[Senate Report 105-181]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 354
105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-181
_______________________________________________________________________


 
                HIGHER EDUCATION ACT AMENDMENTS OF 1998

                               ----------                              

                              R E P O R T

                                 of the

                              COMMITTEE ON
                       LABOR AND HUMAN RESOURCES

                             together with

                            ADDITIONAL VIEWS

                              to accompany

                                S. 1882





                  May 4, 1998.--Ordered to be printed



                 HIGHER EDUCATION ACT AMENDMENTS OF 1998



                                                       Calendar No. 354
105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-181
_______________________________________________________________________


                    HIGHER EDUCATION ACT AMENDMENTS

                                OF 1998
                               __________

                              R E P O R T

                                 of the

                              COMMITTEE ON

                       LABOR AND HUMAN RESOURCES

                             together with

                            ADDITIONAL VIEWS

                              to accompany

                                S. 1882





                  May 4, 1998.--Ordered to be printed


                            C O N T E N T S

                              ----------                              
                                                                   Page
  I. Purpose and summary..............................................1
 II. Background and need for legislation.............................23
III. Legislative history and committee action........................30
 IV. Explanation of the bill and committee views.....................33
  V. Cost estimate...................................................88
 VI. Regulatory impact statement.....................................98
VII. Application of law to the legislative branch....................98
VIII.Section-by-section analysis....................................100

 IX. Additional views...............................................151
  X. Changes in existing law........................................159



                                                       Calendar No. 354
105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-181
_______________________________________________________________________


                HIGHER EDUCATION ACT AMENDMENTS OF 1998
                                _______
                                

                  May 4, 1998.--Ordered to be printed

_______________________________________________________________________


    Mr. Jeffords, from the Committee on Labor and Human Resources, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                         [To accompany S. 1882]

    The Committee on Labor and Human Resources, to which was 
referred the bill (S. 1882) to reauthorize the Higher Education 
Act of 1965, and for other purposes, having considered the 
same, reports favorably thereon with amendments and recommends 
that the bill (as amended) do pass.

                         I. Purpose and Summary

                                 Purpose

    It is the purpose of S. 1882 to reauthorize programs under 
the Higher Education Act of 1965 for the next 5 years. The 
Higher Education Act (HEA) includes the major student financial 
aid programs offering grant, loan, and work assistance to 
students pursuing postsecondary education. These aid programs 
include Pell Grants, Supplemental Educational Opportunity 
Grants (SEOG), Federal Family Education Loans, Direct Loans, 
Perkins Loans, and College Work-Study. Other components of the 
HEA support institutional aid, early intervention, teacher 
preparation and training, international education, graduate 
fellowship programs, and special projects for postsecondary 
improvement.
    The primary objectives of this reauthorization bill are to: 
(1) maintain the historic focus of the act on enhancing student 
opportunities to pursue postsecondary education; (2) develop a 
coherent and comprehensive program designed to promote 
excellence in the teaching profession so that teachers will be 
able to prepare our elementary and secondary students to meet 
the standards we need and expect; (3) to maintain program 
integrity by preserving the safeguards that have led to 
dramatic reductions in loan default rates since the 1992 
reauthorization; (4) to improve the management of student 
financial aid programs, to improve the quality of service to 
students, and to make more effective use of technology in 
program delivery; (5) to assure that both the guaranteed and 
the direct loan programs are able to operate efficiently so 
that students and institutions can benefit from a competitive 
environment; and (6) to streamline the act by eliminating 
unfunded or obsolete provisions, by consolidating overlapping 
activities, and by eliminating unnecessary regulatory 
requirements.

                                Summary

                HIGHER EDUCATION ACT AMENDMENTS OF 1998

    Sponsors: Senators Jeffords, Kennedy, Coats, Dodd, Collins, 
and DeWine

                      Title I: General Provisions

    Current title 1--Partnerships for Educational Excellence--
is repealed, as programs authorized under the title have not 
been funded.
    General Provisions, now included in title XII, are 
transferred to title I.
    Obsolete/unfunded sections of title XII are repealed, 
including: Commission to Study Postsecondary Institutional and 
Programmatic Recognition Process (section 1206), Aggregate 
Limit of Authorization of Appropriations (section 1211), and 
Technology Transfer Centers (section 1212).
    The provisions of Federal-State Relationships; State 
Agreements (section 1203) are transferred to subpart 4 of part 
A (Leveraging Educational Assistance Partnership Program).
    Language is added to require the Secretary to publish the 
expiration dates of terms of members of the National Advisory 
Committee on Institutional Quality and Integrity and to solicit 
nominations for vacancies on the committee.
    Provisions are also added to title I to preserve prior 
rights and obligations for facility projects under the current 
title VII (Construction, Reconstruction, and Renovation of 
Academic Facilities).

                  Title II: Improving Teacher Quality

    The teacher education provisions from the current title V 
are moved to title II. All unfunded programs are repealed and 
replaced with a comprehensive program in part A.

Part A--Teacher quality

    The purpose of part A is to improve student achievement, to 
improve the quality of the current and future teaching force by 
improving the preparation of prospective teachers and enhancing 
professional development activities and to hold institutions of 
higher education accountable for preparing teachers who have 
necessary teaching skills and are highly competent in the 
academic content areas in which they plan to teach, including 
training in the effective use of technology in the classroom. 
The proposal provides a ``top-down'' and ``bottom-up'' approach 
for improving teacher quality.
    First, States are eligible to compete for Teacher Quality 
Enhancement Grants to institute State-level reforms to ensure 
that current and future teachers possess the necessary teaching 
skills and academic content knowledge in the subject areas in 
which they are assigned to teach. In addition, Teacher Training 
Partnership Grants are made to local partnerships comprised of 
academic programs and education programs at institutions of 
higher education, local education agencies, K-12 schools, State 
education agencies, pre-K programs, nonprofit groups, 
businesses and teacher organizations. Partnerships are eligible 
to receive a ``one-time-only'' grant to encourage reform and 
improvement at the local level.
    The proposal includes strong accountability measures for 
both State enhancement and local partnership grants. Grant 
recipients receiving assistance under this title continue to 
receive support after the second year of the grant only if they 
demonstrate that they are making substantial progress in 
meeting such goals as improving student achievement, increasing 
thepassage rate of teachers for initial State licensure or 
certification (in States that have such exams), and increasing the 
classes taken in core academic subject areas. This part is authorized 
at $300 million for fiscal year 1999 and such sums as may be necessary 
in each of the 4 succeeding fiscal years, with 50 percent of the funds 
available for Teacher Quality Enhancement Grants and 50 percent for 
Teacher Training Partnership Grants.

Part B--Recruiting new teachers for underserved areas

    The purpose of part B is to increase the number of 
students, especially minority students, who complete high-
quality teacher preparation programs. The part B provisions 
replace the Minority Teacher Recruitment provision formerly 
authorized in Title V of the Higher Education Act.
    This part authorizes the Secretary to award 5-year 
competitive grants to partnership between institutions of 
higher education and school districts in underserved urban and 
rural areas. Together, the partners determine the needs of 
high-poverty schools in their communities, such as the need for 
diverse faculties or for teachers in particular subject areas. 
Having completed this needs assessment, the partners identify a 
pool of potential teachers fitting those needs, recruit 
individuals from the pool, and design high quality preparation 
and induction programs tailored to those individuals. The needs 
of the respective partnerships determines the recruitment 
focus. Special consideration is given to applications from 
minority-serving institutions and to applications most likely 
to result in an increase in the numbers of minority teachers.
    The program is authorized to support scholarships for 
potential teachers. Applicants determine the funding level and 
number of scholarships to meet the needs of their students. 
Individuals recruited into this program are required to teach 
for at least 3 years in an underserved school district, defined 
by the poverty level. Grantees are required to match the 
Federal share of the costs of the program on an increasing 
basis in an effort to ensure that the program activities 
continue after Federal funding ends. This part is authorized at 
$37 million for fiscal year 1999 and such sums as may be 
necessary for the succeeding 4 fiscal years.

                  Title III: Institutional Development

Part A--Strengthening institutions

    Encourages institutions to improve their technological 
capacity and make effective use of technology.
    Allows institutions to use up to 20 percent of their awards 
to establish or expand an endowment fund.
    Requires a 2-year wait out period between the receipt of 
consecutive grants.
    Authorizes $135 million for fiscal year 1999 and such sums 
as may be necessary for each of the 4 succeeding years.
    Amends the current act to establish a new program to 
provide grants to strengthen the capacity of Tribal Colleges 
and Universities to serve Indian students, and authorizes $5 
million in fiscal year 1999 and such sums as may be necessary 
for each of the 4 succeeding years for that purpose.

Part B--Historically black colleges and universities

    Allows institutions to use up to 20 percent of their awards 
to establish or expand an endowment fund under the terms and 
conditions of part C.
    Authorizes $135 million for fiscal year 1999 and such sums 
as may be necessary for each of the 4 succeeding years.
            Section 326--Professional or graduate institutions
    Clarifies that eligible institutions must match only those 
funds received in excess of $500,000.
    Provides eligible institutions with multiple eligible 
graduate programs the flexibility to spend section 326 funds on 
any qualified graduate program.
    Authorizes $30 million for fiscal year 1999 and such sums 
as may be necessary for each of the 4 succeeding years.

Part C--Endowment challenge funds for institutions eligible for 
        assistance under part A or part B

    Authorizes $10 million for fiscal year 1999 and such sums 
as may be necessary for each of the 4 succeeding years.

Part E--Historically black college and university capital financing

    The Historically Black College and University Capital 
Financing program is moved from the current title VII, part B.
    Expands the definition of capital project to include 
administrative facilities, student centers, and student unions.
    Clarifies that the Secretary may sell qualified bonds 
guaranteed under this provision to any party that the Secretary 
determines offers the best terms.
    Authorizes $110,000 for fiscal year 1999 and such sums as 
may be necessary for each of the 4 succeeding years.

Part F--Minority Science and Engineering Improvement Program

    The Minority Science and Engineering Improvement Program is 
moved from the current title X, part B.
    The definition of science is modified to include behavioral 
sciences.
    Authorizes $10 million for fiscal year 1999 and such sums 
as may be necessary for each of the 4 succeeding years.

                      Title IV: Student Assistance

Part A, subpart 1--Pell grants

    Changes the name of the program from Basic Education 
Opportunities Grants to the Federal Pell Grant program.
    Allows for the Department, after allowing for a formal 
comment period, to institute an accurate and timely payment 
process replacing the mandatory 85 percent advance funding to 
institutions.
    Updates and increases the authorized maximum grant levels 
to $5,000 for academic year 1999-2000, $5,200 for academic year 
2000-2001, $5,400 for academic year 2001-2002, $5,600 for 
academic year 2002-2003, and $5,800 for academic year 2003-
2004.
    Increases allowances for dependent child care expenses by 
making provision in this section consistent with the related 
provisions in part F--Need Analysis.
    Eliminates the minimum step function for the minimum Pell 
Grant by setting the Pell minimum at $200.
    Directs the Secretary to develop regulations to implement 
his discretion to allow, on a case-by-case basis, a student to 
receive two Pell Grants during a single award year.
    Places a time limit on the period during which students may 
receive a Federal Pell Grant equal to 150 percent of the period 
normally required to complete a course of study, unless the 
institution extends that period as an accommodation to a 
disabled student.
    Tightens eligibility for English as a Second Language 
``stand alone'' programs to only those that require an 
independent proficiency test upon completion and have a minimum 
percentage with passing scores as designated by the Secretary.

Part A, subpart 2, chapter I--Early outreach, Federal TRIO programs

    Increases the minimum grant level for TRIO programs to 
ensure comprehensive services remain available to students.
    Permits TRIO directors to administer more than one program 
for disadvantaged students.
    Expands authorized activities in the Talent Search Program 
to include activities designed to acquaint youth with careers 
in which individuals from disadvantaged backgrounds are 
underrepresented.
    Expands authorized activities in Upward Bound to include 
summer work study and permits higher stipends for those Upward 
Bound students participating in summer work study positions.
    Requires the Secretary to consider the institution's 
efforts to provide sufficient financial assistance to meet a 
student's full financial need when awarding Student Support 
Services grants to institutions.
    Reserves up to 2 percent of TRIO funds for Evaluation and 
Dissemination/Partnership grants. The new Dissemination/
Partnership provision would encourage partnerships between TRIO 
programs and other institutions, community based organizations 
or both offering programs or activities serving at-risk 
students to provide technical assistance and disseminate 
program best practices.
    Authorizes $700 million in fiscal year 1999 and such sums 
as may be necessary for each of the 4 succeeding years.

Part A, subpart 2, chapter 2--National Early Intervention Scholarship 
        and Partnership Program

    Reauthorizes the program with no changes.
    Authorizes $200 million for fiscal year 1999 and such sums 
as may be necessary for the 4 succeeding fiscal years.

Part A, subpart 3--Federal supplemental education opportunity grants

    Replaces the requirement that 5 percent of an institution's 
SEOG allotment be awarded to less-than-full-time or independent 
students if their financial need exceeds 5 percent of 
institution's total need with a requirement that a reasonable 
proportion of the allocation be awarded to such students.
    Provides institutions with the authority to carry-back and 
carry-forward 10 percent of the institution's SEOG funds. 
Requires funds not awarded in a fiscal year or carried forward 
or back to be returned to the Secretary for reallocation.
    Authorizes $700 million for fiscal year 1999 and such sums 
as may be necessary for each of the 4 succeeding years.

Part A, subpart 4--Leveraging Educational Assistance Partnership 
        Program

    Incorporates, with modifications, a proposal (S. 1644) 
introduced by Senators Reed and Collins to strengthen the 
Grants to States for State Student Incentives (SSIG) program 
and to rename the program the Leveraging Educational Assistance 
Partnership Program (LEAP).
    Authorizes reserved funds in excess of $35 million to be 
used for a special partnership grant program that requires 
additional State matching and authorizes additional activities.
    Authorizes $105 million for fiscal year 1999 and such sums 
as may be necessary for the 4 succeeding years.

Part A, subpart 5--Special programs for students whose families are 
        engaged in migrant education

    Reauthorizes the current programs with no changes.
    Authorizes the High School Equivalency Program (HEP) and 
the College Assistance Migrant Program (CAMP) at $25 million 
and $10 million, respectively, in fiscal year 1999 and such 
sums as may be necessary for each of the 4 succeeding years.

Part A, subpart 6--Robert C. Byrd Honors Scholarship Program

    Reauthorizes the program with no changes.
    Authorizes $45 million in fiscal year 1999 and such sums as 
may be necessary for each of the 4 succeeding years.

Part A, subpart 7--Child care access means parents in school (CAMPUS)

    Incorporates, with modifications, a proposal (S. 1151) 
introduced by Senators Dodd and Snowe, which authorizes the 
Secretary to award grants of not less than $10,000 for a 3-year 
period to institutions of higher education with Pell Grant 
awards in the preceding fiscal year that equal or exceed 
$350,000 to support or establish campus-based child care for 
Pell Grant eligible, low-income students enrolled at the 
institution.
    Authorizes $60 million in fiscal year 1999 and such sums as 
may be necessary in each of the succeeding 4 years.

Part B and D--Federal Family Education Loan Program and the William D. 
        Ford Federal Direct Loan Program

    Requires nonstate designated guarantors to have the 
capacity to respond to electronic inquiries.
    Clarifies that, for the purpose of calculating cohort 
default rates, loans that are successfully challenged on the 
basis of improper servicing will be removed from both the 
numerator and the denominator.
    Clarifies that the representative sample of loan servicing 
and collection records that will be made available to a school 
that is appealing its cohort default rate based upon 
allegations of improper loan servicing will be those that the 
guaranty agency used in making the determination whether to pay 
an insurance claim to the lender.
    Requires institutions that unsuccessfully appeal high 
cohort default rates and that choose to receive loans during 
the appeal process be held liable for loans made during the 
appeal process and to post surety in an amount sufficient to 
cover these costs.
    Allows institutions with a student loan participation rate 
index of .0375 or lower to be exempted from sanctions related 
to high institutional cohort default rates.
    Limits the current exemption from cohort default rate 
sanctions available to HBCU's, TCCC's, and Navajo Community 
Colleges and requires the institutions to work with the 
Secretary to reduce their cohort default rates below 25 
percent.
    Reduces paperwork for institutions by only requiring them 
to transmit information to lenders that is needed by the 
lenders for originating and servicing the loan.
    Eliminates 30-day disbursement delay for first time 
undergraduate borrowers at institutions with cohort default 
rates of 5 percent or less.
    Eliminates multiple disbursement requirements for fourth 
and fifth year undergraduate students attending institutions 
with cohort default rates of 5 percent or less who will receive 
a loan to complete their degrees in less than 1 year.
    Provides loan forgiveness for teachers, authorizing the 
Secretary to repay loans made under parts B and D. Program 
eligibility extends to new borrowers who become employed as a 
full-time teacher for 3 consecutive, complete school years in a 
high-poverty school. To participate in this program, elementary 
school teachers must demonstrate through certification or 
licensure requirements knowledge and teaching skills in 
reading, writing, mathematics and other areas of the elementary 
school curriculum; and secondary school teachers must be 
certified as teaching in a subject area that is relevant to the 
borrower's academic major. Borrowers who meet these criteria 
are eligible for forgiveness of 30 percent of the total 
outstanding amount and applicable interest of subsidized loans 
after the fourth and fifth complete years of teaching in a 
high-poverty school and 40 percent after the sixth complete 
year, for a total amount of no more than $10,000 per borrower.
    Incorporates, with modifications, a proposal (S. 1029) 
introduced by Senators DeWine and Wellstone to establish a 
demonstration program of loan forgiveness for child care 
providers, authorized at $10 million in fiscal year 1999 and 
such sums as may be necessary in each of the succeeding 4 
years.
    Provides extended repayment terms for FFEL borrowers with 
loans in excess of $30,000 and the option to borrowers to 
change selected repayment plans.
    Exempts low-volume lenders from annual lender audit 
requirements.
    Allows borrowers to request forbearance electronically.
    Allows lenders to provide an initial 60-day forbearance 
period for requests that require additional research. Interest 
may not be capitalized.
    Repeals requirement that States share in costs of 
guarantying student loans that go into default. (This provision 
has never been implemented)
    Allows the Secretary to specify additional factors that may 
be considered in determining PLUS loan eligibility.
    Allows the Secretary to verify immigration status and 
social security number of PLUS loan applicants.
    Excludes borrowers from whom involuntary payments are 
secured through litigation or administrative wage garnishment 
from eligibility for consolidating defaulted loans.
    Eliminates the 180-day rule for the packaging of 
consolidation loans.
    Encourages the development and use, free of charge to 
borrowers, of electronic applications and forms that are 
approved by the Secretary.
    Authorizes the Secretary to develop and implement a 
multiyear promissory note for parts B and D.
    Allows guaranty agencies and lenders to provide required 
disclosures electronically at the request of the borrower.
    Repeals the DC Student Loan Insurance Program--currently 
served by ASA.
    Clarifies the responsibility of program participants for 
the program compliance of their contractors.
    Repeals the requirement that an authority using tax-exempt 
funding submit a plan for doing business.
    Authorizes the Secretary to collect origination and other 
required loan fees directly from the holder or lender if a 
lender fails to bill the Secretary or withdraws from the part B 
program with unpaid fees.
    Clarifies that, for purposes of calculating the FFEL 
program in-school interest subsidy, disbursement means 
disbursement by the school.
    Clarifies the loan limits available to borrowers who are 
eligible for FFEL and DL loans while taking nondegree course 
work necessary for enrollment in a degree program or teacher 
certification.
    Deletes obsolete language referring to the 7-month interval 
of eligibility for unsubsidized Federal Stafford Loans carried 
over from SLS program and clarifies that annual loan limits are 
based on the statutorily defined academic year.
    Establishes the student loan interest rate at 91-day T-bill 
plus 1.7 percent in school and 91-day T-bill plus 2.3 percent 
in repayment. Establishes the rate paid to lenders at 91-day T-
bill plus 2.2 percent in-school and 91-day T-bill plus 2.8 
percent in repayment.
    Clarifies that interest that accrues and is capitalized on 
unsubsidized Federal Stafford loans during in-school periods is 
not considered for purposes of computing aggregate loan limits.
    Repeals payment to guaranty agencies for lender referral 
services.
    Recalls $200 million in guaranty agency reserve funds.
    Creates separate guaranty agency Federal reserve and 
operating funds.
    Clarifies that reserve funds are the sole property of the 
Federal Government.
    Eliminates preclaims and supplemental preclaims assistance 
and replaces with a new default aversion program. Guaranty 
agencies will be reimbursed only for those accounts that are 
brought current.
    Restructures guaranty agency reimbursement to more 
accurately reflect cost structure. Eliminates the 
administrative expense allowance and replaces with a loan 
origination fee and a portfolio maintenance fee.
    Encourages greater emphasis upon default aversion by 
reducing reinsurance from 98 percent to 95 percent and by 
reducing the guaranty agency collection retention amount from 
27 percent to 24 percent.
    Authorizes the Secretary to enter into voluntary flexible 
agreements with guaranty agencies in lieu of their agreements 
under section 428(b) and (c).
    Directs the Secretary of Treasury to conduct a study, in 
consultation with institutions of higher education, lenders, 
students, and other participants in the student loan programs, 
of the impact and feasibility of using market-based mechanisms 
to establish interest rates on student loans.
    Authorizes the Secretary to provide repayment incentives to 
part D borrowers to encourage on-time repayment, provided that 
such incentives are cost-neutral.
            Related student loan provisions in parts G and H
    Authorizes the Secretary to verify the incomes of the 
parents of dependent applicants with the IRS.
    Allows the Secretary to pay for data that the Department 
considers essential to the efficient administration of the 
programs under title IV.
    Allows institutions to participate in one or more programs 
under part B or part D.
    Authorizes the Secretary to allow borrowers under part B to 
use the Free Application for Federal Student Aid (FAFSA) as 
their loan application.
    Allows institutions to use electronic technology to provide 
personalized exit counseling to students.
    Requires the Secretary to report to Congress on the status 
of efforts to bring mission critical systems into Year 2000 
compliance.
    Suspends loan, grant, and work eligibility for students who 
have been convicted of drug-related offenses.

Part C--Federal Work-Study Programs

    Maintains provisions allowing for graduate student 
participation in the Federal Work-Study (FWS) Program in 
positions that reinforce the educational program or vocational 
goals of the student.
    Expands the definition of community service to allow for 
certain types of on-campus jobs to count as community service 
jobs.
    Clarifies that part-time employment under a college work-
study agreement may include internships and research 
assistanceships.
    Replaces the requirement that 5 percent of an institution's 
CWS allotment be awarded to less-than-full-time or independent 
students if their financial need exceeds 5 percent of the 
institution's total need with a requirement that a reasonable 
proportion of the allocation be awarded to such students.
    Allows for a higher Federal contribution for community 
service jobs.
    Deletes the requirement that FWS-equivalent institutional 
employment be available to all students desiring such 
employment.
    Authorizes for the Federal Work Study Program $900 million 
in fiscal year 1999 and such sums as may be necessary for each 
of the 4 succeeding fiscal years.
    Expands the activities of work colleges to include a 
comprehensive, longitudinal study of student academic and 
career outcomes, career choice and continued community service 
after graduation, and repayment of student loans.
    Authorizes for Work Colleges $7 million for fiscal year 
1999 and such sums as may be necessary in the 4 succeeding 
fiscal years.

Part D--(See parts B and D summary above)

Part E--Federal Perkins loans

    Eliminates the Expanded Lending Option (ELO) program and 
increases annual and aggregate loan limits in Perkins to 
previous ELO limits.
    Allows higher loan limits for students pursuing an 
education and careers in teaching.
    Strengthens the penalties for high default in the Federal 
Perkins program, including the loss of eligibility to 
participate in the program (defined as the liquidation of the 
institution's Perkins fund), for institutions with cohort 
default rates of 50 percent or greater for 3 years in a row.
    Replaces the requirement that 5 percent of an institution's 
Perkins allotment be awarded to less-than-full-time or 
independent students if their financial need exceeds 5 percent 
of the institution's total need with a requirement that a 
reasonable proportion of the allocation be awarded to such 
students.
    Eliminates the requirement that institutions establish a 
default management plan if their defaults are 15 percent or 
above.
    Eliminates the exclusion of improperly serviced loans from 
the calculation of cohort default rates.
    Defines default for a borrower in the Federal Perkins loan 
program.
    Establishes a loan rehabilitation program for borrowers in 
default in the Federal Perkins loan program.
    Requires credit bureaus to report defaulted Perkins loans 
until a loan is repaid in full and allows the Secretary to 
establish criteria under which an institution may cease 
reporting such information before a loan is paid in full. 
Clarifies the institution's role in reporting to credit bureaus 
and the information it is required to report.
    Includes discharge provisions for Federal Perkins loans in 
cases where an institution closes and the enrolled borrower is 
unable to complete the program of study.
    Creates an incentive repayment plan in the Federal Perkins 
loan program.
    Updates dates for the mandatory liquidation of Perkins 
loans funds.
    Repeals the Federal Perkins Revolving Fund.
    Authorizes $250 million for fiscal year 1999 and such sums 
as may be necessary for the 4 succeeding fiscal years.
            Related Federal Perkins loan provisions in part G
    Strengthens the language that includes Perkins loans in the 
Student Status Confirmation Report process.

Part F--Need analysis

    Adopts increases in the income protection allowances (IPA) 
for dependent and independent students.
    Indexes IPA changes for inflation.
    Adds a dependent student offset in the amount of the 
negative adjusted parental income available.
    Authorizes adjustments to a dependent student's 
contribution for an enrollment period of less than 9 months.
    Moves authority to reduce loan amount or deny certification 
of loan eligibility from part B to the section entitled 
``Discretion of Student Financial Aid Administrators.''
    Removes the requirement that Cost of Attendance include a 
cost-of-living minimum amount for all populations.

Part G--General provisions

    Requires the Department, to the extent feasible, to publish 
minimal software and hardware requirements by December 1 prior 
to the start of an award year.
    Moves from December 1 to November 1 the deadline by which 
the Secretary must publish regulations affecting Federal 
student assistance programs in order for those regulations to 
be applicable to the following award year and authorizes the 
Secretary to designate regulatory provisions that institutions 
may choose to implement before the effective date that would 
otherwise apply.
    Clarifies the eligibility of home-school graduates for 
title IV assistance.
    Requires the verification of IRS return information.
    Suspends eligibility of students convicted of any Federal 
or State law related to possession or sales of controlled 
substances from title IV grant, loan, and work programs.
    Removes the reference to accrediting agency approved refund 
policies from the list of policies to be compared to determine 
which produces the largest amount.
    Revises methods for determining the ``last day of 
attendance'' for purposes of making pro-rata refund 
calculations.
    Clarifies that institutions may provide students and 
prospective students with a list of information and a statement 
of the procedures required to obtain it in order to comply with 
information dissemination requirements.
    Defines ``prospective student'' as one who has requested 
information regarding application for admission to an 
institution.
    Clarifies that the provision of comparable data by a 
national collegiate athletic association satisfies the 
disclosure requirement regarding athletically related student 
aid to a prospective student athlete's guidance counselor and 
coach.
    Eliminates duplicative athletic reporting provisions.
    Adds a provision to athletic reporting provisions regarding 
disclosure when institutions intend to reduce the number of 
athletes who will be permitted to participate in any collegiate 
sport or in the financial resources that the institution will 
make available to that sport.
    Requires the Secretary, by April 1 of each year, to compile 
a report that summarizes information reported by institutions 
regarding intercollegiate athletics, identifies trends in the 
information, and aggregates the information by divisions of the 
National Collegiate Athletic Association. The Secretary is to 
make the report available on the Internet and to notify all 
secondary schools regarding the availability of this 
intercollegiate athletics information.
    Revises and expands the list of crimes that must be 
included in campus crime statistics to include arson and hate 
crimes; requires institutions to maintain an open daily log 
that records the nature, date, time and general location of 
each crime reported to the local police or campus security; 
makes explicit that neither victims nor persons accused of a 
crime may be identified in the reporting of campus crime 
statistics, except as required by State or local laws; requires 
a national study to examine procedures undertaken after an 
institution of higher education receives a report of sexual 
assault; and exclude criminal activities from a postsecondary 
student's educational records. Authorizes $1 million for fiscal 
year 1999 to carry out the national study.
    Repeals section 486, ``Training in Financial Aid 
Services,'' which has not been funded.
    Requires the National Center for Education Statistics 
(NCES) to develop standard definitions for a few basic 
financial items to help families make decisions about college; 
require institutions to report these items annually; and makes 
the information available to the public. In addition, requires 
NCES, in consultation with the Bureau of Labor Statistics, to 
examine expenditures at institutions of higher education and to 
develop a ``Higher Education Market Basket'' Authorizes the 
Secretary to assess a $25,000 fine against institutions failing 
to report cost data properly.
    Clarifies that only for-profit institutions have 
``owners.''
    Expands the categories of activities for which institutions 
participating in the Quality Assurance Program develop their 
own management approaches and clarifies that the Secretary may 
waive regulatory--but not statutory--requirements of title IV 
that are addressed by the institution''s alternative management 
system.
    Requires the Secretary to report to Congress regarding the 
results of experiments conducted under the current experimental 
sites authority and make recommendations based on those 
findings regarding amendments to the Higher Education Act that 
would improve the operation of the act. Addition of new 
experiments will not be permitted until this report is provided 
to Congress and until the appropriate congressional committees 
have been consulted.
    Authorizes a demonstration program permitting the Secretary 
to select up to five institutions of higher education or 
consortia for which specified statutory restrictions in part F 
and part G may be waived. Any regulatory requirement that 
inhibits distance education may be waived as well for 
participants in the demonstration. Participants will be 
monitored and evaluated by the Secretary, who is also directed 
to identify any statutory and regulatory requirements that 
impede the expansion of quality distance education programs. 
Requires an independent review of distance education by the 
National Academy of Sciences, for which up to $1 million will 
be made available.
    Reauthorizes the Advisory Committee on Student Financial 
Assistance and increases the minimum level of funding to 
$800,000. Directs the committee to conduct studies and 
evaluations of the modernization of student financial aid 
systems and delivery processes, the use of appropriate 
technology in delivery and management of student aid, the 
implications of distance learning on student financial aid 
eligibility, and other issues. In addition, requires the 
committee to make recommendations to the Secretary regarding 
redundant or outdated sections of the act and regulation to 
assist in the review of those sections.
    Continues negotiated rulemaking and adds part D to the 
parts (B, G, & H), which were subject to negotiated rulemaking 
following the 1992 reauthorization. In addition, negotiated 
rulemaking will be required for developing all regulations for 
student loan programs.

Part H--Program integrity triad

            Subpart 1--State role
    State Postsecondary Review Entity (SPRE) provisions are 
repealed.
    SPRE provisions are replaced with language that defines 
State responsibilities as being licensure and notification to 
the Secretary of revocation of license or evidence of 
institutional fraud. Requires institutions to prove they have 
authority to operate in a State.
            Subpart 2--Accrediting agency recognition
    Substitutes the word ``recognition'' for ``approval'' each 
time it appears in subpart 2. Substitutes ``criteria'' for 
``standards,'' consistent with current regulations.
    Adds language stating that the courses or programs 
considered by an accrediting agency in assessing their quality 
may include the institution's distance education courses or 
programs. In addition, the bill provides that, when the 
Secretary determines the scope of recognition of an accrediting 
agency whose members offer distance education, the scope shall 
include the distance education courses or programs.
    Modifies provisions relating to accrediting agency 
assessment of institutions to delete ``in clock hours or credit 
hours'' relating to measure of program length and to clarify 
that accrediting agencies are not expected to enforce 
compliance with title IV.
    Strengthens statutory requirements relating to the time 
frame within which an accrediting agency must come into 
compliance after the Secretary has determined the agency has 
not met the requirements of section 496.
            Subpart 3--Eligibility and certification procedures
    Requires that an institution maintain a copy of any 
contract between the institution and a financial aid service 
provider or loan servicers, and provide a copy of any such 
contract to the Secretary upon request, instead of requiring 
that the institution supply the copy with its application to 
participate in the student aid programs under title IV (as is 
currently the case).
    Substitutes more general language for the specific listing 
of financial responsibility measures now included in the act in 
order to conform with current financial responsibility 
regulations.
    Specifies that the Secretary may accept any reasonable 
third-party financial guarantees in cases where an institution 
fails to meet overall financial responsibility standards.
    Specifies that ``ownership'' applies only to for-profit 
institutions.
    Eliminates the requirement that the Department conduct site 
visits of all institutions and eliminates the ability of the 
Department to charge fees to cover the expenses of 
certification and site visits.
    Gives the Secretary the authority to recertify an 
institution for up to 6 years (rather than the 4 years in 
current law) and requires the Secretary to inform an 
institution 6 months in advance of the expiration of its 
eligibility.
    Establishes a special rule dealing with the recertification 
schedule for institutions of higher education located outside 
of the United States that receive less than $500,000 annually 
in Federal Family Education Loans.
    Clarifies that, prior to seeking certification as a main 
campus or free-standing institution, a branch is required to be 
in existence for at least 2 years after it has been certified 
by the Secretary as a branch campus participating in a title IV 
program.
    Requires the Secretary to establish priorities for program 
reviews of institutions of higher education, update priority 
criteria, and include among the additional categories of 
institutions that the Secretary may identify as requiring 
priority review those that may pose significant risk of failure 
to comply with the administrative or financial responsibility 
provisions of title IV.
    Adds special administrative rules to: (1) require the 
Secretary to inform institutions of the criteria involved in 
program reviews; (2) require the Secretary to implement a 
system of ``cures'' to allow institutions to correct minor 
record-keeping errors; (3) require ``proportionality'' in civil 
penalties; and (4) facilitate the exchange of information 
between the Secretary and State authorizing agencies and 
creditors.
    Requires the Secretary to establish processes for ensuring 
that eligibility and compliance issues are considered 
simultaneously and for identifying unnecessary duplication of 
reporting and related regulatory requirements.

Part I--Performance-based organization

    Establishes a performance-based organization within the 
Department of Education for the purpose of simplifying and 
improving the delivery of student financial aid under this 
title. The Secretary of Education will be provided with 
personnel and procurement flexibilities in order to allow for 
the establishment of an organization rewarded for meeting 
specified contractual goals for the management and delivery of 
student financial aid. Personnel will be rewarded in accordance 
with their ability to meet objective performance measures. 
Proposed personnel and procurement flexibilities include: 
alternative job evaluation systems, ability to establish award 
programs, broad banding, alternative ranking procedures for 
evaluating job applicants, ability to hire technical and 
professional employees under excepted service, simplified 
contracting procedures for commercial items, modular 
contracting authority, and 2-way selection procedures.

       TITLE V: GRADUATE AND POSTSECONDARY EDUCATION IMPROVEMENT

Part A--Jacob K. Javits Fellowship Program

    Maintains a separate Jacob K. Javits Fellowship Program, 
permits forward funding of it, and permits the Secretary to 
contract out administration of the program if such a contract 
would be more effective and efficient.
     Limits eligibility to students who demonstrate financial 
need and bases student awards on title IV needs analysis.
    Requires the Secretary to make fellowship applications 
available no later than October 1 of each year and notify 
recipients of their awards no later than March 1 of the 
following year.
    Increases the authorization of institutional payments to 
$10,000 in fiscal year 1999-2000 and adjusts it for inflation 
each year thereafter.
    Authorizes $30 million in fiscal year 1999 and such sums as 
may be necessary for each of the 4 succeeding years.

Parts B--Graduate assistance in areas of national need

    Maintains the Graduate Assistance in Areas of National Need 
(GAANN) program, with minor amendments.
    Limits eligibility to students who demonstrate financial 
need and bases student awards on title IV needs analysis.
    Requires the Secretary to consult with the National Science 
Foundation, the National Academy of Sciences, and other 
appropriate Federal and nonprofit agencies and organizations to 
designate areas of national need.
    Requires the Secretary to consider an assessment of how a 
program may achieve the most significant impact with available 
resources in determining areas of national need.
    Allows departments receiving GAANN awards to make their 25 
percent matching contribution in cash or in kind.
    Requires academic departments submitting GAANN applications 
to describe the number, types, and amounts of the fellowships 
that the applicant intends to offer under the grant.
    Increases the authorization of institutional payments to 
$10,000 in fiscal year 1999-2000 and adjusts it for inflation 
each year thereafter.
    Authorizes $30 million in fiscal year 1999 and such sums as 
may be necessary for each of the 4 succeeding years.
            General provisions applying to both Javits and GAANN (Part 
                    G)
    Adds an evaluation component.
    Requires the Secretary to coordinate these graduate 
programs with other Federal programs to minimize duplication 
and improve efficiency of program administration.
    Removes the prohibition for students attending schools of 
divinity from competing for graduate fellowships, but prohibits 
institutional payments or allowances to a school or department 
of divinity as a result of the award of a fellowship to an 
individual who is studying for a religious vocation.
    Requires the Secretary to fund authorized continuation 
awards before granting new fellowships.

Part C--Urban community service

    Urban Community Service is moved from current title XI, 
part A.
    Funding priority is given to applicants who have shown 
prior commitment to urban community service.
    Authorizes $20 million in fiscal year 1999 and such sums as 
may be necessary for each of the 4 succeeding years.

Part D--Fund for the improvement of postsecondary education (FIPSE)

    FIPSE is moved from current title X, part A.
    Permits greater flexibility within current personnel 
ceilings to bring in technical experts.
    Revises special projects list to include: international 
exchanges; institutional restructuring to improve learning and 
promote cost efficiencies; evaluation and dissemination of 
model programs; and articulation between 2-year and 4-year 
institutions, including developinginnovative methods for 
ensuring the successful transfer of students from 2-year to 4-year 
institutions.
    Authorization:
          FIPSE General: $26 million in fiscal year 1999 and 
        ``such sums'' in 4 succeeding years.
          Planning Grants: $ 1 million in fiscal year 1999 and 
        ``such sums'' in 4 succeeding years.
          Special Projects: $ 5 million in fiscal year 1999 and 
        ``such sums'' in 4 succeeding years.

Part E--Improving access to higher education for students with 
        disabilities

    This part establishes a new competitive grant program to 
provide assistance to support the development of model programs 
to provide technical assistance or training and professional 
development for faculty and administrators in institutions of 
higher education, to provide the faculty and administrators 
with the skills to teach effectively students with 
disabilities, and to ensure effective evaluation and 
dissemination of such model programs. Grants would be awarded 
for periods of 3 years. Model programs developed under this 
part must be developed for a range of types and sizes of 
institutions of higher education. The Secretary is required to 
consider providing an equitable geographic distribution of 
grants to rural and urban areas. The Secretary may award grants 
to institutions of higher education that have demonstrated 
exceptional programs for students with disabilities in order to 
disseminate those programs. Nothing in this part shall be 
construed to impose any additional duty, obligation, or 
responsibility on an institution of higher education, or on its 
faculty or staff, beyond the requirements of section 504 of the 
Rehabilitation Act of 1973 and the Americans with Disabilities 
Act of 1990. The program is authorized for $10 million in 
fiscal year 1999 and such sums as may be necessary in each of 
the 4 succeeding fiscal years.

Part F--Hispanic-serving institutions

    Simplifies the definition of a Hispanic-serving 
Institution.
    Allows institutions to use up to 20 percent of their awards 
to establish or expand an endowment fund.
    Encourages institutions to collaborate with community-based 
organizations on projects that seek to reduce drop-out rates, 
improve academic achievement, and increase enrollment in higher 
education.
    Repeals the funding trigger that requires that funding for 
title III, part A grants exceed $80 million before any funds 
may be provided for grants under the current section 316.
    Authorizes $45 million for fiscal year 1999 and such sums 
as may be necessary for each of the 4 succeeding years.

                   TITLE VI: INTERNATIONAL EDUCATION

    Unfunded and obsolete provisions are repealed, including: 
the doctoral stipend program under Foreign Language and Area 
Studies Fellowships; Grants to Strengthen Programs of 
Demonstrated Excellence in Undergraduate International Studies 
and Foreign Language Programs; Intensive Summer Language 
Institutes; Periodicals and Other Research Materials Published 
Outside the United States; and Preservation of Pre-1992 
Programs.

Part A--International and foreign language studies

    A finding is added that emphasizes the need to build 
national capacity in international education and foreign 
languages.
    A foreign language component is added to the summer 
institutes authorized under Graduate and Undergraduate Language 
and Area Centers and the Undergraduate International Studies 
and Foreign Language Programs.
    Language Resource Centers are modified to permit the 
operation of intensive summer language institutes, to permit 
the development and dissemination of resource materials for 
elementary and secondary school language teachers, and to make 
dissemination a component of each Center activity.
    Combines into a single authority the existing separate 
grant authorities under Undergraduate International Studies and 
Foreign Language Programs for the creation of undergraduate 
international studies and foreign language programs and for the 
strengthening of such programs already in existence. Key 
provisions of both programs are included in the unified 
authority. The development of partnerships between institutions 
of higher education and the private sector, government, and 
elementary and secondary institutions to enhance international 
knowledge is authorized as a new activity. New grant conditions 
are also established to assure that extensive planning is 
conducted in advance of the submission of a grant application, 
that faculty and administrators of all relevant departments and 
programs are involved in ongoing collaboration, that students a 
participating institutions will have equal access to programs 
supported with grant funds, and that Federal funds will be used 
to supplement and not supplant institutional funds and 
activities provided prior to the receipt of the grant.
    Two new Research and Studies activities are added to 
provide for evaluations of programs receiving assistance under 
title VI and of effective dissemination practices.
    Clarifies that the establishment of new American Overseas 
Research Centers is an allowable activity.

Part B--Business and international education programs

    Provides that Centers for International Business Education 
shall provide interdisciplinary programs for any degree 
candidates, as opposed to advanced degree candidates as 
provided in current law.
    A foreign language component is added to the summer 
institutes.
    Programs to develop or enhance international skills, 
awareness, and expertise may be offered at time most convenient 
for the business community, rather than being limited to 
evenings or summers.
    Specifically mentions that community college 
representatives may serve on the advisory council to Centers 
for International Business Education.

Part C--Institute for international public policy

    Increases required match by Minority Foreign Service 
Professional Development Program grant recipients from one-
fourth to one-half, with the nonfederal contribution being made 
by private sector contributions.
    Authorizes the Institute for International Public Policy to 
make sub-grants to strengthen institutional international 
affairs programs at HBCU's, HSI's, minority institutions, and 
Tribal Colleges.
    Expands the current Junior Year Abroad program. The program 
is renamed ``Study Abroad'' and provides for both Junior year 
abroad and summer abroad programs, with one-third of the cost 
borne by the institution and two-thirds by the institute. 
Students completing their third year of study would be eligible 
to participate in the summer abroad program.
    Authorization Levels:
    Part A: $80 million in fiscal year 1999 and ``such sums'' 
in succeeding 4 years.
    Part B:
          Centers for International Business Education and 
        Education--$11 million in fiscal year 1999 and ``such 
        sums'' in succeeding 4 years.
          Education and Training Programs--$7 million in fiscal 
        year 1999 and ``such sums'' in succeeding 4 years.
    Part C: $10 million in fiscal year 1999 and ``such sums'' 
in succeeding 4 years.

        TITLE VII: RELATED PROGRAMS AND AMENDMENTS TO OTHER LAWS

Part A--Indian Higher Education Programs

    Changes reference to ``Tribally-Controlled Community 
College'' to ``Tribally Controlled College or University'' and 
make conforming and technical changes.
    Increases the per-Indian-student authorization to $6,000.
    Authorization Levels (Department of the Interior):
          Technical Assistance Centers--$3.2 million in fiscal 
        year 1999 and ``such sums''
          Grants to TCCC's--$40 million in fiscal year 1999 and 
        ``such sums''
          Renovation/Construction of Facilities--$10 million in 
        fiscal year 1999 and ``such sums''
          TCCC Endowment Program--$10 million in fiscal year 
        1999 and ``such sums''
          Tribal Economic Development--$2 million in fiscal 
        year 1999 and ``such sums''
    Authorizes $5 million in fiscal year 1999 for the American 
Indian, Alaska Native, and Native Hawaiian Culture and Art 
Development Act.

Part B--Advanced Placement Incentive Program

    Advanced Placement Fee Payment Program is moved from title 
XV, part G, of the Higher Education Amendments of 1992 and is 
renamed the Advanced Placement Incentive Program.
    Modifies program to encourage States to support advanced 
placement teacher training and related activities designed to 
increase the participation of low-income individuals and to 
permit up to 5 percent of funds to disseminate information 
about the availability of test fee payments.
    Authorizes $10 million in fiscal year 1999 and such sums as 
may be necessary for each of the 4 succeeding years.

Part C--Amendments to United States Institute of Peace Act

    Makes technical changes and reauthorizes at $15 million in 
fiscal year 1999 and such sums as may be necessary for each of 
the 4 succeeding years.

Part D--Community scholarship mobilization

    Authorizes a competitive grant program that will allow the 
grant recipient, using the interest from an endowment grant, to 
establish and support State or regional program centers to 
foster the development of local affiliated chapters in high 
poverty areas that promote higher education goals for students 
from low-income families by providing academic support and 
scholarship assistance.
    Seventy-percent of interest income would support the 
establishment or ongoing work of State or regional program 
centers to enable such centers to work with local communities 
to establish local affiliated chapters in high poverty areas 
and provide ongoing assistance, training workshops, and other 
activities to ensure the success of local chapters.
    Thirty-percent of the interest income would be used to 
provide scholarships for students from low-income families, and 
scholarships would be matched 1:1 from funds raised by the 
local community.
    Authorizes $10 million for fiscal year 2000 to carry out 
the purposes of this part.

Part E--Incarcerated youth offenders

    Incarcerated Youth Offenders program is moved from the 
current title X, part E.
    Authorizes $14 million in fiscal year 1999 such sums as may 
be necessary for each of the 4 succeeding years.

Part F--Amendments to Education of the Deaf Act

    Updates references to IDEA. Includes technical and 
conforming amendments to make the provisions pertaining to 
Gallaudet's Kendall Elementary School and the Model Secondary 
School for the Deaf consistent with the 1997 IDEA.
    Extension of authorization of appropriations. Extends 
authorization of appropriations such sums as may be necessary 
for fiscal year 1998 and each of the 4 succeeding fiscal years.
    Clarification of audit requirements. Clarifies that audits 
include the national mission and school operations of the 
elementary and secondary education programs at Gallaudet 
University; and adds a requirement that a copy of each audit be 
provided to the Secretary within 15 days of the acceptance of 
the audit by Gallaudet University or the institution authorized 
to establish and operate the National Technical Institute for 
the Deaf.
    Removal of restrictions on investment of nonfederal portion 
of endowment. Allows institutions to invest the non-Federal 
share of their endowments without the restrictions placed on 
Federal contributions to the endowments.
    Immediate access to interest on endowment. Allows the 
institutions to withdraw orexpend not more than 50 percent of 
the income generated from their Federal endowment funds from the 
current fiscal year.
    Limitation with regard to international student enrollment. 
Requires that, in any school year, no qualified U.S. citizen, 
who elects to enroll in Gallaudet University or the National 
Technical Institute for the Deaf, is denied admission because 
of the admission of an international student.
    Institutional Research Plans. Requires Gallaudet University 
and the National Technical Institute for the Deaf establish and 
disseminate priorities and prepare and submit an annual 
research report to the Secretary and Congress.
    Commission on education of the deaf. Requires the Secretary 
of Education to establish a Commission on Education of the Deaf 
to identify those education-related factors in the lives of 
individuals who are deaf that result in barriers to successful 
postsecondary education experiences and employment and those 
education-related factors in the lives of individuals who are 
deaf that contribute to successful postsecondary education and 
employment experiences.

Part G--Repeals

    Repeals the unfunded programs included in the Higher 
Education Act of 1965 and in the Higher Education Amendments of 
1992 not repealed elsewhere in S. 1882. A complete list of 
repeals appears at the end of this summary.

Part H--Miscellaneous

    Requires the Secretary to report to the Committee on Labor 
and Human Resources and to the Committee on Education and the 
Workforce by March 1, 1999, regarding the Year 2000 computer 
compliance status of all mission critical systems and 
contingency plans for any computer systems which cannot be 
brought into compliance on time.

                     Provisions repealed by S. 1882

Title I--Partnerships for educational excellence

    Part A--School, College, and University Partnerships.
    Part B--Articulation Agreements.
    Part C--Access and Equity to Education for All Americans 
Through Telecommunications.

Title II--Academic libraries and information services

    Title II was repealed by P.L. 104-208 (fiscal year 1997 
Department of Education Appropriations Act)

Title IV--Student assistance

    Part A--Grants to Students in Attendance at Institutions of 
Higher Education.
          Chapter 3--Presidential Access Scholarships.
          Chapter 4--Model Program Community Partnership and 
        Counseling Grants.
          Chapter 5--Public Information/Database and 
        Information Line.
          Chapter 6--National Student Savings Demonstration 
        Program.
          Chapter 7--Preeligibility Form.
          Chapter 8--Technical Assistance for Teachers and 
        Counselors.
    Part G--General Provisions Relating to Student Assistance 
Programs.
          (Section 486--Training in Financial Aid Services).
    Part H--Program Integrity Triad.
          (Subpart 1--State Postsecondary Review Program 
        (SPRE)).

Title V--Educator recruitment, retention, and development

    Part A--State and Local Programs for Teacher Excellence.
    Part B--National Teacher Academies.
    Part C--Teacher Scholarships and Fellowships.
          Subpart 1--Paul Douglas Teacher Scholarships.
          Subpart 2--Christa McAuliffe Fellowship Program.
          Subpart 3--Teacher Corps.
    Part D--Innovation and Research.
          Subpart 1--National Board for Professional Teaching 
        Standards.
          Subpart 3--Class Size Demonstration Grant.
          Subpart 4--Middle School Teaching Demonstration 
        Programs.
    Part E--Minority Teacher Recruitment.
          (Subpart 1--New Teaching Careers).
    Part F--Programs for Special Populations.
          Subpart 1--National Mini Corps Program.
          Subpart 2--Foreign Language Instruction.
                  Section 586--Demonstration Grants for 
                Critical Language and Area Studies.
                  Section 587--Development of Foreign Language 
                and Culture Instructional Materials.
          Subpart 3--Small State Teaching Initiatives.
          Subpart 4--Faculty Development Grants.
          Subpart 5--Early Childhood Education Training.

Title VI--International education programs

    Section 604(b)--Programs of Demonstrated Excellence in Area 
Studies, Foreign Languages, and other International Fields.
    Section 605--Intensive Summer Language Institutes.
    Section 607--Periodicals and Other Research Materials 
Published Outside the United States.

Title VII--Construction, reconstruction, and renovation of academic 
        facilities

    Part A--Improvement of Academic and Library Facilities.
    Part D--College Construction Loan Insurance Association.\1\
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    \1\ The corporation has since been privatized.
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Title VIII--Cooperative education

    Entire title is repealed.

Title IX--Graduate programs

    Part A--Grants to Institutions and Consortia To Encourage 
Women and Minority Participation in Graduate Education.
    Part B--Patricia Roberts Harris Fellowship Program.
    Part E--Faculty Development Fellowship Program.
    Part F--Assistance for Training in the Legal Profession.
    Part G--Law School Clinical Experience.

Title X--Postsecondary improvement programs

    Part B--Minority Science and Engineering Improvement 
Programs.
        (Subpart 2--Science and Engineering Access Programs).
    Part C--Women and Minorities Science and Engineering 
Outreach Demonstration Program.
    Part D--Dwight D. Eisenhower Leadership Program.

Title XI--Community service programs

    Part B--Innovative Projects.
          Subpart 1--Innovative Project for Community Service.
          Subpart 2--Student Literacy Corps and Student 
        Mentoring Corps.

Title XII--General provisions

    Section 1206--Commission to Study Postsecondary 
Institutional and Programmatic Recognition Process.
    Section 1212--Technology Transfer Centers.

Title XIII--Higher education act amendments of 1992

    Part E--Tribal Development Student Assistance Revolving 
Loan Program.
    Part F--American Indian Postsecondary Economic Development 
Scholarship.
    Part G--American Indian Teacher Training.

Title XIV--Higher education act amendments of 1992 (studies and 
        commissions)

    Part A--Studies by Department of Education.
    Part B--National Commission on Independent Higher 
Education.
    Part C--National Commission on the Cost of Higher 
Education.

Title XV--Higher education act amendments of 1992 (related programs and 
        amendments to other laws)

    Part A--National Center for the Workplace.
    Part B--National Clearinghouse for Postsecondary Education 
Materials.
    Part C--School-Based Decisionmakers.
    Part D--Grants for Sexual Offenses Education.
    Part E--Olympic Scholarships.

                II. Background and Need for Legislation

    Postsecondary education is one of the largest enterprises 
in the United States. In 1995, almost 16 million people were 
enrolled in colleges, universities, and noncollegiate 
postsecondary institutions. An additional 2.85 million people 
were working on 11,000 campuses--bringing almost 1 in 14 people 
into the community of higher learning. Each year, enrollments 
increase, and new institutions are established. More Americans 
are realizing the economic value of a college degree and the 
personal satisfaction of lifelong learning.
    Postsecondary education is also a multibillion-dollar-per-
year venture. In the 1994-95 academic year, colleges and 
universities raised almost $190 billion in current-fund 
revenues: 27 percent from tuition and fees, 38 percent from 
government, 6 percent from private gifts, 2 percent from 
endowment income, 23 percent from sales and services, and 4 
percent from other sources. These figures are almost 3 times 
higher in nominal terms than in 1980-81. The cost to students 
and families of higher education has increased substantially as 
well, with college costs rising at nearly double the rate of 
inflation for more than 15 years.
    As participation in postsecondary education continues to 
burgeon and college costs continue to rise, the Higher 
Education Act remains the single most important legislative 
initiative supporting students and institutions of higher 
education. It currently provides $48.5 billion in student 
financial assistance for 8.5 million students and $216 million 
for institutional development. In addition, 55 percent of 
undergraduates received financial assistance under this act in 
1995-96. Thirty-one percent received Federal grants, 43 percent 
received federally-sponsored loans, and 9 percent participated 
in Federal work-study.

Student opportunity

    Expanding student opportunities is a theme reflected 
throughout the act--most particularly in the grant, loan, and 
early intervention programs included in title IV. This 
legislation maintains and strengthens past efforts to increase 
access, particularly for low-income students, to improve 
college preparation, and to alleviate problems created by loan 
indebtedness. In addition, the bill takes a number of steps to 
begin to address the issue of college costs.
    Under S. 1882, students now in school will be assured of 
receiving a lower interest rate on their loans and will see 
more of their own earnings protected with respect to the Pell 
Grant awards they can receive. Students now in high school who 
aspire to a college education will continue to benefit from 
early intervention programs, including the National Early 
Intervention Scholarship Program (NEISP) and TRIO. Students who 
have graduated and are faced with exceptionally high loan 
burdens will be able to take advantage of extended repayment 
options under the guaranteed loan program.
    Paying for higher education is a growing concern of 
American students and their families. Tuition increases have 
outpaced household income by a 3-to-1 margin since 1980. Over 
the past 20 years, the average tuition has increased by almost 
400 percent at public 4-year institutions, over 440 percent at 
private 4-year institutions, and over 400 percent at 2-year 
institutions. One consequence of this has been that students 
have been forced to borrow more through Federal loan programs 
since 1990 than was borrowed in the previous 3 decades 
combined. A recent survey sponsored by the American Council on 
Education revealed that 69 percent of first-year college 
students had concerns about their ability to finance their 
educations. It is not known how many never attend school as a 
result of these same concerns.
    Hearings held by the committee illustrated the challenges 
facing students who have accumulated significant amounts of 
debt. As one example, the following account was presented in 
testimony before the committee:

          Ann and her husband are both graduate students at 
        Michigan Tech, with $20,000 plus in student loans and 
        no savings. By the time Ann and her husband have paid 
        off their loans their son will be ready to enter 
        college. They will be paying off their student loans at 
        a time when they should be saving for retirement and 
        saving for their children's education.

    In its February 1998 report, Straight Talk about College 
Costs and Prices, the National Commission on the Cost of Higher 
Education issued recommendations for controlling the costs of 
higher education and for improving information for families. 
Addressing public anxiety regarding how to pay for college, the 
report notes:

          Each member of this Commission understands this 
        anxiety. . . . We do not take lightly the public 
        concern generated by increases in tuition. Worry about 
        college prices, the difficulty of planning for them, 
        and the amount of debt they entail dominated a 
        discussion group of parents convened by the Commission 
        in Nashville in November 1997. Members of the 
        Commission are equally convinced that if this public 
        concern continues, and if colleges and universities do 
        not take steps to reduce their costs, policymakers at 
        the Federal and State levels will intervene and take up 
        the task for them.

    The committee has included numerous commission 
recommendations throughout this bill. To address the 
commission's primary recommendation that clear, comparable 
information related to college costs be made available to the 
public, the committee has directed that National Center on 
Educational Statistics to compile and make available such 
information. Other commission recommendations incorporated in 
S. 1882 include: investing in higher education; simplifying and 
improving student financial aid delivery; authorizing 
postsecondary improvement projects that promote cost 
efficiencies; providing that every institution be provided a 
complete copy of U.S. Department of Education Program Review 
guidelines and procedures; permitting institutions to cure 
inadvertent errors without penalty; and requiring the Secretary 
of Education to establish processes for ensuring that 
eligibility and compliance issues are considered simultaneously 
and for identifying unnecessary duplication of reporting and 
related regulatory requirements.

Improving teacher quality

    Currently, the Higher Education Act contains a collection 
of some 15 small teacher training programs. All of these 
programs have important, but limited, objectives, and only 1 of 
them is funded. The committee recognizes the key role that 
teachers play in making it possible for our students to achieve 
the standards required to assure both their own well-being and 
the ability of our country to compete internationally. As such, 
the committee has spent considerable time shaping a proposal 
that incorporates into a comprehensive program the good ideas 
represented in the small programs now on the books, along with 
many other useful suggestions.
    The bill takes a 2-pronged approach to helping assure that 
our Nation's elementary and secondary school teachers will be 
thoroughly prepared to offer the quality of instruction needed. 
This approach offers support at both the State level to promote 
systemwide reforms and at the local level to develop 
partnerships to enhance the quality of teacher training.
    The committee feels strongly regarding the need to break 
away from ``business as usual'' practices, to encourage 
partnerships between institutions of higher education, 
elementary and secondary schools and business leaders, and to 
ensure that teachers are prepared to addressthe needs of 
students in today's classrooms.
    The bill also encourages more students to enter the 
teaching profession and teach in underserved areas through the 
expansion of recruitment efforts, the provision of loan 
forgiveness for FFEL and Direct Loans, and the provision of 
higher loan limits in the Perkins Loan program for prospective 
teachers.

Maintaining program integrity

    The committee remains committed to assuring the integrity 
of student financial aid programs--a major focus of the 1992 
amendments to the act. The most recent national cohort default 
rate, 10.4 percent, represents the fifth consecutive year in 
which default rates have declined. The default rate now stands 
at half the level it was in the early 1990's.
    In addition to preserving the strong and effective measures 
already included in the act, the committee has taken steps to 
assure that problems that have occurred in the past are not 
repeated. In particular, the committee has developed an 
approach for dealing with the emerging field of distance 
education that offers room for innovation while providing for a 
careful evaluation of the implications such programs hold for 
student financial aid programs prior to making decisions 
regarding the lifting of current restrictions.
    The restrictions now in place were initially designed to 
curb the abusive practices of a number of correspondence 
schools. Provisions of the act state that an institution is not 
eligible to participate in title IV programs if more than 50 
percent of its courses are correspondence courses or if 50 
percent or more of the institution's students are enrolled in 
correspondence courses. These restrictions apply to programs 
offered through telecommunications as well. Most institutions 
that offer distance education courses or programs do not come 
near these thresholds and are not affected by these 
restrictions. However, although the means of delivery are 
different, distance education programs bear enough similarities 
to correspondence schools that the committee has heeded the 
advice of the many individuals and organizations who have urged 
that current restrictions not be lifted without a careful 
review.
    The Distance Education Demonstrations included in S. 1882 
permit the waiver of current statutory and regulatory 
restrictions for a small number of institutions or consortia 
and call for evaluations by both the Secretary and the National 
Academy of Sciences. Based on these evaluations, the 
demonstration program may be expanded in the future.

Improving the delivery of student financial aid

    The committee recognizes that the effective and efficient 
delivery of the Department of Education's student financial 
assistance programs is of critical importance to the students 
who rely on these programs to help finance their postsecondary 
studies. The Department was created in 1979 to promote 
excellence and equity in education--not to become one of the 
Nation's largest financial services organizations. It is 
therefore not surprising that a new, multibillion dollar 
student loan program would have its challenges. What concerns 
the committee, however, is the time that it has taken to 
rectify some very serious problems. Three pertinent examples of 
the basis for these concerns include the consolidation of 
students loans, the preparation of computer systems for the 
year 2000, and the coordination of electronic student financial 
assistance forms.
    With respect to loan consolidation, the Department 
contracted with Electronic Data Systems (EDS) in 1995 to 
consolidate student loans beginning on January 15, 1996, but 
technical problems prevented the first loans from being 
processed until 8 months later. Subsequently, the Department 
testified that its contractor had so erroneously miscalculated 
the volume of loans and the length of time required to process 
the loans that it was forced to announce on August 26, 1997, 
that it would not accept new applications until the backlog of 
84,000 applications was eliminated. This situation became so 
grave that Congress passed a 1-year emergency consolidation 
bill late last year to help students acquire consolidation 
loans through the private sector until the Department could 
again provide adequate services. Bi-weekly consolidation 
progress reports provided to the committee by the Department, 
however, suggest that a new backlog may be developing.
    The ``Year 2000'' problem is one that many computer systems 
are facing as we approach the new millennium. It is absolutely 
essential that computers involved in the delivery of student 
financial assistance function properly to ensure a continuous 
stream of disbursements, payments, and record-keeping as 
students prepare for their classes in January 2000. The most 
recent Office of Management and Budget report on this subject 
states that ``the Department [of Education] remains behind most 
other Federal agencies in becoming Year 2000 compliant, having 
completed renovation on 14 percent of the mission-critical 
systems being repaired, and not having completed validation or 
implementation of any.'' The committee is especially worried 
since the systems still out of compliance affect the National 
Student Loan Data System, student financial assistance, and 
campus-based programs. These systems are responsible for the 
accurate delivery of nearly $50 billion in financial assistance 
each year.
    Finally, the Department has had repeated difficulties with 
the contracts for the processing of the Free Application for 
Federal Student Aid (FAFSA). Two years ago, direct loan schools 
discovered that the Department's Public Inquiry Contractor 
provided the incorrect school code to students completing the 
FAFSA. All of the direct loan school codes were incorrect, 
creating substantial confusion for schools and students. Last 
year, processing was once again delayed as a result of problems 
with a contract to utilize optical scanners to process student 
aid applications more efficiently. This year, the Department 
had to rely once again upon manual processing of the 
applications as a result of problems with the contract to print 
the financial aid forms.
    The bill takes important steps to improve the delivery of 
student assistance programs. It includes provisions, developed 
in cooperation with the administration, to create a 
Performance-Based Organization (PBO) designed to strengthen the 
management of key systems within the Department of Education. 
In addition, provisions are included requiring the Secretary to 
report to the Committee on Labor and Human Resources and to the 
Committee on Education and the Workforce by March 1, 1999, 
regarding the compliance status of all mission-critical systems 
and contingency plans for any computer systems that cannot be 
brought into compliance on time.
    The committee has also attempted to identify provisions in 
the act that impede the ability of both the private sector and 
the Department to take advantage of the efficiencies made 
possible through electronic processing and other technological 
advances. Examples of the committee's interest can be found in 
provisions that: require that nonstate guaranty agencies be 
able to respond to electronic inquiries; authorize borrowers 
and lenders to provide loan disbursement and loan repayment 
information through electronic as well as written means; permit 
institutions to develop electronic exit counseling programs 
that will provide individualized financial counseling; permit 
borrowers to request deferments electronically; require the 
Secretary to develop and implement a master promissory note; 
and allow students borrowing under the FFEL program to use the 
FAFSA (including the FAFSA on the web) as their student loan 
application.

Assuring fair and healthy competition in loan programs

    The bill reflects a strong commitment to the maintenance of 
two viable loan programs--the guaranteed or Federal Family 
Education Loan Program and the Direct Loan Program.
    The most significant threat to the continuation of two 
viable loan programs is the change in the student loan interest 
rate scheduled to take effect on July 1 of this year. 
Currently, lenders are paid the equivalent of the 91-day 
Treasury bill plus 2.5 percent while a student is in school and 
3.1 percent while a student is in repayment. Students pay the 
same interest rate, capped at 8.25 percent. Beginning July 1, 
1998, the student loan interest rate will be based on the 
equivalent of the 10-year Treasury bill plus 1 percent.
    Analysts who have reviewed the effect of this change have 
concluded that allowing the scheduled rate to go into effect 
will mean the demise of the FFEL program. That outcome is 
unacceptable--given the substantial likelihood of program 
disruption. The Direct Loan program, which now handles only 30 
percent of total loan volume, simply is not in a position to 
pick up the slack.
    Attempting to resolve this problem has been one of the most 
difficult tasks facing the committee during this 
reauthorization process. The dilemma has been finding a way to 
offer students the lowest possible interest rate while assuring 
an uninterrupted flow of loan capital so that borrowing will 
even be possible.
    The provisions included in S. 1882 and adopted by the 
committee dramatically reducesthe interest rate that is charged 
to students, who will pay the equivalent of the 91-day Treasury bill 
plus 1.7 percent while in school and 2.3 percent while in repayment. 
Although it is less onerous than the impending July 1 change, the 
reduction made by S. 1882 in the interest rate paid to lenders is 
substantial. Lenders will be paid the equivalent of the 91-day Treasury 
bill plus 2.2 percent while students are in school and 2.8 percent 
while students are in repayment. This interest rate represents the best 
judgment of the committee of the level needed not only to assure that 
most private lenders will continue to make student loans but also to 
assure that small borrowers and small institutions will not face undue 
difficulties in obtaining loan capital.
    This solution is by no means perfect, nor does it reflect a 
consensus of all committee members. It does, however, reflect 
the sentiment of a majority of the members that a failure to 
act will have disastrous consequences for students and their 
families and that a better option has not yet been put forward.
    The bill also lays the groundwork for future consideration 
of an alternative to congressional rate-setting by directing 
the Secretary of the Treasury to conduct a study of the 
feasibility of employing market-based mechanisms, including 
some form of auction, for determining student loan interest 
rates.
    In addition, to the extent possible within budgetary 
constraints, the bill ``levels the playing field'' to assure 
the continuation of fair and healthy competition between the 
two loan programs. For example, S. 1882 provides for a single 
application form by permitting FFEL applicants to use the Free 
Application for Federal Student Aid. The committee also adopted 
an amendment to offer repayment incentives for Direct Loan 
borrowers so long as such incentives are cost-neutral.
    In many areas, the committee was unable to make all of the 
improvements it would have preferred, due to the high cost of 
the options under consideration. The committee is particularly 
disappointed that it was not possible to extend the provisions 
of the ``Emergency Loan Consolidation Act of 1997'' beyond 
October 1, 1998. This legislation permits borrowers to 
consolidate their Direct Loans into a FFEL consolidation 
package. In addition, it changes the interest rate calculation 
for FFEL consolidation loans so that the formula for 
calculating the interest rate on Federal Direct Loan 
consolidation loans and FFEL consolidation loans is the same. 
Prior to the enactment of this 1-year emergency legislation, a 
student who had FFEL loans could consolidate his or her loans 
through the FFEL program but could not consolidate a Direct 
Loan into a FFEL consolidation loan. A borrower who had both 
Direct and FFEL loans and who wished to consolidate them had to 
do so through the Department of Education. As further 
consideration is given to the reauthorization bill, the 
committee will continue to work to find offsetting savings that 
would permit the continuation of these consolidation 
provisions.
    Extending to FFEL borrowers the same extended repayment 
options available to Direct Loan borrowers also proved to be 
too costly. While it was not possible to make this benefit 
available to all borrowers, S. 1882 does permit a first-time 
borrower with a student loan balance in excess of $30,000 the 
option of selecting an extended or graduated repayment 
schedule.

Streamlining the act

    The committee has also attempted to relieve the regulatory 
burden on program participants while protecting program 
integrity. Examples of this effort include steps to eliminate 
the 30-day delayed disbursement requirements for first-year 
students and multiple disbursement requirements for fourth and 
fifth year undergraduates completing their degrees who are 
attending institutions with default rates 5 percent or less; to 
reduce paperwork where possible by permitting lenders and 
institutions to maintain certain documents on file rather than 
submitting them to the Department in their entirety; and to 
eliminate annual audit requirements for lenders with loan 
volumes under $5 million per year. In addition, S. 1882 
includes provisions designed to focus departmental resources on 
the review of those institutions most likely to present 
problems for student financial aid programs.
    The committee's effort to streamline programs includes the 
streamlining of the act itself. This bill takes nearly 50 
programs off the books and cuts in half--from 12 to 6--the 
number of titles in the act. A list of the programs repealed by 
S. 1882 appears at the end of the summary included in section I 
of this report.

             III. Legislative History and Committee Action

    The Higher Education Amendments of 1998, S. 1882, was 
introduced by Senators Jeffords, Kennedy, Coats, and Dodd on 
March 30, 1998. Senator Collins was added as a cosponsor on 
April 1, and Senator DeWine was added as a cosponsor on April 
29.
    Prior to the introduction of the legislation, the committee 
held 10 days of hearings. Eight of these hearings were held in 
Washington, DC, including:
    ``Administration's Proposal for Higher Education Act 
Reauthorization'' (February 27, 1997).
    ``Pell Grants and Tax Policy: Which Approach Serves Which 
Population'' (March 14, 1997).
    ``Professional Development (title V): The Role of Higher 
Education Institutions in Preparing Our Teachers for the 21st 
Century'' (March 20, 1997).
    ``Technology and the Virtual University: Opportunities and 
Challenges'' (April 16, 1997).
    ``Campus-Based Programs--Reshaping Policy to Meet the Needs 
of a Changing Student Population'' (April 23, 1997).
    ``Management of the Student Aid Delivery System'' (May 15, 
1997).
    ``Opportunity Programs: Opening the Doors to Higher 
Education'' (June 12, 1997).
    ``Access and Costs: Recommendations for Title IV'' (July 
24, 1997).
    Two field hearings were held, including:
    ``Reauthorization of the Higher Education Act'' Burlington, 
VT (February 3, 1997).
    ``Reauthorization of the Higher Education Act and the Costs 
of Higher Education'' Bangor, ME (May 5, 1997).
    In addition, the committee considered the written comments 
and recommendations submitted by approximately 100 
organizations and institutions involved in the field of higher 
education.
    On April 1, 1998, the committee met in executive session to 
consider S. 1882. The committee took action on 9 amendments. 
Five additional amendments were offered and subsequently 
withdrawn. The bill as amended was adopted by a roll call vote 
of 18 yeas to 0 nays.

      A. Amendments Adopted by Voice Vote During Executive Session

    Eight amendments were adopted in the executive session by 
voice vote, as follows:
    1. Senator Jeffords offered a manager's amendment that: (1) 
requires the Secretary to develop regulations to implement his 
discretion to allow, on a case-by-case basis, a student to 
receive two Pell Grants during a single award year (Current law 
section 402(b)(6)); (2) makes modifications to CAMPUS program 
(subpart 7 of part A); (3) adds provisions to part B dealing 
with eligible lenders omitted from earlier draft; (4) provides 
for loan forgiveness for child care workers; (5) clarifies that 
work-study employment includes internships or research 
assistantships; (6) corrects an error in award year dates in 
part F; (7) modifies athletic reporting language; (8) adds 
requirements for the Secretary to compile and make available 
certain athletic information; and (9) reinserts a clarifying 
phrase in section 211(a) of Education of Deaf Act.
    2. Senator Jeffords, on behalf of Senators Reed, Bingaman, 
and Harkin, offered 5 amendments that were adopted en bloc. 
These amendments included: (1) Reed amendment to clarify that 
educationally oriented nonprofit institutions and organizations 
are involved in the effort to improve teacher quality; (2) Reed 
amendment to modify language dealing with priorities for 
teacher training partnership funding; (3) Bingaman amendment 
related to academic majors for teacher training program 
graduates; (4) Bingaman amendment dealing with Hispanic serving 
institutions and Tribally Controlled Colleges and Universities; 
and (5) Harkin amendment reducing the number of years of 
authorization for the U.S. Institute of Peace.
    3. Senator Gregg offered an amendment to suspend loan, 
grant, and work assistance eligibility for students who have 
been convicted of drug-related offenses.
    4. Senator Harkin offered an amendment to offer repayment 
incentives for Direct Loan borrowers. The amendment was 
modified to strengthen provisions dealing with the cost 
neutrality of such repayment incentives.

           B. Roll Call Votes Taken During Executive Session

    Two roll call votes were taken during the executive 
session, as follows:
    1. Senator Dodd offered an amendment to authorize the 
Secretary of Education to fine institutions of higher education 
up to $25,000 for failing to provide the college cost 
information required to be provided under section 487 of S. 
1882. The amendment was adopted by a roll call vote of 10 yeas 
to 8 nays.
        Yeas:                         Nays:
Enzi                                Jeffords
Collins                             Coats
Kennedy                             Gregg
Dodd                                Frist
Harkin                              DeWine
Mikulski                            Hutchinson
Bingaman                            Warner
Wellstone                           McConnell
Murray
Reed

    2. The bill as amended was reported favorably by a vote of 
18 yeas and 0 nays.
        Yeas:
Jeffords
Coats
Gregg
Frist
DeWine
Enzi
Hutchinson
Collins
Warner
McConnell
Kennedy
Dodd
Harkin
Mikulski
Bingaman
Wellstone
Murray
Reed

            C. Amendments Offered and Subsequently Withdrawn

    Five amendments were offered, discussed, and subsequently 
withdrawn:
    1. Senator Kennedy offered and then withdrew an amendment 
to change the student loan interest rate paid to banks to a 
rate based on 91-day T-bill plus 1.9 percent in-school and 91-
day T-bill plus 2.5 percent in repayment, and to move to a 
market-based system to determine bank interest rates.
    2. Senator Wellstone offered and then withdrew an amendment 
to protect nonrevenue generating men's and women's sports.
    3. Senator Wellstone offered and then withdrew an amendment 
to authorize grants to combat violence against women on campus.
    4. Senator Wellstone offered and then withdrew an amendment 
to revise the distance education provisions of the bill.
    5. Senator Bingaman offered and then withdrew an amendment 
to eliminate all Federal funding from any school of education 
unless: (1) the school meets nationally recognized professional 
standards for institutional accreditation of teacher 
preparation programs, or (2) at least 75 percent of its 
graduates pass State licensure examinations on their first 
attempt.
    In addition, Senator Kennedy discussed, but did not offer, 
an amendment to authorize the High Hopes for Scholars Program. 
Senator Bingaman discussed, but did not offer, an amendment to: 
(1) Increase the TRIO authorization from $700 million to $800 
million; (2) Direct the Secretary to develop a uniform 
definition of underserved geographic areas with high dropout 
rates, using program and census data; and (3) Authorize the 
Secretary to give priority points to applications from 
underserved geographic areas with high dropout rates in 
awarding grants for amounts appropriated above $700 million in 
any fiscal year.

            IV. Explanation of the Bill and Committee Views

                      TITLE I--GENERAL PROVISIONS

    The current title I--Partnerships for Educational 
Excellence--is repealed, as programs authorized under the title 
have not been funded.
    General Provisions, now included in title XII, are 
transferred to title I. Unfunded and obsolete sections of title 
XII are repealed, including: Commission to Study Postsecondary 
Institutional and Programmatic Recognition Process (section 
1206), Aggregate Limit of Authorization of Appropriations 
(section 1211), and Technology Transfer Centers (section 1212). 
In addition, the provisions of Federal-State Relationships; 
State Agreements (section 1203) are transferred to subpart 4 of 
part A (Leveraging Educational Assistance Partnership Program). 
Provisions are also added to title I to preserve prior rights 
and obligations for facility projects under the current title 
VII (Construction, Reconstruction, and Renovation of Academic 
Facilities).

National Advisory Committee on Institutional Quality and Integrity

    With one exception, the title XII provisions transferred to 
title I are not amended by this bill. Modifications are made to 
the National Advisory Committee on Institutional Quality and 
Integrity to require the Secretary to publish the expiration 
dates of terms of members of the committee and to solicit 
nominations for vacancies on the committee. These modifications 
were made in response to concerns that the composition of the 
committee is not sufficiently representative of all sectors and 
types of institutions. Requiring public notice of the dates on 
which the terms of current committee members will expire will 
give those wishing to promote candidates for open positions a 
better opportunity to do so. The authorization for the 
committee is extended through September 30, 2004.

                  TITLE II--IMPROVING TEACHER QUALITY

    Preservice professional development for teachers and the 
role of institutions of higher education in preparing our 
Nation's teachers for the 21st century was the subject of one 
of the first higher education hearings of the 105th Congress. 
These issues are paramount due in large part to the fundamental 
role that teachers play in determining the quality of education 
in our Nation's classrooms. Without an investment in improving 
the quality of teacher preparation, the other investments we 
make in elementary and secondary education will fall short of 
expectations.
    Throughout the reauthorization process, members of the 
committee expressed great interest in teacher preparation, and 
many took an active role in shaping the program that has been 
developed for this title. Many of the ideas included in the 
Teacher Quality proposal are drawn from legislation developed 
separately by Senators Frist, DeWine, Kennedy, Bingaman, 
Murray, and Reed. The committee is appreciative of their 
involvement and input in crafting the teacher training 
legislation in S. 1882.
    Clearly, the plethora of bills demonstrate the importance 
of teacher preparation as an area of focus in the Higher 
Education Act. These new provisions underscore the important 
connection between institutions of higher education and 
elementary and secondary schools and highlight the critical 
national need to encourage programs of higher education to work 
cooperatively with States and K-12 schools. Throughout title 
II, the committee emphasizes the importance of content 
knowledge and teaching skills, together, as the basis for 
improving teacher quality. It does so by creating incentives 
for State and local initiatives, in recognition of the 
importance of each with respect to how teachers are trained. 
The committee believes that simultaneously adopting a ``top-
down'' and ``bottom-up'' approach is the best strategy for 
improving teacher quality.
    All unfunded programs previously authorized in title V of 
the Higher Education Act are repealed. The programs are 
replaced with one comprehensive program whose purpose is to 
improve student achievement, to improve the quality of the 
current and future teaching force by improving the preparation 
of prospective teachers and enhancing professional development 
activities, and to hold institutions of higher education 
accountable for preparing teachers who have necessary teaching 
skills and are highly competent in the academic content areas 
in which they plan to teach, including training in the 
effective use of technology in the classroom. The greater 
emphasis in the new title II provisions is on part A, that 
addresses the need to improve teacher quality, while part B 
provisions address the need to recruit new teachers for 
underserved areas.
    Research consistently demonstrates the strong link between 
teacher quality and student achievement, thus teacher quality 
is of critical concern to the committee. To better support 
State efforts to improve the quality of teacher preparation and 
teaching, part A of the bill includes Teacher Quality 
Enhancement Grants. States are required to use funds provided 
under this program to ensure that all teachers have the 
necessary subject matter content knowledge and the skills to 
teach effectively. Funds may also be used to hold institutions 
of higher education responsible for training prospective 
teachers in content areas; to improve teacher certification and 
licensure requirements; to provide prospective teachers 
alternatives to traditional preparation for teaching; to 
improve alternative routes to State certification; to ensure 
that schools are able to recruit and retain highly qualified 
teachers, reward excellent teachers and principals, and remove 
unqualified teachers; to support innovative efforts to reduce 
the shortage of highly qualified teachers in high poverty urban 
and rural areas; and to address the problem of social 
promotion.
    The Teacher Quality Enhancement Grants are designed to 
allow States to fund initiatives that best meet their specific 
teacher preparation and recruitment needs. States are 
encouraged to explore various State level reforms, including 
more rigorous teacher certification and licensure requirements, 
and providing high-quality alternative routes to certification.
    The committee ensures that States have broad flexibility in 
their efforts to recruit and retain highly qualified teachers. 
States are able to use their grant money to develop systems to 
reward high-performing teachers and principals.
    Studies show that the problem of attracting and keeping 
qualified teachers is most severe in high-poverty rural and 
urban areas. The least well-qualified teachers are most likely 
to be found in high-poverty schools, in both rural and urban 
areas. This is a situation that should not be tolerated, and so 
the committee allows States to use their Teacher Quality 
Enhancement Grants to develop and implement innovative efforts 
to reduce the shortage of qualified teachers in high-poverty 
areas.
    Part A also authorizes Teacher Training Partnership Grants, 
which will be made to local partnerships. Each partnership must 
include at least 1 school of arts and science, school or 
program of education, a local education agency, and a K-12 
school. In addition, the partnership must include a high-need 
local educational agency (LEA) or K-12 school. High need is 
defined as an LEA or K-12 school within a State that serves a 
large number of students from low-income families, that has a 
high percentage of teachers not teaching in the content area in 
which they were trained, or that has a low teacher retention 
rate. Partnerships may include the involvement of a State 
education agency, pre-K programs, nonprofit educational groups, 
businesses, or teacher organizations. Partnerships that involve 
businesses, however, will receive priority consideration. 
Partnerships will be eligible to receive a 1 time only grant to 
encourage reform and improvement at the local level. Grants are 
not renewable.
    The committee notes again that ``schools of arts and 
science'' are required participants in eligible Teacher 
Training Partnerships, but that this concept is not meant to be 
defined narrowly. Institutions of higher education have diverse 
academic structures and organizations, and a particular 
department can be located in different administrative units in 
different institutions. The language in the Higher Education 
Act could not specify all the possible administrative units 
within which the content areas appropriate to teacher 
preparation are housed. Therefore the term ``arts and 
sciences'' is used in the act to mean any academic 
administrative unit that offers one or more majors in 
disciplines or content areas corresponding to the subject 
matter areas in which teachers are assigned.
    It is the committee's intent that a successful partnership 
model--the professional development school--can be supported by 
this section of the Higher Education Amendments of 1998. 
Professional development schools, which are analogous to 
teaching hospitals in the medical profession, provide 
prospective teachers with sites for intensively supervised 
internships where they can work with expert practitioners and 
experience hands-on practice linked to their course work; 
enable veteran teachers to mentor prospective teachers and 
renew their own professional development; and allow teachers 
and university faculty to jointly engage in research. 
Professional development schools have shown success in 
leveraging reforms in teacher education while simultaneously 
restructuring and transforming practice in schools. The 
National Commission on Teaching and America's Future has 
recommended professional development schools as one way to 
reinvent teacher preparation and professional development and 
increase student achievement. In its 1996 report, entitled 
``What Matters Most: Teaching for America's Future'' the 
Commission wrote: ``The Nation needs many more professional 
development schools, because these partnerships between higher 
education and local schools, by harnessing theory to practice, 
improve both.''
    In addition, it is the committee's intent to allow 
partnerships to provide high quality professional development 
opportunities to veteran teachers in order to ensure that such 
teachers have updated knowledge of new teaching techniques and 
technology. Improvements in student achievement will not be 
realized unless pathways to an improved professional 
development continuum are provided to both new and veteran 
teachers.
    In awarding teacher training partnership grants, 
partnerships that involve business are given priority 
consideration. The committee believes that K-12 schools and 
institutions of higher education must make the important link 
between education and work. Establishing such links will 
provide today's students an array of learning experiences that 
will better prepare them to be active participants in the 
global economy. Encouraging the involvement of the business 
community in teacher training partnerships will make a 
significant difference in providing educators at institutions 
of higher education and at elementary and secondary schools 
with a deeper understanding of what skills are sought by 
employers--resulting in a substantial benefit to our Nation's 
students. In addition, inviting business involvement will allow 
for the possibility for partnerships to harness additional 
resources for reform efforts authorized under this title.
    The proposal includes strong accountability measures for 
both Enhancement and Partnership grants. Grant recipients may 
only continue to receive assistance after the second year of 
the grant if they have shown that they are making substantial 
progress in meeting such goals as improving student 
achievement, increasing the passage rate of teachers for 
initial State licensure or certification (in States that have 
such exams), and increasing the classes taken in core academic 
subject areas.
    The committee has authorized $300 million for fiscal year 
1999 and such sums as may be necessary for this important 
activity.

Teacher recruitment

    Many urban and rural schools face severe teacher shortages 
today; at the same time, students in those schools often need 
the most qualified teachers. The Federal Government cannot 
solve this recruitment challenge alone, but it can be a 
catalyst that stimulates the recruitment of minority teachers 
and teachers in areas of high need.
    Part B of title II, ``Recruiting New Teachers for 
Underserved Area'' has as its goal increasing the number of 
students, especially minority students, who complete high-
quality teacher preparation programs. The committee has 
authorized appropriations for this part of title II at a level 
of $37 million for fiscal year 1999 and such sums as may be 
necessary for the succeeding 4 fiscal years. The part B 
provisions replace the Minority Teacher Recruitment provision 
formerly authorized in Title V of the Higher Education Act.
    The Secretary is authorized to award 5-year competitive 
grants to partnership between institutions of higher education 
and school districts in underserved urban and rural areas. 
Together, the partners determine the needs of high-poverty 
schools in their communities, such as the need for diverse 
faculties or for teachers in particular subject areas. Having 
completed this needs assessment, the partners would identify a 
pool of potential teachers fitting those needs, recruit 
individuals from the pool, and design high quality preparation 
and induction programs tailored to those individuals. The needs 
of the respective partnerships will determinethe recruitment 
focus. Special consideration is given to applications from minority-
serving institutions and to applications most likely to result in an 
increase in the numbers of minority individuals entering the teaching 
force. The program is authorized to support scholarships for potential 
teachers. Applicants determine the funding level and number of 
scholarships to meet the needs of their students. Individuals recruited 
into this program are required to teach for at least 3 years in an 
underserved school district, defined by the poverty level. Grantees are 
required to match the Federal share of the costs of the program on an 
increasing basis in an effort to ensure that the program activities 
continue after Federal funding ends.
    The committee believes that a focused Federal investment in 
teacher recruitment, in addition to the substantial investment 
in improving teacher quality, can make a significant impact on 
the development and improvement of teachers.

                  TITLE III--INSTITUTIONAL DEVELOPMENT

    Over the past 6 years, increasing attention has been paid 
to the tremendous benefit, both to society and to the 
individual student, of a college education. As public awareness 
of the benefits of a college education has grown, so too has 
public frustration grown with the pace at which the cost of 
attending college has risen. Lost in this debate has been the 
role played by the many small private and public institutions 
that strive to serve first generation and low-income students 
at a reasonable cost. These institutions generally serve local 
and regional needs and do not have the financial or 
administrative resources of their more well-known counterparts. 
Nonetheless, they serve a vital role in our education system 
and provide educational opportunities to students who would 
otherwise be overlooked.
    Title III is the Higher Education Act's largest source of 
direct Federal assistance to these institutions of higher 
education. First authorized in 1965, this title has provided 
support to disadvantaged institutions to strengthen and enhance 
their academic programs and services to students and to support 
their efforts to seek financial stability and independence. 
Title III funds have been utilized to strengthen endowments, 
fund linkages between institutions of higher education, and 
support model programs designed to improve access and reduce 
the cost of delivering education to nontraditional students. As 
amended by this act, title III consists of 6 parts: Part A--
Strengthening Institutions; part B--Strengthening Historically 
Black Colleges and Universities; part C--Endowment Challenge 
Grants; part D--Historically Black College and University 
Capital Financing; part E--Minority Science and Engineering 
Improvement Programs; and part F--General Provisions.

Part A--Strengthening institutions

    Part A provides funds to institutions of higher education 
that serve a large percentage of students receiving need-based 
aid and that have lower than average expenditures per student. 
These funds may be utilized for faculty development, efforts to 
improve institutional management, equipment acquisition, joint 
use of facilities with other institutions and the provision of 
student services. The committee strongly supports continuation 
of part A as a valuable resource for strengthening the academic 
programs and the administrative capacity of these institutions 
and has authorized $135 million for fiscal year 1999 and such 
sums as may be necessary for each of the 4 succeeding years. 
The committee strongly encourages the Committee on 
Appropriations to direct more funding to this important 
program.
            Educational technology
    Over the past 6 years, advances in technology have 
dramatically affected the delivery and administration of 
education and training. In January 1993, the National Science 
Foundation assumed responsibility for registering Internet 
users as part of an effort to expand Internet access to college 
and university researchers. Five-years later, the Internet has 
become a part of every day life and Internet access has become 
an important tool for faculty development, institutional 
management, and the delivery of education. With the advent, 
however, of the Internet II and the Next Generation Internet, 
technology threatens to become a dividing line between 
successful and unsuccessful institutions. Institutions that are 
only beginning to master the possibilities of the Internet must 
begin planning now to build the infrastructure needed to fully 
avail themselves of these emerging technologies.
    In order to assist title III institutions with these 
emerging challenges, the committee has amended the list of 
authorized activities to encourage institutions to use title 
III funding to plan for and acquire new technologies. It is the 
committee's expectation that the Department will work closely 
with institutions that receive funding under this part to 
assist them with planning for and acquiring new electronic 
technologies.
            Applications
    The committee is concerned by reports that many eligible 
institutions do not apply for title III funds because they lack 
experience with sponsored programs and lack the administrative 
resources needed to commit successfully to the grant 
preparation process. In order to encourage less experienced 
colleges and universities to participate in title III, the 
committee encourages the Department, where appropriate, to 
provide technical assistance and/or develop a pre-application 
process.
            Section 316--American Indian tribally controlled colleges 
                    and universities
    In recognition of the challenges faced by Native American 
institutions of higher education, in 1978 the Congress enacted 
the Tribally Controlled Community College Assistance Act. This 
act authorized the Federal Government to spend $5,820 per full-
time Native American student each year. Despite the growing 
needs of the student population that is being served, the 
appropriations under this act have only grown to about $2,992 
per full-time student.
    Tribally Controlled Colleges and Universities have 
succeeded nonetheless. Currently, 31 institutions enroll more 
than 25,000 students across the country. More than 40 percent 
of the students receiving associate degrees or vocational 
certificates go on to pursue more advanced degrees in 4-year 
colleges or universities and students who attend Tribal 
colleges for as little as 1 year and then transfer to another 
college are 4 times as likely to complete their degree as 
Native American students who go straight into other colleges or 
universities. Ninety percent of the graduates of these 
institutions are employed.
    In order to build upon this success, and expand the 
capability of these institutions, the committee has created a 
new section 316, which authorizes $5 million in fiscal year 
1999 and such sums as may be necessary for each of the 4 
succeeding years. These funds may be used to plan, develop, and 
implement activities designed to improve or expand the ability 
of the institution to serve Indian students.

Part B--Strengthening historically black colleges and universities

    Shortly after the Emancipation Proclamation, 24 private 
Black colleges were created through the support of church 
groups and the Freedman's Bureau. A few States established 
public institutions for African Americans during this period 
but the major impetus for the creation of publicly funded 
education opportunities came about with the enactment of the 
second Morrill Act in 1890. Today, numbering approximately 100 
institutions, HBCU's enroll less than 20 percent of all African 
American undergraduates but award more than one-third of all 
bachelor's degrees to African Americans. This current success 
is consistent with the historical role played by HBCU's. Over 
the years, HBCU's have educated nearly 40 percent of this 
country's African American college graduates, 75 percent of 
African American Ph.D.'s, 46 percent of all African American 
business associates, 50 percent of African American engineers, 
80 percent of African American Federal judges, and 85 percent 
of all African American doctors.
    In 1986 the important role of HBCU's was formally 
recognized through the redesignation of part B of title III as 
Strengthening Historically Black Colleges and Universities. 
Funds were authorized for the acquisition of laboratory 
equipment, the renovation and construction of instructional 
facilities, faculty exchanges, academic instruction, the 
purchase of educational materials, tutoring, counseling and 
student services. The committee has expanded this authority to 
permit institutions to use not more than 20 percent of the 
funds they receive under this part to build and/or strengthen 
their endowments.
            Section 326--Strengthening historically black graduate 
                    institutions
     In addition to the grants provided to eligible 
undergraduate HBCU's, the Higher Education Act Amendments of 
1987 provided authority to award grants to 5 black professional 
and graduate institutions--Morehouse School of Medicine, 
Meharry Medical School, Charles R. Drew Postgraduate Medical 
School, Atlanta University, and Tuskegee Institute School of 
Veterinary Medicine. The Higher Education Technical Amendments 
Act of 1987 provided thatMorehouse School of Medicine would 
receive no less than $3 million of the funds appropriated under this 
section. The Higher Education Act Amendments of 1992 expanded 
eligibility to include 11 additional black graduate and professional 
schools and programs.
    The definition of eligible institution currently contained 
within the act is applied inconsistently and allows some 
institutions to secure funding for any qualified graduate 
programs while others are restricted to the school or program 
specified in the statute. In order to allow institutions to 
utilize funds more effectively, the committee has amended the 
definition of eligible institution to allow all institutions 
that are currently eligible for funds under this section to 
utilize section 326 funds in support of any qualified graduate 
program.

Part C--Endowment challenge grants for institutions eligible for 
        assistance under part A or part B

    Endowment Challenge Grants support the establishment or 
expansion of endowment funds at recipient institutions. The 
committee is strongly committed to this program and believes 
that every effort should be made to assist eligible 
institutions in achieving financial security and independence 
through endowment building. The committee has simplified the 
funding formula to reflect historical and anticipated funding 
levels. In order to maximize the number of institutions that 
may benefit from this program, the committee has limited the 
maximum grant to $500,000.

Part D--Historically black college and university capital financing 
        program

    The HBCU Capital Financing Program was established in 1992 
as part of an effort to assist eligible institutions in their 
efforts to borrow funds from the private sector in support of 
the construction and renovation of academic facilities. This 
program provides a cost-effective means of supporting the 
efforts of HBCU's to rebuild their campuses. In order to more 
accurately reflect the needs of these institutions, the 
definition of an eligible project has been expanded to include 
facilities used for the administration of educational programs, 
student centers or student unions, maintenance, storage, or 
utility facilities, and outpatient health care facilities 
constructed for use by students or faculty.

Part E--Minority science and engineering improvement program

    The Minority Science and Engineering Improvement Program 
was established under the authority of the National Science 
Foundation's Organic Act of 1950. In 1979, this program was 
transferred from the National Science Foundation to the newly 
established Department of Education where it has emphasized 
efforts to strengthen undergraduate science and engineering 
education at institutions with a minority enrollment of at 
least 50 percent. Beneficiaries have included Tribal colleges, 
Hispanic-Serving Colleges and Universities, and HBCU's. Funds 
are utilized to purchase equipment, develop curricula, and 
support advanced faculty training. The committee has amended 
the definition of science, contained within this part, to 
broaden opportunities for minority students to study behavioral 
sciences.
    The committee strongly supports the efforts of both the 
Department of Education and the National Science Foundation to 
increase the number of minority students pursuing careers in 
science and engineering. The committee urges the Department to 
work closely with NSF to coordinate these efforts and to ensure 
that students participating in programs supported under Part E 
are made aware of opportunities to participate in graduate 
programs supported by the National Science Foundation.

                 TITLE IV--STUDENT FINANCIAL ASSISTANCE

Part A--Grants to students in attendance at institutions of higher 
        education

            Federal Pell Grant Program
    The Pell Grant program is the foundation of our Federal 
investment in higher education. The fundamental focus of the 
program is to remove financial barriers to postsecondary 
attendance and ensure that students, regardless of income 
level, are able to pursue postsecondary education at 
institutions of their choice. The Pell Grant program is 
especially important in equalizing access to higher education 
for low-income families, who send their children to college at 
lower rates than high income families. Forty-seven percent of 
students receiving the Pell Grant have incomes below $9,000 
(1994-95 figure). The committee made a number of changes to the 
Federal Pell Grant program in an effort to ensure that students 
continue to have access to postsecondary education. Other 
changes were made to simplify the program.
    The name of the program has been changed throughout the 
bill from Basic Education Opportunities Grants to the Federal 
Pell Grant program for purposes of simplification and clarity. 
The Federal Pell Grant maximum award is increased in S. 1882 to 
$5,000 in academic year 1999-2000, and increases by $200 each 
succeeding academic year, reaching a level of $5,800 by 
academic year 2003-2004. Increasing the Pell Grant maximum 
award is an expression of the committee's continued commitment 
to strengthen the program and assure that it continues to hold 
the promise of assuring access for students with financial need 
as it has done in the past.
    This section also includes new language requiring the 
Secretary to promulgate regulations implementing a provision 
that gives the Secretary the authority to allow a student to 
receive two Pell Grants during a single award year. It is the 
committee's hope that if sufficient funds are available, this 
provision may be adopted by the Secretary. By making the Pell 
Grant available for summer school, highly motivated students 
will receive a long-term benefit of reduced costs and fees 
incurred as a result of finishing their courses of study 
earlier than otherwise would be possible.
    In recognition of the greater use of technology, the 
committee has included language that allows the Department of 
Education, after a formal comment period, to institute an 
accurate and more timely payment process to replace the 
mandatory 85 percent advance funding of Pell Grant funds to 
institutions. It is the committee's intent to anticipate and 
allow for institutions and the Department to implement a 
technologically advanced payment processing system while 
assuring that any move to a ``just in time'' payment method is 
not undertaken prior to being assured by institutions of higher 
education and the Department that the new system is fully 
operational and will assure no service interruption for 
students and institutions.
    The step function for the minimum Pell Grant is eliminated. 
The minimum Pell Grant continues to be set at $200 and those 
students who qualify for a $200 Pell will now receive a $200 
Pell Grant. Allowances for dependent child care expenses were 
increased by making provisions in this section consistent with 
the related provisions in part F--Need Analysis.
    The bill sets a time limit on the period during which a 
student may receive a Federal Pell Grant. A student will not 
receive a Pell Grant for more than the full-time equivalent of 
150 percent of the period normally required to complete the 
first undergraduate degree pursued by the student in which the 
student is enrolled, as determined by the institution. First 
recommended by the Department of Education, this provision is 
intended to strike a balance between allowing a financially 
needy student sufficient time to successfully complete a 
degree, while preventing abuse of the program by students 
taking excessive time to complete a course of study. In 
addition, it is hoped that by limiting the period of 
eligibility for the Federal Pell Grant, students will be 
motivated and encouraged to complete their studies in a timely 
manner. Data suggests that the vast majority of students 
continue to complete their undergraduate degrees within the 
time period allowed by this proposal and they would be 
unaffected by this change.
    In another effort to ensure the continued and strengthened 
integrity of the Pell Grant program, provisions relating to the 
eligibility of English as a Second Language ``stand alone'' 
programs are tightened substantially. Students participating in 
``stand alone'' English as a Second Language courses would now 
be required to take an independently administered exam as a 
measure of minimal English proficiency. An English as a Second 
Language program's eligibility for participation in the Federal 
Pell Grant program would be based on a minimum percentage of 
the program's graduates passing one of the tests of English 
proficiency approved by the Secretary.
            TRIO Programs
    The TRIO programs provide beneficial support to students 
who are in need of early intervention service and assure 
greater access, retention, and success in the pursuit of 
postsecondary studies for eligible participating students. The 
committee strongly reiterates its commitment to investing in 
early intervention and outreach programs by increasing the 
authorization level for the TRIO programs and making other 
modest changes to those sectionsof the Higher Education Act 
related to TRIO.
    There is a growing need for expanded early intervention 
services and programs. Recent studies have shown that there are 
a variety of factors that present barriers to entry into 
postsecondary education. For first-generation students, those 
factors include having less direct knowledge of the benefits of 
postsecondary education, lack of knowledge about college 
admissions and the financial aid process. According to a recent 
study entitled, ``Missed Opportunities: A New Look at 
Disadvantaged College Aspirants,'' many first generation 
students did not complete ``as many of the pipeline steps 
necessary for enrollment in a 4-year institution.'' 
``Pipeline'' steps for enrollment in a 4-year institution are 
defined as aspiring to a bachelor's degree, being prepared 
academically, taking entrance exams, applying to a 4-year 
college and enrolling in a 4-year institution. In fact, the 
report states that ``40 percent of first-generation students 
failed to take any of the 5 pipeline steps, compared to only 7 
percent of students whose parents have a bachelor's degree.'' 
Facts such as this demonstrate the need for strengthening and 
providing continued support for programs like TRIO.
    The 1,900 TRIO programs provide benefits to 700,000 
students nationwide. Two-thirds of students in the TRIO 
programs come from families with incomes under $24,000 and 
where neither parent graduated from college. Even with the 
substantial investment that the Federal Government makes in the 
TRIO programs, less than 5 percent of the TRIO eligible 
population is served. While the committee is encouraging growth 
in the TRIO program by increasing the authorization level to 
$700 million in fiscal year 1999, and such sums as may be 
necessary in the 4 succeeding fiscal years, it is the hope of 
the committee that some of the changes made in this legislation 
will encourage TRIO programs to explore and implement ways to 
replicate their successful practices.
    The committee strongly encourages the TRIO community to 
make a greater effort to serve more TRIO eligible students by 
working in partnership with other programs, replicating program 
best practices, and sharing information about how best to meet 
the needs of first-generation, low-income and disabled 
students. Even with the growing Federal investment in TRIO, 
there are too many students in need of outreach services who 
are not receiving any support. The success that TRIO projects 
have had in meeting the needs of low-income, first-generation 
college students must be shared with other service providers 
through any appropriate means in an effort to meet the growing 
need that exists in communities throughout the Nation.
    The minimum grant levels for the various TRIO programs are 
increased. These increases are balanced and measured. They will 
allow the TRIO programs to continue to provide comprehensive 
services to students and ensure that services are not diluted 
because minimum grants are not maintaining pace with inflation, 
while providing sufficient funds for new TRIO projects. The 
committee recognizes the importance of striking a balance that 
ensures intensity of services are maintained and that allows 
for growth in new programs.
    The bill permits TRIO directors to administer more than 1 
program for disadvantaged students. This clarification of 
current law will ensure that all programs for students in need 
of assistance are better coordinated. The committee believes 
that this will make a difference in ensuring that there is a 
better exchange of information between TRIO programs and other 
programs designed to encourage success in postsecondary 
education.
    The authorized activities in the Talent Search Program are 
expanded to include activities designed to acquaint youth with 
careers in which individuals from disadvantaged backgrounds are 
underrepresented. Such activities provide both incentives for 
young people to pursue postsecondary education and first-hand 
knowledge of what careers are possible if they pursue 
postsecondary education. In addition, the committee recognizes 
the importance of maintaining program intensity in Talent 
Search as well as in Educational Opportunity Centers and 
encourages TRIO programs to continue to make appropriate per 
student investments.
    The authorized activities in Upward Bound are also expanded 
to include summer work-study and to permit higher stipends for 
those Upward Bound students participating in summer work study 
positions. Many of the students participating in Upward Bound 
cease to participate during the summer months because they are 
required to find paying jobs to support themselves or their 
families. Increasing the summer stipends for summer work-study 
to $300 a month for June, July, and August is intended to 
decrease the ``dropout rate'' of students participating in 
Upward Bound.
    The most significant changes to the TRIO program are made 
to section 402H of the act relating to program evaluation. The 
new Evaluation and Project Improvement and Dissemination 
Partnership projects provision included in S. 1882 will reserve 
up to 2 percent of TRIO funds for Evaluation and Dissemination/
Partnership grants. The new Dissemination/Partnership provision 
encourages partnerships between TRIO programs and other 
institutions and community-based organizations offering 
programs or activities serving at-risk students. The committee 
intends for this provision to encourage TRIO programs to 
provide technical assistance and disseminate program best 
practices to non-TRIO programs that share the common goals of 
increasing access to and success in postsecondary education for 
low-income, first-generation college students. The committee 
believes that this will provide a means of ensuring a greater 
number of TRIO eligible students receive needed early 
intervention and outreach services as well as further emphasize 
the committee's interest in encouraging TRIO programs to share 
and replicate program best practices.
    This shift in focus of section 402H of the Higher Education 
Act requires a commitment to change and innovation on the part 
of the TRIO projects. By stretching the Federal dollar, it is 
the committee's hope that this provision will have a 
substantial impact on ensuring that more first-generation 
college students receive the benefits of the TRIO.
            National Early Intervention Scholarship and Partnership 
                    Program
    The National Early Intervention Scholarship and Partnership 
(NEISP) program was first authorized as part of the Higher 
Education Amendments of 1992. Since its inception, this program 
has had a significant impact on the lives of young people in 
the 9 States that receive funding under its authority. The 
committee recognizes the need for greater investment in early 
intervention programs that prepare and encourage students to 
pursue studies beyond high school and has therefore maintained 
the authorization level of NEISP at $200 million for fiscal 
year 1999 and such sums as may be necessary for the 4 
succeeding fiscal years. It is the committee's desire that 
Congress provide a more substantial investment in the National 
Early Intervention Scholarship and Partnership program so that 
a greater number of students in more States will benefit from 
the early intervention, outreach, mentoring and scholarship 
assistance that NEISP provides.
            Federal Supplemental Education Opportunity Grants
    The Federal Supplemental Education Opportunity Grants 
(SEOG) program provides important need-based grant aid to 
students, helping them to pursue postsecondary education. The 
Federal investment in grant assistance is critically important 
and the committee recognizes the need to strengthen and expand 
the current Federal grant programs.
    One of three campus-based programs, the SEOG program is 
administered by institutions and allows for flexible 
decisionmaking at the institutional level while maintaining a 
strong commitment to providing grant aid to those students who 
demonstrate financial need. It is the kind of investment that 
helps bridge the gap for our neediest students and makes it 
possible for them to pursue higher education.
    The committee strongly supports the SEOG program and has 
made a minimal number of changes to the program. The changes 
adopted by the committee are intended to reaffirm the 
committee's commitment to SEOG and increase program flexibility 
with the goal of better serving students.
    S. 1882 increases the authorization level for the SEOG 
program to $700 million for fiscal year 1999 and such sums as 
may be necessary for each of the 4 succeeding years. This 
represents an increase over the previously authorized level of 
$675 million. It is the committee's intent to encourage the 
appropriators to continue to make a substantial investment in 
the SEOG program.
    In an effort to eliminate burdensome provisions, the 
current reference to setting aside a specific percentage of 
grant funds to less than full-time or independent students has 
been eliminated. SEOG funds are currently readily available to 
less than full-time and independent students and the required 
monitoring of the current law increases the administrative 
burden to institutions without providing any advantage to the 
intended recipients. In an effort to provide greater 
flexibility in the program, S. 1882 authorizes institutions to 
carry-back and carry-forward 10 percent of the institution's 
SEOG funds. This too will provide added flexibility to 
institutions in their efforts to better serve the needs of 
students, especially those needs that might be unanticipated.
            Grants to states for state student incentives
    Like the SEOG program, the State Student Incentive Grant 
program (SSIG) provides desperately needed Federal grant aid to 
students. The SSIG program is unique in that none of the 
Federal dollars made available for the program are used for the 
administration of the SSIG program--each Federal SSIG dollar 
goes directly into the hands of students. In addition, the SSIG 
program requires a strong level of commitment by the States and 
Federal dollars allotted to SSIG are required to be matched on 
a dollar for dollar basis by participating States leveraging 
additional funds for students to pursue higher education.
    It is the view of the committee that the SSIG program 
represents a wise investment of Federal resources and that this 
unique partnership between the States and the Federal 
Government should be continued and expanded. The committee 
believes that further reductions in appropriations for SSIG 
will have a negative impact on the availability of much needed 
grant assistance for our Nation's students. The committee 
encourages the appropriations committee to consider the far 
reaching changes adopted during the reauthorization process and 
provide increased funding for this program.
    In an effort to strengthen, revitalize, and improve the 
program, the committee has adopted, with minor modification, a 
proposal that was introduced as separate legislation (S. 1644) 
by Senators Reed and Collins. The provisions adopted by the 
committee rename the SSIG program the Leveraging Educational 
Assistance Partnership (LEAP) program and includes a number of 
significant changes that will leverage new State dollars for 
grant assistance and provide States with flexibility as to how 
funds can be best spent to meet the needs of their students.
    Funds appropriated to the LEAP program that exceed $35 
million must be matched by States on a 2:1 basis. This exceeds 
the 1:1 match that is currently required. States will have the 
authority to use new LEAP funds to provide support for eligible 
students who demonstrate financial need through activities such 
as increasing current scholarship or work-study aid; carrying 
out transition programs from secondary to postsecondary school; 
making funds available for community service work-study jobs; 
creating a postsecondary scholarship program for students who 
wish to enter teaching or a program of study leading to a 
degree in math, computer science, or engineering; carrying out 
early intervention programs, mentoring programs and career 
education programs; or awarding merit or academic scholarships. 
The committee is appreciative of Senator Abraham's input in 
suggesting improvements in the LEAP program. The committee has 
adopted his proposal that allows States to use new LEAP funds 
for a scholarship program for students who wish to enter a 
program of study leading to a degree in math, computer science, 
or engineering.
    In adopting these changes, the committee reiterates its 
commitment to this prudent Federal investment in a State/
Federal partnership and to the improvement of a strong Federal/
State program that provides real incentives to States to 
increase their investment in need-based aid.
            Special programs for students whose families are engaged in 
                    migrant education
    The High School Equivalency Program (HEP) and the College 
Assistance Migrant Program (CAMP) provide support and 
educational services to migrant children. The authorization 
levels for the HEP and CAMP programs are increased in S. 1882 
to $25 million and $10 million, respectively for fiscal year 
1999 and such sums as may be necessary for each of the 4 
succeeding years. By increasing the authorization levels for 
these important programs, the committee reiterates its 
continued commitment to providing needed assistance to our 
Nation's migrant students.
            Robert C. Byrd honors scholarship program
    The Robert C. Byrd Honors Scholarship Program is a State-
based program that makes grant aid available to students who 
have demonstrated outstanding academic achievement and show 
promise of continued academic achievement. The Byrd Scholarship 
program is fundamentally sound and the committee has made only 
1 change to the program, by increasing the authorization of 
appropriations to $45 million in fiscal year 1999 and such sums 
as may be necessary for each of the 4 succeeding years in 
recognition of the continued strong congressional support that 
exists for this Federal program.
            CAMPUS
    The committee has included a modified version of Senator 
Dodd's CAMPUS Act (S. 1151) as part of S. 1882. The committee 
believes that the inclusion of this proposal will support the 
participation of low-income parents in post secondary education 
through the provision of campus-based child care. The Secretary 
of Education may award 3 year grants to institutions of higher 
education to assist the institution in supporting or 
establishing acampus-based child care program serving the needs 
of their low-income students. The committee has authorized 
appropriations for this program at $60 million for 1999 and 
such sums as may be necessary for the 4 succeeding fiscal 
years.
    Campus-based child care is vitally necessary for parents 
attending college. Unfortunately, it is often difficult to 
access, particularly for low income parents. Campus-based child 
care is conveniently located, available at the right hours, 
generally of high quality, and often at lower costs. It is the 
committee's view that supporting university based child care 
continues the central goal of Federal higher education policy, 
to increase access to higher education.

Part B--Federal Family Education Loan Program

    In January 1997, as part of the process of preparing for 
the reauthorization of the Higher Education Act, the committee 
called upon members of the higher education community to offer 
their recommendations for the enhancement and improvement of 
Federal student aid programs. These recommendations revealed 
general satisfaction with the basic structure of the student 
aid programs but identified several areas that must be 
addressed: program simplification; debt management relief; 
program integrity; student loan interest rates; and guaranty 
agency financing. The committee implemented many of those 
recommendations.
            Program simplification
    The committee has striven to balance the need for program 
simplification with the need to ensure the continued integrity 
of the student financial assistance programs. In particular, 
efforts have been made to encourage the use and application of 
electronic technology where its use will be most effective. 
Examples of this effort can be found in the provisions that: 
(1) require that nonstate guaranty agencies be able to respond 
to electronic inquiries; (2) authorize borrowers and lenders to 
provide loan disbursement and loan repayment information 
through electronic as well as written means; (3) permit 
institutions to develop electronic exit counseling programs 
that will provide individualized financial counseling; (4) 
permit borrowers to request deferments electronically, (5) 
require the Secretary to develop and implement a master 
promissory note; and (6) allow students borrowing under the 
FFEL program to use the FAFSA (including the FAFSA on the web) 
as their student loan application.
    The committee has also worked to reduce unnecessary 
paperwork and to provide regulatory relief to institutions with 
low cohort default rates. While many of these improvements will 
be invisible to the borrower, they offer great promise for 
improving the efficiency of the delivery system. In this 
spirit, S. 1882 exempts institutions with cohort default rates 
of 5 percent or less from the obligation to delay the 
disbursement of loans provided for first-year students and from 
the obligation to provide multiple disbursement for loans 
provided for the final semester of a student's final year of a 
baccalaureate program. In addition, the committee has included 
a provision that reduces the amount of unnecessary information 
that an institution of higher education must transmit to a 
lender as part of the loan certification and origination 
process. The committee estimates that these provisions will 
provide regulatory relief to more than 2,000 institutions of 
higher education.
            Debt management relief
    The committee is deeply concerned about the rapidly 
escalating debt burden that students are being asked to 
shoulder. S. 1882 provides students with Federal Family 
Education Loan program debt equal to or greater than $30,000 to 
elect to repay their debt under graduated or extended repayment 
terms. In addition, the committee bill allows students to 
receive the benefit of a forbearance of payments on their 
student loans immediately upon request even though all of the 
documentation needed to verify eligibility for the forbearance 
is not yetavailable. Lenders and students will have 60 days to 
collect the appropriate paperwork and interest will not be capitalized 
during this 60-day period. Finally, S. 1882 simplifies the rules 
governing loan consolidation to permit a student to include within a 
subsequent consolidation loan any loans that were originated prior to 
an earlier consolidation loan. Under current law these loans lose all 
eligibility for consolidation within the FFEL program.
    The committee bill as reported also contains a provision 
that permits the Secretary of Education to offer incentives to 
encourage borrowers to maintain timely repayment histories. 
These incentives may only be offered if the Secretary 
determines that the incentives will not result in any increased 
program costs and are in the best interest of the Federal 
Government. The committee looks forward to working closely with 
the Secretary to further explore cost effective ways to 
encourage students to repay their student loans in a timely 
fashion.
    While the committee chose not to raise student loan limits, 
we are very supportive of the Secretary of Education's efforts 
to provide additional support to students who would have 
formerly qualified for the Health Education Assistance Loan 
program. HEAL was administered by the Department of Health and 
Human Services and provided loans to assist students pursuing 
advanced health degrees. In recognition of the high costs, HEAL 
had substantially higher loan limits than guaranteed or direct 
student loans. However, the program was administratively 
complex and duplicative of the Department of Education's 
student loan programs and was eliminated by Congress in 1995. 
While the committee is pleased that the Secretary has used his 
existing authority to raise loan limits for students attending 
institutions that participated in the HEAL program until 1995, 
the committee strongly believes that the Secretary should 
extend this flexibility to students who participated in the 
HEAL program during the 4 years prior to its elimination. This 
would ensure that students at institutions that responded 
responsibly to the likely elimination of the HEAL program with 
an early transition out the program are not unfairly penalized.
            Program integrity
    S. 1882 retains the current cohort default rate provisions 
that prohibit institutions from participating in the FFEL and 
Federal Direct Loan programs if their cohort default rates 
exceed 25 percent for 3 consecutive years. The committee is 
concerned, however, that too many institutions are abusing the 
appeal process to the detriment of students. In order to 
further protect the Federal interest, the committee bill 
requires that if an institution elects to continue to 
participate in the student loan programs while appealing a loss 
of eligibility resulting from a high default rate, the 
institution must provide the Secretary with a letter of credit 
that is sufficient to cover the institution's potential 
liabilities. If the institution is unsuccessful in its appeal, 
the institution shall be required to pay the Secretary an 
amount equal to the amount of interest, special allowance, 
reinsurance, and any related payments made by the Secretary 
with respect to loans made to the institution's students under 
this part.
    The committee recognizes, however, that penalties that are 
tied to cohort default rates may unfairly penalize some 
institutions with low student loan participation rates. As a 
result, S. 1882 has provided a special rule that exempts 
institutions with a participation rate index of .0375 for any 
of the 3 most recent fiscal years from the sanctions that 
result from exceeding the threshold cohort default rate. In 
addition, the committee has provided institutions of higher 
education with the authority to elect to chose the loan 
programs in which they will participate. This will allow low-
cost institutions, like community colleges, to elect to 
participate only in the subsidized or unsubsidized FFEL or 
Federal Direct Loan programs.
    In addition, the committee bill acknowledges the special 
challenges faced by HBCU's and Tribal Colleges. Provisions have 
been included that require such institutions that have high 
default rates to work closely with the Secretary to develop and 
implement a default management plan that will bring their 
institutional cohort default rates down below 25 percent. The 
Secretary is authorized the terminate the program eligibility 
of an institution that fails to meet the requirements of this 
provision.
            Guaranty agency financing
    The new guaranty agency financing model included within the 
reported bill is the product of consultations with the guaranty 
agencies, lenders, and the Department of Education. The goal of 
the model is to achieve cost-savings and efficiencies in the 
delivery and administration of student aid while ensuring that 
students, lenders, the Federal Government and institutions of 
higher education receive high quality service. In order to 
achieve cost-savings, the model recalls $200 million in reserve 
funds to the Federal Treasury. Between this recall, and the $1 
billion recall mandated by the Balanced Budget Act of 1997, 
guaranty agencies will return over $1.2 billion in reserve 
funds to the Treasury over the next 5 years.
    In order to encourage greater administrative efficiency and 
improve customer service, the model places all current Federal 
reserve funds in a new Federal Student Loan Reserve Fund. 
Assets contained within this fund are the sole property of the 
Federal Government and may only be used for the payment of 
lender claims and the payment of default prevention fees. None 
of these funds, including the interest earned on these funds, 
may continue to be used for the operation and administration of 
the agencies. Instead, the guaranty agencies will be authorized 
to establish a new agency operating fund out of which they must 
cover the costs of operating the guaranty agency, including, 
but not limited to: originating and servicing loans, preventing 
defaults, collecting on defaulted loans, lender and 
institutional training and oversight, and outreach to students, 
parents, teachers, and guidance counselors.
    Under current law, all funds administered by a guaranty 
agency are the property of the Federal Government and subject 
to recall by the Secretary or the Congress. As a result, 
guaranty agencies have little incentive to operate more 
efficiently. Under the new model, the Federal Student Loan 
Reserve Fund will remain the sole property of the Federal 
Government but guaranty agencies will be required to establish 
their own operating funds. Federal assets contained within the 
reserve fund will be protected and their use will be strictly 
regulated by the Secretary. By the end of 5 years, guaranty 
agencies will be required to fund their operations totally out 
of fees received for the provision of services and will be able 
to benefit from any operating efficiencies they achieve with 
regard to their own operating fund.
    The new model also increases the incentives to prevent 
default by increasing guaranty agency risk sharing. Under 
current law, the Federal Government reimburses guaranty 
agencies for 98 percent of the outstanding principal and 
applicable interest of a defaulted loan that a guaranty agency 
must pay to a lender in response to a lender claim. Under the 
new model, the Federal Government will reduce this 
reimbursement to 95 percent. The new model creates further 
incentives for default prevention by decreasing the amount of 
funds retained by a guaranty agency on defaulted loans from 27 
percent to 24 percent. The new model further encourages default 
prevention by reforming preclaims and supplemental preclaims 
assistance and replacing it with a new payment for default 
aversion. Under current law, guaranty agencies are reimbursed 
for loans that do not go into default. Critics of this approach 
have expressed concern that guaranty agencies are being 
reimbursed whether or not the borrower has established a 
consistent repayment pattern that keeps the borrower from 
reentering default. Under the new model, guaranty agencies will 
only receive a default aversion fee for those accounts that the 
borrower actually brings current. In addition, guaranty 
agencies will only receive a default aversion fee once on any 
student loan unless the student remains current for 24 
consecutive months before once again becoming delinquent.
    The new model attempts to more clearly define the services 
for which guaranty agencies will be reimbursed and links them 
more directly to the sources of revenue. Revenue and assets 
that remain the property of the Federal Government are clearly 
protected in order to ensure their continued availability and 
proper use. Guaranty agencies will be able to invest nonfederal 
funds in new technology, training, and service improvements for 
the benefit of students, institutions of higher education, 
lenders and the Federal Government. Guaranty agencies will also 
be permitted to use their funds for other student financial aid 
activities, including mentoring programs, State grant and 
scholarship programs, early intervention programs, and other 
services that meet the local needs of students, families, and 
institutions of higher education within the States they serve.
    S. 1882 also includes a new provision that authorizes the 
Secretary of Education and guaranty agencies to enter into 
voluntary flexible agreements in lieu of their existing 
participation agreements. Under these agreements, the Secretary 
is authorized to waive requirements under subsections (b) and 
(c) of section 428 but may not waive any statutory requirement 
pertaining to the terms and conditions attached to student 
loans, default claim payments made to lenders, or the 
prohibitions on inducements. The purpose of these agreements is 
to provide the authority to experiment with new and innovative 
methods for carrying out the types of activities currently 
required of guaranty agencies. The committee looks forward to 
working closely with the Department to ensure that this 
authority is effectively and appropriately utilized.
            Interest rates
    As the committee began to prepare for the reauthorization 
of the higher education act, two concerns were brought clearly 
into focus. First, that college costs were escalating at a rate 
that far exceeded growth in family income. Second, that as a 
result, students were being asked to shoulder an ever greater 
debt burden in exchange for the benefits of a college 
education. These debt burdens are beginning to play a 
significant role in the life decisions that these college 
graduates must make as they consider whether they can afford to 
start a family, buy a house, or pursue meaningful but lower-
paying careers in fields like teaching or public health. In 
addition, with the increased use by borrowers of extended 
repayment options, the impact of student debt will extend far 
into the latter days of a student's career. The committee is 
concerned that many of these borrowers will be repaying their 
student loans at a time when they should be investing heavily 
in their retirement.
    These observations provided the backdrop for one of the 
most challenging tasks that the committee has faced during this 
reauthorization. In 1993, when the Student Loan Reform Act was 
being drafted, its authors anticipated that the Federal 
Government would shift entirely from the FFEL program to the 
Federal Direct Loan program. A transition provision was 
included in the law, which changed the way that student loan 
interest rates will be calculated effective July 1, 1998. This 
change was primarily intended to more accurately reflect the 
way that the government accounts for the Direct Lending 
program. The consequences for student borrowers, however, would 
be dramatic. There is general agreement that, if this interest 
rate is allowed to go into effect, it will become unattractive 
for lenders to continue to participate in the Federal Family 
Education Loan Program. On the other hand, students in both 
programs have been eagerly anticipating a sharp reduction in 
the interest rate they must pay on their loans based on 
provisions contained within current law.
    The transition to Direct Lending that was envisioned by 
this provision has not materialized. The Direct Loan Program, 
which now handles only about 32 percent of total loan volume, 
is not in a position to pick up the slack if there is 
significant disruption in the FFEL program. In recognition of 
this, the Department has attempted to develop a plan to use 
Sallie Mae and the guaranty agencies as lenders of last resort 
should the Congress fail to address the interest rate problem 
prior to July 1, 1998.
    The committee confronts the challenge of trying to provide 
students with the lowest viable interest rate on their student 
loans while ensuring sufficient lender participation to 
preserve open and full access to student loans. After nearly a 
year of consultations with students, lenders, representatives 
of the higher education community, the administration and 
financial services experts, the committee has put forward a 
compromise interest rate package. This package sharply reduces 
lender yield by 30 basis points while allowing students and 
their families to enjoy the significant interest rate reduction 
that they have anticipated. This solution is by no means 
perfect but it promises to preserve the stability of FFEL 
program for the nearly 4 million students and their families 
who depend upon these loans each year.

Study of market-based mechanisms for determining student loan interest 
        rates

    As the committee has wrestled with its desire to balance 
the twin objectives of reducing the interest rate paid by 
students and preserving access to loans under the FFEL program, 
several analysts have recommended using market-based mechanisms 
to establish student loan interest rates. Market-based 
mechanisms, while attractive at first blush, quickly reveal 
themselves to be far more complicated to design and implement 
than is often fully appreciated. Student loan programs are 
designed primarily to offer a social benefit--that is, to offer 
loans, at reasonable rates, to students without respect to 
credit history, educational program, loan size, geographic 
location, or potential as a consumer of future credit products. 
Market-based mechanisms, if they are to be implemented, must be 
designed carefully to ensure that all students continue to have 
equal access to student loans without regard to any particular 
characteristics of the borrower or their program of education.
    In an effort to answer some of these concerns, the 
committee directs the Secretary of the Treasury to conduct a 
study of the feasibility of employing market-based mechanisms. 
After consultation with students, lenders, secondary markets, 
guaranty agencies, borrowers, and institutions of higher 
education, the Secretary of the Treasury is required to analyze 
the potential impact of these mechanisms on the delivery of 
student aid, the implications for students and institutions of 
higher education with regard to access to student loan capital, 
and provide a plan for structuring and implementing a mechanism 
in a manner that ensures the cost-effective availability of 
student loans for students and their families. This report 
shall be provided to the committee on Labor and Human Resources 
no later than September 30, 1999.
            Loan forgiveness for teachers
    The committee's emphasis on a revitalized teacher training 
program, the new title II of the Higher Education Act, is 
testimony to its clear conviction that well-prepared teachers 
are the foundation of a strong educational system. A solid 
curriculum combining content knowledge and teaching skills, 
however, can only be beneficial if students preparing to become 
teachers are the most highly motivated of their college peers. 
Too often, the most talented students shy away from teaching 
careers because they are able to earn higher salaries--and 
repay their student loans faster--in other career fields. The 
shortage of excellent teachers is even more of a problem in 
high-poverty schools, particularly when nearly half of urban 
teachers leave those positions within their first 5 years.
    To address this concern, the committee has authorized a 
loan forgiveness for teachers to support and encourage the best 
people to teach in schools with high need. Sections 432 and 459 
of the bill amend the Higher Education Act with a revised Loan 
Forgiveness for Teachers program authorizing a mandatory loan 
forgiveness program. The Secretary is required to repay through 
the holder of a loan certain subsidized loans made under 
section 428 and under part D of the Higher Education Act. New 
borrowers become eligible when they have been employed as full-
time teachers for 3 consecutive, complete school years in a 
high-poverty school.
    To participate in this program, elementary school teachers 
must demonstrate through certification or licensure 
requirements knowledge and teaching skills in reading, writing, 
mathematics and other areas of the elementary school 
curriculum; and secondary school teachers must be certified as 
teaching in a subject area that is relevant to the borrower's 
academic major. Borrowers who meet these criteria are eligible 
for forgiveness of 30 percent of the total outstanding amount 
and applicable interest of subsidized Stafford loans made under 
part B or Federal Direct/Stafford/Ford loans made under part D 
after the fourth and fifth complete years of teaching in a 
high-poverty school and 40 percent after the sixth complete 
year, for a total amount of no more than $10,000 per borrower. 
Borrowers in default on a loan for which the person seeks 
forgiveness are excluded from participation.
            Child care loan forgiveness program
    The committee has authorized a new child care loan 
forgiveness program in part B, section 428K of the Higher 
Education Act. This provision is based on the Quality Child 
Care Loan Forgiveness Act introduced by Senators DeWine and 
Wellstone with minor modifications. It authorizes a 
demonstration program, administered by the Secretary, that 
provides student loan forgiveness to individuals who earn a 
degree in early childhood education or related fields and 
obtains employment in a child care facility. The committee has 
authorized $10 million for this section in 1999 and such sums 
as may be necessary for the 4 succeeding fiscal years.
    The committee recognizes the extraordinary need that exists 
today for quality child care. Nearly 13 million infants, 
toddlers and preschool children are enrolled in child care. In 
just 20 years, the percentage of children enrolled in child 
care has soared from 30 percent in 1970 to 70 percent in 1993. 
Nearly 88 percent of children whose mothers work full-time and 
75 percent of children whose mothers work full-time and 75 
percent of children whose mothers work part-time are enrolled 
in child care. Recent studies have shown that more than 80 
percent of child care centers provide mediocre or poor-quality 
services. The indications are that a mere 14 percent of the 
centers surveyed met levels of quality that were high enough to 
adequately support a child's development.
    With the growing number of children enrolled in child care, 
it is clear that there is a growing need for well-educated, 
well-trained child care providers. The program authorized in 
this section addresses the critical needs of the early 
childhood education profession by providing incentives that 
encourage highly educated and better trained staff members to 
work in America's child care facilities, a need that the 
committee believes deserves national attention.

Part C--Federal Work-Study Programs

    Like the other campus-based programs, the committee 
believes that the Federal work--study program is fundamentally 
sound and has recommended minor changes to the program that are 
intended to provide added flexibility and simplification to 
improve the programs for participating students. The work-study 
program benefits a great many students nationwide.Currently, 
there are 3,399 institutions of higher education nationwide 
participating in the Federal Work-Study program serving 713,000 
students with an average award of $1,065.
    In general, and to the maximum extent practicable, the 
committee supports the view that work-study employment should 
be aligned with the student's educational purpose. The 
committee wishes to clarify that Federal Work-Study assistance 
is currently available to graduate students and reiterates 
support for the maintenance of that provision. In addition, the 
committee has included a provision intended to clarify that 
internships or research assistantships are appropriate areas of 
placement for eligible students under the work-study program.
    The committee maintains a strong commitment to the work-
study program and has included language increasing the 
authorization level for the Federal Work-Study program to $900 
million in fiscal year 1999 and such sums as may be necessary 
for each of the 4 succeeding fiscal years.
    During hearings related to the reauthorization of the 
Higher Education Act, the committee received testimony from 
Charles Puls, associate financial aid director for Dartmouth 
University, in Hanover, NH who emphasized the importance of 
ensuring flexibility in the work-study program to meet the 
varying needs of students and institutions. In an effort to 
encourage community-service placements, provisions have been 
included that make it possible for schools to count certain 
jobs on campus as community-service activities. These include 
the provision of child care services on campus and assistance 
provided to students with disabilities. These changes to the 
definition of community service will assist institutions of 
higher education located in rural areas meet the current 
requirements of the law, as well as provide beneficial services 
on campus to individuals in the community, including the campus 
community. The committee has provided authority allowing for a 
higher Federal contribution for community-service jobs. The 
committee believes that this change will make it easier for 
colleges to fulfill the 5-percent requirement for community 
service and support the engagement of students with their 
communities.
    In an effort to reduce burdensome requirements, the current 
reference to setting aside a specific percentage of grant funds 
to less than full-time or independent students has been 
eliminated. This change is consistent with the change made in 
the other campus-based programs. Work-study funds are currently 
readily available to less than full-time and independent 
students and the required monitoring of the current law 
increases the administrative burden to institutions without 
providing any advantage to the intended recipients. Finally, 
the legislation deletes the requirement that Federal work-
study-equivalent institutional employment be available to all 
students desiring such employment.
    The committee has continued the authorization for the Work 
Colleges under section 488 of the Higher Education Act and 
increased the authorization level for the program to $7 
million. Presently, 6 institutions carry out comprehensive 
work, community service, and learning initiatives as part of 
their regular academic program for all students. The Work 
College program represents a positive approach and model for 
encouraging academic achievement, student persistence, and 
community service among young people, while at the same time 
reducing their dependence on student borrowing to pay college 
costs. The committee supports the Work Colleges' efforts to 
encourage other institutions of higher education to explore 
this approach to baccalaureate degree study, and to evaluate 
the effectiveness of work-service-learning on students' self-
sufficiency, academic persistence and postgraduate community 
service. The committee also supports additional funding for the 
Work Colleges as part of increases provided through the Federal 
Work-Study program.

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

    Established in 1993, the Direct Lending program had served 
over 2.7 million borrowers as of September 30, 1997, and nearly 
1,300 schools participated in academic year 1996-97. Most 
observers agree that Direct Lending has injected a healthy 
competition into both student lending programs, which has 
greatly benefited students and institutions. The committee is 
committed to maintaining two strong loan programs.

Part E--Federal Perkins Loans

    The Federal Perkins Loan program provides funds to 
institutions of higher education to make available low interest 
loans to undergraduate and graduate students with financial 
need. In fiscal year 1997, this program had an average loan 
volume of $1.058 billion and served 788,000 students. The 
Perkins program has made a substantial difference in increasing 
access to postsecondary education for low-income students by 
offering low-interest loans. Perkins loans are administered by 
schools, thus leading to greater quality control by allowing 
participating institutions to operate the program efficiently 
in a way that best serves the needs of its students. Through 
the Perkins program, institutions are able to bridge the gap 
between the borrower's true need and the aid provided by other 
need-based programs, such as grants and FFELP and Direct Loans, 
and to provide an important supplement to these programs.
    The committee strongly supports the Federal Perkins Loan 
program. While the committee believes that the program is 
fundamentally sound, it has included a number of changes to the 
Perkins program designed to strengthen the integrity of the 
program, provide for greater institutional flexibility, and 
increase benefits to student borrowers. It is the committee's 
hope that these changes will engender even broader 
congressional and administration support for the Perkins 
program.
    The committee has made changes relating to eligibility of 
institutions of higher education in the Federal Perkins program 
and to definitions used with regard to defaults. The committee 
has included a provision to clarify that the default rate used 
in the Perkins program is a cohort rate. Under this provision, 
an institution will be denied a Federal Capital Contribution 
(FCC) for a fiscal year if its cohort default rate is 25 
percent or greater--a more stringent FCC cut-off level than the 
30 percent rate in current law. The requirement that an 
institution submit a default reduction plan if its cohort 
default rate equals or exceeds 15 percent is eliminated. The 
committee recommends these changes in an effort to make the 
Perkins program consistent with the other Federal loan programs 
authorized in the Higher Education Act. In addition, if an 
institution has a cohort default rate that equals or exceeds 50 
percent for the 3 most recent years for which rates have been 
calculated, that institution will lose its eligibility to 
participate in the Perkins program. Loss of eligibility is 
defined in S. 1882 as the mandatory liquidation of the 
institution's Perkins Loan fund. S. 1882 allows institutions to 
appeal the loss of eligibility on the basis of inaccurate data 
used to calculate the institution's cohort default rate and the 
existence of exceptional mitigating circumstances, such as 
small number of borrowers entering repayment, as regulated by 
the Secretary of the Department of Education. The committee 
adopted this provision in response to data that showed 
extraordinarily high default rates for a small number of 
institutions.
    It is the committee's hope that these combined changes will 
provide an incentive to institutions participating in the 
Perkins program to reduce defaults and improve administration 
of the program, particularly in the area of loan servicing and 
collection, as well as to improve the overall integrity of the 
Perkins Program.
    The committee has authorized an increase in the maximum 
Perkins loan available to students. Undergraduate students will 
be eligible for $4,000 Perkins loans and graduate or 
professional students for $6,000 loans. The aggregate maximum 
will be $20,000 for undergraduates, $40,000 for graduate or 
professional students. These new loan limits correspond to the 
maximums authorized in the Expanding Lending Option program. 
Because the committee has recommended increasing loan limits 
for all participating institutions, the ELO program has been 
eliminated. In 1998-99, only 32 schools had opted to 
participate in ELO. With fewer schools choosing to participate 
in ELO each year, the committee believes that this change is 
prudent and will simplify the administration of the program for 
all participating institutions. However, the committee commends 
the efforts of colleges that overmatch Federal Perkins funds 
and continues to encourage colleges to contribute above the 
match and thereby extend the reach of Perkins loans.
    The committee has included a new provision that allows for 
higher loan limits for students who are committed to teaching 
in high need areas. A student who makes a commitment to 
teaching in an area that qualifies for loan cancellation under 
the Perkins program will be eligible for a maximum Perkins loan 
of $8,000 in the third and fourth year of the student's 
baccalaureate program and $10,000 for the first year of 
graduate study. The committee has included reporting 
requirements and possible sanctions in an effort to monitor 
institutions' use of the increased loan limits for this purpose 
and to ensure appropriate application of the program. The 
committee believes that authorizing higher loan limits for 
teachers will encourage more qualified students to pursue 
careers in teaching by making the amount of loan cancellation 
for which they are eligible for more substantial.
    The committee has included a provision to clarify an 
institution of higher education's rolein reporting information 
on Perkins loans to credit bureaus, the information to be reported on a 
loan on an ongoing basis, and the required frequency of reporting. 
Further, S. 1882 makes changes to section 463(c) of the Higher 
Education Act to eliminate the prohibition on reporting on the status 
of a borrower's account, specifically negative credit information on 
defaulted Perkins loans, beyond 7 years, and requires instead, that 
information be reported until the loan is paid in full. These changes 
represent a simplification effort and provide consistency between the 
statute of limitations for collecting loans and the period for 
reporting negative credit information. The committee believes that 
reporting of defaulted loans to credit bureaus is an effective tool and 
should be available to institutions and the Secretary of Education for 
the entire period that loan collection is allowed.
    As in the other campus-based programs, the committee, in an 
effort to reduce burdensome requirements, has eliminated the 
current reference to setting aside a specific percentage of 
Perkins loan funds to less than full-time or independent 
students. Perkins loan funds are currently readily available to 
less than full-time and independent students and the required 
monitoring of the current law increases the administrative 
burden to institutions without providing any advantage to the 
intended recipients. This provision will reduce institutional 
administrative burden while assuring that less than full-time 
and independent students will continue to receive the Perkins 
loan assistance that they are eligible for.
    For purposes of clarification, the committee has included a 
new provision that defines borrower default in the Federal 
Perkins program outside the standard used to calculate an 
institution's annual cohort default rate. The new definition 
provides that a borrower is in default if the borrower fails to 
make scheduled payments when due for 180 days, for a loan paid 
in monthly installments, and 240 days, for a loan paid in less 
frequent installments. This definition is comparable to that 
used for borrower default in the FFEL and FDSL Programs and 
will create one uniform standard of borrower delinquency and 
default in the Perkins loan program and across all the title IV 
student loan programs. The new definition has no impact on the 
standard used to calculate an institution's cohort default 
rate.
    The committee has included a number of new sections to the 
Perkins loan program designed to provide benefits and 
protections to students. In an effort to protect students, the 
committee has included a new subsection that provides for the 
discharge of a Federal Perkins loan made on or after January 1, 
1986 to a borrower who is unable to complete the program of 
study due to the closure of the institution of higher 
education. The Perkins loan discharge provision is comparable 
to the closed school loan discharge provided to FFEL and FDSL 
borrowers in section 437 of the Higher Education Act. As with 
the FFEL and FDSL discharge provision, the Perkins Loan 
amendment provides that upon discharge, the borrower will 
regain eligibility for additional title IV student assistance, 
notwithstanding any prior default on the discharged loan, and 
that the Secretary or institution shall report the discharge to 
credit bureaus.
    A new section is added in S. 1882 that provides specific 
authority in the Federal Perkins program for rehabilitation of 
defaulted Perkins loans. Similar to the loan rehabilitation 
program for defaulted borrowers in the FFEL and FDSL programs, 
the program will allow a defaulted Perkins borrower who makes a 
significant effort to reenter repayment on the loan by making 
twelve on-time, consecutive, regularly scheduled monthly 
payments on the loan to regain eligibility for additional title 
IV assistance, to clear credit bureau records of the default, 
and to regain all program benefits on the loan.
    Finally, the committee has included the authority for 
institutions to establish incentive repayment programs to 
encourage good repayment habits, reduce defaults, and 
accelerate the replenishment of the institution's Perkins fund 
so additional Perkins loans may be made. Institutions may 
reduce the interest rate charged to borrowers by no more than 1 
percent for borrowers who make 48 months of consecutive, 
regular on-time monthly payments, offer a reduced balance on 
the loan of not more than 5 percent of the outstanding 
principal balance for accelerated payment in full, and provide 
other incentives that may be identified by the institution as 
approved by the Secretary of Education. Similar incentive 
programs exist through lenders in the FFEL program and a 
program that has been authorized under specific circumstances 
elsewhere in the bill for borrowers in the Federal Direct Loan 
program. The committee intends that this program will be 
carried out without any negative impact on the institutional 
Perkins loan revolving account.
    The committee would like to encourage the Department of 
Education to provide participating institutions timely 
reimbursement of Perkins loan cancellations consistent with the 
provisions of the Prompt Payment Act.
    The committee has repealed section 467(c) of the Higher 
Education Act that authorizes the Secretary's establishment of 
a Perkins loan revolving fund at the Department of Education 
into which program collections and other funds would be 
deposited for redistribution to institutions for use in making 
Perkins loans. These funds will now be returned directly to the 
Department of the Treasury to support other title IV student 
benefits.
    It is the committee's view that the changes made to the 
Perkins program will strengthen program integrity and 
institutional flexibility and result in increased benefits to 
students.

Part F--Need analysis

    The committee is largely satisfied with the need analysis 
provision adopted during the 1992 reauthorization of the Higher 
Education Act. In weighing the many recommendations made by the 
higher education community relating to need analysis, the 
committee was ever mindful of how changes made in part F impact 
the overall costs of the Pell Grant program. It was the intent 
of the committee to make responsible authorizing changes 
intended to benefit students while not putting in jeopardy the 
current Pell Grant maximum or the possibility of increases in 
the Pell Grant maximum in the future. With that goal in mind, 
the committee has made a number of changes to Need Analysis in 
an effort to ensure a more even-handed treatment of earnings 
and simplify provisions in part F.
    As recommended in legislation introduced separately by 
Senators Dodd and Collins, the committee adopted increases in 
the income protection allowances (IPA) for dependent students 
so as to protect more of the dependent student's income from 
consideration for purposes of determining Federal financial 
aid. The committee has recommended providing an IPA of $2,200 
for dependent students.
    The committee has also included additional provisions 
designed to assist the dependent student. The provision 
included in part F of the Higher Education Act adds a dependent 
student offset in the amount of the negative adjusted parental 
available income in recognition of situations in which students 
contribute directly to the support of the family. The inclusion 
of this provision ensures that for our Nation's financially 
needy families, a dependent student's earnings that are 
necessary to meet the family's living expenses will not be 
considered when determining eligibility for Federal financial 
assistance. Further, the committee has recommended prorating a 
dependent student's contribution for a period of enrollment of 
less than 9 months so that aid, particularly loans, for these 
shorter periods, is calculated properly and the student's 
eligibility is not inappropriately reduced.
    The committee recognizes the need to address the treatment 
of earnings of the independent student as well. The committee 
adopted increases in the income protection allowances (IPA) for 
independent students so as to protect more of the independent 
student's income from consideration for purposes of determining 
eligibility for Federal financial aid. IPA changes were adopted 
for single independent students and for independent married 
students where both are enrolled in school, increasing that 
level to $4,250. The IPA was increased for married independent 
students where one is enrolled in school to $7,250. This change 
will restore eligibility of a great many nontraditional 
students for Pell Grants.
    To further ensure the appropriate treatment of dependent 
and independent student earnings, the committee has indexed all 
the IPA increases for inflation. Requiring that the IPA levels 
continue to grow and keep pace with inflation will provide an 
appropriate protection of student earnings in the future.
    Other changes adopted by the committee are intended to 
simplify and streamline part F. In an effort to simplify the 
act, the authority that financial aid administrators have to 
reduce or deny loans has been moved from section 428(a)(2)(F) 
in the Higher Education Act to a section entitled ``Discretion 
of Student Financial Aid Administrators,'' found in section 
479A of the act. The committee would encourage financial aid 
officers to utilize this important discretionary authority 
where there are concerns about a student's ability to repay or 
responsibly handle this debt. In addition, the committee notes 
that financial aid administrators may take into account the 
unusually high living expenses that affect some military 
personnel when exercising professional judgement. The committee 
also wishes to clarify that financial aid administrators have 
the discretion to grant changes in a student's dependency 
status and urges them to use this authority as appropriate. In 
addition, the committee has simplified section 472 of the act 
relating to Cost of Attendance. The requirement that Cost of 
Attendance include a cost-of-livingminimum amount for all 
populations is removed. The committee made this change in an 
acknowledgment that current minimum cost of living expenses required to 
be included in the cost of attendance are too high at some schools and 
in certain areas of the country. In eliminating this arbitrary minimum, 
schools will be able to determine the amount of living expenses that 
are appropriate based on local conditions and not be constrained by a 
minimum requirement.

Part G--General provisions relating to student assistance programs

            Master calendar
    The Master Calendar provisions of the act are amended to 
require the Department, to the extent feasible, to publish 
minimal software and hardware requirements by December 1 prior 
to the start of an award year. The committee recognizes there 
may be circumstances when publication of such requirements is 
not possible prior to December 1, but expects such 
circumstances will be rare. To assure the effective 
administration of title IV programs, information regarding 
computer hardware and software standards should be made 
available as early as possible. Institutions of higher 
education need sufficient time to purchase or install the 
necessary hardware and software, and vendors need sufficient 
time to produce acceptable products that meet or exceed Federal 
standards.
    The committee is also interested in assuring that 
institutions have sufficient time to complete FISAP's and 
encourages the Department to establish October 1 as the date 
for the submission of these institutional applications for 
campus-based funds.
    The bill also amends the provisions of this section that 
require the Secretary to publish any regulations affecting the 
Federal student assistance programs by December 1 in order for 
those regulations to be applicable to the following award year 
by moving the publication deadline to November 1. The Secretary 
is authorized to designate regulatory provisions that 
institutions or other entities may choose to implement before 
the otherwise applicable effective date. No institution or 
entity would be required to implement a regulatory requirement 
in advance of the effective date of the requirement. The 
committee believes that these changes will provide the 
Secretary and program participants with greater flexibility, as 
well as more lead time, in implementing regulations.
            Forms and regulations
    The Forms and Regulations section of the act is amended to: 
permit borrowers seeking loans under part B to utilize the Free 
Application for Federal Student Aid as their loan application; 
require the Secretary, in consultation with the States, to 
include data items needed to assist the States in awarding 
State student financial assistance; require the Secretary to 
request the social security number of parents of dependent 
students seeking financial assistance under this title; permit 
the Secretary to require that the common reporting form be used 
for the purpose of collecting eligibility and other data for 
purposes of part B, including the applicant's choice of lender; 
permit the Secretary to pay third parties for data that the 
Secretary considers essential to the efficient administration 
of the programs under this title; and require the Secretary to 
develop and implement a multiyear promissory note for loans 
made for periods of enrollment beginning on or after July 1, 
2000.
            Student eligibility
    The bill amends the Student Eligibility section of the act 
to clarify the eligibility of home-school graduates for title 
IV assistance. It has come to the attention of the committee 
that some graduates of home schools are being required to 
demonstrate their ``ability-to-benefit'' from postsecondary 
education by taking the General Educational Development (GED) 
or equivalent test in order to obtain Federal student financial 
aid. In some cases, students who have already been admitted to 
an institution of higher education on the basis of high scores 
on standardized tests such as the ACT or SAT have then been 
required to take the GED to qualify for financial aid. The 
committee does not see the value in requiring students to 
undergo additional types of standardized testing in such 
circumstances. 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 of the students studied achieved 
national scores in the top quarter of the population. To 
address this matter, the bill includes a provision clarifying 
that a student who has completed a high school education in a 
home school setting and has met any State requirements with 
respect to such education is not required to take an additional 
test in order to establish title IV eligibility.
    In addition, the committee adopted an amendment offered by 
Senator Gregg to prohibit title IV grant, loan, or work 
assistance to any student convicted of a drug-related offense. 
The ineligibility period for a first offense for possession is 
1 year, for a second offense 2 years, and for a third offense 
is indefinite. The ineligibility period for a first offense for 
sale of a controlled substance is 2 years and for a second 
offense is indefinite. A student may resume eligibility before 
the end of the specific period if the student completes a drug 
rehabilitation program approved by the Secretary.
    This section of the bill also requires the verification of 
IRS return information.
            Refunds
    The Institutional Refunds section of the act is amended to 
remove the reference to accrediting agency approved refund 
policies from the list of policies to be compared to determine 
which produces the largest amount, as the Secretary has never 
approved any accrediting agency refund policy.
    In addition, S. 1882 replaces references to the ``last day 
of attendance'' with the ``day the student withdrew,'' which is 
defined as the last recorded day of attendance by the student 
or--in instances where attendance is not recorded--either the 
day on which the student began the withdrawal process 
prescribed by the institution or the day the student otherwise 
provided notification to the institution of the intent to 
withdraw. The bill also includes provisions requiring 
institutions to make available to all students the 
institution's requirements and procedures for student 
withdrawal and the consequences to the student with respect to 
receipt of refunds in the event the student fails to provide 
notification of withdrawal.
    The purpose of this change is to emphasize that students, 
as well as institutions, have a responsibility to assure that 
required refunds are made and to ease the administrative 
difficulty of institutions in determining the ``last day of 
attendance.'' Although the committee believes that a student 
should take responsibility for notifying the appropriate 
institutional representative of his or her intention to 
withdraw, the committee does not wish to open the way for the 
establishment of elaborate, formal withdrawal processes that 
few students are likely to complete. It is the expectation of 
the committee that most students will comply with the 
withdrawal procedures established by the institution, but a 
student's receipt of required refunds will not be precluded in 
instances where the student notifies the appropriate 
institutional representative through a less formal process.
            Institutional and financial assistance information for 
                    students
    The bill amends provisions of the act requiring 
institutions to provide institutional and financial assistance 
information to prospective and enrolled students by clarifying 
that prospective students are those who have expressed interest 
in applying for admission, as opposed to those merely 
``requesting information'' and by clarifying that the 
requirements of this section may be met if an institution 
provides annually to all enrolled students a list of the 
required information, along with a statement of the procedures 
required to obtain the information.
    Recognizing the increased use of electronic media by 
institutions and students, the bill also clarifies that 
required information may be made available through such media 
and that an institution may utilize electronic means to provide 
personalized exit counseling. With respect to the provision of 
institutional and financial assistance information to enrolled 
and prospective students, the committee intends that the option 
to provide the required information through electronic media be 
used only in instances where students have ready access to 
computers or any other equipment required to receive the 
information.
            Disclosures required with respect to athletically related 
                    student aid
    The bill makes several changes to provisions of the act 
dealing with information regarding athletically related student 
aid. Language is added to clarify that the provision of 
comparable data by a national collegiate athletic association 
to all secondary schools satisfies the requirements that 
information be disclosed to a prospective student athlete's 
guidancecounselor and coach. Currently, the National Collegiate 
Athletic Association collects and sends to every high school the same 
information required under the student right-to-know provisions of the 
act. In addition, duplicative requirements relating to the reporting of 
athletically related expenses and revenues are consolidated into a 
single section of the act, allowing institutions to produce only one 
report.
    A new reporting requirement is added that provides that 
institutions make a statement of any reduction that will, 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 resources made available to such 
sport, to the extent the reduction is known. The committee is 
aware of concerns about the elimination or substantial 
curtailment of sports at institutions of higher education, 
particularly nonrevenue-generating sports. The disclosure 
requirement included in S. 1882 represents the attempt of the 
committee to balance the desire to see that prospective student 
athletes have pertinent information as they make enrollment 
decisions against the recognition that many circumstances that 
could lead to the elimination or curtailment of a sport cannot 
be anticipated in advance.
    The bill also includes provisions drawn from the ``Fair 
Play Act,'' S. 933, sponsored by Senators Moseley-Braun, Snowe, 
Kennedy, and Mikulski. By April 1 of each year, the Secretary 
is required to compile a report that summarizes information 
reported by institutions regarding intercollegiate athletics, 
identifies trends in the information, and aggregates the 
information by divisions of the National Collegiate Athletic 
Association. The Secretary is to make the report available on 
the Internet and to notify all secondary schools regarding the 
availability of this intercollegiate athletics information.
            Campus security
    The legislation includes provisions designed to build on 
the Higher Education Amendments of 1992 to improve information 
about crime and security issues on college campuses. It is the 
desire of the committee to increase campus safety, primarily by 
improving the reporting of campus crimes, while minimizing new 
burdens placed on institutions of higher education.
    There is little doubt about the seriousness of this 
problem. In a 1997 report on campus crime, the National Center 
for Education Statistics noted the following:

          During each of the 3 years [between 1992 and 1994], 
        institutions reported a total of about 10,000 violent 
        crimes and almost 40,000 property crimes. For 1994, the 
        individual crime composition for violent crimes was 
        about 20 murders, about 1,300 forcible sex offenses, 
        3,100 robberies, and 5,100 cases of aggravated assault. 
        In the property crime category, institutions reported 
        28,800 burglaries and 9,000 motor vehicle thefts in 
        1994 . . . In 1994, institutions reported about 20,400 
        arrests for liquor law violations, about 7,200 arrests 
        for drug abuse violations, and about 2,000 arrests for 
        weapons possessions.

    Even more troubling are allegations by those who have 
followed this issue closely that crimes on college campuses are 
vastly underreported.
    The legislation updates the list of crimes that must be 
documented in campus crime statistics. It adds arson as well as 
crimes that manifest evidence of prejudice based on race, 
gender, religion, sexual orientation, ethnicity, or 
disability--provisions drawn from legislation introduced by 
Senator Robert Torricelli, S. 1493. The bill also requires 
institutions to maintain an open daily log that records the 
nature, date, time, and general location of each crime reported 
to the local police or campus security. These logs would 
provide invaluable, regular information to campus communities 
about incidents of crime. Requiring log entries be disclosed 
publicly within 2 business days of a crime's occurrence, 
subject to restrictions, will also provide an important tool 
for victims to determine the accuracy and timeliness of 
institutional reporting.
    The committee considered proposals to require the 
disclosure of the names of victims or persons accused of 
crimes, but determined that such disclosure could discourage 
victims, particularly of sexual crimes, from reporting those 
crimes to local police or campus security officers. The bill 
includes language, however, to ensure that State or local laws 
that permit or require disclosure of names will not be pre-
empted. The committee also considered whether to require 
university employees, in addition to campus security officers 
or local police, to report campus crimes. Such a requirement is 
not included in the bill, due to the concern of the committee 
that extending it could discourage victims from speaking 
confidentially with people such as resident assistants, 
professors, administrators, or athletic coordinators. Instead, 
the committee strongly recommends that campus officials 
instruct employees who may be approached by crime victims for 
consultation to notify students about campus crime policies and 
procedures, as well as the proper authorities to whom crimes 
should formally be reported.
    Another major problem examined by the committee is the ad 
hoc manner in which campuses respond once crimes are committed, 
particularly with respect to sexual offenses. The committee has 
therefore authorized a year-long study by the Secretary, in 
consultation with the Attorney General, to examine procedures 
undertaken after an institution of higher education receives a 
report of sexual assault. The intent of the committee is that 
findings from this study inform university administrators about 
best practices in implementing procedures for responding to 
sexual assaults on campus.
    The bill also amends the General Education Provisions Act 
to exclude criminal activities from a postsecondary student's 
educational records. At present, when a student is found guilty 
of a crime through campus disciplinary proceedings, the charges 
are included in that student's educational records, which are 
closed to public scrutiny. The committee believes strongly that 
such information should be as publicly accessible as other 
criminal records. In particular, admissions officers at other 
institutions of higher education should have access to criminal 
information about a student who might pose a threat to a new 
campus community.
            Information on the costs of higher education
    In its final report, released in February 1998, the 
National Commission on the Cost of Higher Education issued 
recommendations for controlling the costs of higher education 
and for improving information for families. The commission 
addressed its recommendations to institutions of higher 
education, higher education accrediting bodies, government at 
all levels, and families alike, noting that every partner 
should share in the responsibility for making college 
affordable and accessible.
    The committee takes this charge very seriously and has 
included numerous commission recommendations throughout this 
bill. In particular, the commission recommended that better 
consumer information be made available about the costs and 
prices of higher education to help people make more informed 
decisions about college. It further recommended that the U.S. 
Department of Education collect and make available annual 
tuition and price data, as well as information about the 
relationship between tuition and institutional expenditures.
    The bill offers a 3-pronged strategy for making this 
information available. First, it requires that the National 
Center for Education Statistics (NCES) create common 
definitions of key concepts (including tuition and fees, other 
college costs, average financial assistance awards, and average 
percentage of students receiving financial assistance at an 
institution of higher education), that institutions report 
these data annually, and that NCES make this information 
available publicly through its integrated postsecondary 
education data systems on an annual basis. The committee shares 
the desire expressed by the commission that multiple agencies 
in the private sector use those data for developing college-
cost reports or handbooks that are widely disseminated to 
prospective students, their parents, and the media--in print 
and over the Internet.
    Second, it requires NCES, in consultation with the Bureau 
of Labor Statistics, to produce a report that would examine 
expenditures at institutions of higher education (e.g., faculty 
salaries, administrative salaries and expenditures, academic 
support services, research, construction, and technology 
outlays); how such expenditures change over time; and how such 
expenditures relate to college costs.
    Third, it requires NCES, in consultation with the Bureau of 
Labor Statistics, to develop a ``Higher Education Market 
Basket'' that could be used to determine the composition of the 
costs of higher education to guide future decisionmaking in 
this area.
    Underscoring the strong commitment to the success of this 
effort, the committee adopted an amendment offered by Senator 
Dodd that authorizes the Secretary of Education to fine 
institutions of higher education up to $25,000 for failing to 
provide accurate and timely information on college costs as 
required by S. 1882.
            Quality assurance program
    The bill amends the Quality Assurance Program section of 
the act to rename it as ``Regulatory Relief and Improvement'' 
and to make a number of modifications designed to assure that 
the program achieves its intended purposes.
    It expands the categories of activities for which 
institutions participating in the Quality Assurance Program 
(QAP) develop their own management approaches to include 
processing and disbursement of student financial aid, 
verification of student financial aid application data, and 
entrance and exit interviews. The Secretary may waive 
regulatory, but not statutory, requirements dealing with 
reporting or verification that are addressed by the QAP 
participant's alternative management system. The Secretary 
would be required to review the QAP conducted by each 
participating institution and make recommendations to Congress 
regarding amendments that would streamline the administration 
and enhance the integrity of Federal student assistance 
programs. The purpose of this review is to assure that the 
alternative approaches are effective in enhancing program 
integrity and that promising innovations can be considered for 
broader application.
    The bill also requires the Secretary to review and evaluate 
the experience of institutions participating as experimental 
sites under the current act, to report to Congress regarding 
the findings of each of the experiments, and to make 
recommendations to improve and streamline the act based on 
those findings. No additional institutions may be selected for 
participation as experimental sites until the report regarding 
existing sites is submitted and after consultation with the 
appropriate committees of Congress.
    In the past, Department of Education officials have 
misinterpreted the experimental site provisions to mean that 
the Secretary had the unrestricted authority to waive statutes 
regarding the delivery of student financial assistance. In many 
instances, this authority has been used, not to engage in 
regulatory experiments, but to provide selected institutions 
with special relief from requirements contained within the act.
     There is substantial sentiment in the committee for the 
elimination of experimental site provisions altogether, given 
the history of the implementation of these provisions by the 
Department of Education and given that none of these 
experiments has yet yielded results. The committee has chosen 
instead to obtain detailed information regarding the 
experiments now underway and their findings and conclusions, so 
that a determination of the usefulness of the provisions can be 
made.
            Distance education
    The bill establishes a new authority, Distance Education 
Demonstration Programs, which permits the Secretary to select 
up to 5 institutions of higher education or consortia for which 
specified statutory restrictions in part F and part G may be 
waived. The specific statutory provisions that may be waived 
include section 472(5) as it relates to computer costs, section 
472(10), section 481(a)(3)(A), section 481(a)(3)(B), and 
section 484(l)(1). Section 472(5) deals with ``cost of 
attendance'' for students engaged in correspondence courses, 
and section 472(10) deals with ``cost of attendance'' for 
students receiving instruction through telecommunications. 
Section 481(a)(3)(A) provides that an institution is not an 
eligible institution if more than 50 percent of its courses are 
correspondence courses. Section 481(a)(3)(B) provides that an 
institution is not an eligible institution if 50 percent or 
more of the institution's students are enrolled in 
correspondence courses. Section 484(l)(1) provides that a 
student enrolled in a telecommunications course that is (in 
whole or in part) a program leading to a degree will not be 
regarded as being enrolled in a correspondence course unless 
more that 50 percent of the courses offered by the institution 
are telecommunications/correspondence.
    In addition, any regulatory requirement that inhibits 
distance education may be waived for participants in the 
demonstration. Demonstration program participants will be 
subject to ongoing review by the Department and will be 
evaluated by the Secretary, who will review issues such as 
student access and outcomes and student financial aid issues. 
In addition, the Secretary will issue a report to Congress 
identifying any additional statutory impediments to the 
expansion of quality distance education programs. An 
independent evaluation of the demonstration program and of 
broader issues dealing with distance education quality and 
student outcomes will be conducted by the National Academy of 
Sciences, for which up to $1 million will be made available. 
Based on the evaluations conducted by the Department and by the 
National Academy of Sciences, the Secretary may in the future 
select up to an additional 10 participants in the demonstration 
program.
    The committee is aware of the rapid growth in the use of 
distance education technologies and of the potential of such 
technologies to expand access to postsecondary education and to 
reduce costs. During the reauthorization hearings, members of 
the committee had the opportunity to learn more about one of 
the most ambitious undertakings in this area--the Western 
Governors University (WGU). In testimony before the committee, 
Utah Governor Michael O. Leavitt described WGU as ``. . . truly 
a learning enterprise for the Cybercentury.'' He went on to 
note:

          While the WGU is highly complex in its design and 
        deployment, it is based on a very simple premise: In 
        the past, people had to go to campuses to obtain 
        information and knowledge. Today, in the Information 
        Age, information and knowledge will go wherever the 
        people are. That premise might seem rather elementary. 
        But it is revolutionary in its implications for higher 
        education.

    Although the committee recognizes the great promise of 
distance education, the committee recognizes as well the perils 
of rushing forward and creating an electronic version of the 
correspondence school abuses that Congress worked so hard to 
stop in the 1992 reauthorization. In examining this issue, the 
committee received a large number of comments urging caution--
ranging from the Department's Inspector General to the National 
Education Association and the American Federation of Teachers.
    The distance education demonstration program included in S. 
1882 strikes a careful balance between the need to keep pace 
with technological change and the need to protect taxpayer 
dollars.
    It is important to point out that institutions of higher 
education all over the country are engaging in various types of 
distance education, and the Higher Education Act is not an 
impediment. What is at issue is how to deal with situations 
where more than half of an institution's courses are offered 
via distance learning or where more than half of the students 
receive their courses in this way.
    The 5 demonstration programs provided for in S. 1882 will 
include institutions or consortia--such as Western Governors 
University--permitting those who are ready to go now with an 
opportunity to participate. In particular, it is the intention 
of the committee that the WGU initiative is one that could be 
included in the initial demonstration program.
    In addition, the bill builds in an evaluation of the kind 
of information that is needed--but that is not now available--
for the orderly expansion of quality distance education 
programs. No one has all the answers, and to some extent, no 
one is even sure what all the questions might be. The committee 
looks forward to reviewing any proposed statutory changes to 
enhance the use of distance education, which is to be provided 
by the Secretary as part of the evaluation process.
            Advisory committee on student financial assistance
    The bill extends the authorization of Advisory Committee on 
Student Financial Assistance (ACSFA) through October 1, 2004, 
and makes several changes to enhance the independence of the 
committee. The minimum level of ACSFA funding is increased from 
$750,000 to $800,000.
    In addition, the special analyses and activities to be 
conducted by ACSFA are revised to include review of: the 
modernization of student financial aid systems and delivery 
(including the implementation of a performance-based 
organization within the Department), the feasibility and degree 
of use of appropriate technology, and the implications of 
distance education on student eligibility and other 
requirements for financial assistance. The committee is also 
directed to make recommendations to the Secretary regarding his 
review of redundant or outdated sections of the act and 
regulation.
    The committee relies on ACSFA as an independent source of 
knowledge and technical expertise postsecondary programs and 
has maintained the requirement in the current act that at least 
7 of the 11 members of the committee be 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.'' The 
committee is aware of support for greater diversity in the membership 
of ACSFA and encourages efforts to be made during the appointment 
process to assure that ACSFA members represent a broad and 
representative range of postsecondary institutions.
            Negotiated rulemaking
    The bill continues negotiated rulemaking and adds part D to 
the parts (B, G, and H) that were subject to negotiated 
rulemaking following the 1992 reauthorization. In addition, 
negotiated rulemaking is required for developing all 
regulations for student loan programs. The negotiated 
rulemaking process was first used for higher education programs 
in 1992 and was generally well received by those who 
participated in it. The committee believes that the 
collaborative process used in negotiated rulemaking enhances 
the understanding of all parties of the issues involved.

Part H--Program integrity triad

    In this legislation, the committee maintains its past 
commitment to assuring the integrity of Federal student aid 
programs. The 1992 amendments to the act made great strides in 
this area, and the committee has made every effort to preserve 
these accomplishments.
    Among the most important elements in assuring that tax 
dollars supporting student aid programs are effectively used is 
the process by which institutions become eligible to 
participate in those programs. Traditionally, this gatekeeping 
process has relied on the joint efforts of the so-called 
``Triad'': State licensure, private accreditation, and Federal 
eligibility and certification. In order to participate in 
Federal student aid programs, an institution must be licensed 
in the State in which it operates, be accredited by an agency 
recognized by the Secretary, and be certified by the Department 
of Education.
    The committee continues to believe this concept is a sound 
one. It divides responsibility among the State, private, and 
Federal sectors on the basis of the strengths each bring to the 
process. States, through the licensing process, are primarily 
responsible for consumer protection functions. Private 
accreditation agencies are primarily responsible for making 
determinations regarding institutional quality. The Federal 
Government is primarily responsible for assuring that an 
institution is in compliance with applicable Federal student 
aid requirements and has the administrative and financial 
capacity to deliver educational services.
            State Role
    The 1992 amendments established State Postsecondary Review 
Entities (SPRE's) in an effort to strengthen the State role in 
the triad. SPRE's never achieved their intended purpose and, in 
some cases, duplicated functions being performed by other 
components of the Triad. They have not been funded, and SPRE 
regulations issued by the Department of Education have been 
withdrawn. The committee received a substantial number of 
comments recommending that SPRE be repealed, and the committee 
has done so.
    SPRE provisions have been replaced with language that 
defines State responsibilities as being licensure and 
notification to the Secretary of revocation of license or 
evidence of institutional fraud. In addition, institutions of 
higher education are required to prove they have authority to 
operate in a State.
    The scaling-back of Federal statutory language with respect 
to the State role is not intended to preclude States from 
taking the steps they deem necessary to assure consumer 
protection or to engage in other appropriate regulatory 
activities with respect to institutions of higher education 
located within their borders.
            Accrediting agency recognition
    Provisions of the accrediting agency recognition provisions 
of the act are amended to clarify the role of accrediting 
agencies or associations, to emphasize the responsibility of 
such agencies or associations to consider the quality of any 
distance education courses offered by institutions being 
assessed, and to strengthen statutory requirements relating to 
the timeframe within which an accrediting agency or association 
must come into compliance after the Secretary has determined 
the agency or association has not met the requirements of the 
act.
    The committee recognizes the critical role that accreditors 
play in higher education. Their oversight of academic matters 
makes them a vital component in assuring the quality of the 
programs supported by the Federal Government. Recognizing that 
the primary focus of accreditors should be on student learning 
and success in the context of the institution's mission, the 
committee reordered the standards in section 496(a)(5) of the 
act to put the standard on student success first, moving it 
from (I) to (A). This reflects the committee's view that 
student achievement is the touchstone of accreditation. As the 
National Commission on the Cost of Higher Education 
recommended, accreditors should be focusing more on measures of 
student achievement and less on resources, particularly in the 
light of widespread concern about the cost of higher education.
    In addition, S. 1882 clarifies that it is not the role of 
the agencies to make credit or clock hour determinations. It is 
the view of the committee, however, that assuring that course 
hours are not inflated is an appropriate function of a review 
of course quality. The bill also clarifies that it is not the 
role of accreditors to enforce compliance with title IV. An 
accreditation agency or association is to review an 
institution's record of compliance with program 
responsibilities under title IV. Currently, this matter is 
addressed in an appendix to the regulations, which states that 
``under this standard, the agency is not expected to do the 
work of the Federal Government in reviewing institutions for 
compliance with their title IV, HEA program responsibilities. 
Rather, the agency is expected to review the information 
provided by the Secretary, determine if that information calls 
into question the institution's compliance with agency 
standards, and take follow-up action as appropriate.'' The 
change made by S. 1882 is designed to clarify this 
understanding in statute.
    Regarding distance education, S. 1882 adds language stating 
that the courses or programs considered by an accrediting 
agency in assessing their quality may include the institution's 
distance education courses or programs. In addition, the bill 
provides that, when the Secretary determines the scope of 
recognition of an accrediting agency whose members offer 
distance education, the scope shall include the distance 
education or courses.
    The committee has observed that a number of recognized 
accreditation organizations have increased their capacity to 
deal with the new forms of distance education. The committee 
believes that distance education, even when delivered through 
new means, should meet the same standards of educational 
quality as on-site education. The Department of Education, 
through the Secretary's recognition of accreditors, should not 
subject distance education programs and courses to separate or 
additional educational quality criteria and should not accept 
lower standards with regard to distance education.
    It is the intent of the committee that the Department 
consider any issues of scope about distance education when it 
normally considers the full range of issues on continuing 
recognition, and not initiate an immediate, separate review of 
agencies previously recognized simply because their present 
scope includes distance education.
    In addition, the committee believes that any accreditor 
should have the option to choose not to include distance 
education in its scope of recognition. The new provisions 
regarding scope of recognition is not intended to force all 
accreditors to deal with distance education. In an instance in 
which an accreditor does not choose to accredit distance 
courses or programs, the accreditor should simply notify the 
Department that it does not wish to be recognized for distance 
education, and the Department should automatically alter its 
scope accordingly.
    The bill amends section 496(l)(1) of the act to give the 
Secretary an option other than beginning proceedings to limit, 
suspend, or terminate an agency if it is not in compliance with 
the act. Under the new option, the Secretary may give the 
agency up to 12 months to come into compliance with the statute 
before beginning proceedings on termination. The committee is 
concerned about reports that the Secretary has been reluctant 
to find agencies in violation of the statute and has allowed 
long periods of time for them to correct possible violations. 
These periods of noncompliance may undermine the quality of the 
reviews that accreditors perform during those periods, and so 
may adversely affect the institutions they review. While this 
12-month period may be extended for good cause, it is expected 
that extensions will be rare and as brief as reasonable.
    The committee also urges accreditors to consider whether 
all or part of the accrediting report should be made public. 
The committee understands that some accreditors make their 
reports public, but that other accreditors are concerned that 
reports would be less forthright ifthey became public. The 
committee believes that accreditors have a public trust within the 
Higher Education Act and that, in some situations, more reporting--
perhaps in a summary form--would be beneficial in increasing the 
public's understanding of the accrediting process, the institution, and 
higher education in general.
    The committee considered a recommendation that accrediting 
agencies be prohibited from adopting or applying policies 
restricting the transfer of credits earned by students from 1 
institution to another. Although the committee did not believe 
it appropriate to intervene in an area traditionally under the 
control of individual institutions by including such a 
prohibition in Federal statute, the committee is concerned 
about practices in this area. The committee believes the 
decision whether to accept transfers should be based upon an 
institution's determination that the course or program is 
equivalent in content and the student has achieved a sufficient 
level of proficiency.
    In a related area, the committee has heard concerns that 
some institutions of higher education have established 
unnecessarily burdensome admissions standards for graduates of 
nonpublic, private, and nontraditional educational programs. 
Again, the setting of admissions standards is the 
responsibility of institutions themselves. However, the 
committee encourages institutions that receive Federal funds to 
make every effort to evaluate and treat applicants from 
nonpublic, private, and nontraditional educational programs 
fairly and in a nondiscriminatory manner in determining 
requirements for admission.
    Finally, the committee affirms the Secretary's definition 
of branch campus as it appears in 34 CFR 600.2. It further 
believes that, if an off-site program offered by a school is 
not identified as a branch campus by the school and does not 
meet the regulatory definition of a branch campus, it should 
not trigger a mandatory branch campus accreditation review. The 
committee is concerned about reports that overly broad 
interpretations of Department regulations on the definition of 
a branch campus has caused accreditors to make expensive site 
visits in instances where they are not needed. This 
interpretation should be modified so that accreditation visits 
can focus on productive quality assurance activities.
            Eligibility and certification procedures
    The bill amends the eligibility and certification 
procedures of the act to streamline regulatory requirements and 
provide institutions with greater flexibility, to make minor 
changes in provisions related to financial responsibility 
standards, and to clarify that ``ownership'' applies to for-
profit institutions.
    Several provisions are designed to alleviate unnecessary 
regulatory requirements and expand institutions flexibility, 
including: (1) requiring an institution to maintain a copy of 
any contract between the institution and a financial aid 
service provider or loan servicer, and provide a copy of any 
such contract to the Secretary upon request, instead of 
requiring that the institution supply the copy with its 
application to participate in the student aid programs under 
title IV; (2) providing that an institution may select the 
specific loan programs offered under part B or part D in which 
it will participate; (3) eliminating the requirement that the 
Department conduct site visits of all institutions and 
eliminating the ability of the Department to charge fees to 
cover the expenses of certification and site visits; and (4) 
giving the Secretary the authority to recertify an institution 
for up to 6 years, rather than the 4 years in current law, 
thereby permitting the Secretary to focus resources in the 
areas where problems are most likely to occur.
    In addition, the bill includes a provision establishing a 
special rule for institutions of higher education located 
outside of the United States that receive less than $500,000 
annually in Federal Family Education Loans, permitting the 
Secretary to establish a recertification schedule in 
regulations. The committee recognizes the administrative 
difficulties faced by the Department in monitoring all foreign 
schools in the same manner as other title IV schools and has 
adopted this change proposed by the Department of Education. At 
the same time, the committee urges the Secretary to assure that 
recertification occurs within a reasonable time frame.
    Minor changes are made in financial responsibility 
standards provisions to substitute more general language for 
the specific measures of financial responsibility currently 
mentioned in section 498(c)(2) and to specify that the 
Secretary may accept any reasonable third-party financial 
guarantees in cases where an institution fails to meet overall 
financial responsibility standards. The committee recognizes 
that the financial responsibility regulations issued by the 
Department late last year are the product of a painstaking 
process to develop reasonable and workable standards. The 
committee believes that implementation of these standards 
should proceed without the complications of major changes in 
the statute at this time.
    One change that is included in the bill is the elimination 
of specific references to performance bonds and letters of 
credit as third-party financial guarantees. Instead, the bill 
provides that the Secretary may accept any third-party 
financial guarantees he finds to be reasonable--which may 
include performance bonds, letters of credit, or other such 
guarantees.
    The bill also amends several sections of the act to clarify 
that ``ownership'' refers to for-profit institutions. Ownership 
provisions were included in the 1992 amendments after it came 
to the attention of Congress that a handful of unscrupulous 
school owners, who had been disbarred from ever again owning a 
title IV-eligible institution, were getting around the 
prohibition by naming close family members or friends as an 
institution's ``owner'' while they themselves sat on the board 
and continued to hold the major financial interest and control 
of the school. In other cases, owners with past records of 
title IV mismanagement of funds were subsequently buying new 
schools.
    To address these issues, Congress added language 
authorizing the Secretary to require financial guarantees and 
personal liability from those with ``substantial control'' over 
institutions of higher education. The language also goes on to 
define substantial control as ownership interest, which is then 
defined as ``a share of the legal or beneficial ownership or 
control of, or a right to share in the proceeds of the 
operation of an institution or institution's parent 
corporation.'' In addition, another provision allowed the 
Secretary to determine that an individual exercises control if 
``the individual is a member of the board of directors, the 
chief executive officer, or other executive officers of the 
institution or of an entity that holds a substantial ownership 
interest in the institution.'' It was and is the clear intent 
of Congress that these provisions apply to those who have an 
ownership interest in a school.
    It has come to the attention of the committee that, in the 
ensuring years, the Department of Education has at times 
interpreted these provisions as applying to the board of 
trustees of nonprofit institutions of higher education. By 
definition, nonprofit institutions do not have owners and board 
members of such institutions are not paid for their services.
    Two other provisions were also added to protect for-profit 
institutions that were purchased by unscrupulous owners. One 
provision permits the Secretary to provisionally certify 
schools that have undergone a change of ownership. The other 
requires institutions that have undergone ownership changes to 
requalify for title IV aid. Both of these provisions also apply 
only to for-profit institutions, as is evidenced by both the 
use of the term ``ownership,'' as well as by the exception 
language that addresses instances in which the owner of a 
family run school dies and passes the business onto another 
family member--clearly a circumstance unique to for-profit 
institutions.
    Finally, the bill proposes no changes to provisions of the 
act dealing with administrative capacity standards. The 
committee is aware, however, of concerns expressed by many 
institutions of higher education that the authority provided in 
this section has led to inappropriate overregulation and will 
continue to monitor closely the implementation of these 
provisions of the law.
            Program review and data
    The bill amends the program review and data provisions of 
the act to require the Secretary to establish priorities for 
program reviews of institutions of higher education, and 
specify that additional categories of institutions that the 
Secretary may identify as requiring priority review are those 
that may pose significant risk of failure to comply with 
administrative or financial responsibility provisions. The 
purpose of these changes is to assure that resources will be 
concentrated on those institutions where problems are most 
likely to occur.
    The bill also adopts several recommendations made by the 
National Commission on the Cost of Higher Education, by 
requiring the Secretary: to inform institutions of the criteria 
involved in program reviews; to implement a system of ``cures'' 
to allow institutions to correct minor record-keeping errors; 
to provide proportionality in civil penalties; and to establish 
a process for ensuring coordinated reviews and for identifying 
unnecessary duplication of reporting and related regulatory 
requirements.
    The committee also considered a recommendation to prohibit 
the Secretary from imposing fees on institutions for technical 
assistance related to changes the Department has made in 
software requirements. Although the committee did not include 
this prohibition in the bill, the committee urges the Secretary 
to assure that strong technical support is incorporated in 
software contracts when the Department changes its requirements 
or conditions.

Part I--Administrative provisions for delivery of student financial 
        assistance

    On May 15, 1997, the committee held a hearing on the 
modernization of student financial aid. At this hearing, 
witnesses from all sectors of the Higher Education community 
expressed deep concerns about the need to improve the 
administration and delivery of student financial assistance 
provided by the Department of Education. These concerns have 
been strongly reinforced by subsequent problems, detailed 
elsewhere in this report, with the Federal Direct Loan 
Consolidation program, the printing of the FAFSA, and recent 
reports by the Office of Management and Budget that the 
Department is falling dangerously behind in its efforts to 
become Year 2000 compliant.
    In order to address these problems, the committee has 
worked closely with members of the higher education community 
and representatives of the Secretary to create a new 
performance-based organization within the Department of 
Education. The committee is pleased that the Department has 
finally become a full partner in this effort and looks forward 
to working with the Secretary to improve the quality and 
efficiency of services provided to students and other 
participants in the student financial aid programs.
    The goal of the performance-based organization has been, 
and remains, to improve the delivery of student financial aid 
to students and their families. In order to accomplish this, 
the committee has attempted to identify the functions performed 
by the Office of Postsecondary Education and segregate those 
that are essentially policy functions that must be retained by 
OPE from those that are administrative and that may 
appropriately be handled by the performance-based organization. 
The PBO will be responsible for administration of the 
information and financial systems that support student 
financial assistance programs as well as any additional 
functions that the Secretary determines are necessary or 
appropriate to improve the delivery of student aid.
    In order to accomplish these goals, the Secretary is 
provided with the personnel and procurement flexibilities 
needed to attract and reward personnel with the experience and 
ability to administer a complex information and financial 
services organization. The PBO will be led by a Chief Operating 
Officer with demonstrated management ability and experience in 
information technology or financial services. The Chief 
Operating Officer will be provided with the flexibility needed 
to attract and reward appropriate personnel and will work with 
the Secretary to develop a 5-year performance plan that 
establishes measurable goals and objectives for the 
organization. In exchange for being provided with procurement 
and personnel flexibilities, the compensation of the COO, 
senior management and staff will be linked to their success in 
meeting the objectives contained within the performance plan.

        TITLE V--GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS

    The current title V contains a number of programs relating 
to teacher training, recruitment, and retention. All but one of 
these programs are repealed, as they have not been funded. The 
minority teacher recruitment program that has been funded is 
amended and transferred to part B of the new title II--
Improving Teacher Quality. A comprehensive program related to 
teachers is included in part A of the new title II.
    The new title V--Graduate and Postsecondary Improvement 
Programs includes 7 parts: Part A includes the Jacob K. Javits 
Fellowship Program (transferred from part C of the current 
title IX); part B includes Graduate Assistance in Areas of 
National Need (transferred from part D of the current title 
IX); part C includes Urban Community Service (transferred from 
part A of the current title XI); part D includes the Fund for 
the Improvement of Postsecondary Education (transferred from 
part A of the current title X); part E includes a new program, 
entitled Improving Access to Higher Education for Students with 
Disabilities; part F includes Hispanic-Serving Institutions 
(transferred from section 316 of title III); and part G 
includes general provisions related to the administration of 
graduate education programs.

Graduate education

    Two graduate education programs, the Jacob K. Javits 
Fellowship Program and the Graduate Assistance in Areas of 
National Need (GAANN) are transferred from the current title IX 
of the Higher Education Act to the new title V. Consistent with 
the committee's decision to discontinue unfunded programs, S. 
1882 repeals Grants to Institutions and Consortia to Encourage 
Women and Minority Participation in Graduate Education; 
Patricia Roberts Harris Fellowship Program; Faculty Development 
Fellowship Program; Assistance for Training in the Legal 
Profession; and Law School Clinical Experience Programs.
    Graduate programs in the Higher Education Act are designed 
to attract students of superior ability, achievement, and 
exceptional promise into high-quality graduate programs and to 
provide those students with the financial support necessary to 
complete advanced degrees. To make most effective use of 
limited resources, the committee further targets fellowship 
assistance for excellent students who have demonstrated the 
greatest financial need.
    In the case of the Jacob K. Javits program, the committee 
retains the statutory emphasis on portable fellowships, while 
it continues to focus on developing departmental capacity in 
the Graduate Assistance in Areas of National Need program. The 
committee believes strongly that the Javits program be 
maintained as a separate program with a separate authorization, 
at the same level provided for GAANN. Outside the Javits 
program, there are virtually no funding opportunities for 
students in the humanities, arts, and social sciences. The 
committee recognizes the importance of training excellent 
instructors and researchers in fields in which a substantial 
number of students earn their undergraduate degrees and 
believes the Javits program offers invaluable assistance in 
meeting this need. Advanced students trained in these fields 
also provide invaluable insight into the construction and 
expressions of the social world.
    To address complications that have arisen in the 
administration of graduate programs, the bill would allow the 
Secretary to enter into a contract with a nongovernmental 
agency to administer the Javits program if the Secretary 
determines that doing so would be more efficient than 
administering the program internally. In addition, provisions 
are included to ensure that applications for graduate 
fellowships be made available by October 1 of each funding 
year, that appropriations for new fellowships be forward-funded 
to give the Secretary ample notice about the availability of 
funding for awards, and that notifications of awards be made by 
the following March 1 for the next academic year. Meanwhile, 
the GAANN program is reauthorized with only minor 
modifications.
    The bill also requires that the title V programs to be 
coordinated with other Federal programs that support graduate 
education and makes provision for an evaluation of the Javits 
and GAANN programs to determine the success of fellows in 
earning their degrees and attaining placements in academic and 
other professional positions.

Urban Community Service

    The Urban Community Service program provides discretionary 
grants for up to 5 years to encourage urban universities to 
serve as sources of skills, talents, and knowledge to serve the 
urban areas in which they are located. In general, urban 
universities are located in metropolitan statistical areas with 
populations of 350,000 and above.
    Applicants are encouraged to work with private and civic 
organizations to design projects that address urban community 
problems such as work force preparation, urban economic 
development, health care, crime and underperforming school 
systems. Priority is given to applications that propose joint 
projects supported by other local, State, and Federal programs. 
Applicants must provide a 25 percent match, in cash or in kind.
    The bill extends the authorization of the Urban Community 
Service program and makes one revision in it--to give priority 
to institutions that have demonstrated their commitment to 
urban community service. The committee believes that 
institutions that have a record of serving urban communities 
are more likely to use their grant funds more effectively than 
those without such a record. Among the activities that 
demonstrate such commitment are prior participation in projects 
including Empowerment Zones, Enterprise Zones, Champion 
Communities, and Community Development Block Grants.
    In addition, the committee recognizes the contributions 
that Urban Community Service grantees can make in expanding 
access to technology in the neighborhoods they serve. Access to 
technology becomes increasingly important with the dramatic 
growth in its use in homes,schools, and businesses. Such 
activities are among the broad array of projects that may be supported 
with grant funds.

Fund for the improvement of postsecondary education

    The Fund for the Improvement of Postsecondary Education 
(FIPSE) supports exemplary, locally developed projects that 
encourage innovative reform and improvement of postsecondary 
education. Small discretionary grants or contracts of up to 3 
years are awarded competitively to institutions of higher 
education and other public and private nonprofit institutions 
and agencies under 2 programs.
    The Comprehensive Program supports activities that foster 
improvement broadly in postsecondary education, both those 
highlighted by FIPSE staff and others responding to relevant ad 
hoc issues identified by the educational community. These 
programs tend to be action-oriented and focus on improvements 
in practice, rather than support for basic research.
    The Special Focus Competitions fund projects addressing a 
particular problem area or innovations in postsecondary 
education. This legislation revises the list of special 
projects to include: international exchanges; institutional 
restructuring to improve learning and promote cost 
efficiencies; evaluation and dissemination of model programs; 
and articulation between 2-year and 4-year institutions, 
including developing innovative methods for ensuring the 
successful transfer of students from 2-year to 4-year 
institutions. The committee believes as well that projects 
focusing on the enhancement of articulation agreements among 
high schools, community colleges, and baccalaureate colleges 
would be beneficial in assuring a smooth transition for 
students as they advance through postsecondary study.
    Given the committee's increasing concern about the costs of 
higher education, it is particularly supportive of innovative 
cost-containment projects such as that of the Southeastern 
Pennsylvania Consortium for Higher Education. This 
collaborative initiative uses resource-sharing, technological 
linkages, joint planning, and collective purchasing to enhance 
cost-effectiveness and enhance quality at these institutions. 
The committee urges the Department of Education to continue to 
support the Consortium as a demonstration that can likely be 
replicated for many small and mid-size colleges in urban and 
rural areas.

Higher education access for students with disabilities

    The bill establishes a new program designed to provide 
assistance for developing model programs to improve the 
teaching of students with disabilities. The bill authorizes an 
appropriation of $10 million in fiscal year 1999 and such sums 
as may be necessary in each of the 4 succeeding years.
    Funds would be available to institutions of higher 
education to develop model programs to provide technical 
assistance or training and professional development for faculty 
and administrators in institutions of higher education--to 
provide the faculty and administrators with the skills to teach 
effectively students with disabilities. These grants will cover 
a range of types and sizes of institutions such as community 
colleges, small private institutions, research institutions, 
and large public institutions. The bill requires the Secretary 
to consider providing an equitable geographic distribution of 
grants to rural and urban areas. The committee encourages the 
Secretary to award grants to institutions of higher education 
that have demonstrated exceptional programs for students with 
disabilities in order to disseminate those programs. In 
addition, the committee believes that institutions should be 
encouraged to include students with disabilities when 
developing the plan described in the application process for 
this competitive grant program.
    The committee recognizes the difficulties and lack of 
knowledge that many faculty and administrators have in 
addressing the needs of students with all disabilities, 
including learning disabilities. The committee intends that 
this program provide new and needed support to faculty and 
administrators without imposing any additional duty, 
obligation, or responsibility on the institution of higher 
education, or on its faculty or staff, beyond the requirements 
of section 504 of the Rehabilitation Act of 1973 and the 
Americans With Disabilities Act of 1990.

Hispanic-serving institutions

    Over the past 15 years, there has been growing recognition 
of the critical role that Hispanic-Serving Institutions play in 
meeting the needs of low-income Latino students. The 
supplemental appropriations act for fiscal year 1982 added $5 
million to title III to support institutions whose Hispanic and 
Native American students constituted at least 45 percent of 
enrollment. The Higher Education Act of 1992 formally 
recognized the particular needs of these institutions by 
establishing a set-aside within part A of title III. In 
recognition of the importance of finding new ways of serving 
our Nation's rapidly growing Hispanic community, the committee 
has created a new part within title V dedicated solely to 
supporting the needs of Hispanic-Serving Institutions.
    Part F of title V authorizes the Secretary to provide 
grants and program related assistance to Hispanic-Serving 
institutions to empower them to improve their capacity to serve 
their students. Authorized activities include acquisition of 
scientific or laboratory equipment, renovation of academic and 
research facilities, faculty professional development, 
curriculum development, acquisition of library materials, 
strengthening of funds management, student services and 
endowment building. Eligible institutions are those 
institutions that are eligible for funding under part A of 
title III and have an enrollment of undergraduate full-time 
equivalent students that is at least 25 percent Hispanic, of 
whom not less than 50 percent are low-income. Other 
requirements of part A institutions, such as the new wait-out 
period, also apply to the Hispanic-serving institutions. 
Hispanic-serving institutions retain eligibility for 
participation in title III programs but may not receive funds 
simultaneously from both part B of title III and part F of 
title V.

               TITLE VI--INTERNATIONAL EDUCATION PROGRAMS

    With each reauthorization of the Higher Education Act 
comes, the committee confronts vast changes in the world. Since 
1992, for example, relative peace has been restored to Haiti, 
Somalia, and the Balkans, and there are new hopes for an end to 
civil war in Northern Ireland. While many countries in East 
Asia have seen the value of their currencies plummet, much of 
the world has emerged out of a deep economic recession.
    As the world's remaining superpower, the United States has 
been actively involved in promoting peace and restoring 
economic stability throughout the world. Coordinating its 
efforts with the United Nations and the International Monetary 
Fund, the United States has been a leader in supporting peace 
efforts in tense regions and in ensuring the economic viability 
of the world economy.
    In addition, global competitiveness continues to drive 
American businesses and their employees to sharpen their 
skills, enhance their productivity, and take a fresh look at 
their operations in view of both the challenges and 
opportunities presented by an international marketplace.
    The success of such efforts, however, relies on a thorough 
understanding of international diplomacy and foreign cultures, 
and the committee believes that international education is the 
essential mechanism for promoting that understanding. 
International education provisions in the Higher Education Act 
help ensure that cross-national studies remain an integral part 
of undergraduate and graduate education in the United States.
    Opportunities to study foreign cultures and languages are 
vital to learning not only about other people but also about 
ourselves. Economic, social, health, and environmental maladies 
are rarely unique to a particular country, and strategies 
adopted elsewhere frequently provide useful guidance for us. 
The United States, for example, has much to learn from other 
countries about education. Although institutions of higher 
education in the United States continue to be the best in the 
world, and international students continue to flock to our 
colleges and universities, recent findings from the Third 
International Math and Science Study show that the elementary 
and secondary school students in the United States continue to 
lag in math and science achievement. Cross-national 
collaborations with other countries are therefore providing 
important lessons for educational reform.
    In recognition of the positive contributions being made by 
existing international education programs in producing 
international expertise and research, the committee has 
extended the authorization of these programs with only minor 
modifications. Consistent with the action of the committee on 
other portions of this legislation, title VI is streamlined 
through the repeal of obsolete and unfunded provisions and 
through the incorporation of key activities, such as the 
operation of foreign language summer institutes, into existing 
program structures.
    Provisions that are repealed by S. 1882 include: the 
doctoral stipend program under Foreign Language and Area 
Studies Fellowships; Grants to Strengthen Programs of 
Demonstrated Excellence in Undergraduate International Studies 
and Foreign Language Programs; Intensive Summer Language 
Institutes; Periodicals and Other Research Materials Published 
Outside the United States; and Preservation of Pre-1992 
Programs.

Part A--International and foreign language studies

    The findings and purpose section of part A is amended to 
include a finding that emphasizes the need to build national 
capacity in international education and foreign languages, 
including research in these areas.
    Part A is further amended to extend the authorization of 
the 6 programs currently receiving funding, which include: 
National Resource Centers, Foreign Language and Area Studies 
Fellowships, Language Resource Centers, Undergraduate 
International Studies and Foreign Languages, International 
Research and Studies, and American Overseas Research Centers.
    A funding level of $80 million in fiscal year 1999 and such 
sums as may be necessary in the 4 succeeding fiscal years is 
authorized for part A programs.
            National resource centers/foreign language and area studies 
                    fellowships
    National Resource Centers are operated by institutions of 
higher education, which use grant funds to establish or operate 
such centers. Grant funds may also be used to maintain 
important library collections and to conduct outreach to other 
postsecondary institutions, government entities, and private 
organizations--including the conduct of summer institutes. 
Because the authority for a separate intensive summer language 
institute program is repealed, a foreign language component is 
added to the summer institutes conducted by National Resource 
Centers. Support for graduate Foreign Language and Area Studies 
Fellowships is continued, but the separate authority for 
doctoral stipends is repealed.
            Language resource centers
    In an effort to enhance the value of the Federal investment 
in Language Resource Centers, the committee has included 
provisions making dissemination an essential component of each 
Center activity. In addition, 2 new permissible activities 
designed to broaden the impact of the work of the Centers are 
added: (1) 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, and (2) the development and dissemination of material 
designed to serve as a resource for foreign language teachers 
at the elementary and secondary school levels.
     The committee recognizes that the primary function of the 
Language Resource Centers is to ``serve as resources to improve 
the capacity to teach and learn foreign languages 
effectively.'' The committee recognizes that the current 
Centers are performing competently in this regard and also 
recognizes the substantial contributions of these centers to 
the area of less commonly taught languages. However, there is 
still a need for a more systematic approach to addressing the 
needs of the less commonly taught languages of national 
strategic importance. The committee urges Department of 
Education officials to encourage an assessment of these needs 
and a determination of cost-effective ways to meet them, such 
as allowing some centers to focus on geographic areas or 
language groups, utilizing technology to organize and provide 
wide access to teaching materials, and encouraging 
collaborations with the less commonly taught language community 
and other title VI grant recipients with similar missions.
            Undergraduate international studies and foreign languages
    Currently, title VI includes separate grant authorities for 
the creation of undergraduate international studies and foreign 
language programs and for the strengthening of such programs 
already in existence. The committee has combined these 
functions within a single authority, incorporating key 
provisions of both programs into the unified authority. A 
foreign language component is added to the summer institutes 
authorized under the program. In addition, the development of 
partnerships between institutions of higher education and the 
private sector, government, and elementary and secondary 
institutions to enhance international knowledge is authorized 
as a new activity. New grant conditions are also established to 
assure that extensive planning is conducted in advance of the 
submission of a grant application, that faculty and 
administrators of all relevant departments and programs are 
involved in ongoing collaboration, that students at 
participating institutions will have equal access to programs 
supported with grant funds, and that Federal funds will be used 
to supplement and not supplant institutional funds and 
activities provided prior to the receipt of the grant.
            International research and studies
    Current research and study activities are reauthorized. 
Consistent with the desire of the committee to assure the most 
efficient use of Federal resources and to assure these 
resources have a positive impact beyond title VI grantees, 2 
new activities are added: (1) evaluation of the extent to which 
programs offered with assistance under this title and 
addressing national needs would not otherwise be offered, and 
(2) studies and evaluations of effective practices in the 
dissemination of international information, materials, 
research, teaching strategies and testing techniques throughout 
education, including elementary and secondary schools.
            American overseas research centers
    Title VI support for American Overseas Research Centers, 
first made available by the Higher Education Amendments of 
1992, is continued. Provisions are added to clarify that the 
establishment of new centers is an allowable activity. American 
Overseas Research Centers are consortia of American 
universities, colleges, museums, and research societies. The 
Centers, 11 of which have received title VI assistance since 
fiscal year 1994, serve the post-graduate research needs of 
American scholars and institutions in a specific region or 
country overseas.

Part B--Business and international education programs

    Part B is amended to extend the authorization of 2 business 
and international education programs: Centers for International 
Business Education and Education and Training Programs. Centers 
for International Business Education provide research, 
instruction, and technical assistance combining business and 
international studies. Education and Training Programs promote 
linkages between institutions of higher education and the 
business community.
    A funding level of $11 million in fiscal year 1999 and such 
sums as may be necessary in the 4 succeeding fiscal years is 
authorized for Centers for International Business Education. A 
funding level of $ 7 million in fiscal year 1999 and such sums 
as may be necessary in the 4 succeeding fiscal years is 
authorized for Education and Training Programs.
    These programs have offered valuable assistance in 
enhancing the ability of the American business community to 
compete in international markets. Minor changes are made in 
Business and International Education Programs to provide that 
Centers for International Business Education shall provide 
interdisciplinary programs for any degree candidates, as 
opposed to advanced degree candidates as provided in current 
law. A foreign language component is added to the summer 
institutes. In addition, programs to develop or enhance 
international skills, awareness, and expertise may be offered 
at times most convenient for the business community, rather 
than being limited to evenings or summers. The bill also makes 
specific mention of a community college representative on the 
Advisory Council to an international business education center.

Part C--Institute for International Public Policy

    Part C is amended to extend the authorization of the 
Institute for International Public Policy. This Institute was 
established in the Higher Education Amendments of 1992 in an 
effort to increase the number of minorities entering 
international fields, including the Foreign Service. A funding 
level of $10 million in fiscal year 1999 and such sums as may 
be necessary in the 4 succeeding fiscal years is authorized for 
part C programs.
    Part C is further amended to increase the required match by 
grant recipients from one-fourth to one-half and require that 
the nonfederal contribution be made by private sector 
contributions. In addition, provisions are added to authorize 
subgrants to strengthen Historically Black Colleges and 
Universities, Hispanic-Serving Institutions, minority 
institutions, and Tribal College institutional international 
affairs programs. The bill also expands the current Junior Year 
Abroad program. The program is renamed ``Study Abroad'' and 
provides for both Junior year abroad and summer abroad 
programs, with one-third of the costborne by the institution 
and two-thirds by the Institute. Students completing their third year 
of study would be eligible to participate in the summer abroad program.
    Additional action by institutions of higher education and 
agencies throughout the Federal Government will be required to 
achieve the objective of part C to increase the numbers of 
underrepresented minorities into the field of international 
service, including private international voluntary 
organizations and the foreign service of the United States. In 
particular, the committee encourages improved communication and 
coordination among Federal agencies with international missions 
in devising ways to attract and retain minorities in foreign 
service and related careers.
    In addition, the committee notes the value of internships 
in offering recent college graduates hands-on experience in 
fields in which they have an interest in pursuing a career or 
advanced education. Internships offer a unique opportunity to 
gain an understanding of the operation of an office or 
organization and to build professional relationships. In the 
international field, internships based in the Washington, DC, 
area can be particularly valuable. The committee encourages 
institutions of higher education, Federal agencies, and private 
organizations to develop international service internships 
designed to expand opportunities for underrepresented 
minorities.

        Title VII--Related Programs and Amendments to Other Laws

Part A--Indian Education Programs

    A small number of changes to Indian Education programs are 
included in S. 1882. With respect to the Tribally Controlled 
Community College Assistance Act of 1978, these modifications 
include increasing the per-Indian-pupil institutional grant to 
$6,000, changing institutional references from Tribally 
Controlled Community Colleges to Tribal Colleges and 
Universities, reauthorizing the programs assisted under the 
act, and increasing the authorization for Grants to Tribally 
Controlled Colleges and Universities to $40 million for fiscal 
year 1999. The bill also authorizes $5 million to be 
appropriated in fiscal year 1999 for the Institute of American 
Indian and Alaska Native Culture and Arts Development.

Part B--Advanced Placement Incentive Program

    The Advanced Placement Fee Payment Program established by 
the Higher Education Amendments of 1992 is reauthorized and 
renamed the ``Advanced Placement Incentive Program.'' Several 
changes are made to the program that are designed to encourage 
greater participation in Advanced Placement (AP) courses.
    Advanced placement courses provide academically challenging 
instruction, which permits students not only to master subject 
areas but also to earn college credits. Federal funding was 
first made available in fiscal year 1998 to award grants to 
States to enable them to cover all or a portion of the cost of 
AP test fees for low-income students. An estimated 68,000 low-
income students have benefitted from this assistance. In 
addition, 23 States offer support for the AP program through 
means such as encouraging or requiring AP courses in high 
schools, assisting teachers to attend AP workshops and 
seminars, paying all or a portion of the cost of AP examination 
fees, and establishing statewide policies with respect to the 
use of AP examination grades at State colleges and 
universities. The committee encourages the Secretary to work 
with States not yet participating in this important Federal 
program so that its benefits will reach students in all States.
    Under S. 1882, Federal support for AP activities will 
remain focused on assisting low-income students in paying test 
fees. A portion of the funds, however, may also be used to 
disseminate information regarding the availability of test fee 
payments. In addition, a State may meet ``supplement, not 
supplant'' requirements if supplanted funds are used to 
increase the participation of low-income students in AP courses 
through teacher training and other activities directly related 
to increasing the availability of AP courses. Federal funding 
will be available only if the College Board maintains its fee 
assistance program at levels provided in the preceding year. 
Funding for the Advanced Placement Incentive Program is 
authorized at $10 million in fiscal year 1999 and such sums as 
may be necessary in each of the succeeding 4 years.

Part C--United States Institute of Peace

    The U.S. Institute of Peace was established in 1984 to 
strengthen our capacity to promote peaceful resolution of 
international conflicts. Since this time the Peace Institute 
has used its resources to: (1) mobilize national and 
international experts to support policy makers by providing 
independent assessments of how to deal with international 
conflicts through political means; (2) facilitate resolution of 
international disputes by preparing U.S. negotiators for 
mediation work; (3) train international affairs professionals 
in conflict management and resolution techniques; and, (4) 
strengthen curricula and instruction, from high school through 
graduate education, about the changing character of 
international conflict as well as nonviolent approaches to 
managing international disputes.
    The U.S. Peace Institute has consistently provided the 
administration and Congress with insights into the origins of 
regional conflicts that would otherwise not be available. For 
example, through its special initiative on religion, ethics, 
and human rights, the Peace Institute has made particularly 
important contributions to our understanding of conflicts in 
the Middle East, Bosnia-Herzegovina, Croatia, the Federal 
Republic of Yugoslavia, and elsewhere in Eastern Europe.
    In order to facilitate these and other special initiatives, 
the committee has provided the Institute with explicit 
authority to enter into personal service contracts. This 
authority will allow the Institute to hire experts needed to 
respond to short-term projects that do not demand the 
allocation of permanent staff. In addition, the committee has 
reaffirmed the Institute's eligibility to receive government 
rates for travel, supplies, and services, and extended its 
authorization through the year 2003.

Part D--Community Scholarship Mobilization

    While the Federal Government has a commitment to equalizing 
access to higher education, the committee recognizes the 
potential that communities have in harnessing local resources 
to leverage private support for scholarship aid. In an effort 
to support the efforts of organizations that stimulate 
community activism and involvement in raising grant funds for 
and encouraging participation in postsecondary education, the 
committee has authorized a competitive grant program that will 
allow grant recipients to establish endowments and to use the 
interest earnings to establish and support State, regional, or 
community program centers. These centers are charged with 
fostering the development of local affiliated chapters in high 
poverty areas that promote higher education goals for students 
from low-income families by providing academic support and 
postsecondary scholarship assistance.
    Seventy percent of interest income would support the 
establishment or ongoing work of State or regional program 
centers to enable such centers to work with local communities 
to establish local affiliated chapters in high poverty areas 
and to provide ongoing assistance, training workshops, and 
other activities to ensure the success of local chapters. 
Thirty percent of the interest income would be used to provide 
scholarships for students from low-income families. 
Scholarships would be matched 1:1 from funds raised by the 
local community. The bill authorizes the appropriation of $10 
million for fiscal year 2000 to carry out the purposes of this 
section.
    The committee believes that a small Federal investment in 
private initiatives designed to inspire and motivate a 
financially needy student to gain access to postsecondary 
education will complement and enhance the efforts made at the 
Federal level.

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

    The Grants to States for Workplace and Community Transition 
Training for Incarcerated Youth Offenders program is 
transferred from part E of title X of the Higher Education Act. 
The program provides grants to State correctional education 
agencies to assist and encourage incarcerated youth to acquire 
functional literacy, life, and job skills through the pursuit 
of postsecondary education. Grant funds may also be used to 
provide employment counseling and related services during 
incarceration, continuing through prerelease and parole. 
Students under the age of 25 who are eligible to be released 
from prison within 5 years are eligible to participate. This 
program is reauthorized, without modification, for 5 years. 
Funding levels are set at $14 million in fiscal year 1999 and 
such sums as may be necessary in each of the 4 succeeding 
fiscal years.

Part F--Education of the Deaf

    Selected amendments to the Education of the Deaf Act are 
included in part F. The amendments extend the authorizations 
for Gallaudet University and the National Technical Institute 
for the Deaf (NTID); make the legislation consistent with 
certain provisions in the Individuals with Disabilities 
Education Act of 1997; clarify audit provisions; increase 
flexibility with regard to endowment funds; and create a 
Commission on Education of the Deaf. The committee believes 
these amendments will allow Gallaudet University and the NTID 
to continue to offer specialized educational opportunities to 
students who are deaf; to increase their efforts to share and 
disseminate their respective expertise and research with other 
entities that educate students who are deaf; to address 
emerging and ongoing needs to improve the skills and increase 
the number of educators who can successfully work with students 
who are deaf in diverse educational settings; and to be 
accountable to Congress and the Secretary of Education with 
regard to the effects of their programs and their expenditure 
of Federal funds.
    The committee views the authorization of a Commission on 
Education of the Deaf as the most appropriate and timely 
mechanism for identifying education-related factors that 
facilitate or result in barriers to successful postsecondary 
educational experiences and employment for individuals who are 
deaf. The committee expects the Commission to consider: the 
degree to which appropriate elementary, secondary, and 
postsecondary educational opportunities are available to 
individuals who are deaf; the adequacy of preparation for 
postsecondary education or employment for individuals who are 
deaf; the training and technical assistance needs of 
elementary, secondary, postsecondary, adult, and continuing 
education programs that serve individuals who are deaf; the 
state of employment and training needs of individuals who are 
deaf; and any other factors that the Commission determines 
facilitate or result in barriers to successful postsecondary 
education experiences and employment for individuals who are 
deaf. The committee expects the Commission to include the 
effects of the Americans with Disabilities Act and the 
Individuals with Disabilities Education Act in these areas, as 
well as an assessment of the role played by federally supported 
elementary, secondary, and postsecondary education programs 
that serve individuals who are deaf.
    The committee understands that the Department has given 
NTID approval to use Federal funds to subsidize the tuition of 
students, both deaf and hearing, who are enrolled in the NTID 
master of science degree program in the secondary education of 
students who are deaf or hard of hearing. The committee 
approves of that decision. Because this will be the first time 
NTID uses its direct appropriation to fund its own master of 
science degree program, the committee directs the Department to 
monitor the progress of the program and to report back to 
Congress prior to the next reauthorization of this act. The 
committee directs NTID to submit an annual report on the 
program to the Department and to Congress, which shall include 
data on enrollment numbers and the outcomes for students 
enrolled in the program, including placement data, and such 
additional information as the Secretary may consider necessary. 
The committee also encourages NTID to continue to seek 
additional Federal and nonfederal sources of funding to reduce 
the need to use NTID appropriated funds for this program.

Part G--Repeals

    Streamlining the Higher Education Act is one of the 
objectives of the committee in this reauthorization of the act. 
Unfunded and obsolete provisions of the Higher Education Act of 
1965 and the Higher Education Amendments of 1992 are repealed. 
A complete list of repealed provisions may be found in section 
I (Purpose and Summary) of this report.

Part H--Year 2000 computer problem

    The Year 2000 problem is the result of a programming 
shortcut initiated in the 1960's whereby dates are represented 
with 6 digits (10/10/87) instead of 8 digits (10/10/1987). 
Because the first two digits of the year are omitted, software 
programs assume that every date in the program is a date in the 
20th century. Unfortunately, fixing this problem is time 
consuming and difficult. No one can forecast with certainty how 
an application will analyze dates from the next century without 
evaluation, analysis, and testing. As a result, the Government 
Accounting Office has recommended that every Federal Agency 
begin testing its software renovation work by mid-1998 in order 
to ensure that all Federal software systems are repaired and 
stable before December 31, 1999.
    The Office of Management and Budget, in its most recent 
report on Year 2000 compliance, has raised serious questions 
about the Department's ability to meet the timetable outlined 
by GAO. The Department has completed renovation on only 14 
percent of its mission critical systems and has not completed 
testing or validation on any of the systems that have been 
renovated. The committee is deeply concerned that failure to 
renovate all mission critical systems could result in 
disruptions in the management and delivery of student financial 
aid to more than 8 million students and their families. The 
Secretary is required to report to the Congress, no later than 
March 1, 1999 on the compliance status of all mission critical 
systems and contingency plans for those systems that the 
Department will be unable to renovate, test, and validate, 
prior to December 31, 1999.

                            V. Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                       Washington, DC, May 4, 1998.
Hon. James M. Jeffords,
Chairman, Committee on Labor and Human Resources,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1882, 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,
                                         June E. O'Neill, Director.
    Enclosure.

               congressional budget office cost estimate

S. 1882--Higher Education Act Amendments of 1998

    Summary: S. 1882 would amend the Higher Education Act of 
1965 by reauthorizing several existing programs, authorizing 
new programs, and repealing others. Authorizations of 
appropriations under S. 1882 would total $108 billion for 
fiscal years 1997-2003, assuming adjustments for inflation. 
Without adjustments for inflation, authorizations would total 
$106 billion.
    S. 1882 would also make numerous changes in federal student 
loan programs. These changes are estimated to reduce direct 
spending by $235 million in 1998 but increase spending by about 
$3.8 billion over the 1999-2003 period.
    S. 1882 contains no intergovernmental or private sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments except as a condition of receiving federal 
assistance.
    The estimate assumes that S. 1882 would be enacted by June 
1, 1998. Except where provisions have specific effective dates 
or specify specific loans or borrowers, S. 1882 is assumed to 
become effective on October 1, 1998.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1882 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 S. 1882                                
                                    [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 Adjustments for Inflation                                         
                                                                                                                
Total proposed changes:                                                                                         
    Estimated authorization levels..................  ........    18,658    19,783    21,478    23,238    24,401
    Estimated outlays...............................  ........     3,414    17,682    19,964    21,760    23,401
Total spending under S.1882:                                                                                    
    Estimated authorization levels..................    10,052    18,658    19,783    21,478    23,238    24,401
    Estimated outlays...............................     9.268    11,749    18,067    19,983    21,760    23,401
                                                                                                                
                                        Without Adjustments for Inflation                                       
                                                                                                                
Total proposed changes:                                                                                         
    Estimated authorization levels..................  ........    18,655    19,680    21,268    22,919    23,960
    Estimated outlays...............................  ........     3,413    17,669    19,870    21,562    23,093
Total spending under S. 1882:                                                                                   
    Estimated authorization levels..................    10,052    18,655    19,680    21,268    22,919    23,960
    Estimated outlays...............................     9,268    11,748    18,054    19,889    21,562    23,093
                                                                                                                
                                                 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......................       -60       730       795       895       985     1,025
    estimated outlays...............................      -235       585       695       780       865       920
Baseline spending under S. 1882:                                                                                
    Estimated budget authority......................     3,803     5,912     6,267     6,673     6,063     7,371
    Estimated outlays...............................     3,134     4,974     5,577     5,951     5,342     6,671
----------------------------------------------------------------------------------------------------------------
Note.--Components may not sum to totals due to rounding.                                                        

Basis of estimate

            Spending subject to appropriation
    S. 1882 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 S. 1882 on 
spending subject to appropriation by title, with and without 
adjustments for inflation after 1999.
    Title II: Improving Teacher Quality.--Title II would 
authorize grants aimed at improving teacher quality. These 
authorizations would total $337 million in fiscal year 1999 and 
$1.7 billion for fiscal years 1999-2003, not including 
adjustments for inflation. States and teacher partnerships 
would provide a 50-percent match for funds received under Title 
II.
    Title III: Institutional Aid.--Title III would provide for 
grants designated to strengthen institutions of higher 
education, including historically black colleges and 
universities, Hispanic serving institutions, and American 
Indian colleges and universities. Title III would also 
authorize a minority science improvement program. 
Authorizations under Title III would total $370 million in 
fiscal year 1999 and $1.9 billion for fiscal years 1999-2003, 
not including adjustments for inflation.

   TABLE 2.--ESTIMATED IMPACT OF S. 1882 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 II: Improving Teacher Quality:                                                                        
        Estimated budget authority..................  ........       337       345       354       363       372
        Estimated outlays...........................  ........        40       271       338       353       362
    Title III: Institutional Aid:                                                                               
        Estimated budget authority..................  ........       370       379       388       398       409
        Estimated outlays...........................  ........        44       297       371       388       397
    Title IV: Pell Grants:                                                                                      
        Estimated budget authority..................  ........    14,468    15,498    17,087    18,738    19,780
        Estimated outlays...........................  ........     2,894    14,384    15,795    17,385    18,913
    Title IV: Other Student Assistance:                                                                         
        Estimated budget authority..................       \1\     3,013     3,081     3,158     3,237     3,323
        Estimated outlays...........................       \1\       366     2,410     3,009     3,147     3,229
    Title V: Graduate and Post-Secondary Improvement                                                            
     Programs:                                                                                                  
        Estimated budget authority..................  ........       117       120       123       126       129
        Estimated outlays...........................  ........        14        94       117       123       126
    Title VI: International Education Programs:                                                                 
        Estimated budget authority..................  ........       108       111       113       116       119
        Estimated outlays...........................  ........        13        87       108       113       116
    Title VII: Related Programs and Amendments to                                                               
     Other Acts:                                                                                                
        Estimated budget authority..................       \1\       246       249       254       261       268
        Estimated outlays...........................       \1\        42       140       225       242       258
Total proposed changes:                                                                                         
        Estimated budget authority..................       \1\    18,658    19,783    21,478    23,238    24,401
        Estimated outlays...........................       \1\     3,413    17,682    19,964    21,760    23,401
Total spending under S. 1882:                                                                                   
        Estimated budget authority..................    10,052    18,658    19,783    21,478    23,238    24,401
        Estimated outlays...........................     9,268    11,748    18,067    19,983    21,760    23,401
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.                                                                                         
                                                                                                                
Note: Components may not sum to totals due to rounding.                                                         


  TABLE 3.--ESTIMATED IMPACT OF S. 1882 ON SPENDING SUBJECT TO APPROPRIATION, WITHOUT 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 II: Improving Teacher Quality:                                                                        
        Estimated budget authority..................  ........       337       337       337       337       337
        estimated outlays...........................  ........        40       270       330       337       337
    Title III: Institutional Aid:                                                                               
        Estimated budget authority..................  ........       370       370       370       370       370
        Estimated outlays...........................  ........        44       296       363       370       370
    Title IV: Pell Grants:                                                                                      
        Estimated budget authority..................  ........    14,468    15,498    17,087    18,738    19,780
        Estimated outlays...........................  ........     2,894    14,384    15,795    17,385    18,913
    Title IV: Other Student Assistance:                                                                         
        Estimated budget authority..................       \1\     3,013     3,009     3,009     3,009     3,008
        Estimated outlays...........................       \1\       366     2,401     2,942     3,005     3,008
    Title V: Graduate and Post-Secondary Improvement                                                            
     Programs:                                                                                                  
        Estimated budget authority..................  ........       117       117       117       117       117
        Estimated outlays...........................  ........        14        94       115       117       117
    Title VI: International Education Programs:                                                                 
        Estimated budget authority..................  ........       108       108       108       108       108
        Estimated outlays...........................  ........        13        86       106       108       108
    Title VII: Related Programs and Amendments to                                                               
     Other Acts:                                                                                                
        Estimated budget authority..................       \1\       243       240       239       239       239
        Estimated outlays...........................       \1\        42       138       219       239       239
Total proposed changes:                                                                                         
    Estimated budget authority......................       \1\    18,655    19,680    21,268    22,919    23,960
    Estimated outlays...............................       \1\     3,413    17,669    19,870    21,562    23,093
Total spending under S. 1882:                                                                                   
    Estimated budget authority......................    10,052    18,655    19,680    21,268    22,919    23,960
    Estimated outlays...............................     9,268    11,748    18,054    19,889    21,562    23,093
----------------------------------------------------------------------------------------------------------------
\1\ Less than $500,000.                                                                                         
                                                                                                                
Note: Components may not sum to totals due to rounding.                                                         

    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 
$5,000 for academic year 1999-2000, $5,200 for academic year 
2000-2001, $5,400 for academic year 2001-2002, $5,600 for 
academic year 2002-2003, and $5,800 for academic year 2003-
2004. The Pell program is currently authorized only through 
fiscal year 1998 (academic year 1998-1999). S. 1882 would 
increase estimated authorizations to $14.5 billion for fiscal 
year 1999, $15.5 billion for fiscal year 2000, $17.1 billion 
for fiscal year 2001, $18.7 billion for fiscal year 2002, and 
$19.8 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, 4.8 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 
$3,140 in 1999-2000, $3,240 in 2000-2001, $3,340 in 2001-2002, 
$3,450 in 2002-2003, and $3,560 in 2003-2004. These estimates 
assume that the program would be funded at the maximum levels 
authorized and would include the need analysis and other 
changes contained in the bill.
    Need analysis.--Part F of Title IV of the bill would modify 
the need analysis formulas used for calculating federal Pell 
grants. The need 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.
    S. 1882 would index the income protection allowances (IPAs) 
for dependent students and independent students without 
children to the consumer price index for academic year 2001-
2002 and beyond. The IPA is an amount of income that is not 
expected to be used towardcollege and is not counted as income 
as part of the EFC calculations. 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, 
assuming a $3,000 maximum award (the same level as in 1998-
1999).
    Other provisions.--Under current law, Pell grants for 
students who qualify for an award between $200 and $399 are 
actually awarded $400. Part A would make the minimum award 
$200. Students who qualify for an award of less than $200 still 
would receive nothing. This provision would reduce costs by 
about $10 million in 1999 with a $3,000 maximum award.
    Part A would also limit Pell grants to students who 
complete their degrees within 150 percent of the period 
normally required to do so. CBO estimates that this provision 
would reduce program costs by about $30 million in 1999, 
assuming a $3,000 maximum award.
    Part G instructs the Secretary of Education to verify 
incomes by confirming that adjusted gross income (AGI) claimed 
on student financial aid forms corresponds to the AGI declared 
to the Internal Revenue Service. 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 allowing institutions to 
determine a dependent care or disability-related expenses 
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, giving 
institutions more discretion in determining costs for room and 
board and allowing for a distance education demonstration 
project.
    Title IV: Other Student Assistance.--In addition to 
authorizing Pell grants, Title IV would authorize other grants 
to students. These grants would include work-study grants, TRIO 
programs, a national early intervention scholarship and 
partnership program, federal supplementary education 
opportunity grants, assistance for students whose families are 
engaged in migrant and seasonal farm work, child care grants 
for low-income students, a new loan forgiveness program for 
child care providers, and a Robert C. Byrd Honors Scholarship. 
In addition, the bill would reauthorize the Federal Perkins 
loan program. Title IV also authorizes several studies relating 
to various aspects of higher education and a performance-based 
organization (PBO) within the Department of Education for the 
delivery of student financial assistance. Discretionary 
spending authorized in Title IV, excluding Pell Grants, totals 
$3.0 billion for fiscal year 1999 and $15.0 billion from 1999-
2003, not including adjustments for inflation.
    CBO estimates the studies authorized under Title IV would 
cost $4 million in 1999 and $11 million over the next 5 years. 
Two of the studies--one on additional institutional reporting 
on procedures for handling sexual assault cases and another on 
distance education demonstrations are authorized a $1 million 
each. This title also requires a variety of studies by the 
National Center on Education Statistics (NCES), in some cases 
in collaboration with the Bureau of Labor Statistics, on the 
costs of higher education, the expenditures of institutions of 
higher education, and the development of a market basket 
identifying the various items accounting for the costs of 
higher education. Based on discussions with NCES staff, CBO 
estimates that the total costs of these studies would amount to 
$2 million in 1999 and $9 million over the 1999-2003 period.
    The PBO authorized under Title IV would have a chief 
operating officer and 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 process 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 V: Graduate and Postsecondary Improvement Programs--
Title V would authorize grants for graduate and postsecondary 
improvement programs. These grants would include the Jacob K. 
Javits Fellowship program, grants for graduate assistance in 
areas of need, urban community service grants, and funds for 
the improvement of postsecondary education. Title V would 
authorize $117 million in fiscal year 1999 and $585 million 
over the 1999-2003 period, not including adjustments for 
inflation.
    Title VI: International Education Programs.--Title VI would 
authorize funding for international and foreign language 
studies, a business and international education program, and an 
institute for international public policy. Authorizations under 
Title VI would total$108 million in fiscal year 1999 and $540 
million for fiscal years 1999-2003, not including adjustments for 
inflation.
    Title VII: Related Programs and Amendments to Other Acts.--
Title VII would provide authorizations targeted toward 
tribally-controlled colleges and universities including funds 
for endowment growth, construction, and economic development, 
and would reauthorize funding for Gallaudet University and the 
National Technical Institute for the Deaf (NTID). Title VII 
would also authorize an advanced placement incentive program, 
the Institute for Peace, community scholarships, and grants to 
states for training for youth offenders. Estimated 
authorizations under Title VII would total $243 million in 1999 
and $1.2 billion for fiscal years 1999-2003.
    Amending the Education for the Deaf Act, this title would 
provide such sums as necessary for Gallaudet and NTID. The 
estimate assumes authorizations of $81 million a year for 
Gallaudet and $44 million for NTID, without adjustments for 
inflation (the amounts authorized in 1998).
    Title VII also authorizes a Commission on Education for the 
Deaf. The commission would begin its work within 90 days of the 
bill's enactment, report its findings within 18 months, and 
cease operations completely 21 months after enactment. Based on 
data from other commissions of comparable scope, CBO estimates 
that the commission would cost $3 million in 1999 and $5 
million in total over the 1998-2000 period.

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 ensuring that sufficient loan 
capital is available to students and parents. In general, the 
proposed changes may be classified by their impacts: 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 $235 million in 1998 but increase costs by $625 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 13.7 percent.
    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.
---------------------------------------------------------------------------
    S. 1882 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 that the 10-year bond rate. These 
costs are partially offset by higher borrower interest payments 
in the direct loan program.

                                                TABLE 4.--ESTIMATED IMPACT OF S. 1882 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...........................................     -440      -5       6       b      15      30      70      70      70      75      70
    Outlays....................................................     -405     -45       1       b      15      20      70      70      70      65      70
Borrowers:                                                                                                                                              
    Budget authority...........................................       15      53      83     118     138     143     143     148     158     158     163
    Outlays....................................................       10      38      63      98     123     128     128     133     138     143     143
Other:                                                                                                                                                  
    Budget authority...........................................        5       5       5       5       5       5       5       5       5       5       5
    Outlays....................................................        5       5       5       5       5       5       5       5       5       5       5
Interactions among provisions:                                                                                                                          
    Budget authority...........................................        0      17      16      22      22      17      22      22      27      22      27
    Outlays....................................................       -5      22      16      22      12      27      22      17      17      27      22
Subtotal:                                                                                                                                               
    Budget authority...........................................      -60     770     835     935   1,025   1,065   1,165   1,215   1,270   1,310   1,360
    Outlays....................................................     -235     625     735     820     905     960   1,045    1090   1,125   1,175   1,215
                                                                                                                                                        
                                                                  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...........................................      -60     730     795     895     985   1,025   1,125   1,175   1,230   1,270   1,230
    Outlays....................................................     -235     585     695     780     865     920   1,005   1,050   1,085   1,135   1,175
--------------------------------------------------------------------------------------------------------------------------------------------------------

    a. 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
--------------------------------------------------------------------------------------------------------------------------------------------------------
b. Less than $500,000.                                                                                                                                  

    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.--S. 1882 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 $414 million over the 1998-2003 period.
    This bill would reduce the federal insurance 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 $390 million over the 1998-2003 
period, assuming an effective date of June 1, 1998.
    S. 1882 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. The 
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 $200 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 s. 1882 are 
therefore estimated to reduce net federal spending by $200 
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 of 
outstanding guarantee 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).--S. 1882 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 $460 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 demonstrate knowledge and 
teaching skills (in the case of elementary school teachers) or 
be teaching in a subject area relevant to their college major 
(in the case of secondary school teachers). Loan cancellation 
would apply only to subsidized loans up to $10,000, and the 
loans and accrued interest would be canceled according to the 
following schedule: nothing for the first three years of 
teaching, 30 percent in each of the fourth and fifth years, and 
the remaining 40 percent in the sixth year. Eligibility would 
be restricted to new loans issued to new borrowers beginning on 
the date of enactment of this bill. 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, some 35,000 new teachers are estimated to be 
participating in this program. The estimated subsidy costs of 
the provision are $345 million over the 1998-2003 period.
    This bill would also modify certain rules with regard to 
loan disbursements, change the calculations determining 
eligibility for loans, and modify various repayment rules and 
terms. Together these changes would increase costs by $115 
million over the 1998-2003 period.

                    VI. Regulatory Impact Statement

    The committee has determined that there will be only a 
negligible increase in the regulatory burden of paperwork as a 
result of this legislation.

           VII. Application of Law to the Legislative Branch

    Other changes.--S. 1882 would modify and permanently extend 
the 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. CBO estimates that this 
provision will increase federal costs by $5 million in both 
fiscal years 1998 and 1999 and $30 million over the 1998-2003 
period.
    Interactions among student loan provisions.--Because the 
proposed changes in the student loan programs interact with 
each other, the total budgetary affects 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 $22 million in 
1999 and $94 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. S. 1882 would 
repeal this fund and deposit its current balances in the 
Treasury. This change would save $200 million over the 1998-
2003 period. S. 1882 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 S. 1882 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.........................................    -235           585     695     780     865     920   1,005   1,050   1,085   1,135   1,175
Change in receipts........................................                                                                                              
(10)Not applciable                                                                                                                                      
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: S. 1882 
contains no intergovernmental mandates or private-sector 
mandates as defined in UMRA. The bill would, on the whole, 
benefit public institutions of higher education. While 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.
    Previous CBO estimate: On April 17, 1998, CBO provided an 
estimate of H.R. 6, the Higher Education Amendments of 1998. 
H.R. 6 provided authorizations amounting to $100 billion and 
increased direct spending by an estimated $3.8 billion over the 
1999-2003 period. Where the provisions of H.R. 6 and S. 1882 
are the same, the estimates are identical.
    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.
    S. 1882 reauthorizes and amends the Higher Education Act of 
1965 to continue programs primarily offering assistance to 
students and institutions of higher education and, as such, has 
no application to the legislative branch.

                   VIII. Section-by-Section Analysis

    Section 1 provides that the act may be cited as the 
``Higher Education Amendments of 1998''.
    Section 2 provides that references in this act will refer 
to sections or provisions of the Higher Education Act of 1995, 
unless expressly stated otherwise.

                      TITLE I--GENERAL PROVISIONS

    Section 101 repeals the current title I (Partnerships for 
Educational Excellence) and the current title XII sections 
1203, 1206, 1211, and 1212. Current title XII sections 1201, 
1202, 1204 (as renumbered by Public Law 90-575), 1204 (as added 
by Public Law 96-374), 1205, 1207, 1208, 1209, 1210, and 1213 
are transferred to title I and redesignated as sections 101, 
102, 103, 104, 105, 106, 107, 108, 109, and 110, respectively. 
Current title XII section 1203 provisions are transferred to 
subpart 4 of part A of title IV and redesignated as section 
415G.
    Section 102 makes a technical correction to the 
redesignated section 103 by striking ``(b)''.
    Section 103 amends the redesignated section 105 (National 
Advisory Committee on Institutional Quality and Integrity) by 
deleting obsolete references and extending the authorization of 
the committee through September 30, 2004. The section also 
requires the Secretary to publish the expiration dates of terms 
of members of the committee and to solicit nominations for 
vacancies on the committee.
    Section 104 adds new sections 111 and 112:
     New section 111 preserves prior rights and obligations for 
facility projects approved prior to 1987 under parts A, B, C 
and D of title VII of the Higher Education Act as these parts 
were in effect prior to enactment of the Higher Education Act 
Amendments of 1992. Section 111 also preserves prior rights and 
obligations for projects approved under part C of title VII as 
such part was in effect after enactment of the Higher Education 
Act Amendments of 1992 and prior to the date of enactment of 
the Higher Education Act Amendments of 1998. Federal funds are 
authorized to pay obligations incurred prior to 1987 under 
parts C and D of title VII and for obligations incurred between 
enactment of the Higher Education Act Amendments of 1992 and 
the Higher Education Act Amendments of 1998.
    New section 112 retains the provisions stating that the 
period of Federal interest in an academic facility constructed 
with aid under part A or part B shall consist of 20 years 
following construction of the facility.
    Section 105 corrects references in other Federal statutes 
and cross-references in the Higher Education Act of 1965 to 
reflect the redesignation of current title XII sections, 
particularly current section 1201 (Definitions).

                  TITLE II--IMPROVING TEACHER QUALITY

    Section 201 of the bill adds to the act a new title II, 
entitled Improving Teacher Quality and creates the following 
new sections:
    Section 201 includes the purposes of the title. The 
purposes of the title are to improve student achievement, to 
improve the quality of the current and future teaching force by 
improving the preparation of prospective teachers and enhancing 
professional development activities, and to hold institutions 
of higher education accountable for preparing teachers who have 
the necessary teaching skills and are highly competent in the 
academic content areas in which the teachers plan to teach--
including training in the effective uses of technologies in the 
classroom.

Part A--Teacher quality

            Subpart 1--Teacher quality enhancement grants
    Section 211 authorizes Teacher Quality Enhancement Grants, 
which are grants made to States for a period of up to 5 years. 
Each State desiring a grant under subpart 1 shall, consistent 
with State law, designate a chief individual or entity 
responsible for the State supervision of education to 
administer the activities under this subpart. The individual or 
entity with the authority to submit the application shall 
consult with the Governor, State board of education, or State 
educational agency, as appropriate. Nothing in this subpart 
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. States must match federal 
funds with nonfederal sources on a 1:1 basis in cash or in 
kind.
    Section 212 specifies the use of funds under this subpart. 
Grant funds must be used to reform teacher preparation 
requirements and to ensure that current and future teachers 
possess the necessary teaching skills and academic content 
knowledge in the subject areas in which the teachers are 
assigned to teach by carrying out 1 or more of the following 
activities: (1) implementing reforms that hold institutions of 
higher education with teacher preparation programs accountable 
for preparing teachers who are highly competent in the academic 
content areas in which the teacher plans to teach, which may 
include the use of rigorous subject matter competency tests and 
the requirement that a teacher have an academic major in a 
subject area or related discipline in which the teacher plans 
to teach; (2) reforming teacher certification or licensure 
requirements to ensure that new teachers have the necessary 
teaching skills and academic content knowledge in the subject 
areas where they are assigned to teach; (3) providing 
prospective teachers with alternatives to traditional 
preparation for teaching through programs at colleges of arts 
and sciences or at nonprofit educational organizations; (4) 
funding programs that establish, expand, or improve alternative 
routes to State certification for highly qualified individuals 
from other occupations and recent college graduates with 
records of academic distinction, including support during the 
initial teaching experience; (5) developing and implementing 
effective mechanisms to ensure that schools are able to 
effectively recruit highly qualified teachers, to financially 
reward those teachers and principals whose students have made 
significant progress toward high academic performance such as 
through performance-based compensation systems and access to 
ongoing professional development opportunities for teachers and 
administrators, and to remove teachers who are not qualified; 
(6) developing and implementing innovative efforts aimed at 
reducing the shortage of highly qualified teachers in high 
poverty urban and rural areas that may include the recruitment 
of highly qualified individuals from other occupations through 
alternative certification programs; and (7) developing and 
implementing efforts to address the problem of social promotion 
and to prepare teachers to effectively address the issues 
raised by ending the practice of social promotion.
    Section 213 specifies that grants under the subpart will be 
awarded competitively as well as require that the Secretary use 
a peer review panel in making initial recommendations. The 
panel is required to give priority to applications from States 
that 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 the teachers plan to teach and involve 
the development of innovative efforts aimed at reducing the 
shortage of highly qualified teachers in high poverty urban and 
rural areas.
    Section 214 requires that States desiring a grant under the 
subpart submit an application to the Secretary containing such 
information as the Secretary may require and that the 
application include a description of how the State intends to 
use the funds provided under this subpart.
            Subpart 2--Teacher training partnership grant
    Section 221 authorizes the Secretary to make grants to 
teacher training partnerships for periods of up to 5 years. 
Teacher training partnerships must include a school of arts and 
science, a school or program of education, a local education 
agency and a kindergarten-through-grade-12 school and must 
include a high need local education agency or kindergarten-
through-grade-12 school. Partnerships may include a State 
educational agency, a pre-kindergarten program, a nonprofit 
educational organization, a business, or a teacher 
organization. High need is defined as a local education agency 
or kindergarten-through-grade-12 school that serves an area 
within a State in which there is a large number of individuals 
from families with incomes below the poverty line; a high 
percentage of teachers not teaching in the content area in 
which the teachers were trained to teach; or a high teacher 
turnover rate. Priority shall be given to partnerships that 
involve business.
    In awarding grants, the Secretary must take into 
consideration providing an equitable geographic distribution of 
grants throughout the United States and the proposed project's 
potential for creating improvement and positive change. 
Finally, partnerships may receive a grant under this subpart 
only once.
    Section 222 specifies the use of funds in this subpart. 
Funds shall be used to: (1) coordinate with the activities of 
the Governor, State board of education, and State educational 
agency as appropriate; (2) provide sustained high quality 
preservice clinical experiences, including the mentoring of 
prospective teachers by veteran teachers; (3) work with schools 
of arts and science to provide increased academic study in a 
proposed teaching speciality area; (4) substantially increase 
interaction and 2-way collaboration between faculty at 
institutions ofhigher education and new and experienced 
teachers, principals and other administrators at elementary or 
secondary schools; (5) prepare teachers to use technology effectively 
in the classroom; (6) integrate reliable research-based teaching 
methods into the curriculum; (7) broadly disseminate information on 
effective practices used by the partnership; and (8) provide support, 
including preparation time, for interaction between faculty at an 
institution of higher education and classroom teachers. No individual 
member of the partnership shall retain more than 50 percent of the 
funds made available to the partnership under subpart 2.
    Section 223 specifies that any teacher training partnership 
desiring a grant must submit an application. Each application 
shall: (1) describe the composition of the partnership and the 
involvement of each partner in the development of the 
application; (2) contain a needs assessment; (3) contain a 
resource assessment; (4) describe how the partnership will 
include participation of schools, colleges, or departments of 
arts and sciences within an institution of higher education to 
ensure the integration of teaching techniques and content in 
teaching preparation; (5) describe how the partnership will 
restructure and improve teaching, teacher training, and 
development programs and how such systemic changes will 
contribute to increased student achievement; (6) describe how 
the partnership will prepare teachers to work with diverse 
student populations; (7) describe how the partnership will 
prepare teachers to use technology; (8) contain a dissemination 
plan regarding knowledge and information with respect to 
effective teaching practices and a description of how such 
knowledge will be implemented in elementary or secondary 
schools as well as in institutions of higher education; (9) 
describe the commitment of the partnership to continue the 
activities assisted under this subpart without grant funds 
provided under this subpart; and (10) describe how the 
partnership will involve parents in the reform process.
            Subpart 3--General provisions
    Section 231 includes accountability and evaluation 
provisions. A State receiving a Teacher Quality Enhancement 
Grant shall submit an accountability report to the Secretary, 
the Senate Labor and Human Resources Committee and the House 
Committee on Education and the Workforce describing the degree 
to which the State, in using funds provided has made progress 
in meeting the following goals: (1) increasing student 
achievement for all students, as measured by increased 
graduation rates, decreased dropout rates, or higher scores on 
local, State or other assessments; (2) raising State academic 
standards required to enter the teaching profession including, 
where appropriate, incentives to incorporate the requirement of 
an academic major in the subject, or related discipline, in 
which the teacher plans to teach; (3) increasing success in the 
passage rate for initial State teacher certification or 
licensure or increasing the number of highly qualified 
individuals being certified or licensed as teachers through 
alternative programs; (4) increasing the percentage of 
secondary school classes taught in core academic subject areas 
by teachers with academic majors in those areas or in a related 
field who can demonstrate a high level of competence through 
rigorous academic subject area tests or who can demonstrate 
high levels of competence through experience in relevant 
content areas and increasing the percentage of elementary 
school classes taught by teachers with academic majors in the 
arts and sciences or who can demonstrate high levels of 
competence through experience in relevant content areas; (5) 
decreasing shortages of qualified teachers in poor urban and 
rural areas; (6) increasing opportunities for enhanced and 
ongoing professional development that improves academic content 
knowledge of teachers in subject areas in which teachers are 
certified to teach or in which the teachers are working toward 
certification to teach; and (7) increasing the number of 
teachers prepared to integrate technology in the classroom.
    Any local education agency that benefits from the 
activities assisted under subpart 1 shall make available, upon 
request and in an understandable format, to any parent of a 
student attending any school served by the local education 
agency, information regarding the qualification of the 
student's classroom teacher with regard to subject matter in 
which the teacher provides instruction. The local education 
agency shall inform parents that the parents are entitled to 
receive this information upon request.
    Teacher Training Partnerships supported under subpart 2 are 
required to establish an evaluation plan that includes strong 
performance objectives established in negotiation with the 
Secretary at the time of the grant award. The plan shall 
include objectives and measures for: (1) increased student 
achievement for all students as measured by increased 
graduation rates, decreased dropout rates or higher scores on 
State, local or other assessments for a year compared to 
student achievement as determined by the rates or scores for 
the year prior to the year for which the grant under this part 
is received; (2) increased teacher retention in the first 3 
years of a teacher's career; (3) increased success in the 
passage rate for initial State certification or licensure of 
teachers; (4) increased percentage of secondary school classes 
taught in core academic subject areas by teachers with academic 
majors in those areas or in a related field who can demonstrate 
a high level of competence through rigorous academic subject 
area tests and increasing the percentage of elementary school 
classes taught by teachers with academic majors in the arts and 
sciences; (5) increased integration of technology in teacher 
preparation and in classroom instruction; (6) restructuring or 
change of methodology courses to reflect best practices learned 
from elementary schools, secondary schools, or other entities; 
(7) increased dissemination of information about effective 
teaching strategies and practices; and (8) other effects of 
increased integration among members of the partnership.
    Section 232 specifies conditions under which a State or 
partnership may have its grant revoked. Each State or 
partnership must report annually on progress toward meeting the 
purposes of this part, and the goals, objectives and measures 
described in section 231. If the Secretary, after consultation 
with the peer review panel, where appropriate, determines that 
the State or the partnership is not making substantial progress 
in meeting the purposes, goals, objectives, and measures as 
appropriate by the end of the second year of the grant, the 
grant shall not be continued in the third year of the grant.
    Section 233 requires that the Secretary evaluate the 
activities funded under this part and report the findings to 
the Committee on Labor and Human Resources in the Senate and 
the Committee on Education and the Workforce of the House of 
Representatives. In addition, the Secretary is required to 
disseminate both successful practices as well as information 
regarding such practices so developed that were found to be 
ineffective.
    Section 234 requires the Secretary to conduct a study 
through the National Center for Education Statistics regarding 
the ways teachers are trained and the extent to which teachers 
in the United States and other comparable countries are 
teaching in areas other than the teachers' fields and the 
nature and extent of the problem of out-of-field teaching in 
the United States. The study shall include, at a minimum, all 
the countries that participated in the Third International 
Mathematics and Science Study (TIMSS). The Secretary is 
required to report the results of the study to Congress.
    Section 235 authorizes $300 million for fiscal year 1999 
and such sums as necessary in the 4 succeeding fiscal years to 
carry out the activities under this part, of which 50 percent 
shall be available for each year to carry out subpart 1 and 50 
percent to carry out subpart 2.

Part B--Recruiting new teachers for underserved areas

    Section 251 contains the statement of purpose. The purposes 
of this part are to provide scholarships and, as necessary, 
support services for students with high potential to become 
effective teachers, particularly minority students; to increase 
the quality and number of new teachers nationally; and to 
increase the ability of schools in underserved areas to recruit 
a qualified teaching staff.
    Section 252 includes definitions used in this part. It 
includes definitions for ``eligible partnership,'' ``additional 
partners,'' ``support services,'' and ``underserved areas.''
    Section 253 outlines grant authority and conditions. The 
Secretary is authorized to award grants, on a competitive 
basis, to eligible partnerships to enable the eligible 
partnership to pay the Federal costs of activities defined in 
section 255. Grants shall be awarded for a period that shall 
not exceed 5 years. The Secretary shall make grant payments for 
the second and succeeding years of a grant only after 
determining that the eligible partnership is making 
satisfactory progress in carrying out the activities under the 
grant and shall conduct an intensive review of the eligible 
partnership's progress under the grant with outside experts 
before making grant payments in the fourth year of the grant. 
No eligible partnerships may receive more than 2 grants under 
this subsection. The federal share of the cost of activities 
shall not exceed 70 percent in the first year of the grant, 60 
percent in the second and third years, 50 percent in the 
fourth, fifth and any succeeding year (including each year of 
the second grant). The nonfederal share may be provided in cash 
or in kind from any non Federal public or private source. 
Planning grants of up to 1 year are available to eligible 
partnerships. Partnerships that wish to receive a planning 
grant shall separately apply for a grant under that subsection.
    Section 254 requires that an eligible partnership must 
submit an application to the Secretary. Each application shall 
include: (1) a designation of the institution or agency within 
the eligible partnership that will serve as the fiscal agent 
for grants; (2) information on the quality of the teacher 
preparation program of the institution of higher education 
participating in the eligible partnership and how the eligible 
partnership will ensure that the scholarship recipients will 
receive high-quality preparation; (3) a description of the 
assessment the members of the partnership have undertaken to 
determine the most critical needs of the local educational 
agencies, particularly the need of schools in high poverty 
areas, for new teachers (which may include teachers in 
particular subject areas or at certain grade levels) and how 
the project carried out under the grant will address those 
needs and that reflects the input of all significant entities 
in the community that have an interest in teacher recruitment, 
preparation and induction; (4) a description of the project the 
eligible partnership will carry out with the grant; (5) a 
descriptionof how the institution will use funds provided under 
the grant only to increase the number of students with high potential 
to be effective teachers or to increase the graduates who are minority 
individuals; (6) a description of commitments, by the local educational 
agencies participating in the partnership, to hire qualified 
scholarship recipients in the schools served by the agencies and in the 
subject areas or grade levels for which the scholarship recipients will 
be trained as well as a description of the actions of the participating 
institution of higher education, the participating local educational 
agencies, and the other partners will take to facilitate the successful 
transition of the recipients into teaching; and (7) a description of 
the eligible partnership's plan for institutionalizing the activities 
the partnership is carrying out under this part, so the activities will 
continue once Federal funding ceases.
    Section 255 specifies use of funds. Funds under this part 
shall be used for scholarships to help students pay the federal 
costs of tuition, room, board, and other expenses of completing 
a teacher preparation program; support services, if needed to 
enable the scholarship recipient to complete postsecondary 
education programs; follow-up services during the first 3 years 
of teaching; payments to partner local education agencies, if 
needed to enable the agencies to permit paraprofessional staff 
to participate in teacher preparation programs; and, if no 
other money is available, to pay for cost of additional courses 
taken by former scholarship recipients during the recipients 
initial 3 years of teaching. Funds for planning grants shall be 
used for the costs of planning for the implementation of a 
grant under section 253.
    Section 256 directs the Secretary to select eligible 
partnerships to receive funds on the basis of the quality of 
the teacher preparation program offered by the institution 
participating in the partnership; the quality of the program 
carried out under the application; and the capacity of the 
partnership to carry out the grant successfully. The Secretary 
shall use a peer review process. In awarding grants, the 
Secretary shall seek to ensure that, in the aggregate, eligible 
partnerships carry out a variety of approaches to preparing new 
teachers and that there is equitable geographic distribution of 
grants. The Secretary shall give special consideration to 
applications most likely to result in the preparation of an 
increased number of individuals with high potential for 
effective teaching who are minorities and to applications from 
partnerships that have as members Historically Black Colleges 
and Universities, Hispanic-serving institutions and Tribal 
Colleges and Universities. In selecting eligible partnerships 
to receive second-year grant payments, the Secretary shall give 
preference to projects that have resulted in the placement and 
retention of a substantial number of high-quality graduates in 
teaching positions in underserved high-poverty schools; the 
adoption of effective programs that meet the teacher 
preparation needs of high-poverty urban and rural areas; and 
effective partnerships with elementary schools and secondary 
schools that are supporting improvements in student 
achievement.
    Section 257 states that no individual may receive a 
scholarship under this part for more than 5 years of 
postsecondary education and unless the individual satisfies the 
requirements of section 484(a)(5) of the Higher Education Act. 
No individual may receive a scholarship awarded under this part 
that exceeds the cost of attendance, as defined in section 472 
of the Higher Education Act, at the institution of higher 
education the individual is attending. A scholarship under this 
part shall not be reduced on the basis of the individual's 
receipt of other forms of Federal student assistance and shall 
be regarded as other financial assistance available to the 
student with the meaning of sections 471(3) and 480(j)(1) of 
the Higher Education Act, in determining the student's 
eligibility for grant, loan or work assistance under title IV.
    Section 258 notes that a recipient of a scholarship under 
this part shall continue to receive the scholarship only as 
long as the recipient is enrolled as a full-time student and is 
pursuing a course of study leading to teacher certification, 
unless the recipient is working in a public school as a 
paraprofessional or as a teacher under emergency credentials 
while participating in the program and maintaining satisfactory 
progress as determined by the institution of higher education 
participating in the partnership. Each eligible partnership 
shall modify the application of section 257(a)(1) and of 
subsection (a)(1) to the extent necessary to accommodate the 
rights of individuals with disabilities under section 504 of 
the Rehabilitation Act of 1973.
    Section 259 requires that each eligible partnership enter 
into an agreement with each student to whom the partnership 
awards a scholarship under this part, providing that a 
scholarship recipient who completes a teacher preparation 
program under this part shall, within 7 years of completing 
that program, teach full-time for at least 5 years in a high-
poverty school in an underserved geographic area or repay the 
amount of the scholarship under terms and conditions 
established by the Secretary. The Secretary shall prescribe 
regulations including provisions for waiver of the agreement 
requirements.
    Section 260 requires the Secretary to provide an evaluation 
of the program that shall assess issues such as: (1) whether 
institutions participating in the eligible partnership are 
successful in preparing scholarship recipients to teach to high 
State and local standards; (2) whether scholarship recipients 
are successful in completing teacher preparation programs, 
becoming fully certified teachers, and obtaining teaching 
positions in underserved areas, and whether the recipients 
continue teaching in those areas over a period of years; (3) 
the national impact of the program in assisting local education 
agencies in underserved areas to recruit, prepare, and retain 
diverse, high-quality teachers in the areas in which the 
agencies have the greatest needs; (4) the long-term impact of 
the grants on teacher preparation programs conducted by 
institutions of higher education participating in the eligible 
partnership and on the institutions' relationships with their 
partner local education agencies and other members of the 
partnership; and (5) the relative effectiveness of different 
approaches for preparing new teachers to teach in underserved 
areas, including their effectiveness in preparing new teachers 
to teach to high content and performance standards.
    Section 261 allows the Secretary to reserve up to 5 percent 
of the funds appropriated for this part for peer review of 
applicants, conducting the evaluations required under section 
260, and technical assistance.
    Section 262 authorizes $37 million 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 iii--institutional aid

    Section 301--Transfers and Redesignations. Section 301 
transfers the Historically Black College and University Capital 
Financing Program from title VII of the current act and 
redesignates it as part D of title III. Section 301 also 
transfers the Minority Science Improvement program from title X 
of the current act and redesignates it as part E of title III. 
Section 366, the Science and Engineering Access Program, as 
redesignated, is repealed.

Part A--strengthening institutions

    Section 302--Findings. Section 302 amends section 301(a) of 
the current act to express the sense of Congress that 
institutions of higher education should improve their 
technological capabilities and make effective use of 
technology.
    Section 303--Strengthening Institutions. Section 303 amends 
section 311 of the current act to require the Secretary to 
provide special consideration to applications that propose to 
improve their technological capacity through the acquisition of 
high technology equipment and infrastructure.
    Section 303(a)(2)--Endowment Funds. Section 303(a)(2) 
authorizes eligible institutions to utilize not more than 20 
percent of their grants for establishing or increasing an 
endowment fund in accordance with the applicable provisions of 
part C.
    Section 303(b)--Wait-out Period. Section 303(b) amends 
section 313 of the current act by requiring that any 
institution that receives a 5-year grant be ineligible to 
receive an additional grant under this part until 2 years after 
the date on which the 5-year grant terminates.
    Section 303(c)--American Tribally Controlled Colleges and 
Universities. Section 303(c) amends section 316 of the current 
act to establish a new program to provide grants to American 
Tribal Colleges and Universities.

Part B--Strengthening historically black colleges and universities

    Section 304--Strengthening HBCU's. Section 304 amends 
section 323 of the current act to allow eligible institutions 
to utilize not more than 20 percent of their grants for the 
purpose of establishing or increasing an endowment fund in 
accordance with the applicable provisions of part C.
    Section 304(b) amends section 326 of the current act to 
clarify that nonfederal matching funds are only required for 
that portion of a grant that exceeds $500,000.
    Section 304(b)(2) amends section 326 of the current act to 
allow eligible institutions to utilize funds in support of any 
qualified graduate program.
    Section 305--Endowment Challenge Grants. Section 305 amends 
section 331(b)(2)(B) of the current act to simplify the 
allocation formula and clarify that no institution is eligible 
for an endowment grant in excess of $500,000.

Part C--Historically black college and university capital financing 
        program

    Section 306--HBCU Capital Financing Program. Section 306 
amends section 722(5) of the current act to expand the 
definition of capital project to include facilities for the 
administration of educational programs, student unions, 
outpatient health care facilities for use by students or 
faculty, and maintenance, storage, or utility facilities that 
are essential to the operation of these facilities. Section 306 
also authorizes the Secretary to sell any qualified 
bondguaranteed under this part to any party that offers terms that the 
Secretary determines are in the best interest of the eligible 
institution.

Part D--Minority science and engineering improvement program

    Section 307--Minority Science and Engineering Improvement 
Program. Section 307 amends section 1046(4) of the current act 
to expand the definition of science, for the purposes of this 
part, to include behavioral sciences.

Part E--General provisions

    Section 308--General Provisions. Section 308 makes 
conforming changes to section 351 of the current act to reflect 
the transfer of the Historically Black College Capital 
Financing program and the Minority Science and Engineering 
Improvement Program from title VII and title X to title III. 
Section 308 exempts these programs from the requirement under 
parts A, B, and C that applications contain a comprehensive 
development plan to strengthen the institution's institutional 
management. In addition, the Historically Black College Capital 
Financing program is exempted from the requirements contained 
within section 354(a)(2) of the current act pertaining to 
membership of peer review committees.
    Section 308(d) amends section 360 of the current act to 
provide the following authorization levels:
    Part A--Strengthening Institutions. There are authorized to 
be appropriated to carry out part A (other than section 316), 
$135 million for fiscal year 1999, and such sums as may be 
necessary for each of the 4 succeeding years.
    Section 316--American Indian Tribally Controlled Colleges 
and Universities. There are authorized to be appropriated to 
carry out section 316, $5 million for fiscal year 1999, and 
such sums as may be necessary for each of the 4 succeeding 
years. In addition, the trigger requirement that part A receive 
$80 million before section 316 may be funded is repealed.
    Part B--Strengthening Historically Black Colleges and 
Universities. There are authorized to be appropriated to carry 
out part B (other than section 316), $135 million for fiscal 
year 1999, and such sums as may be necessary for each of the 4 
succeeding years.
    Section 326--Professional or Graduate Institutions. There 
are authorized to be appropriated to carry out section 326, $30 
million for fiscal year 1999, and such sums as may be necessary 
for each of the 4 succeeding years.
    Part C--Endowment Challenge Grants. There are authorized to 
be appropriated to carry out part C, $10 million for fiscal 
year 1999, and such sums as may be necessary for each of the 4 
succeeding years.
    Part D--Historically Black College and University Capital 
Financing. There are authorized to be appropriated to carry out 
part D, $110,000 for fiscal year 1999, and such sums as may be 
necessary for each of the 4 succeeding fiscal years.
    Part E--Minority Science and Engineering Improvement 
Program. There are authorized to be appropriated to carry out 
part E, $10 million for fiscal year 1999, and such sums as may 
be necessary for each of the 4 succeeding fiscal years.

                      title iv--student assistance

Part A--Grants to students in attendance at institutions of higher 
        education

    Section 412(a) of the bill amends the heading of title IV, 
part A, subpart 1 from ``Basic Educational Opportunity Grants'' 
to ``Federal Pell Grants.''
    Section 412(b)(1) amends the heading in section 401 of the 
act from ``Basic Educational Opportunity Grant'' to ``Federal 
Pell Grant.''
    Section 412(b)(2) amends section 401(a)(1) of the act in 
the first sentence by striking ``shall, during the period 
beginning July 1, 1972, and ending September 30, 1998,'' and 
inserting, for each fiscal year through fiscal year 2004, 
shall''. New language is included allowing for a transition to 
a ``just in-time payment'' of the Pell Grant to institutions by 
adding in the second sentence, ``until such time as the 
Secretary determines and publishes in the Federal Register with 
an opportunity for comment, an alternative payment system that 
provides payments to institution in an accurate and timely 
manner.''
    Section 412(b)(3) amends section 401(b) of the act by 
striking current authorized maximum grant levels in subsection 
(2)(A) and replacing them with $5,000 for academic year 1999-
2000; $5,200 for academic year 2000-2001; $5,400 for academic 
year 2001-2002; $5,600 for academic year 2002-2003 and $5,800 
for academic year 2003-2004. The tuition sensitivity language 
in paragraph (3) is amended as follows: ``(3) for any academic 
year for which an appropriations act provides a maximum basic 
grant in an amount in excess of $2,400, the amount of a 
student's basic grant shall equal $2,400 plus--(A) one-half of 
the amount by which such maximum basic grant exceeds $2,400; 
plus (B) the lesser of--(i) the remaining one-half of such 
excess; or (ii) the sum of the student's tuition, fees, and if 
the student has dependent care expenses (as described in 
section 472(8) or disability-related expenses (as described in 
section 472(9)), an allowance determined by the institution for 
such expenses.'' The step function in determining the minimum 
Pell Grant is eliminated by amending paragraph (5), striking 
``$400'' and inserting ``$200.'' The Secretary is required to 
issue regulations relating to a student's receiving two Pell 
Grants in a single award year.
    Section 412(b)(4) amends section 401(c)(1) of the act to 
read as follows: ``Except as provided in subparagraph (B), the 
period during which a student may receive a basic grant shall 
be the period, required for the completion of the first 
undergraduate baccalaureate course of study pursued by the 
student at the institution at which the student is in 
attendance, that does not exceed 150 percent of the period 
normally required by a full-time student (or the equivalent 
period, in the case of a part-time student) to complete the 
course of study at the institution, as determined by the 
institution. A student may receive basic grants under this 
subpart for a period that exceeds the period described in 
subparagraph (A) to the extent the institution in which the 
student in enrolled determines necessary to accommodate the 
rights of students with disabilities under section 504 of the 
Rehabilitation Act of 1973.'' Paragraph (2) is amended by 
striking ``Nothing'' and inserting instead ``Except as provided 
in subparagraph (B), nothing''; by striking ``or, in the case'' 
and all that follows through ``or skills'' and by adding 
``(B)(i) A student may receive a basic grant to attend English 
language instruction that is a separate course of instruction 
only if--(I) students enrolled in such a course are required to 
take an independently administered standardized test of English 
language proficiency upon completion of the course; and (II) 
not less than a minimum percentage of such students achieve a 
passing score on that test. (ii) The Secretary shall promulgate 
regulations that specify 1 or more standardized tests of 
English proficiency, the minimum percentage of students who 
must achieve a passing score on the tests, and such other 
requirements as the Secretary determines are necessary to 
implement clause (i).

Part A, Subpart 2--Federal early outreach and student services programs

            Chapter 1--Federal trio programs
    Section 413 amends the TRIO programs.
    Section 413(a) amends section 402A of the act in subsection 
(b)(3) by increasing the minimum grants levels as follows: in 
subparagraph (A) by striking $170,000 for fiscal year 1993, and 
replacing it with $190,000 for each fiscal year; in 
subparagraph (B) by striking $180,000 in fiscal year 1994, and 
replacing it with $200,000 in each fiscal year; and in 
subparagraph (C) by striking $190,000 in fiscal year 1995, and 
replacing it with $210,000 for each fiscal year.
    Section 413(a)(2) amends the last sentence of section 
402A(c)(6) of the act as follows: ``The Secretary shall permit 
a Director of a program assisted under this chapter to also 
administer 1 or more additional programs for disadvantaged 
students operated by the sponsoring entity regardless of the 
funding source of such additional program.''
    Section 413(a)(3) amends section 402A(f) of the act to 
provide an authorization of $700 million in fiscal year 1999 
and such sums as may be necessary for each of the 4 succeeding 
fiscal years.
    Section 413(b) amends section 402B of the act, the Talent 
Search program, by allowing Talent Search projects to provide 
services such as activities designed to acquaint individuals 
from disadvantaged backgrounds with careers in which the 
individuals are particularly under represented.
    Section 413(c) amends section 402C of the act, the Upward 
Bound program, so as to include ``work-study positions where 
youth participating in the project are exposed to careers 
requiring a postsecondary degree'' as a permissible service. It 
further amends Upward Bound to include language that permits 
youth participating in a work-study position, as defined in the 
new provisions, to be paid a stipend of $300 per month during 
June, July, and August and states that youth participating in a 
project proposed to be carried out under an application may be 
paid stipends not in excess of $40 per month during the 
remaining parts of the year.
    Section 413(d) makes changes to the Student Support 
Services program by amending section 402D(c) of the act to read 
as follows: ``consider, in addition to other criteria as the 
Secretary may prescribe, the institution's effort, and where 
applicable past history, in providing sufficient financial 
assistance to meet the full financial need of each student at 
the institution and maintaining the loan burden of each student 
at a manageable level.''
    Section 413(e) amends the Evaluation and Dissemination 
provisions in section 402H of the act by including the 
following new provisions for Evaluation and Project Improvement 
andDissemination Partnership projects. The Secretary may make 
grants to or enter into contracts with institutions of higher education 
and other public and private institutions and organizations to evaluate 
the effectiveness of the programs and projects assisted under this 
subpart. Such evaluations shall identify institutional, community and 
program or project practices that are particularly effective in 
enhancing access, preparation, and success of low-income individuals 
and first-generation college students to postsecondary education. The 
Secretary may also award grants to institutions of higher education or 
other private and public institutions and organizations, that are 
carrying out programs or projects assisted under this subpart, to 
enable the institutions and organizations to expand and leverage the 
success of such programs or projects by working in partnership with 
other institutions, community-based organizations, or combinations of 
such institutions and organizations that are not receiving assistance 
under this subpart and are serving low-income students and first-
generation college students in order to disseminate and replicate best 
practices of programs or projects assisted under this subpart and 
provide technical assistance regarding programs and projects assisted 
under this subpart. The Secretary shall disseminate results of 
evaluations and grants to similar programs or projects assisted under 
this subpart as well as other individuals concerned with postsecondary 
access for and retention of low-income individuals and first-generation 
college students.
            Subpart 2, Chapter 2--National early intervention 
                    scholarship and partnership program
    Section 414 amends the National Early Intervention 
Scholarship and Partnership Program in section 404G of the act 
by authorizing $200 million in fiscal year 1999 and such sums 
as may be necessary in the 4 succeeding fiscal years.
            Subpart 3--Federal supplemental education opportunity 
                    grants
    Section 415 amends the Federal Supplemental Educational 
Opportunities Grant Program.
    Section 415(a) amends section 413A(b) of the act by 
authorizing $700 million in fiscal year 1999 and such sums as 
may be necessary in the 4 succeeding fiscal years.
    Section 415(b) amends subsection (d) of section 413C of the 
act to read as follows: If the institution's allocation under 
this subpart is directly or indirectly based in part on the 
financial need demonstrated by students who are independent 
students or attending the institution on a less than full time 
basis, a reasonable portion of the allocation shall be made 
available to such students.
    Section 415(c) provides for carryover and carryback 
authority in the SEOG program by adding a new section 413E to 
the act. Of the sums made available to the institution, not 
more than 10 percent may, at the discretion of the institution, 
remain available for expenditure during the succeeding fiscal 
year to carry out the program under this subpart. Of sums made 
available to the institution, not more than 10 percent may, at 
the discretion of the institution, be used by the institution 
for expenditure for the fiscal year preceding the fiscal year 
for which the sums were appropriated. Any sums that are not 
needed by the institution to award supplemental grants during 
the fiscal year, that the institution does not wish to use 
during the succeeding or preceding fiscal year as authorized, 
shall be made available to the Secretary for reallocation under 
section 413D(e).
            Subpart 4--Leveraging educational assistance partnership 
                    program
    Section 416(a) amends the State Student Incentive Grant 
program, renamed the Leveraging Educational Assistance 
Partnership Program, in section 415A(b)(1) of the act by 
authorizing $105 million for fiscal year 1999 and such sums as 
may be necessary in each of the 4 succeeding fiscal years. It 
inserts a new paragraph (2) that includes reservation language 
that states that in any fiscal year for which amounts 
appropriated under paragraph (1) exceed $35 million, the excess 
shall be available to carry out section 415E and renumbers the 
paragraphs accordingly.
    Section 416(b) inserts a new section 415E titled, Special 
Leveraging Educational Assistance Partnership Program. For 
funds appropriated in excess of $35 million, the Secretary 
shall make allotments among States in the same manner as the 
Secretary makes allotments under section 415B and award grants 
to States to enable the States to pay for the Federal costs of 
authorized activities. Provisions of this subpart that are not 
inconsistent with this section shall apply to the program 
authorized in this section. Each State receiving a grant under 
this section may use grant funds for: (1) increasing the dollar 
amounts of grants awarded under section 415B to eligible 
students with demonstrated financial need; (2) carrying out 
transition programs from secondary school to postsecondary 
education for eligible students with demonstrated financial 
need; (3) making funds available for community service work-
study activities for eligible students who demonstrate 
financial need; (4) creating a postsecondary scholarship 
program for eligible students who demonstrate financial need 
and wish to enter teaching; (5) creating a scholarship program 
for eligible students who demonstrate financial need and wish 
to enter a program of study leading to a degree in math, 
computer science or engineering; (6) carrying out early 
intervention programs, mentoring programs, and career education 
programs for eligible students who demonstrate financial need; 
and (7) awarding merit or academic scholarships to eligible 
students who demonstrate financial need. States receiving a 
grant under this section shall provide an assurance to the 
Secretary that the aggregate amount expended per student or the 
aggregate expenditure by the States, from funds derived from 
nonfederal sources, for the authorized activities for the 
preceding fiscal year, were not less than the amount expended 
per student or the aggregate expenditure by the State for the 
activities for the second preceding fiscal year. The federal 
share of the cost of the authorized activities for any fiscal 
year shall be 33 1/3 percent. Provisions relating to Federal-
State relationship and State agreements are moved from title 
XII of the act to section 415G.
            Subpart 5--Special programs for students whose families are 
                    engaged in migrant and seasonal farmwork
    Section 417 amends the Special Programs for Students Whose 
Families are Engaged in Migrant and Seasonal Farmwork. The High 
School Equivalency Program (HEP) is amended in section 
418A(g)(1) of the act by authorizing funding $25 million in 
fiscal year 1999 and such sums as may be necessary in the 4 
succeeding fiscal years. The College Assistance Migrant Program 
(CAMP) is amended in section 418A(g)(2) of the act by 
authorizing funding of $10 million for fiscal year 1999 and 
such sums as may be necessary in the 4 succeeding fiscal years.
            Subpart 6--Robert C. Byrd Honors Scholarship Program
    Section 418 amends the Robert C. Byrd Honors Scholarship 
Program in section 419K of the act by authorizing funding of 
$45 million in fiscal year 1999 and such sums as may be 
necessary in the 4 succeeding fiscal years.
    Section 419 amends part A of title IV, to add a subpart 7, 
to read as follows:
            Subpart 7--Child care access means parents in school
    New section 419N authorizes the Child Care Access Means 
Parents in School program.
    Subsection (a) defines the purpose to support the 
participation of low-income parents in postsecondary education 
through the provision of campus-based child care services.
    Subsection (b) allows the Secretary to award grants to 
institutions of higher education to assist in providing campus-
based child care services primarily to low-income students; 
restricts the amount of a grant to no more than 1 percent of 
the total amount of all Federal Pell Grant funds awarded to 
students enrolled at the institution for the preceding fiscal 
year but no less than $10,000; and requires the Secretary to 
award grants for 3 years, which may be renewed for 3 years, and 
which are subject to fulfilling the requirements of new 
subsection (e)(2). This subsection also explains that an 
institution of higher education is eligible to receive a grant 
for a fiscal year if the total amount of all Federal Pell Grant 
funds awarded to students enrolled at the institution for the 
preceding fiscal year equals or exceeds $350,000; requires that 
institutions receiving these grants use funds to support or 
establish a campus-based child care program primarily servicing 
the needs of low-income students enrolled at that institution; 
clarifies that nothing in this section shall be construed to 
prohibit an institution that receives a grant from serving the 
child care needs of the community served by the institution; 
and defines a ``low-income student'' as a student who is 
eligible to receive a Federal Pell Grant for the fiscal year 
for which the determination is made.
    Subsection (c) requires an institution of higher education 
desiring a grant under this section to submit an application to 
the Secretary in a timely manner and that the application 
include the information that the Secretary may require. 
Applications must: (1) demonstrate that the institution is an 
eligible institution described in subsection (b)(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 information regarding student 
demographics, an assessment of child care capacity on or near 
campus, information regarding the existence of waiting lists 
for existing child care, information regarding additional needs 
created by concentrations of poverty or by geographic 
isolation, and other relevant data; (4) describe the activities 
to be assisted, including whether funds will support an 
existing or new child care program; (5) identify the resources, 
including technical and financial, that the institution willuse 
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; (6) assure that the 
institution will meet the child care needs of low-income students 
through the provision or through a contract for the provision of 
services; (7) describe the extent to which the child care program will 
coordinate with the institution's early childhood education curriculum, 
to the extent the curriculum is available, to meet the needs of the 
students in the early childhood education program at the institution, 
and the needs of the parents and children participating in the child 
care program assisted under this section; (8) provide a timeline 
delineating the steps to achieve the goal of providing low-income 
students with child care services; (9)specify any measures the 
institution will take to assist low-income students with child care 
before the institution provides child care services; and 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; (10) assure that any child care facility assisted under 
this section will meet applicable State or local government licensing, 
certification, approval, or registration requirements; and (11) 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 this assistance.
    Subsection (d) establishes a priority in awarding grants to 
institutions of higher education submitting applications 
describing programs that leverage substantial local or 
institutional resources, including in-kind contributions, to 
support the activities assisted under this section, and utilize 
a sliding fee scale for child care services provided under this 
section to support a high number of low-income parents pursuing 
postsecondary education at the institution.
    Subsection (e) requires institutions receiving a grant to 
report to the Secretary 18 months and 36 months after receiving 
the first grant data on the population served; information on 
campus and community resources and funding used to help low-
income students access child care services; information on 
progress made toward accreditation of any child care facility; 
and information on the impact of the grant on the quality, 
availability, and affordability of campus-based child care 
services. This subsection also requires the Secretary to make 
the third annual grant payment to an institution only if the 
Secretary determines, on the basis of the required 18-month 
report, 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.
    Subsection (f) explains that no funds provided under this 
section shall be used for construction, except for minor 
renovation or repair to meet applicable State or local health 
or safety requirements.
    Subsection (g) authorizes $60 million to be appropriated 
for fiscal year 1999 and such sums as may be necessary for each 
of the 4 succeeding fiscal years.

Part B--Federal family education loan program

    Section 421. Advances For Reserve Funds. Section 421(1)(A) 
amends section 422 of the current act to require that nonstate 
designated guarantors have the capacity to respond to 
electronic inquiries from students and financial aid officers 
in addition to the current requirement that they have the 
capacity to respond to written and telephone inquiries.
    Section 421(1)(B) amends section 422 of the current act by 
striking reference to the transition from the Federal Family 
Education Loan Program to the Federal Direct Student Loan 
Program.
    Section 421(3) amends section 422 of the current act to 
recall to the Federal treasury $200 million in reserve funds. 
These funds will be deposited in the Federal treasury in 5 
equal $40 million installments in each of fiscal years 1999, 
2000, 2001, 2002, and 2003. Each agency is required to return 
an equal percentage reduction of their reserve funds. This 
percentage will be calculated by dividing $200 million by the 
total amount of all guaranty agency reserve funds held on 
September 30, 1996. If any agency returns to the Treasury any 
funds in excess of the amount required under this act or the 
Balanced Budget Act of 1997, the $200 million recall will be 
reduced by the excess amount.
    Section 422 amends the current act to create the following 
new section entitled Federal Student Loan Reserve Fund:
    Section 422A. This section requires each guaranty agency to 
transfer all funds, securities, and other liquid assets 
contained in the reserve fund into a newly created Federal 
Student Loan Reserve Fund. These funds shall be invested in 
obligations issued or guaranteed by the United States or other 
similarly low-risk securities. Earnings from these investments 
will be the sole property of the Federal Government. In 
addition, guaranty agencies will deposit in the Federal fund 
all amounts received from the Secretary as payment of 
reinsurance on loans, the amount of the insurance premium 
collected from borrowers, and from amounts collected on 
defaulted loans, the complement of the reinsurance percentage 
in effect when payment was made pursuant to section 
428(c)(6)(A)(i) of the current act.
    Section 422A(d) restricts the use of funds contained within 
the Federal fund to the payment of lender claims and the 
payment of default prevention fees.
    Section 422A(f) establishes a 5-year transition period 
during which each guaranty agency must transition completely 
from dependence upon the reserve fund for operating expenses to 
dependence upon fees paid to the guaranty agencies for services 
performed on behalf of the FFEL program. During the first 3 
years of this period, a guaranty agency may transfer not more 
than 180 days cash expenses for normal operating expenses for 
use in the performance of its duties under part B of title IV 
of this act. At the end of the third year, each guaranty agency 
must begin repayment of any amount transferred pursuant to this 
section. All funds transferred pursuant to this section must be 
returned to the Federal Fund not later than 5 years after the 
establishment of the new operating fund. Any guaranty agency 
that fails to make a scheduled repayment to the Federal fund 
will be ineligible to receive any other funds under this part 
until the Secretary determines that the agency has made the 
scheduled repayment.
    Section 422A(f)(6) amends section 428(c)(9)(A) of the 
current act to clarify that the Secretary shall include the 
amounts transferred pursuant to section 422A(f) when 
calculating the guaranty agencies compliance with the minimum 
reserve requirements.
    Section 423. Agency Operating Fund. Section 423 amends part 
B of title IV of the current act to create the following new 
section:
    Section 422B. Agency Operating Fund. Section 422B 
authorizes the establishment of a new agency operating fund. 
Each guaranty agency, within 45 days of the date of enactment 
of the act, must establish a fund designated as the agency 
operating fund. Funds contained within this fund, with the 
exception of funds transferred during the transition period, 
are the sole property of the guaranty agency and may be 
invested and expended at the discretion of the guaranty agency. 
The guaranty agency may deposit into this account the loan 
processing fee paid by the Secretary for the origination of 
loans pursuant to section 428(f) as amended by this act, the 
portfolio maintenance fee paid pursuant to section 458 as 
amended by this act, the default prevention fee paid pursuant 
to section 428(l) as amended by this act, and amounts remaining 
from the collection on defaulted loans held by the agency, 
after payment of the Secretary's equitable share, and after 
deposit in the Federal Student Loan Reserve Fund of a 
percentage amount equal to the complement of the reinsurance 
percentage amount in effect when payment was made on the 
defaulted loan.
    Section 422B(d) specifies that the operating fund shall be 
used to conduct student financial aid related activities, 
including but not limited to, application processing, loan 
disbursement, enrollment and repayment status management, 
default prevention activities, default collection activities, 
and school and lender training. A guaranty agency may also 
transfer funds from the agency operating fund to the Federal 
Student Loan Reserve Fund for use pursuant to section 422A of 
the current act as amended in order to ensure timely payment of 
lender claims and compliance with minimum reserve ratio 
requirements. Such transfers shall be irrevocable and any funds 
transferred shall become the sole property of the Federal 
Government.
    Section 422B(e) establishes that the operating fund shall 
be considered to be the property of the guaranty agency. The 
Secretary may not regulate the uses or expenditures of funds in 
the operating fund; however, during any period in which funds 
are owed to the Federal Student Loan Reserve Fund as a result 
of transfer under 422A(f) of this act, funds in the operating 
fund may only be used for expenses related to the student loan 
programs authorized under part B of title IV of this act. The 
Secretary may require such audits and reports as are provided 
for in section 428(b)(2).
    Section 422B(f) authorizes the Secretary to allow guaranty 
agencies to acquire nonliquid assets of the guaranty agency 
that were originally acquired with student loan reserve funds. 
A guaranty agency may not acquire any nonliquid assets during 
any period in which it owes funds to the Federal Student Loan 
Reserve Fund as a result of a transfer under section 422A(f). 
The purchase amount shall be available for expenditures 
pursuant to section 458 of the current act as amended.
    Section 424. Applicable Interest Rates. Section 424 amends 
section 427A of the current act to establish that effective 
July 1, 1998, students who borrow new subsidized or 
unsubsidized Federal Stafford loans under title IV will pay an 
interest rate that is equivalent to the bond equivalent rate of 
91-day Treasury bills plus 2.3 percent with an interest rate 
cap of 8.25 percent on these loans. With respect to any loan 
made after July 1, 1998 under this part (other than Federal 
PLUS loans or Federal consolidation loans) the interest rate 
paid by borrowers prior to the beginning of repayment or while 
the student is in-school will be equivalent to the bond 
equivalent rate of 91-day Treasury bills plus 1.7 percent. The 
interest rate paid by borrowers under the Federal PLUS Loan 
program will be set at the rate currently being paid by 
borrowers--the bond equivalent rate of 91-day Treasury bills 
plus 3.1 percent with an interest rate cap of 9 percent.
    Section 424(a)(2) makes a conforming change to section 
428B(d)(4) pertaining to the interest rate for Federal PLUS 
loans.
    Section 424(b) amends section 438(b)(2)(F) of the current 
act to establish the special allowance that will be paid to 
lenders for Federal Stafford loans disbursed on or after July 
1, 1998. Special allowance payments will be calculated 
quarterly by determining the average of the bond equivalent 
rates for 91-day Treasury bills auctioned during the 3-month 
period, subtracting from that the applicable interest rate 
established in section 424(a) of the bill, adding 2.8 percent 
to the resultant percent and dividing the resultant percent by 
4. With respect to any loan made after July 1, 1998 under this 
part (other than Federal PLUS loans or consolidation loans) the 
special allowance paid to lenders prior to the beginning of 
repayment or while the student is in-school will be calculated 
quarterly by determining the average of the bond equivalent 
rates for 91-day Treasury bills auctioned during the 3-month 
period, subtracting from that the applicable interest rate 
established in section 424(a), adding 2.2 percent to the 
resultant percent and dividing the resultant percent by 4. With 
respect to any PLUS Loan for which the first disbursement is 
made on or after July 1, 1998, special allowance payments shall 
be calculated quarterly by determining the average of the bond 
equivalent rates for 91-day Treasury bills auctioned during the 
3-month period, subtracting from that the applicable interest 
rate established in section 424(a), adding 3.1 percent to the 
resultant percent and dividing the resultant percent by 4. No 
special allowance will be paid for a PLUS Loan, however, unless 
the applicable interest rate determined for any 12-month period 
exceeds 9 percent.
    Section 425. Federal Payments to Reduce Student Interest 
Costs. Section 425 amends section 428(a) of the current act to 
reduce the paperwork burden placed upon students, schools and 
lenders. Institutions of higher education will only be required 
to submit to lenders documents that set forth the loan amount 
for which the student is eligible and a schedule for 
disbursement of the proceeds of the loan. Institutions of 
higher education will be required to determine and document the 
student's amount of need for a loan based upon the student's 
estimated cost of attendance, estimated financial assistance, 
and expected family contribution in accordance with part F of 
the current act as amended by this act.
    Section 425(a)(1)(D) strikes 428(a)(2)(F) of the current 
act to reflect the consolidation of provisions relating to 
financial aid officer discretion in section 479A.
    Section 425(a)(2) amends section 428(a)(3)(A)(v) of the 
current act to clarify that for the purposes of determining 
when students and/or the Federal Government must begin to pay 
interest on Federal Stafford student loans, loan disbursement 
refers to disbursement by the institution of higher education.
    Section 425(b)(1)(A)(iv) amends section 428(b)(1)(A) of the 
current act to clarify, consistent with current policy 
determinations by the Secretary, that for the purposes 
specified in sections 484(b)(3)(B) and 484(b)(4)(B), a student 
is eligible for $2,625 for course work necessary for enrollment 
in an undergraduate degree or certificate program, and $5,500 
for course work necessary for enrollment in a graduate or 
professional degree or certification program or for course work 
necessary for a professional credential or certification from a 
State required for employment as a teacher in an elementary or 
secondary school.
    Section 425(b)(1)(B) amends section 428(b)(1)(E) of the 
current act to provide first time borrowers with a student loan 
balance in excess of $30,000 the option of selecting an 
extended or graduated repayment schedule.
    Section 425(b)(1)(D) amends section 428(b)(1)(U) of the 
current act to reduce the regulatory burden on small eligible 
lenders. An eligible lender that originates or holds $5 million 
or less in loans made under this title for any fiscal year is 
exempted from the annual audit requirements.
    Section 425(c) amends section 428(c) of the current act to 
reduce guaranty agency reimbursement for losses (as a result of 
the default of a student borrower) on the unpaid balance of the 
principal and accrued interest on any insured loan from 98 
percent to 95 percent of the amount expended by it in discharge 
of its insurance obligation. In any year for which the guaranty 
agency has a default rate exceeding 5 percent, the reinsurance 
payment shall be reduced from 88 percent to 85 percent. In any 
year in which the guaranty agency has a default rate in excess 
of 9 percent, the reinsurance payment shall be reduced from 78 
percent to 75 percent.
    Section 425(c)(2) amends section 428(c)(3)(A)(i) of the 
current act to allow students to make electronic as well as 
written requests for forbearance.
    Section 425(c)(2)(D) amends section 428(c)(3) of the 
current act to allow a 60-day forbearance to be provided to a 
borrower, at the borrower's request, in order to collect or 
process supporting documentation related to the request for 
forbearance. During this period, interest may not be 
capitalized.
    Section 425(c)(3) amends section 428(c)(6) of the current 
act to reduce the guaranty agency collection retention 
allowance from 27 percent to 24 percent.
    Section 425(c)(4) amends section 428(c)(8) of the current 
act to delete reference to a transition from the Federal Family 
Education Loan program to the Federal Direct Student Loan 
Program.
    Section 425(c)(5)(A) amends section 428(c)(9) of the 
current act to reduce the required current minimum reserve 
level from .5 percent to .25 percent consistent with the recall 
of reserves authorized under section 421 of the bill.
    Section 425(c)(5)(B) amends section 428(c)(9)(C) of the 
current act to reduce from 80 percent to 78 percent the Federal 
reimbursement payments that can be made to a guaranty agency 
that falls below the minimum reserve requirements for 2 
consecutive years. The section also extends from 30 days to 45 
days the time in which a guaranty agency must submit and 
implement a management plan if the Secretary determines that 
the administrative or financial status of the agency 
jeopardizes its ability to fulfill its responsibilities.
    Section 425(c)(5)(C) amends section 428(c)(9)(E)(vi) of the 
current act to delete reference to the transition from the 
Federal Family Education Loan program to the Federal Direct 
Student Loan Program.
    Section 425(c)(5)(D) amends section 428(c)(9)(F)(vii) of 
the current act to delete reference to the transition from the 
Federal Family Education Loan program to the Federal Direct 
Student Loan Program.
    Section 425(c)(5)(E) amends section 428(c)(9)(K) of the 
current act to delete reference to the transition from the 
Federal Family Education Loan program to the Federal Direct 
Student Loan Program.
    Section 425(d) deletes section 428(e) of the current act 
providing payments to guaranty agencies for lender referrals.
    Section 425(e) amends section 428(f) of the current act 
pertaining to the administrative cost allowance and replaces 
it, for loans originated on or after October 1, 1998, with a 
loan processing and issuance fee equal to 0.65 percent of the 
total amount of FFEL loans issued by the guaranty agency in any 
fiscal year.
    Section 425(f) amends section 428(j) of the current act to 
delete reference to the transition from the Federal Family 
Education Loan program to the Federal Direct Student Loan 
Program.
    Section 425(g) amends section 428(l) of the current act to 
eliminate payments for preclaims assistance and supplemental 
preclaims assistance and replace it with a new default 
prevention fee. Upon receipt of a proper request from a lender 
(not earlier than the 60th nor later than the 90th day of 
delinquency) a guaranty agency shall engage in default aversion 
activities designed to prevent the default by a borrower on a 
student loan. Guaranty agencies will be required to meet a 
higher standard for default aversion and the 1 percent default 
prevention fee shall only be paid to the guaranty agency for 
loans that are brought current on or before the 210th day that 
the loan became delinquent. In addition, the fee can only be 
paid once on any loan unless the borrower remains current for 
at least 24 months.
    Section 426. Voluntary Flexible Agreements. Section 426 of 
the bill creates the following new section:
    Section 428A. Voluntary Flexible Agreements with Guaranty 
Agencies. Section 428A permits the Secretary to enter into a 
voluntary, flexible agreement with guaranty agencies in lieu of 
agreements with a guaranty agency under subsections (b) and (c) 
of section 428. The Secretary may waive or modify any 
requirement of subsections (b) and (c) of section 428 of the 
current act, except that the Secretary may not waive any 
statutory requirement pertaining to default claim payments made 
to lenders, the prohibitions on inducements contained in 
section 428(b)(3) of the current act, or pertaining to the 
terms and conditions attached to student loans, including those 
pertaining to students, institutions of higher education, 
lenders, and secondary markets.
    Section 428A(a)(2) permits the Secretary to enter into 
voluntary flexible agreements with 6 guaranty agencies during 
fiscal years 1999, 2000, and 2001. Beginning in fiscal year 
2000, any guaranty agency may enter into a similar agreement 
with the Secretary.
    Section 428A(a)(3) requires the Secretary to provide, no 
later than September 30, 2001, a report to the Committee on 
Labor and Human Resources and the Committee on Education and 
the Workforce regarding the impact that the voluntary, flexible 
agreements have had upon program integrity, program and cost 
efficiencies, and the availability and delivery of student 
financial aid. This report will include a description of each 
voluntary flexible agreement and the performance goals 
established by the Secretary for each agreement, a list of 
participating guaranty agencies and the specific statutory or 
regulatory waivers provided to each agency, a description of 
the standards by which each participating agency's performance 
was assessed and the degree to which each participating agency 
achieved the established performance standards, and an analysis 
of the fees paid by the Secretary, and the costs and 
efficiencies achieved undereach voluntary agreement.
    Section 428A(b) describes the terms of the agreement into 
which the Secretary and a guaranty agency may mutually agree to 
enter and specifies that under no circumstances may the 
agreement result in increased costs to the Secretary.
    Section 428A(c) requires the Secretary to reinstate the 
guaranty agency's prior agreement under subsections (b) and (c) 
of section 428 upon the expiration or early termination of an 
agreement reached under this section.
    Section 427. Federal PLUS Loans. Section 427 amends section 
428B of the current act to permit the Secretary to require 
parents to meet additional eligibility criteria established by 
the Secretary in order to borrow Federal PLUS Loans.
    Section 427(2) amends section 428B of the current act to 
require that parents seeking to borrow PLUS Loans will be 
subject to verification of their immigration status and their 
social security number in a manner consistent with student 
verification authorized under current law.
    Section 428. Federal Consolidation Loans. Section 428 
amends sections 428C(a)(3) of the current act to prohibit 
borrowers who are subject to a judgement secured through 
litigation or an order for wage garnishment from consolidating 
their loans in order to circumvent the order or judgement.
    Section 428(2) amends section 428C(a)(3)(B) of the current 
act to allow borrowers to consolidate loans that were received 
prior to the date of a consolidation loan. Under current law a 
borrower is provided with 180 days from the date of a 
consolidation loan to add any loans that were received prior to 
the consolidation loan. Loans that were received prior to the 
consolidation loan that were not added during the 180-day 
window could not be included in a subsequent consolidation 
loan. Section 428(2) of this act allows these loans to be 
included in a subsequent consolidation loan.
    Section 429. Requirements for Disbursements of Student 
Loans. Section 429(1) amends section 428G of the current act to 
exempt the loans of students in the final period of enrollment 
in a student's baccalaureate program of study, at an 
institution with a cohort default rate that is 5 percent or 
less, from the multiple disbursement requirements contained 
within 428G(a) of the current act.
    Section 429(2) amends section 428G(b) of the current act to 
exempt the loans of first year students, attending an 
institution with a cohort default rate that is 5 percent or 
less, from the requirement of a 30-day delay in check 
disbursement or disbursement by an institution.
    Section 430. Default Reduction Program. Section 430 amends 
the heading for subsection (b) of section 428F of the current 
act to more accurately reflect the content and purpose of the 
subsection.
    Section 431. Unsubsidized Loans. Section 431 amends section 
428H(b) of the current act to reduce the paperwork burden 
placed upon students, schools and lenders. Institutions of 
higher education will only be required to submit to lenders 
documents that set forth the loan amount for which the student 
is eligible and a schedule for disbursement of the proceeds of 
the loan. Institutions of higher education will be required to 
determine and document the student's amount of need for a loan 
based upon the student's estimated cost of attendance, 
estimated financial assistance, and expected family 
contribution in accordance with part F of the current act as 
amended.
    Section 431(2)(A)(i) makes technical changes to section 
428H(d) of the current act to make the definition of academic 
year applicable to annual loan limits consistent with 
definition contained within section 481(d)(2).
    Section 431(2)(A)(iii) amends section 428H(d)(2) of the 
current act to clarify, consistent with current policy 
determinations by the Secretary, that for the purposes 
specified in sections 484(b)(3)(B) and 484(b)(4)(B), a student 
is eligible for $4,000 for course work necessary for enrollment 
in an undergraduate degree or certificate program, and $5,000 
for course work necessary for enrollment in a graduate or 
professional degree or certification program or for course work 
necessary for a professional credential or certification from a 
State required for employment as a teacher in an elementary or 
secondary school.
    Section 431(2)(B) amends section 428H(d)(3) to clarify that 
maximum aggregate loan limits shall not include interest 
capitalized during an in-school period.
    Section 431(3) amends section 428H(e)(6) to provide first 
time borrowers with a student loan balance in excess of $30,000 
the option of selecting an extended or graduated repayment 
schedule.
    Section 432. Loan Forgiveness for Teachers. Section 432 
amends section 428J of the current act to establish a loan 
forgiveness program for teachers and to read as follows:
    Section 428J. The Secretary is authorized to carry out a 
program assuming the obligation to repay a subsidized Federal 
Stafford loan for any new borrower that has been employed for 3 
complete school years as a full-time teacher in a school that 
is eligible for funding under title I of the Elementary and 
Secondary Education Act of 1965 and in which the enrollment of 
children counted under section 111(c) of the Elementary and 
Secondary Education Act of 1965 exceeds 30 percent of the total 
enrollment of that school. Eligible secondary school teachers 
must teach in a subject area that is relevant to the borrower's 
academic major. Eligible elementary school teachers must 
demonstrate knowledge and teaching skills in reading, writing, 
mathematics and other areas of the elementary school 
curriculum. The Secretary is authorized to repay through 
reimbursement to the holder, 30 percent of the total 
outstanding amount and applicable interest of subsidized 
Federal Stafford loans owed by the eligible borrower after the 
completion of the fourth or fifth complete school year of 
service. The Secretary is authorized to repay through 
reimbursement to the holder, 40 percent of the total 
outstanding amount and applicable interest of subsidized 
Federal Stafford loans owed by the eligible borrower after the 
completion of the sixth complete school year of service. The 
total amount that the Secretary may repay for any borrower 
shall not exceed $10,000.
    Section 433. Loan Forgiveness for Child Care Providers. 
Section 433 adds a new section 428K to the act, to read as 
follows:
    Section 428K. Loan Forgiveness for Child Care Providers. 
The Secretary is authorized to conduct a demonstration program 
of assuming the obligation to repay a loan made, insured or 
guaranteed under part B or part D for any new borrower after 
the date of enactment of the Higher Education Amendments of 
1998 who completes a degree in early childhood education; 
obtains employment in a child care facility; and is working 
full-time and earning an amount that does not exceed the 
greater of an amount equal to 100 percent of the poverty line 
for a family of 2. The Secretary is authorized to repay through 
reimbursement to the holder, 20 percent of a student's 
outstanding principal and applicable interest for loans 
originated after enactment ofthis act, after the borrower 
completes the second year of employment in a child care facility. The 
Secretary is authorized to repay, through reimbursement to the holder, 
20 percent of a borrower's outstanding principal and applicable 
interest for loans originated after enactment of this act, after the 
borrower completes the second year of employment in a child care 
facility. After each of the fourth and fifth years of employment, the 
Secretary is authorized to repay through reimbursement to the holder, 
30 percent of the total amount of loans originated after enactment of 
this act. Loan repayment under this program will be on a first-come, 
first-served basis subject to the availability of appropriations.
    Section 428K(f) authorizes the Secretary to conduct an 
independent national evaluation of the impact of the 
demonstration program assisted under this section on the field 
of early childhood education.
    Section 428K(g) authorizes $10 million for fiscal year 1999 
and such sums as may be necessary for each of the 4 succeeding 
years to carry out the purposes of section 428K.
    Section 434. Common Forms and Formats. Section 434 amends 
section 432(m)(1) of the current act to authorize the Secretary 
to utilize multiyear promissory notes and to allow guaranty 
agencies, borrowers, and lenders to use electronically printed 
versions of common forms approved for use by the Secretary.
    Section 435. Student Loan Information By Eligible Lenders. 
Section 435(1) amends section 433(a) of the current act to 
allow lenders to provide loan information and fulfill 
disclosure requirements prior to disbursement of a student loan 
utilizing electronic as well as written media. Each lender must 
provide a telephone number and may provide an electronic 
address as part of the disclosure.
    Section 435(2) amends section 433(b) of the current act to 
allow lenders to make required disclosures prior to the onset 
of the repayment period utilizing electronic as well as written 
media. Each lender must provide a telephone number and may 
provide an electronic address as part of the required 
disclosure.
    Section 436. Definitions. Section 436 amends section 
435(a)(2) of the current act to require that if an institution 
loses eligibility to participate in the part B and part D 
student loan programs as a result of exceeding the cohort 
default rate threshold and elects to continue to participate in 
the program while it appeals the loss of eligibility, it must 
provide the Secretary with a letter of credit that is 
sufficient to cover the institution's potential liabilities. If 
the institution is unsuccessful in its appeal, the institution 
shall be required to pay the Secretary an amount equal to the 
amount of interest, special allowance, reinsurance, and any 
related payments made by the Secretary (or that the Secretary 
is obligated to make) with respect to loans made to the 
institution's students under this part during the appeal 
period.
    Section 436(a)(1)(B) amends section 435(a)(2)(C) of the 
current act to specify that if a Historically Black College or 
University, a Tribally Controlled College or University, or a 
Navajo Community College exceeds the cohort default rate 
threshold for 2 consecutive years, it will be required to 
submit to the Secretary a default management plan that contains 
criterion that will demonstrate continuous improvement in the 
institution's cohort default rate. If the institution fails to 
submit the required plan, or demonstrate continuous 
improvement, the institution will be subject to a loss of 
eligibility to participate in the part B and part D student 
loan programs.
    Section 436(a)(2) amends section 435(a)(3)(C) of the 
current act to require that an institution seeking to appeal 
its loss of eligibility as a result of a high cohort default 
rate will be provided, within 30 days of request, a 
representative sample of the relevant loan servicing and 
collection records used by a guaranty agency in determining 
whether to pay a claim on a defaulted loan included in the 
cohort.
    Section 436(a)(3) amends section 435(a) of the current act 
to exempt institutions that have a student loan participation 
rate index that is equal to 0.0375 or less for any of the 3 
applicable participation rate indices shall not be subject to a 
loss of eligibility based upon a high cohort default rate. The 
participation rate index shall be determined by multiplying the 
institution's cohort default rate (or weighted average cohort 
default rate) by the percentage of students enrolled on at 
least a half-time basis for a 12-month period. This amendment 
will mitigate the impact of the cohort default rate threshold 
upon institutions with very low rates of participation in the 
part B and D programs.
    Section 436(b) amends section 435(d)(1)(A)(ii) of the 
current act to include within the definition of an eligible 
lender a bank that is a wholly owned subsidiary of a nonprofit 
foundation that makes loans under this part only to 
undergraduate students who are age 22 or younger and has a loan 
portfolio that does not exceed $5 million.
    Section 436(c) amends section 435(m)(1)(B) of the current 
act to clarify that when considering appeals with respect to 
cohort default rates, the Secretary shall exclude improperly 
serviced loans entirely from the calculation of an 
institution's cohort default rate.
    Section 437. Delegation of Functions. Section 437 amends 
section 436 of the current act by deleting provisions referring 
to the obsolete District of Columbia Student Loan Insurance 
Program and replacing it with a new section 436. This new 
section clarifies that an eligible lender (including a lender 
that holds a loan in the lender's capacity as trustee) or 
guaranty agency that contracts with another entity to perform 
any of the lender's or agency's functions remains responsible 
for the compliance of the contracting entity with the 
requirements of title IV.
    Section 438. Special Allowances. Sections 438(a)(1) and (2) 
amends section 438(c) of the current act to authorize the 
Secretary to bill an eligible lender directly for required 
origination and loan fees if, and only if, the lender fails or 
is not required to bill the Secretary for interest and special 
allowance or withdraws from the program.
    Section 438(b) makes a conforming change to section 
432(f)(1)(D) of the current act to reflect the elimination of 
the requirement to submit a plan for doing business.
    Section 439 requires the Secretary of the Treasury to 
conduct a study of the feasibility of employing market-based 
mechanisms, including some form of auction, for determining 
student loan interest rates under title IV of the Higher 
Education Act of 1965. The Secretary shall provide a report to 
Congress no later than September 30, 1999.

Part C--Federal work-study programs

    Sections 441, 442 and 443 amend part C of the act, the 
Federal Work-Study Programs.
    Section 441 amends section 441(b) of the act to authorize 
$900 million in fiscal year 1999 and such sums as may be 
necessary in the 4 succeeding fiscal years to carry out 
theFederal Work-Study program. It amends subsection (c) of section 441 
of the act by inserting ``including child care services provided on 
campus'' and by inserting in paragraph (3) of the same subsection, 
``including students with disabilities who are enrolled at the 
institution.''
    Section 442(1) changes provisions of section 443(b) of the 
act relating to less-than-full-time and independent students. 
Paragraph (3) is amended to read as follows: provided 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 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 attending the institution on a less-than-full-time 
basis or independent students, a reasonable portion of the 
allocation shall be made available to such students.
    Section 442(2) amends section 443(b)(5) by adding a new 
subparagraph (B) to provide that the Federal share of the 
compensation of students employed in community service shall 
not exceed 90 percent. Paragraph (6) is amended by striking the 
provision requiring that institutions of higher education make 
equivalent employment offered or arranged by the institutions 
reasonably available (to the extent of available funds) to all 
students in the institution who desire such employment.
    Section 443 amends provisions relating to Work Colleges in 
section 448 of the act by adding 2 new authorized activities to 
subsection (b)(2): coordinate and carry out joint projects and 
activities to promote work service learning; and carry out a 
comprehensive, longitudinal study of student academic progress 
and academic and career outcomes, relative to student self-
sufficiency in financing their higher education, repayment of 
student loans, continued community service, kind and quality of 
service performed, and career choice and community service 
selected after graduation. It authorizes in subsection (f) $7 
million for fiscal year 1999 and such sums as may be necessary 
in the 4 succeeding fiscal years.

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

    Section 451. Selection of Institutions. Section 451 amends 
section 453(c) of the act to repeal reference to the transition 
from the Federal Family Education Loan program to the Federal 
Direct Student Loan Program.
    Section 452. Terms and Conditions. Section 452 amends 
section 455(b) of the current act to establish that effective 
July 1, 1998, students who borrow new subsidized or 
unsubsidized student Federal Direct Stafford loans under title 
IV, part D of the current act will pay an interest rate that is 
equivalent to the bond equivalent rate of 91-day Treasury bills 
plus 2.3 percent with an interest rate cap of 8.25 percent on 
these loans. With respect to any loan made after July 1, 1998, 
under this part (other than Federal Direct PLUS loans or 
Federal Direct consolidation loans) the interest rate paid by 
borrowers prior to the beginning of repayment or while the 
student is in-school will be equivalent to the bond equivalent 
rate of 91-day Treasury bills plus 1.7 percent. The interest 
rate paid by borrowers under the PLUS Loan program will be set 
at the rate currently being paid by borrowers--the bond 
equivalent rate of 91-day Treasury bills plus 3.1 percent with 
an interest rate cap of 9 percent.
    Section 452 also amends section 455(b) to permit the 
Secretary of Education to prescribe by regulation repayment 
incentives designed to encourage on-time repayment of a student 
loan under part D. These incentives may be offered to borrowers 
only if the Secretary, after receiving a report from the Office 
of Management and Budget, certifies that the incentive is both 
cost neutral and in the best interest of the Federal 
Government. Any increase in subsidy costs resulting from 
incentives shall be completely offset by corresponding savings 
in funds available for the Federal Direct Loan Program in that 
fiscal year from the administrative account authorized under 
section 458 of the current act.
    Section 454. Funds for Administrative Expenses. Section 454 
amends section 458 of the current act to provide for the 
payment of the new account maintenance fees payable to guaranty 
agencies under part B. Funds available for the account in 
section 458 have been increased in accordance with estimates by 
the Congressional Budget Office to ensure that these fees do 
not deplete funds that would otherwise be available for the 
administration of the Federal Direct Loan Program in accordance 
with the Balanced Budget Act of 1997.

Part E--Federal Perkins loans

    Sections 461, 462, 463, 464, 465 and 466 amend part E of 
the act, the Federal Perkins Loan Program.
    Section 461 amends section 461(b) of the act to authorize 
$250 million for fiscal year 1999 and such sums as may be 
necessary in each of the 4 succeeding fiscal years.
    Section 462(a)(1) amends section 462(d)(3) by striking 
``the Secretary for'' and all that follows through ``years.''
    Section 462(a)(2) amends subsection (f) relating to Default 
Penalties. For fiscal years 1998 and any succeeding fiscal 
year, any institution with a cohort default rate that equals or 
exceeds 25 percent shall have a default penalty of zero. For 
fiscal year 1998 and any succeeding fiscal year, any 
institution with a cohort default rate that equals or exceeds 
50 percent for each of the 3 most recent years for which data 
are available shall not be eligible to participate in a program 
under this part for the fiscal year for which the determination 
is made and the 2 succeeding fiscal years, unless, within 30 
days of receiving notification from the Secretary of the loss 
of eligibility under this paragraph, the institution appeals 
the loss of eligibility to the Secretary. The Secretary shall 
issue a decision on any such appeal within 45 days after the 
submission of the appeal. Such decision may permit the 
institution to continue to participate in the program under 
this part if the institution demonstrates to the satisfaction 
of the Secretary that the calculation of the institution's 
cohort default rate is not accurate, and that recalculation 
would reduce the institution's cohort default rate for any of 
the 3 fiscal years below 50 percent, or, that there are, in the 
judgement of the Secretary, exceptional mitigating 
circumstances, such as small number of borrowers entering 
repayment, that would make the application of this paragraph 
inequitable. During an appeal, the Secretary may permit the 
institution to continue to participate in the Federal Perkins 
Loan program. For the purpose of this part, the term, ``loss of 
eligibility'' shall be defined as the mandatory liquidation of 
an institution's student loan fund, and assignment of the 
institution's outstanding loan portfolio to the Secretary.
    Section 462(a)(3) amends section 462(g)(1) of the act to 
state that, for award year 1998 and subsequent years, the 
maximum cohort default rate is 25 percent.
    Section 462(a)(4) amends section 462(h) of the act by 
changing the heading in the definition to read, ``Definition of 
Cohort Default Rate'' and by striking paragraphs (1) and (2) 
and renumbering as appropriate. Subparagraph (B) of the new 
paragraph (1) is stricken and other subparagraphs are 
renumbered as appropriate. The matter preceding subparagraph 
(A) of the new paragraph (2) is amended by striking ``A loan'' 
and inserting ``For purposes of calculating the cohort default 
rate under this subsection, a loan.''
    Section 462(b) includes a number of conforming amendments 
to section 462 of the act. In the matter following paragraphs 
(1)(B) and (2)(D)(ii) of subsection (a) of the act, ``cohort'' 
is inserted before ``default'' each place the term appears. In 
the matter following paragraphs (2)(B) and (3)(C) of subsection 
(c) of the act, ``cohort'' is inserted before ``default'' each 
place the term appears. In subsection (e)(2) of the act, 
``cohort'' is inserted before ``default.'' In the new 
subsection (h)(1)(F) of the act, ``cohort'' is inserted before 
``default.''
    Section 463 amends section 463(a)(2)(B) to read as follows: 
``a capital contribution by an institution in an amount equal 
to one-third of the Federal capital contributions described in 
subparagraph (A).'' Subsection (c)(2) is amended in the matter 
preceding subparagraph (A) by striking ``by the Secretary'' and 
all that follows through ``of--'' and inserting ``by the 
Secretary or an institution, as the case may be, to such 
organizations, with respect to any loan held by the Secretary 
or the institution, respectively, of--'' and subparagraph (A) 
is amended to read as follows: ``the date of disbursement and 
the amount of such loans made to any borrower under this part 
at the time of disbursement of the loan;''. Subparagraph (B) is 
amended by inserting ``the repayment and'' after ``concerning'' 
and by striking ``any defaulted'' and inserting ``such''. 
Subparagraph (C) is amended by inserting ``, or upon 
cancellation or discharge of the borrower's obligation on the 
loan for any reason'' before the period. Paragraph (3) is 
amended in the matter preceding subparagraph (A) by striking 
``until--'' and inserting ``until the loan is paid in full'', 
by striking subparagraphs (A) and (B) and by amending paragraph 
(4) to read as follows: ``Except as provided in subparagraph 
(B), an institution of higher education, after consultation 
with the Secretary and pursuant to the agreements entered into 
under paragraph (1), shall disclose at least annually to any 
credit bureau organization with which the Secretary has such an 
agreement the information set forth in subparagraph (2), and 
shall disclose promptly to such credit bureau organization any 
changes to the information previously disclosed. (B) The 
Secretary may promulgate regulations establishing criteria 
under which an institution of higher education may cease 
reporting the information described in paragraph (2) before a 
loan is paid in full.''.
    Section 464(1) makes changes to section 464 of the act by 
amending subsection (a)(2) to read as follows: ``Except as 
provided in paragraph (4), the total of loans made to a student 
in any academic year or its equivalent by an institution of 
higher education from a loan fund established pursuant to an 
agreement under this part shall not exceed--
                          ``(i) $4,000, in the case of a 
                        student who has not successfully 
                        completed a program of undergraduate 
                        education; or
                          ``(ii) $6,000, in the case of a 
                        graduate or professional student.
                  ``(B) Except as provided in paragraph (4), 
                the aggregate of the loan for all years made to 
                a student by institutions of higher education 
                from loan funds established pursuant to 
                agreements under this part may not exceed--
                          ``(i) $40,000, in the case of any 
                        graduate or professional student (as 
                        defined by regulations issued by the 
                        Secretary, and including any loan from 
                        such funds made to such person before 
                        such person became a graduate or 
                        professional student),
                          ``(ii) $20,000, in the case of a 
                        student who has successfully completed 
                        2 years of a program of education 
                        leading to a bachelor's degree but who 
                        has not completed the work necessary 
                        for such degree (determined under 
                        regulations issued by the Secretary, 
                        and including any loans from such funds 
                        made to such person before such person 
                        became such a student); and
                          ``(iii) $8,000, in the case of any 
                        other student.''
    Section 464(1) includes higher loan limits for students 
pursuing teaching as a career by including the following 
language in section 464(a)(2)(C):
                          ``(i) The total of loans made to a 
                        student described in clause (ii) in any 
                        academic year or its equivalent by an 
                        institution of higher education from 
                        loan funds established pursuant to 
                        agreements under this part may not 
                        exceed--
                                  ``(I) $8,000 for each of the 
                                third and fourth years of the 
                                program of instruction leading 
                                to a bachelor's degree; or
                                  ``(II) $10,000 for the first 
                                year of graduate study (as 
                                defined in regulations issued 
                                by the Secretary).
                          ``(ii) A student referred to in 
                        clause (I) is any student (I) who is a 
                        junior in a program of instruction 
                        leading to a bachelor's degree (II) who 
                        states in writing that the student will 
                        pursue a course of study to become an 
                        elementary or secondary school teacher; 
                        and (III) who states in writing that 
                        the student intends to become a full-
                        time teacher in a school which meets 
                        the requirements of section 
                        465(a)(2)(A).
                          ``(iii) Each institution shall 
                        provide a report to the Secretary 
                        annually containing the number of loans 
                        under this subparagraph that are made, 
                        the amount of each loan, and whether 
                        the students benefiting from the higher 
                        loan limits met the requirements for 
                        receiving those loans.
                          ``(iv) If 3 years after the date of 
                        enactment of the Higher Education 
                        Amendments of 1998, the Secretary 
                        determines that an institution has 
                        engaged in a pattern of abuse of this 
                        subparagraph, the Secretary may reduce 
                        or terminate the institution's Federal 
                        capital contribution.''
    Section 464(2) amends section 464(b) of the act by changing 
paragraph (2) to read as follows: ``If an institution's capital 
contribution in section 462 is directly or indirectly based in 
part on the financial need demonstrated by students who are 
attending the institution less than full time; or (B) 
independent students, a reasonable portion of the loan made 
from the institution's student loan fund containing the 
contribution shall be made available to such students.''
    Section 464(3) amends section 464(c)(1) of the act in 
paragraph (D) by striking ``(i) 3 percent'' and all that 
follows through ``or (iii)'' and by redesignating subparagraphs 
(H) and (I) as subparagraphs (I) and (J), respectively and by 
inserting after subparagraph (G) the following: ``(H) shall 
provide that, in the case of a loan made after July 1, 1999, 
the loan shall be considered in default (except as otherwise 
provided in section 462(h)) if the borrower of a loan made 
under this part fails to make an installment payment when due, 
or to meet any other term of the promissory note or written 
repayment agreement, and such failure persists for--(I) 180 
days in the case of a loan that is repayable in monthly 
installments; or (ii) 240 days in the case of a loan that is 
repayable in less frequent installments;''.
    Section 464(4) adds the following new subsection:
    ``(g) Discharge.--
          ``(1) In general.--If a student borrower who received 
        a loan made under this part on or after January 1, 
        1986, is unable to complete the program in which such 
        student is enrolled due to the closure of the 
        institution, then the Secretary shall discharge the 
        borrower's liability on the loan (including the 
        interest and collection fees) by repaying the amount 
        owed on the loan and shall subsequently pursue any 
        claim available to such borrower against the 
        institution and the institution's affiliates and 
        principals, or settle the loan obligation pursuant to 
        the financialresponsibility standards described in 
section 498(c).
          ``(2) Assignment.--A borrower whose loan has been 
        discharged pursuant to this subsection shall be deemed 
        to have assigned to the United States the right to a 
        loan refund in an amount that does not exceed the 
        amount discharged against the institution and the 
        institution's affiliates and principals.
          ``(3) Eligibility for additional assistance.--The 
        period during which a student was unable to complete a 
        course of study due to the closing of the institution 
        shall not be considered for purposes of calculating the 
        student's period of eligibility for additional 
        assistance under this title.
          ``(4) Special rule.--A borrower whose loan has been 
        discharged pursuant to this subsection shall not be 
        precluded, because of that discharge, from receiving 
        additional grant, loan or work assistance under this 
        title for which the borrower would be otherwise 
        eligible (but for the default on the discharged loan). 
        The amount discharged under this subsection shall not 
        be considered income for the purposes of the Internal 
        Revenue Code of 1986.
      ``(5) Reporting.--The Secretary or institution, as the 
case may be, shall report to the credit bureaus with respect to 
loans that have been discharged pursuant to this subsection.
    ``(h) Rehabilitation of Loans.--
          ``(1)Rehabilitation.--
                  ``(A) In general.--If the borrower of a loan 
                made under this part who has defaulted on the 
                loan makes 12 on-time, consecutive, monthly 
                payments of amounts owed on the loan, as 
                determined by the institution, the loan shall 
                be considered rehabilitated, and the 
                institution that made that loan (or the 
                Secretary, in the case of a loan held by the 
                Secretary) shall instruct any credit bureau 
                organization or credit reporting agency to 
                which the default was reported to remove the 
                default from the borrower's credit history.
                  ``(B) Comparable conditions.--As long as the 
                borrower continues to make scheduled payments 
                on a loan rehabilitated under this paragraph, 
                the rehabilitated loan shall be subject to the 
                same terms and conditions, and qualify for the 
                same benefits and privileges, as other loans 
                made under this part.
                  ``(C) Additional assistance.--The borrower of 
                a rehabilitated loan shall not be precluded by 
                section 484 from receiving additional grant, 
                loan, or work assistance under this title (for 
                which the borrower is otherwise eligible) on 
                the basis of defaulting on the loan prior to 
                such rehabilitation.
                  ``(D) Limitations.--A borrower only once may 
                obtain the benefit of this paragraph with 
                respect to rehabilitating a loan under this 
                part.
          ``(2) Restoration of eligibility.--If the borrower of 
        a loan made under this part who has defaulted on that 
        loan makes 6 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 only once may obtain the 
        benefit of this paragraph with respect to restored 
        eligibility.
    ``(i) Incentive Repayment Program.--
          ``(1) In general.--Each institution of higher 
        education may establish, with the approval of the 
        Secretary, an incentive repayment program designed to 
        reduce default and to replenish student loan funds 
        established under this part. Each such incentive 
        repayment program may--
                  ``(A) offer a reduction of the interest rate 
                on a loan on which the borrower has made 48 
                regular consecutive monthly repayments, but in 
                no event may the rate be reduced more than 1 
                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 may the discount exceed 5 percent of the 
                unpaid principal balance due on the loan at the 
                time the early repayment is made; and
                  ``(C) include such other incentive repayment 
                options as the institution determines will 
                carry out the objectives of this subsection.
          ``(2) Limitations.--No incentive repayment option 
        under an incentive repayment program authorized by this 
        subsection may be paid for with Federal funds, 
        including any Federal funds from the student loan fund, 
        nor can an incentive repayment option be paid for with 
        institutional funds from the student loan fund.''
    Section 465 amends section 466(a) of the act in the matter 
preceding paragraph (1) by striking ``1996'' and inserting 
``2003'', by striking ``1997'' and inserting ``2004'', in 
paragraph (1), by striking ``1996'' and inserting ``2003'', in 
subsection (b) of the act by striking ``2005'' and inserting 
``2012'', by striking ``1996'' and inserting ``2003'' and in 
subsection (c), by striking ``1997'' and inserting ``2004''.
    Section 466 repeals subsection (c) of section 467 of the 
act and adds the following new language ``Transfer of 
Balance.--Any funds in the Perkins Revolving Fund on the date 
of enactment of this act shall be transferred to and deposited 
in the Treasury.''

Part F--Need analysis

    Sections 471 through 475 amend part F of the act, Need 
Analysis.
    Section 471(1) amends section 472 paragraph (3) of the act 
by striking ``not less than $1,500'' and replacing it with 
``determined by the institution,'' in subparagraph (C) by 
striking ``except that the amount may not be less than 
$2,500.''
    Section 471(2) amends section 472(11) by striking 
``placed'' and inserting ``engaged.''
    Section 472(1) amends the income protection allowance in 
section 475(g)(2)(D) by striking $1,750 and inserting $2,200. 
The section adds a new subparagraph (F) that reads as follows: 
``an allowance for parents' negative available income, 
determined in accordance with paragraph (6).'' Paragraph (6) is 
inserted and reads as follows:
          ``(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 (1) exceeds the parents' total income (as 
        defined in section 480).''
    Section 472(2) adds the following new section (j) to 
section 475: ``Adjustments to Students Contribution for 
Enrollment Period of Less Than Nine Months.--For periods of 
enrollment of less than 9 months, the student's contribution 
from adjusted available income (as determined under subsection 
(g)) is determined, for purposes other than subpart 2 of part 
A, by dividing the amount determined under such subsection by 9 
and multiplying the result by the number of months in the 
period of enrollment.''
    Section 473 amends provisions relating to Family 
contributions for Independent Student without Dependents other 
than a Spouse. Section 476(b)(1)(A)(iv) of the act is amended 
by striking $3,000 in subclause (I) and inserting $4,250, by 
striking $3,000 in subclause (II) and inserting $4,250 and by 
striking $6,000 in subclause (III) and inserting $7,250.
    Section 474 updates tables and amounts in section 478(b) of 
the act. The provision strikes ``For each academic year'' and 
inserts ``Revised Tables.--For each academic year.'' A new 
paragraph is inserted that requires the Secretary, for each 
academic year after 1999-2000, to publish in the Federal 
Register revised income protection allowances for the purposes 
of sections 475(g)(2)(D) and 476(b)(1)(A)(iv) of the act. Such 
revised allowance shall bedeveloped 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 1998 and the December 
next preceding the beginning of such academic year, and rounding the 
result to the nearest $10.
    Section 475 amends section 479A (c) to state that an 
eligible institution may refuse to certify a statement that 
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. It 
specifies that no eligible institution shall discriminate 
against any borrower or applicant in obtaining a loan on the 
basis of race, national origin, religion, sex, marital status, 
age or disability status. This provision was moved from section 
428(a)(2)(F) of the act.

Part G--General provisions relating to student assistance programs

    Section 481 amends section 482 (Master Calendar) of the act 
to require the Department, to the extent feasible, to publish 
minimal software and hardware requirements by December 1 prior 
to the start of an award year. It amends section 482(c) by 
moving the publication deadline from December 1 to November 1 
and authorizing the Secretary to designate regulatory 
provisions that institutions or other entities may choose to 
implement before the otherwise applicable effective date.
    Section 482 amends section 483 (Forms and Regulations) of 
the act to: (1) permit borrowers seeking loans under part B to 
utilize the Free Application for Federal Student Aid as their 
loan application; (2) require the Secretary, in consultation 
with the States, to include data items needed to assist the 
States in awarding State student financial assistance; (3) 
require the Secretary to request the social security number of 
parents of dependent students seeking financial assistance 
under this title; (4) permit the Secretary to pay to obtain 
from third parties data that the Secretary considers essential 
to the efficient administration of the programs under this 
title; and (5) require the Secretary to develop and implement a 
multiyear promissory note for loans made for periods of 
enrollment beginning on or after July 1, 2000.
    Section 483 amends section 484 (Student Eligibility) of the 
act to: (1) clarify the eligibility of home-school graduates 
for title IV assistance; (2) require the verification of IRS 
return information; and (3) prohibit title IV grant, loan, or 
work assistance to any student convicted of a drug-related 
offense.
    Section 484 amends section 484B (Institutional Refunds) of 
the act to: (1) remove the reference to accrediting agency 
approved refund policies from the list of policies to be 
compared to determine which produces the largest amount, and 
(2) replace references to ``last day of attendance'' with ``day 
the student withdrew,'' which is defined as the last recorded 
day of attendance by the student or--in instances where 
attendance is not recorded--either the day on which the student 
began the withdrawal process prescribed by the institution or 
the day the student otherwise provided notification to the 
institution of the intent to withdraw.
    Section 485 amends section 485 (Institutional and Financial 
Assistance Information for Students) of the act, as follows:
    Subsection (a) amends section 485(a) (Information 
Dissemination Activities) to: (1) clarify that information may 
be made available through electronic media; (2) require each 
institution to provide annually to all enrolled students a list 
of the information required by the section, along with a 
statement of the procedures required to obtain the information; 
(3) add to the required list of information the requirements 
and procedures for student withdrawal and the consequences to 
the student with respect to receipt of refunds if the student 
fails to provide notification of withdrawal; (4) define 
``prospective student'' as one who has expressed interest in 
applying for admission, as opposed to ``requesting 
information''; and (5) provide that information regarding 
completion or graduation rates be made available by July 1 of 
each year to current and prospective students.
    Subsection (b) amends section 485(b) (Exit Counseling for 
Borrowers) to clarify that an institution may utilize 
electronic means to provide personalized exit counseling.
    Subsection (c) amends section 485(c) (Disclosures Required 
with Respect to Athletically Related Student Aid) to clarify 
that the provision of comparable data by a national collegiate 
athletic association to all secondary schools satisfies the 
requirements that information be disclosed to a prospective 
student athlete's guidance counselor and coach.
    Subsection (d) amends section 485(f) (Disclosure of Campus 
Security Policy and Campus Crime Statistics) to: (1) revise and 
expand the list of crimes that must be included in campus crime 
statistics to include arson as well as crimes that manifest 
evidence of prejudice based on actual or perceived race, 
gender, religion, sexual orientation, ethnicity, or disability; 
(2) require institutions to maintain an open daily log that 
records the nature, date, time, and general location of each 
crime reported to the local police or campus security and to 
update log entries when new information become available; (3) 
make explicit that neither victims nor persons accused of a 
crime may be identified in the reporting of campus crime 
statistics, except as required by State or local laws; and (4) 
require the Secretary, in consultation with the Attorney 
General, to provide for a national study to examine procedures 
undertaken after an institution of higher education receives a 
report of sexual assault and to authorize $1 million in fiscal 
year 1999 for such study.
    Subsection (e) amends section 485(g) (Data Required) to: 
(1) transfer provisions relating to athletic revenues and 
expenses currently found in section 487(a)(18) to section 
485(g); (2) provide that institutions make a statement of any 
reduction that will, 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 
resources made available to such sport, to the extent the 
reduction is known; and (3) require the Secretary to compile by 
April 1 of each year a report summarizing information reported 
by institutions regarding intercollegiate athletics, 
identifying trends in the information, and aggregating the 
information by divisions of the National Collegiate Athletic 
Association. The Secretary is to make the report available on 
the Internet and to notify all secondary schools regarding the 
availability of intercollegiate athletics information.
    Subsection (f) amends section 444(a)(4)(B) of the General 
Education Provisions Act to exclude criminal activities from a 
postsecondary student's educational records.
    Section 486 amends section 485B (National Student Loan Data 
Bank System) to provide that borrowers under part E (Perkins 
Loans) are included in the Student Status Confirmation Report 
in the same manner as borrowers under parts B and D.
    Section 487 amends section 486 of the act to: (1) strike 
provisions related to training in financial aid services and 
insert provisions dealing with information on the costs of 
higher education; (2) require the National Center for Education 
Statistics (NCES) to develop standard definitions of a few key 
financial cost concepts, institutions to report these data 
annually, and NCES to make this information available publicly 
through its integrated postsecondary education data systems on 
an annual basis; (3) require NCES, in consultation with the 
Bureau of Labor Statistics, to produce a report that would 
examine expenditures at institutions of higher education, how 
such expenditures change over time, and how such expenditures 
relate to college costs; (4) require NCES, in consultation with 
the Bureau of Labor Statistics, to develop a ``Higher Education 
Market Basket'' that could be used to determine the composition 
of the costs of higher education; and (5) authorize the 
Secretary to impose a fine of up to $25,000 on an institution 
of higher education for failure to provide the required 
information in a timely or accurate manner or for failure to 
otherwise cooperate with NCES regarding efforts to obtain data 
on the cost of higher education.
    Section 488 amends section 487 (Program Participation 
Agreements) of the act to make several technical and conforming 
changes related to State Postsecondary Review Entity (SPRE) 
references (as SPRE is repealed), the addition of part D loans 
in sections now referencing only part B, and the clarification 
that ``ownership'' refers to for-profit institutions.
    Section 489 amends section 487A (Quality Assurance Program) 
of the act to: (1) rename the section as ``Regulatory Relief 
and Improvement''; (2) authorize the Secretary to select 
institutions for participation in a Quality Assurance Program 
(QAP) through which institutions may develop and implement 
their own comprehensive systems, including processing and 
disbursement of student financial aid, verification of student 
financial aid application data, and entrance and exit 
interviews, to enhance program integrity; (3) permit the 
Secretary to waive regulatory, but not statutory, requirements 
dealing with reporting or verification that are addressed by 
the QAP participant's alternative management system; (4) 
require the Secretary to review the QAP conducted by each 
participating institution and make recommendations to Congress 
regarding amendments that would streamline the administration 
and enhance the integrity of Federal student assistance 
programs; (5) require the Secretary to review and evaluate the 
experience of institutions participating as experimental sites 
under current section 487A(d) and to report to Congress 
regarding the findings of each of the experiments and to make 
recommendations to improve and streamline the act, based on 
those findings; and (6) permit the Secretary to select a 
limited number of institutions for participation as 
experimental sites after the report regarding existing sites is 
submitted to Congress and after consultation with the 
appropriate committees of Congress.
    Section 489A amends part G of the act by adding a new 
section 487C (Distance Education Demonstration Programs). This 
new demonstration authority permits the Secretary to select up 
to 5 institutions of higher education or consortia for which 
specified statutory restrictions in part F and part G may be 
waived. In addition, any regulatory requirement that inhibits 
distance education may be waived for participants in the 
demonstration. Demonstration program participants will be 
subject to ongoing review by the Department and will be 
evaluated by the Secretary, who will review issues such as 
student access and outcomes and student financial aid issues. 
In addition, the Secretary will issue a report to Congress 
identifying any additional statutory impediments to the 
expansion of quality distance education programs. An 
independent evaluation of the demonstration program and of 
broader issues dealing with distance education quality and 
student outcomes will be conducted by the National Academy of 
Sciences, for which up to $1 million will be made available. 
Based on the evaluations conducted by the Department and by the 
National Academy of Sciences, the Secretary may in the future 
select up to an additional 10 participants in the demonstration 
program.
    Section 489B amends section 491 (Advisory Committee on 
Student Financial Assistance) of the act to: (1) clarify that 
the Advisory Committee on Student Financial Assistance (ACSFA) 
has independent control over staffing levels; (2) specify that 
reports and other documents are not subject to review by the 
Secretary; (3) prohibit Federal employees from serving as 
members of ACSFA; (4) allow ACSFA to obtain the services of 
temporary consultants; (5) increase the minimum level of ACSFA 
funding from $750,000 to $800,000; (6) revise the special 
analyses and activities to be conducted by ACSFA to include 
review of the modernization of student financial aid systems 
and delivery (including the implementation of a performance-
based organization within the Department), the feasibility and 
degree of use of appropriate technology, the implications of 
distance education on student eligibility and other 
requirements for financial assistance, and redundant or 
outdated sections of the act and regulation; and (7) extend the 
authorization of ACSFA through October 1, 2004.
    Section 489C amends section 492 (Regional Meetings and 
Negotiated Rulemaking) of the act to continue negotiated 
rulemaking and add part D to the parts (B, G, and H) that were 
subject to negotiated rulemaking following the 1992 
reauthorization and to require negotiated rulemaking for 
developing all regulations for student loan programs.

Part H--Program Integrity Triad

    Section 491 repeals the current subpart 1 of part H (State 
Postsecondary Review Program) and replaces it with provisions 
that define State responsibilities as being licensure and 
notification to the Secretary of revocation of license or 
evidence of institutional fraud. Institutions are required to 
prove they have authority to operate in a State.
    Section 492 amends the current subpart 2 of part H 
(Accrediting Agency Approval) by: (1) substituting the word 
``recognition'' for ``approval'' each time it appears in 
subpart 2; (2) substituting the word ``criteria'' for 
``standards'' each time in appears in subpart 2; (3) adding 
language to make specific reference to distance education 
programs as among those subject to quality review by 
accrediting agencies; (4) reordering review criteria to place 
student learning and success first on the list; (5) deleting 
the specific references to clock and credit hours in describing 
the measures of program length to be assessed by an accrediting 
agency or association; (6) clarifying that an accreditation 
agency or association is to review an institution's record of 
compliance with program responsibilities under title IV, not to 
enforce compliance with title IV; (7) strengthening current 
statutory requirements relating to the time frame within which 
an accrediting agency or association must come into compliance 
after the Secretary has determined the agency or association 
has not met the requirements of section 496; and (8) making 
provision for the accreditation of institutions of higher 
education offering distance education courses or programs being 
within the scope of recognition of an accrediting agency or 
association.
    Section 493 amends the current subpart 3 of part H 
(Eligibility and Certification Procedures), as follows:
    Subsection (a) amends section 498(b) (Single Application 
Form) to: (1) require that an institution maintain a copy of 
any contract between the institution and a financial aid 
service provider or loan servicer, and provide a copy of any 
such contract to the Secretary upon request, instead of 
requiring that the institution supply the copy with its 
application to participate in the student aid programs under 
title IV, and (2) provide that an institution may select the 
specific loan programs offered under part B or part D in which 
it will participate.
    Subsection (b) amends section 498(c) (Financial 
Responsibility Standards) to: (1) substitute more general 
language for the specific measures of financial responsibility 
currently mentioned in section 498(c)(2), and (2) specify that 
the Secretary may accept any reasonable third-party financial 
guarantees in cases where an institution fails to meet overall 
financial responsibility standards.
    Subsection (c) amends section 498(e) (Financial Guarantees 
from Owners) to clarify that ``ownership'' refers to for-profit 
institutions.
    Subsection (d) amends section 498(f) (Site Visits) to 
eliminate the requirement that the Department conduct site 
visits of all institutions and to eliminate the ability of the 
Department to charge fees to cover the expenses of 
certification and site visits.
    Subsection (e) amends section 498(g) (Time Limitations on, 
and Renewal of, Eligibility) to: (1) update language that 
applied only to the 1992 Amendments; (2) give the Secretary the 
authority to recertify an institution for up to 6 years (rather 
than the 4 years in current law); (3) require the Secretary to 
inform an institution 6 months in advance of the expiration of 
its eligibility; and (4) establish a special rule for 
institutions of higher education located outside of the United 
States that receive less than $500,000 annually in Federal 
Family Education Loans.
    Subsection (f) amends section 498(h) (Provisional 
Certification of Institutional Eligibility) to clarify that 
``ownership'' refers to for-profit institutions.
    Subsection (g) amends section 498(i) (Treatment of Changes 
of Ownership) to clarify that ``ownership'' refers to for-
profit institutions.
    Subsection (h) amends section 498(j) (Treatment of 
Branches) to clarify that, prior to seeking certification as a 
main campus or free-standing institution, a branch is required 
to be in existence for at least 2 years after it has been 
certified by the Secretary as a branch campus participating in 
a title IV program.
    Section 494 amends section 498A(a) (Program Review and 
Data) to: (1) require the Secretary to establish priorities for 
program reviews of institutions of higher education, and (2) 
specify that additional categories of institutions that the 
Secretary may identify as requiring priority review are those 
that may pose significant risk of failure to comply with 
administrative or financial responsibility provisions. It 
amends Section 498A(b) (Special Administrative Rules) to: (1) 
require the Secretary to inform institutions of the criteria 
involved in program reviews; (2) require the Secretary to 
implement a system of ``cures'' to allow institutions to 
correct minor record-keeping errors; (3) require 
proportionality in civil penalties; (4) facilitate the exchange 
of information between the Secretary and institutions; and (5) 
require the Secretary to establish a process for ensuring 
coordinated reviews and for identifying unnecessary duplication 
of reporting and related regulatory requirements.

Part I--Administrative Provisions for Delivery of Student Financial 
        Assistance

    Section 495. Performance-Based Organization for the 
Delivery of Federal Student Financial Assistance. Section 495 
amends title IV of the current act to create a new part I 
entitled Administrative Provisions for Delivery of Student 
Financial Assistance containing the following new sections:
    Section 499 amends the current act to authorize the 
Secretary to establish within the Department of Education a 
performance-based organization (PBO) designed to more 
efficiently and effectively administer the various functions 
relating to student financial assistance programs authorized 
under this title. The goals of the PBO will be to improve 
service to students, reduce the costs of administering the 
programs, increase accountability, provide greater flexibility 
for the administration of these programs, and improve and 
integrate the information and delivery systems that support the 
administration and delivery of student aid. Each year the 
Secretary and the Chief Operating Officer shall agree upon and 
make available to the public a 5-year performance plan for the 
PBO. Each year the Chief Operating Officer will prepare and 
submit to Congress and the Secretary an annual report on the 
performance of the PBO. The PBO will be provided with personnel 
and procurement flexibilities in order to achieve the 
objectives of improved service and greater efficiency. In 
exchange, the staff of the PBO, including the chief operating 
officer, will be compensated in accordance with their ability 
to achieve or exceed the goals contained within the performance 
plan.

        title v--graduate and postsecondary improvement programs

    Section 501 amends the title heading of title V from 
``Educator Recruitment, Retention, and Development'' to 
``Graduate and Postsecondary Improvement Programs''; repeals 
parts A, B, C, D, E, and F of title V; transfers part C of 
title IX (Jacob K. Javits Fellowship Program), part D of title 
IX (Graduate Assistance in Areas of National Need), part A of 
title XI (Urban Community Service), and part A of title X (Fund 
for the Improvement of Postsecondary Education) to title V and 
redesignates such parts as parts A, B, C, and D, respectively; 
designates section numbers of programs included in the parts 
transferred to title V; and revises cross-references to 
transferred programs in other parts of the act.
    Section 502 amends section 500 (Findings and Purposes) of 
the act to delete findings and purposes related to educator 
recruitment, retention, and development and to substitute 
purposes related to graduate fellowship programs and the 
promotion of postsecondary programs.

Part A--Jacob K. Javits Fellowship Program

    Section 511 amends the Jacob K. Javits Fellowship Program, 
as follows:
    Subsection (a) establishes financial need, as determined by 
section 484, as a criterion for receiving a grant under this 
part; amends a criterion for eligibility to include students 
pursuing the terminal highest degree awarded in the area of 
study; requires forward funding for the awardof new Javits 
fellowships; stipulates the dates by which the Secretary shall make 
applications available for and announce awards of Javits fellowships; 
and allows the Secretary to enter into a contract with a 
nongovernmental agency to administer the Javits program if the 
Secretary determines that doing so would be efficient.
    Subsection (b) modifies the appointment of members of the 
Board to include representatives of a range of disciplines and 
makes technical amendments to allow for changes if the 
Secretary enters into a contract with a nongovernmental entity 
to administer the Javits program.
    Subsection (c) updates the institutional payment to be 
$10,000 per grant in the 1999-2000 academic year and requires 
that the level of a grant recipient's support be determined in 
accordance with part F of title IV.
    Subsection (d) authorizes $30 million in fiscal year 1999 
and ``such sums as may be necessary'' for each of the 4 
succeeding fiscal years to carry out this part.

Part B--Graduate assistance in areas of national need

    Section 521 amends Graduate Assistance in Areas of National 
Need, as follows:
    Subsection (a) requires the Secretary, after due 
consultation, to designate areas of national need and requires 
the Secretary to consider an assessment of how the program may 
achieve the most significant impact with available resources as 
a new criterion in determining areas of national need.
    Subsection (b) clarifies that institutional matching 
requirements may be in cash or in kind, fairly valued; requires 
that applicants describe the number, types, and amounts of the 
fellowships that the applicant intends to offer with a grant 
under this part; and requires applicants to adopt policies and 
procedures to assure that students who receive awards will have 
financial need, as determined under part F of title IV.
    Subsection (c) updates effective dates; determines grant 
awards to be equal to the National Science Foundation graduate 
fellowships, except not to exceed the fellow's demonstrated 
need determined in accordance with part F of title IV; and 
clarifies that only the excess of institutional payments made 
by the institution of higher education on behalf of individuals 
supported by fellowships under this part in amounts that exceed 
the institutional payments made by the Secretary may count 
toward the amounts the institution is required to provide in 
its institutional match.
    Subsection (d) updates the institutional payment to be 
$10,000 per grant in the 1999-2000 academic year.
    Subsection (e) authorizes $30 million in fiscal year 1999 
and ``such sums as may be necessary' for each of the 4 
succeeding fiscal years to carry out this part.

Part C--Urban community service

    Section 531 amends Urban Community Service to give priority 
to institutions that have demonstrated their commitment to 
urban community service and to authorize $20 million in fiscal 
year 1999 and ``such sums as may be necessary'' for each of the 
4 succeeding fiscal years to carry out this part.

Part D--Fund for the improvement of postsecondary education

    Section 541 amends the Fund for the Improvement of 
Postsecondary Education to: (1) clarify that combinations of 
institutions of higher education are eligible to receive grants 
or contracts; (2) permit the Secretary to appoint up to 7 
technical employees, rather than the 5 permitted under current 
law; (3) authorize $26 million in fiscal year 1999 and such 
sums as may be necessary for each of the 4 succeeding fiscal 
years to carry out subpart 1; (4) authorize $1 million in 
fiscal year 1999 and such sums as may be necessary for each of 
the 4 succeeding fiscal years to carry out planning grants 
authorized under subpart 1; (5) revise the listing of areas of 
national need for which grants for innovative projects under 
subpart 2 may be awarded to delete ``campus climate and 
culture'' and to add institutional restructuring to improve 
learning and promote costs efficience; evaluation and 
dissemination of model programs; and articulation between 2-
year and 4-year institutions, including developing innovative 
methods for ensuring the successful transfer of students from 
2-year to 4-year institutions; and (6) authorize $5 million in 
fiscal year 1999 and such sums as may be necessary for each of 
the 4 succeeding fiscal years to carry out subpart 2.

Part E--Higher education access for students with disabilities; 
        Hispanic-serving institutions; general provisions

    Section 551 adds new parts E (Higher Education Access for 
Students with Disabilities), F (Hispanic-Serving Institutions), 
and G (General Provisions) to title V, to read as follows:

Part E--Higher education access for students with disabilities

    New section 571 establishes a new grant program to promote 
higher education access for students with disabilities.
    Subsection (a) sets out the purposes of the part, which is 
to support the development of model programs to provide 
technical assistance or training and professional development 
for faculty and administrators in institutions of higher 
education, as defined in section 481(a) of the act, to provide 
the faculty and administrators with the skills and assistance 
to teach effectively students with disabilities; and to ensure 
effective and dissemination of such model programs.
    Subsection (b) authorizes the Secretary to award grants to 
institutions of higher education to carry out the purposes of 
this part. It specifies that, to the extent feasible, the model 
programs developed under this part shall be developed for a 
range of types and sizes of institutions of higher education. 
When awarding grants, the Secretary is required to consider 
providing an equitable geographic distribution of such grants 
and distributing such grants to urban and rural areas. The 
Secretary is required to award grants for a range of approaches 
to providing support to faculty and administrators, such as in-
service training, professional development, customized and 
general technical assistance, workshops, summer institutes 
distance learning and the use of educational technology.
    Subsection (c) authorizes the Secretary to award grants to 
institutions of higher education that have demonstrated 
exceptional programs for students with disabilities under this 
part in order to disseminate those programs.
    Subsection (d) provides that institutions of higher 
education must submit applications to the Secretary, and these 
applications must include a plan to assess the needs of the 
institution of higher education in order to meet the purposes 
of this part, in consultation with a broad range of persons 
within that institution and a plan for coordinating with or 
collaborating with the office within the institution that 
provides services to students with disabilities, and the equal 
opportunity office within the institution, if the offices 
exist.
    Subsection (e) provides that funds shall be used to meet 
the purposes of this section and ensure that projects assisted 
under this part include components for model development, 
demonstration, evaluation, and dissemination to other 
institutions of higher education, and may include, to the 
extent practicable, graduate teaching assistants in the 
services provided under the grant.
    Subsection (f) provides that the Secretary shall award 
grants for up to 3 years.
    Subsection (g) provides that nothing in this section shall 
be construed to impose any additional duty, obligation, or 
responsibility on an institution of higher education, or on the 
institution's administrators, faculty, or staff, in addition to 
the requirements of section 504 of the Rehabilitation Act of 
1973 and the Americans with Disabilities Act of 1990.
    Subsection (h) authorizes appropriations of $10 million for 
fiscal year 1999 and such sums as may be necessary for the 4 
succeeding fiscal years to carry out this section.

Part F--Hispanic-serving institutions

    Section 581--Purpose. New section 581 declares that the 
purpose of new part G is to expand educational opportunities 
for and improve the academic attainment of Hispanic students 
while expanding and enhancing the academic offerings, program 
quality, and institutional stability of colleges and 
universities that serve large numbers of Hispanic students.
    Section 582--Program Authorized. New section 582 authorizes 
the Secretary to provide grants and related assistance to 
Hispanic-serving institutions to enable such institutions to 
improve and expand their capacity to serve Hispanic students 
and other low-income individuals. Authorized activities 
include: purchase, rental, or lease of scientific/laboratory 
equipment; renovation and improvement of facilities; support of 
faculty exchanges and faculty development programs; curriculum 
development; acquisition of library materials, funds and 
administrative management; and tutoring, counseling, and 
student support services. In addition, an eligible Hispanic 
Serving Institution may use not more than 20 percent of its 
grant under this part to establish or increase an endowment 
fund.
    Section 583--Application Process. New section 583 requires 
each Hispanic-serving institution desiring to receive 
assistance under this part to submit enrollment data and any 
other data the Secretary may require. Applications for 
assistance must include a 5-year plan for strengthening the 
service provided to Hispanic and other low-income students. 
Priority will be given to applications that demonstrate that 
the institution has entered into a collaborative relationship 
with a local educational agency or community-based organization 
to reduce dropout rates for Hispanic students, improve rates of 
academic achievement for Hispanic students, and increase the 
rates at which Hispanic students enroll in higher education.
    Section 584--Special Rule. New section 584 prohibits any 
institution that receives funds under this part from 
simultaneously receiving funds under part A or B of title III.
    Section 585--Definitions. New section 585 defines Hispanic-
serving institution to mean an institution of higher education 
that is eligible for assistance under part A of title III and, 
at the time of the application, has an enrollment of full-time 
equivalent undergraduate students that is at least 25 percent 
Hispanic. At least 50 percent of these students must be low-
income individuals (individuals whose taxable income did not 
exceed 150 percent of the poverty level).
    Section 586--Authorization of Appropriations. New section 
586 authorizes $45 million for fiscal year 1999 and such sums 
as may be necessary for each of the 4 succeeding years.

Part G--General provisions

    New section 591 provides general administrative provisions 
for the graduate fellowship programs authorized in parts A and 
B of title V, which include: (1) requiring the Secretary to 
coordinate administration and regulation of these graduate 
programs with other Federal programs providing assistance for 
graduate education to minimize duplication and improve 
efficiency to ensure that the programs are carried out in a 
manner most compatible with academic practices and with the 
standard timetables for applications for, and notifications of 
acceptance to, graduate programs; (2) requiring the Secretary 
to appoint such administrative and technical employees, with 
the appropriate educational backgrounds, as shall be needed to 
assist in the administration of such parts; (3) prohibiting an 
institutional payment or allowance to a school or department of 
divinity with respect to an individual who is studying for a 
religious vocation; (4) requiring the Secretary to evaluate the 
success of assistance provided to individuals under the 
graduate fellowship programs with respect to their graduation 
from degree programs and their placement in faculty and 
professional positions; and (5) requiring the Secretary to use 
funds appropriated to provide continuing Javits or GAANN grants 
before providing any new awards.

               title vi--international education programs

    Section 601 amends part A of title VI (International and 
Foreign Language Studies) to read as follows:

Part A--International and foreign language studies

    New section 601 sets out the findings and purposes of part 
A, including replacing current section 601(a)(3) with a finding 
that emphasizes the need to build national capacity in 
international education and foreign languages.
    New section 602 reauthorizes Graduate and Undergraduate 
Language and Area Centers and Programs; returns a foreign 
language component to the summer institutes authorized under 
section 602(1)(4)(E); and repeals the doctoral stipend program 
currently authorized undersection 602(b) (2) and (3).''
    New section 603 reauthorizes Language Resource Centers; 
makes dissemination an essential component of each Center 
activity; and adds as new permissible activities--(1) 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 and (2) 
the development and dissemination of material designed to serve 
as a resource for foreign language teachers at the elementary 
and secondary school levels.
    New section 604 repeals current section 604(b) (Grants to 
Strengthen Programs of Demonstrated Excellence in Undergraduate 
International Studies and Foreign Language Programs) and 
incorporates key provisions of the program into subsection 
(a)--which is reauthorized and renamed ``Incentives for the 
Creation of New Programs and the Strengthening of Existing 
Programs in Undergraduate International Studies and Foreign 
Language.'' A foreign language component is added to the summer 
institutes authorized under section 604(a)(2)(I), and a new 
activity is authorized under section 604(a)(2)(J)--which is the 
development of partnerships between institutions of higher 
education and the private sector, government, and elementary 
and secondary institutions to enhance international knowledge. 
New grant conditions are also established.
    New section 605 replaces current Intensive Summer Language 
Institutes provisions (that are repealed) with the Research; 
Studies; Annual Report provisions currently contained in 
section 606. These activities are reauthorized and 2 new 
activities are added: (1) evaluation of the extent to which 
programs offered with assistance under this title and 
addressing national needs would not otherwise be offered and 
(2) studies and evaluations of effective practices in the 
dissemination of international information, materials, 
research, teaching strategies and testing techniques throughout 
education, including elementary and secondary schools.
    New section 606 maintains the provisions currently 
contained in section 608 relating to the selection of certain 
grant recipients under part A.
    New section 607 maintains the provisions currently 
contained in section 609 relating to the equitable distribution 
of certain funds under part A.
    New section 608 reauthorizes the American Overseas Research 
Centers currently authorized under section 610 and clarifies 
that the establishment of new centers is an allowable activity.
    New section 609 authorizes $80 million in fiscal year 1999 
and such sums as may be necessary for each of the 4 succeeding 
fiscal years to carry out part A.
    Section 602 amends part B of title VI (Business and 
International Education Programs) to: (1) provide that Centers 
for International Business Education shall provide 
interdisciplinary programs for any degree candidates, as 
opposed to advanced degree candidates as provided in current 
law, and that programs to develop or enhance international 
skills, awareness, and expertise not be limited to evening or 
summer programs; (2) return a foreign language component to the 
summer institutes that may be conducted by Centers for 
International Business Education; (3) include specific mention 
of a community college representative on the Advisory Council 
to an international business education center; (4) authorize 
$11 million in fiscal year 1999 and such sums as may be 
necessary in the succeeding 4 years to carry out section 612; 
and (5) authorize $7 million in fiscal year 1999 and such sums 
as may be necessary in the succeeding 4 years to carry out 
section 613.
    Section 603 amends part C of title VI (Institute for 
International Public Policy) to: (1) increase the required 
match by grant recipients from one-fourth to one-half and 
require that the nonfederal contribution be made by private 
sector contributions; (2) create a new section 622 to authorize 
subgrants to strengthen Historically Black Colleges and 
Universities, Hispanic-Serving Institutions, minority 
institution, and Tribal College institutional international 
affairs programs; (3) authorize a Summer Abroad program for 
students after their junior year, with one- third of the cost 
borne by the institution and two-thirds by the Institute; and 
(4) authorize $10 million in fiscal year 1999 and such sums as 
may be necessary in the succeeding 4 years to carry out part C.
    Section 604 repeals current section 632 (Preservation of 
Pre-1992 Programs).

       title vii -- related programs and amendments to other acts

Part A--Indian education programs

    Section 711 reauthorizes the Tribally Controlled Community 
College Assistance Act of 1978 and amends it to: (1) require 
the Secretary of the Interior, subject to appropriations, to 
grant approved Tribal Colleges and Universities $6,000 per-
Indian-student; (2) authorize $3.2 million in fiscal year 1999 
and such sums as may be necessary in the succeeding 4 years to 
carry out section 105; (3) authorize $40 million in fiscal year 
1999 and such sums as may be necessary in the succeeding 4 
fiscal years to carry out section 107; (4) authorize $10 
million in fiscal year 1999 and such sums as may be necessary 
in the succeeding 4 fiscal years to carry out sections 112(b) 
and 113; (5) update provisions regarding the expeditious 
transfer of funds by the Secretary of the Treasury from fiscal 
year 1993 and each of the succeeding 4 fiscal years to fiscal 
year 1999 and each of the succeeding 4 fiscal years; (6) 
authorize $10 million in fiscal year 1999 and such sums as may 
be necessary in the succeeding 4 fiscal years to carry out 
title III (Tribally Controlled Community College Endowment 
Program); (7) authorize $2 million in fiscal year 1999 and such 
sums as may be necessary in the succeeding 4 fiscal years to 
carry out section 403 of the Tribal Economic Development and 
Technology Related Education Assistance Act of 1990; and (8) 
change references throughout the act from ``Tribally Controlled 
Community College'' to ``Tribally Controlled College or 
University.''
    Section 712 authorizes $5 million for fiscal year 1999 to 
carry out part A of the American Indian, Alaska Native, and 
Native Hawaiian Culture and Art Development Act.

Part B--Advanced placement incentive program

    Section 721 reauthorizes the Advanced Placement Fee Payment 
Program currently authorized as part G of title XV of the 
Higher Education Amendments of 1992 and amends it to: (1) 
rename it as the ``Advanced Placement Incentive Program''; (2) 
provide that grants to States having approved applications be 
allotted to each State in an amount that bears the same 
relationto the sum as the number of low-income individuals in 
the State bears to the number of low-income individuals in all States; 
(4) permit a State educational agency to use up to 5 percent of grant 
funds to disseminate information regarding the availability of test fee 
payments; (5) provide an exception to the ``supplement, not supplant'' 
provision in cases where funds used to supplant are used to increase 
the participation of low-income individuals in advanced placement 
courses through teacher training and other activities directly related 
to increasing the availability of advanced placement courses; (6) 
provide that the Secretary shall award grants under this section only 
if the College Board maintains its fee assistance program at no less 
than the level provided in the preceding fiscal year; (7) require each 
State to report annually the number of low-income individuals in the 
State receiving assistance under this section and the teacher training 
and other activities conducted by the State; and (8) authorize $10 
million for fiscal year 1999 and such sums as may be necessary for each 
of the 4 succeeding fiscal years to carry out this section.

Part C--United States Institute of Peace

    Section 731. Authorities of the U.S. Institute of Peace. 
Section 731 amends section 1705 of the U.S. Institute of Peace 
Act to allow the Institute to enter into personal service 
contracts and to continue to fully utilize government rates for 
travel, supply and and administrative services provided by the 
General Services Administration. Section 731 further amends 
section 1710(a)(1) of the U.S. Institute of Peace Act to 
authorize $15 million for fiscal year 1999 and such sums as may 
be necessary for each of the 4 succeeding fiscal years.

Part D--Community Scholarship Mobilization

    Section 741 authorizes the Community Scholarship 
Mobilization Act.
    Section 742 specifies that Congress finds that the local 
community, when properly organized and challenged, is on the 
best sources of academic support, motivation toward 
achievement, and financial resources for aspiring postsecondary 
students; local communities, working to complement or augment 
services currently offered by area school or colleges, can 
raise the educational expectations and increase the rate of 
postsecondary attendance of their youth by forming locally 
based organizations that provide both academic support 
(including guidance, counseling, mentoring, tutoring, 
encouragement and recognition) and tangible, locally raised, 
effectively targeted, publicly recognized, financial 
assistance; proven methods of stimulating these community 
efforts can be promoted though Federal support for the 
establishment of regional, State or community program centers 
to organize and challenge community efforts to develop 
educational incentives and support for local students; and 
using Federal funds to leverage private contributions to help 
students from low-income families attain educational and career 
goals is an efficient and effective investment of scarce 
taxpayer-provided resources.
    Section 743 includes definitions for regional, State or 
community program center; local entity; national organization; 
high poverty area; and students from low-income families.
    Section 744 states that the purpose of this part is to 
establish and support regional, State or community program 
centers to enable such centers to foster the development of 
local entities in high poverty areas that promote higher 
education goals for students from low income families by 
providing academic support and providing scholarship 
assistance. The Secretary is required to award an endowment 
grant, on a competitive basis, to a national organization to 
enable such organization to support the establishment or 
ongoing work of regional, State or community program centers 
that foster the development of local entities in high poverty 
areas to improve high school graduation rates and postsecondary 
attendance though the provision of academic support services 
and scholarship assistance.
    Section 745 authorizes the Secretary to award 1 or more 
endowment grants pursuant to an agreement between the Secretary 
and a national organization. The agreement shall: (1) require 
the national organization to establish an endowment fund in the 
amount of the grant, the corpus of which shall remain intact 
and the interest income from which shall be used to support 
authorized activities; (2) require the national organization to 
use 70 percent of the interest income in any fiscal year to 
support the establishment or ongoing work of regional, State or 
community program centers; (3) require the national 
organization to use 30 percent of the interest income to 
provide scholarships for postsecondary education to students 
from low-income families and that those scholarship dollars be 
matched on a 1:1 basis from funds received by the local 
entities; (4) requires that at least 50 percent of all interest 
income be allocated to establish new local entities or support 
regional, State or community program centers in high-poverty 
areas; (5) require the national organization to submit for each 
fiscal year in which such organization uses the interest from 
the endowment fund a report to the Secretary containing 
information relating to the programs and activities supported 
by such interest and an audited financial statement of the 
organization; (6) contain such assurances as the Secretary may 
require with respect to management and operation of the 
endowment fund; and (7) contain an assurance that, if the 
Secretary determines that such organization is not in 
substantial compliance with the provisions of this part, the 
national organization shall pay to the Secretary an amount 
equal to the corpus of the endowment fund plus any accrued 
interest on such fund that is available to such national 
organization on the date of such determination. Funds returned 
shall be available to carry out any scholarship or grant 
program assisted under title IV of the Higher Education Act of 
1965.
    Section 746 authorizes the appropriation of $10 million for 
fiscal year 2000.

Part E--Grants to states for workplace and community transition 
        training for incarcerated youth offenders

    Section 751 reauthorizes the Grants to States for Workplace 
and Community Transition Training for Incarcerated Youth 
Offenders program currently authorized as part E of title X. To 
carry out this part, funds are authorized at $14 million for 
fiscal year 1999 and such sums as may be necessary for each of 
the 4 succeeding fiscal years.

Part F--Education of the deaf

    Section 761 provides that this part may be cited as the 
``Education of the DeafAmendments of 1998.''
    Section 762 includes technical and conforming amendments to 
make the provisions pertaining to Gallaudet's Kendall 
Elementary School and the Model Secondary School for the Deaf 
consistent with the 1997 Individuals with Disabilities 
Education Act (IDEA).
    Section 763 makes provision for the periodic updating of an 
agreement between the Secretary and Gallaudet University 
regarding operation and national mission activities.
    Section 764 makes provision for the periodic assessment and 
updating of an agreement between the Secretary and the National 
Technical Institute for the Deaf.
    Section 765 strikes the references to Palau from the 
definitions included in sections 201(1)(C) and 201(5).
    Section 766 clarifies that audits include the national 
mission and school operations of the elementary and secondary 
education programs at Gallaudet University; and adds a 
requirement that a copy of each audit be provided to the 
Secretary within 15 days of the acceptance of the audit by 
Gallaudet University or the institution authorized to establish 
and operate the National Technical Institute for the Deaf.
    Section 767 permits the Board of Trustees of Gallaudet 
University and the Board of Trustees or other government body 
of the institution authorized to establish and operate the 
National Technical Institute for the Deaf to provide a summary 
of annual audited financial statements and auditor's report 
(rather than the complete documents) in submitting an annual 
report to the Secretary and the appropriate committees of 
Congress.
    Section 768 extends authorization of appropriations of such 
sums as may be necessary from fiscal year 1998 through fiscal 
year 2003 to carry out the monitoring and evaluation activities 
authorized under section 205.
    Section 769 modifies provisions related to Federal 
endowment programs for Gallaudet University and the National 
Technical Institute for the Deaf: (1) to allow the institutions 
to invest the nonfederal share of their endowments without the 
restrictions placed on Federal contributions to the endowments, 
and (2) to allow the institutions to withdraw or expend not 
more than 50 percent of the income generated from their Federal 
endowment funds from the current fiscal year. Section 769 also 
extends the authorization of appropriations of such sums as may 
be necessary from fiscal year 1998 through fiscal year 2003 to 
carry out these programs.
    Section 770 provides that, in any school year, no qualified 
United States citizen who elects to enroll in Gallaudet 
University or the National Technical Institute for the Deaf is 
denied admission because of the admission of an international 
student.
    Section 771 requires Gallaudet University and the National 
Technical Institute for the Deaf establish and disseminate 
priorities and prepare and submit an annual research report to 
the Secretary and Congress.
    Section 772 extends authorization of appropriations of such 
sums as may be necessary from fiscal year 1998 through fiscal 
year 2003 to carry out the provisions of titles I and II 
relating to Gallaudet University, Kendall Demonstration 
Elementary School, the Model Secondary School for the Deaf, and 
the National Technical Institute for the Deaf.
    Section 773 adds a new title III (Commission on Education 
of the Deaf), requiring the Secretary of Education to establish 
a Commission on Education of the Deaf to identify those 
education-related factors in the lives of individuals who are 
deaf that result in barriers to successful postsecondary 
education experiences and employment and those education-
related factors in the lives of individuals who are deaf that 
contribute to successful postsecondary education and employment 
experiences. Such sums as may be necessary are authorized for 
each of the fiscal years 1999 and 2000 to carry out this title.

Part G--Repeals

    Section 781 repeals unfunded provisions of the Higher 
Education Act of 1965 and the Higher Education Amendments of 
1992. Higher Education Act of 1965 provisions that are repealed 
include: parts A (Improvement of Academic and Library 
Facilities), C (Loans for Construction, Reconstruction, and 
Renovation of Academic, Housing, and Other Educational 
Facilities), D (College Construction Loan Insurance 
Association), and E (General) of title VII (Construction, 
Reconstruction, and Renovation of Academic Facilities); title 
VIII (Cooperative Education); parts A (Grants to Institutions 
and Consortia to Encourage Women and Minority Participation in 
Graduate Education), B (Patricia Roberts Harris Fellowship 
Program), E (Faculty Development Fellowship Program), F 
(Assistance for Training in the Legal Profession), and G (Law 
School Clinical Experience Programs) of title IX (Graduate 
Programs); parts C (Women and Minorities Science and 
Engineering Outreach Demonstration Program), D (Dwight D. 
Eisenhower Leadership Program), and E (Grant to States for 
Workplace and Community Transition Training for Incarcerated 
Youth Offenders--moved to part E of title VII) of title X 
(Postsecondary Improvement Programs); and part B (Innovative 
Projects) of title XI (Community Service Programs). Higher 
Education Amendments of 1992 provisions that are repealed 
include: parts E (Tribal Development Student Assistance 
Revolving Loan Program), F (American Indian Postsecondary 
Economic Development Scholarship), and G (American Indian 
Teacher Training) of title XIII; title XIV (Studies and 
Commissions), and title XV (Related Programs and Amendments to 
Other Laws).

Part H--Miscellaneous

    Section 791. Year 2000 Computer problem. Section 791 
requires the Secretary of Education to provide, no later than 
March 1, 1999, a report to the Congress describing the 
compliance status of all mission critical systems at the 
Department, and contingency plans for those computer systems 
that the Department will be able to correct prior to the onset 
of the year 2000.

                          IX. Additional Views

                              ----------                              


ADDITIONAL VIEWS OF SENATORS KENNEDY, DODD, HARKIN, MIKULSKI, BINGAMAN, 
                      WELLSTONE, MURRAY, AND REED

    This bill makes many significant improvements in the Higher 
Education Act, and will help keep college accessible for 
millions of students across the country. We are particularly 
pleased with the proposals to increase aid to the neediest 
students through higher Pell grants, and to provide loan 
forgiveness for students who become teachers. The bill also 
continues a commitment to reduce barriers to higher education 
by providing assistance for child care for students, an 
expansion of distance learning, and support for faculty who 
teach students with disabilities. The revision of the teacher 
training programs reflects the deep interest of many of us, and 
will help improve the education of new teachers across the 
country.
    However, there are three areas where changes are needed.
    Early Intervention.--The bill does not include the 
Administration's proposal on early intervention for college. 
The High Hopes initiative would create local partnerships 
between colleges and high-need middle schools, with the support 
of community-based organizations and states. High Hopes targets 
students early, offers them comprehensive services through high 
school, and works with entire grades of students rather than 
singling out a few. The federal funds will act as seed money, 
and will decline over the course of a grant to ensure growing 
community participation, and broad support for the program. We 
look forward to working with others to reach the important goal 
of cost-effective early intervention services to prepare needy 
students for college.
    Guaranty Agencies.--Under the bill, these agencies are 
still paid too much and hold too many federal dollars. In 
particular, the financial incentives are distorted. The 
guaranty agencies are paid too much if students go into 
default, and not enough to prevent defaults. The bill also 
increases payments to guaranty agencies from the Department of 
Education's section 458 administrative account. This will 
seriously deplete the funds needed by the Department to operate 
the overall student loan program, and will undermine both the 
Direct Lending Program and the Federal Family Education Loan 
Program. A positive feature of the bill is that it allows 
guaranty agencies to reach voluntary, flexible agreements with 
the Secretary of Education that will be more business-like and 
will focus on preventing defaults.
    Student Loan Interest.--We welcome the bipartisan agreement 
to preserve the reduction in the interest rate that students 
pay on their loans. But the bill creates a new subsidy so that 
bank receipts will go down only slightly from the excessive 
receipts under the higher interest rates now in effect. This 
subsidy will be paid by the taxpayers. The cost is estimated at 
$1 billion to $3.6 billion between 1998-2003, and the bill is 
not offset.
    Experts agree that the current system in which Congress 
sets the interest rates should change. We should move to 
market-based rates for banks for student loan interest, not 
rates set by Congress. We should permit the Administration to 
begin a pilot program to develop a market-based system by July 
2000. We must do all we can to reduce the high cost of 
borrowing for students, without enacting an entitlement for 
banks.
    We are disappointed that the origination fees that students 
pay up-front on their loans were not reduced. Those fees pose 
an additional unwarranted burden on students. We will continue 
to look for ways to cut this cost of borrowing.

                                   Ted Kennedy.
                                   Tom Harkin.
                                   Paul D. Wellstone.
                                   Patty Murray.
                                   Christopher Dodd.
                                   Barbara A. Mikulski.
                                   Jeff Bingaman.
                                   Jack Reed.

                 ADDITIONAL VIEWS OF SENATOR JACK REED

    The Higher Education Amendments of 1998 represents a 
significant step forward in our efforts to open the doors of 
higher education to students who would otherwise lack the 
resources to further improve themselves. This legislation seeks 
to address the serious concerns that I have heard firsthand 
from lower and middle income Rhode Island families and students 
about their ability to pay for college. Without the kind of 
student aid in this bill, millions of bright young Americans 
would never reach their potential.
    In a world where economic activity knows no national 
boundaries, it is crucial to the future of our economy and our 
country that we have the best trained and most knowledgeable 
workers in the world. The key to reaching this goal is strong 
investment in education. Indeed, the connection between 
education and a successful economy is undeniable, as is the 
link between education and higher wages.
    I commend the Committee for strengthening federal support 
for higher education. The Higher Education Amendments of 1998 
increases the authorization of the maximum Pell Grant to $5,000 
in 1999. I will work with the Committee throughout the 
appropriations process to make increases in the maximum Pell 
Grant a reality--we must restore the purchasing power of the 
Pell Grant, which has been lost due to skyrocketing college 
costs and the widening grant-loan imbalance.
    This legislation also expands the formula for needs 
analysis to protect more of the income of students who are 
financially independent of their families, as well as dependent 
students who must work. I personally heard about the importance 
of this expansion in meetings I held in March 1998 with Rhode 
Island college presidents and financial aid officers.
    Other important provisions of the Higher Education 
Amendments of 1998 include: a reduction in the interest rate 
students pay on their student loans by almost one percent from 
the current rate; loan forgiveness for teachers who teach for 
at least three years in high-need schools; college cost 
disclosure requirements to provide families and students with 
reliable and comparable information on college costs; and a new 
initiative to help colleges improve teaching and support 
services on their campuses for students with disabilities.

      leveraging educational assistance partnership (leap) program

    I am pleased that the Higher Education Amendments of 1998 
contains legislation I introduced with Senator Collins and many 
members of the Committee to reauthorize and strengthen the 
State Student Incentive Grant (SSIG) Program. This effort to 
reform SSIG follows last year's successful Senate fight to 
restore funding for this vital program on an 84 to 4 vote.
    SSIG provides critical funding on a dollar for dollar match 
basis to encourage states to provide need-based financial aid 
to 700,000 students through grants and community service work 
study awards. Grants are targeted to the neediest undergraduate 
and graduate students. Without this important federal 
incentive, many states would not have established or maintained 
their need-based financial aid programs. Moreover, students, 
searching for sources of need-based grants to make their higher 
education dreams a reality, have come to rely on SSIG. In an 
increasingly competitive world, now is not the time to abandon 
this program.
    To ensure that needy students have alternatives to 
borrowing, the Higher Education Amendments of 1998 incorporates 
the SSIG reforms recommended by student and higher education 
groups, such as the National Association of State Student Grant 
and Aid Programs (NASSGAP), the National Association of 
Independent Colleges and Universities (NAICU), the American 
Council on Education (ACE), the United States Public Interest 
Research Group (USPIRG), and the United States Student 
Association (USSA). These changes, which were included in my 
Leveraging Educational Assistance Partnership (LEAP) Act 
legislation (S. 1644), provide states greater incentives and 
flexibility to help needy students attend college.
    The legislation creates a two-tier grant program. Any funds 
appropriated over $35 million would require an increased state 
match of two new dollars for every federal dollar. At the same 
time, states would gain new flexibility to use these funds for 
activities such as increasing grant amounts or carrying out 
academic scholarship programs, mentorship programs, secondary 
to postsecondary education transition programs, or scholarship 
programs for students wishing to enter the teaching profession.
    Critics of SSIG have stated that the ``incentive'' nature 
of the program has eroded since it does not necessarily attract 
new state funds and many states overmatch the federal 
allotment. The Higher Education Amendments of 1998 restores the 
incentive nature of the program by attracting new state funds 
for student aid and by providing greater flexibility for the 
use of these funds, while not disenfranchising states that can 
only match according to the current one-to-one requirement.
    I look forward to working with Senator Collins and the 
Committee to strengthen our commitment to America's students by 
retaining these critical changes to the SSIG program throughout 
the reauthorization process. I will also work with like-minded 
colleagues to encourage the Appropriations Committee to provide 
increased funding for this program.

                  title ii: improving teacher quality

    At a time when our nation is struggling to improve 
elementary and secondary education, the Committee appropriately 
provides a renewed and coherent focus on teacher training and 
recruitment programs in Title II. I am pleased that Title II 
mirrors the goals and intent of the Teacher Excellence in 
America Challenge Act (TEACH Act, S. 1169), legislation I 
introduced last fall to reform teacher training programs. 
Moreover, Subpart 2, the Teacher Training Partnership Grants 
portion of Title II, in many instances, contains identical 
provisions to S. 1169.
    My reasons for introducing the TEACH Act stemmed from the 
findings and recommendations of the 1996 report by the National 
Commission on Teaching and America's Future, the mediocre 
results of American students in several assessments, and the 
concerns I heard from many Rhode Island teachers and parents. 
Reforming our teacher training and development system offers us 
the best avenue to boost student achievement--something we must 
do in order to compete in this high-tech, competitive global 
economy.
    The 1996 report by the National Commission on Teaching and 
America's Future, entitled ``WhatMatters Most: Teaching for 
America's Future,'' noted that well-trained and fully prepared teachers 
are the critical elements of successful learning. Furthermore, the 
Commission cited several studies which conclude that teacher expertise 
is one of the most important factors in determining student 
achievement. For instance, a study comparing high- and low-achieving 
elementary schools with similar student characteristics, found that 
more than 90% of the variation in achievement in math and reading was 
due to differences in teacher qualifications.
    Unfortunately, the Commission reported that many of our 
nation's classrooms are filled with poorly trained teachers. 
One statistic that highlights this disappointing fact is that 
in schools with the highest minority enrollments, students have 
less than a 50% chance of getting a science or mathematics 
teacher who holds a license and degree in the field he or she 
teaches.
    It is no wonder that in international assessments, such as 
the Third International Math and Science Study (TIMSS), 
American students don't fare well. Our eighth-grade students 
barely scored above the world average in science and below the 
world average in mathematics. Our twelfth-grade students fared 
even worse. These results are unacceptable and clearly 
insufficient to meet the challenges of a highly competitive 
global economy.
    It is absolutely critical that we fix our teacher 
preparation system to respond to these challenges and ensure 
that every student is taught by a well-prepared teacher. We 
must do this now, so that we have a strong system in place to 
train the estimated two million new teachers that are needed 
over the next decade.
    Indeed, as the National Commission on Teaching and 
America's Future reported, our current teacher preparation 
system in many instances does not give teachers a fair shot at 
success. Students at many of our nation's teacher colleges are 
not likely to be given adequate training and experiences to 
prepare them for actual classrooms and allow them to teach 
effectively. This is primarily due to a disconnect between many 
of the teacher colleges that prepare teachers and the 
elementary and secondary schools that hire them. This 
inadequate teacher training system throws new teachers into 
classrooms without the clinical skills to succeed, and it is 
estimated that 30% of new teachers leave the profession within 
the first few years.
    In addition to the Commission's report, I also heard from 
many Rhode Island teachers about the critical need to improve 
teacher training. Teachers surveyed for a Providence Journal-
Bulletin's series called ``Teaching Matters,'' made several 
suggestions on how to improve teaching, such as allowing 
teachers to observe and learn from their peers and ensuring 
that teachers know about diverse cultures.
    The TEACH Act directly connects our teacher preparation 
system to our schools by establishing a competitive federal 
grant program for partnerships between teacher colleges, 
schools, and others. The federal government has many reasons to 
invest in such partnerships, writes Linda Darling-Hammond, 
Executive Director of the National Commission on Teaching and 
America's Future:

          . . . just as it has invested in the development and 
        support of teaching hospitals as part of its efforts to 
        improve medical education and ensure an adequate supply 
        of qualified health professionals. Investing in the 
        capacity of the teaching profession to develop and 
        transmit knowledge, to prepare new entrants 
        effectively, and to stem unnecessary attrition are all 
        appropriate and much needed federal interventions that 
        would offer significant support for the pursuit of 
        other federal education goals.

    Like the TEACH Act, Subpart 2, the Teacher Training 
Partnership Grants portion of Title II, establishes teacher 
training partnerships. As in my legislation, partnerships are 
required to provide sustained and high quality preservice 
clinical experiences, including mentoring of prospective 
teachers by veteran teachers; prepare teachers to integrate 
technology into the classroom; and integrate reliable research-
based teaching methods into the classroom. Partnerships must 
also work closely with a school of arts and science to provide 
increased academic study, as well as substantially increase 
collaboration and interaction between faculty at institutions 
of higher education, new and veteran teachers, and principals, 
and provide support, including preparation time, for such 
interaction. Lastly, partnerships must broadly disseminate 
information on effective practices.
    Another important facet of the partnership section of Title 
II is a requirement that funding be targeted to high need 
schools--where our scarce resources and investment are most 
urgently needed. In addition, the partnership section, like my 
legislation, offers resources to partnerships, but it demands 
results. Strong evaluation provisions require that partnerships 
demonstrate increased student achievement, improved teacher 
preparation, and increased teacher retention in order to 
continue receiving grant funding.
    There are some areas where my legislation differs from the 
Committee's bill. My legislation utilized a specific 
partnership model: the professional development school. 
Professional development schools, a key recommendation of the 
National Commission on Teaching and America's Future, are like 
teaching hospitals in medicine. In the words of Linda Darling-
Hammond,

          . . . [professional development schools] support the 
        learning of prospective and beginning teachers by 
        creating settings in which novices enter professional 
        practice by working with expert practitioners, enabling 
        veteran teachers to renew their own professional 
        development and assume new roles as mentors. . . . They 
        allow school and university educators to engage jointly 
        in research and rethinking of practice, thus creating 
        an opportunity for the profession to expand its 
        knowledge base by putting research into practice--and 
        practice into research.

    Professional development schools, at which prospective 
teachers are often required to spend a year-long internship as 
part of an extended teacher education program, have shown 
success in leveraging reforms in teacher education while 
simultaneously restructuring and transforming practice in 
schools.
    According to the American Association of Colleges for 
Teacher Education's Clinical Schools Clearinghouse, there are 
an estimated 650 professional development schools across the 
nation. I have seen a professional development school in 
action--the Sullivan School in Newport, Rhode Island, which is 
in a partnership with Salve Regina University. At the Sullivan 
School, Salve Regina students are given opportunities to 
practice teaching in a real classroom. Sullivan teachersare 
involved in observing Salve Regina students and can utilize Salve 
Regina University resources for their own professional development. 
Sullivan students go on field trips to Salve Regina University for both 
higher education and career awareness activities, and the parents of 
Sullivan students are involved and are also provided with education and 
training opportunities.
    This is one example of the professional development school 
model and its potential to enhance the preparation of teachers, 
the education of students, and the involvement of parents. 
Other examples of professional development schools include the 
University of Southern Maine Partnership and the Cincinnati 
Initiative for Teacher Education.
    I am pleased that Chairman Jeffords and Senator Kennedy 
have agreed to report language on professional development 
schools as a successful model that could by supported by the 
Title, as well as report language to clarify that providing 
veteran teachers with ongoing professional development 
opportunities is an allowable use of funds.
    I am, however, concerned about two sections of Title II. 
First, I am troubled by the lack of emphasis on quality 
recruits in the alternative certification provisions of Subpart 
1, the Teacher Quality Enhancement Grants section. According to 
teacher training experts, there is evidence that recruits under 
``quick fix'' alternative certification programs, which could 
be promoted by this legislation, are more likely to be rated 
``poor'' as teachers, less likely to produce increases in 
student achievement, and more likely to leave teaching at high 
rates.
    Secondly, I believe that the fifty-fifty funding split 
between Subpart 1 and Subpart 2 is inappropriate. Considering 
budget constraints, I would expect that appropriation levels 
will be far less than the Title's $300 million authorization. 
Indeed, more emphasis and funding should be provided to 
partnerships, which have been shown to be an effective way to 
leverage improvements in teacher quality and increases in 
student achievement. Moreover, scarce federal resources should 
be provided to many of the activities funded under Subpart 1, 
which are redundant, already funded state functions.
    In conclusion, I believe Title II will help us create a 
teacher training and professional development system that 
works--one that provides every student with quality teaching, 
and, most importantly, gives teachers a chance to succeed and 
students the opportunity to excel. However, I hope that the 
concerns listed above will be resolved before the legislation 
is taken to the floor. I also look forward to working with the 
Committee to ensure that the partnership subpart prevails as 
the reauthorization process moves forward.

                                                         Jack Reed.

                  ADDITIONAL VIEWS OF SENATOR DE WINE

    S. 1029, the Quality Child Care Loan Forgiveness 
legislation, as modified, has strong bipartisan support.
    We must address the needs of our children by providing them 
with quality teachers. This legislation can serve as a first 
step to bring more quality individuals into the early childhood 
profession.
    This Nation needs to take a more active role in ensuring 
that our children are given the best care and resources 
available. The inclusion of S. 1029 in the Higher Education 
Amendments Act of 1998 will serve as an incentive to those 
individuals who earn an early childhood degree to work in a 
child care facility and help stimulate the academic growth of 
our children.
    It is important to note that on April 29, 1998, the United 
States House of Representatives accepted an amendment offered 
by Representative Lazio to be added to HR 6, the House version 
of the Higher Education Amendments Act of 1998. This amendment 
was based on HR 3727, which is entitled the Quality Child Care 
and Loan Forgiveness Act. This legislation is based on S. 1029, 
and it also has wide bipartisan support.

                                                       Mike DeWine.

                       X. Changes in Existing Law

    In compliance with rule XXVI paragraph 12 of the Standing 
Rules of the Senate, the following provides a print of the 
statute or the part or section thereof to be amended or 
replaced (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 AMENDMENTS OF 1998

           *       *       *       *       *       *       *


    [Title I repealed]

           *       *       *       *       *       *       *


[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 Sate 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.]

           *       *       *       *       *       *       *


[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. 1211. [20 U.S.C. 1145E] AGGREGATE LIMIT OF AUTHORIZATION OF 
                    APPROPRIATIONS.

    Notwithstanding any other provisions 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 years 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. [20 U.S.C. 1145F] 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.]

           *       *       *       *       *       *       *


                      TITLE I--GENERAL PROVISIONS

                    [TITLE XII--GENERAL PROVISIONS]

SEC. [1201.] 101. DEFINITIONS.

           *       *       *       *       *       *       *


SEC. [1202.] 102. ANTIDISCRIMINATION.

           *       *       *       *       *       *       *


                federal control of education prohibited

    Sec. [1204.] 103. 
    [(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.] 104. 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.] 105. 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 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).]

           *       *       *       *       *       *       *

    (c) Public Notice.--The Secretary shall--
          (1) annually publish in the Federal Register a list 
        containing the name of each member of the Committee and 
        the date of the expiration of the term of office of the 
        member; and
          (2) publicly solicit nominations for each vacant 
        position or expiring term of office on the Committee.
    [(c)] (d) Functions.--The Committee shall--
          (1) * * *

           *       *       *       *       *       *       *

          [(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)] (6) advise the Secretary with respect to the 
        relationship between--
                  (A) accreditation of institutions of higher 
                education and the certification and eligibility 
                of such institutions; and
                  (B) State licensing responsibilities with 
                respect to such institutions; and
          [(8)] (7) carry out such other advisory functions 
        relating to accreditation and institutional eligibility 
        as the Secretary may prescribe.
    [(d)] (e) Meeting Procedures.--The Committee shall meet not 
less than twice each year at the call of the Chairperson. The 
date of, and agenda for, each meeting of the Committee shall be 
submitted in advance to the Secretary for approval. A 
representative of the Secretary shall be present at all 
meetings of the Committee.
    [(e)] (f) 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)] (g) 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.] 2004.

SEC. [1207.] 106. STUDENT REPRESENTATION.

           *       *       *       *       *       *       *


SEC. [1208.] 102. FINANCIAL RESPONSIBILITY OF FOREIGN STUDENTS.

           *       *       *       *       *       *       *


SEC. [1209.] 108. DISCLOSURES OF FOREIGN GIFTS.

           *       *       *       *       *       *       *


SEC. [1210.] 109. APPLICATION OF PEER REVIEW PROCESS.

           *       *       *       *       *       *       *


SEC. [1213.] 110. DRUG AND ALCOHOL ABUSE PREVENTION.

           *       *       *       *       *       *       *


SEC. 111. PRIOR RIGHTS AND OBLIGATIONS.

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

SEC. 112. RECOVERY OF PAYMENTS.

  (a) Public Benefit.--Congress declares that, if a facility 
constructed with the aid of a grant under part A of title VII 
as such part A was in effect prior to the date of enactment of 
the Higher Education Amendments of 1998, or part B of such 
title as such part B was in effect prior to the date of 
enactment of the Higher Education Amendments of 1992, is used 
as an academic facility for 20 years following completion of 
such construction, the public benefit accruing to the United 
States will equal in value the amount of the grant. The period 
of 20 years after completion of such construction shall 
therefore be deemed to be the period of Federal interest in 
such facility for the purposes of such title as so in effect.
  (b) Recovery Upon Cessation of Public Benefit.--If, within 20 
years after completion of construction of an academic facility 
which has been constructed, in part with a grant under part A 
of title VII as such part A was in effect prior to the date of 
enactment of the Higher Education Amendments of 1998, or part B 
of title VII as such part B was in effect prior to the date of 
enactment of the Higher Education Amendments of 1992--
          (1) the applicant under such parts as so in effect 
        (or the applicant's successor in title or possession) 
        ceases or fails to be a public or nonprofit 
        institution, or
          (2) the facility ceases to be used as an academic 
        facility, or the facility is used as a facility 
        excluded from the term ``academic facility'' (as such 
        term was defined under title VII, as so in effect), 
        unless the Secretary determines that there is good 
        cause for releasing the institution from its 
        obligation,
the United States shall be entitled to recover from such 
applicant (or successor) an amount which bears to the value of 
the facility at that time (or so much thereof as constituted an 
approved project or projects) the same ratio as the amount of 
Federal grant bore to the cost of the facility financed with 
the aid of such grant. The value shall be determined by 
agreement of the parties or by action brought in the United 
States district court for the district in which such facility 
is situated.
  (c) Prohibition on Use for Religion.--Notwithstanding the 
provisions of subsections (a) and (b), no project assisted with 
funds under title VII (as in effect prior to the date of 
enactment of the Higher Education Amendments of 1998) shall 
ever be used for religious worship or a sectarian activity or 
for a school or department of divinity.

                  TITLE II--IMPROVING TEACHER QUALITY

SEC. 201. PURPOSES.

  The purpose of this title is to--
          (1) improve student achievement;
          (2) improve the quality of the current and future 
        teaching force by improving the preparation of 
        prospective teachers and enhancing professional 
        development activities; and
          (3) hold institutions of higher education accountable 
        for preparing teachers who have the necessary teaching 
        skills and are highly competent in the academic content 
        areas in which the teachers plan to teach, including 
        training in the effective uses of technologies in the 
        classroom.

                        PART A--TEACHER QUALITY

             Subpart 1--Teacher Quality Enhancement Grants

SEC. 211. GRANTS AUTHORIZED.

  (a) In General.--The Secretary is authorized to award grants 
to States to enable the States to carry out the activities 
described in section 212. Each grant may be awarded for a 
period of not more than 5 years.
  (b) State Designation.--
          (1) In general.--A State desiring a grant under this 
        subpart shall, consistent with State law, designate the 
        chief individual or entity in the State responsible for 
        the State supervision of education, to administer the 
        activities assisted under this subpart.
          (2) Consultation.--The individual or entity 
        designated under paragraph (1) shall consult with the 
        Governor, State board of education, or State 
        educational agency, as appropriate.
          (3) Construction.--Nothing in this subpart shall be 
        construed to negate or supersede the legal authority 
        under State law of any State agency, State entity, or 
        State public official over programs that are under the 
        jurisdiction of the agency, entity, or official.
  (c) Matching Requirement.--Each State receiving a grant under 
this subpart 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 through the grant.

SEC. 212. USE OF FUNDS.

  A State that receives a grant under this subpart shall use 
the grant funds to reform teacher preparation requirements, and 
to ensure that current and future teachers possess the 
necessary teaching skills and academic content knowledge in the 
subject areas in which the teachers are assigned to teach, by 
carrying out 1 or more of the following activities:
          (1) Reforms.--Implementing reforms that hold 
        institutions of higher education with teacher 
        preparation programs accountable for preparing teachers 
        who are highly competent in the academic content areas 
        in which the teachers plan to teach, which may include 
        the use of rigorous subject matter competency tests and 
        the requirement that a teacher have an academic major 
        in the subject area, or related discipline, in which 
        the teacher plans to teach.
          (2) Certification or licensure requirements.--
        Reforming teacher certification or licensure 
        requirements to ensure that new teachers have the 
        necessary teaching skills and academic content 
        knowledge in the subject areas in which teachers are 
        assigned to teach.
          (3) Alternatives to traditional preparation for 
        teaching.--Providing prospective teachers alternatives 
        to traditional preparation for teaching through 
        programs at colleges of arts and sciences or at 
        nonprofit educational organizations.
          (4) Alternative routes.--Funding programs that 
        establish, expand, or improve alternative routes to 
        State certification for highly qualified individuals 
        from other occupations and recent college graduates 
        with records of academic distinction, including support 
        during the initial teaching experience.
          (5) Recruitment; pay; removal.--Developing and 
        implementing effective mechanisms to ensure that 
        schools are able to effectively recruit highly 
        qualified teachers, to financially reward those 
        teachers and principals whose students have made 
        significant progress toward high academic performance, 
        such as through performance-based compensation systems 
        and access to ongoing professional development 
        opportunities for teachers and administrators, and to 
        remove teachers who are not qualified.
          (6) Innovative efforts.--Development and 
        implementation of innovative efforts aimed at reducing 
        the shortage of highly qualified teachers in high 
        poverty urban and rural areas, that may include the 
        recruitment of highly qualified individuals from other 
        occupations through alternative certification programs.
          (7) Social promotion.--Development and implementation 
        of efforts to address the problem of social promotion 
        and to prepare teachers to effectively address the 
        issues raised by ending the practice of social 
        promotion.

SEC. 213. COMPETITIVE AWARDS.

  (a) Annual Awards; Competitive Basis.--The Secretary shall 
award grants under this subpart annually and on a competitive 
basis.
  (b) Peer Review Panel.--The Secretary shall provide the 
applications submitted by States under section 214 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 for funding to 
the Secretary, the panel shall give priority to applications 
from States that describe activities that--
          (1) 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 the 
        teachers plan to teach; and
          (2) involve the development of innovative efforts 
        aimed at reducing the shortage of highly qualified 
        teachers in high poverty urban and rural areas.

SEC. 214. APPLICATIONS.

    (a) In General.--Each State 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 require.
    (b) Content of Applications.--Such application shall 
include a description of how the State intends to use funds 
provided under this subpart.

            Subpart 2--Teacher Training Partnerships Grants

SEC. 221. GRANTS AUTHORIZED.

    (a) In General.--The Secretary is authorized to award 
grants to teacher training partnerships to enable the 
partnerships to carry out the activities described in section 
222. Each grant may be awarded for a period of not more than 5 
years.
    (b) Definitions.--In this part:
          (1) Teacher training partnerships.--
                  (A) In general.--The term `teacher training 
                partnership' means a partnership that--
                          (i) shall include a school of arts 
                        and sciences, a school or program of 
                        education, a local educational agency, 
                        and a kindergarten through grade 12 
                        school;
                          (ii) shall include a high need local 
                        educational agency or kindergarten 
                        through grade 12 school; and
                          (iii) may include a State educational 
                        agency, a pre-kindergarten program, a 
                        nonprofit educational organization, a 
                        business, or a teacher organization.
                  (B) High need.--A local educational agency or 
                kindergarten through grade 12 school shall be 
                considered high need for purposes of 
                subparagraph (A)(ii) if the agency or school 
                serves an area within a State in which there 
                is--
                          (i) a large number of individuals 
                        from families with incomes below the 
                        poverty line;
                          (ii) a high percentage of teachers 
                        not teaching in the content area in 
                        which the teachers were trained to 
                        teach; or
                          (iii) a high teacher turnover rate.
          (2) Kindergarten through grade 12 school.--The term 
        ``kindergarten through grade 12 school'' means a school 
        having any one of the grades kindergarten through grade 
        12.
    (c) Priority.--In awarding grants under this subpart the 
Secretary shall give priority to partnerships that involve 
businesses.
    (d) Consideration.--In awarding grants under this subpart 
the Secretary shall take into consideration--
          (1) providing an equitable geographic distribution of 
        the grants throughout the United States; and
          (2) the proposed project's potential for creating 
        improvement and positive change.
    (e) Matching Funds.--Each partnership receiving a grant 
under this subpart shall provide, from sources other than this 
subpart, an amount equal to 25 percent of the grant in the 
first year, 35 percent in the second such year, and 50 percent 
in each succeeding such year, of the amount of the grant, in 
cash or in kind, to carry out the activities supported by the 
grant.
    (f) One-Time Award.--A partnership may receive a grant 
under this section only once.

SEC. 222. USE OF FUNDS.

    (a) In General.--Grant funds under this part shall be used 
to--
          (1) coordinate with the activities of the Governor, 
        State board of education, and State educational agency, 
        as appropriate;
          (2) provide sustained and high quality preservice 
        clinical experiences including the mentoring of 
        prospective teachers by veteran teachers;
          (3) work with a school of arts and sciences to 
        provide increased academic study in a proposed teaching 
        specialty area, through activities such as--
                  (A) restructuring curriculum;
                  (B) changing core course requirements;
                  (C) increasing liberal arts focus;
                  (D) providing preparation for board 
                certification; and
                  (E) assessing and improving alternative 
                certification, including mentoring and 
                induction support;
          (4) substantially increasing interaction and 2-way 
        collaboration between--
                  (A) faculty at institutions of higher 
                education; and
                  (B) new and experienced teachers, principals, 
                and other administrators at elementary schools 
                or secondary schools;
          (5) prepare teachers to use technology effectively in 
        the classroom;
          (6) integrate reliable research-based teaching 
        methods into the curriculum;
          (7) broadly disseminate information on effective 
        practices used by the partnership; and
          (8) provide support, including preparation time, for 
        interaction between faculty at an institution of higher 
        education and classroom teachers.
    (b) Special Rule.--No individual member of a partnership 
shall retain more than 50 percent of the funds made available 
to the partnership under this subpart.

SEC. 223. APPLICATIONS.

    Each teacher training partnership 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 require. Each such application shall--
          (1) describe the composition of the partnership and 
        the involvement of each partner in the development of 
        the application;
          (2) contain a needs assessment that includes an 
        analysis of the needs of all the partners with respect 
        to teaching and learning;
          (3) contain a resource assessment that includes--
                  (A) an analysis of resources available to the 
                partnership;
                  (B) a description of the intended use of the 
                grant funds;
                  (C) a description of how the partnership will 
                coordinate with other teacher training or 
                professional development programs, including 
                Federal, State, local, private, and other 
                programs;
                  (D) a description of how the activities 
                assisted under this subpart are consistent with 
                educational reform activities that promote 
                student achievement; and
                  (E) a description of the commitment of the 
                resources of the partnership to the activities 
                assisted under this subpart, including 
                financial support, faculty participation, and 
                time commitments;
          (4) describe how the partnership will include the 
        participation of the schools, colleges, or departments 
        of arts and sciences within an institution of higher 
        education to ensure the integration of teaching 
        techniques and content in teaching preparation;
          (5) describe how the partnership will restructure and 
        improve teaching, teacher training, and development 
        programs, and how such systemic changes will contribute 
        to increased student achievement;
          (6) describe how the partnership will prepare 
        teachers to work with diverse student populations, 
        including individuals with disabilities and limited 
        English proficient individuals;
          (7) describe how the partnership will prepare 
        teachers to use technology;
          (8) contain a dissemination plan regarding knowledge 
        and information with respect to effective teaching 
        practices, and a description of how such knowledge and 
        information will be implemented in elementary schools 
        or secondary schools as well as institutions of higher 
        education;
          (9) describe the commitment of the partnership to 
        continue the activities assisted under this subpart 
        without grant funds provided under this subpart; and
          (10) describe how the partnership will involve and 
        include parents in the reform process.

                     Subpart 3--General Provisions

SEC. 231. ACCOUNTABILITY AND EVALUATION.

    (a) Teacher Quality Enhancement Grants.--
          (1) Accountability report.--A State that receives a 
        grant under subpart 1 shall submit an annual 
        accountability report to the Secretary, the Committee 
        on Labor and Human Resources of the Senate, and the 
        Committee on Education and the Workforce of the House 
        of Representatives. Such report shall include a 
        description of the degree to which the State, in using 
        funds provided under subpart 1, has made substantial 
        progress in meeting the following goals:
                  (A) Student achievement.--Increasing student 
                achievement for all students, as measured by 
                increased graduation rates, decreased dropout 
                rates, or higher scores on local, State or 
                other assessments.
                  (B) Raising standards.--Raising the State 
                academic standards required to enter the 
                teaching profession, including, where 
                appropriate, incentives to incorporate the 
                requirement of an academic major in the 
                subject, or related discipline, in which the 
                teacher plans to teach.
                  (C) Initial certification or licensure.--
                Increasing success in the passage rate for 
                initial State teacher certification or 
                licensure, or increasing numbers of highly 
                qualified individuals being certified or 
                licensed as teachers through alternative 
                programs.
                  (D) Core academic subjects.--(i) Increasing 
                the percentage of secondary school classes 
                taught in core academic subject areas by 
                teachers--
                          (I) with academic majors in those 
                        areas or in a related field;
                          (II) who can demonstrate a high level 
                        of competence through rigorous academic 
                        subject area tests; or
                          (III) who can demonstrate high levels 
                        of competence through experience in 
                        relevant content areas.
                  (ii) Increasing the percentage of elementary 
                school classes taught by teachers--
                          (I) with academic majors in the arts 
                        and sciences; or
                          (II) who can demonstrate high levels 
                        of competence through experience in 
                        relevant content areas.
                  (E) Decreasing shortages for professional 
                development.--Decreasing shortages of qualified 
                teachers in poor urban and rural areas.
                  (F) Increasing opportunities.--Increasing 
                opportunities for enhanced and ongoing 
                professional development that improves the 
                academic content knowledge of teachers in the 
                subject areas in which the teachers are 
                certified to teach or in which the teachers are 
                working toward certification to teach.
                  (G) Technology integration.--Increasing the 
                number of teachers prepared to integrate 
                technology in the classroom.
          (2) Teacher qualifications provided to parent upon 
        request.--Any local educational agency that benefits 
        from the activities assisted under subpart 1 shall make 
        available, upon request and in an understandable and 
        uniform format, to any parent of a student attending 
        any school served by the local educational agency, 
        information regarding the qualifications of the 
        student's classroom teacher with regard to the subject 
        matter in which the teacher provides instruction. The 
        local educational agency shall inform parents that the 
        parents are entitled to receive the information upon 
        request.
    (b) Teacher Training Partnership Evaluation Plan.--Each 
teacher training partnership receiving a grant under subpart 2 
shall establish an evaluation plan that includes strong 
performance objectives established in negotiation with the 
Secretary at the time of the grant award. The plan shall 
include objectives and measures for--
          (1) increased student achievement for all students as 
        measured by increased graduation rates, decreased 
        dropout rates, or higher scores on local, State, or 
        other assessments for a year compared to student 
        achievement as determined by the rates or scores, as 
        the case may be, for the year prior to the year for 
        which a grant under this part is received;
          (2) increased teacher retention in the first 3 years 
        of a teacher's career;
          (3) increased success in the passage rate for initial 
        State certification or licensure of teachers;
          (4) increased percentages of secondary school classes 
        taught in core academic subject areas by teachers--
                  (A) with academic majors in those areas or in 
                a related field;
                  (B) who can demonstrate a high level of 
                competence through rigorous academic subject 
                area tests; and
                  (C) increasing the percentage of elementary 
                school classes taught by teachers with academic 
                majors in the arts and sciences;
          (5) increased integration of technology in teacher 
        preparation and in classroom instruction;
          (6) restructuring or change of methodology courses to 
        reflect best practices learned from elementary schools, 
        secondary schools or other entities;
          (7) increased dissemination of information about 
        effective teaching strategies and practices; and
          (8) other effects of increased integration among 
        members of the partnership.

SEC. 232. REVOCATION OF GRANT.

      Each State or teacher training partnership receiving a 
grant under this part shall report annually on progress toward 
meeting the purposes of this part, and the goals, objectives 
and measures described in section 231. If the Secretary, after 
consultation with the peer review panel described in section 
213(b) determines that the State or partnership is not making 
substantial progress in meeting the purposes, goals, objectives 
and measures, as appropriate, by the end of the second year of 
the grant, the grant shall not be continued for the third year 
of the grant.

SEC. 233. EVALUATION AND DISSEMINATION.

    The Secretary shall evaluate the activities funded under 
this part and report the Secretary's findings to the Committee 
on Labor and Human Resources of the Senate and the Committee on 
Education and the Workforce of the House of Representatives. 
The Secretary shall broadly disseminate successful practices 
developed by the States and teacher training partnerships under 
this part, and shall broadly disseminate information regarding 
such practices so developed that were found to be ineffective.

SEC. 234. INTERNATIONAL STUDY AND REPORT.

    (a) Study.--The Secretary shall conduct a study through the 
National Center for Education Statistics regarding the ways 
teachers are trained and the extent to which teachers in the 
United States and other comparable countries are teaching in 
areas other than the teachers' field of study or expertise. The 
study will examine specific fields and will outline the nature 
and extent of the problem of out-of-field teaching in the 
United States and in other countries that are considered 
comparable to the United States. The study shall include, at a 
minimum, all the countries that participated in the Third 
International Mathematics and Science Study (TIMSS).
    (b) Report.--The Secretary shall report to Congress 
regarding the results of the study described in subsection (a).

SEC. 235. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this 
part $300,000,000 for fiscal year 1999 and such sums as 
necessary for each of the 4 succeeding fiscal years, of which--
          (1) 50 percent shall be available for each fiscal 
        year to carry out subpart 1; and
          (2) 50 percent shall be available for each fiscal 
        year to carry out subpart 2.

         PART B--RECRUITING NEW TEACHERS FOR UNDERSERVED AREAS

SEC. 251. STATEMENT OF PURPOSE.

    It is the purpose of this part to--
          (1) provide scholarships and, as necessary, support 
        services for students with high potential to become 
        effective teachers, particularly minority students;
          (2) increase the quality and number of new teachers 
        nationally; and
          (3) increase the ability of schools in underserved 
        areas to recruit a qualified teaching staff.

SEC. 252. DEFINITIONS.

    In this part--
          (1) Eligible partnership.--
                  (A) In general.--The term ``eligible 
                partnership'' means a partnership consisting 
                of--
                          (i) an institution of higher 
                        education that awards baccalaureate 
                        degrees and prepares teachers for their 
                        initial entry into the teaching 
                        profession; and
                          (ii) one or more local educational 
                        agencies that serve underserved areas.
                  (B) Additional partners.--Such a partnership 
                may also include--
                          (i) 2-year institutions of higher 
                        education that operate teacher 
                        preparation programs and maintain 
                        articulation agreements, with the 
                        institutions of higher education that 
                        award baccalaureate degrees for the 
                        transfer of credits in teacher 
                        preparation;
                          (ii) State agencies that have 
                        responsibility for policies related to 
                        teacher preparation and teacher 
                        certification or licensure; and
                          (iii) other public and private, 
                        nonprofit agencies and organizations 
                        that serve, or are located in, 
                        communities served by the local 
                        educational agencies in the 
                        partnership, and that have an interest 
                        in teacher recruitment, preparation, 
                        and induction.
          (2) Support services.--The term ``support services'' 
        means--
                  (A) academic advice and counseling;
                  (B) tutorial services;
                  (C) mentoring; and
                  (D) child care and transportation, if funding 
                for those services cannot be arranged from 
                other sources.
          (3) Underserved area.--The term ``underserved area'' 
        means--
                  (A) the area served by the 3 local 
                educational agencies in the State that have the 
                highest numbers of children, ages 5 through 17, 
                from families below the poverty level (based on 
                data satisfactory to the Secretary); and
                  (B) the area served by any other local 
                educational agency in which the percentage of 
                such children is at least 20 percent, or the 
                number of such children is at least 10,000.

SEC. 253. GRANT AUTHORITY AND CONDITIONS.

    (a) Grants Authorized.--
          (1) Grants.--
                  (A) In general.--From amounts appropriated 
                under section 262 the Secretary shall award 
                grants, on a competitive basis, to eligible 
                partnerships to enable the eligible 
                partnerships to pay the Federal share of the 
                cost of carrying out the activities described 
                in section 255.
                  (B) Duration.--Each grant awarded under 
                subparagraph (A) shall be awarded for a period 
                not to exceed 5 years.
          (2) Continuing eligibility; review of progress.--The 
        Secretary shall--
                  (A) continue to make grant payments for the 
                second and succeeding years of a grant awarded 
                under this part, only after determining that 
                the eligible partnership is making satisfactory 
                progress in carrying out the activities under 
                the grant; and
                  (B) conduct an intensive review of the 
                eligible partnerships's progress under the 
                grant, with the assistance of outside experts, 
                before making grant payments for the fourth 
                year of the grant.
          (3) Maximum number.--No eligible partnership may 
        receive more than 2 grants under this subsection.
    (b) Matching Requirement.--
          (1) Federal share.--The Federal share of the cost of 
        activities carried out under a grant made under 
        subsection (a) shall not exceed--
                  (A) 70 percent of the cost in the first year 
                of the grant;
                  (B) 60 percent in the second year;
                  (C) 60 percent in the third year;
                  (D) 50 percent in the fourth year; and
                  (E) 50 percent in the fifth year and any 
                succeeding year (including each year of the 
                second grant, if any).
          (2) Non-federal share.--The non-Federal share of 
        activities carried out with a grant under subsection 
        (a) may be provided in cash or in kind, fairly 
        evaluated, and may be obtained from any non-Federal 
        public or private source.
    (c) Planning Grants.--
          (1) In general.--The Secretary may award planning 
        grants to eligible partnerships that are not ready to 
        implement programs under subsection (a).
          (2) Duration.--Each planning grant shall be for a 
        period of not more than 1 year, which shall be in 
        addition to the period of any grant under subsection 
        (a).
          (3) Requirement.--Any recipient of a planning grant 
        under this subsection that wishes to receive a grant 
        under subsection (a)(1) shall separately apply for a 
        grant under that subsection.

SEC. 254. GRANT APPLICATIONS.

    (a) Applications Required.--Any eligible partnership 
desiring to receive a grant under this part shall submit an 
application to the Secretary at such time, in such form, and 
containing such information as the Secretary may require.
    (b) Application Contents.--Each application for a grant 
under section 253(a) shall include--
          (1) a designation of the institution or agency, 
        within the eligible partnership, that will serve as the 
        fiscal agent for the grant;
          (2) information on the quality of the teacher 
        preparation program of the institution of higher 
        education participating in the eligible partnership and 
        how the eligible partnership will ensure, through 
        improvements in the eligible partnership's teacher 
        preparation practices or other appropriate strategies, 
        that scholarship recipients will receive high-quality 
        preparation;
          (3) a description of the assessment the members of 
        the eligible partnership have undertaken--
                  (A) to determine--
                          (i) the most critical needs of the 
                        local educational agencies, 
                        particularly the needs of schools in 
                        high-poverty areas, for new teachers 
                        (which may include teachers in 
                        particular subject areas or at certain 
                        grade levels); and
                          (ii) how the project carried out 
                        under the grant will address those 
                        needs; and
                  (B) that reflects the input of all 
                significant entities in the community 
                (including organizations representing teachers 
                and parents) that have an interest in teacher 
                recruitment, preparation, and induction;
          (4) a description of the project the eligible 
        partnership will carry out with the grant, including 
        information regarding--
                  (A) the recruitment and outreach efforts the 
                eligible partnership will undertake to 
                publicize the availability of scholarships and 
                other assistance under the program;
                  (B)(i) the number and types of students that 
                the eligible partnership will serve under the 
                program, which may include education 
                paraprofessionals seeking to achieve full 
                teacher certification or licensure; teachers 
                whom the partner local educational agencies 
                have hired under emergency certification or 
                licensure procedures; or former military 
                personnel, mid-career professionals, or 
                AmeriCorps or Peace Corps volunteers, who 
                desire to enter teaching; and
                  (ii) the criteria that the eligible 
                partnership will use in selecting the students, 
                including criteria to determine whether 
                individuals have the capacity to benefit from 
                the program, complete teacher certification 
                requirements, and become effective teachers;
                  (C) the activities the eligible partnership 
                will carry out under the grant, including a 
                description of, and justification for, any 
                support services the institution of higher 
                education participating in the eligible 
                partnership will offer to participating 
                students;
                  (D) the number and funding range of the 
                scholarships the institution will provide to 
                students; and
                  (E) the procedures the institution will 
                establish for entering into, and enforcing, 
                agreements with scholarship recipients 
                regarding the recipients' fulfillment of the 
                service commitment described in section 259;
          (5) a description of how the institution will use 
        funds provided under the grant only--
                  (A) to increase the number of students--
                          (i) with high potential to be 
                        effective teachers;
                          (ii) participating in the 
                        institution's teacher preparation 
                        programs; or
                          (iii) in the particular type or types 
                        of preparation programs that the grant 
                        will support; or
                  (B) to increase the number of graduates, who 
                are minority individuals, with high potential 
                to be effective teachers;
          (6) a description of the commitments, by the local 
        educational agencies participating in the partnership, 
        to hire qualified scholarship recipients in the schools 
        served by the agencies and in the subject areas or 
        grade levels for which the scholarship recipients will 
        be trained, and a description of the actions the 
        participating institution of higher education, the 
        participating local educational agencies, and the other 
        partners will take to facilitate the successful 
        transition of the recipients into teaching; and
          (7) a description of the eligible partnership's plan 
        for institutionalizing the activities the partnership 
        is carrying out under this part, so that the activities 
        will continue once Federal funding ceases.

SEC. 255. USES OF FUNDS.

    (a) In General.--Each eligible partnership receiving a 
grant under section 523(a) shall use the grant funds for the 
following:
          (1) Scholarships.--Scholarships to help students pay 
        the costs of tuition, room, board, and other expenses 
        of completing a teacher preparation program.
          (2) Support services.--Support services, if needed to 
        enable scholarship recipients to complete postsecondary 
        education programs.
          (3) Followup services.--Followup services provided to 
        former scholarship recipients during the recipients' 
        first 3 years of teaching.
          (4) Payments.--Payments to partner local educational 
        agencies, if needed to enable the agencies to permit 
        paraprofessional staff to participate in teacher 
        preparation programs (such as the cost of release time 
        for the staff).
          (5) Additional courses.--If appropriate, and if no 
        other funds are available for, paying the costs of 
        additional courses taken by former scholarship 
        recipients during the recipients' initial 3 years of 
        teaching.
  (b) Planning Grants.--A recipient of a planning grant under 
section 253(c) shall use the grant funds for the costs of 
planning for the implementation of a grant under section 
253(a).

SEC. 256. SELECTION OF APPLICANTS.

  (a) Peer Review.--The Secretary, using a peer review process, 
shall select eligible partnerships to receive funding under 
this part on the basis of--
          (1) the quality of the teacher preparation program 
        offered by the institution participating in the 
        partnership;
          (2) the quality of the program carried out under the 
        application; and
          (3) the capacity of the partnership to carry out the 
        grant successfully.
  (b) Criteria.--
          (1) In general.--In awarding grants under section 
        253(a), the Secretary shall seek to ensure that--
                  (A) in the aggregate, eligible partnerships 
                carry out a variety of approaches to preparing 
                new teachers; and
                  (B) there is an equitable geographic 
                distribution of the grants.
          (2) Special consideration.--In addition to complying 
        with paragraph (1), the Secretary shall give special 
        consideration to--
                  (A) applications most likely to result in the 
                preparation of increased numbers of individuals 
                with high potential for effective teaching who 
                are minority individuals; and
                  (B) applications from partnerships that have 
                as members of the partnerships historically 
                Black colleges and universities, Hispanic-
                serving institutions, and Tribal Colleges and 
                Universities.
  (c) Second Five-Year Grants.--In selecting eligible 
partnerships to receive second year grant payments under this 
part, the Secretary shall give a preference to eligible 
partnerships whose projects have resulted in--
          (1) the placement and retention of a substantial 
        number of high-quality graduates in teaching positions 
        in underserved, high-poverty schools;
          (2) the adoption of effective programs that meet the 
        teacher preparation needs of high-poverty urban and 
        rural areas; and
          (3) effective partnerships with elementary schools 
        and secondary schools that are supporting improvements 
        in student achievement.

SEC. 257. DURATION AND AMOUNT OF ASSISTANCE; RELATION TO OTHER 
                    ASSISTANCE.

  (a) Duration of Assistance.--No individual may receive 
scholarship assistance under this part--
          (1) for more than 5 years of postsecondary education; 
        and
          (2) unless that individual satisfies the requirements 
        of section 484(a)(5).
  (b) Amount of Assistance.--No individual may receive a 
scholarship awarded under this part that exceeds the cost of 
attendance, as defined in section 472, at the institution of 
higher education the individual is attending.
  (c) Relation to Other Assistance.--A scholarship awarded 
under this part--
          (1) shall not be reduced on the basis of the 
        individual's receipt of other forms of Federal student 
        financial assistance; and
          (2) shall be regarded as other financial assistance 
        available to the student, within the meaning of 
        sections 471(3) and 480(j)(1), in determining the 
        student's eligibility for grant, loan, or work 
        assistance under title IV.

SEC. 258. SCHOLARSHIP CONDITIONS.

  (a) In General.--A recipient of a scholarship under this part 
shall continue to receive the scholarship assistance only as 
long as the recipient is--
          (1) enrolled as a full-time student and pursuing a 
        course of study leading to teacher certification, 
        unless the recipient is working in a public school (as 
        a paraprofessional, or as a teacher under emergency 
        credentials) while participating in the program; and
          (2) maintaining satisfactory progress as determined 
        by the institution of higher education participating in 
        the partnership.
  (b) Special Rule.--Each eligible partnership shall modify the 
application of section 257(a)(1) and of subsection (a)(1) to 
the extent necessary to accommodate the rights of individuals 
with disabilities under section 504 of the Rehabilitation Act 
of 1973.

SEC. 259. SERVICE REQUIREMENTS.

  (a) Requirement.--Each eligible partnership receiving a grant 
under this part shall enter into an agreement, with each 
student to whom the partnership awards a scholarship under this 
part, providing that a scholarship recipient who completes a 
teacher preparation program under this part shall, within 7 
years of completing that program, teach full-time for at least 
5 years in a high-poverty school in an underserved geographic 
area or repay the amount of the scholarship, under the terms 
and conditions established by the Secretary.
  (b) Regulations.--The Secretary shall prescribe regulations 
relating to the requirements of subsection (a), including any 
provisions for waiver of those requirements.

SEC. 260. EVALUATION.

  The Secretary shall provide for an evaluation of the program 
carried out under this part, which shall asses such issues as--
          (1) whether institutions participating in the 
        eligible partnerships are successful in preparing 
        scholarship recipients to teach to high State and local 
        standards;
          (2) whether scholarship recipients are successful in 
        completing teacher preparation programs, becoming fully 
        certified teachers, and obtaining teaching positions in 
        underserved areas, and whether the recipients continue 
        teaching in those areas over a period of years;
          (3) the national impact of the program in assisting 
        local educational agencies in underserved areas to 
        recruit, prepare, and retain diverse, high-quality 
        teachers in the areas in which the agencies have the 
        greatest needs;
          (4) the long-term impact of the grants on teacher 
        preparation programs conducted by institutions of 
        higher education participating in the eligible 
        partnership and on the institutions' relationships with 
        their partner local educational agencies and other 
        members of the partnership; and
          (5) the relative effectiveness of different 
        approaches for preparing new teachers to teach in 
        underserved areas, including their effectiveness in 
        preparing new teachers to teach to high content and 
        performance standards.

SEC. 261. NATIONAL ACTIVITIES.

  The Secretary may reserve not more than 5 percent of the 
funds appropriated for this part for any fiscal year for--
          (1) peer review of applications;
          (2) conducting the evaluation required under section 
        260; and
          (3) technical assistance.

SEC. 262. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated to carry out this 
part $37,000,000 for fiscal year 1999 and such sums as may be 
necessary for each of the 4 succeeding fiscal years.

                      TITLE III--INSTITUTIONAL AID

SEC. 301. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that--
          (1) there are a significant number of institutions of 
        higher education serving high percentages of minority 
        students and students from low-income backgrounds, that 
        face problems that threaten their ability to survive;
          (2) the problems relate to the management and fiscal 
        operations of certain institutions of higher education, 
        as well as to an inability to engage in long-range 
        planning and development activities, including 
        endowment building;
          (3) in order to be competitive and provide a high-
        quality education for all, institutions of higher 
        education should improve their technological capacity 
        and make effective use of technology;
          [(3)] (4)  the title III program prior to 1985 did 
        not always meet the specific development needs of 
        historically Black colleges and universities and other 
        institutions with large concentrations of minority, 
        low-income students;
          [(4)] (5)  the solution of the problems of these 
        institutions would enable them to become viable, 
        fiscally stable and independent, thriving institutions 
        of higher education;
          [(5)] (6)  providing assistance to eligible 
        institutions will enhance the role of such institutions 
        in providing access and quality education to low-income 
        and minority students;
          [(6)] (7)  these institutions play an important role 
        in the American system of higher education, and there 
        is a strong national interest in assisting them in 
        solving their problems and in stabilizing their 
        management and fiscal operations, and in becoming 
        financially independent; and
          [(7)](8)  there is a particular national interest in 
        aiding those institutions of higher education that have 
        historically served students who have been denied 
        access to postsecondary education because of race or 
        national origin and whose participation in the American 
        system of higher education is in the Nation's interest 
        so that equality of access and quality of postsecondary 
        education opportunities may be enhanced for all 
        students.
    (b) Purpose.--It is the purpose of this title to assist 
such institutions in equalizing educational opportunity through 
a program of Federal assistance.

                   PART A--STRENGTHENING INSTITUTIONS

SEC. 311. PROGRAM PURPOSE.

    (a) General Authorization.-- * * *

           *       *       *       *       *       *       *

    (b) Grants Awarded; Special Consideration.--(1) From the 
sums available for this part under section [360(a)(1)] 
398(a)(1), the Secretary may award grants to any eligible 
institution with an application approved under section 351 in 
order to assist such an institution to plan, develop, or 
implement activities that promise to strengthen the 
institution.

           *       *       *       *       *       *       *

    (D) acquisition of equipment including high technology 
equipment for use in strengthening funds management and 
academic programs;
    (E) joint use of facilities such as libraries and 
laboratories; and
    (F) student services.
  (c) Endowment Fund.--
          (1) In general.--An eligible institution may use not 
        more than 20 percent of the grant funds provided under 
        this part to establish or increase an endowment fund at 
        such institution.
          (2) Matching requirement.--In order to be eligible to 
        use grant funds in accordance with paragraph (1), the 
        eligible institution shall provide matching funds, in 
        an amount equal to the Federal funds used in accordance 
        with paragraph (1), for the establishment or increase 
        of the endowment fund.
          (3) Comparability.--The provisions of part C, 
        regarding the establishment or increase of an endowment 
        fund, that the Secretary determines are not 
        inconsistent with this subsection, shall apply to funds 
        used under paragraph (1).

SEC. 312. DEFINITIONS; ELIGIBILITY

    (a) Educational and General Expenditures.-- * * *

           *       *       *       *       *       *       *

                  (B) except as provided in section [352(b)] 
                392(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;

           *       *       *       *       *       *       *

          (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 [352(a)] 392(a).

           *       *       *       *       *       *       *


SEC. 313. DURATION OF GRANT.

    (a) Award Period.--The Secretary may award a grant to an 
eligible institution under this part for 5 years.
    (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 [354(a)(1)] 394(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.
  (d) Wait-Out-Period.--Each eligible institution that received 
a grant under this part for a 5-year period shall not be 
eligible to receive an additional grant under this part until 2 
years after the date on which the 5-year grant period 
terminates.

           *       *       *       *       *       *       *


[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 be 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.--In this section:
          (1) Indian.--The term ``Indian'' has the meaning 
        given the term in section 2 of the Tribally Controlled 
        College or University Assistance Act of 1978.
          (2) Indian tribe.--The term ``Indian tribe'' has the 
        meaning given the term in section 2 of the Tribally 
        Controlled College or University Assistance Act of 
        1978.
          (3) Tribal college or university.--The term ``Tribal 
        College or University'' has the meaning give the term 
        ``tribally controlled college or university'' in 
        section 2 of the Tribally Controlled College or 
        University Assistance Act of 1978, and includes an 
        institution listed in the Equity in Educational Land 
        Grant Status Act of 1994.
          (4) Institution of higher education.--The term 
        ``institution of higher education'' means an 
        institution of higher education as defined in section 
        1201(a), except that paragraph (2) of such section 
        shall not apply.
    (c) Authorized Activities.--
          (1) In general.--Grants awarded under this section 
        shall be used by Tribal Colleges or Universities to 
        assist such institutions to plan, develop, undertake, 
        and carry out activities to improve and expand such 
        institutions' capacity to serve Indian students.
          (2) Examples of authorized activities.--The 
        activities described in paragraph (1) may include--
                  (A) purchase, rental, or lease of scientific 
                or laboratory equipment for educational 
                purposes, including instructional and research 
                purposes;
                  (B) construction, maintenance, renovation, 
                and improvement in classrooms, libraries, 
                laboratories, and other instructional 
                facilities, including purchase or rental of 
                telecommunications technology equipment or 
                services;
                  (C) support of faculty exchanges, faculty 
                development, and faculty fellowships to assist 
                in attaining advanced degrees in the faculty's 
                field of instruction;
                  (D) academic instruction in disciplines in 
                which American Indians are underrepresented;
                  (E) purchase of library books, periodicals, 
                and other educational materials, including 
                telecommunications program material;
                  (F) tutoring, counseling, and student service 
                programs designed to improve academic success;
                  (G) funds management, administrative 
                management, and acquisition of equipment for 
                use in strengthening funds management;
                  (H) joint use of facilities, such as 
                laboratories and libraries;
                  (I) establishing or improving a development 
                office to strengthen or improve contributions 
                from alumni and the private sector;
                  (J) establishing or enhancing a program of 
                teacher education designed to qualify students 
                to teach in elementary schools or secondary 
                schools, with a particular emphasis on teaching 
                American Indian children and youth, that shall 
                include, as part of such program, preparation 
                for teacher certification;
                  (K) establishing community outreach programs 
                that encourage American Indian elementary 
                school and secondary school students to develop 
                the academic skills and the interest to pursue 
                postsecondary education;
                  (L) other activities proposed in the 
                application submitted pursuant to subsection 
                (d) that--
                          (i) contribute to carrying out the 
                        activities described in subparagraphs 
                        (A) through (K); and
                          (ii) are approved by the Secretary as 
                        part of the review and acceptance of 
                        such application.
          (3) Endowment fund.--
                  (A) In general.--A Tribal College or 
                University may use not more than 20 percent of 
                the grant funds provided under this section to 
                establish or increase an endowment fund at the 
                institution.
                  (B) Matching requirement.--In order to be 
                eligible to use grant funds in accordance with 
                subparagraph (A), the Tribal College or 
                University shall provide matching funds, in an 
                amount equal to the Federal funds used in 
                accordance with subparagraph (A), for the 
                establishment or increase of the endowment 
                fund.
                  (C) Comparability.--The provisions of part C 
                regarding the establishment or increase of an 
                endowment fund, that the Secretary determines 
                are not inconsistent with this paragraph, shall 
                apply to funds used under subparagraph (A).
  (d) Application Process.--
          (1) Institutional eligibility.--To be eligible to 
        receive assistance under this section, a Tribal College 
        or University shall be an institution that--
                  (A) is an eligible institution under section 
                312(b);
                  (B) is eligible to receive assistance under 
                the Tribally Controlled College or University 
                Assistance Act of 1978; or
                  (C) is eligible to receive funds under the 
                Equity in Educational Land Grant Status Act of 
                1994.
          (2) Application.--Any Tribal College or University 
        desiring to receive assistance under this section shall 
        submit an application to the Secretary at such time, 
        and in such manner, as the Secretary may by regulation 
        reasonably require. Each such application shall 
        include--
                  (A) a 5-year plan for improving the 
                assistance provided by the Tribal College or 
                University to Indian students, increasing the 
                rates at which Indian secondary school students 
                enroll in higher education, and increasing 
                overall postsecondary retention rates for 
                Indian students; and
                  (B) such enrollment data and other 
                information and assurances as the Secretary may 
                require to demonstrate compliance with 
                subparagraph (A) or (B) of paragraph (1).
          (3) Special rule.--For the purposes of this part, no 
        Tribal College or University that is eligible for and 
        receives funds under this section may concurrently 
        receive other funds under this part or part B.

PART B--STRENGTHENING HISTORICALLY BLACK COLLEGES AND UNIVERSITIES

           *       *       *       *       *       *       *


SEC. 323. GRANTS TO INSTITUTIONS.

           *       *       *       *       *       *       *


  (b) Endowment Fund.--
          (1) In general.--An institution may use not more than 
        20 percent of the grant funds provided under this part 
        to establish or increase an endowment fund at the 
        institution.
          (2) Matching requirement.--In order to be eligible to 
        use grant funds in accordance with paragraph (1), the 
        eligible institution shall provide matching funds, in 
        an amount equal to the Federal funds used in accordance 
        with paragraph (1), for the establishment or increase 
        of the endowment fund.
          (3) Comparability.--The provisions of part C 
        regarding the establishment or increase of an endowment 
        fund, that the Secretary determines are not 
        inconsistent with this subsection, shall apply to funds 
        used under paragraph (1).
    [(b)] (c) Limitations.--(1) No grant may be made under this 
Act for any educational program, activity, or service related 
to sectarian instruction or religious worship, or provided by a 
school or department of divinity. For the purpose of this 
subsection, the term ``school or department of divinity'' means 
an institution whose program is specifically for the education 
of students to prepare them to become ministers of religion or 
to enter upon some other religious vocation, or to prepare them 
to teach theological subjects.

           *       *       *       *       *       *       *


SEC. 326. PROFESSIONAL OR GRADUATE INSTITUTIONS.

    (a) General Authorization.--(1) * * *

           *       *       *       *       *       *       *

    (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. 
If a grant of less than $500,000 is made under this section, 
matching funds provided from non-Federal sources are not 
required. If a grant equal to or in excess of $500,000 is made 
under this section, match funds provided from non-Federal 
sources are required only with respect to the amount of the 
grant that exceeds $500,000.

           *       *       *       *       *       *       *

    (c) Uses of Funds.--A grant under this section may be used 
for--* * *

           *       *       *       *       *       *       *

          (E) Tuskegee University School of Veterinary 
        Medicine, and any Tuskegee University qualified 
        graduate program;
          (F) Xavier University School of Pharmacy, and any 
        Xavier University qualified graduate program;
          (G) Southern University School of Law, and any 
        Southern University qualified graduate program;
          (H) Texas Southern University School of Law and 
        School of Pharmacy, and any Texas Southern University 
        qualified graduate program;
          (I) Florida A&M University School of Pharmaceutical 
        Sciences, and any Florida A&M University qualified 
        graduate program;
          (J) North Carolina Central University School of Law, 
        and any North Carolina Central University qualified 
        graduate program;

           *       *       *       *       *       *       *


   PART C--ENDOWMENT CHALLENGE GRANTS FOR INSTITUTIONS ELIGIBLE FOR 
                   ASSISTANCE UNDER PART A OR PART B

SEC. 331 ENDOWMENT CHALLENGE GRANTS.

    (a) Purpose; Definitions.--(1) * * *

           *       *       *       *       *       *       *

    [(B) The Secretary may make a grant under this part to an 
eligible institution under the following circumstances:
          [(i) In any fiscal year in which the amount 
        appropriated to carry out this part is less then 
        $15,000,000, the institution--
                  [(I) may apply for a grant in an amount not 
                exceeding $500,000; and
                  [(II) shall have deposited in its endowment 
                fund established under this section an amount 
                which is equal to one-half of the amount of 
                such grant.
          [(ii) In any fiscal year in which the amount 
        appropriated to carry out this part is equal to or 
        greater than $15,000,000 but less than $25,000,000, the 
        institution--
                  (I) may apply for a grant in an amount not 
                exceeding $1,000,000; and
                  [(II) shall have deposited in its endowment 
                fund established under this section an amount 
                which is equal to one-half of the amount of 
                such grant.
         [(iii) In any fiscal year in which the amount 
        appropriated to carry out this part is equal to or 
        greater than 25,000,000, the institution may apply for 
        a grant in an amount not to exceed $1,500,000 if such 
        institution has deposited in its endowment fund 
        established under this section an amount which is equal 
        to one-half of the amount of such grant.
    [(C)(i) Except as provided in clause (ii), if the 
appropriation for this part in a fiscal year is $20,000,000 or 
less, an eligible institution of higher education that is 
awarded a grant under subsection (b)(2)(B) of this section 
shall not be eligible for a grant under subsection (b)(2)(B) of 
this section during the 10 years immediately following the 
period that such institution received such a grant.
    [(ii) If the appropriation for this part in any fiscal year 
is greeter than $20,000,000, and eligible institution of higher 
education that is awarded a grant under subsection (b)(2)(B) of 
this section shall not be eligible to reapply for grant under 
subsection (b)(2)(B) of this section during the 5 years 
immediately following the period that such institution received 
such a grant. This provision shall apply for the fiscal year in 
which the appropriation is greater than $20,000,000 and 
subsequent fiscal years regardless of the appropriation in 
those fiscal years.]
  (B) The Secretary may make a grant under this part to an 
eligible institution in any fiscal year if the institution
          (i) applies for a grant in an amount not exceeding 
        $500,000; and
          (ii) has deposited in the eligible institution's 
        endowment fund established under this section an amount 
        which is equal to \1/2\ of the amount of such grant.
  (C) An eligible institution of higher education that is 
awarded a grant under subparagraph (B) shall not be eligible to 
receive an additional grant under subparagraph (B) until 10 
years after the date on which the grant period terminates.

           *       *       *       *       *       *       *


PART [B] D--HISTORICALLY BLACK COLLEGE AND UNIVERSITY CAPITAL FINANCING

SEC. [721.] 341. FINDINGS.

           *       *       *       *       *       *       *


SEC. [722.] 342. DEFINITIONS.

           *       *       *       *       *       *       *


          (3) The term ``qualified bond'' means any obligation 
        issued by the designated bonding authority at the 
        direction of the Secretary, the net proceeds of which 
        are loaned to an eligible institution for the purposes 
        described in section [723(b)] 343(b).
          (4) The term ``funding'' means any payment under this 
        part from the Secretary to the eligible institution or 
        its assignee in fulfillment of the insurance 
        obligations of the Secretary pursuant to an agreement 
        under section [723] 343.
          (5) The term ``capital project'' means, subject to 
        section [724(b)] 344(b) the repair, renovation, or, in 
        exceptional circumstances, the construction or 
        acquisition, of--
                  (A) any classroom facility, library, 
                laboratory facility, dormitory (including 
                dining facilities) or other facility 
                customarily used by colleges and universities 
                for instructional or research purposes or for 
                housing students, faculty, and staff;
                  (B) a facility for the administration of an 
                educational program, or a student center or 
                student union, except that not more than 5 
                percent of the loan proceeds provided under 
                this part may be used for the facility, center 
                or union if the facility, center or union is 
                owned, leased, managed, or operated by a 
                private business, that, in return for such use, 
                makes a payment to the eligible institution;
                  [(B)] (C) instructional equipment, research 
                instrumentation, and any capital equipment or 
                fixture related to facilities described in 
                subparagraph (A);
                  (D) a maintenance, storage, or utility 
                facility that is essential to the operation of 
                a facility, a library, a dormitory, equipment, 
                instrumentation, a fixture, real property or an 
                interest therein, described in this paragraph;
                  (E) a facility designed to provide primarily 
                outpatient health care for students or faculty;
                  [(C)] (F) any other facility, equipment or 
                fixture which is essential to the maintaining 
                or accreditation of the member institution by a 
                nationally recognized accrediting agency or 
                association; and
                  [(D)] (G) any real property or interest 
                therein underlying facilities described in 
                subparagraph (A) or [(C)] (F).
          (6) The term ``interest'' includes accredited value 
        or any other payment constituting interest on an 
        obligation.
          (7) The term ``outstanding,'' when used with respect 
        to bonds, shall not include bonds the payment of which 
        shall have been provided for by the irrevocable deposit 
        in trust of obligations maturing as to principal and 
        interest in such amounts and at such times as will 
        ensure the availability of sufficient moneys to make 
        payments on such bonds.
          (8) The term ``designated bonding authority'' means 
        the private, for-profit corporation selected by the 
        Secretary pursuant to section [725(1)] 345(1) for the 
        purpose of issuing taxable construction bonds in 
        furtherance of the purposes of this part.
          (9) The term ``Advisory Board'' means the Advisory 
        Board established by section [727] 347 of this part.

SEC. [723.] 343. FEDERAL INSURANCE FOR BONDS.

    (a) General Rule.--Subject to the limitations in section 
[724] 344, the Secretary is authorized to enter into insurance 
agreements to provide financial insurance to guarantee the full 
payment of principal and interest on qualified bonds upon the 
conditions set forth in subsections (b), (c) and (d).
    (b) Responsibilities of the Designated Bonding Authority.--
The Secretary may not enter into an insurance agreement 
described in subsection (a) unless the Secretary designates a 
qualified bonding authority in accordance with sections [725(1) 
and 726] 345(1) and 346 and the designated bonding authority 
agrees in such agreement to--

           *       *       *       *       *       *       *

          (10) comply with the limitations set forth in section 
        [724] 324 of this part; and

           *       *       *       *       *       *       *

    (d) Full Faith and Credit Provisions.--Subject to section 
[723(c)(1)] 343(c)(1) the full faith and credit of the United 
States is pledged to the payment of all funds which may be 
required to be paid under the provisions of this section.
  (e) Notwithstanding any other provision of law, the Secretary 
may sell a qualified bond guaranteed under this part to any 
party that offers terms that the Secretary determines are in 
the best interest of the eligible institution.

SEC. [724] 344. LIMITATIONS ON FEDERAL INSURANCE FOR BONDS ISSUED BY 
                    THE DESIGNATED BONDING AUTHORITY.

           *       *       *       *       *       *       *


SEC. [725] 345. AUTHORITY OF THE SECRETARY.

           *       *       *       *       *       *       *


          (2) shall require that the first loans for capital 
        projects authorized under section [723] 343 be made no 
        later than March 31, 1994;

           *       *       *       *       *       *       *


SEC. [726] 346. PROHIBITION.

           *       *       *       *       *       *       *


SEC. [727] 347. HBCU CAPITAL FINANCING ADVISORY BOARD.

           *       *       *       *       *       *       *


SEC. [728] 348. MINORITY BUSINESS ENTERPRISE UTILIZATION.

    In the performance of and with respect to the Secretary's 
effectuation of his responsibilities under section [725(1)] 
345(1) and to the maximum extent feasible in the implementation 
of the purposes of this part, minority business persons, 
including bond underwriters and credit enhancers, bond counsel, 
marketers, accountants, advisors, construction contractors, and 
managers should be utilized.

        [Part B--Minority and Engineering Improvement Programs]

           [Subpart 1--Minority Science Improvement Program]

              PART E--MINORITY SCIENCE IMPROVEMENT PROGRAM

SEC. [1021] 351. PURPOSE; AUTHORITY.

           *       *       *       *       *       *       *


SEC. [1022] 352. GRANT RECIPIENT SELECTION.

           *       *       *       *       *       *       *


SEC. [1023] 353. 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)] 365(6));
          (2) cooperative grants (as defined in section 
        [1046(7)] 365(7));
          (3) design projects (as defined in section [1046(8)] 
        365(8));
          (4) special projects (as defined in section [1046(9)] 
        365(9));

           *       *       *       *       *       *       *


SEC. [1024] 354. MULTIAGENCY STUDY OF MINORITY SCIENCE PROGRAMS.

           *       *       *       *       *       *       *


          Subpart [3] 2--Administrative and General Provisions

SEC. [1041] 361. 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)] 365); and
          (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] 362. GRANT APPLICATION.

    (a) Submission and Contents of Applications.--An eligible 
applicant (as determined under section [1041] 361) 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)] 
        351(b) in such detail as will enable the Secretary to 
        determine the degree to which such program will 
        accomplish such purpose or purposes; and

           *       *       *       *       *       *       *


SEC. [1043] 363. CROSS PROGRAM AND CROSS AGENCY COOPERATION.

           *       *       *       *       *       *       *


SEC. [1044] 364. ADMINISTRATION PROVISIONS.

           *       *       *       *       *       *       *


SEC. [1046] 365. DEFINITIONS.

    For the purpose of this part--
          (1) * * *

           *       *       *       *       *       *       *

          (4) 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. [1047] 366. 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 [D] F--GENERAL PROVISIONS

SEC. [351.] 391. APPLICATIONS FOR ASSISTANCE.

    (a) Application Required; Approval.--* * *

           *       *       *       *       *       *       *

          (1) set forth, or describe how the institution (other 
        than an institution applying under part C, D or E) 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);

           *       *       *       *       *       *       *

          (6) provide that the institution will comply with the 
        limitations set forth in section [357] 396;

           *       *       *       *       *       *       *


SEC. [352.] 392. WAIVER AUTHORITY AND REPORTING REQUIREMENT.

           *       *       *       *       *       *       *


SEC. [353.] 393. APPLICATION REVIEW PROCESS.

    (a) Review Panel.--(1) * * *

           *       *       *       *       *       *       *

      (d) Exclusion.--The provisions of this section shall not 
apply to applications submitted under part D.

SEC. [354.] 394. COOPERATIVE ARRANGEMENTS.

           *       *       *       *       *       *       *


SEC. [356.] 395. ASSISTANCE TO INSTITUTIONS UNDER OTHER PROGRAMS.

    (a) Assistance Eligibility.--* * *

           *       *       *       *       *       *       *

          (2) The provisions of this section shall apply to any 
        program authorized by title [IV, VII, or VIII] part D, 
        title IV, or title VIII of this Act.

           *       *       *       *       *       *       *


SEC. [357.] 396. LIMITATIONS.

           *       *       *       *       *       *       *


SEC. [358.] 397. PENALTIES.

           *       *       *       *       *       *       *


SEC. [360.] 398. 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] 1999, and such 
        sums as may be necessary for each of the 4 succeeding 
        fiscal years.
          [(B)(i) There] (B) There are authorized to be 
        appropriated to carry out section 316, [$45,000,000 for 
        fiscal year 1993] $5,000,000 for fiscal year 1999 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] 1999, and 
        such sums as may be necessary for each for the 4 
        succeeding fiscal years.
          (B) There are authorized to be appropriated to carry 
        out section 326, [$20,000,000 for fiscal year 1993] 
        $30,000,000 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, [$50,000,000 for fiscal year 1993] 
        $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, $110,000 for fiscal year 1999, and 
        such sums as may be necessary for each of the 4 
        succeeding fiscal years.
          (5) Part e.--There are authorized to be appropriated 
        to carry out part E, $10,000,000 for fiscal year 1999, 
        and such sums as may be necessary for each of the 4 
        succeeding fiscal years.

           *       *       *       *       *       *       *


                      TITLE IV--STUDENT ASSISTANCE

  PART A--GRANTS TO STUDENTS IN ATTENDANCE AT INSTITUTIONS OF HIGHER 
EDUCATION

           *       *       *       *       *       *       *


 Subpart 1--[Basic Educational Opportunity Grants] Federal Pell Grants

SEC. 401. [BASIC EDUCATIONAL OPPORTUNITY GRANTS] 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,], for each fiscal year through 
fiscal year 2004, shall 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 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 
until such time as the Secretary determines and publishes in 
the Federal Register with an opportunity for comment, an 
alternative payment system that provides payments to 
institutions in an accurate and timely manner, 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.

           *       *       *       *       *       *       *

    (b) Purpose and Amount of Grants.--(1) * * *

           *       *       *       *       *       *       *

    (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,
          [(v) $4,500 for academic year 1997-1998,]
          (i) $5,000 for academic year 1999-2000;
          (ii) $5,200 for academic year 2000-2001;
          (iii) $5,400 for academic year 2001-2002;
          (iv) $5,600 for academic year 2002-2003; and
          (v) $5,800 for academic year 2003-2004;
less an amount equal to the amount determined to be the 
expected family contribution with respect to that student for 
that year.

           *       *       *       *       *       *       *

    [(3)(A) For any academic year for which an appropriation 
Act provides a maximum basic grant in an amount in excess of 
$2,400, the amount of a student's basic grant shall equal 
$2,400 plus--
          [(i) one-half of the amount by which such maximum 
        basic grant exceeds $2,400; plus
          [(ii) the lesser of--
                  [(I) the remaining one-half of such excess; 
                or
                  [(II) the sum of the student's tuition and 
                the student's allowance determined under 
                subparagraph (B), if applicable.
    [(B) For purposes of subparagraph (A)(ii)(II), a student's 
allowance is $750 if the student has dependent care expenses 
(as defined in section 472(8)) or disability related expenses 
(as defined in section 472(9)).]
    (3) For any academic year for which an appropriation Act 
provides a maximum basic grant in an amount in excess of 
$2,400, the amount of a student's basic grant shall equal 
$2,400 plus--
          (A) one-half of the amount by which such maximum 
        basic grant exceeds $2,400; plus
                  (B) the lesser of--
                  (i) the remaining one-half of such excess; or
                  (ii) the sum of the student's tuition, fees, 
                and if the student has dependent care expenses 
                (as described in section 472(8) or disability-
                related expenses (as described in section 
                472(9)), an allowance determined by the 
                institution for such expenses.

           *       *       *       *       *       *       *

    (5) No basic 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 that is equal to or greater than $200 but less than $400 
shall be awarded a basic grant of $400] $200.
    (6) (A) The Secretary may allow, on a case-by-case basis, a 
student to receive 2 Pell grants during a single award year, 
if--
          [(A)] (i) the student is enrolled full-time in an 
        associate or baccalaureate degree program of study that 
        is 2 years or longer at an eligible institution that is 
        computed in credit hours; and
          [(B)] (ii) the student completes course work toward 
        completion of an associate or baccalaureate degree that 
        exceeds the requirements for a full academic year as 
        defined by the institution.
          (B) The Secretary shall promulgate regulations 
        implementing this paragraph.

           *       *       *       *       *       *       *

    (c) Period of Eligibility for Grants.--[(1) The period 
during which a student may receive basic 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.] 
(1)(A) Except as provided in subparagraph (B), the period 
during which a student may receive a basic grant shall be the 
period, required for the completion of the first undergraduate 
baccalaureate course of study pursued by the student at the 
institution at which the student is in attendance, that does 
not exceed 150 percent of the period normally required by a 
full-time student (or the equivalent period, in the case of a 
part-time student) to complete the course of study at the 
institution, as determined by the institution.
    (B) A student may receive basic grants under this subpart 
for a period that exceeds the period described in subparagraph 
(A) to the extent the institution in which the student is 
enrolled determines necessary to accommodate the rights of 
students with disabilities under section 504 of the 
Rehabilitation Act of 1973.
    (2) [Nothing] (A) Except as provided in subparagraph (B), 
nothing; in this section shall exclude from eligibility courses 
of study which are noncredit or remedial in nature (including 
courses in English language instruction) which are determined 
by the institution to be necessary to help the student be 
prepared for the pursuit of a first undergraduate baccalaureate 
degree or certificate [or, in the case of courses in English 
language instruction, to be necessary to enable the student to 
utilize already existing knowledge, training, or skills]. 
Nothing in this section shall exclude from eligibility programs 
of study abroad that are approved for credit by the home 
institution at which the student is enrolled.
    (B)(i) A student may receive a basic grant to attend 
English language instruction that is a separate course of 
instruction only if--
          (I) students enrolled in such a course are required 
        to take an independently administered standardized test 
        of English language proficiency upon completion of the 
        course; and
          (II) not less than a minimum percentage of such 
        students achieve a passing score on that test.
    (ii) The Secretary shall promulgate regulations that 
specify 1 or more standardized tests of English proficiency, 
the minimum percentage of students who must achieve a passing 
score on the tests, and such other requirements as the 
Secretary determines are necessary to implement clause (i).

           *       *       *       *       *       *       *


    Subpart 2--Federal Early Outreach and Student Services Programs

                    CHAPTER 1--FEDERAL TRIO PROGRAMS

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

    (a) Grants and Contracts Authorized.--* * *

           *       *       *       *       *       *       *

    (b) Recipients, Duration, and Size.--
          (1) Recipients.--* * *

           *       *       *       *       *       *       *

          (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 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]; $190,000 for 
        each fiscal year (B) for programs authorized under 
        section 402B or 402F shall not be less than [$180,000 
        for fiscal year 1994]; $200,000 for each fiscal year 
        and (C) for programs authorized under section 402C or 
        402E shall not be less than [$190,000 for fiscal year 
        1995] $210,000 for each fiscal year.

           *       *       *       *       *       *       *

    (c) Procedures for Awarding Grants and Contracts.--
          (1) Prior experience.--* * *

           *       *       *       *       *       *       *

          (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] 110 and adjusted for prior * * *.

           *       *       *       *       *       *       *

          (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 not require a separate 
        Director to administer a program funded under this 
        chapter if the imposition of such requirement will 
        hinder coordination among programs funded under this 
        chapter or between programs funded under this subpart 
        and similar programs funded through other sources.] The 
        Secretary shall permit a Director of a program assisted 
        under this chapter to also administer 1 or more 
        additional programs for disadvantaged students operated 
        by the sponsoring entity regardless of the funding 
        source of such additional 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] $700,000,000 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) Program Authority.--* * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

          (5) personal and career counseling;, or activities 
        designed to acquaint individuals from disadvantaged 
        backgrounds with careers in which the individuals are 
        particularly underrepresented;

           *       *       *       *       *       *       *


SEC. 402C. UPWARD BOUND.

    (a) Program Authority.--* * *
    (b) Permissible Services.--* * *

           *       *       *       *       *       *       *

          (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) work-study positions where youth participating 
        in the project are exposed to careers requiring a 
        postsecondary degree; and
          [(10)] (11) programs and activities as described in 
        paragraphs (1) through [(9)] (10) which are specially 
        designed for students of limited English proficiency.

           *       *       *       *       *       *       *

    (e) Maximum Stipends.--Youths participating in a project 
proposed to be carried out under any application may be paid 
stipends not in excess of $60 per month during June, July, and 
August, [and not in excess of $40 per month during the 
remaining period of the year.] except that youth participating 
in a work-study position under subsection (b)(10) may be paid a 
stipend of $300 per month during June, July, and August. Youths 
participating in a project proposed to be carried out under any 
application may be paid stipends not in excess of $40 per month 
during the remaining period of the year.

SEC. 402D. STUDENT SUPPORT SERVICES.

    (a) Program Authority.--* * *

           *       *       *       *       *       *       *

    (c) Requirements for Approval of Applications.--* * *

           *       *       *       *       *       *       *

          [(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.]
          (6) consider, in addition to such other criteria as 
        the Secretary may prescribe, the institution's effort, 
        and where applicable past history, in--
                  (A) providing sufficient financial assistance 
                to meet the full financial need of each student 
                at the institution; and
                  (B) maintaining the loan burden of each such 
                student at a manageable level.

           *       *       *       *       *       *       *


  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.

[SEC. 402H. EVALUATION FOR PROJECT IMPROVEMENT.

    [(a) In General.--For the purpose of improving the 
operation of the programs and projects assisted under this 
chapter, the Secretary is authorized to make grants to and 
enter into contracts with institutions of higher education and 
other public and private institutions and organizations to 
evaluate the effectiveness of the various programs assisted 
under this subpart in meeting the purposes described in this 
chapter.
    [(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 individuls and 
students for postsecondary education, and such individuals' and 
students' success in postsecondary education.
    [(c) Rusults.--In order to improve program effectiveness, 
the results of the ongoing evaluations described in subsection 
(a) shall be disseminated by the Secretary to similar programs 
assisted under this chapter as well as other individuals 
concerned with the postsecondary access and retention of low-
income individuals and first-generation college students.]

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

  (a) Evaluations.--
          (1) In general.--For the purpose of improving the 
        effectiveness of the programs and projects assisted 
        under this subpart, the Secretary may make grants to or 
        enter into contracts with institutions of higher 
        education and other public and private institutions and 
        organizations to evaluate the effectiveness of the 
        programs and projects assisted under this subpart.
          (2) Practices.--The evaluations described in 
        paragraph (1) shall identify institutional, community, 
        and program or project practices that are particularly 
        effective in enhancing the access of low-income 
        individuals and first-generation college students to 
        postsecondary education, the preparation of the 
        individuals and students for postsecondary education, 
        and the success of the individuals and students in 
        postsecondary education.
  (b) Grants.--The Secretary may award grants to institutions 
of higher education or other private and public institutions 
and organizations, that are carrying out a program or project 
assisted under this subpart prior to the date of enactment of 
the Higher Education Amendments of 1998, to enable the 
institutions and organizations to expand and leverage the 
success of such programs or projects by working in partnership 
with other institutions, community-based organizations, or 
combinations of such institutions and organizations, that are 
not receiving assistance under this subpart and are serving 
low-income students and first generation college students, in 
order to--
          (1) disseminate and replicate best practices of 
        programs or projects assisted under this subpart; and
          (2) provide technical assistance regarding programs 
        and projects assisted under this subpart.
  (c) Results.--In order to improve overall program or project 
effectiveness, the results of evaluations and grants described 
in this section shall be disseminated by the Secretary to 
similar programs or projects assisted under this subpart, as 
well as other individuals concerned with postsecondary access 
for and retention of low-income individuals and first-
generation college students.
    [Chapters 3 through 8 repealed]

     Subpart 3--Federal Supplemental Educational Opportunity Grants

SEC. 413A. PURPOSE; APPROPRIATIONS AUTHORIZED.

    (a) Purpose of Subpart.--

           *       *       *       *       *       *       *

    (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 as 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] $700,000,000 for fiscal year 1999, and such sums as may 
be necessary for the 4 succeeding fiscal years.

           *       *       *       *       *       *       *


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

    (a) Institutional Eligibility.--* * *

           *       *       *       *       *       *       *

    [(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 
institutions 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.]
    (d) Use of Funds for Less-Than-Full-Time Students.--If the 
institution's allocation under this subpart is directly or 
indirectly based in part on the financial need demonstrated by 
students who are independent students or attending the 
institution on less than a full-time basis, a reasonable 
proportion of the allocation shall be made available to such 
students.

           *       *       *       *       *       *       *


SEC. 413E. CARRYOVER, CARRYBACK, AND REALLOCATION.

    (a) Carryover Authority.--Of the sums made available to an 
eligible institution under this subpart for a fiscal year, not 
more than 10 percent may, at the discretion of the institution, 
remain available for expenditure during the succeeding fiscal 
year to carry out the program under this subpart.
    (b) Carryback Authority.--Of the sums made available to an 
eligible institution under this subpart for a fiscal year, not 
more than 10 percent may, at the discretion of the institution, 
be used by the institution for expenditure for the fiscal year 
preceding the fiscal year for which the sums were appropriated.
    (c) Reallocation.--Any of the sums made available to an 
eligible institution under this subpart for a fiscal year that 
are not needed by the institution to award supplemental grants 
during that fiscal year, that the institution does not wish to 
use during the succeeding fiscal year as authorized in 
subsection (a), and that the institution does not wish to use 
for the preceding fiscal year as authorized in subsection (b), 
shall be made available to the Secretary for reallocation under 
section 413D(e) until the end of the second fiscal year after 
the fiscal year for which such sums were appropriated.

        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 
        $35,000,000, 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 for which 
        such sums were appropriated.

SEC. 415B. ALLOTMENT AMONG STATES.

    (a) Allotment Based on Number of Religible 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) Applicability Rule.--The provisions of this subpart 
which are not inconsistent with this section shall apply to the 
program authorized by this section.
    (c) Authorized Activities.--Each State receiving a grant 
under this section may use the grant funds for--
          (1) increasing the dollar amount of grants awarded 
        under section 415B to eligible students who demonstrate 
        financial need;
          (2) carrying out transition programs from secondary 
        school to postsecondary education for eligible students 
        who demonstrate financial need;
          (3) making funds available for community service 
        work-study activities for eligible students who 
        demonstrate financial need;
          (4) creating a postsecondary scholarship program for 
        eligible students who demonstrate financial need and 
        wish to enter teaching;
          (5) creating a scholarship program for eligible 
        students who demonstrate financial need and wish to 
        enter a program of study leading to a degree in 
        mathematics, computer science, or engineering;
          (6) carrying out early intervention programs, 
        mentoring programs, and career education programs for 
        eligible students who demonstrate financial need; and
          (7) awarding merit or academic scholarships to 
        eligible students who demonstrate financial need.
    (d) Maintenance of Effort Requirement.--Each State 
receiving a grant under this section for a fiscal year shall 
provide the Secretary an assurance that the aggregate amount 
expended per student or the aggregate expenditures by the 
State, from funds derived from non-Federal sources, for the 
authorized activities described in subsection (c) for the 
preceding fiscal year were not less than the amount expended 
per student or the aggregate expenditures by the State for the 
activities for the second preceding fiscal year.
    (e) Federal Share.--The Federal share of the cost of the 
authorized activities described in subsection (c) for any 
fiscal year shall be 33\1/3\ percent.

SEC. [415E.] 415F DEFINITION.

           *       *       *       *       *       *       *


SEC. 415G. FEDERAL-STATE RELATIONSHIPS; STATE AGREEMENTS.

  (a) In General.--Any State that desires to receive assistance 
under this subpart 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 under this 
subpart.
    (b) Contents.--
          (1) In general.--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--
                  (A) the State will provide for such methods 
                of administration as are necessary for the 
                proper and efficient administration of the 
                program under this subpart in keeping with the 
                purposes set forth under this subpart;
                  (B) the State will provide for 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 this subpart;
                  (C) 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 under 
                this subpart; and
                  (D) the State has a comprehensive planning or 
                policy formulation process that--
                          (i) considers the relation between 
                        State administration of the program 
                        under this subpart, and administration 
                        of similar State programs or processes;
                          (ii) encourages State policies 
                        designed to consider effects on 
                        declining enrollments on all sectors of 
                        postsecondary education in the State;
                          (iii) considers the postsecondary 
                        education needs of unserved and 
                        underserved individuals within the 
                        State, including individuals beyond the 
                        traditional college age;
                          (iv) 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
                          (v) 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.
          (2) Special rule.--Participation under paragraph 
        (1)(D)(v) 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) Special Rule.--The information and assurances provided by 
a State in accordance with subparagraphs (A), (B), and (C) of 
subsection (b)(1), 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 
program under this subpart.
  (d) Agreement Duration; Compliance.--
          (1) Agreement duration.--An agreement of a State 
        shall remain in effect subject to modification as 
        changes in information or circumstances require.
          (2) Compliance.--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 
        subparagraph (A), (B), or (C) of subsection (b)(1), the 
        Secretary shall notify the State that the State is no 
        longer eligible to participate in the program under 
        this subpart until the Secretary is satisfied that 
        there is no longer any such failure to comply.
  (e) Special Rules.--
          (1) Entities entering into agreements.--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) Construction.--
                  (A) State structure.--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 a program under this subpart, 
                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) State authority.--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 
                that 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.

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

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

    (a) Program Authority.--* * *

           *       *       *       *       *       *       *

    (g) Authorization of Appropriations.--(1) There are 
authorized to be appropriated for the high school equivalency 
program [$15,000,000 for fiscal year 1993] $25,000,000 for 
fiscal year 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] 
$10,000,000 for fiscal year 1999 and such sums as may be 
necessary for each of the 4 succeeding fiscal years.

Subpart 6--Robert C. Byrd Honors Scholarship Program

           *       *       *       *       *       *       *


SEC. 419K. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated for this subpart 
[$10,000,000 for fiscal year 1993] $45,000,000 for fiscal year 
1999 and such sums as may be necessary for each of the 4 
succeeding fiscal years.

      [Subpart 7--Assistance to Institutions of Higher Education]

          Subpart 7_Child Care Access Means Parents in School

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

  (a) Purpose.--The purpose of this section is to support the 
participation of low-income parents in postsecondary education 
through the provision of campus-based child care services.
  (b) Program Authorized.--
          (1) Authority.--The Secretary may award grants to 
        institutions of higher education to assist the 
        institutions in providing campus-based child care 
        services primarily to low-income students.
          (2) Amount of grants.--
                  (A) In general.--The amount of a grant 
                awarded to an institution of higher education 
                under this section for a fiscal year shall not 
                exceed 1 percent of the total amount of all 
                Federal Pell Grant funds awarded to students 
                enrolled at the institution of higher education 
                for the preceding fiscal year.
                  (B) Minimum.--A grant under this section 
                shall be awarded in an amount that is not less 
                than $10,000.
          (3) Duration; renewal; and payments.--
                  (A) Duration.--The Secretary shall award a 
                grant under this section for a period of 3 
                years.
                  (B) Renewal.--A grant under this section may 
                be renewed for a period of 3 years.
                  (C) Payments.--Subject to subsection (e)(2), 
                the Secretary shall make annual grant payments 
                under this section.
          (4) Eligible institutions.--An institution of higher 
        education shall be eligible to receive a grant under 
        this section for a fiscal year if the total amount of 
        all Federal Pell Grant funds awarded to students 
        enrolled at the institution of higher education for the 
        preceding fiscal year equals or exceeds $350,000.
          (5) Use of funds.--Grant funds under this section 
        shall be used by an institution of higher education to 
        support or establish a campus-based child care program 
        primarily serving the needs of low-income students 
        enrolled at the institution of higher education.
          (6) Construction.--Nothing in this section shall be 
        construed to prohibit an institution of higher 
        education that receives grant funds under this section 
        from serving the child care needs of the community 
        served by the institution.
          (7) Definition of low-income student.--For the 
        purpose of this section, the term ``low-income 
        student'' means a student who is eligible to receive a 
        Federal Pell Grant for the fiscal year for which the 
        determination is made.
  (c) Applications.--An institution of higher education 
desiring a grant under this section shall submit an application 
to the Secretary at such time, in such manner, and accompanied 
by such information as the Secretary may require. Each 
application shall--
          (1) demonstrate that the institution is an eligible 
        institution described in subsection (b)(4);
          (2) specify the amount of funds requested;
          (3) demonstrate the need of low-income students at 
        the institution for campus-based child care services by 
        including in the application--
                  (A) information regarding student 
                demographics;
                  (B) an assessment of child care capacity on 
                or near campus;
                  (C) information regarding the existence of 
                waiting lists for existing child care;
                  (D) information regarding additional needs 
                created by concentrations of poverty or by 
                geographic isolation; or
                  (E) other relevant data;
          (4) contain a description of the activities to be 
        assisted, including whether the grant funds will 
        support an existing child care program or a new child 
        care program;
          (5) identify the resources, including technical 
        expertise and financial support, the institution will 
        draw upon to support the child care program and the 
        participation of low-income students in the program, 
        such as accessing social services funding, using 
        student activity fees to help pay the costs of child 
        care, using resources obtained by meeting the needs of 
        parents who are not low-income students, and accessing 
        foundation, corporate or other institutional support, 
        and demonstrate that the use of the resources will not 
        result in increases in student tuition;
          (6) contain an assurance that the institution will 
        meet the child care needs of low-income students 
        through the provision of services, or through a 
        contract for the provision of services;
          (7) describe the extent to which the child care 
        program will coordinate with the institution's early 
        childhood education curriculum, to the extent the 
        curriculum is available, to meet the needs of the 
        students in the early childhood education program at 
        the institution, and the needs of the parents and 
        children participating in the child care program 
        assisted under this section;
          (8) in the case of an institution seeking assistance 
        for a new child care program--
                  (A) provide a timeline, covering the period 
                from receipt of the grant through the provision 
                of the child care services, delineating the 
                specific steps the institution will take to 
                achieve the goal of providing low-income 
                students with child care services;
                  (B) specify any measures the institution will 
                take to assist low-income students with child 
                care during the period before the institution 
                provides child care services; and
                  (C) include a plan for identifying resources 
                needed for the child care services, including 
                space in which to provide child care services, 
                and technical assistance if necessary;
          (9) contain an assurance that any child care facility 
        assisted under this section will meet the applicable 
        State or local government licensing, certification, 
        approval, or registration requirements; and
          (10) contain a plan for any child care facility 
        assisted under this section to become accredited within 
        3 years of the date the institution first receives 
        assistance under this section.
  (d) Priority.--The Secretary shall give priority in awarding 
grants under this section to institutions of higher education 
that submit applications describing programs that--
          (1) leverage significant local or institutional 
        resources, including in-kind contributions, to support 
        the activities assisted under this section; and
          (2) utilize a sliding fee scale for child care 
        services provided under this section in order to 
        support a high number of low-income parents pursuing 
        postsecondary education at the institution.
  (e) Reporting Requirements; Continuing Eligibility.--
          (1) Reporting requirements.--
                  (A) Reports.--Each institution of higher 
                education receiving a grant under this section 
                shall report to the Secretary 18 months, and 36 
                months, after receiving the first grant payment 
                under this section.
                  (B) Contents.--The report shall include--
                          (i) data on the population served 
                        under this section;
                          (ii) information on campus and 
                        community resources and funding used to 
                        help low-income students access child 
                        care services;
                          (iii) information on progress made 
                        toward accreditation of any child care 
                        facility; and
                          (iv) information on the impact of the 
                        grant on the quality, availability, and 
                        affordability of campus-based child 
                        care services.
          (2) Continuing eligibility.--The Secretary shall make 
        the third annual grant payment under this section to an 
        institution of higher education only if the Secretary 
        determines, on the basis of the 18-month report 
        submitted under paragraph (1), that the institution is 
        making a good faith effort to ensure that low-income 
        students at the institution have access to affordable, 
        quality child care services.
  (f) Construction.--No funds provided under this section shall 
be used for construction, except for minor renovation or repair 
to meet applicable State or local health or safety 
requirements.
  (g) Authorization of Appropriations.--There are authorized to 
be appropriated to carry out this section $60,000,000 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. 422. ADVANCES FOR RESERVE FUNDS OF STATE AND NONPROFIT PRIVATE 
                    LOAN INSURANCE PROGRAMS.

    (a) Purpose of and Authority for Advances to Reserve 
Funds.--

           *       *       *       *       *       *       *

    (c) Advances for Insurance Obligations.--
          (1) Use for payment of insurance obligations.-- * * *

           *       *       *       *       *       *       *

          (6) Payment of advances where no state program.-- * * 
        *

           *       *       *       *       *       *       *

                          (i) agrees to establish within such 
                        State at least one office with 
                        sufficient staff to handle [written] 
                        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

           *       *       *       *       *       *       *

    (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--
    (i) Additional Recall of Reserves.--
          (1) In general.--Notwithstanding any other provision 
        of law and subject to paragraph (4), the Secretary 
        shall recall $40,000,000 for each of the fiscal years 
        1999, 2000, 2001, 2002, and 2003 from reserve funds 
        held in the Federal Student Loan Reserve Funds 
        established under section 422A 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 reserve funds under paragraph 
        (1) annually on the basis of \1/5\ of the agency's 
        required share. For purposes of this paragraph, a 
        guaranty agency's required share shall be determined as 
        follows:
                  (A) Equal percentage.--The Secretary shall 
                require each guaranty agency to return an equal 
                percentage reduction in the amount of reserve 
                funds held by the agency on September 30, 1996.
                  (B) Calculation.--The equal percentage 
                reduction shall be the percentage obtained by 
                dividing--
                          (i) $200,000,000, by
                          (ii) the total amount of all guaranty 
                        agencies' reserve funds held on 
                        September 30, 1996.
          (4) Offset of required shares.--If any guaranty 
        agency returns to the Secretary any reserve funds in 
        excess of the amount required under this subsection or 
        subsection (h), the total amount required to be 
        returned under paragraph (1) shall be reduced by the 
        amount of such excess reserve funds returned.
          (5) Definition of reserve funds.--The term ``reserve 
        funds'' when used with respect to a guaranty agency--
                  (A) includes any reserve funds in cash or 
                liquid assets held by the guaranty agency, or 
                held by, or under the control of, any other 
                entity; and
                  (B) does not include buildings, equipment, or 
                other nonliquid assets.

           *       *       *       *       *       *       *


SEC. 422A. FEDERAL STUDENT LOAN RESERVE FUND.

  (a) Establishment.--Each guaranty agency shall, not later 
than 45 days after the date of enactment of this section, 
deposit all funds, securities, and other liquid assets 
contained in the reserve fund established pursuant to section 
422 into a Federal Student Loan Reserve Fund (in this section 
referred to as the `Federal Fund'), in an account of a type 
selected by the agency, with the approval of the Secretary.
  (b) Investment of Funds.--Funds transferred to the Federal 
Fund shall be invested in obligations issued or guaranteed by 
the United States or a State, or in other similarly low-risk 
securities selected by the guaranty agency, with the approval 
of the Secretary. Earnings from the Federal Fund shall be the 
sole property of the Federal Government.
  (c) Additional Deposits.--After the establishment of the 
Federal Fund, a guaranty agency shall deposit into the Federal 
Fund--
          (1) all amounts received from the Secretary as 
        payment of reinsurance on loans pursuant to section 
        428(c)(1);
          (2) from amounts collected on behalf of the 
        obligation of a defaulted borrower, a percentage amount 
        equal to the complement of the reinsurance percentage 
        in effect when payment under the guaranty agreement was 
        made with respect to the defaulted loan pursuant to 
        section 428(c)(6)(A)(i); and
          (3) the amount of the insurance premium collected 
        from borrowers pursuant to section 428(b)(1)(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 sections 
        428(b)(1)(G), 428(j), 437, and 439(q); and
          (2) to pay into the Agency Operating Fund established 
        pursuant to section 422B a default prevention fee in 
        accordance with section 428(l).
  (e) Ownership of Federal Fund.--The Federal Fund administered 
by the guaranty agency, regardless of who holds or controls the 
reserve funds or assets, and any nonliquid assets that were 
purchased with Federal reserve funds, 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). The Secretary may direct a guaranty agency, or 
such agency's officers or directors, to cease any activity 
involving expenditure, use, or transfer of the Federal Fund 
administered by the guaranty agency that the Secretary 
determines is a misapplication, misuse, or improper expenditure 
of such funds or assets.
  (f) Transition.--
          (1) In general.--In order to establish the Agency 
        Operating Fund established by section 422B, each agency 
        may transfer not more than 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) for use in the 
        performance of the agency's duties under this part. 
        Such transfers may occur during the first 3 years 
        following the establishment of the Agency Operating 
        Fund, except that no agency may transfer in excess of 
        40 percent of the Federal Fund balance to the agency's 
        Agency Operating Fund during any fiscal year. In 
        determining the amount necessary for transfer, the 
        agency shall assure that sufficient funds remain in the 
        Federal Fund to pay lender claims within the required 
        time periods and to meet the reserve funds recall 
        requirements of subsection (b).
          (2) Repayment provisions.--Each guaranty agency shall 
        begin repayment of sums transferred pursuant to this 
        subsection not later than 3 years after the 
        establishment of the Agency Operating Fund, and shall 
        repay all sums transferred not later than 5 years from 
        the date of the establishment of the Agency Operating 
        Fund. The guaranty agency shall provide to the 
        Secretary a schedule for repayment of the sums 
        transferred and an annual financial analysis 
        demonstrating the agency's ability to comply with the 
        schedule and repay all outstanding sums transferred.
          (3) Prohibition.--If a guaranty agency transfers 
        funds from the Federal Fund in accordance with this 
        section, and fails to make scheduled repayments to the 
        Federal Fund, the agency may not receive any other 
        funds under this part until the Secretary determines 
        that the agency has made such repayments.
          (4) Waiver.--The Secretary may waive the requirements 
        of paragraph (3) for a guaranty agency described in 
        such paragraph if the Secretary determines there are 
        extenuating circumstances beyond the control of the 
        agency that justify such a waiver.
          (5) Investment of federal funds.--Funds transferred 
        from the Federal Fund to the Agency Operating Fund for 
        operating expenses shall be invested in obligations 
        issued or guaranteed by the United States or a State, 
        or in other similarly low-risk securities selected by 
        the guaranty agency, with the approval of the 
        Secretary.
          (6) 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 guaranty agency in the calculation.

SEC. 422B. AGENCY OPERATING FUND.

    (a) Establishment.--Each guaranty agency shall, not later 
than 45 days after the date of enactment of this section, 
establish a fund designated as the Agency Operating Fund (in 
this section referred to as the ``Operating Fund'').
    (b) Investment of Funds.--Funds deposited into the 
Operating Fund, with the exception of funds transferred from 
the Federal Student Loan Reserve Fund pursuant to section 
422A(f), shall be invested at the discretion of the guaranty 
agency.
    (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 in accordance with section 458;
          (3) the default prevention fee paid in accordance 
        with section 428(l); and
          (4) amounts remaining pursuant to section 
        428(c)(6)(A)(ii) from collection on defaulted loans 
        held by the agency, after payment of the Secretary's 
        equitable share, excluding amounts deposited in the 
        Federal Student Loan Reserve Fund pursuant to section 
        422A(c)(2).
  (d) Uses of Funds.--
          (1) In general.--Funds in the Operating Fund shall be 
        used for application processing, loan disbursement, 
        enrollment and repayment status management, default 
        prevention activities (including those described in 
        section 422(h)(8), default collection activities, 
        school and lender training, compliance monitoring, and 
        other student financial aid related activities as 
        determined by the Secretary.
          (2) Special rule.--The guaranty agency may, in the 
        agency's discretion, transfer funds from the Operating 
        Fund to the Federal Student Loan Reserve Fund for use 
        pursuant to section 422A. Such transfer shall be 
        irrevocable, and any funds so transferred shall become 
        the sole property of the United States.
          (3) Definitions.--For purposes of this subsection:
                  (A) Default collection activities.--The term 
                ``default collection activities'' means 
                activities of a guaranty agency that are 
                directly related to the collection of the loan 
                on which a default claim has been paid to the 
                participating lender, including the 
                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.
                  (B) Default prevention activities.--The term 
                ``default prevention activities'' means 
                activities of a guaranty agency, including 
                those described in section 422(h)(8), that are 
                directly related to providing collection 
                assistance to the lender on a delinquent loan, 
                prior to the loan's being 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 default prevention 
                activity), fees paid to locate a missing 
                borrower, postage, equipment, supplies, 
                telephone, and similar charges.
                  (C) Enrollment and repayment status 
                management.--The term ``enrollment and 
                repayment status management'' means activities 
                of a guaranty agency that are directly related 
                to ascertaining the student's enrollment 
                status, including prompt notification to the 
                lender of such status, an audit of the note or 
                written agreement to determine if the 
                provisions of that note or agreement are 
                consistent with the records of the guaranty 
                agency as to the principal amount of the loan 
                guaranteed, and an examination of the note or 
                agreement to assure that the repayment 
                provisions are consistent with the provisions 
                of this title.
  (e) Ownership of Operating Fund.--The Operating Fund, with 
the exception of funds transferred from the Federal Student 
Loan Reserve Fund in accordance with section 422A(f), shall be 
considered to be the property of the guaranty agency. The 
Secretary may not regulate the uses or expenditure of moneys in 
the Operating Fund, but the Secretary may require such 
necessary reports and audits as provided in section 428(b)(2). 
However, during any period in which funds are owed to the 
Federal Student Loan Reserve Fund as a result of 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.
  (f) Authority of Secretary To Dispose of Nonliquid Assets.--
The Secretary may allow a guaranty agency to purchase nonliquid 
assets of the agency originally acquired with student loan 
reserve funds, except that an agency may not purchase any 
nonliquid assets during any period in which funds are owed to 
the Federal Student Loan Reserve Fund as a result of a transfer 
under section 422A(f). The purchase amount shall be available 
for expenditure under section 458.

           *       *       *       *       *       *       *


[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;
                  [(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) to 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 
        July 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) Types of loans that qualify.--Each student who 
        has received a loan for study at an eligible 
        institution-- * * *

           *       *       *       *       *       *       *

          (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]
                          (I) sets forth the loan amount for 
                        which the student shows financial need; 
                        and
                          (II) sets forth a schedule for 
                        disbursement of the proceeds of the 
                        loan in installments, consistent with 
                        the requirements of section 428G; 
                        and''; and
                  [(ii) meet the requirements of subparagraph 
                (B); and]
                  (ii) meets 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).]
          (B) For the purpose of clause (ii) of subparagraph 
        (A), a student shall qualify for a portion of an 
        interest payment under paragraph (1) (and a loan amount 
        pursuant to section 428H) if the eligible institution 
        has determined and documented the student's amount of 
        need for a loan based on the student's estimated cost 
        of attendance, estimated financial assistance, and, for 
        the purpose of an interest payment pursuant to this 
        section, the expected family contribution (as 
        determined under part F), 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.]
          (C) For the purpose of subparagraph (B) and this 
        paragraph--
                  (i) a student's cost of attendance shall be 
                determined under section 472;
                  (ii) a student's estimated financial 
                assistance means, for the period for which the 
                loan is sought, 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, parts C and E, 
                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
                  (iii) the determination of need and of the 
                amount of a loan by an eligible institution 
                under subparagraph (B) with respect to a 
                student shall, with the exception of loans made 
                under section 428H, be calculated in accordance 
                with part F.

           *       *       *       *       *       *       *

          [(F) Except as provided in subparagraph (D), an 
        eligible institution may refuse to certify a statement 
        which permits a student to receive a loan under this 
        part or to certify a loan amount that is less than the 
        student's determination of need (as determined under 
        part F of this title), if the reason for such action is 
        documented and provided in written form to each student 
        so affected.]

           *       *       *       *       *       *       *

          (v) A lender may not receive interest on a loan for 
        any period that precedes the date that is--
                  (I) in the case of a loan disbursed by check, 
                10 days before the first disbursement by the 
                institution of the loan; or
                  (II) in the case of a loan disbursed by 
                electronic funds transfer, 3 days before the 
                first disbursement by the institution of the 
                loan.
          (B) If--

           *       *       *       *       *       *       *

    (b) Insurance Program Agreements To Qualify Loans for 
Interest Subsidies.--
          (1) Requirements of insurance program.--* * *

           *       *       *       *       *       *       *

                  (A) authorizes the insurance in any academic 
                year, as defined in section 481(d)(2), 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--
                          (iv) in the case of a student who has 
                        received an associate or baccalaureate 
                        degree and is enrolled in an eligible 
                        program for which the institution 
                        requires such degree for admission, the 
                        number of years that a student has 
                        completed in a program of undergraduate 
                        education shall, for the purposes of 
                        clauses (ii) and (iii), include any 
                        prior enrollment in the eligible 
                        program of undergraduate education for 
                        which the student was awarded such 
                        degree; [and]
                          (v) in the case of a graduate or 
                        professional student (as defined in 
                        regulations of the Secretary) at an 
                        eligible institution, $8,500; and
                          (vi) in the case of a student 
                        enrolled in coursework specified in 
                        sections 484(b)(3)(B) and 
                        484(b)(4)(B)--
                                  (I) $2,625 for coursework 
                                necessary for enrollment in an 
                                undergraduate degree or 
                                certificate program, and $5,500 
                                for coursework necessary for 
                                enrollment in a graduate or 
                                professional degree or 
                                certification program; and
                                  (II) $5,500 for coursework 
                                necessary for a professional 
                                credential or certification 
                                from a State required for 
                                employment as a teacher in an 
                                elementary or secondary school;
                except in cases where the Secretary determines, 
                pursuant to regulations, that a higher amount 
                is warranted in order to carry out the purposes 
                of this part with respect to students engaged 
                in specialized training requiring exceptionally 
                high costs of education, but the annual 
                insurable limit per student shall not be deemed 
                to be exceeded by a line of credit under which 
                actual payments by the lender to the borrower 
                will not be made in any years in excess of the 
                annual limit;
                  [(E) subject to subparagraphs (D) and (L), 
                and except as provided by subparagraph (M), 
                provides that--
                          [(i) not more than 6 months prior to 
                        the date on which the borrower's first 
                        payment is due, the lender shall offer 
                        the borrower of a loan made, insured, 
                        or guaranteed under this section or 
                        section 428A, the option of repaying 
                        the loan in accordance with a graduated 
                        or income-sensitive repayment schedule 
                        established by the lender and in 
                        accordance with regulations of the 
                        Secretary; and
                          [(ii) repayment of loans shall be in 
                        installments over a period of not less 
                        than 5 years (unless the student, 
                        during the 6 months immediately 
                        preceding the start of the repayment 
                        period, specifically requests that 
                        repayment be made over a shorter 
                        period) nor more than 10 years 
                        commencing at the beginning of the 
                        repayment period determined under 
                        paragraph (7) of this subsection;]
                  (E) subject to subparagraphs (D) and (L), and 
                except as provided by subparagraph (M), 
                provides that--
                          (i) not more than 6 months prior to 
                        the date on which the borrower's first 
                        payment is due, the lender shall offer 
                        the borrower of a loan made, insured, 
                        or guaranteed under this section or 
                        section 428H, the option of repaying 
                        the loan in accordance with a 
                        graduated, income-sensitive, or 
                        extended repayment schedule (as 
                        described in paragraph (9)) established 
                        by the lender in accordance with 
                        regulations provided by the Secretary; 
                        and
                          (ii) repayment of loans shall be in 
                        installments in accordance with the 
                        repayment plan selected under paragraph 
                        (9) and commencing at the beginning of 
                        the repayment period determined under 
                        paragraph (7)

           *       *       *       *       *       *       *

                  (L) provides that the total payments by a 
                borrower--
                          (i) except as otherwise provided by a 
                        repayment plan selected by the borrower 
                        under clause (ii) or (iii) of paragraph 
                        (9)(A), during any year of any 
                        repayment period with respect to the 
                        aggregate amount of all loans to that 
                        borrower which are insured under this 
                        part shall not, unless the borrower and 
                        the lender otherwise agree, be less 
                        than $600 or the balance of all such 
                        loans (together with interest thereon), 
                        whichever amount is less (but in no 
                        instance less than the amount of 
                        interest due and payable); and

           *       *       *       *       *       *       *

                  (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, 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, limit, 
                suspend, or terminate lenders, and (iii) for 
                (I) a compliance audit of each lender that 
                originates or holds more than $5,000,000 in 
                loans made under this title for any fiscal year 
                (except that each lender described in section 
                435(d)(1)(A)(ii)(III) shall annually submit the 
                results of an audit required by this clause), 
                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 
                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, 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;

           *       *       *       *       *       *       *

          (9) Repayment plans.--
                  (A) Design and selection.--In accordance with 
                regulations promulgated by the Secretary, the 
                lender shall offer a borrower of a loan made 
                under this part the plans described in this 
                subparagraph for repayment of such loan, 
                including principal and interest thereon. 
                Except as provided in paragraph (1)(L)(i), no 
                plan may require a borrower to repay a loan in 
                less than 5 years. The borrower may choose 
                from--
                          (i) a standard repayment plan, with a 
                        fixed annual repayment amount paid over 
                        a fixed period of time, not to exceed 
                        10 years;
                          (ii) a graduated repayment plan paid 
                        over a fixed period of time, not to 
                        exceed 10 years;
                          (iii) an income-sensitive repayment 
                        plan, with income-sensitive repayment 
                        amounts paid over a fixed period of 
                        time not to exceed 10 years, except 
                        that the borrower's scheduled payments 
                        shall not be less than the amount of 
                        interest due; and
                          (iv) for first-time borrowers on or 
                        after the date of enactment of the 
                        Higher Education Amendments of 1998 
                        with outstanding loans under this part 
                        totaling more than $30,000, an extended 
                        repayment plan, with a fixed annual or 
                        graduated repayment amount paid over an 
                        extended period of time, not to exceed 
                        25 years, except that the borrower 
                        shall repay annually a minimum amount 
                        determined in accordance with paragraph 
                        (2)(L).
                  (B) Lender selection of option if borrower 
                does not select.--If a borrower of a loan made 
                under this part does not select a repayment 
                plan described in subparagraph (A), the lender 
                shall provide the borrower with a repayment 
                plan described in subparagraph (A)(j).
                  (C) Changes in selection.--The borrower of a 
                loan made under this part may change the 
                borrower's selection of a repayment plan under 
                subparagraph (B), as the case may be, under 
                such conditions as may be prescribed by the 
                Secretary in regulation.
                  (D) Acceleration permitted.--Under any of the 
                plans described in this paragraph, the borrower 
                shall be entitled to accelerate, without 
                penalty, repayment on the borrower's loans 
                under this part.
    (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 percent] as reimbursement for loans for which the 
        first disbursement is made on or after the date of 
        enactment of the Higher Education Amendments of 1998 
        shall be equal to 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 percent of the amount of such excess] 85 
                percent of the amount of such excess for loans 
                for which the first disbursement is made on or 
                after the date of enactment of the Higher 
                Education Amendments of 1998; 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 percent of the 
                        amount of such excess]. 75 percent of 
                        the amount of such excess for loans for 
                        which the first disbursement is made on 
                        or after the date of enactment of the 
                        Higher Education Amendments of 1998.

           *       *       *       *       *       *       *

                  (E) 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''] ``95 
                        percent'';
                          (ii) subparagraph (B)(i) by 
                        substituting ``100 percent'' for [``88 
                        percent''] ``85 percent''; and
                           (iii) subparagraph (B)(ii) by 
                        substituting ``100 percent'' for [``78 
                        percent''] ``75 percent''.
                  (F) 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''] ``95 
                        percent'';
                          (ii) subparagraph (B)(i) by 
                        substituting ``90 percent'' for [``88 
                        percent''] ``85 percent''; and
                          (iii) subparagraph (B)(ii) by 
                        substituting ``80 percent'' for ``78 
                        percent''.
                  (G) Notwithstanding any other provision of 
                this section, the Secretary shall exclude a 
                loan made pursuant to a lender-of-last-resort 
                program when making reimbursement payment 
                calculations under subparagraphs (B) and (C).

           *       *       *       *       *       *       *

          (3) Forbearance.--A guaranty agreement under this 
        subsection--
                  (A) shall contain provisions providing that--
                          (i) upon written or electronic 
                        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--

           *       *       *       *       *       *       *

                  (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; [and]
                  (C) shall contain provisions that specify 
                that the form of forbearance granted by the 
                lender for purposes of this paragraph shall be 
                the temporary cessation of payments, unless the 
                borrower selects forbearance in the form of an 
                extension of time for making payments, or 
                smaller payments than were previously 
                scheduled[.]; and
                  (D) shall contain provisions that specify 
                that forbearance for a period not to exceed 60 
                days may be granted if the lender determines 
                that such a suspension of collection activity 
                is warranted following a borrower's request for 
                forbearance in order to collect or process 
                appropriate supporting documentation related to 
                the request, and that during such period 
                interest shall not be capitalized.

           *       *       *       *       *       *       *

          [(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 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.]
          (6) Secretary's equitable share.--For the purpose of 
        paragraph (2)(D), the Secretary's equitable share of 
        payments made by the borrower shall be that portion of 
        the payments remaining after the guaranty agency with 
        which the Secretary has an agreement under this 
        subsection has deducted from such payments--
                  (A) a percentage amount equal to the 
                complement of the reinsurance percentage in 
                effect when payment under the guaranty 
                agreement was made with respect to the loan; 
                and
                  (B) an amount equal to 24 percent of such 
                payments for use in accordance with section 
                422B.

           *       *       *       *       *       *       *

                  (8) Assignment to protect federal fiscal 
                interest. --[(A) If] 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) Each guaranty 
        agency which has entered into an agreement with the 
        Secretary pursuant to this subsection shall [maintain a 
        current minimum reserve level of at least .5 percent] 
        maintain in the agency's Federal Student Loan Reserve 
        Fund established under section 422A a current minimum 
        reserve level of at least 0.25 percent of the total 
        attributable amount of all outstanding loans guaranteed 
        by such agency. For purposes of this paragraph, such 
        total attributable amount does not include amounts of 
        outstanding loans transferred to the guaranty agency 
        from another guaranty agency pursuant to a plan of the 
        Secretary in response to the insolvency of the latter 
        such guaranty agency.

           *       *       *       *       *       *       *

          (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] 78 percent 
        pursuant to section 428(c)(1)(B)(ii), 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 working] 45 
        working days of any such event.

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

                  (K) The Secretary, within 3 months after the 
                end of each fiscal year, shall submit to the 
                House Committee on Education and Labor 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) The Secretary shall make payments in accordance 
        with this paragraph to a guaranty agency with which the 
        Secretary has an agreement under subparagraph (B) which 
        provides a lender referral service for students who 
        meet the requirements of paragraph (2).
          [(B)(i) The Secretary may enter into agreements with 
        guaranty agencies that meet standards established by 
        the Secretary to provide lender referral services in 
        geographic areas specified by the Secretary. Such 
        guaranty agencies shall be paid in accordance with 
        paragraph (3) for such services.
          [((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.
          [(2) Student eligibility.--A student is eligible to 
        apply for lender referral services to a guaranty agency 
        with which the Secretary has an agreement under 
        paragraph (1)(B) if--
                  [(A) such student is either a resident of, or 
                is accepted for enrollment in, or is attending, 
                an eligible institution located in a geographic 
                area for which the Secretary (i) determines 
                that loans are not available to all eligible 
                students, and (ii) has entered into an 
                agreement with a guaranty agency under 
                paragraph (1)(B) to provide lender referral 
                services; and
                  [(B) such student has sought and was unable 
                to find a lender willing to make a loan under 
                this part.
          [(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.
          [(4) Incentive fees to lenders.--Nothing in this or 
        any law shall prohibit an agency from using all or any 
        portion of the funds received under this part for the 
        payment of incentive fees to lenders who agree to 
        participate in a lender 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.
          [(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 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.
          [(C) No payment may be made under this paragraph for 
        loans for which the disbursement checks have not been 
        cashed or for which electronic funds transfers have not 
        been completed.
          [(2) Applications for payments.--No payment may be 
        made under paragraph (1) of this subsection unless the 
        guaranty agency submits to the Secretary an application 
        at such time, at least annually, in such manner, and 
        containing or accompanied by such information, as the 
        Secretary may reasonably require. Each such application 
        shall--
                  [(A) set forth assurances that the student 
                loan insurance program subject to the guaranty 
                agreement complies with subparagraphs (A)< 
                9(B), (G), (R), (S), (T), and (U) of subsection 
                (b)(1);
                  [(B) contain provisions designed to 
                demonstrate the capability of carrying out a 
                necessary and successful program of collection 
                of and preclaim assistance for the loan program 
                subject to that agreement;
                  [(C) set forth an estimate of the costs which 
                are eligible for payment under the provisions 
                of this subsection;
                  [(D) provide for such administrative and 
                fiscal procedures, including an audit, as are 
                necessary to carry out the provisions of this 
                subsection; and
                  [(E) set forth assurances that the guaranty 
                agency will furnish such data and information, 
                including where necessary estimates, as the 
                Secretary may reasonably require, to carry out 
                the provisions of this subsection.]
    (f) Payments of Certain Costs.--
          (1) Payment for certain activities.--
                  (A) In general.--The Secretary, for loans 
                originated on or after October 1, 1998, and in 
                accordance with the provisions of this 
                paragraph, shall pay to each guaranty agency, a 
                loan processing and issuance fee equal to 0.65 
                percent of the total principal amount of the 
                loans on which insurance was issued under this 
                part during such fiscal year by such agency.
                  (B) Payment.--The payment required by 
                subparagraph (A) shall be paid on a quarterly 
                basis. The guaranty agency shall be deemed to 
                have a contractual right against the United 
                States to receive payments according to the 
                provisions of this subparagraph. Payments shall 
                be made promptly and without administrative 
                delay to any guaranty agency submitting an 
                accurate and complete application therefore 
                under this subparagraph.

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

          (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.

           *       *       *       *       *       *       *

    [(1) 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 the lender not earlier than the 60th nor 
        later than the 90th day of delinquency, a guaranty 
        agency having an agreement with the Secretary under 
        subsection (c) shall engage in default aversion 
        activities designed to prevent the default by a 
        borrower on a loan covered by such agreement.
          ``(2) Default prevention fee required.--
                  ``(A) In general.--A guaranty agency, in 
                accordance with the provisions of this 
                paragraph, may transfer from the Federal 
                Student Loan Reserve Fund to the Agency 
                Operating Fund a default prevention 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) Amount.--The default prevention fee 
                shall be equal to 1 percent of the total unpaid 
                principal and accrued interest on the loan 
                calculated 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 24 
                months prior to the subsequent delinquency. A 
                guaranty agency may transfer such fees earned 
                under this subsection not more frequently than 
                monthly.
                  ``(C) Definition of current repayment 
                status.--For the purpose of this paragraph, the 
                term ``current repayment status'' means that 
                the borrower is not delinquent, in any respect, 
                in the payment of principal and interest on the 
                loan at the time the guaranty agency qualifies 
                for the default prevention fee.''.

           *       *       *       *       *       *       *

    [(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 
                        sum 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) 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.]

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

    (a) Voluntary Agreements.--
          (1) Authority.--The Secretary may enter into a 
        voluntary, flexible agreement, subject to paragraph 
        (2), with guaranty agencies under this section, in lieu 
        of agreements with a guaranty agency under subsections 
        (b) and (c) of section 428. The Secretary may waive or 
        modify any requirement under such subsections, except 
        that the Secretary may not waive any statutory 
        requirement pertaining to the terms and conditions 
        attached to student loans, default claim payments made 
        to lenders, or the prohibitions on inducements 
        contained in section 428(b)(3).
          (2) Eligibility.--During fiscal years 1999, 2000, and 
        2001, the Secretary may enter into a voluntary, 
        flexible agreement with not more than 6 guaranty 
        agencies that had 1 or more agreements with the 
        Secretary under subsections (b) and (c) of section 428 
        as of the day before the date of enactment of the 
        Higher Education Amendments of 1998. Beginning in 
        fiscal year 2002, any guaranty agency or consortium 
        thereof may enter into a similar agreement with the 
        Secretary.
          (3) Report required.--Not later than September 30, 
        2001, the Secretary shall report to the Committee on 
        Labor and Human Resources of the Senate and the 
        Committee on Education and the Workforce of the House 
        of Representatives regarding the impact that the 
        voluntary flexible agreements have had upon program 
        integrity, program and cost efficiencies, and the 
        availability and delivery of student financial aid. 
        Such report shall include--
                  (A) a description of each voluntary flexible 
                agreement and the performance goals established 
                by the Secretary for each agreement;
                  (B) a list of participating guaranty agencies 
                and the specific statutory or regulatory 
                waivers provided to each guaranty agency;
                  (C) a description of the standards by which 
                each agency's performance under the agency's 
                voluntary flexible agreement was assessed and 
                the degree to which each agency achieved the 
                performance standards; and
                  (D) an analysis of the fees paid by the 
                Secretary, and the costs and efficiencies 
                achieved under each voluntary agreement.
    (b) Terms of Agreement.--An agreement between the Secretary 
and a guaranty agency under this section--
          (1) shall be developed by the Secretary, in 
        consultation with the guaranty agency, on a case-by 
        case basis;
          (2) may be secured by 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 aversion activities;
                          (iv) review of default claims made by 
                        lenders;
                          (v) payment of default claims;
                          (vi) collection of defaulted loans;
                          (vii) adoption of internal systems of 
                        accounting and auditing that are 
                        acceptable to the Secretary, and 
                        reporting the result thereof to the 
                        Secretary in a timely manner, and on an 
                        accurate, and auditable basis;
                          (viii) timely and accurate collection 
                        and reporting of such other data as the 
                        Secretary may require to carry out the 
                        purposes of the programs under this 
                        title;
                          (ix) monitoring of institutions and 
                        lenders participating in the program 
                        under this part;
                          (x) the performance of other program 
                        functions by the guaranty agency or the 
                        agency's affiliates; and
                          (xi) informational outreach to 
                        schools and students in support of 
                        access to higher education;
                  (B) regarding the fees the Secretary shall 
                pay, in lieu of revenues that the guaranty 
                agency may otherwise receive under this part, 
                to the guaranty agency under the agreement, and 
                other funds that the guaranty agency may 
                receive or retain under the agreement, except 
                that in no case may the cost to the Secretary 
                of the agreement, as reasonably projected by 
                the Secretary, exceed the cost to the 
                Secretary, as similarly projected, in the 
                absence of the agreement;
                  (C) regarding the use of net revenues, as 
                described in the agreement under this section, 
                for such other activities in support of 
                postsecondary education as may be agreed to by 
                the Secretary and the guaranty agency;
                  (D) regarding the standards by which the 
                guaranty agency's performance of the agency's 
                responsibilities under the agreement will be 
                assessed, and the consequences for a guaranty 
                agency's failure to achieve a specified level 
                of performance on one or more performance 
                standards;
                  (E) regarding the circumstances in which a 
                guaranty agency's agreement under this section 
                may be ended in advance of the agency's 
                expiration date;
                  (F) regarding such other businesses, 
                previously purchased or developed with reserve 
                funds, that relate to the program under this 
                part and in which the Secretary permits the 
                guaranty agency to engage; and
                  (G) such other provisions as the Secretary 
                may determine to be necessary to protect the 
                United States from the risk of unreasonable 
                loss and to promote the purposes of this part; 
                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, and including the 
guaranty agency's compliance with reserve requirements under 
sections 422 and 428.

SEC. 428B. FEDERAL PLUS LOANS.

    [(a) Authority To Borrow.--Parents of a dependent student, 
who do not have an adverse credit history as determined 
pursuant to regulations of the Secretary, shall be eligible to 
borrow funds under this section in amounts specified in 
subsection (b), and unless otherwise specified in subsections 
(c), (d), and (e), such loans shall have the same terms, 
conditions, and benefits as all other loans made under this 
part. Whenever necessary to carry out the provisions of this 
section, the terms ``student'' and ``borrower'' as used in this 
part shall include a parent borrower under this section.]
  (a) Authority To Borrow.--
          (1) Authority and eligibility.--Parents of a 
        dependent student shall be eligible to borrow funds 
        under this section in amounts specified in subsection 
        (b), if--
                  (A) the parents do not have an adverse credit 
                history as determined pursuant to regulations 
                promulgated by the Secretary; and
                  (B) the parents meet such other eligibility 
                criteria as the Secretary may establish by 
                regulation, after consultation with guaranty 
                agencies, eligible lenders, and other 
                organizations involved in student financial 
                assistance.
          (2) Terms, conditions, and benefits.--Except as 
        provided in subsections (c), (d), and (e), loans made 
        under this section shall have the same terms, 
        conditions, and benefits as all other loans made under 
        this part.
          (3) Special rule.--Whenever necessary to carry out 
        the provisions of this section, the terms ``student'' 
        and ``borrower'' as used in this part shall include a 
        parent borrower under this section.

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

          (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)] section 427A(a)(3).

           *       *       *       *       *       *       *

  (f) Verification of Immigration Status and Social Security 
Number.--A parent who wishes to borrow funds under this section 
shall be subject to verification of the parent's--
          (1) immigration status in the same manner as 
        immigration status is verified for students under 
        section 484(g); and
          (2) social security number in the same manner as 
        social security numbers are verified for students under 
        section 484(p).

SEC. 428C. FEDERAL CONSOLIDATION LOANS.

    (a) Agreements With Eligible Lenders.--
          (1) Agreement required for insurance coverage.--* * *

           *       *       *       *       *       *       *

          (3) Definition of eligible borrowers.--[(A) For the 
        purpose of this section, the term ``eligible borrower'' 
        means a borrower who, at the time of application for a 
        consolidation loan is in repayment status, or in a 
        grace period preceding repayment, or is a defaulted 
        borrower who has made arrangements to repay the 
        obligation on the defaulted loans satisfactory to the 
        holders of the defaulted loans.]
                  (A) For the purpose of this section, the term 
                eligible borrower means a borrower who--
                          (i) is not subject to a judgment 
                        secured through litigation or an order 
                        for wage garnishment under section 
                        488A; or
                          (ii) at the time of application for a 
                        consolidation loan--
                                  (I) is in repayment status;
                                  (II) is in a grace period 
                                preceding repayment; or
                                  (III) is a defaulted borrower 
                                who has made arrangements to 
                                repay the obligation on the 
                                defaulted loans satisfactory to 
                                the holders of the defaulted 
                                loans.
                  (B)(i) An individual's status as an eligible 
                borrower under this section terminates upon 
                receipt of a consolidation loan under this 
                section, except--
                          (I) with respect to eligible student 
                        loans received after the date of 
                        receipt of the consolidation loan; 
                        [and]
                          (II) with respect to eligible student 
                        loans received prior to the date of 
                        consolidation that the borrower may 
                        wish to include with eligible loans 
                        specified in subclause (I) in a later 
                        consolidation loan; and
                          [(II) that loans] with respect to 
                        loans received prior to the date of the 
                        consolidation loan that may be added to 
                        the consolidation loan during the 180-
                        day period following the making of the 
                        consolidation loan.

           *       *       *       *       *       *       *


SEC. 428F. DEFAULT REDUCTION PROGRAM.

    (a) Other Repayment Incentives.--

           *       *       *       *       *       *       *

    (b) [Special Rule] Satisfactory Repayment Arrangements To 
Renew Eligibility.--Each guaranty agency shall establish a 
program which allows a borrower with a defaulted loan or loans 
to renew eligibility for all title IV student financial 
assistance (regardless of whether the defaulted loan has been 
sold to an eligible lender) upon the borrower's payment of 6 
consecutive monthly payments. The guaranty agency shall not 
demand from a borrower as a monthly payment amount under this 
subsection more than is reasonable and affordable based upon 
the borrower's total financial circumstances. A borrower may 
only obtain the benefit of this subsection with respect to 
renewed eligibility once.

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

    (a) Multiple Disbursement Required.--
          (1) Two disbursements required.--[The proceeds] 
        Except for a loan made for the final period of 
        enrollment, that is less than an academic year, in a 
        student's baccalaureate program of study, at an 
        institution with a cohort default rate (as calculated 
        under section 435(m)) that is 5 percent or less, the 
        proceed; of any loan made, insured, or guaranteed under 
        this part that is made for any period of enrollment 
        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] Except for a 
        loan made to a student borrower entering an institution 
        with a cohort default rate (as calculated under section 
        435(m)) of less than 5 percent, 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.

           *       *       *       *       *       *       *


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

    (a) In General.--* * *

           *       *       *       *       *       *       *

    [(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).]
    (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 if the eligible 
institution at which the student has been accepted for 
enrollment, or at which the student is in attendance, has--
          (1) determined and documented the student's need for 
        the loan based on the student's estimated cost of 
        attendance (as determined under section 472) and the 
        student's estimated financial assistance, including a 
        loan which qualifies for interest subsidy payments 
        under section 428; and
          (2) provided the lender a statement--
                  (A) certifying the eligibility of the student 
                to receive a loan under this section and the 
                amount of the loan for which such student is 
                eligible, in accordance with subsection (c); 
                and
                  (B) setting forth a schedule for disbursement 
                of the proceeds of the loan in installments, 
                consistent with the requirements of section 
                428G.

           *       *       *       *       *       *       *

    (d) Loan Limits.--
          (1) In general.-- Except as provided in paragraphs 
        (2) and (3), the annual and aggregate limits for loans 
        under this section shall be the same as those 
        established under section 428(b)(1), less any amount 
        receive by such student pursuant to the subsidized loan 
        program established under section 428.
          (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, as defined in section 
        481(d)(2) or its equivalent [or in any period of 7 
        consecutive months, whichever is longer,] shall be the 
        amount determined under paragraph (1) plus--

           *       *       *       *       *       *       *

                  (C) in the case of such a student who is a 
                graduate or professional student attending an 
                eligible institution, $10,000; and
                  (D) in the case of a student enrolled in 
                coursework specified in sections 484(b)(3)(B) 
                and 484(b)(4)(B)--
                          (i) $4,000 for coursework necessary 
                        for enrollment in an undergraduate 
                        degree or certificate program, and 
                        $5,000 for coursework necessary for 
                        enrollment in a graduate or 
                        professional program; and
                          (ii) $5,000 for coursework necessary 
                        for a professional credential or 
                        certification from a State required for 
                        employment as a teacher in an 
                        elementary or secondary school;

           *       *       *       *       *       *       *

          (3) Aggregate limits for independent, graduate, and 
        professional students.--The maximum aggregate amount of 
        loans under this section a student described in 
        paragraph (2) may borrow shall be the amount described 
        in paragraph (1), adjusted to reflect the increased 
        annual limits described in paragraph (2), as prescribed 
        by the Secretary by regulation. The maximum aggregate 
        amount shall not include interest capitalized from an 
        in-school period.
    (e) Payment of Principal and Interest.--
          (1) Commencement of repayment.--* * *

           *       *       *       *       *       *       *

          (6) Repayment period.--For purposes of calculating 
        the [10-year repayment period under section 
        428(b)(1)(D)] repayment period under section 428(b)(9), 
        such period shall commence at the time the first 
        payment of principal is due from the borrower.

           *       *       *       *       *       *       *


[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 
                        fields 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 
                section (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 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. 428J. LOAN FORGIVENESS FOR TEACHERS.

    (a) Statement of Purpose.--It is the purpose of this 
section to encourage individuals to enter and continue in the 
teaching profession.
    (b) Program Authorized.--The Secretary is authorized to 
carry out a program, through the holder of the loan, of 
assuming the obligation to repay a loan made under section 428 
that is eligible for interest subsidy, for any new borrower on 
or after the date of enactment of the Higher Education 
Amendments of 1998, who--
          (1) has been employed as a full-time teacher for 3 
        consecutive complete school years--
                  (A) in a school that qualifies under section 
                465(a)(2)(A) for loan cancellation for Perkins 
                loan recipients who teach in such schools;
                  (B) if employed as a secondary school 
                teacher, is teaching a subject area that is 
                relevant to the borrower's academic major as 
                certified by the chief administrative officer 
                of the public or nonprofit private secondary 
                school in which the borrower is employed; and
                  (C) if employed as an elementary school 
                teacher, has demonstrated, in accordance with 
                State teacher certification or licensing 
                requirements and as certified by the chief 
                administrative officer of the public or 
                nonprofit private elementary school in which 
                the borrower is employed, knowledge and 
                teaching skills in reading, writing, 
                mathematics and other areas of the elementary 
                school curriculum; and
          (2) is not in default on a loan for which the 
        borrower seeks forgiveness.
    (c) Regulations.--The Secretary is authorized to issue such 
regulations as may be necessary to carry out the provisions of 
this section.
    (d) Loan Repayment During Continuing Teaching Service.--
          (1) In general.--The Secretary shall assume the 
        obligation to repay through reimbursement to the 
        holder--
                  (A) 30 percent of the total outstanding 
                amount and applicable interest of subsidized 
                Federal Stafford loans owed by the student 
                borrower after the completion of the fourth or 
                fifth complete school year of service described 
                in subsection (b);
                  (B) 40 percent of such total amount after the 
                completion of the sixth complete school year of 
                such service; and
                  (C) a total amount for any borrower that 
                shall not exceed $10,000.
          (2) Construction.--Nothing in this section shall be 
        construed to authorize any refunding of any repayment 
        of a loan.
    (e) List.--If the list of schools in which a teacher may 
perform service pursuant to subsection (b) is not available 
before May 1 of any year, the Secretary may use the list for 
the year preceding the year for which the determination is made 
to make such service determination.
    (f) Continued Eligibility.--Any teacher who performs 
service in a school that--
          (1) meets the requirements of subsection (b)(1)(A) in 
        any year during such service; and
          (2) in a subsequent year fails to meet the 
        requirements of such subsection, may continue to teach 
        in such school and shall be eligible for loan 
        forgiveness pursuant to subsection (b).

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

    (a) Definitions.--In this section:
          (1) Child care facility.--The term ``child care 
        facility'' means a facility, including a home, that--
                  (A) provides child care services; and
                  (B) meets applicable State or local 
                government licensing, certification, approval, 
                or registration requirements, if any.
          (2) Child care services.--The term ``child care 
        services'' means activities and services provided for 
        the education and care of children from birth through 
        age 5 by an individual who has a degree in early 
        childhood education.
          (3) Degree.--The term ``degree'' means an associate's 
        or bachelor's degree awarded by an institution of 
        higher education.
          (4) Early childhood education.--The term ``early 
        childhood education'' means education in the areas of 
        early child education, child care, or any other 
        educational area related to child care that the 
        Secretary determines appropriate.
          (5) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning 
        given the term in section 1201.
    (b) Demonstration Program.--
          (1) In general.--The Secretary may carry out a 
        demonstration program of assuming the obligation to 
        repay, pursuant to subsection (c), a loan made, insured 
        or guaranteed under this part or part D (excluding 
        loans made under sections 428B and 428C) for any new 
        borrower after the date of enactment of the Higher 
        Education Amendments of 1998, who--
                  (A) completes a degree in early childhood 
                education;
                  (B) obtains employment in a child care 
                facility; and
                  (C) is working full-time and is earning an 
                amount which does not exceed the greater of an 
                amount equal to 100 percent of the poverty line 
                for a family of 2 as determined in accordance 
                with section 673(2) of the Community Services 
                Block Grant Act.
          (2) Award basis; priority.--
                  (A) Award basis.--Subject to subparagraph 
                (B), loan repayment under this section shall be 
                on a first-come, first-served basis and subject 
                to the availability of appropriations.
                  (B) Priority.--The Secretary shall give 
                priority in providing loan repayment under this 
                section for a fiscal year to student borrowers 
                who received loan repayment under this section 
                for the preceding fiscal year.
          (3) Regulations.--The Secretary is authorized to 
        prescribe 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) after the second year of employment 
                described in subparagraphs (B) and (C) of 
                subsection (b)(1), 20 percent of the total 
                amount of all loans made after date of 
                enactment of the Higher Education Amendments of 
                1998, to a student under this part or part D;
                  (B) after the third year of such employment, 
                20 percent of the total amount of all such 
                loans; and
                  (C) after each of the fourth and fifth years 
                of such employment, 30 percent of the total 
                amount of all such loans.
          (2) Construction.--Nothing in this section shall be 
        construed to authorize the refunding of any repayment 
        of a loan made under this part or part D.
          (3) Interest.--If a portion of a loan is repaid by 
        the Secretary under this section for any year, the 
        proportionate amount of interest on such loan which 
        accrues for such year shall be repaid by the Secretary.
          (4) Special rule.--In the case where a student 
        borrower who is not participating in loan repayment 
        pursuant to this section returns to an institution of 
        higher education after graduation from an institution 
        of higher education for the purpose of obtaining a 
        degree in early childhood education, the Secretary is 
        authorized to assume the obligation to repay the total 
        amount of loans made under this part or part D incurred 
        for a maximum of two academic years in returning to an 
        institution of higher education for the purpose of 
        obtaining a degree in early childhood education. Such 
        loans shall only be repaid for borrowers who qualify 
        for loan repayment pursuant to the provisions of this 
        section, and shall be repaid in accordance with the 
        provisions of paragraph (1).
          (5) Ineligibility of national service award 
        recipients.--No student borrower may, for the same 
        volunteer service, receive a benefit under both this 
        section and subtitle D of title I of the National and 
        Community Service Act of 1990 (42 U.S.C. 12601 et 
        seq.).
  (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 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 require.
          (2) Conditions.--An eligible individual may apply for 
        loan repayment under this section after completing each 
        year of qualifying employment. The borrower shall 
        receive forbearance while engaged in qualifying 
        employment unless the borrower is in deferment while so 
        engaged.
  (f) Evaluation.--
          (1) In general.--The Secretary shall conduct, by 
        grant or contract, an independent national evaluation 
        of the impact of the demonstration program assisted 
        under this section on the field of early childhood 
        education.
          (2) Competitive basis.--The grant or contract 
        described in subsection (a) shall be awarded on a 
        competitive basis.
          (3) Contents.--The evaluation described in this 
        subsection shall--
                  (A) determine the number of individuals who 
                were encouraged by the demonstration program 
                assisted under this section to pursue early 
                childhood education;
                  (B) determine the number of individuals who 
                remain employed in a child care facility as a 
                result of participation in the program;
                  (C) identify the barriers to the 
                effectiveness of the program;
                  (D) assess the cost-effectiveness of the 
                program in improving the quality of--
                          (i) early childhood education; and
                          (ii) child care services;
                  (E) identify the reasons why participants in 
                the program have chosen to take part in the 
                program;
                  (F) identify the number of individuals 
                participating in the program who received an 
                associate's degree and the number of such 
                individuals who received a bachelor's degree; 
                and
                  (G) identify the number of years each 
                individual participates in the program.
          (4) Interim and final evaluation reports.--The 
        Secretary shall prepare and submit to the President and 
        the Congress such interim reports regarding the 
        evaluation described in this subsection as the 
        Secretary deems appropriate, and shall prepare and so 
        submit a final report regarding the evaluation by 
        January 1, 2002.
  (g) Authorization of Appropriations.--There are authorized to 
be appropriated to carry out this section $10,000,000 for 
fiscal year 1999, and such sums as may be necessary for each of 
the 4 succeeding fiscal years.

SEC. 432. LEGAL POWERS AND RESPONSIBILITIES.

    (a) General Powers.-- * * *

           *       *       *       *       *       *       *

    (m) Common Forms and Formats.--
          (1) Common guaranteed student loan application form 
        and promissory note.--
                  (A) In general.--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] common application forms and 
                promissory notes, or multiyear promissory 
                notes, 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 in this 
                section shall be construed to limit the 
                development of electronic application and other 
                forms and procedures. Guaranty agencies, 
                borrowers, and lenders may use electronically 
                printed versions of common forms approved for 
                use by the Secretary.

           *       *       *       *       *       *       *


SEC. 438. SPECIAL ALLOWANCES.

    (a) Findings.--* * *

           *       *       *       *       *       *       *

    (b) Computation and Payment.--* * *

           *       *       *       *       *       *       *

          (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--

           *       *       *       *       *       *       *

          [(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 section 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.

           *       *       *       *       *       *       *


                    PART H--PROGRAM INTEGRITY TRIAD

                          [Subpart 1 repealed]

Subpart [2]1_Accrediting Agency Approval

           *       *       *       *       *       *       *


Subpart [3]2_Eligibility and Certification Procedures

           *       *       *       *       *       *       *


SEC. 432. [20 U.S.C. 1082] LEGAL POWERS AND RESPONSIBILITIES.

    (a) General Powers.--* * *

           *       *       *       *       *       *       *

                  (D) any Authority [required to file a plan 
                for doing business under section 438(d)] that 
                meets the requirements of section 438(e).

           *       *       *       *       *       *       *


SEC. 433. [20 U.S.C. 1083] 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. 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--]
    (a) Required Disclosure Before Disbursement.--Each eligible 
lender shall, at or prior to the time such lender disburses a 
loan that is insured or guaranteed under this part (other than 
a loan made under section 428C), provide thorough and accurate 
loan information on such loan to the borrower. Any disclosure 
required by this subsection may be made by an eligible lender 
by written or electronic means, including as part of the 
application material provided to the borrower, as part of the 
promissory note evidencing the loan, or on a separate written 
form provided to the borrower. Each lender shall provide a 
telephone number, and may provide an electronic address, to 
each borrower through which additional loan information can be 
obtained. The disclosure shall include--

           *       *       *       *       *       *       *

    [(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 this subsection. 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--]
    (b) Required Disclosure Before Repayment.--Each eligible 
lender shall, at or prior to the start of the repayment period 
of the student borrower on loans made, insured, or guaranteed 
under this part, disclose to the borrower by written or 
electronic means the information required under this 
subsection. Each eligible lender shall provide a telephone 
number, and may provide an electronic address, to each borrower 
through which additional loan information can be obtained. For 
any loan made, insured, or guaranteed under this part, other 
than a loan made under section 428B or 428C, such disclosure 
required by this subsection shall be made not less than 30 days 
nor more than 240 days before the first payment on the loan is 
due from the borrower. The disclosure shall include--

           *       *       *       *       *       *       *


SEC. 435. [20 U.S.C. 1085] DEFINITIONS FOR STUDENT LOAN INSURANCE 
                    PROGRAM.

    As used in this part:
    (A) Eligible Institution.--
          (1) In general.--* * *

           *       *       *       *       *       *       *

                          (ii) there are, in the judgment of 
                        the Secretary, 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. If an institution 
                continues to participate in a program under 
                this part, and the institution's appeal of the 
                loss of eligibility is unsuccessful, the 
                institution shall be required to pay to the 
                Secretary an amount equal to the amount of 
                interest, special allowance, reinsurance, and 
                any related payments made by the Secretary (or 
                which the Secretary is obligated to make) with 
                respect to loans made under this part to 
                students attending, or planning to attend, that 
                institution during the pendency of such appeal. 
                In order to continue to participate during an 
                appeal under this paragraph, the institution 
                shall provide a letter of credit in favor of 
                the Secretary or other third-party financial 
                guarantees satisfactory to the Secretary in an 
                amount determined by the Secretary to be 
                sufficient to satisfy the institution's 
                potential liability on such loans under the 
                preceding sentence.

           *       *       *       *       *       *       *

                  [(C) Until July 1, 1998, this paragraph shall 
                not apply to any institution that is--
                          [(i) a part B institution within the 
                        meaning of section 322(2) of this Act;
                          [(ii) a tribally controlled community 
                        college within the meaning of section 
                        2(a)(4) of the Tribally Controlled 
                        Community College Assistance Act of 
                        1978; or
                          [(iii) a Navajo Community College 
                        under the Navajo Community College 
                        Act.]
                  (C)(i) This paragraph shall not apply to any 
                institution described in clause (ii), and any 
                such institution that exceeds the threshold 
                percentage in subparagraph (A)(ii) for 2 
                consecutive years shall submit to the Secretary 
                a default management plan satisfactory to the 
                Secretary and containing criteria designed, in 
                accordance with the regulations of the 
                Secretary, to demonstrate continuous 
                improvement by the institution in the 
                institution's cohort default rate. If the 
                institution fails to submit the required plan, 
                or to satisfy the criteria in the plan, the 
                institution shall be subject to a loss of 
                eligibility in accordance with this paragraph, 
                except as the Secretary may otherwise specify 
                in regulations.
                  (ii) An institution referred to in clause (i) 
                is--
                          (I) a part B institution within the 
                        meaning of section 322(2);
                          (II) a Tribally Controlled College or 
                        University within the meaning of 
                        section 2(a)(4) of the Tribally 
                        Controlled College or University 
                        Assistance Act of 1978; or
                          (III) a Navajo Community College 
                        under the Navajo Community College Act.

           *       *       *       *       *       *       *

                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 for a reasonable period of time, not 
                to exceed 30 days, 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 for a reasonable period of time, not 
                to exceed 30 days] used by a guaranty agency in 
                determining whether to pay a claim on a 
                defaulted loan. 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) Participation rate index.--
                  (A) In general.--An institution that 
                demonstrates to the Secretary that the 
                institution's participation rate index is equal 
                to or less than 0.0375 for any of the 3 
                applicable participation rate indices shall not 
                be subject to paragraph (2). The participation 
                rate index shall be determined by multiplying 
                the institution's cohort default rate for loans 
                under part B or D, or weighted average cohort 
                rate for loans under parts B and D, by the 
                percentage of the institution's regular 
                students, enrolled on at least a half-time 
                basis, who received a loan made under part B or 
                D for a 12-month period ending during the 6 
                months immediately preceding the fiscal year 
                for which the cohort of borrowers used to 
                calculate the institution's cohort default rate 
                is determined.
                  (B) Data.--An institution shall provide the 
                Secretary with sufficient data to determine the 
                institution's participation rate index within 
                30 days after receiving an initial notification 
                of the institution's draft cohort default rate.
                  (C) Notification.--Prior to publication of a 
                final cohort default rate for an institution 
                that provides the data described in 
                subparagraph (B), the Secretary shall notify 
                the institution of the institution's compliance 
                or noncompliance with subparagraph (A).
    (d) * * *

           *       *       *       *       *       *       *

                          (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 (as 
                        defined in section 3(a)(1) of the 
                        Federal Deposit Insurance Act (12 
                        U.S.C. 1813(a)(1)) that is a wholly 
                        owned subsidiary of a nonprofit 
                        foundation, the foundation is described 
                        in section 501(c)(3) of the Internal 
                        Revenue Code of 1986 and exempt from 
                        taxation under section 501(1) of such 
                        Code, and the bank makes loans under 
                        this part only to undergraduate 
                        students who are age 22 or younger and 
                        has a portfolio of such loans that is 
                        not more than $5,000,000;

           *       *       *       *       *       *       *

    (m) * * *

           *       *       *       *       *       *       *

                  (B) In determining the number of students who 
                default before the end of such fiscal year, the 
                Secretary shall include only loans for which 
                the Secretary or a guaranty agency has paid 
                claims for [insurance, and in considering 
                appeals with respect to cohort default rates 
                pursuant to subsection (a)(3), exclude] 
                insurance. In considering appeals with respect 
                to cohort default rates pursuant to subsection 
                (a)(3), the Secretary shall exclude, from the 
                calculation of the number of students who 
                entered repayment and from the calculation of 
                the number of students who default, any loans 
                which, due to improper servicing or collection, 
                would, as demonstrated by the evidence 
                submitted in support of the institution's 
                timely appeal to the Secretary, result in an 
                inaccurate or incomplete calculation of such 
                cohort default rate.

           *       *       *       *       *       *       *


[SEC. 436. [20 U.S.C. 1086] DISTRICT OF COLUMBIA STUDENT LOAN INSURANCE 
                    PROGRAM.

    [(a) Authority.--The government of the District of Columbia 
is authorized (1) to establish a student loan insurance program 
which meets the requirements of this part for a State loan 
insurance program in order to enter into agreements with the 
Secretary for the purposes of this title, (2) to enter into 
such agreements with the Secretary, (3) to use amounts 
appropriated for the purposes of this section to establish a 
fund for such purposes and for expenses in connection 
therewith, and (4) to accept and use donations for the purposes 
of this section.
    [(b) Binding Effect on Minors.--Notwithstanding the 
provisions of any applicable law, if the borrower, on any loan 
insured under the program established pursuant to this section, 
is a minor, any otherwise valid vote or other written agreement 
executed by him for the purposes of such loan shall create a 
binding obligation.
    [(c) Appropriations Authorized.--There are authorized to be 
appropriated such amounts as may be necessary for the purposes 
of this section.]

SEC. 436. DELEGATION OF FUNCTIONS.

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

           *       *       *       *       *       *       *


SEC. 438. [20 U.S.C. 1087-1] SPECIAL ALLOWANCES.

    (a) Findings.--* * *

           *       *       *       *       *       *       *

          [(1) Deduction from interest and special allowance 
        subsidies.--Notwithstanding subsection (b), the total 
        amount of interest and special allowance payable under 
        section 428(a)(3)(A) and subsection (b) of this 
        section, respectively, to any holder shall be reduced 
        by the Secretary by the amount which the lender is 
        authorized to charge as an origination fee in 
        accordance with paragraph (2) of this subsection. If 
        the total amount of interest and special allowance 
        payable under section 428(a)(3)(A) and subsection (b) 
        of this section, respectively, is less than the amount 
        the lender was authorized to charge borrowers for 
        origination fees in that quarter, the Secretary shall 
        deduct the excess amount from the subsequent quarters' 
        payments until the total amount has been deducted.]
          (1) Deduction from interest and special allowance 
        subsidies.--(A) Notwithstanding subsection (b), the 
        Secretary shall collect the amount the lender is 
        authorized to charge as an origination fee in 
        accordance with paragraph (2) of this subsection--
                  (i) by reducing the total amount of interest 
                and special allowance payable under section 
                428(a)(3)(A) and subsection (b) of this 
                section, respectively, to any holder; or
                  (ii) directly from the holder of the loan, if 
                the lender fails or is not required to bill the 
                Secretary for interest and special allowance or 
                withdraws from the program with unpaid loan 
                origination fees.
          (B) If the Secretary collects the origination fee 
        under this subsection through the reduction of interest 
        and special allowance, and the total amount of interest 
        and special allowance payable under section 
        428(a)(3)(A) and subsection (b) of this section, 
        respectively, is less than the amount the lender was 
        authorized to charge borrowers for origination fees in 
        that quarter, the Secretary shall deduct the excess 
        amount from the subsequent quarters' payments until the 
        total amount has been deducted.

           *       *       *       *       *       *       *

          [(1) Deduction from interest and special allowance 
        subsidies.--Notwithstanding subsection (b), the 
        Secretary shall reduce the total amount of interest and 
        special allowance payable under section 428(a)(3)(A) 
        and subsection (b) of this section, respectively, to 
        any holder of a loan by a loan fee in an amount 
        determined in accordance with paragraph (2) of this 
        subsection. If the total amount of interest and special 
        allowance payable under section 428(a)(3)(A) and 
        subsection (b) of this section, respectively, is less 
        than the amount of such loan fee, then the Secretary 
        shall deduct such excess amount from subsequent 
        quarters' payments until the total amount has been 
        deducted.]
          (1) Deduction from interest and special allowance 
        subsidies.--
                  (A) In general.--Notwithstanding subsection 
                (b), the Secretary shall collect a loan fee in 
                an amount determined in accordance with 
                paragraph (2)--
                          (i) by reducing the total amount of 
                        interest and special allowance payable 
                        under section 428(a)(3)(A) and 
                        subsection (b), respectively, to any 
                        holder of a loan; or
                          (ii) directly from the holder of the 
                        loan, if the lender--
                                  (I) fails or is not required 
                                to bill the Secretary for 
                                interest and special allowance 
                                payments; or
                                  (II) withdraws from the 
                                program with unpaid loan fees.
                  (B) Special rule.--If the Secretary collects 
                loan fees under this subsection through the 
                reduction of interest and special allowance 
                payments, and the total amount of interest and 
                special allowance payable under section 
                428(a)(3)(A) and subsection (b), respectively, 
                is less than the amount of such loan fees, then 
                the Secretary shall deduct the amount of the 
                loan fee balance from the amount of interest 
                and special allowance payments that would 
                otherwise be payable, in subsequent quarterly 
                increments until the balance has been deducted.

           *       *       *       *       *       *       *

    (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 serve 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)] (1) 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)] (2) 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.

           *       *       *       *       *       *       *


                  Part C--Federal Work-Study Programs

SEC. 441. [42 U.S.C. 2751] PURPOSE; APPROPRIATIONS AUTHORIZED.

    (a) Purpose.-- * * *

           *       *       *       *       *       *       *

    (b) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this part, [$800,000,0000 for 
fiscal year 1993] $900,000,000 for fiscal year 1999 and such 
sums as may be necessary for each of the 4 succeeding fiscal 
years.
          (1) such fields as health care, child care, 
        (including child services provided on campus) literacy 
        training, education (including tutorial services), 
        welfare, social services, transportation, housing and 
        neighborhood improvement, public safety, crime 
        prevention and control, recreation, rural development, 
        and community improvement;

           *       *       *       *       *       *       *

          (3) support services to students with disabilities, 
        including students with disabilities who are enrolled 
        at the institution; and

           *       *       *       *       *       *       *


SEC. 443. [42 U.S.C. 2753] GRANTS FOR FEDERAL WORK-STUDY PROGRAMS.

    (a) Agreements Required.-- * * *

           *       *       *       *       *       *       *

          (1) provide for the operation by the institution of a 
        program for the part-time employment, including 
        internships or research assistanceships as determined 
        by the Secretary, of its students in work for the 
        institution itself, work in community service or work 
        in the public interest for a Federal, State, or local 
        public agency or private nonprofit organization under 
        an arrangement between the institution and such agency 
        or organization, and such work--

           *       *       *       *       *       *       *

          [(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 need demonstrated 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 meet the requirements of section 
        484 will be assisted, except that if the institution's 
        grant under this part is directly or indirectly based 
        in part on the financial need demonstrated by students 
        who are (A) attending the institution on less than a 
        full-time basis, or (B) independent students, a 
        reasonable portion of the allocation shall be made 
        available to such students;

           *       *       *       *       *       *       *

          (5) [provide that] (A) provide that the Federal share 
        of the compensation of students employed in the work-
        study program in accordance with the agreement shall 
        not exceed 75 percent for academic year [1993-1994] 
        1999-2000 and succeeding academic years, except that 
        the Federal share may exceed such amounts of 
        compensation if the Secretary determines, pursuant to 
        regulations promulgated by the Secretary establishing 
        objective criteria for such determinations, that a 
        Federal share in excess of such amounts is required in 
        furtherance of the purpose of this part; and
          (B) provide that the Federal share of the 
        compensation of students employed in community service 
        shall not exceed 90 percent;
          (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 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];

           *       *       *       *       *       *       *


SEC. 448. [42 U.S.C. 2756B] WORK COLLEGES.

    (a) Purpose.-- * * *

           *       *       *       *       *       *       *

                  (C) carry out activities described in section 
                443 or 446; [and]

           *       *       *       *       *       *       *

                          (ii) alternatives that develop sound 
                        citizenship, encourage student 
                        persistence, and make optimum use of 
                        assistance under this part in education 
                        and student development[.] ; and

           *       *       *       *       *       *       *

                  (E) coordinate and carry out joint projects 
                and activities to promote work service 
                learning; and
                  (F) carry out a comprehensive, longitudinal 
                study of student academic progress and academic 
                and career outcomes, relative to student self-
                sufficiency in financing their higher 
                education, repayment of student loans, 
                continued community service, kind and quality 
                of service performed, and career choice and 
                community service selected after graduation.

           *       *       *       *       *       *       *

    (f) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this section [$5,000,000 for 
fiscal year 1993] $7,000,000 for fiscal year 1999 and such sums 
as may be necessary for each of the 4 succeeding fiscal years.

           *       *       *       *       *       *       *


SEC. 453. [20 U.S.C. 1087C] SELECTION OF INSTITUTIONS FOR PARTICIPATION 
                    AND ORIGINATION.

    (a) Phase-In of Program.--

           *       *       *       *       *       *       *

          (2) [Transition] selection criteria.--For academic 
        year 1994-1995, the Secretary may approve an 
        institution to originate loans only if such 
        institution--

           *       *       *       *       *       *       *

                  [(E) in the opinion of the Secretary, has not 
                had significant deficiencies identified by a 
                State postsecondary review entity under subpart 
                1 of part H of this title;]
                  [(F)] (E) in the opinion of the Secretary, 
                has not had severe performance deficiencies for 
                any of the programs under this title, including 
                such deficiencies demonstrated by audits or 
                program reviews submitted or conducted during 
                the 5 calendar years immediately preceding the 
                date of application;
                  [(G)] (F) provides an assurance that such 
                institution has no delinquent outstanding debts 
                to the Federal Government, unless such debts 
                are being repaid under or in accordance with a 
                repayment arrangement satisfactory to the 
                Federal Government, or the Secretary in the 
                Secretary's discretion determines that the 
                existence or amount of such debts has not been 
                finally determined by the cognizant Federal 
                agency; and
                  [(H)] (G) meets such other criteria as the 
                Secretary may establish to protect the 
                financial interest of the United States and to 
                promote the purposes of this part.
          (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. [20 U.S.C. 1087E] TERMS AND CONDITIONS OF LOANS.

    (a) In General.--

           *       *       *       *       *       *       *

    [(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/Ford Loans and Federal Direct Unsubsidized 
        Stafford/Ford 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/Ford Loan or Federal 
        Direct Unsubsidized Stafford/Ford 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) 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 the 
        determination.
          (5) Repayment incentives.--
                  (A) In general.--Notwithstanding any other 
                provision of this part, the Secretary is 
                authorized to prescribe by regulation such 
                reductions in the interest rate paid by a 
                borrower of a loan made under this part as the 
                Secretary determines appropriate to encourage 
                on-time repayment of the loan. Such reductions 
                may be offered only if the Secretary determines 
                the reductions are cost neutral and in the best 
                financial interest of the Federal Government. 
                Any increase in subsidy costs resulting from 
                such reductions shall be completely offset by 
                corresponding savings in funds available for 
                the William D. Ford Federal Direct Loan Program 
                in that fiscal year from section 458 and other 
                administrative accounts.
                  (B) Accountability.--The Secretary shall 
                ensure the cost neutrality of such reductions 
                by obtaining an official report from the 
                Director of the Office of Management and Budget 
                and the Director of the Congressional Budget 
                Office that any such reductions will be 
                completely cost neutral. The reports shall be 
                transmitted to the Committee on Labor and Human 
                Resources of the Senate and the Committee on 
                Education and the Workforce of the House of 
                Representatives not less than 60 days prior to 
                the publication of regulations proposing such 
                reductions.

           *       *       *       *       *       *       *


SEC. 456. [20 U.S.C. 1087F] CONTRACTS.

    (a) Contracts for Supplies and Services.--
          (1) * * *

           *       *       *       *       *       *       *

    (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. [20 U.S.C. 1087H] 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) Availability.--Funds made available under subsection 
(a) shall remain available until expended.]
    (a) Administrative Expenses.--
          (1) In general.--Each fiscal year there shall be 
        available to the Secretary, from funds not otherwise 
        appropriated, funds to be obligated for--
                  (A) administrative costs under this part and 
                part B, including the costs of the direct 
                student loan programs under this part; and
                  (B) account maintenance fees payable to 
                guaranty agencies under part B and calculated 
                in accordance with 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.
          (2) Account maintenance fees.--Account maintenance 
        fees under subparagraph (B) shall be paid quarterly and 
        deposited in the Agency Operating Fund established 
        under section 422B.
          (3) Carryover.--The Secretary may carry over funds 
        made available under this section to a subsequent 
        fiscal year.
    (b) Calculation Basis.--Account maintenance fees payable to 
guaranty agencies under paragraph (1)(B) shall be calculated--
          (1) for fiscal years 1999 and 2000, on the basis of 
        0.12 percent of the original principal amount of 
        outstanding loans on which insurance was issued under 
        part B; and
          (2) for fiscal year 2001, 2002, and 2003, on the 
        basis of 0.10 percent of the original principal amount 
        of outstanding loans on which insurance was issued 
        under part B.

SEC. 459. LOAN CANCELLATION FOR TEACHERS.

    (a) Statement of Purpose.--It is the purpose of this 
section to encourage individuals to enter and continue in the 
teaching profession.
    (b) Program Authorized.--The Secretary is authorized to 
carry out a program of canceling the obligation to repay a 
Federal Direct Stafford/Ford Loan made under this part that is 
eligible for an interest subsidy, for any new borrower on or 
after the date of enactment of the Higher Education Amendments 
of 1998, who--
          (1) has been employed as a full-time teacher for 3 
        consecutive complete school years--
                  (A) in a school that qualifies under section 
                465(a)(2)(A) for loan cancellation for Perkins 
                loan recipients who teach in such schools;
                  (B) if employed as a secondary school 
                teacher, is teaching a subject area that is 
                relevant to the borrower's academic major as 
                certified by the chief administrative officer 
                of the public or non-profit private secondary 
                school in which the borrower is employed; and
                  (C) if employed as an elementary school 
                teacher, has demonstrated, in accordance with 
                State teacher certification or licensing 
                requirements and as certified by the chief 
                administrative officer of the public or 
                nonprofit private elementary school in which 
                the borrower is employed, knowledge and 
                teaching skills in reading, writing, 
                mathematics and other areas of the elementary 
                school curriculum; and
          (2) is not in default on a loan for which the 
        borrower seeks forgiveness.
    (c) Regulations.--The Secretary is authorized to issue such 
regulations as may be necessary to carry out the provisions of 
this section.
    (d) Loan Cancellation During Continuing Teaching Service.--
          (1) In general.--The Secretary shall cancel the 
        obligation to repay--
                  (A) 30 percent of the total outstanding 
                amount and applicable interest of subsidized 
                Federal Direct Stafford/Ford loans owed by the 
                student borrower after the completion of the 
                fourth or fifth complete school year of service 
                described in subsection (b);
                  (B) 40 percent of such total amount after the 
                completion of the sixth complete school year of 
                such service; and
                  (C) a total amount for any borrower that 
                shall not exceed $ 10,000.
          (2) Construction.--Nothing in this section shall be 
        construed to authorize any refunding of any canceled 
        loan.
  (e) List.--If the list of schools in which a teacher may 
perform service pursuant to subsection (b) is not available 
before May 1 of any year, the Secretary may use the list for 
the year preceding the year for which the determination is made 
to make such service determination.
  (f) Continued Eligibility.--Any teacher who performs service 
in a school that--
          (1) meets the requirements of subsection (b)(1)(A) in 
        any year during such service; and
          (2) in a subsequent year fails to meet the 
        requirements of such subsection, may continue to teach 
        in such school and shall be eligible for loan 
        cancellation pursuant to subsection (b).

           *       *       *       *       *       *       *


                     Part E--Federal Perkins Loans

SEC. 461. [20 U.S.C. 1087AA] APPROPRIATIONS AUTHORIZED.

    (a) Program Authority.--* * *

           *       *       *       *       *       *       *

    (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.

           *       *       *       *       *       *       *


SEC. 462. [20 U.S.C. 1087BB] ALLOCATION OF FUNDS

    (a) Allocation Based on Previous Allocation.--(1) * * *

           *       *       *       *       *       *       *

          (B) the institution's default penalty, as determined 
        under subsection (f),
except that if the institution has a cohort default rate in 
excess of the applicable maximum cohort default rate under 
subsection (g), the institution may not receive an allocation 
under this paragraph.

           *       *       *       *       *       *       *

except that if the institution has a cohort default rate in 
excess of the applicable maximum cohort default rate under 
subsection (g), the institution may not receive an allocation 
under this paragraph.

           *       *       *       *       *       *       *

    (c)--* * *

           *       *       *       *       *       *       *

except that an eligible institution which has a cohort default 
rate in excess of the applicable maximum cohort default rate 
under subsection (g) may not receive an allocation under this 
paragraph.

           *       *       *       *       *       *       *

except that, if the institution has a cohort default rate in 
excess of the applicable maximum cohort default rate under 
subsection (g), the eligible amount of that institution is 
zero.

           *       *       *       *       *       *       *

    (d) Determination of Institution's Self-Help Need.--* * *

           *       *       *       *       *       *       *

          (3) To determine the self-help need of an 
        institution's eligible graduate and professional 
        students, [the Secretary, for academic year 1988-1989, 
        shall use the procedures employed for academic year 
        1986-1987, and, for any subsequent academic years,] the 
        Secretary shall--

           *       *       *       *       *       *       *

    (e) Anticipated Collections.--(1) * * *

           *       *       *       *       *       *       *

          (2) The Secretary shall establish an appeals process 
        by which the anticipated collections required in 
        paragraph (1) may be waived for institutions with low 
        cohort default rates in the program assisted under this 
        part.

           *       *       *       *       *       *       *

    [(f) 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), 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;
          [(B) equals or exceeds 20 percent, but is less than 
        25 percent, shall have a default penalty of 0.9;
          [(C) equals or exceeds 25 percent, but is less than 
        30 percent, shall have a default penalty of 0.7; and
          [(D) equals or exceeds 30 percent shall have a 
        default penalty of zero.]
    (f) Default Penalties.--
          (1) In general.--For fiscal year 1998 and any 
        succeeding fiscal year, any institution with a cohort 
        default rate (as defined under subsection (h)) that 
        equals or exceeds 25 percent shall have a default 
        penalty of zero.
          (2) Ineligibility.--
                  (A) In general.--For fiscal year 1998 and any 
                succeeding fiscal year, any institution with a 
                cohort default rate (as defined in subsection 
                (h)) that equals or exceeds 50 percent for each 
                of the 3 most recent years for which data are 
                available shall not be eligible to participate 
                in a program under this part for the fiscal 
                year for which the determination is made and 
                the 2 succeeding fiscal years, unless, within 
                30 days of receiving notification from the 
                Secretary of the loss of eligibility under this 
                paragraph, the institution appeals the loss of 
                eligibility to the Secretary. The Secretary 
                shall issue a decision on any such appeal 
                within 45 days after the submission of the 
                appeal. Such decision may permit the 
                institution to continue to participate in a 
                program under this part if--
                          (i) the institution demonstrates to 
                        the satisfaction of the Secretary that 
                        the calculation of the institution's 
                        cohort default rate is not accurate, 
                        and that recalculation would reduce the 
                        institution's cohort default rate for 
                        any of the 3 fiscal years below 50 
                        percent; or
                          (ii) there are, in the judgment of 
                        the Secretary, exceptional mitigating 
                        circumstances such as a small number of 
                        borrowers entering repayment, that 
                        would make the application of this 
                        subparagraph inequitable.
                  (B) Continued participation.--During an 
                appeal under subparagraph (A), the Secretary 
                may permit the institution to continue to 
                participate in a program under this part.
                  (C) Definition.--For the purposes of 
                subparagraph (A), the term `loss of 
                eligibility' shall be defined as the mandatory 
                liquidation of an institution's student loan 
                fund, and assignment of the institution's 
                outstanding loan portfolio to the Secretary.
    (g) Applicable Maximum Default Rate.--[For award years 1992 
and 1993, the applicable maximum default rate is 15 percent.] 
(1) For award year 1998 and subsequent years, the maximum 
cohort default rate is 25 percent.

           *       *       *       *       *       *       *

    (h) [Definitions of Default Rate and] Definition of Cohort 
Default Rate.--[(1) For any award year prior to award year 
1994, for the purpose of this section, the default rate is 
computed by dividing--
          [(A) the total principal amount of defaulted loans; 
        by
          [(B) the total principal amount of all loans made 
        under this part, less the principal amount of all loans 
        made to borrowers who are eligible for deferment under 
        section 464(c)(2)(A)(i) or are in a grace period 
        preceding repayment.
    [(2) For the purpose of paragraph (1)(A), the total 
principal amount of defaulted loans is equal to the total 
amount borrowed under loans that have reached repayment status 
and that are in default, minus--
          [(A) amounts that have been repaid or cancelled on 
        such loans;
          [(B) loans discharged in bankruptcy;
          [(C) loans referred or assigned to the Secretary for 
        collection under paragraph (5)(A), (5)(B)(i), or (6) of 
        section 463(a); and
          [(D) loans that are in default but on which the 
        borrowers have made satisfactory arrangements to resume 
        payment.]
    [(3)](1)(A) For award year 1994 and any succeeding year, 
the term ``cohort default rate'' means, for any award year in 
which 30 or more current and former students at the institution 
enter repayment on loans under this part (received for 
attendance at the institution), the percentage of those current 
and former students who enter repayment on such loans (received 
for attendance at that institution) in that award year who 
default before the end of the following award year.
          [(B) In determining the number of students who 
        default before the end of such award year, the 
        Secretary shall, in calculating the cohort default 
        rate, exclude any loans which, due to improper 
        servicing or collecting, would result in an inaccurate 
        or incomplete calculation of the cohort default rate.]
          [(C)] (B) For any award year in which less than 30 of 
        the institution's current and former students enter 
        repayment, the term ``cohort default rate'' means the 
        percentage of such current and former students who 
        entered repayment on such loans in any of the three 
        most recent award years and who default before the end 
        of the award year immediately following the year in 
        which they entered repayment.
          [(D)] (C) A loan on which a payment is made by the 
        institution of higher education, its owner, agency, 
        contractor, employee, or any other entity or individual 
        affiliated with such institution, in order to avoid 
        default by the borrower, is considered in default for 
        the purposes of this subsection.
          [(E)] (D) Any loan that is in default but on which 
        the borrower has made satisfactory arrangements to 
        resume payment or any loan which has been rehabilitated 
        before the end of such following award year is not 
        considered as in default for purposes of this 
        subsection.
          [(F)] (E) In the case of a student who has attended 
        and borrowed at more than one school, the student (and 
        his or her subsequent repayment or default) is 
        attributed to the school for attendance at which the 
        student received the loan that entered repayment in the 
        award year.
          [(G)] (F) The Secretary shall prescribe regulations 
        designed to prevent an institution from evading the 
        application to that institution of a cohort default 
        rate determination under this subsection through the 
        use of such measures as branching, consolidation, 
        change of ownership or control or other means as 
        determined by the Secretary.
    [(4)](2) [A loan] For purposes of calculating the cohort 
default rate under this subsection, a loan shall be considered 
to be in default--

           *       *       *       *       *       *       *


SEC. 463. [20 U.S.C. 1087 CC] AGREEMENTS WITH INSTITUTIONS OF HIGHER 
                    EDUCATION.

    (a) Contents of Agreements. * * *

           *       *       *       *       *       *       *

          [(B) a capital contribution--
                  [(i) by an institution that--
                          [(I) is granted permission by the 
                        Secretary to participate in an Expanded 
                        Lending Option under the program, and
                          [(II) has a default rate which does 
                        not exceed 7.5 percent for award year 
                        1993-1994 and has a cohort default rate 
                        which does not exceed 15 percent for 
                        award year 1994-1995 or for any 
                        succeeding award year,
                in an amount not less than the amount of the 
                Federal capital contributions described in 
                subparagraph (A); or
                  [(ii) by any other institution, in an amount 
                not less than three-seventeenths of such 
                Federal capital contribution in fiscal year 
                1993, and one-third of such Federal capital 
                contribution in each of the succeeding fiscal 
                years, of the amount of the Federal capital 
                contributions described in subparagraph (A);]
          (B) a capital contribution by an institution in an 
        amount equal to one-third of the Federal capital 
        contributions described in subparagraph (A);

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

    (2) Each cooperative agreement made pursuant to paragraph 
(1) shall be made in accordance with the requirements of 
section 430A except that such agreement shall provide for the 
disclosure by the Secretary to such organizations, with respect 
to any loan for which the Secretary is responsible, of--] by 
the Secretary or an institution, as the case may be, to such 
organizations, with respect to any loan held by the Secretary 
or the institution, respectively, or--
          [(A) the date of disbursement and the amount of any 
        such loan;]
          (A) the date of disbursement and the amount of such 
        loans made to any borrower under this part at the time 
        of disbursement of the loan;
          (B) information concerning the repayment and 
        collection of any such loan, including information 
        concerning the status of [any defaulted] such loan; and
          (C) the date of cancellation of the note upon 
        completion of repayment by the borrower of any such 
        loan, or upon cancellation or discharge of the 
        borrower's obligation on the loan for any reason.
    (3) Notwithstanding paragraphs (4) and (6) of subsection 
(a) of section 605 of the Fair Credit Reporting Act (15 U.S.C. 
1681c (a)(4), (a)(6)), a consumer reporting agency may make a 
report containing information received from the Secretary 
regarding the status of a borrower's account on a loan made 
under this part [until--] until the loan is paid in full.
          [(A) 7 years from the date on which the Secretary 
        accepted an assignment or referral of a loan, or
          [(B) 7 years from the date the Secretary first 
        reports the account to a consumer reporting agency.]
    [(4) Each institution of higher education, after 
consultation with the Secretary and pursuant to the agreements 
entered into under paragraph (1), shall disclose at least 
annually to any credit bureau organization with which the 
Secretary has such an agreement--
          [(A) the amount of loans made to any borrower under 
        this part at the time of the disbursement of the loan; 
        and
          [(B) the information set forth in section 430A(a).]
    (4)(A) Except as provided in subparagraph (B), an 
institution of higher education, after consultation with the 
Secretary and pursuant to the agreements entered into under 
paragraph (1), shall disclose at least annually to any credit 
bureau organization with which the Secretary has such an 
agreement the information set forth in paragraph (2), and shall 
disclose promptly to such credit bureau organization any 
changes to the information previously disclosed.
    (B) The Secretary may promulgate regulations establishing 
criteria under which an institution of higher education may 
cease reporting the information described in paragraph (2) 
before a loan is paid in full.

           *       *       *       *       *       *       *


SEC. 464. [20 U.S.C. 1087DD] TERMS OF LOANS.

    (a) Terms and Conditions.--* * *

           *       *       *       *       *       *       *

          [(2)(A) Except as provided in paragraph (4), the 
        total of loans made to a student in any academic year 
        or its equivalent by an institution of higher education 
        from a loan fund established pursuant to an agreement 
        under this part shall not exceed--
                  [(i) for institutions that have an agreement 
                with the Secretary to participate in the 
                Expanded Lending Option under section 
                463(a)(2)(B)(i)--
                          [(I) $4,000, in the case of a student 
                        who has not successfully completed a 
                        program of undergraduate education; or
                          [(II) $6,000, in the case of a 
                        graduate or professional student (as 
                        defined in regulations issued by the 
                        Secretary).
(ii) for all other institutions--
                          [(I) $3,000 in the case of a student 
                        who has not successfully completed a 
                        program of undergraduate education; or
                          [(II) $5,000, in the case of a 
                        graduate or professional student (as 
                        defined in regulations issued by the 
                        Secretary).
          [(B) Except as provided in paragraph (4), the 
        aggregate of the loans for all years made to a student 
        by institutions of higher education from loan funds 
        established pursuant to agreements under this part may 
        not exceed--
                  [(i) for institutions that have an agreement 
                with the Secretary to participate in the 
                Expanded Lending Option under section 
                463(a)(2)(B)(i)--
                          [(I) $40,000 in the case of any 
                        graduate or professional student (as 
                        defined by regulations of the 
                        Secretary, and including any loans from 
                        such funds made to such person before 
                        he became a graduate or professional 
                        student);
                          [(II) $20,000 in the case of a 
                        student who has successfully completed 
                        2 years of a program of education 
                        leading to a bachelor's degree but who 
                        has not completed the work necessary 
                        for such a degree (determined under 
                        regulations of the Secretary, and 
                        including any loans from such funds 
                        made to such person before he became 
                        such a student); and
                          [(III) $8,000 in the case of any 
                        other student; or
(ii) for all other institutions--
                          [(I) $15,000, in the case of any 
                        student who has not successfully 
                        completed a program of undergraduate 
                        education; or
                          [(II) $30,000, in the case of any 
                        graduate or professional student (as 
                        defined in regulations issued by the 
                        Secretary) and including any loans from 
                        such funds made to such student before 
                        the student became a graduate or 
                        professional student.]
          (2)(A) Except as provided in paragraph (4), the total 
        of loans made to a student in any academic year or its 
        equivalent by an institution of higher education from a 
        loan fund established pursuant to an agreement under 
        this part shall not exceed--
                  (i) $4,000, in the case of a student who has 
                not successfully completed a program of 
                undergraduate education; or
                  (ii) $6,000, in the case of a graduate or 
                professional student (as defined in regulations 
                issued by the Secretary).
          (B) Except as provided in paragraph (4), the 
        aggregate of the loans for all years made to a student 
        by institutions of higher education from loan funds 
        established pursuant to agreements under this part may 
        not exceed--
                  (i) $40,000, in the case of any graduate or 
                professional student (as defined by regulations 
                issued by the Secretary, and including any 
                loans from such funds made to such person 
                before such person became a graduate or 
                professional student);
                  (ii) $20,000, in the case of a student who 
                has successfully completed 2 years of a program 
                of education leading to a bachelor's degree but 
                who has not completed the work necessary for 
                such a degree (determined under regulations 
                issued by the Secretary, and including any 
                loans from such funds made to such person 
                before such person became such a student); and
                  (iii) $8,000, in the case of any other 
                student.
          (C)(i) The total of loans made to a student described 
        in clause (ii) in any academic year or its equivalent 
        by an institution of higher education from loan funds 
        established pursuant to agreements under this part may 
        not exceed--
                  (I) $8,000 for each of the third and fourth 
                years of the program of instruction leading to 
                a bachelor's degree; or
                  (II) $10,000 for the first year of graduate 
                study (as defined in regulations issued by the 
                Secretary).
          (ii) A student referred to in clause (i) is any 
        student--
                  (I) who is a junior in a program of 
                instruction leading to a bachelor's degree;
                  (II) who states in writing that the student 
                will pursue a course of study to become an 
                elementary or secondary school teacher; and
                  (III) who states in writing that the student 
                intends to become a full-time teacher in a 
                school which meets the requirements of section 
                465(a)(2)(A).
          (iii) Each institution shall provide a report to the 
        Secretary annually containing the number of loans under 
        this subparagraph that are made, the amount of each 
        loan, and whether students benefiting from the higher 
        loan limits met the requirements for receiving those 
        loans.
          (iv) If 3 years after the date of enactment of the 
        Higher Education Amendments of 1998, the Secretary 
        determines that an institution has engaged in a pattern 
        of abuse of this subparagraph, the Secretary may reduce 
        or terminate the institution's Federal capital 
        contribution.

           *       *       *       *       *       *       *

    (b) * * *

           *       *       *       *       *       *       *

          [(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 institutions 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.]
          (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, a reasonable portion of the loans 
        made from the institution's student loan fund 
        containing the contribution shall be made available to 
        such students.
    (c) * * *

           *       *       *       *       *       *       *

          (D) shall provide that the loan shall bear interest, 
        on the unpaid balance of the loan, at the rate of [(i) 
        3 percent per year, (ii) 4 percent per year in the case 
        of any loan made on or after July 1, 1981, or (iii)] 5 
        percent per year in the case of any loan made on or 
        after October 1, 1981, except that no interest shall 
        accrue (I) prior to the beginning date of repayment 
        determined under subparagraph (A)(i), or (II) during 
        any period in which repayment is suspended by reason of 
        paragraph (2);

           *       *       *       *       *       *       *

          (H) shall provide that, in the case of a loan made on 
        or after July 1, 1999, the loan shall be considered in 
        default (except as otherwise provided in section 
        462(h)) if the borrower of a loan made under this part 
        fails to make an installment payment when due, or to 
        meet any other term of the promissory note or written 
        repayment agreement, and such failure persists for--
                  (i) 180 days in the case of a loan that is 
                repayable in monthly installments; or
                  (ii) 240 days in the case of a loan that is 
                repayable in less frequent installments;
          [(H)] (I) pursuant to regulations of the Secretary, 
        shall provide for an assessment of a charge with 
        respect to the loan for failure of the borrower to pay 
        all or part of an installment when due, which shall 
        include the expenses reasonably incurred in attempting 
        collection of the loan, to the extent permitted by the 
        Secretary, except that no charge imposed under this 
        subparagraph shall exceed 20 percent of the amount of 
        the monthly payment of the borrower; and
          [(I)] (J) shall contain a notice of the system of 
        disclosure of information concerning default on such 
        loan to credit bureau organizations under section 
        463(c).

           *       *       *       *       *       *       *

    (f) * * *

           *       *       *       *       *       *       *

  (g) Discharge.--
          (1) In general.--If a student borrower who received a 
        loan made under this part on or after January 1, 1986, 
        is unable to complete the program in which such student 
        is enrolled due to the closure of the institution, then 
        the Secretary shall discharge the borrower's liability 
        on the loan (including the interest and collection 
        fees) by repaying the amount owed on the loan and shall 
        subsequently pursue any claim available to such 
        borrower against the institution and the institution's 
        affiliates and principals, or settle the loan 
        obligation pursuant to the financial responsibility 
        standards described in section 498(c).
          (2) Assignment.--A borrower whose loan has been 
        discharged pursuant to this subsection shall be deemed 
        to have assigned to the United States the right to a 
        loan refund in an amount that does not exceed the 
        amount discharged against the institution and the 
        institution's affiliates and principals.
          (3) Eligibility for additional assistance.--The 
        period during which a student was unable to complete a 
        course of study due to the closing of the institution 
        shall not be considered for purposes of calculating the 
        student's period of eligibility for additional 
        assistance under this title.
          (4) Special rule.--A borrower whose loan has been 
        discharged pursuant to this subsection shall not be 
        precluded, because of that discharge, from receiving 
        additional grant, loan, or work assistance under this 
        title for which the borrower would be otherwise 
        eligible (but for the default on the discharged loan). 
        The amount discharged under this subsection shall not 
        be considered income for purposes of the Internal 
        Revenue Code of 1986.
          (5) Reporting.--The Secretary or institution, as the 
        case may be, shall report to credit bureaus with 
        respect to loans that have been discharged pursuant to 
        this subsection.
  (h) Rehabilitation of Loans.--
          (1) Rehabilitation.--
                  (A) In general.--If the borrower of a loan 
                made under this part who has defaulted on the 
                loan makes 12 ontime, consecutive, monthly 
                payments of amounts owed on the loan, as 
                determined by the institution, the loan shall 
                be considered rehabilitated, and the 
                institution that made that loan (or the 
                Secretary, in the case of a loan held by the 
                Secretary) shall instruct any credit bureau 
                organization or credit reporting agency to 
                which the default was reported to remove the 
                default from the borrower's credit history.
                  (B) Comparable conditions.--As long as the 
                borrower continues to make scheduled repayments 
                on a loan rehabilitated under this paragraph, 
                the rehabilitated loan shall be subject to the 
                same terms and conditions, and qualify for the 
                same benefits and privileges, as other loans 
                made under this part.
                  (C) Additional assistance.--The borrower of a 
                rehabilitated loan shall not be precluded by 
                section 484 from receiving additional grant, 
                loan, or work assistance under this title (for 
                which the borrower is otherwise eligible) on 
                the basis of defaulting on the loan prior to 
                such rehabilitation.
                  (D) Limitations.--A borrower only once may 
                obtain the benefit of this paragraph with 
                respect to rehabilitating a loan under this 
                part.
          (2) Restoration of eligibility.--If the borrower of a 
        loan made under this part who has defaulted on that 
        loan makes 6 ontime, consecutive, monthly payments of 
        amounts owed on such loan, the borrower's eligibility 
        for grant, loan, or work assistance under this title 
        shall be restored. A borrower only once may obtain the 
        benefit of this paragraph with respect to restored 
        eligibility.
  (i) Incentive Repayment Program.--
          (1) In general.--Each institution of higher education 
        may establish, with the approval of the Secretary, an 
        incentive repayment program designed to reduce default 
        and to replenish student loan funds established under 
        this part. Each such incentive repayment program may--
                  (A) offer a reduction of the interest rate on 
                a loan on which the borrower has made 48 
                consecutive monthly repayments, but in no event 
                may the rate be reduced by more than 1 percent;
                  (B) provide for a discount on the balance 
                owed on a loan on which the borrower pays the 
                principal and interest in full prior to the end 
                of the applicable repayment period, but in no 
                event may the discount exceed 5 percent of the 
                unpaid principal balance due on the loan at the 
                time the early repayment is made; and
                  (C) include such other incentive repayment 
                options as the institution determines will 
                carry out the objectives of this subsection.
          (2) Limitation.--No incentive repayment option under 
        an incentive repayment program authorized by this 
        subsection may be paid for with Federal funds, 
        including any Federal funds from the student loan fund, 
        nor can an incentive repayment option be paid for with 
        institutional funds from the student loan fund.

           *       *       *       *       *       *       *


SEC. 466. [20 U.S.C. 1087FF] 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.

           *       *       *       *       *       *       *

    (b) Distribution of Late Collections.--After March 31, 
[2005] 2012, 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:

           *       *       *       *       *       *       *


[SEC. 467. [20 U.S.C. 1087GG] COLLECTION OF DEFAULTED LOANS: PERKINS 
                    LOAN REVOLVING FUND.

    [(a) Authority of Secretary To Collect Referred, 
Transferred, or Assigned Loans.--With respect to any loan--
          [(1) which was made under this part, and
          [(2) which is referred, transferred, or assigned to 
        the Secretary by an institution with an agreement under 
        section 463(a),
the Secretary is authorized to attempt to collect such loan by 
any means authorized by laws for collecting claims of the 
United States (including referral to the Attorney General for 
litigation) and under such terms and conditions as the 
Secretary may prescribe, including reimbursement for expenses 
reasonably incurred in attempting such collection.
    [(b) Collection of Referred, Transferred, or Assigned 
Loans.--The Secretary shall continue to attempt to collect any 
loan referred, transferred, or assigned under paragraph (5)(A), 
(5)(B)(i), or (6) of section 463(a) until all appropriate 
collection efforts, as determined by the Secretary, have been 
expended.
    [(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. 472. [20 U.S.C. 1087II] COST OF ATTENDANCE.

    For the purpose of this title, the term ``cost of 
attendance'' means--
          [(1) * * *

           *       *       *       *       *       *       *

                  (A) shall be an allowance [of not less than 
                $1,500] mined by the institution for a student 
                without dependents residing at home with 
                parents;

           *       *       *       *       *       *       *

                  (C) for all other students shall be an 
                allowance based on the expenses reasonably 
                incurred by such students for room and board[, 
                except that the amount may not be less than 
                $2,500];
          (11) for a student [placed] engaged in a work 
        experience under a cooperative education program; an 
        allowance for reasonable costs associated with such 
        employment (as determined by the institution); and

           *       *       *       *       *       *       *


SEC. 475. [20 U.S.C. 1067OO] FAMILY CONTRIBUTION FOR DEPENDENT 
                    STUDENTS.

    (a) * * *

           *       *       *       *       *       *       *

    (g) Student Contribution From Available Income.--
          [(1) In general.--* * *

           *       *       *       *       *       *       *

                  (D) an income protection allowance of 
                [$1,750] $2,200; and
                  (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 (1) exceeds the parents' total income (as 
        defined in section 480).

           *       *       *       *       *       *       *

    (j) Adjustments to Students Contributions for Enrollment 
Periods of Less Than Nine Months.--For periods of enrollment of 
less than 9 months, the student's contribution from adjusted 
available income (as determined under subsection (g)) is 
determined, for purposes other than subpart 2 of part A, by 
dividing the amount determined under such subsection by 9, and 
multiplying the result by the number of months in the period of 
enrollment.

SEC. 476. [20 U.S.C. 1087PP] FAMILY CONTRIBUTION FOR INDEPENDENT 
                    STUDENTS WITHOUT DEPENDENTS OTHER THAN A SPOUSE.

           *       *       *       *       *       *       *


          (I) [$3,000] $4,250 for single students;
          (II) [$3,000] $4,250 for married students where both 
        are enrolled pursuant to subsection (a)(2); and
          (III) [$6,000] $7,250 for married students where one 
        is enrolled pursuant to subsection (a)(2);

           *       *       *       *       *       *       *


SEC. 478 [20 U.S.C. 1087RR] 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 1999-2000, 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 1998 
and the December next preceding the beginning of such academic 
year, and rounding the result to the nearest $10.

           *       *       *       *       *       *       *


SEC. 479A. [20 U.S.C. 1987TT] DISCRETION OF STUDENT FINANCIAL AID 
                    ADMINISTRATION.

    (a) In General.--* * *

           *       *       *       *       *       *       *

    [(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 as 
                        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 difference between the amount of a student's 
        Federal Pell Grants 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 adjustment under this 
        subsection only for Federal Pell Grants awarded for 
        academic years 1993-1994, 1994-1995, and 1995-1996.
          [(4) Special rule.--Adjustment 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.--An 
eligible institution may refuse to certify a statement that 
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. No 
eligible institution shall discriminate against any borrower or 
applicant in obtaining a loan on the basis of race, national 
origin, religion, sex, marital status, age, or disability 
status.

           *       *       *       *       *       *       *


   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)] 101(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)] 101(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)] 
101(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--

           *       *       *       *       *       *       *

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)] 101(a).

           *       *       *       *       *       *       *

    (b) Proprietary Institution of Higher Education.--For the 
purpose of this section, the term ``proprietary institution of 
higher education'' means a school (1) which provides an 
eligible program of training to prepare students for gainful 
employment in a recognized occupation, (2) which meets the 
requirements of clauses (1) and (2) of section [1201(a)] 
101(a), (3) which does not meet the requirement of clause (4) 
of section [1201(a)] 101(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)] 101(a), admits as regular students persons 
who are beyond the age of compulsory school attendance in the 
State in which the institution is located.
    (c) Postsecondary Vocational Institution.--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)] 101(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)] 
101(a), admits as regular students persons who are beyond the 
age of compulsory school attendance in the State in which the 
institution is located.

           *       *       *       *       *       *       *


SEC. 482. MASTER CALENDAR.

    (a) * * *

           *       *       *       *       *       *       *

          (3) To the extent feasible, the Secretary shall 
        notify eligible institutions and vendors by December 1 
        prior to the start of an award year of minimal hardware 
        and software requirements necessary to administer 
        programs under this title.

           *       *       *       *       *       *       *

    [(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.]
    (c) Delay of Effective Date of Late Publications.--(1) 
Except as provided in paragraph (2), any regulatory changes 
intitated by the Secretary affecting the programs under this 
title that have not been published in final form by November 1 
prior to the start of the award year shall not become effective 
until the beginning of the second award year after such 
November 1 date.
    (2)(A) The Secretary may designate any regulatory provision 
that affects the programs under this title and is published in 
final form after November 1 as one that an entity subject to 
the provision may, in the entity's discretion, choose to 
implement prior to the effective date described in paragraph 
(1). The Secretary may specify in the designation when, and 
under what conditions, an entity may implement the provision 
prior to that effective date. The Secretary shall publish any 
designation under this subparagraph in the Federal Register.
    (B) If an entity chooses to implement a regulatory 
provision prior to the effective date described in paragraph 
(1), as permitted by subparagraph (A), the provision shall be 
effective with respect to that entity in accordance with the 
terms of the Secretary's designation.

           *       *       *       *       *       *       *


SEC. 483. [20 U.S.C. 1090] FORMS AND REGULATIONS.

    (a) Common Financial Aid [Form] Form Development 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 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.]
          (1) Single form requirements.--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 (which shall include 
        electronic versions of the form) to be used--
                  (A) to determine the need (including the 
                expected family contribution and, if 
                appropriate, cost of attendance) and 
                eligibility of a student for financial 
                assistance under parts A, C, D, and E; and
                  (B) to determine the need (including the 
                expected family contribution and cost of 
                attendance) of a student for the purposes of 
                part B.
          (2) State data items.--The Secretary shall include on 
        the form developed under this subsection such data 
        items, selected in consultation with the States to 
        assist the States in awarding State student financial 
        assistance, as the Secretary determines are appropriate 
        for inclusion.
          (3) Parent's social security number.--The Secretary 
        shall include on the form developed under this 
        paragraph space for the social security number of 
        parents of dependent students seeking financial 
        assistance under this title.
          (4) Use.--The Secretary shall require that the form 
        developed under this paragraph be used for the purpose 
        of collecting eligibility and other data for purposes 
        of part B, including the applicant's choice of lender.

           *       *       *       *       *       *       *

          (3) Distribution of data.--[Institutions of higher 
        education and States shall receive] The Secretary shall 
        provide, without charge, the data collected by the 
        Secretary using the form developed pursuant to this 
        section for the purposes of 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].

           *       *       *       *       *       *       *

  (g) Payment for Data.--The Secretary may pay such charges as 
the Secretary determines are necessary to obtain data that the 
Secretary considers essential to the efficient administration 
of the programs under this title.
  (h) Multiyear Promissory Note.--The Secretary shall require, 
for loans made under this title for periods of enrollment 
beginning on or after July 1, 2000, the use of a promissory 
note applicable to more than 1 academic year, or more than 1 
type of loan made under this title. Prior to implementing this 
subsection, the Secretary shall develop and test such a 
promissory note on a limited or pilot basis.

           *       *       *       *       *       *       *


SEC. 484. [20 U.S.C. 1091] STUDENT ELIGIBILITY.

    (a) In General.-- * * *

           *       *       *       *       *       *       *

    (d) Students Who Are Not High School Graduates.--In order 
for a student who does not have a certificate of graduation 
from a school providing secondary education, or the recognized 
equivalent of such certificate, to be eligible for any 
assistance under subparts 1, 3, and 4 of part A and parts B, C, 
D, and E of this title, the student shall meet [either] one of 
the following standards:

           *       *       *       *       *       *       *

          (3) The student has completed a high school education 
        in a home school setting and has met any State 
        requirements with respect to such education in a home 
        school setting.

           *       *       *       *       *       *       *

    (q) Verification of IRS Return Information.--The Secretary 
shall verify the information reported by all applicants for 
assistance on the form prescribed under section 483 with the 
return information (as defined in section 6103 of the Internal 
Revenue Code of 1986) available to the Secretary of the 
Treasury. Notwithstanding section 6103 of such Code the 
Secretary of the Treasury shall provide the return information 
to the Secretary. In the case of a dependent student the return 
information shall include the return information of the parent 
of the student. The form prescribed by the Secretary under 
section 483 shall contain a prominent notice of the 
verification of the information and a warning to all the 
applicants of the penalties for misrepresentation, with respect 
to the information, under the United States Code.
    (r) Suspension of Eligibility for Drug-Related Offenses.--
          (1) In general.--A student who has been convicted of 
        any offense under any Federal or State law involving 
        the possession or sale of a controlled substance shall 
        not be eligible to receive any grant, loan, or work 
        assistance under this title during the period beginning 
        on the date of such conviction and ending after the 
        interval specified in the following table:

If convicted of an offense involving:

The possession of a Ineligibility period is:
  First offense.....1 year .............................................
  Second offense....2 years ............................................
  Third offense.....Indefinite..........................................
The sale of a controIneligibility period is:
  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 ineligibility period 
        determined under such paragraph if the student 
        satisfactorily completes a drug rehabilitation program 
        that complies with such criteria as the Secretary shall 
        prescribe in regulations for purposes of this 
        paragraph.
          (3) Definitions.--In this subsection, the term 
        ``controlled substance'' has the meaning given the term 
        in section 102(6) of the Controlled Substances Act (21 
        U.S.C. 802(6)).

           *       *       *       *       *       *       *


SEC. 484B. [20 U.S.C. 1091B] INSTITUTIONAL REFUNDS.

    (a) Refund Policy Required.-- * * *

           *       *       *       *       *       *       *

    (b) Determinations.--The institution's refund policy shall 
be considered to be fair and equitable for purposes of this 
section if that policy provides for a refund in an amount of at 
least the largest of the amounts provided under--
          (1) the requirements of applicable State law; or
          [(2) the specific refund requirements established by 
        the institution's nationally recognized accrediting 
        agency and approved by the Secretary; or]
          [(3)] (2) the pro rata refund calculation described 
        in subsection (c), except that this paragraph will not 
        apply to the institution's refund policy for any 
        student whose date of withdrawal from the institution 
        is after the 60 percent point (in time) in the period 
        of enrollment for which the student has been charged.
    (c) Definitions.--(1) As used in this section, the term 
``pro rata refund'' means a refund by the institution to a 
student attending such institution for the first time of not 
less than that portion of the tuition, fees, room and board, 
and other charges assessed the student by the institution equal 
to the portion of the period of enrollment for which the 
student has been charged that remains on the [last day of 
attendance by the student] day the student withdrew, rounded 
downward to the nearest 10 percent of that period, less any 
unpaid charges owed by the student for the period of enrollment 
for which the student has been charged, and less a reasonable 
administrative fee not to exceed the lesser of 5 percent of the 
tuition, fees, room and board, and other charges assessed the 
student, or $100.

           *       *       *       *       *       *       *

                  (A) in the case of a program that is measured 
                in credit hours, by dividing the total number 
                of weeks comprising the period of enrollment 
                for which the student has been charged into the 
                number of weeks remaining in that period as of 
                the [last recorded day of attendance by the 
                student] day the student withdrew;
          (3) For the purpose of this section, the term ``day a 
        student withdrew''--
                  (A) is the date that was the last recorded 
                day of attendance by the student; or
                  (B) in instances where attendance is not 
                recorded, is the date on which--
                          (i) the student began the withdrawal 
                        process prescribed by the institution; 
                        or
                          (ii) the student otherwise provided 
                        notification to the institution of the 
                        intent to withdraw.

           *       *       *       *       *       *       *


SEC. 485 [20 U.S.C. 1092] 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], mailings, and electronic media, to 
all enrolled students, and to any prospective student upon 
request. Each eligible institution annually shall provide to 
all students enrolled at the institution, a list of the 
information that is required by this section, together with a 
statement of the procedures required to obtain the information. 
The information required by this section shall accurately 
describe--

           *       *       *       *       *       *       *

    (2) For the purpose of this section,the term ``prospective 
student'' means any individual who has contacted an eligible 
institution requesting information concerning an application 
for admission to that institution.
    (3) In calculating the completion or graduation rate under 
subparagraph (L) of paragraph (1) of this subsection 
(graduation notes) or under subsection (e), (student right-to-
know), 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 suparagraph--
                  [(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

           *       *       *       *       *       *       *

    (b) Exit Counseling for Borrowers.--(1)(A) Each eligible 
institution shall, through financial aid officers or otherwise, 
make available counseling to borrowers [individually or in 
groups] of loans which are made, insured, or guaranteed under 
part B (other than loans made pursuant to section 428B) of this 
title or made under part D or E of this title prior to the 
completion of the course of study for which the borrower 
enrolled at the institution or at the time of departure from 
such institution. The counseling required by this subsection 
shall find include--

           *       *       *       *       *       *       *

  (C) Nothing in this subsection shall be construed to prohibit 
an institution of higher education from utilizing electronic 
means to provide personalized exit counseling.

           *       *       *       *       *       *       *

    (e) * * *

           *       *       *       *       *       *       *

    [(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 counselor, and coach the 
information contained in the report submitted by such 
institution pursuant to paragraph (1).]
          (2) When an institution described in paragraph (1) 
        offers a potential student athlete athletically related 
        student aid, such institution shall provide to the 
        student, the student's parents, the student's guidance 
        counselor, and the student's 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 the previous sentence, the distribution of the 
        compilation to all secondary schools shall fulfill the 
        responsibility of the institution to provide the 
        information to a prospective student athlete's guidance 
        counselor and coach.

           *       *       *       *       *       *       *

    [(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 each July 1 and shall cover the 1-year period 
        ending August 31 of the preceding year.
    (f) * * *

           *       *       *       *       *       *       *

                  (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 for 
                which data are available--
                          (i) of the following criminal 
                        offenses reported to campus security 
                        authorities or local police agencies--
                                  (I) homicide, including 
                                murder or nonnegligent 
                                manslaughter or negligent 
                                manslaughter;
                                  (II) sex offenses, forcible 
                                or nonforcible;
                                  (III) robbery;
                                  (IV) aggravated assault;
                                  (V) burglary;
                                  (VI) motor vehicle theft; and
                                  (VII) arson;
                          (ii) of the crimes described in 
                        subclauses (I) through (VII), and 
                        vandalism and simple assault, that 
                        manifest evidence of prejudice based on 
                        actual or perceived race, gender, 
                        religion, sexual orientation, ethncity, 
                        or disability that are reported to 
                        campus security authorities or local 
                        police agencies, which data shall be 
                        collected and reported according to 
                        category of prejudice.

           *       *       *       *       *       *       *

                  (I) 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)(A) Each institution participating in any program 
        under this title which 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 all crimes reported to 
        such police or security department, including--
                  (i) the nature, date, time, and general 
                location of each crime; and
                  (ii) the disposition of the complaint, if 
                known.
          (B)(i) All entries that are required pursuant to this 
        paragraph shall, except where disclosure of such 
        information is prohibited by law or such disclosure 
        would jeopardize the confidentiality of the victim, be 
        open to public inspection within 2 business days of the 
        initial report being made to the department or a campus 
        security authority.
          (ii) If new information about an entry into a log 
        becomes available to a police or security department, 
        then the new information shall be recorded in the log 
        not later than 2 business days after the information 
        becomes available to the police or security department.
          (iii) Where there is clear and convincing evidence 
        that the release of such information would jeopardize 
        an ongoing criminal investigation or the safety of an 
        individual, cause a suspect to flee or evade detection, 
        or result in the destruction of evidence, such 
        information may be withheld until that damage is no 
        longer likely to occur from the release of such 
        information.
          (iv) Notwithstanding clause (iii), an institution of 
        higher education shall record all criminal incidents 
        occurring on campus and shall make the reports open to 
        public inspection not later than 2 business days after 
        the requirements of clause (iii) are met.
          [(4)](5) Upon the request of the Secretary, 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). The Secretary shall--

           *       *       *       *       *       *       *

          [(5)](6)(A) For purposes of this subsection, the term 
        ``campus'' includes--

           *       *       *       *       *       *       *

          [(6)](7) The statistics described in paragraphs 
        (1)(F) and (1)(H) 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, except 
        as permitted by State or local law.
          [(7)](8)(A) Each institution of higher education 
        participating in any program under this title shall 
        develop and distribute as part of the report described 
        in paragraph (1) a statement of policy regarding--

           *       *       *       *       *       *       *

          (9) Study.--
                  (A) In general.--The Secretary, in 
                consultation with the Attorney General, shall 
                provide for a national study to examine 
                procedures undertaken after an institution of 
                higher education receives a report of sexual 
                assault.
                  (B) Report.--The study required by 
                subparagraph (A) shall include an analysis of--
                          (i) the existence and publication of 
                        the institution of higher education's 
                        and State's definition of sexual 
                        assault;
                          (ii) the existence and publication of 
                        the institution's policy for campus 
                        sexual assaults;
                          (iii) the individuals to whom reports 
                        of sexual assault are given most often 
                        and--
                                  (I) how the individuals are 
                                trained to respond to the 
                                reports; and
                                  (II) the extent to which the 
                                individuals are trained;
                          (iv) the reporting options that are 
                        articulated to the victim or victims of 
                        the sexual assault regarding--
                                  (I) on-campus reporting and 
                                procedure options; and
                                  (II) off-campus reporting and 
                                procedure options;
                          (v) the resources available for 
                        victims' safety, support, medical 
                        health, and confidentiality, 
                        including--
                                  (I) how well the resources 
                                are articulated both 
                                specifically to the victim of 
                                sexual assault and generally to 
                                the campus at large; and
                                  (II) the security of the 
                                resources in terms of 
                                confidentiality or reputation;
                          (vi) policies and practices that may 
                        prevent or discourage the reporting of 
                        campus sexual assaults to local crime 
                        authorities, or that may otherwise 
                        obstruct justice or interfere with the 
                        prosecution of perpetrators of campus 
                        sexual assaults;
                          (vii) policies and practices found 
                        successful in aiding the report and any 
                        ensuing investigation or prosecution of 
                        a campus sexual assault;
                          (viii) the on-campus procedures for 
                        investigation and disciplining the 
                        perpetrator of a sexual assault, 
                        including--
                                  (I) the format for collecting 
                                evidence; and
                                  (II) the format of the 
                                investigation and disciplinary 
                                proceeding, including the 
                                faculty responsible for running 
                                the disciplinary procedure and 
                                the persons allowed to attend 
                                the disciplinary procedure; and
                          (ix) types of punishment for 
                        offenders, including--
                                  (I) whether the case is 
                                directed outside for further 
                                punishment; and
                                  (II) how the institution 
                                punishes perpetrators.
                  (C) Submission of report.--The report 
                required by subparagraph (B) shall be submitted 
                to Congress not later than September 1, 1999.
                  (D) Definition.--For purposes of this 
                section, the term `campus sexual assaults' 
                means sexual assaults occurring at institutions 
                of higher education and sexual assaults 
                committed against or by students or employees 
                of such institutions.
                  (E) Authorization of appropriations.--There 
                is authorized to be appropriated to carry out 
                this section $1,000,000 for fiscal year 1999.

           *       *       *       *       *       *       *

    (g) * * *

           *       *       *       *       *       *       *

                  (I)(i) The total revenues, and the revenues 
                from football, men's basketball, women's 
                basketball, all other men's sports combined, 
                and all other women's sports combined, derived 
                by the institution from the institution's 
                intercollegiate athletics activities.
                  (ii) For the purpose of clause (i) revenues 
                from intercollegiate athletics activities 
                allocable to a sport shall include, without 
                limitation, gate receipts, broadcast revenues, 
                appearance guarantees and options, concessions 
                and advertising, except that revenues such as 
                student activities fees or alumni contributions 
                not so allocable shall be included in the 
                calculation of total revenues only.
                  (J)(i) The total expenses, and the expenses 
                attributable to football, men's basketball, 
                women's basketball, all other men's sports 
                combined and all other women's sports combined, 
                made by the institution for the institution's 
                intercollegiate athletics activities.
                  (ii) For the purpose of clause (i) expenses 
                for intercollegiate athletics activities 
                allocable to a sport shall include without 
                limitation grants-in-aid, salaries, travel, 
                equipment, and supplies, except that 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 will, 
                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 for 
                any such sport, and the reasons for any such 
                reduction, to the extent the reduction is 
                known.

           *       *       *       *       *       *       *

          (4) Submission; report; information availability.--
        (A) Each institution of higher education described in 
        paragraph (1) shall provide to the Secretary, within 15 
        days of the date that the institution makes available 
        the report under paragraph (1), the information 
        contained in the report.
          (B) The Secretary shall prepare a report regarding 
        the information received under subparagraph (A) for 
        each year by April 1 of the year. The report shall--
                  (i) summarize the information and identify 
                trends in the information;
                  (ii) aggregate the information by divisions 
                of the National Collegiate Athletic 
                Association; and
                  (iii) contain information on each individual 
                institution of higher education.
          (C) The Secretary shall ensure that the report 
        described in subparagraph (B) is made available on the 
        Internet within a reasonable period of time.
          (D) The Secretary shall notify, not later than 180 
        days after the date of enactment of the Higher 
        Education Amendments of 1998, all secondary schools in 
        all States regarding the availability of the 
        information reported under subparagraph (B) and the 
        information made available under paragraph (1), and how 
        such information may be accessed.
          [(4)](5) Definition.--For the purposes of this 
        subsection, the term ``operating expenses'' means 
        expenditures on lodging and meals, transportation, 
        officials, uniforms and equipment.
          [(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. [20 U.S.C. 1092B] NATIONAL STUDENT LOAN DATA SYSTEM.

    (a) Development of the System.--* * *

           *       *       *       *       *       *       *

  (h) Student Status Confirmation Report.--In order to reduce 
unnecessary paperwork and to increase the efficient 
administration, the Secretary shall assure that borrowers under 
part E are included in the Student Status Confirmation Report 
in the same manner as borrowers under parts B and D.

           *       *       *       *       *       *       *


SEC. 486. [20 U.S.C. 1093] TRAINING IN FINANCIAL AID SERVICES.

    [(a) Program Authority.--The Secretary is authorized to 
provide grants to appropriate nonprofit private organizations 
or combinations of such organizations to provide training for 
student financial aid administrators and TRIO personnel, at all 
levels of experience, who provide or are involved in student 
financial aid services.
    [(b) Use of Funds.--Financial assistance under this section 
may be used for--
          [(1) the operation of short-term training institutes 
        and special training programs for student financial aid 
        administrators or TRIO personnel designed to--
                  [(A) improve the professional management 
                skills of participants in such institutes and 
                programs;
                  [(B) improve the delivery of student 
                services;
                  [(C) improve students' or prospective 
                students' information on the availability and 
                operation of student financial assistance 
                programs; and
                  [(D) improve the understanding and knowledge 
                of the participants concerning the legislative 
                and regulatory requirements of the student 
                financial assistance programs and changes in 
                such requirements; and
          [(2) the development of appropriate training 
        materials.
    [(c) Limitations.--Grants authorized under this section--
          [(1) shall be limited to not less than $1,000,000 in 
        the case of single-year grants;
          [(2) shall be limited to not less than $1,000,000 per 
        year in the case of multiple-year grants;
          [(3) shall be limited to a maximum of 3 years in the 
        case of multiple-year grants; and
          [(4) may be renewed at the discretion of the 
        Secretary.
    [(d) Authorization of Appropriations and Use of Funds.--
There are authorized to be appropriated $5,000,000 for fiscal 
year 1993 and such sums as may be necessary for each of the 4 
succeeding fiscal years to carry out the provisions of this 
section.]

SEC. 486. INFORMATION ON THE COSTS OF HIGHER EDUCATION.

  (a) In General.--For the purpose of providing comparative 
information to families about the costs of higher education--
          (1) the National Center for Education Statistics 
        shall--
                  (A) develop a standard definition for the 
                following data elements:
                          (i) Tuition and fees.
                          (ii) Total cost of attendance, 
                        including costs such as housing, books, 
                        supplies, and transportation.
                          (iii) Average amount of financial 
                        assistance received by a student who 
                        attends an institution of higher 
                        education, in terms of the following:
                                  (I) Grants and loans.
                                  (II) Institutional and other 
                                assistance.
                          (iv) Percentage of students receiving 
                        student financial assistance, in terms 
                        of the following:
                                  (I) Grants and loans.
                                  (II) Institutional and other 
                                assistance;
                  (B) report the definitions to each 
                institution of higher education and the 
                Committee on Labor and Human Resources of the 
                Senate and the Committee on Education and the 
                Workforce of the House of Representatives not 
                later than 90 days after the date of enactment 
                of the Higher Education Amendments of 1998;
                  (C) collect information regarding the data 
                elements described in subparagraph (A) with 
                respect to all institutions of higher 
                education, and make available the information 
                each year in a timely fashion through the 
                integrated postsecondary education data system, 
                beginning with the information from the 1999-
                2000 academic year;
                  (D) provide the public notice when the 
                information described in subparagraph (C) is 
                available for public inspection; and
                  (E) publish in a timely fashion a report 
                after the third year of collection of the 
                information described in subparagraph (C) that 
                compares the information described in 
                subparagraph (C) longitudinally by institution, 
                which information shall be presented in a form 
                that is easily understandable, including clear 
                definitions of the data elements described in 
                subparagraph (A), to allow parents and students 
                to make informed decisions about attending 
                college; and
          (2) institutions of higher education shall provide 
        information regarding each data element described in 
        paragraph (1)(A) to the National Center for Education 
        Statistics by March 1 of each year, beginning in the 
        year 2000.
  (b) Study.--
          (1) In general.--In consultation with the Bureau of 
        Labor Statistics, the National Center for Education 
        Statistics shall conduct a national study of 
        expenditures at institutions of higher education. Such 
        study shall include information about--
                  (A) expenditures for--
                          (i) faculty salaries and benefits;
                          (ii) administrative salaries, 
                        benefits, and expenses;
                          (iii) academic support services;
                          (iv) research;
                          (v) construction; and
                          (vi) technology;
                  (B) how such expenditures change over time; 
                and
                  (C) how such expenditures relate to college 
                costs.
          (2) Final report.--The National Center for Education 
        Statistics shall submit a report regarding the findings 
        of the study required by paragraph (1) to the Committee 
        on Labor and Human Resources of the Senate and the 
        Committee on Education and the Workforce of the House 
        of Representatives not later than September 30, 2001.
  (c) Higher Education Market Basket.--In consultation with the 
Bureau of Labor Statistics, the National Center for Education 
Statistics shall develop a Higher Education Market Basket that 
identifies the items that comprise the costs of higher 
education. The National Center for Education Statistics shall 
provide a report on the market basket to the Committee on Labor 
and Human Resources of the Senate and the Committee on 
Education and the Workforce of the House of Representatives not 
later than September 30, 2002.
  (d) Fines.--In addition to the actions authorized in section 
487(c), the Secretary may impose a fine in an amount not to 
exceed $25,000 on an institution of higher education for 
failure to provide the information described in subsection 
(a)(2) in a timely or accurate manner, or for failure to 
otherwise cooperate with the National Center for Education 
Statistics regarding efforts to obtain data on the cost of 
higher education under such subsection.

SEC. 487. [20 U.S.C. 1094] PROGRAM PARTICIPATION AGREEMENTS.

    (a) * * *

           *       *       *       *       *       *       *

                  [(A) the Secretary;
                  [(B) the appropriate State review entity 
                designated under subpart 1 of part H;]
                  [(C)] (B) the appropriate guaranty agency; 
                and
                  [(D)] (C) the appropriate accrediting agency 
                or association.

           *       *       *       *       *       *       *

          (9) In the case of an institution participating in a 
        program under [part B] part B or D, the institution 
        will inform all eligible borrowers enrolled in the 
        institution about the availability and eligibility of 
        such borrowers for State grant assistance from the 
        State in which the institution is located, and will 
        inform such borrowers from another State of the source 
        for further information concerning such assistance from 
        that State.

           *       *       *       *       *       *       *

          (14)(A) The institution, in order to participate as 
        an eligible institution under [part B] part B or D, 
        will develop a Default Management Plan for approval by 
        the Secretary as part of its initial application for 
        certification as an eligible institution and will 
        implement such Plan for two years thereafter.
          (B) Any for-profit institution of higher education 
        which changes ownership [and any eligible institution 
        which] or changes it status as a parent or subordinate 
        institution shall, in order to participate as an 
        eligible institution under [part B] part B or D, 
        develop a Default Management Plan for approval by the 
        Secretary and implement such Plan for two years after 
        its change of ownership or status.
          (15) The institution acknowledges the authority of 
        the Secretary, guaranty agencies, lenders, accrediting 
        agencies, the Secretary of Veterans Affairs, and [State 
        review entities] the State agencies under subpart 1 of 
        part H to share with each other any information 
        pertaining to the institution's eligibility to 
        participate in programs under this title or any 
        information on fraud and abuse.

           *       *       *       *       *       *       *

          [(21) The institution will meet the requirements 
        established by the Secretary, State postsecondary 
        review entities, and accrediting agencies pursuant to 
        part H of this title.]
          (21) The institution will meet the requirements 
        established by the Secretary and accrediting agencies 
        or associations, and will provide evidence to the 
        Secretary that the institution has the authority to 
        operate within a State.

           *       *       *       *       *       *       *

    (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] appropriate State agency notifying the 
        Secretary under subpart 1 of part H; or

           *       *       *       *       *       *       *

    (4) The Secretary shall publish[, after consultation with 
each State review entity designated under subpart 1 of part H,] 
a list of State agencies which the Secretary determines to be 
reliable authority as to the quality of public postsecondary 
vocational education in their respective States for the purpose 
of determining eligibility for all Federal student assistance 
programs.
    (5) The Secretary shall make readily available to 
appropriate guaranty agencies, eligible lenders, [State review 
entities designated] State agencies notifying the Secretary 
under subpart 1 of part H, and accrediting agencies or 
associations the results of the audits of eligible institutions 
conducted pursuant to paragraph (1)(A).

           *       *       *       *       *       *       *


[SEC. 487A. [20 U.S.C. 1094A] 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. REGULATORY RELIEF AND IMPROVEMENT.

  (a) Quality Assurance Program.--
          (1) In general.--The Secretary is authorized to 
        select institutions for voluntary participation in a 
        Quality Assurance Program that provides participating 
        institutions with an alternative management approach 
        through which individual schools develop and implement 
        their own comprehensive systems, including processing 
        and disbursement of student financial aid, verification 
        of student financial aid application data, and entrance 
        and exit interviews, thereby enhancing program 
        integrity within the student aid delivery system. 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.
          (2) Waiver.--The Secretary is authorized to waive for 
        any institution participating in the Quality Assurance 
        Program any regulations dealing with reporting or 
        verification requirements in this title that are 
        addressed by the institution's alternative management 
        system, and may substitute such quality assurance 
        reporting as the Secretary determines necessary to 
        ensure accountability and compliance with the purposes 
        of the programs under this title.
          (3) Determination.--The Secretary is authorized to 
        determine--
                  (A) when an institution that is unable to 
                administer the Quality Assurance Program shall 
                be removed from such program; and
                  (B) when institutions desiring to cease 
                participation in such program will be required 
                to complete the current award year under the 
                requirements of the Quality Assurance Program.
          (4) Review and evaluation.--The Secretary shall 
        review and evaluate the Quality Assurance Program 
        conducted by each participating institution and, on the 
        basis of that evaluation, make recommendations 
        regarding amendments to this Act that will streamline 
        the administration and enhance the integrity of Federal 
        student assistance programs. Such recommendations shall 
        be submitted to the Committee on Labor and Human 
        Resources of the Senate and the Committee on Education 
        and the Workforce of the House of Representatives.
  (b) Regulatory Improvement and Streamlining Experiments.--
          (1) In general.--The Secretary shall review and 
        evaluate the experience of institutions participating 
        as experimental sites during the period of 1993 through 
        1998 under this section (as such section was in effect 
        on the day before the date of enactment of the Higher 
        Education Amendments of 1998), and shall submit a 
        report based on this review and evaluation to the 
        Committee on Labor and Human Resources of the Senate 
        and the Committee on Education and the Workforce of the 
        House of Representatives not later than 6 months after 
        the enactment of the Higher Education Amendments of 
        1998. Such report shall include--
                  (A) a list of participating institutions and 
                the specific statutory or regulatory waivers 
                granted to each institution;
                  (B) the findings and conclusions reached 
                regarding each of the experiments conducted; 
                and
                  (C) recommendations for amendments to improve 
                and streamline this Act, based on the results 
                of the experiment.
          (2) Selection.--
                  (A) In general.--The Secretary is authorized 
                to select a limited number of 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, 
                except that additional institutions may not be 
                selected by the Secretary until the report 
                required by subsection (b)(1) has been 
                submitted to Congress.
                  (B) Consultation.--Prior to approving any 
                additional experimental sites, the Secretary 
                shall consult with the Committee on Labor and 
                Human Resources of the Senate and the Committee 
                on Education and the Workforce of the House of 
                Representatives and shall provide--
                          (i) a list of institutions proposed 
                        for participation in the experiment and 
                        the specific statutory or regulatory 
                        waivers proposed to be granted to each 
                        institution;
                          (ii) the objectives to be achieved 
                        through the experiment; and
                          (iii) the period of time over which 
                        the experiment is to be conducted.
                  (C) Waivers.--The Secretary is authorized to 
                waive, for any institution participating as an 
                experimental site under subparagraph (A), any 
                requirements in this title, or regulations 
                prescribed under this title, that will bias 
                experimental results.
  (c) Definitions.--For purposes of this section, the term 
`current award year' is defined as the award year during which 
the participating institution indicates the institution's 
intention to cease participation.

           *       *       *       *       *       *       *


SEC. 487C. 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 to test the quality and 
        viability of expanded distance education programs 
        currently restricted under this Act;
          (2) to help determine the specific statutory and 
        regulatory requirements which should be altered to 
        provide greater access to high quality distance 
        education programs; and
          (3) 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, in accordance with 
        the provisions of subsection (d), is authorized to 
        select institutions of higher education or consortia of 
        such institutions for voluntary participation in a 
        Distance Education Demonstration Program that provides 
        participating institutions with the ability to offer 
        distance education programs that do not meet all or a 
        portion of the sections or regulations described in 
        paragraph (2).
          (2) Waivers.--The Secretary is authorized to waive, 
        for any institution or consortia participating in a 
        Distance Education Demonstration Program, 1 or more of 
        the requirements of section 472(5) as the section 
        relates to computer costs, sections 472(10), 
        481(a)(3)(A), 481(a)(3)(B), 484(l)(1), or 1 or more of 
        the regulations prescribed for distance education under 
        part F or G.
          (3) Special rule.--An institution of higher 
        education, as defined in section 481(a), is eligible to 
        participate in the demonstration program authorized 
        under this section if such institution awards a degree, 
        except that--
                  (A) such institutions that are described in 
                section 481(a)(1)(C) shall not be eligible to 
                participate; and
                  (B) subject to subparagraph (A), such 
                institutions that meet the requirements of 
                subsection (a) of section 481, other than the 
                requirements of paragraph (3)(A) or (3)(B) of 
                such subsection, shall be eligible to 
                participate.
  (c) Application.--
          (1) In general.--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 and in such manner as the 
        Secretary may require.
          (2) Contents.--Each application shall include--
                  (A) a description of the institution or 
                consortium's consultation with a recognized 
                accrediting agency or association with respect 
                to quality assurances for the distance 
                education programs to be offered;
                  (B) a description of the statutory and 
                regulatory requirements described in subsection 
                (b)(2) for which a waiver is sought and the 
                reasons for which the waiver is sought;
                  (C) a description of the distance education 
                programs to be offered;
                  (D) a description of the students to whom 
                distance education programs will be offered;
                  (E) an assurance that the institution or 
                consortium will offer full cooperation with the 
                ongoing evaluations of the demonstration 
                program provided for in this section; and
                  (F) such other information as the Secretary 
                may require.
  (d) Selection.--The Secretary is authorized to select not 
more than 5 institutions or consortia to participate in the 
initial year of the demonstration program authorized under this 
section. If expansion of the demonstration program can be 
supported on the basis of the evaluations conducted pursuant to 
subsections (f) and (g), the Secretary may select not more than 
10 additional institutions or consortia, taking into account 
the number and quality of applications received and the 
Department's capacity to oversee and monitor each demonstration 
program. To the extent feasible, the Secretary shall select a 
representative sample of institutions for participation. 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.
  (e) Notification.--The Secretary shall make available to the 
public and to the Committee on Labor and Human Resources of the 
Senate and the Committee on Education and the Workforce of the 
House of Representatives a list of institutions or consortia 
selected to participate in the demonstration program authorized 
by this section. Such notice shall include a listing of the 
specific statutory and regulatory requirements being waived for 
each institution or consortia and a description of the distance 
education courses to be offered.
  (f) Evaluations and Reports.--
          (1) Evaluation.--The Secretary, on an annual basis, 
        shall evaluate the demonstration programs authorized 
        under this section. Such evaluations shall specifically 
        review--
                  (A) the number and types of students 
                participating in the programs being offered, 
                including the progress of participating 
                students toward recognized associate, 
                bachelor's, or graduate degrees, and the degree 
                to which participation in such programs 
                increased;
                  (B) issues related to student financial 
                assistance for distance education; and
                  (C) the extent to which statutory or 
                regulatory requirements not waived under the 
                demonstration program present difficulties for 
                students or institutions.
          (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) Reports.--
                  (A) In general.--Within 18 months of the 
                initiation of the demonstration program, the 
                Secretary shall report to the Committee on 
                Labor and Human Resources of the Senate and the 
                Committee on Education and the Workforce of the 
                House of Representatives with respect to--
                          (i) the evaluations of the 
                        demonstration programs authorized under 
                        this section; and
                          (ii) any proposed statutory changes 
                        designed to enhance the use of distance 
                        education.
                  (B) Additional reports.--The Secretary shall 
                provide additional reports to the Committee on 
                Labor and Human Resources of the Senate and the 
                Committee on Education and the Workforce of the 
                House of Representatives on an annual basis 
                regarding the demonstration programs authorized 
                under this section.
  (g) Independent Evaluation.--
          (1) In general.--The Secretary shall enter into a 
        contract with the National Academy of Sciences to study 
        the quality of and student learning outcomes in 
        distance education programs. Such study shall include--
                  (A) identification of the elements by which 
                quality in distance education can be assessed, 
                such as subject matter, interactivity, and 
                student outcomes; and
                  (B) identification of the types of students 
                which can most benefit from distance education 
                in areas such as access to higher education, 
                persistence, and graduation.
          (2) Scope.--Such study shall include distance 
        education programs offered by the institutions or 
        consortia participating in the demonstration program 
        authorized by this section, as well as the distance 
        education programs offered by other institutions.
          (3) Interim and final reports.--The Secretary shall 
        request that the National Academy of Sciences submit an 
        interim report to the Secretary, the Committee on Labor 
        and Human Resources of the Senate, and the Committee on 
        Education and the Workforce of the House of 
        Representatives not later than December 31, 2000, and a 
        final report not later than December 31, 2002, 
        regarding the study.
          (4) Funding.--The Secretary shall make available not 
        more than $1,000,000 for the study required by this 
        subsection.
  (h) Oversight.--In conducting the demonstration program 
authorized under this section, the Secretary shall, on a 
continuing basis--
          (1) assure compliance of institutions or consortia 
        with the requirements of this title (other than the 
        sections and regulations that are waived under 
        subsection (b)(2));
          (2) provide technical assistance;
          (3) monitor fluctuations in the student population 
        enrolled in the participating institutions or 
        consortia; and
          (4) consult with appropriate accrediting agencies or 
        associations and appropriate State regulatory 
        authorities.
  (i) Definition.--For the purpose of this section, 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. 491. [20 U.S.C. 1098] 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], expenditures and 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. Reports, publications, and 
other documents, including such reports, publications, and 
documents in electronic form, shall not be subject to review by 
the Secretary. 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. 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.

           *       *       *       *       *       *       *

    (e) * * *

           *       *       *       *       *       *       *

          (3) No officers or full-time employees of the Federal 
        Government shall serve as members of the Advisory 
        Committee.
    [(3)](4) The Advisory Committee shall elect a Chairman and 
a Vice Chairman from among its members.
    [(4)](5) Six members of the Advisory Committee shall 
constitute a quorum.
    [(5)](6) The Advisory Committee shall meet at the call of 
the Chairman or a majority of its members.

           *       *       *       *       *       *       *

    (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] 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 many be determined necessary by 
the Chairman without regard to 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 The Advisory 
Committee may appoint not more than 1 full-time equivalent, 
nonpermanent, consultant without regard to the provisions of 
title 5, United States Code. The Advisory Committee shall not 
be required by the Secretary to reduce personnel to meet agency 
personnel reduction goals.

           *       *       *       *       *       *       *

    (i) Availability of Funds.--In each fiscal year not less 
than [$750,000] $800,000, 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 Advisory Committee 
shall--
          (1) monitor and evaluate the modernization of student 
        financial aid systems and delivery processes, including 
        the implementation of a performance-based organization 
        within the Department, and report to Congress regarding 
        such modernization on not less than an annual basis, 
        including recommendations for improvement;
          (2) assess the adequacy of current methods for 
        disseminating information about programs under this 
        title and recommend improvements, as appropriate, 
        regarding early needs assessment and information for 
        first-year secondary school students;
          (3) assess and make recommendations concerning the 
        feasibility and degree of use of appropriate technology 
        in the application for, and delivery and management of, 
        financial assistance under this title, as well as 
        policies that promote use of such technology to reduce 
        cost and enhance service and program integrity, 
        including electronic application and reapplication, 
        just-in-time delivery of funds, reporting of 
        disbursements and reconciliation;
          (4) assess the implications of distance learning on 
        student eligibility and other requirements for 
        financial assistance under this title, and make 
        recommendations that will enhance access to 
        postsecondary education through distance learning while 
        maintaining access, through on-campus instruction at 
        eligible institutions, and program integrity; and
          (5) make recommendations to the Secretary regarding 
        redundant or outdated provisions of and regulations 
        under this Act, consistent with the Secretary's 
        requirements under section 498A(b)(3).
    (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. [20 U.S.C. 1098A] REGIONAL MEETINGS AND NEGOTIATED 
                    RULEMAKING.

    (a) Meetings.--
          (1) In general.--The Secretary, after the enactment 
        of each Act to reauthorize this Act that contains an 
        amendment to this title, shall convene regional 
        meetings to obtain public involvement in the 
        development of proposed regulations for parts B, D, 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, D, G, and H, as amended by the Higher 
        Education Amendments of [1992] 1998, and for the 
        implementation of this title as amended by each Act to 
        reauthorize this Act enacted after the date of 
        enactment of the Higher Education Amendments of 1998 
        that contains an amendment to this title. 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] (1) In general._ After 
holding regional meetings and before publishing proposed 
regulations in the Federal Register, the Secretary shall 
prepare draft regulations implementing parts B, D, G, and H of 
this title as amended by the Higher Education Amendments of 
[1992] 1998, and for the implementation of this title as 
amended by each Act to reauthorize this Act enacted after the 
date of enactment of the Higher Education Amendments of 1998 
that contains an amendment to this title, 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.
       (2) Expansion of negotiated rulemaking in student loan 
programs.--All regulations pertaining to the student assistance 
programs in parts B, D, G, and H, that are promulgated after 
the date of enactment of this paragraph, shall be subject to 
the negotiated rulemaking process, unless the Secretary 
determines that exceptional circumstances exist making 
negotiated rulemaking impractical with respect to given 
regulations and publishes the basis for such determination in 
the Federal Register at the same time as the proposed 
regulations in questions are first published. All published 
proposed regulations shall conform, unless impracticable, to 
agreements resulting from such negotiated rulemaking. Such 
negotiated rulemaking shall be conducted in accordance with the 
provisions of paragraph (1).

           *       *       *       *       *       *       *


                    PART H--PROGRAM INTEGRITY TRIAD

            [Subpart 1--State Postsecondary Review Program]

Subpart 1--State Role

           *       *       *       *       *       *       *


SEC. 495. STATE RESPONSIBILITIES.

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

           *       *       *       *       *       *       *


          Subpart 2--Accrediting Agency [Approval] Recognition

SEC. 496. [20 U.S.C. 199B] [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--
          (4) such agency or association consistently applies 
        and enforces standards that ensure that the courses or 
        programs of instruction, training, or study [at the 
        institution] offered by the institution of higher 
        education, including distance education courses or 
        programs, 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 of the agency or 
        association assess the institution's--
                  ``(A) success with respect to student 
                achievement in relation to the institution's 
                mission, including, as appropriate, 
                consideration of course completion, State 
                licensing examination, and job placement rates;
                  [(A)] (B) curricula;
                  [(B)] (C) faculty;
                  [(C)] (D) facilities, equipment, and 
                supplies;
                  [(D)] (E) fiscal and administrative capacity 
                as appropriate to the specified scale of 
                operations;
                  [(E)] (F) student support services;
                  [(F)] (G) recruiting and admissions 
                practices, academic calendars, catalogs, 
                publications, grading and advertising;
                  [(G)] (H) program length and tuition and fees 
                in relation to the subject matters taught and 
                the objectives of the degrees or credentials 
                offered;
                  [(H)] (I) measures of program [length in 
                clock hours or credit hours;]
                  [(I) success with respect to student 
                achievement in relation to its mission, 
                including, as appropriate, consideration of 
                course completion, State licensing examination, 
                and job placement rates;]

           *       *       *       *       *       *       *

                  (L) record of compliance with its program 
                responsibilities under title IV of this [Act, 
                including any] Act based on the results of 
                financial or compliance audits, program 
                reviews, and any such other information as the 
                Secretary may provide to the agency or 
                association;
        except that subparagraphs [(G),] (H), (I), (J), and (L) 
        shall not apply to agencies or associations described 
        in paragraph (2)(A)(ii) of this subsection;

           *       *       *       *       *       *       *

    (l) Limitation, Suspension or Termination of Approval.--
[(1) The Secretary shall limit, suspend, or terminate the 
approval 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 standards or operate according to the 
procedures provided in this section.]
          (1)(A)(i) If the Secretary determines that an 
        accrediting agency or association has failed to apply 
        effectively the standards in this section, or is 
        otherwise not in compliance with the requirements of 
        this section, the Secretary shall--
                  (I) after notice and opportunity for a 
                hearing, limit, suspend, or terminate the 
                approval of the agency or association; or
                  (II) require the agency or association to 
                take appropriate action to bring the agency or 
                association into compliance with such 
                requirements within a timeframe specified by 
                the Secretary, except that--
                          (aa) such timeframe shall not exceed 
                        12 months unless the Secretary extends 
                        such period for good cause; and
                          (bb) if the agency or association 
                        fails to bring the agency or 
                        association into compliance within such 
                        timeframe, the Secretary shall, after 
                        notice and opportunity for a hearing, 
                        limit, suspend, or terminate the 
                        approval of the agency or association.

           *       *       *       *       *       *       *

          (3) The Secretary shall consider all available 
        relevant information concerning the compliance of the 
        accrediting agency or association with the standards 
        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 process. The Secretary shall not, under any 
        circumstances, base decisions on the approval or 
        disapproval of accreditation agencies on associations 
        or standards other than those contained in this 
        section. ``When the Secretary decides to recognize an 
        accrediting agency or association, the Secretary shall 
        determine the agency or association's scope of 
        recognition. If the agency or association reviews 
        institutions offering distance education courses or 
        programs and the Secretary determines that the agency 
        or association meets the requirements of this section, 
        then the agency shall be recognized and the scope of 
        recognition shall include accreditation of institutions 
        offering distance education courses or programs.

           *       *       *       *       *       *       *


          Subpart 3--Eligibility and Certification Procedures

SEC. 498. ELIGIBILITY AND CERTIFICATION PROCEDURES.

    (A) General Requirement.--* * *

           *       *       *       *       *       *       *

          (1) requires sufficient information and documentation 
        to determine that the requirements of eligibility, 
        accreditation, and [and capability] financial 
        responsibility, and administrative capability of the 
        institution of higher education are met;

           *       *       *       *       *       *       *

          [(3) requires a description of third party servicers 
        of an institution of higher education, together with a 
        copy of any contract with the institution of higher 
        education and a financial aid service provider or loan 
        servicer; and]
          (3) requires--
                  ``(A) a description of the third party 
                servicers of an institution of higher 
                education; and
                  (B) the institution to maintain a copy of any 
                contract with a financial aid service provider 
                or loan servicer, and provide a copy of any 
                such contract to the Secretary upon request;
          (4) requires such other information as the Secretary 
        determines will ensure compliance with the requirements 
        of this title with respect to eligibility, 
        accreditation, administrative capability and financial 
        responsibility[.] ; and
           (5) provides, at the option of the institution, for 
        participation in 1 or more of the programs under part B 
        or part D.
    (c) * * *

           *       *       *       *       *       *       *

          (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] 
        regarding 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 and nonprofit institution. The 
        Secretary shall take into account an instutition's 
        total financial circumstances in making a determination 
        of its ability to meet the standards herein required.

           *       *       *       *       *       *       *

                  (A) such institution submits to the 
                [Secretary third-party financial guarantees, 
                such as performance bonds or letters of credit 
                payable to the Secretary] Secretary any third 
                party guarantees, which the Secretary 
                determines are reasonable, that, which third-
                party financial guarantees shall equal not less 
                than one-half of the annual potential 
                liabilities of such institution to the 
                Secretary for funds under this title, including 
                loan obligations discharged pursuant to section 
                437, and to students for refunds of 
                institutional charges, including funds under 
                this title;

           *       *       *       *       *       *       *

          (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 or 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--

           *       *       *       *       *       *       *

                  (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.

           *       *       *       *       *       *       *

    (e) Financial Guarantees From Owners of For-Profit 
Institutions._(1) Notwithstanding any other provision of law, 
the Secretary may, to the extent necessary to protect the 
financial interest of the United States, require--
          (A) financial guarantees [from an] from a for-profit 
        institution participating, or seeking to participate, 
        in a program under this title, or from one or more 
        individuals who the Secretary determines, in accordance 
        with paragraph (2), exercise substantial control over 
        such institution, or both, in an amount determined by 
        the Secretary to be sufficient to satisfy the 
        institution's potential liability to the Federal 
        Government, student assistance recipients, and other 
        program participants for funds under this title; and

           *       *       *       *       *       *       *

          (2)(A) The Secretary may determine that an individual 
        exercises substantial control over one or more for-
        profit institutions participanting in a program under 
        this title if the Secretary determines that--

           *       *       *       *       *       *       *

          (B) The Secretary may determine that an entity 
        exercises substantial control over one or more for-
        profit institutions participating in a program under 
        this title if the Secretary determines that the entity 
        directly or indirectly holds a substantial ownership 
        interest in the institution.
          (3) For purposes of this subsection, an ownership 
        interest is defined as a share of the legal or 
        beneficial ownership or control of, or a right to share 
        in the proceeds of the [operation of, an institution 
        or] operation of, a for-profit institution or the 
        institution's parent corporation. An ownership interest 
        may include, but is not limited to--

           *       *       *       *       *       *       *

    (f) Actions on Applications[; Site Visits and Fees and Site 
Visits._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 establish priorities by which 
institutions are to receive site visits, and [may] shall 
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.]
    [(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 on, and Renewal of, Eligibility.--
          ``(1) General rule.--After the expiration of the 
        certification of any institution under the schedule 
        prescribed under this section (as in effect prior to 
        the enactment of the Higher Education Act Amendments of 
        1998), or upon request for initial certification from 
        an institution not previously certified, the Secretary 
        may certify the eligibility for the purposes of any 
        program authorized under this title of each such 
        institution for a period not to exceed 6 years.
          (2) Notification.--The Secretary shall notify each 
        institution of higher education not later than 6 months 
        prior to the date of the expiration of the 
        institution's certification.
          (3) Institutions outside the united states.--The 
        Secretary shall promulgate regulations regarding the 
        recertification requirements applicable to an 
        institution of higher education outside of the United 
        States that meets the requirements of section 
        481(a)(1)(C) and received less than $500,000 in funds 
        under part B for the most recent year for which data 
        are available.
    (h) * * *

           *       *       *       *       *       *       *

                          (ii) there is a complete or partial 
                        change of ownership, as defined under 
                        subsection (i), of [an eligible] a for-
                        profit eligible institution; or

           *       *       *       *       *       *       *

          (2) Whenever the Secretary withdraws [the approval] 
        the 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 
                        of For-Profit Institutions._ (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)) and this section after such 
                        change in control.

           *       *       *       *       *       *       *

          (2) An action resulting in a change in control may 
        include (but is not limited to)--
                  (A) the sale of the for-profit institution or 
                the majority of its assets;

           *       *       *       *       *       *       *

                  (C) the merger of [two] a for-profit 
                institution with one or more eligible 
                institutions;
                  (D the division of one or more for-profit  
                institutions into two or more institutions;
                  (E) the transfer of the controlling interest 
                of stock of the institutions to its parent 
                corporation; or
                  (F) the transfer of the liabilities of the 
                for-profit institution to its parent 
                corporation.

           *       *       *       *       *       *       *

    (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) prior to seeking such certification. Such branch 
is required to be in existence at least 2 years after the 
branch is certified by the Secretary as a branch campus 
participating in a program under title IV, 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.--* * *

           *       *       *       *       *       *       *

          (2) [may] shall give priority for program review to 
        institutions of higher education that are--

           *       *       *       *       *       *       *

                  [(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;]
                  (C) institutions with a significant 
                fluctuation in Federal Stafford Loan volume, 
                Federal Direct Stafford/Ford Loan volume, or 
                Federal Pell Grant award volume, or any 
                combination thereof, in the year for which the 
                determination is made, compared to the year 
                prior to such year, that are not accounted for 
                by changes in the Federal Stafford Loan 
                program, the Federal Direct Stafford/Ford Loan 
                program, or the Pell Grant program, or any 
                combination thereof;
                  [(D) institutions reported to have 
                deficiencies or financial aid problems by the 
                appropriate State postsecondary review entity 
                designated under subpart 1 of this part or by 
                the appropriate accrediting agency or 
                association;]
                  (D)institutions reported to have deficiencies 
                or financial aid problems by the State 
                licensing or authorizing agency, or by the 
                appropriate accrediting agency or association;
                  (E) institutions with high annual dropout 
                rates; and
                  [(F) any institution which is required to be 
                reviewed by a State postsecondary review entity 
                pursuant to subpart 1 of part H under section 
                494C(b); and
                  [(G) such other institutions as the Secretary 
                deems necessary; and]
                  (F) such other institutions that the 
                Secretary determines may pose a significant 
                risk of failure to comply with the 
                administrative capability or financial 
                responsibility provisions of this title; and

           *       *       *       *       *       *       *

                  (A) all relevant information available to the 
                Department;

           *       *       *       *       *       *       *

    [(b) Special Administrative Rules.--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 general.--In carrying out paragraphs (1) and 
        (2) of subsection (a) and any other relevant provisions 
        of this title, the Secretary shall--
                  (A) establish guidelines designed to ensure 
                uniformity of practice in the conduct of 
                program reviews of institutions of higher 
                education;
                  (B) make available to each institution 
                participating in programs authorized under this 
                title complete copies of all review guidelines 
                and procedures used in program reviews;
                  (C) permit the institution to correct or cure 
                an administrative, accounting, or recordkeeping 
                error if the error is not part of a pattern of 
                error and there is no evidence of fraud or 
                misconduct related to the error;
                  (D) base any civil penalty assessed against 
                an institution of higher education resulting 
                from a program review or audit on the gravity 
                of the violation, failure, or 
                misrepresentation; and
                  (E) inform the appropriate State and 
                accrediting agency or association whenever the 
                Secretary takes action against an institution 
                of higher education under this section, section 
                498, or section 432.
          (2) Uniformity of application of regulations.--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.
          (3) Nonduplication and coordination.--The Secretary 
        shall establish a process for ensuring that eligibility 
        and compliance issues, such as institutional audit, 
        program review, and recertification, are considered 
        simultaneously, and shall establish a process for 
        identifying unnecessary duplication of reporting and 
        related regulatory requirements. In developing such 
        processes, the Secretary shall consult with relevant 
        representatives of institutions participating in the 
        programs authorized by this title.

           *       *       *       *       *       *       *


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

SEC. 499. PERFORMANCE-BASED ORGANIZATION FOR THE DELIVERY OF FEDERAL 
                    STUDENT FINANCIAL ASSISTANCE.

    (a) Establishment.--The Secretary shall establish in the 
Department a performance-based organization (hereafter in this 
part referred to as the ``PBO'') to administer various 
functions relating to student financial assistance programs 
authorized under this title.
    (b) Oversight and Authority.--
          (1) Policy oversight and direction.--The Secretary 
        shall maintain responsibility for the policy relating 
        to functions managed by the PBO, and the PBO shall 
        remain subject to the Secretary's oversight and 
        direction.
          (2) Audits and review.--The PBO shall be subject to 
        the usual and customary Federal audit procedures and to 
        review by the Inspector General of the Department.
          (3) Changes.--
                  (A) In general.--The Secretary and the Chief 
                Operating Officer shall consult concerning the 
                effects of policy, market, or other changes on 
                the ability of the PBO to achieve the goals and 
                objectives established in the performance plan 
                described in subsection (e).
                  (B) Revisions to agreement.--The Secretary 
                and the Chief Operating Officer may revise the 
                annual performance agreement described in 
                subsection (f)(2) in light of policy, market, 
                or other changes that occur after theSecretary 
and the PBO enter into the agreement.
  (c) Purposes of PBO.--The purposes of the PBO are--
          (1) to improve service to students and other 
        participants in the student financial assistance 
        programs authorized under this title, including making 
        those programs more understandable to students and 
        their parents;
          (2) to reduce the costs of administering those 
        programs;
          (3) to increase the accountability of the officials 
        responsible for administering those programs;
          (4) to provide greater flexibility in the 
        administration of those programs;
          (5) to improve and integrate the information and 
        delivery systems that support those programs; and
          (6) to develop and maintain a student financial 
        assistance system that contains complete, accurate, and 
        timely data to ensure program integrity.
  (d) Functions.--
          (1) In general.--Subject to subsection (b) of this 
        section, the PBO shall be responsible for 
        administration of the information and financial systems 
        that support student financial assistance programs 
        authorized under this title, including--
                  (A) collecting, processing, and transmitting 
                applicant data to students, institutions, and 
                authorized third parties, as provided for in 
                section 483;
                  (B) contracting for the information and 
                financial systems supporting student financial 
                assistance programs under this title;
                  (C) developing technical specifications for 
                software and systems that support those 
                programs; and
                  (D) providing all customer service, training, 
                and user support related to systems that 
                support those programs.
          (2) Additional functions.--The Secretary may allocate 
        to the PBO such additional functions as the Secretary 
        determines necessary or appropriate to achieve the 
        purposes of the PBO.
  (e) Performance Plan and Report.--
          (1) Performance plan.--
                  (A) In general.--Each year, the Secretary and 
                Chief Operating Officer shall agree on, and 
                make available to the public, a performance 
                plan for the PBO for the succeeding 5 years 
                that establishes measurable goals and 
                objectives for the organization.
                  (B) Consultation.--In developing the 5-year 
                performance plan, the Secretary and the Chief 
                Operating Officer shall consult with students, 
                institutions of higher education, Congress, 
                lenders, and other interested parties not less 
                than 30 days prior to the implementation of the 
                performance plan.
                  (C) Areas.--The plan shall address the PBO's 
                responsibilities in the following areas:
                          (i) Improving service.--Improving 
                        service to students and other 
                        participants in student financial aid 
                        programs authorized under this title, 
                        including making those programs more 
                        understandable to students and their 
                        parents.
                          (ii) Reducing costs.--Reducing the 
                        costs of administering those programs.
                          (iii) Improvement and integration of 
                        support systems.--Improving and 
                        integrating the information and 
                        delivery systems that support those 
                        programs.
                          (iv) Delivery and information 
                        system.--Developing an open, common, 
                        and integrated delivery and information 
                        system for programs authorized under 
                        this title.
                          (v) Other areas.--Any other areas 
                        identified by the Secretary.
          (2) Annual report.--Each year, the Chief Operating 
        Officer shall prepare and submit to Congress, through 
        the Secretary, an annual report on the performance of 
        the PBO, including an evaluation of the extent to which 
        the PBO met the goals and objectives contained in the 
        5-year performance plan described in paragraph (1) for 
        the preceding year.
  (f) Chief Operating Officer.--
          (1) Appointment.--
                  (A) In general.--The management of the PBO 
                shall be vested in a Chief Operating Officer 
                who shall be appointed by the Secretary to a 
                term of not less than 3 and not more than 5 
                years and compensated without regard to 
                chapters 33, 51, and 53 of title 5, United 
                States Code.
                  (B) Basis.--The appointment shall be made on 
                the basis of demonstrated ability in management 
                and experience in information technology or 
                financial services, without regard to political 
                affiliation or activity.
                  (C) Reappointment.--The Secretary may 
                reappoint the Chief Operating Officer to 
                subsequent terms of not less than 3 and not 
                more than 5 years, so long as the performance 
                of the Chief Operating Officer, as set forth in 
                the performance agreement described in 
                paragraph (2), is satisfactory.
          (2) Performance agreement.--
                  (A) In general.--Each year, the Secretary and 
                the Chief Operating Officer shall enter into an 
                annual performance agreement, that shall set 
                forth measurable organization and individual 
                goals for the Chief Operating Officer.
                  (B) Transmittal.--The final agreement 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.--
                  (A) In general.--The Chief Operating Officer 
                is authorized to be paid at an annual rate of 
                basic pay not to exceed the maximum rate of 
                basic pay for the Senior Executive Service 
                under section 5382 of title 5, United States 
                Code, including any applicable locality-based 
                comparability payment that may be authorized 
                under section 5304(h)(2)(C) of such title.
                  (B) Bonus.--In addition, the Chief Operating 
                Officer may receive a bonus in an amount that 
                does not exceed 50 percent of such annual rate 
                of basic pay, based upon the Secretary's 
                evaluation of the Chief Operating Officer's 
                performance in relation to the goals set forth 
                in the performance agreement described in 
                paragraph (2).
                  (C) Payment.--Payment of a bonus under this 
                subparagraph (B) may be made to the Chief 
                Operating Officer only to the extent that such 
                payment does not cause the Chief Operating 
                Officer's total aggregate compensation in a 
                calendar year to equal or exceed the amount of 
                the President's salary under section 102 of 
                title 3, United States Code.
          (4) Removal.--The Chief Operating Officer shall be 
        removable--
                  (A) by the President; or
                  (B) by the Secretary for misconduct or 
                failure to meet the goals set forth in the 
                performance agreement described in paragraph 
                (2).
    (g) Senior Management.--
          (1) Appointment.--
                  (A) In general.--The Chief Operating Officer 
                may appoint such senior managers as that 
                officer determines necessary without regard to 
                the provisions of title 5, United States Code, 
                governing appointments in the competitive 
                service.
                  (B) Compensation.--The senior managers 
                described in subparagraph (A) may be paid 
                without regard to the provisions of chapter 51 
                and subchapter III of chapter 53 of such title 
                relating to classification and General Schedule 
                pay rates.
          (2) Performance agreement.--Each year, the Chief 
        Operating Officer and each senior manager appointed 
        under this subsection shall enter into an annual 
        performance agreement that sets forth measurable 
        organization and individual goals.
          (3) Compensation.--
                  (A) In general.--A senior manager appointed 
                under this subsection may be paid at an annual 
                rate of basic pay of not more than the maximum 
                rate of basic pay for the Senior Executive 
                Service under section 5382 of title 5, United 
                States Code, including any applicable locality-
                based comparability payment that may be 
                authorized under section 5304(h)(2)(C) of such 
                title 5.
                  (B) Bonus.--In addition, a senior manager may 
                receive a bonus in an amount such that the 
                manager's total annual compensation does not 
                exceed 125 percent of the maximum rate of basic 
                pay for the Senior Executive Service, including 
                any applicable locality-based comparability 
                payment, based upon the Chief Operating 
                Officer's evaluation of the manager's 
                performance in relation to the goals set forth 
                in the performance agreement described in 
                paragraph (2).
          (4) Removal.--A senior manager shall be removable by 
        the Secretary or by the Chief Operating Officer.
    (h) Authorization of Appropriations.--The Secretary shall 
allocate from funds made available under section 458 such funds 
as are appropriate to the functions assumed by the PBO. In 
addition, there are authorized to be appropriated such sums as 
may be necessary to carry out the purposes of this section, 
including transition costs.

      [TITLE V--EDUCATOR RECRUITMENT, RETENTION, AND DEVELOPMENT]

        TITLE V--GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS

[SEC. 500. [20 U.S.C. 1101] 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 
        underrepresentated 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 improve educational 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 
        professional 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.]

SEC. 500. PURPOSE.

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

        [PART A--STATE AND LOCAL PROGRAMS FOR TEACHER EXCELLENCE

[SEC. 501. [20 U.S.C. 1102] 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 
                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 
                educational 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 91) 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 [20 U.S.C. 1102A] 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. [20 U.S.C. 1102B] 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 establishments 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 [20 U.S.C. 1102C] 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 
theSecretary, 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. [20 U.S.C. 1102D] 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 member;
                          [(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 ofparticipant knowledge in 
areas not related to academic subjects.
          [(2) Special rule.--In awarding grants under this 
        section the State educational agency may provide for 
        training in 2 or more key academic subjects at a single 
        site.
          [(3) Additional academies or awards.--If a State can 
        demonstrate that the State's need for academies in key 
        academic subjects has been met, and if the State can 
        demonstrate that it is implementing the findings of the 
        teacher education study described in section 504(c), 
        then the State may use a portion of the amount reserved 
        pursuant to section 501(b)(2)(B)(ii)(I) to establish 
        one or more of the following academies or awards:
                  [(A) Early childhood academies.--A State 
                educational agency may establish an academy 
                aimed at early childhood education training. 
                Such an academy shall give a priority to 
                recruiting candidates from underrepresented 
                groups in the early childhood education 
                profession and shall provide intensive 
                childhood training in violence counseling.
                  [(B) Tech-prep academies.--A State 
                educational agency may establish an academy 
                for--
                          [(i) assisting educators in secondary 
                        schools and community colleges to more 
                        effectively understand organizational 
                        structures and organizational change 
                        strategies;
                          [(ii) assisting educators to learn 
                        effective peer leadership strategies;
                          [(iii) assisting secondary school 
                        teachers and community college faculty 
                        to identify the knowledge and skills 
                        required in highly technical industries 
                        and workplaces;
                          [(iv) assisting secondary school 
                        teachers and community college faculty 
                        to apply creative strategies to the 
                        development of interdisciplinary 
                        curricula; and
                          [(v) assisting educators in 
                        integrating academic and vocational 
                        education.
                  [(C) Teacher awards.--(i) A State educational 
                agency may make awards to State Academies for 
                Teachers to provide for a program of cash 
                awards and recognition to outstanding teachers 
                in the key academic subject or subjects covered 
                by the program of the Academy.
                  [(ii) Any full-time public or private 
                elementary or secondary school teacher of a key 
                academic subject or vocational and technology 
                education subject, including an elementary 
                school teacher of the general curriculum, shall 
                be eligible to receive an award under this 
                subparagraph.
                  [(iii) The amount of a teacher's award under 
                this subparagraph shall not exceed $5,000 and 
                shall be available for any purpose the 
                recipient chooses.
                  [(iv) Each Academy receiving an award under 
                clause (i) of this subparagraph shall select 
                teachers to receive awards from nominations 
                received from local educational agencies, 
                public and private elementary and secondary 
                schools, teachers, associations of teachers, 
                parents, associations of parents and teachers, 
                businesses, business groups, and student 
                groups.
                  [(v) The Academy shall select award 
                recipients under this subparagraph in 
                accordance with criteria developed by the 
                Academy and approved by the State educational 
                agency. The selection criteria may take into 
                account teacher's success in--
                          [(I) educating disadvantaged children 
                        and children with disabilities;
                          [(II) educating gifted and talented 
                        children;
                          [(III) encouraging students to 
                        enroll, and succeed, in advanced 
                        classes in a key academic subject or 
                        vocational and technology education 
                        subject;
                          [(IV) teaching a key academic subject 
                        or vocational and technology education 
                        subject successfully in schools 
                        educating large numbers of 
                        educationally disadvantaged students, 
                        including schools in low-income inner-
                        city or rural areas;
                          [(V) introducing a new curriculum in 
                        a key academic subject into a school or 
                        strengthening an established 
                        curriculum;
                          [(VI) acting as a master teacher; and
                          [(VII) other criteria as developed by 
                        the Academies and approved by the State 
                        educational agency.

[SEC. 506. [20 U.S.C. 1102E] 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 Educational 
                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 participant's 
        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. [20 U.S.C. 1102F] 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 teachers 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. [20 U.S.C. 1102G] 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 participant's 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 entry 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. [20 U.S.C. 1102H] 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. [20 U.S.C. 1102I] 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. [20 U.S.C. 1102J] 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. [20 U.S.C. 1103] 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. [20 U.S.C. 1103A] 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. [20 U.S.C. 1103B] 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. [20 U.S.C. 1103C] 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. [20 U.S.C. 1103D] 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. [20 U.S.C. 1103E] 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. [20 U.S.C. 1103F] 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. [20 U.S.C. 1103G] 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. [20 U.S.C. 1104] 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. [20 U.S.C. 1104A] 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. [20 U.S.C. 1104B] 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 section 
        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 State in addressing teacher shortages, including the demand 
for and supply of early childhood and elementary teachers in 
the State, the demand for and supply of secondary teachers in 
the State, and the demand for teachers with training in 
specific academic disciplines in the State.
    [(d) Special Consideration.--The State educational agency, 
in cooperation with the State higher education agency, shall 
give special consideration in the selection of scholarship 
recipients to individuals who--
          [(1) intend to teach or provide related services to 
        students with disabilities;
          [(2) intend to teach limited English proficient 
        students;
          [(3) intend to teach preschool age children;
          [(4) intend to teach in schools servicing inner city 
        or rural or geographically isolated areas (as defined 
        by the Secretary by regulations consistent with the 
        purposes of this section);
          [(5) intend to teach in curricular areas or 
        geographic areas where there are demonstrated shortages 
        of qualified teachers; or
          [(6) are from disadvantaged backgrounds, including 
        racial and ethnic minorities and individuals with 
        disabilities, and are underrepresented in the teaching 
        profession or in the curricular areas in which they are 
        preparing to teach.
    [(e) Solicitation of Views on Selection Criteria and 
Procedures.--In developing the selection criteria and 
procedures to be used by the State, the State shall solicit the 
views of local educational agencies, private educational 
institutions, and other interested parties. Such views--
          [(1) shall be solicited by means of--
                  [(A) written comments; and
                  [(B) publication of proposed selection 
                criteria and procedures in final form for 
                implementation; and
          [(2) may be solicited by means of--
                  [(A) public hearings on the teaching needs of 
                elementary and secondary schools in the State 
                (including the number of new teachers needed, 
                the expected supply of new teachers, and the 
                shortages in the State of teachers with 
                specific preparation); or
                  [(B) such other methods as the State may 
                determine to be appropriate to gather 
                information on such needs.

[SEC. 524. [20 U.S.C. 1104C] 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. [20 U.S.C. 1104D] 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 
Procedure.--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. [20 U.S.C. 1104E] 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 
        post-secondary 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. [20 U.S.C. 1104F] 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. [20 U.S.C. 1104G] 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. [20 U.S.C. 1104H] 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 section (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 there-upon 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. [20 U.S.C. 1104I] 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. [20 U.S.C. 1104J] 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. [20 U.S.C. 1104K] 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. [20 U.S.C. 1105] 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 know as a ``Christa McAuliffe fellow''.

[SEC. 532. [20 U.S.C. 1105A] 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. [20 U.S.C. 1105B] 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. [20 U.S.C. 1105C] 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. [20 U.S.C. 1105D] 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 statewise 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. [20 U.S.C. 1105E] FELLOWSHIP REPAYMENT PROVISIONS.

    [Repayment of the award shall be made to the Federal 
Government in the case of fraud or gross noncompliance.

[SEC. 537. [20 U.S.C. 1105F] 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. [20 U.S.C. 1105G] 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. [20 U.S.C. 1105H] 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 41,000,000 from the amounts appropriated pursuant to 
the authority of section 540 in fiscal years 1993 through 1997 
to carry out this section.

[SEC. 540. [20 U.S.C. 1105I] 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. [20 U.S.C. 1106] 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. [20 U.S.C. 1106A] 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 scholarships in accordance with the 
        provisions of this subpart; and
    [(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 Corp 
        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. [20 U.S.C. 1106B] 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 teach 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. [20 U.S.C. 1106C] 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 State 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. [20 U.S.C. 1104D] 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 
        post-secondary institution; and
          [(2) maintaining satisfactory progress defined under 
        section 484.

[SEC. 546. [20 U.S.C. 1106E] 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 (1) during any 
        period in which such individual meets the exceptions to 
        repayment provisions set forth in sections 528(a)(2), 
        528(a)(3) or 528(b), or if the individual dies.
          [(3) Repayment percentages.--Each individual found by 
        the Secretary to be in noncompliance with the agreement 
        entered into under subsection (a) shall be required to 
        repay--
                  [(A) 100 percent of the total amount of 
                scholarships awarded under this subpart if such 
                individual does not teach pursuant to the 
                agreement described in subsection (a) or 
                teaches pursuant to such agreement for less 
                than 1 year;
                  [(B) 67 percent of such amount if such 
                individual teaches pursuant to such agreement 
                for at least 1 year but less than 2 years; and
                  [(C) 34 percent of such amount if such 
                individual teaches pursuant to such agreement 
                for at least 2 years but less than 3 years.
          [(4) Interest.--If a portion of scholarship is repaid 
        under this subsection in any year, the entire amount of 
        interest on such portion of such scholarship which 
        accrues for such year shall be repaid.
          [(5) Use of repayments.--Any repayments of 
        scholarships made to the Secretary pursuant to the 
        provisions of this section shall be used by the 
        Secretary to make additional grants in accordance with 
        the provisions of this subpart.
    [(c) Waiver.--The Secretary may provide for the partial or 
total waiver or suspension of any service obligation or 
repayment by an individual who received a Teacher Corps 
scholarship whenever compliance by such individual is 
impossible or would involve extreme hardship to such 
individual.

[SEC. 547. [20 U.S.C. 1106F] 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 
        teachers 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 [20 U.S.C. 1106G] 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. [20 U.S.C. 1107] 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.--
          [(I) 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 Resources Committee 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 2--Alternative Routes to Teacher Certification and Licensure]

               [Subpart 3--Class Size Demonstration Grant

[SEC. 561. [20 U.S.C. 1109] 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. [20 U.S.C. 1109A] 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 [20 U.S.C. 1109B] 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. [20 U.S.C. 1109C] 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. [20 U.S.C. 1109D] EVALUATION AND DISSEMINATION.

    [(a) National Evaluation.--The Secretary shall conduct a 
national evaluation of the demonstration projects assisted 
under this subpart to determine the cost 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. [20 U.S.C. 1109E] 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. [20 U.S.C. 1110] 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. [20 U.S.C. 1110A] DEFINITIONS.

    [As used in the 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. [20 U.S.C. 1110B] 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. [20 U.S.C. 1110C] 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. [20 U.S.C. 1110D] 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. [20 U.S.C. 1110E] 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. [20 U.S.C. 1111] STATEMENT OF PURPOSE.

    [It is the purpose of this subject to establish and operate 
new career programs to attract minority candidates, who are in 
school support of paraprofessional positions in shortage area 
schools serving disadvantaged students, to careers as certified 
or licensed teachers.

[SEC. 572. [20 U.S.C. 1111A] 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 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 part 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. [20 U.S.C. 1111B] 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. [20 U.S.C. 1111C] 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 assurance 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. [20 U.S.C. 1111D] 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 
        post-secondary 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. [20 U.S.C. 1111E] 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. [20 U.S.C. 1111F] 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. [20 U.S.C. 1111G] 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. [20 U.S.C. 1111H] 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. [20 U.S.C. 1112] 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. [20 U.S.C. 1112A] 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. [20 U.S.C. 1112B] 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 describes 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. [20 U.S.C. 1112C] 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. [20 U.S.C. 1112D] 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. [20 U.S.C. 112E] 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. [20 U.S.C. 1113] 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 provisions 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. [20 U.S.C. 1114] 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 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. [20 U.S.C. 1114A] 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. [20 U.S.C. 1115] 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. [20 U.S.C. 1116] 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. [20 U.S.C. 1117] 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) prepared 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. [20 U.S.C. 1117A] 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 service 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 
        administrating funds received under the Child Care and 
        Development Block Grant Act.
          [(2) Other State agencies administering or regulating 
        childhood, 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, though the lead agency, a 
        plan to the Secretary at such item, 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. [20 U.S.C. 1117B] 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. 589. [20 U.S.C. 1117C] 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 approriated $10,000,000 for fiscal 
year 1993 and such sums as may be necessary for each of the 4 
succeeding fiscal years.

           *       *       *       *       *       *       *


           [PART C] PART A_JACOB K. JAVITS FELLOWSHIP PROGRAM

SEC. [931] 511. [20 U.S.C. 1134H] 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, financial 
need and exceptional promise. These fellowships shall be 
awarded to [students intending] students who are eligible to 
receive any grant, loan, or work assistance pursuant to section 
484 and intend to pursue a doctoral degree, except that 
fellowships may be granted to students pursuing a master's 
degree in those fields in which the master's degree is 
[commonly accepted as the appropriate degree for a tenured-
track faculty position in a baccalaureate degree-granting 
institution] the terminal highest degree awarded in the area of 
study. All funds appropriated in a fiscal year shall be 
obligated and expended to the students for fellowships for use 
in the academic year beginning after July 1 of the fiscal year 
following the fiscal year for which the funds were 
appropriated. The fellowships shall be awarded for only 1 
academic year of study and shall be renewable for a period not 
to exceed 4 years of study.
    (b) Designation of Fellows.--Students receiving awards 
under this 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.
    (d) Process and Timing of Competition.--The Secretary shall 
make applications for fellowships under this part available not 
later than October 1 of the academic year preceding the 
academic year for which fellowships will be awarded, and shall 
announce the recipients of fellowships under this section not 
later than March 1 of the academic year preceding the academic 
year for which the fellowships are awarded.
    (e) Authority To Contract.--The Secretary is authorized to 
enter into a contract with a nongovernmental agency to 
administer the program assisted under this part if the 
Secretary determines that entering into the contract is an 
efficient means of carrying out the program.

SEC. [923] 512. [20 U.S.C. 1134I] 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] representative of a range of discipline, 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;]
                  (B) establish general criteria for the award 
                of fellowships in academic fields identified by 
                the Board, or, in the event that the Secretary 
                enters into a contract with a nongovernmental 
                entity to administer the program assisted under 
                this part, by such nongovernmental entity;
                  (C) appoint panels of academic scholars with 
                distinguished backgrounds in the arts, 
                humanities, and social sciences for the purpose 
                of selecting fellows except that, in the event 
                that the Secretary enters into a contract with 
                a nongovernmental entity to administer the 
                program, such panels may be appointed by such 
                nongovernmental entity; and
                  (D) prepare and submit to the Congress at 
                least once in every 3-year period a report on 
                any modifications in the program that the Board 
                determines are appropriate.
          (3) Consultations.--In carrying out its 
        responsibilities, the Board shall consult on a regular 
        basis with representatives of the National Science 
        Foundation, the National Endowment for the Humanities, 
        the National Endowment for the Arts, and 
        representatives of institutions of higher education and 
        associations of such 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 except that in the event that the 
Secretary enters into a contract with a nongovernmental entity 
to administer the program, such panels may be appointed by such 
nongovernmental entity. The number of recipients in each field 
in each year shall not exceed the number of fellows allocated 
to that field for that year by the Board.
    (c) Fellowship Portability.--Each recipient shall be 
entitled to use the fellowship in a graduate program at any 
accredited institution of higher education in which the 
recipient may decide to enroll.

SEC. [933.] 513 [20 U.S.C. 1134J] 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] 1990-2000 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 [according to measurements of need 
approved by the Secretary] determined in accordance with part F 
of title IV.
    (b) Institutional Payments.--
          (1) In general.--(A) The Secretary shall (in addition 
        to stipends paid to individuals under this 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] $10,000 annually with respect to 
                individuals who first received fellowships 
                under this part prior to academic year [1993-
                1994] 1999-2000; and
                  (ii) with respect to individuals who first 
                receive fellowships during or after academic 
                year [1993-1994] 1999-2000--
                          (I) [$9,000 for the academic year 
                        1993-1994] $10,000 for the academic 
                        year 1999-2000; and
                          (II) for succeeding academic years, 
                        [$9,000] $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.
          (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] 514. [20 U.S.C. 1134K] 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] 513 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] 515. [20 U.S.C. 1134K-1] AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated $30,000,000 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] PART B--GRADUATE ASSISTANCE IN AREAS OF NATIONAL NEED

SEC. [941] 521. [20 U.S.C. 1134] PURPOSE.

    In order to sustain an 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] 522. [20 U.S.C. 1134M] 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 organizations 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] 523. [20 U.S.C. 1134N] 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.]
  (b) Designation of Areas of National Need.--After 
consultation with the National Science Foundation, the National 
Academy of Sciences, and other appropriate Federal and 
nonprofit agencies and organizations, the Secretary shall 
designate areas of national need. In making such designations, 
the Secretary shall take into consideration--
          (1) the extent to which the national interest in the 
        area is compelling;
          (2) the extent to which other Federal programs 
        support postbaccalaureate study in the area concerned; 
        and
          (3) an assessment of how the program may achieve the 
        most significant impact with available resources.

SEC. [944] 524. [20 U.S.C. 1134O] 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 
national 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] sources, 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) 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) describe the number, types, and amounts of the 
        fellowships that the applicant intends to offer with 
        grant funds provided under this part;
          [(4)] (5) 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] part F 
                of title IV;
                  (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)] (6) 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)] (7) 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] 525.
          (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.] 525. [20 U.S.C. 1134P] 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] 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 [according to measurements of need 
approved by the Secretary] determined in accordance with 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 [946(a)] 
526(a) may count [such payments] such excess toward the amounts 
the institution is required to provide pursuant to section 
[944(b)(2)] 526(a) 524(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.] 526. [20 U.S.C. 1134Q] 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] $10,000 for each academic year, 
        with respect to individuals who first received 
        fellowships under this part prior to academic year 
        [1993-1994] 1999-2000.
          (B) with respect to individuals who first receive 
        fellowships during or after academic year [1993-1994] 
        1999-2000; and
                  (i) [$9,000 for the academic year 1993-1994] 
                $10,000 for the academic year 1999-2000; and
                  (ii) for succeeding academic years, [$9,000] 
                $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. [947.] 527. [20 U.S.C. 2234Q-1] AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated [$40,000,000 for 
fiscal year 1993] $30,000,000 for fiscal year 1999 and such 
sums as necessary for each of the 4 succeeding fiscal years to 
carry out this part.

                [PART A] PART C--URBAN COMMUNITY SERVICE

SEC. [1101.] 531. [20 U.S.C. 1136] FINDINGS.

          (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.] 532. [20 U.S.C. 1136A] 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] 534 in accordance with 
the provisions of this part.

[1103.] 533. [20 U.S.C. 1136B] APPLICATION FOR URBAN COMMUNITY SERVICE 
                    GRANTS.

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

SEC. [1104] 534. [20 U.S.C. 1136C] 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)] 
        533(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] 535. [20 U.S.C. 1136D] 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] 536. [20 U.S.C. 1136E] 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] 537. [20 U.S.C. 1136F] 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. [1109] 538. [20 U.S.C. 1136G] 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] 533, 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] 539. [20 U.S.C. 1136H] 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] PART D--FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION

                      Subpart 1--Program Authority

SEC. [1001]541. [20 U.S.C. 1135] 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], combinations 
of such institutions, and other public and private nonprofit 
institutions and agencies, to enable such[ institutions and 
combinations of such institutions] institutions, combinations, 
and agencies to improve postsecondary education opportunities 
by--
          (1) encouraging the reform, innovation, and 
        improvement of postsecondary education, and providing 
        equal educational opportunity for all;
          (2) the creation of institutions [and programs 
        involving new], programs and joint efforts involving 
        paths to career and professional training, and [new 
        combinations] 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]542. [20 U.S.C. 1135A-1] 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 of 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]543. [20 U.S.C. 1135A-2] 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] 7 
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 the administration of the Fund for the 
Improvement of Postsecondary Education.

SEC. [1004] 544. [20 U.S.C. 1135A-3] AUTHORIZATION OF APPROPRIATIONS.

    (a) In General.--There are authorized to appropriated to 
carry out this subpart (except for section [1001(b)] 541(b)) 
[$20,000,000 for fiscal year 1993] $26,000,000 for fiscal year 
1999 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)] 541(b) $1,000,000 
for fiscal year [1993] 1999 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 551. 20 U.S.C. 1135A-11 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] Institutional 
        restructuring to improve learning and promote cost 
        effectiveness.
          (3) Evaluation and dissemination of model programs.
          (4) Articulation between 2-year and 4-year 
        institutions of higher education, including developing 
        innovative methods for ensuring the successful transfer 
        of students from 2-year to 4-year institutions of 
        higher education.
    (d) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this subpart $5,000,000 for 
fiscal year [1993] 1999 and such sums as may be necessary for 
each of the 4 succeeding fiscal years.

           *       *       *       *       *       *       *


     PART F--HIGHER EDUCATION ACCESS FOR STUDENTS WITH DISABILITIES

SEC. 571. HIGHER EDUCATION ACCESS FOR STUDENTS WITH DISABILITIES.

    (a) Purpose.--It is the purpose of this part--
          (1) to support the development of model programs to 
        provide technical assistance or training, and 
        professional development, for faculty and 
        administrators in institutions of higher education, as 
        defined in section 481(a), to provide the faculty and 
        administrators with the skills and assistance to teach 
        effectively students with disabilities; and
          (2) to ensure effective evaluation and dissemination 
        of such model programs.
    (b) Grants Authorized.--
          (1) In general.--The Secretary is authorized to award 
        grants to institutions of higher education to carry out 
        the purposes of this part.
          (2) Model programs.--To the extent feasible, the 
        model programs developed under this part shall be 
        developed for a range of types and sizes of 
        institutions of higher education.
          (3) Geographic distribution.--In awarding grants 
        under this part, the Secretary shall consider--
                  (A) providing an equitable geographic 
                distribution of such grants; and
                  (B) distributing such grants to urban and 
                rural areas.
          (4) Approaches.--The Secretary shall award grants 
        under this part for a range of approaches to providing 
        support to faculty and administrators, such as in-
        service training, professional development, customized 
        and general technical assistance, workshops, summer 
        institutes, distance learning and the use of 
        educational technology.
    (c) Dissemination of Grants.--The Secretary may award 
grants to institutions of higher education that have 
demonstrated exceptional programs for students with 
disabilities under this part in order to disseminate those 
programs.
    (d) Applications.--Each institution of higher education 
desiring a grant under this part shall submit an application to 
the Secretary at such time, in such manner, and accompanied by 
such information as the Secretary may require. Each such 
application shall include--
        (1) a plan to assess the needs of the institution of 
        higher education in order to meet the purposes of this 
        part, in consultation with a broad range of persons 
        within that institution; and
        (2) a plan for coordinating with or collaborating with 
        the office within the institution that provides 
        services to students with disabilities, and the equal 
        opportunity office within the institution, if the 
        offices exist.
    (e) Use of Funds.--Any institution of higher education 
receiving a grant under this part--
        (1) shall use the grant funds to--
                  (A) meet the purposes of this section; and
                  (B) ensure that projects assisted under this 
                part include components for model development, 
                demonstration, evaluation, and dissemination to 
                other institutions of higher education; and
          (2) may include, to the extent practicable, graduate 
        teaching assistants in the services provided under the 
        grant.
    (f) Grant Awards.--The Secretary shall award grants under 
this part for a period of 3 years.
    (g) Construction.--Nothing in this section shall be 
construed to impose any additional duty, obligation, or 
responsibility on an institution of higher education, or on the 
institution's administrators, faculty, or staff, in addition to 
the requirements of section 504 of the Rehabilitation Act of 
1973 and the Americans with Disabilities Act of 1990.
    (h) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this section $10,000,000 for 
fiscal year 1999 and such sums as may be necessary for each of 
the 4 succeeding fiscal years.

                 PART G--HISPANIC-SERVING INSTITUTIONS

SEC. 581. PURPOSE.

    The purpose of this part is to--
          (1) expand educational opportunities for, and improve 
        the academic attainment of, Hispanic students; and
          (2) expand and enhance the academic offerings, 
        program, quality, and institutional stability of 
        colleges and universities that are educating the 
        majority of Hispanic college students and helping large 
        numbers of Hispanic students and other low-income 
        individuals complete postsecondary degrees.

SEC. 582. PROGRAM AUTHORIZED.

    (a) In General.--The Secretary shall provide grants and 
related assistance to Hispanic-serving institutions to enable 
such institutions to improve and expand their capacity to serve 
Hispanic students and other low-income individuals.
    (b) 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 to improve and expand such institutions' 
        capacity to serve Hispanic students and other low-
        income students.
          (2) Examples of authorized activities.--The programs 
        described in paragraph (1) may include--
                  (A) purchase, rental, or lease of scientific 
                or laboratory equipment for educational 
                purposes, including instructional and research 
                purposes;
                  (B) renovation and improvement in class-room, 
                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;
                  (H) academic tutoring and counseling programs 
                and student support services; and
                  (I) expanding the number of Hispanic and 
                other underrepresented graduate and 
                professional students that can be served by the 
                institution by expanding courses and 
                institutional resources.
          (3) Endowment fund.--
                  (A) In general.--A Hispanic-serving 
                institution may use not more than 20 percent of 
                the grant funds provided under this part to 
                establish or increase an endowment fund at the 
                institution.
                  (B) Matching requirement.--In order to be 
                eligible to use grant funds in accordance with 
                subparagraph (A), the Hispanic-serving 
                institution shall provide matching funds, in an 
                amount equal to the Federal funds used in 
                accordance with subparagraph (A), for the 
                establishment or increase of the endowment 
                fund.
                  (C) Comparability.--The provisions of part C 
                of title III regarding the establishment or 
                increase of an endowment fund, that the 
                Secretary determines are not inconsistent with 
                this paragraph, shall apply to funds used under 
                subparagraph (A).
  (c) Wait-Out-Period.--Each Hispanic-serving institution that 
receives a grant under this part shall not be eligible to 
receive an additional grant under this part until 2 years after 
the date on which the preceding grant period terminates.

SEC. 583. 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 the institution is a Hispanic-
serving institution as defined in section 585, along with such 
other data and information 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 data and information submitted under subsection (a)) may 
submit an application for assistance under this part to the 
Secretary. Such application shall include--
          (1) a 5-year plan for improving the assistance 
        provided by the Hispanic-serving institution to 
        Hispanic students and other low-income individuals; and
          (2) such other information and assurance as the 
        Secretary may require.
  (c) Priority.--With respect to applications for assistance 
under this section, the Secretary shall give priority to an 
application that contains satisfactory evidence that the 
Hispanic-serving institution has entered into or will enter 
into a collaborative arrangement with at least one local 
educational agency or community-based organization to provide 
such agency or organization with assistance (from funds other 
than funds provided under this part) in reducing dropout rates 
for Hispanic students, improving rates of academic achievement 
for Hispanic students, and increasing the rates at which 
Hispanic secondary school graduates enroll in higher education.

SEC. 584. SPECIAL RULE.

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

SEC. 585. DEFINITIONS.

  For purposes of this part:
          (1) Hispanic-serving institution.--The term 
        ``Hispanic-serving institution'' means an institution 
        of higher education which--

SEC. 586. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this 
part $45,000,000 for fiscal year 1999 and such sums as may be 
necessary for each of the 4 succeeding fiscal years.

               Subpart 3--Small State Teaching Initiative

SEC. 591. MODEL PROGRAMS AND EDUCATIONAL EXCELLENCE.

    (a) Purpose.--* * *

           *       *       *       *       *       *       *

    (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)] 101(a) that is located in 
        a small State and that provides a course of study which 
        prepares an individual to become a classroom teacher.

           *       *       *       *       *       *       *

                  (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; and
                  (C) provides assurances that not less than 50 
                percent of its Hispanic students are low-income 
                individuals.
          (2) 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.

                       PART H--GENERAL PROVISIONS

SEC. 591. ADMINISTRATIVE PROVISIONS FOR PARTS A AND B.

  (a) Coordinated Administration.--In carrying out the purpose 
described in section 500(1), the Secretary shall provide for 
coordinated administration and regulation of graduate programs 
assisted under parts A and B with other Federal programs 
providing assistance for graduate education in order to 
minimize duplication and improve efficiency to ensure that the 
programs are carried out in a manner most compatible with 
academic practices and with the standard timetables for 
applications for, and notifications of acceptance to, graduate 
programs.
  (b) Hiring Authority.--For purposes of carrying out parts A 
and B, the Secretary shall appoint, without regard to the 
provisions of title 5, United States Code, that govern 
appointments in the competitive service, such administrative 
and technical employees, with the appropriate educational 
background, as shall be needed to assist in the administration 
of such parts. The employees shall be paid without regard to 
the provisions of chapter 51 and subchapter III of chapter 53 
of such title relating to classification and General Schedule 
pay rates.
  (c) Use for Religious Purposes Prohibited.--No institutional 
payment or allowance under section 513(b) or 526 shall be paid 
to a school or department of divinity as a result of the award 
of a fellowship under part A or B, respectively, to an 
individual who is studying for a religious vocation.
    (d) Evaluation.--The Secretary shall evaluate the success 
of assistance provided to individuals under part A or B with 
respect to graduating from their degree programs, and placement 
in faculty and professional positions.
    (e) Continuation Awards.--The Secretary, using funds 
appropriated to carry out parts A and B, and before awarding 
any assistance under such parts to a recipient that did not 
receive assistance under part C or D of title IX (as such parts 
were in effect prior to the date of enactment of the Higher 
Education Amendments of 1998) shall continue to provide funding 
to recipients of assistance under such part C or D (as so in 
effect), as the case may be, pursuant to any multiyear award of 
such assistance.

           *       *       *       *       *       *       *


              [TITLE VI--INTERNATIONAL EDUCATION PROGRAMS

          [PART A--INTERNATIONAL AND FOREIGN LANGUAGE STUDIES

[SEC. 601. [20 U.S.C. 1121] 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. 602. [20 U.S.C. 1122] GRADUATE AND UNDERGRADUATE LANGUAGE AND 
                    AREA CENTERS.

    [(a) National Language and Area Centers 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 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 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.
          [(3) Grants to maintain library collections.--The 
        Secretary may make grants to centers described in 
        paragraph (1) having important library collections for 
        the maintenance of such collections.
          [(4) Outreach Grants and Summer Institutions.--The 
        Secretary may make additional grants to centers 
        described in paragraph (1) for any one or combination 
        of the following purposes:
                  [(A) Programs of linkage or outreach between 
                foreign language, area studies, and other 
                international fields and professional schools 
                and colleges.
                  [(B) Programs of linkage or outreach with 2-
                and 4-year colleges and universities.
                  [(C) Programs of linkage or outreach with 
                departments or agencies of Federal and State 
                Governments.
                  [(D) Programs of linkage or outreach with the 
                news media, business, professional, or trade 
                associations.
                  [(E) Summer institutes in foreign area and 
                other international fields designed to carry 
                out programs of linkage and outreach in 
                subparagraphs (A), (B), (C), and (D) of this 
                paragraph.
    [(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.

[SEC. 603. [20 U.S.C. 1123] 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) the conduct of research on new and improved 
        teaching methods, including the use of advanced 
        educational technology;
          [(2) the development of new teaching materials 
        reflecting the use of such research in effective 
        teaching strategies;
          [(3) the development and application of performance 
        testing appropriate to an educational setting for use 
        as a standard and comparable measurement of skill 
        levels in all languages;
          [(4) the training of teachers in the administration 
        and interpretation of performance tests, the use of 
        effective teaching strategies, and the use of new 
        technologies;
          [(5) the publication of instructional materials in 
        the less commonly taught languages; and
          [(6) the widespread dissemination of research 
        results, teaching materials, and improved pedagogical 
        strategies to others within the postsecondary education 
        community.
    [(b) Conditions for Grants.--Grants under this section 
shall be made on such conditions as the Secretary determines to 
be necessary to carry out the provisions of this section.

[SEC. 604. [20 U.S.C. 1124] UNDERGRADUATE INTERNATIONAL STUDIES AND 
                    FOREIGN LANGUAGE PROGRAMS.

    [(a) Incentives for the Creation of Undergraduate 
International Studies and Foreign Language Programs.--
          [(1) Authority.--The Secretary is authorized to make 
        grants to institutions of higher education or 
        combinations of such institutions to assist such 
        institutions or combinations in planning, developing, 
        and carrying out a program 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.
          [(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 educational 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.
          [(4) Priority.--In awarding grants under this 
        section, the Secretary shall give priority to 
        applications from institutions of higher education or 
        combinations of such institutions that require entering 
        students to have successfully completed at least 2 
        years of secondary school foreign language instruction 
        or that require each graduating student to earn 2 years 
        of post-secondary credit in a foreign language (or have 
        demonstrated equivalent competence in the foreign 
        language) or, in the case of a two-year degree granting 
        institution, offer 2 years of post-secondary credit in 
        a foreign language.
    [(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 institutions;
                  [(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 
        Secretary may establish criteria for evaluating 
        programs and require an annual report which evaluates 
        the progress and performance of students in such 
        programs.
    (c) 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.

[SEC. 605. [20 U.S.C. 1124A] 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. [20 U.S.C. 1125] 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) studies and surveys to determine needs for 
        increased or improved instruction in foreign language, 
        area studies, or other international fields, including 
        the demand for foreign language, area, and other 
        international specialists in government, education, and 
        the private sector;
          [(2) studies and surveys to assess the utilization of 
        graduates of programs supported under this title by 
        governmental, educational, and private sector 
        organizations and other studies assessing the outcomes 
        and effectiveness of programs so supported;
          [(3) comparative studies of the effectiveness of 
        strategies to provide international capabilities at 
        institutions of higher education;
          [(4) research on more effective methods of providing 
        instruction and achieving competency in foreign 
        languages;
          [(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.
    [(b) Annual Report.--The secretary shall prepare, publish, 
and announce an annual report listing the books and research 
materials produced with assistance under this section.

[SEC. 607. [20 U.S.C. 1125A] 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 for 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 withthe 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, effect, or define the provisions of title 
17, United States Code, relating to copyright.

[SEC. 608. [20 U.S.C. 1125B] SELECTION OF CERTAIN GRANT RECIPIENTS.

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

[SEC. 609. [20 U.S.C. 1126] EQUITABLE DISTRIBUTION OF CERTAIN FUNDS.

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

[SEC 610. [20 U.S.C. 1127] AMERICAN OVERSEAS RESEARCH CENTERS.

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

[SEC. 610A. [20 U.S.C. 1128] AUTHORIZATION OF APPROPRIATIONS.

    [There are authorized to be appropriated to carry out this 
part $80,000,000 for fiscal year 1993, and such sums as may be 
necessary for the 4 succeeding fiscal years.

          ``PART A--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) systematic efforts are necessary to enhance the 
        capacity of institutions of higher education in the 
        United States for--
                  (A) producing graduates with international 
                and foreign language expertise and knowledge; 
                and
                  (B) research regarding such expertise and 
                knowledge.
      (b) Purposes.--It is the purpose of this part--
          (1) to assist in the development of knowledge, 
        international study, resources, and trained personnel;
          (2) to stimulate the attainment of foreign language 
        acquisition and fluency;
          (3) to develop a pool of international experts to 
        meet national needs; and
          (4) to coordinate the programs of the Federal 
        Government in the areas of foreign language, area and 
        other international studies, including professional 
        international affairs education, and research.

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

    (a) National Language and Area Centers and Programs 
Authorized.--
          (1) Centers and programs.--
                  (A) In general.--The Secretary is 
                authorized--
                          (i) to make grants to institutions of 
                        higher education, or combinations 
                        thereof, for the purpose of 
                        establishing, strengthening, and 
                        operating comprehensive language and 
                        area centers and programs; and
                          (ii) to make grants to such 
                        institutions or combinations for the 
                        purpose of establishing, strengthening, 
                        and operating a diverse network of 
                        undergraduate language and area centers 
                        and programs.
                  (B) National resources.--The centers and 
                programs referred to in paragraph (1) shall be 
                national resources for--
                          (i) teaching of any modern foreign 
                        language;
                          (ii) instruction in fields needed to 
                        provide full understanding of areas, 
                        regions, or countries in which such 
                        language is commonly used;
                          (iii) research and training in 
                        international studies, and the 
                        international and foreign language 
                        aspects of professional and other 
                        fields of study; and
                          (iv) instruction and research on 
                        issues in world affairs 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 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 this section.
          (3) Grants to maintain library collections.--The 
        Secretary may make grants to centers described in 
        paragraph (1) having important library collections, as 
        determined by the Secretary, for the maintenance of 
        such collections.
          (4) Outreach grants and summer institutes.--The 
        Secretary may make additional grants to centers 
        described in paragraph (1) for any one or more of the 
        following purposes:
                  (A) Programs of linkage or outreach between 
                foreign language, area studies, and other 
                international fields and professional schools 
                and colleges.
                  (B) Programs of linkage or outreach with 2-
                year and 4-year colleges and universities.
                  (C) Programs of linkage or outreach with 
                departments or agencies of Federal and State 
                Governments.
                  (D) Programs of linkage or outreach with the 
                news media, business, professional, or trade 
                associations.
                  (E) Summer institutes in foreign area, 
                foreign language, and other international 
                fields designed to carry out the programs of 
                linkage and outreach in subparagraphs (A), (B), 
                (C), and (D).
    (b) Stipends for Foreign Language and Area Studies.--
          (1) In general.--The Secretary is authorized to make 
        grants to institutions of higher education or 
        combinations of such institutions for the purpose of 
        paying stipends to individuals undergoing advanced 
        training in any center or program approved by the 
        Secretary.
          (2) Requirements.--Students receiving stipends 
        described in paragraph (1) shall be individuals who are 
        engaged in an instructional program with stated 
        performance goals for functional foreign language use 
        or in a program developing such performance goals, in 
        combination with area studies, international studies, 
        or the international aspects of a professional studies 
        program.
          (3) Allowances.--Stipends awarded to graduate level 
        recipients may include allowances for dependents and 
        for travel for research and study in the United States 
        and abroad.
    (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.

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.
    (b) Authorized Activities.--The activities carried out by 
the centers described in subsection (a)--
          (1) shall include effective dissemination efforts, 
        whenever appropriate; and
          (2) may include--
                  (A) the conduct and dissemination of research 
                on new and improved teaching methods, including 
                the use of advanced educational technology;
                  (B) the development and dissemination of new 
                teaching materials reflecting the use of such 
                research in effective teaching strategies;
                  (C) the development, application, and 
                dissemination of performance testing 
                appropriate to an educational setting for use 
                as a standard and comparable measurement of 
                skill levels in all languages;
                  (D) the training of teachers in the 
                administration and interpretation of 
                performance tests, the use of effective 
                teaching strategies, and the use of new 
                technologies;
                  (E) the publication and dissemination to 
                individuals and organizations in the foreign 
                language field of instructional materials in 
                the less commonly taught languages;
                  (F) the development and dissemination of 
                materials designed to serve as a resource for 
                foreign language teachers at the elementary and 
                secondary school levels; and
                  (G) 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.
    (c) Conditions for Grants.--Grants under this section shall 
be made on such conditions as the Secretary determines to be 
necessary to carry out the provisions of this section.

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

    (a) Incentives for the Creation of New Programs and the 
Strengthening of Existing Programs in Undergraduate 
International Studies and Foreign Languages.--
          (1) Authority.--The Secretary is authorized to make 
        grants to institutions of higher education, 
        combinations of such institutions, or partnerships 
        between nonprofit educational institutions and 
        institutions of higher education, to assist such 
        institutions, combinations or partnerships in planning, 
        developing, and carrying out programs to improve 
        undergraduate instruction in international studies and 
        foreign languages. Such grants shall be awarded to 
        institutions, combinations or partnerships seeking to 
        create new programs or to strengthen existing programs 
        in 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 and foreign languages;
                  (B) teaching, research, curriculum 
                development, faculty training in the United 
                States or abroad, and other related activities, 
                including the expansion of library and teaching 
                resources;
                  (C) expansion of opportunities for learning 
                foreign languages, including less commonly 
                taught languages;
                  (D) programs under which foreign teachers and 
                scholars may visit institutions as visiting 
                faculty;
                  (E) programs designed to develop or enhance 
                linkages between 2-year and 4-year institutions 
                of higher education, or baccalaureate and post-
                baccalaureate programs or institutions;
                  (F) the development of undergraduate study 
                abroad programs in locations abroad in which 
                such study opportunities are not otherwise 
                available and the integration of these programs 
                into specific on-campus degree programs;
                  (G) the development of model programs to 
                enhance the effectiveness of study abroad, 
                including predeparture and post return 
                programs;
                  (H) the development of programs designed to 
                integrate professional and technical education 
                with area studies, foreign languages, and other 
                international fields;
                  (I) the conduct of summer institutes in 
                foreign area, foreign language, and other 
                international fields for purposes that are 
                consistent with the projects and activities 
                described in this subsection; and
                  (J) the development of partnerships between 
                institutions of higher education and the 
                private sector, government, and elementary and 
                secondary education institutions to enhance 
                international knowledge.
          (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, private sector, corporation, or 
        foundation contributions.
          (4) Priority.--In awarding grants under this section, 
        the Secretary shall give priority to applications from 
        institutions of higher education, combinations or 
        partnerships that require entering students to have 
        successfully completed at least 2 years of secondary 
        school foreign language instruction or that require 
        each graduating student to earn 2 years of 
        postsecondary credit in a foreign language (or have 
        demonstrated equivalent competence in the foreign 
        language) or, in the case of a 2-year degree granting 
        institution, offer 2 years of postsecondary credit in a 
        foreign language.
          (5) Grant conditions.--Grants under this subsection 
        shall be made on such conditions as the Secretary 
        determines to be necessary to carry out this 
        subsection.
          (6) Application.--Each application for assistance 
        under this subsection shall include--
                  (A) evidence that the applicant has conducted 
                extensive planning prior to submitting the 
                application;
                  (B) an assurance that the faculty and 
                administrators of all relevant departments and 
                programs served by the applicant are involved 
                in ongoing collaboration with regard to 
                achieving the stated objectives of the 
                application;
                  (C) an assurance that students at the 
                applicant institutions, as appropriate, will 
                have equal access to, and derive benefits from, 
                the program assisted under this subsection; and
                  (D) an assurance that each institution, 
                combination or partnership will use the Federal 
                assistance provided under this subsection to 
                supplement and not supplant funds expended by 
                the institution, prior to the receipt of the 
                Federal assistance, for programs to improve 
                undergraduate instruction in international 
                studies and foreign languages.
          (7) Evaluation.--The Secretary may establish 
        requirements for program evaluations and require grant 
        recipients to submit annual reports that evaluate the 
        progress and performance of students participating in 
        programs assisted under this subsection.
    (b) Programs of National Significance.--The Secretary may 
also award grants to public and private nonprofit agencies and 
organizations, including professional and scholarly 
associations, whenever the Secretary determines such grants 
will make an especially significant contribution to improving 
undergraduate international studies and foreign language 
programs.

SEC. 605. RESEARCH; STUDIES; ANNUAL REPORT.

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

SEC. 606. SELECTION OF CERTAIN GRANT RECIPIENTS.

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

SEC. 607. EQUITABLE DISTRIBUTION OF CERTAIN FUNDS.

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

SEC. 608. AMERICAN OVERSEAS RESEARCH CENTERS.

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

SEC. 609. AUTHORIZATION OF APPROPRIATIONS.

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

           *       *       *       *       *       *       *


SEC. 612. [20 U.S.C. 1130-1] CENTERS FOR INTERNATIONAL BUSINESS 
                    EDUCATION.

    (a) Program Authorized.--

           *       *       *       *       *       *       *

                  (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, 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;

           *       *       *       *       *       *       *

                  (C) summer institutes in international 
                business, foreign area studies, foreign 
                language, and other international studies 
                designed to carry out the purposes of 
                subparagraph (A) of this paragraph;

           *       *       *       *       *       *       *

    (d) * * *

           *       *       *       *       *       *       *

                  (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. [20 U.S.C. 1130B] 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.

           *       *       *       *       *       *       *


SEC. 621. [20 U.S.C. 1131] MINORITY FOREIGN SERVICE PROFESSIONAL 
                    DEVELOPMENT PROGRAM.

    (a) Establishment.--* * *

           *       *       *       *       *       *       *

    (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. The 
non-Federal contribution shall be made from private sector 
sources.

SEC. 622. INSTITUTIONAL DEVELOPMENT.

    (a) In General.--The Institute shall award grants, from 
amounts available to the Institute for each fiscal year, to 
historically Black colleges and universities, Hispanic-serving 
institutions, Tribally Controlled Colleges or Universities, and 
minority institutions, to enable such colleges, universities, 
and institutions to strengthen international affairs programs.
    (b) Application.--No grant may be made by the Institute 
unless an application is made by the college, university, or 
institution at such time, in such manner, and accompanied by 
such information as the Institute may require.
    (c) Definitions.--In this section--
          (1) the term ``historically Black college and 
        university'' has the meaning given the term in section 
        322;
          (2) the term ``Hispanic-serving institution'' has the 
        meaning given the term in section 316(b);
          (3) the term ``Tribally Controlled College or 
        University'' has the meaning given the term in section 
        2 of the Tribally Controlled College or University 
        Assistance Act of 1978 (25 U.S.C. 1801); and
          (4) the term ``minority institution'' has the meaning 
        given the term in section 1046.

SEC. 622 523. [20 U.S.C. 1131A] [JUNIOR YEAR] STUDY ABROAD PROGRAM.

    [(a)] Program Authority.--* * *

           *       *       *       *       *       *       *

          (2) entering the third year of study, or completing 
        the third year of study in the case of a summer abroad 
        program, at an institution of higher education which 
        nominates such student for participation in the [junior 
        year] study abroad program.
    (c) Special Rule.--An institution of higher education 
desiring to send a student on the [junior year] study 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] study 
        abroad or internship programs;
          (2) pay [one-half] one-third the cost of each student 
        it nominates for participation in the [junior year] 
        study abroad program; and

           *       *       *       *       *       *       *


SEC. [623] 624. [20 U.S.C. 1131B] MASTERS DEGREE IN INTERNATIONAL 
                    RELATIONS.

           *       *       *       *       *       *       *


SEC. [624] 625. [20 U.S.C. 1131C] INTERNSHIPS.

           *       *       *       *       *       *       *


SEC. [625] 626. [20 U.S.C. 1131D] REPORT.

           *       *       *       *       *       *       *


SEC. [626] 627. [20 U.S.C. 1131E] 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] 626.

SEC. [627] 628. [20 U.S.C. 1131F] 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

SEC. 631. DEFINITIONS.

    (a) Definitions.--As used in this title--
          (1) * * *

           *       *       *       *       *       *       *

          (8) the term ``institution of higher education'' 
        means, in addition to institutions which meet the 
        definition of [section 1201(a)] section 101(a) of this 
        Act, institutions which meet the requirements of 
        [section 1201(a)] 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)] of 
        section 101(a) of this Act.

           *       *       *       *       *       *       *


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

SEC. 701. [20 U.S.C. 1132A] PURPOSES.

    (a) In General.-- * * *

           *       *       *       *       *       *       *


        [PART A--IMPROVEMENT OF ACADEMIC AND LIBRARY FACILITIES]

. SEC. 711. [20 U.S.C. 1132B] SHORT TITLE.

           *       *       *       *       *       *       *


   [PART C--LOANS FOR CONSTRUCTION RECONSTRUCTION AND RENOVATION OF 
          ACADEMIC, HOUSING, AND OTHER EDUCATIONAL FACILITIES]

SEC. 731. [20 U.S.C. 1132D] FEDERAL ASSISTANCE IN THE FORM OF LOANS.

           *       *       *       *       *       *       *


       [PART D--COLLEGE CONSTRUCTION LOAN INSURANCE ASSOCIATION]

SEC. 751. [20 U.S.C. 1132F] CONGRESSIONAL DECLARATION OF PURPOSE; 
                    DEFINITION; INCORPORATION.

    (a) Purpose.-- * * *

           *       *       *       *       *       *       *


                           [PART E--GENERAL]

SEC. 781. [20 U.S.C. 1132I] RECOVERY OF PAYMENTS.

    (a) Public Benefit.-- * * *

           *       *       *       *       *       *       *


                  [TITLE VIII--COOPERATIVE EDUCATION]

SEC. 801. [20 U.S.C. 1133] STATEMENT OF PURPOSE; DEFINITION.

    (a) Purpose.-- * * *

           *       *       *       *       *       *       *


                     [TITLE IX--GRADUATE PROGRAMS]

SEC. 901. [20 U.S.C. 1134] PURPOSE AND ADMINISTRATIVE PROVISIONS.

           *       *       *       *       *       *       *


 [PART A--GRANTS TO INSTITUTIONS AND CONSORTIA TO ENCOURAGE WOMEN AND 
             MINORITY PARTICIPATION IN GRADUATE EDUCATION]

SEC. 911. [20 U.S.C. 1134A] GRANTS AUTHORIZED.

           *       *       *       *       *       *       *


          [PART B--PATRICIA ROBERTS HARRIS FELLOWSHIP PROGRAM]

SEC. 921. [20 U.S.C. 1134D] STATEMENT OF PURPOSE; DESIGNATION.

           *       *       *       *       *       *       *


            [PART E--FACULTY DEVELOPMENT FELLOWSHIP PROGRAM]

SEC. 951. [20 U.S.C. 1134R] FELLOWSHIPS AUTHORIZED.

           *       *       *       *       *       *       *


       [PART F--ASSISTANCE FOR TRAINING IN THE LEGAL PROFESSION]

SEC. 961. [20 U.S.C. 1134S] PROGRAM REQUIREMENTS.

           *       *       *       *       *       *       *


           [PART G--LAW SCHOOL CLINICAL EXPERIENCE PROGRAMS]

SEC. 971. [20 U.S.C. 1134U] PROGRAM AUTHORIZED.

           *       *       *       *       *       *       *


          [Subpart 2--Science and Engineering Access Programs]

SEC. 1031. [20 U.S.C. 1135C] MINORITY SUPPORT IN SCIENCE AND 
                    ENGINEERING PROGRAMS.

           *       *       *       *       *       *       *


    [PART C--WOMEN AND MINORITIES SCIENCE AND ENGINEERING OUTREACH 
                         DEMONSTRATION PROGRAM]

SEC. 1061. [20 U.S.C. 1135E] PURPOSE.

           *       *       *       *       *       *       *


           [PART D--DWIGHT D. EISENHOWER LEADERSHIP PROGRAM]

SEC. 1081. [20 U.S.C. 1135F] SHORT TITLE; ESTABLISHMENT OF THE PROGRAM.

           *       *       *       *       *       *       *


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

SEC. 1091. [20 U.S.C. 1135G] GRANTS TO STATES FOR WORKPLACE AND 
                    COMMUNITY TRANSITION TRAINING FOR INCARCERATED 
                    YOUTH OFFENDERS.

           *       *       *       *       *       *       *


                      [PART B--INNOVATIVE PROJECTS

         [Subpart 1--Innovative Projects for Community Service]

SEC. 1121. [20 U.S.C. 1137] STATEMENT OF PURPOSE.

           *       *       *       *       *       *       *


            PART D--DWIGHT D. EISENHOWER LEADERSHIP PROGRAM

SEC. 1081. SHORT TITLE; ESTABLISHMENT OF THE PROGRAM.

    (a) Short Title.-- * * *

           *       *       *       *       *       *       *

    (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] 101(a) of this title), or with 
nonprofit private organizations in consortia with such 
institutions, to operate the program assisted under the part.

           *       *       *       *       *       *       *


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) 
        of the Higher Education Act of 1965;

           *       *       *       *       *       *       *


Carl D. Perkins Vocational Education Act

           *       *       *       *       *       *       *


PART E--TECH-PREP EDUCATION

           *       *       *       *       *       *       *


SEC. 347. DEFINITIONS.

    For purposes of this part:
          (1) The term ``articulation agreement'' means a 
        commitment to a program designed to provide students 
        with a nonduplicative sequence of progressive 
        achievement leading to competencies in a tech-prep 
        education program.
          (2) The term ``community college''--
                  (A) has the meaning provided in section 
                [1201(a)] 101(a) 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

           *       *       *       *       *       *       *


 Morris K. Udall Scholarship and Excellence in National Environmental 
and Native American Public Policy Act of 1992

           *       *       *       *       *       *       *


SEC. 4. DEFINITIONS.

    For the purpose of this Act--
          (1) * * *

           *       *       *       *       *       *       *

          (6) the term ``institution of higher education'' has 
        the same meaning given to such term by section 
        [1201(a)] 101(a) of the Higher Education Act of 1965; 
        and

           *       *       *       *       *       *       *


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) Bilingual education program.--* * *

           *       *       *       *       *       *       *

          (4) Community college.--The term ``community 
        college'' means an institution of higher education as 
        defined in section [1201(a)] 101(a) 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) Average daily attendance.--* * *

           *       *       *       *       *       *       *

          (17) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning 
        given that term in section [1201(a)] 101(a) of the 
        Higher Education Act of 1965.

           *       *       *       *       *       *       *


               NATIONAL EDUCATION STATISTICS ACT OF 1994

                TITLE IV--NATIONAL EDUCATION STATISTICS

SEC. 401. SHORT TITLE.

    This title may be cited as the ``National Education 
Statistics Act of 1994''.

SEC. 402. FINDINGS; PURPOSE; DEFINITIONS.

    (a) Findings.--The Congress finds that--* * *

           *       *       *       *       *       *       *

    (c) Definitions.--For the purpose of this title and unless 
otherwise specified--
          (1) the term ``Assistant Secretary'' means the 
        Assistant Secretary for Educational Research and 
        Improvement established under section 202(b)(1)(E) of 
        the Department of Education Organization Act;
          (2) the term ``Department'' means the Department of 
        Education;
          (3) the term ``institution of higher education'' has 
        the same meaning given such term in section [1201(a)] 
        101(a) of the Higher Education Act of 1965;

           *       *       *       *       *       *       *


Tribally Controlled Community College Assistance Act of 1978

           *       *       *       *       *       *       *


                              definitions

    Sec. 2. [25 U.S.C. 1801] (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;

           *       *       *       *       *       *       *

          (7) ``Indian student count'' means a number equal to 
        the total number of Indian students enrolled in each 
        tribally controlled [community college,] colleges or 
        university's 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

           *       *       *       *       *       *       *

    (b) * * *

           *       *       *       *       *       *       *

          (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] 
        colleges or university's system for providing credit 
        for participation in such program.

           *       *       *       *       *       *       *


     TITLE I--TRIBALLY CONTROLLED [COMMUNITY COLLEGES] COLLEGES OR 
                              UNIVERSITIES

                                purpose

    Sec. 101. [25 U.S.C. 1802] It is the purpose of this title 
to provide grants for the operation and improvement of tribally 
controlled [community colleges] colleges or 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. [25 U.S.C. 1803] (a) The Secretary shall, subject 
to appropriations, make grants pursuant to this title to 
tribally controlled [community colleges] colleges or 
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, education, 
and administrative purposes and for the operation and 
maintenance of the college. Funds provided pursuant to this 
title shall not be used in connection with religious worship or 
sectarian instruction.

                       eligible grant recipients

    Sec. 103. [25 U.S.C. 1804] To be eligible for assistance 
under this title, a tribally controlled [community college] 
college or university must be one which--

           *       *       *       *       *       *       *


                            planning grants

    Sec. 104. [25 U.S.C. 1804a] (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 or universities, or (2) to determine the need and 
potential for the establishment of [such colleges] colleges or 
universities.

           *       *       *       *       *       *       *


                     technical assistance contracts

    Sec. 105. [25 U.S.C. 1805] 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

    Sec. 106. [25 U.S.C. 1806] (a) * * *

           *       *       *       *       *       *       *

    (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.

           *       *       *       *       *       *       *


     grants to tribally controlled [community college] COLLEGES OR 
                              UNIVERSITIES

    Sec. 107. [25 U.S.C. 1807] (a) Grants shall be made under 
this title only in response to applications by tribally 
controlled [community colleges] colleges or 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. [25 U.S.C. 1808] (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--

           *       *       *       *       *       *       *

          (2) [$5,820] $6,000,
except that no grant shall exceed the total cost of the 
education program provided by [such college] such college or 
university.

           *       *       *       *       *       *       *

          (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.

           *       *       *       *       *       *       *

          (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] college or 
        universities.

                        effect on other programs

    Sec. 109. [25 U.S.C. 1809] (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 or universities or postsecondary educational 
institutions.
    (b)(1) The amount of any grant for which tribally 
controlled [community colleges] colleges or 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) 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. [25 U.S.C. 1810] (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 for fiscal year 1993] 
$40,000,000 for fiscal year 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 
College] College or University being designated as its own 
certifying agency.

           *       *       *       *       *       *       *


                           grant adjustments

    Sec. 111. [25 U.S.C. 1811] (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 or 
universities  under section 107 for such fiscal year by the sum 
of the Indian student counts of such colleges 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 [25 U.S.C. 1812] (a) The Secretary shall provide 
for the conduct of a study of facilities available for use by 
tribally controlled [community colleges] colleges or 
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--

           *       *       *       *       *       *       *

          (2) which is available for use by tribally controlled 
        [community colleges] colleges or 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).

           *       *       *       *       *       *       *

          (B) has demonstrated expertise in areas and issues 
        dealing with tribally controlled [community colleges] 
        colleges or universities.

           *       *       *       *       *       *       *


                     construction of new facilities

    Sec. 113. [25 U.S.C. 1813] (a) * * *

           *       *       *       *       *       *       *

    (b) In order to be eligible for a grant under this section, 
a tribally controlled [community college] college or 
university--

           *       *       *       *       *       *       *

          (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)), 
        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 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 following factors: (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 to have a bearing on the 
availability of resources for compliance with the requirements 
of paragraph (1) and which may include he educational 
attainment of tribal members.

           *       *       *       *       *       *       *


     TITLE III--TRIBALLY CONTROLLED [COMMUNITY COLLEGE] COLLEGE OR 
                      UNIVERSITY ENDOWMENT PROGRAM

                                purpose

    Sec. 301. [25 U.S.C. 1831] 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 or universities.

              establishment of program, program agreements

    Sec. 302. [25 U.S.C. 1832] (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 or 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] 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] such 
college or university shall be eligible for such a grant for a 
fiscal year if [such college] 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] such college or university 
enters into an agreement with the Secretary which--

           *       *       *       *       *       *       *

                  (B) a capital contribution by [such college] 
                such college or university in an amount (or of 
                a value) equal to half of the amount of each 
                Federal capital contribution; and

           *       *       *       *       *       *       *

          (4) provides that, if at any time [such college] such 
        college or university withdraws any capital 
        contribution made by that college, 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;

           *       *       *       *       *       *       *


                              use of funds

    Sec. 303. [25 U.S.C. 1833] 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], such college or university to defray any expenses 
associated with the operation of [such college], 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. [25 U.S.C. 1834] 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] 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, 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. [25 U.S.C. 1835] (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] such 
college or university demonstrates has been placed within the 
control of, or irrevocably committed to the use of, the college 
and is available for deposit as a capital contribution of that 
college in accordance with section 302(b)(2)(B), except that 
the maximum amount which may be so allocated to any [such 
college] 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] such college or university 
pursuant to subsection (a), then the amount of the allocation 
to each [such college] such college or university shall be 
ratably reduced.

                    authorization of appropriations

    Sec. 306. [25 U.S.C. 1836] (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.

           *       *       *       *       *       *       *


SEC. 402. [25 U.S.C. 1851] GRANTS AUTHORIZED.

    (a) General Authority.--The Secretary is authorized, 
subject to the availability of appropriations, to make grants 
to tribally controlled [community colleges] college or 
university 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:

           *       *       *       *       *       *       *


SEC. 403. [25 U.S.C. 1852] 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.

           *       *       *       *       *       *       *


EDUCATION OF THE DEAF ACT OF 1986

           *       *       *       *       *       *       *


SEC. 104. ELEMENTARY AND SECONDARY EDUCATION PROGRAMS.

    (a) General Authority.--* * *

           *       *       *       *       *       *       *

    (b) Administrative Requirements.--(1) The elementary and 
secondary education programs shall--
          (A) provide technical assistance and outreach 
        throughout the Nation to meet the training and 
        information needs of parents of infants, children, and 
        youth who are deaf or hard of hearing; and
          (B) provide technical assistance and training to 
        personnel for use in teaching (i) students who are deaf 
        or hard of hearing, in various educational 
        environments, and (ii) students who are deaf or hard of 
        hearing with a broad spectrum of needs as described in 
        subsection (a)[; and].
          [(C) establish and publish priorities for research, 
        development, and demonstration through a process that 
        allows for public input.]
    (2) To the extent possible, the elementary and secondary 
education programs shall provide the services required under 
[paragraph (1)] paragraph (1)(B) in an equitable manner, based 
on the national distributions of students who are deaf or hard 
of hearing in educational environments as determined by the 
Secretary for purposes of [section 618(b)] section 618(a)(1)(A) 
of the Individuals with Disabilities Education Act. Such 
educational environments shall include--

           *       *       *       *       *       *       *

    (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) notify the appropriate local educational agency, 
        [intermediate educational unit] educational service 
        agency or State educational agency of that child's 
        attendance in the program;
          (B) work with local educational agencies, 
        [intermediate educational units] educational service 
        agencies, and State educational agencies, where 
        appropriate, to ensure a smooth transfer of the child 
        to and from that program; and
          [(C) provide the child a free appropriate public 
        education in accordance with part B of the individual 
        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) 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).]
          (C) provide the child a free appropriate public 
        education in accordance with part B of the Individuals 
        with Disabilities Education Act and procedural 
        safeguards in accordance with the following provisions 
        of section 615 of such Act:
                  (i) paragraphs (1), and (3) through (6), of 
                subsection (b).
                  (ii) Subsections (c) through (g).
                  (iii) Subsection (h), except for the matter 
                in paragraph (4) pertaining to transmission of 
                findings and decisions to a State advisory 
                panel.
                  (iv) Paragraphs (1) and (2) of subsection 
                (i).
                  (v) Subsection (j)--
                          (I) except that such subsection shall 
                        not be applicable to a decision by the 
                        University to refuse to admit a child; 
                        or
                          (II) to dismiss a child, except that, 
                        before dismissing any child, the 
                        University shall give at least 60 days 
                        written notice to the child's parents 
                        and to the local educational agency in 
                        which the child resides, unless the 
                        dismissal involves a suspension, 
                        expulsion, or other change in placement 
                        covered under section 615(k).
                  (vi) Subsections (k) through (m).

           *       *       *       *       *       *       *


SEC. 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 Secretary or the University shall determine the necessity 
for the periodic update described in the preceding sentence.

           *       *       *       *       *       *       *


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.]
    (2) The Secretary and the institution of higher education 
with which the Secretary has an agreement under this section--
          (A) shall periodically assess the need for 
        modification of the agreement; and
          (B) shall periodically update the agreement as 
        determined necessary by the Secretary or the 
        institution.

           *       *       *       *       *       *       *


                      TITLE II--GENERAL PROVISIONS

SEC. 201. DEFINITIONS.

    As used in this Act--
          (1) * * *

           *       *       *       *       *       *       *

                  (C) is not lawfully admitted for permanent 
                residence in American Samoa, Guam, [Palau (but 
                only until the Compact of Free Association with 
                Palau take 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 Island[s, 
        and Palau (but only until the Compact of Free 
        Association with Palau takes effect)].

SEC. 203. AUDIT.

    (a) General Accounting Office Authority.-- * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *


SEC. 204. REPORTS.

           *       *       *       *       *       *       *


    (3)(A) [The annual] A summary of the annual audited 
financial statements and auditor's report of the University, as 
required under section 203, and (B) [the annual] a summary of 
the annual audited financial statements and auditor's report of 
the institution of higher education with which the Secretary 
has an agreement under section 112, including specific 
schedules and analyses for all NTID funds, as required under 
section 203, and such supplementary schedules presenting 
financial information for NTID for the end of the Federal 
fiscal year as determined by the Secretary.

SEC. 205. MONITORING, EVALUATION, AND REPORTING.

    (a) Activities--* * *

           *       *       *       *       *       *       *

    (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] 1998 through 
2003 to carry out the monitoring and evaluation activities 
authorized under this section.

           *       *       *       *       *       *       *


SEC. 207. FEDERAL ENDOWMENT PROGRAMS FOR GALLAUDET UNIVERSITY AND THE 
                    NATIONAL TECHNICAL INSTITUTE FOR THE DEAF.

    (a) Establishment of Programs.--

           *       *       *       *       *       *       *

    (c) Investments.--
          (1) Except as provided in subsection (e), the 
        University and NTID, respectively, shall invest the 
        Federal contribution of its Federal endowment fund 
        corpus and income in instruments and securities offered 
        through one or more cooperative service organizations 
        of operating educational organizations under section 
        501(f) of the Internal Revenue Code of 1986, or in low-
        risk instruments and securities in which a regulated 
        insurance company may invest under the laws of the 
        State in which the institution involved is located.
    (d) * * *

           *       *       *       *       *       *       *

          (3)(A) Except as provided in subparagraph (B), the 
        University and NTID, respectively, may, on an annual 
        basis, withdraw or expend not more than 50 percent of 
        the income generated from its Federal endowment fund 
        from the [prior] current fiscal year.

           *       *       *       *       *       *       *

    (h) * * *

           *       *       *       *       *       *       *

          (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] 1998 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] 1998 through 2003.

           *       *       *       *       *       *       *


SEC. 210. INTERNATIONAL STUDENTS.

    (a) Enrollment.--Effective with new admissions for academic 
year 1992-1994 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, except that in any school year no United States citizen 
who is qualified to be admitted to the University or NTID and 
applies for admission to the University or NTID shall be denied 
admission because of the admission of an international student.

           *       *       *       *       *       *       *


[SEC. 211. 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 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 to carry out the 
provisions of this Act relating to the National Technical 
Institute for the Deaf.]

SEC. 211. RESEARCH PRIORITIES.

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

SEC. 212. AUTHORIZATION OF APPROPRIATIONS.

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

             TITLE III--COMMISSION ON EDUCATION OF THE DEAF

SEC. 301. COMMISSION ESTABLISHED.

  (a) Establishment.--
          (1) In general.--The Secretary shall establish a 
        Commission on the Education of the Deaf to identify 
        those education-related factors in the lives of 
        individuals who are deaf that result in barriers to 
        successful postsecondary education experiences and 
        employment, and those education-related factors in the 
        lives of individuals who are deaf that contribute to 
        successful postsecondary education experiences and
          (2) Definition of individuals who are deaf.--In this 
        title, the term `individuals who are deaf' means all 
        persons with hearing impairments, including those who 
        are hard-of-hearing, those deafened later in life, and 
        those who are profoundly deaf.
    (b) Composition.--
          (1) In general.--The Commission shall be composed of 
        13 members appointed by the Secretary from 
        recommendations made by the National Association of the 
        Deaf, the American Society for Deaf Children, the 
        Alexander Graham Bell Association, the President of 
        Gallaudet, the Vice President of the National Technical 
        Institute for the Deaf, State Schools for the Deaf, 
        projects to train teachers of the deaf funded under 
        section 673(b) of the Individuals with Disabilities 
        Education Act, parent training and information centers 
        funded under section 682 of such Act, the Regional 
        Centers on Postsecondary Education for Individuals who 
        are Deaf funded under section 672 of such Act, Self-
        Help for Hard of Hearing People, and the Cothe Council 
        on Education of the Deaf.
          (2) Qualifications.--
                  (A) In general.--Members of the Commission 
                shall be appointed from among individuals who 
                have broad experience and expertise in 
                deafness, program evaluation, education, 
                rehabilitation, and job training generally, 
                which expertise and experience shall be 
                directly relevant to the issues to be addressed 
                by the Commission.
                  (B) Deaf individuals.--At least \1/3\ of 
                members of the Commission shall be individuals 
                who are deaf.
                  (C) Chairperson.--The chairperson of the 
                Commission shall be elected by a simple 
                majority of the Commission.
                  (D) Assistant secretary.--One member of the 
                Commission shall be the Assistant Secretary for 
                Special Education and Rehabilitative Services.
          (3) Date.--Members of the Commission shall be 
        appointed not later than 90 days after the date of 
        enactment of the Education of the Deaf Amendments of 
        1998.

SEC. 302. DUTIES, REPORT, AND DURATION OF THE COMMISSION.

    (a) Identification of Factors.--The Commission shall 
identify, with respect to individuals who are deaf, factors 
that pose barriers to or factors that facilitate--
          (1) educational performance and progress of students 
        who are deaf in high school;
          (2) educational performance and progress of students 
        who are deaf in postsecondary education;
          (3) career exploration and selection;
          (4) job performance and satisfaction in initial 
        postsecondary employment; and
          (5) career advancement and satisfaction.
    (b) Report.--The Commission shall report to the President 
and Congress such interim reports that the Commission deems 
appropriate, and not later than 18 months after the date of 
enactment of the Education of the Deaf Amendments of 1998, a 
final report containing the findings of the Commission with 
respect to the factors identified under subsection (a). The 
final report shall include recommendations, including 
legislative proposals, that the Commission deems advisable.
    (c) Termination.--The Commission shall terminate 90 days 
after the date on which the Commission submits the Commission's 
final report described in subsection (b).

SEC. 303. ADMINISTRATIVE PROVISIONS.

    (a) Personnel.--
          (1) In general.--The Commission may appoint such 
        personnel, including a staff director, as the 
        Commission deems necessary without regard to the 
        provisions of title 5, United States Code, except that 
        the rate pay for any employee of the Commission may not 
        exceed the rate payable for level V of the Executive 
        Schedule under section 5316 of title 5, United States 
        Code.
          (2) Procurement of temporary and intermittent 
        services.--The Chairperson of the Commission may 
        procure temporary and intermittent services under 
        section 3109(b) of title 5, United States Code, at 
        rates for individuals which do not exceed the daily 
        equivalent of the annual rate of basic pay prescribed 
        for level V of the Executive Schedule under section 
        5316 of such title.
    (b) Hearings; Quorum.--
          (1) Hearings.--The Commission or, with the 
        authorization of the Commission, any committee of the 
        Commission, may, for the purpose of carrying out the 
        provisions of this title, hold such hearings, sit, and 
        act at such times and such places in the United States 
        as the Commission or such committee may deem advisable.
          (2) Quorum.--Seven members of the Commission shall 
        constitute a quorum, but 2 or more members may conduct 
        hearings.
          (3) Hearings and public input.--In conducting 
        hearings and acquiring public input under this title, 
        the Commission may use various telecommunications 
        media, including teleconferencing, video-conferencing, 
        the Internet, and other media.
      (c) Consultation; Information and Statistics; Agency 
Cooperation.--
          (1) In general.--In carrying out the Commission's 
        duties under this title and to the extent not 
        prohibited by Federal law, the Commission is authorized 
        to secure consultation, information, statistics, and 
        cooperation from Federal agencies, entities funded by 
        the Federal Government, and other entities the 
        Commission deems advisable.
          (2) Special rule.--The Commission is authorized to 
        use, with their consent, the services, personnel, 
        information, and facilities of other Federal, State, 
        local, and private agencies with or without 
        reimbursement.

SEC. 304. COMPENSATION OF MEMBERS.

  (a) United States Officer and Employee Members.--Members of 
the Commission 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 may 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) Public Members.--Members of the Commission who are not 
officers or full-time employees of the United States shall 
receive compensation at a rate that does not exceed the daily 
rate payable for level V of the Executive Schedule under 
section 5316 of title 5, United States Code, for each day 
(including travel time) during which such members are engaged 
in the actual performance of the duties of the Commission. In 
addition, such members may 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.

SEC. 305. AUTHORIZATIONS OF APPROPRIATIONS.

  There is authorized to be appropriated to carry out this 
title such sums as may be necessary for each of the fiscal 
years 1999 and 2000.

           *       *       *       *       *       *       *


UNITED STATES CODE--TITLE 20

           *       *       *       *       *       *       *


GENERAL EDUCATION PROVISIONS ACT

           *       *       *       *       *       *       *


SEC. 1232G. FAMILY EDUCATIONAL AND PRIVACY RIGHTS.

           *       *       *       *       *       *       *


                          (iii) records that are maintained by 
                        local police or campus security 
                        officers of an educational agency or 
                        institution about--
                                  (I) individuals who have been 
                                found guilty of, or have pled 
                                guilty to, committing or 
                                participating in any criminal 
                                activity as defined in Federal, 
                                State, or local law that has 
                                occurred while the individual 
                                was a student in attendance, 
                                including audit or noncredit, 
                                at an educational institution; 
                                and
                                  (II) findings of guilt of 
                                criminal misconduct and related 
                                sanctions from any previously 
                                attended educational agencies 
                                or institutions where such 
                                records were created on or 
                                after September 1, 1999, and 
                                that are maintained by the 
                                institution currently or most 
                                recently attended by the 
                                individual;
                          [(iii)] (iv) in the case of persons 
                        who are employed by an educational 
                        agency or institution but who are not 
                        in attendance at such agency or 
                        institution, records made and 
                        maintained in the normal course of 
                        business which relate exclusively to 
                        such person in that person's capacity 
                        as an employee and are not available 
                        for use for any other purpose; or
                          [(iv)] (v) records on a student who 
                        is eighteen years of age or older, or 
                        is attending an institution of 
                        postsecondary education, which are made 
                        or maintained by a physician, 
                        psychiatrist, psychologist, or other 
                        recognized professional or 
                        paraprofessional acting in his 
                        professional or paraprofessional 
                        capacity, or assisting in that 
                        capacity, and which are made, 
                        maintained, or used only in connection 
                        with the provision of treatment to the 
                        student, and are not available to 
                        anyone other than persons providing 
                        such treatment, except that such 
                        records can be personally reviewed by a 
                        physician or other appropriate 
                        professional of the student's choice.

           *       *       *       *       *       *       *


  AMERICAN INDIAN, ALASKA NATIVE, AND NATIVE HAWAIIAN CULTURE AND ART 
DEVELOPMENT ACT

           *       *       *       *       *       *       *


            SUBCHAPTER III--AUTHORIZATION OF APPROPRIATIONS

[SEC. 4451. AUTHORIZATION OF APPROPRIATIONS.

    [(a) Subchapter I
          [(1) There are authorized to be appropriated for each 
        fiscal year such sums as may be necessary to carry out 
        the provisions of subchapter I of this chapter.
          [(2) Funds appropriated under the authority of 
        paragraph (1) shall remain available without fiscal 
        year limitation.
          [(3) Except as provided for amounts subject to 
        section 4425(d) of this title, amounts appropriated 
        under the authority of this subsection for fiscal year 
        1989, and for each succeeding fiscal year, shall be 
        paid to the Institute at the later of--
                  [(A) the beginning of the fiscal year, or
                  [(B) upon enactment of such appropriation.
          [(4) Funds appropriated under this subsection for the 
        fiscal year 1992 and for each succeeding fiscal year 
        shall be transferred by the Secretary of the Treasury 
        through the most expeditious method available with the 
        Institute being designated as its own certifying 
        agency.
          [(5) Funds are authorized to be appropriated for 
        programs for more than one fiscal year. For the purpose 
        of affording adequate notice of funding available under 
        this chapter, amounts appropriated in an appropriations 
        Act for any fiscal year to carry out this chapter may, 
        subject to the appropriation, become available for 
        obligations on July 1, of that fiscal year.
    [(b) Subchapter II
    There are authorized to be appropriated for the purpose of 
carrying out the provisions of subchapter II of this chapter--
          [(1) for fiscal year 1987, $1,000,000, and
          [(2) for each succeeding fiscal year, such sums as 
        may be necessary to carry out such provisions.]

SEC. 4451. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated to carry out part A 
$5,000,000 for fiscal year 1999.

           *       *       *       *       *       *       *


UNITED STATES CODE TITLE 22

           *       *       *       *       *       *       *


UNITED STATES INSTITUTE OF PEACE ACT

           *       *       *       *       *       *       *


SEC. 4604. POWERS AND DUTIES.

    (a) District of Columbia Nonprofit-Corporative Powers.--

           *       *       *       *       *       *       *

    (f) Contracts for operation of Institute.--The Institute 
may enter to personal service and other contracts for the 
proper operation of the Institute.

           *       *       *       *       *       *       *

    (o) Administrative Services from General Services 
Administration.--The Institute may obtain administrative 
support services from the Administrator of General Services and 
use all sources of supply and services of the General Services 
Administration on a reimbursable basis.

           *       *       *       *       *       *       *


SEC. 4609. FUNDING

    (a) Authorization of appropriations.--
        (1) In general.--For the purpose of carrying out this 
        chapter, there are authorized to be appropriated 
        $15,000,000 for fiscal year [1993] 1999 and such sums 
        as may be necessary for each of the [6] 4 succeeding 
        fiscal years.

           *       *       *       *       *       *       *


SEC. 4611. BIENNIAL REPORTS TO PRESIDENT AND CONGRESS; COMMENTS, 
                    FINDINGS, AND RECOMMENDATIONS; CONGRESSIONAL 
                    COMMITTEE HEARINGS.

    Beginning two years after October 19, 1984, and at 
intervals of two years thereafter, the Chairman of the Board 
shall prepare and transmit to the Congress and the President a 
report detailing the progress the institute has made in 
carrying out the purposes of this chapter during the preceding 
two-year period. The President [shall] may prepare and transmit 
to the Congress within a reasonable time after the receipt of 
such report the written comments and recommendations of the 
appropriate agencies of the United States with respect to the 
contents of such report and their recommendations with respect 
to any legislation which may be required concerning the 
Institute. After receipt of such report by the Congress, the 
Committee on Foreign Affairs and the Committee on Education and 
Labor of the House of Representatives and the Committee on 
Foreign Relations and the Committee on Labor and Human 
Resources of the Senate [shall] may hold hearings to review the 
findings and recommendations of such report and the written 
comments received from the President.

           *       *       *       *       *       *       *


TITLE 10

           *       *       *       *       *       *       *


         SCIENCE AND MATHEMATICS EDUCATION IMPROVEMENT PROGRAM

SEC. 2193. SCIENCE AND MATHEMATICS EDUCATION IMPROVEMENT PROGRAM.

        (a)(1) * * *

           *       *       *       *       *       *       *

      (c) in this section:
          (1) The term ``institution of higher education'' has 
        the meaning given such term in section [1201(a)] 101(a) 
        of the Higher Education Act of 1965 [(20 U.S.C. 
        1141(a))].

           *       *       *       *       *       *       *


SEC. 2199. DEFINITIONS.

    In this chapter:
          (1) * * *
          (2) The term ``institution of higher education'' has 
        the meaning given such term in section [1201(a)] 101(a) 
        of the Higher Education Act of 1965 [(20 U.S.C. 
        1141(a))].

           *       *       *       *       *       *       *


                             TITLE 10--NOTE

                   NATIONAL DEFENSE AUTHORIZATION ACT

SEC. 2324. ALLOWABLE COSTS UNDER DEFENSE CONTRACTS.

           *       *       *       *       *       *       *


    (c) Definitions.--In this section:
          (1) * * *
          (2) The term ``institution of higher education'' has 
        the meaning given such term in section [1201(a)] 101(a) 
        of the Higher Education Act of 1965 [(20 U.S.C. 
        1141(a))] [section 1141(a) of Title 20, Education].

           *       *       *       *       *       *       *


SEC. 2701. ENVIRONMENTAL RESTORATION PROGRAM.

Environmental Restoration Institutional Grants for Training Dislocated 
Defense Workers and young adults

           *       *       *       *       *       *       *


                          (i) Definitions.--For purposes of 
                        this section [this note]:

           *       *       *       *       *       *       *

          (3) Institution of higher education.--The term 
        ``institution of higher education'' has the meaning 
        given such term in section [1201(a)] 101(a) of the 
        Higher Education Act of 1965 [(20 U.S.C. 1141(a))].

           *       *       *       *       *       *       *


Environmental Education Opportunities Program

           *       *       *       *       *       *       *


    (k) Definitions.--For purposes of this section [this note]:

           *       *       *       *       *       *       *

          (3) The term ``institution of higher education'' has 
        the same meaning given such term in section [1201(a)] 
        101(a) of the Higher Education Act of 1965 [(20 U.S.C. 
        1141(a))].

           *       *       *       *       *       *       *


Environmental Scholarship and Fellowship Program for the department of 
Defense

           *       *       *       *       *       *       *


    (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)] 
        101(a) of the Higher Education Act of 1965 [(20 U.S.C. 
        1141(a))];

           *       *       *       *       *       *       *


SEC. 1. TRUSTS, ETC., IN RESTRAINT OF TRADE ILLEGAL; PENALTY.

Application of Antitrust Laws to award of Need-Based Educational Aid

           *       *       *       *       *       *       *


    (c) Definitions.--For purposes of this section--
          (1) * * *

           *       *       *       *       *       *       *

          (3) the term ``institution of higher education'' has 
        the meaning given such term in section [1201(a)] 101(a) 
        of the Higher Education Act of 1965 [(20 U.S.C. 
        1141(a))];

           *       *       *       *       *       *       *


                                TITLE 18

                     CRIMES AND CRIMINAL PROCEDURE

SEC. 207. RESTRICTIONS ON FORMER OFFICERS, EMPLOYEES, AND ELECTED 
                    OFFICIALS OF THE EXECUTIVE AND LEGISLATIVE 
                    BRANCHES.

    (a) Restrictions on All Officers and Employees of the 
Executive Branch and Certain Other Agencies.--* * *

           *       *       *       *       *       *       *

    (j) Exceptions.--

           *       *       *       *       *       *       *

                  (B) an accredited, degree-granting 
                institution of higher education, as defined in 
                section [1201(a)] 101(a) 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.

           *       *       *       *       *       *       *


                        ACT OF NOVEMBER 2, 1991

                (Popularly 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 purpose:
    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 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 
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 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 
his 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) 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

           *       *       *       *       *       *       *


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) * * *

           *       *       *       *       *       *       *

          (5) ``institution of higher education'' means an 
        institution of higher education as defined by section 
        [1201(a)] 101(a) 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;

           *       *       *       *       *       *       *


                     construction of new facilities

    Sec. 113. (a) * * *

           *       *       *       *       *       *       *

          (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) 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 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.

           *       *       *       *       *       *       *


  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) of the Higher Education Act of 1965; and

           *       *       *       *       *       *       *


 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) 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) 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) 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

           *       *       *       *       *       *       *


                PART G--AMERICAN INDIAN TEACHER TRAINING

SEC. 1371. AMERCIAN 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) of the Higher Education Act of 
                1965; and

           *       *       *       *       *       *       *


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) 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 at 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) 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.

           *       *       *       *       *       *       *


                  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 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 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) 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) of the Higher Education Act of 1965.

           *       *       *       *       *       *       *


         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) 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) 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) 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.

           *       *       *       *       *       *       *


  SEC. 670G OF THE CHILD CARE AND DEVELOPMENT BLOCK GRANT ACT OF 1990

                              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) 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. 114(a))] 101(a) of the 
        Higher Education Act of 1965,

           *       *       *       *       *       *       *


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) of the Higher Education Act of 1965.

           *       *       *       *       *       *       *


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) 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 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 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 1417 OF THE FOOD AND AGRICULTURE ACT OF 1977

    (a) * * *

           *       *       *       *       *       *       *

    (h) Secondary Education and 2-Year Postsecondary Education 
Teaching Programs.--
          (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) of 
        the Higher Education Act of 1965.

           *       *       *       *       *       *       *


          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 the term by section [1201(a)] 
        101(a) of the Higher Education Act of 1965.

           *       *       *       *       *       *       *


        SECTION 815 OF THE JAMES MADISON MEMORIAL FELLOWSHIP ACT

                              definitions

    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) of the Higher Education Act of 1965; and
          (4) the term ``secondary school'' has the same 
        meaning given that term by section [1201(d) of the 
        Higher Education Act of 1965] 14101 of the Elementary 
        and Secondary 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) of the 
                Higher Education Act of 1965; or

           *       *       *       *       *       *       *


TITLE 20 U.S.C.

           *       *       *       *       *       *       *


HIGHER EDUCATION AMENDMENTS OF 1992

           *       *       *       *       *       *       *


Sec. 1001. 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--

           *       *       *       *       *       *       *


HISTORICAL AND STATUTORY NOTES

           *       *       *       *       *       *       *


                 General Provisions of 1992 Amendments

    Pub.L. 102-325, Sec. 1(c), July 23, 1992, 106 Stat. 448, 
provided that: ``Unless otherwise provided therein, terms used 
in titles XIII, XIV, and XV [enacting sections 1145h and 4426 
of this title, sections 3301 to 3371 of Title 25, Indians, and 
sections 2401 to 2405 of Title 29; Labor, amending sections 
1221e-1, 1232g, 3412, 4412, 4414, 4416, 4417, 4418, 4421, 4422, 
4423, 4424, 4425, 5381, and 5411 of this title, section 5315 of 
Title 5, Government Organization and Employees, sections 4604 
and 4609 of Title 22, Foreign Relations and Intercourse, 
sections 640c-1, 1810, 1836, and 1852 of Title 25, and sections 
295g-8 and 12576 of Title 42, The Public Health and Welfare, 
amending provisions set out as a note under section 362 of 
Title 11, Bankruptcy, and enacting provisions set out as notes 
under sections 1070, 1070a-11, 1070a-21, 1071, 1080, 1088, 
1091a, 1101, 1132a, 1134, 1221-1, 1221e, 1221e-1, 1232g, and 
1452 of this title] shall have the same meaning given to such 
terms in section [1201] 101 of the Higher Education Act of 1965 
[section 1141 of this title].''

           *       *       *       *       *       *       *


 COMMUNITY SCHOOLS YOUTH SERVICES AND SUPERVISION GRANT PROGRAM 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) 101 of the Higher 
        Education Act of 1965 [(20 U.S.C. 1141(i))], and a 
        public secondary school, as defined in section 
        [1201](d) 101 of that Act.

           *       *       *       *       *       *       *


POLICE CORPS ACT

           *       *       *       *       *       *       *


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)] 
        101(a) of the Higher Education Act of 1965 [(20 U.S.C. 
        1141(a))].

           *       *       *       *       *       *       *


LAW ENFORCEMENT SCHOLARSHIP AND RECRUITMENT ACT

           *       *       *       *       *       *       *


            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)] 
        101(a) of the Higher Education Act of 1965 [(20 U.S.C. 
        1141(a))].

           *       *       *       *       *       *       *


              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] 101 of the 
        Higher Education Act of 1965 [(20 U.S.C. 1141)].

           *       *       *       *       *       *       *


BARRY GOLDWATER SCHOLARSHIP AND EXCELLENCE IN EDUCATION ACT

           *       *       *       *       *       *       *


SEC. 1403. DEFINITIONS.

    In this title:
          (1) * * *

           *       *       *       *       *       *       *

          (4) The term ``institution of higher education'' 
        means any such institution as defined in section 
        [1201(a)] 101(a) of the Higher Education Act of 1965 
        [(20 U.S.C. 1141(A))].

           *       *       *       *       *       *       *


DAVID L. BOREN NATIONAL SECURITY EDUCATION ACT OF 1991

           *       *       *       *       *       *       *


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)] 101(a) 
        of the Higher Education Act of 1965 [(20 U.S.C. 
        1141(a))].

           *       *       *       *       *       *       *


SURFACE MINING CONTROL AND RECLAMATION ACT OF 1977

           *       *       *       *       *       *       *


         TITLE VII--ADMINISTRATIVE AND MISCELLANEOUS PROVISIONS

                              DEFINITIONS

    Sec. 701. For the purposes of this Act--
          (1) * * *

           *       *       *       *       *       *       *

          (32) the term ``institution of higher education'' as 
        used in titles VIII and IX, means any such institution 
        as defined by section [1201(a)] 101(a) of the Higher 
        Education Act of 1968.

           *       *       *       *       *       *       *


FOREIGN RELATIONS AUTHORIZATION ACT, FISCAL YEARS 1994 AND 1995

           *       *       *       *       *       *       *


SEC. 240. ENVIRONMENT AND SUSTAINABLE DEVELOPMENT EXCHANGE PROGRAM.

    (a) Purpose.-- * * *

           *       *       *       *       *       *       *

    (d) Definition.--For purposes of this section, the term 
``institution of higher education'' has the same meaning given 
to such term by section [1201(a)] 101(a) of the Higher 
Education Act of 1965.

           *       *       *       *       *       *       *


COMMUNITY SERVICES BLOCK GRANT ACT--SEC. 682(b)(1)

           *       *       *       *       *       *       *


    Sec. 682(a) * * *

           *       *       *       *       *       *       *

    (b) Program Requirements.--
          (1) Any instructional activity carried out by an 
        eligible service provider receiving a grant under this 
        subsection shall be carried out on the campus of an 
        institution of higher education (as defined in section 
        [1201(a)] 101(a) of the Higher Education Act [(20 USCS 
        Sec. 1141(a))] and shall include--

           *       *       *       *       *       *       *


           OMNIBUS CRIME CONTROL AND SAFE STREETS ACT OF 1968

Sec. 3791. General provisions

    (a) Definitions.--As used in this title--

           *       *       *       *       *       *       *

          (17) ``institution of higher education'' means any 
        such institution as defined by section [1201(a)] 101(a) 
        of the Higher Education Act of 1965 [(20 USCS 
        Sec. 1141(a))], subject, however, to such modifications 
        and extensions as the Office may determine to be 
        appropriate;

           *       *       *       *       *       *       *


TITLE 42--UNITED STATES CODE

           *       *       *       *       *       *       *


SEC. 1862I. SCIENTIFIC AND TECHNICAL EDUCATION.

    (a)--National advanced scientific and technical education 
program.

           *       *       *       *       *       *       *

    (g) Definitions.--As used in this section--
          (1) * * *

           *       *       *       *       *       *       *

          (2) the term ``associate-degree-granting college'' 
        means an institution of higher education (as determined 
        under section [1201(a)] 101(a) of the Higher Education 
        Act of 1965 [(20 U.S.C. 1141(a))] that--

           *       *       *       *       *       *       *

          (3) the term ``bachelor-degree-granting institution'' 
        means an institution of higher education (as determined 
        under section [1201(a)] 101(a) of the Higher Education 
        Act of 1965 [(20 U.S.C. 1141(a))] that offers a 
        baccalaureate degree program;

           *       *       *       *       *       *       *


                                
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