[House Report 109-231]
[From the U.S. Government Publishing Office]



109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    109-231
_______________________________________________________________________

                                     



               COLLEGE ACCESS AND OPPORTUNITY ACT OF 2005

                               ----------                              

                              R E P O R T

                                 of the

                COMMITTEE ON EDUCATION AND THE WORKFORCE

                                   on

                                H.R. 609




               COLLEGE ACCESS AND OPPORTUNITY ACT OF 2005


109th Congress 
 1st Session                                                     Report
                        HOUSE OF REPRESENTATIVES                109-231
_______________________________________________________________________

                                     



               COLLEGE ACCESS AND OPPORTUNITY ACT OF 2005

                               __________

                              R E P O R T

                                 of the

                COMMITTEE ON EDUCATION AND THE WORKFORCE

                                   on

                                H.R. 609




109th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    109-231

======================================================================



 
               COLLEGE ACCESS AND OPPORTUNITY ACT OF 2005

                                _______
                                

 September 22, 2005.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

    Mr. Boehner, from the Committee on Education and the Workforce, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 609]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Education and the Workforce, to whom was 
referred the bill (H.R. 609) to amend and extend the Higher 
Education Act of 1965, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

  (a) Short Title.--This Act may be cited as the ``College Access and 
Opportunity Act of 2005''.
  (b) Table of Contents.--

Sec. 1. Short title; table of contents.
Sec. 2. References; effective date.

                      TITLE I--GENERAL PROVISIONS

Sec. 101. Definition of institution of higher education.
        ``Sec. 101. Definition of institution of higher education.
        ``Sec. 102. Institutions outside the United States.
        ``Sec. 123. Restrictions on funds for for-profit schools.
Sec. 102. New borrower definition.
Sec. 103. Student speech and association rights.
Sec. 104. National Advisory Committee on Institutional Quality and 
Integrity.
Sec. 105. Alcohol and drug abuse prevention.
Sec. 106. Prior rights and obligations.
Sec. 107. Limitation on Certain Uses of Funds.
        ``Sec. 124. Limitation on Certain Uses of Funds.
Sec. 108. Consumer information and public accountability in higher 
education.
        ``Sec. 131. Consumer information and public accountability in 
                        higher education.
Sec. 109. Databases of student information.
        ``Sec. 132. Databases of student information prohibited.
Sec. 110. Performance-based organization.

                     TITLE II--TEACHER PREPARATION

Sec. 201.  Teacher quality enhancement grants.

      ``Part A--Teacher Quality Enhancement Grants for States and 
                              Partnerships

        ``Sec. 201. Purposes; definitions.
        ``Sec. 202. State grants.
        ``Sec. 203. Partnership grants.
        ``Sec. 204. Teacher recruitment grants.
        ``Sec. 205. Administrative provisions.
        ``Sec. 206. Accountability and evaluation.
        ``Sec. 207. Accountability for programs that prepare teachers.
        ``Sec. 208. State functions.
        ``Sec. 209. General provisions.
        ``Sec. 210. Authorization of appropriations.
Sec. 202. Preparing tomorrow's teachers to use technology.
Sec. 203. Centers of excellence.

                    ``Part C--Centers of Excellence

        ``Sec. 231. Purposes; definitions.
        ``Sec. 232. Centers of excellence.
        ``Sec. 233. Authorization of appropriations.
Sec. 204. Teacher incentive fund program.

                ``Part D--Teacher Incentive Fund Program

        ``Sec. 241. Purpose; definitions.
        ``Sec. 242. Teacher incentive fund grants.
        ``Sec. 243. Evaluations.
        ``Sec. 244. Authorization of appropriations.
Sec. 205. Transition.

                      TITLE III--INSTITUTIONAL AID

Sec. 301. Title III grants for American Indian Tribally Controlled 
Colleges and Universities.
Sec. 302. Alaska Native and Native Hawaiian-serving institutions.
Sec. 303. Grants to part B institutions.
Sec. 304. Technical amendments.
Sec. 305. Title III authorizations.

                      TITLE IV--STUDENT ASSISTANCE

                       Part A--Grants to Students

Sec. 401. Pell Grants.
        ``Sec. 401A. Pell Grants Plus: achievement grants for State 
                        scholars.
Sec. 402. TRIO programs.
Sec. 403. TRIO reform.
        ``Sec. 402G. Staff development activities.
        ``Sec. 402H. Evaluations.
Sec. 404. GEARUP.
Sec. 405. Federal Supplemental Educational Opportunity Grants.
Sec. 406. LEAP.
Sec. 407. HEP/CAMP program.
Sec. 408. Robert C. Byrd Honors Scholarship Program.

          ``Subpart 6--Robert C. Byrd Honors Scholarship Program

        ``Sec. 419A. Robert C. Byrd mathematics and science honors 
                        scholarship program.
        ``Sec. 419B. Mathematics and science incentive program.
        ``Sec. 419C. Mathematics and science education coordinating 
                        council grants.
        ``Sec. 419D. Authorization of appropriations.
Sec. 409. Child care access.
Sec. 410. Learning anytime anywhere partnerships.

             Part B--Federal Family Education Loan Program

Sec. 421. Reauthorization of Federal Family Education Loan Program.
Sec. 422. Loan limits.
Sec. 423. Interest rates and special allowances.
Sec. 424. Additional loan terms and conditions.
Sec. 425. Consolidation loan changes.
Sec. 426. Deferment of student loans for military service.
Sec. 427. Loan forgiveness for service in areas of national need.
        ``Sec. 428K. Loan forgiveness for service in areas of national 
                        need.
Sec. 428. Unsubsidized Stafford loans.
Sec. 429. Elimination of termination dates from Taxpayer-Teacher 
Protection Act of 2004.
Sec. 430. Additional administrative provisions.
        ``Sec. 428I. Special insurance and reinsurance rules for 
                        exceptional performance.

                  Part C--Federal Work-Study Programs

Sec. 441. Authorization of appropriations.
Sec. 442. Community service.
Sec. 443. Allocation of funds.
Sec. 444. Books and supplies.
Sec. 445. Job location and development.
Sec. 446. Work colleges.

                  Part D--Federal Direct Loan Program

Sec. 451. Reauthorization of the Direct Loan Program.

                  Part E--Federal Perkins Loan Program

Sec. 461. Reauthorization of program.
Sec. 462. Loan terms and conditions.
Sec. 463. Loan cancellation.
Sec. 464. Technical amendments.

                         Part F--Need Analysis

Sec. 471. Significantly simplifying the student aid application 
process.
Sec. 472. Additional need analysis amendments.

  Part G--General Provisions Relating to Student Financial Assistance

Sec. 481. Definitions of academic year and eligible program.
Sec. 482. Distance education.
Sec. 483. Expanding information dissemination regarding eligibility for 
Pell Grants.
Sec. 484. Student eligibility.
Sec. 485. Institutional refunds.
Sec. 486. Institutional and financial assistance information for 
students.
Sec. 487. College access initiative.
        ``Sec. 485D. College access initiative.
Sec. 488. Distance education demonstration program.
Sec. 489. College affordability demonstration program.
        ``Sec. 486A. College affordability demonstration program.
Sec. 490. Program participation agreements.
Sec. 491. Additional technical and conforming amendments.

                       Part H--Program Integrity

Sec. 495. Accreditation.
Sec. 496. Report to congress on prevention of fraud and abuse in 
student financial aid programs.
        ``Sec. 499. Report to Congress on prevention of fraud and abuse 
                        in student financial aid programs.

                    TITLE V--DEVELOPING INSTITUTIONS

Sec. 501. Definitional changes.
Sec. 502. Assurance of enrollment of needy students.
Sec. 503. Additional amendments.
Sec. 504. Postbaccalaureate opportunities for Hispanic Americans.

   ``Part B--Promoting Postbaccalaureate Opportunities for Hispanic 
                               Americans

        ``Sec. 511. Purposes.
        ``Sec. 512. Program authority and eligibility.
        ``Sec. 513. Authorized activities.
        ``Sec. 514. Application and duration.
Sec. 505. Authorization of appropriations.

                     TITLE VI--TITLE VI AMENDMENTS

Sec. 601. International and foreign language studies.
Sec. 602. Business and international education programs.
Sec. 603. Institute for International Public Policy.
        ``Sec. 621. Program for foreign service professionals.
Sec. 604. Evaluation, outreach, and dissemination.
        ``Sec. 632. Evaluation, outreach, and dissemination.
Sec. 605. Advisory Board.
        ``Sec. 633. International Higher Education Advisory Board.
Sec. 606. Recruiter access to students and student recruiting 
information; safety.
        ``Sec. 634. Recruiter access to students and student recruiting 
                        information.
        ``Sec. 635. Student safety.
Sec. 607. National study of foreign language heritage communities.
        ``Sec. 636. National study of foreign language heritage 
                        communities.

                    TITLE VII--TITLE VII AMENDMENTS

Sec. 701. Javits fellowship program.
Sec. 702. Graduate assistance in areas of national need.
Sec. 703. Thurgood Marshall legal educational opportunity program.
Sec. 704. Fund for the improvement of postsecondary education.
Sec. 705. Urban community service.
Sec. 706. Demonstration projects to ensure students with disabilities 
receive a quality higher education.

                    TITLE VIII--CLERICAL AMENDMENTS

Sec. 801. Clerical amendments.

              TITLE IX--AMENDMENTS TO OTHER EDUCATION LAWS

               Part A--Education of the Deaf Act of 1986

Sec. 901. Laurent Clerc National Deaf Education Center.
Sec. 902. Authority.
Sec. 903. Agreement for the National Technical Institute for the Deaf.
Sec. 904. Definitions.
Sec. 905. Audit.
Sec. 906. Reports.
Sec. 907. Liaison for educational programs.
Sec. 908. Federal endowment programs for Gallaudet University and the 
National Technical Institute for the Deaf.
Sec. 909. Oversight and effect of agreements.
Sec. 910. Authorization of appropriations.
        ``Sec. 1.  Short title.

                   Part B--Additional Education Laws

Sec. 921. Cancellation of Student Loan Indebtedness For Survivors of 
Victims of the September 11, 2001, Attacks.
Sec. 922. Amendment to Higher Education Amendments of 1998.
Sec. 923. Tribally Controlled College or University Assistance Act of 
1978.
Sec. 924. Navajo Community College Act.
Sec. 925. Education Amendments of 1992.
Sec. 926. Study of student learning outcomes and public accountability.
Sec. 927. Study of minority graduation rates.
Sec. 928. Study of education-related indebtedness of medical school 
graduates.
Sec. 929. Study of adult learners.
Sec. 930.  Increase in college textbook prices.

SEC. 2. REFERENCES; EFFECTIVE DATE.

  (a) References.--Except as otherwise expressly provided, whenever in 
this Act an amendment or repeal is expressed in terms of an amendment 
to, or repeal of, a section or other provision, the reference shall be 
considered to be made to a section or other provision of the Higher 
Education Act of 1965 (20 U.S.C. 1001 et seq.).
  (b) Effective Date.--Except as otherwise provided in this Act, the 
amendments made by this Act shall take effect on the date of enactment 
of this Act.

                      TITLE I--GENERAL PROVISIONS

SEC. 101. DEFINITION OF INSTITUTION OF HIGHER EDUCATION.

  (a) Amendment.--Title I is amended by striking sections 101 and 102 
(20 U.S.C. 1001, 1002) and inserting the following:

``SEC. 101. DEFINITION OF INSTITUTION OF HIGHER EDUCATION.

  ``(a) Institution of Higher Education.--For purposes of this Act, the 
term `institution of higher education' means an educational institution 
in any State that--
          ``(1) admits as regular students only individuals who--
                  ``(A) meet the requirements of section 484(d)(3), or 
                have a certificate of graduation from a school 
                providing secondary education, or the recognized 
                equivalent of such a certificate;
                  ``(B) are beyond the age of compulsory school 
                attendance in the State in which the institution is 
                located; or
                  ``(C) will be dually enrolled in that institution and 
                a secondary school;
          ``(2) is legally authorized within such State to provide a 
        program of education beyond secondary education;
          ``(3)(A) is accredited by a nationally recognized accrediting 
        agency or association; or
          ``(B) if not so accredited, is a public or nonprofit 
        institution that has been granted preaccreditation status by 
        such an agency or association that has been recognized by the 
        Secretary for the granting of preaccreditation status, and the 
        Secretary has determined that there is satisfactory assurance 
        that the institution will meet the accreditation standards of 
        such an agency or association within a reasonable time; and
          ``(4) meets either of the following criteria:
                  ``(A) is a nonprofit, for-profit, or public 
                institution that--
                          ``(i) provides an educational program for 
                        which the institution awards a bachelor's, 
                        graduate, or professional degree;
                          ``(ii) provides not less than a 2-year 
                        educational program which is acceptable for 
                        full credit towards such a degree;
                          ``(iii) provides not less than a 1-year 
                        program of training that prepares students for 
                        gainful employment in a recognized occupation; 
                        or
                          ``(iv) awards a degree that is acceptable for 
                        admission to graduate or professional degree 
                        programs, subject to the review and approval of 
                        the Secretary; or
                  ``(B) is a nonprofit, for-profit, or public 
                institution that provides an eligible program (as 
                defined in section 481)--
                          ``(i) for which the institution awards a 
                        certificate; and
                          ``(ii) that prepares students for gainful 
                        employment in a recognized occupation.
  ``(b) Additional Limitations.--
          ``(1) For-profit postsecondary institutions.--
                  ``(A) Duration of accreditation.--A for-profit 
                institution shall not be considered to be an 
                institution of higher education unless such institution 
                is accredited by a nationally recognized accrediting 
                agency or association and such institution has been in 
                existence for at least 2 years.
                  ``(B) Institutional eligibility only for competitive 
                grants.--For the purposes of any program providing 
                grants to institutions for use by the institution (and 
                not for distribution among students), a for-profit 
                institution shall not be considered to be an 
                institution of higher education under this section if 
                such grants are awarded on any basis other than 
                competition on the merits of the grant proposal or 
                application.
          ``(2) Postsecondary vocational institutions.--A nonprofit or 
        public institution that meets the criteria of subsection 
        (a)(4)(B) shall not be considered to be an institution of 
        higher education unless such institution has been in existence 
        for at least 2 years.
          ``(3) Limitations based on management.--An institution shall 
        not be considered to meet the definition of an institution of 
        higher education in this section if--
                  ``(A) the institution, or an affiliate of the 
                institution that has the power, by contract or 
                ownership interest, to direct or cause the direction of 
                the management or policies of the institution, has 
                filed for bankruptcy, except that this paragraph shall 
                not apply to a nonprofit institution, the primary 
                function of which is to provide health care educational 
                services (or an affiliate of such an institution that 
                has the power, by contract or ownership interest, to 
                direct or cause the direction of the institution's 
                management or policies) that filed for bankruptcy under 
                chapter 11 of title 11, United States Code, between 
                July 1, 1998, and December 1, 1998; or
                  ``(B) the institution, the institution's owner, or 
                the institution's chief executive officer has been 
                convicted of, or has pled nolo contendere or guilty to, 
                a crime involving the acquisition, use, or expenditure 
                of Federal, State, or local government funds, or has 
                been judicially determined to have committed a crime 
                involving the acquisition, use, or expenditure 
                involving Federal, State, or local government funds.
          ``(4) Limitation on course of study or enrollment.--An 
        institution shall not be considered to meet the definition of 
        an institution of higher education in subsection (a) if such 
        institution--
                  ``(A) offers more than 50 percent of such 
                institution's courses by correspondence (excluding 
                courses offered by telecommunications as defined in 
                section 484(l)(4)), unless the institution is an 
                institution that meets the definition in section 
                3(3)(C) of the Carl D. Perkins Vocational and Technical 
                Education Act of 1998;
                  ``(B) enrolls 50 percent or more of the institution's 
                students in correspondence courses (excluding courses 
                offered by telecommunications as defined in section 
                484(l)(4)), unless the institution is an institution 
                that meets the definition in section 3(3)(C) of the 
                Carl D. Perkins Vocational and Technical Education Act 
                of 1998, except that the Secretary, at the request of 
                the institution, may waive the applicability of this 
                subparagraph to the institution for good cause, as 
                determined by the Secretary in the case of an 
                institution of higher education that provides a 2- or 
                4-year program of instruction (or both) for which the 
                institution awards an associate or baccalaureate 
                degree, respectively;
                  ``(C) has a student enrollment in which more than 25 
                percent of the students are incarcerated, except that 
                the Secretary may waive the limitation contained in 
                this subparagraph for an institution that provides a 2- 
                or 4-year program of instruction (or both) for which 
                the institution awards a bachelor's degree, or an 
                associate's degree or a postsecondary certificate, 
                respectively; or
                  ``(D) has a student enrollment in which more than 50 
                percent of the students either do not meet the 
                requirements of section 484(d)(3) or do not have a 
                secondary school diploma or its recognized equivalent, 
                and does not provide a 2- or 4-year program of 
                instruction (or both) for which the institution awards 
                an associate's degree or a bachelor's degree, 
                respectively, except that the Secretary may waive the 
                limitation contained in this subparagraph if an 
                institution demonstrates to the satisfaction of the 
                Secretary that the institution exceeds such limitation 
                because the institution serves, through contracts with 
                Federal, State, or local government agencies, 
                significant numbers of students who do not meet the 
                requirements of section 484(d)(3) or do not have a 
                secondary school diploma or its recognized equivalent.
  ``(c) List of Accrediting Agencies.--For purposes of this section, 
the Secretary shall publish a list of nationally recognized accrediting 
agencies or associations that the Secretary determines, pursuant to 
subpart 2 of part H of title IV, to be reliable authority as to the 
quality of the education or training offered.
  ``(d) Certification.--The Secretary shall certify, for the purposes 
of participation in title IV, an institution's qualification as an 
institution of higher education in accordance with the requirements of 
subpart 3 of part H of title IV.
  ``(e) Loss of Eligibility.--An institution of higher education shall 
not be considered to meet the definition of an institution of higher 
education in this section for the purposes of participation in title IV 
if such institution is removed from eligibility for funds under title 
IV as a result of an action pursuant to part H of title IV.

``SEC. 102. INSTITUTIONS OUTSIDE THE UNITED STATES.

  ``(a) Institutions Outside the United States.--
          ``(1) In general.--An institution outside the United States 
        shall be considered to be an institution of higher education 
        only for purposes of part B of title IV if the institution is 
        comparable to an institution of higher education, as defined in 
        section 101, is legally authorized by the education ministry 
        (or comparable agency) of the country in which the school is 
        located, and has been approved by the Secretary for purposes of 
        that part. The Secretary shall establish criteria by regulation 
        for that approval and that determination of comparability. An 
        institution may not be so approved or determined to be 
        comparable unless such institution is a public or nonprofit 
        institution, except that, subject to paragraph (2)(B), a 
        graduate medical school or veterinary school located outside 
        the United States may be a for-profit institution.
          ``(2) Medical and veterinary school criteria.--In the case of 
        a graduate medical or veterinary school outside the United 
        States, such criteria shall include a requirement that a 
        student attending such school outside the United States is 
        ineligible for loans made, insured, or guaranteed under part B 
        of title IV unless--
                  ``(A) in the case of a graduate medical school 
                located outside the United States--
                          ``(i)(I) at least 60 percent of those 
                        enrolled in, and at least 60 percent of the 
                        graduates of, the graduate medical school 
                        outside the United States were not persons 
                        described in section 484(a)(5) in the year 
                        preceding the year for which a student is 
                        seeking a loan under part B of title IV; and
                          ``(II) at least 60 percent of the individuals 
                        who were students or graduates of the graduate 
                        medical school outside the United States or 
                        Canada (both nationals of the United States and 
                        others) taking the examinations administered by 
                        the Educational Commission for Foreign Medical 
                        Graduates received a passing score in the year 
                        preceding the year for which a student is 
                        seeking a loan under part B of title IV; or
                          ``(ii) the institution has a clinical 
                        training program that was approved by a State 
                        as of January 1, 1992; or
                  ``(B) in the case of a veterinary school located 
                outside the United States that is not a public or 
                nonprofit institution, the institution's students 
                complete their clinical training at an approved 
                veterinary school located in the United States.
  ``(b) Advisory Panel.--
          ``(1) In general.--For the purpose of qualifying a foreign 
        medical school as an institution of higher education only for 
        purposes of part B of title IV, the Secretary shall publish 
        qualifying criteria by regulation and establish an advisory 
        panel of medical experts that shall--
                  ``(A) evaluate the standards of accreditation applied 
                to applicant foreign medical schools; and
                  ``(B) determine the comparability of those standards 
                to standards for accreditation applied to United States 
                medical schools.
          ``(2) Failure to release information.--The failure of an 
        institution outside the United States to provide, release, or 
        authorize release to the Secretary of such information as may 
        be required by subsection (a)(2) shall render such institution 
        ineligible for the purpose of part B of title IV.''.
  (b) Restrictions on Funds for For-Profit Schools.--Part B of title I 
is amended by inserting after section 122 (20 U.S.C. 1011k) the 
following new section:

``SEC. 123. RESTRICTIONS ON FUNDS FOR FOR-PROFIT SCHOOLS.

  ``(a) In General.--Notwithstanding any other provision of this Act 
authorizing the use of funds by an institution of higher education that 
receives funds under this Act, none of the funds made available under 
this Act to a for-profit institution of higher education may be used 
for--
          ``(1) construction, maintenance, renovation, repair, or 
        improvement of classrooms, libraries, laboratories, or other 
        facilities;
          ``(2) establishing, improving, or increasing an endowment 
        fund; or
          ``(3) establishing or improving an institutional development 
        office to strengthen or improve contributions from alumni and 
        the private sector.
  ``(b) Exception.--Subsection (a) shall not apply to funds received by 
the institution from the grant, loan, or work assistance that is 
awarded under title IV to the students attending such institution.
  ``(c) Ineligibility for Certain Programs.--Notwithstanding section 
101, a for-profit institution of higher education shall not be 
considered an eligible institution for the programs under titles III 
and V of this Act.''.
  (c) Conforming Amendments.--
          (1) Section 114(a) (20 U.S.C. 1011c(a)) is amended by 
        striking ``(as defined in section 102)''.
          (2) Section 435(a)(1) (20 U.S.C. 1085(a)(1)) is amended by 
        striking ``section 102'' and inserting ``section 101''.
          (3) Subsection (d) of section 484 (20 U.S.C. 1091(d)) is 
        amended by striking the designation and heading of such 
        subsection and inserting the following:
  ``(d) Satisfaction of Secondary Education Standards.--''.
          (4) Section 486(b)(2) (20 U.S.C. 1093(b)(2)) is amended by 
        striking ``102(a)(3)(A), 102(a)(3)(B)'' and inserting 
        ``101(b)(4)(A), 101(b)(4)(B)''.
          (5) Section 487(c)(1)(A)(iii) (20 U.S.C. 1094(c)(1)(A)(iii)) 
        is amended by striking ``section 102(a)(1)(C)'' and inserting 
        ``section 102''.
          (6) Section 487(d) (20 U.S.C. 1094(d)) is amended by striking 
        ``section 102'' and inserting ``section 101''.
          (7) Subsections (j) and (k) of section 496 (20 U.S.C. 
        1099b(j), (k)) are each amended by striking ``section 102'' and 
        inserting ``section 101''.
          (8) Section 498(g)(3) (20 U.S.C. 1099c(g)(3)) is amended by 
        striking ``section 102(a)(1)(C)'' and inserting ``section 
        102''.
          (9) Section 498(i)(1) (20 U.S.C. 1099c(i)(1)) is amended by 
        striking ``section 102'' and inserting ``section 101''.
          (10) Section 498(j)(1) (20 U.S.C. 1099c) is amended by 
        striking ``except that such branch shall not be required to 
        meet the requirements of sections 102(b)(1)(E) and 102(c)(1)(C) 
        prior to seeking such certification'' and inserting ``except 
        that such branch shall not be required to be in existence for 
        at least 2 years prior to seeking such certification''.
          (11) Section 498B(b) (20 U.S.C. 1099c-2(b)) is amended by 
        striking ``section 102(a)(1)(C)'' and inserting ``section 
        102''.
  (d) Effect on Other Laws.--
          (1) Inclusion of for-profit institutions in definition.--The 
        inclusion of proprietary and for-profit institutions within the 
        definition of the term ``institution of higher education''' in 
        section 101 of the Higher Education Act of 1965 (20 U.S.C. 
        1001) pursuant to the amendment made by subsection (a) of this 
        section shall not apply to any other provision of law (other 
        than the Higher Education Act of 1965) enacted before the date 
        of enactment of this Act that references section 101 of the 
        Higher Education Act of 1965 (or that term as so defined), 
        except as expressly provided by an amendment to, or other 
        revision of the application of, such law enacted after such 
        date of enactment.
          (2) Inclusion of for-profit institutions as title iii or v 
        eligible institution.--Any reference in any provision of law 
        other than the Higher Education Act of 1965 to institutions of 
        higher education that are eligible to participate in programs 
        under title III or V of such Act (20 U.S.C. 1051 et. seq., 1101 
        et seq.) shall not be treated, as a consequence of the 
        amendment to section 101 of the Higher Education Act of 1965 
        (20 U.S.C. 1001) by subsection (a) of this section, as 
        including a reference to a for-profit or proprietary 
        institution of higher education, except as expressly provided 
        by an amendment to, or other revision of the application of, 
        such law enacted after such date of enactment.

SEC. 102. NEW BORROWER DEFINITION.

  Paragraph (7) of section 103 (20 U.S.C. 1003) is amended to read as 
follows:
          ``(7) New borrower.--The term `new borrower' when used with 
        respect to any date for any loan under any provision of--
                  ``(A) part B or part D of title IV means an 
                individual who on that date has no outstanding balance 
                of principal or interest owing on any loan made, 
                insured, or guaranteed under either of those parts; and
                  ``(B) part E of title IV means an individual who on 
                that date has no outstanding balance of principal or 
                interest owing on any loan made under that part.''.

SEC. 103. STUDENT SPEECH AND ASSOCIATION RIGHTS.

  Section 112 (20 U.S.C. 1011a) is amended--
          (1) by amending subsection (a) to read as follows:
  ``(a) Protection of Rights.--
          ``(1) It is the sense of Congress that no student attending 
        an institution of higher education on a full- or part-time 
        basis should, on the basis of participation in protected speech 
        or protected association, be excluded from participation in, be 
        denied the benefits of, or be subjected to discrimination or 
        official sanction under any education program, activity, or 
        division of the institution directly or indirectly receiving 
        financial assistance under this Act, whether or not such 
        program, activity, or division is sponsored or officially 
        sanctioned by the institution; and
          ``(2) It is the sense of Congress that--
                  ``(A) the diversity of institutions and educational 
                missions is one of the key strengths of American higher 
                education;
                  ``(B) individual colleges and universities have 
                different missions and each institution should design 
                its academic program in accordance with its educational 
                goals;
                  ``(C) within the context of its institutional 
                mission, a college should promote intellectual 
                pluralism and facilitate the free and open exchange of 
                ideas;
                  ``(D) students should not be intimidated, harassed, 
                discouraged from speaking out, discriminated against, 
                or subject to official sanction because of their 
                personal political, ideological, or religious beliefs; 
                and
                  ``(E) students should be treated equally and fairly, 
                including evaluation and grading, without regard to or 
                consideration of their personal political views or 
                ideological beliefs.
          ``(3) Nothing in paragraph (2) shall be construed to modify, 
        change, or infringe upon any constitutionally protected 
        religious liberty, freedom, expression, or association.''; and
          (2) in subsection (b)(1), by inserting after ``higher 
        education'' the following: ``, if the imposition of such 
        sanction is done objectively, fairly, and without regard to the 
        student's personal political, ideological, or religious 
        beliefs''.

SEC. 104. NATIONAL ADVISORY COMMITTEE ON INSTITUTIONAL QUALITY AND 
                    INTEGRITY.

  (a) Membership.--Section 114(b) (20 U.S.C. 1011c(b)) is amended by 
adding at the end the following new sentence: ``A member of the 
Committee may continue to serve after the expiration of a term until a 
successor has been appointed.''.
  (b) Extension.--Section 114(g) (20 U.S.C. 1011c(g)) is amended by 
striking ``2004'' and inserting ``2012''.

SEC. 105. ALCOHOL AND DRUG ABUSE PREVENTION.

  Section 120(e)(5) (20 U.S.C. 1011i(e)(5)) is amended--
          (1) by striking ``1999'' and inserting ``2006''; and
          (2) by striking ``4 succeeding fiscal years'' and inserting 
        ``5 succeeding fiscal years''.

SEC. 106. PRIOR RIGHTS AND OBLIGATIONS.

  Section 121(a) (20 U.S.C. 1011j(a)) is amended by striking ``1999 and 
for each of the 4'' each place it appears and inserting ``2006 and for 
each of the 5''.

SEC. 107. LIMITATION ON CERTAIN USES OF FUNDS.

   Part B of title I is further amended by adding after section 123 (as 
added by section 101(b) of this Act) the following new section:

``SEC. 124. LIMITATION ON CERTAIN USES OF FUNDS.

  ``No funds made available to carry out this Act may be used--
          ``(1) for publicity or propaganda purposes not authorized by 
        the Congress before the date of enactment of the College Access 
        and Opportunity Act of 2005; or
          ``(2) unless authorized by law in effect on such date of 
        enactment, to produce any prepackaged news story intended for 
        broadcast or distribution unless such story includes a clear a 
        notification contained within the text or audio of such story 
        stating that the prepackaged news story was prepared or funded 
        by the Department of Education.''.

SEC. 108. CONSUMER INFORMATION AND PUBLIC ACCOUNTABILITY IN HIGHER 
                    EDUCATION.

  Section 131 (20 U.S.C. 1015) is amended to read as follows:

``SEC. 131. CONSUMER INFORMATION AND PUBLIC ACCOUNTABILITY IN HIGHER 
                    EDUCATION.

  ``(a) Purpose.--It is the purpose of this section to--
          ``(1) provide students and families with an easy-to-use, 
        comprehensive web-based tool for researching and comparing 
        institutions of higher education;
          ``(2) increase the transparency of college cost, price, and 
        financial aid; and
          ``(3) raise public awareness of information available about 
        postsecondary education, particularly among low-income 
        families, non-traditional student populations, and first-
        generation college students.
  ``(b) College Opportunity On-Line (COOL) Website Re-Design Process.--
In carrying out this section, the Secretary--
          ``(1) shall identify the data elements that are of greatest 
        importance to prospective students, enrolled students, and 
        their families, paying particular attention to low-income, non-
        traditional student populations, and first-generation college 
        students;
          ``(2) shall convene a group of individuals with expertise in 
        the collection and reporting of data related to institutions of 
        higher education, the measurement of institutional compliance 
        costs, consumer use of data related to institutions of higher 
        education, general consumer marketing, and college intervention 
        services to--
                  ``(A) determine the relevance of particular data 
                elements to prospective students, enrolled students, 
                and families;
                  ``(B) assess the cost-effectiveness of various ways 
                in which institutions of higher education might produce 
                the data desired by consumers;
                  ``(C) determine the general comparability of the data 
                across institutions of higher education;
                  ``(D) make recommendations regarding the inclusion of 
                specific data items and the most effective and least 
                burdensome methods to institutions of higher education 
                of collecting and reporting useful data; and
          ``(3) shall assure that the redesigned COOL website--
                  ``(A) uses, to the extent practicable, data elements 
                currently provided by institutions of higher education 
                to the Secretary;
                  ``(B) includes clear and uniform information 
                determined to be relevant to prospective students, 
                enrolled students, and families;
                  ``(C) provides comparable information, by assuring 
                that data is based on accepted criteria and common 
                definitions;
                  ``(D) includes a sorting function that permits users 
                to customize their search for and comparison of 
                institutions of higher education based on the 
                information identified through the process as 
                prescribed in paragraph (1) as being of greatest 
                relevance to choosing an institution of higher 
                education.
  ``(c) Data Collection.--
          ``(1) Data system.--The Secretary shall continue to redesign 
        the relevant parts of the Integrated Postsecondary Education 
        Data System to include additional data as required by this 
        section and to continue to improve the usefulness and 
        timeliness of data collected by such systems in order to inform 
        consumers about institutions of higher education.
          ``(2) College consumer profile.--The Secretary shall publish, 
        for each academic year and in accordance with standard 
        definitions developed by the Commissioner of Education 
        Statistics (including definitions developed under section 
        131(a)(3)(A) as in effect on the day before the date of 
        enactment of the College Access and Opportunity Act of 2005), 
        from at least all institutions of higher education 
        participating in programs under title IV the following 
        information:
                  ``(A) The tuition and fees charged for a first-time, 
                full-time undergraduate student.
                  ``(B) The room and board charges for such a student.
                  ``(C) The cost of attendance for a first-time, full-
                time undergraduate student, consistent with the 
                provisions of section 472.
                  ``(D) The average amount of financial assistance 
                received by a first-time full-time undergraduate 
                student, including--
                          ``(i) each type of assistance or benefits 
                        described in 428(a)(2)(C)(ii);
                          ``(ii) institutional and other assistance; 
                        and
                          ``(iii) Federal loans under parts B, D, and E 
                        of title IV.
                  ``(E) The number of first-time, full-time students 
                receiving financial assistance described in each clause 
                of subparagraph (D).
                  ``(F) The average net price for first-time, full-time 
                students receiving Federal, State, or institutional 
                grant or loan assistance.
                  ``(G) The institutional instructional expenditure per 
                full-time equivalent student.
                  ``(H) Student enrollment information, including 
                information on the number and percentage of full-time 
                and part-time students, the number and percentage of 
                resident and non-resident students.
                  ``(I) Faculty/student ratios.
                  ``(J) Faculty information, including the total number 
                of faculty and the percentage of faculty who are full-
                time employees of the institution and the percentage 
                who are part-time.
                  ``(K) Completion and graduation rates, identifying 
                whether the completion or graduation rates are from a 
                2-year or 4-year program of instruction and, in the 
                case of a 2-year program of instruction, the percentage 
                of students who transfer to 4-year institutions prior 
                or subsequent to completion or graduation.
                  ``(L) A link to the institution of higher education 
                with information of interest to students including 
                mission, accreditation, student services (including 
                services for students with disabilities), transfer of 
                credit policies and, if appropriate, placement rates 
                and other measures of success in preparing students for 
                entry into or advancement in the workforce.
                  ``(M) Any additional information that the Secretary 
                may require.
  ``(d) Data Dissemination.--The Secretary shall make available, at a 
minimum, the data collected pursuant to this section, including an 
institution's college affordability index as calculated in accordance 
with subsection (e). Such data shall be made available in a manner that 
permits the review and comparison of data submissions of individual 
institutions of higher education. Such data shall be presented in a 
form that is easily accessible and understandable and allows parents 
and students to make informed decisions based on the prices for typical 
full-time undergraduate students and the institution's rate of cost 
increase. The Secretary shall work with public and private entities to 
promote broad public awareness, particularly among middle and high 
school students and their families, of the information made available 
under this section, including by distribution to students who 
participate in or receive benefits from Federally funded education 
programs and other Federal programs determined by the Secretary.
  ``(e) College Affordability Index.--
          ``(1) In general.--The Secretary shall, on the basis of the 
        data submitted under subsection (a), calculate a college 
        affordability index for each institution of higher education 
        submitting such data and shall make the index available in 
        accordance with subsection (d) as soon as operationally 
        possible on the Department's college opportunity online Web 
        site. Such index shall be presented in a manner so that the 
        index for any institution is stated in a column or cell 
        immediately adjacent to a column or cell containing the total 
        tuition and fees of the institution.
          ``(2) Calculation of index.--The college affordability index 
        shall be equal to--
                  ``(A) the percentage increase in the tuition and fees 
                charged for a first-time, full-time, full-year 
                undergraduate student between the first of the 3 most 
                recent preceding academic years and the last of those 3 
                academic years; divided by
                  ``(B) the percentage increase in the Consumer Price 
                Index--All Urban Consumers (Current Series) from July 
                of the first of those 3 academic years to July of the 
                last of those 3 academic years.
  ``(f) Outcomes and Actions.--
          ``(1) Response from institution.--Effective on June 30, 2009, 
        an institution that has a college affordability index that 
        exceeds 2.0 for any 3-year interval ending on or after that 
        date shall provide a report to the Secretary, in such a form, 
        at such time, and containing such information as the Secretary 
        may require. Such report shall include--
                  ``(A) an explanation of the factors contributing to 
                the increase in the institution's costs and in the 
                tuition and fees charged to students;
                  ``(B) a management plan stating the specific steps 
                the institution is and will be taking to reduce its 
                college affordability index;
                  ``(C) an action plan, including a schedule, by which 
                the institution will reduce increases in or stabilize, 
                such costs and tuition and fees; and
                  ``(D) if determinations of tuition and fee increases 
                are not within the exclusive control of the 
                institution, a description of the agency or 
                instrumentality of State government or other entity 
                that participates in such determinations and the 
                authority exercised by such agency, instrumentality, or 
                entity.
          ``(2) Information to the public.--Upon receipt of the 
        institution's report and management plan under paragraph (1), 
        the Secretary shall make the institution's report required 
        under paragraph (1) available to the public in accordance with 
        subsection (b).
          ``(3) Quality-efficiency task forces.--
                  ``(A) Required.--Each institution subject to 
                paragraph (1) that has a college affordability index 
                that is in the highest 25 percent of such indexes of 
                all institutions subject to paragraph (1) shall 
                establish a quality-efficiency task force to review the 
                operations of such institution.
                  ``(B) Membership.--Such task force shall include 
                administrators and business and civic leaders and may 
                include faculty, students, trustees, parents of 
                students, and alumni of such institution.
                  ``(C) Functions.--Such task force shall analyze 
                institutional operating costs in comparison with such 
                costs at other institutions within the class of 
                institutions. Such analysis should identify areas 
                where, in comparison with other institutions in such 
                class, the institution operates more expensively to 
                produce a similar result. Any identified areas should 
                then be targeted for in-depth analysis for cost 
                reduction opportunities.
                  ``(D) Report.--The results of the analysis by a 
                quality-efficiency task force under this paragraph 
                shall be included in the report to the Secretary under 
                paragraph (1).
          ``(4) Consequences for 2-year continuation of failure.--If 
        the Secretary determines that the institution has failed to 
        comply with the management plan and action plan submitted by 
        the institution under this subsection following the next 2 
        academic years that begin after the submission of such plans, 
        and has failed to reduce the college affordability index below 
        2.0 for such 2 academic years, the Secretary--
                  ``(A) shall make available to the public a detailed 
                report provided by the institution on all costs and 
                expenditures, and on all tuition and fees charged to 
                students, for such 2 academic years;
                  ``(B) shall place the institution on an affordability 
                alert status and shall make the information regarding 
                the institution's failure available in accordance with 
                subsection (d);
                  ``(C) shall notify the institution's accrediting 
                agency of the institution's failure; and
                  ``(D) may require the institution to submit to a 
                review and audit by the Inspector General of the 
                Department of Education to determine the cause of the 
                institution's failure.
          ``(5) Information to state agencies.--Any institution that 
        reports under paragraph (1)(C) that an agency or 
        instrumentality of State government or other entity 
        participates in the determinations of tuition and fee increases 
        shall, prior to submitting any information to the Secretary 
        under this subsection, submit such information to, and request 
        the comments and input of, such agency, instrumentality, or 
        entity. With respect to any such institution, the Secretary 
        shall provide a copy of any communication by the Secretary with 
        that institution to such agency, instrumentality, or entity.
          ``(6) Exemptions.--
                  ``(A) Relative price exemption.--The Secretary shall, 
                for any 3-year interval for which college affordability 
                indexes are computed under paragraph (1), determine and 
                publish the dollar amount that, for each class of 
                institution described in paragraph (7) represents the 
                maximum tuition and fees charged for a full-time 
                undergraduate student in the least costly quartile of 
                institutions within each such class during the last 
                year of such 3-year interval. An institution that has a 
                college affordability index computed under paragraph 
                (1) that exceeds 2.0 for any such 3-year interval, but 
                that, on average during such 3-year interval, charges 
                less than such maximum tuition and fees shall not be 
                subject to the actions required by subparagraph (B) or 
                (C) of paragraph (1), or any action under paragraph 
                (4), unless such institution, for a subsequent 3-year 
                interval, charges more than such maximum tuition and 
                fees.
                  ``(B) Dollar increase exemption.--An institution that 
                has a college affordability index computed under 
                paragraph (1) that exceeds 2.0 for any 3-year interval, 
                but that exceeds such 2.0 by a dollar amount that is 
                less than $500, shall not be subject to the actions 
                required by subparagraph (B) or (C) of paragraph (1), 
                or any action under paragraph (4), unless such 
                institution has a college affordability index for a 
                subsequent 3-year interval that exceeds 2.0 by more 
                than such dollar amount.
          ``(7) Classes of institutions.--For purposes of this 
        subsection, the classes of institutions shall be those sectors 
        used by the Integrated Postsecondary Education Data System, 
        based on whether the institution is public, nonprofit private, 
        or for-profit private, and whether the institution has a 4-
        year, 2-year, or less than 2-year program of instruction.
  ``(g) Fines.--In addition to 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 failing to provide the 
information described in this section in a timely and accurate manner, 
or for failing to otherwise cooperate with the National Center for 
Education Statistics regarding efforts to obtain data on the cost and 
price of higher education under this section and pursuant to the 
program participation agreement entered into under section 487.
  ``(h) GAO Study and Report.--
          ``(1) GAO study.--The Comptroller General shall conduct a 
        study of the policies and procedures implemented by 
        institutions in increasing the affordability of postsecondary 
        education. Such study shall include information with respect 
        to--
                  ``(A) a list of those institutions that--
                          ``(i) have reduced their college 
                        affordability indexes; or
                          ``(ii) are, as determined under subsection 
                        (f)(6)(A), within the least costly quartile of 
                        institutions within each class described in 
                        subsection (f)(7);
                  ``(B) policies implemented to stem the increase in 
                tuition and fees and institutional costs;
                  ``(C) the extent to which room and board costs and 
                prices changed;
                  ``(D) the extent to which other services were altered 
                to affect tuition and fees;
                  ``(E) the extent to which the institution's policies 
                affected student body demographics and time to 
                completion;
                  ``(F) what, if any, operational factors played a role 
                in reducing tuition and fees;
                  ``(G) the extent to which academic quality was 
                affected, and how;
                  ``(H) the extent to which policies and practices 
                reducing costs and prices may be replicated from one 
                institution to another; and
                  ``(I) other information as necessary to determine 
                best practices in increasing the affordability of 
                postsecondary education.
          ``(2) Interim and final reports.--The Comptroller General 
        shall submit an interim and a final report regarding the 
        findings of the study required by paragraph (1) to the 
        appropriate authorizing committees of Congress. The interim 
        report shall be submitted not later than July 31, 2011, and the 
        final report shall be submitted not later than July 31, 2013.
  ``(i) Student Aid Recipient Survey.--
          ``(1) Survey required.--The Secretary shall conduct a survey 
        of student aid recipients under title IV on a regular cycle and 
        State-by-State basis, but not less than once every 4 years--
                  ``(A) to identify the population of students 
                receiving Federal student aid;
                  ``(B) to describe the income distribution and other 
                socioeconomic characteristics of federally aided 
                students;
                  ``(C) to describe the combinations of aid from State, 
                Federal, and private sources received by students from 
                all income groups;
                  ``(D) to describe the debt burden of educational loan 
                recipients and their capacity to repay their education 
                debts, and the impact of such debt burden on career 
                choices;
                  ``(E) to describe the role played by the price of 
                postsecondary education in the determination by 
                students of what institution to attend; and
                  ``(F) to describe how the increased costs of 
                textbooks and other instructional materials affects the 
                costs of postsecondary education to students.
          ``(2) Survey design.--The survey shall be representative of 
        full-time and part-time, undergraduate, graduate, and 
        professional and current and former students in all types of 
        institutions, and designed and administered in consultation 
        with the Congress and the postsecondary education community.
          ``(3) Dissemination.--The Secretary shall disseminate the 
        information resulting from the survey in both printed and 
        electronic form.
  ``(j) Regulations.--The Secretary is authorized to issue such 
regulations as may be necessary to carry out the provisions of this 
section.''.

SEC. 109. DATABASES OF STUDENT INFORMATION.

  Part C of title I is further amended by adding at the end the 
following new section:

``SEC. 132. DATABASES OF STUDENT INFORMATION PROHIBITED.

  ``(a) Prohibition.--Except as described in (b), nothing in this Act 
shall be construed to authorize the design, development, creation, 
implementation, or maintenance of a nationwide database of personally 
identifiable information on individuals receiving assistance, attending 
institutions receiving assistance, or otherwise involved in any studies 
or other collections of data under this Act, including a student unit 
record system, an education bar code system, or any other system that 
tracks individual students over time.
  ``(b) Exception.--The provisions of subsection (a) shall not affect 
the loan obligation enforcement activities described in section 485B of 
this Act.''.

SEC. 110. PERFORMANCE-BASED ORGANIZATION.

  Section 141 (20 U.S.C. 1018) is amended--
          (1) in subsection (a)(2)(B)--
                  (A) by inserting ``unit'' after ``to reduce the''; 
                and
                  (B) by inserting ``and, to the extent practicable, 
                the total costs of administering those programs'' after 
                ``those programs'';
          (2) in subsection (c)--
                  (A) in paragraph (1)(A), by striking ``Each year'' 
                and inserting ``Each fiscal year'';
                  (B) in paragraph (1)(B), by inserting ``secondary 
                markets, guaranty agencies,'' after ``lenders,''; and
                  (C) in paragraph (2)(B), by striking ``Chief 
                Financial Officer Act of 1990 and'' and inserting 
                ``Chief Financial Officers Act of 1990,'' and by 
                inserting before the period at the end the following: 
                ``, and other relevant statutes''; and
          (3) in subsection (f)(3)(A), by striking ``paragraph (1)(A)'' 
        and inserting ``paragraph (1)''.

                     TITLE II--TEACHER PREPARATION

SEC. 201. TEACHER QUALITY ENHANCEMENT GRANTS.

  Part A of title II (20 U.S.C. 1021 et seq.) is amended to read as 
follows:

      ``PART A--TEACHER QUALITY ENHANCEMENT GRANTS FOR STATES AND 
                              PARTNERSHIPS

``SEC. 201. PURPOSES; DEFINITIONS.

  ``(a) Purposes.--The purposes of this part are to--
          ``(1) improve student academic achievement;
          ``(2) improve the quality of the current and future teaching 
        force by improving the preparation of prospective teachers and 
        enhancing professional development activities;
          ``(3) hold institutions of higher education accountable for 
        preparing highly qualified teachers; and
          ``(4) recruit qualified individuals, including minorities and 
        individuals from other occupations, into the teaching force.
  ``(b) Definitions.--In this part:
          ``(1) Arts and sciences.--The term `arts and sciences' 
        means--
                  ``(A) when referring to an organizational unit of an 
                institution of higher education, any academic unit that 
                offers one or more academic majors in disciplines or 
                content areas corresponding to the academic subject 
                matter areas in which teachers provide instruction; and
                  ``(B) when referring to a specific academic subject 
                matter area, the disciplines or content areas in which 
                academic majors are offered by the arts and science 
                organizational unit.
          ``(2) Exemplary teacher.--The term `exemplary teacher' has 
        the meaning given such term in section 9101 of the Elementary 
        and Secondary Education Act of 1965 (20 U.S.C. 7801).
          ``(3) Highly qualified.--The term `highly qualified' when 
        used with respect to an individual means that the individual is 
        highly qualified as determined under section 9101 of the 
        Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801) 
        or section 602 of the Individuals with Disabilities Education 
        Act (20 U.S.C. 1401).
          ``(4) High-need local educational agency.--The term `high-
        need local educational agency' means a local educational 
        agency--
                  ``(A)(i)(I) that serves not fewer than 10,000 
                children from families with incomes below the poverty 
                line; or
                  ``(II) for which not less than 25 percent of the 
                children served by the agency are from families with 
                incomes below the poverty line;
                  ``(ii) that is among those serving the highest number 
                or percentage of children from families with incomes 
                below the poverty line in the State, but this clause 
                applies only in a State that has no local educational 
                agency meeting the requirements of clause (i); or
                  ``(iii) with a total of less than 600 students in 
                average daily attendance at the schools that are served 
                by the agency and all of whose schools are designated 
                with a school locale code of 7, as determined by the 
                Secretary; and
                  ``(B)(i) for which there is a high percentage of 
                teachers not teaching in the academic subjects or grade 
                levels that the teachers were trained to teach; or
                  ``(ii) for which there is a high percentage of 
                teachers with emergency, provisional, or temporary 
                certification or licensing.
          ``(5) Poverty line.--The term `poverty line' means the 
        poverty line (as defined by the Office of Management and 
        Budget, and revised annually in accordance with section 673(2) 
        of the Community Services Block Grant Act (42 U.S.C. 9902(2))) 
        applicable to a family of the size involved.
          ``(6) Professional development.--The term `professional 
        development' has the meaning given such term in section 9101 of 
        the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
        7801).
          ``(7) Scientifically based reading research.--The term 
        `scientifically based reading research' has the meaning given 
        such term in section 1208 of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 6368).
          ``(8) Scientifically based research.--The term 
        `scientifically based research' has the meaning given such term 
        in section 9101 of the Elementary and Secondary Education Act 
        of 1965 (20 U.S.C. 7801).
          ``(9) Teaching skills.--The term `teaching skills' means 
        skills that--
                  ``(A) are based on scientifically based research;
                  ``(B) enable teachers to effectively convey and 
                explain subject matter content;
                  ``(C) lead to increased student academic achievement; 
                and
                  ``(D) use strategies that--
                          ``(i) are specific to subject matter;
                          ``(ii) include ongoing assessment of student 
                        learning;
                          ``(iii) focus on identification and tailoring 
                        of academic instruction to students's specific 
                        learning needs; and
                          ``(iv) focus on classroom management.

``SEC. 202. STATE GRANTS.

  ``(a) In General.--From amounts made available under section 210(1) 
for a fiscal year, the Secretary is authorized to award grants under 
this section, on a competitive basis, to eligible States to enable the 
eligible States to carry out the activities described in subsection 
(d).
  ``(b) Eligible State.--
          ``(1) Definition.--In this part, the term `eligible State' 
        means--
                  ``(A) the Governor of a State; or
                  ``(B) in the case of a State for which the 
                constitution or law of such State designates another 
                individual, entity, or agency in the State to be 
                responsible for teacher certification and preparation 
                activity, such individual, entity, or agency.
          ``(2) Consultation.--The Governor or the individual, entity, 
        or agency designated under paragraph (1)(B) shall consult with 
        the Governor, State board of education, State educational 
        agency, State agency for higher education, or State agency 
        responsible for early childhood education and programs, as 
        appropriate, with respect to the activities assisted under this 
        section.
          ``(3) Construction.--Nothing in this subsection 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) Application.--To be eligible to receive a grant under this 
section, an eligible State shall submit an application to the Secretary 
that--
          ``(1) meets the requirement of this section;
          ``(2) demonstrates that the State is in full compliance with 
        sections 207 and 208;
          ``(3) includes a description of how the eligible State 
        intends to use funds provided under this section;
          ``(4) includes measurable objectives for the use of the funds 
        provided under the grant;
          ``(5) demonstrates the State has submitted and is actively 
        implementing a plan that meets the requirements of sections 
        1111(h)(1)(C)(viii) and 1119 of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 6311(h)(1)(C)(viii) and 6319); 
        and
          ``(6) contains such other information and assurances as the 
        Secretary may require.
  ``(d) Uses of Funds.--An eligible State that receives a grant under 
this section shall use the grant funds to reform teacher preparation 
requirements, to coordinate with State activities under section 2113(c) 
of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 
6613(c)), and to ensure that current and future teachers are highly 
qualified, by carrying out one or more of the following activities:
          ``(1) Reforms.--Ensuring that all teacher preparation 
        programs in the State are preparing teachers who are highly 
        qualified, are able to understand scientifically based research 
        and its applicability, and are able to use advanced technology 
        effectively in the classroom, including use for instructional 
        techniques to improve student academic achievement, by 
        assisting such programs--
                  ``(A) to retrain faculty; and
                  ``(B) to design (or redesign) teacher preparation 
                programs so they--
                          ``(i) are based on rigorous academic content, 
                        scientifically based research (including 
                        scientifically based reading research), and 
                        challenging State student academic content 
                        standards; and
                          ``(ii) promote strong teaching skills.
          ``(2) Certification or licensure requirements.--Reforming 
        teacher certification (including recertification) or licensing 
        requirements to ensure that--
                  ``(A) teachers have the subject matter knowledge and 
                teaching skills in the academic subjects that the 
                teachers teach that are necessary to help students meet 
                challenging State student academic achievement 
                standards; and
                  ``(B) such requirements are aligned with challenging 
                State academic content standards.
          ``(3) Alternatives to traditional teacher preparation and 
        state certification.--Providing prospective teachers with 
        alternative routes to State certification and traditional 
        preparation to become highly qualified teachers through--
                  ``(A) innovative approaches that reduce unnecessary 
                barriers to State certification while producing highly 
                qualified teachers, which may include articulation 
                agreements between institutions of higher education;
                  ``(B) programs that provide support to teachers 
                during their initial years in the profession; and
                  ``(C) alternative routes to State certification of 
                teachers for qualified individuals, including mid-
                career professionals from other occupations, former 
                military personnel, and recent college graduates with 
                records of academic distinction.
          ``(4) Innovative programs.--Planning and implementing 
        innovative programs to enhance the ability of institutions of 
        higher education to prepare highly qualified teachers, such as 
        charter colleges of education or university and local 
        educational agency partnership schools, that--
                  ``(A) permit flexibility in meeting State 
                requirements as long as graduates, during their initial 
                years in the profession, increase student academic 
                achievement;
                  ``(B) provide long-term data gathered from teachers' 
                performance over multiple years in the classroom on the 
                ability to increase student academic achievement;
                  ``(C) ensure high-quality preparation of teachers 
                from underrepresented groups; and
                  ``(D) create performance measures that can be used to 
                document the effectiveness of innovative methods for 
                preparing highly qualified teachers.
          ``(5) Merit pay.--Developing, or assisting local educational 
        agencies in developing--
                  ``(A) merit-based performance systems that reward 
                teachers who increase student academic achievement; and
                  ``(B) strategies that provide differential and bonus 
                pay in high-need local educational agencies to retain--
                          ``(i) principals;
                          ``(ii) highly qualified teachers who teach in 
                        high-need academic subjects, such as reading, 
                        mathematics, and science;
                          ``(iii) highly qualified teachers who teach 
                        in schools identified for school improvement 
                        under section 1116(b) of the Elementary and 
                        Secondary Education Act of 1965 (20 U.S.C. 
                        6316(b));
                          ``(iv) special education teachers;
                          ``(v) teachers specializing in teaching 
                        limited English proficient children; and
                          ``(vi) highly qualified teachers in urban and 
                        rural schools or districts.
          ``(6) Teacher advancement.--Developing, or assisting local 
        educational agencies in developing, teacher advancement and 
        retention initiatives that promote professional growth and 
        emphasize multiple career paths (such as paths to becoming a 
        highly qualified mentor teacher or exemplary teacher) and pay 
        differentiation.
          ``(7) Teacher removal.--Developing and implementing effective 
        mechanisms to ensure that local educational agencies and 
        schools are able to remove expeditiously incompetent or 
        unqualified teachers consistent with procedures to ensure due 
        process for the teachers.
          ``(8) Technical assistance.--Providing technical assistance 
        to low-performing teacher preparation programs within 
        institutions of higher education identified under section 
        208(a).
          ``(9) Teacher effectiveness.--Developing--
                  ``(A) systems to measure the effectiveness of teacher 
                preparation programs and professional development 
                programs; and
                  ``(B) strategies to document gains in student 
                academic achievement or increases in teacher mastery of 
                the academic subjects the teachers teach as a result of 
                such programs.
          ``(10) Teacher recruitment and retention.--Undertaking 
        activities that--
                  ``(A) develop and implement effective mechanisms to 
                ensure that local educational agencies and schools are 
                able effectively to recruit and retain highly qualified 
                teachers; or
                  ``(B) are described in section 204(d).
          ``(11) Early childhood educator.--Developing strategies--
                  ``(A) to improve the qualifications of preschool 
                teachers, which may include State certification for 
                such teachers;
                  ``(B) to improve and expand preschool teacher 
                preparation programs; and
                  ``(C) to reduce unnecessary burdens to the attainment 
                of a bachelor's degree in early childhood education and 
                increase the number of bilingual early childhood 
                educators, which may include developing articulation 
                agreements between institutions of higher education.
          ``(12) Gifted and talented students.--Incorporating the 
        learning needs of gifted and talented students into the 
        activities described in paragraph (1), (2), or (3) in order to 
        ensure that new teachers possess the basic knowledge and skills 
        necessary to meet the educational needs of gifted and talented 
        students.
          ``(13) New-teacher mentoring on the needs of gifted and 
        talented students.-- Establishing or expanding new-teacher 
        mentoring and assessment programs (including induction and 
        evaluation programs) that are a part of a licensure process 
        which is designed to demonstrate that new teachers possess 
        basic knowledge of the classroom indicators of giftedness, are 
        able to identify student learning differences among gifted 
        students, and are able to provide instruction to accommodate 
        such differences.
          ``(14) Special education, math, and science faculty.--
        Supporting the development of new special education, math, and 
        science faculty positions in institutions of higher education 
        dedicated to the preparation of highly qualified special 
        education, math, and science teachers (as defined by section 
        9101 of the Elementary and Secondary Education Act or section 
        602 of the Individuals with Disabilities Education Act), with 
        matching funds from institutions of higher education and a 
        commitment to continue new faculty positions when Federal 
        funding ends.
          ``(15) Subject area evaluation.--Assessing the performance of 
        teacher preparation programs within institutions of higher 
        education in the State using an assessment which provides 
        comparisons across such schools in the State based upon 
        indicators including teacher candidate knowledge in subject 
        areas in which such candidate has been prepared to teach. Such 
        information shall be made publicly available and widely 
        disseminated.
  ``(e) Evaluation.--
          ``(1) Evaluation system.--An eligible State that receives a 
        grant under this section shall develop and utilize a system to 
        evaluate annually the effectiveness of teacher preparation 
        programs and professional development activities within the 
        State in producing gains in--
                  ``(A) the teacher's annual contribution to improving 
                student academic achievement, as measured by State 
                academic assessments required under section 1111(b)(3) 
                of the Elementary and Secondary Education Act of 1965 
                (20 U.S.C. 6311(b)(3)); and
                  ``(B) teacher mastery of the academic subjects they 
                teach, as measured by pre- and post-participation tests 
                of teacher knowledge, as appropriate.
          ``(2) Use of evaluation system.--Such evaluation system shall 
        be used by the State to evaluate--
                  ``(A) activities carried out using funds provided 
                under this section; and
                  ``(B) the quality of its teacher education programs.
          ``(3) Public reporting.--The State shall make the information 
        described in paragraph (1) widely available through public 
        means, such as posting on the Internet, distribution to the 
        media, and distribution through public agencies.

``SEC. 203. PARTNERSHIP GRANTS.

  ``(a) Grants.--From amounts made available under section 210(2) for a 
fiscal year, the Secretary is authorized to award grants under this 
section, on a competitive basis, to eligible partnerships to enable the 
eligible partnerships to carry out the activities described in 
subsections (d) and (e).
  ``(b) Definitions.--
          ``(1) Eligible partnerships.--In this part, the term 
        `eligible partnership' means an entity that--
                  ``(A) shall include--
                          ``(i) a partner institution;
                          ``(ii) a school of arts and sciences;
                          ``(iii) a high-need local educational agency; 
                        and
                          ``(iv) a public or private educational 
                        organization; and
                  ``(B) may include a Governor, State educational 
                agency, the State board of education, the State agency 
                for higher education, an institution of higher 
                education not described in subparagraph (A), a public 
                charter school, a public or private elementary school 
                or secondary school, a public or private educational 
                organization, a business, a science-, mathematics-, or 
                technology-oriented entity, a faith-based or community 
                organization, a prekindergarten program, a teacher 
                organization, an education service agency, a consortia 
                of local educational agencies, or a nonprofit 
                telecommunications entity.
          ``(2) Partner institution.--In this section, the term 
        `partner institution' means an institution of higher education, 
        the teacher training program of which demonstrates that--
                  ``(A) graduates from the teacher training program 
                exhibit strong performance on State-determined 
                qualifying assessments for new teachers through--
                          ``(i) demonstrating that the graduates of the 
                        program who intend to enter the field of 
                        teaching have passed all of the applicable 
                        State qualification assessments for new 
                        teachers, which shall include an assessment of 
                        each prospective teacher's subject matter 
                        knowledge in the content area or areas in which 
                        the teacher intends to teach; or
                          ``(ii) being ranked among the highest-
                        performing teacher preparation programs in the 
                        State as determined by the State--
                                  ``(I) using criteria consistent with 
                                the requirements for the State report 
                                card under section 207(a); and
                                  ``(II) using the State report card on 
                                teacher preparation required under 
                                section 207(a); or
                  ``(B) the teacher training program requires all the 
                students of the program to participate in intensive 
                clinical experience, to meet high academic standards, 
                and--
                          ``(i) in the case of secondary school 
                        candidates, to successfully complete an 
                        academic major in the subject area in which the 
                        candidate intends to teach or to demonstrate 
                        competence through a high level of performance 
                        in relevant content areas; and
                          ``(ii) in the case of elementary school 
                        candidates, to successfully complete an 
                        academic major in the arts and sciences or to 
                        demonstrate competence through a high level of 
                        performance in core academic subject areas.
  ``(c) Application.--Each eligible partnership 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 such application shall--
          ``(1) contain a needs assessment of all the partners with 
        respect to teaching and learning and a description of how the 
        partnership will coordinate with other teacher training or 
        professional development programs, and how the activities of 
        the partnership will be consistent with State, local, and other 
        education reform activities that promote student academic 
        achievement;
          ``(2) contain a resource assessment that describes the 
        resources available to the partnership, the intended use of the 
        grant funds, including a description of how the grant funds 
        will be used in accordance with subsection (f), and the 
        commitment of the resources of the partnership to the 
        activities assisted under this part, including financial 
        support, faculty participation, time commitments, and 
        continuation of the activities when the grant ends;
          ``(3) contain a description of--
                  ``(A) how the partnership will meet the purposes of 
                this part;
                  ``(B) how the partnership will carry out the 
                activities required under subsection (d) and any 
                permissible activities under subsection (e);
                  ``(C) the partnership's evaluation plan pursuant to 
                section 206(b);
                  ``(D) how faculty of the teacher preparation program 
                at the partner institution will serve, over the term of 
                the grant, with highly qualified teachers in the 
                classrooms of the high-need local educational agency 
                included in the partnership;
                  ``(E) how the partnership will ensure that teachers, 
                principals, and superintendents in private elementary 
                and secondary schools located in the geographic areas 
                served by an eligible partnership under this section 
                will participate equitably in accordance with section 
                9501 of the Elementary and Secondary Education Act of 
                1965 (20 U.S.C. 7881);
                  ``(F) how the partnership will design and implement a 
                clinical program component that includes close 
                supervision of student teachers by faculty of the 
                teacher preparation program at the partner institution 
                and mentor teachers;
                  ``(G) how the partnership will design and implement 
                an induction program to support all new teachers 
                through the first 3 years of teaching that includes 
                mentors who are trained and compensated by the 
                partnership for their work with new teachers; and
                  ``(H) how the partnership will collect, analyze, and 
                use data on the retention of all teachers in schools 
                located in the geographic areas served by the 
                partnership to evaluate the effectiveness of its 
                teacher support system; and
          ``(4) contain a certification from the high-need local 
        educational agency included in the partnership that it has 
        reviewed the application and determined that the grant proposed 
        will comply with subsection (f).
  ``(d) Required Uses of Funds.--An eligible partnership that receives 
a grant under this section shall use the grant funds to reform teacher 
preparation requirements, to coordinate with State activities under 
section 2113(c) of the Elementary and Secondary Education Act of 1965 
(20 U.S.C. 6613(c)), and to ensure that current and future teachers are 
highly qualified, by carrying out one or more of the following 
activities:
          ``(1) Reforms.--Implementing reforms within teacher 
        preparation programs to ensure that such programs are preparing 
        teachers who are highly qualified, are able to understand 
        scientifically based research and its applicability, and are 
        able to use advanced technology effectively in the classroom, 
        including use for instructional techniques to improve student 
        academic achievement, by--
                  ``(A) retraining faculty; and
                  ``(B) designing (or redesigning) teacher preparation 
                programs so they--
                          ``(i) are based on rigorous academic content, 
                        scientifically based research (including 
                        scientifically based reading research), and 
                        challenging State student academic content 
                        standards; and
                          ``(ii) promote strong teaching skills.
          ``(2) Clinical experience and interaction.--Providing 
        sustained and high-quality preservice and in-service clinical 
        experience, including the mentoring of prospective teachers by 
        exemplary teachers, substantially increasing interaction 
        between faculty at institutions of higher education and new and 
        experienced teachers, principals, and other administrators at 
        elementary schools or secondary schools, and providing support 
        for teachers, including preparation time and release time, for 
        such interaction.
          ``(3) Professional development.--Creating 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, and that 
        promotes strong teaching skills.
          ``(4) Teacher preparation.--Developing, or assisting local 
        educational agencies in developing, professional development 
        activities that--
                  ``(A) provide training in how to teach and address 
                the needs of students with different learning styles, 
                particularly students with disabilities, limited 
                English proficient students, gifted and talented 
                students, and students with special learning needs; and
                  ``(B) provide training in methods of--
                          ``(i) improving student behavior in the 
                        classroom; and
                          ``(ii) identifying early and appropriate 
                        interventions to help students described in 
                        subparagraph (A) learn.
  ``(e) Allowable Uses of Funds.--An eligible partnership that receives 
a grant under this section may use such funds to carry out the 
following activities:
          ``(1) Alternatives to traditional teacher preparation and 
        state certification.--Providing prospective teachers with 
        alternative routes to State certification and traditional 
        preparation to become highly qualified teachers through--
                  ``(A) innovative approaches that reduce unnecessary 
                barriers to teacher preparation producing highly 
                qualified teachers, which may include articulation 
                agreements between institutions of higher education;
                  ``(B) programs that provide support during a 
                teacher's initial years in the profession; and
                  ``(C) alternative routes to State certification of 
                teachers for qualified individuals, including mid-
                career professionals from other occupations, former 
                military personnel, and recent college graduates with 
                records of academic distinction.
          ``(2) Dissemination and coordination.--Broadly disseminating 
        information on effective practices used by the partnership, and 
        coordinating with the activities of the Governor, State board 
        of education, State higher education agency, and State 
        educational agency, as appropriate.
          ``(3) Managerial and leadership skills.--Developing and 
        implementing professional development programs for principals 
        and superintendents that enable them to be effective school 
        leaders and prepare all students to meet challenging State 
        academic content and student academic achievement standards.
          ``(4) Teacher recruitment.--Activities--
                  ``(A) to encourage students to become highly 
                qualified teachers, such as extracurricular enrichment 
                activities; and
                  ``(B) activities described in section 204(d).
          ``(5) Clinical experience in science, mathematics, and 
        technology.--Creating opportunities for clinical experience and 
        training, by participation in the business, research, and work 
        environments with professionals, in areas relating to science, 
        mathematics, and technology for teachers and prospective 
        teachers, including opportunities for use of laboratory 
        equipment, in order for the teacher to return to the classroom 
        for at least 2 years and provide instruction that will raise 
        student academic achievement.
          ``(6) Coordination with community colleges.--Coordinating 
        with community colleges to implement teacher preparation 
        programs, including through distance learning or articulation 
        agreements, for the purposes of allowing prospective teachers--
                  ``(A) to attain a bachelor's degree and State 
                certification or licensure; and
                  ``(B) to become highly qualified teachers.
          ``(7) Teacher mentoring.--Establishing or implementing a 
        teacher mentoring program that--
                  ``(A) includes minimum qualifications for mentors;
                  ``(B) provides training and stipends for mentors;
                  ``(C) provides mentoring programs for teachers in 
                their first 3 years of teaching;
                  ``(D) provides regular and ongoing opportunities for 
                mentors and mentees to observe each other's teaching 
                methods in classroom settings during the school day;
                  ``(E) establishes an evaluation and accountability 
                plan for activities conducted under this paragraph that 
                includes rigorous objectives to measure the impact of 
                such activities; and
                  ``(F) provides for a report to the Secretary on an 
                annual basis regarding the partnership's progress in 
                meeting the objectives described in subparagraph (E).
          ``(8) Computer software for multilingual education.--Training 
        teachers to use computer software for multilingual education to 
        address the needs of limited English proficient students.
          ``(9) Gifted and talented students.--Increasing the knowledge 
        and skills of preservice teachers participating in activities 
        under subsection (d) in the educational and related needs of 
        gifted and talented students by, among other strategies, 
        infusing teacher coursework with units on the characteristics 
        of high-ability learners, using assessments to identify 
        preexisting knowledge and skills among students, and developing 
        teaching strategies that are driven by the learner's progress.
          ``(10) Reducing the shortage of highly qualified special 
        education, math, and science teachers.--Increasing the number 
        of highly qualified special education, math, and science 
        teachers (as defined by section 9101 of the Elementary and 
        Secondary Education Act or section 602 of the Individuals with 
        Disabilities Education Act) through such activities as 
        recruitment, scholarships for tuition, and new teacher 
        mentoring.
  ``(f) Special Rule.--At least 50 percent of the funds made available 
to an eligible partnership under this section shall be used directly to 
benefit the high-need local educational agency included in the 
partnership. Any entity described in subsection (b)(1)(A) may be the 
fiscal agent under this section.
  ``(g) Construction.--Nothing in this section shall be construed to 
prohibit an eligible partnership from using grant funds to coordinate 
with the activities of more than one Governor, State board of 
education, State educational agency, local educational agency, or State 
agency for higher education.
  ``(h) Supplement, not Supplant.--Funds made available under this 
section shall be used to supplement, and not supplant, other Federal, 
State, and local funds that would otherwise be expended to carry out 
the purposes of this section.

``SEC. 204. TEACHER RECRUITMENT GRANTS.

  ``(a) Program Authorized.--From amounts made available under section 
210(3) for a fiscal year, the Secretary is authorized to award grants, 
on a competitive basis, to eligible applicants to enable the eligible 
applicants to carry out activities described in subsection (d).
  ``(b) Eligible Applicant Defined.--In this part, the term `eligible 
applicant' means--
          ``(1) an eligible State described in section 202(b); or
          ``(2) an eligible partnership described in section 203(b).
  ``(c) Application.--Any eligible applicant desiring to receive a 
grant under this section shall submit an application to the Secretary 
at such time, in such form, and containing such information as the 
Secretary may require, including--
          ``(1) a description of the assessment that the eligible 
        applicant, and the other entities with whom the eligible 
        applicant will carry out the grant activities, have undertaken 
        to determine the most critical needs of the participating high-
        need local educational agencies;
          ``(2) a description of the activities the eligible applicant 
        will carry out with the grant, including the extent to which 
        the applicant will use funds to recruit minority students to 
        become highly qualified teachers; and
          ``(3) a description of the eligible applicant's plan for 
        continuing the activities carried out with the grant, once 
        Federal funding ceases.
  ``(d) Uses of Funds.--Each eligible applicant receiving a grant under 
this section shall use the grant funds--
          ``(1)(A) to award scholarships to help students, such as 
        individuals who have been accepted for their first year, or who 
        are enrolled in their first or second year, of a program of 
        undergraduate education at an institution of higher education, 
        pay the costs of tuition, room, board, and other expenses of 
        completing a teacher preparation program;
          ``(B) to provide support services, if needed to enable 
        scholarship recipients--
                  ``(i) to complete postsecondary education programs; 
                or
                  ``(ii) to transition from a career outside of the 
                field of education into a teaching career; and
          ``(C) for followup services provided to former scholarship 
        recipients during the recipients first 3 years of teaching; or
          ``(2) to develop and implement effective mechanisms to ensure 
        that high-need local educational agencies and schools are able 
        effectively to recruit highly qualified teachers.
  ``(e) Additional Discretionary Uses of Funds.--In addition to the 
uses described in subsection (d), each eligible applicant receiving a 
grant under this section may use the grant funds--
          ``(1) to develop and implement effective mechanisms to 
        recruit into the teaching profession employees from--
                  ``(A) high-demand industries, including technology 
                industries; and
                  ``(B) the fields of science, mathematics, and 
                engineering;
          ``(2) to conduct outreach and coordinate with inner city and 
        rural secondary schools to encourage students to pursue 
        teaching as a career;
          ``(3) to develop and implement dual degree programs that 
        enable students at institutions of higher education to earn two 
        undergraduate degrees concurrently, one of such degrees being 
        in education and the other in the subject matter of the 
        student's choosing; and
          ``(4) to recruit high achieving students, bilingual students, 
        and other qualified candidates into early childhood education 
        programs.
  ``(f) Service Requirements.--
          ``(1) In general.--The Secretary shall establish such 
        requirements as the Secretary determines necessary to ensure 
        that recipients of scholarships under this section who complete 
        teacher education programs--
                  ``(A) subsequently teach in a high-need local 
                educational agency for a period of time equivalent to--
                          ``(i) one year; increased by
                          ``(ii) the period for which the recipient 
                        received scholarship assistance; or
                  ``(B) repay the amount of the scholarship.
          ``(2) Use of repayments.--The Secretary shall use any such 
        repayments to carry out additional activities under this 
        section.
  ``(g) Priority.--The Secretary shall give priority under this section 
to eligible applicants who provide an assurance that they will recruit 
a high percentage of minority students to become highly qualified 
teachers.

``SEC. 205. ADMINISTRATIVE PROVISIONS.

  ``(a) Duration; One-Time Awards; Payments.--
          ``(1) Duration.--
                  ``(A) Eligible states and eligible applicants.--
                Grants awarded to eligible States and eligible 
                applicants under this part shall be awarded for a 
                period not to exceed 3 years.
                  ``(B) Eligible partnerships.--Grants awarded to 
                eligible partnerships under this part shall be awarded 
                for a period of 5 years.
          ``(2) One-time award.--An eligible partnership may receive a 
        grant under each of sections 203 and 204, as amended by the 
        College Access and Opportunity Act of 2005, only once.
          ``(3) Payments.--The Secretary shall make annual payments of 
        grant funds awarded under this part.
  ``(b) Peer Review.--
          ``(1) Panel.--The Secretary shall provide the applications 
        submitted under this part 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.
          ``(2) Priority.--In recommending applications to the 
        Secretary for funding under this part, the panel shall--
                  ``(A) with respect to grants under section 202, give 
                priority to eligible States that--
                          ``(i) have initiatives to reform State 
                        teacher certification requirements that are 
                        based on rigorous academic content, 
                        scientifically based research, including 
                        scientifically based reading research, and 
                        challenging State student academic content 
                        standards;
                          ``(ii) have innovative reforms to hold 
                        institutions of higher education with teacher 
                        preparation programs accountable for preparing 
                        teachers who are highly qualified and have 
                        strong teaching skills; or
                          ``(iii) have innovative efforts aimed at 
                        reducing the shortage of highly qualified 
                        teachers in high poverty urban and rural areas; 
                        and
                  ``(B) with respect to grants under section 203--
                          ``(i) give priority to applications from 
                        broad-based eligible partnerships that involve 
                        businesses and community organizations; and
                          ``(ii) take into consideration--
                                  ``(I) providing an equitable 
                                geographic distribution of the grants 
                                throughout the United States; and
                                  ``(II) the potential of the proposed 
                                activities for creating improvement and 
                                positive change.
          ``(3) Secretarial selection.--The Secretary shall determine, 
        based on the peer review process, which application shall 
        receive funding and the amounts of the grants. In determining 
        grant amounts, the Secretary shall take into account the total 
        amount of funds available for all grants under this part and 
        the types of activities proposed to be carried out.
  ``(c) Matching Requirements.--
          ``(1) State grants.--Each eligible State receiving a grant 
        under section 202 or 204 shall provide, from non-Federal 
        sources, an amount equal to 50 percent of the amount of the 
        grant (in cash or in kind) to carry out the activities 
        supported by the grant.
          ``(2) Partnership grants.--Each eligible partnership 
        receiving a grant under section 203 or 204 shall provide, from 
        non-Federal sources (in cash or in kind), an amount equal to 25 
        percent of the grant for the first year of the grant, 35 
        percent of the grant for the second year of the grant, and 50 
        percent of the grant for each succeeding year of the grant.
  ``(d) Limitation on Administrative Expenses.--An eligible State or 
eligible partnership that receives a grant under this part may not use 
more than 2 percent of the grant funds for purposes of administering 
the grant.

``SEC. 206. ACCOUNTABILITY AND EVALUATION.

  ``(a) State Grant Accountability Report.--An eligible State that 
receives a grant under section 202 shall submit an annual 
accountability report to the Secretary and the authorizing committees. 
Such report shall include a description of the degree to which the 
eligible State, in using funds provided under such section, has made 
substantial progress in meeting the following goals:
          ``(1) Percentage of highly qualified teachers.--Increasing 
        the percentage of highly qualified teachers in the State as 
        required by section 1119 of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 6319) and section 602 of the 
        Individuals with Disabilities Act (20 U.S.C. 1401).
          ``(2) Student academic achievement.--Increasing student 
        academic achievement for all students, which may be measured 
        through the use of value-added assessments, as defined by the 
        eligible State.
          ``(3) Raising standards.--Raising the State academic 
        standards required to enter the teaching profession as a highly 
        qualified teacher.
          ``(4) Initial certification or licensure.--Increasing success 
        in the pass rate for initial State teacher certification or 
        licensure, or increasing the numbers of qualified individuals 
        being certified or licensed as teachers through alternative 
        routes to certification and licensure.
          ``(5) Decreasing teacher shortages.--Decreasing shortages of 
        highly qualified teachers in poor urban and rural areas.
          ``(6) Increasing opportunities for research-based 
        professional development.--Increasing opportunities for 
        enhanced and ongoing professional development that--
                  ``(A) improves the academic content knowledge of 
                teachers in the subject areas in which the teachers are 
                certified or licensed to teach or in which the teachers 
                are working toward certification or licensure to teach; 
                and
                  ``(B) promotes strong teaching skills.
          ``(7) Technology integration.--Increasing the number of 
        teachers prepared effectively to integrate technology into 
        curricula and instruction and who use technology to collect, 
        manage, and analyze data to improve teaching, learning, 
        decisionmaking, and parental involvement for the purpose of 
        increasing student academic achievement.
  ``(b) Eligible Partnership Evaluation.--Each eligible partnership 
applying for a grant under section 203 shall establish, and include in 
the application submitted under section 203(c), an evaluation plan that 
includes strong performance objectives. The plan shall include 
objectives and measures for--
          ``(1) increased student achievement for all students, as 
        measured by the partnership;
          ``(2) increased teacher retention in the first 3 years of a 
        teacher's career;
          ``(3) increased success in the pass rate for initial State 
        certification or licensure of teachers;
          ``(4) increased percentage of highly qualified teachers; and
          ``(5) increasing the number of teachers trained effectively 
        to integrate technology into curricula and instruction and who 
        use technology to collect, manage, and analyze data to improve 
        teaching, learning, and decisionmaking for the purpose of 
        improving student academic achievement.
  ``(c) Revocation of Grant.--
          ``(1) Report.--Each eligible State or eligible partnership 
        receiving a grant under section 202 or 203 shall report 
        annually on the progress of the eligible State or eligible 
        partnership toward meeting the purposes of this part and the 
        goals, objectives, and measures described in subsections (a) 
        and (b).
          ``(2) Revocation.--
                  ``(A) Eligible states and eligible applicants.--If 
                the Secretary determines that an eligible State or 
                eligible applicant is not making substantial progress 
                in meeting the purposes, goals, objectives, and 
                measures, as appropriate, by the end of the second year 
                of a grant under this part, then the grant payment 
                shall not be made for the third year of the grant.
                  ``(B) Eligible partnerships.--If the Secretary 
                determines that an eligible partnership is not making 
                substantial progress in meeting the purposes, goals, 
                objectives, and measures, as appropriate, by the end of 
                the third year of a grant under this part, then the 
                grant payments shall not be made for any succeeding 
                year of the grant.
  ``(d) Evaluation and Dissemination.--The Secretary shall evaluate the 
activities funded under this part and report annually the Secretary's 
findings regarding the activities to the authorizing committees. The 
Secretary shall broadly disseminate successful practices developed by 
eligible States and eligible partnerships under this part, and shall 
broadly disseminate information regarding such practices that were 
found to be ineffective.

``SEC. 207. ACCOUNTABILITY FOR PROGRAMS THAT PREPARE TEACHERS.

  ``(a) State Report Card on the Quality of Teacher Preparation.--Each 
State that receives funds under this Act shall provide to the Secretary 
annually, in a uniform and comprehensible manner that conforms with the 
definitions and methods established by the Secretary, a State report 
card on the quality of teacher preparation in the State, both for 
traditional certification or licensure programs and for alternative 
certification or licensure programs, which shall include at least the 
following:
          ``(1) A description of the teacher certification and 
        licensure assessments, and any other certification and 
        licensure requirements, used by the State.
          ``(2) The standards and criteria that prospective teachers 
        must meet in order to attain initial teacher certification or 
        licensure and to be certified or licensed to teach particular 
        subjects or in particular grades within the State.
          ``(3) A description of the extent to which the assessments 
        and requirements described in paragraph (1) are aligned with 
        the State's standards and assessments for students.
          ``(4) The percentage of students who have completed at least 
        50 percent of the requirements for a teacher preparation 
        program at an institution of higher education or alternative 
        certification program and who have taken and passed each of the 
        assessments used by the State for teacher certification and 
        licensure, and the passing score on each assessment that 
        determines whether a candidate has passed that assessment.
          ``(5) For students who have completed at least 50 percent of 
        the requirements for a teacher preparation program at an 
        institution of higher education or alternative certification 
        program, and who have taken and passed each of the assessments 
        used by the State for teacher certification and licensure, each 
        such institution's and each such program's average raw score, 
        ranked by teacher preparation program, which shall be made 
        available widely and publicly.
          ``(6) A description of each State's alternative routes to 
        teacher certification, if any, and the number and percentage of 
        teachers certified through each alternative certification route 
        who pass State teacher certification or licensure assessments.
          ``(7) For each State, a description of proposed criteria for 
        assessing the performance of teacher preparation programs in 
        the State, including indicators of teacher candidate skills, 
        academic content knowledge, and evidence of gains in student 
        academic achievement.
          ``(8) For each teacher preparation program in the State, the 
        number of students in the program, the number of minority 
        students in the program, the average number of hours of 
        supervised practice teaching required for those in the program, 
        and the number of full-time equivalent faculty and students in 
        supervised practice teaching.
  ``(b) Report of the Secretary on the Quality of Teacher 
Preparation.--
          ``(1) Report card.--The Secretary shall provide to Congress, 
        and publish and make widely available, a report card on teacher 
        qualifications and preparation in the United States, including 
        all the information reported in paragraphs (1) through (8) of 
        subsection (a). Such report shall identify which eligible 
        States received a grant under this part, and the States in 
        which eligible partnerships receiving grants are located. Such 
        report shall be published and made available annually.
          ``(2) Report to congress.--The Secretary shall report to 
        Congress--
                  ``(A) a comparison of States' efforts to improve 
                teaching quality; and
                  ``(B) regarding the national mean and median scores 
                on any standardized test that is used in more than one 
                State for teacher certification or licensure.
          ``(3) Special rule.--In the case of programs with fewer than 
        10 students who have completed at least 50 percent of the 
        requirements for a teacher preparation program taking any 
        single initial teacher certification or licensure assessment 
        during an academic year, the Secretary shall collect and 
        publish information with respect to an average pass rate on 
        State certification or licensure assessments taken over a 3-
        year period.
  ``(c) Coordination.--The Secretary, to the extent practicable, shall 
coordinate the information collected and published under this part 
among States for individuals who took State teacher certification or 
licensure assessments in a State other than the State in which the 
individual received the individual's most recent degree.
  ``(d) Institution and Program Report Cards on Quality of Teacher 
Preparation.--
          ``(1) Report card.--Each institution of higher education or 
        alternative certification program that conducts a teacher 
        preparation program that enrolls students receiving Federal 
        assistance under this Act shall report annually to the State 
        and the general public, in a uniform and comprehensible manner 
        that conforms with the definitions and methods established by 
        the Secretary, both for traditional certification or licensure 
        programs and for alternative certification or licensure 
        programs, the following information:
                  ``(A) Pass rate.--(i) For the most recent year for 
                which the information is available, the pass rate of 
                each student who has completed at least 50 percent of 
                the requirements for the teacher preparation program on 
                the teacher certification or licensure assessments of 
                the State in which the institution is located, but only 
                for those students who took those assessments within 3 
                years of receiving a degree from the institution or 
                completing the program.
                  ``(ii) A comparison of the institution or program's 
                pass rate for students who have completed at least 50 
                percent of the requirements for the teacher preparation 
                program with the average pass rate for institutions and 
                programs in the State.
                  ``(iii) A comparison of the institution or program's 
                average raw score for students who have completed at 
                least 50 percent of the requirements for the teacher 
                preparation program with the average raw scores for 
                institutions and programs in the State.
                  ``(iv) In the case of programs with fewer than 10 
                students who have completed at least 50 percent of the 
                requirements for a teacher preparation program taking 
                any single initial teacher certification or licensure 
                assessment during an academic year, the institution 
                shall collect and publish information with respect to 
                an average pass rate on State certification or 
                licensure assessments taken over a 3-year period.
                  ``(B) Program information.--The number of students in 
                the program, the average number of hours of supervised 
                practice teaching required for those in the program, 
                and the number of full-time equivalent faculty and 
                students in supervised practice teaching.
                  ``(C) Statement.--In States that require approval or 
                accreditation of teacher education programs, a 
                statement of whether the institution's program is so 
                approved or accredited, and by whom.
                  ``(D) Designation as low-performing.--Whether the 
                program has been designated as low-performing by the 
                State under section 208(a).
          ``(2) Requirement.--The information described in paragraph 
        (1) shall be reported through publications such as school 
        catalogs and promotional materials sent to potential 
        applicants, secondary school guidance counselors, and 
        prospective employers of the institution's program graduates, 
        including materials sent by electronic means.
          ``(3) Fines.--In addition to the actions authorized in 
        section 487(c), the Secretary may impose a fine not to exceed 
        $25,000 on an institution of higher education for failure to 
        provide the information described in this subsection in a 
        timely or accurate manner.
  ``(e) Data Quality.--Either--
          ``(1) the Governor of the State; or
          ``(2) in the case of a State for which the constitution or 
        law of such State designates another individual, entity, or 
        agency in the State to be responsible for teacher certification 
        and preparation activity, such individual, entity, or agency;
shall attest annually, in writing, as to the reliability, validity, 
integrity, and accuracy of the data submitted pursuant to this section.

``SEC. 208. STATE FUNCTIONS.

  ``(a) State Assessment.--In order to receive funds under this Act, a 
State shall have in place a procedure to identify and assist, through 
the provision of technical assistance, low-performing programs of 
teacher preparation within institutions of higher education. Such State 
shall provide the Secretary an annual list of such low-performing 
institutions that includes an identification of those institutions at 
risk of being placed on such list. Such levels of performance shall be 
determined solely by the State and may include criteria based upon 
information collected pursuant to this part. Such assessment shall be 
described in the report under section 207(a). A State receiving Federal 
funds under this title shall develop plans to close or reconstitute 
underperforming programs of teacher preparation within institutions of 
higher education.
  ``(b) Termination of Eligibility.--Any institution of higher 
education that offers a program of teacher preparation in which the 
State has withdrawn the State's approval or terminated the State's 
financial support due to the low performance of the institution's 
teacher preparation program based upon the State assessment described 
in subsection (a)--
          ``(1) shall be ineligible for any funding for professional 
        development activities awarded by the Department of Education; 
        and
          ``(2) shall not be permitted to accept or enroll any student 
        who receives aid under title IV of this Act in the 
        institution's teacher preparation program.

``SEC. 209. GENERAL PROVISIONS.

  ``(a) Methods.--In complying with sections 207 and 208, the Secretary 
shall ensure that States and institutions of higher education use fair 
and equitable methods in reporting and that the reporting methods do 
not allow identification of individuals.
  ``(b) Special Rule.--For each State in which there are no State 
certification or licensure assessments, or for States that do not set 
minimum performance levels on those assessments--
          ``(1) the Secretary shall, to the extent practicable, collect 
        data comparable to the data required under this part from 
        States, local educational agencies, institutions of higher 
        education, or other entities that administer such assessments 
        to teachers or prospective teachers; and
          ``(2) notwithstanding any other provision of this part, the 
        Secretary shall use such data to carry out requirements of this 
        part related to assessments or pass rates.
  ``(c) Limitations.--
          ``(1) Federal control prohibited.--Nothing in this part shall 
        be construed to permit, allow, encourage, or authorize any 
        Federal control over any aspect of any private, religious, or 
        home school, whether or not a home school is treated as a 
        private school or home school under State law. This section 
        shall not be construed to prohibit private, religious, or home 
        schools from participation in programs or services under this 
        part.
          ``(2) No change in state control encouraged or required.--
        Nothing in this part shall be construed to encourage or require 
        any change in a State's treatment of any private, religious, or 
        home school, whether or not a home school is treated as a 
        private school or home school under State law.
          ``(3) National system of teacher certification prohibited.--
        Nothing in this part shall be construed to permit, allow, 
        encourage, or authorize the Secretary to establish or support 
        any national system of teacher certification.

``SEC. 210. AUTHORIZATION OF APPROPRIATIONS.

  ``There are authorized to be appropriated to carry out this part 
$300,000,000 for fiscal year 2006 and such sums as may be necessary for 
each of the 5 succeeding fiscal years, of which--
          ``(1) 45 percent shall be available for each fiscal year to 
        award grants under section 202;
          ``(2) 45 percent shall be available for each fiscal year to 
        award grants under section 203; and
          ``(3) 10 percent shall be available for each fiscal year to 
        award grants under section 204.''.

SEC. 202. PREPARING TOMORROW'S TEACHERS TO USE TECHNOLOGY.

  (a) Eligibility.--Section 222(a)(3)(D) (20 U.S.C. 1042(a)(3)(D)) is 
amended by inserting ``nonprofit telecommunications entity,'' after 
``community-based organization,''.
  (b) Permissible Uses of Funds.--Section 223(b)(1)(E) of the Higher 
Education Act of 1965 (20 U.S.C. 1043(b)(1)(E)) is amended to read as 
follows:
                  ``(E) to use technology to collect, manage, and 
                analyze data to improve teaching, learning, and 
                decisionmaking for the purpose of increasing student 
                academic achievement.''.
  (c) Authorization of Appropriations.--Section 224 (20 U.S.C. 1044) is 
amended by striking ``each of fiscal years 2002 and 2003.'' and 
inserting ``fiscal year 2006 and each of the 5 succeeding fiscal 
years.''.

SEC. 203. CENTERS OF EXCELLENCE.

  Title II (20 U.S.C. 1021 et seq.) is amended by adding at the end the 
following:

                    ``PART C--CENTERS OF EXCELLENCE

``SEC. 231. PURPOSES; DEFINITIONS.

  ``(a) Purposes.--The purposes of this part are--
          ``(1) to help recruit and prepare teachers, including 
        minority teachers, to meet the national demand for a highly 
        qualified teacher in every classroom; and
          ``(2) to increase opportunities for Americans of all 
        educational, ethnic, class, and geographic backgrounds to 
        become highly qualified teachers.
  ``(b) Definitions.--As used in this part:
          ``(1) Eligible institution.--The term `eligible institution' 
        means--
                  ``(A) an institution of higher education that has a 
                teacher preparation program that meets the requirements 
                of section 203(b)(2) and that is--
                          ``(i) a part B institution (as defined in 
                        section 322);
                          ``(ii) a Hispanic-serving institution (as 
                        defined in section 502);
                          ``(iii) a Tribal College or University (as 
                        defined in section 316);
                          ``(iv) an Alaska Native-serving institution 
                        (as defined in section 317(b)); or
                          ``(v) a Native Hawaiian-serving institution 
                        (as defined in section 317(b));
                  ``(B) a consortium of institutions described in 
                subparagraph (A); or
                  ``(C) an institution described in subparagraph (A), 
                or a consortium described in subparagraph (B), in 
                partnership with any other institution of higher 
                education, but only if the center of excellence 
                established under section 232 is located at an 
                institution described in subparagraph (A).
          ``(2) Highly qualified.--The term `highly qualified' when 
        used with respect to an individual means that the individual is 
        highly qualified as determined under section 9101 of the 
        Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801) 
        or section 602 of the Individuals with Disabilities Education 
        Act (20 U.S.C. 1401).
          ``(3) Scientifically based reading research.--The term 
        `scientifically based reading research' has the meaning given 
        such term in section 1208 of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 6368).
          ``(4) Scientifically based research.--The term 
        `scientifically based research' has the meaning given such term 
        in section 9101 of the Elementary and Secondary Education Act 
        of 1965 (20 U.S.C. 7801).

``SEC. 232. CENTERS OF EXCELLENCE.

  ``(a) Program Authorized.--From the amounts appropriated to carry out 
this part, the Secretary is authorized to award competitive grants to 
eligible institutions to establish centers of excellence.
  ``(b) Use of Funds.--Grants provided by the Secretary under this part 
shall be used to ensure that current and future teachers are highly 
qualified, by carrying out one or more of the following activities:
          ``(1) Implementing reforms within teacher preparation 
        programs to ensure that such programs are preparing teachers 
        who are highly qualified, are able to understand scientifically 
        based research, and are able to use advanced technology 
        effectively in the classroom, including use for instructional 
        techniques to improve student academic achievement, by--
                  ``(A) retraining faculty; and
                  ``(B) designing (or redesigning) teacher preparation 
                programs that--
                          ``(i) prepare teachers to close student 
                        achievement gaps, are based on rigorous 
                        academic content, scientifically based research 
                        (including scientifically based reading 
                        research), and challenging State student 
                        academic content standards; and
                          ``(ii) promote strong teaching skills.
          ``(2) Providing sustained and high-quality preservice 
        clinical experience, including the mentoring of prospective 
        teachers by exemplary teachers, substantially increasing 
        interaction between faculty at institutions of higher education 
        and new and experienced teachers, principals, and other 
        administrators at elementary schools or secondary schools, and 
        providing support, including preparation time, for such 
        interaction.
          ``(3) Developing and implementing initiatives to promote 
        retention of highly qualified teachers and principals, 
        including minority teachers and principals, including programs 
        that provide--
                  ``(A) teacher or principal mentoring from exemplary 
                teachers or principals; or
                  ``(B) induction and support for teachers and 
                principals during their first 3 years of employment as 
                teachers or principals, respectively.
          ``(4) Awarding scholarships based on financial need to help 
        students pay the costs of tuition, room, board, and other 
        expenses of completing a teacher preparation program.
          ``(5) Disseminating information on effective practices for 
        teacher preparation and successful teacher certification and 
        licensure assessment preparation strategies.
          ``(6) Activities authorized under sections 202, 203, and 204.
  ``(c) Application.--Any eligible institution desiring a grant under 
this section shall submit an application to the Secretary at such a 
time, in such a manner, and accompanied by such information the 
Secretary may require.
  ``(d) Minimum Grant Amount.--The minimum amount of each grant under 
this part shall be $500,000.
  ``(e) Limitation on Administrative Expenses.--An eligible institution 
that receives a grant under this part may not use more than 2 percent 
of the grant funds for purposes of administering the grant.
  ``(f) Regulations.--The Secretary shall prescribe such regulations as 
may be necessary to carry out this part.

``SEC. 233. AUTHORIZATION OF APPROPRIATIONS.

  ``There are authorized to be appropriated to carry out this part 
$10,000,000 for fiscal year 2006 and such sums as may be necessary for 
each of the 5 succeeding fiscal years.''.

SEC. 204. TEACHER INCENTIVE FUND PROGRAM.

  Title II (20 U.S.C. 1021 et seq.), as amended by section 203 of this 
Act, is further amended by adding at the end the following:

                ``PART D--TEACHER INCENTIVE FUND PROGRAM

``SEC. 241. PURPOSE; DEFINITIONS.

  ``(a) Purpose.--The purpose of this part is to assist States, local 
educational agencies, and non-profit or for-profit organizations to 
develop and implement, or expand, innovative compensation systems to 
provide financial rewards for teachers and principals who raise student 
academic achievement and close the achievement gap, especially in the 
highest-need local educational agencies.
  ``(b) Definitions.--For purposes of this part:
          ``(1) Eligible entity.--The term `eligible entity' means--
                  ``(A) a local educational agency, including a charter 
                school that is a local educational agency;
                  ``(B) a State educational agency, or other State 
                agency designated by the chief executive of the State; 
                or
                  ``(C) a partnership of--
                          ``(i) one or more agencies described in 
                        subparagraph (A) or (B), or both; and
                          ``(ii) at least one non-profit or for-profit 
                        organization.
          ``(2) High-need local educational agency.--The term `high-
        need local educational agency' has the meaning given that term 
        in section 201.

``SEC. 242. TEACHER INCENTIVE FUND GRANTS.

  ``(a) Program Authorized.--
          ``(1) In general.--From the amounts appropriated to carry out 
        this part, the Secretary is authorized to award competitive 
        grants of up to 5 years in length to eligible entities to 
        develop and implement, or expand, a comprehensive performance-
        based compensation system for teachers and principals for one 
        or more local educational agencies.
          ``(2) Comprehensive performance-based compensation systems.--
        A comprehensive performance-based compensation system developed 
        and implemented, or expanded with funds under this part--
                  ``(A) shall differentiate levels of compensation 
                primarily on the basis of increases in student academic 
                achievement; and
                  ``(B) may--
                          ``(i) differentiate levels of compensation on 
                        the basis of high-quality teachers' and 
                        principals' employment and success in hard-to-
                        staff schools or high-need subject areas; and
                          ``(ii) recognize teachers' and principals' 
                        skills and knowledge as demonstrated through--
                                  ``(I) successful fulfillment of 
                                additional responsibilities or job 
                                functions; and
                                  ``(II) evidence of high achievement 
                                and mastery of content knowledge and 
                                teaching skills.
  ``(b) Use of Funds.--A grantee shall use grant funds provided under 
this part only to design and implement, or expand, in collaboration 
with teachers, principals, other school administrators, and members of 
the public, a compensation system consistent with the requirements of 
this part. Authorized activities under this part may include the 
following:
          ``(1) Developing appraisal systems that reflect clear and 
        fair measures of student academic achievement.
          ``(2) Conducting outreach within the local educational agency 
        (or agencies) or the State to gain input on how to construct 
        the appraisal system and to develop support for it.
          ``(3) Paying, as part of a comprehensive performance-based 
        compensation system, bonuses and increased salaries to teachers 
        and principals who raise student academic achievement, so long 
        as the grantee uses an increasing share of non-Federal funds to 
        pay these monetary rewards each year of the grant.
          ``(4) Paying, as part of a comprehensive performance-based 
        compensation system, additional bonuses to teachers who both 
        raise student academic achievement and either teach in high-
        poverty schools or teach subjects that are difficult to staff, 
        or both, so long as the grantee uses an increasing share of 
        non-Federal funds to pay these monetary rewards each year of 
        the grant.
          ``(5) Paying, as part of a comprehensive performance-based 
        compensation system, additional bonuses to principals who both 
        raise student academic achievement and serve in high-poverty 
        schools, so long as the grantee uses an increasing share of 
        non-Federal funds to pay these monetary rewards each year of 
        the grant.
  ``(c) Applications.--To be eligible to receive a grant under this 
part, an eligible entity shall submit an application that includes--
          ``(1) a description of the local educational agency or local 
        educational agencies to be served by the project, including 
        such demographic information as the Secretary may request;
          ``(2) information on student academic achievement and the 
        quality of the teachers and principals in the local educational 
        agency or agencies to be served by the project;
          ``(3) a description of the performance-based teacher and 
        principal compensation system that the applicant proposes to 
        develop and implement or expand;
          ``(4) a description of how the applicant will use grant funds 
        under this part in each year of the grant;
          ``(5) an explanation of how the applicant will meet the 
        requirement in subsection (b)(3) and how the grantee will 
        continue its performance-based compensation system after the 
        grant ends;
          ``(6) a description of the support and commitment from 
        teachers, the community or local educational agency or agencies 
        for the development and implementation, or expansion, of a 
        performance-based teacher and principal compensation system;
          ``(7) a description of how teacher, principal and student 
        performance will be measured and the baseline measurement 
        units; and
          ``(8) a description, if applicable, of how the applicant will 
        define the term `high-quality' for the purposes of subsection 
        (a)(2)(B)(i), through the use of measurable indicators, such as 
        effectiveness in raising student academic achievement, or 
        demonstrated mastery of subject matter knowledge.
  ``(d) Priority.--The Secretary shall give priority to applications 
for projects that would establish comprehensive performance-based 
compensation systems in high-need local educational agencies.

``SEC. 243. EVALUATIONS.

  ``The Secretary shall conduct an independent evaluation of the 
program under this part and may use up to 1 percent of the funds made 
available under this part or $1,000,000, whichever is less, for any 
fiscal year for the cost of the evaluation.

``SEC. 244. AUTHORIZATION OF APPROPRIATIONS.

  ``There are authorized to be appropriated to carry out this part 
$100,000,000 for fiscal year 2006 and such sums as may be necessary for 
each of the 5 succeeding fiscal years.''.

SEC. 205. TRANSITION.

  The Secretary of Education shall take such actions as the Secretary 
determines to be appropriate to provide for the orderly implementation 
of this title.

                      TITLE III--INSTITUTIONAL AID

SEC. 301. TITLE III GRANTS FOR AMERICAN INDIAN TRIBALLY CONTROLLED 
                    COLLEGES AND UNIVERSITIES.

  (a) Eligible Institutions.--Subsection (b) of section 316 (20 U.S.C. 
1059c(b)) is amended to read as follows:
  ``(b) Definitions.--
          ``(1) Eligible institutions.--For purposes of this section, 
        Tribal Colleges and Universities are the following:
                  ``(A) any of the following institutions that qualify 
                for funding under the Tribally Controlled College or 
                University Assistance Act of 1978 or is listed in 
                Equity in Educational Land Grant Status Act of 1994 (7 
                U.S.C. 301 note): Bay Mills Community College; 
                Blackfeet Community College; Cankdeska Cikana Community 
                College; Chief Dull Knife College; College of Menominee 
                Nation; Crownpoint Institute of Technology; Dine 
                College; D-Q University; Fond du Lac Tribal and 
                Community College; Fort Belknap College; Fort Berthold 
                Community College; Fort Peck Community College; Haskell 
                Indian Nations University; Institute of American Indian 
                and Alaska Native Culture and Arts Development; Lac 
                Courte Oreilles Ojibwa Community College; Leech Lake 
                Tribal College; Little Big Horn College; Little Priest 
                Tribal College; Nebraska Indian Community College; 
                Northwest Indian College; Oglala Lakota College; 
                Saginaw Chippewa Tribal College; Salish Kootenai 
                College; Si Tanka University--Eagle Butte Campus; Sinte 
                Gleska University; Sisseton Wahpeton Community College; 
                Sitting Bull College; Southwestern Indian Polytechnic 
                Institute; Stone Child College; Tohono O'Odham 
                Community College; Turtle Mountain Community College; 
                United Tribes Technical College; and White Earth Tribal 
                and Community College; and
                  ``(B) any other institution that meets the definition 
                of tribally controlled college or university in section 
                2 of the Tribally Controlled College or University 
                Assistance Act of 1978, and meets all other 
                requirements of this section.
          ``(2) Indian.--The term `Indian' has the meaning given the 
        term in section 2 of the Tribally Controlled College or 
        University Assistance Act of 1978.''.
  (b) Distance Learning.--Subsection (c)(2) of such section is 
amended--
          (1) by amending subparagraph (B) to read as follows:
                  ``(B) construction, maintenance, renovation, and 
                improvement in classrooms, libraries, laboratories, and 
                other instructional facilities, including purchase or 
                rental of telecommunications technology equipment or 
                services, and the acquisition of real property adjacent 
                to the campus of the institution on which to construct 
                such facilities;'';
          (2) in subparagraph (C), by inserting before the semicolon at 
        the end the following: ``, or advanced degrees in tribal 
        governance or tribal public policy'';
          (3) in subparagraph (D), by inserting before the semicolon at 
        the end the following: ``, in tribal governance, or tribal 
        public policy'';
          (4) by striking ``and'' at the end of subparagraph (K);
          (5) by redesignating subparagraph (L) as subparagraph (M); 
        and
          (6) by inserting after subparagraph (K) the following new 
        subparagraph:
                  ``(L) developing or improving facilities for Internet 
                use or other distance learning academic instruction 
                capabilities; and''.
  (c) Application and Allotment.--Subsection (d) of such section is 
amended to read as follows:
  ``(d) Application and Allotment.--
          ``(1) Institutional eligibility.--To be eligible to receive 
        assistance under this section, a Tribal College or University 
        shall be an eligible institution under section 312(b).
          ``(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 reasonably require.
          ``(3) Allotments to institutions.--
                  ``(A) Allotment: pell grant basis.--From the amount 
                appropriated to carry out this section for any fiscal 
                year, the Secretary shall allot to each eligible 
                institution a sum which bears the same ratio to one-
                half that amount as the number of Pell Grant recipients 
                in attendance at such institution at the end of the 
                award year preceding the beginning of that fiscal year 
                bears to the total number of Pell Grant recipients at 
                all eligible institutions.
                  ``(B) Allotment: degree and certificate basis.--From 
                the amount appropriated to carry out this section for 
                any fiscal year, the Secretary shall allot to each 
                eligible institution a sum which bears the same ratio 
                to one-half that amount as the number of degrees or 
                certificates awarded by such institution during the 
                preceding academic year bears to the total number of 
                degrees or certificates at all eligible institutions.
                  ``(C) Minimum grant.--Notwithstanding subparagraphs 
                (A) and (B), the amount allotted to each institution 
                under this section shall not be less than $400,000.
          ``(4) Special rules.--
                  ``(A) Concurrent funding.--For the purposes of this 
                part, no Tribal College or University that is eligible 
                for and receives funds under this section shall 
                concurrently receive funds under other provisions of 
                this part or part B.
                  ``(B) Exemption.--Section 313(d) shall not apply to 
                institutions that are eligible to receive funds under 
                this section.''.

SEC. 302. ALASKA NATIVE AND NATIVE HAWAIIAN-SERVING INSTITUTIONS.

  (a) Distance Learning.--Section 317(c)(2) (20 U.S.C. 1059d(c)(2)) is 
amended--
          (1) by amending subparagraph (B) to read as follows:
                  ``(B) construction, maintenance, renovation, and 
                improvement in classrooms, libraries, laboratories, and 
                other instructional facilities, including purchase or 
                rental of telecommunications technology equipment or 
                services, and the acquisition of real property adjacent 
                to the campus of the institution on which to construct 
                such facilities;'';
          (2) in subparagraph (C), by inserting before the semicolon at 
        the end the following: ``, or advanced degrees in tribal 
        governance or tribal public policy'';
          (3) in subparagraph (D), by inserting before the semicolon at 
        the end the following: ``, in tribal governance, or tribal 
        public policy'';
          (4) by striking ``and'' at the end of subparagraph (G);
          (5) by striking the period at the end of subparagraph (H) and 
        inserting a semicolon; and
          (6) by inserting after subparagraph (H) the following new 
        subparagraph:
                  ``(I) development or improvement of facilities for 
                Internet use or other distance learning academic 
                instruction capabilities; and''.
  (b) Endowment Funds.--Section 317(c) is further amended by adding at 
the end the following new paragraph:
          ``(3) Endowment funds.--
                  ``(A) In general.--An Alaska Native or Native 
                Hawaiian-serving institution 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 institution shall provide to the endowment fund 
                from non-Federal funds an amount equal to the Federal 
                funds used in accordance with subparagraph (A), for the 
                establishment or increase of the endowment fund.
                  ``(C) Applicability of other provisions.--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).''.
  (c) Application Process.--Section 317(d)(2) is amended by striking 
``Such application shall include--'' and all that follows through ``may 
require.''.

SEC. 303. GRANTS TO PART B INSTITUTIONS.

  (a) Use of Funds.--
          (1) Facilities and equipment.--
                  (A) Undergraduate institutions.--Paragraph (2) of 
                section 323(a) (20 U.S.C. 1062(a)) is amended to read 
                as follows:
          ``(2) Construction, maintenance, renovation, and improvement 
        in classrooms, libraries, laboratories, and other instructional 
        facilities, including purchase or rental of telecommunications 
        technology equipment or services, and the acquisition of real 
        property adjacent to the campus of the institution on which to 
        construct such facilities.''.
                  (B) Graduate and professional schools.--Paragraph (2) 
                of section 326(c) is amended to read as follows:
          ``(2) construction, maintenance, renovation, and improvement 
        in classrooms, libraries, laboratories, and other instructional 
        facilities, including purchase or rental of telecommunications 
        technology equipment or services, and the acquisition of real 
        property adjacent to the campus of the institution on which to 
        construct such facilities;''.
          (2) Outreach and collaboration.--Paragraph (11) of section 
        323(a) is amended to read as follows:
          ``(11) Establishing community outreach programs and 
        collaborative partnerships between part B institutions and 
        local elementary or secondary schools. Such partnerships may 
        include mentoring, tutoring, or other instructional 
        opportunities that will boost student academic achievement and 
        assist elementary and secondary school students in developing 
        the academic skills and the interest to pursue postsecondary 
        education.''.
  (b) Technical Assistance.--Section 323 (20 U.S.C. 1062) is amended--
          (1) by redesignating subsection (c) as subsection (d); and
          (2) by inserting after subsection (b) the following new 
        subsection:
  ``(c) Technical Assistance.--
          ``(1) In general.--An institution may not use more than 2 
        percent of the grant funds provided under this part to secure 
        technical assistance services.
          ``(2) Technical assistance services.--Technical assistance 
        services may include assistance with enrollment management, 
        financial management, and strategic planning.
          ``(3) Report.--The institution shall report to the Secretary 
        on an annual basis, in such form as the Secretary requires, on 
        the use of funds under this subsection.''.
  (c) Distance Learning.--Section 323(a)(2) (20 U.S.C. 1062(a)(2)) (as 
amended by subsection (a)(1)(A)) is further amended by inserting 
``development or improvement of facilities for Internet use or other 
distance learning academic instruction capabilities and'' after 
``including''.
  (d) Minimum Grants.--Section 324(d)(1) (20 U.S.C. 1063(d)(1)) is 
amended by inserting before the period at the end the following: ``, 
except that, if the amount appropriated to carry out this part for any 
fiscal year exceeds the amount required to provide to each institution 
an amount equal to the total amount received by such institution under 
subsections (a), (b), and (c) for the preceding fiscal year, then the 
amount of such excess appropriation shall first be applied to increase 
the minimum allotment under this subsection to $750,000''.
  (e) Eligible Graduate or Professional Schools.--
          (1) General authority.--Section 326(a)(1) (20 U.S.C. 
        1063b(a)(1)) is amended--
                  (A) by inserting ``(A)'' after ``subsection (e) 
                that'';
                  (B) by inserting before the period at the end the 
                following: ``, (B) is accredited by a nationally 
                recognized accrediting agency or association determined 
                by the Secretary to be a reliable authority as to the 
                quality of training offered, and (C) according to such 
                an agency or association, is in good standing''.
          (2) Eligible institutions.--Section 326(e)(1) (20 U.S.C. 
        1063b(e)(1)) is amended--
                  (A) by striking ``and'' at the end of subparagraph 
                (Q);
                  (B) by striking the period at the end of subparagraph 
                (R) and inserting a semicolon; and
                  (C) by adding at the end the following new 
                subparagraphs:
                  ``(S) Alabama State University qualified graduate 
                program;
                  ``(T) Prairie View A & M University qualified 
                graduate program;
                  ``(U) Coppin State University qualified graduate 
                program; and
                  ``(V) Delaware State University qualified graduate 
                program.''.
          (3) Conforming amendment.--Section 326(e)(3) (20 U.S.C. 
        1063b(e)(3)) is amended--
                  (A) by striking ``1998'' and inserting ``2005''; and
                  (B) by striking ``(Q) and (R)'' and inserting ``(S), 
                (T), (U), and (V)''.
  (f) Professional or Graduate Institutions.--Section 326(f) (20 U.S.C. 
1063b(f)) is amended--
          (1) in paragraph (1)--
                  (A) by striking ``$26,600,000'' and inserting 
                ``$54,500,000''; and
                  (B) by striking ``(P)'' and inserting ``(R)'';
          (2) in paragraph (2)--
                  (A) by striking ``$26,600,000, but not in excess of 
                $28,600,000'' and inserting ``$54,500,000, but not in 
                excess of $58,500,000''; and
                  (B) by striking ``subparagraphs (Q) and (R)'' and 
                inserting ``subparagraphs (S), (T), (U), and (V)''; and
          (3) in paragraph (3)--
                  (A) by striking ``$28,600,000'' and inserting 
                ``$58,500,000''; and
                  (B) by striking ``(R)'' and inserting ``(V)''.
  (g) Hold Harmless.--Section 326(g) (20 U.S.C. 1063b(g)) is amended by 
striking ``1998'' each place it appears and inserting ``2005''.

SEC. 304. TECHNICAL AMENDMENTS.

  (a) Amendments.--Title III is further amended--
          (1) in section 311(c) (20 U.S.C. 1057(c))--
                  (A) by redesignating paragraphs (7) through (12) as 
                paragraphs (8) through (13), respectively; and
                  (B) by inserting after paragraph (6) the following:
          ``(7) Education or counseling services designed to improve 
        the financial literacy and economic literacy of students and, 
        as appropriate, their parents.'';
          (2) in section 312(b)(1)(A) (20 U.S.C. 1058(b)(1)(A)), by 
        striking ``subsection (c)'' and inserting ``subsection (d)'';
          (3) in section 312(b)(1)(F) (20 U.S.C. 1058(b)(1)(F)), by 
        inserting ``which is'' before ``located'';
          (4) in section 312(b)(1) (20 U.S.C. 1058(b)(1)), by 
        redesignating subparagraphs (E) and (F) as subparagraphs (F) 
        and (G), respectively, and by inserting after subparagraph (D) 
        the following new subparagraph:
                  ``(E) which provides a program that is not less than 
                a 2-year educational program that is acceptable for 
                full credit toward a bachelor's degree;'';
          (5) in section 316(c)(2) (20 U.S.C. 1059c(c)(2))--
                  (A) by redesignating subparagraphs (G) through (M) 
                (as redesignated by section 301(b)(2) of this Act) as 
                subparagraphs (H) through (N), respectively;
                  (B) by inserting after subparagraph (F) the 
                following:
                  ``(G) education or counseling services designed to 
                improve the financial literacy and economic literacy of 
                students and, as appropriate, their parents;''; and
                  (C) in subparagraph (N), as redesignated by 
                subparagraph (A), by striking ``subparagraphs (A) 
                through (K)'' and inserting ``subparagraphs (A) through 
                (M)'';
          (6) in section 317(c)(2) (20 U.S.C. 1059d(c)(2)), by 
        inserting after subparagraph (I) (as added by section 302(a)(6) 
        of this Act) the following:
                  ``(J) education or counseling services designed to 
                improve the financial literacy and economic literacy of 
                students and, as appropriate, their parents.'';
          (7) in section 323(a) (20 U.S.C. 1062(a))--
                  (A) by striking ``section 360(a)(2)'' and inserting 
                ``section 399(a)(2)'';
                  (B) by redesignating paragraphs (7) through (12) as 
                paragraphs (8) through (13), respectively; and
                  (C) by inserting after paragraph (6) the following:
          ``(7) Education or counseling services designed to improve 
        the financial literacy and economic literacy of students and, 
        as appropriate, their parents.'';
          (8) in section 324(d)(2) (20 U.S.C. 1063(d)(2)), by striking 
        ``section 360(a)(2)(A)'' and inserting ``section 
        399(a)(2)(A)'';
          (9) in section 326(e)(1) (20 U.S.C. 1063b(e)(1)), in the 
        matter preceding subparagraph (A), by inserting a colon after 
        ``the following'';
          (10) in section 327(b) (20 U.S.C. 1063c(b)), by striking 
        ``initial'';
          (11) in section 342(5)(C) (20 U.S.C. 1066a(5)(C))--
                  (A) by inserting a comma after ``equipment'' the 
                first place it appears; and
                  (B) by striking ``technology,,'' and inserting 
                ``technology,'';
          (12) in section 343(e) (20 U.S.C. 1066b(e)), by inserting 
        after the subsection designation the following: ``Sale of 
        Qualified Bonds.--'';
          (13) in section 351(a) (20 U.S.C. 1067a(a)), by striking ``of 
        1979'';
          (14) in section 391(b)(7)(E) (20 U.S.C. 1068(b)(7)(E)), by 
        striking ``subparagraph (E)'' and inserting ``subparagraph 
        (D)''; and
          (15) in section 396 (20 U.S.C. 1068e), by striking ``section 
        360'' and inserting ``section 399''.
  (b) Repeal.--Section 1024 (20 U.S.C. 1135b-3), as transferred by 
section 301(a)(5) of the Higher Education Amendments of 1998 (Public 
Law 105-244; 112 Stat. 1636), is repealed.

SEC. 305. TITLE III AUTHORIZATIONS.

  Section 399(a) (20 U.S.C. 1068h(a)) is amended--
          (1) by striking ``1999'' each place it appears and inserting 
        ``2006'';
          (2) by striking ``4 succeeding fiscal years'' each place it 
        appears and inserting ``5 succeeding fiscal years'';
          (3) in paragraph (1)--
                  (A) by striking ``$10,000,000'' in subparagraph (B) 
                and inserting ``$23,800,000''; and
                  (B) by striking ``$5,000,000'' in subparagraph (C) 
                and inserting ``$11,900,000'';
          (4) in paragraph (2)--
                  (A) by striking ``$135,000,000'' in subparagraph (A) 
                and inserting ``$241,000,000''; and
                  (B) by striking ``$35,000,000'' in subparagraph (B) 
                and inserting ``$59,000,000''; and
          (5) in paragraph (4), by striking ``$110,000'' and inserting 
        ``$212,000''.

                      TITLE IV--STUDENT ASSISTANCE

                       PART A--GRANTS TO STUDENTS

SEC. 401. PELL GRANTS.

  (a) Extension of Authority.--Section 401(a) (20 U.S.C. 1070a(a)) is 
amended by striking ``2004'' and inserting ``2012''.
  (b) Direct Payment.--Section 401(a) (20 U.S.C. 1070a(a)) is further 
amended--
          (1) by striking paragraph (2); and
          (2) by redesignating paragraph (3) as paragraph (2).
  (c) Maximum Pell Grant Increase.-- Paragraph (2)(A) of section 401(b) 
20 U.S.C. 1070a(b)(2)(A)) is amended to read as follows:
  ``(2)(A) The amount of the Federal Pell Grant for a student eligible 
under this part shall be $6,000 for academic years 2006-2007 through 
2012-2013, less an amount equal to the amount determined to be the 
expected family contribution with respect to that student for that 
year.''.
  (d) Tuition Sensitivity.--Section 401(b) is further amended--
          (1) by striking paragraph (3); and
          (2) by redesignating paragraphs (4) through (8) as paragraphs 
        (3) through (7), respectively.
  (e) Multiple Grants.--Paragraph (5) of section 401(b) (as 
redesignated by subsection (d)(2)) is amended to read as follows:
          ``(5) Year-round pell grants.--
                  ``(A) In general.--The Secretary shall, for students 
                enrolled full time in a baccalaureate or associate's 
                degree program of study at an eligible institution, 
                award such students two Pell grants during a single 
                award year to permit such students to accelerate 
                progress toward their degree objectives by enrolling in 
                academic programs for 12 months rather than 9 months.
                  ``(B) Limitation.--The Secretary shall limit the 
                awarding of additional Pell grants under this paragraph 
                in a single award year to students attending--
                          ``(i) baccalaureate degree granting 
                        institutions that have a graduation rate as 
                        reported by the Integrated Postsecondary 
                        Education Data System for the 4 preceding 
                        academic years of at least 30 percent; or
                          ``(ii) two-year institutions that have a 
                        graduation rate as reported by the Integrated 
                        Postsecondary Education Data Systems, in at 
                        least one of the last 3 years for which data is 
                        available, that is above the average for the 
                        applicable year for the institution's type and 
                        control.
                  ``(C) Evaluation.--The Secretary shall conduct an 
                evaluation of the program under this paragraph and 
                submit to the Congress an evaluation report no later 
                than October 1, 2011.
                  ``(D) Regulations required.--The Secretary shall 
                promulgate regulations implementing this paragraph.''.
  (f) Ineligibility Based on Involuntary Civil Commitment for Sexual 
Offenses.--Paragraph (7) of section 401(b) (as redesignated by 
subsection (d)(2)) is amended by inserting before the period the 
following: ``or who is subject to an involuntary civil commitment upon 
completion of a period of incarceration for a sexual offense (as 
determined under regulations of the Secretary)''.
  (g) Pell Grant Eligibility Duration.--Section 401(c) (20 U.S.C. 
1070a(c)) is amended--
          (1) in paragraph (1)--
                  (A) by striking ``The period'' and inserting in lieu 
                thereof ``Subject to paragraph (5), the period''; and
                  (B) by striking the period at the end thereof and 
                inserting ``but shall be subject to the limitation 
                described in paragraph (5).''; and
          (2) by adding at the end the following new paragraph:
  ``(5) The period during which a student may receive Federal Pell 
Grants shall not exceed the equivalent of 18 semesters or 27 quarters 
in duration (as determined by the Secretary by regulation), without 
regard to whether the student is enrolled on a full-time basis during 
any portion of that period, and including any period of time for which 
the student received Federal Pell Grants prior to the date of enactment 
of the College Access and Opportunity Act of 2005.''.
  (h) Eligibility Period.--Section 401(c)(2) (20 U.S.C. 1070a(c)(2)) is 
amended by inserting ``, for not more than one academic year,'' after 
``which are determined by the institution'' in the first sentence.
  (i) Pell Grants Plus: Achievement Grants for State Scholars 
Program.--
          (1) Amendment.--Subpart 1 of part A of title IV is amended by 
        inserting after section 401 (20 U.S.C. 1070a) the following new 
        section:

``SEC. 401A. PELL GRANTS PLUS: ACHIEVEMENT GRANTS FOR STATE SCHOLARS.

  ``(a) Grants Authorized.--From sums appropriated to carry out section 
401, the Secretary shall establish a program to award Pell Grants Plus 
to students who--
          ``(1) have successfully completed a rigorous high school 
        program of study established by a State or local educational 
        agency in consultation with a State coalition assisted by the 
        Center for State Scholars;
          ``(2) are enrolled full-time in the first academic year of 
        undergraduate education, and have not been previously enrolled 
        in a program of undergraduate education; and
          ``(3) are eligible to receive Federal Pell Grants for the 
        year in which the grant is awarded.
  ``(b) Amount of Grants.--
          ``(1) In general.--Except as provided in paragraph (2), the 
        amount of the grant awarded under this section shall be $1,000.
          ``(2) Assistance not to exceed cost of attendance.--A grant 
        awarded under this section to any student, in combination with 
        the Federal Pell Grant assistance and other student financial 
        assistance available to such student, may not exceed the 
        student's cost of attendance.
  ``(c) Selection of Recipients.--
          ``(1) Procedures established by regulation.--The Secretary 
        shall establish by regulation procedures for the determination 
        of eligibility of students for the grants awarded under this 
        section. Such procedures shall include measures to ensure that 
        eligibility is determined in a timely and accurate manner 
        consistent with the requirements of section 482 and the 
        submission of the financial aid form required by section 483.
          ``(2) Required information.--Each eligible student desiring 
        an award under this section shall submit at such time and in 
        such manner such information as the Secretary may reasonably 
        require.
          ``(3) Continuation of grant requirements.--In order for a 
        student to continue to be eligible to receive an award under 
        this section for the second year of undergraduate education, 
        the eligible student must--
                  ``(A) maintain eligibility to receive a Federal Pell 
                Grant for that year;
                  ``(B) obtain a grade point average of at least 3.0 
                (or the equivalent as determined under regulations 
                prescribed by the Secretary) for the first year of 
                undergraduate education; and
                  ``(C) be enrolled full-time and fulfill the 
                requirements for satisfactory progress described in 
                section 484(c).
  ``(d) Evaluation, and Reports.--The Secretary shall monitor the 
progress, retention, and completion rates of the students to whom 
awards are provided under this section. In doing so, the Secretary 
shall evaluate the impact of the Pell Grants Plus Program and report, 
not less than biennially, to the authorizing committees of the House of 
Representatives and the Senate.''.
          (2) Conforming amendment.--Chapter 3 of subpart 2 of part A 
        of title IV (20 U.S.C. 1070a-31 through 1070a-35) is repealed.

SEC. 402. TRIO PROGRAMS.

  (a) Duration of Grants.--
          (1) Amendment.--Section 402A(b)(2) (20 U.S.C. 1070a-11(b)(2)) 
        is amended to read as follows:
          ``(2) Duration.--Grants or contracts awarded under this 
        chapter shall be awarded for a period of 5 years, except that--
                  ``(A) grants under section 402G shall be awarded for 
                a period of 2 years; and
                  ``(B) grants under section 402H shall be awarded for 
                a period determined by the Secretary.''.
          (2) Transition to synchronous grant periods.--Notwithstanding 
        section 402A(b)(2) of the Higher Education Act of 1965 (as in 
        effect both prior to and after the amendment made by paragraph 
        (1) of this subsection), the Secretary of Education may 
        continue an award made before the date of enactment of this Act 
        under section 402B, 402C, 402D, 402E, or 402F of such Act as 
        necessary to permit all the awards made under such a section to 
        expire at the end of the same fiscal year, and thereafter to 
        expire at the end of 5 years as provided in the amendment made 
        by paragraph (1) of this subsection.
  (b) Minimum Grants.--Section 402A(b)(3) (20 U.S.C. 1070a-11(b)(3)) is 
amended to read as follows:
          ``(3) Minimum grants.--Unless the institution or agency 
        requests a smaller amount, individual grants for programs 
        authorized under this chapter shall be no less than $200,000, 
        except that individual grants for programs authorized under 
        section 402G shall be no less than $170,000.''.
  (c) Prior Experience; Novice Applicants.--Section 402A(c)(2) (20 
U.S.C. 1070a-11(c)(2)) is amended--
          (1) by striking ``In making grants'' and inserting ``(A) 
        Subject to subparagraph (B), in making grants''; and
          (2) by adding at the end the following new subparagraph:
          ``(B) From the amount available under subsection (h) for a 
        program under this chapter (other than a program under section 
        402G or 402H) for any fiscal year in which the Secretary 
        conducts a competition for the award of grants or contracts 
        under such program, the Secretary shall reserve 10 percent of 
        such available amount for purposes of funding applications from 
        novice applicants. If the Secretary determines that there are 
        an insufficient number of qualified novice applicants to 
        utilize the amount so reserved, the Secretary shall restore the 
        unutilized remainder of the amount reserved for use by 
        applicants qualifying under subparagraph (A).''.
  (d) Application Status.--Section 402A(c) (20 U.S.C. 1070a-11(c)) is 
amended by striking paragraph (7).
  (e) Documentation of Status.--Section 402A(e) (20 U.S.C. 1070a-11(e)) 
is amended by striking ``(g)(2)'' each place it appears in paragraphs 
(1) and (2) and inserting ``(i)(4)''.
  (f) Homeless and Unaccompanied Youth.--Section 402A(e) is further 
amended by adding at the end the following new paragraph:
  ``(3) Notwithstanding this subsection and subsection (i)(4), 
individuals who are homeless or unaccompanied youth as defined in 
section 725 of the McKinney-Vento Homeless Assistance Act shall be 
eligible to participate in programs under sections 402B, 402C, 402D, 
and 402F of this chapter.''.
  (g) Authorization of Appropriations.--Section 402A(f) (20 U.S.C. 
1070a-11(f)) is amended by striking ``$700,000,000 for fiscal year 
1999, and such sums as may be necessary for each of the 4 succeeding 
fiscal years'' and inserting ``$836,500,000 for fiscal year 2006 and 
such sums as may be necessary for each of the 5 succeeding fiscal 
years''.
  (h) Definition.--Section 402A(g) (20 U.S.C. 1070a-11(g)) is amended--
          (1) in paragraph (3), by striking ``by reason of such 
        individual's age'';
          (2) by redesignating paragraphs (1) through (4) as paragraphs 
        (3) through (6), respectively; and
          (3) by inserting before paragraph (3), as redesignated, the 
        following:
          ``(1) Different campus.--The term `different campus' means an 
        institutional site that--
                  ``(A) is geographically apart from the main campus of 
                the institution;
                  ``(B) is permanent in nature; and
                  ``(C) offers courses in educational programs leading 
                to a degree, certificate, or other recognized 
                educational credential.
          ``(2) Different population.--The term `different population' 
        means a group of individuals, with respect to whom an entity 
        seeks to serve through an application for funding under this 
        chapter, that--
                  ``(A) is separate and distinct from any other 
                population that the entity seeks to serve through an 
                application for funding under this chapter; or
                  ``(B) while sharing some of the same needs as another 
                population that the entity seeks to serve through an 
                application for funding under this chapter, has 
                distinct needs for specialized services.''.
  (i) Education and Counseling Services.--Chapter 1 of subpart 2 of 
part A of title IV is further amended--
          (1) in section 402B(b) (20 U.S.C. 1070a-12(b))--
                  (A) by redesignating paragraphs (3) through (10) as 
                paragraphs (4) through (11), respectively;
                  (B) by inserting after paragraph (2) the following:
          ``(3) education or counseling services designed to improve 
        the financial literacy and economic literacy of students and, 
        as appropriate, their parents;''; and
                  (C) in paragraph (11), as redesignated by 
                subparagraph (A), by striking ``paragraphs (1) through 
                (9)'' and inserting ``paragraphs (1) through (10)'';
          (2) in section 402C (20 U.S.C. 1070a-13)--
                  (A) in subsection (b)--
                          (i) by redesignating paragraphs (2) through 
                        (12) as paragraphs (3) through (13), 
                        respectively;
                          (ii) by inserting after paragraph (1) the 
                        following:
          ``(2) education or counseling services designed to improve 
        the financial literacy and economic literacy of students and, 
        as appropriate, their parents;'';
                          (iii) in paragraph (12), as redesignated by 
                        clause (i), by inserting ``, specifically in 
                        the fields of math and science'' after 
                        ``postsecondary education''; and
                          (iv) in paragraph (13), as redesignated by 
                        clause (i), by striking ``paragraphs (1) 
                        through (11)'' and inserting ``paragraphs (1) 
                        through (12)''; and
                  (B) in subsection (e), by striking ``subsection 
                (b)(10)'' and inserting ``subsection (b)(11)'';
          (3) in section 402D(b) (20 U.S.C. 1070a-14(b))--
                  (A) by redesignating paragraphs (2) through (10) as 
                paragraphs (3) through (11), respectively;
                  (B) by inserting after paragraph (1) the following:
          ``(2) education or counseling services designed to improve 
        the financial literacy and economic literacy of students and, 
        as appropriate, their parents;''; and
                  (C) in paragraph (11), as redesignated by 
                subparagraph (A), by striking ``paragraphs (1) through 
                (9)'' and inserting ``paragraphs (1) through (10)'';
          (4) in section 402E(b) (20 U.S.C. 1070a-15(b))--
                  (A) by redesignating paragraphs (7) and (8) as 
                paragraphs (8) and (9), respectively; and
                  (B) by inserting after paragraph (6) the following:
          ``(7) education or counseling services designed to improve 
        the financial literacy and economic literacy of students and, 
        as appropriate, their parents;''; and
          (5) in section 402F(b) (20 U.S.C. 1070a-16(b))--
                  (A) by redesignating paragraphs (4) through (10) as 
                paragraphs (5) through (11), respectively;
                  (B) by inserting after paragraph (3) the following:
          ``(4) education or counseling services designed to improve 
        the financial literacy and economic literacy of students and, 
        as appropriate, their parents;''; and
                  (C) in paragraph (11), as redesignated by 
                subparagraph (A), by striking ``paragraphs (1) through 
                (9)'' and inserting ``paragraphs (1) through (10)''.
  (j) Maximum Stipends.--Section 402C(e) (20 U.S.C. 1070a-13(e)) is 
amended--
          (1) by striking ``$60'' and inserting ``$100''; and
          (2) by striking ``$40'' and inserting ``$60''.
  (k) Student Support Services.--Section 402D(d)(6) (20 U.S.C. 1070a-
14(d)(6)) is amended--
          (1) by striking ``and'' at the end of subparagraph (A);
          (2) by striking the period at the end of subparagraph (B) and 
        inserting ``; and''; and
          (3) by inserting after subparagraph (B) the following new 
        subparagraph:
                  ``(C) working with other entities that serve low-
                income working adults to increase access to and 
                successful progress in postsecondary education by low-
                income working adults seeking their first postsecondary 
                degree or certificate.''.
  (l) Postbaccalaureate Achievement Maximum Stipends.--Section 
402E(e)(1) (20 U.S.C. 1070a-15(e)(1)) is amended by striking ``$2,800'' 
and inserting ``$5,000''.
  (m) Educational Opportunity Centers: Application Approval.--Section 
402F(c) (20 U.S.C. 1070a-16(c)) is amended--
          (1) by striking ``and'' at the end of paragraph (2);
          (2) by striking the period at the end of paragraph (3) and 
        inserting ``; and''; and
          (3) by inserting after paragraph (3) the following new 
        paragraph:
          ``(4) consider the extent to which the proposed project would 
        provide services to low-income working adults in the region to 
        be served, in order to increase access to postsecondary 
        education by low-income working adults.''.

SEC. 403. TRIO REFORM.

  (a) Performance Measures.--Section 402A (20 U.S.C. 1070a-11) is 
amended--
          (1) by redesignating subsections (c), (d), (e), (f), and (g) 
        as subsections (d), (e), (g), (h), and (i), respectively; and
          (2) by inserting after subsection (b) the following new 
        subsection:
  ``(c) Performance Measures.--
          ``(1) In general.--The Secretary shall establish expected 
        program outcomes and procedures for measuring, annually and for 
        longer periods, the quality and effectiveness of programs 
        operated under this chapter, and the impact of the services 
        provided through the programs to support the attainment of 
        higher education for students from disadvantaged backgrounds, 
        low-income individuals, and prospective first-generation 
        college students.
          ``(2) Use of measures.--The performance measures described in 
        paragraph (1) shall be used to--
                  ``(A) assess the impact of the specific services 
                provided by recipients of grants or contracts under 
                this chapter and, to the extent the Secretary finds 
                appropriate, administrative and financial management 
                practices of such programs;
                  ``(B) identify strengths and weaknesses in the 
                provision of services provided by grantees under this 
                chapter;
                  ``(C) identify project operations that may require 
                training and technical assistance resources.
          ``(3) Additional measures.--In addition to the performance 
        measures in paragraph (1), each grant recipient may establish 
        local performance measures.''.
  (b) Selection.--Subsection (d) of such section (as redesignated by 
subsection (a)(1) of this section) is amended--
          (1) by redesignating paragraphs (2) through (6) as paragraphs 
        (3) through (7), respectively; and
          (2) by inserting after paragraph (1) the following new 
        paragraph:
          ``(2) Selection.--
                  ``(A) In general.--In awarding grants from among 
                qualified applicants, the Secretary shall consider the 
                effectiveness of each applicant in providing services 
                under this chapter, based on--
                          ``(i) the plan of such applicant to deliver 
                        program services and achieve expected program 
                        outcomes established by the Secretary;
                          ``(ii) the plan of such applicant to 
                        coordinate program services with other programs 
                        for disadvantaged students; and
                          ``(iii) any prior experience of such 
                        applicant in achieving expected program 
                        outcomes under this chapter.
                  ``(B) Additional criteria.--The Secretary may 
                establish additional selection criteria as necessary to 
                identify the most qualified applicants.''.
  (c) Prior Experience.--Paragraph (3) of such subsection (d) (as 
amended by section 402(c) and redesignated by subsection (b)(1) of this 
section) is amended--
          (1) by striking subparagraph (A) and inserting ``(A) In 
        making grants under this chapter, the Secretary shall use the 
        measures described in subsection (c)(1) to evaluate each 
        applicant's prior experience in achieving expected program 
        outcomes under the particular program for which funds are 
        sought.''; and
          (2) by adding at the end the following new subparagraph:
          ``(C) The Secretary shall not give prior experience points to 
        any current grantee that during the then most recent period for 
        which funds were provided--
                  ``(i) failed to meet one or more expected program 
                outcomes based on the performance measures described in 
                subsection (c); or
                  ``(ii) expended funds for indirect costs in an amount 
                that exceeded 8 percent of the total grant award.''.
  (d) Order of Awards.--Paragraph (4) of such subsection (d) (as 
redesignated by subsection (b)(1) of this section) is amended--
          (1) in subparagraph (A)--
                  (A) by striking ``under paragraph (4)'' and inserting 
                ``under paragraph (5)''; and
                  (B) by stiking ``with paragraph (2)'' and inserting 
                ``with paragraph (3)''; and
          (2) by amending subparagraph (B) to read as follows:
          ``(B) The Secretary shall not provide assistance to an entity 
        if the Secretary has determined that such entity has involved 
        the fraudulent use of public or private funds.''.
  (e) Technical Assistance.--Paragraph (3) of subsection (e) of such 
section (as redesignated by subsection (a)(1) of this section) is 
amended to read as follows:
          ``(3) Technical assistance.--The Secretary shall provide 
        technical assistance to applicants for projects and programs 
        authorized under this chapter. The Secretary shall give 
        priority to serving programs and projects that serve geographic 
        areas and eligible populations which have been underserved by 
        the programs assisted under this chapter. Technical training 
        activities shall include the provision of information on 
        authorizing legislation, goals and objectives of the program, 
        required activities, eligibility requirements, the application 
        process and application deadlines, and assistance in the 
        development of program proposals and the completion of program 
        applications.''.
  (f) Recordkeeping and Reporting.--Section 402A is further amended by 
inserting after subsection (e) of such section (as redesignated by 
subsection (a)(1) of this section) the following new subsection:
  ``(f) Recordkeeping and Reporting.--
          ``(1) In general.--The Secretary shall establish uniform 
        reporting requirements and require each recipient of funds 
        under this chapter to submit annually and in electronic form 
        such information in such manner and form and at such time as 
        the Secretary may require, except that reporting such 
        information shall not reveal personally identifiable 
        information about an individual student.
          ``(2) Report to congress.--At least once every 2-year period, 
        the Secretary shall prepare and submit to the authorizing 
        committees, a report on the services provided to students that 
        shall include--
                  ``(A) a statement for the then most recently 
                concluded fiscal year specifying--
                          ``(i) the amount of funds received by 
                        grantees to provide services under this 
                        chapter; and
                          ``(ii) the amount of funds received by new 
                        grantees to provide services under this 
                        chapter;
                  ``(B) a description of the specific services provided 
                to students;
                  ``(C) a summary of the overall success in achieving 
                specific program outcomes or progress toward such 
                outcomes;
                  ``(D) a report of the number of students served by 
                types of service received;
                  ``(E) information summarizing the types of 
                organizations that received funds under this chapter; 
                and
                  ``(F) a summary of the research and evaluation 
                activities under section 402H, including--
                          ``(i) a status report on ongoing activities; 
                        and
                          ``(ii) results, conclusions, and 
                        recommendations of such activities available 
                        after the then most recent report.''.
  (g) Increased Monitoring.--Subsection (h) of such section (as 
redesignated by subsection (a)(1) of this section) is amended by 
striking everything after the first sentence and inserting the 
following: ``Of the amount appropriated under this chapter, the 
Secretary may use no more than one half of 1 percent of such amount to 
support the administration of the Federal TRIO programs including to 
increase the level of oversight monitoring, to support impact studies, 
program assessments and reviews, and to provide technical assistance to 
prospective applicants and current grantees.''.
  (h) Expected Program Outcome.--
          (1) Section 402B (20 U.S.C. 1070a-12) is amended by adding at 
        the end the following new subsection:
  ``(d) Expected Program Outcome.--For the purposes of assessing an 
applicant's past performance under section 402A(c)(1), and prior 
experience under section 402A(d)(3), the Secretary shall consider the 
college-going rate of the participants served by the program compared 
to that of other applicants eligible to receive consideration of prior 
experience.''.
          (2) Section 402C (20 U.S.C. 1070a-12) is amended by adding at 
        the end the following new subsection:
  ``(f) Expected Program Outcome.--For the purposes of assessing an 
applicant's past performance under section 402A(c)(1), and prior 
experience under section 402A(d)(3), the Secretary shall consider the 
college-going rate of the participants served by the program compared 
to that of other applicants eligible to receive consideration of prior 
experience.''.
          (3) Section 402D (20 U.S.C. 1070a-12) is amended by adding at 
        the end the following new subsection:
  ``(e) Expected Program Outcome.--For the purposes of assessing an 
applicant's past performance under section 402A(c)(1), and prior 
experience under section 402A(d)(3), the Secretary shall consider the 
college-going rate of the participants served by the program compared 
to that of other applicants eligible to receive consideration of prior 
experience.''.
          (4) Section 402E (20 U.S.C. 1070a-12) is amended by striking 
        subsection (f) and inserting the following:
  ``(f) Expected Program Outcome.--For the purposes of assessing an 
applicant's past performance under section 402A(c)(1), and prior 
experience under section 402A(d)(3), the Secretary shall consider the 
college-going rate of the participants served by the program compared 
to that of other applicants eligible to receive consideration of prior 
experience.''.
          (5) Section 402F (20 U.S.C. 1070a-12) is amended by adding at 
        the end the following new subsection:
  ``(d) Expected Program Outcome.--For the purposes of assessing an 
applicant's past performance under section 402A(c)(1), and prior 
experience under section 402A(d)(3), the Secretary shall consider the 
college-going rate of the participants served by the program compared 
to that of other applicants eligible to receive consideration of prior 
experience.''.
  (i) Staff Development.--Section 402G (20 U.S.C. 1070a-17) is amended 
to read as follows:

``SEC. 402G. STAFF DEVELOPMENT ACTIVITIES.

  ``(a) Secretary's Authority.--For the purpose of improving the 
operation of the programs and projects authorized by this chapter, the 
Secretary is authorized to make grants to institutions of higher 
education and other public and private nonprofit institutions and 
organizations to provide training and technical assistance for staff 
and leadership personnel employed in, participating in, or preparing 
for employment in, such programs and projects.
  ``(b) Contents of Training Programs.--Such training shall be provided 
to assist programs and projects in--
          ``(1) achieving the expected program outcomes stated under 
        this chapter or additional outcomes identified by individual 
        programs or projects;
          ``(2) addressing any identified program weaknesses in the 
        overall development, conduct, or administration of a grant or 
        contract;
          ``(3) improving the quality of services provided to eligible 
        students; or
          ``(4) additional areas in need of program improvement as 
        identified by the Secretary or as requested by grantees in 
        order to enhance program operations and outcomes.
  ``(c) Consultation.--Grants for the purposes of this section shall be 
made only after consultation with regional and State professional 
associations of persons having special knowledge with respect to the 
needs and problems of such programs and projects.''.
  (j) Evaluations.--Section 402H (20 U.S.C. 1070a-18) is amended to 
read as follows:

``SEC. 402H. EVALUATIONS.

  ``(a) Evaluations.--
          ``(1) In general.--For the purpose of improving the 
        effectiveness of the programs and projects assisted under this 
        chapter, the Secretary shall make grants to or enter into 
        contracts with one or more organizations to--
                  ``(A) evaluate the effectiveness of the programs and 
                projects assisted under this chapter; and
                  ``(B) disseminate information on the impact of the 
                programs in increasing the education level of 
                participating students, as well as other appropriate 
                measures.
          ``(2) Issues to be evaluated.--The evaluations described in 
        paragraph (1) shall measure the effectiveness of programs under 
        this chapter in--
                  ``(A) meeting the expected program outcomes stated 
                under this chapter and all performance measures 
                identified by the Secretary;
                  ``(B) enhancing the access of low-income individuals 
                and first-generation college students to postsecondary 
                education;
                  ``(C) preparing individuals and students for 
                postsecondary education;
                  ``(D) comparing the level of education completed by 
                students who participate in the programs funded under 
                this chapter with the level of education completed by 
                students of similar backgrounds who do not participate 
                in such programs;
                  ``(E) comparing the retention rates, dropout rates, 
                graduation rates, and college admission and completion 
                rates of students who participate in the programs 
                funded under this chapter with the rates of students of 
                similar backgrounds who do not participate in such 
                programs; and
                  ``(F) such other issues as the Secretary considers 
                appropriate for inclusion in the evaluation.
          ``(3) Program methods.--Such evaluations shall also 
        investigate the effectiveness of alternative and innovative 
        methods within Federal TRIO programs of increasing access to, 
        and retention of, students in postsecondary education.
  ``(b) Results.--The Secretary shall submit to the authorizing 
committees--
          ``(1) an annual interim report on the progress and 
        preliminary results of the evaluation of each program funded 
        under this chapter no later than 2 years following the date of 
        enactment of the College Access and Opportunity Act of 2005; 
        and
          ``(2) a final report not later than 3 years following the 
        date of enactment of such Act.
  ``(c) Public Availability.--All reports and underlying data gathered 
pursuant to this section shall be made available to the public upon 
request, in a timely manner following submission of the applicable 
reports under subsection (b), except that any personally identifiable 
information on students participating in any TRIO program shall not be 
disclosed or made available to the public.''.

SEC. 404. GEARUP.

  (a) Duration of Awards.--Section 404A(b) (20 U.S.C. 1070a-21(b)) is 
amended--
          (1) in paragraph (2)(B), by striking ``Higher Education 
        Amendments of 1998'' and inserting ``College Access and 
        Opportunity Act of 2005''; and
          (2) by adding at the end thereof the following new paragraph:
          ``(3) Duration.--An award made by the Secretary under this 
        chapter to an eligible entity described in paragraph (1) or (2) 
        of subsection (c) shall be for the period of 6 years.''.
  (b) Continuing Eligibility.--Section 404A (20 U.S.C. 1070a-21) is 
amended by adding at the end the following new subsection:
  ``(d) Continuing Eligibility.--An eligible entity shall not cease to 
be an eligible entity upon the expiration of any grant under this 
chapter (including a continuation award).''.
  (c) Continuity of Service.--
          (1) Cohort approach.--Section 404B(g)(1)(B) (20 U.S.C. 1070a-
        22(g)(1)(B)) is amended by inserting ``and provide the option 
        of continued services through the student's first year of 
        attendance at an eligible institution of higher education'' 
        after ``grade level''.
          (2) Early intervention.--Section 404D (20 U.S.C. 1070a-24) is 
        amended--
                  (A) in subsection (b)(2)(A), by inserting ``and 
                students in the first year of attendance at an eligible 
                institution of higher education'' after ``grade 12''; 
                and
                  (B) in subsection (c), by inserting ``, and may 
                consider students in their first year of attendance at 
                an eligible institution,'' after ``grade 12''.
  (d) Coordination.--Section 404C(a)(2) (20 U.S.C. 1070a-23(a)(2)) is 
amended--
          (1) by striking ``and'' at the end of subparagraph (A);
          (2) by redesignating subparagraph (B) as subparagraph (C); 
        and
          (3) by inserting after subparagraph (A) the following new 
        subparagraph:
                  ``(B) describe activities for coordinating, 
                complementing, and enhancing services under this 
                chapter provided by other eligible entities in the 
                State; and''.
  (e) Education and Counseling Services.--Section 404D(b)(2)(A)(ii) (20 
U.S.C. 1070a-24(b)(2)(A)(ii)) is amended by striking ``and academic 
counseling'' and inserting ``academic counseling, and financial 
literacy and economic literacy education or counseling''.
  (f) Homeless and Unaccompanied Youth.--Section 404D is further 
amended by adding at the end the following new subsection:
  ``(e) Homeless and Unaccompanied Youth.--Notwithstanding any other 
provision of this chapter, individuals who are homeless or 
unaccompanied youth as defined in section 725 of the McKinney-Vento 
Homeless Assistance Act shall be eligible to participate in programs 
under this section.''.
  (g) Reauthorization.--Section 404H (20 U.S.C. 1070a-28) is amended by 
striking ``$200,000,000 for fiscal year 1999 and such sums as may be 
necessary for each of the 4 succeeding fiscal years'' and inserting 
``$306,500,000 for fiscal year 2006 and such sums as may be necessary 
for each of the 5 succeeding fiscal years''.

SEC. 405. FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS.

  (a) Authorization of Appropriations.--Section 413A(b)(1) (20 U.S.C. 
1070b(b)(1)) is amended by striking ``$675,000,000 for fiscal year 1999 
and such sums as may be necessary for the 4 succeeding fiscal years'' 
and inserting ``$779,000,000 for fiscal year 2006 and such sums as may 
be necessary for the 5 succeeding fiscal years''.
  (b) Priority of Awards.--Paragraph (2) of section 413C(c) (20 U.S.C. 
1070b-2(c)(2)) is amended to read as follows:
  ``(2) In carrying out paragraph (1) of this subsection, each 
institution of higher education shall, in the agreement made under 
section 487, assure that the selection procedures--
          ``(A) will give a priority for supplemental grants under this 
        subpart to students who receive Pell Grants and meet the 
        requirements of section 484; and
          ``(B) will award no more than 10 percent of each 
        institution's allocation received under section 413D to 
        students who did not receive Federal Pell Grants in a prior 
        year.''.
  (c) Phaseout of Allocation Based on Previous Allocations.--
          (1) Amendment.--Subsection (a) of section 413D (20 U.S.C. 
        1070b-3(a)) is amended to read as follows:
  ``(a) Allocation Based on Previous Allocation.--
          ``(1) Base guarantee.--From the amount appropriated pursuant 
        to section 413A(b) for each fiscal year after fiscal year 2007, 
        the Secretary shall, subject to paragraph (2), first allocate 
        to each eligible institution an amount equal to the following 
        percentage of the amount such institution received under 
        subsection (a) of this section for fiscal year 2007 (as such 
        subsection was in effect with respect to allocations for such 
        fiscal year):
                  ``(A) 80 percent for fiscal years 2008 and 2009;
                  ``(B) 60 percent for fiscal years 2010 and 2011;
                  ``(C) 40 percent for fiscal years 2012 and 2013;
                  ``(D) 20 percent for fiscal years 2014 and 2015; and
                  ``(E) 0 percent for fiscal year 2016 and any 
                succeeding fiscal year.
          ``(2) Ratable reductions for insufficient appropriations.--
                  ``(A) Reduction of base guarantee.--If the amount 
                appropriated for any fiscal year is less than the 
                amount required to be allocated to all institutions 
                under this subsection, then the amount of the 
                allocation to each such institution shall be ratably 
                reduced.
                  ``(B) Additional appropriations allocation.--If 
                additional amounts are appropriated for any such fiscal 
                year, such reduced amounts shall be increased on the 
                same basis as they were reduced (until the amount 
                allocated equals the amount required to be allocated 
                under this subsection).
          ``(3) Additional allocations for certain institutions.--
                  ``(A) Allocations permitted.--Notwithstanding any 
                other provision of this section, the Secretary may 
                allocate an amount equal to not more than 10 percent of 
                the amount by which the amount appropriated in any 
                fiscal year to carry out this subpart exceeds 
                $700,000,000 among eligible institutions described in 
                subparagraph (B).
                  ``(B) Eligible institutions.--An otherwise eligible 
                institution may receive a portion of the allocation 
                described in subparagraph (A) if--
                          ``(i) not less than 10 percent of the 
                        students attending the institution receive 
                        Federal Pell Grants; and
                          ``(ii)(I) in the case of an institution that 
                        offers programs of at least 4 years in 
                        duration, if its graduation rate for Federal 
                        Pell Grant recipients attending the institution 
                        and graduating within the period of time equal 
                        to normal duration of the longest undergraduate 
                        program offered by the institution, as measured 
                        from the first day of their enrollment, exceeds 
                        the median rate for the class of institution 
                        (as defined in section 131(f)(5)(C)); or
                          ``(II) in the case of an institution that 
                        offers programs of at least 2, but less than 4, 
                        years in duration, if its rate for Federal Pell 
                        Grant recipients attending the institution and 
                        graduating or transferring to an institution 
                        that offers programs of at least 4 years in 
                        duration within the period of time equal to the 
                        normal duration of the program offered, as 
                        measured from the first day of their 
                        enrollment, exceeds the median rate for the 
                        class of institution (as defined in section 
                        131(f)(5)(C)).''.
          (2) Effective date.--The amendment made by paragraph (1) 
        shall apply with respect to any amounts appropriated under 
        section 413A(b) of the Higher Education Act of 1965 (20 U.S.C. 
        1070b(b)) for fiscal year 2008 or any succeeding fiscal year.
  (d) Books and Supplies.--Section 413D(c)(3)(D) (20 U.S.C. 1070-
3(c)(3)(D)) is amended by striking ``$450'' and inserting ``$600''.

SEC. 406. LEAP.

  Section 415A(b)(1) (20 U.S.C. 1070c(b)(1)) is amended--
          (1) by striking ``1999'' and inserting ``2006''; and
          (2) by striking ``4 succeeding'' and inserting ``5 
        succeeding''.

SEC. 407. HEP/CAMP PROGRAM.

  Section 418A (20 U.S.C. 1070d-2) is amended--
          (1) in subsection (b)(1)(B)(i), by inserting ``, or whose 
        spouse'' after ``themselves'';
          (2) in subsection (b)(3)(B), by inserting ``, including 
        preparation for college entrance exams'' after ``program'';
          (3) in subsection (b)(8), by inserting ``, including child 
        care and transportation'' after ``supportive services'';
          (4) by striking ``and'' at the end of subsection (b)(7), by 
        striking the period at the end of subsection (b)(8) and 
        inserting ``; and'', and by adding at the end of subsection (b) 
        the following new paragraph:
          ``(9) follow-up activity and reporting requirements, except 
        that not more than 2 percent of the funds provided under this 
        section may be used for such purposes.'';
          (5) in subsection (c)(1)(A), by inserting ``, or whose 
        spouse'' after ``themselves'';
          (6) in subsection (c)(1)(B), by striking clause (i) and 
        inserting the following:
                  ``(i) personal, academic, career, and economic 
                education or personal finance counseling as an ongoing 
                part of the program;'';
          (7) in subsection (c)(2)(B), by inserting ``(including 
        mentoring and guidance of such students)'' after ``services'';
          (8) in subsection (c)(2), by striking ``and'' at the end of 
        subparagraph (A), by striking the period at the end of 
        subparagraph (B) and inserting ``; and'', and by adding at the 
        end of subsection (c)(2) the following new subparagraph:
          ``(C) for students in any program that does not award a 
        bachelor's degree, encouraging the transfer to, and persistence 
        in, such a program, and monitoring the rate of such transfer, 
        persistence, and completion.'';
          (9) in subsection (e), by striking ``section 402A(c)(1)'' and 
        inserting ``section 402A(c)(2)''; and
          (10) in subsection (h)--
                  (A) in paragraph (1), by striking ``$15,000,000 for 
                fiscal year 1999 and such sums as may be necessary for 
                each of the 4 succeeding fiscal years'' and inserting 
                ``$24,000,000 for fiscal year 2006 and such sums as may 
                be necessary for each of the 5 succeeding fiscal 
                years''; and
                  (B) in paragraph (2), by striking ``$5,000,000 for 
                fiscal year 1999 and such sums as may be necessary for 
                each of the 4 succeeding fiscal years'' and inserting 
                ``$16,000,000 for fiscal year 2006 and such sums as may 
                be necessary for each of the 5 succeeding fiscal 
                years''.

SEC. 408. ROBERT C. BYRD HONORS SCHOLARSHIP PROGRAM.

  Subpart 6 of part A of title IV is amended to read as follows:

         ``Subpart 6--Robert C. Byrd Honors Scholarship Program

``SEC. 419A. ROBERT C. BYRD MATHEMATICS AND SCIENCE HONORS SCHOLARSHIP 
                    PROGRAM.

  ``(a) Purpose.--The purpose of this section is to award scholarships 
to students who are enrolled in studies leading to baccalaureate and 
advanced degrees in physical, life, or computer sciences, mathematics, 
and engineering.
  ``(b) Definitions.--As used in this section--
          ``(1) the term `computer science' means the branch of 
        knowledge or study of computers, including such fields of 
        knowledge or study as computer hardware, computer software, 
        computer engineering, information systems, and robotics;
          ``(2) the term `eligible student' means a student who--
                  ``(A) is a citizen of the United States;
                  ``(B) is selected by the managing agent to receive a 
                scholarship;
                  ``(C) is enrolled full-time in an institution of 
                higher education, other than a United States service 
                academy; and
                  ``(D) has shown a commitment to and is pursuing a 
                major in studies leading to a baccalaureate, masters, 
                or doctoral degree (or a combination thereof) in 
                physical, life, or computer sciences, mathematics, or 
                engineering;
          ``(3) the term `engineering' means the science by which the 
        properties of matter and the sources of energy in nature are 
        made useful to humanity in structures, machines, and products, 
        as in the construction of engines, bridges, buildings, mines, 
        and chemical plants, including such fields of knowledge or 
        study as aeronautical engineering, chemical engineering, civil 
        engineering, electrical engineering, industrial engineering, 
        materials engineering, manufacturing engineering, and 
        mechanical engineering;
          ``(4) the term `life sciences' means the branch of knowledge 
        or study of living things, including such fields of knowledge 
        or study as biology, biochemistry, biophysics, microbiology, 
        genetics, physiology, botany, zoology, ecology, and behavioral 
        biology, except that the term does not encompass social 
        psychology or the health professions;
          ``(5) the term `managing agent' means an entity to which an 
        award is made under subsection (c) to manage a program of 
        Mathematics and Science Honors Scholarships;
          ``(6) the term `mathematics' means the branch of knowledge or 
        study of numbers and the systematic treatment of magnitude, 
        relationships between figures and forms, and relations between 
        quantities expressed symbolically, including such fields of 
        knowledge or study as statistics, applied mathematics, and 
        operations research; and
          ``(7) the term `physical sciences' means the branch of 
        knowledge or study of the material universe, including such 
        fields of knowledge or study as astronomy, atmospheric 
        sciences, chemistry, earth sciences, ocean sciences, physics, 
        and planetary sciences.
  ``(c) Award.--
          ``(1)(A) From funds authorized under section 419D to carry 
        out this section, the Secretary is authorized, through a grant 
        or cooperative agreement, to make an award to a private, non-
        profit organization, other than an institution of higher 
        education or system of institutions of higher education, to 
        manage, through a public and private partnership, a program of 
        Mathematics and Science Honors Scholarships under this section.
          ``(B) The award under subparagraph (A) shall be for a five-
        year period.
          ``(2)(A) One hundred percent of the funds awarded under 
        paragraph (1)(A) for any fiscal year shall be obligated and 
        expended solely on scholarships to eligible students.
          ``(B) No Federal funds shall be used to provide more than 50 
        percent of the cost of any scholarship to an eligible student.
          ``(C) The maximum scholarship award shall be the difference 
        between an eligible student's cost of attendance minus any non-
        loan based aid such student receives.
          ``(3)(A) The secretary may establish--
                  ``(i) eligibility criteria for applicants for 
                managing agent, including criteria regarding financial 
                and administrative capability; and
                  ``(ii) operational standards for the managing agent, 
                including management and performance requirements, such 
                as audit, recordkeeping, record retention, and 
                reporting procedures and requirements.
          ``(B) The Secretary, as necessary, may review and revise any 
        criteria, standards, and rules established under this paragraph 
        and, through the agreement with the managing agent, see that 
        any revisions are implemented.
          ``(4) If the managing agent fails to meet the requirements of 
        this section the Secretary may terminate the award to the 
        managing agent.
          ``(5) The Secretary shall conduct outreach efforts to help 
        raise awareness of the Mathematics and Science Honors 
        Scholarships.
  ``(d) Duties of the Managing Agent.--The managing agent shall--
          ``(1) develop criteria to award Mathematics and Science 
        Honors Scholarships based on established measurements available 
        to secondary students who wish to pursue degrees in physical, 
        life, or computer sciences, mathematics, and engineering;
          ``(2) establish a Mathematics and Science Honors Scholarship 
        Fund in a separate, named account that clearly discloses the 
        amount of Federal and non-Federal funds deposited in the 
        account and used for scholarships under this section;
          ``(3) solicit funds for scholarships and for the 
        administration of the program from non-Federal sources;
          ``(4) solicit applicants for scholarships;
          ``(5) from the amounts in the Fund, award scholarships to 
        eligible students and transfer such funds to the institutions 
        of higher education that they attend; and
          ``(6) annually submit to the Secretary a financial audit and 
        a report on the progress of the program, and such other 
        documents as the Secretary may require to determine the 
        effective management of the program.
  ``(e) Applications.--
          ``(1) Any eligible entity that desires to be the managing 
        agent under this section shall submit an application to the 
        Secretary, in such form and containing such information, as the 
        Secretary may require.
          ``(2) Each application shall include a description of--
                  ``(A) how the applicant meets or will meet 
                requirements established under subsections (c)(3)(A) 
                and (d);
                  ``(B) how the applicant will solicit funds for 
                scholarships and for the administration of the program 
                from non-Federal sources;
                  ``(C) how the applicant will provide nationwide 
                outreach to inform students about the program and to 
                encourage students to pursue degrees in physical, life, 
                or computer sciences, mathematics, and engineering;
                  ``(D) how the applicant will solicit applications for 
                scholarships, including how the applicant will balance 
                efforts in urban and rural areas;
                  ``(E) the selection criteria based on established 
                measurements available to secondary students the 
                applicant will use to award scholarships and to renew 
                those awards;
                  ``(F) how the applicant will inform the institution 
                of higher education chosen by the recipient of the name 
                and scholarship amount of the recipient;
                  ``(G) what procedures and assurances the applicant 
                and the institution of higher education that the 
                recipient attends will use to verify student 
                eligibility, attendance, degree progress, and academic 
                performance and to deliver and account for payments to 
                such institution;
                  ``(H) the management (including audit and accounting) 
                procedures the applicant will use for the program;
                  ``(I) the human, financial, and other resources that 
                the applicant will need and use to manage the program;
                  ``(J) how the applicant will evaluate the program and 
                report to the Secretary annually; and
                  ``(K) a description of how the entity will coordinate 
                with, complement, and build on similar public and 
                private mathematics and science programs.
  ``(f) Scholarship Recipients.--
          ``(1) A student receiving a scholarship under this section 
        shall be known as a `Byrd Mathematics and Science Honors 
        Scholar'.
          ``(2) Any student desiring to receive a scholarship under 
        this section shall submit an application to the managing agent 
        in such form, and containing such information, as the managing 
        agent may require.
          ``(3) Any student that receives a scholarship under this 
        section shall enter into an agreement with the managing agent 
        to complete 5 consecutive years of service to begin no later 
        than 12 months following completion of the final degree in a 
        position related to physical, life, or computer sciences, 
        mathematics, or engineering as defined under this section.
          ``(4) If any student that receives a scholarship under this 
        section fails to earn at least a baccalaureate degree in 
        physical, life, or computer sciences, mathematics, or 
        engineering as defined under this section, the student shall 
        repay to the managing agent the amount of any financial 
        assistance paid to such student.
          ``(5) If any student that receives a scholarship under this 
        section fails to meet the requirements of paragraph (3), the 
        student shall repay to the managing agent the amount of any 
        financial assistance paid to such student.
          ``(6)(A) Scholarships shall be awarded for only one academic 
        year of study at a time.
          ``(B)(i) A scholarship shall be renewable on an annual basis 
        for the established length of the academic program if the 
        student awarded the scholarship remains eligible.
          ``(ii) The managing agent may condition renewal of a 
        scholarship on measures of academic progress and achievement, 
        with the approval of the Secretary.
          ``(C)(i) If a student fails to either remain eligible or meet 
        established measures of academic progress and achievement, the 
        managing agent shall instruct the student's institution of 
        higher education to suspend payment of the student's 
        scholarship.
          ``(ii) A suspension of payment shall remain in effect until 
        the student is able to demonstrate to the satisfaction of the 
        managing agent that he or she is again eligible and meets the 
        established measures of academic progress and achievement.
          ``(iii) A student's eligibility for a scholarship shall be 
        terminated if a suspension period exceeds 12 months.
          ``(D)(i)(I) A student awarded a scholarship may, in a manner 
        and under the terms established by, and with the approval of, 
        the managing agent, postpone or interrupt his or her enrollment 
        at an institution of higher education for up to 12 months.
                  ``(II) Such a postponement or interruption shall not 
                be considered a suspension for purposes of subparagraph 
                (C).
          ``(ii) Neither a student nor the student's institution of 
        higher education shall receive the student's scholarship 
        payments during the period of postponement or interruption, but 
        such payments shall resume upon enrollment or reenrollment.
          ``(iii) In exceptional circumstances, such as serious injury 
        or illness or the necessity to care for family members, the 
        student's postponement or interruption may, upon notification 
        and approval of the managing agent, be extended beyond the 12 
        month period described in clause (i)(I).
  ``(g) Responsibilities of Institution of Higher Education.--
          ``(1) The managing agent shall require any institution of 
        higher education that enrolls a student who receives a 
        scholarship under this section to annually provide an 
        assurance, prior to making any payment, that the student--
          ``(A) is eligible in accordance with subsection (b)(2); and
          ``(B) has provided the institution with a written commitment 
        to attend, or is attending, classes and is satisfactorily 
        meeting the institution's academic criteria for enrollment in 
        its program of study.
          ``(2)(A) The managing agent shall provide the institution of 
        higher education with payments from the Fund for selected 
        recipients in at least two installments.
          ``(B) An institution of higher education shall return 
        prorated amounts of any scholarship payment to the managing 
        agent, who shall deposit it in to the Fund, if a recipient 
        declines a scholarship, does not attend courses, transfers to 
        another institution of higher education, or becomes ineligible 
        for a scholarship.

``SEC. 419B. MATHEMATICS AND SCIENCE INCENTIVE PROGRAM.

  ``(a) Program.--
          ``(1) In general.--The Secretary is authorized to carry out a 
        program of assuming the obligation to pay, pursuant to the 
        provisions of this section, the interest on a loan made, 
        insured, or guaranteed under part B or D of this title.
          ``(2) Eligibility.--The Secretary may assume interest 
        payments under paragraph (1) only for a borrower who--
                  ``(A) has submitted an application in compliance with 
                subsection (d);
                  ``(B) obtained one or more loans described in 
                paragraph (1) as an undergraduate student;
                  ``(C) is a new borrower (within the meaning of 
                section 103(7) of this Act) on or after the date of 
                enactment of the College Access and Opportunity Act of 
                2005;
                  ``(D) is a highly qualified teacher of science, 
                technology, engineering or mathematics at an elementary 
                or secondary school in a high need local educational 
                agency, or is a mathematics, science, or engineering 
                professional; and
                  ``(E) enters into an agreement with the Secretary to 
                complete 5 consecutive years of service in a position 
                described in subparagraph (D), starting on the date of 
                the agreement.
          ``(3) Prior interest limitations.--The Secretary shall not 
        make any payments for interest that--
                  ``(A) accrues prior to the beginning of the repayment 
                period on a loan in the case of a loan made under 
                section 428H or a Federal Direct Unsubsidized Stafford 
                Loan; or
                  ``(B) has accrued prior to the signing of an 
                agreement under paragraph (2)(E).
          ``(4) Initial selection.--In selecting participants for the 
        program under this section, the Secretary--
                  ``(A) shall choose among eligible applicants on the 
                basis of--
                          ``(i) the national security, homeland 
                        security, and economic security needs of the 
                        United States, as determined by the Secretary, 
                        in consultation with other Federal agencies, 
                        including the Departments of Labor, Defense, 
                        Homeland Security, Commerce, and Energy, the 
                        Central Intelligence Agency, and the National 
                        Science Foundation; and
                          ``(ii) the academic record or job performance 
                        of the applicant; and
                  ``(B) may choose among eligible applicants on the 
                basis of--
                          ``(i) the likelihood of the applicant to 
                        complete the 5-year service obligation;
                          ``(ii) the likelihood of the applicant to 
                        remain in science, mathematics, or engineering 
                        after the completion of the service 
                        requirement; or
                          ``(iii) other relevant criteria determined by 
                        the Secretary.
          ``(5) Availability subject to appropriations.--Loan interest 
        payments under this section shall be subject to the 
        availability of appropriations. If the amount appropriated for 
        any fiscal year is not sufficient to provide interest payments 
        on behalf of all qualified applicants, the Secretary shall give 
        priority to those individuals on whose behalf interest payments 
        were made during the preceding fiscal year.
          ``(6) Regulations.--The Secretary is authorized to prescribe 
        such regulations as may be necessary to carry out the 
        provisions of this section.
  ``(b) Duration and Amount of Interest Payments.--The period during 
which the Secretary shall pay interest on behalf of a student borrower 
who is selected under subsection (a) is the period that begins on the 
effective date of the agreement under subsection (a)(2)(E), continues 
after successful completion of the service obligation, and ends on the 
earlier of--
          ``(1) the completion of the repayment period of the loan;
          ``(2) payment by the Secretary of a total of $5,000 on behalf 
        of the borrower;
          ``(3) if the borrower ceases to fulfill the service 
        obligation under such agreement prior to the end of the 5-year 
        period, as soon as the borrower is determined to have ceased to 
        fulfill such obligation in accordance with regulations of the 
        Secretary; or
          ``(4) 6 months after the end of any calendar year in which 
        the borrower's gross income equals or exceeds 4 times the 
        national per capita disposable personal income (current 
        dollars) for such calendar year, as determined on the basis of 
        the National Income and Product Accounts Tables of the Bureau 
        of Economic Analysis of the Department of Commerce, as 
        determined in accordance with regulations prescribed by the 
        Secretary.
  ``(c) Repayment to Eligible Lenders.--Subject to the regulations 
prescribed by the Secretary by regulation under subsection (a)(6), the 
Secretary shall pay to each eligible lender or holder for each payment 
period the amount of the interest that accrues on a loan of a student 
borrower who is selected under subsection (a).
  ``(d) Application for Repayment.--
          ``(1) In general.--Each eligible individual desiring loan 
        interest payment 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) Failure to complete service agreement.--Such 
        application shall contain an agreement by the individual that, 
        if the individual fails to complete the 5 consecutive years of 
        service required by subsection (a)(2)(E), the individual agrees 
        to repay the Secretary the amount of any interest paid by the 
        Secretary on behalf of the individual.
  ``(e) Treatment of Consolidation Loans.--A consolidation loan made 
under section 428C of this Act, or a Federal Direct Consolidation Loan 
made under part D of title IV of this Act, may be a qualified loan for 
the purpose of this section only to the extent that such loan amount 
was used by a borrower who otherwise meets the requirements of this 
section to repay--
          ``(1) a loan made under section 428 or 428H of this Act; or
          ``(2) a Federal Direct Stafford Loan, or a Federal Direct 
        Unsubsidized Stafford Loan, made under part D of title IV of 
        this Act.
  ``(f) Prevention of Double Benefits.--No borrower may, for the same 
service, receive a benefit under both this section and--
          ``(1) any loan forgiveness program under title IV of this 
        Act; or
          ``(2) subtitle D of title I of the National and Community 
        Service Act of 1990 (42 U.S.C. 12601 et seq.).
  ``(g) Definitions.--As used in this section--
          ``(1) the term `high need local educational agency' has the 
        same meaning given such term in section 201(b)(4); and
          ``(2) the term `mathematics, science, or engineering 
        professional' means a person who--
                  ``(A) holds a baccalaureate, masters, or doctoral 
                degree (or a combination thereof) in science, 
                mathematics, or engineering; and
                  ``(B) works in a field the Secretary determines is 
                closely related to that degree, which shall include 
                working as a professor at a two- or four-year 
                institution of higher education.

``SEC. 419C. MATHEMATICS AND SCIENCE EDUCATION COORDINATING COUNCIL 
                    GRANTS.

  ``(a) Purposes.--The purposes of this section include--
          ``(1) supporting programs that encourage students to enroll 
        in and successfully complete baccalaureate and advanced degrees 
        in science, technology, engineering, and mathematics;
          ``(2) achieving the common objective of organizing, leading, 
        and implementing State-based reform agendas that support the 
        continuing improvement of mathematics and science education; 
        and
          ``(3) improving collaboration in a State among the State 
        educational agency, 2-year and 4-year institutions of higher 
        education, and the business community through the development 
        or improvement of a coordinating council.
  ``(b) Definitions.--For the purposes of this section:
          ``(1) the term `eligible State' means--
                  ``(A) the Governor of a State; or
                  ``(B) in the case of a State for which the 
                constitution or laws of the State designate an 
                individual, entity, or agency in the State, other than 
                the Governor, to be responsible for coordination among 
                segments of the State's educational systems, such 
                individual, entity, or agency.
          ``(2) the term `mathematics and science education 
        coordinating council' means an organization that is charged by 
        a State with coordinating mathematics and science education in 
        the State. Such a council shall be composed of education, 
        business, and community leaders working together to increase 
        student participation and academic achievement in mathematics 
        and science.
  ``(c) State Grants.--From amounts made available under section 419D 
for this section, the Secretary is authorized to use not more than 
$5,000,000 to award grants on a competitive basis to eligible States 
for the purpose of carrying out activities described in subsection (d).
  ``(d) Uses of Funds.--An eligible State that receives a grant under 
this section is authorized to use grant funds to carry out one or more 
of the following activities:
          ``(1) In a State in which a mathematics and science education 
        coordinating council does not exist, planning and establishing 
        such a council.
          ``(2) In a State in which such a council exists, reforming or 
        expanding the activities of the council, including implementing 
        State-based reform agendas that support the continuing 
        improvement of mathematics and science education, and support 
        services that lead to better teacher recruitment and training, 
        increased student academic achievement, and increased student 
        enrollment and degree attainment in science, technology, 
        engineering, and mathematics.
          ``(3) Coordinating with activities under part B of title II 
        of the Elementary and Secondary Education Act of 1965 and with 
        title II of this Act, especially as it pertains to the 
        recruitment and preparation of highly qualified mathematics and 
        science teachers.
  ``(e) Application.--To be eligible to receive a grant under this 
section, an eligible State shall submit an application to the Secretary 
that--
          ``(1) describes the activities the State will carry out with 
        the funds;
          ``(2) contains a plan for continuing such activities once 
        Federal funding ceases; and
          ``(3) contains such other information and assurances as the 
        Secretary may require.
  ``(f) Consultation.--The Governor of a State, or the individual, 
entity, or agency in the State described in subsection (b)(1)(B), shall 
consult with the State board of education, State educational agency, 
and the State agency for higher education, as appropriate, with respect 
to the activities assisted under this section. In the case of an 
individual, entity, or agency described in subsection (b)(1)(B), such 
consultation shall also include the Governor.
  ``(g) Construction.--Nothing in this section 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.
  ``(h) Administrative Provisions.--
          ``(1) In general.--
                  ``(A) Grants awarded under this section shall be 
                awarded for a period not to exceed 5 years.
                  ``(B) A grantee may receive a grant under this part 
                only once.
                  ``(C) Payments of grant funds under this section 
                shall be annual.
          ``(2) Secretarial selections.--The Secretary shall determine 
        which applications receive funds under this section, and the 
        amount of the grant. In determining grant amounts, the 
        Secretary shall take into account the total amount of funds 
        available for all grants under this section and the nature of 
        each grant proposal, including whether funds are being sought 
        to assist in the creation of a new State mathematics and 
        science education coordinating council or to extend the work of 
        an existing council. The Secretary shall also take into account 
        the equitable geographic distribution of grants throughout the 
        United States.
          ``(3) Matching requirement.--Each eligible State receiving a 
        grant under this section shall provide, from non-Federal 
        sources, an amount equal to 50 percent of the amount of the 
        grant (in cash or in kind) to carry out the activities 
        supported by the grant.
  ``(i) Accountability and Evaluation.--
          ``(1) State grant accountability report.--An eligible State 
        that receives a grant under this section shall submit an annual 
        accountability report to the Secretary. Such report shall 
        include a description of the degree to which the eligible 
        State, in using grant funds, has made substantial progress in 
        meeting its objectives.
          ``(2) Evaluation and dissemination.--The Secretary shall 
        evaluate the activities funded under this section and report 
        the Secretary's findings regarding such activities to the 
        authorizing committees. The Secretary shall broadly disseminate 
        successful practices developed by eligible States under this 
        section, and shall broadly disseminate information regarding 
        such practices that were found to be ineffective.
          ``(3) Revocation.--If the Secretary determines that an 
        eligible State is not making substantial progress in meeting 
        the purposes, objectives, and measures, as appropriate, 
        required under this section by the end of the second year of a 
        grant, then the grant payment shall not be made for the third 
        year and subsequent years of the grant.

``SEC. 419D. AUTHORIZATION OF APPROPRIATIONS.

  ``There are authorized to be appropriated $41,000,000 for fiscal year 
2006 and such sums as may be necessary for each of the 5 succeeding 
fiscal years to carry out this subpart.''.

SEC. 409. CHILD CARE ACCESS.

   Section 419N(g) (20 U.S.C. 1070e(g)) is amended--
          (1) by striking ``1999'' and inserting ``2006''; and
          (2) by striking ``4 succeeding'' and inserting ``5 
        succeeding''.

SEC. 410. LEARNING ANYTIME ANYWHERE PARTNERSHIPS.

  (a) Repeal.--Subpart 8 of part A of title IV (20 U.S.C. 1070f--1070f-
6) is repealed.
  (b) Conforming Amendment.--Section 400(b) (20 U.S.C. 1070(b)) is 
amended by striking ``through 8'' and inserting ``through 7''.

             PART B--FEDERAL FAMILY EDUCATION LOAN PROGRAM

SEC. 421. REAUTHORIZATION OF FEDERAL FAMILY EDUCATION LOAN PROGRAM.

  (a) Authorization of Appropriations.--Section 421(b)(5) (20 U.S.C. 
1071(b)(5)) is amended by striking ``an administrative cost allowance'' 
and inserting ``a loan processing and issuance fee''.
  (b) Extension of Authority.--
          (1) Federal insurance limitations.--Section 424(a) (20 U.S.C. 
        1074(a)) is amended--
                  (A) by striking ``2004'' and inserting ``2012''; and
                  (B) by striking ``2008'' and inserting ``2016''.
          (2) Guaranteed loans.--Section 428(a)(5) (20 U.S.C. 
        1078(a)(5)) is amended--
                  (A) by striking ``2004'' and inserting ``2012''; and
                  (B) by striking ``2008'' and inserting ``2016''.
          (3) Consolidation loans.--Section 428C(e) (20 U.S.C. 1078-
        3(e)) is amended by striking ``2004'' and inserting ``2012''.

SEC. 422. LOAN LIMITS.

  (a) Federal Insurance Limits.--Section 425(a)(1)(A) (20 U.S.C. 
1075(a)(1)(A)) is amended--
          (1) in clause (i)(I), by striking ``$2,625'' and inserting 
        ``$3,500''; and
          (2) in clause (ii)(I), by striking ``$3,500'' and inserting 
        ``$4,500''.
  (b) Guarantee Limits.--Section 428(b)(1)(A) (20 U.S.C. 1078(b)(1)(A)) 
is amended--
          (1) in clause (i)(I), by striking ``$2,625'' and inserting 
        ``$3,500''; and
          (2) in clause (ii)(I), by striking ``$3,500'' and inserting 
        ``$4,500''.
  (c) Counting of Consolidation Loans Against Limits.--Section 
428C(a)(3)(B) (20 U.S.C. 1078-3(a)(3)(B)) is amended by adding at the 
end the following new clause:
          ``(ii) Loans made under this section shall, to the extent 
        used to pay off the outstanding principal balance on loans made 
        under this title, excluding capitalized interest, be counted 
        against the applicable limitations on aggregate indebtedness 
        contained in sections 425(a)(2), 428(b)(1)(B), 428H(d), 455, 
        and 464(a)(2)(B).''.
  (d) Effective Date.--The amendments made by this section shall apply 
with respect to any loan made, insured, or guaranteed under part B or 
part D of title IV of the Higher Education Act of 1965 for which the 
first disbursement of principal is made on or after July 1, 2007.

SEC. 423. INTEREST RATES AND SPECIAL ALLOWANCES.

  (a) FFEL Interest Rates.--Section 427A (20 U.S.C. 1077a(k)) is 
amended--
          (1) in subsection (k)--
                  (A) by striking ``, and Before July 1, 2006'' in the 
                heading of such subsection; and
                  (B) by striking ``, and before July 1, 2006,'' each 
                place it appears other than paragraph (4);
          (2) by striking subsection (l); and
          (3) by redesignating subsections (m) and (n) as subsections 
        (l) and (m), respectively.
  (b) Direct Loan Interest Rates.--Section 455(b) (20 U.S.C. 1087e(b)) 
is amended--
          (1) in paragraph (6)--
                  (A) by striking ``, and before july 1, 2006'' in the 
                heading of such paragraph; and
                  (B) by striking ``, and before July 1, 2006,'' each 
                place it appears other than subparagraph (D);
          (2) by striking paragraph (7); and
          (3) by redesignating paragraphs (8) and (9) as paragraphs (7) 
        and (8), respectively.
  (c) Consolidation Loan Interest Rates.--
          (1) FFEL loans.--Section 427A(k) (20 U.S.C. 1077a(k)) is 
        further amended--
                  (A) in the heading of paragraph (4), by inserting 
                ``before july 1, 2006'' after ``loans'';
                  (B) by redesignating paragraph (5) as paragraph (6); 
                and
                  (C) by inserting after paragraph (4) the following:
          ``(5) Consolidation loans on or after july 1, 2006.--
                  ``(A) Borrower election.--With respect to any 
                consolidation loan under section 428C for which the 
                application is received by an eligible lender on or 
                after July 1, 2006, the applicable rate of interest 
                shall, at the election of the borrower at the time of 
                application for the loan, be either at the rate 
                determined under subparagraph (B) or the rate 
                determined under subparagraph (C).
                  ``(B) Variable rate.--Except as provided in 
                subparagraph (D), 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, for such 12-
                month period, not be more than--
                          ``(i) the bond equivalent rate of 91-day 
                        Treasury bills auctioned at the final auction 
                        held prior to such June 1; plus
                          ``(ii) 2.3 percent,
                except that such rate shall not exceed 8.25 percent.
                  ``(C) Fixed rate.--Except as provided in subparagraph 
                (D), the rate determined under this subparagraph shall 
                be determined for the duration of the term of the loan 
                on the July 1 that is or precedes the date on which the 
                application is received by an eligible lender, and 
                shall be, for such duration, not more than--
                          ``(i) the bond equivalent rate of 91-day 
                        Treasury bills auctioned at the final auction 
                        held prior to the June 1 immediately preceding 
                        such July 1; plus
                          ``(ii) 3.3 percent,
                except that such rate shall not exceed 8.25 percent.
                  ``(D) Consolidation of plus loans.--In the case of 
                any such consolidation loan that is used to repay loans 
                each of which was made under section 428B or was a 
                Federal Direct PLUS Loan (or both), the rates 
                determined under clauses (B) and (C) shall be 
                determined--
                          ``(i) by substituting `3.1 percent' for `2.3 
                        percent';
                          ``(ii) by substituting `4.1 percent' for `3.3 
                        percent'; and
                          ``(iii) by substituting `9.0 percent' for 
                        `8.25 percent'.''.
          (2) Direct loans.--Section 455(b)(6) (20 U.S.C. 1087e(b)(6)) 
        is further amended--
                  (A) in the heading of subparagraph (D), by inserting 
                ``before july 1, 2006'' after ``loans''
                  (B) by redesignating subparagraph (E) as subparagraph 
                (F); and
                  (C) by inserting after subparagraph (D) the 
                following:
                  ``(E) Consolidation loans on or after july 1, 2006.--
                          ``(i) Borrower election.--Notwithstanding the 
                        preceding paragraphs of this subsection, with 
                        respect to any Federal Direct Consolidation 
                        Loan for which the application is received by 
                        an eligible lender on or after July 1, 2006, 
                        the applicable rate of interest shall, at the 
                        election of the borrower at the time of 
                        application for the loan, be either at the rate 
                        determined under clause (ii) or the rate 
                        determined under clause (iii).
                          ``(ii) Variable rate.--Except as provided in 
                        clause (iv), the rate determined under this 
                        clause shall, during any 12-month period 
                        beginning on July 1 and ending on June 30, be 
                        determined on the preceding June 1 and, for 
                        such 12-month period, be equal to--
                                  ``(I) the bond equivalent rate of 91-
                                day Treasury bills auctioned at the 
                                final auction held prior to such June 
                                1; plus
                                  ``(II) 2.3 percent,
                        except that such rate shall not exceed 8.25 
                        percent.
                          ``(iii) Fixed rate.--Except as provided in 
                        clause (iv), the rate determined under this 
                        clause shall be determined for the duration of 
                        the term of the loan on the July 1 that is or 
                        precedes the date on which the application is 
                        received by an eligible lender, and shall be, 
                        for such duration, equal to--
                                  ``(I) the bond equivalent rate of 91-
                                day Treasury bills auctioned at the 
                                final auction held prior to the June 1 
                                immediately preceding such July 1; plus
                                  ``(II) 3.3 percent,
                        except that such rate shall not exceed 8.25 
                        percent.
                          ``(iv) Consolidation of plus loans.--In the 
                        case of any such Federal Direct Consolidation 
                        Loan that is used to repay loans each of which 
                        was made under section 428B or was a Federal 
                        Direct PLUS Loan (or both), the rates 
                        determined under clauses (ii) and (iii) shall 
                        be determined--
                                  ``(I) by substituting `3.1 percent' 
                                for `2.3 percent';
                                  ``(II) by substituting `4.1 percent' 
                                for `3.3 percent'; and
                                  ``(III) by substituting `9.0 percent' 
                                for `8.25 percent'.''.
  (d) Consolidation Loan Conforming Amendment.--Section 
428C(c)(1)(A)(ii) (20 U.S.C. 1078-3(c)(1)(A)(ii)) is amended by 
striking ``section 427A(l)(3)'' and inserting ``section 427A(k)(5)''.
  (e) Conforming Amendments for Special Allowances.--
          (1) Amendment.--Subparagraph (I) of section 438(b)(2) (20 
        U.S.C. 1087-1(b)(2)) is amended--
                  (A) by striking clause (ii) and inserting the 
                following:
                          ``(ii) In school and grace period.--In the 
                        case of any loan for which the first 
                        disbursement is made on or after January 1, 
                        2000, and for which the applicable interest 
                        rate is described in section 427A(k)(2), clause 
                        (i)(III) of this subparagraph shall be applied 
                        by substituting `1.74 percent' for `2.34 
                        percent'.'';
                  (B) in clause (iii)--
                          (i) by striking ``or (l)(2)''; and
                          (ii) by striking ``, subject to clause (v) of 
                        this subparagraph'';
                  (C) in clause (iv)--
                          (i) by striking ``or (l)(3)'' and inserting 
                        ``or (k)(5)''; and
                          (ii) by striking ``, subject to clause (vi) 
                        of this subparagraph''; and
                  (D) by striking clauses (v), (vi), and (vii) and 
                inserting the following:
                          ``(v) Recapture of excess interest.--
                                  ``(I) Excess credited.--With respect 
                                to a loan on which the applicable 
                                interest rate is determined under 
                                section 427A(k) and for which the first 
                                disbursement of principal is made on or 
                                after July 1, 2006, if the applicable 
                                interest rate for any 3-month period 
                                exceeds the special allowance support 
                                level applicable to such loan under 
                                this subparagraph for such period, then 
                                an adjustment shall be made by 
                                calculating the excess interest in the 
                                amount computed under subclause (II) of 
                                this clause, and by crediting the 
                                excess interest to the Government not 
                                less often than annually.
                                  ``(II) Calculation of excess.--The 
                                amount of any adjustment of interest on 
                                a loan to be made under this subsection 
                                for any quarter shall be equal to--
                                          ``(aa) the applicable 
                                        interest rate minus the special 
                                        allowance support level 
                                        determined under this 
                                        subparagraph; multiplied by
                                          ``(bb) the average daily 
                                        principal balance of the loan 
                                        (not including unearned 
                                        interest added to principal) 
                                        during such calendar quarter; 
                                        divided by
                                          ``(cc) four.
                                  ``(III) Special allowance support 
                                level.--For purposes of this clause, 
                                the term `special allowance support 
                                level' means, for any loan, a number 
                                expressed as a percentage equal to the 
                                sum of the rates determined under 
                                subclauses (I) and (III) of clause (i), 
                                and applying any substitution rules 
                                applicable to such loan under clauses 
                                (ii), (iii), and (iv) in determining 
                                such sum.''.
          (2) Effective date.--The amendments made by this subsection 
        shall not apply with respect to any special allowance payment 
        made under section 438 of the Higher Education Act of 1965 (20 
        U.S.C 1087-1) before July 1, 2006.

SEC. 424. ADDITIONAL LOAN TERMS AND CONDITIONS.

  (a) Federal Default Fees.--
          (1) In general.--Subparagraph (H) of section 428(b)(1) (20 
        U.S.C. 1078(b)(1)(H)) is amended to read as follows:
                  ``(H) provides--
                          ``(i) for loans for which the first 
                        disbursement of principal is made before July, 
                        1, 2006, for the collection of a single 
                        insurance premium equal to not more than 1.0 
                        percent of the principal amount of the loan, by 
                        deduction proportionately from each installment 
                        payment of the proceeds of the loan to the 
                        borrower, and insures that the proceeds of the 
                        premium will not be used for incentive payments 
                        to lenders; or
                          ``(ii) for loans for which the first 
                        disbursement of principal is made on or after 
                        July 1, 2006, for the collection and deposit 
                        into the Federal Student Loan Reserve Fund 
                        under section 422A of a Federal default fee of 
                        1.0 percent of the principal amount of such 
                        loan, which shall be deducted proportionately 
                        from each installment payment of the proceeds 
                        of the loan to the borrower prior to payment to 
                        the borrower, and insures that the proceeds of 
                        the Federal default fee will not be used for 
                        incentive payments to lenders;''.
          (2) Unsubsidized loans.--Section 428H(h) (20 U.S.C. 1078-
        8(h)) is amended by adding at the end the following new 
        sentence: ``In lieu of the insurance premium authorized under 
        the preceding sentence, and effective for loans for which the 
        first disbursement of principal is made on or after July 1, 
        2006, each State or nonprofit private institution or 
        organization having an agreement with the Secretary under 
        section 428(b)(1) shall collect and deposit into the Federal 
        Student Loan Reserve Fund under section 422A a Federal default 
        fee of 1.0 percent of the principal amount of the loan, 
        obtained by deduction proportionately from each installment 
        payment of the proceeds of the loan to the borrower.''.
          (3) Voluntary flexible agreements.--Section 428A(a)(1) (20 
        U.S.C. 1078-1(a)(1)) is amended--
                  (A) by striking ``or'' at the end of subparagraph 
                (A);
                  (B) by striking the period at the end of subparagraph 
                (B) and inserting ``; or''; and
                  (C) by adding at the end the following new 
                subparagraph:
                  ``(C) the Federal default fee required by section 
                428(b)(1)(H) and the second sentence of section 
                428H(h).''.
  (b) Disbursement.--Section 428(b)(1)(N) (20 U.S.C. 1078(b)(1)(N)(ii)) 
is amended--
          (1) in clause (i), by inserting ``(including an eligible 
        foreign institution, except as provided in clause (ii))'' after 
        ``institution''; and
          (2) in clause (ii), by striking ``or at an eligible foreign 
        institution''.
  (c) Repayment Plans.--
          (1) FFEL loans.--Section 428(b)(9)(A) (20 U.S.C. 
        1078(b)(9)(A)) is amended--
                  (A) by inserting before the semicolon at the end of 
                clause (ii) the following: ``, and the Secretary may 
                not restrict the proportions or ratios by which such 
                payments may be graduated with the informed agreement 
                of the borrower'';
                  (B) by striking ``and'' at the end of clause (iii);
                  (C) by redesignating clause (iv) as clause (v); and
                  (D) by inserting after clause (iii) the following new 
                clause:
                          ``(iv) a delayed repayment plan under which 
                        the borrower makes scheduled payments for not 
                        more than 2 years that are annually not less 
                        than the amount of interest due or $600, 
                        whichever is greater, and then makes payments 
                        in accordance with clause (i), (ii), or (iii); 
                        and''.
          (2) Direct loans.--Section 455(d)(1) (20 U.S.C. 1087e(d)(1)) 
        is amended--
                  (A) by redesignating subparagraph (D) as subparagraph 
                (E); and
                  (B) by striking subparagraphs (A), (B), and (C) and 
                inserting the following:
                  ``(A) a standard repayment plan, consistent with 
                subsection (a)(1) of this section and with section 
                428(b)(9)(A)(i);
                  ``(B) a graduated repayment plan, consistent with 
                section 428(b)(9)(A)(ii);
                  ``(C) an extended repayment plan, consistent with 
                section 428(b)(9)(A)(v), except that the borrower shall 
                annually repay a minimum amount determined by the 
                Secretary in accordance with section 428(b)(1)(L);
                  ``(D) a delayed repayment plan under which the 
                borrower makes scheduled payments for not more than 2 
                years that are annually not less than the amount of 
                interest due or $600, whichever is greater, and then 
                makes payments in accordance with subparagraph (A), 
                (B), or (C); and''.
  (d) Origination Fees.--
          (1) FFEL program.--Paragraph (2) of section 438(c) (20 U.S.C. 
        1087-1(c)) is amended--
                  (A) by striking the designation and heading of such 
                paragraph and inserting the following:
          ``(2) Amount of origination fees.--
                  ``(A) In general.--''; and
                  (B) by adding at the end the following new 
                subparagraph:
                  ``(B) Subsequent reductions.--Subparagraph (A) shall 
                be applied to loans made under this part (other than 
                loans made under sections 428C and 439(o))--
                          ``(i) by substituting `2.0 percent' for `3.0 
                        percent' with respect to loans for which the 
                        first disbursement of principal is made on or 
                        after July 1, 2006, and before July 1, 2007;
                          ``(ii) by substituting `1.5 percent' for `3.0 
                        percent' with respect to loans for which the 
                        first disbursement of principal is made on or 
                        after July 1, 2007, and before July 1, 2008;
                          ``(iii) by substituting `1.0 percent' for 
                        `3.0 percent' with respect to loans for which 
                        the first disbursement of principal is made on 
                        or after July 1, 2008, and before July 1, 2009;
                          ``(iv) by substituting `0.5 percent' for `3.0 
                        percent' with respect to loans for which the 
                        first disbursement of principal is made on or 
                        after July 1, 2009, and before July 1, 2010; 
                        and
                          ``(v) by substituting `0.0 percent' for `3.0 
                        percent' with respect to loans for which the 
                        first disbursement of principal is made on or 
                        after July 1, 2010.''.
          (2) Direct loan program.--Subsection (c) of section 455 (20 
        U.S.C. 1087e(c)) is amended to read as follows:
  ``(c) Loan Fee.--
          ``(1) In general.--The Secretary shall charge the borrower of 
        a loan made under this part an origination fee of 4.0 percent 
        of the principal amount of loan.
          ``(2) Subsequent reduction.--Paragraph (1) shall be applied 
        to loans made under this part, other than consolidation loans 
        and PLUS loans--
                  ``(A) by substituting `not more or less than 3.0 
                percent' for `4.0 percent' with respect to loans for 
                which the first disbursement of principal is made on or 
                after July 1, 2006, and before July 1, 2007;
                  ``(B) by substituting `not more or less than 2.5 
                percent' for `4.0 percent' with respect to loans for 
                which the first disbursement of principal is made on or 
                after July 1, 2007, and before July 1, 2008;
                  ``(C) by substituting `not more or less than 2.0 
                percent' for `4.0 percent' with respect to loans for 
                which the first disbursement of principal is made on or 
                after July 1, 2008, and before July 1, 2009;
                  ``(D) by substituting `not more or less than 1.5 
                percent' for `4.0 percent' with respect to loans for 
                which the first disbursement of principal is made on or 
                after July 1, 2009, and before July 1, 2010; and
                  ``(E) by substituting `not more or less than 1.0 
                percent' for `4.0 percent' with respect to loans for 
                which the first disbursement of principal is made on or 
                after July 1, 2010.
          ``(3) Waivers and repayment incentives prohibited.--Beginning 
        with loans made on or after July 1, 2006, the Secretary is 
        prohibited--
                  ``(A) from waiving any amount of the loan fee 
                prescribed under this section as part of a repayment 
                incentive in section 455(b)(7); and
                  ``(B) from providing any repayment incentive before 
                the borrower enters repayment.''.
  (e) Fixed Rate Offset Charge.--
          (1) FFEL consolidation loans.--Section 438(c) (20 U.S.C. 
        1087-1(c)) is further amended--
                  (A) in paragraph (1)(A), by inserting after 
                ``paragraph (2) of this subsection'' the following: 
                ``and the amount the lender is authorized to collect as 
                a fixed rate offset charge in accordance with paragraph 
                (9) of this subsection'';
                  (B) in paragraph (1)(B)--
                          (i) by inserting ``and the fixed rate offset 
                        charge'' after ``origination fee''; and
                          (ii) by inserting ``and fixed rate offset 
                        charges'' after ``origination fees'';
                  (C) in paragraphs (3) and (4), by inserting ``and 
                fixed rate offset charge'' after ``origination fee'' 
                each place it appears;
                  (D) in paragraph (5)--
                          (i) by inserting ``or fixed rate offset 
                        charge'' after ``origination fee''; and
                          (ii) by inserting ``or fixed rate offset 
                        charges'' after ``origination fees'';
                  (E) in paragraph (7), by inserting ``and fixed rate 
                offset charges'' after ``origination fees''; and
                  (F) by adding at the end the following new paragraph:
          ``(9) Fixed rate offset charges for consolidation loans.--For 
        any loan under section 428C for which the borrower elects to 
        take a fixed rate under section 427A(k)(5)(C), the lender is 
        authorized to collect a fixed rate offset charge in an amount 
        not to exceed 0.5 percent of the principal amount of the loan. 
        Such amount may be added to the principal amount of the loan 
        for repayment by the borrower.''.
          (2) Direct loans.--Section 455(c) (20 U.S.C. 1087e(c)), as 
        amended by subsection (d)(2) of this section, is further 
        amended by adding at the end the following new paragraph:
          ``(4) Fixed rate offset charges for consolidation loans.--For 
        any Federal Direct Consolidation Loan for which the borrower 
        elects to take a fixed rate under section 455(b)(6)(E)(iii), 
        the Secretary shall collect a fixed rate offset charge in an 
        amount not to exceed 0.5 percent of the principal amount of the 
        loan. Such amount may be added to the principal amount of the 
        loan for repayment by the borrower. Such amount is not subject 
        to the requirements of paragraph (3) of this subsection.''.

SEC. 425. CONSOLIDATION LOAN CHANGES.

  (a) Cross-Consolidation Between Programs.--Section 428C (20 U.S.C. 
1078-3) is amended--
          (1) in subsection (a)(3)(B)(i)--
                  (A) by inserting ``or under section 455(g)'' after 
                ``under this section'' both places it appears;
                  (B) by inserting ``under both sections'' after 
                ``terminates''
                  (C) by striking ``and'' at the end of subclause 
                (III);
                  (D) by striking the period at the end of subclause 
                (IV) and inserting ``; and''; and
                  (E) by adding at the end the following new subclause:
                  ``(V) an individual may obtain a subsequent 
                consolidation loan under section 455(g) only for the 
                purposes of obtaining an income contingent repayment 
                plan, and only if the loan has been submitted to the 
                guaranty agency for default aversion.''; and
          (2) in subsection (b)(5), by striking the first sentence and 
        inserting the following: ``In the event that a lender with an 
        agreement under subsection (a)(1) of this section denies a 
        consolidation loan application submitted to it by an eligible 
        borrower under this section, or denies an application submitted 
        to it by such a borrower for a consolidation loan with income-
        sensitive repayment terms, the Secretary shall offer any such 
        borrower who applies for it, a direct consolidation loan. The 
        Secretary shall offer such a loan to a borrower who has 
        defaulted, for the purpose of resolving the default.''.
  (b) Repeal of in-School Consolidation.--
          (1) Definition of repayment period.--Section 428(b)(7)(A) (20 
        U.S.C. 1078(b)(7)(A)) is amended by striking ``shall begin--'' 
        and all that follows through ``earlier date.'' and inserting 
        the following: ``shall begin the day after 6 months after the 
        date the student ceases to carry at least one-half the normal 
        full-time academic workload (as determined by the 
        institution).''.
          (2) Conforming change to eligible borrower definition.--
        Section 428C(a)(3)(A)(ii)(I) (20 U.S.C. 1078-3(a)(3)(A)(ii)(I)) 
        is amended by inserting ``as determined under section 
        428(b)(7)(A)'' after ``repayment status''.
  (c) Additional Amendments.--Section 428C (20 U.S.C. 1078-3) is 
amended--
          (1) in subsection (a)(3), by striking subparagraph (C); and
          (2) in subsection (b)(1)--
                  (A) by striking everything after ``under this 
                section'' the first place it appears in subparagraph 
                (A) and inserting the following: ``and that, if all the 
                borrower's loans under this part are held by a single 
                holder, the borrower has notified such holder that the 
                borrower is seeking to obtain a consolidation loan 
                under this section;'';
                  (B) by striking ``(i) which'' and all that follows 
                through ``and (ii)'' in subparagraph (C);
                  (C) by striking ``and'' at the end of subparagraph 
                (E);
                  (D) by redesignating subparagraph (F) as subparagraph 
                (G); and
                  (E) by inserting after subparagraph (E) the following 
                new subparagraph:
                  ``(F) that the lender of the consolidation loan 
                shall, upon application for such loan, provide the 
                borrower with a clear and conspicuous notice of at 
                least the following information:
                          ``(i) the effects of consolidation on total 
                        interest to be paid, fees to be paid, and 
                        length of repayment;
                          ``(ii) the effects of consolidation on a 
                        borrower's underlying loan benefits, including 
                        loan forgiveness, cancellation, deferment, and 
                        reduced interest rates on those underlying 
                        loans;
                          ``(iii) the ability of the borrower to prepay 
                        the loan, pay on a shorter schedule, and to 
                        change repayment plans;
                          ``(iv) that borrower benefit programs may 
                        vary among different loan holders, and a 
                        description of how the borrower benefits may 
                        vary among different loan holders;
                          ``(v) the tax benefits for which borrowers 
                        may be eligible;
                          ``(vi) the consequences of default; and
                          ``(vii) that by making the application the 
                        applicant is not obligated to agree to take the 
                        consolidation loan; and''.
  (d) Effective Date for Single Holder Amendment.--The amendment made 
by subsection (c)(2)(A) shall apply with respect to any loan made under 
section 428C of the Higher Education Act of 1965 (20 U.S.C. 1078-3) for 
which the application is received by an eligible lender on or after 
July 1, 2006.
  (e) Conforming Amendments to Direct Loan Program.--Section 455 (20 
U.S.C. 1087e) is amended
          (1) in subsection (a)(1) by inserting ``428C,'' after 
        ``428B,'';
          (2) in subsection (a)(2)--
                  (A) by striking ``and'' at the end of subparagraph 
                (B);
                  (B) by redesignating subparagraph (C) as subparagraph 
                (D); and
                  (C) by inserting after subparagraph (B) the 
                following:
                  ``(C) section 428C shall be known as `Federal Direct 
                Consolidation Loans'; and ''; and
          (3) in subsection (g)--
                  (A) by striking the second sentence; and
                  (B) by adding at the end the following new sentences: 
                ``To be eligible for a consolidation loan under this 
                part, a borrower must meet the eligibility criteria set 
                forth in section 428C(a)(3). The Secretary, upon 
                application for such a loan, shall comply with the 
                requirements applicable to a lender under section 
                428C(b)(1)(F).''.

SEC. 426. DEFERMENT OF STUDENT LOANS FOR MILITARY SERVICE.

  (a) Federal Family Education Loans.--Section 428(b)(1)(M) (20 U.S.C. 
1078(b)(1)(M)) is amended--
          (1) by striking ``or'' at the end of clause (ii);
          (2) by redesignating clause (iii) as clause (iv); and
          (3) by inserting after clause (ii) the following new clause:
                          ``(iii) not in excess of 3 years during which 
                        the borrower--
                                  ``(I) is serving on active duty 
                                during a war or other military 
                                operation or national emergency; or
                                  ``(II) is performing qualifying 
                                National Guard duty during a war or 
                                other military operation or national 
                                emergency; or''.
  (b) Direct Loans.--Section 455(f)(2) (20 U.S.C. 1087e(f)(2)) is 
amended--
          (1) by redesignating subparagraph (C) as subparagraph (D); 
        and
          (2) by inserting after subparagraph (B) the following new 
        subparagraph:
                  ``(C) not in excess of 3 years during which the 
                borrower--
                          ``(i) is serving on active duty during a war 
                        or other military operation or national 
                        emergency; or
                          ``(ii) is performing qualifying National 
                        Guard duty during a war or other military 
                        operation or national emergency; or''.
  (c) Perkins Loans.--Section 464(c)(2)(A) (20 U.S.C. 1087dd(c)(2)(A)) 
is amended--
          (1) by redesignating clauses (iii) and (iv) as clauses (iv) 
        and (v), respectively; and
          (2) by inserting after clause (ii) the following new clause:
          ``(iii) not in excess of 3 years during which the borrower--
                  ``(I) is serving on active duty during a war or other 
                military operation or national emergency; or
                  ``(II) is performing qualifying National Guard duty 
                during a war or other military operation or national 
                emergency;''.
  (d) Definitions.--Section 481 (20 U.S.C. 1088) is amended by adding 
at the end the following new subsection:
  ``(d) Definitions for Military Deferments.--For purposes of parts B, 
D, and E of this title:
          ``(1) Active duty.--The term `active duty' has the meaning 
        given such term in section 101(d)(1) of title 10, United States 
        Code, except that such term does not include active duty for 
        training or attendance at a service school.
          ``(2) Military operation.--The term `military operation' 
        means a contingency operation as such term is defined in 
        section 101(a)(13) of title 10, United States Code.
          ``(3) National emergency.--The term `national emergency' 
        means the national emergency by reason of certain terrorist 
        attacks declared by the President on September 14, 2001, or 
        subsequent national emergencies declared by the President by 
        reason of terrorist attacks.
          ``(4) Serving on active duty.--The term `serving on active 
        duty during a war or other military operation or national 
        emergency' means service by an individual who is--
                  ``(A) a Reserve of an Armed Force ordered to active 
                duty under section 12301(a), 12301(g), 12302, 12304, or 
                12306 of title 10, United States Code, or any retired 
                member of an Armed Force ordered to active duty under 
                section 688 of such title, for service in connection 
                with a war or other military operation or national 
                emergency, regardless of the location at which such 
                active duty service is performed; and
                  ``(B) any other member of an Armed Force on active 
                duty in connection with such emergency or subsequent 
                actions or conditions who has been assigned to a duty 
                station at a location other than the location at which 
                such member is normally assigned.
          ``(5) Qualifying national guard duty.--The term `qualifying 
        National Guard duty during a war or other military operation or 
        national emergency' means service as a member of the National 
        Guard on full-time National Guard duty (as defined in section 
        101(d)(5) of title 10, United States Code) under a call to 
        active service authorized by the President or the Secretary of 
        Defense for a period of more than 30 consecutive days under 
        section 502(f) of title 32, United States Code, in connection 
        with a war, other military operation, or a national emergency 
        declared by the President and supported by Federal funds.''.
  (e) Rule of Construction.--Nothing in the amendments made by this 
section shall be construed to authorize any refunding of any repayment 
of a loan.
  (f) Effective Date.--The amendments made by this section shall apply 
with respect to loans for which the first disbursement is made on or 
after July 1, 1993, to an individual who is a new borrower (within the 
meaning of section 103 of the Higher Education Act of 1965 (20 U.S.C. 
1003)) on or after such date.

SEC. 427. LOAN FORGIVENESS FOR SERVICE IN AREAS OF NATIONAL NEED.

  Section 428K (20 U.S.C. 1078-11) is amended to read as follows:

``SEC. 428K. LOAN FORGIVENESS FOR SERVICE IN AREAS OF NATIONAL NEED.

  ``(a) Purposes.--The purposes of this section are--
          ``(1) to encourage highly trained individuals to enter and 
        continue in service in areas of national need; and
          ``(2) to reduce the burden of student debt for Americans who 
        dedicate their careers to service in areas of national need.
  ``(b) Program Authorized.--
          ``(1) In general.--The Secretary is authorized to carry out a 
        program of assuming the obligation to repay, pursuant to 
        paragraphs (2) of subsection (c) and subsection (d), a 
        qualified loan amount for a loan made, insured, or guaranteed 
        under this part or part D (other than loans made under section 
        428B and 428C and comparable loans made under part D), for any 
        new borrower after the date of enactment of the College Access 
        and Opportunity Act of 2005, who--
                  ``(A) has been employed full-time for at least 5 
                consecutive complete school, academic, or calendar 
                years, as appropriate, in an area of national need 
                described in subsection (c); and
                  ``(B) is not in default on a loan for which the 
                borrower seeks forgiveness.
          ``(2) Award basis.--Loan repayment under this section shall 
        be on a first-come, first-served basis pursuant to the 
        designation under subsection (c) and subject to the 
        availability of appropriations.
          ``(3) Regulations.--The Secretary is authorized to issue such 
        regulations as may be necessary to carry out the provisions of 
        this section.
  ``(c) Areas of National Need.--
          ``(1) Statutory categories.--For purposes of this section, an 
        individual shall be treated as employed in an area of national 
        need if the individual is employed full time and is any of the 
        following:
                  ``(A) Early childhood educators.--An individual who 
                is employed as an early childhood educator in an 
                eligible preschool program or child care facility in a 
                low-income community, and who is involved directly in 
                the care, development and education of infants, 
                toddlers, or young children through age five.
                  ``(B) Nurses.--An individual who is employed--
                          ``(i) as a nurse in a clinical setting; or
                          ``(ii) as a member of the nursing faculty at 
                        an accredited school of nursing (as those terms 
                        are defined in section 801 of the Public Health 
                        Service Act (42 U.S.C. 296)).
                  ``(C) Foreign language specialists.--An individual 
                who has obtained a baccalaureate degree in a critical 
                foreign language and is employed--
                          ``(i) in an elementary or secondary school as 
                        a teacher of a critical foreign language; or
                          ``(ii) in an agency of the United States 
                        Government in a position that regularly 
                        requires the use of such critical foreign 
                        language.
                  ``(D) Librarians.--An individual who is employed 
                full-time as a libarian in--
                          ``(i) a public library that serves a 
                        geographic area within which the public schools 
                        have a combined average of 30 percent or more 
                        of their total student enrollments composed of 
                        children counted under section 1113(a)(5) of 
                        the Elementary and Secondary Education Act of 
                        1965; or
                          ``(ii) an elementary or secondary school 
                        which is in the school district of a local 
                        educational agency which is eligible in such 
                        year for assistance pursuant to title I of the 
                        Elementary and Secondary Education Act of 1965, 
                        and which for the purpose of this paragraph and 
                        for that year has been determined by the 
                        Secretary (pursuant to regulations and after 
                        consultation with the State educational agency 
                        of the State in which the school is located) to 
                        be a school in which the enrollment of children 
                        counted under section 1113(a)(5) of the 
                        Elementary and Secondary Education Act of 1965 
                        exceeds 30 percent of the total enrollment of 
                        that school.
                  ``(E) Highly qualified teachers: bilingual education 
                and low-income communities.--An individual who--
                          ``(i) is highly qualified as such term is 
                        defined in section 9101 of the Elementary and 
                        Secondary Education Act of 1965; and
                          ``(ii)(I) is employed as a full-time teacher 
                        of bilingual education; or
                          ``(II) is employed as a teacher for service 
                        in a public or nonprofit private elementary or 
                        secondary school which is in the school 
                        district of a local educational agency which is 
                        eligible in such year for assistance pursuant 
                        to title I of the Elementary and Secondary 
                        Education Act of 1965, and which for the 
                        purpose of this paragraph and for that year has 
                        been determined by the Secretary (pursuant to 
                        regulations and after consultation with the 
                        State educational agency of the State in which 
                        the school is located) to be a school in which 
                        the enrollment of children counted under 
                        section 1113(a)(5) of the Elementary and 
                        Secondary Education Act of 1965 exceeds 40 
                        percent of the total enrollment of that school.
                  ``(F) First responders in low-income communities.--An 
                individual who--
                          ``(i) is employed as a firefighter, police 
                        officer, or emergency medical technician; and
                          ``(ii) serves as such in a low-income 
                        community.
                  ``(G) Child welfare workers.--An individual who--
                          ``(i) has obtained a degree in social work or 
                        a related field with a focus on serving 
                        children and families; and
                          ``(ii) is employed in public or private child 
                        welfare services.
                  ``(H) Speech-language pathologists.--An individual 
                who is a speech-language pathologist, who is employed 
                in an eligible preschool program or an elementary or 
                secondary school, and who has, at a minimum, a graduate 
                degree in speech-language pathology, or communication 
                sciences and disorders.
                  ``(I) Additional areas of national need.--An 
                individual who is employed in an area designated by the 
                Secretary under paragraph (2) and has completed a 
                baccalaureate or advanced degree related to such area.
          ``(2) Designation of areas of national need.--After 
        consultation with appropriate Federal, State, and community-
        based agencies and organizations, the Secretary shall designate 
        areas of national need. In making such designations, the 
        Secretary shall take into account the extent to which--
                  ``(A) the national interest in the area is 
                compelling;
                  ``(B) the area suffers from a critical lack of 
                qualified personnel; and
                  ``(C) other Federal programs support the area 
                concerned.
  ``(d) Qualified Loan Amount.--The Secretary shall repay not more than 
$5,000 in the aggregate of the loan obligation on a loan made under 
section 428 or 428H that is outstanding after the completion of the 
fifth consecutive school, academic, or calendar year, as appropriate, 
described in subsection (b)(1).
  ``(e) Construction.--Nothing in this section shall be construed to 
authorize the refunding of any repayment of a loan made under section 
428 or 428H.
  ``(f) Ineligibility of National Service Award Recipients.--No student 
borrower may, for the same 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.).
  ``(g) Ineligibility for Double Benefits.--No borrower may receive a 
reduction of loan obligations under both this section and section 428J 
or 460.
  ``(h) Definitions.--In this section
          ``(1) Child care facility.--The term `child care facility' 
        means a facility, including a home, that--
                  ``(A) provides for the education and care of children 
                from birth through age 5; and
                  ``(B) meets any applicable State or local government 
                licensing, certification, approval, or registration 
                requirements.
          ``(2) Critical foreign language.--The term `critical foreign 
        language' includes the languages of Arabic, Korean, Japanese, 
        Chinese, Pashto, Persian-Farsi, Serbian-Croatian, Russian, 
        Portuguese, and any other language identified by the Secretary 
        of Education, in consultation with the Defense Language 
        Institute, the Foreign Service Institute, and the National 
        Security Education Program, as a critical foreign language 
        need.
          ``(3) Early childhood educator.--The term `early childhood 
        educator' means an early childhood educator employed in an 
        eligible preschool program who has completed a baccalaureate or 
        advanced degree in early childhood development, early childhood 
        education, or in a field related to early childhood education.
          ``(4) Eligible preschool program.--The term `eligible 
        preschool program' means a program that provides for the care, 
        development, and education of infants, toddlers, or young 
        children through age 5, meets any applicable State or local 
        government licensing, certification, approval, and registration 
        requirements, and is operated by--
                  ``(A) a public or private school that may be 
                supported, sponsored, supervised, or administered by a 
                local educational agency;
                  ``(B) a Head Start agency serving as a grantee 
                designated under the Head Start Act (42 U.S.C. 9831 et 
                seq.);
                  ``(C) a nonprofit or community based organization; or
                  ``(D) a child care program, including a home.
          ``(5) Low-income community.--In this subsection, the term 
        `low-income community' means a community in which 70 percent of 
        households earn less than 85 percent of the State median 
        household income.
          ``(6) Nurse.--The term `nurse' means a nurse who meets all of 
        the following:
                  ``(A) The nurse graduated from--
                          ``(i) an accredited school of nursing (as 
                        those terms are defined in section 801 of the 
                        Public Health Service Act (42 U.S.C. 296));
                          ``(ii) a nursing center; or
                          ``(iii) an academic health center that 
                        provides nurse training.
                  ``(B) The nurse holds a valid and unrestricted 
                license to practice nursing in the State in which the 
                nurse practices in a clinical setting.
                  ``(C) The nurse holds one or more of the following:
                          ``(i) A graduate degree in nursing, or an 
                        equivalent degree.
                          ``(ii) A nursing degree from a collegiate 
                        school of nursing (as defined in section 801 of 
                        the Public Health Service Act (42 U.S.C. 296)).
                          ``(iii) A nursing degree from an associate 
                        degree school of nursing (as defined in section 
                        801 of the Public Health Service Act (42 U.S.C. 
                        296)).
                          ``(iv) A nursing degree from a diploma school 
                        of nursing (as defined in section 801 of the 
                        Public Health Service Act (42 U.S.C. 296)).
          ``(7) Speech-language pathologist.--The term `speech-language 
        pathologist' means a speech-language pathologist who meets all 
        of the following:
                  ``(A) the speech-language pathologist has received, 
                at a minimum, a graduate degree in speech-language 
                pathology or communication sciences and disorders from 
                an institution of higher education accredited by an 
                agency or association recognized by the Secretary 
                pursuant to section 496(a) of this Act; and
                  ``(B) the speech-language pathologist meets or 
                exceeds the qualifications as defined in section 
                1861(ll) of the Social Security Act (42 U.S.C. 1395x).
  ``(i) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section such sums as may be necessary 
for fiscal year 2006 and such sums as may be necessary for each of the 
5 succeeding fiscal years.''.

SEC. 428. UNSUBSIDIZED STAFFORD LOANS.

  (a) Amendment.--Section 428H(d)(2)(C) (20 U.S.C. 1078-8(d)(2)(C)) is 
amended by striking ``$10,000'' and inserting ``$12,000''.
  (b) Effective Date.--The amendment made by subsection (a) shall apply 
to loans for which the first disbursement of principal is made on or 
after July 1, 2007.

SEC. 429. ELIMINATION OF TERMINATION DATES FROM TAXPAYER-TEACHER 
                    PROTECTION ACT OF 2004.

  (a) Extension of Limitations on Special Allowance for Loans From the 
Proceeds of Tax Exempt Issues.--Section 438(b)(2)(B) (20 U.S.C. 1087-
1(b)(2)(B)) is amended--
          (1) in clause (iv), by striking ``and before January 1, 
        2006,''; and
          (2) in clause (v)(II)--
                  (A) by striking ``and before January 1, 2006,'' each 
                place it appears in divisions (aa) and (bb); and
                  (B) by striking ``, and before January 1, 2006'' in 
                division (cc).
  (b) Additional Limitation on Special Allowance for Loans From the 
Proceeds of Tax Exempt Issues.--Section 438(b)(2)(B) (20 U.S.C 1087-
1(b)(2)(B)) is further amended by adding at the end thereof the 
following new clause:
          ``(vi) Notwithstanding clauses (i), (ii), and (v), the 
        quarterly rate of the special allowance shall be the rate 
        determined under subparagraph (A), (E), (F), (G), (H), or (I) 
        of this paragraph, as the case may be, for a holder of loans--
                  ``(I) that were made or purchased on or after October 
                1, 2005; or
                  ``(II) that were not earning a quarterly rate of 
                special allowance determined under clauses (i) or (ii) 
                of subparagraph (B) of this paragraph (20 U.S.C. 1087-
                1(b)(2)(b)) as of October 1, 2005.''.
  (c) Elimination of Effective Date Limitation on Higher Teacher Loan 
Forgiveness Benefits.--Paragraph (3) of section 3(b) of the Taxpayer-
Teacher Protection Act of 2004 (20 U.S.C. 1078-10, note) is repealed.
  (d) Additional Changes to Teacher Loan Forgiveness Provisions.--
          (1) FFEL provisions.--Section 428J (20 U.S.C. 1078-10) is 
        amended--
                  (A) in subsection (b)(1)(B), by inserting after 
                ``1965'' the following: ``, or meets the requirements 
                of subsection (g)(3)'';
                  (B) in subsection (c)(3)--
                          (i) by striking ``and'' at the end of 
                        subparagraph (A);
                          (ii) by striking the period at the end of 
                        subparagraph (B) and inserting ``; and''; and
                          (iii) by inserting after subparagraph (B) the 
                        following new subparagraph:
                  ``(C) an elementary or secondary school teacher who 
                primarily teaches reading--
                          ``(i) who meets the requirements of 
                        subsection (b);
                          ``(ii) who has obtained a separate reading 
                        instruction credential from the State in which 
                        the teacher is employed; and
                          ``(iii) who is certified by the chief 
                        administrative officer of the public or 
                        nonprofit private elementary or secondary 
                        school in which the borrower is employed to 
                        teach reading--
                                  ``(I) as being proficient in teaching 
                                the essential components of reading 
                                instruction as defined in section 1208 
                                of the Elementary and Secondary 
                                Education Act of 1965; and
                                  ``(II) as having such credential.''; 
                                and
                  (C) in subsection (g), by adding at the end the 
                following new paragraph:
          ``(3) Private school teachers.--An individual who is employed 
        as a teacher in a private school and is exempt from State 
        certification requirements (unless otherwise applicable under 
        State law), may, in lieu of the requirement of subsection 
        (a)(1)(B), have such employment treated as qualifying 
        employment under this section if such individual is permitted 
        to and does satisfy rigorous subject knowledge and skills tests 
        by taking competency tests in the applicable grade levels and 
        subject areas. For such purposes, the competency tests taken by 
        such a private school teacher must be recognized by 5 or more 
        States for the purpose of fulfilling the highly qualified 
        teacher requirements under section 9101 of the Elementary and 
        Secondary Education Act of 1965, and the score achieved by such 
        teacher on each test must equal or exceed the average passing 
        score of those 5 States.''.
          (2) Direct loan provisions.--Section 460 (20 U.S.C. 1087j) is 
        amended--
                  (A) in subsection (b)(1)(A)(ii), by inserting after 
                ``1965'' the following: ``, or meets the requirements 
                of subsection (g)(3)'';
                  (B) in subsection (c)(3)--
                          (i) by striking ``and'' at the end of 
                        subparagraph (A);
                          (ii) by striking the period at the end of 
                        subparagraph (B) and inserting ``; and''; and
                          (iii) by inserting after subparagraph (B) the 
                        following new subparagraph:
                  ``(C) an elementary or secondary school teacher who 
                primarily teaches reading--
                          ``(i) who meets the requirements of 
                        subsection (b);
                          ``(ii) who has obtained a separate reading 
                        instruction credential from the State in which 
                        the teacher is employed; and
                          ``(iii) who is certified by the chief 
                        administrative officer of the public or 
                        nonprofit private elementary or secondary 
                        school in which the borrower is employed to 
                        teach reading--
                                  ``(I) as being proficient in teaching 
                                the essential components of reading 
                                instruction as defined in section 1208 
                                of the Elementary and Secondary 
                                Education Act of 1965; and
                                  ``(II) as having such credential.''; 
                                and
                  (C) in subsection (g), by adding at the end the 
                following new paragraph:
          ``(3) Private school teachers.--An individual who is employed 
        as a teacher in a private school and is exempt from State 
        certification requirements (unless otherwise applicable under 
        State law), may, in lieu of the requirement of subsection 
        (a)(1)(A)(ii), have such employment treated as qualifying 
        employment under this section if such individual is permitted 
        to and does satisfy rigorous subject knowledge and skills tests 
        by taking competency tests in the applicable grade levels and 
        subject areas. For such purposes, the competency tests taken by 
        such a private school teacher must be recognized by 5 or more 
        States for the purpose of fulfilling the highly qualified 
        teacher requirements under section 9101 of the Elementary and 
        Secondary Education Act of 1965, and the score achieved by such 
        teacher on each test must equal or exceed the average passing 
        score of those 5 States.''.

SEC. 430. ADDITIONAL ADMINISTRATIVE PROVISIONS.

  (a) Treatment of Exempt Claims.--
          (1) Insurance coverage.--Section 428(b)(1)(G) (20 U.S.C. 
        1078(b)(1)(G)) is amended by inserting before the semicolon at 
        the end the following: ``and 100 percent of the unpaid 
        principal amount of exempt claims as defined in subsection 
        (c)(1)(G)''.
          (2) Treatment.--Section 428(c)(1) (20 U.S.C. 1078(c)(1)) is 
        amended--
                  (A) by redesignating subparagraph (G) as subparagraph 
                (I), and moving such subparagraph 2 em spaces to the 
                left; and
                  (B) by inserting after subparagraph (F) the following 
                new subparagraph:
          ``(G)(i) Notwithstanding any other provisions of this 
        section, in the case of exempt claims, the Secretary shall 
        apply the provisions of--
                  ``(I) the fourth sentence of subparagraph (A) by 
                substituting `100 percent' for `95 percent';
                  ``(II) subparagraph (B)(i) by substituting `100 
                percent' for `85 percent'; and
                  ``(III) subparagraph (B)(ii) by substituting `100 
                percent' for `75 percent'.
          ``(ii) For purposes of clause (i) of this subparagraph, the 
        term `exempt claims' means claims with respect to loans for 
        which it is determined that the borrower (or the student on 
        whose behalf a parent has borrowed), without the lender's or 
        the institution's knowledge at the time the loan was made, 
        provided false or erroneous information or took actions that 
        caused the borrower or the student to be ineligible for all or 
        a portion of the loan or for interest benefits thereon.''.
  (b) Reduction of Insurance/Reinsurance Percentage.--
          (1) Insurance percentage reduction.--Section 428(b)(1)(G) as 
        amended by subsection (a)(1) is further amended by inserting 
        after the matter inserted by such subsection the following: ``, 
        except, for any loan for which the first disbursement of 
        principal is made on or after July 1, 2006, the preceding 
        provisions of this subparagraph shall be applied by 
        substituting `96 percent' for `98 percent' ''.
          (2) Reinsurance percentage reduction.--Section 428(c)(1) as 
        amended by subsection (a)(2) is further amended by adding after 
        subparagraph (G) as added by such subsection the following new 
        subparagraph:
          ``(H) Notwithstanding subparagraphs (A) and (B), but subject 
        to subparagraphs (E) and (F), in the case of a loan for which 
        the first disbursement of principal is made on or after July 1, 
        2006, the Secretary shall apply--
                  ``(i) the fourth sentence of subparagraph (A) by 
                substituting `93 percent' for `95 percent';
                  ``(ii) subparagraph (B)(i) by substituting `83 
                percent' for `85 percent'; and
                  ``(iii) subparagraph (B)(ii) by substituting `73 
                percent' for `75 percent'.''.
          (3) Increase insurance for exceptional performance.--Section 
        428I (20 U.S.C. 1078-9) is amended to read as follows:

``SEC. 428I. SPECIAL INSURANCE AND REINSURANCE RULES FOR EXCEPTIONAL 
                    PERFORMANCE.

  ``(a) Designation of Lenders and Servicers.--
          ``(1) In general.--Whenever the Secretary determines that an 
        eligible lender or servicer meets the performance measures 
        required by paragraph (2), the Secretary shall designate that 
        eligible lender or servicer, as the case may be, for 
        exceptional performance. The Secretary shall notify each 
        appropriate guaranty agency of the eligible lenders and 
        servicers designated under this section.
          ``(2) Performance measures.--
                  ``(A) In determining whether to award a lender or 
                servicer the exceptional performance designation, the 
                Secretary shall require that the lender or servicer be 
                performing at or above the 95 percentile of the 
                industry, and demonstrate improved performance against 
                the lender's or service's average of the last 3 years 
                on the factors described in subparagraph (B).
                  ``(B) The factors on which the Secretary shall 
                require improvement shall include--
                          ``(i) delinquency rates;
                          ``(ii) the rate at which delinquent accounts 
                        are restored to good standing;
                          ``(iii) default rates;
                          ``(iv) the rate of rejected claims; and
                          ``(v) any other such measures as determined 
                        by the Secretary.
                  ``(C) In addition, the Secretary shall not make any 
                award of such a designation unless the consequence of 
                the designation is cost-neutral to the Federal 
                Government.
          ``(3) Additional information on lenders and servicers.--Each 
        appropriate guaranty agency shall provide the Secretary with 
        such other information in its possession regarding an eligible 
        lender or servicer desiring designation as may relate to the 
        Secretary's determination under paragraph (1), including but 
        not limited to any information suggesting that the application 
        of a lender or servicer for designation should not be approved.
          ``(4) Determinations by the secretary.--
                  ``(A) The Secretary shall designate an eligible 
                lender or servicer for exceptional performance if the 
                eligible lender or servicer meets the performance 
                measures required by paragraph (2).
                  ``(B) The Secretary shall make the determination 
                under paragraph (1) based upon the documentation 
                submitted by the eligible lender or servicer as 
                specified in regulation, such other information as 
                provided by any guaranty agency under paragraph (3), 
                and any information in the possession of the Secretary 
                or submitted by any other agency or office of the 
                Federal Government.
                  ``(C) The Secretary shall inform the eligible lender 
                or servicer and the appropriate guaranty agency that 
                its application for designation as an exceptional 
                performance lender or servicer has been approved or 
                disapproved.
          ``(5) Transition.--
                  ``(A) Any eligible lender or servicer designated for 
                exceptional performance as of the day before the date 
                of enactment of the College Access and Opportunity Act 
                of 2005 shall continue to be so designated, and subject 
                to the requirements of this section as in effect on 
                that day (including revocation), until the performance 
                standards described in paragraph (2) are established.
                  ``(B) The Secretary shall not designate any 
                additional eligible lenders or servicers for 
                exceptional performance until those performance 
                standards are established.
  ``(b) Payment to Lenders and Servicers.--A guaranty agency shall pay, 
to each eligible lender or servicer (as agent for an eligible lender) 
designated under subsection (a), 98 percent of the unpaid principal and 
interest of all loans for which claims are submitted for payment by 
that eligible lender or servicer for the one-year period following the 
receipt by the guaranty agency of the notification of designation under 
this section, or until the guaranty agency receives notice from the 
Secretary that the designation of the lender or servicer under 
subsection (a)(2) has been revoked.
  ``(c) Revocation Authority.--
          ``(1) The Secretary shall revoke the designation of a lender 
        or a servicer under subsection (a) if the Secretary determines 
        that the lender or servicer has failed to meet the performance 
        standards required by subsection (a)(2).
          ``(2) Notwithstanding any other provision of this section, a 
        designation under subsection (a) may be revoked at any time by 
        the Secretary, in the Secretary's discretion, if the Secretary 
        determines that the eligible lender or servicer has failed to 
        meet the criteria and performance standards established by the 
        Secretary in regulation, or if the Secretary believes the 
        lender or servicer may have engaged in fraud in securing 
        designation under subsection (a), or is failing to service 
        loans in accordance with program regulations.
  ``(d) Documentation.--Nothing in this section shall restrict or limit 
the authority of guaranty agencies to require the submission of claims 
documentation evidencing servicing performed on loans, except that the 
guaranty agency may not require greater documentation than that 
required for lenders and servicers not designated under subsection (a).
  ``(e) Special Rule.--Reimbursements made by the Secretary on loans 
submitted for claim by an eligible lender or loan servicer designated 
for exceptional performance under this section shall not be subject to 
additional review by the Secretary or repurchase by the guaranty agency 
for any reason other than a determination by the Secretary that the 
eligible lender or loan servicer engaged in fraud or other purposeful 
misconduct in obtaining designation for exceptional performance.
  ``(f) Limitation.--Nothing in this section shall be construed to 
affect the processing of claims on student loans of eligible lenders 
not subject to this section.
  ``(g) Claims.--A lender or servicer designated under subsection (a) 
failing to service loans or otherwise comply with applicable program 
regulations shall be considered in violation of section 3729 of title 
31, United States Code.
  ``(h) Termination.--The Secretary may terminate the designation of 
lenders and servicers under this section if he determines that 
termination would be in the fiscal interest of the United States.
  ``(i) Definitions.--As used in this section--
          ``(1) the term `eligible loan' means a loan made, insured, or 
        guaranteed under this part; and
          ``(2) the term `servicer' means an entity servicing and 
        collecting student loans that--
                  ``(A) has substantial experience in servicing and 
                collecting consumer loans or student loans;
                  ``(B) has an independent financial audit annually 
                which is furnished to the Secretary and any other 
                parties designated by the Secretary;
                  ``(C) has business systems which are capable of 
                meeting the requirements of this part;
                  ``(D) has adequate personnel who are knowledgeable 
                about the student loan programs authorized by this 
                part; and
                  ``(E) does not have any owner, majority shareholder, 
                director, or officer of the entity who has been 
                convicted of a felony.''.
          (4) Effective date of amendments.--The amendments made by 
        this subsection shall apply with respect to loans for which the 
        first disbursement of principal is made on or after July 1, 
        2006.
  (c) Documentation of Forbearance Agreements.--Section 428(c) (20 
U.S.C. 1078(c)) is further amended--
          (1) in paragraph (3)(A)(i), by striking ``in writing''; and
          (2) by adding at the end the following new paragraph:
          ``(10) Documentation of forbearance agreements.--For the 
        purposes of paragraph (3), the terms of forbearance agreed to 
        by the parties shall be documented by confirming the agreement 
        of the borrower by notice to the borrower from the lender, and 
        by recording the terms in the borrower's file.''.
  (d) Consolidation of Defaulted Loans.--Section 428(c) (20 U.S.C. 
1078(c)) is further amended--
          (1) in paragraph (2)(A)--
                  (A) by inserting ``(i)'' after ``including''; and
                  (B) by inserting before the semicolon at the end the 
                following: ``and (ii) requirements establishing 
                procedures to preclude consolidation lending from being 
                an excessive proportion of guaranty agency recoveries 
                on defaulted loans under this part'';
          (2) in paragraph (2)(D), by striking ``paragraph (6)'' and 
        inserting ``paragraph (6)(A)''; and
          (3) in paragraph (6)--
                  (A) by inserting ``(A)'' before ``For the purpose of 
                paragraph (2)(D),'';
                  (B) by redesignating subparagraphs (A) and (B) as 
                clauses (i) and (ii), respectively; and
                  (C) by adding at the end the following new 
                subparagraphs:
  ``(B) A guaranty agency shall--
          ``(i) on or after October 1, 2006--
                  ``(I) not charge the borrower collection costs in an 
                amount in excess of 18.5 percent of the outstanding 
                principal and interest of a defaulted loan that is paid 
                off through consolidation by the borrower under this 
                title; and
                  ``(II) remit to the Secretary a portion of the 
                collection charge under subclause (I) equal to 8.5 
                percent of the outstanding principal and interest of 
                such defaulted loan; and
          ``(ii) on and after October 1, 2009, remit to the Secretary 
        the entire amount charged under clause (i)(I) with respect to 
        each defaulted loan that is paid off with excess consolidation 
        proceeds.
  ``(C) For purposes of subparagraph (B), the term `excess 
consolidation proceeds' means, with respect to any guaranty agency for 
any Federal fiscal year beginning on or after October 1, 2009, the 
proceeds of consolidation of defaulted loans under this title that 
exceed 45 percent of the agency's total collections on defaulted loans 
in such Federal fiscal year.''.
  (e) Voluntary Flexible Agreements.--Section 428A (20 U.S.C. 1078-1) 
is amended--
          (1) in subsection (a)(1)(B), by striking ``unless the 
        Secretary'' and all that follows through ``designated 
        guarantor'';
          (2) by striking paragraph (2) of subsection (a);
          (3) in paragraph (4)(B) of subsection (a), by striking ``and 
        any waivers provided to other guaranty agencies under paragraph 
        (2)'';
          (4) by redesignating paragraphs (3) and (4) of subsection (a) 
        as paragraphs (2) and (3), respectively; and
          (5) by striking paragraph (3) of subsection (c) and inserting 
        the following:
          ``(3) Notice to interested parties.--Once the Secretary 
        reaches a tentative agreement in principle under this section, 
        the Secretary shall publish in the Federal Register a notice 
        that invites interested parties to comment on the proposed 
        agreement. The notice shall state how to obtain a copy of the 
        tentative agreement in principle and shall give interested 
        parties no less than 30 days to provide comments. The Secretary 
        may consider such comments prior to providing the notices 
        pursuant to paragraph (2).''.
  (f) Fraud: Repayment Required.--Section 428B(a)(1) (20 U.S.C. 1078-
2(a)(1)) is amended--
          (1) by striking ``and'' at the end of subparagraph (A);
          (2) by striking the period at the end of subparagraph (B) and 
        inserting ``; and''; and
          (3) by adding at the end the following new subparagraph:
                  ``(C) if either of the parents has been convicted of, 
                or has pled nolo contendere or guilty to, a crime 
                involving fraud in obtaining funds under this title, 
                such parent has completed the repayment of such funds 
                to the Secretary, or to the holder in the case of a 
                loan under this title obtained by fraud.''.
  (g) Default Reduction Program.--Section 428F(a)(1) (20 U.S.C. 1078-
6(a)(1)) is amended--
          (1) in subparagraph (A), by striking ``consecutive payments 
        for 12 months'' and inserting ``9 payments made within 20 days 
        of the due date during 10 consecutive months'';
          (2) by redesignating subparagraph (C) as subparagraph (D); 
        and
          (3) by inserting after subparagraph (B) the following new 
        subparagraph:
                  ``(C) A guaranty agency may charge the borrower and 
                retain collection costs in an amount not to exceed 18.5 
                percent of the outstanding principal and interest at 
                the time of sale of a loan rehabilitated under 
                subparagraph (A).''.
  (h) Financial and Economic Literacy.--
          (1) Default reduction program.--Section 428F is further 
        amended by adding at the end the following:
  ``(c) Financial and Economic Literacy.--Where appropriate, each 
program described under subsection (b) shall include making available 
financial and economic education materials for the borrower.''.
          (2) Program assistance for borrowers.--Section 432(k)(1) (20 
        U.S.C. 1082(k)(1)) is amended by striking ``and offering'' and 
        all that follows through the period and inserting ``, offering 
        loan repayment matching provisions as part of employee benefit 
        packages, and providing employees with financial and economic 
        education and counseling.''.
  (i) Credit Bureau Organization Agreements.--Section 430A(a) (20 
U.S.C. 1080a(a)) is amended by striking ``agreements with credit bureau 
organizations'' and inserting ``an agreement with each national credit 
bureau organization (as described in section 603(p) of the Fair Credit 
Reporting Act)''.
  (j) Uniform Administrative and Claims Procedure.--Section 
432(l)(1)(H) (20 U.S.C. 1082(l)(1)(H)) is amended by inserting ``and 
anticipated graduation date'' after ``status change''.
  (k) Default Reduction Management.--Section 432 is further amended--
          (1) by striking subsection (n); and
          (2) by redesignating subsections (o) and (p) as subsections 
        (n) and (o), respectively.
  (l) Schools as Lenders.--Paragraph (2) of section 435(d) (20 U.S.C. 
1085(d)(2)) is amended to read as follows:
          ``(2) Requirements for eligible institutions.--
                  ``(A) In general.--To be an eligible lender under 
                this part, an eligible institution--
                          ``(i) shall employ at least one person whose 
                        full-time responsibilities are limited to the 
                        administration of programs of financial aid for 
                        students attending such institution;
                          ``(ii) shall not be a home study school;
                          ``(iii) shall not--
                                  ``(I) make a loan to any 
                                undergraduate student;
                                  ``(II) make a loan other than a loan 
                                under section 428 or 428H to a graduate 
                                or professional student; or
                                  ``(III) make a loan to a borrower who 
                                is not enrolled at that institution;
                          ``(iv) shall award any contract for 
                        financing, servicing, or administration of 
                        loans under this title on a competitive basis;
                          ``(v) shall offer loans which carry an 
                        origination fee or an interest rate, or both, 
                        that are less than such fee or rate authorized 
                        under the provisions of this title;
                          ``(vi) shall not have a cohort default rate 
                        (as defined in section 435(m)) greater than 10 
                        percent;
                          ``(vii) shall, for any year for which the 
                        institution engages in activities as an 
                        eligible lender, provide for a compliance audit 
                        conducted in accordance with section 
                        428(b)(1)(U)(iii)(I), and the regulations 
                        thereunder, and submit the results of such 
                        audit to the Secretary; and
                          ``(viii) shall use any proceeds from special 
                        allowance payments and interest payments from 
                        borrowers, interest subsidies received from the 
                        Department of Education, and any proceeds from 
                        the sale or other disposition of loans, for 
                        need-based grant programs.
                  ``(B) Administrative expenses.--An eligible lender 
                under subparagraph (A) shall be permitted to use a 
                portion of the proceeds described in subparagraph 
                (A)(viii) for reasonable and direct administrative 
                expenses.
                  ``(C) Supplement, not supplant.--An eligible lender 
                under subparagraph (A) shall ensure that the proceeds 
                described in subparagraph (A)(viii) are used to 
                supplement, and not to supplant, non-Federal funds that 
                would otherwise be used for need-based grant 
                programs.''.
  (m) Disability Determinations.--Section 437(a) (20 U.S.C. 1087(a)) is 
amended by adding at the end the following new sentence: ``In making 
such determination of permanent and total disability, the Secretary 
shall provide that a borrower who has been certified as permanently and 
totally disabled by the Department of Veterans Affairs or the Social 
Security Administration shall not be required to present further 
documentation for purposes of this title.''.
  (n) Treatment of Falsely Certified Borrowers.--Section 437(c)(1) (20 
U.S.C. 1087(c)(1)) is amended by inserting ``or parent's eligibility'' 
after ``such student's eligibility''.
  (o) Perfection of Security Interests.--Section 439(d) (20 U.S.C. 
1087-2(d)) is amended--
          (1) by striking paragraph (3); and
          (2) by redesignating paragraphs (4) and (5) as paragraphs (3) 
        and (4), respectively.
  (p) Additional Technical Amendments.--
          (1) Section 428(a)(2)(A) (20 U.S.C. 1078(a)(2)(A)) is 
        amended--
                  (A) by striking ``and'' at the end of subclause (II) 
                of clause (i); and
                  (B) by moving the margin of clause (iii) two ems to 
                the left.
          (2) Section 428(a)(3)(A)(v) (20 U.S.C. 1078(a)(3)(A)(v)) is 
        amended--
                  (A) by striking ``or'' at the end of subclause (I);
                  (B) by striking the period at the end of subclause 
                (II) and inserting ``; or''; and
                  (C) by adding after subclause (II) the following new 
                subclause:
                  ``(III) in the case of a loan disbursed through an 
                escrow agent, 3 days before the first disbursement of 
                the loan.''.
          (3) Section 428(c)(1)(A) (20 U.S.C. 1078(c)(1)(A)) is amended 
        by striking ``45 days'' in the last sentence and inserting ``30 
        days''.
          (4) Section 428(i)(1) (20 U.S.C. 1078(i)(1)) is amended by 
        striking ``21 days'' in the third sentence and inserting ``10 
        days''.
          (5) Section 428G(e) (20 U.S.C. 1078-7(e)) is amended by 
        striking ``, made to a student to cover the cost of attendance 
        at an eligible institution outside the United States,''.
          (6) Section 428H(e) (20 U.S.C. 1078-8(e)) is amended by 
        striking paragraph (6) and inserting the following:
          ``(6) Time limits on billing interest.--A lender may not 
        receive interest on a loan under this section from a borrower 
        for any period that precedes the dates described in section 
        428(a)(3)(A)(v).''.
          (7) Section 432(m)(1)(B) (20 U.S.C. 1082(m)(1)(B)) is 
        amended--
                  (A) in clause (i), by inserting ``and'' after the 
                semicolon at the end; and
                  (B) in clause (ii), by striking ``; and'' and 
                inserting a period.
          (8) Section 438(b)(4)(B) (20 U.S.C. 1087-1(b)(4)(B)) is 
        amended by striking ``shall be computed'' and all that follows 
        through ``to the loan'' and inserting ``described in 
        subparagraph (A) shall be computed using the interest rate 
        described in section 3902(a) of title 31, United States 
        Code,''.

                  PART C--FEDERAL WORK-STUDY PROGRAMS

SEC. 441. AUTHORIZATION OF APPROPRIATIONS.

  Section 441(b) (42 U.S.C. 2751(b)) is amended--
          (1) by striking ``1999'' and inserting ``2006''; and
          (2) by striking ``4 succeeding'' and inserting ``5 
        succeeding''.

SEC. 442. COMMUNITY SERVICE.

  Section 441(c)(1) (42 U.S.C. 2751(c)(1)) is amended by striking 
``that are open and accessible to the community''.

SEC. 443. ALLOCATION OF FUNDS.

  (a) Phaseout of Allocation Based on Previous Allocations.--Subsection 
(a) of section 442 (42 U.S.C. 2752(a)) is amended to read as follows:
  ``(a) Allocation Based on Previous Allocation.--
          ``(1) Base guarantee.--From the amount appropriated pursuant 
        to section 441(b) for each fiscal year after fiscal year 2007, 
        the Secretary shall, subject to paragraph (2), first allocate 
        to each eligible institution an amount equal to the following 
        percentage of the amount such institution received under 
        subsection (a) of this section for fiscal year 2007 (as such 
        subsection was in effect with respect to allocations for such 
        fiscal year):
                  ``(A) 80 percent for fiscal years 2008 and 2009;
                  ``(B) 60 percent for fiscal years 2010 and 2011;
                  ``(C) 40 percent for fiscal years 2012 and 2013;
                  ``(D) 20 percent for fiscal years 2014 and 2015; and
                  ``(E) 0 percent for fiscal year 2016 and any 
                succeeding fiscal year.
          ``(2) Ratable reductions for insufficient appropriations.--
                  ``(A) Reduction of base guarantee.--If the amount 
                appropriated for any fiscal year is less than the 
                amount required to be allocated to all institutions 
                under this subsection, then the amount of the 
                allocation to each such institution shall be ratably 
                reduced.
                  ``(B) Additional appropriations allocation.--If 
                additional amounts are appropriated for any such fiscal 
                year, such reduced amounts shall be increased on the 
                same basis as they were reduced (until the amount 
                allocated equals the amount required to be allocated 
                under this subsection).
          ``(3) Additional allocations for certain institutions.--
                  ``(A) Allocations permitted.--Notwithstanding any 
                other provision of this section, the Secretary may 
                allocate an amount equal to not more than 10 percent of 
                the amount by which the amount appropriated in any 
                fiscal year to carry out this part exceeds $700,000,000 
                among eligible institutions described in subparagraph 
                (B).
                  ``(B) Eligible institutions.--An otherwise eligible 
                institution may receive a portion of the allocation 
                described in subparagraph (A) if--
                          ``(i) not less than 10 percent of the 
                        students attending the institution receive 
                        Federal Pell Grants; and
                          ``(ii)(I) in the case of an institution that 
                        offers programs of at least 4 years in 
                        duration, if its graduation rate for Federal 
                        Pell Grant recipients attending the institution 
                        and graduating within the period of time equal 
                        to normal duration of the longest undergraduate 
                        program offered by the institution, as measured 
                        from the first day of their enrollment, exceeds 
                        the median rate for the class of institution 
                        (as defined in section 131(f)(5)(C)); or
                          ``(II) in the case of an institution that 
                        offers programs of at least 2, but less than 4, 
                        years in duration, if its rate for Federal Pell 
                        Grant recipients attending the institution and 
                        graduating or transferring to an institution 
                        that offers programs of at least 4 years in 
                        duration within the period of time equal to the 
                        normal duration of the program offered, as 
                        measured from the first day of their 
                        enrollment, exceeds the median rate for the 
                        class of institution (as defined in section 
                        131(f)(5)(C)).''.
  (b) Effective Date.--The amendment made by subsection (a) shall apply 
with respect to any amounts appropriated under section 441(b) of the 
Higher Education Act of 1965 (42 U.S.C. 2751(b)) for fiscal year 2008 
or any succeeding fiscal year.

SEC. 444. BOOKS AND SUPPLIES.

  Section 442(c)(4)(D) (42 U.S.C. 2752(c)(4)(D)) is amended by striking 
``$450'' and inserting ``$600''.

SEC. 445. JOB LOCATION AND DEVELOPMENT.

  Section 446(a)(1) (42 U.S.C. 2756(a)(1)) is amended--
          (1) by striking ``10 percent or $50,000'' and inserting ``15 
        percent or $75,000''; and
          (2) by inserting before the period at the end the following: 
        ``, except that not less than one-third of such amount shall be 
        specifically allocated to locate and develop community service 
        jobs''.

SEC. 446. WORK COLLEGES.

  Section 448 (42 U.S.C. 2756b) is amended--
          (1) by striking ``work-learning'' each place it appears and 
        inserting ``work-learning-service'';
          (2) by amending subparagraph (C) of subsection (e)(1) to read 
        as follows:
                  ``(C) requires all resident students, including at 
                least one-half of all students who are enrolled on a 
                full-time basis, to participate in a comprehensive 
                work-learning-service program for at least 5 hours each 
                week, or at least 80 hours during each period of 
                enrollment, unless the student is engaged in an 
                institutionally organized or approved study abroad or 
                externship program; and'';
          (3) by amending paragraph (2) of subsection (e) to read as 
        follows:
          ``(2) the term `comprehensive student work-learning-service 
        program'--
                  ``(A) means a student work-learning-service program 
                that is an integral and stated part of the 
                institution's educational philosophy and program;
                  ``(B) requires participation of all resident students 
                for enrollment and graduation;
                  ``(C) includes learning objectives, evaluation, and a 
                record of work performance as part of the student's 
                college record;
                  ``(D) provides programmatic leadership by college 
                personnel at levels comparable to traditional academic 
                programs;
                  ``(E) recognizes the educational role of work-
                learning-service supervisors; and
                  ``(F) includes consequences for nonperformance or 
                failure in the work-learning-service program similar to 
                the consequences for failure in the regular academic 
                program.''; and
          (4) in subsection (f), by striking ``1999 and such sums as 
        may be necessary for each of the 4 succeeding fiscal years'' 
        and inserting ``2006 and such sums as may be necessary for the 
        5 succeeding fiscal years''.

                  PART D--FEDERAL DIRECT LOAN PROGRAM

SEC. 451. REAUTHORIZATION OF THE DIRECT LOAN PROGRAM.

  (a) Administrative Expenses.--Section 458(a)(1) (20 U.S.C. 
1087h(a)(1)) is amended by striking ``$617,000,000'' and all that 
follows through ``fiscal year 2003'' and inserting ``$820,000,000 in 
fiscal year 2006, $833,000,000 in fiscal year 2007, $847,000,000 in 
fiscal year 2008, $862,000,000 in fiscal year 2009, and $878,000,000 in 
fiscal year 2010, and $894,000,000 in fiscal year 2011''.
  (b) Calculation Basis.--Subsection (b) of section 458 (20 U.S.C. 
1087h(b)) is amended by striking ``shall be calculated--'' and all that 
follows through the end of such subsection and inserting ``shall be 
calculated on the basis of 0.10 percent of the original principal 
amount of outstanding loans on which insurance was issued under part 
B.''.
  (c) Special Rules: Fee Cap.--Section 458(c)(1) (20 U.S.C. 
1087h(c)(1)) is amended by striking subparagraphs (A) through (E) and 
inserting the following:
                  ``(A) for fiscal year 2006, shall not exceed 
                $220,000,000;
                  ``(B) for fiscal year 2007, shall not exceed 
                $233,000,000;
                  ``(C) for fiscal year 2008, shall not exceed 
                $247,000,000;
                  ``(D) for fiscal year 2009, shall not exceed 
                $262,000,000;
                  ``(E) for fiscal year 2010, shall not exceed 
                $278,000,000; and
                  ``(F) for fiscal year 2011, shall not exceed 
                $294,000,000.''.
  (d) Income Contingent Repayment.--Section 455(e)(2) (20 U.S.C. 
1087e(e)(2)) is amended by striking ``and files a Federal income tax 
return jointly with the borrower's spouse''.

                  PART E--FEDERAL PERKINS LOAN PROGRAM

SEC. 461. REAUTHORIZATION OF PROGRAM.

  (a) Program Authorization.--
          (1) Authorization of appropriations.--Section 461(b) (20 
        U.S.C. 1087aa(b)) is amended--
                  (A) in paragraph (1)--
                          (i) by striking ``1999'' and inserting 
                        ``2006''; and
                          (ii) by striking ``4 succeeding'' and 
                        inserting ``5 succeeding''; and
                  (B) in paragraph (2), by striking ``2003'' each place 
                it appears and inserting ``2012''.
          (2) Federal capital contribution recovery.--Section 466 (20 
        U.S.C. 1087ff) is amended--
                  (A) by striking ``2004'' each place it appears in 
                subsections (a) and (c) and inserting ``2012''; and
                  (B) in subsection (a), by striking ``2003'' each 
                place it appears and inserting ``2011''.
  (b) Phaseout of Allocation Based on Previous Allocations.--
          (1) Amendment.--Subsection (a) of section 462 (20 U.S.C. 
        1087bb(a)) is amended to read as follows:
  ``(a) Allocation Based on Previous Allocation.--
          ``(1) Base guarantee.--From the amount appropriated pursuant 
        to section 461(b) for each fiscal year after fiscal year 2007, 
        the Secretary shall, subject to paragraphs (2) and (3), first 
        allocate to each eligible institution an amount equal to--
                  ``(A) 100 percent of the amount such institution 
                received under subsection (a) of this section for 
                fiscal year 2007 (as such subsection was in effect with 
                respect to allocations for such fiscal year), 
                multiplied by
                  ``(B) the institution's default penalty, as 
                determined under subsection (e), except that if the 
                institution has a cohort default rate in excess of the 
                applicable maximum cohort default rate under subsection 
                (f), the institution may not receive an allocation 
                under this paragraph.
          ``(2) Phase out.--For each of the fiscal years after fiscal 
        year 2007, paragraph (1) shall be applied by substituting for 
        `100 percent':
                  ``(A) `80 percent' for fiscal years 2008 and 2009;
                  ``(B) `60 percent' for fiscal years 2010 and 2011;
                  ``(C) `40 percent' for fiscal years 2012 and 2013;
                  ``(D) `20 percent' for fiscal years 2014 and 2015; 
                and
                  ``(E) `0 percent' for fiscal year 2016 and any 
                succeeding fiscal year.
          ``(3) Ratable reductions for insufficient appropriations.--
                  ``(A) Reduction of base guarantee.--If the amount 
                appropriated for any fiscal year is less than the 
                amount required to be allocated to all institutions 
                under this subsection, then the amount of the 
                allocation to each such institution shall be ratably 
                reduced.
                  ``(B) Additional appropriations allocation.--If 
                additional amounts are appropriated for any such fiscal 
                year, such reduced amounts shall be increased on the 
                same basis as they were reduced (until the amount 
                allocated equals the amount required to be allocated 
                under this subsection).''.
          (2) Effective date.--The amendment made by paragraph (1) 
        shall apply with respect to any amounts appropriated under 
        section 461(b) of the Higher Education Act of 1965 (20 U.S.C. 
        1087bb(b)) for fiscal year 2008 or any succeeding fiscal year.
  (c) Books and Supplies.--Section 462(c)(4)(D) (20 U.S.C. 
1087bb(c)(4)(D)) is amended by striking ``$450'' and inserting 
``$600''.

SEC. 462. LOAN TERMS AND CONDITIONS.

  (a) Loan Limits.--Section 464(a) (20 U.S.C. 1087dd(a)) is amended--
          (1) in paragraph (2)(A)--
                  (A) by striking ``$4,000'' in clause (i) and 
                inserting ``$5,500''; and
                  (B) by striking ``$6,000'' in clause (ii) and 
                inserting ``$8,000''; and
          (2) in paragraph (2)(B)--
                  (A) by striking ``$40,000'' in clause (i) and 
                inserting ``$60,000'';
                  (B) by striking ``$20,000'' in clause (ii) and 
                inserting ``$27,500''; and
                  (C) by striking ``$8,000'' in clause (iii) and 
                inserting ``$11,000''.
  (b) Forbearance.--Section 464(e) (20 U.S.C. 1087dd(e)) is amended by 
striking ``, upon written request,''.
  (c) Special Repayment Rule.--Paragraph (2) of section 464(f) is 
amended to read as follows:
  ``(2) No compromise repayment of a defaulted loan as authorized by 
paragraph (1) may be made unless agreed to by the Secretary.''.
  (d) Rehabilitation.--Section 464(h)(1)(A) (20 U.S.C. 1087dd(h)(1)(A)) 
is amended by striking ``12 ontime'' and inserting ``9 on-time''.

SEC. 463. LOAN CANCELLATION.

  Section 465(a)(3)(A) (20 U.S.C. 1087ee(a)(3)(A)) is amended--
          (1) by inserting ``(D),'' after ``subparagraph (A), (C),'' in 
        clause (i);
          (2) by inserting ``or'' after the semicolon at the end of 
        clause (ii);
          (3) by striking clause (iii); and
          (4) by redesignating clause (iv) as clause (iii).

SEC. 464. TECHNICAL AMENDMENTS.

  Part E is further amended as follows:
          (1) Section 462(g)(1)(E)(i)(I) (20 U.S.C. 
        1087bb(g)(1)(E)(i)(I)) is amended by inserting ``monthly'' 
        after ``consecutive''.
          (2) Section 463(a)(4)(A) (20 U.S.C. 1087cc(a)(4)(A)) is 
        amended by striking ``the Secretary may'' and inserting ``the 
        Secretary shall''.
          (3) Section 464(c)(1)(D) (20 U.S.C. 1087dd(c)(1)(D)) is 
        amended by redesignating subclauses (I) and (II) as clauses (i) 
        and (ii), respectively.
          (4) Section 465(a)(2) (20 U.S.C. 1087ee(a)(2)) is amended in 
        subparagraph (A), by striking ``section 111(c)'' and inserting 
        ``section 1113(a)(5)''.
          (5) Section 467(b) (20 U.S.C. 1087gg(b)) is amended by 
        striking ``(5)(A), (5)(B)(i), or (6)'' and inserting ``(4)(A), 
        (4)(B), or (5)''.
          (6) Section 469(c) (20 U.S.C. 1087ii(c)) is amended--
                  (A) by striking ``sections 602 and 632'' and 
                inserting ``sections 602(3) and 632(5)'';
                  (B) by striking ``qualified professional provider of 
                early intervention services'' and inserting ``early 
                intervention services''; and
                  (C) by striking ``section 672(2)'' and inserting 
                ``section 632(4)''.

                         PART F--NEED ANALYSIS

SEC. 471. SIGNIFICANTLY SIMPLIFYING THE STUDENT AID APPLICATION 
                    PROCESS.

  (a) Expanding the Auto-Zero and Further Simplifying the Simplified 
Needs Test.--
          (1) Simplified needs test.--Section 479 (20 U.S.C. 1087ss) is 
        amended--
                  (A) in subsection (b)--
                          (i) in paragraph (1)--
                                  (I) by striking clause (i) of 
                                subparagraph (A) and inserting the 
                                following:
                          ``(i) the student's parents file, or are 
                        eligible to file, a form described in paragraph 
                        (3) or certify that they are not required to 
                        file an income tax return, and the student 
                        files, or is eligible to file, such a form or 
                        certifies that the student is not required to 
                        file an income tax return, or the student's 
                        parents, or the student, received benefits at 
                        some time during the previous 12-month period 
                        under a means-tested Federal benefit program as 
                        defined under subsection (d); and''; and
                                  (II) by striking clause (i) of 
                                subparagraph (B) and inserting the 
                                following:
                          ``(i) the student (and the student's spouse, 
                        if any) files, or is eligible to file, a form 
                        described in paragraph (3) or certifies that 
                        the student (and the student's spouse, if any) 
                        is not required to file an income tax return, 
                        or the student (and the student's spouse, if 
                        any) received benefits at some time during the 
                        previous 12-month period under a means-tested 
                        Federal benefit program as defined under 
                        subsection (d); and''; and
                          (ii) in paragraph (3), by striking ``A 
                        student or family files a form described in 
                        this subsection, or subsection (c), as the case 
                        may be, if the student or family, respectively, 
                        files'' and inserting ``In the case of an 
                        independent student, the student, or in the 
                        case of a dependent student, the parent, files 
                        a form described in this subsection, or 
                        subsection (c), as the case may be, if the 
                        student or parent, as appropriate, files'';
                  (B) in subsection (c)--
                          (i) in paragraph (1), by striking 
                        subparagraph (A) and inserting the following:
                  ``(A) the student's parents file, or are eligible to 
                file, a form described in subsection (b)(3) or certify 
                that they are not required to file an income tax 
                return, and the student files, or is eligible to file, 
                such a form or certifies that the student is not 
                required to file an income tax return, or the student's 
                parents, or the student, received benefits at some time 
                during the previous 12-month period under a means-
                tested Federal benefit program as defined in subsection 
                (d); and''; and
                          (ii) in paragraph (2), by striking 
                        subparagraph (A) and inserting the following:
                  ``(A) the student (and the student's spouse, if any) 
                files, or is eligible to file, a form described in 
                subsection (b)(3) or certifies that the student (and 
                the student's spouse, if any) is not required to file 
                an income tax return, or the student (and the student's 
                spouse, if any) received benefits at some time during 
                the previous 12-month period under a means-tested 
                Federal benefit program as defined in subsection (d); 
                and''; and
                  (C) by adding at the end the following new 
                subsections:
  ``(d) Definition of Means-Tested Federal Benefit Program.--For the 
purposes of this section, the term `means-tested Federal benefit 
program' means a mandatory spending program of the Federal Government, 
other than a program under this title, in which eligibility for the 
program's benefits, or the amount of such benefits, or both, are 
determined on the basis of income or resources of the individual or 
family seeking the benefit, and may include such programs as the 
supplemental security income program under title XVI of the Social 
Security Act, the food stamp program under the Food Stamp Act of 1977, 
the free and reduced price school lunch program established under the 
Richard B. Russell National School Lunch Act, the temporary assistance 
to needy families program established under part A of title IV of the 
Social Security Act, and the women, infants and children program 
established under Section 17 of the Child Nutrition Act of 1966, and 
other programs identified by the Secretary.
  ``(e) Reporting Requirements.--The Secretary shall regularly evaluate 
the impact of the eligibility guidelines in subsections (b)(1)(A)(i), 
(b)(1)(B)(i), (c)(1)(A) and (c)(2)(A) of this section. In particular, 
the Secretary shall evaluate whether, under the definition of means-
tested Federal benefit programs in subsection (d), the Simplified Needs 
Test continues to be targeted to the maximum number of low- and 
moderate-income students.''.
  (b) Improvements to Paper and Electronic Forms.--
          (1) Common financial aid form development and processing.--
        Section 483(a) (20 U.S.C. 1090(a)) is amended--
                  (A) by striking paragraphs (1), (2), and (5);
                  (B) by redesignating paragraphs (3), (4), (6), and 
                (7), as paragraphs (9), (10), (11), and (12), 
                respectively;
                  (C) by inserting before paragraph (9), as 
                redesignated by subparagraph (B), the following:
          ``(1) In general.--The Secretary, in cooperation with 
        representatives of agencies and organizations involved in 
        student financial assistance, shall produce, distribute, and 
        process free of charge common financial reporting forms as 
        described in this subsection to be used for application and 
        reapplication to determine the need and eligibility of a 
        student for financial assistance under parts A through E (other 
        than subpart 4 of part A). These forms shall be made available 
        to applicants in both paper and electronic formats and shall be 
        referred to as the `Free Application for Federal Student Aid' 
        or the `FAFSA' .
          ``(2) Early estimates.--
                  ``(A) In general.--The Secretary shall permit 
                applicants to complete such forms as described in this 
                subsection in the 4 years prior to enrollment in order 
                to obtain a non-binding estimate of the family 
                contribution, as defined in section 473. The estimate 
                shall clearly and conspicuously indicate that it is 
                only an estimate of family contribution, and may not 
                reflect the actual family contribution of the applicant 
                that shall be used to determine the grant, loan, or 
                work assistance that the applicant may receive under 
                this title when enrolled in a program of postsecondary 
                education. Such applicants shall be permitted to update 
                information submitted on forms described in this 
                subsection using the process required under paragraph 
                (5)(A).
                  ``(B) Evaluation.--Two years after the early 
                estimates are implemented under this paragraph and from 
                data gathered from the early estimates, the Secretary 
                shall evaluate the differences between initial, non-
                binding early estimates and the final financial aid 
                award made available under this title.
                  ``(C) Report.--The Secretary shall provide a report 
                to the authorizing committees on the results of the 
                evaluation.
          ``(3) Paper format.--
                  ``(A) In general.--The Secretary shall produce, 
                distribute, and process common forms in paper format to 
                meet the requirements of paragraph (1). The Secretary 
                shall develop a common paper form for applicants who do 
                not meet the requirements of subparagraph (B).
                  ``(B) Ez fafsa.--
                          ``(i) In general.--The Secretary shall 
                        develop and use a simplified paper application 
                        form, to be known as the `EZ FAFSA', to be used 
                        for applicants meeting the requirements of 
                        section 479(c).
                          ``(ii) Reduced data requirements.--The form 
                        under this subparagraph shall permit an 
                        applicant to submit, for financial assistance 
                        purposes, only the data elements required to 
                        make a determination of whether the applicant 
                        meets the requirements under section 479(c).
                          ``(iii) State data.--The Secretary shall 
                        include on the form under this subparagraph 
                        such data items as may be necessary to award 
                        State financial assistance, as provided under 
                        paragraph (6), except that the Secretary shall 
                        not include a State's data if that State does 
                        not permit its applicants for State assistance 
                        to use the form under this subparagraph.
                          ``(iv) Free availability and processing.--The 
                        provisions of paragraph (7) shall apply to the 
                        form under this subparagraph, and the data 
                        collected by means of the form under this 
                        subparagraph shall be available to institutions 
                        of higher education, guaranty agencies, and 
                        States in accordance with paragraph (9).
                          ``(v) Testing.--The Secretary shall conduct 
                        appropriate field testing on the form under 
                        this subparagraph.
                  ``(C) Promoting the use of electronic fafsa.--
                          ``(i) In general.--The Secretary shall make 
                        an effort to encourage applicants to utilize 
                        the electronic forms described in paragraph 
                        (4).
                          ``(ii) Maintenance of the fafsa in a 
                        printable electronic file.--The Secretary shall 
                        maintain a version of the paper forms described 
                        in subparagraphs (A) and (B) in a printable 
                        electronic file that is easily portable. The 
                        printable electronic file will be made easily 
                        accessible and downloadable to students on the 
                        same website used to provide students with the 
                        electronic application forms described in 
                        paragraph (4) of this subsection. The Secretary 
                        shall enable students to submit a form created 
                        under this subparagraph that is downloaded and 
                        printed from an electronic file format in order 
                        to meet the filing requirements of this section 
                        and in order to receive aid from programs under 
                        this title.
                          ``(iii) Reporting requirement.--The Secretary 
                        shall report annually to Congress on the impact 
                        of the digital divide on students completing 
                        applications for title IV aid described under 
                        this paragraph and paragraph (4). The Secretary 
                        will also report on the steps taken to 
                        eliminate the digital divide and phase out the 
                        paper form described in subparagraph (A) of 
                        this paragraph. The Secretary's report will 
                        specifically address the impact of the digital 
                        divide on the following student populations: 
                        dependent students, independent students 
                        without dependents, and independent students 
                        with dependents other than a spouse.
          ``(4) Electronic format.--
                  ``(A) In general.--The Secretary shall produce, 
                distribute, and process common forms in electronic 
                format to meet the requirements of paragraph (1). The 
                Secretary shall develop common electronic forms for 
                applicants who do not meet the requirements of 
                subparagraph (C) of this paragraph.
                  ``(B) State data.--The Secretary shall include on the 
                common electronic forms space for information that 
                needs to be submitted from the applicant to be eligible 
                for State financial assistance, as provided under 
                paragraph (6), except the Secretary shall not require 
                applicants to complete data required by any State other 
                than the applicant's State of residence.
                  ``(C) Simplified applications: fafsa on the web.--
                          ``(i) In general.--The Secretary shall 
                        develop and use a simplified electronic 
                        application form to be used by applicants 
                        meeting the requirements under subsection (c) 
                        of section 479 and an additional, separate 
                        simplified electronic application form to be 
                        used by applicants meeting the requirements 
                        under subsection (b) of section 479.
                          ``(ii) Reduced data requirements.--The 
                        simplified electronic application forms shall 
                        permit an applicant to submit for financial 
                        assistance purposes, only the data elements 
                        required to make a determination of whether the 
                        applicant meets the requirements under 
                        subsection (b) or (c) of section 479.
                          ``(iii) State data.--The Secretary shall 
                        include on the simplified electronic 
                        application forms such data items as may be 
                        necessary to award state financial assistance, 
                        as provided under paragraph (6), except that 
                        the Secretary shall not require applicants to 
                        complete data required by any State other than 
                        the applicant's State of residence.
                          ``(iv) Availability and processing.--The data 
                        collected by means of the simplified electronic 
                        application forms shall be available to 
                        institutions of higher education, guaranty 
                        agencies, and States in accordance with 
                        paragraph (9).
                          ``(v) Testing.--The Secretary shall conduct 
                        appropriate field testing on the forms 
                        developed under this subparagraph.
                  ``(D) Use of forms.--Nothing in this subsection shall 
                be construed to prohibit the use of the forms developed 
                by the Secretary pursuant to this paragraph by an 
                eligible institution, eligible lender, guaranty agency, 
                State grant agency, private computer software provider, 
                a consortium thereof, or such other entities as the 
                Secretary may designate.
                  ``(E) Privacy.--The Secretary shall ensure that data 
                collection under this paragraph complies with section 
                552a of title 5, United States Code, and that any 
                entity using the electronic version of the forms 
                developed by the Secretary pursuant to this paragraph 
                shall maintain reasonable and appropriate 
                administrative, technical, and physical safeguards to 
                ensure the integrity and confidentiality of the 
                information, and to protect against security threats, 
                or unauthorized uses or disclosures of the information 
                provided on the electronic version of the forms. Data 
                collected by such electronic version of the forms shall 
                be used only for the application, award, and 
                administration of aid awarded under this title, State 
                aid, or aid awarded by eligible institutions or such 
                entities as the Secretary may designate. No data 
                collected by such electronic version of the forms shall 
                be used for making final aid awards under this title 
                until such data have been processed by the Secretary or 
                a contractor or designee of the Secretary, except as 
                may be permitted under this title.
                  ``(F) Signature.--Notwithstanding any other provision 
                of this Act, the Secretary may permit an electronic 
                form under this paragraph to be submitted without a 
                signature, if a signature is subsequently submitted by 
                the applicant.
          ``(5) Streamlining.--
                  ``(A) Streamlined reapplication process.--
                          ``(i) In general.--The Secretary shall 
                        develop streamlined reapplication forms and 
                        processes, including both paper and electronic 
                        reapplication processes, consistent with the 
                        requirements of this subsection, for an 
                        applicant who applies for financial assistance 
                        under this title--
                                  ``(I) in the academic year succeeding 
                                the year in which such applicant first 
                                applied for financial assistance under 
                                this title; or
                                  ``(II) in any succeeding academic 
                                years.
                          ``(ii) Mechanisms for reapplication.--The 
                        Secretary shall develop appropriate mechanisms 
                        to support reapplication.
                          ``(iii) Identification of updated data.--The 
                        Secretary shall determine, in cooperation with 
                        States, institutions of higher education, 
                        agencies, and organizations involved in student 
                        financial assistance, the data elements that 
                        can be updated from the previous academic 
                        year's application.
                          ``(iv) Reduced data authorized.--Nothing in 
                        this title shall be construed as limiting the 
                        authority of the Secretary to reduce the number 
                        of data elements required of reapplicants.
                          ``(v) Zero family contribution.--Applicants 
                        determined to have a zero family contribution 
                        pursuant to section 479(c) shall not be 
                        required to provide any financial data in a 
                        reapplication form, except that which is 
                        necessary to determine eligibility under such 
                        section.
                  ``(B) Reduction of data elements.--
                          ``(i) Reduction encouraged.--Of the number of 
                        data elements on the FAFSA on the date of 
                        enactment of the College Access and Opportunity 
                        Act of 2005 (including questions on the FAFSA 
                        for the purposes described in paragraph (6)), 
                        the Secretary, in cooperation with 
                        representatives of agencies and organizations 
                        involved in student financial assistance, shall 
                        continue to reduce the number of such data 
                        elements following the date of enactment. 
                        Reductions of data elements under paragraph 
                        (3)(B), (4)(C), or (5)(A)(iv) shall not be 
                        counted towards the reduction referred to in 
                        this paragraph unless those data elements are 
                        reduced for all applicants.
                          ``(ii) Report.--The Secretary shall annually 
                        report to the House of Representatives and the 
                        Senate on the progress made of reducing data 
                        elements.
          ``(6) State requirements.--
                  ``(A) In general.--The Secretary shall include on the 
                forms developed under this subsection, such State-
                specific data items as the Secretary determines are 
                necessary to meet State requirements for State need-
                based financial aid under section 415C, except as 
                provided in paragraphs (3)(B)(iii) and (4)(C)(iii) of 
                this subsection. Such items shall be selected in 
                consultation with State agencies in order to assist in 
                the awarding of State financial assistance in 
                accordance with the terms of this subsection, except as 
                provided in paragraphs (3)(B)(iii) and (4)(C)(iii) of 
                this subsection. The number of such data items shall 
                not be less than the number included on the form on 
                October 7, 1998, unless a State notifies the Secretary 
                that the State no longer requires those data items for 
                the distribution of State need-based financial aid.
                  ``(B) Annual review.--The Secretary shall conduct an 
                annual review process to determine which forms and data 
                items the States require to award State need-based 
                financial aid and other application requirements that 
                the States may impose.
                  ``(C) State use of simplified forms.--The Secretary 
                shall encourage States to take such steps as necessary 
                to encourage the use of simplified application forms, 
                including those described in paragraphs (3)(B) and 
                (4)(C), to meet the requirements under subsection (b) 
                or (c) of section 479.
                  ``(D) Federal register notice.--The Secretary shall 
                publish on an annual basis a notice in the Federal 
                Register requiring State agencies to inform the 
                Secretary--
                          ``(i) if the State agency is unable to permit 
                        applicants to utilize the simplified 
                        application forms described in paragraphs 
                        (3)(B) and (4)(C); and
                          ``(ii) of the State-specific data that the 
                        State agency requires for delivery of State 
                        need-based financial aid.
                  ``(E) State notification to the secretary.--
                          ``(i) In general.--Each State agency shall 
                        notify the Secretary--
                                  ``(I) whether the State permits an 
                                applicant to file a form described in 
                                paragraph (3)(B) or paragraph (4)(C) of 
                                this subsection for purposes of 
                                determining eligibility for State need-
                                based financial aid; and
                                  ``(II) the State-specific data that 
                                the State agency requires for delivery 
                                of State need-based financial aid.
                          ``(ii) Acceptance of forms.--In the event 
                        that a State does not permit an applicant to 
                        file a form described in paragraph (3)(B) or 
                        paragraph (4)(C) of this subsection for 
                        purposes of determining eligibility for State 
                        need-based financial aid--
                                  ``(I) the State shall notify the 
                                Secretary if the State is not permitted 
                                to do so because of either State law or 
                                because of agency policy; and
                                  ``(II) the notification under 
                                subclause (I) shall include an estimate 
                                of the program cost to permit 
                                applicants to complete simplified 
                                application forms under paragraphs 
                                (3)(B) and paragraph (4)(C) of this 
                                subsection.
                          ``(iii) Lack of notification by the state.--
                        If a State does not notify the Secretary 
                        pursuant to clause (i), the Secretary shall--
                                  ``(I) permit residents of that State 
                                to complete simplified application 
                                forms under paragraphs (3)(B) and 
                                paragraph (4)(C) of this subsection; 
                                and
                                  ``(II) not require any resident of 
                                that State to complete any data 
                                previously required by that State under 
                                this section.
          ``(7) Charges to students and parents for use of forms 
        prohibited.--
                  ``(A) Fees prohibited.--The FAFSA, in whatever form 
                (including the EZ-FAFSA, paper, electronic, simplified, 
                or reapplication), shall be produced, distributed, and 
                processed by the Secretary and no parent or student 
                shall be charged a fee for the collection, processing, 
                or delivery of financial aid through the use of the 
                FAFSA. The need and eligibility of a student for 
                financial assistance under parts A through E of this 
                title (other than under subpart 4 of part A) may only 
                be determined by using the FAFSA developed by the 
                Secretary pursuant to this subsection. No student may 
                receive assistance under parts A through E of this 
                title (other than under subpart 4 of part A), except by 
                use of the FAFSA developed by the Secretary pursuant to 
                this subsection. No data collected on a form for which 
                a fee is charged shall be used to complete the FAFSA.
                  ``(B) Notice.--Any entity that provides to students 
                or parents, or charges students or parents for, any 
                value-added services with respect to or in connection 
                with the FAFSA, such as completion of the FAFSA, 
                submission of the FAFSA, or tracking of the FAFSA for a 
                student, shall provide to students and parents clear 
                and conspicuous notice that--
                          ``(i) the FAFSA is a free Federal student aid 
                        application;
                          ``(ii) the FAFSA can be completed without 
                        professional assistance; and
                          ``(iii) includes the current Internet address 
                        for the FAFSA on the Department's web site.
          ``(8) Application processing cycle.--The Secretary shall 
        enable students to submit a form created under this subsection 
        in order to meet the filing requirements of this section and in 
        order to receive aid from programs under this title and shall 
        initiate the processing of applications under this subsection 
        as early as practicable prior to January 1 of the student's 
        planned year of enrollment.''.
          (2) Master calendar.--Section 482(a)(1)(B) (20 U.S.C. 1089) 
        is amended to read as follows:
                  ``(B) by March 1: proposed modifications, updates, 
                and notices pursuant to sections 478, 479(c)(2)(C), and 
                483(a)(6) published in the Federal Register;''.
  (c) Increasing Access to Technology.--Section 483 (20 U.S.C. 1090) is 
further amended by adding at the end the following:
  ``(f) Addressing the Digital Divide.--The Secretary shall utilize 
savings accrued by moving more applicants to the electronic forms 
described in subsection (a)(4) to improve access to the electronic 
forms described in subsection (a)(4) for applicants meeting the 
requirements of section 479(c).''.
  (d) Expanding the Definition of an Independent Student.--Section 
480(d) (20 U.S.C.1087vv(d)) is amended by striking paragraph (2) and 
inserting the following:
          ``(2) is an orphan, in foster care, or a ward of the court, 
        or was in foster care or a ward of the court until the 
        individual reached the age of 18;''.

SEC. 472. ADDITIONAL NEED ANALYSIS AMENDMENTS.

  (a) Income Protection Allowance for Dependent Students.----
          (1) Amendment.--Section 475(g)(2)(D) (20 U.S.C. 
        1087oo(g)(2)(D)) is amended by striking ``$2,200'' and 
        inserting ``$3,000''.
          (2) Effective date.--The amendment made by paragraph (1) 
        shall apply with respect to determinations of need for periods 
        of enrollment beginning on or after July 1, 2006.
  (b) Employment Expense Allowance.--Section 478(h) (20 U.S.C. 
1087rr(h)) is amended--
          (1) by striking ``476(b)(4)(B),''; and
          (2) by striking ``meals away from home, apparel and upkeep, 
        transportation, and housekeeping services'' and inserting 
        ``food away from home, apparel, transportation, and household 
        furnishings and operations''.
  (c) Discretion of Student Financial Aid Administrators.--Section 
479A(a) (20 U.S.C. 1087tt(a)) is amended--
          (1) by striking ``(a) In General.--'' and inserting the 
        following:
  ``(a) Authority to Make Adjustments.--
          ``(1) Adjustments for special circumstances.--'';
          (2) by inserting before ``Special circumstances may'' the 
        following:
          ``(2) Special circumstances defined.--'';
          (3) by inserting ``a student's status as a ward of the court 
        at any time prior to attaining 18 years of age, a student's 
        status as an individual who was adopted at or after age 13, a 
        student's status as a homeless or unaccompanied youth (as 
        defined in section 725 of the McKinney-Vento Homeless 
        Assistance Act),'' after ``487,'';
          (4) by inserting before ``Adequate documentation'' the 
        following:
          ``(3) Documentation and use of supplementary information.--
        ''; and
          (5) by inserting before ``No student'' the following:
          ``(4) Fees for supplementary information prohibited.--''.
  (d) Treating Active Duty Members of the Armed Forces as Independent 
Students.--Section 480(d)(3) (20 U.S.C. 1087vv(d)(3)) is amended by 
inserting before the semicolon at the end the following: ``or is 
currently serving on active duty in the Armed Forces for other than 
training purposes''.
  (e) Excludable Income.--Section 480(e) (20 U.S.C. 1087vv(e)) is 
amended--
          (1) by striking ``and'' at the end of paragraph (3);
          (2) by striking the period at the end of paragraph (4) and 
        inserting ``; and''; and
          (3) by adding at the end the following new paragraph:
          ``(5) any part of any distribution from a qualified tuition 
        program established under section 529 of the Internal Revenue 
        Code of 1986 that is not includable in gross income under such 
        section 529.''.
  (f) Treatment of Savings Plans.--
          (1) Amendment.--Section 480(f) (20 U.S.C. 1087vv(f)) is 
        amended--
                  (A) in paragraph (1), by inserting ``qualified 
                tuition programs established under section 529 of the 
                Internal Revenue Code of 1986 (26 U.S.C. 529), except 
                as provided in paragraph (2),'' after ``tax 
                shelters,'';
                  (B) by redesignating paragraph (2) as paragraph (3); 
                and
                  (C) by inserting after paragraph (1) the following 
                new paragraph:
  ``(2) A qualified tuition program shall not be considered an asset of 
a dependent student under section 475 of this part. The value of a 
qualified tuition program for purposes of determining the assets of 
parents or independent students shall be--
          ``(A) the refund value of any tuition credits or certificates 
        purchased under section 529 of the Internal Revenue Code of 
        1986 (26 U.S.C. 529) on behalf of a beneficiary; or
          ``(B) the current balance of any account which is established 
        under such section for the purpose of meeting the qualified 
        higher education expenses of the designated beneficiary of the 
        account.''.
          (2) Conforming amendment.--Section 480(j) (20 U.S.C. 
        1087vv(j)) is amended--
                  (A) by striking ``; Tuition Prepayment Plans'' in the 
                heading of such subsection;
                  (B) by striking paragraph (2);
                  (C) in paragraph (3), by inserting ``, or a 
                distribution that is not includable in gross income 
                under section 529 of such Code,'' after ``1986''; and
                  (D) by redesignating paragraph (3) as paragraph (2).
  (g) Treatment of Family Ownership of Small Businesses.--Section 
480(f)(3) of the Higher Education Act of 1965 (20 U.S.C. 1087vv(f)(3)), 
as redesignated by subsection (f) of this section, is amended--
          (1) in subparagraph (A), by striking ``or'';
          (2) in subparagraph (B), by striking the period at the end 
        and inserting ``; or''; and
          (3) by adding at the end the following new subparagraph:
          ``(C) a small business with not more than 100 full-time or 
        full-time equivalent employees (or any part of such a small 
        business) that is owned and controlled by the family.''.
  (h) Designated Assistance.--Section 480(j) (20 U.S.C. 1087vv(j)) is 
amended by adding after paragraph (2) (as redesignated by subsection 
(f)(2)(D) of this section) the following new paragraph:
  ``(3) Notwithstanding paragraph (1) and section 472, assistance not 
received under this title may be excluded from both estimated financial 
assistance and cost of attendance, if that assistance is designated by 
the State providing that assistance to offset a specific component of 
the cost of attendance. If that assistance is excluded from either 
estimated financial assistance or cost of attendance, it shall be 
excluded from both.''.

  PART G--GENERAL PROVISIONS RELATING TO STUDENT FINANCIAL ASSISTANCE

SEC. 481. DEFINITIONS OF ACADEMIC YEAR AND ELIGIBLE PROGRAM.

  (a) Academic Year.--Paragraph (2) of section 481(a) (20 U.S.C. 
1088(a)) is amended to read as follows:
  ``(2)(A) For the purpose of any program under this title, the term 
`academic year' shall--
          ``(i) require a minimum of 30 weeks of instructional time for 
        a course of study that measures its program length in credit 
        hours; or
          ``(ii) require a minimum of 26 weeks of instructional time 
        for a course of study that measures its program length in clock 
        hours; and
          ``(iii) require an undergraduate course of study to contain 
        an amount of instructional time whereby a full-time student is 
        expected to complete at least--
                  ``(I) 24 semester or trimester hours or 36 quarter 
                credit hours in a course of study that measures its 
                program length in credit hours; or
                  ``(II) 900 clock hours in a course of study that 
                measures its program length in clock hours.
  ``(B) The Secretary may reduce such minimum of 30 weeks to not less 
than 26 weeks for good cause, as determined by the Secretary on a case-
by-case basis, in the case of an institution of higher education that 
provides a 2-year or 4-year program of instruction for which the 
institution awards an associate or baccalaureate degree.''.
  (b) Eligible Program.--Section 481(b) (20 U.S.C. 1088(b)) is amended 
by adding at the end the following new paragraph:
  ``(3) For purposes of this title, an eligible program includes an 
instructional program that utilizes direct assessment of student 
learning, or recognizes the direct assessment of student learning, in 
lieu of credit hours or clock hours as the measure of student learning. 
In the case of a program being determined eligible for the first time 
under this paragraph, such determination shall be made by the Secretary 
before such program is considered to be eligible. The Secretary shall 
provide an annual report to Congress identifying the programs made 
eligible under this paragraph.''.

SEC. 482. DISTANCE EDUCATION.

  (a) Distance Education: Eligible Program.--Section 481(b) (20 U.S.C. 
1088(b)) is amended by adding after paragraph (3) (as added by section 
481(b) of this Act) the following new paragraph:
  ``(4) An otherwise eligible program that is offered in whole or in 
part through telecommunications is eligible for the purposes of this 
title if the program is offered by an institution, other than a foreign 
institution, that has been evaluated and determined (before or after 
the date of enactment of this paragraph) to have the capability to 
effectively deliver distance education programs by an accrediting 
agency or association that--
          ``(A) is recognized by the Secretary under subpart 2 of Part 
        H; and
          ``(B) has evaluation of distance education programs within 
        the scope of its recognition, as described in section 
        496(n)(3).''.
  (b) Correspondence Courses.--Section 484(l)(1) (20 U.S.C. 1091(l)(1)) 
is amended--
          (1) in subparagraph (A)--
                  (A) by striking ``for a program of study of 1 year or 
                longer''; and
                  (B) by striking ``unless the total'' and all that 
                follows through ``courses at the institution''; and
          (2) by amending subparagraph (B) to read as follows:
                  ``(B) Exception.--Subparagraph (A) does not apply to 
                an institution or school described in section 3(3)(C) 
                of the Carl D. Perkins Vocational and Technical 
                Education Act of 1998.''.

SEC. 483. EXPANDING INFORMATION DISSEMINATION REGARDING ELIGIBILITY FOR 
                    PELL GRANTS.

  Section 483(a) (20 U.S.C. 1090(a)) (as amended by section 471(b)) is 
further amended by adding at the end the following new paragraph:
          ``(13) Expanding information dissemination regarding 
        eligibility for pell grants.--The Secretary shall make special 
        efforts, in conjunction with State efforts, to notify students 
        and their parents who qualify for a free lunch under the 
        Richard B. Russell National School Lunch Act (42 U.S.C. 1751 et 
        seq.), the Food Stamps program, or such other programs as the 
        Secretary shall determine, of their potential eligibility for a 
        maximum Pell Grant, and shall disseminate such informational 
        materials as the Secretary deems appropriate.''.

SEC. 484. STUDENT ELIGIBILITY.

  (a) Fraud: Repayment Required.--Section 484(a) (20 U.S.C. 1091(a)) is 
amended--
          (1) by striking the period at the end of paragraph (5) and 
        inserting ``; and''; and
          (2) by adding at the end the following new paragraph:
          ``(6) if the student has been convicted of, or has pled nolo 
        contendere or guilty to, a crime involving fraud in obtaining 
        funds under this title, have completed the repayment of such 
        funds to the Secretary, or to the holder in the case of a loan 
        under this title obtained by fraud.''.
  (b) Technical Amendment.--Section 484(b)(5) (20 U.S.C. 1091(b)(5)) is 
amended by inserting ``or parent (on behalf of a student)'' after 
``student''.
  (c) Loan Ineligibility Based on Involuntary Civil Commitment for 
Sexual Offenses.--Section 484(b)(5) (20 U.S.C. 1091(b)(5)) is further 
amended by inserting before the period the following: ``, and no 
student who is subject to an involuntary civil commitment upon 
completion of a period of incarceration for a sexual offense (as 
determined under regulations of the Secretary) is eligible to receive a 
loan under this title''.
  (d) Freely Associated States.--Section 484(j) (20 U.S.C. 1091(j)) is 
amended by inserting ``and shall be eligible only for assistance under 
subpart 1 of part A thereafter,'' after ``part C,''.
  (e) Verification of Income Date.--Paragraph (1) of section 484(q) (20 
U.S.C. 1091(q)) is amended to read as follows:
          ``(1) Confirmation with irs.--The Secretary of Education, in 
        cooperation with the Secretary of the Treasury, is authorized 
        to confirm with the Internal Revenue Service the information 
        specified in section 6103(l)(13) of the Internal Revenue Code 
        of 1986 reported by applicants (including parents) under this 
        title on their Federal income tax returns for the purpose of 
        verifying the information reported by applicants on student 
        financial aid applications.''.
  (f) Suspension of Eligibility for Drug Offenses.--Section 484(r)(1) 
(20 U.S.C. 1091(r)(1)) is amended by striking everything preceding the 
table and inserting the following:
          ``(1) In general.--A student who is convicted of any offense 
        under any Federal or State law involving the possession or sale 
        of a controlled substance for conduct that occurred during a 
        period of enrollment for which the student was receiving any 
        grant, loan, or work assistance under this title shall not be 
        eligible to receive any grant, loan, or work assistance under 
        this title from the date of that conviction for the period of 
        time specified in the following table:''.

SEC. 485. INSTITUTIONAL REFUNDS.

  Section 484B (20 U.S.C. 1091b) is amended--
          (1) in subsection (a)(1), by inserting ``subpart 4 of part A 
        or'' after ``received under'';
          (2) in subsection (a)(2), by striking ``takes a leave'' and 
        by inserting ``takes one or more leaves'';
          (3) in subsection (a)(3)(B)(ii), by inserting ``(as 
        determined in accordance with subsection (d))'' after ``student 
        has completed'';
          (4) in subsection (a)(4), by amending subparagraph (A) to 
        read as follows:
                  ``(A) In general.--After determining the eligibility 
                of the student for a late disbursement or post-
                withdrawal disbursement (as required in regulations 
                prescribed by the Secretary), the institution of higher 
                education shall contact the borrower and obtain 
                confirmation that the loan funds are still required by 
                the borrower. In making such contact, the institution 
                shall explain to the borrower the borrower's obligation 
                to repay the funds following any such disbursement. The 
                institution shall document in the borrower's file the 
                result of such contact and the final determination made 
                concerning such disbursement.'';
          (5) in subsection (b)(1), by inserting ``no later than 45 
        days from the determination of withdrawal'' after ``return'';
          (6) in subsection (b)(2), by amending subparagraph (C) to 
        read as follows:
                  ``(C) Grant overpayment requirements.--
                          ``(i) In general.--Notwithstanding 
                        subparagraphs (A) and (B), a student shall only 
                        be required to return grant assistance in the 
                        amount (if any) by which--
                                  ``(I) the amount to be returned by 
                                the student (as determined under 
                                subparagraphs (A) and (B)), exceeds
                                  ``(II) 50 percent of the total grant 
                                assistance received by the student 
                                under this title for the payment period 
                                or period of enrollment.
                          ``(ii) Minimum.--A student shall not be 
                        required to return amounts of $50 or less.'';
          (7) in subsection (b)(2), by adding at the end the following 
        new subparagraph:
                  ``(D) Waivers of pell grant repayment by students 
                affected by disasters.--The Secretary may waive the 
                amounts that students are required to return under this 
                section with respect to Pell grants if the withdrawals 
                on which the returns are based are withdrawals by 
                students--
                          ``(i) who were residing in, employed in, or 
                        attending an institution of higher education 
                        that is located in an area in which the 
                        President has declared that a major disaster 
                        exists, in accordance with section 401 of the 
                        Robert T. Stafford Disaster Relief and 
                        Emergency Assistance Act (42 U.S.C. 5170);
                          ``(ii) whose attendance was interrupted 
                        because of the impact of the disaster on the 
                        student or the institution; and
                          ``(iii) whose withdrawal ended within the 
                        academic year during which the designation 
                        occurred or during the next succeeding academic 
                        year.''; and
          (8) in subsection (d), by striking ``(a)(3)(B)(i)'' and 
        inserting ``(a)(3)(B)''.

SEC. 486. INSTITUTIONAL AND FINANCIAL ASSISTANCE INFORMATION FOR 
                    STUDENTS.

  (a) Information Dissemination Activities.--Section 485(a)(1) (20 
U.S.C. 1092(a)(1)) is amended--
          (1) by amending the second sentence to read as follows: ``The 
        information required by this section shall be produced and be 
        made publicly available to an enrolled student and to any 
        prospective student, through appropriate publications, 
        mailings, electronic media, and the reports required by the 
        institution's accrediting agency under section 496(c)(9).'';
          (2) by amending subparagraph (G) to read as follows:
          ``(G) the academic programs of the institution, including--
                  ``(i) the current degree programs and other 
                educational and training programs;
                  ``(ii) the institution's educational mission and 
                goals;
                  ``(iii) the instructional, laboratory, and other 
                physical plant facilities which relate to the academic 
                programs; and
                  ``(iv) the faculty and other instructional 
                personnel;'';
          (3) by striking subparagraph (L) and inserting the following:
          ``(L) a summary of student outcomes for full-time 
        undergraduate students, including--
                  ``(i) the completion or graduation rates of 
                certificate- or degree-seeking undergraduate students 
                entering such institutions; and
                  ``(ii) any other student outcome data, qualitative or 
                quantitative, including data regarding distance 
                education, deemed by the institution to be appropriate 
                to its stated educational mission and goals, and, when 
                applicable, licensing and placement rates for 
                professional and vocational programs;'';
          (4) by inserting before the semicolon at the end of 
        subparagraph (J) the following: ``, and the process for 
        students to register complaints with the accrediting agencies 
        or associations'';
          (5) in subparagraph (M), by striking ``guaranteed student 
        loans under part B of this title or direct student loans under 
        part E of this title, or both,'' and inserting ``student loans 
        under part B, D, or E of this title'';
          (6) by striking ``and'' at the end of subparagraph (N);
          (7) by striking the period at the end of subparagraph (O) and 
        inserting a semicolon; and
          (8) by adding at the end the following new subparagraphs:
          ``(P) the penalties contained in subsection 484(r) regarding 
        suspension of eligibility for drug related offenses;
          ``(Q) the policies of the institution regarding the 
        acceptance or denial of academic credit earned at another 
        institution of higher education, which shall include a 
        statement that such decisions will not be based solely on the 
        source of accreditation of a sending institution, provided that 
        the sending institution is accredited by an agency or 
        association that is recognized by the Secretary pursuant to 
        section 496 to be a reliable authority as to the quality of the 
        education or training offered, and except that nothing in this 
        subparagraph shall be construed to--
                  ``(i) authorize an officer or employee of the 
                Department to exercise any direction, supervision, or 
                control over the curriculum, program of instruction, 
                administration, or personnel of any institution of 
                higher education, or over any accrediting agency or 
                association;
                  ``(ii) limit the application of the General Education 
                Provisions Act; or
                  ``(iii) create any legally enforceable right; and''.
  (b) Additional Amendments.--Section 485(a) is further amended by 
striking paragraph (6) and inserting the following:
  ``(6) Each institution may provide supplemental information to 
enrolled and prospective students showing the completion or graduation 
rate for students described in paragraph (4). For the purpose of this 
paragraph, the definitions provided in the Integrated Postsecondary 
Education Data System shall apply.
  ``(7) Each eligible institution participating in any program under 
this title may publicly report to currently enrolled and prospective 
students the voluntary information collected by the National Survey of 
Student Engagement (NSSE), the Community College Survey of Student 
Engagement (CCSSE), or other instruments that provide evidence of 
student participation in educationally purposeful activities. The 
information shall be produced and made available in a uniform and 
comprehensible manner, through appropriate publications, mailings, and 
electronic media, and may be included in reports required by the 
institution's accrediting agency.''.
  (c) Exit Counseling.--Section 485(b) (20 U.S.C. 1092(b)) is amended 
by adding at the end the following new paragraph:
  ``(3) Each eligible institution shall, during the exit interview 
required by this subsection, provide to a borrower of a loan made under 
part B, D, or E a clear and conspicuous notice describing the effect of 
using a consolidation loan to discharge the borrower's student loans, 
including--
          ``(A) the effects of consolidation on total interest to be 
        paid, fees to be paid, and length of repayment;
          ``(B) the effects of consolidation on a borrower's underlying 
        loan benefits, including loan forgiveness, cancellation, and 
        deferment;
          ``(C) the ability for the borrower to prepay the loan, pay on 
        a shorter schedule, and to change repayment plans, and that 
        borrower benefit programs may vary among different loan 
        holders;
          ``(D) the tax benefits for which the borrower may be 
        eligible; and
          ``(E) the consequences of default.''.
  (d) Campus Crime Information.--Section 485(f)(1) (20 U.S.C. 
1092(f)(1)) is amended by inserting ``, other than a foreign 
institution of higher education,'' after ``under this title''.
  (e) Disclosure of Fire Safety of Campus Buildings.--Section 485 of 
the Higher Education Act of 1965 (20 U.S.C. 1092) is further amended--
          (1) in subsection (a)(1), by adding after subparagraph (Q) 
        (as added by subsection (a)(8) of this section) the following 
        new subparagraph:
          ``(R) the fire safety report prepared by the institution 
        pursuant to subsection (h).''; and
          (2) by adding at the end the following new subsection:
  ``(h) Disclosure of Fire Safety Standards and Measures.--
          ``(1) Annual fire safety reports required.--Each institution 
        participating in any program under this title shall, beginning 
        in the first academic year that begins after the date of 
        enactment of the College Access and Opportunity Act of 2005, 
        and each year thereafter, prepare, publish, and distribute, 
        through appropriate publications (including the Internet) or 
        mailings, to all current students and employees, and to any 
        applicant for enrollment or employment upon request, an annual 
        fire safety report. Such reports shall contain at least the 
        following information with respect to the campus fire safety 
        practices and standards of that institution:
                  ``(A) A statement that identifies each institution-
                owned or controlled student housing facility, and 
                whether or not such facility is equipped with a fire 
                sprinkler system or other fire safety system, or has 
                fire escape planning or protocols.
                  ``(B) Statistics for each such facility concerning 
                the occurrence of fires and false alarms in such 
                facility during the 2 preceding calendar years for 
                which data are available.
                  ``(C) For each such occurrence in each such facility, 
                a summary of the human injuries or deaths, structural 
                or property damage, or combination thereof.
                  ``(D) Information regarding rules on portable 
                electrical appliances, smoking and open flames (such as 
                candles), regular mandatory supervised fire drills, and 
                planned and future improvements in fire safety.
                  ``(E) Information about fire safety education and 
                training provided to students, faculty, and staff.
                  ``(F) Information concerning fire safety at any 
                housing facility owned or controlled by a fraternity, 
                sorority, or student group that is recognized by the 
                institution, including--
                          ``(i) information reported to the institution 
                        under paragraph (4); and
                          ``(ii) a statement concerning whether and how 
                        the institution works with recognized student 
                        fraternities and sororities, and other 
                        recognized student groups owning or controlling 
                        housing facilities, to make each building and 
                        property owned or controlled by such 
                        fraternities, sororities, and groups more fire 
                        safe.
          ``(2) Fraternities, sororities, and other groups.--Each 
        institution participating in a program under this title shall 
        request each fraternity and sorority that is recognized by the 
        institution, and any other student group that is recognized by 
        the institution and that owns or controls housing facilities, 
        to collect and report to the institution the information 
        described in subparagraphs (A) through (E) of paragraph (1), as 
        applied to the fraternity, sorority, or recognized student 
        group, respectively, for each building and property owned or 
        controlled by the fraternity, sorority, or group, respectively.
          ``(3) Current information to campus community.--Each 
        institution participating in any program under this title shall 
        make, keep, and maintain a log, written in a form that can be 
        easily understood, recording all on-campus fires, including the 
        nature, date, time, and general location of each fire and all 
        false fire alarms. All entries that are required pursuant to 
        this paragraph shall, except where disclosure of such 
        information is prohibited by law, be open to public inspection, 
        and each such institution shall make annual reports to the 
        campus community on such fires and false fire alarms in a 
        manner that will aid the prevention of similar occurrences.
          ``(4) Reports to the secretary.--On an annual basis, each 
        institution participating in any program under this title shall 
        submit to the Secretary a copy of the statistics required to be 
        made available under paragraph (1)(B). The Secretary shall--
                  ``(A) review such statistics;
                  ``(B) make copies of the statistics submitted to the 
                Secretary available to the public; and
                  ``(C) in coordination with nationally recognized fire 
                organizations and representatives of institutions of 
                higher education, identify exemplary fire safety 
                policies, procedures, and practices and disseminate 
                information concerning those policies, procedures, and 
                practices that have proven effective in the reduction 
                of campus fires.
          ``(5) Rule of construction.--Nothing in this subsection shall 
        be construed to authorize the Secretary to require particular 
        policies, procedures, or practices by institutions of higher 
        education with respect to fire safety.
          ``(6) Definitions.--In this subsection, the term `campus' has 
        the meaning provided in subsection (f)(6).''.

SEC. 487. COLLEGE ACCESS INITIATIVE.

  Part G is further amended by inserting after section 485C (20 U.S.C. 
1092c) the following new section:

``SEC. 485D. COLLEGE ACCESS INITIATIVE.

  ``(a) State-by-State Information.--The Secretary shall direct each 
guaranty agency with which the Secretary has an agreement under section 
428(c) to provide to the Secretary the information necessary for the 
development of web links and access for students and families to a 
comprehensive listing of the postsecondary education opportunities, 
programs, publications, Internet Web sites, and other services 
available in the States for which such agency serves as the designated 
guarantor.
  ``(b) Guaranty Agency Activities.--
          ``(1) Plan and activity required.--Each guaranty agency with 
        which the Secretary has an agreement under section 428(c) shall 
        develop a plan and undertake the activity necessary to gather 
        the information required under subsection (a) and to make such 
        information available to the public and to the Secretary in a 
        form and manner as prescribed by the Secretary.
          ``(2) Activities.--Each guaranty agency shall undertake such 
        activities as are necessary to promote access to postsecondary 
        education for students through providing information on college 
        planning, career preparation, and paying for college. The 
        guaranty agency shall publicize such information and coordinate 
        such activities with other entities that either provide or 
        distribute such information in the States for which such 
        guaranty agency serves as the designated guarantor.
          ``(3) Funding.--The activities required by this section may 
        be funded from the guaranty agency's operating account 
        established pursuant to section 422B and, to the extent funds 
        remain, from earnings on the restricted account established 
        pursuant to section 422(h)(4).
  ``(c) Access to Information.--
          ``(1) Secretary's responsibility.--The Secretary shall ensure 
        the availability of the information provided by the guaranty 
        agencies in accordance with this section to students, parents, 
        and other interested individuals, through web links or other 
        methods prescribed by the Secretary.
          ``(2) Guaranty agency responsibility.--The guaranty agencies 
        shall ensure that the information required by this section is 
        available without charge in printed format for students and 
        parents requesting such information.
          ``(3) Publicity.--Within 270 days after the date of enactment 
        of the College Access and Opportunity Act of 2005, the 
        Secretary and guaranty agencies shall publicize the 
        availability of the information required by this section, with 
        special emphasis on ensuring that populations that are 
        traditionally underrepresented in postsecondary education are 
        made aware of the availability of such information.''.

SEC. 488. DISTANCE EDUCATION DEMONSTRATION PROGRAM.

  (a) Eligible Applicants.--Section 486(b)(3) (20 U.S.C. 1093(b)(3)) is 
amended--
          (1) in subparagraph (B), by striking ``section 102(a)(1)(C)'' 
        and inserting ``section 102''; and
          (2) in subparagraph (C), by striking ``subsection (a) of 
        section 102, other than the requirement of paragraph (3)(A) or 
        (3)(B) of such subsection,'' and inserting ``section 101, other 
        than the requirements of subparagraph (A) or (B) of subsection 
        (b)(4) of such section''.
  (b) Selection.--Section 486(d)(1) (20 U.S.C. 1093(d)(1)) is amended--
          (1) by striking ``the third year'' and inserting ``subsequent 
        years'';
          (2) by striking ``35 institutions'' and inserting ``100 
        institutions''; and
          (3) by adding at the end the following new sentence: ``Not 
        more than 5 of such institutions, systems, or consortia may be 
        accredited, degree-granting correspondence schools.''.

SEC. 489. COLLEGE AFFORDABILITY DEMONSTRATION PROGRAM.

  Part G of title IV is amended by inserting after section 486 (20 
U.S.C. 1093) the following new section:

``SEC. 486A. COLLEGE AFFORDABILITY DEMONSTRATION PROGRAM.

  ``(a) Purpose.--It is the purpose of this section--
          ``(1) to provide, through a college affordability 
        demonstration program, for increased innovation in the delivery 
        of higher education and student financial aid in a manner 
        resulting in reduced costs for students as well as the 
        institution by employing one or more strategies including 
        accelerating degree or program completion, increasing 
        availability of, and access to, distance components of 
        education delivery, engaging in collaborative arrangements with 
        other institutions and organizations, and other alternative 
        methodologies; and
          ``(2) to help determine--
                  ``(A) the most effective means of delivering student 
                financial aid as well as quality education;
                  ``(B) the specific statutory and regulatory 
                requirements that should be altered to provide for more 
                efficient and effective delivery of student financial 
                aid, as well as access to high quality distance 
                education programs, resulting in a student more 
                efficiently completing postsecondary education; and
                  ``(C) the most effective methods of obtaining and 
                managing institutional resources.
  ``(b) Demonstration Program Authorized.--
          ``(1) In general.--In accordance with the purposes described 
        in subsection (a) and the provisions of subsection (d), the 
        Secretary is authorized to select not more than 100 
        institutions of higher education, including those applying as 
        part of systems or consortia of such institutions, for 
        voluntary participation in the College Affordability 
        Demonstration Program in order to enable participating 
        institutions to carry out such purposes by providing programs 
        of postsecondary education, and making available student 
        financial assistance under this title to students enrolled in 
        those programs, in a manner that would not otherwise meet the 
        requirements of this title.
          ``(2) Waivers.--The Secretary is authorized to waive for any 
        institutions of higher education, or any system or consortia of 
        institutions of higher education, selected for participation in 
        the College Affordability Demonstration Program, any 
        requirements of this Act or the regulations thereunder as 
        deemed necessary by the Secretary to meet the purpose described 
        in subsection (a)(1), and shall make a determination that the 
        waiver can reasonably be expected to result in reduced costs to 
        students or institutions without an increase in Federal program 
        costs. The Secretary may not waive under this paragraph the 
        maximum award amounts for an academic year or loan period.
          ``(3) Eligible applicants.--
                  ``(A) Eligible institutions.--Except as provided in 
                subparagraph (B), only an institution of higher 
                education that is eligible to participate in programs 
                under this title shall be eligible to participate in 
                the demonstration program authorized under this 
                section.
                  ``(B) Prohibition.--An institution of higher 
                education described in section 102 shall not be 
                eligible to participate in the demonstration program 
                authorized under this section.
  ``(c) Application.--
          ``(1) In general.--Each institution or system of institutions 
        desiring to participate in the 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 of applications.--Each application for the 
        college affordability demonstration program shall include at 
        least the following:
                  ``(A) a description of the institution or system or 
                consortium of institutions and what quality assurance 
                mechanisms are in place to insure the integrity of the 
                Federal financial aid programs;
                  ``(B) a description of the innovation or innovations 
                being proposed and the affected programs and students, 
                including--
                          ``(i) a description of any collaborative 
                        arrangements with other institutions or 
                        organizations to reduce costs;
                          ``(ii) a description of any expected economic 
                        impact of participation in the program within 
                        the community in which the institution is 
                        located; and
                          ``(iii) a description of any means the 
                        institution will employ to reduce the costs of 
                        instructional materials, such as textbooks;
                  ``(C) a description of each regulatory or statutory 
                requirement for which waivers are sought, with a reason 
                for each waiver;
                  ``(D) a description of the expected outcomes of the 
                program changes proposed, including the estimated 
                reductions in costs both for the institution and for 
                students;
                  ``(E) a description of the quality assurance 
                mechanisms in place to ensure the integrity of the 
                Federal financial aid programs;
                  ``(F) an assurance from each institution in a system 
                or consortium of a commitment to fulfill its role as 
                described in the application;
                  ``(G) an assurance that the participating institution 
                or system of institutions will offer full cooperation 
                with the ongoing evaluations of the demonstration 
                program provided for in this section; and
                  ``(H) any other information or assurances the 
                Secretary may require.
  ``(d) Selection.--In selecting institutions to participate in the 
demonstration program under this section, the Secretary shall take into 
account--
          ``(1) the number and quality of applications received, 
        determined on the basis of the contents required by subsection 
        (c)(2);
          ``(2) the Department's capacity to oversee and monitor each 
        institution's participation;
          ``(3) an institution's--
                  ``(A) financial responsibility;
                  ``(B) administrative capability;
                  ``(C) program or programs being offered via distance 
                education, if applicable;
                  ``(D) student completion rates; and
                  ``(E) student loan default rates; and
          ``(4) the participation of a diverse group of institutions 
        with respect to size, mission, and geographic distribution.
  ``(e) Notification.--The Secretary shall make available to the public 
and to the authorizing committees a list of institutions 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 and a 
description of the innovations being demonstrated.
  ``(f) Evaluations and Reports.--
          ``(1) Evaluation.--The Secretary shall evaluate the 
        demonstration program authorized under this section on a 
        biennial basis. Such evaluations specifically shall review--
                  ``(A) the extent to which expected outcomes, 
                including the estimated reductions in cost, were 
                achieved;
                  ``(B) the number and types of students participating 
                in the programs offered, including the progress of 
                participating students toward recognized certificates 
                or degrees and the extent to which participation in 
                such programs increased;
                  ``(C) issues related to student financial assistance 
                associated with the innovations undertaken;
                  ``(D) effective technologies and alternative 
                methodologies for delivering student financial 
                assistance;
                  ``(E) the extent of the cost savings to the 
                institution, the student, and the Federal Government by 
                virtue of the waivers provided, and an estimate as to 
                future cost savings for the duration of the 
                demonstration program;
                  ``(F) the extent to which students saved money by 
                virtue of completing their postsecondary education 
                sooner;
                  ``(G) the extent to which the institution reduced its 
                tuition and fees and its costs by virtue of 
                participation in the demonstration program;
                  ``(H) the extent to which any collaborative 
                arrangements with other institutions or organizations 
                have reduced the participating institution's costs; and
                  ``(I) the extent to which statutory or regulatory 
                requirements not waived under the demonstration program 
                present difficulties for students or institutions.
          ``(2) Policy analysis.--The Secretary shall review current 
        policies and identify those policies that present impediments 
        to the implementation of innovations that result in cost 
        savings and in expanding access to education.
          ``(3) Reports.--The Secretary shall provide a report to the 
        authorizing committees on a biennial basis regarding--
                  ``(A) the demonstration program authorized under this 
                section;
                  ``(B) the results of the evaluations conducted under 
                paragraph (1);
                  ``(C) the cost savings to the Federal Government by 
                the demonstration program authorized by this section; 
                and
                  ``(D) recommendations for changes to increase the 
                efficiency and effective delivery of financial aid.
  ``(g) Oversight.--In conducting the demonstration program authorized 
under this section, the Secretary shall, on a continuing basis--
          ``(1) ensure compliance of institutions or systems of 
        institutions with the requirements of this title (other than 
        the sections and regulations that are waived under subsection 
        (b)(2));
          ``(2) provide technical assistance to institutions in their 
        application to and participation in the demonstration program;
          ``(3) monitor fluctuations in the student population enrolled 
        in the participating institutions or systems of institutions;
          ``(4) monitor changes in financial assistance provided at the 
        institution; and
          ``(5) consult with appropriate accrediting agencies or 
        associations and appropriate State regulatory authorities.
  ``(h) Termination of Authority.--The authority of the Secretary under 
this section shall cease to be effective on October 1, 2011.''.

SEC. 490. PROGRAM PARTICIPATION AGREEMENTS.

  (a) Refund Policies.--Section 487(a) (20 U.S.C. 1094(a)) is amended--
          (1) in paragraph (16), by inserting ``or other Federal, 
        State, or local government funds'' after ``funds under this 
        title'' each place it appears;
          (2) in paragraph (22), by striking ``refund policy'' and 
        inserting ``policy on the return of title IV funds''; and
          (3) in paragraph (23)--
                  (A) by moving subparagraph (C) 2 em spaces to the 
                left; and
                  (B) by adding after such subparagraph the following 
                new subparagraph:
          ``(D) An institution shall be considered in compliance with 
        the requirements of subparagraph (A) for any student to whom 
        the institution electronically transmits a message containing a 
        voter registration form acceptable for use in the State in 
        which the institution is located, or an Internet address where 
        such a form can be downloaded, provided such information is in 
        an electronic message devoted to voter registration.''.
  (b) Enforcing the 90/10 Rule.--
          (1) Amendment.--Section 487(a) (20 U.S.C. 1094(a)) is further 
        amended by adding at the end the following new paragraph:
          ``(24) The institution will, as calculated in accordance with 
        subsection (f)(1), have at least 10 percent of its revenues 
        from sources other than funds provided under this title, or 
        will be subject to the sanctions described in subsection 
        (f)(2).''.
          (2) Implementation.--Section 487 is further amended by adding 
        at the end the following new subsection:
  ``(f) Implementation of Non-Title IV Revenue Requirement.--
          ``(1) Calculation.--In carrying out subsection (a)(24), an 
        institution shall use the cash basis of accounting and count 
        the following funds toward the 10 percent of revenues from 
        sources of funds other than funds provided under this title:
                  ``(A) funds used by students to pay tuition, fees, 
                and other institutional charges from sources other than 
                funds provided under this title as long as the 
                institution can reasonably demonstrate that such funds 
                were used for such purposes;
                  ``(B) institutional funds used to satisfy matching-
                fund requirements for programs under this title;
                  ``(C) funds from savings plans for educational 
                expenses established pursuant to the Internal Revenue 
                Code of 1986;
                  ``(D) funds paid by a student, or on behalf of a 
                student by a party other than the institution, for an 
                education or training program that is not eligible for 
                funds under this title, so long as the program is 
                approved or licensed by the appropriate State agency or 
                an accrediting agency recognized by the Secretary; and
                  ``(E) institutional aid, as follows:
                          ``(i) in the case of institutional loans, 
                        only the amount of loan repayments received 
                        during the fiscal year; and
                          ``(ii) in the case of institutional 
                        scholarships, only those provided by the 
                        institution in the form of monetary aid or 
                        tuition discounts based upon the academic 
                        achievements or financial need of students, 
                        disbursed during the fiscal year from an 
                        established restricted account, and only to the 
                        extent that the funds in that account represent 
                        designated funds from an outside source or from 
                        income earned on those funds.
          ``(2) Sanctions.--An institution that fails to meet the 
        requirements of subsection (a)(24) for 3 consecutive years 
        shall become ineligible to participate in the programs 
        authorized by this title. In addition to such other means of 
        enforcing the requirements of this title as may be available to 
        the Secretary, if an institution fails to meet the requirements 
        of subsection (a)(24) in any year, the Secretary may impose one 
        or more of the following sanctions on the institution:
                  ``(A) Place the institution on provisional 
                certification in accordance with section 498(h) until 
                the institution demonstrates, to the satisfaction of 
                the Secretary, that it is in compliance with subsection 
                (a)(24).
                  ``(B) Require such other increased monitoring and 
                reporting requirements as the Secretary determines 
                necessary until the institution demonstrates, to the 
                satisfaction of the Secretary, that it is in compliance 
                with subsection (a)(24).
          ``(3) Publication on cool website.--The Secretary shall 
        identify, on the College Opportunities On-Line website under 
        section 131(b), any institution that fails to meet the 
        requirements of subsection (a)(24) in any year as an 
        institution that is failing to meet the minimum non-Federal 
        source of revenue requirements of that subsection.''.
  (c) Reports on Disciplinary Proceedings.--
          (1) Amendment.--Section 487(a) (20 U.S.C. 1094(a)) is further 
        amended by adding after paragraph (24), as added by subsection 
        (b) of this section, the following new paragraph:
          ``(25) The institution will disclose to the alleged victim of 
        any crime of violence (as that term is defined in section 16 of 
        title 18), or a nonforcible sex offense, the final results of 
        any disciplinary proceeding conducted by such institution 
        against a student who is the alleged perpetrator of such crime 
        or offense with respect to such crime or offense. If the 
        alleged victim of such crime or offense is deceased, the next 
        of kin of such victim shall be treated as the alleged victim 
        for purposes of this paragraph.''.
          (2) Effective date.--The amendment made by paragraph (1) 
        shall apply with respect to any disciplinary proceeding 
        conducted by such institution on or after one year after the 
        date of enactment of this Act.
  (d) Audit Requirements.--Section 487(c)(1)(A)(i) (20 U.S.C. 
1094(c)(1)(A)(i)) is amended by inserting before the semicolon at the 
end the following: ``, except that the Secretary may modify the 
requirements of this clause with respect to institutions of higher 
education that are foreign institutions, and may waive such 
requirements with respect to a foreign institution whose students 
receive less than $500,000 in loans under this title during the award 
year preceding the audit period''.

SEC. 491. ADDITIONAL TECHNICAL AND CONFORMING AMENDMENTS.

  Part G is further amended as follows:
          (1) Section 483(d) (20 U.S.C. 1090(d)) is amended by striking 
        ``that is authorized under section 685(d)(2)(C)'' and inserting 
        ``, or another appropriate provider of technical assistance and 
        information on postsecondary educational services, that is 
        supported under section 663''.
          (2) Section 484 (20 U.S.C. 1091) is amended--
                  (A) in subsection (a)(4), by striking 
                ``certification,,'' and inserting ``certification,''; 
                and
                  (B) in subsection (b)(2)--
                          (i) in the matter preceding subparagraph (A), 
                        by striking ``section 428A'' and inserting 
                        ``section 428H'';
                          (ii) in subparagraph (A), by inserting 
                        ``and'' after the semicolon at the end thereof;
                          (iii) in subparagraph (B), by striking ``; 
                        and'' and inserting a period; and
                          (iv) by striking subparagraph (C).
          (3) Section 484A(b)(2) (20 U.S.C. 1091a(b)(2)) is amended by 
        striking ``part B of this title'' and inserting ``part B, D, or 
        E of this title''.
          (4) Section 485B(a) (20 U.S.C. 1092b(a)) is amended--
                  (A) by redesignating paragraphs (6) through (10) as 
                paragraphs (7) through (11), respectively;
                  (B) by redesignating the paragraph (5) (as added by 
                section 2008 of Public Law 101-239) as paragraph (6); 
                and
                  (C) in paragraph (5) (as added by section 204(3) of 
                the National Community Service Act of 1990 (Public Law 
                101-610))--
                          (i) by striking ``(22 U.S.C. 2501 et 
                        seq.)),'' and inserting ``(22 U.S.C. 2501 et 
                        seq.),''; and
                          (ii) by striking the period at the end 
                        thereof and inserting a semicolon.
          (5) Section 487A(b) (20 U.S.C. 1094a(b)) is amended--
                  (A) in paragraph (1)--
                          (i) by striking ``Higher Education Amendments 
                        of 1998'' and inserting ``College Access and 
                        Opportunity Act of 2005''; and
                          (ii) by striking the second sentence;
                  (B) in paragraph (2)--
                          (i) by striking ``1993 through 1998'' and 
                        inserting ``1998 through 2004'';
                          (ii) by striking ``(as such section'' and all 
                        that follows through ``Amendments of 1998)''; 
                        and
                          (iii) by striking ``Higher Education 
                        Amendments of 1998.'' and inserting ``College 
                        Access and Opportunity Act of 2005.''; and
                  (C) in paragraph (3)(A)--
                          (i) by striking ``Upon the submission'' and 
                        all that follows through ``limited number of 
                        additional institutions for voluntary 
                        participation'' and inserting ``The Secretary 
                        is authorized to continue the voluntary 
                        participation of institutions participating as 
                        of July 1, 2005,''; and
                          (ii) by inserting before the period at the 
                        end the following: ``, and shall continue the 
                        participation of any such institution unless 
                        the Secretary determines that such 
                        institution's participation has not been 
                        successful in carrying out the purposes of this 
                        section''.
          (6) Section 491(c) (20 U.S.C. 1098(c)) is amended by adding 
        at the end the following new paragraph:
  ``(3) The appointment of members under subparagraphs (A) and (B) of 
paragraph (1) shall be effective upon publication of the appointment in 
the Congressional Record.''.
          (7) Section 491(h)(1) (20 U.S.C. 1098(h)(1)) is amended by 
        striking ``the rate authorized for GS-18 of the General 
        Schedule'' and inserting ``the maximum rate payable under 
        section 5376 of such title''.
          (8) Section 491(k) (20 U.S.C. 1098(k)) is amended by striking 
        ``2004'' and inserting ``2011''.
          (9) Section 493A (20 U.S.C. 1098c) is repealed.
          (10) Section 498 (20 U.S.C. 1099c) is amended--
                  (A) in subsection (c)(2), by striking ``for profit,'' 
                and inserting ``for-profit,''; and
                  (B) in subsection (d)(1)(B), by inserting ``and'' 
                after the semicolon at the end thereof.

                       PART H--PROGRAM INTEGRITY

SEC. 495. ACCREDITATION.

  (a) Standards for Accreditation.--Section 496(a) (20 U.S.C. 1099b(a)) 
is amended--
          (1) in paragraph (3)--
                  (A) by inserting ``or'' after the semicolon at the 
                end of subparagraph (A);
                  (B) by striking subparagraph (B); and
                  (C) by redesignating subparagraph (C) as subparagraph 
                (B);
          (2) in paragraph (4)--
                  (A) by inserting ``(A)'' after ``(4)'';
                  (B) by inserting after ``consistently applies and 
                enforces standards'' the following: ``that consider the 
                stated missions of institutions of higher education, 
                including such missions as inculcation of religious 
                values, and'';
                  (C) by inserting ``and'' after the semicolon at the 
                end thereof; and
                  (D) by adding at the end the following new 
                subparagraph:
          ``(B) if such agency or association already has or seeks to 
        include within its scope of recognition the evaluation of the 
        quality of institutions or programs offering distance 
        education, such agency or association shall, in addition to 
        meeting the other requirements of this subpart, demonstrate to 
        the Secretary that--
                  ``(i) the accreditation agency's or association's 
                standards effectively address the quality of an 
                institution's distance education programs in the areas 
                identified in paragraph (5) of this subsection, except 
                that the agency or association shall not be required to 
                have separate standards, procedures, or policies for 
                the evaluation of distance education institutions or 
                programs in order to meet the requirements of this 
                subparagraph; and
                  ``(ii) the agency or association requires that an 
                institution that offers distance education programs to 
                have processes by which it establishes that the student 
                who registers in a distance education course or program 
                is the same student who participates, completes 
                academic work, and receives academic credit;'';
          (3) in paragraph (5)--
                  (A) by amending subparagraph (A) to read as follows:
                  ``(A) success with respect to student achievement in 
                relation to the institution's mission, including, as 
                appropriate, consideration of student academic 
                achievement as determined by the institution (in 
                accordance with standards of the accrediting agency or 
                association), retention, course and program completion, 
                State licensing examinations, and job placement rates, 
                and other student performance information selected by 
                the institution, particularly that information used by 
                the institution to evaluate or strengthen its 
                programs;''; and
                  (B) by amending subparagraph (E) to read as follows:
                  ``(E) fiscal, administrative capacity, as appropriate 
                to the specified scale of operations, and, for an 
                agency or association where its approval for such 
                institution determines eligibility for student 
                assistance under this title, board governance, within 
                the context of the institution's mission;'';
          (4) by striking paragraph (6) and inserting the following:
          ``(6) such an agency or association shall establish and apply 
        review procedures throughout the accrediting process, including 
        evaluation and withdrawal proceedings that comply with due 
        process that provides for--
                  ``(A) adequate specification of requirements and 
                deficiencies at the institution of higher education or 
                program being examined;
                  ``(B) an opportunity for a written response by any 
                such institution to be included in the evaluation and 
                withdrawal proceedings;
                  ``(C) upon the written request of an institution, an 
                opportunity for the institution to appeal any adverse 
                action at a hearing prior to such action becoming final 
                before an appeals panel that--
                          ``(i) shall not include current members of 
                        the agency or association's underlying 
                        decision-making body that made the adverse 
                        decision; and
                          ``(ii) is subject to a conflict of interest 
                        of policy; and
                  ``(D) the right to representation by counsel for an 
                such institution;''; and
          (5) by striking paragraph (8) and inserting the following:
          ``(8) such agency or association shall make available to the 
        public and submit to the Secretary and the State licensing or 
        authorizing agency, together with the comments of the affected 
        institution, a summary of agency or association actions, 
        involving--
                  ``(A) final denial, withdrawal, suspension, or 
                termination of accreditation; and
                  ``(B) any other final adverse action taken with 
                respect to an institution.''.
  (b) Operating Procedures.--Section 496(c) (20 U.S.C. 1099b(c)) is 
amended--
          (1) by inserting ``(including those regarding distance 
        education)'' before the semicolon at the end of paragraph (1);
          (2) by striking ``and'' at the end of paragraph (5);
          (3) by striking the period at the end of paragraph (6) and 
        inserting a semicolon; and
          (4) by inserting after paragraph (6) the following new 
        paragraphs:
          ``(7) ensures that its onsite comprehensive reviews for 
        accreditation or reaccreditation include evaluation of the 
        substance of the information required in subparagraph (H) of 
        section 485(a)(1);
          ``(8) confirms as a part of its review for accreditation or 
        reaccreditation that the institution has transfer policies--
                  ``(A) that are publicly disclosed; and
                  ``(B) that do not deny transfer of credit based 
                solely on the accreditation of the sending institution 
                as long as the association or agency is recognized by 
                the Secretary pursuant to section 496;
          ``(9) develops a brief summary, available to the public, of 
        final adverse actions in accordance with the requirements of 
        subsection (a)(8);
          ``(10) monitors the enrollment growth of distance education 
        to ensure that an institution experiencing signficant growth 
        has the capacity to serve its students effectively;
          ``(11) discloses publicly, on the agency's website or through 
        other similar dissemination--
                  ``(A) a list of the individuals who comprised the 
                evaluation teams during the prior calendar year for 
                each agency or association and the title and 
                institutional affiliation of such individuals, although 
                such list shall not be required to identify those 
                individuals who comprised the evaluation team used for 
                any specific institution;
                  ``(B) a description of the agency's or association's 
                process for selecting, preparing, and evaluating such 
                individuals; and
                  ``(C) any statements related to the accreditation 
                responsibilities of such individuals; and
          ``(12) reviews the record of student complaints resulting 
        from the student information process described in section 
        485(a)(1)(J).''.
  (c) Limitation, Suspension, and Termination of Recognition.--Section 
496(l) is amended by adding at the end the following new paragraph:
  ``(3) The Secretary shall provide an annual report to Congress on the 
status of any agency or association for which the Secretary has 
limited, suspended or terminated recognition under this subsection.''.
  (d) Program Review and Data.--Section 498A(b) (20 U.S.C. 1099c-1(b)) 
is amended--
          (1) by striking ``and'' at the end of paragraph (4);
          (2) by striking the period at the end of paragraph (5) and 
        inserting a semicolon; and
          (3) by adding at the end the following new paragraphs:
          ``(6) provide to the institution adequate opportunity to 
        review and respond to any program review report or audit 
        finding and underlying materials related thereto before any 
        final program review or audit determination is reached;
          ``(7) review and take into consideration the institution's 
        response in any final program review or audit determination, 
        and include in the final determination--
                  ``(A) a written statement addressing the 
                institution's response and stating the basis for such 
                final determination; and
                  ``(B) a copy of the institution's statement in 
                response, appropriately redacted to protect 
                confidential information;
          ``(8) maintain and preserve at all times the confidentiality 
        of any program review report or audit finding until the 
        requirements of paragraphs (6) and (7) are met, and until a 
        final program review or audit determination has been issued, 
        except to the extent required to comply with paragraph (5), 
        provided, however, that the Secretary shall promptly disclose 
        any and all program review reports and audit findings to the 
        institution under review; and
          ``(9) require that the authority to approve or issue any 
        program review report or audit finding, preliminary or 
        otherwise, that contains any finding, determination, or 
        proposed assessment that exceeds or may exceed $500,000 in 
        liabilities shall not be delegated to any official beyond the 
        Chief Operating Officer of Federal Student Aid.''.

SEC. 496. REPORT TO CONGRESS ON PREVENTION OF FRAUD AND ABUSE IN 
                    STUDENT FINANCIAL AID PROGRAMS.

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

``SEC. 499. REPORT TO CONGRESS ON PREVENTION OF FRAUD AND ABUSE IN 
                    STUDENT FINANCIAL AID PROGRAMS.

  ``(a) Purpose.--It is the purpose of this section to require the 
Secretary to commission a nonpartisan, comprehensive study on the 
prevention of fraud and abuse in title IV student financial aid 
programs, and to report the results of such study to Congress.
  ``(b) Scope of Report.--The study under this section shall thoroughly 
identify and address the following:
          ``(1) The impact of fraud and abuse in title IV student 
        financial aid programs upon students and taxpayers, and the 
        nature of such fraud and abuse.
          ``(2) The effectiveness of existing policies and requirements 
        under this Act that were put in place to prevent fraud and 
        abuse in title IV student financial aid programs, and how such 
        policies and requirements should be improved.
          ``(3) The extent to which existing protections against fraud 
        and abuse under this Act are adequately enforced, and how 
        enforcement should be strengthened.
          ``(4) Areas in which additional information is needed to 
        assess the effectiveness of current protections and enforcement 
        against fraud and abuse.
          ``(5) Existing policies and requirements under this Act aimed 
        at fraud and abuse that are ineffective, hinder innovation, or 
        could be eliminated without reducing effectiveness.
          ``(6) New policies and enforcement, particularly those suited 
        for the current higher education marketplace, needed to protect 
        against fraud and abuse in title IV student financial aid 
        programs.
          ``(7) The extent to which States are implementing regulations 
        to protect students from fraud and abuse, and whether changes 
        to Federal law will preempt such regulations.
  ``(c) Report.--Not later than December 31, 2007, the Secretary, after 
an opportunity for both the Secretary and the Inspector General of the 
Department of Education to review the results of the study, shall 
transmit to Congress a report on the study conducted under this 
section. Such report shall--
          ``(1) include clear and specific recommendations for 
        legislative and regulatory actions that are likely to 
        significantly reduce the fraud and abuse in title IV student 
        financial aid programs identified under subsection (b); and
          ``(2) include both the Secretary's and the Inspector 
        General's comments on the report.''.

                    TITLE V--DEVELOPING INSTITUTIONS

SEC. 501. DEFINITIONAL CHANGES.

  Section 502(a) (20 U.S.C. 1101a(a)) is amended--
          (1) in paragraph (5)--
                  (A) by inserting ``and'' after the semicolon at the 
                end of subparagraph (A);
                  (B) by inserting ``at the end of the award year 
                immediately preceding the date of application'' after 
                ``Hispanic students'' in subparagraph (B);
                  (C) by striking ``; and'' at the end of subparagraph 
                (B) and inserting a period; and
                  (D) by striking subparagraph (C); and
          (2) by striking paragraph (7).

SEC. 502. ASSURANCE OF ENROLLMENT OF NEEDY STUDENTS.

  Section 511(c) (20 U.S.C. 1103(c)) is amended--
          (1) by striking paragraph (2);
          (2) by redesignating paragraphs (3) through (7) as paragraphs 
        (2) through (6); and
          (3) by inserting after paragraph (6) as so redesignated the 
        following new paragraph:
          ``(7) contain such assurances as the Secretary may require 
        that the institution has an enrollment of needy students as 
        required by section 502(b);''.

SEC. 503. ADDITIONAL AMENDMENTS.

  Title V is further amended--
          (1) in section 502(a)(2)(A) (20 U.S.C. 1101a(a)(2)(A)), by 
        redesignating clauses (v) and (vi) as clauses (vi) and (vii), 
        respectively, and inserting after clause (iv) the following new 
        clause:
                          ``(v) which provides a program of not less 
                        than 2 years that is acceptable for full credit 
                        toward a bachelor's degree;'';
          (2) in section 503(b) (20 U.S.C. 1101b(b))--
                  (A) by amending paragraph (2) to read as follows:
          ``(2) Construction, maintenance, renovation, and improvement 
        in classrooms, libraries, laboratories, and other instructional 
        facilities, including purchase or rental of telecommunications 
        technology equipment or services, and the acquisition of real 
        property adjacent to the campus of the institution on which to 
        construct such facilities.'';
                  (B) by amending paragraph (12) to read as follows:
          ``(12) Establishing community outreach programs and 
        collaborative partnerships between Hispanic-serving 
        institutions and local elementary or secondary schools. Such 
        partnerships may include mentoring, tutoring, or other 
        instructional opportunities that will boost student academic 
        achievement and assist elementary and secondary school students 
        in developing the academic skills and the interest to pursue 
        postsecondary education.'';
                  (C) by redesignating paragraphs (5) through (14) as 
                paragraphs (6) through (15), respectively; and
                  (D) by inserting after paragraph (4) the following:
          ``(5) Education or counseling services designed to improve 
        the financial literacy and economic literacy of students and, 
        as appropriate, their parents.'';
          (3) in section 504(a) (20 U.S.C. 1101c(a))--
                  (A) by striking the following:
  ``(a) Award Period.--
          ``(1) In general.--The Secretary'' and inserting the 
        following:
  ``(a) Award Period.--The Secretary''; and
                  (B) by striking paragraph (2); and
          (4) in section 514(c) (20 U.S.C. 1103c(c)), by striking 
        ``section 505'' and inserting ``section 504''.

SEC. 504. POSTBACCALAUREATE OPPORTUNITIES FOR HISPANIC AMERICANS.

  (a) Establishment of Program.--Title V is amended--
          (1) by redesignating part B as part C;
          (2) by redesignating sections 511 through 518 as sections 521 
        through 528, respectively; and
          (3) by inserting after section 505 (20 U.S.C. 1101d) the 
        following new part:

   ``PART B--PROMOTING POSTBACCALAUREATE OPPORTUNITIES FOR HISPANIC 
                               AMERICANS

``SEC. 511. PURPOSES.

  ``The purposes of this part are--
          ``(1) to expand postbaccalaureate educational opportunities 
        for, and improve the academic attainment of, Hispanic students; 
        and
          ``(2) to expand the postbaccalaureate academic offerings and 
        enhance the program quality in the institutions that are 
        educating the majority of Hispanic college students and helping 
        large numbers of Hispanic and low-income students complete 
        postsecondary degrees.

``SEC. 512. PROGRAM AUTHORITY AND ELIGIBILITY.

  ``(a) Program Authorized.--Subject to the availability of funds 
appropriated to carry out this part, the Secretary shall award 
competitive grants to Hispanic-serving institutions determined by the 
Secretary to be making substantive contributions to graduate 
educational opportunities for Hispanic students.
  ``(b) Eligibility.--For the purposes of this part, an `eligible 
institution' means an institution of higher education that--
          ``(1) is an eligible institution under section 502(a)(2); and
          ``(2) offers a postbaccalaureate certificate or degree 
        granting program.

``SEC. 513. AUTHORIZED ACTIVITIES.

  ``Grants awarded under this part shall be used for one or more of the 
following activities:
          ``(1) Purchase, rental, or lease of scientific or laboratory 
        equipment for educational purposes, including instructional and 
        research purposes.
          ``(2) Construction, maintenance, renovation, and improvement 
        of classrooms, libraries, laboratories, and other instructional 
        facilities, including purchase or rental of telecommunications 
        technology equipment or services.
          ``(3) Purchase of library books, periodicals, technical and 
        other scientific journals, microfilm, microfiche, and other 
        educational materials, including telecommunications program 
        materials.
          ``(4) Support for needy postbaccalaureate students including 
        outreach, academic support services, mentoring, scholarships, 
        fellowships, and other financial assistance to permit the 
        enrollment of such students in postbaccalaureate certificate 
        and degree granting programs.
          ``(5) Support of faculty exchanges, faculty development, 
        faculty research, curriculum development, and academic 
        instruction.
          ``(6) Creating or improving facilities for Internet or other 
        distance learning academic instruction capabilities, including 
        purchase or rental of telecommunications technology equipment 
        or services.
          ``(7) Collaboration with other institutions of higher 
        education to expand postbaccalaureate certificate and degree 
        offerings.
          ``(8) Other activities proposed in the application submitted 
        pursuant to section 514 that--
                  ``(A) contribute to carrying out the purposes of this 
                part; and
                  ``(B) are approved by the Secretary as part of the 
                review and acceptance of such application.

``SEC. 514. APPLICATION AND DURATION.

  ``(a) Application.--Any eligible institution may apply for a grant 
under this part by submitting an application to the Secretary at such 
time and in such manner as determined by the Secretary. Such 
application shall demonstrate how the grant funds will be used to 
improve postbaccalaureate education opportunities in programs and 
professions in which Hispanic Americans are underrepresented.
  ``(b) Duration.--Grants under this part shall be awarded for a period 
not to exceed 5 years.
  ``(c) Limitation.--The Secretary shall not award more than one grant 
under this part in any fiscal year to any Hispanic-serving 
institution.''.
  (b) Cooperative Arrangements.--Section 524(a) (as redesignated by 
subsection (a)(2)) (20 U.S.C. 1103c(a)) is amended by inserting ``and 
section 513'' after ``section 503''.

SEC. 505. AUTHORIZATION OF APPROPRIATIONS.

  Subsection (a) of section 528 (as redesignated by section 504(a)(2) 
of this Act) (20 U.S.C. 1103g) is amended to read as follows:
  ``(a) Authorizations.--
          ``(1) Part a.--There are authorized to be appropriated to 
        carry out part A and part C of this title $96,000,000 for 
        fiscal year 2006 and such sums as may be necessary for each of 
        the 5 succeeding fiscal years.
          ``(2) Part b.--There are authorized to be appropriated to 
        carry out part B of this title $59,000,000 for fiscal year 2006 
        and such sums as may be necessary for each of the 5 succeeding 
        fiscal years.''.

                     TITLE VI--TITLE VI AMENDMENTS

SEC. 601. INTERNATIONAL AND FOREIGN LANGUAGE STUDIES.

  (a) Findings and Purposes.--Section 601 (20 U.S.C. 1121) is amended--
          (1) in subsection (a)--
                  (A) by striking ``post-Cold War'' in paragraph (3);
                  (B) by redesignating paragraphs (4) and (5) as 
                paragraphs (5) and (6), respectively; and
                  (C) by inserting after paragraph (3) the following 
                new paragraph:
          ``(4) The events and aftermath of September 11, 2001, have 
        underscored the need for the Nation to strengthen and enhance 
        American knowledge of international relations, world regions, 
        and foreign languages. Homeland security and effective United 
        States engagement abroad depend upon an increased number of 
        Americans who have received such training and are willing to 
        serve their Nation.'';
          (2) in subsection (b)(1)--
                  (A) by striking ``; and'' at the end of subparagraph 
                (D) and inserting ``, including through linkages 
                overseas with institutions of higher education and 
                relevant organizations that contribute to the 
                educational programs assisted under this part;'';
                  (B) by inserting ``and'' after the semicolon at the 
                end of subparagraph (E);
                  (C) by inserting after such subparagraph (E) the 
                following new subparagraph:
          ``(F) to assist the national effort to educate and train 
        citizens to participate in the efforts of homeland security;''; 
        and
          (3) in subsection (b)(3)--
                  (A) by inserting ``reinforce and'' before 
                ``coordinate''; and
                  (B) by inserting ``, and international business and 
                trade competitiveness'' before the period.
  (b) Graduate and Undergraduate Language and Area Centers and 
Programs.--Section 602(a) (20 U.S.C. 1122(a)) is amended--
          (1) in paragraph (1), by striking subparagraph (A) and 
        inserting the following:
                  ``(A) In general.--The Secretary is authorized to 
                make grants to institutions of higher education or 
                consortia of such institutions for the purpose of 
                establishing, strengthening, and operating--
                          ``(i) comprehensive foreign language and area 
                        or international studies centers and programs; 
                        and
                          ``(ii) a diverse network of undergraduate 
                        foreign language and area or international 
                        studies centers and programs.'';
          (2) in paragraph (2)--
                  (A) by striking ``and'' at the end of subparagraph 
                (G);
                  (B) by striking the period at the end of subparagraph 
                (H) and inserting a semicolon; and
                  (C) by inserting after subparagraph (H) the following 
                new subparagraphs:
                  ``(I) supporting instructors of the less commonly 
                taught languages;
                  ``(J) widely disseminating materials developed by the 
                center or program to local educational agencies and 
                public and private elementary and secondary education 
                schools, and institutions of higher education, 
                presented from diverse perspectives and reflective of a 
                wide range of views on the subject matter, except that 
                no more than 50 percent of funds awarded to an 
                institution of higher education or consortia of such 
                institutions for purposes under this title may be 
                associated with the costs of dissemination; and
                  ``(K) projects that support in students an 
                understanding of science and technology in coordination 
                with foreign language proficiency.''; and
          (3) in paragraph (4)--
                  (A) by amending subparagraph (B) to read as follows:
                  ``(B) Partnerships or programs of linkage and 
                outreach with 2-year and 4-year colleges and 
                universities, including colleges of education and 
                teacher professional development programs.'';
                  (B) in subparagraph (C), by striking ``Programs of 
                linkage or outreach'' and inserting ``Partnerships or 
                programs of linkage and outreach'';
                  (C) in subparagraph (E)--
                          (i) by striking ``foreign area'' and 
                        inserting ``area studies'';
                          (ii) by striking ``of linkage and outreach''; 
                        and
                          (iii) by striking ``(C), and (D)'' and 
                        inserting ``(D), and (E)'';
                  (D) by redesignating subparagraphs (C), (D), and (E) 
                as subparagraphs (D), (E), and (F), respectively; and
                  (E) by inserting after subparagraph (B) the following 
                new subparagraph:
                  ``(C) Partnerships with local educational agencies 
                and public and private elementary and secondary 
                education schools that are designed to increase student 
                academic achievement in foreign language and knowledge 
                of world regions, and to facilitate the wide 
                dissemination of materials related to area studies, 
                foreign languages, and international studies that are 
                reflective of a wide range of views on the subject 
                matter.''.
  (c) Language Resource Centers.--Section 603(c) (20 U.S.C. 1123(c)) is 
amended by inserting ``reflect the purposes of this part and'' after 
``shall''.
  (d) Undergraduate International Studies and Foreign Language 
Programs.--Section 604 (20 U.S.C. 1124) is amended--
          (1) in subsection (a)(1), by striking ``combinations'' each 
        place it appears and inserting ``consortia'';
          (2) in subsection (a)(2)--
                  (A) in subparagraph (B)(ii), by striking ``teacher 
                training'' and inserting ``teacher professional 
                development'';
                  (B) by redesignating subparagraphs (I) through (M) as 
                subparagraphs (J) through (N), respectively;
                  (C) by inserting after subparagraph (H) the following 
                new subparagraph:
                  ``(I) the provision of grants for educational 
                programs abroad that are closely linked to the 
                program's overall goals and have the purpose of 
                promoting foreign language fluency and knowledge of 
                world regions, except that not more than 10 percent of 
                a grant recipient's funds may be used for this 
                purpose;''; and
                  (D) in subparagraph (M)(ii) (as redesignated by 
                subparagraph (B) of this paragraph), by striking 
                ``elementary and secondary education institutions'' and 
                inserting ``local educational agencies and public and 
                private elementary and secondary education schools'';
          (3) in subsection (a)(4)(B), by inserting ``that demonstrates 
        a need for a waiver or reduction'' before the period at the 
        end;
          (4) in subsection (a)(6), by inserting ``reflect the purposes 
        of this part and'' after ``shall'';
          (5) in subsection (a)(8), by striking ``may'' and inserting 
        ``shall''; and
          (6) by striking subsection (c).
  (e) Research; Studies; Annual Report.--Section 605(a) (20 U.S.C. 
1125(a)) is amended by inserting before the period at the end of the 
first sentence the following: ``, including the systematic collection, 
analysis, and dissemination of data''.
  (f) Technological Innovation and Cooperation for Foreign Information 
Access.--Section 606 (20 U.S.C. 1126) is amended--
          (1) in subsection (a)--
                  (A) by striking ``or consortia of such institutions 
                or libraries'' and inserting ``museums, or consortia of 
                such entities'';
                  (B) by striking ``new''; and
                  (C) by inserting ``from foreign sources'' after 
                ``disseminate information'';
          (2) in subsection (b)--
                  (A) by inserting ``acquire and'' before ``facilitate 
                access'' in paragraph (1);
                  (B) by striking ``new means of'' in paragraph (3) and 
                inserting ``new means and standards for'';
                  (C) by striking ``and'' at the end of paragraph (6);
                  (D) by striking the period at the end of paragraph 
                (7) and by inserting a semicolon; and
                  (E) by inserting after paragraph (7) the following 
                new paragraphs:
          ``(8) to establish linkages between grant recipients under 
        subsection (a) with libraries, museums, organizations, or 
        institutions of higher education located overseas to facilitate 
        carrying out the purposes of this section; and
          ``(9) to carry out other activities deemed by the Secretary 
        to be consistent with the purposes of this section.''; and
          (3) by adding at the end the following new subsection:
  ``(e) Special Rule.--The Secretary may waive or reduce the required 
non-Federal share for institutions that--
          ``(1) are eligible to receive assistance under part A or B of 
        title III or under title V; and
          ``(2) have submitted a grant application under this section 
        that demonstrates a need for a waiver or reduction.''.
  (g) Selection of Grant Recipients.--Section 607(b) (20 U.S.C. 
1127(b)) is amended--
          (1) by striking ``objectives'' and inserting ``missions''; 
        and
          (2) by adding at the end the following new sentence: ``In 
        keeping with the purposes of this part, the Secretary shall 
        take into account the degree to which activities of centers, 
        programs, and fellowships at institutions of higher education 
        address national interests, generate and disseminate 
        information, and foster debate on international issues from 
        diverse perspectives.''.
  (h) Equitable Distribution.--Section 608(a) (20 U.S.C. 1128(a)) is 
amended by adding at the end the following new sentence: ``Grants made 
under section 602 shall also reflect the purposes of this part.''.
  (i) Authorization of Appropriations.--Section 610 (20 U.S.C. 1128b) 
is amended--
          (1) by striking ``1999'' and inserting ``2006''; and
          (2) by striking ``4 succeeding'' and inserting ``5 
        succeeding''.
  (j) Conforming Amendments.--
          (1) Sections 603(a), 604(a)(5), and 612 (20 U.S.C. 1123(a), 
        1124(a)(5), 1130-1) are each amended by striking 
        ``combinations'' each place it appears and inserting 
        ``consortia''.
          (2) Section 612 (20 U.S.C. 1130-1) is amended by striking 
        ``combination'' each place it appears and inserting 
        ``consortium''.

SEC. 602. BUSINESS AND INTERNATIONAL EDUCATION PROGRAMS.

  (a) Centers for International Business Education.--Section 612 (20 
U.S.C. 1130-1) is amended--
          (1) in subsection (c)(1)(D), by inserting ``(including those 
        that are eligible to receive assistance under part A or B of 
        title III or under title V)'' after ``other institutions of 
        higher education''; and
          (2) in subsection (e), by adding at the end the following new 
        paragraph:
          ``(5) Special rule.--The Secretary may waive or reduce the 
        required non-Federal share for institutions that--
                  ``(A) are eligible to receive assistance under part A 
                or B of title III or under title V; and
                  ``(B) have submitted a grant application under this 
                section that demonstrates a need for a waiver or 
                reduction.''.
  (b) Education and Training Programs.--Section 613 (20 U.S.C. 1130a) 
is amended by adding at the end the following new subsection:
  ``(e) Special Rule.--The Secretary may waive or reduce the required 
non-Federal share for institutions that--
          ``(1) are eligible to receive assistance under part A or B of 
        title III or under title V; and
          ``(2) have submitted a grant application under this section 
        that demonstrates a need for a waiver or reduction.''.
  (c) Authorization of Appropriations.--Section 614 (20 U.S.C. 1130b) 
is amended--
          (1) by striking ``1999'' each place it appears and inserting 
        ``2006''; and
          (2) by striking ``4 succeeding'' each place it appears and 
        inserting ``5 succeeding''.

SEC. 603. INSTITUTE FOR INTERNATIONAL PUBLIC POLICY.

  (a) Foreign Service Professional Development.--Section 621 (20 U.S.C. 
1131) is amended--
          (1) by striking the heading of such section and inserting the 
        following:

``SEC. 621. PROGRAM FOR FOREIGN SERVICE PROFESSIONALS.'';

          (2) by striking the second sentence of subsection (a) and 
        inserting the following: ``The Institute shall conduct a 
        program to enhance the international competitiveness of the 
        United States by increasing the participation of 
        underrepresented populations in the international service, 
        including private international voluntary organizations and the 
        foreign service of the United States.''; and
          (3) in subsection (b)(1), by striking subparagraphs (A) and 
        (B) and inserting the following:
                  ``(A) A Tribally Controlled College or University or 
                Alaska Native or Native Hawaiian-serving institution 
                eligible for assistance under title III, an institution 
                eligible for assistance under part B of title III, or a 
                Hispanic-serving institution eligible for assistance 
                under title V.
                  ``(B) An institution of higher education which serves 
                substantial numbers of underrepresented students.''.
  (b) Institutional Development.--Section 622 (20 U.S.C. 1131-1) is 
amended by inserting before the period at the end of subsection (a) the 
following: ``and promote collaboration with colleges and universities 
that receive funds under this title''.
  (c) Study Abroad Program.--Section 623(a) (20 U.S.C. 1131a(a)) is 
amended by inserting after ``1978,'' the following: ``Alaska Native-
serving, Native Hawaiian-serving, and Hispanic-serving institutions,''.
  (d) Advanced Degree in International Relations.--Section 624 (20 
U.S.C. 1131b) is amended--
          (1) by striking ``MASTERS'' in the heading of such section 
        and inserting ``ADVANCED'';
          (2) by striking ``a masters degree in international 
        relations'' and inserting ``an advanced degree in international 
        relations, international affairs, international economics, or 
        other academic areas related to the Institute fellow's career 
        objectives''; and
          (3) by striking ``The masters degree program designed by the 
        consortia'' and inserting ``The advanced degree study program 
        shall be designed by the consortia, consistent with the 
        fellow's career objectives, and''.
  (e) Internships.--Section 625 (20 U.S.C. 1131c) is amended--
          (1) in subsection (a), by inserting after ``1978,'' the 
        following: ``Alaska Native-serving, Native Hawaiian-serving, 
        and Hispanic-serving institutions,'';
          (2) in subsection (b)--
                  (A) by inserting ``and'' after the semicolon at the 
                end of paragraph (2);
                  (B) by striking ``; and'' at the end of paragraph (3) 
                and inserting a period; and
                  (C) by striking paragraph (4); and
          (3) by amending subsection (c) to read as follows:
  ``(c) Ralph J. Bunche Fellows.--In order to assure the recognition 
and commitment of individuals from underrepresented student populations 
who demonstrate special interest in international affairs and language 
study, eligible students who participate in the internship programs 
authorized under (a) and (b) shall be known as the `Ralph J. Bunche 
Fellows'.''.
  (f) Report.--Section 626 (20 U.S.C. 1131d) is amended by striking 
``annually prepare a report'' and inserting ``prepare a report 
biennially''.
  (g) Authorization of Appropriations.--Section 628 (20 U.S.C. 1131f) 
is amended--
          (1) by striking ``1999'' and inserting ``2006''; and
          (2) by striking ``4 succeeding'' and inserting ``5 
        succeeding''.

SEC. 604. EVALUATION, OUTREACH, AND DISSEMINATION.

  Part D of title VI is amended by inserting after section 631 (20 
U.S.C. 1132) the following new section:

``SEC. 632. EVALUATION, OUTREACH, AND DISSEMINATION.

  ``The Secretary may use not more than one percent of the funds made 
available for this title for program evaluation, national outreach, and 
information dissemination activities.''.

SEC. 605. ADVISORY BOARD.

  Part D of title VI is amended by inserting after section 632 (as 
added by section 604) the following new section:

``SEC. 633. INTERNATIONAL HIGHER EDUCATION ADVISORY BOARD.

  ``(a) Establishment and Purpose.--
          ``(1) Establishment.--There is established in the Department 
        an independent International Higher Education Advisory Board 
        (hereafter in this section referred to as the `International 
        Advisory Board'). The International Advisory Board shall 
        provide advice, counsel, and recommendations to the Secretary 
        and the Congress on international education issues for higher 
        education.
          ``(2) Purpose.--The purpose of the International Advisory 
        Board is--
                  ``(A) to provide expertise in the area of national 
                needs for proficiency in world regions, foreign 
                languages, international affairs, and international 
                business;
                  ``(B) to make recommendations that will promote the 
                excellence of international education programs and 
                result in the growth and development of such programs 
                at the postsecondary education level that will reflect 
                diverse perspectives and a wide range of views on world 
                regions, foreign language, international affairs, and 
                international business; and
                  ``(C) to advise the Secretary and the Congress with 
                respect to needs for expertise in government, the 
                private sector, and education in order to enhance 
                America's understanding of, and engagement in, the 
                world.
  ``(b) Independence of International Advisory Board.--In the exercise 
of its functions, powers, and duties, the International Advisory Board 
shall be independent of the Secretary and the other offices and 
officers of the Department. Except as provided in this subsection and 
subsection (f), the recommendations of the International Advisory Board 
shall not be subject to review or approval by any officer of the 
Federal Government. Nothing in this title shall be construed to 
authorize the International Advisory Board to mandate, direct, or 
control an institution of higher education's specific instructional 
content, curriculum, or program of instruction or instructor. The 
International Advisory Board is authorized to assess a sample of 
activities supported under this title, using materials that have been 
submitted to the Department of Education by grant recipients under this 
title, in order to provide recommendations to the Secretary and the 
Congress for the improvement of programs under the title and to ensure 
programs meet the purposes of the title to promote the study of and 
expertise in foreign language and world regions, especially with 
respect to diplomacy, national security, and international business and 
trade competitiveness. The recommendations of the International 
Advisory Board may address any area in need of improvement, except that 
any recommendation of specific legislation to Congress shall be made 
only if the President deems it necessary and expedient.
  ``(c) Membership.--
          ``(1) Appointment.--The International Advisory Board shall 
        have 7 members of whom--
                  ``(A) 3 members shall be appointed by the Secretary;
                  ``(B) 2 members shall be appointed by the Speaker of 
                the House of Representatives, upon the recommendation 
                of the Majority Leader and the Minority Leader; and
                  ``(C) 2 members shall be appointed by the President 
                pro tempore of the Senate, upon the recommendation of 
                the Majority Leader and the Minority Leader.
          ``(2) Representation.--Two of the members appointed by the 
        Secretary under paragraph (1)(A) shall be appointed to 
        represent Federal agencies that have diplomacy, national 
        security, international commerce, or other international 
        activity responsibilities, after consultation with the heads of 
        such agencies. The members of the International Advisory Board 
        shall also include (but not be limited to) persons with 
        international expertise representing States, institutions of 
        higher education, cultural organizations, educational 
        organizations, international business, local education 
        agencies, students, and private citizens with expertise in 
        international concerns.
          ``(3) Qualification.--Members of the International Advisory 
        Board shall be individuals who have technical qualifications, 
        professional standing, experience working in international 
        affairs or foreign service or international business 
        occupations, or demonstrated knowledge in the fields of higher 
        education and international education, including foreign 
        languages, world regions, or international affairs.
  ``(d) Functions of the International Advisory Board.--
          ``(1) In general.--The International Advisory Board shall 
        provide recommendations in accordance with subsection (b) 
        regarding improvement of programs under this title to the 
        Secretary and the Congress for their review. The International 
        Advisory Board may--
                  ``(A) review and comment upon the regulations for 
                grants under this title;
                  ``(B) assess a sample of activities supported under 
                this title based on the purposes and objectives of this 
                title, using materials that have been submitted to the 
                Department of Education by grant recipients under this 
                title, in order to provide recommendations for 
                improvement of the programs under this title;
                  ``(C) make recommendations that will assist the 
                Secretary and the Congress to improve the programs 
                under this title to better reflect the national needs 
                related to foreign languages, world regions, diplomacy, 
                national security, and international business and trade 
                competitiveness, including an assessment of the 
                national needs and the training provided by the 
                institutions of higher education that receive a grant 
                under this title for expert and non-expert level 
                foreign language training;
                  ``(D) make recommendations to the Secretary and the 
                Congress regarding such studies, surveys, and analyses 
                of international education that will provide feedback 
                about the programs under this title and assure that 
                their relative authorized activities reflect diverse 
                perspectives and a wide range of views on world 
                regions, foreign languages, diplomacy, national 
                security, and international business and trade 
                competitiveness;
                  ``(E) make recommendations that will strengthen the 
                partnerships between local educational agencies, public 
                and private elementary and secondary education schools, 
                and grant recipients under this title to ensure that 
                the research and knowledge about world regions, foreign 
                languages, and international affairs is widely 
                disseminated to local educational agencies;
                  ``(F) make recommendations on how institutions of 
                higher education that receive a grant under this title 
                can encourage students to serve the Nation and meet 
                national needs in an international affairs, 
                international business, foreign language, or national 
                security capacity;
                  ``(G) make recommendations on how linkages between 
                institutions of higher education and public and private 
                organizations that are involved in international 
                education, international business and trade 
                competitiveness, language training, and international 
                research capacities may fulfill the manpower and 
                information needs of United States businesses; and
                  ``(H) make recommendations to the Secretary and the 
                Congress about opportunities for underrepresented 
                populations in the areas of foreign language study, 
                diplomacy, international business and trade 
                competitiveness, and international economics, in order 
                to effectively carry out the activities of the 
                Institute under part C.
          ``(2) Hearings.--The International Advisory Board shall 
        provide for public hearing and comment regarding the matter 
        contained in the recommendations described in paragraph (1), 
        prior to the submission of those recommendations to the 
        Secretary and the Congress.
  ``(e) Operations of the Committee.--
          ``(1) Terms.--Each member of the International Advisory Board 
        shall be appointed for a term of 3 years, except that, of the 
        members first appointed (A) 4 shall be appointed for a term of 
        3 years, and (B) 3 shall be appointed for a term of 4 years, as 
        designated at the time of appointment by the Secretary. A 
        member of the International Advisory Board may be reappointed 
        to successive terms on the International Advisory Board.
          ``(2) Vacancies.--Any member appointed to fill a vacancy 
        occurring prior to the expiration of the term of a predecessor 
        shall be appointed only for the remainder of such term. A 
        member of the International Advisory Board shall, upon the 
        Secretary's request, continue to serve after the expiration of 
        a term until a successor has been appointed.
          ``(3) No governmental members.--Except for the members 
        appointed by the Secretary under subsection (c)(1)(A), no 
        officers or full-time employees of the Federal Government shall 
        serve as members of the International Advisory Board.
          ``(4) Meetings.--The International Advisory Board shall meet 
        not less than once each year. The International Advisory Board 
        shall hold additional meetings at the call of the Chair or upon 
        the written request of not less than 3 voting members of the 
        International Advisory Board.
          ``(5) Quorum.--A majority of the voting members of the 
        International Advisory Board serving at the time of a meeting 
        shall constitute a quorum.
          ``(6) Chair.--The International Advisory Board shall elect a 
        Chairman or Chairwoman from among the members of the 
        International Advisory Board.
  ``(f) Submission to Department for Comment.--The International 
Advisory Board shall submit its proposed recommendations to the 
Secretary of Education for comment for a period not to exceed 30 days 
in each instance.
  ``(g) Personnel and Resources.--
          ``(1) Compensation and expense.--Members of the International 
        Advisory Board shall serve without pay for such service. 
        Members of the International Advisory Board who are officers or 
        employees of the United States may not receive additional pay, 
        allowances, or benefits by reason of their service on the 
        International Advisory Board. Members of the International 
        Advisory Board may each receive reimbursement for travel 
        expenses incident to attending International Advisory Board 
        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.
          ``(2) Personnel.--The International Advisory Board may 
        appoint such personnel as may 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 maximum 
        rate payable under section 5376 of such title. The 
        International Advisory Board may appoint not more than one 
        full-time equivalent, nonpermanent, consultant without regard 
        to the provisions of title 5, United States Code. The 
        International Advisory Board shall not be required by the 
        Secretary to reduce personnel to meet agency personnel 
        reduction goals.
          ``(3) Consultation.--In carrying out its duties under the 
        Act, the International Advisory Board shall consult with other 
        Federal agencies, representatives of State and local 
        governments, and private organizations to the extent feasible.
          ``(4) Assistance from other agencies.--
                  ``(A) Information.--The International Advisory Board 
                is authorized to secure directly from any executive 
                department, bureau, agency, board, commission, office, 
                independent establishment, or instrumentality 
                information, suggestions, estimates, and statistics for 
                the purpose of this section and each such department, 
                bureau, agency, board, commission, office, independent 
                establishment, or instrumentality is authorized and 
                directed, to the extent permitted by law, to furnish 
                such information, suggestions, estimates, and 
                statistics directly to the International Advisory 
                Board, upon request made by the Chairman for the 
                purpose of providing expertise in the area of national 
                needs for the proficiency in world regions, foreign 
                languages, and international affairs.
                  ``(B) Services and personnel.--The head of each 
                Federal agency shall, to the extent not prohibited by 
                law, consult with the International Advisory Board in 
                carrying out this section. The International Advisory 
                Board is authorized to utilize, with their consent, the 
                services, personnel, information, and facilities of 
                other Federal, State, local, and private agencies with 
                or without reimbursement, for the purpose of providing 
                expertise in the area of national needs for the 
                proficiency in world regions, foreign languages, and 
                international affairs.
          ``(5) Contracts; experts and consultants.--The International 
        Advisory Board may enter into contracts for the acquisition of 
        information, suggestions, estimates, and statistics for the 
        purpose of this section. The International Advisory Board is 
        authorized to obtain the services of experts and consultants 
        without regard to section 3109 of title 5, United States Code 
        and to set pay in accordance with such section.
  ``(h) Termination.--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 International Advisory Board shall be 
authorized through September 30, 2012.
  ``(i) Funds.--The Secretary shall use not more than one-half of the 
funds available to the Secretary under section 632 to carry out this 
section.''.

SEC. 606. RECRUITER ACCESS TO STUDENTS AND STUDENT RECRUITING 
                    INFORMATION; SAFETY.

  Part D of title VI is amended by inserting after section 633 (as 
added by section 605) the following new sections:

``SEC. 634. RECRUITER ACCESS TO STUDENTS AND STUDENT RECRUITING 
                    INFORMATION.

  ``Each institution of higher education that receives a grant under 
this title shall assure that--
          ``(1) recruiters of the United States Government and agencies 
        thereof are given the same access to students as is provided 
        generally to other institutions of higher education and 
        prospective employers of those students for the purpose of 
        recruiting for graduate opportunities or prospective 
        employment; and
          ``(2) no undue restrictions are placed upon students that 
        seek employment with the United States Government or any agency 
        thereof.

``SEC. 635. STUDENT SAFETY.

  ``Applicants seeking funds under this title to support student travel 
and study abroad shall submit as part of their grant application a 
description of safety policies and procedures for students 
participating in the program while abroad.''.

SEC. 607. NATIONAL STUDY OF FOREIGN LANGUAGE HERITAGE COMMUNITIES.

  Part D of title VI is further amended by inserting after section 635 
(as added by section 606) the following new section:

``SEC. 636. NATIONAL STUDY OF FOREIGN LANGUAGE HERITAGE COMMUNITIES.

  ``(a) Study.--The Secretary of Education, in consultation with the 
International Advisory Board, shall conduct a study to identify foreign 
language heritage communities, particularly such communities that 
include speakers of languages that are critical to the national 
security of the United States.
  ``(b) Foreign Language Heritage Community.--For purposes of this 
section, the term `foreign language heritage community' means a 
community of residents or citizens of the United States who are native 
speakers of, or who have partial fluency in, a foreign language.
  ``(c) Report.--Not later than one year after the date of the 
enactment of this Act, the Secretary of Education shall submit a report 
to the Congress on the results of the study conducted under this 
section.''.

                    TITLE VII--TITLE VII AMENDMENTS

SEC. 701. JAVITS FELLOWSHIP PROGRAM.

  (a) Authority and Timing of Awards.--Section 701(a) (20 U.S.C. 
1132a(a)) is amended by inserting after the second sentence the 
following: ``For purposes of the exception in the preceding sentence, a 
master's degree in fine arts shall be considered a terminal degree.''.
  (b) Interruptions of Study.--Section 701(c) (20 U.S.C. 1134(c)) is 
amended by adding at the end the following new sentence: ``In the case 
of other exceptional circumstances, such as active duty military 
service or personal or family member illness, the institution of higher 
education may also permit the fellowship recipient to interrupt periods 
of study for the duration of the tour of duty (in the case of military 
service) or not more than 12 months (in any other case), but without 
payment of the stipend.''.
  (c) Allocation of Fellowships.--Section 702(a)(1) (20 U.S.C. 
1134a(a)(1)) is amended--
          (1) in the first sentence, by inserting ``from diverse 
        geographic regions'' after ``higher education''; and
          (2) by adding at the end the following new sentence: ``The 
        Secretary shall also assure that at least one representative 
        appointed to the Board represents an institution that is 
        eligible for a grant under title III or V of this Act.''.
  (d) Stipends.--Section 703 (20 U.S.C. 1134b(a)) is amended--
          (1) in subsection (a)--
                  (A) by striking ``1999-2000'' and inserting ``2006-
                2007'';
                  (B) by striking ``shall be set'' and inserting ``may 
                be set''; and
                  (C) by striking ``Foundation graduate fellowships'' 
                and inserting ``Foundation Graduate Research Fellowship 
                Program on February 1 of such academic year''; and
          (2) in subsection (b), by amending paragraph (1)(A) to read 
        as follows:
          ``(1) In general.--(A) The Secretary shall (in addition to 
        stipends paid to individuals under this subpart) pay to the 
        institution of higher education, for each individual awarded a 
        fellowship under this subpart at such institution, an 
        institutional allowance. Except as provided in subparagraph 
        (B), such allowance shall be, for 2006-2007 and succeeding 
        academic years, the same amount as the institutional payment 
        made for 2005-2006 adjusted for 2006-2007 and annually 
        thereafter in accordance with inflation as determined by the 
        Department of Labor's Consumer Price Index for All Urban 
        Consumers for the previous calendar year.''.
  (e) Authorization of Appropriations.--Section 705 (20 U.S.C. 1134d) 
is amended by striking ``fiscal year 1999 and such sums as may be 
necessary for each of the 4 succeeding fiscal years'' and inserting 
``fiscal year 2006 and such sums as may be necessary for each of the 5 
succeeding fiscal years''.

SEC. 702. GRADUATE ASSISTANCE IN AREAS OF NATIONAL NEED.

  (a) Designation of Areas of National Need; Priority.--Section 712 (20 
U.S.C. 1135a) is amended--
          (1) in the last sentence of subsection (b)--
                  (A) by striking ``and an assessment'' and inserting 
                ``an assessment''; and
                  (B) by inserting before the period at the end the 
                following: ``, and the priority described in subsection 
                (c) of this section''; and
          (2) by adding at the end the following new subsection:
  ``(c) Priority.--The Secretary shall establish a priority for grants 
in order to prepare individuals for the professoriate who will train 
highly-qualified elementary and secondary math and science teachers, 
special education teachers, and teachers who provide instruction for 
limited English proficient individuals. Such grants shall offer program 
assistance and graduate fellowships for--
          ``(1) post-baccalaureate study related to teacher preparation 
        and pedagogy in math and science for students who have 
        completed a master's degree or are pursuing a doctorate of 
        philosophy in math and science;
          ``(2) post-baccalaureate study related to teacher preparation 
        and pedagogy in special education and English language 
        acquisition and academic proficiency for limited English 
        proficient individuals; and
          ``(3) support of dissertation research in the fields of math, 
        science, special education, or second language pedagogy and 
        second language acquisition.''.
  (b) Collaboration Required for Certain Applications.--Section 713(b) 
(20 U.S.C. 1135b) is amended--
          (1) by striking ``and'' at the end of paragraph (9);
          (2) by redesignating paragraph (10) as paragraph (11); and
          (3) by inserting after paragraph (9) the following new 
        paragraph:
          ``(10) in the case of an application for a grant by a 
        department, program, or unit in education or teacher 
        preparation, contain assurances that such department, program, 
        or unit collaborates with departments, programs, or units in 
        all content areas to assure a successful combination of 
        training in both teaching and such content; and''.
  (c) Stipends.--Section 714(b) (20 U.S.C. 1135c(b)) is amended--
          (1) by striking ``1999-2000'' and inserting ``2006-2007'';
          (2) by striking ``shall be set'' and inserting ``may be 
        set''; and
          (3) by striking ``Foundation graduate fellowships'' and 
        inserting ``Foundation Graduate Research Fellowship Program on 
        February 1 of such academic year''.
  (d) Additional Assistance.--Section 715(a)(1) (20 U.S.C. 1135d(a)(1)) 
is amended--
          (1) by striking ``1999-2000'' and inserting ``2006-2007'';
          (2) by striking ``1998-1999'' and inserting ``2005-2006''; 
        and
          (3) by inserting ``for All Urban Consumers'' after ``Price 
        Index''.
  (e) Authorization of Appropriations.--Section 716 (20 U.S.C. 1135e) 
is amended by striking ``fiscal year 1999 and such sums as may be 
necessary for each of the 4 succeeding fiscal years'' and inserting 
``fiscal year 2006 and such sums as may be necessary for each of the 5 
succeeding fiscal years''.
  (f) Technical Amendments.--Section 714(c) (20 U.S.C. 1135c(c)) is 
amended--
          (1) by striking ``section 716(a)'' and inserting ``section 
        715(a)''; and
          (2) by striking ``section 714(b)(2)'' and inserting ``section 
        713(b)(2)''.

SEC. 703. THURGOOD MARSHALL LEGAL EDUCATIONAL OPPORTUNITY PROGRAM.

  (a) Contract and Grant Purposes.--Section 721(c) (20 U.S.C. 1136(c)) 
is amended--
          (1) by amending paragraph (2) to read as follows:
          ``(2) to prepare such students for study at accredited law 
        schools and assist them with the development of analytical 
        skills and study methods to enhance their success and promote 
        completion of law school;'';
          (2) by striking ``and'' at the end of paragraph (4);
          (3) by striking the period at the end of paragraph (5) and 
        inserting ``; and''; and
          (4) by adding at the end the following new paragraph:
          ``(6) to award Thurgood Marshall Fellowships to eligible law 
        school students--
                  ``(A) who participated in summer institutes 
                authorized by subsection (d) and who are enrolled in an 
                accredited law school; or
                  ``(B) who are eligible law school students who have 
                successfully completed a comparable summer institute 
                program certified by the Council on Legal Educational 
                Opportunity.''.
  (b) Services Provided.--Section 721(d)(1)(D) (20 U.S.C. 
1136(d)(1)(D)) is amended by inserting ``in analytical skills and study 
methods'' after ``courses''.
  (c) Authorization of Appropriations.--Section 721(h) (20 U.S.C. 
1136(h)) is amended by striking ``1999 and each of the 4 succeeding 
fiscal years'' and inserting ``2006 and each of the 5 succeeding fiscal 
years''.
  (d) General Provisions.--Subsection (e) of section 731 (20 U.S.C. 
1137(e)) is repealed.

SEC. 704. FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION.

  (a) Contract and Grant Purposes.--Section 741(a) (20 U.S.C. 1138(a)) 
is amended--
          (1) by amending paragraph (1) to read as follows:
          ``(1) the encouragement of the reform and improvement of, and 
        innovation in, postsecondary education and the provision of 
        educational opportunity for all, especially for the non-
        traditional student populations;'';
          (2) in paragraph (2), by inserting before the semicolon at 
        the end the following: ``for postsecondary students, especially 
        institutions, programs, and joint efforts that provide academic 
        credit for programs'';
          (3) by amending paragraph (3) to read as follows:
          ``(3) the establishment of institutions and programs based on 
        the technology of communications, including delivery by 
        distance education;'';
          (4) by amending paragraph (6) to read as follows:
          ``(6) the introduction of institutional reforms designed to 
        expand individual opportunities for entering and reentering 
        postsecondary institutions and pursuing programs of 
        postsecondary study tailored to individual needs;'';
          (5) by striking ``and'' at the end of paragraph (7);
          (6) by striking the period at the end of paragraph (8) and 
        inserting a semicolon; and
          (7) by adding at the end the following new paragraphs:
          ``(9) the provision of support and assistance to programs 
        implementing integrated education reform services in order to 
        improve secondary school graduation and college attendance and 
        completion rates for disadvantaged students, and to programs 
        that reduce postsecondary remediation rates, and improve degree 
        attainment rates, for low-income students and former high 
        school dropouts; and
          ``(10) the assessment, in partnership with a public or 
        private nonprofit institution or agency, of the performance of 
        teacher preparation programs within institutions of higher 
        education in a State, using an assessment which provides 
        comparisons across such schools within the State based upon 
        indicators including teacher candidate knowledge in subject 
        areas in which such candidate has been prepared to teach. ''.
  (b) Prohibition.--Section 741 (20 U.S.C. 1138) is further amended by 
adding at the end the following new subsection:
  ``(c) Prohibition.--No funds made available under this part may be 
used to provide financial assistance to students who do not meet the 
requirements of section 484(a)(5).''.
  (c) Areas of National Need.--Section 744(c) (20 U.S.C. 1138c(c)) is 
amended--
          (1) by amending paragraph (2) to read as follows:
          ``(2)(A) Development of partnerships between local 
        educational agencies and institutions of higher education to 
        establish or expand existing dual enrollment programs at 
        institutions of higher education that allow high school 
        students to earn high school and transferable college credit.
          ``(B) Development of consortia of institutions of higher 
        education to create dual enrollment programs including academic 
        and student support agreements and comprehensive articulation 
        agreements that would allow for the seamless and timeless 
        acquisition of college credits and the transfer of 
        postsecondary academic credits between such institutions, 
        particularly from 2-year to 4-year institutions of higher 
        education.''; and
          (2) by striking paragraph (4) and inserting the following:
          ``(4) International cooperation, partnerships, or student 
        exchange among postsecondary educational institutions in the 
        United States and abroad.
          ``(5) Establishment of academic programs including graduate 
        and undergraduate courses, seminars and lectures, support of 
        research, and development of teaching materials for the purpose 
        of supporting faculty and academic programs that teach 
        traditional American history (including significant 
        constitutional, political, intellectual, economic, diplomatic, 
        and foreign policy trends, issues, and documents; the history, 
        nature, and development of democratic institutions of which 
        American democracy is a part; and significant events and 
        individuals in the history of the United States).
          ``(6) Support for 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 enable institutions of higher 
        education to work with private and civic organizations to 
        assist communities to meet and address their pressing and 
        severe problems, including economic development, community 
        infrastructure and housing, crime prevention, education, 
        healthcare, self-sufficiency, and workforce preparation. Such 
        activities may include support for the development of 
        coordinated curriculum and internship opportunities for 
        students in disadvantaged communities.''.
  (d) Authorization of Appropriations.--Section 745 (20 U.S.C. 1138d) 
is amended by striking ``$30,000,000 for fiscal year 1999 and such sums 
as may be necessary for each of the 4 succeeding fiscal years'' and 
inserting ``$40,000,000 for fiscal year 2006 and such sums as may be 
necessary for each of the 5 succeeding fiscal years'' .

SEC. 705. URBAN COMMUNITY SERVICE.

  Part C of title VII (20 U.S.C. 1139 et seq.) is repealed.

SEC. 706. DEMONSTRATION PROJECTS TO ENSURE STUDENTS WITH DISABILITIES 
                    RECEIVE A QUALITY HIGHER EDUCATION.

  (a) Serving All Students With Disabilities.--Section 762(a) (20 
U.S.C. 1140a(a)) is amended by striking ``students with learning 
disabilities'' and inserting ``students with disabilities''.
  (b) Authorized Activities.--
          (1) Amendment.--Section 762(b)(2) is amended--
                  (A) in subparagraph (A), by inserting ``in order to 
                improve retention and completion'' after 
                ``disabilities'';
                  (B) by redesignating subparagraphs (B) and (C) as 
                subparagraphs (C) and (E), respectively;
                  (C) by inserting after subparagraph (A) the following 
                new subparagraph:
                  ``(B) Effective transition practices.--The 
                development of innovative, effective, and efficient 
                teaching methods and strategies to ensure the smooth 
                transition of students with disabilities from high 
                school to postsecondary education.''; and
                  (D) by inserting after subparagraph (C) (as 
                redesignated by subparagraph (B) of this paragraph) the 
                following new subparagraph:
                  ``(D) Distance learning.--The development of 
                innovative, effective, and efficient teaching methods 
                and strategies to provide faculty and administrators 
                with the ability to provide accessible distance 
                education programs or classes that would enhance access 
                of students with disabilities to higher education, 
                including the use of electronic communication for 
                instruction and advisement.''.
          (2) Conforming amendment.--Section 762(b)(3) is amended by 
        striking ``subparagraphs (A) through (C)'' and inserting 
        ``subparagraphs (A) through (E)''.
  (c) Applications.--Section 763 (20 U.S.C. 1140b) is amended--
          (1) by amending paragraph (1) to read as follows:
          ``(1) a description of how such institution plans to address 
        the activities allowed under this part;'';
          (2) by striking ``and'' at the end of paragraph (2);
          (3) by striking the period at the end of paragraph (3) and 
        inserting ``; and''; and
          (4) by adding at the end the following new paragraph:
          ``(4) a description of the extent to which an institution 
        will work to replicate the best practices of institutions of 
        higher education with demonstrated success in serving students 
        with disabilities.''.
  (d) Authorization of Appropriations.--Section 765 (20 U.S.C. 1140d) 
is amended by striking ``fiscal year 1999 and such sums as may be 
necessary for each of the 4 succeeding fiscal years'' and inserting 
``fiscal year 2006 and such sums as may be necessary for each of the 5 
succeeding fiscal years''.

                    TITLE VIII--CLERICAL AMENDMENTS

SEC. 801. CLERICAL AMENDMENTS.

  (a) Definition.--Section 103 (20 U.S.C. 1003) (as amended by section 
102) is further amended--
          (1) by redesignating paragraphs (1) through (16) as 
        paragraphs (2) through (17), respectively; and
          (2) by inserting before paragraph (2) (as so redesignated) 
        the following new paragraph:
          ``(1) Authorizing committees.--The term `authorizing 
        committees' means the Committee on Health, Education, Labor, 
        and Pensions of the Senate and the Committee on Education and 
        the Workforce of the House of Representatives.''.
  (b) Committees.--
          (1) The following provisions are each amended by striking 
        ``Committee on Labor and Human Resources of the Senate and the 
        Committee on Education and the Workforce of the House of 
        Representatives'' and inserting ``authorizing committees'':
                  (A) Section 428(g) (20 U.S.C. 1078(g)).
                  (B) Section 428A(a)(3) (20 U.S.C. 1078-1(a)(3)), as 
                redesignated by section 430(e)(4).
                  (C) Section 428A(c)(2) (20 U.S.C. 1078-1(c)(2)).
                  (D) Section 428A(c)(5) (20 U.S.C. 1078-1(c)(5)).
                  (E) Section 455(b)(7)(B) (20 U.S.C. 1087e(b)(7)(B)), 
                as redesignated by section 423(b)(3).
                  (F) Section 483(c) (20 U.S.C. 1090(c)).
                  (G) Section 486(e) (20 U.S.C. 1093(e)).
                  (H) Section 486(f)(3)(A) (20 U.S.C. 1093(f)(3)(A)).
                  (I) Section 486(f)(3)(B) (20 U.S.C. 1093(f)(3)(B)).
                  (J) Section 487A(a)(5) (20 U.S.C. 1094a(a)(5)).
                  (K) Section 487A(b)(2) (20 U.S.C. 1094a(b)(2)).
                  (L) Section 487A(b)(3)(B) (20 U.S.C. 1094a(b)(3)(B)).
                  (M) Section 498B(d)(1) (20 U.S.C. 1099c-2(d)(1)).
                  (N) Section 498B(d)(2) (20 U.S.C. 1099c-2(d)(2)).
          (2) The following provisions are each amended by striking 
        ``Committee on Education and the Workforce of the House of 
        Representatives and the Committee on Labor and Human Resources 
        of the Senate'' and inserting ``authorizing committees'':
                  (A) Section 141(d)(4)(B) (20 U.S.C. 1018(d)(4)(B)).
                  (B) Section 428(n)(4) (20 U.S.C. 1078(n)(4)).
                  (C) Section 437(c)(1) (20 U.S.C. 1087(c)(1)).
                  (D) Section 485(f)(5)(A) (20 U.S.C. 1092(f)(5)(A)).
                  (E) Section 485(g)(4)(B) (20 U.S.C. 1092(g)(4)(B)).
          (3) Section 401(f)(3) (20 U.S.C. 1070a(f)(3)) is amended by 
        striking ``Committee on Appropriations and the Committee on 
        Labor and Human Resources of the Senate and the Committee on 
        Appropriations and the Committee on Education and the Workforce 
        of the House of Representatives'' and inserting ``Committees on 
        Appropriations of the Senate and House of Representatives and 
        the authorizing committees''.
          (4) Section 428(c)(9)(K) (20 U.S.C. 1078(c)(9)(K)) is amended 
        by striking ``House Committee on Education and the Workforce 
        and the Senate Committee on Labor and Human Resources'' and 
        inserting ``authorizing committees''.
          (5) Section 432(f)(1)(C) (20 U.S.C. 1082(f)(1)(C)) is amended 
        by striking ``Committee on Education and the Workforce of the 
        House of Representatives or the Committee on Labor and Human 
        Resources of the Senate'' and inserting ``either of the 
        authorizing committees''.
          (6) Section 439(d)(1)(E)(iii) (20 U.S.C. 1087-
        2(d)(1)(E)(iii)) is amended by striking ``Chairman and the 
        Ranking Member on the Committee on Labor and Human Resources of 
        the Senate and the Chairman and the Ranking Member of the 
        Committee on Education and Labor of the House of 
        Representatives'' and inserting ``chairpersons and ranking 
        minority members of the authorizing committees''.
          (7) Paragraphs (3) and (8)(C) of section 439(r) (20 U.S.C. 
        1087-2(r)) are each amended by striking ``Chairman and ranking 
        minority member of the Committee on Labor and Human Resources 
        of the Senate, the Chairman and ranking minority member of the 
        Committee on Education and Labor of the House of 
        Representatives,'' and inserting ``chairpersons and ranking 
        minority members of the authorizing committees''.
          (8) Paragraphs (5)(B) and (10) of section 439(r) (20 U.S.C. 
        1087-2(r)) are each amended by striking ``Chairman and ranking 
        minority member of the Senate Committee on Labor and Human 
        Resources and to the Chairman and ranking minority member of 
        the House Committee on Education and Labor'' and inserting 
        ``chairpersons and ranking minority members of the authorizing 
        committees''.
          (9) Section 439(r)(6)(B) (20 U.S.C. 1087-2(r)(6)(B)) is 
        amended by striking ``Chairman and ranking minority member of 
        the Committee on Labor and Human Resources of the Senate and to 
        the Chairman and ranking minority member of the Committee on 
        Education and Labor of the House of Representatives'' and 
        inserting ``chairpersons and ranking minority members of the 
        authorizing committees''.
          (10) Section 439(s)(2)(A) (20 U.S.C. 1087-2(s)(2)(A)) is 
        amended by striking ``Chairman and Ranking Member of the 
        Committee on Labor and Human Resources of the Senate and the 
        Chairman and Ranking Member of the Committee on Economic and 
        Educational Opportunities of the House of Representatives'' and 
        inserting ``chairpersons and ranking minority members of the 
        authorizing committees''.
          (11) Section 439(s)(2)(B) (20 U.S.C. 1087-2(s)(2)(B)) is 
        amended by striking ``Chairman and Ranking Minority Member of 
        the Committee on Labor and Human Resources of the Senate and 
        Chairman and Ranking Minority Member of the Committee on 
        Economic and Educational Opportunities of the House of 
        Representatives'' and inserting ``chairpersons and ranking 
        minority members of the authorizing committees''.
          (12) Section 482(d) (20 U.S.C. 1089(d)) is amended by 
        striking ``Committee on Labor and Human Resources of the Senate 
        and the Committee on Education and Labor of the House of 
        Representatives'' and inserting ``authorizing committees''.
  (c) Additional Clerical Amendments.--
          (1) Clauses (i) and (ii) of section 425(a)(2)(A) (20 U.S.C. 
        1075(a)(2)(A)) are each amended by striking ``428A or 428B'' 
        and inserting ``428B or 428H''.
          (2) Section 428(a)(2)(E) (20 U.S.C. 1078(a)(2)(E)) is amended 
        by striking ``428A or''.
          (3) Clauses (i) and (ii) of section 428(b)(1)(B) (20 U.S.C. 
        1078(b)(1)(B)) are each amended by striking ``428A or 428B'' 
        and inserting ``428B or 428H''.
          (4) Section 428(b)(1)(Q) (20 U.S.C. 1078(b)(1)(Q)) is amended 
        by striking ``sections 428A and 428B'' and inserting ``section 
        428B or 428H''.
          (5) Section 428(b)(7)(C) (20 U.S.C. 1078(b)(7)(C)) is amended 
        by striking ``428A, 428B,'' and inserting ``428B''.
          (6) Section 428G(c)(2) (20 U.S.C. 1078-7(c)(2)) is amended by 
        striking ``428A'' and inserting ``428H''.
          (7) The heading for section 433(e) (20 U.S.C. 1083(e)) is 
        amended by striking ``SLS Loans And''.
          (8) Section 433(e) (20 U.S.C. 1083(e)) is amended by striking 
        ``428A, 428B,'' and inserting ``428B''.
          (9) Section 435(a)(3) (20 U.S.C. 1085(a)(3)) is amended--
                  (A) by inserting ``or'' at the end of subparagraph 
                (A);
                  (B) by striking subparagraph (B); and
                  (C) by redesignating subparagraph (C) as subparagraph 
                (B).
          (10) Section 435(d)(1)(G) (20 U.S.C. 1085(d)(1)(G)) is 
        amended by striking ``428A(d), 428B(d), 428C,'' and inserting 
        ``428B(d), 428C, 428H,''.
          (11) Section 435(m) (20 U.S.C. 1085(m)) is amended--
                  (A) in paragraph (1)(A), by striking ``, 428A,''; and
                  (B) in paragraph (2)(D), by striking ``428A'' each 
                place it appears and inserting ``428H''.
          (12) Section 438(b)(2)(D)(ii) (20 U.S.C. 1087-1(b)(2)(D)(ii)) 
        is amended by striking ``division (i) of this subparagraph'' 
        and inserting ``clause (i) of this subparagraph''.
          (13) Section 438(c)(6) (20 U.S.C. 1087-1(c)(6)) is amended--
                  (A) by striking ``Sls and plus'' in the heading and 
                inserting ``Plus''; and
                  (B) by striking ``428A or''.
          (14) Section 438(c)(7) (20 U.S.C. 1087-1(c)(7)) is amended by 
        striking ``428A or''.
          (15) Nothing in the amendments made by this subsection shall 
        be construed to alter the terms, conditions, and benefits 
        applicable to Federal supplemental loans for students (``SLS 
        loans'') under section 428A as in effect prior to July 1, 1994 
        (20 U.S.C. 1078-1).

              TITLE IX--AMENDMENTS TO OTHER EDUCATION LAWS

               PART A--EDUCATION OF THE DEAF ACT OF 1986

SEC. 901. LAURENT CLERC NATIONAL DEAF EDUCATION CENTER.

  (a) General Authority.--Section 104(a)(1)(A) of the Education of the 
Deaf Act of 1986 (20 U.S.C. 4304(a)(1)(A)) is amended by inserting 
after ``maintain and operate'' the following: ``, at the Laurent Clerc 
National Deaf Education Center,''.
  (b) Administrative Requirements.--
          (1) In general.--Section 104(b) of the Education of the Deaf 
        Act of 1986 (20 U.S.C. 4304(b)) is amended--
                  (A) in the matter preceding subparagraph (A) of 
                paragraph (1), by striking ``elementary and secondary 
                education programs'' and inserting ``Laurent Clerc 
                National Deaf Education Center''; and
                  (B) in paragraph (2), by striking ``elementary and 
                secondary education programs'' and inserting ``Laurent 
                Clerc National Deaf Education Center''.
          (2) Academic content standards, achievement standards, and 
        assessments.--Section 104(b) of the Education of the Deaf Act 
        of 1986 (20 U.S.C. 4304(b)) is amended by adding at the end the 
        following new paragraph:
  ``(5) The University, in consultation with the Secretary and 
consistent with the mission of the elementary and secondary programs 
operated at the Laurent Clerc National Deaf Education Center, shall--
          ``(A) not later than the beginning of the 2007-2008 school 
        year, adopt and implement academic content standards, academic 
        achievement standards, and academic assessments as described in 
        paragraphs (1) and (3) of section 1111(b) of the Elementary and 
        Secondary Education Act of 1965 for such Center;
          ``(B) develop adequate yearly progress standards for such 
        Center as described in section 1111(b)(2)(C) of such Act; and
          ``(C) publicly report the results of such assessments, except 
        in such case in which such reporting would not yield 
        statistically reliable information or would reveal personally 
        identifiable information about an individual student.''.

SEC. 902. AUTHORITY.

  Section 111 of the Education of the Deaf Act of 1986 (20 U.S.C. 4331) 
is amended by striking ``the institution of higher education with which 
the Secretary has an agreement under this part'' and inserting ``the 
Rochester Institute of Technology''.

SEC. 903. AGREEMENT FOR THE NATIONAL TECHNICAL INSTITUTE FOR THE DEAF.

  (a) General Authority.--Section 112(a) of the Education of the Deaf 
Act of 1986 (20 U.S.C. 4332(a)) is amended--
          (1) in paragraph (1)--
                  (A) in the first sentence--
                          (i) by striking ``an institution of higher 
                        education'' and inserting ``the Rochester 
                        Institute of Technology, Rochester, New 
                        York,''; and
                          (ii) by striking ``of a'' and inserting ``of 
                        the''; and
                  (B) by striking the second sentence; and
          (2) in paragraph (2)--
                  (A) in the matter preceding subparagraph (A), by 
                striking ``the institution of higher education with 
                which the Secretary has an agreement under this 
                section'' and inserting ``the Rochester Institute of 
                Technology''; and
                  (B) in subparagraph (B), by striking ``the 
                institution'' and inserting ``the Rochester Institute 
                of Technology''.
  (b) Provisions of Agreement.--Section 112(b) of the Education of the 
Deaf Act of 1986 (20 U.S.C. 4332(b)) is amended--
          (1) in paragraph (2), by striking ``or other governing body 
        of the institution'' and inserting ``of the Rochester Institute 
        of Technology''; and
          (2) in paragraph (3)--
                  (A) by striking ``or other governing body of the 
                institution'' and inserting ``of the Rochester 
                Institute of Technology'';
                  (B) by striking ``the institution of higher education 
                under the agreement with the Secretary'' and inserting 
                ``the Rochester Institute of Technology by the National 
                Technical Institute for the Deaf''; and
                  (C) by striking ``Committee on Education and Labor of 
                the House of Representatives and to the Committee on 
                Labor and Human Resources of the Senate'' and inserting 
                ``Committee on Education and the Workforce of the House 
                of Representatives and to the Committee on Health, 
                Education, Labor, and Pensions of the Senate''.
  (c) Limitation.--Section 112(c) of the Education of the Deaf Act of 
1986 (20 U.S.C. 4332(c)) is amended in paragraphs (1) and (2) by 
striking ``institution'' each place it appears and inserting 
``Rochester Institute of Technology''.

SEC. 904. DEFINITIONS.

  Section 201 of the Education of the Deaf Act of 1986 (20 U.S.C. 4351) 
is amended--
          (1) by striking paragraph (3);
          (2) by redesignating paragraphs (4) through (7) as paragraphs 
        (3) through (6), respectively; and
          (3) by adding at the end the following new paragraph:
          ``(7) The term `RIT' means the Rochester Institute of 
        Technology.''.

SEC. 905. AUDIT.

  (a) Government Accountability Office Authority.--Section 203(a) of 
the Education of the Deaf Act of 1986 (20 U.S.C. 4353(a)) is amended--
          (1) in the heading, by striking ``General Accounting Office'' 
        and inserting ``Government Accountability Office''; and
          (2) in the matter following paragraph (2), by striking 
        ``General Accounting Office'' and inserting ``Government 
        Accountability Office''.
  (b) Independent Financial and Compliance Audit.--Section 203(b)(1) of 
the Education of the Deaf Act of 1986 (20 U.S.C. 4353(b)(1)) is amended 
by striking the second sentence and inserting the following: ``NTID 
shall have an annual independent financial and compliance audit made of 
RIT programs and activities, including NTID programs and activities.''.
  (c) Compliance.--Section 203(b)(2) of the Education of the Deaf Act 
of 1986 (20 U.S.C. 4353(b)(2)) is amended by striking ``sections'' and 
all that follows through ``section 207'' and inserting ``sections 
102(b), 105(b)(4), 112(b)(5), 203(c), 207(b)(2), subsections (c) 
through (f) of section 207''.
  (d) Submission of Audits.--Section 203(b)(3) of the Education of the 
Deaf Act of 1986 (20 U.S.C. 4353(b)(3)) is amended--
          (1) by inserting after ``Secretary'' the following: ``and the 
        Committee on Education and the Workforce of the House of 
        Representatives and the Committee on Health, Education, Labor, 
        and Pensions of the Senate''; and
          (2) by striking ``or the institution authorized to establish 
        and operate the NTID under section 112(a)'' and inserting ``or 
        RIT''.
  (e) Limitations Regarding Expenditure of Funds.--Section 203(c)(2)(A) 
of the Education of the Deaf Act of 1986 (20 U.S.C. 4353(c)(2)(A)) is 
amended in the fifth sentence by striking ``the Committee on Education 
and Labor of the House of Representatives and the Committee on Labor 
and Human Resources of the Senate'' and inserting ``the Committee on 
Education and the Workforce of the House of Representatives and the 
Committee on Health, Education, Labor, and Pensions of the Senate''.

SEC. 906. REPORTS.

  (a) Technical Amendments.--Section 204 of the Education of the Deaf 
Act of 1986 (20 U.S.C. 4354) is amended in the matter preceding 
paragraph (1)--
          (1) by striking ``or other governing body of the institution 
        of higher education with which the Secretary has an agreement 
        under section 112'' and inserting ``of RIT''; and
          (2) by striking ``Committee on Education and Labor of the 
        House of Representatives and the Committee on Labor and Human 
        Resources of the Senate'' and inserting ``Committee on 
        Education and the Workforce of the House of Representatives and 
        the Committee on Health, Education, Labor, and Pensions of the 
        Senate''.
  (b) Contents of Report.--Section 204 of the Education of the Deaf Act 
of 1986 (20 U.S.C. 4354) is amended--
          (1) in paragraph (2)(C), by striking ``upon graduation/
        completion'' and inserting ``within one year of graduation/
        completion''; and
          (2) in paragraph (3)(B), by striking ``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 
        inserting ``of RIT programs and activities''.

SEC. 907. LIAISON FOR EDUCATIONAL PROGRAMS.

  Section 206(a) of the Education of the Deaf Act of 1986 (20 U.S.C. 
4356(a)) is amended by striking ``Not later than 30 days after the date 
of enactment of this Act, the'' and inserting ``The''.

SEC. 908. FEDERAL ENDOWMENT PROGRAMS FOR GALLAUDET UNIVERSITY AND THE 
                    NATIONAL TECHNICAL INSTITUTE FOR THE DEAF.

  Section 207(a)(2) of the Education of the Deaf Act of 1986 (20 U.S.C. 
4357(a)(2)) is amended by striking ``or other governing body of the 
institution of higher education with which the Secretary has an 
agreement under section 112'' and inserting ``of RIT''.

SEC. 909. OVERSIGHT AND EFFECT OF AGREEMENTS.

  Section 208(a) of the Education of the Deaf Act of 1986 (20 U.S.C. 
4359(a)) is amended--
          (1) by striking ``the institution of higher education with 
        which the Secretary has an agreement under part B of title I'' 
        and inserting ``RIT''; and
          (2) by striking ``Committee on Labor and Human Resources of 
        the Senate and the Committee on Education and the Workforce of 
        the House of Representatives'' and inserting ``Committee on 
        Education and the Workforce of the House of Representatives and 
        the Committee on Health, Education, Labor, and Pensions of the 
        Senate''.

SEC. 910. AUTHORIZATION OF APPROPRIATIONS.

  (a) Monitoring and Evaluation Activities.--Section 205(c) of the 
Education of the Deaf Act of 1986 (20 U.S.C. 4355(c)) is amended by 
striking ``fiscal years 1998 through 2003'' and inserting ``fiscal 
years 2006 through 2011''.
  (b) Federal Endowment Programs for Gallaudet University and the 
National Technical Institute for the Deaf.--Section 207(h) of the 
Education of the Deaf Act of 1986 (20 U.S.C. 4357(h)) is amended in 
paragraphs (1) and (2) by striking ``fiscal years 1998 through 2003'' 
each place it appears and inserting ``fiscal years 2006 through 2011''.
  (c) General Authorization of Appropriations.--Section 212 of the 
Education of the Deaf Act of 1986 (20 U.S.C. 4360a) is amended--
          (1) in the matter preceding paragraph (1) in subsection (a), 
        by striking ``fiscal years 1998 through 2003'' and inserting 
        ``fiscal years 2006 through 2011''; and
          (2) in subsection (b), by striking ``fiscal years 1998 
        through 2003'' and inserting ``fiscal years 2006 through 
        2011''.
  (d) Short Title.--
          (1) In general.--The Education of the Deaf Act of 1986 (20 
        U.S.C. 4301 note) is amended by striking the matter preceding 
        title I and inserting the following:

``SECTION 1. SHORT TITLE.

  ``This Act may be cited as the `Gallaudet University and National 
Technical Institute for the Deaf Act'.''.
          (2) Other references.-- Any reference in a law, regulation, 
        document, or other record of the United States to the Education 
        of the Deaf Act of 1986 shall be deemed to be a reference to 
        the Gallaudet University and National Technical Institute for 
        the Deaf Act.

                   PART B--ADDITIONAL EDUCATION LAWS

SEC. 921. CANCELLATION OF STUDENT LOAN INDEBTEDNESS FOR SURVIVORS OF 
                    VICTIMS OF THE SEPTEMBER 11, 2001, ATTACKS.

  (a) Definitions.--For purposes of this section:
          (1) Eligible public servant.--The term ``eligible public 
        sesrvant'' means an individual who, as determined in accordance 
        with regulations of the Secretary--
                  (A) served as a police officer, firefighter, other 
                safety or rescue personnel, or as a member of the Armed 
                Forces; and
                  (B) died (or dies) or became (or becomes) permanently 
                and totally disabled due to injuries suffered in the 
                terrorist attack on September 11, 2001.
          (2) Eligible victim.--The term ``eligible victim'' means an 
        individual who, as determined in accordance with regulations of 
        the Secretary, died (or dies) or became (or becomes) 
        permanently and totally disabled due to injuries suffered in 
        the terrorist attack on September 11, 2001.
          (3) Eligible parent.--The term ``eligible parent'' means the 
        parent of an eligible victim if--
                  (A) the parent owes a Federal student loan that is a 
                consolidation loan that was used to repay a PLUS loan 
                incurred on behalf of such eligible victim; or
                  (B) the parent owes a Federal student loan that is a 
                PLUS loan incurred on behalf of an eligible victim.
          (4) Secretary.--The term ``Secretary'' means the Secretary of 
        Education.
          (5) Federal student loan.--The term ``Federal student loan'' 
        means any loan made, insured, or guaranteed under part B, D, or 
        E of title IV of the Higher Education Act of 1965.
  (b) Relief From Indebtedness.--
          (1) In general.--The Secretary shall provide for the 
        discharge or cancellation of--
                  (A) the Federal student loan indebtedness of the 
                spouse of an eligible public servant, as determined in 
                accordance with regulations of the Secretary, including 
                any consolidation loan that was used jointly by the 
                eligible public servant and his or her spouse to repay 
                the Federal student loans of the spouse and the 
                eligible public servant;
                  (B) the portion incurred on behalf of the eligible 
                victim (other than an eligible public servant), of a 
                Federal student loan that is a consolidation loan that 
                was used jointly by the eligible victim and his or her 
                spouse, as determined in accordance with regulations of 
                the Secretary, to repay the Federal student loans of 
                the eligible victim and his or her spouse;
                  (C) the portion of the consolidation loan 
                indebtedness of an eligible parent that was incurred on 
                behalf of an eligible victim; and
                  (D) the PLUS loan indebtedness of an eligible parent 
                that was incurred on behalf of an eligible victim.
          (2) Method of discharge or cancellation.--A loan required to 
        be discharged or canceled under paragraph (1) shall be 
        discharged or canceled by the method used under section 437(a), 
        455(a)(1), or 464(c)(1)(F) of the Higher Education Act of 1965 
        (20 U.S.C. 1087(a), 1087e(a)(1), 1087dd(c)(1)(F)), whichever is 
        applicable to such loan.
  (c) Facilitation of Claims.--The Secretary shall--
          (1) establish procedures for the filing of applications for 
        discharge or cancellation under this section by regulations 
        that shall be prescribed and published within 90 days after the 
        date of enactment of this Act and without regard to the 
        requirements of section 553 of title 5, United States Code; and
          (2) take such actions as may be necessary to publicize the 
        availability of discharge or cancellation of Federal student 
        loan indebtedness under this section.
  (d) Availability of Funds for Payments.--Funds available for the 
purposes of making payments to lenders in accordance with section 
437(a) for the discharge of indebtedness of deceased or disabled 
individuals shall be available for making payments under section 437(a) 
to lenders of loans as required by this section.
  (e) Applicable to Outstanding Debt.--The provisions of this section 
shall be applied to discharge or cancel only Federal student loans 
(including consolidation loans) on which amounts were owed on September 
11, 2001. Nothing in this section shall be construed to authorize any 
refunding of any repayment of a loan.

SEC. 922. AMENDMENT TO HIGHER EDUCATION AMENDMENTS OF 1998.

  (a) Repeals of Expired and Executed Provisions.--The following 
provisions of the Higher Education Amendments of 1998 are repealed:
          (1) Study of market mechanisms in federal student loan 
        programs.--Section 801 (20 U.S.C. 1018 note).
          (2) Study of feasibility of alternate financial instruments 
        for determining lender yields.--Section 802.
          (3) Student related debt study.--Section 803 (20 U.S.C. 1015 
        note).
          (4) Study of opportunities for participation in athletic 
        programs.--Section 805 (20 U.S.C. 1001 note).
          (5) Community scholarship mobilization.--Part C of title VIII 
        (20 U.S.C. 1070 note).
          (6) Incarcerated youth.--Part D of title VIII (20 U.S.C. 
        1151).
          (7) Improving united states understanding of science, 
        engineering, and technology in east asia.--Part F of title VIII 
        (42 U.S.C. 1862 note).
          (8) Web-based education commission.--Part J of title VIII.
  (b) Extensions of Authorizations and Studies.--
          (1) Transfer of credit.--Section 804(b) of such Act (20 
        U.S.C. 1099b note) is amended--
                  (A) by striking ``one year after the date of 
                enactment of this Act'' and inserting ``September 30, 
                2007''; and
                  (B) by inserting ``and policies of institutions of 
                higher education'' after ``agencies or associations''.
          (2) Cohort default rate study.--Section 806 of such Act is 
        amended--
                  (A) in subsection (a), by striking ``higher education 
                at which less'' and inserting ``higher education. The 
                study shall also review the effect of cohort default 
                rates specifically on institutions of higher education 
                at which less''; and
                  (B) in subsection (c), by striking ``September 30, 
                1999,'' and inserting ``September 30, 2007,''.
          (3) Violence against women.--Section 826 of such Act (20 
        U.S.C. 1152) is amended--
                  (A) in subsection (g), by striking ``for each of the 
                fiscal years 2001 through 2005'' and inserting ``fiscal 
                year 2006 and each of the 5 succeeding fiscal years''; 
                and
                  (B) by redesignating subsections (f) and (g) as 
                subsections (e) and (f), respectively.
          (4) Underground railroad.--Subsection (c) of section 841 (20 
        U.S.C. 1153(c)) is amended to read as follows:
  ``(c) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $3,000,000 for fiscal year 2006 
and such sums as may be necessary for each of the 5 succeeding fiscal 
years.''.
  (c) Disbursement of Student Loans.--Section 422(d) of the Higher 
Education Amendments of 1998 (Public Law 105-244; 112 Stat. 1696) is 
amended by adding at the end the following new sentence: ``Such 
amendments shall also be effective on and after July 1, 2006.''.

SEC. 923. TRIBALLY CONTROLLED COLLEGE OR UNIVERSITY ASSISTANCE ACT OF 
                    1978.

  (a) Title I Authorization.--Section 110(a) of the Tribally Controlled 
Community College or University Assistance Act of 1978 (25 U.S.C. 
1810(a)) is amended--
          (1) by striking ``1999'' each place it appears and inserting 
        ``2006''; and
          (2) by striking ``4 succeeding'' each place it appears and 
        inserting ``5 succeeding''.
  (b) Title III Reauthorization.--Section 306(a) of the Tribally 
Controlled Community College or University Assistance Act of 1978 (25 
U.S.C. 1836(a)) is amended--
          (1) by striking ``1999'' and inserting ``2006''; and
          (2) by striking ``4 succeeding'' and inserting ``5 
        succeeding''.
  (c) Title IV Reauthorization.--Section 403 of the Tribal Economic 
Development and Technology Related Education Assistance Act of 1990 (25 
U.S.C. 1852) is amended--
          (1) by striking ``1999'' and inserting ``2006''; and
          (2) by striking ``4 succeeding'' and inserting ``5 
        succeeding''.
  (d) Additional Amendments.--The Tribally Controlled Community College 
or University Assistance Act of 1978 is further amended--
          (1) in section 2(a)(6) (25 U.S.C. 1801(a)(6)), by striking 
        ``in the field of Indian education'' and inserting ``in the 
        field of Tribal Colleges and Universities and Indian higher 
        education'';
          (2) in section 2(b), by striking paragraph (5) and inserting 
        the following:
          ``(5) Eligible credits earned in a continuing education 
        program shall be determined as one credit for every 10 contact 
        hours for institutions on a quarter system, and 15 contact 
        hours for institutions on a semester system, of participation 
        in an organized continuing education experience under 
        responsible sponsorship, capable direction, and qualified 
        instruction, as described in the criteria established by the 
        International Association for Continuing Education and 
        Training, and may not exceed 20 percent of an institution's 
        total Indian student count.''; and
          (3) in section 103 (25 U.S.C. 1804), by striking ``and'' at 
        the end of paragraph (2), by striking the period at the end of 
        paragraph (3) and inserting ``; and'', and by inserting after 
        paragraph (3) the following new paragraph:
          ``(4) has been accredited by a nationally recognized 
        accrediting agency or association determined by the Secretary 
        of Education to be a reliable authority as to the quality of 
        training offered, or is, according to such an agency or 
        association, making reasonable progress toward 
        accreditation.''.

SEC. 924. NAVAJO COMMUNITY COLLEGE ACT.

  Section 5(a)(1) of the Navajo Community College Act (25 U.S.C. 640c-
1(a)(1)) is amended--
          (1) by striking ``1999'' and inserting ``2006''; and
          (2) by striking ``4 succeeding'' and inserting ``5 
        succeeding''.

SEC. 925. EDUCATION AMENDMENTS OF 1992.

  Section 1543(d) of the Education Amendments of 1992 (20 U.S.C. 1070 
note) is amended--
          (1) by striking ``1999'' and inserting ``2006''; and
          (2) by striking ``4 succeeding'' and inserting ``5 
        succeeding''.

SEC. 926. STUDY OF STUDENT LEARNING OUTCOMES AND PUBLIC ACCOUNTABILITY.

  (a) Study Required.--The Secretary shall provide for the conduct a 
study of the best practices of States in assessing undergraduate 
postsecondary student learning, particularly as such practices relate 
to public accountability systems.
  (b) Characteristics of the Association.--Such study shall be 
conducted by an association or organization with specific expertise and 
knowledge in state practices and access to necessary state officials 
(in this section referred to as the ``association''). The association 
responsible for the study under this section shall be a national, non-
partisan or bi-partisan entity representing States or State officials 
with expertise in evaluative and qualitative policy research for best 
practice models, the capacity to convene experts, and to formulate 
policy recommendations.
  (c) Required Subjects of Study.--In performing the study, the 
association shall, at a minimum, examine the following:
          (1) The current status of institutional and state efforts to 
        embed student learning assessments into the state-level public 
        accountability frameworks.
          (2) The extent to which there is commonality among educators 
        and accrediting agencies on learning standards for the 
        associates and bachelors degrees.
          (3) The reliability, rigor, and generalizability of available 
        instruments to assess general education at the undergraduate 
        level.
          (4) Roles and responsibilities for public accountability for 
        student learning.
  (d) Consultation.--
          (1) National committee.--The association shall establish and 
        consult with a national committee. The committee shall meet not 
        less than twice a year to review the research, identify best 
        practice models, and review recommendations.
          (2) Membership.--The national advisory committee shall 
        consist of a representative of the Secretary of Education and 
        individuals with expertise in--
                  (A) State accountability systems;
                  (B) student learning assessments;
                  (C) student flow data;
                  (D) transitions between K-12 and higher education; 
                and
                  (E) Federal higher education policy.
          (3) Additional expertise.--The association may augment this 
        committee with other expertise, as appropriate.
  (e) Congressional Consultation.--The association shall consult on a 
regular basis with the Committee on Education and the Workforce of the 
House of Representatives and the Committee on Health Education Labor 
and Pensions of the Senate in carrying out the study required by this 
section.
  (f) Report.--The association shall, not later than two years after 
the date of enactment of this Act, prepare and submit a report on the 
study required by this section to the Committee on Education and the 
Workforce of the House of Representatives and the Committee on Health, 
Education, Labor, and Pensions of the Senate.

SEC. 927. STUDY OF MINORITY GRADUATION RATES.

  (a) Study Required.--The Secretary of Education shall--
          (1) commission a national study on the decreasing numbers of 
        underrepresented minority males, particularly African American 
        males, entering and graduating from colleges and universities; 
        and
          (2) make specific recommendations to the Congress on new 
        approaches to increase minority male graduation rates and the 
        number of minority males going into careers where the 
        population is underrepresented.
  (b) Submission of Report.--Not later than one year after the date of 
the enactment this Act, the Secretary shall submit a report on the 
study required by subsection (a)(1), together with the recommendations 
required by subsection (a)(2), to the Committee on Health, Education, 
Labor and Pensions of the Senate and the Committee on Education and the 
Workforce of the House of Representatives.

SEC. 928. STUDY OF EDUCATION-RELATED INDEBTEDNESS OF MEDICAL SCHOOL 
                    GRADUATES.

  (a) Study Required.--The Secretary of Education shall conduct a study 
to evaluate the higher education-related indebtedness of medical school 
graduates in the United States at the time of graduation.
  (b) Deadline.--Not later than one year after the date of enactment of 
this Act, the Secretary shall submit a report on the study required by 
subsection (a) to the Committee on Education and the Workforce of the 
House of Representatives and the Committee on Health, Education, Labor 
and Pensions of the Senate, and shall make the report widely available 
to the public. Additional reports may be periodically prepared and 
released as necessary.

SEC. 929. STUDY OF ADULT LEARNERS.

  The Secretary of Education shall conduct a study of the developing 
trends in older adult learners attending college and how institutions 
of higher education are addressing the needs of this specific 
population in terms of outreach, accessibility, financing, and student 
support services, including online education. The Secretary shall 
submit a report on the study to the Committee on Education and the 
Workforce of the House of Representatives that includes recommendations 
on measures the Federal Government can take to address the needs in 
regards to education and job training for the aging population and the 
changing demographics of our country.

SEC. 930. INCREASE IN COLLEGE TEXTBOOK PRICES.

  (a) Findings.--The Committee on Education and the Workforce of the 
House of Representatives makes the following findings:
          (1) The rising costs of higher education are making a 
        postsecondary education inaccessible for many individuals.
          (2) The rise in college textbook pricing contributes to the 
        overall costs of higher education, and many factors have 
        contributed to the rise in textbook pricing.
  (b) Sense of the Committee on Education and the Workforce.--It is the 
sense of the Committee on Education and the Workforce of the House of 
Representatives that in order to make a higher education more 
accessible for all students, the following should occur to make college 
textbooks more affordable for students:
          (1) The Congress encourages textbook publishers to provide 
        students with the option of buying materials such as textbooks, 
        CD-ROMs, access to websites, and workbooks, ``a la carte'' or 
        ``unbundled''.
          (2) Textbook publishers should work with faculty to 
        understand the cost to students of purchasing the recommended 
        textbooks.
          (3) College bookstores should work with faculty to review 
        timelines and processes for ordering and stocking selected 
        textbooks, and disclose textbook costs to faculty and students.
          (4) Colleges and universities should be encouraged to 
        implement numerous options to address textbook affordability.

                                Purpose

    H.R. 609, the College Access and Opportunity Act, 
reauthorizes the Higher Education Act of 1965 by expanding 
college access for low- and middle-income students. The bill 
reauthorizes the teacher training programs, student aid 
programs, programs that assist minority serving institutions, 
graduate study programs, international and foreign language 
programs, and various provisions that support and enhance 
student access and institutional accountability. The bill 
includes comprehensive reforms that prioritize student access 
and strengthen accountability to empower students and parents, 
the consumers of higher education.

                            Committee Action

    On May 24, 2001, the Chairman of the Education and the 
Workforce Committee and the Chairman of the Subcommittee on 
21st Century Competitiveness, along with the Ranking Members, 
invited interested parties to provide the Committee with 
proposals, suggestions and ideas for improvements to the 
expiring Higher Education Act. The initiative was called 
``Upping the Effectiveness of Our Federal Student Aid Programs 
(FED UP).'' As part of the Committee's successful ``FED UP'' 
project, an email address and web site were developed to allow 
individuals, organizations, higher education institutions, 
lenders and citizens to contact the Committee with ease and 
efficiency. The Committee considered over 3,000 submissions 
from individuals and more than 100 organizations on this 
initiative, as part of the reauthorization process.
    The Committee on Education and the Workforce and the 
Subcommittees on 21st Century Competitiveness and Select 
Education held a total of 35 hearings in Washington, D.C. and 
across the country, as well as a series of site visits to many 
institutions of higher education in preparation for and as part 
of the reauthorization of the Higher Education Act.

                             107TH CONGRESS

Hearings--First session

    On Monday, April 23, 2001, the Committee on Education and 
the Workforce, Subcommittee on Select Education, held a field 
hearing in Oklahoma City, Oklahoma, on ``Responding to the 
Needs of Historically Black Colleges and Universities in the 
21st Century.'' The purpose of the hearing was to examine the 
unique role of Historically Black Colleges and Universities 
(HBCUs) and their role in the higher education system. 
Testifying before the Subcommittee were Dr. Ernest L. Holloway, 
President, Langston University, Langston, Oklahoma; Dr. Henry 
Ponder, Chief Executive Officer and President, National 
Association for Equal Opportunity in Higher Education, Silver 
Spring, Maryland; Dr. Trudie Kibbe Reed, President, Philander 
Smith College, Little Rock, Arkansas; Dr. Lawrence A. Davis, 
Jr., Chancellor, University of Arkansas at Pine Bluff, Pine 
Bluff, Arkansas; and Dr. Joseph Simmons, Executive Vice 
President, Lincoln University, Jefferson City, Missouri.
    On Wednesday, June 20, 2001, the Committee on Education and 
the Workforce, Subcommittee on 21st Century Competitiveness, 
held a hearing in Washington, D.C., on ``H.R. 1992, the 
Internet Equity and Education Act of 2001.'' The purpose of the 
hearing was to hear testimony on the provisions in H.R. 1992 
introduced by Representative Johnny Isakson (R-GA) on May 24, 
2001. Testifying before the Subcommittee were Dr. Stanley 
Ikenberry, President, American Council on Education, 
Washington, D.C.; Dr. Richard Gowan, President, South Dakota 
School of Mines and Technology, Rapid City, South Dakota; Dr. 
Joseph DiGregorio, Vice Provost for Distance Learning, 
Continuing Education and Outreach, Georgia Institute of 
Technology, Atlanta, Georgia; Ms. Lorraine Lewis, Inspector 
General, U.S. Department of Education, Washington, D.C.; and 
Mr. Omer Waddles, Executive Vice President, ITT Educational 
Services, Inc., Indianapolis, Indiana.
    On Monday, July 16, 2001, the Committee on Education and 
the Workforce, Subcommittee on Select Education, held a field 
hearing in Wilberforce, Ohio, on ``Responding to the Needs of 
Historically Black Colleges and Universities in the 21st 
Century.'' The purpose of the hearing was to examine the unique 
role of Historically Black Colleges and Universities (HBCUs) 
and their role in the higher education system. Testifying 
before the Subcommittee were Dr. John L. Henderson, President, 
Wilberforce University, Wilberforce, Ohio; Dr. John W. Garland, 
President, Central State University, Wilberforce, Ohio; Dr. W. 
Clinton Pettus, President, Cheyney University of Pennsylvania, 
Cheyney, Pennsylvania; and Dr. Marjorie Harris, President, 
Lewis College of Business, Detroit, Michigan.
    On Wednesday, October 31, 2001, the Committee on Education 
and the Workforce, Subcommittees on 21st Century 
Competitiveness and Select Education, jointly held a hearing in 
Washington, D.C., on ``Tracking International Students in 
Higher Education--Policy Options and Implications for 
Students.'' The purpose of the hearing was to examine the 
issues related to international students and their attendance 
at U.S. institutions of higher education. Testifying before the 
Subcommittees on the first panel were Ms. Mary Ryan, Assistant 
Secretary of State for Consular Affairs, U.S. Department of 
State, Washington, D.C.; and Mr. Michael Becraft, Acting Deputy 
Commissioner, Immigration and Naturalization Service, 
Washington, D.C. Testifying before the Subcommittees on the 
second panel were Dr. David Ward, President, American Council 
on Education, Washington, D.C.; Dr. Gail Short Hanson, Vice 
President of Student Services, American University, Washington 
D.C.; and Ms. Julia Beatty, President, United States Student 
Association, Washington, D.C.

Second session

    On Wednesday, February 13, 2002, the Committee on Education 
and the Workforce, Subcommittees on 21st Century 
Competitiveness and Select Education, jointly held a hearing in 
Washington, D.C., on ``Responding to the Needs of Historically 
Black Colleges and Universities in the 21st Century.'' The 
purpose of the hearing was to examine the unique role played by 
Historically Black Colleges and Universities (HBCUs) and to 
examine the unique issues these institutions face. Testifying 
before the Subcommittees were Dr. William B. DeLauder, 
President, Delaware State University, Dover, Delaware; Dr. 
Frederick S. Humphries, Chief Executive Officer and President, 
National Association for Equal Opportunity in Higher Education, 
Silver Spring, Maryland; Dr. Shirley A.R. Lewis, President, 
Paine College, Augusta, Georgia; and Mr. Christopher Elders, 
student and Rhodes Scholar, Morehouse College, Atlanta, 
Georgia.
    On Tuesday, July 16, 2002, the Committee on Education and 
the Workforce held a hearing in Washington, D.C., on ``Access 
to Higher Education for Low-Income Students: A Review of the 
Advisory Committee on Student Financial Assistance Report.'' 
The purpose of the hearing was to consider the issue of access 
to postsecondary education, specifically for low-income 
students, by examining two reports released by the Advisory 
Committee on Student Financial Assistance, entitled Empty 
Promises--The Myth of College Access in America (July 2002) and 
Access Denied (February 2001). Testifying before the Committee 
were Dr. Juliet Garcia, Chairperson, Advisory Committee on 
Student Financial Assistance, Washington, D.C.; Mr. Lawrence E. 
Gladieux, Education and Public Policy Consultant, Potomac 
Falls, Virginia; Dr. Shirley A.R. Lewis, President, Paine 
College, Augusta, Georgia; and Ms. Elizabeth Sengkhammee, 
student, University of Wisconsin-Milwaukee, Milwaukee, 
Wisconsin.
    On Thursday, September 19, 2002, the Committee on Education 
and the Workforce, Subcommittees on 21st Century 
Competitiveness and Select Education held a joint hearing in 
Washington, D.C., on ``Responding to the Needs of Historically 
Black Colleges and Universities in the 21st Century.'' The 
purpose of the hearing was to continue efforts to learn about 
the unique role that Historically Black Colleges and 
Universities (HBCUs) play in providing postsecondary education 
to students. Testifying before the Subcommittees were Dr. 
Michael L. Lomax, President, Dillard University, New Orleans, 
Louisiana; Dr. Marie McDemmond, President, Norfolk State 
University, Norfolk, Virginia; Dr. Willis B. McLeod, 
Chancellor, Fayetteville State University, Fayetteville, North 
Carolina; Dr. Elson S. Floyd, President, Western Michigan State 
University, Kalamazoo, Michigan; and Mr. Steve Stephens, II, 
President, Student Governing Association, Langston University, 
Langston, Oklahoma.
    On Tuesday, September 24, 2002, the Committee on Education 
and the Workforce, Subcommittees on 21st Century 
Competitiveness and Select Education held a joint hearing in 
Washington, D.C., on ``Homeland Security: Tracking 
International Students in Higher Education--Progress & Issues 
Since 9-11.'' The purpose of the hearing was to learn about the 
implementation of the Student Exchange and Visitor Information 
System (SEVIS); the issues still outstanding in having SEVIS 
fully operational; and the interaction between institutions of 
higher education, the Immigration and Naturalization Service 
(INS) and the U.S. Department of State. Testifying before the 
Subcommittees were Mr. Glenn A. Fine, Inspector General, U.S. 
Department of Justice, Washington, D.C.; Ms. Janis Sposato, 
Assistant Deputy Executive, Associate Commissioner for 
Immigration Services Division, Immigration and Naturalization 
Service, Washington, D.C.; Mr. Stephen A. Edson, Acting 
Managing Director, Directorate of Visa Services, Bureau of 
Consular Affairs, U.S. Department of State, Washington, D.C.; 
and Dr. David Ward, President, American Council on Education, 
Washington, D.C.
    On Tuesday, October 1, 2002, the Committee on Education and 
the Workforce, Subcommittee on 21st Century Competitiveness 
held a hearing in Washington, D.C., on ``Assuring Quality and 
Accountability in Postsecondary Education: Assessing the Role 
of Accreditation.'' The purpose of the hearing was to learn 
more about the accreditation process, how regional and national 
accreditors interact, and the specific roles and 
responsibilities of accrediting agencies. Testifying before the 
Subcommittee were Dr. Judith S. Eaton, President, Council for 
Higher Education Accreditation, Washington, D.C.; Dr. Charles 
M. Cook, Director, Commission of Institutions of Higher 
Education, New England Association of Schools and Colleges, 
Bedford, Massachusetts; Dr. Laura Palmer Noone, President, 
University of Phoenix, Phoenix, Arizona; the Honorable Hank 
Brown, President and Chief Executive Officer, Daniels Fund, 
Greeley, Colorado; and Dr. Linwood Rose, President, James 
Madison University, Harrisonburg, Virginia.
    On Thursday, October 3, 2002, the Committee on Education 
and the Workforce held a hearing in Washington, D.C., on ``The 
Rising Price of a Quality Postsecondary Education: Fact or 
Fiction?'' The purpose of this hearing was to examine the 
effects that increasing costs of a postsecondary education have 
on students and families. Testifying before the Committee were 
Dr. Robert A. Corrigan, President, San Francisco State 
University, San Francisco, California; Dr. Richard M. Freeland, 
President, Northeastern University, Boston, Massachusetts; Dr. 
C.D. Mote, Jr., Professor of Engineering (testifying on behalf 
of Dr. William Kirwan, President, University of Maryland), 
Glenn L. Martin Institute, College Park, Maryland; and Dr. 
Gordon Winston, Economics Professor, Williams College, 
Williamstown, Massachusetts.
    On Wednesday, October 9, 2002, the Committee on Education 
and the Workforce, Subcommittee on 21st Century Competitiveness 
held a hearing in Washington, D.C., on ``Training Tomorrow's 
Teachers: Ensuring a Quality Postsecondary Education.'' The 
purpose of the hearing was to examine the effectiveness of the 
competitive grant programs authorized under title II of the 
Higher Education Act and also to examine the accountability 
provisions for teacher preparation programs under the Act. 
Testifying before the Subcommittee were Ms. Cornelia M. Ashby, 
Director of Education, Workforce and Income Security Issues, 
U.S. Government Accountability Office, Washington, D.C.; Mr. 
Wendell Cave, Division of Testing, Research and Internship, 
Education Professional Standards Board, Frankfort, Kentucky; 
Mr. Steven Brandick, Director of the Career Ladder Office, Los 
Angeles Unified School District, Los Angeles, California; Mr. 
Kurt Landgraf, President & Chief Executive Officer, Educational 
Testing Service, Princeton, New Jersey; and Dr. Allen Mori, 
Dean of the Charter College of Education, California State 
University, Los Angeles, California.

Legislative action--First session

    On May 24, 2001, Representatives Johnny Isakson (R-GA), 
John Boehner (R-OH), Howard P. ``Buck'' McKeon (R-CA), Mike 
Castle (R-DE), and Bob Goodlatte (R-VA) introduced H.R. 1992, 
the Internet Equity and Education Act of 2001, to amend the 
Higher Education Act and repeal the 50 percent rule for 
telecommunications and make additional reforms regarding 
distance education.
    On June 28, 2001, the Subcommittee on 21st Century 
Competitiveness considered H.R. 1992 in legislative session and 
reported it favorably, as amended, to the Committee on 
Education and the Workforce by voice vote. The Subcommittee 
considered and adopted by voice vote the following amendments 
to H.R. 1992:
           Representative Isakson (R-GA) offered a 
        substitute amendment that made technical and clarifying 
        changes to the legislation. Specifically, the amendment 
        clarified provisions dealing with incentive 
        compensation and third-party service providers.
           Representative Wu (D-OR) offered an 
        amendment to require a study and a report on the effect 
        of the provisions enacted by H.R. 1992.
    On August 1, 2001, the Committee on Education and the 
Workforce considered H.R. 1992 in legislative session and 
reported it favorably, as amended, to the House of 
Representatives by a vote of 31-10. The Committee considered 
and adopted by voice vote the following amendments to H.R. 
1992:
           Representative Isakson (R-GA) offered a 
        substitute amendment that made technical and clarifying 
        changes to the legislation. Specifically, the amendment 
        made modifications to the 50 percent rule for 
        telecommunications. Additionally, the amendment 
        modified the 12-hour rule to require non-traditional 
        programs that provide less than 12 scheduled hours of 
        instruction to notify the Secretary of Education.
           Representative Miller (D-CA) offered an 
        amendment to authorize the Learning Anytime Anywhere 
        Partnership Grants at $30 million, an increase from the 
        current law authorization of $10 million.

Legislative action--Second session

    On July 11, 2002, Representatives Lindsey Graham (R-SC), 
John Boehner (R-OH), Howard P. ``Buck'' McKeon (R-CA), Todd 
Platts (R-PA), James Greenwood (R-PA), Johnny Isakson (R-GA), 
Charlie Norwood (R-GA), John Cooksey (R-LA), Sam Graves (R-MO), 
Van Hilleary (R-TN), Todd Tiahrt (R-KS), Richard Burr (R-NC), 
Ileana Ros-Lehtinen (R-FL) introduced H.R. 5091, the Canceling 
Loans to Allow School Systems to Attract Classroom Teachers Act 
(CLASS ACT), which amended the Higher Education Act to provide 
discretionary loan forgiveness of up to $17,500 for math, 
science and special education teachers.
    On Thursday, September 5, 2002, the Committee on Education 
and the Workforce considered H.R. 5091 in legislative session 
and reported favorably, as amended to the House of 
Representatives by voice vote. The Committee considered and 
adopted by voice vote the following amendments to H.R. 5091:
           Representative Graham (R-SC) offered a 
        substitute amendment to make technical and clarifying 
        changes to the legislation.
           Representative Kind (D-WI) offered an 
        amendment to have the Secretary of Education notify 
        local educational agencies eligible to participate in 
        the Small Rural Achievement Program of the benefits 
        provided by the teacher loan forgiveness program within 
        H.R. 5091, and to encourage those agencies to notify 
        their teachers of the program.
           Representative Holt (D-NJ) offered an 
        amendment to set a priority for teacher loan 
        forgiveness for those teachers teaching math or 
        science, or special education teachers.
           Representative Miller (D-CA) offered an 
        amendment to set a priority for teacher loan 
        forgiveness for those teachers employed in local 
        educational agencies that are determined by the State 
        educational agency to have failed to make progress 
        toward annual increases in the employment of highly 
        qualified teachers as required by the Elementary and 
        Secondary Act of 1965, for two consecutive years.
           Representative McCarthy (D-NY) offered an 
        amendment to provide loan forgiveness for spouses of 
        victims who died or became permanently and totally 
        disabled as a result of the terrorist attacks on 
        September 11, 2001. The amendment also provided for 
        forgiveness of the consolidation loan debt of surviving 
        spouses who consolidated their loans together with the 
        victim, as well as parent loans if the child on whose 
        behalf the loan was taken died or become totally and 
        permanently disabled as a result of the September 11th 
        attacks.

                             108TH CONGRESS

Hearings--First session

    On Tuesday, May 13, 2003, the Committee on Education and 
the Workforce held a hearing in Washington, D.C., on ``The 
State of American Higher Education: What Are Parents, Students 
and Taxpayers Getting for Their Money?'' The purpose of the 
hearing was to learn what institutions of higher education can 
and should be doing to assure the American public that the 
investment in higher education by a student, parent or taxpayer 
is one that will produce results and assist with lifelong 
career pursuits. Testifying before the Committee were Mr. 
Charles Miller, Chairman, University of Texas System, Board of 
Regents, Houston, Texas; Dr. Frank Newman, Director, The 
Futures Project, Brown University, Providence, Rhode Island; 
and Dr. Mary Ellen Duncan, President, Howard Community College, 
Columbia, Maryland.
    On Tuesday, May 20, 2003, the Committee on Education and 
the Workforce, Subcommittee on 21st Century Competitiveness, 
held a hearing in Washington, D.C., on ``America's Teacher 
Colleges: Are They Making the Grade?'' The purpose of the 
hearing was to discuss whether teacher colleges and other 
teacher preparation programs are producing a competent cadre of 
teachers. Testifying before the Subcommittee were Mrs. Lisa 
Graham Keegan, Chief Executive Officer, Education Leaders 
Council, Washington, D.C.; Ms. Kati Haycock, Director, The 
Education Trust, Washington, D.C.; Dr. Arthur E. Wise, 
President, National Council for Accreditation of Teacher 
Education, Washington, D.C.; Dr. Louanne Kennedy, Provost & 
Vice President for Academic Affairs, California State 
University--Northridge, Northridge, California; Dr. Jerry 
Robbins, Dean, College of Education, Eastern Michigan 
University, Ypsilanti, Michigan; and Dr. Joyce R. Coppin, Chief 
Executive, Division of Human Resources, New York City 
Department of Education, Brooklyn, New York.
    On Thursday, June 19, 2003, the Committee on Education and 
the Workforce, Subcommittee on Select Education, held a hearing 
in Washington, D.C., on ``International Programs in Higher 
Education and Questions about Bias.'' The purpose of the 
hearing was to learn how programs authorized under title VI of 
the Higher Education Act can provide innovative ways to help 
bridge the international knowledge gap and also to learn about 
the merits of, and concern for, Federal support given to some 
of the international education programs that have been 
questioned in regard to their teachings. Testifying before the 
Subcommittee were Dr. Foster Roden, Professor, University of 
North Texas, College of Business, Denton, Texas; Dr. Stanley 
Kurtz, Research Fellow, Hoover Institution, Contributing 
Editor, National Review Online, Washington, D.C.; Dr. Terry 
Hartle, Senior Vice President, American Council on Education, 
Washington, D.C.; Ms. Vivian Stewart, Vice President for 
Education, Asia Society, New York, New York; and Dr. Gilbert W. 
Merkx, Vice Provost for International Affairs, Duke University, 
Durham, North Carolina.
    On Thursday, July 10, 2003, the Committee on Education and 
the Workforce, Subcommittee on 21st Century Competitiveness, 
held a hearing in Washington, D.C., on ``Affordability in 
Higher Education: We Know There's a Problem; What's the 
Solution?'' The purpose of the hearing was to examine the 
effects of ever-rising college tuition and debate some of the 
possible solutions to this problem. Testifying before the 
Subcommittee were Dr. Sandy Baum, Professor, Skidmore College, 
Saratoga Springs, New York; Mr. Scott Ross, Executive Director, 
Florida Student Association, Tallahassee, Florida; Dr. Carol 
Twigg, Executive Director, Center for Academic Transformation, 
Troy, New York; Dr. Rolf Wegenke, President, Wisconsin 
Association of Independent Colleges and Universities, Madison, 
Wisconsin; and Dr. Patrick Kirby, Vice President and Dean of 
Enrollment Services, Westminster College, Fulton, Missouri.
    On Tuesday, July 15, 2003, the Committee on Education and 
the Workforce, Subcommittee on 21st Century Competitiveness, 
held a hearing in Washington, D.C., on ``Expanding Access to 
College in America: How the Higher Education Act Can Put 
College Within Reach.'' The purpose of this hearing was to 
examine the college access programs that currently exist at a 
national, state and local level; to hear recommendations for 
improvements in these programs; and to learn what provisions in 
the law may currently prohibit some postsecondary institutions 
from accessing resources that would enable them to work more 
closely with various student populations. Testifying before the 
Subcommittee were Dr. Richard Fonte, President, Austin 
Community College, Austin, Texas; Ms. Teri Flack, Deputy 
Commissioner, Texas Higher Education Coordinating Board, 
Austin, Texas; Mr. Mark Dreyfus, President, ECPI College of 
Technology, Virginia Beach, Virginia; Ms. Christina Milano, 
Executive Director, National College Access Network, Cleveland, 
Ohio; and Dr. Arnold Mitchem, President, Council for 
Opportunity in Education, Washington, D.C.
    On Tuesday, July 22, 2003, the Committee on Education and 
the Workforce, Subcommittee on 21st Century Competitiveness, 
held a hearing in Washington, D.C., on ``Consolidation Loans: 
What's Best for Past Borrowers, Future Students & U.S. 
Taxpayers?'' The purpose of the hearing was to learn how the 
consolidation loan program fits into the mission of the Higher 
Education Act by increasing access and affordability to 
students pursuing postsecondary education, and to learn more 
about whether the program is fair for all borrowers. The first 
panel testifying before the Subcommittee included The Honorable 
Ralph Regula (R-OH), U.S. House of Representatives, Chairman, 
Subcommittee on Labor, Health and Human Services, and 
Education, Committee on Appropriations, Washington, D.C., and 
The Honorable Rosa DeLauro (D-CT), U.S. House of 
Representatives, Member, Subcommittee on Labor, Health and 
Human Services, and Education, Committee on Appropriations, 
Washington, D.C. The second panel testifying before the 
Subcommittee included Ms. Rebecca Wasserman, Vice President, 
United States Student Association, Washington, D.C.; Ms. June 
McCormack, Executive Vice President, Sallie Mae, Fishers, 
Indiana; Mr. Paul Wozniak, Managing Director and Manager, 
Education Loan Group, UBS Financial Services, Inc., New York, 
New York; Dr. Dallas Martin, President, National Association of 
Student Financial Aid Administrators, Washington, D.C.; and Mr. 
Barry Morrow, Chief Executive Officer, Collegiate Funding 
Services, Fredericksburg, Virginia.
    On Tuesday, September 9, 2003, the Committee on Education 
and the Workforce, Subcommittee on Select Education, held a 
hearing in Washington, D.C., on ``Beyond Baccalaureate: 
Graduate Programs in the Higher Education Act.'' The purpose of 
the hearing was to learn about the various graduate programs 
authorized under title VII of the Higher Education Act and to 
hear suggestions for the reauthorization of these programs. 
Testifying before the Subcommittee were Dr. Earl Lewis, Dean of 
the Graduate School, Rackham School of Graduate Studies, 
University of Michigan, Ann Arbor, Michigan; Mr. Daniel Hall, 
Vice President of University Relations, University of 
Louisville, Louisville, Kentucky; Dr. William B. Allen, 
Department of Political Science, Michigan State University, 
East Lansing, Michigan; and Dr. Blandina ``Bambi'' Cardenas, 
Associate Professor and Dean of Education, University of 
Texas--San Antonio, San Antonio, Texas.
    On Thursday, September 11, 2003, the Committee on Education 
and the Workforce, Subcommittee on 21st Century 
Competitiveness, held a hearing in Washington, D.C., on ``H.R. 
3039, the Expanding Opportunities in Higher Education Act of 
2003.'' The purpose of the hearing was to hear testimony 
regarding the provisions in H.R. 3039, introduced by 
Representative Tom Cole (R-OK) on September 9, 2003. Testifying 
before the Subcommittee were Dr. Donald E. Heller, Associate 
Professor, Center for the Study of Higher Education Policy, The 
Pennsylvania State University, University Park, Pennsylvania; 
Dr. Antonio Flores, President and Chief Executive Officer, 
Hispanic Association of Colleges and Universities, San Antonio, 
Texas; Mr. George Chin, University Director for Financial Aid, 
City University of New York, New York, New York; and Mr. David 
G. Moore, Chairman and Chief Executive Officer, Corinthian 
Colleges, Inc., Santa Ana, California.
    On Tuesday, September 23, 2003, the Committee on Education 
and the Workforce, Subcommittee on 21st Century 
Competitiveness, held a hearing in Washington, D.C., on ``The 
College Cost Crisis Report: Are Institutions Accountable Enough 
to Students and Parents?'' The purpose of the hearing was to 
examine the findings in the report, to discuss the broad issue 
of affordability in higher education, and to hear possible 
solutions on how best to address the problem of increasing 
college costs. Testifying before the Subcommittee were Dr. 
Valerie F. Lewis, President, State Higher Education Executive 
Officers, Denver, Colorado; Dr. F. King Alexander, President, 
Murray State University, Murray, Kentucky; Mr. Jamie P. 
Merisotis, President, Institute for Higher Education Policy, 
Washington, D.C.; and Ms. Jessica Hanson, Student, Florida 
State University, Tallahassee, Florida.
    On Monday, October 6, 2003, the Committee on Education and 
the Workforce, Subcommittee on Select Education, held a field 
hearing in Edinburg, Texas, on ``Expanding Opportunities in 
Higher Education: Honoring the Contributions of America's 
Hispanic Serving Institutions.'' The purpose of the field 
hearing was to learn about expanding educational opportunities 
for students at Hispanic Serving Institutions (HSIs). The first 
panel to testify before the Subcommittee included Dr. Miguel 
Nevarez, President, University of Texas--Pan-American, 
Edinburg, Texas; Dr. Rumaldo Juarez, President, University of 
Texas A&M--Kingsville, Kingsville, Texas; Dr. John Brockman, 
President, Coastal Bend Community College, Beeville, Texas. The 
second panel to testify before the Subcommittee included Dr. 
Juliet Garcia, President, University of Texas--Brownsville, 
Brownsville, Texas; Dr. Shirley Reed, President, South Texas 
Community College, McAllen, Texas; and Ms. Ariana De La Garza, 
Student Representative, University of Texas--Pan-American, 
Mission, Texas.

Second session

    On Wednesday, March 17, 2004, the Committee on Education 
and the Workforce held a hearing in Washington, D.C., on 
``Fiscal Responsibility and Federal Consolidation Loans: 
Examining Cost Implications for Taxpayers, Students, and 
Borrowers.'' The purpose of the hearing was to examine the 
consolidation loan program and how student lending issues fit 
within the broader goal of expanding access to low- and middle-
income students pursing a postsecondary education. Testifying 
before the Committee were Ms. Cornelia M. Ashby, U.S. 
Government Accountability Office, Director, Education, 
Workforce and Income Security, Washington, D.C.; Mr. Titus M. 
Hamlett, Student, University of Maryland, Baltimore, Maryland; 
Dr. Tom S. Neubig, National Director, Quantitative Economics 
and Statistics, Ernst and Young LLP, Washington, D.C.; and Dr. 
Robert Shapiro, Chairman, Sonecon, LLP, and Senior Fellow, 
Brookings Institution and Progressive Policy Institute, 
Washington, D.C.
    On Wednesday, May 12, 2004, the Committee on Education and 
the Workforce held a hearing in Washington, D.C., on ``H.R. 
4283, the College Access and Opportunity Act of 2004.'' The 
purpose of this hearing was to examine the provisions in H.R. 
4283 and to provide an opportunity for Members of Congress to 
hear about provisions in the bill. Testifying before the 
Committee were Mr. Jim Boyle, President, College Parents of 
America, Washington, D.C.; Dr. Dallas Martin, President, 
National Association of Federal Student Aid Administrators, 
Washington, D.C.; Ms. Rebecca Wasserman, President, United 
States Student Association, Washington, D.C.; Dr. Charles Reed, 
Chancellor, California State University System, Long Beach, 
California; and Mr. Michael Grayer, Recent Graduate, Virginia 
College, Jackson, Mississippi.
    On Wednesday, June 16, 2004, the Committee on Education and 
the Workforce held a hearing in Washington, D.C., on ``H.R. 
4283, the College Access & Opportunity Act: Are Students at 
Proprietary Institutions Treated Equitably Under Current Law?'' 
The purpose of this hearing was to examine issues facing 
students attending eligible proprietary institutions of higher 
education. Testifying before the Committee was Dr. Dwight 
Smith, President and Chief Executive Officer, Sophisticated 
Systems, Inc., Columbus, Ohio; Mr. Andrew Rosen, President and 
Chief Operations Officer, Kaplan Inc., President, Kaplan 
College, Boca Raton, Florida; Dr. Alice Letteney, Director, 
University of New Mexico--Valencia, Los Lunas, New Mexico; Mr. 
Barmak Nassirian, Associate Director, American Association of 
Collegiate Registrars and Admissions Officers, Washington, 
D.C.; and Mr. David Moore, Chairman and Chief Executive 
Officer, Corinthian Colleges Inc., Santa Ana, California.
    On Tuesday, June 22, 2004, the Committee on Education and 
the Workforce, Subcommittee on 21st Century Competitiveness, 
held a hearing in Washington, D.C., on ``H.R. 4283, the College 
Access & Opportunity Act: Does Accreditation Provide Students 
and Parents Accountability and Quality?'' The purpose of this 
hearing was to examine issues related to accountability in 
higher education and those sections within the bill that deal 
with the accreditation process for institutions, and also the 
recognition of accreditors by the U.S. Department of Education. 
Testifying before the Subcommittee were Dr. Thomas Dary Erwin, 
Associate Vice President of Academic Affairs for Assessment and 
Program Evaluation, James Madison University, Harrisonburg, 
Virginia; Dr. James Davis, President, Shenandoah University, 
Winchester, Virginia; Dr. Stephen Crow, Executive Director, 
Higher Learning Commission, North Central Association of 
Colleges and Schools, Chicago, Illinois; Dr. Jerry Martin, 
Chairman, American Council of Trustees and Alumni, Washington, 
D.C.; and Dr. Arthur Keiser, Immediate Past Chairman, 
Accrediting Commission of Career Schools and Colleges of 
Technology, Ft. Lauderdale, Florida.
    On Tuesday, July 13, 2004, the Committee on Education and 
the Workforce held a hearing in Washington, D.C., on ``H.R. 
4283, the College Access and Opportunity Act: Increasing the 
Focus on Graduation Rates and Student Outcomes.'' The purpose 
of this hearing was to examine issues regarding college 
graduation rates and the findings of a report issued by The 
Education Trust entitled, ``A Matter of Degrees: Improving 
Graduation Rates in Four-Year Colleges and Universities.'' 
Testifying before the Committee were Dr. Richard Nault, Vice 
President for Student Affairs, Miami University, Oxford, Ohio; 
Dr. Paul Lingenfelter, Executive Director, State Higher 
Education Executive Officers, Denver, Colorado; Mr. Ross 
Wiener, Policy Director, The Education Trust, Washington, D.C.; 
and Dr. William Law, President, Tallahassee Community College, 
Tallahassee, Florida.
    On Tuesday, July 20, 2004, the Committee on Education and 
the Workforce, Subcommittee on 21st Century Competitiveness, 
held a hearing in Washington, D.C., entitled, ``Are College 
Textbooks Priced Fairly?'' The purpose of this hearing was to 
examine the issue of the high cost of textbooks on college 
campuses and the effect on a student's overall cost of higher 
education. Testifying before the Subcommittee were Ms. Merriah 
Fairchild, Higher Education Director, California Student Public 
Interest Research Group, Sacramento, California; Mr. Marc L. 
Fleischaker, Legal Counsel, National Association of College 
Stores, Arent Fox LLC, Washington, D.C.; Mr. John Isley, 
Executive Vice President, Publishing, Planning and Business, 
Pearson Higher Education and Professional Publishing, Boston, 
Massachusetts; Mr. Virgil Monroe, Manager, Textbook Services, 
University of Wisconsin--River Falls, River Falls, Wisconsin.
    On Thursday, September 23, 2004, the Committee on Education 
and the Workforce, Subcommittee on 21st Century 
Competitiveness, held a hearing in Washington, D.C., entitled, 
``Are Current Safeguards Protecting Taxpayers against Diploma 
Mills?'' The purpose of this hearing was to examine issues 
related to diploma mills and their impact on the credibility of 
the higher education system and to also hear from witnesses 
about the challenge and complexity involved in defining a 
diploma mill. Testifying before the Subcommittee were Mr. Allen 
Ezell, Retired Agent, Federal Bureau of Investigations, Apollo 
Beach, Florida; Ms. Jean Avnet Morse, Executive Director, 
Middle States Commission on Higher Education, Philadelphia, 
Pennsylvania; and Mr. Robert Cramer, Managing Director, Office 
of Special Investigations, Government Accountability Office, 
Washington, D.C.

Legislative action--First session

    On January 29, 2003, Representatives Joe Wilson (R-SC), 
John Boehner (R-OH), Howard P. ``Buck'' McKeon (R-CA), Johnny 
Isakson (R-GA), Todd Platts (R-PA), James Greenwood (R-PA), 
Patrick Tiberi (R-OH), Tom Cole (R-OK), Mark Souder (R-IN), 
Richard Baker (R-LA), Sam Graves (R-MO) and Heather Wilson (R-
NM) introduced H.R. 438, the Teacher Recruitment and Retention 
Act of 2003, which amended the Higher Education Act to provide 
up to $17,500 in loan forgiveness for math, science and special 
education teachers.
    On May 22, 2003, Representatives Phil Gingrey (R-GA), John 
Boehner (R-OH), Howard P. ``Buck'' McKeon (R-CA), and Joe 
Wilson (R-SC) introduced H.R. 2211, the Ready to Teach Act of 
2003, to reauthorize teacher preparation provisions under title 
II of the Higher Education Act through fiscal year 2008.
    On June 4, 2003, the Subcommittee on 21st Century 
Competitiveness considered H.R. 438 in legislative session and 
reported it favorably, as amended, to the Committee on 
Education and the Workforce by voice vote. The Subcommittee 
considered and adopted by voice vote the following amendment to 
H.R. 438:
          Representative McKeon (R-CA) offered a 
        substitute amendment to make technical and clarifying 
        changes to the legislation. Specifically, the amendment 
        requires all teachers seeking increased loan 
        forgiveness to be highly qualified under the No Child 
        Left Behind Act.
    On June 4, 2003, the Subcommittee on 21st Century 
Competitiveness considered H.R. 2211 in legislative session and 
reported it favorably, as amended, to the Committee on 
Education and the Workforce by voice vote. The Subcommittee 
considered and adopted by voice vote the following amendments 
to H.R. 2211:
         Representative Gingrey (R-GA) offered a 
        substitute amendment that made technical and clarifying 
        changes to the legislation. In addition, the substitute 
        amended authorized activities to: include faith-based 
        and community organizations; benefit high poverty and 
        rural local educational agencies; increase teacher 
        retention; allow funds to be used to develop strategies 
        to improve qualifications of pre-kindergarten teachers; 
        ensure that teachers in private elementary and 
        secondary schools are able to participate equitably in 
        partnerships; provide training in how to teach limited 
        English proficient students; and ensure that 
        partnership activities focus on the needs of teachers 
        in the classroom.
         Representative McKeon (R-CA) offered an 
        amendment that made technical and clarifying changes to 
        the legislation. In addition, it ensured that urban and 
        rural school teachers are included in State grant 
        retention strategies and clarified that State and 
        institutional reporting requirements are intended for 
        students that take assessments used by the State for 
        teacher certification or licensure.
         Representatives Burns (R-GA), Owens (D-NY), 
        and Hinojosa (D-TX) offered an amendment to authorize 
        grants for the creation of Centers of Excellence at 
        high quality (as determined by the State) minority 
        serving institutions. In general, the purposes of this 
        amendment are to: (1) increase teacher recruitment at 
        minority serving institutions; and (2) make 
        institutional improvements to teacher preparation 
        programs at minority serving institutions. Under the 
        amendment, grants are competitively awarded to high 
        quality teacher preparation programs at eligible 
        institutions which include: Historically Black Colleges 
        or Universities, Hispanic-Serving Institutions, 
        Tribally Controlled Colleges or Universities, Alaska 
        Native-Serving Institutions, or Native Hawaiian-Serving 
        Institutions.
         Representative Kind (D-WI) offered an 
        amendment to reinstate a current law provision that 
        allows partnership grant funds to be used for 
        managerial and leadership activities that include 
        superintendents.
         Representative Hinojosa (D-TX) offered an 
        amendment to add teachers of limited English proficient 
        students to the allowable list of educators that could 
        benefit from merit pay initiatives.
         Representative Tierney (D-MA) offered an 
        amendment to allow current teachers to participate in 
        authorized clinical experience partnership grant 
        activities.
         Representative Holt (D-NJ) offered an 
        amendment to allow teachers to use partnership grant 
        funds to gain clinical experience in science, math, and 
        technology (as long as such teachers commit to an 
        additional two years in the classroom).
         Representative Wu (D-OR) offered an amendment 
        to allow teacher recruitment grants to be used to 
        recruit employees from high demand industries, 
        including technology industries, into the teaching 
        profession.
    On June 10, 2003, the Committee on Education and the 
Workforce considered H.R. 2211 in legislative session and 
reported it favorably, as amended, to the House of 
Representatives by voice vote. The Committee considered and 
adopted by voice vote the following amendments to H.R. 2211:
           Representative Gingrey (R-GA) offered a 
        substitute amendment that made technical and clarifying 
        changes to the legislation. In addition, the substitute 
        amendment: adds a definition of ``teaching skills'' to 
        the Act that is based on scientifically based research; 
        requires evaluation of State grant activities that are 
        based on teacher effectiveness (as measured by 
        increased student academic achievement) and teacher 
        mastery of academic subjects they teach; clarifies 
        language to ensure that at least 50 percent of 
        partnership funds are used to directly benefit partner 
        local educational agencies; allows partnership grants 
        to be used to coordinate activities with community 
        colleges to implement teacher preparation programs; 
        increases the minimum service requirements for students 
        that receive scholarships under the teacher recruitment 
        grant program; requires the Governor of a State to 
        attest to the reliability of State data reported to the 
        Secretary of Education; and maintains the original 
        authorization level of $300 million for Part A 
        activities and authorizes $10 million for teacher 
        preparation Centers of Excellence authorized under Part 
        C.
           Representative Van Hollen (D-MD) and 
        Representative Woolsey (D-CA) offered an amendment to 
        allow States to use funds to develop strategies to 
        improve the qualifications of preschool teachers, which 
        may include the State certification for such teachers.
           Representative Holt (D-NJ) offered an 
        amendment to allow teacher recruitment grants to be 
        used to recruit employees from high demand industries, 
        including science, mathematics, and engineering, into 
        the teaching profession.
    On September 11, 2003, Representatives Pete Hoekstra (R-
MI), John Boehner (R-OH), Howard P. ``Buck'' McKeon (R-CA), 
James Greenwood (R-PA), Joe Wilson (R-SC), and Tom Cole (R-OK) 
introduced H.R. 3077, the International Studies in Higher 
Education Act of 2003, to reauthorize international education 
programs under title VI of the Higher Education Act through 
fiscal year 2009.
    On September 11, 2003, Representatives Pete Hoekstra (R-
MI), John Boehner (R-OH), Howard P. ``Buck'' McKeon (R-CA), 
Johnny Isakson (R-GA), Patrick Tiberi (R-OH), Joe Wilson (R-
SC), and Tom Cole (R-OK) introduced H.R. 3076, the Graduate 
Opportunities in Higher Education Act of 2003, to reauthorize 
graduate education programs under title VII of the Higher 
Education Act through fiscal year 2009.
    On September 17, 2003, the Subcommittee on Select Education 
considered H.R. 3077 in legislative session and reported it 
favorably, as amended, to the Committee on Education and the 
Workforce by voice vote. The Subcommittee considered and 
adopted by voice vote the following amendment to H.R. 3077:
           Representative Hoekstra (R-MI) offered a 
        substitute amendment that made technical and clarifying 
        changes to the legislation. Specifically, the amendment 
        changed the process for naming the members of the 
        International Advisory Board from the Secretary of 
        Education to the House of Representatives, Senate and 
        Secretary of Education, including the addition of two 
        representatives from national security agencies. The 
        amendment further required that the activities and 
        functions of the International Advisory Board were to 
        be paid by no more than 50 percent or less of the funds 
        appropriated to the Secretary for evaluation, outreach 
        and dissemination. The amendment clarified that 
        minority serving institutions should be considered as 
        partners in the International Business Education 
        Centers program. Lastly, the amendment clarified the 
        language allowing agency and military recruiters access 
        to campuses.
    On September 17, 2003, the Subcommittee on Select Education 
considered H.R. 3076 in legislative session and reported it 
favorably as amended to the Committee on Education and the 
Workforce by voice vote. The Subcommittee considered and 
adopted by voice vote the following amendment to H.R. 3076:
           Representative Hoekstra (R-MI) offered a 
        substitute amendment that made technical and clarifying 
        changes to the legislation, including the reinstatement 
        of language that ensures qualified students receive 
        Javits fellowship awards, regardless of Department of 
        Education error.
    On September 25, 2003, the Committee on Education and the 
Workforce considered H.R. 3077 in legislative session and 
reported it favorably, as amended, to the House of 
Representatives by voice vote. The Committee considered and 
adopted the following amendments to H.R. 3077:
           Representative Hoekstra (R-MI) offered a 
        substitute amendment that clarified the functions of 
        the International Advisory Board to ensure the Board is 
        advisory in its scope. In addition, the amendment 
        clarified that Board members cannot receive 
        compensation or gifts for their service, staggered the 
        terms of the Board members, and clarified the basic 
        operations of the Board. The amendment clarified that 
        no more than half of the total funds awarded to an 
        institution of higher education or consortia of such 
        institutions under title VI could be used for costs of 
        dissemination of materials to elementary and secondary 
        schools. Lastly, the amendment also clarified that 
        Federal agency and military recruiters are given the 
        same access to campuses as provided to other 
        prospective employers. The amendment was adopted by 
        voice vote.
           Representative Holt (D-NJ) offered an 
        amendment that established a study, to be conducted by 
        the Secretary of Education in consultation with the 
        International Advisory Board, of foreign language 
        heritage communities. The amendment was adopted by 
        unanimous consent.
           Representative Holt (D-NJ) offered an 
        amendment to authorize projects under the National 
        Language and Area Centers programs that support 
        students' understanding of science and technology in 
        coordination with foreign language proficiency. The 
        amendment was adopted by unanimous consent.
    On Thursday, September 25, 2003, the Committee on Education 
and the Workforce considered H.R. 3076 in legislative session 
and reported it favorably as amended to the House of 
Representatives by voice vote. The Committee considered and 
adopted the following amendments to H.R. 3076:
           Representative Hoekstra (R-MI) offered a 
        substitute amendment that made technical and clarifying 
        changes to the legislation. The amendment included the 
        addition of an authorized use of special project funds 
        for the Fund for the Improvement of Postsecondary 
        Education (FIPSE), which encourages the establishment 
        of academic programs to train faculty to teach 
        traditional American history. The substitute also moved 
        the competitive priority for graduate work in second 
        language pedagogy and second language acquisition, 
        including the preparation of teachers who teach limited 
        English proficient students, from the Javits program to 
        the Graduate Assistance in Areas of National Need 
        (GAANN) program. The amendment was adopted by voice 
        vote.
           Representative Ehlers (R-MI) offered an 
        amendment that was adopted by unanimous consent by the 
        Committee. The amendment moves the GAANN competitive 
        priority language to the section of title VII within 
        which areas of national need and institutional 
        eligibility are determined. This placement is more 
        appropriate to the intent of the priority and aligns 
        the determination of the Secretary with the actual 
        disciplines to be considered. The amendment also 
        requires that an applicant have a master's degree or be 
        working toward a Ph.D. in math or science prior to 
        receipt of the fellowship.
           Representative Holt (D-NJ) offered an 
        amendment that was adopted by unanimous consent by the 
        Committee. The amendment requires applicants for the 
        GAANN program to include within that application, 
        assurances that the department receiving the grant 
        collaborates with departments, programs or units in all 
        content areas to ensure a successful combination of 
        training in both teaching and content areas.
           Representatives Ryan (D-OH) and Hoekstra (R-
        MI) offered an amendment that was adopted by unanimous 
        consent by the Committee. The amendment would add an 
        authorized activity in the special projects fund of 
        FIPSE. The amendment allows FIPSE to include support 
        for planning, research, training, and other services to 
        be provided by institutions of higher education in 
        order to work with private and civic organizations to 
        assist communities in addressing pressing and severe 
        community problems.

                             109TH CONGRESS

Hearings--First session

    On Tuesday, March 1, 2005, the Committee on Education and 
the Workforce held a hearing in Washington, D.C., entitled, 
``Enforcement of Federal Anti-Fraud Laws in For-Profit 
Education.'' The purpose of this hearing was to examine the 
effectiveness and enforcement of Federal laws that exist to 
prevent fraud and abuse in for-profit education. Testifying 
before the Committee were The Honorable Maxine Waters (D-CA), 
Member of Congress, U.S. House of Representatives; Mr. Thomas 
A. Carter, Deputy Inspector General, Department of Education, 
Washington, D.C.; Mr. David Rhodes, President, The School of 
Visual Arts, New York, New York; Mr. Nicholas Glakas, 
President, Career College Association, Washington, D.C.; and 
Ms. Paula Dorsey, former Director of Admissions, Bryman 
College, Reseda, California.
    On Tuesday, April 19, 2005, the Committee on Education and 
the Workforce held a hearing in Washington D.C., entitled, 
``College Access: Is Government Part of this hearing was to 
learn about what has been accomplished in regard to the 
conditions under which individuals enter the country with the 
use of a student visa since the Subcommittees held joint 
hearings on October 31, 2001 and September 24, 2002. Testifying 
before the Subcommittees were Mr. Victor Cerda, Special 
Counsel, U.S. Department of Homeland Security, Immigration and 
Customs Enforcement, Washington, D.C.; Mr. Stephen A. Edson, 
Managing Director of the Visa Services Directorate, Bureau of 
Consular Affairs, Department of State, Washington, D.C.; Mr. 
Randolph C. Hite, Director, Information Technology Architecture 
and Systems Issues, Government Accountability Office, 
Washington, D.C.; Mr. Lawrence Bell, Director, Office of 
International Education, University of Colorado, Boulder, 
Colorado; and Dr. C.D. Mote, Jr., President, University of 
Maryland, College Park, Maryland.
    On Friday, April 22, 2005, the Committee on Education and 
the Workforce held a hearing entitled, ``College Access: Is 
Government Part of the Solution, or Part of the Problem?'' This 
hearing served as a forum to discuss the effects of ever-rising 
college tuition costs and debate some of the possible solutions 
to this problem. Testifying before the Committee were Dr. 
Richard Vedder, Distinguished Professor of Economics, Ohio 
University, Athens, Ohio; and Dr. Donald Heller, Associate 
Professor and Senior Research Associate, Center for the Study 
of Higher Education, The Pennsylvania State University, 
University Park, Pennsylvania.
    On Monday, May 2, 2005, the Committee on Education and the 
Workforce, Subcommittee on Select Education, held a field 
hearing entitled, ``International Education and Foreign 
Language Studies in Higher Education.'' The hearing was held to 
discuss international education and the respective programs 
under title VI of the Higher Education Act. Specifically, the 
Subcommittee sought to gather additional information about how 
institutions of higher education are working with local K-12 
schools to promote international education opportunities. 
Testifying before the Subcommittee were Dr. Blandina Cardenas, 
President, The University of Texas--Pan American, Edinburg, 
Texas; Ms. Olga Chapa, Graduate Student, The University of 
Texas--Pan American, Edinburg, Texas; Dr. Raymund Paredes, 
Commissioner, Texas Higher Education Coordinating Board, 
Austin, Texas; Dr. Jose Jaime Rivera, President, University of 
the Sacred Heart, San Juan, Puerto Rico; and Dr. Tomas 
Arciniega, President Emeritus, California State University--
Bakersfield, Valley Center, California.
    On Monday, May 5, 2005, the Committee on Education and the 
Workforce, Subcommittee on Select Education, held a hearing 
entitled, ``College Credit Mobility: Can Transfer of Credit 
Policies be Improved?'' This hearing served as a forum to 
discuss college credit mobility policies at the institutional 
level, as well as to examine best practices at the state level, 
which ensure that the policies and articulation agreements 
permit the fair and efficient transfer of credit. Testifying 
before the Subcommittee were Dr. Philip Day, National 
Articulation and Transfer Network, San Francisco, California; 
Dr. Nancy Zimpher, President, University of Cincinnati, 
Cincinnati, Ohio; Dr. Theresa Klebacha, Director, Strategic 
Initiatives, Florida Department of Education, Tallahassee, 
Florida; and Mr. Jerome Sullivan, Executive Director, American 
Association of Collegiate Registrars and Admissions Officers, 
Washington, D.C.
    On Thursday, May 5, 2005, the Committee on Education and 
the Workforce, Subcommittee on 21st Century Competitiveness, 
held a hearing in Washington D.C., entitled, ``College Credit 
Mobility: Can Transfer of Credit Policies be Improved?'' This 
hearing served as a forum to discuss college credit mobility 
policies at the institutional level, as well as to examine best 
practices at the state level, which ensure that the policies 
and articulation agreements permit the fair and efficient 
transfer of credit. Testifying before the Subcommittee were Dr. 
Philip Day, National Articulation and Transfer Network, San 
Francisco, California; Dr. Nancy Zimpher, President, University 
of Cincinnati, Cincinnati, Ohio; Dr. Theresa Klebacha, 
Director, Strategic Initiatives, Florida Department of 
Education, Tallahassee, Florida; and Mr. Jerome Sullivan, 
Executive Director, American Association of Collegiate 
Registrars and Admissions Officers, Washington, D.C.
    On Thursday, May 19, 2005, the Committee on Education and 
the Workforce, Subcommittee on 21st Century Competitiveness, 
held a hearing in Washington D.C., entitled, ``Challenges to 
American Competitiveness in Math and Science.'' The hearing 
focused on whether elementary and high schools are being 
creative enough with their math and science curriculum to make 
these courses appealing to students. Also, the hearing examined 
what is being done at institutions of higher education to 
retain and graduate students who start their academic careers 
in math, science or engineering disciplines. Testifying before 
the Subcommittee were Mr. Norm Augustine, Retired Chairman and 
Chief Executive Officer, Lockheed Martin Corporation, Bethesda, 
Maryland; Dr. Thomas Magnanti, Dean of the School of 
Engineering, Massachusetts Institute of Technology, Cambridge, 
Massachusetts; Ms. June Streckfus, Executive Director, Maryland 
Business Roundtable, Baltimore, Maryland; and Dr. Nancy Songer, 
Professor of Science Education and Learning Technologies, 
University of Michigan, Ann Arbor, Michigan.

Legislative action--First session

    On February 8, 2005, Representatives John Boehner (R-OH) 
and Howard P. ``Buck'' McKeon (R-CA) introduced H.R. 609, the 
College Access and Opportunity Act, to reauthorize the Higher 
Education Act (HEA) through fiscal year 2011.
    On February 2, 2005, Representatives Patrick Tiberi (R-OH), 
John Boehner (R-OH), Howard P. ``Buck'' McKeon (R-CA), Joe 
Wilson (R-SC), Peter Hoekstra (R-MI), and Ruben Hinojosa (D-TX) 
introduced H.R. 509, the International Studies in Higher 
Education Act of 2005, to reauthorize international education 
programs under title VI of the Higher Education Act through 
fiscal year 2011.
    On February 2, 2005, Representatives Patrick Tiberi (R-OH), 
John Boehner (R-OH), Howard P. ``Buck'' McKeon (R-CA), Vernon 
Ehlers (R-MI), Joe Wilson (R-SC), Peter Hoekstra (R-MI), and 
Ruben Hinojosa (D-TX) introduced H.R. 510, the Graduate 
Opportunities in Higher Education Act of 2005, to reauthorize 
graduate education programs under title VII of the Higher 
Education Act through fiscal year 2011.
    On June 16, 2005, the Subcommittee on Select Education 
considered H.R. 509 in legislative session and reported it 
favorably, as amended, to the Committee on Education and the 
Workforce by voice vote. The Subcommittee considered and 
adopted by voice vote the following amendment to H.R. 509:
           Representative Tiberi (R-OH) offered a 
        substitute amendment that made technical and clarifying 
        changes to the legislation. Specifically, the amendment 
        emphasized international business and trade 
        competitiveness as some of the core areas in 
        international education initiatives; clarified grantees 
        that are required to disseminate information to 
        elementary and secondary schools ensure that the 
        materials are reflective of a wide range of viewpoints; 
        and expanded the representation on the International 
        Advisory Board to include additional Federal agency 
        representatives that have responsibilities for 
        diplomacy and international commerce.
    On June 16, 2005, the Subcommittee on Select Education 
considered H.R. 510 in legislative session and reported it 
favorably, as amended, to the Committee on Education and the 
Workforce by voice vote. The Subcommittee considered and 
adopted by voice vote the following amendment to H.R. 510:
           Representative Tiberi (R-OH) offered a 
        substitute amendment to make technical and clarifying 
        changes to the legislation.
    The Subcommittee on 21st Century Competitiveness considered 
H.R. 609 in legislative session on Wednesday, July 13 and 
Thursday, July 14, 2005 and reported it favorably, as amended 
to the Committee on Education and the Workforce by a vote of 
18-15. The Subcommittee considered and adopted the following 
amendments to H.R. 609:
           Representative McKeon (R-CA) offered a 
        substitute amendment to make technical and clarifying 
        changes to the legislation. Specifically, under title I 
        of the bill, the amendment modified the provision on 
        Student Speech and Association Rights; clarified the 
        college cost reporting requirements; and added a 
        prohibition for propaganda not authorized by Congress. 
        The substitute amended title II of the bill to include 
        gifted and talented as one of the learning styles on 
        which teacher preparation programs should focus and 
        amended reporting requirements to include additional 
        information on the academic fields being studied by 
        students participating in teacher preparation programs. 
        Title III was amended by adding a new eligible 
        institution to the Historically Black Graduate 
        Institution (HBGI) program. Amendments to title IV 
        included a reconfiguration of the reduction of 
        origination fees that incorporated the mandatory 
        guaranty fee while still reducing fees paid by students 
        to 1 percent by 2010; clarified the prohibition of the 
        ability for students to consolidate their loans while 
        in-school in both the Federal Family Education Loan 
        (FFEL) program and the Direct Loan (DL) program; 
        eliminated the ability of FFEL lenders to take 
        advantage of the ``super two step'' loophole in the 
        consolidation loan program; prospectively eliminated 
        the ability of lenders to earn a minimum of 9.5 percent 
        special allowance through the practice of 
        ``recycling''; clarified how much money a guarantor can 
        retain from defaulted borrowers through consolidation 
        versus rehabilitation of a borrower's defaulted loan; 
        amended the date for Perkins loan Federal Capital 
        Contributions recovery; established eligibility for 
        competency based programs for title IV purposes; 
        removed the reporting requirements on transfer of 
        credit; and added due process language for program 
        reviews and accreditation hearings. In addition, the 
        substitute amendment made minor changes to the 
        Education of the Deaf Act, by linking the 
        accountability provisions of the No Child Left Behind 
        Act with the elementary and secondary schools operated 
        by Gallaudet University. The amendment was adopted by 
        voice vote.
           Representative Fortuno (R-PR) offered an 
        amendment to maintain the single definition of an 
        institution of higher education, but exempt titles III 
        and V of the Higher Education Act from those funds for 
        which for-profit institutions would be eligible to 
        compete. The amendment was adopted by a vote of 22-10.
           Representative Foxx (R-NC) offered an 
        amendment to prohibit the Department of Education from 
        implementing the proposed student unit record database. 
        The amendment was adopted by voice vote.
           Representative Wu (D-OR) offered an 
        amendment to allow for the development of dual degree 
        programs that allow students to earn two undergraduate 
        degrees, one in education and the other in the subject 
        of the student's choosing. The amendment was adopted by 
        voice vote.
           Representative Price (R-GA) offered an 
        amendment to authorize the Teacher Incentive Fund, 
        which will provide funds to states that want to develop 
        merit pay initiatives. The amendment was adopted by a 
        vote of 17-15.
           Representative Keller (R-FL) offered an 
        amendment to waive Pell Grant repayment obligations for 
        students who withdraw from their institution of higher 
        education due to Federally-declared natural disasters. 
        The amendment was adopted by voice vote.
           Representative Keller (R-FL) offered an 
        amendment to prohibit individuals who are subject to an 
        involuntary civil commitment upon completion of a 
        period of incarceration for a sexual offense from being 
        eligible for a Pell Grant. The amendment was adopted by 
        voice vote.
           Representative Keller (R-FL) offered an 
        amendment to raise the maximum authorized Pell Grant to 
        $6,000. The amendment was adopted by voice vote.
           Representative Johnson (R-TX) offered an 
        amendment to limit a student's Pell Grant to 16 
        semesters (8 years) or 24 quarters (6 years). The 
        amendment was amended by unanimous consent to limit a 
        student's Pell Grant to 18 semesters (9 years) or 27 
        quarters (7 years). The amendment was adopted by voice 
        vote.
           Representative Castle (R-DE) offered an 
        amendment to strike the repeal of the 90/10 rule and 
        move the rule to the Program Participation Agreement 
        and further define what is included in the 10 percent 
        part of the ratio. The amendment was adopted by voice 
        vote.
           Representatives Porter (R-NV) and McCarthy 
        (D-NY) offered an amendment to modify the existing 
        Child Care Loan Forgiveness discretionary program to 
        include loan forgiveness for nurses and other 
        occupations deemed by the Secretary to be areas of 
        national need. The amendment was adopted by voice vote.
           Representative McCollum (D-MN) offered an 
        amendment to direct the Secretary of Education to 
        commission a study on fraud and abuse in the title IV 
        student financial aid programs. The amendment was 
        adopted by a vote of 33-0.
    The Committee on Education and the Workforce considered 
H.R. 609 in legislative session on Wednesday, July 20, 
Thursday, July 21 and Friday, July 22, 2005 and reported it 
favorably, as amended, to the House of Representatives, by a 
vote of 27-20, 1 present. The Committee considered and adopted 
the following amendments to H.R. 609:
           Representative Boehner (R-OH) offered a 
        substitute amendment to make technical and clarifying 
        changes to the legislation. Specifically, under title I 
        of the bill, the substitute clarified that degrees 
        offered by Rabbinical schools are recognized as 
        equivalent to the baccalaureate degree and Rabbinical 
        schools are able to participate in the title IV student 
        financial aid programs; and improved the fraud and 
        abuse protections for students that receive title IV 
        aid enrolled in foreign schools. In title II, the 
        substitute added language that allow states to further 
        evaluate the content knowledge of potential teachers in 
        the subject matter they will be teaching; allowed funds 
        to be used to increase the supply of highly qualified 
        math, science and special education teachers and the 
        faculty needed to train them; clarified that funds can 
        be used to help recruit high achieving students, 
        including those who are bilingual, into the field of 
        early childhood education; and allowed institutions of 
        higher education to develop articulation agreements to 
        make it easier for existing early childhood educators 
        to obtain a bachelor's degree. In title III, the 
        substitute included a provision for the Tribally 
        Controlled Colleges and Universities and the Alaska-
        Native and Native-Hawaiian Serving Institutions to use 
        grant funds to support instruction in tribal governance 
        and tribal public policy. In title IV, the substitute 
        clarified that individuals who are convicted of fraud 
        and abuse within the title IV student aid programs are 
        no longer eligible for such aid until they pay back to 
        the Federal government the aid received through 
        fraudulent means. Additionally, the substitute 
        specifically addresses the needs of homeless youth in 
        the TRIO program and GEAR UP and clarifies that TRIO 
        programs should include services to address the 
        transition of veterans into math and science fields. 
        The substitute adds language to ensure that a loan 
        cannot be transferred into a qualifying tax exempt bond 
        to obtain 9.5 percent special allowance. The substitute 
        also includes a provision to provide the opportunity 
        for active duty members of the Armed Services who are 
        out of school to obtain a student loan deferment of up 
        to three years. The substitute consolidates and 
        clarifies consumer empowerment information by 
        establishing a central location for the collection of 
        such information, designated as the College 
        Opportunities On-Line (COOL) website operated by the 
        Department of Education. The substitute also includes 
        foreign language teachers and U.S. government employees 
        who are in positions that regularly require the use of 
        a foreign language in the discretionary national need 
        loan forgiveness program. The substitute amendment 
        reflected the amendments made to H.R. 509 and H.R. 510, 
        the reauthorization bills for title VI and VII of the 
        Higher Education Act, respectively. Under title VI of 
        the bill, the substitute clarifies that when the 
        members of the International Advisory Board assess 
        activities of centers or programs supported by title VI 
        funds, the materials that are used to make assessments 
        must be those submitted by grantees to the Department 
        of Education as part of the grant requirements. Under 
        title VII of the bill, the substitute adds language to 
        prohibit funds from the Fund for the Improvement of 
        Postsecondary Education (FIPSE) from being spent on 
        students who are not eligible for title IV aid; and 
        allows FIPSE funds to be used to support students who 
        are fulfilling internships in disadvantaged 
        communities. The substitute renames the ``Education of 
        the Deaf Act of 1986'' as the ``Gallaudet University 
        and National Technical Institute for the Deaf Act.'' 
        The amendment was adopted by voice vote.
           Representative Castle (R-DE) offered an 
        amendment to clarify for-profit institutions cannot 
        automatically compete for other Federal programs 
        outside of the Higher Education Act. The amendment was 
        adopted by voice vote.
           Representative McCarthy (D-NY) offered an 
        amendment to require that reports of graduation rates 
        under the college cost section of the bill must 
        indicate whether completion or graduation rates are 
        from two- or four-year institutions, and if the rates 
        are from a two-year program of instruction, they be 
        accompanied by the percentage of students who 
        transferred to a four-year institution. The amendment 
        was adopted by unanimous consent.
           Representative McCarthy (D-NY) offered an 
        amendment to clarify that the College Affordability 
        Index must be presented next to an institution's 
        tuition and fees on the College Opportunities On-Line 
        (COOL) website. The amendment was adopted by unanimous 
        consent.
           Representatives Hinojosa (D-TX), Grijalva 
        (D-AZ), Fortuno (R-PR), and Tiberi (R-OH) offered an 
        amendment to create a new program for graduate programs 
        at Hispanic Serving Institutions (HSIs). The amendment 
        was adopted by a vote of 46-2.
           Representative Wu (D-OR) offered an 
        amendment to establish or expand dual enrollment 
        programs at institutions of higher education with funds 
        from the Fund for the Improvement of Postsecondary 
        Education (FIPSE). The amendment was adopted by 
        unanimous consent.
           Representatives Tiberi (R-OH) and Barrow (D-
        GA) offered an amendment to clarify that programs that 
        reduce postsecondary remediation rates and improve 
        degree attainment rates for low-income students and 
        former high school dropouts are eligible for funds 
        under FIPSE. The amendment was adopted by voice vote.
           Representative Price (R-GA) offered an 
        amendment to direct the Secretary of Education to study 
        the indebtedness of medical school graduates. The 
        amendment was adopted by voice vote.
           Representative Davis (D-IL) offered an 
        amendment to direct the Secretary of Education to study 
        the graduation rates of minority male students. The 
        amendment was adopted by voice vote.
           Representatives Petri (R-WI) and Boehner (R-
        OH) offered an amendment to provide borrowers a choice 
        between a fixed interest rate and a variable interest 
        rate on consolidation loans. The amendment was adopted 
        by a vote of 26-20.
           Representative Petri (R-WI) offered an 
        amendment to reduce insurance and reinsurance rates for 
        lenders and guarantors, respectively. The amendment was 
        adopted by voice vote.
           Representatives Kildee (D-MI) and Van Hollen 
        (D-MD) offered an amendment to reform the school as 
        lender initiative in the FFEL program. The amendment 
        was adopted by unanimous consent.
           Representative Grijalva (D-AZ) offered an en 
        bloc amendment to expand the discretionary national 
        need loan forgiveness program to include librarians, 
        teachers of bilingual education, first-responders, and 
        child welfare workers. The amendment was adopted by 
        voice vote.
           Representative Musgrave (R-CO) offered an 
        amendment to exempt small business assets from being 
        included in the disclosure of assets for the purposes 
        of need analysis. The amendment was adopted by a vote 
        of 28-18.
           Representatives Osborne (R-NE) and Holt (D-
        NJ) offered an amendment to make community colleges 
        eligible to participate in the year-round Pell Grant 
        program. The amendment was adopted by voice vote.
           Representative Boustany (R-LA) offered an 
        amendment to consider children who are adopted after 
        age 13 to be included in the ``special circumstances'' 
        discretion allowed for school financial aid officers in 
        need analysis determinations. The amendment was adopted 
        by voice vote.
           Representative Musgrave (R-CO) offered an 
        amendment to ensure that a student's Federal student 
        aid is not impacted by his or her participation in a 
        State choice program. The amendment was amended by 
        unanimous consent by Representative Musgrave by 
        changing ``entity'' to ``State'' and adopted by voice 
        vote.
           Representative Foxx (R-NC) offered an 
        amendment to increase accountability in the TRIO 
        programs. The amendment was adopted by a vote of 27-19.
           Representative Castle (R-DE) offered an 
        amendment to further define the 90/10 ratio and 
        increase the penalties for non-compliance. The 
        amendment was adopted by voice vote.
           Representative Platts (R-PA) offered an 
        amendment to require colleges and universities that are 
        in the top 25 percent of those in their sector to 
        exceed the College Affordability Index to establish 
        college cost task forces. The amendment was adopted by 
        voice vote.
           Representative Ehlers (R-MI) offered an 
        amendment to require accrediting agencies to monitor 
        the growth of distance education programs. The 
        amendment was adopted by unanimous consent.
           Representatives McKeon (R-CA), Ehlers (R-MI) 
        and Kind (D-WI) offered an amendment to provide 
        scholarships to the top high school seniors to pursue 
        undergraduate and graduate degrees in math and science, 
        allow interest repayment on loans for math and science 
        studies, and create education councils on math and 
        science. The amendment was adopted by voice vote.
           Representatives McKeon (R-CA), Ryan (D-OH), 
        and Tierney (D-MA) offered an amendment to authorize 
        the non-mandatory cost provisions of the Advisory 
        Committee on Student Financial Aid report on FAFSA 
        simplification. The amendment was adopted by voice 
        vote.
           Representative Van Hollen (D-MD) offered an 
        amendment to continue the Experimental Sites initiative 
        and experiments. The amendment was amended by unanimous 
        consent by clarifying institutional experiments in the 
        Experimental Sites initiative would continue unless the 
        Secretary determines the institution's participation 
        has not been successful. The amendment was adopted by 
        voice vote.
           Representative McKeon (R-CA) offered an 
        amendment to ensure accreditors take into account an 
        institution's religious mission during the 
        institutional review. The amendment was adopted by 
        voice vote.
           Representative Andrews (D-NJ) offered an 
        amendment to require institutions of higher education 
        to disclose fire safety policies and procedures to 
        enrolled and prospective students. The amendment was 
        adopted by a vote of 35-13.
           Representative Andrews (D-NJ) offered an 
        amendment to modify the return of title IV provisions 
        for clock hour institutions. The amendment was adopted 
        by voice vote.
           Representative Wu (D-OR) offered an 
        amendment to establish a Sense of the Committee 
        regarding textbook costs. The amendment was adopted by 
        voice vote.
           Representative Kind (D-WI) offered an 
        amendment to direct the Secretary of Education to do a 
        study on adult learners attending institutions of 
        higher education. The amendment was adopted by voice 
        vote.
    Below is a summary of H.R. 609.

                                Summary


Short title; Table of contents

    Section 1 gives the short title of the bill as the College 
Access and Opportunity Act of 2005 and sets forth the table of 
contents.

References; Effective date

    Section 2 specifies that the provisions of the bill amend 
the Higher Education Act of 1965, and makes these amendments 
(except as otherwise provided in the legislation) effective 
upon enactment of the legislation.

Title I--General provisions

    Title I of H.R. 609 amends provisions and programs under 
title I (General Provisions) of the Higher Education Act and 
reauthorizes title I through fiscal year 2011.
            Definition of an institution of higher education
    The bill creates a single definition of an institution of 
higher education. Under current law, the Higher Education Act 
includes two definitions of an institution of higher education. 
The first definition, in section 101 of the law, applies to 
institutional participation in both title IV student financial 
aid programs and non-title IV programs. The second definition, 
in section 102 of the law, applies only to institutions 
participating in title IV programs. By creating a single 
definition, H.R. 609 removes the 90/10 rule from the criteria 
that institutions of higher education must meet in order to be 
eligible for title IV participation. Additionally, the single 
definition provision repeals the 50 percent rule for 
telecommunications courses.
    The single definition provision clarifies that institutions 
of higher education that dually enroll students in their 
institution and a secondary school will continue to be eligible 
for participation in the title IV programs. Additionally, the 
single definition clarifies that institutions of higher 
education who admit home-schooled students are able to 
participate in the title IV programs.
            Institutions outside the United States
    H.R. 609 maintains the section 102 definition of an 
institution of higher education for institutions outside of the 
United States and makes several amendments to the current law 
provision. The bill clarifies the definition of a foreign 
school to include a requirement for the school to be legally 
authorized by the education ministry (or comparable agency) of 
the country in which the school is located. H.R. 609 also 
removes the requirement for students attending Canadian Medical 
schools to take the Foreign Medical exam. For the purposes of 
qualifying as a foreign medical school for participation in the 
Federal Family Education Loan (FFEL) program, the bill requires 
the Secretary to publish qualifying criteria by regulation and 
establish an advisory panel of medical experts to evaluate the 
standards of foreign medical school accreditation and determine 
their comparability to U.S. standards.
            Restrictions on funds for for-profit institutions
    With the creation of a single definition of an institution 
of higher education, the bill also places restrictions on funds 
for proprietary schools and makes proprietary schools 
ineligible for funds available through title III or title V of 
the Higher Education Act. Additionally, other Federal funds 
made available to institutions of higher education through the 
current statutory reference to section 101 will not be made 
automatically available to for-profit institutions until the 
other Federal statute is amended to expressly include the for-
profit sector.
            New borrower definition
    H.R. 609 clarifies the definition of a ``new borrower'' to 
separate the Federal Family Education Loan (FFEL) and Direct 
Loan (DL) programs from the Perkins loan program.
            Student Speech and Association Rights
    H.R. 609 modifies the current Sense of Congress on Student 
Speech and Association Rights to clarify students should not be 
excluded from campus activities or denied any benefits based on 
their ideological or political beliefs.
            National Advisory Committee on Institutional Quality and 
                    Integrity
    The bill reauthorizes the National Advisory Committee on 
Institutional Quality and Integrity (NACIQI) and permits 
members of NACIQI to continue to serve after an expiration of 
their term until a successor has been appointed.
            Alcohol and Drug Abuse Prevention; Prior Rights and 
                    Obligations; Performance Based Organization
    H.R. 609 reauthorizes the Alcohol and Drug Abuse Prevention 
grants program, Prior Rights and Obligations dealing with bond 
servicing, and the Performance Based Organization (PBO) through 
fiscal year 2011.
            Limitation on certain uses of funds
    The bill places a limitation on certain uses of funds, such 
as limiting publicity or propaganda activities not authorized 
by Congress prior to the enactment of H.R. 609.
            Consumer information and public accountability in higher 
                    education
    H.R. 609 amends current law section 131 to require the 
Secretary to redesign the College Opportunities On-Line (COOL) 
website to make the site more user-friendly and contain 
information that is of greater use to students and families 
when making decisions about college. The bill requires the 
Department to revamp its current COOL website, including all 
currently required data from institutions of higher education, 
to create a College Consumer Profile that is easily reviewed by 
parents and students. The bill also amends the Higher Education 
Act section 131 to require institutions of higher education 
that increase their tuition and fees more than twice the rate 
of inflation over a three-year interval to submit a management 
plan in conjunction with the entity that controls their tuition 
and fee costs to the Secretary for publication on the COOL 
website. H.R. 609 establishes a college affordability index and 
requires an institution that exceeds the index to report how it 
will work to reduce that increase. Institutions that are in the 
highest 25 percent of the college affordability index for their 
sector will be required to establish a quality-efficiency task 
force to review operations at the institution. Institutions 
that fail to comply with their management plan or action plan 
are subject to an audit by the Inspector General, additional 
monitoring by the Department of Education, and potentially a 
fine of $25,000. The bill provides for a low-cost school 
exemption as well as an exemption for those schools that exceed 
the index but do so by less than $500. The bill requires the 
Government Accountability Office to conduct a study of best 
practices of those institutions that keep costs low and 
increase the affordability of higher education. H.R. 609 also 
calls for a student aid recipient survey on the current 
population of students receiving Federal student aid to be 
completed by the Department of Education not less than once 
every four years.
            Databases of student information
    H.R. 609 contains a prohibition of the design, development, 
creation, implementation or maintenance of nationwide databases 
that track individual students over time.

Title II--Teacher Preparation

    Title II of H.R. 609 amends provisions and programs under 
title II (Teacher Preparation) of the Higher Education Act and 
reauthorizes title II through fiscal year 2011.
    H.R. 609 amends Part A (Teacher Quality Enhancement Grants 
for States and Partnerships) and Part B (Preparing Tomorrow's 
Teachers to Use Technology) of title II of the Higher Education 
Act, authorizes new teacher preparation activities under Part C 
(Centers of Excellence), and authorizes the creation of new 
state and locally developed performance based pay structures 
for teachers and principals under Part D (Teacher Incentive 
Fund).
            Teacher quality enhancement grants for states and 
                    partnerships
    The bill authorizes competitively awarded grants to: (1) 
increase student academic achievement; (2) improve the quality 
of the current and future teaching force by improving the 
preparation of prospective teachers and enhancing professional 
development activities; (3) hold institutions of higher 
education accountable for preparing highly qualified teachers; 
(4) recruit highly qualified individuals, including minorities 
and individuals from other occupations, into the teaching 
force, and (5) assist States and local educational agencies in 
developing and implementing performance based pay systems for 
teachers and principals who increase student academic 
achievement and close the achievement gap.
            State grants
    H.R. 609 requires States that receive grants to develop 
evaluation systems to determine the effectiveness of grant 
activities, which must include measures for teacher 
effectiveness that are based on gains in student academic 
achievement and teacher mastery of the academic subjects they 
teach.
    Under this section, States must use funds to reform teacher 
preparation requirements, coordinate with State activities 
authorized under title II of the No Child Left Behind Act and 
ensure that current and future teachers are highly qualified. 
State grant funds can be used for: (1) designing teacher 
preparation programs that are based on rigorous academic 
content, scientifically based research (including 
scientifically based reading research), and challenging State 
student academic content standards; (2) reforming teacher State 
certification to ensure that teachers have the necessary 
subject matter knowledge and teaching skills to help students 
meet challenging State student academic achievement standards; 
(3) providing prospective teachers with alternative routes to 
traditional preparation and State certification; (4) planning 
and implementing innovative teacher preparation programs, such 
as charter colleges of education; (5) developing performance-
based compensation systems for teachers and principals; (6) 
developing teacher advancement and retention initiatives that 
promote professional growth, multiple career paths, and pay 
differentiation; (7) ensuring that local educational agencies 
and schools are able to expeditiously remove incompetent or 
unqualified teachers; (8) developing systems to measure the 
effectiveness of teacher preparation programs; (9) providing 
technical assistance to low-performing teacher preparation 
programs as identified by the State; (10) ensuring that local 
educational agencies and schools are able to recruit highly 
qualified teachers; (11) developing strategies to improve 
qualifications of preschool teachers and preschool teacher 
preparation programs; (12) incorporating the learning needs of 
gifted and talented students into activities to ensure that new 
teachers possess basic knowledge and skills to meet the needs 
of these students; (13) establishing or expanding new-teacher 
mentoring and assessment programs that are part of a licensure 
process to identify student learning differences among gifted 
students; (14) supporting the development of new special 
education, math and science faculty positions in institutions 
of higher education dedicated to the preparation of teachers in 
these disciplines; and (15) assessing the performance of 
teacher preparation programs within institutions of higher 
education in States that provide comparisons across schools in 
the State.
            Partnership grants
    H.R. 609 provides that each eligible partnership must 
include at least: (1) a high quality teacher preparation 
program at an institution of higher education; (2) a school of 
arts and sciences; (3) a high need local educational agency; 
and (4) a public or private educational organization.
    Each eligible partnership must submit an application that, 
among other things, describes: (1) how faculty of a teacher 
preparation program at an institution of higher education that 
seeks a partnership grant will serve with highly qualified 
teachers in the classroom at partner local educational agencies 
over the term of the grant; and (2) how teachers in private 
elementary and secondary schools located in the geographic 
areas served by the partnership will be able to participate 
equitably in the partnership.
    This section requires that at least 50 percent of 
partnership funds be used to ``directly benefit'' partner local 
educational agencies and clarifies that any entity under the 
partnership may be the fiscal agent of such partnership.
    H.R. 609 requires that eligible partnerships use funds to 
reform teacher preparation requirements, coordinate with State 
activities authorized under title II of the No Child Left 
Behind Act, and ensure that current and future teachers are 
highly qualified. Partnership grant funds must be used for: (1) 
designing teacher preparation programs that are based on 
rigorous academic content, scientifically based research 
(including scientifically based reading research), and 
challenging State student academic content standards; (2) 
providing sustained and high quality pre-service and in-service 
clinical experience for teachers, including the mentoring of 
prospective teachers by exemplary teachers; (3) creating 
opportunities for enhanced and ongoing professional development 
consistent with the definition of ``professional development'' 
in the No Child Left Behind Act; and (4) developing 
professional development activities that provide training in 
how to teach and address the needs of students with different 
learning styles (particularly students with disabilities) and 
to provide training in methods of improving student behavior in 
the classroom.
    An eligible partnership that receives a partnership grant 
may also use funds for: (1) providing prospective teachers with 
alternative routes to traditional preparation and State 
certification; (2) disseminating information on effective 
practices of the partnership; (3) developing managerial and 
leadership professional development programs for principals and 
superintendents; (4) providing teacher recruitment activities; 
(5) creating opportunities for teachers to gain clinical 
experience in science, math, and technology (as long as such 
teachers commit to an additional two years in the classroom 
after the clinical experience); (6) coordination with community 
colleges to implement teacher preparation programs; (7) 
establishing or implementing a teacher mentoring program; (8) 
providing training for teachers to use computer software for 
multilingual education to address the needs of limited English 
proficient students; (9) increasing the knowledge and skills of 
pre-service teachers participating in activities related to the 
needs of gifted and talented students; and (10) increasing the 
number of highly qualified special education, math and science 
teachers.
            Teacher recruitment grants
    H.R. 609 requires that applicants for Teacher Recruitment 
Grants submit an application that, among other things, 
describes the extent to which the applicant will use funds to 
recruit minorities into the teaching profession and directs the 
Secretary of Education to give priority to applicants that will 
place an emphasis on recruiting minorities into the teaching 
profession. In addition, the legislation increases the minimum 
service requirements (as teachers in high need local 
educational agencies) for students that receive assistance to a 
minimum of one year, plus an amount of time equivalent to the 
aid received.
    An eligible applicant must use teacher recruitment grant 
funds to: (1) award scholarships to help students pay the costs 
of tuition, room, board, and other expenses of completing a 
teacher preparation program; (2) provide support services to 
enable scholarship recipients to complete postsecondary 
education programs; and (3) provide follow up services to 
former scholarship recipients during the recipients' first 3 
years of teaching; or develop and implement activities to 
ensure that high need local educational agencies and schools 
are able to effectively recruit highly qualified teachers.
    In addition to using funds for the aforementioned required 
activities, an eligible applicant that receives a teacher 
recruitment grant may also use funds to recruit employees from 
high demand industries, including mathematics, science, 
engineering, and technology industries, into the teaching 
profession. Eligible applicants may also use funds to conduct 
outreach and coordinate with inner city and rural secondary 
schools to encourage students to pursue teaching as a career; 
develop and implement dual degree programs; and recruit high 
achieving students and bilingual students into early childhood 
education programs.
            Accountability for programs that prepare teachers
    Under H.R. 609, each State that receives grants under the 
Act must continue its ``State Report Card on the Quality of 
Teacher Preparation'' (as required under P.L. 105-244, the 
Higher Education Amendments of 1998) and report annually to the 
Secretary of Education, for both traditional and alternative 
teacher preparation programs, the percentage of students (who 
completed at least 50 percent of the coursework required for 
teacher preparation programs) that took and passed the State 
certification or licensure assessment.
    H.R. 609 continues provisions for the Secretary of 
Education to report on teacher quality and preparation in the 
United States. Among other things, the Secretary's report 
(which is made available to the Congress and the public) must 
include: (1) A comparison of States' efforts to improve 
teaching quality; and (2) the national mean and median scores 
on any standardized test that is used in one or more States for 
teacher certification or licensure.
    Each teacher preparation program that enrolls students 
receiving Federal assistance under the Act must also continue 
current law reporting requirements with regard to the quality 
of teacher preparation. In particular, H.R. 609 requires annual 
reports from teacher preparation programs that must include: 
(1) the pass rate of each student who completed at least 50 
percent of the coursework required for the teacher preparation 
program on the State certification or licensure assessment; (2) 
a comparison of the program's pass rate for students who 
completed at least 50 percent of the coursework required for 
the teacher preparation program with the average pass rate for 
other programs in the State; and (3) a comparison of the 
program's average raw score for students who completed at least 
50 percent of the coursework required for the teacher 
preparation program with the average raw scores for other 
programs in the State. In the case of programs with fewer than 
ten students who have completed at least 50 percent of the 
requirements, the institution shall collect and publish 
information with respect to an average pass rate on State 
certification or licensure assessments taken over a 3-year 
period.
    H.R. 609 adds provisions to the Higher Education Act that 
require the Governor of a State (or the entity in the State 
responsible for teacher certification and preparation) to 
attest to the reliability of data reported under the Act to the 
Secretary of Education.
            Preparing tomorrow's teachers to use technology
    H.R. 609 continues activities authorized under the 
Preparing Tomorrow's Teachers to Use Technology program. This 
program was updated and transferred from the Elementary and 
Secondary Education Act to the Higher Education Act during 
consideration of the No Child Left Behind Act in the 107th 
Congress. The purpose of this program is to prepare prospective 
teachers to use advanced technology to prepare all students to 
meet challenging State and local academic content and student 
academic achievement standards.
            Centers of excellence
    H.R. 609 authorizes grants for the creation of Centers of 
Excellence at high quality minority serving institutions. Under 
this part, grants are competitively awarded to high quality 
teacher preparation programs (as determined by the State) at 
eligible institutions which include: Historically Black 
Colleges or Universities, Hispanic-Serving Institutions, 
Tribally Controlled Colleges or Universities, Alaska Native-
Serving Institutions, or Native Hawaiian-Serving Institutions.
            Teacher incentive fund
    The bill also authorizes the Teacher Incentive Fund with 
the purpose of assisting States, local educational agencies, 
and non-profit or for-profit organizations to develop and 
implement, or expand, innovative compensation systems to 
provide financial rewards for teachers and principals who raise 
student academic achievement and close the achievement gap, 
especially in the highest-need local educational agencies.

Title III--Institutional Aid

    Title III of H.R. 609 amends provisions and programs under 
title III (Institutional Aid) of the Higher Education Act and 
reauthorizes title III through fiscal year 2011.
            Tribally Controlled Colleges and Universities
    The bill amends the current competitive grant program for 
Tribally Controlled Colleges and Universities (TCCUs) and 
establishes a formula grant for these institutions. The minimum 
grant for each institution is $400,000. With the creation of a 
formula grant, the bill removes the two-year wait-out period, 
which is no longer necessary under the new formula grant 
provision. Additionally, H.R. 609 allows TCCUs to use funds for 
the development and improvement of facilities for Internet and 
other distance learning academic instruction capabilities and 
to use funds to assist with advanced degrees in tribal 
governance or the development of tribal public policy.
            Alaska-Native and Native-Hawaiian Serving Institutions
    H.R. 609 conforms the uses of funds provisions for Alaska-
Native and Native-Hawaiian Serving Institutions to that of all 
the other minority serving institution programs by allowing 
funds to be used for construction and maintenance of 
instructional facilities. These institutions can also use funds 
for the development and improvement of facilities for Internet 
and other distance learning academic instruction capabilities 
and to use funds to assist with advanced degrees in tribal 
governance or the development of tribal public policy. Lastly, 
the bill allows these institutions to use no more than 20 
percent of their grant funds to establish an endowment fund 
with the use of matching funds. This provision is already 
provided for within title III for other minority serving 
institutions.
            Historically Black Colleges and Universities
    The bill amends the program that serves Historically Black 
Colleges and Universities (HBCUs) to allow these institutions 
to use no more than two percent of funds received through their 
grant to secure technical assistance, for use with enrollment 
management, financial management and strategic planning. The 
bill also requires that these institutions report to the 
Secretary on the use of those funds. As with the other programs 
that assist minority serving institutions, the bill allows 
HBCUs to use their funds for the development and improvement of 
facilities for Internet and other distance learning academic 
instruction capabilities. H.R. 609 permits HBCUs to use their 
funds to establish community outreach programs and 
collaborative partnerships between their institution and 
elementary and secondary schools. Lastly, the bill increases 
the minimum grant for HBCUs from $500,000 to $750,000 provided 
funds are available to provide eligible institutions a grant 
equal to the preceding year.
            Historically Black Graduate Institutions
    H.R. 609 amends the Historically Black Graduate 
Institutions (HBGIs) program to ensure that the institution 
receiving an HBGI grant is accredited by a national accrediting 
agency recognized by the Secretary and is in good standing with 
that agency. The bill adds four new eligible institutions to 
the HBGI program and maintains the current hold harmless 
funding provisions.
            Technical amendments to Title III
    H.R. 609 amends the uses of funds for all of the programs 
that award funds to minority-serving institutions under this 
title to encourage education and counseling services for 
students and their families that will improve their financial 
and economic literacy. Additionally, all minority serving 
institutions can use funds to acquire real property adjacent to 
the campus for the expansion and development of academic 
facilities. The bill also ensures that eligible programs under 
this title are those that provide not less than a two-year 
program that is acceptable for full credit toward a bachelor's 
degree.

Title IV--Student Assistance

    Title IV of H.R. 609 amends provisions and programs under 
title IV (Student Assistance) of the Higher Education Act and 
reauthorizes title IV through fiscal year 2011, unless 
otherwise specified.
            Pell Grant program
    H.R. 609 amends the Pell Grant program by extending the 
authorization through academic year 2012-2013 and establishes a 
maximum grant award of $6,000. The bill eliminates the tuition 
sensitivity provision. The bill provides for year-round Pell 
Grants for students enrolled for 12 consecutive months, rather 
than 9 consecutive months in order to accelerate program 
completion. Year-round Pell Grants are limited to four-year 
institutions that have a graduation rate of at least 30 percent 
and two-year institutions that have a graduation rate in at 
least one of the last three years for which data is available 
that exceeds the average for the sector. The bill requires an 
evaluation of the year-round Pell Grant program and a report by 
the Secretary to the Congress. H.R. 609 restricts the use of 
Pell Grants for remedial or ESL instruction to one academic 
year. H.R. 609 also limits the number of semesters or quarters 
a student may receive a Pell Grant to 18 semesters or 27 
quarters.
    The bill creates a new initiative called Pell Grants Plus--
Achievement Grants for State Scholars. This initiative will 
provide for up to an additional $1,000 for the first two years 
of full-time undergraduate study to Pell-eligible, high 
achieving students. To be eligible to receive the additional 
$1,000 for the first-year of postsecondary study, a student 
must be enrolled full-time in the first year of undergraduate 
education and not have been previously enrolled in an 
undergraduate program. The student must also be Pell eligible 
and have successfully completed a high school program supported 
by the Center for State Scholars. This award, along with other 
aid for which the student is eligible, may not exceed the 
student's cost of attendance. To continue eligibility for the 
second year of undergraduate study, the student must continue 
to be Pell-eligible, be enrolled full time and obtain a grade 
point average of at least 3.0 and fulfill satisfactory academic 
progress. The Secretary will monitor the progress, retention, 
and completion of these students to evaluate the impact of this 
program and provide recommendations to the authorizing 
committees for its continuation or necessary changes.
            TRIO program
    H.R. 609 reauthorizes the TRIO program and extends TRIO 
grants to five years and synchronizes the grants to a five-year 
term. The bill also increases the minimum award amount for TRIO 
grants. H.R. 609 allows for a competition among novice TRIO 
applicants to provide an opportunity for institutions that have 
never received a TRIO grant to compete for funds. The provision 
requires the Secretary to put aside ten percent of the funds 
available for each competition for novice applicants. If there 
are not enough qualified novice applicants to utilize the ten 
percent, the bill directs the funds to be returned to the 
general TRIO fund for other awards. H.R. 609 ensures that all 
veterans and individuals who are defined as homeless or 
unaccompanied youth will be eligible to participate in TRIO 
provided services. The bill also clarifies that institutions 
with more than one campus may apply for separate grants to 
serve different populations on different campuses. The bill 
increases stipends for students in Upward Bound and the McNair 
Postbaccalaureate Achievement Program. Throughout the TRIO 
programs, the bill authorizes funds to be used for education 
and counseling services to improve financial and economic 
literacy of students and families who are assisted by TRIO 
funds. Additionally, the bill calls for Educational Opportunity 
Centers and Student Support Services to provide services to 
low-income working adults. The bill also establishes new 
performance measures for TRIO grantees, which will help the 
Secretary and the Congress measure the quality and 
effectiveness of programs and the impact the programs are 
having on the target populations to be served.
            Gaining Early Awareness and Readiness for Undergraduate 
                    Programs (GEAR UP)
    H.R. 609 reauthorizes the Gaining Early Awareness and 
Readiness for Undergraduate Program (GEAR UP) and provides 
assurances that entities currently holding GEAR UP grants may 
reapply upon expiration of their grant. Additionally, the bill 
allows GEAR UP services to be provided to students coming out 
of a GEAR UP cohort and transitioning into postsecondary 
education. The bill requires that GEAR UP applications include 
a description of activities in place to coordinate, complement 
and enhance services provided by other State entities. H.R. 609 
authorizes funds to be used for education and counseling 
services to improve financial and economic literacy of students 
and families who are assisted by GEAR UP funds. The bill 
clarifies individuals who are defined as homeless or 
unaccompanied youth are eligible to participate in GEAR UP 
programs. Finally, H.R. 609 clarifies that the duration of a 
GEAR UP grant is for six years.
            Campus based aid programs
    H.R. 609 reauthorizes all three campus based aid programs: 
Supplemental Educational Opportunity Grants (SEOG), Federal 
Work Study and the Perkins loan program. The bill provides for 
a phase out of the base guarantee for the allocation of campus 
based aid funds to eligible institutions beginning in 2008. 
Base guarantee funds decrease by 20 percent every two years and 
are replaced by funds awarded by the fair share formula 
calculation. Should the funds in the SEOG and Federal Work 
Study programs exceed $700 million, the bill gives the 
Secretary the discretion to allocate not more than 10 percent 
of such funds to institutions that graduate degree-seeking Pell 
Grant recipients who complete a four-year degree in four years 
and a two-year degree in two years. Within all three campus 
based aid programs, the books and supplies allowance is 
increased in the determination of the cost of attendance. 
Within the Federal Work Study program, the bill allows student 
employment in on-campus day care centers to count toward 
community service jobs for work-study students. The bill also 
permits up to 15 percent or $75,000 of an institution's 
allocation, whichever is less, to be used to locate and develop 
jobs for students, including community service jobs. H.R. 609 
makes technical and clarifying corrections to the work college 
provisions.
            Leveraging Educational Assistance Partnerships; Child Care 
                    Access Means Parents in School
    H.R. 609 reauthorizes the Leveraging Educational Assistance 
Partnerships (LEAP) program and the Child Care Access Means 
Parents in School program.
            High School Equivalency Program; College Assistance Migrant 
                    Program
    H.R. 609 reauthorizes the High School Equivalency Program 
(HEP) and the College Assistance Migrant Program (CAMP). The 
bill expands services to those with family members who are 
migrant or seasonal farm workers, and allows for follow-up 
services. H.R. 609 encourages that funds be used for HEP 
students who are in programs of two-years or less to transfer 
to four-year institutions.
            Robert C. Byrd Honors Scholarship Program
    The bill reauthorizes the Byrd Scholarship Program and 
amends the emphasis of the program to focus more intently on 
the math and science related disciplines. The program is 
renamed to the Robert C. Byrd Mathematics and Science Honors 
Scholarship Program.
            Learning Anytime Anywhere Partnerships
    H.R. 609 repeals the Learning Anytime Anywhere Partnerships 
program.
            Federal Family Education Loan (FFEL) & Direct Loan (DL) 
                    programs
    The Federal Family Education Loan (FFEL) program is 
reauthorized through fiscal year 2011 and the insurance 
provisions are reauthorized through fiscal year 2012. The 
Direct Loan (DL) program is also reauthorized through fiscal 
year 2011. H.R. 609 provides a small increase to the maximum 
amount of funds that are available to guaranty agencies for 
administrative purposes included in section 458 of the Higher 
Education Act, while maintaining current authorized levels for 
the overall administration of the student aid programs.
    H.R. 609 increases the annual maximum loan limits in both 
the FFEL and DL programs for first and second year college 
students from $2,625 to $3,500 and from $3,500 to $4,500, 
respectively, beginning with loans issued on or after July 1, 
2007. The bill also clarifies that underlying loans that have 
been wrapped into a consolidation loan will still count against 
the borrower's aggregate loan limits. Finally, H.R. 609 
increases the annual unsubsidized graduate loan limits in both 
the FFEL and DL programs from $10,000 to $12,000.
    The bill retains the variable rate formula for both the 
FFEL and DL programs and repeals the change in Stafford loan 
and PLUS loan interest rates scheduled for July 1, 2006.
    Beginning on July 1, 2006, the bill changes the interest 
rates on consolidation loans in both the FFEL and DL programs 
to offer the borrower a choice between a fixed interest rate or 
a variable interest rate. The fixed interest rate is equal to 
the 91-day Treasury bill + 3.3 percent, capped at 8.25 percent 
and includes a one-time fixed rate offset fee of 0.50 percent. 
The variable interest rate is equal to the 91-day Treasury bill 
+ 2.3 percent, capped at 8.25 percent. The fixed interest rate 
for PLUS loans is equal to the 91-day Treasury bill + 4.1 
percent, capped at 9.0 percent and includes a one-time fixed 
rate offset fee of 0.50 percent. The variable interest rate for 
PLUS loans is equal to the 91-day Treasury bill + 3.1 percent, 
capped at 9.0 percent.
    H.R. 609 retains a provision from current law that limits 
the number of times a borrower can consolidate his loans; 
however, the bill does allow a borrower to move into the DL 
program for purposes of avoiding default by utilizing income 
contingent repayment. The bill also eliminates in-school 
consolidation in the FFEL program and closes a loophole in the 
consolidation loan program that permits borrowers to re-
consolidate by switching between the FFEL and DL programs. H.R. 
609 eliminates the single holder rule but requires that a 
borrower notify the holder of his loans of his intent to 
consolidate if all of the loans are held by one lender. In 
addition, the bill requires lenders provide the borrowers with 
more information, such as the benefits the borrower could be 
losing by consolidating, when the borrower requests to 
consolidate his loans. Taken together, these two reforms give 
greater flexibility for borrowers to choose their consolidation 
lender and ensure the borrowers are given all the information 
about the advantages and disadvantages of consolidating his 
loans.
    The bill makes several conforming and technical amendments 
within the special allowance section. The bill also requires 
lenders to rebate to the government their ``floor income.'' 
Floor income is a benefit to lenders that takes place when the 
fluctuating guaranteed rate of return for lenders is lower than 
the fluctuating borrower interest rate. During this period, 
current law permits the lender to keep the higher amount being 
paid by the borrower, rather than just retaining the lender's 
guaranteed rate of return. H.R. 609 requires the lender only 
receive its guaranteed rate of return and rebate to the 
government the difference between lender yield and the 
borrower's interest rate, when the borrower rate is higher.
    H.R. 609 also permanently closes the 9.5 percent subsidy by 
extending the Taxpayer-Teacher Protection Act (P.L. 108-409) 
and shutting down the ability of lenders to recycle additional 
loans to gain the minimum 9.5 percent special allowance.
    H.R. 609 requires guaranty agencies to charge the one 
percent Federal default fee on loans disbursed on or after July 
1, 2006. This fee is already included in current law, but the 
guaranty agencies have the ability to waive the fee. The fee 
will be deposited in the guaranty agencies' Federal Student 
Loan Reserve fund. The bill also phases down the origination 
fee charged on FFEL Stafford loans from three percent to zero 
percent over the course of the reauthorization. H.R. 609 also 
phases down the origination fee required on Direct Loans from 
the statutorily required four percent to one percent by 2010. 
The bill also prohibits the Secretary of Education from waiving 
this fee as a repayment incentive and prohibits any sort of 
repayment incentive being given prior to the borrower entering 
repayment. By 2010, students will only be charged a one percent 
fee on their student loans in both the FFEL and the DL 
programs.
    To prevent against further fraud and abuse within the 
student loan program, H.R. 609 requires the disbursement of 
Federal loan funds to students attending foreign schools to be 
sent to the institution.
    The bill aligns the DL extended repayment plan with the 
FFEL extended repayment plan. The bill also requires a borrower 
to take into account his or her spouse's income when 
determining income for purposes of the income contingent 
repayment plans. H.R. 609 also creates a new interest only 
repayment plan under which the borrower would only pay the 
interest on the loan for the first two years. This plan was 
created in both the FFEL and Direct Loan programs.
    The bill adds a new deferment option for student loan 
borrowers (either in the FFEL or DL program) that are serving 
in the U.S. Armed Forces.
    H.R. 609 authorizes additional areas for discretionary loan 
forgiveness in both the FFEL and DL programs, including early 
childhood educators, nurses, foreign language specialists, 
librarians, bilingual educators, first responders in low income 
areas, child welfare workers, speech language pathologists and 
other areas of national need as designated by the Secretary.
    The bill also makes permanent mandatory teacher loan 
forgiveness for highly qualified math, science and special 
education teachers teaching in public or private schools and 
adds a new teacher loan forgiveness option for reading 
specialists. The bill increases risk sharing for the lenders 
and guarantors in the FFEL program by lowering the lender 
insurance from 98 percent to 96 percent and the guarantor 
reinsurance from 95 percent to 93 percent. H.R. 609 also grants 
100 percent insurance for claims with respect to loans for 
which it is determined that the borrower, without the lender's 
knowledge, provided false information when the loan was made 
that caused the loan to be ineligible for interest benefits 
under the Federal loan programs. The bill also tightens the 
requirements on the exceptional performance program and lowers 
the insurance from 100 percent to 98 percent. H.R. 609 lowers 
the amount guarantors are permitted to keep as collection costs 
from 18.5 percent to 10 percent if the borrower consolidates a 
defaulted loan rather than pursuing rehabilitation. In 
addition, H.R. 609 imposes a limit of 45 percent on the amount 
of a guarantor's collections portfolio that can be in 
consolidation loans. The bill also lowers the number of 
payments for a borrower to rehabilitate the loan from 12 to 9 
and infuses more requirements of financial literacy into 
borrower education initiatives.
    H.R. 609 adds a provision that requires parents to repay 
loan funds obtained by fraud before any additional funds can be 
taken out if the parents are convicted of fraud in the student 
loan programs.
    The school as lender program provisions are reformed to 
clarify that schools can only lend to graduate students and any 
profits made by the school must be put toward need based aid.
    To ease the burden on student loan borrowers that are 
already facing formidable challenges due to a disability, H.R. 
609 provides that if the Veterans Administration or the Social 
Security Administration determines an individual to be totally 
and permanently disabled, the Secretary of Education shall 
accept that determination and the borrower need not provide the 
Secretary of Education with additional paperwork for the 
discharge of student loan obligations.
    H.R. 609 also eliminates the requirement that a forbearance 
agreement be in writing in the FFEL and DL programs, and 
instead requires that a notice of forbearance agreement be sent 
to the borrower and kept in the borrower's file.
            Teacher loan forgiveness
    H.R. 609 makes permanent an increase in the allowable 
maximum loan forgiveness for math, science, special education 
teachers and reading specialists in the FFEL and the DL 
programs from $5,000 to $17,500. This loan forgiveness was 
originally included for one year in the Taxpayer-Teacher 
Protection Act of 2004 (P.L. 108-409). This increased loan 
forgiveness is available for highly qualified math, science and 
special education teachers and reading specialists teaching in 
high need, title I schools. The loan forgiveness passed by the 
Congress last year, and made permanent in H.R. 609, coordinates 
the requirement for teachers to be highly qualified, as well as 
the poverty level for school wide programs, as defined in the 
No Child Left Behind Act, with eligibility for all teacher loan 
forgiveness.
            Perkins loan program
    The Perkins loan program is reauthorized through fiscal 
year 2011. As with the other two campus based aid programs, the 
base guarantee is also phased out for the Perkins loan program 
and the allocation of funds is replaced with the fair share 
formula calculation. H.R. 609 increases the annual maximum loan 
limits from $4,000 to $5,500 for undergraduates and from $6,000 
to $8,000 for graduate or professional students. Additionally, 
the aggregate loan limits are increased from $20,000 to $27,500 
for undergraduates and from $40,000 to $60,000 for graduate and 
professional students. The bill conforms forbearance 
requirements in Perkins to FFEL and DL to state that a borrower 
need not request the forbearance in writing. H.R. 609 also 
allows institutions to negotiate compromise payments on 
defaulted Perkins loans. The bill conforms the rehabilitation 
provision in Perkins to that in FFEL and DL by requiring 9 on-
time, consecutive monthly payments, rather than 12. H.R. 609 
also allows for greater cancellation opportunities for members 
of the Armed Services and gives them the same consideration as 
is given to teachers, full-time law enforcement officers and 
nurses.
            Need analysis
    H.R. 609 simplifies and expands the eligibility of families 
to utilize the Simplified Needs Test for need analysis to 
include those already receiving benefits under a means-tested 
Federal benefit program, which is defined in the bill. The bill 
also authorizes the Secretary to regularly evaluate the impact 
of these eligibility guidelines and ensure that the Simplified 
Needs Test continues to be targeted to the maximum number of 
low- and moderate-income students as possible.
    H.R. 609 calls for improvements to the paper and electronic 
Free Application for Federal Student Aid (FAFSA). The bill 
directs the Secretary to permit applicants to complete their 
FAFSA in the three years prior to enrollment in order to obtain 
a non-binding estimate of the family contribution. The bill 
also authorizes an evaluation by the Secretary to determine 
differences between initial, non-binding early estimates and 
the final financial aid award made to the student. 
Additionally, H.R. 609 authorizes the Secretary to develop and 
use a simplified paper application form to be known as the EZ-
FAFSA for applicants who meet the requirements of eligibility 
for the Simplified Needs Test. The Secretary shall annually 
report to Congress on the impact of the digital divide on 
students completing applications for Federal student aid and 
also report on the steps taken to phase out the paper form as 
barriers to the electronic form are eliminated. In addition to 
the EZ-FAFSA, the Secretary shall develop and use a simplified 
electronic application with reduced data elements and state 
data that only applies to the applicant.
    For all forms, the Secretary shall ensure that data 
collection complies with privacy requirements and that all 
forms developed shall maintain reasonable and appropriate 
administrative, technical, and physical safeguards to ensure 
the integrity and confidentiality of the information.
    H.R. 609 authorizes a streamlined reapplication process for 
students and further encourages the Secretary to work to reduce 
the number of data elements on the FAFSA. The Secretary shall 
encourage States to take such steps as necessary to encourage 
the use of simplified application forms and conduct an annual 
review to determine which forms and data items the States 
require to award need-based State aid to applicants.
    The bill makes clear that the FAFSA, in whatever form it is 
produced, shall be produced, distributed, and processed by the 
Secretary and no parent or student shall be charged a fee for 
the collection, processing or delivery of financial aid through 
the use of the FAFSA.
    The bill clarifies that a student who is an orphan, in 
foster care, or is a ward of the court, or was in foster care 
or a ward of the court until the age of 18, is considered an 
independent student. H.R. 609 also treats active duty members 
of the military as independent students for the purposes of 
need analysis. H.R. 609 clarifies that a student's status as a 
ward of the court prior to 18 years of age, a student's status 
as an individual adopted at or after age 13, or a student's 
status as a homeless or unaccompanied youth can be considered 
as a ``special circumstance'' for the purposes of awarding 
title IV Federal financial aid.
    The bill increases the dependent student work protection 
allowance from $2,200 to $3,000. H.R. 609 excludes 
distributions from eligible 529 plans from counting as income 
or a resource and equalizes the treatment of both tuition 
savings plans and pre-paid tuition plans in the need analysis 
formula. Under the bill, plans will be treated as assets of the 
parents for dependent students and assets of the student for 
independent students. H.R. 609 provides for an exception to be 
made to the need analysis formula for families that own small 
businesses that employ less than 100 full-time equivalent 
employees. The bill also provides for a clarification to the 
need analysis formula for students who receive a stipend from 
their State as a replacement for the direct appropriation of 
funds to the institution of higher education.
            Definitions of academic year and eligible program
    H.R. 609 provides simplification for clock hour schools 
within the definition of an academic year in terms of the 
number of weeks required. The bill reduces a 30-week 
requirement to 26 weeks, while retaining the requirement for 
900 hours to constitute a full academic year. Additionally, the 
bill recognizes that an eligible program can include an 
instructional program that utilizes direct assessment of 
student learning, in lieu of credit or clock hours.
            Distance education
    The bill amends the definition of distance education as an 
eligible program for title IV student aid purposes as a program 
that is offered in whole or part through telecommunications, if 
provided by an accredited institution of higher education, 
other than a foreign school. The accreditor that accredits the 
institution must have the evaluation of distance education 
within its scope. The bill eliminates the connection between 
correspondence and telecommunications for the purposes of the 
repeal of the 50 percent rule and title IV program 
participation.
            Expanding information dissemination regarding eligibility 
                    for Pell Grants
    H.R. 609 requires the Secretary to make a special effort to 
notify students and parents who qualify for free lunch, food 
stamps, or other such programs, of their potential eligibility 
for a maximum Pell Grant.
            Student eligibility
    The bill amends various provisions concerning student 
eligibility. Students who are convicted of title IV program 
fraud are required to repay the funds they fraudulently 
obtained to the Secretary or the holder of the loan. Second, 
individuals who are subject to involuntary civil commitments 
upon completion of a period of incarceration for sexual 
offenses are not eligible for Pell Grants. Third, the bill 
clarifies eligibility for students from the Freely Associated 
States for Pell Grants.
    H.R. 609 authorizes the Secretary of Education to work with 
the Secretary of the Treasury to provide for an IRS data match.
    The bill clarifies that the suspension of eligibility for 
drug offense convictions occurs only for those students 
enrolled in an institution of higher education and receiving 
title IV aid when convicted of their offense. H.R. 609 also 
requires the institution of higher education to inform students 
of the possibility of suspension of eligibility for title IV 
aid for drug related offenses.
            Institutional refunds
    H.R. 609 allows an institution of higher education to 
contact a student who may be eligible for a late disbursement 
of loan funds and get the borrower's agreement before 
disbursing the funds. The bill also provides an institution 
with 45 days from the date of determination that a student has 
withdrawn to return loan funds. H.R. 609 permits the Secretary 
to waive the amounts that students are required to return to 
the government with respect to Pell Grant funds if the 
withdrawal is due to a major disaster, declared by the 
President.
            Institutional and financial assistance information for 
                    students
    The bill ensures that institutional and financial 
assistance information that is provided to students is made 
publicly available through appropriate publications, mailings, 
electronic media, and accrediting agency reports. H.R. 609 
expands the information an institution provides to students 
regarding academic programs to include the institution's 
educational mission and goals. Additionally, the institution is 
responsible for providing the student with a summary of student 
outcomes for full time undergraduate students that includes 
completion and graduation rates of certificate and degree-
seeking students, as well as any additional qualitative or 
quantitative outcome data reflective of distance education 
outcomes or licensing and placement rates for professional and 
vocational programs. The bill provides students the opportunity 
to register complaints about the institution with the 
institution or programmatic accreditor. H.R. 609 requires the 
institution to notify the student regarding the acceptance or 
denial of academic credit earned at another institution of 
higher education and maintain a policy that the denial of 
credit will not be based solely on the source of accreditation 
of a sending institution, provided that the sending institution 
is accredited by an agency or association that is recognized by 
the Secretary.
    The bill does clarify that the provision does not authorize 
any employee at the Department of Education to exercise any 
direction, supervision, or control over the curriculum, program 
of instruction, administration or personnel of any institution 
of higher education or any accrediting agency or association 
regarding the transfer of credit policy. H.R. 609 permits 
institutions to provide supplemental data to enrolled and 
prospective students that demonstrate evidence of student 
participation in educationally purposeful activities.
    The bill requires institutions of higher education to 
include in their exit counseling materials the same consumer 
protection language required by lenders with regard to 
consolidation loans. H.R. 609 also clarifies that foreign 
institutions are not required to report data dealing with 
campus crime, as these institutions do not utilize similar 
crime definitions and do not abide by similar reporting 
requirements as domestic institutions of higher education.
    H.R. 609 requires institutions of higher education to file 
a fire safety report with the Secretary detailing campus fire 
safety practices and standards.
            College Access Initiative
    The bill creates a new section, the College Access 
Initiative that is intended to provide outreach and better 
information regarding student financial aid and access programs 
to students and their families. The College Access Initiative 
requires guaranty agencies to gather information on programs 
and student aid available in the State in which they are 
designated. That information must be made available to the 
public and reported to the Secretary to establish a directory 
of programs and provide for access to the information through 
the Internet and any other means determined by the Secretary. 
Each guaranty agency shall establish a plan to gather and 
disseminate the information required and the plan shall include 
how the agency will undertake the task, how it will publicize 
the information gathered, and how it will coordinate with other 
entities in the State. Information collected by the guarantors 
will include resources on college planning, career preparation 
and paying for college. Guarantors may utilize funds from their 
operating fund and if any funds remain, they may use funds from 
their former restricted accounts.
            Distance Education Demonstration Program
    H.R. 609 reauthorizes and amends the Distance Education 
Demonstration Program to allow up to five degree-granting, 
accredited correspondence schools to participate. The bill also 
increases the number of institutional and consortium 
participants from 35 to 100.
            College Affordability Demonstration Program
    The bill authorizes a College Affordability Demonstration 
Program that will foster increased innovation in the delivery 
of higher education and student financial aid in a manner that 
results in reduced costs for students as well as the 
institution. Strategies that can be employed could include: 
accelerated degree or program completion, increasing 
availability of and access to distance education, and engaging 
in collaborative arrangements with other institutions and 
organizations. The College Affordability Demonstration Program 
is open to no more than 100 institutions of higher education, 
including those applying as part of systems or consortia and 
does not include foreign schools. At the conclusion of the 
Demonstration, the Secretary shall review current law rules and 
regulations and identify those that present impediments to the 
implementation of innovations that result in cost savings and 
in expanding access to education.
            Program Participation Agreements
    The bill clarifies that an institution of higher education 
is permitted to provide voter registration materials 
electronically to enrolled students.
    The bill also amends the Program Participation Agreement 
(PPA) by moving the 90/10 rule for proprietary institutions 
from eligibility criteria for the for-profit sector to the PPA 
and further defining the 10 percent portion of the ratio. The 
new 90/10 rule now applies to all institutions of higher 
education and counts the following funds toward the 10 percent: 
(1) funds used by students to pay tuition, fees and other 
institutional charges from sources other than title IV funds; 
(2) institutional funds used to satisfy matching-fund 
requirements for programs under title IV; (3) funds from 
savings plans for educational expenses established by the 
Internal Revenue Code of 1986; (4) funds paid by a student, or 
on behalf of a student by a party other than the institution, 
for an education or training program that is not eligible for 
funds under title IV; and (5) institutional aid (in the case of 
loans, only the amount of loan repayment received during the 
fiscal year and in the case of institutional scholarships, only 
those provided by the institution in the form of monetary aid 
or tuition discounts). If the institution fails to comply with 
the 90/10 rule for three consecutive years, the institution 
shall become ineligible to participate in the title IV 
programs. The Secretary may also place the institution on 
provisional certification or require other such monitoring and 
reporting that is necessary for the institution to demonstrate 
compliance. The Secretary shall identify on the College 
Opportunities On-Line (COOL) website those institutions that 
fail to meet the 90/10 rule in any given year.
    H.R. 609 also requires institutions of higher education, 
within one year of the date of enactment, to disclose to an 
alleged victim of any crime of violence or non-forcible sex 
offense, the final results of any disciplinary proceeding. If 
the victim is deceased, that information shall be disclosed to 
the victim's next of kin.
            Program integrity
    H.R. 609 permits States to be able to apply to the 
Secretary for approval as a recognized accreditor.
    The bill clarifies that accreditors who seek to have 
distance education in the scope of their accrediting process 
must demonstrate to the Secretary that the accreditation 
agency's or association's standards effectively address the 
quality of an institution's distance education programs, but 
the accreditors are not required to have separate standards, 
procedures, or policies for the evaluation of distance 
education or programs. The bill also requires that an 
institution that offers distance education programs have 
processes by which it establishes that the student who 
registers in a distance education course or program is the same 
student who participates, completes academic work, and receives 
academic credit. H.R. 609 ensures that accrediting agencies or 
associations shall take into account the institution's stated 
missions, including religious values, when evaluating the 
institution for accreditation in a particular program.
    H.R. 609 clarifies that student achievement success must be 
measured against the relevant performance data and measures 
that the institution determines to be necessary to evaluate or 
strengthen its programs. The bill also clarifies that the 
accreditor must take into consideration fiscal administrative 
capacity and board governance, in the context of the 
institution's mission, when evaluating an institution.
    In order to clarify the due process protections provided to 
the institution by the accrediting process, H.R. 609 calls for 
accrediting agencies and associations to establish and apply 
review procedures throughout the accrediting process, including 
evaluation and withdrawal proceedings that comply with due 
process requirements. These requirements include: (1) adequate 
specification of requirements and deficiencies at the 
institution or program being examined; (2) an opportunity for a 
written response by any such institution to be included in the 
evaluation and withdrawal proceedings; (3) an opportunity for 
the institution to appeal any adverse action at a hearing prior 
to such action becoming final before an appeals panel; and (4) 
the right to representation by counsel for an institution.
    The bill requires accrediting agencies and associations to 
make public a summary of agency or association actions 
including final denial, withdrawal, suspension or termination 
of accreditation or any other final adverse action taken with 
respect to an institution.
    H.R. 609 amends the accrediting agency and association 
operating procedures to include a provision under which 
agencies and associations confirm that institutions have 
transfer of credit policies that are publicly disclosed and do 
not call for the denial of credit transfer based solely on the 
accreditor of the sending institution as long as the agency or 
association is recognized by the Secretary of Education. 
Additionally, accrediting agencies and associations are 
required to develop a brief summary, which should be made 
available to the public that details final adverse actions 
against institutions of higher education. The agencies and 
associations are also required to monitor the enrollment growth 
of distance education programs to ensure that an institution 
experiencing significant growth has the capacity to serve its 
students effectively. H.R. 609 also requires that the agencies 
and associations publicly disclose a list of the individuals 
who comprise the evaluation teams and a description of the 
agency's process for selecting, preparing and evaluating its 
evaluation team volunteers; as well as any statements related 
to the accreditation responsibilities of such individuals. 
Lastly, the bill requires that the agency or association review 
any record of student complaints received. The Secretary is 
required to provide the Congress with an annual report on the 
status of any accreditation agency or association whose 
evaluation scope has been limited, or that has been suspended 
or terminated from recognition.
    During program reviews, H.R. 609 requires the Secretary to 
provide the institution with adequate opportunity to review and 
respond to any program review report or audit finding before 
the final program review or audit determination is reached. 
Additionally, the bill requires the Secretary to take into 
consideration the institution's response in any final program 
review or audit determination. Under the bill, the Secretary 
shall include in the response a written statement addressing 
the institution's response and stating the basis for the final 
determination. H.R. 609 also requires that the Secretary 
maintain and preserve at all times the confidentiality of any 
program review report or audit finding until a final program 
review or audit determination has been issued. Lastly, the bill 
requires that the authority to approve or issue any program 
review report or audit finding, preliminary or otherwise that 
exceeds $500,000 not be delegated to any officer other than the 
Chief Operating Officer of Federal Student Aid at the 
Department of Education.
            Report to Congress on prevention of fraud and abuse in 
                    student financial aid programs
    H.R. 609 authorizes the Secretary to commission a 
nonpartisan, comprehensive study on the prevention of fraud and 
abuse in title IV student financial aid programs and report the 
results to Congress not later than December 31, 2007.

Title V--Developing Institutions

    Title V of H.R. 609 amends provisions and programs under 
title V (Developing Institutions) of the Higher Education Act 
and reauthorizes title V through fiscal year 2011.
    H.R. 609 amends the definition of an eligible Hispanic 
Serving Institution (HSI) and clarifies when an institution's 
eligibility is determined. The bill also requires that the 
institution offer not less than a two-year program that is 
eligible for credit toward a bachelor's degree in order to be 
eligible under title V. H.R. 609 also provides for a use of 
funds that will allow these institutions to use their grant 
funds to educate or counsel students and their families on 
economic and financial literacy. The bill will also allow HSIs 
to acquire real property adjacent to the campus with title V 
funds. Additionally, the bill allows these institutions to use 
their grant funds to establish community outreach programs and 
partnerships between HSIs and local elementary and secondary 
schools. H.R. 609 repeals the two-year wait out period for 
HSIs. The bill also establishes a graduate program for HSIs.

Title VI--International Education

    Title VI of H.R. 609 amends the programs under title VI 
(International Education Programs) of the Higher Education Act 
and reauthorizes title VI through fiscal year 2011.
    The bill creates a new International Education Advisory 
Board for all title VI programs to increase accountability by 
providing advice, counsel, and recommendations to the Secretary 
of Education and the Congress on international education issues 
for higher education. H.R. 609 also requires the Secretary of 
Education to take into account the degree to which activities 
of the centers, programs, and fellowships at institutions 
funded by title VI advance national interests, generate and 
disseminate information, and foster debate on international 
issues from diverse perspectives.
    In order to ensure that students of all ages are exposed to 
international education, the bill encourages and strengthens 
international knowledge at all stages of education by allowing 
centers and programs funded by title VI to serve as a national 
resource for courses and materials for use in elementary and 
secondary schools.
    The bill allows more of the overall title VI funds to be 
used for undergraduate education and also permits 10 percent of 
a project's funds to be used for sending undergraduate students 
on educational programs abroad. Additionally, the bill stresses 
the importance for institutions to promote the safety of 
students in study abroad programs.
    Noting that minority serving institutions may not have the 
capacity to provide matching funds for the programs under title 
VI, the bill adds a special rule to the programs in the title 
that allows the Secretary to waive or reduce the non-Federal 
match for Historically Black Colleges and Universities, 
Hispanic Serving Institutions, Tribally Controlled Colleges and 
Universities, and Alaska-Native and Native-Hawaiian Serving 
institutions.
    The bill clarifies that the Institute for International 
Public Policy (IIPP) include all underrepresented populations 
in its program in order to enhance participation in 
international service. The International Studies in Higher 
Education Act also names students who participate in graduate 
or undergraduate internship programs through the IIPP as the 
``Ralph J. Bunche Fellows.''

Title VII--Graduate Education

    Title VII of H.R. 609 amends the programs under title VII 
(Graduate Education Programs) of the Higher Education Act and 
reauthorizes title VII through fiscal year 2011.
            Jacob K. Javits Fellowship Program
    The bill permits military personnel to interrupt Javits 
fellowship study when called to active duty, and requires the 
Javits fellowship board to include members from diverse 
geographic regions as well as at least one representative from 
a minority serving institution. The bill aligns the stipends 
for Javits fellowships to the National Science Foundation (NSF) 
Graduate Research Fellowship program.
            Graduate Assistance in Areas of National Need
    Within the Graduate Assistance in Areas of National Need 
(GAANN) program, the bill establishes a competitive priority 
for grants to those preparing math, science and special 
education faculty, as well as those preparing faculty to teach 
teachers of limited English proficient individuals. The bill 
aligns the stipends for GAANN fellowships to the NSF Graduate 
Research Fellowship program.
            The Thurgood Marshall Legal Educational Opportunity Program
    The College Access and Opportunity Act clarifies the grant 
authority within the Thurgood Marshall Program.
            Fund for the Improvement of Postsecondary Education (FIPSE)
    The bill encourages the recognition of innovative reform 
programs with the Fund for the Improvement of Postsecondary 
Education (FIPSE) program for non-traditional student 
populations and programs that work to improve secondary school 
and college graduation rates. The bill also provides for 
special projects within FIPSE to include partnerships to 
develop dual enrollment programs and articulation agreements; 
international partnerships with postsecondary institutions 
abroad; encourages the establishment of academic programs that 
teach traditional American history; and provide funds for 
institutions of higher education that want to provide services 
to disadvantaged communities.
            Urban Community Service program
    The bill repeals the Urban Community Service program.
            Demonstration Projects to Ensure Students with Disabilities 
                    Receive a Quality Higher Education
    The bill provides for new authority within the 
Demonstration Projects to Ensure Students with Disabilities 
Receive a Quality Higher Education Program to assist with 
students' transition between secondary and postsecondary 
education.

Title VIII--Clerical amendments

    Title VIII makes technical and clerical amendments to the 
Act.

Title IX--Amendments to other education laws

            Education of the Deaf Act of 1986
    Title IX of H.R. 609 amends multiple education laws. The 
first is the Education of the Deaf Act of 1986, which 
authorizes and provides support for Gallaudet University and 
the National Technical Institute for the Deaf (NTID). H.R. 609 
reauthorizes the Education of the Deaf Act of 1986 through 2011 
and includes amendments to several provisions of the Act.
    First, H.R. 609 identifies the Laurent Clerc National Deaf 
Education Center as the entity responsible for K-12 education 
programs at Gallaudet University. Second, the bill requires 
Gallaudet University to develop academic content standards, 
academic achievement standards, and academic assessments 
consistent with the No Child Left Behind Act for the elementary 
and secondary programs operated at the Laurent Clerc National 
Deaf Education Center. Third, the bill deletes the unnecessary 
definition of ``institution of higher education.'' Fourth, the 
bill slightly alters the reporting requirements for the NTID 
and Gallaudet University to require information about the 
disposition of students within one year of graduation or 
completion of their program. Fifth, the bill codifies the 
relationship between the Secretary of Education and the 
Rochester Institute of Technology for the operation of the 
NTID. Sixth, the bill includes several technical amendments, 
including updates to references to the authorizing committees 
of Congress. And, finally, the bill changes the name of the Act 
to the ``Gallaudet University and National Technical Institute 
for the Deaf Act.''
            Cancellation of student loan debt for survivors of victims 
                    of the September 11, 2001 attacks
    H.R. 609 provides for cancellation of student loan debt for 
survivors of victims of the September 11, 2001 terrorist 
attacks.
            Repeals of expired and executed provisions
    The bill repeals the following provisions from the Higher 
Education Act Amendments of 1998: the Study of Market 
Mechanisms in Federal Student Loan Programs, the Study of 
Feasibility of Alternative Financial Instruments for 
Determining Lender Yields, the Student Related Debt Study, the 
Study of Opportunities for Participation in Athletic Programs, 
the Community Scholarship Mobilization program, the 
Incarcerated Youth program, the Improving United States 
Understanding of Science, Engineering, and Technology in East 
Asia program, and the Web-Based Education Commission.
            Extensions of authorizations and studies
    H.R. 609 extends the authorizations for the Transfer of 
Credit study, the Cohort Default Rate study, the Violence 
Against Women program, and the Underground Railroad program.
            Tribally Controlled College or University Assistance Act of 
                    1978; Navajo Community College Act; Education 
                    Amendments of 1992
    The bill reauthorizes the Tribally Controlled College or 
University Assistance Act of 1978 and makes clarifying changes 
to provisions concerning Indian student count and 
accreditation. H.R. 609 reauthorizes the Navajo Community 
College Act and the provisions in the Education Amendments of 
1992.
            Studies and Sense of the Committee
    H.R. 609 authorizes four new studies, including: a Study of 
Student Learning Outcomes and Public Accountability, a Study of 
Minority Graduation Rates, a Study of Education-Related 
Indebtedness of Medical School Graduates, and a Study of Adult 
Learners. The bill also contains a Sense of the Committee on 
Education and the Workforce regarding college textbook prices.

                            Committee Views

    In 1965, the Higher Education Act was established as a 
means to help low- and middle-income students gain access to 
college. The Higher Education Act represented the vision that a 
college education should be available to students from all 
walks of life, from across geographic regions, and from varying 
financial circumstances. The Higher Education Act was not 
created as a new postsecondary infrastructure to support or 
control colleges and universities; the investment was and still 
is primarily targeted to students themselves. The Higher 
Education Act is unique in its focus on providing students with 
a portable funding source that they may use at the institution 
of their choosing, modeling the success that can be achieved 
through authentic educational choice.
    Since its inception four decades ago, the Higher Education 
Act has provided hundreds of billions of dollars to students, 
as well as significant resources to colleges and universities 
themselves. The Higher Education Act is responsible for helping 
generations of American students successfully complete 
postsecondary studies and reap the benefits that come with 
higher education. Yet despite this clear success, the Committee 
believes the Higher Education Act has failed to achieve a 
fundamental goal: lowering the cost of a college education. For 
every increase in Federal student aid, it seems there is a 
larger increase in college tuition. The result is an unending 
spiral of financial confusion that leaves far too many American 
students unable to pursue a college education.
    The Committee believes reauthorization of the Higher 
Education Act is a vital opportunity to reassess the 
effectiveness of the Federal investment in higher education; 
realign our priorities to ensure the focus of the Higher 
Education Act is students; and redefine what it means to hold 
colleges and universities accountable. Policymakers have an 
opportunity--and an obligation--to enact meaningful reforms on 
behalf of American students, families, and taxpayers.
    The College Access and Opportunity Act, H.R. 609, reflects 
four principles for reform that guided the Committee's efforts 
throughout the reauthorization process. Those principles are: 
affordability, accessibility, accountability, and quality.
    The first principle, affordability, cannot be achieved 
through Federal intervention alone. Colleges and universities, 
states and local communities, business interests, and students 
and parents must all work together to develop solutions to the 
affordability crisis in American higher education. However, 
there is a Federal role to play, and to that end, H.R. 609 
seeks to make postsecondary education more affordable through 
two distinct approaches. First, the bill strengthens and 
updates the Federal student aid programs to better reflect the 
current higher education climate. Second, the bill shines a 
spotlight on the college cost issue to empower consumers as 
they make decisions in the college marketplace.
    The second principle, accessibility, also requires input 
and involvement from all higher education stakeholders. While 
affordability is one key to accessibility, the issue of college 
access is not simply a question of cost. To expand college 
access, H.R. 609 includes a multitude of reforms aimed at 
meeting the needs of non-traditional college students. The face 
of the higher education population is changing, and Federal 
programs must be flexible and dynamic in serving the growing 
number of Americans from differing backgrounds pursuing higher 
education. The College Access and Opportunity Act adds new 
flexibility to allow programs and institutions to serve the 
changing needs of their students. The bill embraces advances in 
technology such as distance learning that can open the doors of 
higher education to new segments of the population. The 
Committee also believes college access is not just about 
getting students in the door, but ensuring their persistence 
and success. For that reason, the bill seeks to break down 
barriers to college credit transferability to allow an 
increasingly mobile student population to plan ahead to 
transfer from one institution to another and ultimately 
complete their education.
    The third principle, accountability, is a term that has 
become almost synonymous with education reform in recent years. 
However, accountability has a different connotation in the 
context of higher education than that commonly associated with 
K-12 education reform. In higher education, accountability can 
be best understood as a means for higher education consumers--
students and parents, as well as all American taxpayers--to 
access information. It is often said that knowledge is power, 
and in higher education, the Committee believes that adage 
holds true. By providing consumers with access to information, 
they will be empowered with the knowledge they need to make 
their own best decisions in the college marketplace. The very 
nature of Federal higher education support--primarily a 
portable funding source that students spend at the institution 
of their choosing--demands that accountability will be in 
service to that consumer.
    Finally, the fourth principle, quality, must be understood 
within the realm of the vast diversity of America's higher 
education system. There is no single, standard measure of 
quality that can be applied to all institutions or sectors of 
higher education. Institutions have differing missions. 
Students have differing goals within their postsecondary 
pursuits, and as such, seek differing measures by which they 
may judge quality. For these reasons, the Committee believes 
there cannot be a single Federal measure of quality, but rather 
the Federal government can help facilitate opportunities for 
institutions, students, and the public to make their own 
determinations of what constitutes a quality higher education. 
To that end, H.R. 609 focuses on greater transparency within 
the accreditation process and for the data colleges and 
universities report to the Federal government and made 
available to the public.
    Education beyond high school is becoming increasingly vital 
to the success of individual Americans, and to our society as a 
whole. As the Committee helps shape the future of higher 
education policy, it must bear in mind the vast growth in 
higher education participation that is yet to come. H.R. 609 
will help update America's higher education system to meet the 
challenges of the future, and to ensure the Federal investment 
in higher education continues to be as effective and efficient 
as it can be.
    Historically speaking, and perhaps even more so today, 
Federal involvement in higher education is primarily viewed in 
financial terms. The Committee believes this emphasis on 
funding has both positive and negative implications for 
students and taxpayers. On the positive side, the Committee 
strongly believes that what has made the Higher Education Act 
so effective is that it targets funds directly to students. The 
Higher Education Act is a shining example of how educational 
freedom encourages competition and serves students by allowing 
them to make decisions about what educational opportunity will 
best meet their needs. On the negative side, the Committee 
believes the vast Federal investment has allowed America's 
higher education system to become complacent in its efforts to 
expand service, increase efficiency, hold down costs, and 
increase quality. Some would even argue that the infusion of 
Federal resources has stifled the type of innovation and 
competition that would exist in a more demand-driven system 
that was not so dependent on third-party payments.
    Funding for higher education has indeed gone up 
dramatically in recent years. According to information from the 
College Board in its 2004 Trends in Student Aid report, 
Federally supported student aid programs have increased by 152 
percent in the last decade. This includes increases in Pell 
Grants, Supplemental Educational Opportunity Grants, Federal 
Work Study, support for veterans and other military personnel, 
and student loans. As the cornerstone of the need-based Federal 
student aid programs, the increases in the Pell Grant program 
are striking. Since Republicans gained control of the House of 
Representatives in 1995, total Pell Grant funding has doubled, 
increasing from $6.2 billion to $12.4 billion for fiscal year 
2005 and the maximum Pell Grant award has increased from $2,340 
to $4,050 in that same period.
    The Committee is proud of the financial commitment Congress 
has demonstrated in recent years toward higher education. This 
support will continue. However, the Committee is concerned that 
the value of this investment may be diminished by a lack of 
market discipline, meaningful competition, and consumer 
awareness. As such, the Committee believes that while the 
financial focus of the Higher Education Act is important to its 
success, there is also a need to refocus on the aforementioned 
principles of access, accountability, affordability, and 
quality.

Title I--General provisions

    Through the College Access and Opportunity Act, the 
Committee intends to restore fairness to the Higher Education 
Act in its treatment of students from varying backgrounds 
pursuing the common goal of accessing and succeeding in 
postsecondary education. A college degree is viewed by many as 
the gateway to the American Dream, and the Committee believes 
students should be treated fairly and equitably as they strive 
for their goals. In title I of H.R. 609, the Committee seeks 
to: call upon the higher education community to engage in 
efforts to rein in the dramatic tuition increases that threaten 
college access for low- and middle-income students; ensure fair 
recognition for institutions of higher education and the 
students they serve; protect students' rights and individual 
privacy; recognize the unique circumstances of students 
educated in non-traditional settings such as home schools; 
emphasize the importance of alcohol education; and ensure the 
protection of individual students' personal information.
            College cost
    A college education has long been viewed as a ticket to 
prosperity, the gateway to the American Dream. Today, higher 
education is playing a more vital role than ever in shaping our 
nation's competitiveness. However, America's higher education 
system is in crisis. Decades of uncontrolled cost increases are 
pushing the dream of a college degree further out of reach for 
needy students. The crisis requires a dramatic response. 
According to a 2002 report from the Advisory Committee on 
Student Financial Assistance, cost factors prevent 48 percent 
of college-qualified high school graduates from attending a 
four-year institution, and 22 percent from attending any 
college at all. The statistics are similarly bleak for middle 
income students and families. At this rate, by the end of the 
decade, more than two million college-qualified students will 
be completely denied the opportunity for a postsecondary 
education.
    The Committee believes the college cost explosion is a 
disturbing trend and one that cannot be allowed to continue. 
Education, the great equalizer in our country, can bridge 
social, economic, racial and geographic divides like no other 
force. Parents, students and taxpayers are investing billions 
of dollars in higher education each year, and institutions of 
higher education must be accountable for ensuring that they are 
getting a quality return on that investment.
    For four decades, the Federal government has provided 
significant funding to help ensure that students from low- and 
moderate-income families are not prevented from receiving a 
postsecondary education simply because of financial 
circumstances. It is estimated by the Department of Education 
that this year alone the Federal government is investing more 
than $70 billion in financial aid awarded directly to students 
through grants, Federally-guaranteed loans, work-study 
opportunities, and various other financial assistance programs. 
The Pell Grant program, which is the foundation of need-based 
student aid, has received record support in the past ten years 
under Republican-controlled Congresses. Additionally, total 
program funding has doubled, the maximum Pell Grant award has 
increased significantly, and more students than ever before are 
gaining access to a college education with the help of Pell 
Grants.
    There is no question that the Federal contribution to 
student aid programs has been significant, and has increased 
much more quickly than the rate of inflation in order to keep 
pace with college costs. However, college costs have risen 
dramatically over the past three decades, and even the immense 
Federal contribution has struggled to keep pace with 
skyrocketing tuition increases. On April 19, 2005, the 
Committee held a hearing to examine the issue of ``College 
Access: Is Government Part of the Solution; or Part of the 
Problem?'' During the hearing, members of Congress heard from 
Dr. Richard Vedder, Distinguished Professor of Economics at 
Ohio University:

          There are two sectors of the economy where the 
        federal government involves itself heavily in financing 
        private transactions, namely health care and higher 
        education. It is not a coincidence that these are the 
        two sectors with the greatest amount of price inflation 
        in modern times. When the federal government increases 
        subsidized student loans, gives a Pell Grant, or grants 
        a tuition tax credit, it increases the number of 
        students wishing to attend college at any given tuition 
        fee. Indeed, that is the idea--the federal government 
        wants to provide access to persons who might not 
        otherwise go to college for financial reasons. In 
        short, federal policies increase the demand for 
        education relative to the supply, which pushes prices 
        or tuition fees up.

    The idea of affordability in higher education is not a new 
one, particularly for members of Congress. In 1997, Congress 
established the National Commission on the Cost of Higher 
Education. The Commission was to study the many factors 
surrounding the rising costs of education, including trends 
associated with those increases and all of the factors that go 
into those costs. It was also to examine the extent to which 
increases in institutional financial aid and tuition 
discounting affected tuition increases. In its 1998 report, 
``Straight Talk about College Costs and Prices,'' the 
Commission cautioned:

          Financing a college education is a serious and 
        troublesome matter to the American people. 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.

    While the recommendations of the Commission have been 
available since 1998, little progress has been made toward 
implementing the strategies outlined to help rein in escalating 
college costs. The Committee believes that if the college cost 
crisis is to be resolved, a good faith effort must be made by 
institutions of higher education and the greater higher 
education community to acknowledge the problem and work toward 
solutions. Additionally, it is the Committee's view that 
keeping college affordable will help Federal student aid go 
further for students and families and ensure that more students 
can realize the dream of a higher education. In the 
Commission's 1998 report to Congress, the Commission reported 
that:

          Institutions of higher education, even to most people 
        in the academy, are financially opaque. Academic 
        institutions have made little effort, either on campus 
        or off, to make themselves more transparent, to explain 
        their finances. As a result, there is no readily 
        available information about college costs and prices 
        nor is there a common national reporting standard for 
        either.

    Although tuition and fee increases are clearly a nationwide 
problem affecting students and families in all types of 
institutions and courses of study, it is important to highlight 
success as well as failure. Many institutions of higher 
education, facing the same economic circumstances as the rest 
of the higher education community, have chosen not to rapidly 
increase tuition, and instead explore cost reduction measures, 
find improvements in administrative efficiency, and work toward 
numerous other strategies that seek proactive solutions to keep 
college affordable. During the July 10, 2003 hearing in front 
of the Subcommittee on 21st Century Competitiveness, entitled, 
``Affordability in Higher Education: We Know There's a Problem; 
What's the Solution?,'' Dr. Rolf Wegenke, President of the 
Wisconsin Association of Independent Colleges and Universities 
(WAICU) testified about his association's improvements in cost-
effectiveness, which has become a national model, and stated 
that:

          The WAICU Collaboration Project is a comprehensive 
        initiative to perform all administrative support (back 
        office) functions of Wisconsin's 20 private colleges 
        and universities on a collaborative basis. The 
        objectives are to save money, to improve the quality of 
        services to students, faculty, and staff, and to serve 
        as a national model for controlling college costs. This 
        project moves beyond incrementalism. Never before in 
        history have private colleges and universities 
        considered as extensive a consolidation of functions 
        short of an actual merger. It sends a message to the 
        entire nation that something transformative has taken 
        place.

    The Committee believes that the college cost crisis is 
unlikely to be solved by good intentions alone. Rather, 
solutions will come from an increased awareness, understanding, 
and commitment from the higher education community to not only 
acknowledge the problem but work toward addressing it, and 
broad cooperative efforts from all stakeholders in higher 
education to make a concerted effort to improve the 
affordability of higher education in America.
    The College Affordability Index established in H.R. 609 was 
an outgrowth of the concern over the ever-rising cost of 
postsecondary education. H.R. 609 requires the Secretary to 
ensure data regarding college costs is available in an easily 
understandable and accessible format. The College Affordability 
Index is simply a means to take existing information and 
present it to students and families in a new format that can be 
useful and accessible as they make decisions about what 
institutions of higher education to attend. This index provides 
an apples-to-apples comparison of tuition growth compared to 
the growth in the Consumer Price Index (CPI).
    Colleges and universities are already reporting on their 
increases in tuition and fees. The College Affordability Index 
simply compares that data to a widely-accepted standard for 
measuring inflation, the CPI. The College Affordability Index 
does not determine the quality of education, but it does allow 
students and their families to determine what they can or 
cannot afford when making decisions about what could be their 
largest financial investment. Simply stated, if an institution 
of higher education increases its tuition and fees more than 
two times the CPI for an interval of three years, it warrants 
additional attention.
    The requirements in the bill simply ask that an institution 
of higher education provide additional information to allow for 
a clear and informed decision by consumers. If a student 
decides to attend an institution that increases tuition and 
fees that exceed the College Affordability Index, they do so 
fully aware and educated. It is the Committee's position that 
the Federal government does not currently have the authority to 
dictate tuition and fee rates for institutions of higher 
education. Under H.R. 609, that current practice remains the 
same--the Federal government does not have the ability to set 
tuition and fee rates for colleges and universities. The 
provisions in the bill simply serve as a means by which 
additional information can be provided to students and their 
families so they can make informed and educated decisions about 
their postsecondary education options based on trends in 
college costs.
    H.R. 609 provides needed comprehensive solutions to help 
address college costs. The College Affordability Index infuses 
some accountability and understandability to cost increases, 
but the bill does much more than that. Additionally, the bill 
seeks to proactively assist institutions of higher education to 
find innovative solutions that will keep college affordable and 
creates a College Affordability Demonstration initiative, which 
provides 100 institutions of higher education with the 
opportunity to waive statutory or regulatory provisions that 
could lead the institution to lower costs and operating 
expenses.
    In a time when the cost of higher education continues to 
skyrocket, families have the right to see in a clear and 
uniform manner how much an institution of higher education 
raises its tuition and fees.
            Single definition
    For many non-traditional college students, alternative 
postsecondary education options such as community colleges, 
degree-granting or certificate programs, proprietary schools, 
and distance learning programs provide an important alternative 
gateway to a college education. The College Access and 
Opportunity Act updates legal definitions within the Higher 
Education Act to ensure all eligible institutions are 
recognized fully as institutions of higher education. The 
current dual definition results in a tiered system that implies 
some institutions are less worthy than others, or may not have 
the same standing as part of our nation's higher education 
system when it comes to providing opportunities to students. 
During the June 16, 2004 hearing on, ``H.R. 4283, the College 
Access and Opportunity Act: Are Students at Proprietary 
Institutions Treated Equitably Under Current Law,'' Mr. David 
Moore, Chairman and Chief Executive Officer of Corinthian 
Colleges, Inc., stated:

          A single definition would send an important signal to 
        these students that for-profit institutions represent 
        an equally valid option for the pursuit of their higher 
        education and training. It would say to these students 
        that, if they choose to seek the education, training, 
        and skills that they need to become productive members 
        of the economy at these institutions, they will not be 
        regarded under federal law as second class citizens.

    The Committee believes in simply combining the two current 
institutional definitions into one single, straightforward 
definition of an institution of higher education while ensuring 
funds historically awarded to community colleges and minority 
serving institutions are preserved for these types of 
institutions. Money that is awarded to institutions under title 
III programs, mainly community colleges, and title V programs, 
Hispanic-Serving Institutions (HSIs), would not be available 
for award to for-profit institutions under H.R. 609. The bill 
clarifies that outside of the Higher Education Act, proprietary 
institutions will not automatically gain eligibility for 
program participation, but policymakers will determine on a 
case-by-case basis which sectors are eligible to receive 
Federal funds.
    Reforms such as the single definition of an institution of 
higher education are a priority for the Committee, as they 
create a level playing field for all sectors of higher 
education. Proprietary, or for-profit, institutions of higher 
education have become mainstream players in the world of higher 
education options for students. These institutions have existed 
since the 17th century, providing quick training in many 
professional disciplines. The modern-day proprietary colleges 
began to crop up on the higher education landscape after World 
War II. The expanded Federal role in financing postsecondary 
education through student financial aid, beginning with the 
Higher Education Act of 1972 and the introduction of direct 
grants to students now known as Pell grants, created incentives 
for the entry and expansion of a wide range of proprietary 
schools and expanded opportunities for students to attend 
college.
    Today, there are over 4,500 private for-profit institutions 
educating millions of students in a wide range of occupational 
programs, both degree- and non degree-granting. Most for-profit 
institutions offer degrees previously considered to be the 
domain of traditional colleges and universities. Complex and 
converging forces, including demographic trends, shifts in the 
job market, technological developments, and demands on higher 
education from ongoing reforms and innovations have contributed 
to the growth of the proprietary sector and have created a 
phenomenal demand for higher education providers that the 
traditional sector cannot meet alone.
            Student speech and association rights
    The Committee believes it is critical that students and 
members of the campus community are able to exercise their 
right to speak freely and express their views in organizations 
and events on campus. Therefore, the Committee amended the 
existing Sense of Congress on Student Speech and Association 
Rights to ensure that institutions of higher education are 
protecting these rights for students. These rights include that 
students should be judged solely on their knowledge and 
reasoned answers; that student funds should be used to present 
diverse views at campus events, lectures and programs; that 
institutions should present students with an array of material 
in the instructional setting that include dissenting views; and 
that students should not be unfairly punished because of their 
ideology or political beliefs.
    Further, the Committee recognizes that a good education 
involves free academic inquiry and thought in all fields of 
study. There is evidence to suggest, however, that both faculty 
and students have been harassed or discriminated against 
because of the expression of their personal or professional 
judgments, opinions or beliefs that may be considered 
political, ideological or religious. Sometimes these opinions 
or beliefs may, in fact, be well-researched and intellectually 
informed, but because they are deemed controversial, the 
faculty or students who hold these beliefs may be harassed or 
limited in some way from academic or professional advancement. 
The Committee believes that such discrimination discourages the 
type of intellectual curiosity necessary for a free, democratic 
society to flourish and encourages universities to promote 
intellectual pluralism within the context of the university's 
institutional mission.
            Home-school students
    A growing number of Americans are receiving their 
elementary and secondary education in a non-public, private, or 
non-traditional campus setting. These programs are a valuable 
part of our nation's efforts to prepare its youth for the 
demands of a modern society. For example, the Committee 
recognizes that home schooling is an effective and popular 
means of educating an estimated two million students and is a 
legal educational option available to parents and students in 
all 50 states. Home schools comply with states' compulsory 
attendance laws through specific home school provisions or 
through provisions applying to private schools. Students 
educated in these non-public, private, or non-traditional 
schools acquire four years of academic requirements, generally 
graduate with all the requirements of a college preparatory 
diploma, and have a record of nationally standardized 
achievement scores well above the national average, including 
college admissions tests.
    However, these non-traditional settings frequently do not 
offer a seamless fit with traditional transcript formats and 
admissions standards at institutions of higher education. 
Unfortunately, some state university systems and individual 
colleges and universities have failed to positively address 
this issue, despite clear and specific language in the 1998 
Committee Report on the Higher Education Act reauthorization. 
The Committee understands that some community colleges, 
individual colleges and universities, and state university 
systems continue to require applicants from home school 
settings to submit scores from additional standardized tests in 
lieu of a transcript or diploma from an accredited high school. 
The Committee strongly urges these institutions to take note of 
the changes in this bill that accord the same admissions 
standing for students graduating from a home school setting and 
specifically clarify that these students have satisfied 
secondary education standards.
    The Committee recognizes students graduate from a home 
school setting as high school graduates and recommends that 
institutions of higher education adopt admissions policies and 
practices that reflect this recognition. Given that 
standardized test scores (ACT or SAT) and portfolios provide a 
sound basis for an admission decision regarding these students, 
the Committee recommends that colleges and universities 
consider using these methods for assessing applicants educated 
in home school settings rather than requiring them to undergo 
additional types of testing which could be seen as 
discriminating against these specific students and may have the 
effect of discouraging these students from applying to certain 
institutions, decreasing the diversity of opinions and 
backgrounds that most institutions strive to achieve.
    Accordingly, the Committee believes that in determining 
requirements for admission, an institution of higher education 
that receives Federal funds shall make every effort to evaluate 
and treat applicants from home school settings fairly and in a 
non-discriminatory manner. The Committee further encourages 
institutions and systems of higher education to continue to 
adopt admissions policies that reflect this sense of the 
Committee, and to engage in a dialogue with parents, students 
and other representatives of the home school community 
regarding admissions policies that will best serve the 
educational interests of home school graduates.
            Alcohol and drug abuse
    College and university presidents have cited alcohol 
consumption as a major health problem on college and university 
campuses. According to the National Institute on Alcohol Abuse 
and Alcoholism, two of 5 college students are binge drinkers, 
and 1,700 college students die each year from alcohol-related 
injuries, the vast majority of whom are killed in traffic 
accidents in which the victims or their friends were driving 
drunk or impaired. Department of Education figures indicate 
that between 30 and 40 percent of college and university 
students are below the age of 21, and cannot legally consume 
alcohol.
    Advertising for alcoholic beverages, like all advertising, 
can be seen by underage individuals even though they may not be 
the intended audience. The Congress has urged all colleges and 
universities to adopt policies limiting the advertisement and 
promotion of alcoholic beverages on campus. Although a causal 
link between advertising and youth consumption has not been 
established, it is the opinion of the Committee that ongoing 
efforts are necessary to ensure that alcohol advertising and 
marketing remains directed at adult audiences. This 
recommendation is consistent with existing voluntary 
advertising codes and is not predicated on the argument that 
banning the advertising will, in itself, reduce the prevalence 
and intensity of drinking among underage college students. 
Instead, the objective is to declare and affirm colleges' 
genuine and consistent commitment to a policy of discouraging 
alcohol use among underage students.
    In addition to urging conscientious adherence to voluntary 
advertising codes, the Committee urges all interested parties 
to continue to build upon existing public-private partnerships 
to restrict access to illegal underage individuals, encourage 
the use of designated drivers, and other measures that would 
improve the safety of students, residents of surrounding 
communities, and all citizens using our highways.
            Unit record system prohibition
    The Committee believes that students pursuing higher 
education have an expectation of basic privacy protections, and 
that students should not be forced to relinquish their 
fundamental privacy rights as a condition of attending an 
institution of higher education. Further, the Committee 
disagrees with claims that the only means of assuring 
accountability in higher education is to collect and maintain a 
vast, Federal database of private, personally identifiable 
information about all students enrolled in higher education. 
Accountability is among the core principles identified by the 
Committee to help guide higher education reform, and the 
Committee believes accountability will be achieved by placing 
more information about colleges and universities into the hands 
of students--not by placing information about students into a 
massive new database that could compromise fundamental privacy 
protections.
    The Committee understands that the longitudinal sample 
surveys carried out by the National Center for Education 
Statistics, such as the Baccalaureate and Beyond Study, the 
Beginning Post-Secondary Study, and the National Postsecondary 
Student Aid Survey, involve the voluntary participation of 
samples of students rather than the collection of extensive, 
personally identifiable data on all students, and thus are not 
subject to the prohibition.

Title II--Teacher preparation

    The caliber of teacher education programs has come under 
increased scrutiny over the past several years. Among other 
things, teacher preparation programs have been criticized for 
providing prospective teachers with inadequate time to learn 
subject matter; for teaching a superficial curriculum; and for 
being unduly fragmented, with courses not linked to practice 
teaching and with education faculty isolated from their arts 
and sciences faculty colleagues. In particular, there have been 
concerns about high rates of failure of recent teacher college 
graduates on initial licensing or certification exams. 
According to the Congressional Research Service, one of the 
most publicly reported instances of high failure rates was in 
1998 when 59 percent of prospective teachers in Massachusetts 
failed that State's new certification exam. The results raised 
questions about the quality of the preparation and training 
prospective teachers had received from teacher preparation 
programs at institutions of higher education across the State.
    In January 2002, President Bush signed into law the No 
Child Left Behind Act, the bipartisan education reform package 
that has infused accountability for results into K-12 education 
in America. The No Child Left Behind Act calls for a highly 
qualified teacher in every public school classroom by the end 
of the 2005-2006 school year. In order to be highly qualified, 
a teacher must obtain full State certification, a bachelor's 
degree, and be able to demonstrate a high level of competency 
in all subjects taught (by passing a rigorous State assessment, 
completing an academic major for each subject taught, or 
participating in a State approved review process).
    Title II of H.R. 609 seeks to meet the call of the No Child 
Left Behind Act to place a highly qualified teacher in every 
classroom by making improvements that will help ensure teacher 
training programs are producing well-prepared teachers who meet 
the needs of America's students. H.R. 609 takes the important 
step of aligning teacher training programs under title II of 
the Higher Education Act with the high standards for teacher 
quality found in the bipartisan No Child Left Behind Act. This 
bill will help to ensure that teacher training programs are 
fulfilling their obligation to those seeking to enter the 
teaching profession--an obligation to ensure that teachers are 
well-prepared to teach when they enter the classroom.
    In general, H.R. 609 continues the current law structure of 
title II of the Higher Education Act and authorizes three types 
of competitive grants that each play a unique, yet critical 
role in the education of tomorrow's teachers. Under the Higher 
Education Act, 45 percent of the funds are reserved for State 
grants, which must be used to reform teacher preparation 
requirements and ensure that current and future teachers are 
highly qualified; 45 percent of the funds are reserved for 
partnership grants, which allow effective partners to join 
together, combining strengths and resources to train highly 
qualified teachers to achieve success where it matters most--in 
the classroom; and 10 percent of the funds are reserved for 
teacher recruitment grants, which will help bring high quality 
individuals into teacher programs, and ultimately put more 
highly qualified teachers into classrooms.
            State grants
    H.R. 609 authorizes States to use funds to design (or 
redesign) teacher preparation programs so they are based on 
rigorous academic content, scientifically based research 
(including scientifically based reading research), and 
challenging State academic content standards. As a result, 
States will be able to strengthen teacher preparation programs 
by setting higher standards for what potential teachers need to 
learn as part of their instruction and ensure more teachers 
leave these programs ready to meet the ``highly qualified'' 
definition for teachers established under the No Child Left 
Behind Act.
    On May 20, 2003, the Subcommittee on 21st Century 
Competitiveness held a hearing entitled ``America's Teacher 
Colleges: Are They Making the Grade?'' The purpose of this 
hearing was to discuss whether teacher colleges and other 
teacher preparation programs are producing a high quality 
teaching force. Kati Haycock, Director of the Education Trust, 
testified during the hearing that:

          Discussions of teacher quality are inadequately 
        informed by data regarding what makes the biggest 
        difference in student learning. As the U.S. Government 
        Accountability Office has reported, the U.S. Department 
        of Education has granted almost half a billion dollars 
        ($460 million) in HEA Title II funds but there is no 
        consistent, reliable way to evaluate the effect of 
        these grants on raising student achievement. State 
        Grants should be limited to states that are willing to 
        establish data systems to evaluate the efficacy of 
        teacher training programs and professional development 
        activities on improving teacher effectiveness. 
        Ultimately, states should be in a position to evaluate 
        their success in terms of hard data indicating whether 
        various activities helped raise student achievement.

    Accordingly, H.R. 609 adds a new State grant evaluation 
provision that requires States that accept grants under the Act 
to develop evaluation systems to determine the effectiveness of 
grant activities. Specifically, these new systems will evaluate 
the effectiveness of teacher preparation programs and 
professional development activities within the State in 
producing gains in: (1) the teacher's annual contribution to 
improving student academic achievement, as measured by State 
academic assessments required under section 1111 of the No 
Child Left Behind Act; and (2) teacher mastery of the academic 
subjects they teach, as measured by pre- and post-participation 
tests of teacher knowledge.
    The College Access and Opportunity Act recognizes that 
flexibility should exist in the methods used for training 
highly qualified teachers and allows funds to be used for 
innovative methods in teacher preparation programs, such as 
charter colleges of education and university and local 
educational agency partnership schools, which can provide an 
alternative gateway for teachers to become highly qualified.
    Under H.R. 609, States have the flexibility to set up 
charter colleges of education that function in a manner similar 
to elementary and secondary charter schools except that they 
would prepare highly qualified teachers in a higher education 
setting. These charter colleges of education will exchange 
flexibility in meeting State requirements for institutional 
commitments to produce results-based outcomes for teacher 
education graduates--measured based on increased student 
academic achievement. The Committee is aware of at least three 
institutions of higher education that have created charter 
colleges: the Charter College of Education at California State 
University, Los Angeles, California; the Charter School of 
Education and Human Sciences at Berry College in Mount Berry, 
Georgia; and the Charter Teacher Education Program at Fort 
Valley State University in Fort Valley, Georgia.
    On October, 9, 2002, the Subcommittee on 21st Century 
Competitiveness held a hearing in Washington, D.C. entitled 
``Training Tomorrow's Teachers: Ensuring a Quality 
Postsecondary Education.'' Dr. Allen Mori, Dean of the Charter 
College of Education at California State University, Los 
Angeles, California, testified before the Subcommittee and 
noted that:

          The Charter College of Education is clearly on the 
        cutting edge of high quality teacher preparation in the 
        21st century. Spurred by the Title II requirements to 
        improve teacher education, faculty was determined to 
        build world-class teacher preparation programs to meet 
        the needs of the ethnically and linguistically diverse 
        urban community of the Los Angeles basin. This context 
        is a powerful theme in both the subject matter and 
        teacher preparation curriculum.

    Specifically, the language in H.R. 609 allows States to use 
funds for the planning and implementation of charter colleges 
of education that: (1) permit flexibility in meeting State 
requirements as long as graduates, during their initial years 
in the profession, increase student academic achievement; (2) 
provide long-term data gathered from teachers' performance over 
multiple years in the classroom on the ability to increase 
student academic achievement; (3) ensure high-quality 
preparation of teachers from underrepresented groups; and (4) 
create performance measures that can be used to document the 
effectiveness of innovative methods for preparing highly 
qualified teachers.
    The Committee recognizes that there are other innovative 
approaches to teacher preparation, such as university and local 
educational agency partnership schools, which will support and 
encourage institutions of higher education to establish K-12 
schools of excellence in partnership with local educational 
agencies. These partnership schools will utilize the assets of 
the institution of higher education, the local educational 
agency, and the community in order to introduce new models for 
learning that are founded on research-based practices, rigorous 
academic content, and high standards.
    States can also use their grant funds to provide 
prospective teachers with alternative routes to traditional 
preparation to become highly qualified teachers and achieve 
State certification. Such approaches will help to reduce 
unnecessary barriers to State certification and offer 
alternative routes to State teacher certification for qualified 
individuals, including mid-career professionals from other 
occupations, former military personnel, and recent college 
graduates with records of academic distinction. The Committee 
notes that alternative routes to State certification, as 
opposed to traditional teacher preparation programs 
administered by colleges of education, can streamline the State 
certification process and help to move competent and qualified 
candidates into the classroom in an expeditious manner.
    There are several well-known programs nationwide that 
recruit highly qualified candidates using alternative routes to 
State certification, including the Troops to Teachers program. 
This program provides financial assistance and training to 
retiring military personnel and helps to place them in local 
school districts, thus providing a new source of teachers to 
schools across the country. According to the National Center 
for Education Information, teachers certified through 
alternative routes also bring diversity to the classroom and 
are more apt to take challenging assignments. In particular, 
the Center found that 90 percent of teachers in the Troops to 
Teachers program are male, compared to just 26 percent in the 
overall teaching force and about 30 percent of teachers in the 
program are from a minority or ethnic group, compared to just 
10 percent overall.
    Another popular and successful program associated with 
alternative routes to teaching is Teach for America. This 
nationwide nonprofit organization recruits accomplished college 
graduates without formal backgrounds in education to teach in 
high-need urban and rural schools. Candidates apply to the 
program and, if selected, attend a summer training course 
before being placed in school districts across the country. 
Teach for America and the host school districts provide new 
teachers with support during the two-year program, after which 
some teachers return to graduate school, transfer to other 
professions or continue teaching. Since its inception in 1990, 
Teach for America has placed more than 12,000 talented young 
men and women in some of our nation's most disadvantaged 
schools.
    The Committee also recognizes the potential for an improved 
teaching force through the American Board for Certification of 
Teacher Excellence, which provides a nationally recognized, 
high quality credential to attract the best and the brightest 
into the classroom. This certification has also been recognized 
by the Congress--in section 2151(c)(2) of the Elementary and 
Secondary Education Act of 1965--as one of the nationally 
recognized doorways into the teaching profession. The American 
Board is a rigorous way to open the doors for highly qualified 
candidates--including professionals who may want to enter 
teaching from other fields. Because the rigor of the exam its 
candidates will be required to take, American Board certified 
teachers have to prove that they not only have a mastery of 
their subject matter, but also the professional knowledge to 
become successful and highly qualified teachers. The American 
Board offers two types of teacher certification: a ``Passport 
to Teaching,'' which is available for career changers and 
prospective new teachers and ``Master Certification,'' which is 
targeted toward extraordinary educators who are already in the 
teaching profession and have a demonstrated record of 
accomplishment in improving student academic achievement.
    The Committee notes that the key to producing highly 
qualified teachers is not the path by which they travel, but 
the destination they reach. Teachers trained through innovative 
options, or certified through alternate means, will still be 
held to the same standards of accountability and quality, but 
will not be constrained by artificial requirements that could 
place barriers between high quality individuals and the 
classrooms where they are desperately needed. H.R. 609 takes 
the important step of recognizing that individuals seeking to 
enter the teaching profession often have varied backgrounds--
and by creating flexible approaches that step outside the box, 
these individuals can become highly qualified teachers through 
training programs as unique as their individual experiences.
    H.R. 609 authorizes State grant, partnership grant, and 
teacher recruitment grant programs for the development and 
implementation of mechanisms to assist local educational 
agencies in recruiting and retaining highly qualified teachers. 
The Committee notes that the authorized activities under these 
programs provide significant flexibility for States and 
partnerships to design innovative initiatives to recruit and 
retain highly qualified teachers. The Committee wants to make 
clear that funds under these programs may be used to cover 
moving expenses to secure employment of highly qualified 
teachers and provide other financial assistance necessary to 
purchase a home (including mortgage application fees and 
closing costs). The Committee recognizes this use of grant 
funds as an appropriate way to attract and retain highly 
qualified teachers.
            Partnership grants
    Under H.R. 609, each eligible partnership seeking 
assistance under the Act must include at least: (1) a high 
quality teacher preparation program at an institution of higher 
education; (2) a school of arts and sciences; (3) a high need 
local educational agency; and (4) a public or private 
educational organization. The Committee believes that these 
expanded partnership grants will bring diverse expertise 
together for the common goal of placing highly qualified 
teachers in the classrooms of high need school districts. The 
Committee is requiring participation by a public or private 
educational organization in each partnership because varied 
expertise in areas such as teacher preparation, certification, 
test preparation, and others can bring added dimensions that 
benefit school districts, teachers, and most importantly, 
students. Some public or private educational entities may be 
particularly skilled at working with disadvantaged students and 
can help make teachers more successful in teaching to standards 
with challenging student populations. Other organizations may 
be adept at helping students master concepts critical to their 
achievement on high quality assessments. The Committee supports 
a flexible approach and believes it would be impossible to 
define every valuable service that may be offered by a ``public 
or private educational organization'' to a partnership under 
this program. Limiting the potential participants is a 
disservice to the partnership concept and decreases the ability 
of school districts and teacher preparation programs to make 
local decisions about the best ways to improve teacher quality 
and increase student academic achievement. The Committee also 
notes that public and private educational organizations that 
participate in the partnership should have the capacity to 
offer high quality services that respond to the needs of the 
partnership.
    The College Access and Opportunity Act requires partnership 
grant applicants to describe how faculty of a teacher 
preparation program at an institution of higher education that 
seeks a partnership grant will serve with highly qualified 
teachers in the classroom at partner local educational agencies 
over the term of the grant. The Committee believes this 
increased interaction between teaching faculty and teachers in 
the classroom will provide additional insight into the needs of 
everyday teachers. In addition, H.R. 609 requires that at least 
50 percent of partnership funds be used to ``directly benefit'' 
partner local educational agencies and clarifies that any 
entity under the partnership may be the fiscal agent of such 
partnership. It is the intent of the Committee that partner 
local educational agencies actively participate in the 
application process and support any proposed grant activities 
as described in such partnership applications. Provisions in 
H.R. 609 are designed to ensure that each partner local 
educational agency has the ability to influence grant 
activities and guarantee that partnership activities focus on 
the needs of teachers and students in the classroom.
            Accountability
    While current higher education law contains annual 
reporting requirements, these reporting measures have proven 
ineffective in determining the true quality of teacher 
preparation programs. In fact, under the current law reporting 
requirements (as required under title II of P.L. 105-244, the 
Higher Education Act Amendments of 1998) many States and 
teacher preparation programs have, either intentionally or 
unintentionally, submitted skewed and irrelevant data. Under 
current law, teacher preparation programs at institutions of 
higher education must report the percentage of graduates who 
successfully pass the State certification or licensure 
assessments.
    However, most institutions have simply made completion of 
their program contingent upon passage of these assessments. 
This practice masks the number of students who are not 
adequately prepared by the institution to pass these tests in 
the first place. The Committee is discouraged by this reporting 
loophole that some teacher preparation programs at institutions 
of higher education have used to circumvent current law 
accountability provisions. Accordingly, the College Access and 
Opportunity Act includes improved accountability provisions 
that will strengthen reporting measures and hold teacher 
preparation programs (for both traditional and alternative 
programs) accountable for providing accurate and useful 
information.
    H.R. 609 requires each State that receives funds under the 
Act to annually report to the Secretary (for both traditional 
and alternative teacher preparation programs) on the percentage 
of students who completed at least 50 percent of the 
requirements for teacher preparation programs that go on to 
take and pass the State certification or licensure assessment. 
These State report cards on the quality of teacher preparation 
must also report on the State-determined passing score of that 
assessment and disaggregate and rank each teacher preparation 
program in the State based on such data.
    In addition, each teacher preparation program that enrolls 
students receiving Federal assistance under the Higher 
Education Act must report annually to the State and the general 
public: (1) the pass rate of each student who completed at 
least 50 percent of the requirements for the teacher 
preparation program on the State certification or licensure 
assessment; (2) a comparison of the program's pass rate with 
the average pass rate for other programs in the State; and (3) 
a comparison of the program's average raw score with the 
average raw scores for other programs in the State.
    The Committee directs institutions of higher education and 
other teacher preparation programs that receive grants under 
the College Access and Opportunity Act to report effective data 
on the number of students that have spent a significant amount 
of time in teacher preparation programs (those who have 
completed at least half of the requirements of the teacher 
preparation program) and that have taken and passed State 
certification or licensure assessments. The Committee believes 
that effective reporting of such data will demonstrate which 
teacher preparation programs have added value to program 
participants (enabling such participants to pass State 
certification and licensure assessments) and that these 
improved reporting requirements will make it less likely that 
States will submit misleading data. Clarifying language in H.R. 
609 (which focuses on students who have completed at least 50 
percent of the requirements for a teacher preparation program) 
is specifically designed to eliminate the discrepancy in 
current law with regard to reporting requirements for 
``graduates'' and ``program completers.'' The Committee also 
believes that new data on average raw scores on State 
certification or licensure assessments will help to distinguish 
teacher preparation programs within States that report similar 
pass rate data.
            Centers of Excellence
    The demand for more ethnically and culturally diverse 
highly qualified teachers is critical, especially given the 
significant growth in the numbers of minority K-12 students 
across the country. Opportunities that increase the numbers of 
minority teachers and enhance their training, will support 
broader strategies to enhance instructional opportunities for, 
and can help to eliminate the achievement gaps of, minority 
students. Accordingly, H.R. 609 authorizes grants for the 
creation of Centers of Excellence at high quality minority 
serving institutions. The Committee believes that the Centers 
of Excellence will provide minority serving institutions that 
have a demonstrated record of preparing highly qualified 
teachers with a leadership role in recruiting and preparing 
highly qualified teachers and increase opportunities for 
Americans of all educational, ethnic, economic, and geographic 
backgrounds to become highly qualified teachers.
    In general, the purposes of these Centers are to increase 
teacher recruitment at minority serving institutions and make 
institutional improvements to teacher preparation programs at 
such institutions. Grants are competitively awarded to high 
quality teacher preparation programs (as determined by the 
State) at eligible institutions which include: Historically 
Black Colleges and Universities, Hispanic-Serving Institutions, 
Tribally Controlled Colleges and Universities, Alaska Native-
Serving Institutions, or Native Hawaiian-Serving Institutions.
            Promoting improved early childhood education
    The reforms in H.R. 609 expand opportunities for increasing 
the number of early childhood education programs offered at 
institutions of higher education to prepare high quality pre-
kindergarten teachers. The community college system is an 
important component of a professional development system for 
the early childhood education workforce. The Committee 
encourages States to do everything possible to ensure that a 
lack of articulation between two and four-year institutions 
does not require prospective early childhood education teachers 
to repeat coursework, which lengthens the amount of time it 
takes such teachers to obtain Bachelor's degrees in early 
childhood education and results in higher costs. Under H.R. 
609, States could use funds to provide grants to institutions 
of higher education to implement articulation agreements that 
ensure there is no replication of coursework, and ensure 
students have the opportunity to make a smooth transition from 
an Associate's degree to a Bachelor's degree program in early 
childhood education.
    Evidence suggests that early childhood education programs, 
including Head Start programs, struggle to recruit teachers 
with the language skills to implement research-based 
instructional strategies for limited English proficient 
children. The College Access and Opportunity Act will address 
this issue by improving opportunities for States to recruit 
bilingual early childhood education teachers and to increase 
the number of early childhood education teacher preparation 
programs for bilingual teachers. For example, a state could use 
grant funds to provide financial and academic support for 
bilingual or teachers of limited English proficient students 
seeking to comply with Head Start Bachelor's degree 
requirements.
            Teacher Incentive Fund
    One of the most important goals of the No Child Left Behind 
Act is to ensure that all public school students are taught by 
a highly qualified teacher, with a particular emphasis on 
ensuring that schools with high concentrations of low-income 
students are staffed by fully credentialed teachers that have a 
firm understanding of the subject area content knowledge they 
are imparting to students.
    The Committee is concerned that the manner in which public 
school teachers are generally compensated (paying teachers 
according to a structured scale on the basis of their level of 
education and number of years in the classroom, even though 
neither of these factors is necessarily associated with better 
teaching or higher student achievement) may work against the 
goals in No Child Left Behind.
    H.R. 609 addresses this issue by including language 
authorizing the Teacher Incentive Fund, a competitive grant 
program for State educational agencies, local educational 
agencies, or partnerships that include a non-profit 
organization. These grants would be used to design and 
implement performance based compensation systems that provide 
financial rewards for teachers and principals who demonstrate 
effectiveness in raising student achievement and closing the 
achievement gap, especially in our nation's highest need local 
educational agencies. Grantees will be allowed to determine the 
specifics of what these compensation systems look like as long 
as they are based primarily on gains in student academic 
achievement. A priority for high need local educational 
agencies is also included.
    Grantees will be required to demonstrate a significant 
investment in, and ensure the sustainability of, the 
performance based compensation system funded by the Teacher 
Incentive Fund by committing to pay for an increasing share of 
the total cost of the project, for each year of the grant, with 
State, local, or other non-Federal funds. The Department of 
Education is also required to assess each funded project 
through an outside, independent evaluator, to ensure that 
Federal funds are being used to improve student outcomes.
    The Committee is confident that the Teacher Incentive Fund 
will allow States and local educational agencies, along with 
their non-profit partners, to implement reforms to teacher 
compensation systems that will result in improved learning 
environments and increased academic achievement for our 
nation's neediest students.

Title III--Institutional aid

    Title III of the Higher Education Act provides assistance 
to Historically Black Colleges and Universities (HBCUs) and 
other institutions of higher education that enroll large 
numbers of minority and low-income students. To be eligible for 
funds under title III, institutions must have low educational 
and general expenditures as compared to other similar 
institutions. H.R. 609 makes significant changes to title III, 
designed to expand the activities for which these institutions 
can use Federal funds.
    Republicans have been committed to providing all minority 
serving institutions with the resources necessary to ensure 
students receive a high-quality postsecondary education. There 
is a strong, demonstrated record of increased funding for these 
institutions. HBCUs have received $238.6 million in fiscal year 
2005, which represents a 29 percent increase since President 
George W. Bush took office in 2001. Since Republicans took 
control of the House of Representatives, funding for HBCUs has 
increased by almost 120 percent, from $109 million in fiscal 
year 1995 to $238.6 million in fiscal year 2005.
    Funding for Historically Black Graduate Institutions 
(HBGIs) has increased by nearly 30 percent since President 
George W. Bush took office, from $45 million in fiscal year 
2001 to $58 million in fiscal year 2005. Funding for HBGIs has 
increased by almost 200 percent since Republicans took control 
of the House of Representatives, from $19.6 million in fiscal 
year 1995 to $58 million in fiscal year 2005.
    Funding for Alaska Native and Native Hawaiian-serving 
institutions has increased by nearly 100 percent since 
President George W. Bush took office, from $6 million in fiscal 
year 2001 to $11.9 million in fiscal year 2005. When 
Republicans took control of the House of Representatives, 
Alaska Native and Native Hawaiian-serving institutions were 
receiving no Federal support. In fiscal year 2005, they 
received $11.9 million. Additionally, funding for Tribally 
Controlled Colleges and Universities (TCCUs) has increased by 
almost 60 percent since President George W. Bush took office, 
from $15 million in fiscal year 2001 to $23.8 million in fiscal 
year 2005. When Republicans took control of the House of 
Representatives, TCCUs were not receiving any Federal funding 
support under the Higher Education Act.
    Authorized under title V of the Higher Education Act, 
Hispanic-Serving Institutions (HSIs) have seen an increase in 
funding by 39 percent since President George W. Bush took 
office, from $68.5 million in fiscal year 2001 to $95.1 million 
in fiscal year 2005. Funding for HSIs has increased by nearly 
700 percent since Republicans took control of the House of 
Representatives, from $12 million in fiscal year 1995 to $95.1 
million in fiscal year 2005.
    Under the bill, all institutions under title III are able 
to use funds for the acquisition of real property adjacent to 
the campus of the institution on which to construct classrooms, 
libraries, laboratories and other instructional facilities. 
Additionally, the bill retains the ability for institutions to 
use their funds for construction, maintenance, renovation and 
improvement of instructional facilities. The Committee is 
concerned about the current state of many historically 
significant buildings on campuses that are designated as title 
III institutions. Many of these buildings are not only in need 
of renovation and updating; they are also in need of seismic 
reinforcement and substantial repair. The Committee believes 
that reinforcement and repair of these historical buildings is 
a type of construction, maintenance, renovation and improvement 
and that funds used for this purpose should be permitted by the 
Secretary.
    Additionally, the bill ensures that all minority-serving 
institutions can use funds for the development or improvement 
of facilities for Internet use or other distance learning 
academic instruction capabilities as a way to expand access and 
increase the use of technology in the classroom. The bill also 
equalizes all of the uses of funds for title III institutions. 
One significant addition provides that each type of minority 
serving institution may use no more than 20 percent of their 
grant funds to establish or increase an endowment fund.
            Tribally Controlled College and University Formula
    The Committee believes that Tribally Controlled Colleges 
and Universities (TCCUs) would greatly benefit from a formula 
distribution of the title III development grants program. The 
formula established in H.R. 609 recognizes the needs of these 
unique institutions and the intent of the program. Many TCCUs 
operate on very small budgets and many rely on a patchwork of 
competitive grants for the funds to simply keep their doors 
open to students. These institutions are some of the neediest 
in the nation and as such, they use a significant amount of 
resources to complete competitive applications for funds they 
receive year after year. The pool of eligible applicants for 
TCCU funds is small and is likely to remain below 50 
institutions in the foreseeable future. The Committee believes 
that creating a simplified application process would enable 
these institutions to use their resources to directly serve 
students and improve the infrastructure and academic 
opportunities.
            Historically Black Graduate Institutions (HBGIs)
    The Committee believes that the addition of four 
Historically Black Graduate Institutions (HBGIs) will continue 
provide opportunities for growth in math and science fields 
where African American graduate students are underrepresented. 
It is the Committee's view that the both Master and Doctoral 
degree granting institutions are well-served by HBGI program 
funds. When distributing HBGI funds, there should be no 
distinction made as to which degree the eligible institution 
awards, so long as it is in a math or science related 
discipline in which African American students are 
underrepresented. The Committee also believes that only 
institutions in good standing with their institutional 
accreditor should be eligible for funds in order to best 
utilize the program resources.

Title IV--Student assistance

    Through the Higher Education Act, the Federal government is 
providing more than $70 billion in direct financial aid to 
students in fiscal year 2005 alone. Those funds, provided 
through Pell Grants, student loans, and campus-based and other 
financial aid programs, are meant to help defray the cost of 
college and level the playing field so low- and middle-income 
students can access higher education opportunities like those 
available to higher income students.
    The Federal student aid programs are meant to help offset 
some of the costs of higher education, yet considerable 
evidence exists showing that increases in student aid coincide 
with increases in college costs. As a result, student aid may 
be contributing to the very tuition increases it is intended to 
guard against. There is no simple remedy to this spiral of aid 
and cost increases. However, by gaining awareness of the 
correlation between aid and tuition growth, policymakers can 
have more informed conversations with higher education 
stakeholders as they work together to ensure college access for 
American students.
    If the tuition explosion of the past decade has taught us 
anything, it is that simply pouring more money into the system 
is not a viable solution. To be sure, Federal financial aid is 
a critical component of our nation's higher education system. 
It can help bridge the gap between lower and higher income 
students, and provide even more access to postsecondary 
education and the possibilities it offers. But increased aid 
alone will not result in increased college access if the 
pattern of college cost increases at its current pace.
    American taxpayers are already shouldering a tremendous 
higher education cost burden. In addition to the more than $70 
billion annually in direct Federal student aid, Federal dollars 
support institutional aid, research, and a wide-range of 
programs outside the scope of the Higher Education Act but 
still involving colleges and universities. In addition, a 
significant portion of state revenues are devoted to higher 
education subsidies. And even after all this taxpayer support, 
students and families must also contend with annual tuition and 
fee increases that grow at double-digit rates and squeeze 
family budgets to the breaking point.
    The Committee believes that further investments in student 
aid must be made strategically, bearing in mind that more money 
alone will not result in more access to higher education for 
American students. H.R. 609 demands greater accountability, 
efficiency, and effectiveness from the existing student aid 
programs. The bill continues a long-standing effort to reduce 
red tape, eliminate unnecessary bureaucracy, and examine the 
underlying causes that drive up tuition. By reassessing current 
investments in higher education, the Committee believes the 
reforms contained in H.R. 609 will make better use of the 
massive Federal investment in higher education by expanding 
college access while simultaneously protecting the interests of 
all American taxpayers who are footing the bill.
            FED UP
    The Committee began to lay the groundwork for the College 
Access and Opportunity Act dating back to 2001 with an 
innovative, web-based outreach initiative that was a first-of-
its-kind opportunity for higher education stakeholders across 
the nation to get involved in the reauthorization process. The 
Committee believed the first step in developing meaningful 
reforms was not simply to impose new regulations on top of the 
existing framework, but to identify ways to actually reduce red 
tape and bureaucracy for students, financial aid personnel, and 
colleges and universities. Known as the FED UP project, this 
bipartisan initiative was the first step toward developing a 
more efficient and effective Federal student aid system.
    In that spirit, and in an effort to identify outdated, 
redundant, or overly burdensome provisions in title IV of the 
Higher Education Act and its regulations, the ``Upping the 
Effectiveness of Our Federal Student Aid Programs,'' or ``FED 
UP,'' was developed by 21st Century Competitiveness 
Subcommittee Chairman Howard P. ``Buck'' McKeon (R-CA) and the 
late Representative Patsy Mink (D-HI) in 2001. The project, 
which was launched in May 2001, solicited suggestions from the 
higher education community as to what provisions in the Higher 
Education Act and which regulations should be changed or 
eliminated and why. More than 3,000 responses were received and 
logged from loan professionals, financial aid officers, 
students, higher education associations and concerned citizens. 
The Department of Education completed a negotiated rulemaking 
session based on the proposals submitted through FED UP and 
released new regulations.
    H.R. 609 continues the FED UP project to streamline the 
current student aid regulations. The legislation specifically 
addresses statutory changes that are necessary to relieve some 
of the administrative burdens on students, financial aid 
professionals, student loan providers and institutions of 
higher education, while providing clarification of other 
provisions currently in law. This opportunity to address 
technical and clerical amendments necessary to alleviate 
unnecessary burdens and confusion within the title IV programs 
was supported widely by Members of Congress and all sectors of 
the higher education community. Some of the responses to the 
FED UP process from financial aid professionals include 
comments from student financial aid officers, trade 
associations and college presidents.
    ``FED UP is an example of how government should work,'' 
said David Sheridan, Dean of Enrollment Services at the Stevens 
Institute of Technology in New Jersey.
    ``Your FED UP initiative is a unique, cooperative effort to 
streamline and appropriately target aid to needy students. It 
has been most welcomed by our colleges and universities and we 
hope to see further positive results from your undertaking,'' 
said David Warren, President of the National Association of 
Independent Colleges and Universities (NAICU).
    Jolene Koester, President of the California State 
University at Northridge said, ``I am delighted to participate 
in this effort because I share your belief that the time, 
effort, and especially Federal dollars that are consumed in 
some of these processes could be better applied to more 
productive ends. We very much appreciate the opportunity to 
respond, and thank you for bringing the attention of your 
office to this important issue.''
            Pell Grants
    The Federal Pell Grant program is the single largest source 
of grant aid for postsecondary education attendance funded by 
the Federal government. Congress has appropriated nearly $12.4 
billion in fiscal year 2005 to serve about 5.3 million 
undergraduate students. The annual appropriations process sets 
the maximum award, currently at the historically high level of 
$4,050 for fiscal year 2005. Pell Grants are need-based aid 
intended to be the foundation for all Federal student aid 
awarded to undergraduates. The grants do not have to be repaid 
and are awarded to needy students and families who might not 
otherwise have the opportunity to pursue a college education. 
Although there is no absolute income threshold that determines 
who is eligible and who is ineligible for Pell Grants, 
recipients are primarily low-income.
    Beginning in fiscal year 1973, the Pell Grant program has 
made the dream of college a reality for tens of millions of 
students. Funding for the Pell Grant program has increased 
dramatically over the past three decades, but even these 
significant funding increases have not been able to keep pace 
with the explosion in college costs. Tuition increases at 
institutions across the country have been regularly outpacing 
the rate of inflation by three to four times, and often more. 
The purchasing power of the Pell Grant has been largely 
impacted by the dramatic increase in tuition and fees in all 
sectors of American higher education. Tuition increases, if 
left unchecked, will continue to erode the great strides made 
by Congress in support of the Pell Grant program. That's why 
the issue of college costs must also be included in any 
discussion of higher education accessibility. In conjunction 
with efforts to address the larger issues that impact college 
affordability and accessibility, H.R. 609 includes important 
reforms to strengthen the Pell Grant program and provides 
necessary reforms to ensure that the nation's neediest students 
are able to continue to access a postsecondary education.
    Since Republicans gained control of the House of 
Representatives in 1995, total Pell Grant funding has doubled, 
increasing from $6.2 billion to $12.4 billion for fiscal year 
2005. In President Bush's first term, Pell Grant funding 
increased by $3.6 billion, an increase of more than 40 percent. 
Republicans have also significantly increased the Pell Grant 
maximum award. Since 1995, the Pell Grant maximum award has 
increased by 73 percent, from $2,340 to $4,050. The House of 
Representatives recently approved a spending bill for fiscal 
year 2006 that added more than $1 billion in total funding for 
the Pell Grant program to increase the total appropriation for 
the program to $13.4 billion and increased the maximum award to 
$4,100. This is a major accomplishment, since even incremental 
increases in the Pell Grant maximum award are costly. Budget 
estimates indicate that increasing the maximum award by $100 at 
current maximum award levels costs $420 million. In addition, 
in order to ensure that the Pell Grant program remains on solid 
financial ground, the House of Representatives passed a Labor-
HHS-Education spending bill that pays off the $4.3 billion 
program shortfall and institutes a Pell Grant scoring rule, 
which ensures that the program will not run a deficit in future 
years.
    Increased funding not only leads to increases in the 
maximum award--it also allows the program to serve a greater 
number of disadvantaged students. Since 1995, the number of 
students receiving Pell Grants has increased from 3.6 million 
to 5.3 million--an increase of 1.7 million students, or 47 
percent. In President Bush's first term alone, the number of 
students receiving Pell Grants increased by one million.
    H.R. 609 includes several important reforms to strengthen 
the Pell Grant program and better serve students. The bill 
calls for a maximum award funding authorization of $6,000--a 
responsible and realistic authorization level for the program. 
The increased authorization level, from $5,800, which is the 
current law authorization, to $6,000 was offered by 
Representative Ric Keller (R-FL).
            Pell Grants Plus--Achievement Grants for State Scholars
    H.R. 609 creates the Pell Grants Plus--Achievement Grants 
for State Scholars initiative and provides an additional 
$1,000--over and above the Pell Grant a student is receiving--
for high-achieving, low-income students who participate in the 
State Scholars program, a rigorous, college preparatory high 
school program. The provision has been a part of President 
Bush's budget submission to Congress for the past two years. 
Under this new initiative, students may receive Pell Grants 
Plus in their first and second years of college, providing 
additional aid in the freshman and sophomore years when 
students often struggle to pay for college and may be more 
vulnerable to dropping out. According to the American College 
Testing (ACT) program, ``Students who complete a rigorous 
curriculum--with at least three years of mathematics and 
science, as well as four years of English and social studies, 
and courses in foreign language--are more successful in 
pursuing and completing further education.''
    While this is the first time that merit has been associated 
with the Pell Grant program, the Committee believes that it is 
imperative to get grant funds in the hands of high-achieving, 
low-income students who have great potential to be successful 
in postsecondary education.
            Year-Round Pell Grants
    In order to help needy students who are working to graduate 
quickly, the bill allows for year-round Pell Grants. Currently, 
students may only receive Pell Grants based on the traditional 
two semester academic year. This limits options for students 
studying year-round or on a non-traditional schedule.
    The Committee believes that in the coming decades, many 
states will experience significant increases in postsecondary 
education enrollments. To respond to this challenge, 
institutions must look for new ways to deliver higher education 
and make more effective and efficient use of existing campuses. 
Offering year-round Pell Grants will allow institutions of 
higher education to make better use of current facilities by 
encouraging students to attend college on a year-round basis. 
Students who do this might, for example, complete a two-year 
associates or a four-year bachelor's degree in less time than 
usual. Students may use the new summer Pell Grant eligibility 
to take courses that are overbooked in the regular academic 
year due to rising enrollments, concentrate on certain courses 
that require intensive study, or prepare for difficult or 
preliminary coursework (particularly incoming freshman and 
transfer students).
    The provision of year-round Pell Grants will reduce costs 
to students and move them through their programs more quickly, 
thus allowing institutions to increase enrollments and 
accelerate course completion and graduation for students. 
Equally as important to expedited program completion, the 
provision of year-round Pell Grants reduces the overall cost of 
the Pell Grant program to the taxpayer. Additionally, year-
round Pell Grants reduce the amount of debt that a student may 
have to absorb, if year-round Pell Grants were otherwise not 
available and the student was left to finance his education by 
loans alone during the summer months. Since 1992, the Secretary 
had the option to offer year-round Pell Grants on a ``case-by-
case basis,'' but has never exercised that authority because of 
the concern that it will add to the shortfall in the Pell Grant 
program. Because of the necessity to limit the cost in the 
initial phase of the program, the provision is limited to four-
year degree granting institutions of higher education that have 
a graduation rate of at least 30 percent and two-year degree 
granting institutions of higher education that have a 
graduation rate for one of the last three years that is above 
the average for their sector.
            Tuition sensitivity
    H.R. 609 eliminates the tuition sensitivity provision 
currently in the Higher Education Act, which reduces the annual 
maximum Pell Grant for students attending institutions with 
very low tuition charges. This provision penalizes the lowest 
income students, by reducing their Pell Grant aid, for 
attending very low cost institutions. In fiscal year 2003, the 
year for which the most recent data is available, the tuition 
sensitivity rule impacted 97,600 students whose Pell Grants 
were reduced by an aggregate amount slightly more than $19.9 
million. According to the Congressional Research Service, the 
estimated average loss in Pell Grant assistance for affected 
students was approximately $204 in fiscal year 2003.
    Reduced grants under the tuition sensitivity rule may 
result in some of the neediest students having to borrow 
additional funds to meet their expenses--even at the lowest 
priced institutions. Retaining this provision may serve as an 
incentive for low-cost institutions to increase their tuition. 
The Committee believes that the cost of attendance at 
institutions is high enough, even at institutions with the 
lowest tuition charges, and elimination of the tuition 
sensitivity provision will not result in favoring lower priced 
public institutions over higher priced institutions.
            Pell Grant eligibility
    Current law prohibits a student who is incarcerated in a 
State or Federal penal institution from receiving Federal 
student loans and Pell Grants. However, some State laws allowed 
jurors to confine the worst sexual predators to mental health 
facilities. Offenders in these centers are not called 
``inmates'' but ``residents.'' Therefore, current law permits 
these offenders to qualify for Pell Grants. In the past year 
alone, over 50 sexual predators residing in one mental health 
facility in Florida have received over $200,000 to take college 
courses, paid for by U.S. taxpayer dollars through the Pell 
Grant program. Representative Ric Keller (R-FL) offered an 
amendment to modify the eligibility requirements for Pell 
Grants by ensuring that offenders who remain in custody through 
involuntary civil commitment not be eligible for the awards. 
The Committee believes that this amendment does not thwart 
rehabilitation or education of offenders, but it does address a 
very specific and particularly dangerous group of offenders and 
does not permit Federal funds to be expended to these 
individuals through Pell Grant awards.
            Pell Grant limitation
    Representative Sam Johnson (R-TX) offered an amendment to 
limit the length of time a student may receive a Pell Grant to 
18 semesters or 27 quarters. This amendment returns to the 
original intent of the Higher Education Act while recognizing 
new enrollment trends. Until 1992, a student's eligibility was 
limited to six years. This amendment ensures that this 
reauthorization will refocus grant aid to students who are 
actively pursuing a degree, while at the same time, recognizing 
the growth in part-time attendance. The Committee believes this 
is a reasonable limit that will encourage students to make 
consistent progress toward a degree while protecting the 
American taxpayers' investment in higher education. By basing 
the limit on semesters or quarters rather than years, this 
amendment protects the ability of part-time and non- 
traditional students to pursue a degree over an extended number 
of years.
    Data from the Department of Education shows that only about 
six percent of students who received a Pell Grant in 2004 first 
received their grant in 1996 or earlier. Data also shows that 
less than one percent of students received eight Pell Grants 
over an 11 year span. This data demonstrates that the vast 
majority of students will easily meet this requirement. And the 
few students who might have struggled to comply with this 
timeframe will have new incentives to complete a degree and 
enter the workforce.
            Tax table updates
    In December 2004, the Department of Education published a 
notice of its intent to revise the Federal need analysis 
methodology for the 2005-2006 award year. This action was 
consistent with the Higher Education Act, which since 1992 has 
required periodic updates to the tables used within the need 
analysis formula. In the notice, the Department of Education 
published revised versions of the tables for state and other 
taxes used to determine the Expected Family Contribution of 
students and their families. There has been concern expressed 
that the revisions to the tables may cause some students to 
lose Pell Grant funds, since the data previously used was from 
1988 and reflects State and local taxes that were much higher 
than the tax rates in the current environment. However, it is 
essential for policy makers to use the best information 
available to target those resources to students who need them 
the most.
    The Committee believes that the decision to update the IRS 
tax tables that are used by the Department of Education as part 
of its need analysis methodology for determining students' Pell 
Grant eligibility was the right thing to do to ensure integrity 
in serving students with the greatest need. The Department of 
Education is required under the changes made in the Higher 
Education Act Amendments of 1992, signed into law under the 
Clinton Administration, to use up-to-date information in 
determining students' Pell Grant eligibility. Prior to the 
recent updates, the Department of Education was relying on tax 
data that dated back to 1988. As a consequence, 17-year-old 
tables were still being used nearly two decades after they were 
compiled.
    Updating the tax tables used to determine Pell Grant 
eligibility will not only allow continued increases in the 
number of American students receiving Pell Grants, but it will 
also improve prospects for a future increase in the maximum 
Pell Grant award--the amount of aid available annually to the 
poorest students in America. Support for the tax table updates 
has been voiced throughout the country. In December 2004, the 
Cleveland Plain Dealer reported that, ``In truth, the revision 
was long overdue. Officials had been using tax data more than a 
decade out of date'' and in January 2005, associate provost of 
university enrollment at Northwestern University told the Daily 
Northwestern that ``[The Education Department] should update 
[the tax tables]. If they waited two years from now, the hit 
could be stronger.''
            TRIO novice applicants
    In order to promote competition in the TRIO program and 
allows new programs the opportunity to compete for and receive 
grant funds, H.R. 609 requires the Secretary of Education to 
set aside ten percent of the TRIO funds available for each TRIO 
program competition for quality novice applicants. The current 
TRIO award structure is intended to be competitive, yet in 
practice it virtually guarantees a limited number, if any, new 
programs will receive grants. Under this set-aside, if there 
are not enough quality novice applicants to utilize the ten 
percent set aside, the funds would be returned to the general 
TRIO fund for additional future awards.
    The purpose of the TRIO programs is to ensure that low-
income, first-generation college students and students with 
disabilities are able to access and get additional information 
about postsecondary education opportunities. Ensuring that 
novice applicants can compete for and receive grants only 
serves to expand access to higher education.
    Current law requires the same weight be given to prior 
experience that was given in 1994-1997. Prior experience is 
defined in the regulations to ultimately award a grantee a 
maximum of 15 extra points on their application, putting them 
at a distinct advantage over new grantees who cannot receive 
the prior experience points. The Committee adamantly opposes 
the provision of prior experience points based on historical 
participation over the demonstrated outcomes and achievements 
of the grantee. While the 15 points are not guaranteed for 
prior experience, assuming a previous grant holder meets basic 
requirements, the seasoned grantee will be awarded extra points 
that in some cases make it mathematically impossible for new 
programs to get funded. The Committee believes the best 
programs should be funded and programs that have not met the 
performance criteria are not simply carried by virtue of 
previously having a grant. While some previously funded 
programs are not automatically renewed, they do have a 
substantial advantage. The Committee believes in retaining 
prior experience as a consideration, but questions the current 
15 point process as less than two percent of previous grants 
were not renewed.
    The novice applicant proposal retains the current prior 
experience provision which, with little if any impact on 
current grantees, will ensure novice applicants are provided a 
clear opportunity to compete with their peers for awards that 
ultimately serve students.
            TRIO accountability
    While many TRIO grantees provide quality services, an 
evaluation of three programs--Upward Bound, Talent Search, and 
Student Support Services--conducted by the Office of Management 
and Budget (OMB) calls into question the overall impact of 
certain TRIO programs. Additionally, the current grantee 
selection process, although competitive, heavily favors current 
TRIO providers, making it difficult for even the most qualified 
novice applicants to receive a grant.
    Since 1990, TRIO appropriations have more than tripled from 
$241.8 million to $836.5 million in fiscal year 2005. The 
Committee takes seriously its responsibility to ensure that the 
near $837 million taxpayers spend annually for TRIO programs 
are meeting the expectation that TRIO is improving college 
entrance and retention rates for low-income and first 
generation college students. Current law does not require 
recipients of these funds to demonstrate results in achieving 
the programs' stated purpose and the Committee supports reforms 
to ensure that the most qualified applicants are awarded grants 
to operate TRIO programs, and new applicants have a greater 
opportunity to participate.
    Among the TRIO reforms included in H.R. 609 is an amendment 
offered by Representative Virginia Foxx (R-NC) to strengthen 
TRIO accountability, transparency, and the quality of TRIO 
services available to eligible students by establishing program 
performance measures and enhancing grantee reporting 
requirements. Improved data collection and the use of program 
measures will allow grant recipients to quantitatively evaluate 
their success at meeting the program's objective, while helping 
the Department of Education identify areas needing program 
improvement so that resources can be effectively targeted.
    Evidence shows that greater competition fosters continuous 
program improvement. In many cases, year after year the same 
TRIO providers receive the bulk of the funds, even when there 
is little or no evidence of results. The performance-based 
grant selection process created by Representative Foxx will 
ensure that the most qualified applicants receive grants. The 
amendment will allow high-quality grantees to continue 
operating TRIO programs in their communities, while providing 
the Secretary clear authority to replace grantees that are not 
meeting performance goals. Under H.R. 609, current TRIO 
providers that do not meet performance goals will not receive 
priority consideration during the next grant cycle yet may 
still compete for a subsequent TRIO award. In the view of this 
Committee, programs that cannot demonstrate reasonable program 
outcomes must not be given a free pass to continue receiving 
taxpayer funds.
    President George W. Bush has made competition for the 
provision of government services a priority of his 
Administration. This is good policy because when competition 
increases, the consumer generally benefits. A requirement that 
current TRIO grantees demonstrate success before subsequent 
grants are awarded promotes basic fairness and encourages 
enhanced program performance. With millions of dollars awarded 
each year in Federal TRIO grants, the need for efficiency and 
accountability is significant.
    The Committee recognizes that the primary principles of 
government contracting and grant-making should be to purchase 
the best product, provide the best service, and fund the best 
operations at the best price for the American taxpayer. The 
TRIO programs should not depart from these basic principles.
            TRIO for veterans
    The Committee bill also resolves an issue important to 
veterans who are being served by the Upward Bound TRIO program. 
The bill authorizes the use of Upward Bound funding for Math 
and Science programs for veterans. In taking this action, the 
Committee recognizes that from 1991 through 2004, the 
Department of Education successfully funded Veterans Upward 
Bound Math Science programs at both Humboldt State University 
and Montana State University. In 2004, the Department of 
Education unilaterally decided to discontinue these grants 
after 13 years despite the fact that one of the grantees has 
successfully won the competition to operate its Veterans Upward 
Bound Math Science program and was completing the first year in 
a multi-year grant. The Committee action specifically provides 
the legislative authority to fund such programs, and the 
Committee expects the Secretary to reinstate these programs for 
the duration of the grant cycle. The Committee further expects 
the Secretary to honor the terms under which the grants were 
originally awarded including funding level, number of students 
to be served, recruitment criteria, provision of room and 
board, and the ability to offer veterans the opportunity to 
earn math and science credit.
            General TRIO provisions
    In return, the Committee expects the grantees to comply 
with all applicable accountability measures and new program 
outcomes that are part of the legislation. Further, the 
Committees intends for the programs to continue on a 
competitive basis for the duration of the authorization period. 
In taking this action, the Committee believes such efforts will 
ensure that these important outreach initiatives will continue 
to be offered to veterans across the country, as they return 
from service, to better prepare them to pursue a postsecondary 
education and gain the skills they need to be successful in 
today's economy while complying with new accountability 
standards and program outcome measures.
    The bill also provides some important technical changes in 
the TRIO program. The Department of Education has adopted 
regulations within the Student Support Services program that 
narrowly define additional campuses. This definition thwarts an 
institution's ability to apply for grants to serve diverse 
groups of disadvantaged students at various campuses. H.R. 609 
provides clarification for institutions with multiple campuses 
serving different populations by defining the terms ``multiple 
campuses'' and ``different populations.''
            Robert C. Byrd Mathematics and Science Honors Scholarship 
                    Program
    Over the past several years the Committee has heard from 
multiple witnesses that our nation's competitiveness depends on 
the quality of our science, technology, engineering and 
mathematics related workforce. Careers in these disciplines 
support the United States in maintaining its leadership in 
innovation and in ensuring that we can solve challenging 
problems such as designing new technologies, protecting our 
nation, and maintaining a strong economy. Therefore, the 
Committee is discouraged that America's high school students 
are struggling to keep up with their industrialized-world peers 
in the fields of mathematics and science and believes that 
Congress must do more to encourage our young people to pursue 
careers in these fields, which will not only benefit their 
future, but the future of our country.
    Accordingly, H.R. 609 includes a comprehensive proposal to 
help strengthen American competitiveness by increasing 
opportunities for students to study mathematics, science, and 
related fields. H.R. 609 builds on the framework of existing 
Federal higher education investments to better reflect the 
national priority of increasing the number of American students 
studying advanced science and mathematics. H.R. 609 updates the 
Robert C. Byrd Honors Scholarship program to authorize grants 
for mathematics and science scholarships, loan interest 
repayment, and state education coordinating councils.
    The College Access and Opportunity Act of 2005 includes 
three distinct approaches to increase mathematics and science 
opportunities for students. First, the bill authorizes 
mathematics and science honors scholarships to encourage 
students to pursue a baccalaureate, masters, or doctoral degree 
in physical, life, or computer sciences, mathematics, and 
engineering. This idea, generated from testimony provided by 
Mr. Norm Augustine during the hearing, ``Challenges to American 
Competitiveness in Math and Science,'' is intended to provide 
an incentive for more students to persist in studies in the 
math and science disciplines. Mr. Augustine's testimony pointed 
out that in the mathematics field, current trends indicate that 
of 3,500 ninth graders interested in math, only 300 of those 
students will qualify as freshmen to pursue a degree in 
mathematics. Of the 300 students, only 10 will receive a 
bachelor's degree and only one will finish at the Ph.D. level.
    Second, H.R. 609 authorizes the Secretary to pay up to 
$5,000 in student loan interest for individuals who have 
obtained degrees in science or mathematics and serve as 
teachers or other professionals in related fields. The loan 
forgiveness also provides an incentive for students to enter 
into the math and science fields. In addition, this incentive 
attempts to maintain people in the math and science fields by 
requiring that anyone receiving this forgiveness must work in a 
math or science related field for at least five years. Finally, 
the College Access and Opportunity Act of 2005 authorizes the 
Secretary to award grants to states for Mathematics and Science 
Education Coordinating Councils that would be composed of 
education, business, and community leaders within the state. 
These Councils would work together to implement state-based 
reform agendas that support the continuing improvement of 
mathematics and science education and will help to support 
activities that lead to better teacher recruitment and training 
and increased student academic achievement in math and science.
    The Committee recognizes that Federal, State, and local 
mathematics and science programs are broadening their 
perspective to include science, technology, engineering and 
mathematics education, commonly referred to as ``STEM'' 
education. With respect to coordinating councils under this 
subpart, it is the Committee's intent that the Mathematics and 
Science Coordinating Councils include STEM within its purview 
of State activities. It is also the Committee's intent that 
funds can be used for recruitment and training of science, 
technology, engineering and mathematics teachers, and to 
support increased student achievement in science, technology, 
engineering and mathematics.
            Stafford Loan programs
    The Federal student loan system is comprised of two 
separate student loan programs--the Federal Family Education 
Loan (FFEL) program and the Direct Loan (DL) program. In the 
FFEL program, private lenders partnering with the government 
disburse the capital. Borrowers then deal with their private 
lender as the loan moves through its life cycle. Lenders can be 
banks, stand-alone student loan companies or non-profit 
agencies. Guaranty agencies work with the lenders and the 
borrowers to ensure that the borrowers stay out of default and 
administer the Federal guarantee to the lenders if the borrower 
does default on the loan. All government partners in the FFEL 
program work to provide borrowers with customer service and 
financial education with the goal of avoiding borrower 
defaults. Secondary markets, which are generally non-profit 
state agencies/organizations that act as lenders, purchase 
loans from other lenders to free up capital and also originate 
their own loans, often offering significant cuts to the 
borrower interest rate or favorable repayment terms.
    The main difference between the FFEL program and the DL 
program is that in the DL program, the capital is disbursed 
directly from the Federal Treasury, via the Department of 
Education, to the schools on behalf of the student. Borrowers 
then deal with the Department of Education and its contractors 
for customer service.
    Over the years, the two programs have competed against each 
other and the participants in the FFEL program competed against 
themselves. This competition has dramatically improved the 
level of service being offered in both programs. In addition, 
because the two student loan programs were created at different 
times, the borrower benefit offerings in the programs differ. 
H.R. 609 took steps toward equalizing the two student loan 
programs to ensure that borrowers did not have different 
benefits in one program over the other program.
    The Committee entered into this reauthorization with the 
goal of making it easier for America's young people access and 
persist in completing some form of higher education. A primary 
effort has been made to reevaluate the current investment and 
determine whether program priorities are in need of 
realignment. The Committee specifically identified the pressing 
need to address the explosion in subsidies directed to college 
graduates; the dramatic growth in the cost of the consolidation 
loan program, for example, poses a very real threat to the 
ability of Congress to direct future aid increases to low- and 
middle-income students who have not yet had the opportunity to 
pursue a college education. The Committee has developed a 
reasonable, sustainable loan structure that will continue to 
serve college graduates working to repay their loans while 
refocusing the primary investment on current and future 
students. The Committee has met these goals by passing a number 
of reforms to both the FFEL program and the DL program that 
will increase loan limits, significantly decrease fees paid by 
borrowers and better align the borrower benefits offered in the 
FFEL and DL programs. The Committee offers these additional 
benefits to borrowers by common sense reforms that curb the 
excess funds being spent unwisely in the student loan programs. 
The reforms included in H.R. 609 will better equalize the 
Stafford loan programs and also put both programs on a more 
solid financial foundation that will allow the program to 
operate efficiently for years into the future.
            Borrower benefits
    The Federal student loan programs offer unparalleled 
borrower benefits. Students are able to access Federally 
guaranteed loans at below-market interest rates without 
collateral or credit checks. Lower income borrowers who qualify 
for the Subsidized Stafford Loan program are not charged 
interest on their loans while in school, in their six month 
grace period following graduation, or in periods of loan 
deferment. Borrowers can access a variety of repayment options, 
and the already low fees in the programs are lowered even 
further under H.R. 609. However, the Committee believes 
inequities between the FFEL and DL programs must be corrected 
so that all student loan borrowers, regardless of which loan 
program their school has chosen, have access to the same level 
of borrower benefits.
    In the area of loan fees, the Committee believes the 
current fee structure is unnecessarily complex, and unevenly 
applied to borrowers. For example, under current law, the fees 
paid by the borrowers can vary lender by lender or between 
student loan programs. The Higher Education Act requires that 
the Secretary charge a four percent origination fee for loans 
originated in the DL program and lenders charge a three percent 
origination fee in the FFEL program, plus an optional one 
percent fee to be charged by guarantors. Thus, under a strict 
reading of the law, borrowers in both programs are to be 
charged a total of four percent in fees upon origination of 
their Federal student loans. Congress originally added these 
fees as a temporary cost saving measure during the Omnibus 
Budget Reconciliation Act of 1981. These fees were never 
intended to be a permanent addition to the Higher Education 
Act.
    Since that time, a number of changes have been made to the 
origination fees charged on Federal student loans. In the DL 
program, beginning under the Clinton Administration, the 
Department of Education interpreted the origination fee 
provision to permit DL to only charge a three percent fee. This 
practice has continued. The program then further discounts the 
origination fee by offering an up-front rebate of 1.5 percent 
of the loan principal purported to be a repayment incentive. 
When a borrower enters repayment, if the borrower does not make 
12 on-time payments, the fee is capitalized back onto the 
principal of the loan. Only about 19 percent of students in the 
DL program are actually able to meet the 12 on-time payments 
requirement. In practice, this policy results in some DL 
borrowers paying a 1.5 percent fee and others paying a three 
percent fee.
    In the FFEL program, the government must receive a three 
percent origination fee on loans, but the statute is not 
specific as to who pays that fee--lenders or borrowers. Thus, 
similar to the uneven borrower treatment in DL, some borrowers 
in the FFEL program will pay the full three percent fee, while 
others pay a discounted origination fee because some or all of 
the fee will be paid by the lender on the borrower's behalf. 
The FFEL borrower also may pay a fee of one percent of the loan 
to the guaranty agency to be deposited into the guarantor's 
Federal Reserve fund; however, guaranty agencies currently have 
the authority to waive charging this fee to the student. The 
funds deposited into the Federal Reserve fund are property of 
the Federal government, and the Committee believes it is unwise 
public policy for Congress to grant guaranty agencies the 
authority to waive collection of the Federal dollars, thereby 
endangering the fiscal health of the agency and weakening the 
overall strength of the FFEL program. The guaranty fee has 
always been included in the structure of the Higher Education 
Act and unlike origination fees, was never thought to be a 
temporary measure.
    H.R. 609 provides for a multi-step process by which total 
loan fees will be reduced for all borrowers while the future 
fiscal health of the loan programs will be improved. H.R. 609 
mandates that borrowers pay the existing one percent fee 
charged by guaranty agencies, renamed the Federal default fee, 
to ensure the long-term viability of the loan guaranty 
structure. At the same time, H.R. 609 phases out the temporary 
origination fees in the FFEL program, and phases total DL fees 
to one percent, concurrently eliminating the complex and uneven 
practice of rebating fees prior to repayment. Taken together, 
this will result in both FFEL and DL borrowers paying a total 
of just one percent in loan fees, a 75 percent reduction from 
the four percent fees under existing law. This simplified 
structure will ensure borrowers in both programs are treated 
equally and increase the amount of money a borrower actually 
receives to help pay for his education. Borrowers will pay a 
small fee (one percent) for the benefit of a consumer loan 
capped at a fiscally responsible 8.25 percent that includes a 
number of benefits that will assist students as they work to 
complete their education, allow borrowers to pay back their 
loans in a timely fashion and assist struggling borrowers to 
develop repayment options.
            Loan limits
    To encourage responsible borrowing habits, prevent 
excessive student loan debt, and protect taxpayers against loan 
defaults, the Higher Education Act provides for annual and 
aggregate loan limits. As the Committee developed its higher 
education reform package, there was considerable debate between 
those who sought significantly higher loan limits, and those 
who believed loan limits should remain at their current levels, 
or even be reduced for some borrowers.
    At the heart of this debate is the question of whether 
higher loan limits will do more to expand college access or 
simply expand student debt. According to the College Board, the 
cost of attendance at a public four-year institution has risen 
28 percent over the past 10 years. However, loan limits for 
first year students have not increased significantly since 
1986. As a result, many would argue that loan limits should be 
increased to keep pace with the explosion in tuition. Groups 
such as the American Council on Education (ACE), Association of 
American Universities (AAU), College Parents of America, 
Consumer Bankers Association (CBA), Education Finance Council 
(EFC), National Association on Independent Colleges and 
Universities (NAICU), National Association of State 
Universities and Land Grant Colleges (NASULGC), National 
Association of Student Financial Aid Administrators (NASFAA), 
National Council of Higher Education Loan Programs (NCHELP) and 
Sallie Mae all spoke out in favor of increased loan limits for 
students. As the cost of attending college rapidly increases, 
students and families are relying more and more on student 
loans to assist them in pursuing their education. At the same 
time, the level of student debt continues to rise as well. The 
average Stafford loan debt level for a student graduating in 
1995-1996 was $10,471; this figure rose to $15,862 for those 
graduating in 2003-04. The Committee believes reasonable 
concern should be given to ensure the Federal government is not 
contributing to unmanageable debt burdens by providing 
irresponsible loan limits. The Committee believes that the 
Federal government should do its part to ensure that borrowers 
have access to affordable loans through the Stafford loan 
program. If students complete their first and second years, 
they are more likely to continue on through graduation. In 
increasing the loan limits for these students, the Committee 
believes students will be better equipped to enter into and 
graduate from college. H.R. 609 provides reasonable increases 
in annual maximum loan limits for first and second year 
undergraduate students from $2,625 to $3,500 and $3,500 to 
$4,500, respectively, but does not increase the aggregate limit 
of $23,000. Similarly, H.R. 609 increases the annual maximum 
graduate loan limits from $10,000 to $12,000 but does not 
increase the aggregate loan limit.
            Interest rates
    Throughout the four decade history of the Federal student 
loan program, one of the most contentious issues has been that 
of the interest rate charged to borrowers. The Federal 
government has implemented a variety of fixed interest rates, 
only to be forced to revisit those rates when the inevitable 
occurs and the rate becomes out of sync with market conditions. 
The Committee believes it is of paramount importance that the 
student loan programs be placed on a solid financial foundation 
based in sound economic principles. As such, the Committee 
believes a variable interest rate that fluctuates with the 
market offers a viable, long-term solution to the interest rate 
question.
    Under current law, the Stafford loan program is provided to 
borrowers on a variable interest rate pegged to the 91-day 
Treasury bill. The rate is adjusted annually, and a discount is 
provided to borrowers in school, in a grace period, or in 
deferment. However, that variable rate structure is scheduled 
to be replaced by a fixed, 6.8 percent interest rate for all 
borrowers beginning on July 1, 2006. Without Congressional 
action, all future Stafford loan borrowers would pay a static 
6.8 percent interest rate regardless of market conditions.
    Over the past several years, interest rates have fallen 
dramatically, and the variable rate structure of the student 
loan programs has allowed for students to benefit tremendously 
from these circumstances. In fact, interest rates have hit an 
all-time low in recent years for the student loan programs, 
residing at 3.37 percent last year. Even as interest rates rose 
somewhat in July 2005 to 4.7 percent for students in school and 
5.3 percent for borrowers in repayment, the rates have not 
risen to the level set to take effect on July 1, 2006, which 
would lock borrowers in with no opportunity to benefit from 
changes in the economic climate. Prior to the introduction of 
the variable interest rate in 1992, Congress made a number of 
failed attempts at predicting future economic conditions by 
setting fixed interest rates ranging from six percent to up to 
10 percent over time. The Committee believes the history of the 
loan programs demonstrate clearly that a fixed rate is 
unsustainable because it prevents borrowers from taking 
advantage of fluctuations in the market. However, the variable 
rate currently in place--and included in H.R. 609--offers 
borrowers dual benefits. It allows borrowers access to low 
rates when they are made available, and it protects borrowers 
from excessive rate increases through an interest rate cap of 
8.25 percent. H.R. 609 eliminates the switch to a fixed 
interest rate on July 1, 2006 and keeps the interest rates set 
on a variable rate formula. In the past, every reauthorization 
period resulted in Congress adjusting the interest rates to 
match the current economic environment. By maintaining a 
variable interest rate with a reasonable cap of 8.25 percent, 
H.R. 609 ensures that students are able to take advantage of 
low interest rates when rates decline and are protected by a 
fiscally responsible and reasonable cap should interest rates 
rise. The 8.25 percent cap also protects the taxpayers' 
liability in the program.
    Considerable debate during the reauthorization also 
surrounded the issue of interest rates for the consolidation 
loan program. The consolidation loan program was originally 
intended to assist two groups of borrowers: first, borrowers 
with multiple lenders who wanted to consolidate their debt in 
order to make just one student loan payment per month, and 
second, those borrowers who had so much debt that they needed 
to stretch out their repayment term to lower their monthly 
payments. Congress never intended the consolidation loan 
program to be a refinancing tool. In fact, when the 
consolidation loan program was created in 1986, borrowers paid 
the greater of the weighted average of the underlying loans 
rounded up to the nearest whole percent, or 9 percent. That 
means borrowers paid a minimum interest rate of 9 percent. 
Given this historical perspective, it is clear that the 
consolidation loan program was not created as a refinancing 
tool to secure interest rates like those seen in recent years, 
and the explosion in consolidation loan subsidies have been an 
unintended consequence that must be addressed to ensure the 
future health and viability of the loan programs.
    As interest rates began to decline in recent years, a 
period most argued was not predicted, nor would last, a record 
number of borrowers have consolidated their loans not 
necessarily because they needed the intended benefits of the 
program, but because of abnormally low interest rates and the 
unintended disparity between the consolidation program and the 
underlying Stafford program. Under current law, Stafford loans 
are variable interest rate loans, and consolidation loans are 
fixed interest rate loans. By consolidating a loan under these 
conditions, a borrower was able to lock in a long term fixed 
rate based on the rates of their underlying loans. In fact, 
consolidation loan volume is now very close to Stafford loan 
volume. In the 2004-05 academic year there were $55.225 billion 
in Stafford loans disbursed and $55.272 billion in 
consolidation loans disbursed. Just five years ago, during the 
1999-2000 academic year, there were $32.110 billion in Stafford 
loans disbursed and only $10.217 billion in consolidation loans 
disbursed.
    The Committee held a hearing last year entitled, ``Fiscal 
Responsibility and Federal Consolidation Loans: Examining Cost 
Implications for Taxpayers, Students, and Borrowers,'' during 
which Mr. Robert Shapiro, Chairman of Sonecon, LLP and a Senior 
Fellow with the Brookings Institution and Progressive Policy 
Institute, testified about the long term budgetary impacts of 
the consolidation loan program. In his testimony, Mr. Shapiro 
stated:

          If interest rates move in the most likely way, 
        taxpayers will pay private consolidators almost $14 
        billion to subsidize the interest on the current stock 
        of fixed-rate consolidated student loans over the 
        lifetime of those loans. Moreover, there is a 
        reasonable likelihood that the costs will be much 
        higher over the lifetime of these loans, if interest 
        rates are 2 to 3 percentage points higher than 
        projected, taxpayers will pay private consolidators 
        more than $48 billion to service the current stock of 
        loans.

    In addition, the independent Government Accountability 
Office pointed out the problem as well in its report, ``As 
Federal Costs of Loan Consolidation Rise, Other Options Should 
Be Examined,'' which pointed out that the record low interest 
rates and the record high consolidation loan volume has led to 
increased administrative costs and subsidy costs in the student 
loan programs.
    While the Committee acknowledges that in the last few 
years, the fixed rate structure of the consolidation loan 
program has been advantageous to some borrowers, it is also 
clear that sound public policy cannot be based on a snapshot of 
a few years of unsustainably low interest rates. In making 
long-term policy, the Committee sought information on long-term 
trends to see how borrowers and taxpayers would be best served. 
In that vein, the independent Congressional Research Service 
(CRS) issued a report in 2004 that demonstrated that variable 
interest rate consolidation loans would have, more often than 
not, been cheaper for borrowers. The CRS analysis showed that 
in 13 of the last 18 years--since 1986, the first year of the 
consolidation loan program--borrowers would actually have been 
better off had their consolidation loans been available under a 
variable interest rate. If borrowers had extended repayment of 
their consolidation loans to 20 years, the analysis showed 
borrowers would have paid less interest in 14 of the last 18 
years. This analysis demonstrates that over time, variable 
rates are actually beneficial to borrowers by offering the dual 
benefits of market fluctuation and an interest rate cap.
    H.R. 609 also takes precedent setting steps in offering 
borrowers new options in the consolidation loan program. For 
the first time ever, a borrower whose loans are held with one 
lender will be permitted to shop around with other lenders for 
the best deal on a consolidation loan. In addition, when the 
borrower consolidates, for the first time ever, the borrower 
will be able to choose between a fixed interest rate loan and a 
variable interest rate loan. The variable interest rate will be 
based on the same fiscally prudent formula that sets the 
Stafford loans, the 91-day Treasury bill + 2.3 percent. The 
fixed interest rate will be based off of the 91-day Treasury 
bill + 3.3 percent with a one time 0.50 percent fixed rate 
offset fee. These formulas permit borrowers to obtain 
exceptionally good interest rates (both options maintain the 
cap at 8.25 percent), but require that a borrower bear a 
greater share of the costs and risks associated with the 
benefits of up to a 30-year repayment schedule at a low fixed 
interest rate.
            Direct Loans versus Federal Family Education Loans
    Ever since the inception of the Direct Loan program in 
1993, there has been confusion and debate as to which program 
is better, costs less, and whether the two should coexist at 
all. The Committee continues to be concerned about the 
budgetary scoring of the Direct Loan (DL) program and the 
Federal Family Education Loan (FFEL) program. Our concerns echo 
those expressed in the fiscal year 2006 conference budget 
resolution adopted earlier this year by Congress. The 
resolution includes the following report language concerning 
the budgetary scoring of the student loan programs:

          Although the Congress strongly supports the Federal 
        student loan programs, it is increasingly concerned 
        that the subsidy estimates for the Ford Direct Loan 
        Program do not reflect the program's true cost to the 
        Federal Government. For example, the President's 2006 
        budget reveals that although the program was expected 
        to result in a net savings of $2 billion from its 
        inception through fiscal year 2004, the actual 
        experience is that the program resulted in a net cost 
        to taxpayers of $3 billion over the same period. This 
        represents a $5-billion underestimate of the program's 
        actual cost to taxpayers over roughly 10 years. 
        Accordingly, the Congress supports the administration's 
        continuing efforts to direct the Department of 
        Education to refine and improve its cost estimating 
        techniques for this program.
          The Congress believes it is important for estimates 
        to be corrected for all known deficiencies so that the 
        decision makers have sufficient information to compare 
        the cost to taxpayers of competing policy options, and 
        large-scale structural reform proposals, in the student 
        loan programs.

    Due to the concerns the Committee had about the costs of 
the two programs and because the Committee believes the 
competition between the two programs has been beneficial to all 
colleges and universities, the Committee made a decision to 
allow the market to decide in allowing the competition, which 
has been beneficial both to the programs, students, and 
institutions, to continue. That competition resulted in better 
customer service and borrower benefits in the FFEL program and 
has resulted in some increased accountability in the DL program 
by the Department of Education. Earlier in this Congress, the 
Committee on Government Reform held a hearing entitled, 
``Federal Student Loan Programs Are They Meeting the Needs of 
Students and Schools?'' with the purpose of exploring the 
differences between the two student loan programs as it relates 
to the services the programs provide schools and students. 
During this hearing, the Director of Student Financial Aid at 
The Ohio State University, the country's largest DL 
institution, Ms. Natala Hart, spoke about the benefits of the 
competition between the two student loan programs. She stated:

          We at Ohio State believe both FFELP and DL working 
        together have resulted in the most effective and 
        efficient improvements in the financial aid system. 
        While we remain steadfastly a DL school, we encourage 
        continuation of FFELP as well as DL, as competition 
        makes both programs more receptive to students' needs.

    At that same hearing, Ms. Cynthia Thorton, Director of 
Financial Aid at Dillard University also testified. Her 
testimony focused around the problems her university 
experienced with the DL program and why they switched back into 
the FFEL program. Dillard University joined the DL program in 
1996 and left the program in 2003 after experiencing continued 
problems with reconciliation of accounts. She stated:

          Dillard University entered the FDLP in 1996, after 
        the program was two years old. Initially, it appeared 
        that loans were being delivered in a timelier manner. 
        However, in 1997, the FDLP transitioned its loan 
        origination services from Computer Data Systems to 
        Electronic Data Systems. The transition was difficult 
        on the Department of Education and the schools 
        involved.
          During this transition, student loan services were 
        interrupted for four to five weeks which created a 
        financial crisis for the school and loan recipients 
        awaiting funds to meet fiscal obligations. After 
        evaluating the challenges the students and the 
        administration were experiencing with the FDLP, Dillard 
        University made the decision to return to the FFELP 
        program.
          Dillard's return to the FFELP was a slow process. I 
        believe if one would ask the Financial Aid Office at 
        FDLP schools what is the one element they dislike about 
        the Direct Loan Program, I am sure the overwhelming 
        response would be the reconciliation. In addition to 
        the arduous task of administering the FDLP, reconciling 
        the FDLP was an additional responsibility not required 
        by the FFELP. I recall many difficulties trying to 
        reconcile and close out the program simply because 
        records were lost at the Direct Loan servicer. Even 
        after providing the agencies copies of cancelled 
        checks, it was difficult to bring closure to 
        discrepancies. We officially closed out our loans with 
        the FDLP at the conclusion of the 2003-2004 school 
        years.

    Ms. Thorton was not alone in her experience. In a survey 
conducted by Rockbridge Associates Inc. of Financial Aid 
Administrators (FAAs) at institutions that switched from the DL 
program to the FFEL program, 20 percent of the FAAs surveyed 
said that the decision to switch programs relied heavily on 
general issues of customer service and 22 percent said that the 
fees and borrower benefits in the program were the reasons the 
institutions switched programs. In addition, since the 
inception of the DL program, over 500 schools have left the 
program to return to the FFEL program. Today, approximately 75 
percent of the student loan volume is in the FFEL program and 
25 percent is in the DL program. However, the DL schools now 
seem pleased with the level of service they are receiving. For 
that reason, the Committee focused its efforts in 
reauthorization around taking steps toward leveling the playing 
field between the two programs from the borrower's perspective. 
For example, H.R. 609 phases down fees paid by borrowers so 
that by 2010 students will be paying one percent in both 
programs. The bill also increases loan limits in each program 
and aligns the DL program's extended repayment plan to match 
the FFEL repayment plan.
    Over the past several years, the Committee tried to better 
evaluate the cost of the two student loan programs. While the 
Committee passed a reauthorization bill that tried to 
strengthen both student loan programs, the Committee remains 
concerned that the subsidy estimate for the DL program does not 
reflect the program's true cost. The President's fiscal year 
2006 budget request indicates that over the life of the 
programs, the FFEL program has been re-estimated to cost $7 
billion less than originally estimated while the DL program has 
been re-estimated to cost $5 billion more than originally 
estimated. In addition, in a recently released report, Citizens 
Against Government Waste recommended that closer scrutiny of 
the costs between the FFEL program and the DL program is 
warranted. Earlier this year, the independent auditing firm 
PricewaterhouseCoopers (PwC) concluded that the DL program 
costs taxpayers significantly more than the Federal budget 
estimates show because certain costs and revenues are 
completely ignored. For example, budget estimates fail to 
account for the revenue generated by taxes paid to the Treasury 
by private sector lenders, exclude all administrative costs 
associated with the DL program, and utilize biased scorekeeping 
rules that continue to underestimate the cost of the DL 
program.
    The Committee is also concerned that the official 
scorekeeping baselines for the Federal student loan programs 
are inadequate as a policy decision-making tool because they do 
not accurately portray the relative cost of the two major 
student loan programs--the DL and the FFEL--or the cost impact 
of shifting loan volume between the two programs.
    The Committee believes that until the above factors are 
accurately accounted for in the official scoring baseline, any 
claim of budgetary savings from shifting loan volume among the 
student loan programs is premature. This will remain the case 
so long as a flawed and incomplete system of accounting remains 
in use. Therefore, the Committee intends to work with the House 
Budget Committee and the Congressional Budget Office to develop 
a more accurate official scoring baseline, that incorporates 
the cost and revenue factors identified by the 
PricewaterhouseCoopers study, and which will more correctly 
account for the budgetary impact of the Federal DL program.
            Teacher loan forgiveness
    No Child Left Behind requires each State educational agency 
to develop a plan to ensure that all teachers teaching in core 
academic subjects within the State are highly qualified not 
later than the end of the 2005-2006 school year. Additionally, 
over the next ten years, school districts will need to hire 
over two million additional teachers to keep up with increased 
student enrollment.
    States and school districts must recruit a greater quantity 
of people to the teaching profession while also ensuring 
teacher quality. Unfortunately, schools with concentrated 
poverty have greater teacher and administrator shortages, fewer 
applications for vacancies, higher absenteeism among teachers 
and staff, and higher rates of teacher and administrator 
turnover. Shortages of math, science and special education 
teachers are at a critical level. While No Child Left Behind 
will help school districts recruit and train high quality 
teachers, more help is needed.
    The expanded loan forgiveness for math, science and special 
education teachers, as well as reading specialists, is a 
longstanding priority for the Committee and the Congress. There 
are demonstrated shortages of teachers in these subject areas, 
particularly in rural and urban school districts that serve 
disadvantaged students. According to The Urban Teacher 
Challenge, released in January 2000, the nation's largest urban 
school districts responding to a national survey reported 
immediate needs for math (95 percent), science (98 percent) and 
special education teachers (98 percent). The National Center 
for Education Statistics reports, for the 1999-2000 school 
year, that 67 percent of public elementary and middle schools 
had vacancies in special education, 70 percent in mathematics, 
61 percent in biology and 51 percent in physical science. 
According to the Center for the Study of Teaching Policy, 
almost 57 percent of public school teachers are teaching 
physical science without a major or minor in their field. H.R. 
609 will provide incentives that will allow flexibility to 
local schools to recruit and retain highly qualified teachers 
in these critical subject areas in both public and private 
elementary and secondary schools across the country. Similar 
loan forgiveness measures have been included in President 
Bush's annual budget requests in 2002, 2003, 2004, 2005, and 
2006 and approved by Congress in 2002 (H.R. 5091), 2003 (H.R. 
438), and 2004 (H.R. 5186).
    H.R. 609 complements No Child Left Behind's focus on 
improving the education that children receive, particularly the 
education that disadvantaged students and students with 
disabilities receive, by supporting quality teachers for our 
children. H.R 609 makes permanent the expanded mandatory 
teacher loan forgiveness maximum amount of $17,500, up from the 
previous $5,000, of a teacher's outstanding loan obligation for 
those teaching math, science or special education for five 
years in a title I school. In addition, H.R. 609 includes loan 
forgiveness for reading specialists, recognizing that literacy 
is one of the most important building blocks students need to 
learn in order to be successful throughout their lives. The 
teacher must teach for five consecutive years in a title I 
school for five years in order to qualify. Additionally, in 
order to aid those students who are not able to meet their loan 
payments while they are teaching, the Secretary has authority 
to provide the borrower a waiver of that repayment obligation 
if the borrower can prove, in accordance with regulations 
promulgated by the Secretary, economic hardship.
    By offering additional financial support for public and 
private elementary and secondary teachers who have made a 
commitment to teach in title I schools in the defined critical 
subject areas--math, science and special education--this bill 
can make it possible for more disadvantaged students to be 
taught by caring and competent teachers in subject areas that 
will help shape not only the student but the economic future of 
the country. Teaching in high need, low income schools isn't 
always easy, but nowhere is it more important.
    H.R. 609 includes a provision that would permit private 
school teachers who are otherwise exempt from State 
certification requirements related to highly qualified teacher 
status to also take advantage of the increased amount of 
teacher loan forgiveness included in this bill. H.R. 609 
considers private school teachers to be in the same category as 
charter school teachers under the highly qualified teacher 
provisions of No Child Left Behind. Further, allowing private 
school teachers to fulfill rigorous subject matter and skills 
knowledge requirements by achieving passing scores on 
nationally developed and available teacher competency tests 
would provide private school teachers the opportunity to 
participate in the loan forgiveness program even in States that 
preclude such teachers from taking State teacher competency 
tests.
    The Committee believes we need to do everything we can to 
encourage college students to enter a field that, while 
challenging, is one of the most rewarding careers one can 
undertake. H.R. 609 will help to encourage the best and the 
brightest of our nation's college students to enter the 
teaching profession to remain committed to the profession and 
the schools in which they teach.
            National need loan forgiveness
    H.R. 609 also updates the existing authority for 
discretionary loan forgiveness for child care workers, a 
program that has not received funding in recent years in its 
current form. Under the bill, the Committee expanded the 
program to offer up to $5,000 of loan forgiveness to 
individuals in professions considered to be areas of national 
need as designated by the Secretary. This program includes loan 
forgiveness for early childhood educators, nurses, foreign 
language specialists, librarians, bilingual educators, first 
responders in low income communities, child welfare workers and 
speech language pathologists. These items were added by the 
Committee as priorities at this time.
    During the mark-up, Representative Porter (R-NV) 
highlighted that dating back to 2000, there was a six percent 
shortage of nurses and other health care professionals. That 
shortage is projected to increase to a shortage of almost 30 
percent in the next 15 to 20 years. There is also a shortage of 
professionals available to teach students to become nurses, 
exacerbating the shortages today and those we will see into the 
future. Over the next 10 years, more than two million teachers 
will leave the field for other careers. With the continued 
vacancies in the nursing profession, we need people willing to 
go into the teaching field to educate students hoping to pursue 
a career in nursing. In addition, Representative Platts (R-PA) 
brought to the Committee's attention the shortage of early 
childhood educators and the importance of having qualified 
people serve in these positions. The Economic Policy Institute, 
the Keystone Research Center and the Foundation for Child 
Development recently published a report titled, ``Losing Ground 
in Early Childhood Education: Declining Workforce 
Qualifications in an Expanding Industry, 1979-2004,'' in which 
it was demonstrated that the number of early childhood staff 
with college degrees has dropped significantly over the past 20 
years, from 43 percent to 30 percent. In addition, the report 
pointed out that the most educated cohort of early childhood 
teachers are retiring in the next 15 years and there are not 
enough students in the pipeline to fill those positions.
    The Committee believes authorizing loan forgiveness for 
these areas with demonstrated national need will provide a step 
in the right direction as the nation works to alleviate 
shortages in key fields.
            Cutting excess spending out of the student loan programs
    H.R. 609 makes a number of reforms that alter the Federal 
investment in the student loan programs and ensure Federal 
funds will be spent more wisely on behalf of students and 
taxpayers. Perhaps most visible of these reforms given the 
significant media attention to the issue in the months 
preceding reauthorization is the provision for a comprehensive 
and permanent end to provisions that allow certain lenders to 
collect higher than market rate yields--the so-called half SAP/
9.5 floor for special allowance--on some students loans. The 
history of these provisions is complex, but the solution 
provided under H.R. 609 is unambiguous.
    By way of background, current law and regulations permit 
lenders with access to pre-October 1, 1993 tax-exempt bond 
estates to receive a minimum return on the loans of 9.5 
percent. This practice originated in order to place non-profit 
lenders on a more level playing field with other types of 
lenders; through eligible tax-exempt bonds, non-profit lenders 
were guaranteed to receive half the special allowance payment 
(SAP) of banks, or a minimum of 9.5 percent. The special 
allowance payment of half SAP or at least 9.5 percent, from 
here forward to be referred to as 9.5 percent subsidies, was 
put into the law in the 1980s when interest rates were much 
higher and the Federal government needed to infuse additional 
capital into the program.
    The Omnibus Reconciliation Act of 1993 eliminated the 
guaranteed 9.5 percent rate of return for tax-exempt bonds 
going forward as interest rates began to fall. Many, including 
the Committee, believe Congressional intent was that over time, 
as the eligible bonds were paid off and retired, the 9.5 
subsidies would be eliminated entirely. However, through a 
series of administrative actions, the subsidy payments were 
allowed to continue.
    In 1993, the Clinton Administration issued a Dear Colleague 
Letter that permitted the 9.5 percent subsidies to continue by 
allowing eligible bonds to be refinanced without losing the 9.5 
percent benefit. In 1996, the Department of Education under the 
Clinton Administration issued another piece of administrative 
guidance that permitted loans to be transferred in and out of 
eligible bonds, allowing still more loans to become subject to 
the higher guaranteed rate of return. This practice of 
transferring, in particular, has been responsible for the 
significant growth in volume of 9.5 percent subsidies, as 
eligible loans have been transferred to taxable bonds.
    In recent years interest rates have dropped dramatically 
and the 9.5 percent subsidies have created a windfall for some 
lenders. The Committee believes that while the 9.5 percent 
subsidies may have made sense two decades ago, when the 
economic climate was much different than it is today, the time 
has come to put an end to this unnecessarily high rate of 
return. During the 108th Congress, temporary legislation was 
enacted to provide an immediate halt to the practices that had 
allowed the volume of 9.5 percent subsidies to grow: 
transferring loans in and out of eligible bonds, and refunding 
bonds to extend the maturity date. The Committee was clear when 
that bill, the Taxpayer-Teacher Protection Act (P.L. 108-409), 
was enacted, it was merely a temporary solution. The complete 
and permanent closure of the 9.5 percent subsidies was to come 
during the Higher Education Act reauthorization.
    There is ample evidence that the administrative actions 
during the Clinton Administration allowed the 9.5 percent 
subsidies to expand, rather than decline as was originally 
intended. From 2001 to 2004, the Department of Education's 
special allowance payments on these ``9.5 loans'' increased 
from $209 million to $955.5 million. Between the time Congress 
passed the Taxpayer-Teacher Protection Act in October 2004 and 
the third quarter of fiscal year 2005, special allowance 
payments on these loans have dropped from $262 million to $210 
million and loan volume has decreased from 17.5 billion to 14.6 
billion.
    With demonstrated proof that the Taxpayer Teacher 
Protection Act is working, the Committee believes the 9.5 
percent subsidies are well on their way to being eliminated 
entirely. Through H.R. 609, the Committee makes the provisions 
of the Taxpayer-Teacher Protection Act permanent, and goes a 
step further by also closing down the practice known as 
recycling, which permits the proceeds of an eligible bond to be 
reinvested in new loans which also carry the higher rate of 
return. Taken together, the reforms in H.R. 609 will halt the 
practices of transferring, refunding, and recycling, and no 
additional loans will be tagged with the special 9.5 percent 
subsidies. Subsidies are already declining rapidly, and under 
the bill, in time they will be eliminated all together.
    A second practice which spends Federal funds unwisely is 
known as the ``Super Two Step,'' a practice whereby lenders 
counsel borrowers with FFEL consolidation loans to re-
consolidate into the DL program and then re-consolidate again 
into the FFEL program. As previously stated, the intent of the 
consolidation loan program was to permit borrowers to either 
lower their monthly loan payments by stretching out their 
repayment term or consolidate multiple payments into one 
payment. The program was never intended to be used for 
refinancing purposes. This practice subverts all Congressional 
intent of the statute and has resulted in millions of dollars 
being bled from the Federal Treasury.
    H.R. 609 also stops another form of excess earnings in the 
loan programs, in which lenders are able to collect more than 
their guaranteed minimum rate of return. The structure of the 
loan programs provides for a minimum rate of return for lenders 
to ensure funds are available to students, as well as a below 
market interest rate for borrowers. The lenders' guaranteed 
rate of return, known as a lender yield, fluctuates with the 
market. Student loan interest rates also fluctuate with the 
market. As a result, the borrower rate--still below the market 
rate for other consumer loan products--may sometimes exceed the 
lender yield. In simple terms, this means the rate being paid 
by the borrower is actually higher than the minimum rate 
guaranteed to the lender. H.R. 609 requires lenders to return 
to the Federal government these excess earnings, otherwise 
referred to as ``floor income.'' This reform will generate 
savings for taxpayers while preserving the basic structure of 
low rates for borrowers and minimum returns for lenders.
            Risk sharing
    The Federally guaranteed loan program is based on the 
premise that the Federal government guarantees lenders against 
default, in exchange for which lenders offer capital to loan 
borrowers at below market rates. In the past several years, 
lenders have significantly increased efficiency and improved 
program operation, and as a result, are able to provide student 
loans with a lower cost of capital while still providing 
valuable benefits to borrowers. Student loan borrowers have 
already begun to benefit from the improvements made by lenders, 
and under H.R. 609, taxpayers will also begin to benefit.
    Given the increased efficiency in the loan programs and the 
historically low default rates, the Committee believes it is 
prudent for lenders to accept a modest increase in the risk 
sharing. In addition, the Committee feels strongly that FFEL 
program participants, lenders, and guarantors must continue 
efforts in the area of default aversion to ensure default rates 
remain low. The Committee agreed with the President's fiscal 
year 2006 budget submission to Congress on this point. 
Representative Tom Petri (R-WI) responded by introducing an 
amendment, which the Committee accepted, that reduced lender 
insurance from 98 percent to 96 percent and reduced guarantor 
reinsurance from 95 percent to 93 percent. When lender 
insurance is cut, the guarantors are not required to reimburse 
the lenders as much and therefore should be proportionately 
reduced in the reinsurance paid by the Federal government. In 
addition, the cut to guarantor reinsurance will provide an 
additional incentive to guaranty agencies to continue to excel 
in preventing delinquencies and defaults. As previously 
mentioned, H.R. 609 also infuses more stability in the 
financial health of the guarantor's system by requiring 
borrower payment of the one percent Federal default fee.
    To further strengthen the loan programs in the interest of 
American taxpayers, the Committee has provided for common sense 
changes to reward high-performing lenders and servicers. 
Currently, a large majority of the loan volume qualifies for 
the 100 percent insurance award that comes with the designation 
of a lender or service as an ``Exceptional Performer.'' As of 
the writing of this report, the Department of Education has 
awarded the Exceptional Performer designation to 11 lenders or 
servicers. Of those 11, the servicers together service loans 
for 93 lenders and the lenders are all in ranked in the top 35 
of loan holders. These numbers demonstrate that a large 
majority of the loan volume is currently receiving 100 percent 
insurance, rather than the standard 98 percent. With so little 
risk sharing in the program, lenders and servicers have little 
incentive to continue to strive to improve their default 
aversion methods. The Exceptional Performer program has 
achieved its goal and the Committee believes it is time to 
retool the program so that it continues to serve its original 
purpose--to push lenders and servicers to improve their 
programs thereby resulting in lower defaults. To that end, the 
Committee ties the exceptional performer designation to outcome 
based measures rather than the current method, which demands 
nothing more than a score on a compliance audit. The new 
Exceptional Performer designation is also constructed in such a 
way that only the best lenders and servicers are awarded this 
designation by only permitting the top five percent in the 
industry to receive the special award.
            Repayment plans
    In recent years, college students have seen a rise in the 
cost of college and similarly, a rise in the amount of student 
loan debt they need to take on in order to pay for that rise in 
college tuition. In addition, over the past few years, the 
market has provided record low interest rates on their student 
loans. When students graduate, they are faced with a decision 
about whether to consolidate their loans, thereby stretching 
out their monthly payments, or to pick one of the repayment 
plans currently offered within the Stafford loan program. Under 
current law, DL borrowers will find themselves with different 
options than FFEL borrowers. H.R. 609 levels the playing field 
by conforming the DL repayment plans to match the FFEL 
repayment plans.
    Under current law, borrowers who have just graduated and 
may not have a job right away or who may have a low-paying job 
have limited options as far as avenues to lower their monthly 
payment without stretching out their debt. The Committee 
believes this is an important gap to fill as some students may 
just need temporary relief and do not want to stretch their 
payments out longer than 10 years. H.R. 609 implements an 
interest only repayment plan whereby borrowers pay only the 
interest accruing on their loan, or $600 annually which ever is 
more, for the first two years they are in repayment. This new 
interest only repayment plan, which is added to both the FFEL 
and DL programs will give borrowers additional repayment relief 
as they begin their careers without having the borrowers forced 
into the consolidation loan program or forced to default 
because they do not have the funds to make the initial 
payments.
            Military deferment
    In 2003, Congress extended the Higher Education Relief 
Opportunities for Students Act (HEROES), P.L. 108-76, granting 
the Department of Education waiver authority of statutory and 
regulatory student loan requirements for college students who 
had been called to active duty in the U.S. Armed Forces. The 
Department of Education implemented the waivers in December 
2003. Since that time, students serving in the Armed Forces 
have enjoyed the benefits of extended in-school deferment on 
their loans, relaxed requirements to obtain a leave of absence 
from the school and extended grace periods if the student was 
in grace when he or she was called to serve. In addition, 
student loan borrowers that obtained loans prior to July 1, 
1993 were able to qualify for a military deferment. This 
deferment option was removed during the 1992 reauthorization.
    The Committee believes members of the military that have 
accrued loans since July 1, 1993 should also be afforded these 
same benefits and accepted an idea proposed by Representative 
Tom Osborne (R-NE) to solve this discrepancy. As a result, H.R. 
609 includes a provision that extends a student loan deferment 
option to members of the Armed Forces or National Guard serving 
on active duty during a war or other military emergency or 
national emergency. This new deferment will permit the 
borrowers to forgo payments on their loan principal without 
going into default. In addition, all interest accruing on 
subsidized loans will be paid for by the Department of 
Education. The borrower will have the option of either paying 
the interest that is accruing on the unsubsidized loans or not 
paying the interest and having it capitalize at the end of the 
deferment period. This new provision will permit our service 
members the ability to concentrate on the task at hand without 
having to worry that they are meeting their monthly student 
loan payments. The provision also sends a message of support to 
our deployed troops, many of whom have left their families and 
often their civilian jobs, that they do not have to forfeit the 
right to an affordable education in order to serve their 
country in uniform.
            Financial education and additional disclosures
    The rules and regulations surrounding the student loan 
program are complex and can be extremely confusing to 
borrowers. With students taking on increased levels of student 
loan debt to finance their education and with the strong 
detrimental effects on a borrower's credit report that evolves 
from defaulting on student loan payments, the Committee 
strongly believes that more financial education should be 
infused into the law. Currently, students must attend both 
entrance counseling and exit counseling in order to take out 
student loans. However, often these sessions are held in 
auditoriums or big group settings where the borrower is not 
given counseling that directly meets their financial situation. 
In addition, more and more financial aid offices are taking 
their entrance and exit counseling online where the borrower 
can quickly click through some instructions and answer a fairly 
simple quiz that, again, does not address their specific 
financial situation. These counseling sessions also do not take 
into account other spending or budgeting needs of a newly 
graduated student. The Committee has spoken with many lenders, 
servicers and guarantors regarding the steps these entities are 
already taking to provide borrowers with better counseling. 
FFEL participants are taking more steps than necessary in order 
to ensure that their customers are well informed. However, the 
Committee strongly believes there is an important Federal 
purpose here, so H.R. 609 is infused with various provisions 
requiring guaranty agencies to undertake additional steps in 
the financial education area. It is the hope of the Committee 
that with the new provisions, students and borrowers will be 
better informed about the burden of borrowing more money than 
necessary and will also be counseled on how to work into their 
overall budget their student loan obligations which will 
prevent delinquencies and defaults.
    The goal of creating better informed borrowers also spills 
into the consolidation loan program. Over the past several 
years, the Committee has heard from Americans all across the 
country who consolidated their loans at much higher interest 
rates because they were not told that they could only 
consolidate once or that they would lose certain benefits upon 
consolidating. In addition, with the advent of the record low 
interest rates, an increased amount of direct-to-consumer 
advertising in the student loan industry has commenced. In 
response to these new trends, H.R. 609 takes steps to ensure 
that borrowers are being given all of the relevant information 
by these companies. The bill requires that lenders give 
borrowers information on the effects of consolidation on the 
borrower's total interest to be paid, fees to be paid and 
length of repayment. In addition, the borrower is to be told 
about how the consolidation loan would change the benefits 
given by the underlying loan, the ability of a borrower to 
prepay the loan or pay on a shorter schedule. Finally, lenders 
are also required to disseminate information on any tax 
benefits for which the borrower could be eligible. The 
Committee believes these additional disclosures will help 
borrowers more fully understand their rights under the student 
loan program and assist borrowers in deciding whether it is 
financially prudent to consolidate their loans.
    The Committee has also heard from borrowers who indicated 
that they wanted to be able to find the best offer on their 
consolidation loans or find a lender with different customer 
service. Currently, if borrowers have all of their loans with 
one lender, the borrower must consolidate with that lender. 
H.R. 609 expands the borrower's options in eliminating this 
inflexible rule. With the changes in the Committee's bill, 
borrowers will now be able to shop around to find the best 
offer that suits their financial needs.
            Credit bureaus
    In 2003, the media reported on an incident with one lender 
where the student loan company stopped reporting to all three 
national credit bureaus and instead reported its borrowers' 
payment information to just one bureau. The lender defended its 
actions by saying that it wanted to protect its customers' 
privacy because the other two credit bureaus were selling its 
borrowers' loan information to other student loan companies. 
This lack of disclosure affected borrowers' ability to obtain 
mortgages and credit cards, and had a particularly detrimental 
effect on first time home buyers. Mortgage lenders will often 
look at all three bureaus' credit scores and average them for a 
particular borrower in order to determine the feasibility of 
lending to the borrower. If the borrower's scores are 
inconsistent, this could harm the borrower's ability to obtain 
a positive review by the mortgage lender. The Committee 
understands the dramatic effect paying, or not paying, student 
loans back has on a borrower's credit rating and believes 
strongly that a lender should report information to all 
national credit bureaus. H.R. 609 requires that lenders must 
report loan payment information to all national credit bureaus, 
not just one or two particular companies.
            Disability determination
    H.R. 609 makes a subtle but powerful change to the 
parameters around total and permanent disability discharge 
provisions. The Higher Education Act has long provided for the 
discharge of a student's loan in the case of death and total 
and permanent disability. In 2000, the regulations surrounding 
the total and permanent disability discharge changed 
dramatically. New and additional burdens to students already 
facing very difficult life and health situations were added in 
an effort to stem perceived fraud and abuse. While the 
Committee agrees with enforcing standards to ensure only those 
truly eligible receive such a benefit, the accompanying 
requirements must also be reasonable. H.R. 609 provides if the 
Veterans Administration or the Social Security Administration 
determines an individual is in fact totally and permanently 
disabled, the Secretary of Education shall accept that 
determination. The Committee believes that a balance can be 
achieved between providing for this discharge without 
unnecessary administrative burden on recipients and preventing 
fraud and abuse. The Committee believes that once an individual 
has met the burden of proof relating to disability for the 
purposes of the discharge of a student loan under rules 
established under another Federal agency, there should be no 
need for an additional Federal agency to revisit that 
determination.
            School as lender
    The Committee believes that there is a need to clarify 
Congressional intent with respect to the school as lender 
program and put into place additional protections for students 
whose schools serve as the lender given the inherent conflict 
of interest that may exist with this arrangement. According to 
the Government Accountability Office, schools receive a premium 
for the loans anywhere between two and six percent of the face 
value of the loans. Under current law, schools are permitted to 
use the premiums made off of selling the loans for their own 
purposes, but must use the borrower interest payments and 
special allowance payments from the government for need based 
grant programs. For students attending those institutions, the 
financial aid office is both their lender as well as their 
financial advisor. The Committee views the school as lender 
program as an inherent conflict of interest in the school's 
role, which is, first and foremost, to educate the student and 
second, to ensure that the student is receiving the best 
financial aid package for his or her financial situation. H.R. 
609 takes additional steps to reduce the role schools can play 
as a student's bank by permitting schools to only lend to 
graduate students, not parents or undergraduate students, and 
also further restricts where the profits the school is making 
can be spent. If schools are making money from the program, the 
Committee believes it should be put back into the need based 
aid programs at the school. Through requiring that the schools' 
profits from its lending programs be put into the need based 
aid programs, H.R. 609 takes one more step to ensure that 
students receive the funding they truly need to attend college, 
without forcing the student to take out more costly private 
loans.
            Institutional default reduction initiatives
    H.R. 609 permanently extends two expiring provisions within 
the Higher Education Act that provide incentives to 
institutions to keep their default rates low and assist 
students in receiving student loan funds without delay. The 
1998 Higher Education Act reauthorization provided for a waiver 
of multiple disbursements required for single term loans, and 
of a 30-day delay in delivering loan funds to a student who is 
enrolled in the first year of an undergraduate program of study 
and who has not previously borrowed. The Committee believes 
that it is important to extend these two provisions, as they 
have provided an incentive for institutions of higher education 
to maintain low default rates and serve to benefit students, 
who are able to receive Federal student aid funds faster and 
more efficiently.
            Campus based aid programs
    H.R. 609 contains provisions to phaseout base guarantee 
allocations to institutions of higher education in the three 
campus based aid programs--Federal Work Study (FWS), Perkins 
loans, and Supplemental Educational Opportunity Grants (SEOG)--
based on previous allocations, or the ``base guarantee'' over 
the period of 2008-2016. The New York Times highlighted the 
problem in a November 2003 story, when it reported, ``The 
federal government typically gives the wealthiest private 
universities, which often serve the smallest percentage of low-
income students, significantly more financial aid money than 
their struggling counterparts with much greater shares of poor 
students'' (``Rich Colleges Receiving Richest Share of U.S. 
Aid,'' Greg Winter, New York Times, November 9, 2003).
    While certain institutions and associations, such as the 
California State University (CSU) System and the National 
Association of Student Financial Aid Administrators (NASFAA) 
have urged a more rapid phaseout, the Committee chose this time 
frame to ensure that all institutions of higher education had 
ample time to adjust to the new funding formula. Under current 
law, the campus based aid funding formulas ensure that 
participating institutions receive no less than their base 
guarantee. Since 1986, an institution's base guarantee has been 
the principal determinant of its current year allocation, 
regardless of whether its enrollment of financially needy 
students increased, decreased, or remained constant. This 
``hold harmless'' provision drastically reduces the funding 
available to students attending institutions that have seen 
dramatic increases in the enrollment of students from low-
income families.
    The bill proposes to phase out the base guarantee and 
replace the formula with the ``fair share'' formula already 
provided for in current law. The fair share formula bases its 
allocation on important criteria such as the number of 
financially needy students and the tuition and fee costs at the 
institution. These criteria are relevant and reflect the needs 
of the campus more so than a historical funding figure that may 
be awarded to institutions in a manner disproportionate to the 
number of needy students at the campus.
    Defenders of the status quo have historically tried to pit 
states and even individual colleges and universities against 
one another by claiming that a ``fair share'' formula will cut 
their portion of student aid. This argument misses the point 
entirely. When it comes to Federal student aid, it's not about 
one state versus another or one college versus another: it's 
about how Congress can best assist individual needy students. 
The solution is one of basic fairness. Federal student aid 
should be awarded based on the financial need of students. The 
base guarantee concept is especially unfair to students at new 
institutions or new campuses. For new institutions, the base 
guarantee is calculated using enrollment data from the first 1-
2 years of the institution's program participation. The 
``snapshot'' of student enrollment generally does not reflect a 
mature campus population as the new campus adds both programs 
and students in its early years. The result is an artificially 
low campus based aid allocation for a growing student body and 
little new money to be distributed to students on a ``fair 
share'' basis.
    Under current law, the majority of funding provided for the 
campus-based aid programs is allocated for base guarantees. 
Approximately more than 40 percent of funding is available for 
allocation according to fair share criteria in SEOG, about 30 
percent in FWS and only 8 percent in Perkins loans. With most 
funding being devoted to meeting institutional base guarantees, 
little Federal money is actually being allocated to 
institutions based on their needy student population.
    The Committee is concerned over the inequity of the current 
formula and is especially concerned for the students who will 
go underserved if the campus based aid formula goes unchanged.
            Perkins loan program
    Federal financial assistance programs significantly boost 
the chance for students to pursue a higher education. In 
particular, the Perkins loan program offers low interest rates 
to students through campus-based revolving funds.
    Perkins loan borrowers are predominantly from lower income 
families. These students are often the first in their family to 
attend college. For the 2003-2004 academic year, the Department 
of Education reports that 630,000 students borrowed $1.46 
billion in Perkins loans, with an average amount of $2,003 
awarded per student. Since the inception of the Perkins loan 
program in 1958, over $27 billion dollars in loans have been 
made to students through almost 25 million financial aid 
awards.
    While the Committee applauds the Administration's budget 
proposal to enhance the financial aid programs, this increase 
would come at the expense of the elimination of the Perkins 
loan program, which is a critical source of low-interest loans 
that many students rely on to pay for college. Perkins loans 
provide substantial financial assistance to millions of 
students and families across the country. H.R. 609 reauthorizes 
the Perkins loan program and makes additional reforms to ensure 
funds are targeted to the neediest students and the program 
continues to operate in an efficient manner.
    Within the Perkins loan program, H.R. 609 makes clear that 
a student who has a defaulted loan may be eligible for 
rehabilitation if it is practicable, especially in cases where 
a judgment has been entered against the borrower. However, 
rehabilitation is not an entitlement to the borrower, as 
institutions of higher education have often gone to significant 
time and expense in obtaining a judgment against a borrower who 
refuses to repay a loan in default. In those cases, it may not 
be in the best interest of the program to require that a 
borrower be offered the benefits of loan rehabilitation. The 
Committee believes that the decisions should be left up to the 
institution or the Secretary to determine on a case-by-case 
basis so that unique situations and circumstances can be 
considered.
            Need analysis--simplification
    Two years ago, Congress tasked the Advisory Committee on 
Student Financial Assistance, which provides advice and counsel 
to Congress and the Secretary of Education on student financial 
aid matters, to conduct a study on options to simplify the 
student financial aid process. Its primary task was to examine 
possible changes to the financial aid process to make it more 
understandable and less complex, especially for low- to 
moderate-income families, without increasing program costs or 
reducing program integrity. The final report, ``The Student Aid 
Gauntlet'' was released with ten major recommendations. In 
response to Congressional concern that the Advisory Committee 
had not fulfilled its obligation regarding the potential costs 
associated with its recommendations, the Advisory Committee 
claimed that ``Eight of the ten recommendations do not require 
any increase in program costs.'' The Committee wishes to 
reiterate that the Advisory Committee's analysis only took into 
account the cost implications to the Pell Grant program, and 
not the mandatory cost implications for the student loan 
program. While minimal, some of the modifications made to H.R. 
609 as suggested by the Advisory Committee's report have 
mandatory cost implications. The Advisory Committee's 
recommendations that were not adopted in H.R. 609 would likely 
have had significant cost implications. The Committee is 
committed to access and providing streamlined and simplified 
means for students to access postsecondary education. However, 
given current budgetary and fiscal constraints, the Committee 
believes the Advisory Committee should have more appropriately 
recognized the fiscal barriers that precluded implementation of 
some of the recommendations.
    While many of the reforms of the Advisory Committee were 
adopted in H.R. 609 and have bipartisan support, the Committee 
remains concerned that the approach taken by the Advisory 
Committee in its dissemination of the final report to the press 
prior to delivery to Congressional requesters was careless and 
inappropriate. The Committee hopes that with a new 
reauthorization, the Advisory Committee will work together with 
Congressional leaders to continue the work of providing 
policymakers with ways to understand and ideas to reform the 
Federal, State and institutional programs that provide need-
based aid to millions of students.
    H.R. 609 provisions and the amendment offered by 
Representatives Howard P. ``Buck'' McKeon (R-CA), Tim Ryan (D-
OH) and John Tierney (D-MA) implement the non-cost related 
recommendations of the Advisory Committee. The provisions help 
break down barriers for students and their families that want 
to pursue the dream of a higher education by directing the 
Secretary to develop a streamlined application and re-
application form and encouraging the Secretary to reduce the 
number of data elements required on the Free Application for 
Federal Student Aid (FAFSA). Excessive data elements make the 
FAFSA confusing and time-consuming, especially for low- and 
middle-income families and first-generation college students.
    H.R. 609 aligns eligibility for the Simplified Needs Test 
(SNT) to other means-tested Federal benefit programs. The 
Committee believes this alignment will allow more students to 
take advantage of the simplified application form for SNT 
eligible students. Additionally, the bill directs the Secretary 
to develop an EZ-FAFSA to allow auto-zero eligible students 
access to a simplified paper application.
    Additionally, the bill directs the Secretary to submit to 
students and their families ``early estimates'' where a student 
can submit their FAFSA prior to enrollment to obtain an 
estimate of their financial aid package. The Committee believes 
this will allow families to plan in advance for their child's 
education and be more informed about the realities of college 
cost and the amount of financial aid available.
    During the 1992 reauthorization of the Higher Education 
Act, the bill passed by the House of Representatives included a 
provision that exempted small business assets from need 
analysis formula. Representative Marilyn Musgrave (R-CO) 
offered, and the Committee accepted, a similar amendment that 
exempted small business assets from the need analysis formula 
for families that own a business that employs less than 100 
full-time equivalent employees. Under current law, farm 
equipment and other assets attributed to farms are excluded 
from the need analysis formula. The Committee believes this 
same protection should apply to small business owners, who 
should not be asked to borrow against their way of living to 
finance a child's education.
            Internal Revenue Service data match
    H.R. 609 contains a provision that will greatly enhance the 
integrity of Federal student aid programs and will help 
accomplish the goals of President Bush's initiative to reduce 
erroneous student aid payments government-wide. The bill 
provides authorization for the Secretary of Education to work 
with the Secretary of the Treasury to provide for an Internal 
Revenue Service (IRS) data match. Multiple Inspector General 
(IG) reports have found significant evidence of student 
applicants (either by error or fraud) underreporting income on 
the student financial aid application and the FAFSA, thus 
gaining eligibility to higher than deserved Pell Grant awards. 
Statistical test matches between the Department of Education 
and the IRS confirm the IG findings of significant 
underreporting (and thus significant overpayments) in the Pell 
Grant program. IG reports have further concluded that the 
Department of Education's current verification process is 
inadequate to address the fraud and error in Pell Grant awards. 
During the 108th Congress, H.R. 3613, the Student Aid 
Streamlined Disclosure Act of 2003, was introduced by 
Representative Sam Johnson (R-TX) and would require the Federal 
government to improve the verification process for Pell Grant 
awards through an IRS data match. In addition to helping to 
reduce the under-awarding of Pell Grant benefits for students 
who actually qualify for more generous awards, the bill was 
estimated to free up as much as $340 million that Congress 
could use to better serve the increasing number of needy 
students legitimately receiving Pell grants or increase the 
maximum Pell Grant award for students.
            Income protection allowance
    H.R. 609 increases the income protection allowance for 
dependent students to $3,000 for the 2006-07 academic year. 
This increase will offer additional protections for students 
that need to work while in college without having those hard-
earned funds reduce the amount of Federal financial aid awarded 
to them.
            Portable student scholarship treatment
    Facing increasing pressure to deal with high college costs 
and tight budgets, some States are seeking innovative 
opportunities to focus higher education funding directly on 
students. Some States are directing the subsidy they 
traditionally provide to institutions of higher education to 
individual students in the form of portable scholarships, 
rather than subsidizing State-level institutions that in turn 
may serve some students within the State.
    For example, the State of Colorado developed the College 
Opportunity Fund (COF), which links State funding directly to 
resident undergraduate students. Through the COF, the State is 
able to be up front with potential students and their parents 
about the cost of higher education and the State's willingness 
to help fund college costs. The State of Colorado will do this 
by collecting information through performance contracts that 
will make public information such as: student enrollment, 
transfer, and graduation rates; student satisfaction and 
performance; and institutional cost and productivity. 
Specifically, under the new State system, the State will no 
longer make direct lump-sum financial transactions to its 
public institutions for undergraduate education. Instead, funds 
will go to public and private institutions on behalf of 
resident undergraduate students in the form of a per-student 
stipend. Stipends are set annually by the General Assembly in 
Colorado during the budget process and the allocation is 
defined on a credit hour basis. The stipend for the 2005-2006 
academic year is $2,400 per student for public institutions and 
$1,200 per student for the participating private institutions.
    While these types of state choice programs may appear to 
direct a large sum of financial aid to students, in reality, it 
is simply a new methodology for distributing subsidies that 
have always been provided to higher education. Student 
financial aid is calculated based on a complex group of 
factors, including the amount of aid awarded from other 
sources. Therefore, because this is a new way of awarding funds 
to students, this type of State higher education subsidy if not 
protected in Federal law, may actually hinder a student's 
eligibility for Federal student aid. The Committee believes 
that students should not lose out on Federal aid simply because 
their State has chosen an innovative option for funding higher 
education institutions. The amendment offered by Representative 
Marilyn Musgrave (R-CO) simply ensures students will not lose 
eligibility because of their State higher education funding 
process.
            Return of Title IV
    Within the return of title IV funds policy, H.R. 609 simply 
clarifies current law that a program measured in clock hours 
may, under certain circumstances, use scheduled hours to 
determine the percentage of the payment period or period of 
enrollment for which assistance has been earned. H.R. 609 makes 
clear that students are not to return more than 50 percent of 
the total grant assistance they received. This clarification 
will assist students from the lowest income families who 
receive large Pell Grant awards. The amount returned will be 
only that amount which exceeds the 50 percent remaining after 
the calculation has been completed. The Committee wishes to 
alleviate a burden, which falls disproportionately on the 
lowest income students, while ensuring that students are 
responsible to return some portion of the grant assistance 
received from the Federal government when the student withdraws 
from school. The bill also clarifies that a student will not be 
required to return sums of $50 or less.
    In order to assist Pell Grant recipients who are forced to 
withdraw from their institution of higher education due to a 
natural disaster as declared by the President, Representative 
Ric Keller (R-FL) offered an amendment to grant the Secretary 
waiver authority for purposes of the return of title IV 
formula. Waiver authority currently exists for institutions of 
higher education that are adversely impacted by natural 
disasters. However, there is no authority for the Secretary to 
work with the nation's neediest students in times of 
catastrophe. This provision is narrowly and responsibly crafted 
to protect low-income students who are forced to withdraw from 
school because of a Federally-declared natural disaster.
            Drug provision
    The Committee believes strongly in providing clarification 
to the drug ineligibility requirements now in law. Only those 
students who are enrolled in an institution of higher education 
and receiving Federal financial aid should be subject to the 
ineligibility requirements. This will ensure the provision 
serves the purpose for which it was intended: to serve as a 
deterrent to prevent drug offenses while students are enrolled 
in higher education at taxpayer expense, and not to reach back 
and limit financial aid for past offenses.
            Campus disciplinary proceedings
    The Committee acknowledges the importance of informing the 
victim, or the next of kin in case of death, in specific 
instances of student misconduct at institutions of higher 
education; however, it also recognizes the need to maintain the 
protection and privacy of student educational records, as 
required under Federal privacy laws. Therefore the Committee 
approved a requirement for institutions of higher education to 
disclose the final results of any disciplinary proceeding to an 
alleged victim of any crime of violence or non-forcible sex 
offense. This will ensure the institution carefully examines 
the complaint and if any action is taken that the victim, or 
victim's family, knows what action the institution took in 
regard to the crime and is informed while protecting student 
privacy. This provision will help institutions of higher 
education and victims work together toward greater safety on 
campus.
            Distance education
    In the 1992 reauthorization of the Higher Education Act, 
Congress enacted provisions to restrict access to title IV 
funds for institutions offering more than 50 percent of their 
courses by correspondence or enrolling 50 percent or more of 
their students in correspondence courses. An unintended and 
unforeseen result was that the definition of correspondence 
included telecommunications, which over the last decade has 
encompassed distance education on the Internet.
    In 1998, Congress created the Distance Education 
Demonstration Program that provides waivers to these rules for 
participating institutions and created a Commission to study 
the quality and accessibility of distance education. Internet-
based distance education was still relatively new at that time. 
The Distance Education Demonstration Program was one means to 
study distance education to determine appropriate changes to 
the Higher Education Act. The Commission, with former Senator 
Bob Kerrey as Chairman and then-Congressman Johnny Isakson as 
Vice-Chairman, and the Distance Education Demonstration Program 
found that distance education is capable of providing access to 
millions of students, particularly working adults, at a level 
comparable to on-ground education. Both the Web-based 
Commission and the Department of Education have recommended the 
repeal of the 50 percent rules which continue to limit 
students' access to distance education.
    The Committee repeals the application of the 50 percent 
rule's application to distance education to ensure the higher 
education system can take advantage of technological 
advancements that create new opportunities for students and 
schools. By removing unnecessary barriers to distance 
education, the Committee believes institutions of higher 
education will be given the flexibility to increase the use of 
technology and provide students with new postsecondary options. 
Financial rules, administrative capability rules, and 
accreditation safeguards remain in place to prevent fraud and 
abuse. While maintaining the rule for correspondence classes, 
the bill also continues and expands the Distance Education 
Demonstration Program to include up to five accredited, degree-
granting correspondence schools.
    The Committee understands that Internet-based distance 
learning is a mode of learning by which students pursue higher 
education, courses are conducted and managed, and institutions 
of higher education expand to reach a new and non-traditional 
group of students. The Committee further understands that 
distance learning can be a cost-effective way of educating 
students through both synchronous (live) and asynchronous 
(interactive) means. Therefore, the Committee encourages 
institutions of higher education to consider the use of 
``computer transmission,'' whether synchronous or asynchronous, 
and ``computer conferencing,'' that is, distance learning, in a 
way that uses a distributed learning system which ensures 
secure and encrypted protection for students getting their 
education through an Internet-based system.
    The Committee also provides for significant accreditation 
safeguards to ensure the quality of institutions of higher 
education that offer distance education. The bill requires 
accrediting agencies or associations that accredit institutions 
offering distance education to have distance education within 
their scope of recognition as approved by the Secretary. This 
will ensure that only accrediting agencies or associations with 
the capability to review distance education will allow these 
institutions access to the title IV programs. In addition to 
the criteria that accrediting agencies or associations are 
already required to review for all institutions, the bill 
requires accrediting agencies and associations to ensure that 
institutions offering distance education programs have 
processes by which they establish that the student who 
registers is the same student who participates in and completes 
the program. The Committee expects institutions that offer 
distance education today to have security mechanisms in place, 
such as identification numbers or other pass code information 
required to be used each time the student participates in class 
time or coursework on-line. In time, as technology develops, 
the Committee anticipates that additional identification 
technologies will become more sophisticated, less expensive and 
more mainstream.
    Finally, the bill requires accrediting agencies to monitor 
the growth of distance education programs at institutions that 
are experiencing significant increases in enrollments. The 
purpose of such monitoring is to determine whether institutions 
continue to have the capacity to handle a significant increase 
in the number of students. The Committee does not suggest that 
growth in enrollments necessarily relates to a loss of quality. 
Instead, the role of the accrediting agency or association 
should be to review that the institution maintains the same or 
an increasing level of quality, regardless of enrollment 
growth.
    In its third report to Congress on the Distance Education 
Demonstration Program, the Department of Education reports that 
repeal of the 50 percent rule is necessary to expand access to 
non-traditional student populations, including minority 
students. The Committee concurs with the Department's 
statement:

          The advent of distance learning has forever changed 
        this critical segment of our educational system. 
        Indeed, the evidence would suggest that several of the 
        rules that were intended to protect Federal funds have 
        instead protected brick-and-mortar institutions, by 
        limiting Title IV eligibility to institutions that 
        offer primarily on-site courses, and delayed 
        appropriate expansion of this alternative mode of 
        delivery.
          Along with the development of new delivery modes, the 
        changing demographics of postsecondary education stunts 
        bring into focus the problems arising from the outmoded 
        assumptions that at one time warranted using term 
        structure as a foundation for financial aid rules.
            Transfer of credit
    In light of the significant changes in the economy, 
workforce needs and the postsecondary student population, the 
Committee believes that arbitrary and unnecessary barriers to 
transfer of credits must be eliminated. The Committee received 
evidence of many instances in which students who decide to 
continue or further their education at a new institution are 
hindered by their inability to transfer credits based upon 
indefensible factors. The denial of credit transfer inhibits 
students from obtaining the education and training they need to 
enter or advance their careers. In doing so, deterrents to 
credit transfer often results in increasing the cost of 
postsecondary education by forcing students to take and pay for 
the same courses twice. This situation puts an unnecessary 
financial strain on individual students, the title IV programs, 
and the American taxpayer.
    The Committee does not intend to intrude upon institutions' 
evaluation of student work and other academic factors affecting 
transfer decisions. However, one factor often used as a 
substitute for such individual evaluations--the agency 
accrediting the sending institution--is not a legitimate basis 
on which to deny credit transfer as long as the institution's 
accrediting agency has been reviewed by the Department of 
Education and determined to be a reliable authority on 
educational quality. Accordingly, the bill requires 
institutions to publicly disclose their policies regarding 
transfer of credit decisions, and not to deny transfer of 
credit solely on the accreditation of the sending institution 
so long as the accrediting agency or association is recognized 
by the Secretary. H.R. 609 does not mandate what course work 
must be accepted by any institution of higher education. The 
Committee encourages institutions of higher education to 
establish their own policies for the acceptance of transfer 
credits. H.R. 609 would simply require an institution to base 
its decision to accept credits based on its own stated and 
publicized policies.
    In order to protect institutions from inappropriate Federal 
intrusion on educational decision making, the legislation 
requires accrediting agencies and associations to ensure 
institutional compliance. The Committee expects the accrediting 
agencies and associations to be vigilant and to vigorously 
review the transfer of credit provisions through their 
accreditation processes so that no institution will deny 
transfer of credit based solely on the accreditation of the 
sending program or institution. The Committee also expects the 
Department to review thoroughly and consistently accrediting 
agencies' performance in this area as part of its recognition 
of accrediting agencies and associations.
    The Committee is concerned that difficulties in transfer 
and articulation continue to serve as a barrier to access and 
completion of postsecondary education for many students across 
the country. According to data from the Department of 
Education, nearly half of all students will change colleges 
during their academic career. Loss of credits can mean the 
difference between success and failure for many students and is 
particularly detrimental to minority and low-income students. 
Accordingly, the Committee wishes to acknowledge the National 
Articulation and Transfer Network (NATN), which has been 
working to develop a nationally coordinated articulation and 
transfer network to increase the rate of percentage of credits 
accepted in transfer and fully counted toward the degree or 
certificate completion requirements of undergraduate students. 
NATN is supported and sponsored by hundreds of institutions of 
higher education across the United States with minority serving 
institutions being at the forefront of its current efforts. The 
Committee believes that NATN can become a national center of 
information for students and institutions to facilitate the 
enrollment, transfer, and full-credit articulation of students. 
The Committee encourages the Secretary to work closely with 
NATN and its partner institutions and organizations to find 
ways to ease the transfer burden for postsecondary students.
            90/10 Rule
    The 90/10 rule was put into effect by the 1998 Higher 
Education Act Amendments (P.L. 105-244), replacing its 
predecessor, the 85/15 rule, which was authorized by the 1992 
Higher Education Act Amendments (P.L. 102-235).
    Supporters of the 85/15 rule argued that the rule was 
necessary to stem fraudulent and abusive practices that had 
been identified at proprietary institutions. It also was argued 
that implementing the rule might restore some market incentive 
to education as proprietary institutions would be unable to 
charge more than what students not receiving enough Federal 
financial aid to pay all their institutional charges were 
willing to pay. Detractors of the rule argued that requiring 
proprietary institutions to obtain at least 15 percent of their 
revenue from non-title IV sources could limit access to low-
income students if proprietary institutions were forced to deny 
admission to students receiving title IV funds to meet the 
required percentage of non-title IV revenues.
    During the 1998 reauthorization process, Congress reduced 
the percentage of revenue that proprietary institutions had to 
obtain from non-title IV sources to at least 10 percent. 
Congress declined to make changes to the formula for 
calculating revenue that had generated controversy since its 
inception following the 1992 reauthorization. The Department of 
Education, however, opted to modify the definition of revenue 
and calculation of eligibility through regulations following 
the 1998 reauthorization.
    While the utility of the 90/10 rule as a proxy measure of 
institutional integrity and educational quality was subject to 
dispute, the Committee concluded that it was inappropriate to 
repeal the rule at this time and instead decided to modify it 
significantly. In addition, the Committee, through the amended 
language, wishes to clarify the rule's interpretation and 
application by the Department.
    The Committee has changed the 90/10 rule from an 
eligibility criterion to a program participation criterion 
under the Program Participation Agreement (PPA) currently in 
law. In addition, the rule will now apply to all program 
participants, instead of solely to proprietary institutions. 
The Committee believes if the rule does act to promote 
institutional integrity and educational quality, it should 
apply more broadly. Failure to comply with the requirements of 
the PPA results in sanctions against an institution. The 
penalties against the institution for non-compliance or 
violation of the 90/10 rule will not be as severe as they would 
be if the rule remained an eligibility criterion, which 
ultimately penalizes individual students. Because the operation 
of the rule involves a number of complexities and variables, 
the Committee further modified it by requiring that before the 
ultimate sanction of discontinuing participation is pursued, an 
institution would have to violate the rule for three 
consecutive years. If an institution violates the rule in any 
one year, the Department has a range of means to monitor the 
institution, and the institution should have the opportunity to 
demonstrate any inaccuracies in the calculation, or come back 
into compliance.
    The Committee wishes to make clear that the provision means 
that all non-title IV revenue received by an institution for 
any educational purposes consistent with its mission shall 
count toward the 10 percent requirement. The Committee is aware 
that the Department, under its current rules, presumes that all 
title IV funds are to be counted first in establishing a 
participant's compliance with the rule. This presumption does 
not comport with Congress' intent. The purpose of the rule is 
to ensure that institutions receive at least 10 percent of 
their revenues from non-title IV sources. Thus this revenue 
should be counted first and apply toward meeting the 
requirement provided that institutions can supply a reasonable 
audit trail.
    Furthermore, the Committee intends to reverse the 
Department's current interpretation that excludes institutional 
funds used to satisfy matching-fund requirements, and funds 
from savings plans such as those established under section 529 
of the Internal Revenue Code, from being counted toward the 10 
percent requirement. The Committee does not intend for this 
rule to be a disincentive for institutional participation in 
programs requiring matching funds, or individual participation 
in educational savings plans.
    The Committee believes that institutional aid, in the form 
of loans and scholarships, including both monetary aid and 
tuition discounts, should be encouraged. The Committee directs 
the Department to apply the statutory language in a manner that 
carries out this intent, and does not impose unnecessary 
impediments to counting such aid toward the 10 percent 
requirement. The Committee emphasizes that the provision on 
established restricted accounts does not apply to discounted 
tuition.
    The Committee detailed certain funds that shall be included 
in calculating the 10 percent, but it should be clear that the 
list is not intended to be exclusive. Those types of funds that 
were permitted to be included as non-title IV funds under the 
current regulations, such as non-Federal public grant funds, 
workforce development funds, and funds from activities 
conducted by the institution that are necessary for the 
education and training of its students, such as clinical or 
service programs or auxiliary enterprises in which students are 
required to participate, are intended to continue to be 
included in calculating the 10 percent requirement.
            Protections against fraud/abuse/diploma mills
    Although no formal legal definition exists, a diploma mill 
is generally regarded as an entity that lacks accreditation 
from a State or professional accreditation organization, but 
that nonetheless sells college and graduate degrees that are 
fraudulent or worthless because of the lack of standards 
imposed on the purchasers of such degrees. Diploma mills have 
proliferated in recent decades due to lax law enforcement and 
technological advances such as the rise of the Internet. By 
some estimates, there are several hundred diploma mills 
operating at any given time, with revenue in excess of $200 
million per year. There has also been a swell of fake 
accrediting organizations to provide diploma mills an air of 
legitimacy.
    The Committee learned more about diploma mills and the 
proliferation of fake degrees and accreditors during a hearing 
held by the Subcommittee on 21st Century Competitiveness on 
September 23, 2004 entitled, ``Are Current Safeguards 
Protecting Taxpayers Against Diploma Mills?'' During the 
hearing, witnesses described characteristics of diploma mills 
and called for solutions, such as public lists of accredited 
institutions of higher education.
    Most diploma mills display some or all of the following 
hallmarks of a fraudulent operation: (1) They are unaccredited 
or they claim to be accredited but the organization that they 
cite is not one of the legitimate accrediting agencies 
recognized by the Council on Higher Education Accreditation or 
the Department of Education; (2) they do not require previous 
academic records, such as grade point average or test scores, 
for admission; (3) they charge tuition based on the number of 
degrees purchased rather than the number of credit hours or 
courses taken; (4) they offer many or all degree credits based 
on a student's life experience; (5) they guarantee that 
students will receive diplomas in far less time than it would 
take at a traditional university; (6) their professors often 
have degrees from unaccredited universities and have little or 
no contact with students; (7) they are located in a foreign 
country or have addresses that are post office box numbers; and 
(8) they have names that are strikingly similar to legitimate, 
accredited universities.
    Diploma mills pose dangers to consumers and employers, as 
well as the general public and to legitimate institutions of 
higher education. Although some individuals who obtain degrees 
from diploma mills are active conspirators in fraud, others are 
innocent victims of financial scams in which they pay hundreds 
or thousands of dollars for worthless degrees.
    State and Federal efforts to shut down these entities have 
been somewhat erratic over the years, depending in part on the 
jurisdiction and enforcement priorities involved. For example, 
enforcement has been weak at times for reasons that range from 
the difficulty in distinguishing between fraudulent and 
legitimate institutions to the ability of diploma mills to move 
jurisdictions quickly if authorities in one state begin an 
aggressive enforcement campaign. Further complicating matters 
is the fact that every state has its own diploma mill laws, 
which vary in strength and effectiveness. Meanwhile, the 
Federal government pursues enforcement actions against diploma 
mills under a separate set of laws.
    Although Federal law does not explicitly prohibit diploma 
mills, the sale of fraudulent academic credentials is 
punishable under several Federal statutes relating to mail 
fraud, wire fraud, and conspiracy, and four different 
governmental agencies have some direct involvement in or 
authority over the legal issues raised by diploma mills, namely 
the FBI, the U.S. Postal Inspection Service, the Federal Trade 
Commission, and the Department of Education. In recent years 
the investigative and enforcement activities at the Federal 
level have not been as strong as in the past or as they could 
be. The Committee encourages these agencies to focus their 
attention on eradicating diploma and accreditation mills, and 
to coordinate their efforts when possible.
    In the past year, three agencies have ramped up their 
efforts. The Department of Education has unveiled a website/
master on-line list of accredited colleges, universities and 
other postsecondary institutions, including career and trade 
schools that are accredited by agencies recognized by the 
Department of Education. This website is intended to help 
students, parents, and employers determine whether a particular 
school is a diploma mill or not. The website can be accessed 
at: http://ope.ed.gov/accreditation/. The Office of Personnel 
Management also announced stricter guidelines regarding 
educational requirements of those who seek employment with the 
Federal government--aimed at helping agencies better understand 
how to check credibility of an applicant's credentials and 
professional training. Finally, the Federal Trade Commission 
released a document, entitled: ``Avoid Fake-Degree Burns by 
Researching Academic Credentials,'' which may serve as a guide 
for businesses explaining how to identify a diploma mill.
    Although the Federal government has been successful in 
keeping diploma mills and accreditation mills out of the 
Federal student aid programs in recent years, the Committee 
recognizes there should be a greater effort across both the 
Federal and State governments to find ways to keep diploma 
mills out of business altogether.
            Accreditation
    Accreditation is a peer review process meant to ensure the 
academic quality of a school or a program offered by an 
institution of higher education. In order for an institution of 
higher education to be eligible to participate in any of the 
Federal title IV student aid programs, the institution must be 
accredited by an agency or association recognized by the 
Secretary based on certain criteria set forth in the Higher 
Education Act.
    For decades, our nation has used the independent peer 
reviewed accreditation system to ensure the quality of an 
institution of higher education. Yet far too few students, 
parents, or taxpayers know what this process entails. H.R. 609 
makes common sense reforms that strengthen the value of 
accreditation by opening the process up to consumers. The 
accreditation system serves as the central component in the 
Federal government's effort to hold institutions accountable. 
It is widely credited as an invaluable tool for measuring 
institutional quality without undue Federal control and Federal 
pressure.
    At the same time, the Committee also recognizes that the 
accreditation system is not perfect. While it may be a 
``uniquely American institution,'' it is also one that--all too 
often--perpetuates the status quo on campuses. Even with the 
additional requirement made in the 1998 Higher Education Act 
Amendments that accreditors begin to focus on student outcomes, 
the system and the institutions they accredit could be more 
effective when it comes to measuring academic quality. This 
lackluster focus on academic achievement and student learning 
outcomes has resulted in the fact that more than half of our 
nation's students do not graduate in four years. Low graduation 
rates may be compounded by the fact that parents and students 
lack the necessary information to determine whether a 
particular college or university is a quality institution or 
appear to meet the needs of that particular student.
    In order to provide information to students, parents, and 
policy makers, H.R. 609 ensures the quality of the 
accreditation team conducting site visits with some enhanced 
standards other than requiring that volunteers are ``well-
trained.'' H.R. 609 requires accreditors to disclose their 
process for selecting and evaluating their agency accrediting 
team members. The bill also ensures that accrediting agencies 
and associations are not required to establish different 
standards and reviews for distance education, as compared to 
more traditional face-to-face classroom interaction. Further, 
H.R. 609 clarifies those institutions that offer courses by 
distance education have in place processes to determine the 
students who register in a distance education course or program 
are the same students who participate, complete and receive 
academic credit. H.R. 609 requires the Secretary to provide 
Congress a report of the agency or association actions 
including accreditation granted, suspended, terminated, or 
denied; information on the qualifications of the team members 
doing site visits; and reasons for the actions taken.
    Following an adverse decision regarding the accreditation 
status of an institution of higher education, questions of the 
adequacy of current due process procedures under the Higher 
Education Act were raised. Accreditation has functioned well 
for decades using volunteers and following the classic 
principles of peer review and collegiality. The fairness of 
accreditation processes has repeatedly been upheld by courts, 
for the denial or withdrawal of accreditation often leads to 
lawsuits asserting a denial of due process. While the Committee 
believes the Department of Education has a reliable and 
comprehensive process to review and approve accrediting 
agencies' appeals processes, the Committee amended the Higher 
Education Act to provide additional processes for accrediting 
agencies or associations to follow when taking an adverse 
action against an institution. The Committee clarifies that an 
institution shall be given appropriate notice and opportunity 
to be heard prior to an adverse action by an accrediting agency 
or association becoming final. It is not the intent of the 
Committee to expand the types of adverse actions beyond those 
already defined by the Secretary as the denial, withdrawal, 
suspension, revocation, or termination of accreditation or pre-
accreditation, or any comparable accrediting action an agency 
may take against an institution or program. Finally, while it 
is essential to afford institutions appropriate due process in 
the accreditation context, it is not the intent of this 
Committee or this statutory provision to suggest or imply that 
accrediting agencies or associations are state actors or that 
the level of constitutional due process shall apply.

Title V--Developing institutions

    Hispanic Serving Institutions (HSIs) play an important role 
in American higher education, particularly in their capacity to 
provide college access to underrepresented populations, and 
populations of students with limited financial means. HSIs 
receive Federal funding under title V of the Higher Education 
Act. These grants are provided to institutions that offer and 
increase the number of educational opportunities available to 
Hispanic and other low-income students. The Committee supports 
the elimination of the two-year wait-out period for HSIs that 
prevents these institutions from applying for a new grant until 
two years have elapsed after the expiration of the prior grant. 
The Committee has determined that there is no need for a wait-
out provision and its elimination will allow funds for 
institutional development to go to the maximum number of 
institutions that submit qualified applications.
            Hispanic Serving Institution Graduate Program
    The Committee believes that increasing the number of 
Hispanic students in graduate education is imperative to 
business, industry, medicine and education. During the May 2, 
2005 field hearing entitled, ``Expanding Opportunities for 
Graduate Study at Hispanic Serving Institutions,'' Dr. Blandina 
Cardenas, President of the University of Texas--Pan American 
argued that:

          The students with master's degrees will be required 
        to lead a diverse work force and create new products 
        and product delivery systems for a diverse national 
        market and for competitiveness in the global market. 
        Hispanics with doctoral degrees must be available in 
        sufficient numbers to serve the teaching and research 
        needs of our colleges and universities and research 
        organizations in the private and public sector. I 
        believe that Hispanics with post-baccalaureate 
        preparation will bring significant added value to the 
        creative and problem-solving enterprise--not in spite 
        of the less privileged backgrounds, but because of it.

    Hispanics still lag well behind other groups in college-
going rates, retention and graduation rates and participation 
in graduate education. In 2003, data from the Department of 
Education shows that 34 percent of white students over the age 
of 25 had completed four or more years of college. For African 
American students, the figure was 17.3 percent; and for 
Hispanic students, the rate was 11.4 percent.
    In 2002, Hispanic students received 4.2 percent of all 
masters degrees awarded in the U.S., compared to 62.1 percent 
for white students and 7.7 percent for African American 
students. From 1992 to 2002, the percentage of Hispanic 
students receiving master's degrees rose from 2.6 percent to 
4.2 percent. In 2002, the percentage of Hispanic students 
receiving doctoral degrees was 3.1 percent, compared to 57.3 
percent for white students and 5.1 percent for African American 
students. The share of doctoral degrees received by Hispanic 
students in 1992 was two percent. The Committee believes these 
data illustrate the necessity of expanding graduate 
opportunities for Hispanic students and providing resources to 
the institutions that serve the majority of Hispanic students 
desiring a graduate degree.

Title VI--International education

    International education programs at the postsecondary level 
play a critical role in building and maintaining the nation's 
ability to supply expertise in foreign language, area studies 
and international business arenas. In order to continue the 
nation's established leadership role in international affairs, 
the opportunities for students to become knowledgeable in 
international issues and foreign languages has become 
increasingly important. America's interests and national 
security are inextricably tied to our knowledge and 
understanding of the rest of the world.
    Programs authorized under title VI of the Higher Education 
Act reflect the priority placed by the Federal government on 
diplomacy, national security, and trade competitiveness by 
allowing for the study of international and world issues and 
cultures, as well as foreign languages at the postsecondary 
education level. Centers and fellowships authorized under title 
VI serve the nation's national security interests in two ways: 
they produce new cadres of personnel trained in foreign 
languages and knowledgeable about foreign areas and they 
provide a cumulative body of knowledge about international 
affairs, which provide expertise for government agencies and an 
intellectual foundation for intelligence.
    In a report published by the American Council on 
Education's Center for Institutional and International 
Initiatives entitled, ``Beyond September 11: A Comprehensive 
National Policy on International Education,'' three national 
policy objectives have been established by the higher education 
community for success in international education. First, the 
nation must produce international experts and knowledge to 
address national strategic needs. Second, it is imperative to 
strengthen the ability of the United States to solve 
international problems. Third, it is time to develop a 
citizenry and workforce that is competent in international 
issues and affairs. Programs under title VI were established 
over forty years ago to address these objectives and have been 
reformed and reauthorized to better reflect the current 
international climate.
    The bill updates the findings and purposes of the programs 
under title VI to reflect our national security needs in the 
post-September 11th era, as well as the current international 
climate. Therefore, H.R. 609 increases coordination between 
international and foreign language studies programs to better 
meet America's national and international security needs. The 
bill also clarifies that programs under title VI are to 
reinforce and coordinate with other Federal programs in the 
areas of foreign language, area studies, and international 
affairs. The Committee recognizes that a complete understanding 
of area studies is intrinsically tied to knowledge of the 
history, politics, geography, and languages within a particular 
region.
    During the June 2005 hearing on title VI programs at The 
Ohio State University, Dr. Jerry R. Ladman, Associate Professor 
for International Affairs commented about the importance of the 
title VI programs to the current international climate, both 
inside and out of academia. He said:

          As was Sputnik and the Cold War, the events of 
        September 11, 2001, were another milestone event. 
        Probably nothing in our nation's history has indicated 
        to the population at large how important it is to have 
        numerous professionals within the public and private 
        sectors who are trained in area studies and foreign 
        languages, especially less-commonly taught languages, 
        such as Arabic, Urdu, Hindi, Pashto, and Tajik. Whereas 
        it is obvious that this is important for matters of 
        national security, it is also generally recognized as 
        important for the United States in business and other 
        matters.
            International Advisory Board
    In a June 2005 report from the Congressional Research 
Service, there was significant discussion regarding the 
establishment of either a ``multi-agency board, endowment, 
foundation or other independent Federal entity to coordinate 
and/or administer all Federal programs dealing with foreign 
language and international studies.'' The report further 
suggested that one function of such board or agency might be 
``relatively long-range planning to attempt to meet both the 
Federal government's and the Nation's needs for foreign 
language and area studies specialists in a coordinated 
manner.''
    During the June 2003 hearing on title VI, Dr. Stanley 
Kurtz, a Research Fellow with the Hoover Institution, argued 
that a board, similar to those that govern the Fulbright and 
National Security Education Programs, was needed to help 
enhance the programs under title VI. Dr. Kurtz proposed that a 
board should be inclusive of all points of view and should 
therefore ``be able to hold annual [public] hearings on title 
VI activities, including the outreach activities of the 
National Resource Centers.''
    In a book entitled, ``Language and National Security in the 
21st Century,'' published by the National Foreign Language 
Center, the authors recommend an ``establishment of mechanisms 
to monitor national needs and capacity in language and to 
assess how those needs and that capacity are addressed by 
Federal, State, and local programs, including title VI.'' The 
International Advisory Board, authorized by the bill, is 
responsible for making specific recommendations that will 
assist the Secretary and the Congress to improve the programs 
under title VI to better reflect the national needs related to 
homeland security, international education, and international 
affairs, including the assessment of the national needs and 
training provided by the institutions of higher education that 
receive a grant for expert and non-expert level foreign 
language training.
    The Committee believes that the programs authorized under 
title VI of the Higher Education Act are crucially important 
because they ensure the expansion of the international 
knowledge base of the nation's citizenry and promote the growth 
and development in national need areas related to addressing 
national security interests and international commerce. The 
International Advisory Board will provide advice, counsel and 
recommendations to the Secretary and the Congress on 
international education issues for higher education in order to 
improve international education program. Members of the 
International Advisory Board are to be appointed by the House 
of Representatives, the Senate, and the Secretary, who must 
select two representatives from agencies with diplomacy, 
national security, international commerce or other 
international activity responsibilities. These agencies may 
include, but not be limited to, the Department of Defense, the 
Department of Homeland Security, the Department of State, the 
Department of Commerce, and the Central Intelligence Agency.
    The International Advisory Board is authorized to hold 
public hearings to review the recommendations provided by the 
Board to the Secretary and the Congress. The Committee believes 
this is an important first step to engage the independent board 
with the grantees, communities and constituencies who are most 
interested in the objectives and outcomes of the programs 
authorized under title VI. The Committee believes strongly that 
H.R. 609 and the new International Advisory Board does not have 
the authority to mandate, direct, or control an institution of 
higher education's specific instructional content, curriculum, 
or program of instruction.
    Moreover, the Committee believes that when selecting 
grantees, the Secretary should take into account the degree to 
which activities of centers, programs, and fellowships at 
institutions of higher education advance national interests, 
generate and disseminate information, and foster debate on 
American foreign policy from diverse intellectual perspectives. 
The Committee also believes that the bill clearly requires that 
recruiters from the military and Federal agencies should be 
given the same access as is granted to prospective employers 
who wish to recruit students for non-government related 
employment opportunities. The Committee believes students who 
benefit from the programs funded under title VI have 
instrumental and unique skills in foreign language, world 
regions and international affairs that would serve to benefit 
the military and agencies of the Federal government.
            Coordination with elementary and secondary schools
    During the June 2003 hearing, Ms. Vivien Stewart, 
representing the Asia Society, testified that the levels of 
student knowledge about international affairs is rudimentary. 
``Young Americans are next to last in their knowledge of 
geography and international affairs compared with students from 
eight other industrial countries,'' she argued. Furthermore, 
Ms. Stewart highlighted the fact that most prospective teachers 
do not take any international education courses and have very 
low participation rates in study abroad programs.
    H.R. 609 ensures that colleges of education and teacher 
professional development programs can be included as partners 
in outreach grants and summer institute programs. By 
authorizing the Secretary to make grants to outreach and summer 
institute programs that involve partnerships with local 
educational agencies and public and private elementary and 
secondary schools, the Committee believes there will be an 
increase in student academic achievement in foreign language 
and knowledge of world regions. Finally, by authorizing title 
VI centers and programs to serve as a national resource for 
courses and materials for elementary and secondary schools, the 
Committee believes this legislation will encourage and enhance 
international knowledge at all stages and levels of education.
            Foreign language studies
    The Committee urges the Secretary to encourage the 
development of programs that stress the teaching of foreign 
languages for practical and professional use, including 
programs that promote foreign language education across the 
curriculum.
    The bill encourages the Secretary to engage in data 
collection and analysis of international education and foreign 
language needs and outputs on an ongoing and systematic basis, 
and to make the results known nationally on a regular basis. 
The Committee notes that international and foreign language 
education is an evolving field in the United States, with 
heightened importance to the national interest. The Committee 
also encourages the Secretary to consider projects that assess 
the impact of student learning abroad, develop foreign language 
proficiency assessments where they do not exist for the less 
commonly taught languages, assess the relationship between 
gains in foreign language proficiency and knowledge of world 
regions, and assess the impact of technology on language 
acquisition.
    The Committee recognizes that students who study abroad for 
the enhancement of foreign language knowledge and proficiency, 
as well as the study of world regions, may travel to areas or 
regions in conflict or unrest. The Committee encourages 
institutions of higher education to take into consideration 
safety policies and procedures for students participating in 
any study abroad program funded under title VI.
            International business education
    The Committee believes that international business 
education programs reauthorized by H.R. 609 under title VI of 
the Higher Education Act play a unique and important role in 
overall international education efforts. The programs have 
proven to be an integral part of many postsecondary 
institutions' efforts to develop international education 
initiatives.
    During the May 2005 hearing on title VI initiatives in the 
area of international business education, Dr. Stephen M. Hills, 
Academic Director, Office of International Programs in the 
Fisher College of Business at The Ohio State University, 
discussed the importance of the Centers for International 
Business Education & Research (CIBERs), authorized under title 
VI:

          There are currently 30 national CIBER centers in the 
        United States, each committed to enlarging the sphere 
        of teaching, research, and outreach undertaken on their 
        campuses and in their communities in the area of 
        international business development. Each of the CIBER 
        centers has at its core the goal of increasing 
        international competitiveness, business language 
        acumen, global trade expertise, and area studies 
        competency. Programs are directed to undergraduate, 
        graduate and Ph.D. students within colleges of business 
        as well as elsewhere on campus; to faculty from 
        throughout the university, and to executives and 
        professionals within business communities.
            Institute for International Public Policy (IIPP)
    A hallmark program for the education, inclusion and 
participation of students from underrepresented populations, 
the Institute for International Public Policy (IIPP) was 
amended in H.R. 609 to include all underrepresented populations 
in its program in order to enhance participation in 
international service. The Committee recognizes the 
achievements of a statesman and diplomat, Ralph J. Bunche by 
naming students who participate in internships under the IIPP 
program as the ``Ralph J. Bunche Fellows.''
    Additionally, the Committee recognizes the valuable and 
important role minority serving institutions play in 
postsecondary education. As these institutions may not have the 
capacity to provide full matching funds for the programs under 
title VI, H.R. 609 adds a special rule to the programs in the 
title that allows the Secretary to waive or reduce the non-
Federal match for Historically Black Colleges and Universities, 
Hispanic Serving Institutions, Tribally Controlled Colleges and 
Universities, and Alaska Native and Native Hawaiian serving 
institutions. Although this waiver authority currently exists 
for some programs under the title and throughout the Higher 
Education Act, the Committee believes it is important to ensure 
continuity and consistency among all title VI programs, which 
have a direct benefit to our national interests and security.
    It is imperative that title VI programs, as the largest 
Federal program supporting language and area studies in the 
national interest, continue to take responsibility for training 
experts as well as building and maintaining national capacity 
in the nation's education system. The consideration and 
adoption of H.R. 609 will have a distinct effect on the 
international education efforts of postsecondary education 
institutions as partners in addressing national strategic needs 
in foreign language, area studies, international affairs and 
international business education.

Title VII--Graduate education

    As we proceed through the 21st Century, the need for 
advanced education is becoming increasingly more critical to 
successfully maintaining our place in a technologically 
advanced economy. Now, more than ever, our citizens are 
obtaining graduate degrees in order to gain more knowledge and 
expertise in their field of study.
            Graduate Assistance in Areas of National Need
    Graduate programs, while important for their role in higher 
education, also play an essential, yet often overlooked role in 
K-12 education. Graduate programs provide the education and 
training necessary for individuals to become faculty at 
institutions of higher education, who in turn, train the 
elementary and secondary teachers of tomorrow. In order to 
ensure the nation's children receive the best education 
possible, Congress must ensure the faculties in our teacher 
colleges are prepared to meet this challenge.
    The Committee commends the Secretary for identifying as the 
current areas of national need: biology, chemistry, computer 
and information sciences, engineering, geological and related 
sciences, math, and physics. It is estimated that more than 
half of the economic growth of the United States today results 
directly from research and development in science and 
technology. The effectiveness of the United States in promoting 
economic growth will be largely determined by the intellectual 
capital of the United States. Education is critical to 
developing this resource.
    Teachers provide the essential connection between students 
and the content they are learning. Elementary and secondary 
classrooms across the nation are facing teacher shortages in 
particular subject areas. Many states and schools are 
struggling to find highly qualified math, science and special 
education teachers. As our schools work to educate a rapidly 
growing population whose native language is not English, we 
need individuals specifically trained in teaching students with 
limited English proficiency (LEP). Student performance on the 
recent Third International Math and Science Study highlights 
the shortcomings of current K-12 science and mathematics 
education in the United States, particularly when compared to 
other countries. We must expect more from our nation's 
educators and students if we are to build on the 
accomplishments of previous generations. New methods of 
teaching mathematics and science are required, as well as 
better curricula and improved training of special education and 
LEP teachers.
    To achieve improved training of teachers, H.R. 609 requires 
that the Secretary establish a competitive priority for grants 
under the Graduate Assistance in Areas of National Need (GAANN) 
program in order to prepare individuals for the professoriate 
who are committed to training highly qualified elementary and 
secondary school teachers of mathematics and science.
    The Committee encourages the Secretary to provide priority 
to departments that engage in such activities, and encourages 
the Secretary to regard departments of mathematics and 
sciences, as well as departments of engineering, as departments 
that may provide such activities.
    The Committee recognizes that a chronic and persistent 
shortage of special education faculty curtails the national 
capacity of colleges and universities to conduct research and 
prepare teachers who can effectively teach students with 
disabilities. The number of special education doctorates 
produced annually has decreased by 30 percent in the last 20 
years, according to the Higher Education Consortium for Special 
Education. About half of those with doctorates choose to work 
in higher education; the others work in leadership positions in 
settings such as local school systems.
    The Committee is aware that the chronic and persistent 
shortage of special education teachers is exacerbated by the 
shortage of special education faculty in institutions of higher 
education. Without adequate faculty, there will be fewer 
qualified teachers and thus lower student achievement. Research 
has documented that students are more likely to have higher 
achievement when they are taught by qualified teachers, than 
when they are taught by unqualified teachers. As accountability 
for student achievement increases, the demand for qualified 
special education teachers will likewise increase.
    To achieve improved training of teachers, H.R. 609 requires 
the Secretary to establish a competitive priority for grants 
under the GAANN program in order to prepare individuals for the 
professoriate who are committed to training highly qualified 
elementary and secondary school teachers that can effectively 
teach students with disabilities.
    The provisions of No Child Left Behind require closing the 
achievement gap that exists for the nation's 4.5 million 
limited English proficient children. There is an acute shortage 
of teachers prepared to teach these young students. The 
tremendous need for bilingual/English as a second language 
(ESL) teachers exists not only in states with traditionally 
large immigrant populations like California, Florida and Texas, 
but also on a national level and in an increasing number of 
small towns and rural communities.
    Therefore, in order to ensure that students with limited 
English proficiency are instructed by teachers who are 
qualified to address the needs of this unique student 
population, H.R. 609 requires the Secretary to establish a 
competitive priority for grants under the GAANN program. This 
priority will help to ensure preparation of individuals for the 
professoriate in fields such as second language pedagogy and 
second language acquisition who are committed to training 
highly qualified elementary and secondary school teachers can 
effectively teach limited English proficient students.
            Fund for the Improvement of Postsecondary Education
    Ensuring innovation, reform and outreach in higher 
education is essential in assisting institutions to meet their 
full potential and allowing their students to do the same. The 
Committee recognizes that many institutions of higher education 
possess tremendous resources in their facilities, faculty and 
student body, and often these resources are underutilized 
outside of the traditional classroom. H.R. 609 extends the 
opportunity for institutions of higher education to reach out 
to the communities in which they reside. By allowing the 
Secretary to include community outreach and involvement as an 
activity within the Fund for Improving Postsecondary Education 
(FIPSE), the special project authorization allows institutions 
of higher education to assist in meeting the pressing needs of 
the surrounding community, while providing an educational 
experience for students that will be unmatched in the 
classroom.
    The Committee anticipates that one of the new activities 
provided through FIPSE grants can and should improve secondary 
school graduation and college attendance and completion rates 
for disadvantaged students. While there are many secondary 
school reform models that could meet this eligibility 
requirement, the Committee would like to make note of one 
particular model program called Project GRAD. Project GRAD is a 
comprehensive, cost-effective program with a record of 
improving the academic achievement and college access of 
students from low-income backgrounds. Project GRAD's integrated 
approach to teaching and learning includes working with an 
entire feeder system in a school district, the local non-profit 
GRAD organization, community involvement and collaboration, and 
working with existing assets. Project GRAD delivers a 
comprehensive set of research-based programs in reading, 
mathematics, classroom management, social services/parent 
involvement, and college preparation. In addition, Project GRAD 
provides a four-year college scholarship to all students who 
qualify. It is this unique structural approach that contributes 
to higher academic standards and offers the dream of graduation 
and college to all the students within a feeder system, or even 
an entire district.
    In response to the numerous institutions of higher 
education that are working to implement programs to work with 
private and civic organizations to resolve pressing and severe 
community problems, FIPSE includes a new 'national need' 
designation that permits grantees to use funds to support the 
development of coordinated curriculum and internship 
opportunities for students in disadvantaged communities. The 
Committee understands that some universities, such as the 
Shepherd Program at Washington and Lee University, are working 
to coordinate and expand programs to study poverty and its 
impact on communities. The Committee encourages the Department 
to identify other such programs for the purposes of awarding 
funds in order to assist disadvantaged communities in meeting 
this important national need.
    In 2000, Congress unanimously passed a concurrent 
resolution (S. Con. Res. 129) stating, in part, that ``the 
historical illiteracy of America's college and university 
graduates is a serious problem. * * *'' reflecting a failure to 
impart to students a basic understanding of the history, 
ideals, documents and institutions that have formed the nation. 
The Committee notes that the events of September 11, 2001 made 
these concerns even more compelling. The ideals, institutions, 
key documents, and history on which our nation stands need to 
be understood if they are to be sustained in times of trial.
    This issue was most recently highlighted in a hearing 
conducted by the Subcommittee on Select Education, on September 
9, 2003. At that hearing, Dr. William Barclay Allen, Professor 
of Political Philosophy and Director of the Program in Public 
Policy and Administration at Michigan State University, spoke 
of the impact of the disappearance of university requirements 
in traditional American history and western civilization:

          A direct consequence of this trend has been an 
        erosion of the training of professors (and therefore K-
        12 teachers) to preserve broad familiarity with facts, 
        texts, and significant dates affecting our civic 
        existence. A targeted response to this situation, 
        cutting across disciplinary distinctions, will 
        meaningfully strengthen the academy's ability to play a 
        central role in fostering content mastery regarding the 
        significant moral, constitutional, political, 
        intellectual, economic, cultural, and international 
        influences revealed through American history.

    In response to this concern, H.R. 609 includes an important 
amendment to the FIPSE program. Specifically, language was 
added identifying the expansion of academic programs focused on 
traditional American history as an area of ``national need.'' 
It is the intent of the Committee that this authority be used 
for reinvigorating majors and graduate programs in these 
fields, thus creating a new pipeline for producing the scholars 
and teachers needed to staff these fields at the graduate and 
undergraduate levels and in teacher training programs.
    By including the establishment of academic programs in 
support of research and the development of teaching materials 
for teaching traditional American history, students and faculty 
may once again ensure the values and history of the United 
States are learned, remembered and passed on to future 
generations. H.R. 609 will go a long way in bringing back the 
relevance of teaching this important topic and ensure it is 
done comprehensively.
    During this reauthorization, the Committee feels strongly 
that the importance of graduate education overall should not be 
overlooked. Dr. Earl Lewis, Dean of the Rackham Graduate 
School, Vice Provost for Academic Affairs for Graduate Studies, 
and Professor of History at the University of Michigan 
expressed his support for graduate education programs before 
the Subcommittee on Select Education:

          Graduate education prepares the scientists and 
        engineers needed by industry, government, and 
        universities to conduct the nation's research and 
        development. Graduate programs also educate the 
        scholars in the humanities, social sciences, and the 
        arts who preserve and enlarge our understanding of the 
        history and scope of human thought and the human 
        condition, and transmit that knowledge to succeeding 
        generations. Moreover, graduate programs at our 
        nation's universities generate new knowledge and act as 
        incubators of innovative ideas that drive new 
        technologies and create new ways to address societal, 
        health, security, and economic needs and challenges.

    As Congress continues its work on the reauthorization of 
the Higher Education Act, it must continue to build on the 
demonstrated success of these valuable graduate programs. These 
programs, and the amendments made within H.R. 609, will prepare 
the next generation of scientists, scholars and teachers and 
ensure the support and effectiveness of these programs.

Title VIII--Clerical amendments

    H.R. 609 made numerous technical and clarifying amendments 
to the Higher Education Act.

Title IX--Amendments to other education laws

    H.R. 609 mostly maintains current law in its 
reauthorization of the Education of the Deaf Act of 1986. 
However, the bill includes three important reforms that the 
Committee feels will strengthen the Act and improve the 
programs offered by Gallaudet University and the National 
Technical Institute for the Deaf (NTID).
    First, H.R. 609 requires Gallaudet University to develop 
academic content standards, academic achievement standards, and 
academic assessments consistent with the No Child Left Behind 
Act for the elementary and secondary programs operated at the 
Laurent Clerc National Deaf Education Center. In July, data 
from the National Assessment of Educational Progress 2004 long-
term trend assessment was released showing improving test 
scores in mathematics and reading. This data confirms that the 
high standards and accountability established in the No Child 
Left Behind Act are having a significant impact on our nation's 
schools. The Committee feels strongly that students 
participating in the elementary and secondary programs at 
Gallaudet University deserve the same high standards and 
opportunities that other students are experiencing.
    H.R. 609 also codifies the relationship between the 
Secretary and the Rochester Institute of Technology (RIT). RIT 
has operated the NTID through a contract with the Secretary 
since 1968, yet the Education of the Deaf Act of 1986 has never 
recognized this relationship. Given RIT's nearly 40 years of 
successful work on behalf of students who are deaf or hard of 
hearing, the Committee believes that formally identifying RIT 
as the university responsible for the operation of the NTID is 
a commonsense reform that rewards excellence and ensures 
stability in this program.
    Finally, H.R. 609 changes the name of the Act to the 
``Gallaudet University and National Technical Institute for the 
Deaf Act.'' This technical change recognizes the Act's purpose 
of providing support for the academic programs and research 
projects of these two institutions. Given the many other 
programs that are geared more generally toward students who are 
deaf or hard of hearing, the Committee believes that this 
change will ensure that the Act will continue to focus 
resources on Gallaudet University and the NTID for the benefit 
of all students who are deaf or hard of hearing.

Conclusion

    The College Access and Opportunity Act is the product of 
more than two years of dedicated effort to improving America's 
higher education system. The Committee believes the Higher 
Education Act is among the nation's most significant mechanisms 
to empower individuals and increase opportunities for success, 
and that is why the reauthorization could be no ordinary task. 
From the outset, the Committee has been committed to enacting 
meaningful reforms that would benefit students and taxpayers. 
The process began, appropriately, by identifying ways to 
simplify the process. The goal was not to add another layer of 
confusion, but to review the programs with a critical eye to 
determine what is working well, and what could be working 
better; what regulations and red tape are unnecessary, and what 
more needs to be done.
    Early in the process, the Committee identified access, 
accountability, affordability, and quality as the guiding 
principles for the reauthorization. Those ideals helped to 
shape the policies contained in the legislation, and can be 
used to determine Congressional intent. Ultimately, the 
Committee believes that reauthorization of the Higher Education 
Act is an opportunity to reform and strengthen one of the most 
vital systems in America--the higher education system. Rather 
than squander the opportunity with a rubber stamp for the 
status quo, the Committee members rolled up their sleeves and 
fought for real changes. The result is a bill that will expand 
college access and ensure the Higher Education Act is equipped 
for the future.

                      Section-by-Section Analysis


Section 1. Short title; table of contents

    States the short title as the ``College Access and 
Opportunity Act of 2005.'' Contains the Table of Contents.

Section 2. References; effective date

    Establishes the effective date as the date of enactment. 
States that, unless otherwise noted, any amendment to repeal or 
amend a section or provision amends or repeals a section or 
provision of the Higher Education Act of 1965.

                      Title I--General Provisions


Section 101. Definition of institution of higher education

    Strikes sections 101 and 102 and inserts new sections 101 
and 102. Creates a single definition of an institution of 
higher education under section 101. Includes within the list of 
students an institution may enroll to meet the definition those 
students who are dually enrolled at the institution and a 
secondary school. Clarifies requirements for the legal 
authorization of foreign schools. Repeals the 50 percent rule 
as it pertains to distance education by telecommunication. 
Clarifies the institutional eligibility criteria applicable to 
foreign not-for-profit veterinary schools. Removes the 
requirement for students attending Canadian Medical schools to 
take the Foreign Medical exam. Requires the Secretary to 
publish qualifying criteria by regulations and establish an 
advisory panel with regards to evaluating the qualifications of 
foreign medical schools. Adds a new section 123 that clarifies 
how proprietary institutions may use grant funds and makes 
proprietary institutions ineligible for funds under titles III 
and V of this Act. Makes conforming amendments regarding home-
schooled students. Amends the title of 484(d) to read ``(d) 
Satisfaction of Secondary Education Standards.'' Makes several 
conforming amendments to reflect the single definition of 
institutions of higher education. States that the inclusion of 
for-profit schools within the definition of ``institution of 
higher education'' will not apply to any other provision of law 
enacted before the date of enactment of this Act.

Section 102. New borrower definition

    Amends section 103(7) to clarify definition of ``new 
borrower'' and separate the Federal Family Education Loan and 
Direct Loan programs from the Perkins program.

Section 103. Student speech and association rights

    Amends section 112 to clarify the current Sense of Congress 
regarding student speech and association rights.

Section 104. Extension of National Advisory Committee on Institutional 
        Quality and Integrity

    Amends section 114(b) by permitting members of the 
Committee to continue to serve after the expiration of a term 
until a successor is appointed.
    Amends section 114(g) to extend the authorization of the 
National Advisory Committee on Institutional Quality and 
Integrity.

Section 105. Alcohol and drug abuse prevention

    Amends section 120(e)(5) to extend the Alcohol and Drug 
Abuse prevention grants.

Section 106. Prior rights and obligations

    Amends section 121(a) to extend the authorization to 
continue coverage of prior rights and obligations for servicing 
of outstanding bonds from old title VII bonds.

Section 107. Limitation on certain uses of funds

    Amends part B of title I by inserting a new section 124 
that prohibits funds from this Act from being used for 
publicity or propaganda not authorized by Congress or for any 
prepackaged news story not authorized by law unless it includes 
a clear notification that the story was prepared or funded by 
the Department of Education.

Section 108. Consumer information and public accountability in higher 
        education

    Amends section 131 by rewriting the section. Outlines the 
purpose of the section. Requires the Secretary to assess the 
key data elements that are of greatest importance to students 
and families; convene a group of experts to determine what data 
elements are important, cost-effective strategies for 
institutions to employ to collect necessary data, and the 
general comparability of data across institutions; to make 
recommendations on what data elements to include on the 
redesigned College Opportunities On-Line (COOL) website; and, 
to assure that the redesigned COOL website uses data elements 
currently provided by institutions, includes clear and uniform 
information, provides comparable information, and includes a 
sorting function. Also requires the Secretary to redesign the 
Integrated Postsecondary Education Data Systems as necessary. 
Also requires the Secretary to publish a college consumer 
profile for each institution participating in title IV 
programs. Requires the Secretary to make available, at a 
minimum, the data collected pursuant to this section in a 
manner that permits the review and comparison of institutions 
and is easily accessible and understandable. Requires the 
Secretary to work with public and private entities to promote 
broad public awareness, particularly among middle and high 
school students and their families, of the information made 
available under this section. Requires the Secretary to 
distribute this information to students who participate in 
Federally funded education programs and other Federal programs 
as determined by the Secretary. Establishes a college 
affordability index and requires institutions that exceed the 
index to report how they will work to address that increase.
    Requires each institution that has a college affordability 
index that exceeds two for any three year period and that has 
an index that is in the highest 25 percent of those 
institutions to establish a quality-efficiency task force to 
review the operations of the institution. Outlines the 
membership and functions of the task force and requires the 
task force's recommendations to be included in the report to 
the Secretary. If the Secretary determines that an institution 
who has exceeded the index has failed to comply with its 
management plan and has failed to meet the index for two 
consecutive academic years, the Secretary is required to 
publicly report the institution's costs and expenditures and 
tuition and fees from students, place the institution on an 
affordability alert status, notify the institution's 
accrediting agency, and may require the institution to submit 
to a review and audit by the Department's Inspector General. 
Provides for a relative price exemption and dollar increase 
exemption to this requirement. Establishes classes of 
institutions for the purposes of comparing costs. Permits the 
Secretary to impose fines on institutions that fail to provide 
the necessary information in a timely and accurate manner. 
Requires GAO to conduct a study of best practices regarding 
costs. Requires an interim report in 2011 and a final report in 
2013. Makes technical amendments regarding data collection and 
references to other sections. Requires the Secretary conduct 
the student aid survey every 4 years.

Section 109. Databases of student information

    Inserts a new section 132 that states that nothing in the 
Act should be construed to authorize the design, development, 
creation, implementation, or maintenance of a nationwide 
database of personally identifiable information on individuals 
receiving assistance, attending institutions receiving 
assistance, or otherwise involved in any studies or other 
collections of data under this Act, including a student unit 
record system, an education bar code system, or any other 
system that tracks individual students over time. The new 
section clarifies that this prohibition does not affect the 
loan obligation enforcement activities described in section 
485B of this Act.

Section 110. Performance-based organization

    Revises section 141 to clarify the goals of the 
Performance-Based Organization related to the costs of 
administering the student aid programs. Clarifies the 
definition of ``year.'' Revises the consultation process on the 
annual performance plan to include guarantors and secondary 
markets. Makes technical amendments to correct various 
citations.

                     Title II--Teacher Preparation


Section 201. Teacher quality enhancement grants

    Amends Part A of title II by rewriting sections 201 through 
210. Section 201 outlines the purposes and definitions for the 
title. States the need for holding institutions of higher 
education accountable for preparing highly qualified teachers. 
Defines or modifies the definition for the following terms: 
``Arts and Sciences,'' ``Exemplary Teacher,'' ``Highly 
Qualified,'' High-Need Local Educational Agency,'' ``Poverty 
Line,'' ``Professional Development,'' ``Scientifically Based 
Reading Research,'' ``Scientifically Based Research,'' and 
``Teaching Skills.''
    Section 202 authorizes the State Grants competitive grant 
program for eligible States.
    Defines the term ``Eligible State'' and outlines 
requirements for applications for grants. Requires States to 
use funds to reform teacher preparation requirements, 
coordinate with State activities under section 2113(c) of the 
Elementary and Secondary Education Act of 1965, and ensure that 
current and future teachers are highly qualified. Authorizes 
grant recipients to use funds to develop teacher preparation 
programs that prepare highly qualified teachers who are able to 
understand scientifically based research and its applicability, 
and are able to use advanced technology effectively in the 
classroom; reform teacher certification, recertification, or 
licensing requirements to ensure that teachers have the 
necessary subject matter knowledge and teaching skills and that 
the requirements are aligned with challenging State academic 
content standards; provide prospective teachers with 
alternative routes to State certification and traditional 
preparation to become highly qualified teachers; implement 
innovative programs such as charter colleges of education or 
university and local educational agency partnership schools 
that enhance the ability of institutions of higher education to 
prepare highly qualified teachers; develop, or assist local 
educational agencies in developing, merit or bonus pay systems 
to retain principals and teachers; develop, or assist local 
educational agencies in developing, teacher advancement and 
retention initiatives that promote professional growth and 
emphasize multiple career paths and pay differentiation; 
develop and implement effective mechanisms to ensure that local 
educational agencies and schools are able to remove incompetent 
or unqualified teachers consistent with procedures that ensure 
due process; provide technical assistance to low-performing 
teacher preparation programs; develop systems to measure the 
effectiveness of teacher preparation programs and professional 
development programs and strategies to document gains in 
student academic achievement or increases in teacher master of 
content; develop mechanisms to ensure that local educational 
agencies and schools are able to recruit and retain highly 
qualified teachers or provide activities as described in 
section 204(d); improve the qualifications of early childhood 
educators, improve and expand preschool teacher preparation 
programs, and reduce unnecessary burdens to the attainment of a 
bachelor's degree in early childhood education and increase the 
number of bilingual early childhood educators, which may 
include developing articulation agreements between institutions 
of higher education; incorporate the learning needs of gifted 
and talented students into the activities described in 
paragraphs (1), (2), or (3) of this subsection in order to 
ensure that new teachers possess basic knowledge and skills 
necessary to meet the educational needs of gifted and talented 
students; establish or expand new teacher mentoring and 
assessment programs that are a part of a licensure process 
which is designed to demonstrate that new teachers possess 
basic knowledge of the classroom indicators of giftedness, are 
able to identify student learning differences among gifted 
students, and are able to provide instruction to accommodate 
such differences; support the development of new special 
education, math, and science faculty positions in institutions 
of higher education dedicated to the preparation of highly 
qualified special education, math, and science teachers, with 
matching funds from institutions of higher education and a 
commitment to continue new faculty positions when Federal 
funding ends; and, assess the performance of teacher 
preparation programs within institutions of higher education in 
the State using an assessment which provides comparisons across 
such schools in the State based upon indicators including 
teacher candidate knowledge in subject areas in which such 
candidate has been prepared to teach, and to make such 
information publicly available and widely disseminated. 
Requires States to develop and utilize a system to annually 
evaluate teacher preparation programs and professional 
development activities, and to publicize the results.
    Section 203 authorizes the Partnership Grants competitive 
grant program for eligible partnerships. Defines the terms 
``Eligible Partnerships'' and ``Partner Institution'' and 
outlines the requirements for applications for grants. Requires 
grantees to reform teacher preparation requirements, coordinate 
with State activities under section 2113(c) of the Elementary 
and Secondary Education Act of 1965, and ensure that current 
and future teachers are highly qualified by engaging in one or 
more of the following activities: implement reforms within 
teacher preparation programs to ensure that such programs are 
preparing teachers who are highly qualified, are able to 
understand scientifically based research and its applicability, 
and are able to use advanced technology effectively in the 
classroom; provide sustained and high-quality pre-service and 
in-service clinical and mentoring experiences; create 
opportunities for enhanced and ongoing professional development 
that improves academic content knowledge of teachers and 
promotes strong teaching skills; develop, or assist local 
educational agencies in developing, professional development 
activities that provide training in how to teach and address 
the needs of students with different learning styles and needs 
and provide training in improving student behavior and 
identifying interventions to help those students. Authorizes 
grantees to use funds to provide prospective teachers with 
alternative routes to State certification and traditional 
preparation to become highly qualified teachers; disseminate 
information on effective practices and coordinate activities 
with other State offices and agencies; develop and implement 
professional development programs for principals and 
superintendents that enable them to be effective school leaders 
and prepare all students to meet challenging State academic 
content and achievement standards; recruit students into the 
teaching profession; create opportunities for clinical 
experience and training in areas related to math, science, and 
technology; coordinate with community colleges to implement 
teacher preparation programs, including through distance 
education or articulation agreements; establish or implement a 
teacher mentoring program for teachers in their first three 
years of teaching; train teachers to use computer software for 
multilingual education to address the needs of limited English 
proficient students; increase the knowledge and skills of pre-
service teachers participating in activities under the required 
uses of funds subsection in the educational and related needs 
of gifted and talented students; and, increase the number of 
highly qualified special education, math, and science teachers 
through such activities as recruitment, scholarships for 
tuition and new teacher mentoring. Requires that at least 50 
percent of the funds made available under this section be used 
directly to benefit the high-need local educational agency 
included in the partnership. Requires that funds received under 
this section supplement, rather than supplant, other Federal, 
State, and local funds.
    Section 204 authorizes the Teacher Recruitment Grants 
competitive grants program for eligible applicants. Defines the 
term ``Eligible Applicant'' and outlines the requirements for 
applications for grants. Requires grantees to use funds to 
award scholarships to help students pay the costs of tuition, 
room, board, and other expenses of completing a teacher 
preparation program; provide support services to enable 
students to complete a program and transition from another 
field into a teaching career; provide follow-up services to 
former scholarship recipients during the recipient's first 
three years of teaching; and develop mechanisms to ensure that 
high-need local educational agencies and schools are able to 
effectively recruit highly qualified teachers. Authorizes 
grantees to use funds to develop effective mechanisms to 
recruit into the teaching profession employees from high-demand 
industries and the fields of math, science, and engineering; 
conduct outreach and coordinate with inner city and rural 
secondary schools to encourage students to pursue teaching 
careers; develop and implement dual degree programs that enable 
students at institutions of higher education to earn two 
undergraduate degrees concurrently, one of which being in 
education and the other in the subject matter of the student's 
choosing; and, recruit high achieving students, bilingual 
students, and other qualified candidates into early childhood 
education programs. Requires scholarship recipients to teach in 
a high-need local educational agency for a certain time period 
or repay the scholarship. Requires the Secretary of Education 
to give priority to eligible applicants who provide an 
assurance that they will recruit a high percentage of minority 
students to become highly qualified teachers.
    Section 205 outlines administrative provisions for Part A 
of title II. Specifies the duration of grants awarded under 
this part and that grantees under sections 203 and 204 may only 
receive a grant once. Requires the Secretary to refer 
applications for grants under this part to a peer review panel 
for evaluation. Outlines the priorities the peer review panel 
should consider in making recommendations to the Secretary. 
Requires the Secretary to determine, based on the peer review 
process, which application shall receive funding and the 
amounts of the grants. Requires grantees under this part to 
provide matching funds. Limits to two percent the amount of the 
grant that can be used on administration expenses.
    Section 206 requires grantees under section 202 to submit 
an annual accountability report to the Secretary and the 
education committees of Congress. Outlines the areas that are 
to be covered by the accountability report. Requires grantees 
under section 203 to establish as a condition of submitting an 
application an evaluation plan that includes strong performance 
objectives. Outlines the objectives and measures that are to be 
considered by the plan. Requires grantees under sections 202 
and 203 to report annually on the progress toward meeting the 
purposes of this part and the goals, objectives, and measures 
described in subsections (a) and (b) of the section. Requires 
the Secretary to withhold certain grant payments if the 
Secretary determines that a grantee is not making substantial 
progress in meeting the purposes and goals of the appropriate 
section. Requires the Secretary to evaluate the activities 
funded under this part, report his or her findings to the 
education committees of Congress, and broadly disseminate 
information regarding both successful and ineffective 
practices.
    Section 207 requires each State that receives funds under 
the Act to submit to the Secretary annually a State report card 
on the quality of teacher preparation in the State. Outlines 
what is required to be included in the report. Requires the 
Secretary to provide annually a report to Congress on teacher 
qualifications and preparation in the United States. Outlines 
what is required to be included in the report. Requires the 
Secretary to coordinate, to the extent practicable, the 
information collected and published under this part among 
States for teachers who become certified in a State other than 
the one in which they received their most recent degree. 
Requires each institution of higher education or alternative 
certification program that conducts a teacher preparation 
program that enrolls students who receive Federal aid under 
this Act to submit an annual report to the State and the 
general public on both traditional certification or licensure 
programs and alternative certification or licensure programs. 
Outlines what is required to be included in the report and how 
the report must be published and disseminated. Permits the 
Secretary to impose a fine on an institution of higher 
education for failure to provide the required information in a 
timely or accurate manner.
    Section 208 requires each State that receives funds under 
the Act to have in place a procedure to identify and assist, 
through the provision of technical assistance, low-performing 
programs of teacher preparation within institutions of higher 
education. Requires each State that receives funds under the 
Act to provide annually a list of such low-performing programs, 
including programs in danger of being placed on the list. 
Requires States receiving funds under this title to develop 
plans to close or reconstitute underperforming programs of 
teacher preparation within institutions of higher education. 
States that any institution of higher education that provides a 
program of teacher preparation in which the State has withdrawn 
its approval or terminated financial support due to low 
performance will be ineligible for any funding for professional 
development activities awarded by the Department of Education 
and will not be permitted to enroll any student who receives 
aid under title IV of the Act in the institution's teacher 
preparation program.
    Section 209 requires the Secretary to ensure that States 
and institutions of higher education use equitable methods in 
reporting and that the reporting not allow for the 
identification of individuals. Outlines procedures for the 
Secretary to collect data from States in which there are no 
certification or licensure assessments or that do not set 
minimum performance levels on those assessments. Prohibits 
Federal control over any aspect of any private, religious, or 
home school, and clarifies that nothing in this section 
prohibits private, religious, or home schools from 
participating in the programs under this part. Clarifies that 
nothing in this part encourages or requires any changes in a 
State's treatment of any private, religious, or home school. 
Prohibits the Secretary from establishing or supporting any 
national system of teacher certification.
    Section 210 establishes the authorization of appropriations 
for this part as $300 million for fiscal year 2006 and such 
sums for each of the 5 succeeding fiscal years. Establishes the 
percentages of funds to be available for sections 202, 203, and 
204, respectively.

Section 202. Preparing tomorrow's teachers to use technology

    Amends section 222(a) by establishing nonprofit 
telecommunications entities as eligible applicants.
    Amends section 223(b) by clarifying that funds should focus 
on using technology to increase student academic achievement.
    Amends section 224 with regards to the authorization of 
appropriations.

Section 203. Centers of excellence

    Amends title II by inserting a new part C.
    Section 231 establishes the purposes for this part. Defines 
the following terms: ``Eligible Institution,'' ``Highly 
Qualified,'' ``Scientifically Based Reading Research,'' and 
``Scientifically Based Research.''
    Section 232 authorizes the Centers of Excellence 
competitive grant program. Requires grantees to ensure that 
current and future teachers are highly qualified. Requires 
grantees to use funds to implement reforms within teacher 
preparation programs to ensure that such programs are preparing 
teachers who are highly qualified, are able to understand 
scientifically based research, and are able to use advanced 
technology effectively in the classroom to improve student 
academic achievement; provide new teachers sustained and high-
quality pre-service clinical experience, mentoring from 
exemplary teachers, and increased interaction between faculty 
at institutions of higher education and new and experienced 
school personnel; develop initiatives to promote retention of 
highly qualified teachers and principals, including minority 
teachers and principals; award need-based scholarships to help 
students pay the cost of tuition, room, board, and other 
expenses; disseminate information on effective practices for 
teacher preparation and successful teacher certification and 
licensure assessment preparation strategies; and activities 
authorized under sections 202, 203, and 204. Outlines the 
requirements for submitting an application. Sets the minimum 
grant under this part at $500,000. Limits to two percent the 
amount of a grant that can be used for administrative expenses. 
Requires the Secretary to prescribe regulations as necessary.
    Section 233 establishes the authorization of appropriations 
as $10 million for fiscal year 2006 and such sums for the five 
succeeding fiscal years.

Section 204. Teacher incentive fund program

    Amends title II by inserting a new part D. Section 241 
outlines the purposes of this part and defines the terms 
``Eligible Entity'' and ``High-Need Local Educational Agency.''
    Section 242 authorizes the Secretary to award competitive 
grants of up to 5 years in length for eligible entities to 
develop and implement, or expand, a comprehensive performance-
based compensation system for teachers and principals for one 
or more local educational agencies. Outlines the necessary and 
permitted characteristics of a comprehensive performance-based 
compensation system under this part. Requires grantees to use 
funds only to design and implement, or expand, in collaboration 
with teachers, principals, other school administrators, and 
members of the public, a compensation system consistent with 
the requirements of this part. Allows grantees to use funds to: 
develop appraisal systems that reflect clear and fair measures 
of student academic achievement; conduct outreach with the 
local educational agency or the State to gain input on how to 
construct the appraisal system and to develop support for it; 
pay, as part of a comprehensive performance-based system, 
bonuses and increased salaries to teachers and principals who 
raise student achievement, so long as the grantee uses an 
increasing share of non-Federal funds to pay these monetary 
rewards each year of the grant; pay, as part of a comprehensive 
performance-based compensation system, additional bonuses to 
teachers who both raise student achievement and either teach in 
high-poverty schools or teach subjects that are difficult to 
staff, or both, so long as the grantee uses an increasing share 
of non-Federal funds to pay these monetary rewards each year of 
the grant; pay, as part of a comprehensive performance-based 
compensation system, additional bonuses to principals who both 
raise student achievement and serve in high-poverty schools, so 
long as the grantee uses an increasing share of non-Federal 
funds to pay these monetary rewards each year of the grant. 
Outlines what is required to be included in the grant 
application. Requires the Secretary to give priority to 
applications for projects that would establish comprehensive 
performance-based compensation systems in high-need local 
educational agencies.
    Section 243 requires the Secretary to conduct an 
independent evaluation of the program under this part and may 
use up to 1 percent of the funds made available under this part 
or $1,000,000, whichever is less, for any fiscal year for the 
cost of the evaluation.
    Section 244 establishes the authorization for this part as 
$100,000,000 for fiscal year 2006 and such sums as may be 
necessary through 2010.

Section 205. Transition

    Requires the Secretary to take necessary actions to provide 
for the orderly implementation of this title.

                      Title III--Institutional Aid


Section 301. Title III grants for American Indian tribally controlled 
        colleges and universities

    Amends section 316(b) with regards to the definitions of 
eligible institutions and Indian.
    Amends section 316(c)(2) to expand the authorized use of 
funds related to instructional facilities, and to provide new 
authorized activities with regards to distance learning and 
tribal governance.
    Amends section 316(d) by changing the program from a 
competitive grant program to a formula grant program. Provides 
a minimum grant to each eligible institution of $400,000. 
Removes the two-year wait out period for these grants, as it is 
no longer necessary under a formula system.

Section 302. Alaska Native and Native Hawaiian-serving institutions

    Amends section 317(c)(2) to authorize the use of funds for 
the construction and maintenance of instructional facilities 
and the acquisition of real property adjacent to the campus. 
Creates additional new authorized uses of funds related to 
distance learning and tribal governance.
    Amends section 317(c) by allowing grant funds to be used to 
establish or increase an endowment fund so long as the 
institution provides matching funds.
    Amends section 317(d) by striking subparagraphs (A) and (B) 
in paragraph (2) with regards to the requirements that 
applications include a 5-year improvement plan and other 
information and assurances as the Secretary may require.

Section 303. Grants to part B institutions

    Amends section 323(a) by authorizing the use of funds for 
the construction and maintenance of instructional facilities 
and the acquisition of real property adjacent to the campus. 
Amends the authority to establish community outreach programs 
to prepare elementary and secondary students for postsecondary 
education.
    Amends section 323 by adding a new subsection (c) to allow 
for the use of no more than two percent of funds received under 
Part B to secure technical assistance, financial management and 
strategic planning
    Amends section 323(a)(2) to include activities related to 
distance learning.
    Amends section 324(d)(1) to increase the minimum grant to 
$750,000 under certain conditions.
    Amends section 326(a)(1) to require that the institution be 
accredited by a national accrediting agency and be in good 
standing.
    Amends section 326(c) to authorize the use of funds for the 
construction and maintenance of instructional facilities and 
the acquisition of real property adjacent to the campus.
    Amends section 326(e) to add the names of additional 
eligible institutions. Further amends section 326(e) to update 
the year for the special rule.
    Amends section 326(f) to update the authorization levels. 
Further amends section 326(f) to update cross-references.
    Amends section 326(g) to update the year for the hold 
harmless rule.

Section 304. Technical amendments

    Amends section 311(c) to include within the use of funds 
education or counseling services to improve financial and 
economic literacy.
    Amends section 312(b) to require that an institution offer 
not less than a two year program that is acceptable for full 
credit toward a bachelor's degree.
    Amends section 316(c) to include within the use of funds 
education or counseling services to improve financial and 
economic literacy.
    Amends section 317(c) to include within the use of funds 
education counseling services to improve financial and economic 
literacy.
    Amends section 323(a) to include within the use of funds 
education counseling services to improve financial and economic 
literacy.
    Makes several technical amendments.
    Revises section 343(e) to add in a subsection heading to 
read: ``Sale of Qualified Bonds.''
    Repeals section 1024 as transferred by section 301(a)(5) of 
the Higher Education Amendments of 1998.

Section 305. Title III authorizations

    Amends section 399(a) in regards to the authorization of 
appropriations.

                      Title IV--Student Assistance


                       PART A--GRANTS TO STUDENTS

Section 401. Pell Grants

    Amends section 401(a) by extending the authority of the 
program. Further amends section 401(a) by striking paragraph 
(2) with regards to advance payment to students attending 
institutions that do not participate in the disbursement 
system.
    Amends section 401(b) to increase the authorized annual 
maximum award to $6,000 through academic year 2012-2013. 
Further amends section 401(b) by eliminating tuition 
sensitivity. Further amends section 401(b) by providing for 
year-round Pell grants for students enrolled for 12 months at 
baccalaureate degree granting institutions with a graduation 
rate of at least 30 percent for the four preceding years and 
two-year institutions with a graduation rate that is at least 
above the average for the institution's type and control. 
Outlines the requirements for the awarding of the year-round 
Pell grants. Requires an evaluation and report by the Secretary 
by 2011.
    Amends section 401(c) by inserting a new paragraph (5) that 
limits the period during which a student may receive a Pell 
Grant to the equivalent of 18 semesters or 27 quarters in 
duration (as determined by the Secretary) without regard to 
whether the student is enrolled on a full-time basis during any 
portion of that period, and including any period of time for 
which the student received Pell Grants prior to the date of 
enactment of this Act. Further amends section 401(c) by 
restricting the use of Pell Grants for remedial or English as a 
second language instruction to one academic year.
    Further amends section 401(b) by prohibiting a student who 
is subject to an involuntary civil commitment upon completion 
of a period of incarceration for a sexual offense (as 
determined by the Secretary) from receiving a Pell Grant.
    Amends subpart 1 of part A by inserting a new section 401A 
to create the Pell Grants Plus--Achievement Grants for State 
Scholars program. Outlines how students will be eligible to 
receive grants and sets the grant amount as $1000 so long as 
the total amount of a student's financial assistance does not 
exceed the cost of attendance. Requires the Secretary to 
establish regulations for determining student eligibility. 
Outlines the requirements students must meet to continue to 
receive an award during his or her second year of undergraduate 
education. Requires the Secretary to monitor the progress, 
retention, and completion of students receiving awards, 
evaluate the impact of the program, and submit a report at 
least every two years to the authorizing committees of 
Congress. Repeals Chapter 3 of subpart 2 of part A, the 
Academic Achievement Incentive Scholarship program.

Section 402. TRIO programs

    Amends section 402A(b) to establish the duration of TRIO 
grants as five years and Staff Development Activities grants as 
two years, and allow the Secretary to determine the duration of 
Project Improvement and Dissemination Partnership Projects 
grants. Further amends section 402A(b) to synchronize 
outstanding grants to the five-year term. Further amends 
section 402A(b) to increase the minimum TRIO grants to $200,000 
and Staff Development Activities grants to $170,000.
    Amends section 402A(c) to require the Secretary to set 
aside ten percent of funds for novice applicants. In the event 
an insufficient number of quality novice applicants are 
available, requires the Secretary to distribute the ten percent 
among other applicants.
    Amends section 402A(c) by striking the requirement that the 
Secretary notify current grant holders applying for an 
additional grant of the status of that application up to eight 
months prior to the expiration of the current grant.
    Amends section 402A(e) with a technical amendment. Further 
amends section 402A(e) by inserting a new paragraph (3) to make 
homeless or unaccompanied youth under section 725 of the 
McKinney-Vento Act eligible to participate in the Talent 
Search, Upward Bound, Student Support Services, and Educational 
Opportunity Centers programs.
    Amends section 402A(f) to establish the authorization level 
as $836,500,000 and to extend the authorization through fiscal 
year 2011.
    Amends section 402A(g) by amending the definition of 
``Veteran Eligibility'' and defining the terms ``Different 
Campus'' and ``Different Population.''
    Amends section 402B(b) to add education or counseling 
services that address the financial and economic literacy of 
students and parents to the list of permissible services.
    Amends section 402C(b) to add education or counseling 
services that address the financial and economic literacy of 
students and parents to the list of permissible services.
    Further amends section 402C(b) to stress the transition of 
veterans into math and science fields in the list of 
permissible services.
    Amends section 402D(b) to add education or counseling 
services that address the financial and economic literacy of 
students and parents to the list of permissible services.
    Amends section 402E(b) to add education or counseling 
services that address the financial and economic literacy of 
students and parents to the list of permissible services.
    Amends section 402F(b) to add education or counseling 
services that address the financial and economic literacy of 
students and parents to the list of permissible services.
    Amends section 402C(e) by increasing the maximum stipend to 
$100 for services carried out in June, July, and August, and to 
$60 for services carried out during the remainder of the year.
    Amends section 402D(d) to include within an application's 
consideration the services provided to low-income working 
adults.
    Amends section 402E(e) by increasing the maximum stipend to 
$5,000.
    Amends section 402F(c) by requiring the Secretary to 
consider the services that would be provided to low-income 
working adults when considering the application.

Section 403. TRIO reform

    Amends section 402A by inserting a new subsection (c). The 
new subsection requires the Secretary to establish expected 
program outcomes and procedures for measuring the quality and 
effectiveness of TRIO programs. Describes the purposes for 
which the measures are to be used. Permits local grant 
recipients to establish local performance measures.
    Amends section 402A(d) by amending paragraph (2). The new 
paragraph establishes criteria to be used by the Secretary in 
selecting grant recipients. Further amends section 402A(d) by 
striking subparagraph (A) of paragraph (3) and inserting a new 
subparagraph (A) that requires the Secretary to use the 
performance measures to evaluate each applicant's prior 
experience in achieving expected program outcomes. Further 
amends section 402A(d) by inserting a new subparagraph (C) in 
paragraph (3) that prohibits the Secretary from awarding prior 
experience points to any current grantee that failed to meet 
certain criteria. Further amends section 402A(d) by amending 
subparagraph (B) of paragraph (4) to prohibit the Secretary 
from providing assistance to an entity if the Secretary has 
determined that such entity has been involved in fraud.
    Amends section 402A(e) by amending paragraph (3) with 
regards to the provision of technical assistance by the 
Secretary to applicants for grants under the TRIO programs.
    Rewrites section 402A(f) to require the Secretary to 
establish uniform reporting requirements and require each 
recipient of funds to annually submit information the Secretary 
deems necessary. Requires the Secretary to submit a report to 
the authorizing committees of Congress at least once every two 
years. Describes what is to be included in the report.
    Amends section 402A(g) to permit the Secretary to use no 
more than one half of 1 percent of funds appropriated for TRIO 
to support the administration of the programs.
    Amends section 402B by inserting a new subsection (d) that 
requires the Secretary to consider the college-going rate of 
participants in programs provided by the grantee and compare 
that to the rates of other applicants eligible to receive 
consideration of prior experience when considering a grantee's 
past performance and prior experience.
    Amends section 402C by inserting a new subsection (f) that 
requires the Secretary to consider the college-going rate of 
participants in programs provided by the grantee and compare 
that to the rates of other applicants eligible to receive 
consideration of prior experience when considering a grantee's 
past performance and prior experience.
    Amends section 402D by inserting a new subsection (e) that 
requires the Secretary to consider the college-going rate of 
participants in programs provided by the grantee and compare 
that to the rates of other applicants eligible to receive 
consideration of prior experience when considering a grantee's 
past performance and prior experience.
    Amends section 402E by inserting a new subsection (f) that 
requires the Secretary to consider the college-going rate of 
participants in programs provided by the grantee and compare 
that to the rates of other applicants eligible to receive 
consideration of prior experience when considering a grantee's 
past performance and prior experience.
    Amends section 402F by inserting a new subsection (d) that 
requires the Secretary to consider the college-going rate of 
participants in programs provided by the grantee and compare 
that to the rates of other applicants eligible to receive 
consideration of prior experience when considering a grantee's 
past performance and prior experience.
    Rewrites section 402G to authorize the Secretary to make 
grants to institutions of higher education and other entities 
to provide training and technical assistance for staff and 
leadership personnel participating in TRIO programs for the 
purpose of improving the operations of the programs. Outlines 
the areas in which training should be provided. Requires the 
Secretary to consult with regional and State professional 
associations with knowledge of TRIO programs before issuing 
grants.
    Rewrites section 402H to require the Secretary to make 
grants or enter into contracts with organizations to evaluate 
the effectiveness of the programs and disseminate information 
on the impact of the programs. Outlines the areas of 
effectiveness to be measured. Requires the Secretary to submit 
to the authorizing committees of Congress an annual interim 
report on the progress of the evaluations within two years of 
the date of enactment of this Act and a final report no later 
than three years following the date of enactment. Requires all 
reports and underlying data to be made publicly available upon 
request.

Section 404. GEARUP

    Amends section 404A(b) to establish the duration of the 
grant as six years.
    Amends section 404A by inserting a new subsection (d) to 
ensure that entities currently receiving a grant may reapply 
once the grant expires.
    Amends section 404B to allow services to be provided to 
students during their first year of college.
    Amends section 404D to allow services to be provided to 
students during their first year of college.
    Amends section 404C(a) to require applications for grants 
to include a description of activities in place to coordinate, 
complement, and enhance services provided by other State 
entities.
    Amends section 404D(b) to include financial and economic 
literacy within the counseling provided.
    Further amends section 404D by inserting a new subsection 
(e) to make homeless or unaccompanied youth under section 725 
of the McKinney-Vento Act eligible to participate in the Talent 
Search, Upward Bound, Student Support Services, and Educational 
Opportunity Centers programs.
    Amends section 404H to increase the authorization level and 
extend the authorization through 2011.

Section 405. Federal Supplemental Educational Opportunity Grants

    Amends 413A(b) to increase the authorization level and 
extend the authorization through 2011.
    Amends section 413C(c) to ensure that institutions give 
priority for supplemental grants to students who receive Pell 
Grants and meet the requirements under section 484, and that no 
more than 10 percent of an institution's funds go to students 
who did not receive a Pell Grant in a prior year.
    Amends section 413D(a) to phase out of the base guarantee 
beginning in fiscal year 2007. Further amends section 413D(a) 
to allow the Secretary, should the allocation exceed 
$700,000,000 for fiscal year 2008 or any succeeding fiscal 
year, to allocate not more than 10 percent of such funds to 
institutions with at least 10 percent of students receiving 
Federal Pell Grants and that meet certain graduate rate 
criteria for Pell Grant-receiving students depending on the 
type of institution.
    Amends section 413D(c) to increase the books and supplies 
allowance to $600.

Section 406. LEAP

    Amends section 415A(b) to extend the authorization through 
2011.

Section 407. HEP/CAMP program

    Amends section 418A(b) to expand recruitment services to 
include those with a spouse who is a migrant or seasonal farm 
worker. Further amends section 418A(b) to include preparation 
for college entrance exams and child care and transportation 
among the supportive services provided. Further amends section 
418A(b) to allow up to two percent of funds to be used for 
follow up and reporting.
    Amends section 418A(c) to expand outreach and recruitment 
services to include those with a spouse who is a migrant or 
seasonal farm worker. Further amends section 418A(c) to include 
economic education or personal finance counseling among the 
services provided. Further amends section 418A(c) to specify 
that mentoring and guidance should be included among the follow 
up services provided. Further amends section 418A(c) to 
encourage the transfer of those in a program of two years or 
less to a four year institution.
    Amends section 418A(h) to increase the high school 
equivalency program authorization to $24,000,000 and extend the 
authorization to 2011. Further amends section 418A(h) to 
increase the college assistance migrant program authorization 
to $16,000,000 and extend the authorization to 2011.

Section 408. Robert C. Byrd Honors Scholarships Program

    Amends subpart 6 of part A by rewriting the subpart.
    Section 419A authorizes the Robert C. Byrd Mathematics and 
Science Honors Scholarship Program. States the purposes of the 
section and defines the terms ``Computer Science,'' ``Eligible 
Student,'' ``Engineering,'' ``Life Sciences,'' ``Managing 
Agent,'' ``Mathematics,'' and ``Physical Sciences.'' Authorizes 
the Secretary to make a five year award to a private, non-
profit organization to manage a program of Mathematics and 
Science Honors Scholarships under this section. Outlines 
requirements for the Federal contribution to the scholarships 
and the maximum scholarship award. Permits the Secretary to 
establish eligibility criteria and operational standards for 
the managing agent, and review and revise those criteria as 
necessary. Permits the Secretary to terminate the agreement if 
the managing agent fails to meet the requirements and requires 
the Secretary to conduct outreach efforts to raise awareness of 
the scholarships. Outlines the duties of the managing agent. 
Outlines the requirements for submitting an application. 
Outlines several responsibilities of students for receiving and 
maintaining a scholarship. Outlines the responsibilities of 
institutions of higher education.
    Section 419B authorizes the Mathematics and Science 
Incentive Program. Authorizes the Secretary to carry out a 
program of assuming the obligation to pay, pursuant to the 
provisions of this section, the interest on a loan made, 
insured, or guaranteed under parts B and D of title IV. 
Outlines the eligibility criteria for inclusion in the program. 
Outlines limitations on the obligations the Secretary is 
permitted to assume. Outlines the responsibilities of the 
Secretary in selecting program participants. Subjects the 
payment of interest under this section to the availability of 
appropriations. Outlines the period during which the Secretary 
is required to pay interest on behalf of the borrower. Requires 
the Secretary to pay to each eligible lender or holder for each 
payment period the amount of interest that accrues on a loan. 
Outlines the application procedures for eligible borrowers. 
Defines criteria for including a consolidation loan in this 
program. Prohibits the receipt of benefits under this program 
and several others. Defines the terms ``High Need Local 
Educational Agency'' and ``Mathematics, Science, or Engineering 
Professional.''
    Section 419C authorizes the Mathematics and Science 
Education Coordinating Council Grants program. Outlines the 
purposes of the program and defines the terms ``Eligible 
State'' and ``Mathematics and Science Education Coordinating 
Council.'' Authorizes the Secretary to use not more than $5 
million to award competitive grants to eligible States for the 
purposes of carrying out activities under this section. 
Outlines the authorized uses of funds. Outlines the application 
process. Requires the Governor of a State, or the State entity 
described in section (b)(1)(B) to consult with a variety of 
State entities with respect to the activities undertaken under 
this section. Outlines several administrative provisions 
related to the awarding of grants under this section. Requires 
States that receive a grant under this section to submit an 
annual accountability report to the Secretary. Requires the 
Secretary to evaluate the activities funded under this section 
and report his or her findings to the authorizing committees of 
Congress. Also requires the Secretary to broadly disseminate 
successful practices developed under this section. Prohibits 
the Secretary for making the grant payment for more than two 
years if he or she determines that the State is not making 
substantial progress in meeting the goals required under this 
section.
    Section 419D authorizes $41 million for this subpart for 
fiscal year 2006 and such sums for the five succeeding years.

Section 409. Child Care Access

    Amends section 419N(g) to extend the authorization to 2011.

Section 410. Learning Anytime Anywhere Partnerships

    Repeals subpart 8 of part A. Amends section 400(b) to make 
a conforming amendment.

             PART B--FEDERAL FAMILY EDUCATION LOAN PROGRAM

Section 421. Reauthorization of Federal Family Education Loan program

    Amends section 421(b) to reference loan processing and 
issuance fee rather than administrative cost allowance.
    Amends section 424(a) to extend Federal insurance on 
student loans to 2012. Further amends section 424(a) to extend 
Federal insurance on student loans for students who have other 
loans under this part and are continuing their education 
through 2016.
    Amends sections 428(a) and 428C(e) to continue the 
authorization for the guaranteed and consolidation loan 
programs.

Section 422. Loan limits

    Amends sections 425(a) and 428(b) to increase the maximum 
annual loan limits for freshmen from $2,625 to $3,500 and for 
sophomores from $3,500 to $4,500.
    Amends section 428C(a) by inserting a new clause (ii) in 
paragraph (3)(B)to clarify that the underlying loans in a 
consolidation loan will count against a borrower's aggregate 
borrowing limits.
    Establishes that amendments made by this section will apply 
to loans made, insured, or guaranteed under part B or part D 
beginning July 1, 2007.

Section 423. Interest rates and special allowances

    Amends section 427A(k) to repeal the interest rate change 
to a fixed interest rate scheduled to take effect in 2006.
    Amends section 427A by striking subsection (l) with regards 
to interest rates for new loans on or after July 1, 2006.
    Amends section 455(b) to repeal the interest rate change to 
a fixed interest rate scheduled to take effect in 2006. Further 
amends section 455(b) by striking paragraph (7) with regards to 
interest rates for new loans on or after July 1, 2006.
    Further amends section 427A(k) by specifying in the heading 
of paragraph (4) that the paragraph applies to loans made 
before July 1, 2006. Further amends section 427A(k) by 
inserting a new paragraph (5) to provide borrowers a choice 
between a variable rate and a fixed rate for all consolidation 
loans made on or after July 1, 2006. Establishes how the 
interest rates will be determined and establishes an interest 
rate cap.
    Amends section 455(b) by specifying in the heading of 
subparagraph (D) of paragraph (6) that the subparagraph applies 
to loans made before July 1, 2006. Further amends section 
455(b) by inserting a new subparagraph (E) in paragraph (6) to 
provide borrowers a choice between a variable rate and a fixed 
rate for all consolidation loans made on or after July 1, 2006. 
Establishes how the interest rates will be determined and 
establishes an interest rate cap.
    Makes technical amendment to section 428C.
    Makes technical and conforming amendments to section 
438(b). Further amends section 438(b) by striking clauses (v), 
(vi), and (vii) and inserting a new clause (v) in subparagraph 
(I) of paragraph (2) that requires the annual return of excess 
interest to the Federal treasury, outlines how the excess 
interest is to be calculated, and defines the term ``special 
allowance support level.'' States that the amendments made to 
this subsection do not apply to any loans made under this 
section before July 1, 2006.

Section 424. Additional loan terms and conditions

    Amends section 428(b) by inserting a new subparagraph (H) 
in paragraph (1) to require guaranty agencies to collect a 
single insurance premium equal to no more than 1 percent of the 
loan principal for loans for which the first disbursement of 
principal is made before July 1, 2006, or for the collection 
and deposit into the Federal Student Loan Reserve Fund of a 
Federal default fee of 1 percent of the loan principal for 
loans made on or after July 1, 2006. Further amends section 
428(b) in paragraph (N) to require the disbursement of loan 
funds to students attending foreign schools to be sent to the 
institution but made payable to the student. Also requires the 
endorsement or other certification by the student. Further 
amends section 428(b) to prohibit the Secretary from 
restricting the proportions or ratios by which payments may be 
graduated with the informed agreement of the borrower. Further 
amends section 428(b) by inserting a new clause (iv) in 
subparagraph (A) of paragraph (9) to provide for an interest 
only repayment plan, so long as the interest amounts to at 
least $600, for the first two years of repayment.
    Amends section 428H(h) to require guaranty agencies with 
agreements with the Secretary under section 428(b)(1) to, in 
lieu of the insurance premium, collect and deposit into the 
Federal Student Loan Reserve Fund a Federal default fee of 1 
percent of the loan principal for loans made on or after July 
1, 2006.
    Amends section 428A(a) by inserting a new subparagraph (C) 
in paragraph (1) to prohibit the Secretary from waiving the 
Federal default fee under sections 428(b)(1)(H) and 428H(h).
    Amends section 428B(a)(1) by inserting a new subparagraph 
(C) in paragraph (3) to ensure parents who have been convicted 
of fraud have paid off their student loans before they are able 
to take out additional loans.
    Amends section 455(d) to make technical and conforming 
amendments to align repayment plans in part D with repayment 
plans in part D.
    Amends section 438(c) by inserting a new subparagraph 
heading in paragraph (2) to read: ``(A) In General--.'' Further 
amends section 438(c) by inserting a new subparagraph (B) 
within paragraph (2) to gradually reduce origination fees paid 
by students to 0 percent by 2010 for loans, except 
consolidation loans, made under part B.
    Amends section 455(c) to reduce origination fees to 1 
percent by 2010 for loans, except PLUS loans and consolidation 
loans, made under part D. Further amends section 455(c) by 
prohibiting the Secretary from waiving any amount of the loan 
fee prescribed under this section as part of a repayment 
incentive. Also prohibits the Secretary from providing any 
repayment incentive before a borrower enters repayment.
    Further amends section 438(c) by inserting a new paragraph 
(9) that establishes a fixed rate offset charge in an amount 
not to exceed 0.5 percent of the principal for consolidation 
loans.
    Further amends section 455(c) by inserting a new paragraph 
(4) that establishes a fixed rate offset charge in an amount 
not to exceed 0.5 percent of the principal for consolidation 
loans.

Section 425. Consolidation loan changes

    Amends section 428C(a) to terminate a student's status as 
an eligible borrower under this section and section 455(g) upon 
the receipt of a consolidation loan. Further amends section 
428C(a) by inserting a new subclause (V) in clause (i) of 
subparagraph (B) of paragraph (3) to allow a student who has 
already consolidated their loan to obtain a subsequent Direct 
Loan consolidation loan only for the purposes of obtaining an 
income contingent repayment plan and only if the loan has been 
submitted to the guaranty agency for default aversion. Further 
amends section 428C(a) to include a cross-reference to section 
428(b)(7)(A) in subclause (I) of clause (ii) of subparagraph 
(3). Further amends section 428C(a) by striking subparagraph 
(C) of paragraph (3) with regards to spousal consolidation.
    Amends section 428C(b) to require the Secretary to offer 
any eligible borrower that is denied a consolidation loan, or a 
consolidation loan with income-sensitive repayment terms, by an 
eligible lender under subsection (a)(1) of this section, a 
direct consolidation loan if the eligible borrower submits an 
application. The Secretary is required to offer such loans to a 
borrower who has defaulted so that the borrower may resolve the 
default. Further amends section 428C(b) by requiring lenders of 
consolidation loans to have an eligible borrower certify, if 
all of his or her loans are held by a single holder, that he or 
she has notified that holder of his or her interest in 
receiving a consolidation loan and strikes language that 
required borrowers with a single holder to consolidate with 
that holder. Further amends section 428C(b) by striking an 
outdated references to a minimum loan balance required for 
consolidation. Further amends section 428C(b) by inserting a 
new subparagraph (F) in paragraph (1) that requires the 
consolidating lender to provide a borrower with a clear and 
conspicuous notice of the effects of consolidation on a 
borrower's total interest to be paid, fees and length of 
repayment; the effects of consolidation on a borrower's 
underlying loan benefits; the ability of the borrower to pre-
pay the loan, pay on a shorter schedule, change repayment 
plans, and information making clear how borrower benefit 
programs may vary among lenders and loan holders; the tax 
benefits for which the borrower might be eligible; the 
consequences of default; and that by applying for the 
consolidation loan, the borrower is not obligated to take the 
loan.
    Amends section 428(b) to require the repayment period to 
begin the day after 6 months after the date the student ceases 
to carry at least on-half the normal full-time academic 
workload as determined by the institution.
    Establishes the effective date for the amendments under 
subsection (a)(2)(A) of this section of H.R. 609 as July 1, 
2006.
    Amends sections 455(a) and 455(g) to align consolidation 
loans under part D with the requirements of this section.

Section 426. Deferment of student loans for military service

    Amends section 428(b) by inserting a new clause (iii) in 
subparagraph (M) of paragraph (1) to provide loan deferments 
for up to three years for individuals serving on active duty or 
performing National Guard duty during a war or other military 
operation or emergency.
    Amends section 455(f) by inserting a new subparagraph (C) 
in paragraph (2) to provide loan deferments for up to three 
years for individuals serving on active duty or performing 
National Guard duty during a war or other military operation or 
emergency.
    Amends section 464(c) by inserting a new clause (iii) in 
subparagraph (A) of paragraph (2) to provide loan deferments 
for up to three years for individuals serving on active duty or 
performing National Guard duty during a war or other military 
operation or emergency.
    Amends section 481 by inserting a new subsection (d) that 
defines the terms ``Active Duty,'' ``Military Operation,'' 
``National Emergency,'' ``Serving on Active Duty,'' and 
``Qualifying National Guard Duty.''
    States that nothing in these amendments authorizes the 
refunding of any repayment on a loan.
    Establishes the effective date for these amendments as July 
1, 1993.

Section 427. Loan forgiveness for service in areas of national need

    Rewrites section 428K to amend the Loan Forgiveness for 
Child Care Providers program. Renames the program the Loan 
Forgiveness for Service in Areas of National Need program. 
Outlines the purposes of the section. Authorizes the Secretary 
to assume the obligation to repay a qualified loan amount for a 
loan made, insured, or guaranteed under this part or part D 
(excluding PLUS and consolidated loans) by a borrower who has 
been employed full-time for at least five consecutive complete 
school, academic, or calendar years in an area of national 
need, and is not in default on a loan for which the borrower 
seeks forgiveness. Forgiveness is awarded on a first-come, 
first-served basis subject to the availability of 
appropriations. Identifies the areas of national need as being 
early childhood educators, nurses, foreign language 
specialists, librarians, highly qualified teachers of bilingual 
education in low-income communities, first responders in low-
income communities, child welfare workers, and speech-language 
pathologists. Provides the Secretary the authority to designate 
the areas of national need. Establishes the qualified loan 
amount as being not more than $5,000. Prohibits a borrower from 
receiving a benefit for the same service under both this 
section and subtitle D of title I of the National and Community 
Service Act of 1990. Prohibits a borrower from receiving a 
reduction of loan obligations under both this section and 
sections 428J or 460. Defines the terms ``Child Care 
Facility,'' ``Critical Foreign Language,'' ``Early Childhood 
Educator,'' ``Eligible Preschool Program,'' ``Low-Income 
Community,'' ``Nurse,'' and ``Speech-Language Pathologist.'' 
Authorizes such sums as may be necessary for fiscal years 2006-
2011.

Section 428. Unsubsidized Stafford Loans

    Amends section 428H(d) to increase the maximum annual loan 
limits for unsubsidized loans for graduate students from 
$10,000 to $12,000.
    States that this amendment will apply to loans made on or 
after July 1, 2007.

Section 429. Elimination of termination dates from Taxpayer-Teacher 
        Protection Act of 2004

    Amends section 438(b) as amended by the Taxpayer-Teacher 
Protection Act of 2004 to eliminate the termination dates for 
special allowance payments. Further amends section 438(b) by 
inserting a new clause (vi) in subparagraph (B) of paragraph 
(2) to require the quarterly rate of the special allowance to 
be the rate determined under subparagraphs (A), (E), (F), (G), 
(H), or (I) for a holder of loans that were made or purchased 
on or after October 1, 2005, or for a holder of loans that were 
not earning a quarterly rate of special allowance determined in 
this subsection as of October 1, 2005.
    Amends section 3(b) of the Taxpayer-Teacher Protection Act 
of 2004 by striking paragraph (3) with regards to the effective 
date for new borrowers to be eligible for loan forgiveness.
    Amends section 428J(a) by including a cross-reference to a 
new subsection (g)(3).
    Amends section 428J(c) by inserting a new subparagraph (C) 
in paragraph (3). The new subparagraph (C) includes elementary 
or secondary school teachers who primarily teach reading. To 
qualify, such teachers must meet the requirements of subsection 
(b) of this section, have obtained a separate reading 
instruction credential from the State in which the teacher is 
employed and be certified by the chief administrative officer 
of the public or non-profit private elementary or secondary 
school in which the borrower is employed to teach reading as 
being proficient in teaching the essential components of 
reading instruction and as having such credential.
    Amends section 428J(g) by inserting a new paragraph (3) to 
establish guidelines for private school teachers to qualify 
under this section for the loan forgiveness.
    Amends section 460(a) by inserting a cross-reference to a 
new subsection (g)(3).
    Amends section 460(g) by inserting a new paragraph (3) to 
establish guidelines for private school teachers to qualify 
under this section.

Section 430. Additional administrative provisions

    Amends section 428(b) to require 100 percent insurance on 
``exempt claims.'' Further amends section 428(b) by changing 
the insurance rate from 98 percent to 96 percent in the case of 
a loan for which the first disbursement of principal is made or 
on after July 1, 2006.
    Amends section 428(c) by inserting a new subparagraph (G) 
in paragraph (1) to require 100 percent reinsurance on ``exempt 
claims'' and define ``exempt claims'' under this new 
subparagraph. Further amends section 428(c) by inserting a new 
subparagraph (H) in paragraph (1) to reduce the reinsurance 
rate from 95 percent to 93 percent for loans for which the 
first disbursement of principal is made on or after July 1, 
2006 described in subparagraphs (A) and (B). Further amends 
section 428(c) to eliminate the requirement that forbearance 
agreements be documented in writing. Further amends section 
428(c) by inserting a new paragraph (10) that requires 
forbearance agreements to be recorded and confirmed with the 
borrower. Further amends section 428(c) by inserting a heading 
for clause (i) in paragraph (2)(A) and inserting a new clause 
(ii) to require the guaranty agreements to include requirements 
establishing procedures to preclude consolidation lending from 
being an excessive proportion of guaranty agency recoveries on 
defaulted loans. Further amends section 428(c) by amending a 
cross-reference by redesignating certain subparagraphs as 
clauses, and by adding new subparagraphs (B) and (C). The new 
subparagraphs require guaranty agencies, beginning October 1, 
2006, to not charge collection costs that are more than 18.5 
percent of the outstanding principal and interest of a 
defaulted loan that is paid off through consolidation; return 
to the Secretary a portion of the collection charge equal to 
8.5 percent of the outstanding principal and interest of such 
defaulted loan; and, beginning October 1, 2009, to return to 
the Secretary the entire amount charged with respect to each 
defaulted loan that is paid off with excess consolidation 
proceeds. The new subparagraphs also define the term ``excess 
consolidation proceeds.''
    Amends section 428I which outlines the rules for 
exceptional performance. States that the Secretary is required 
to designate eligible lenders and servicers that meet certain 
performance measures for exceptional performance, and to notify 
the guaranty agencies of the lenders and servicers receiving 
the designation. Outlines the performance measures eligible 
lenders and servicers must meet to receive the designation. 
Requires each guaranty agency to provide the Secretary with 
other information in its possession regarding lenders and 
servicers requesting the exceptional performance designation 
from the Secretary. Outlines the basis for the Secretary's 
decision. States that any lender or servicer designated for 
exceptional performance as of the day before the date of 
enactment of the College Access and Opportunity Act of 2005 
shall continue to be so designated and subject to the 
requirements of this section as in effect on that day until the 
performance standards described in this section are 
established. Prohibits the Secretary from designating any 
additional lenders or servicers until the new performance 
standards are established. Requires guaranty agencies to pay, 
to each eligible lender or servicer, 98 percent of the unpaid 
principal and interest of all loans for which claims are 
submitted for payment by that eligible lender or servicer for 
the one year period following the receipt by the guaranty 
agency of the notification of designation under this section, 
or until the guaranty agency receives notice from the Secretary 
that the designation of the lender or servicer has been 
revoked. Requires the Secretary to revoke the exceptional 
performance designation if a lender or servicer fails to meet 
the performance standards, gained the designation through 
fraud, or is failing to operate in accordance with regulations. 
States that this section does not limit the ability of guaranty 
agencies to require the submission of claims documentation 
evidencing servicing performed on loans, except that the 
guaranty agency may not require greater documentation than that 
required for lenders and servicers not receiving the 
exceptional performance designation. States that loans 
reimbursed under this section will not be subject to additional 
review by the Secretary or repurchase by the guaranty agency 
unless a determination is made by the Secretary that the lender 
or servicer engaged in fraud or other purposeful misconduct in 
obtaining the exceptional performance designation. Grants the 
Secretary the authority to terminate the exceptional 
performance designation of lenders and servicers if he or she 
determines that the termination would be in the best interests 
of the United States. Defines the terms ``Eligible Loan'' and 
``Servicer.'' Establishes the effective date of these 
amendments as July 1, 2006. Makes additional technical 
amendments.
    Amends section 428A(a) by striking the authority of the 
Secretary to waive the prohibition on inducements under certain 
circumstances within the Voluntary Flexible Agreements (VFA).
    Amends section 428A(c) by striking the existing paragraph 
(3) and inserting a new paragraph (3) that requires the 
Secretary to publish notification in the Federal Register of 
any new agreements and allow public comment on the proposed 
agreement prior to final approval.
    Amends section 428B(a)(1) by adding at the end, a new 
subparagraph which requires parents convicted of or who have 
plead guilty to a crime involving fraud in obtaining funds 
under this title complete repayment of the funds to the 
Secretary before they are eligible to receive additional funds.
    Amends section 428F(a) to strike the requirement for 12 
months of consecutive payments and insert a requirement for 
nine payments made within 20 days of the due date during 10 
consecutive months. Further amends section 428F(a) by inserting 
a new subparagraph (C) of paragraph (1) to codify the 
collection costs permissible for rehabilitated loans at up to 
18.5 percent of the outstanding principle and interest of the 
loan.
    Amends section 428F by inserting a new subsection (c) that 
requires, where appropriate, each program described under 
subsection (b) of section 428F to make available financial and 
economic education materials for the borrower.
    Amends section 432(k) to require the Secretary to provide 
financial and economic education and counseling.
    Amends section 430A(a) to require loan holders to report 
loan information to all national credit bureaus.
    Amends section 432(l) to include the anticipated graduation 
date.
    Amends section 432 by striking subsection (n) with regards 
to Default Reduction Management.
    Amends section 435(d) by amending paragraph (2) to 
establish new requirements for institutions to become an 
eligible lender in the FFEL program. Establishes that an 
eligible institution is permitted to use a portion of the 
proceeds from special allowance payments, interest payments 
from borrowers, interest subsidies from the Department, and any 
proceeds from the sale or other disposition of loans for need 
based aid and reasonable, direct administrative expenses. 
Requires an institution to ensure that the proceeds received 
under this paragraph are used to supplement, and not supplant, 
non-Federal funds that would otherwise be used for need-based 
grant programs. Prohibits schools from acting as PLUS lenders 
and as lenders to undergraduate students.
    Amends section 437(a) to state that a borrower who has been 
certified as permanently and totally disabled by the Department 
of Veteran Affairs or the Social Security Administration will 
not be required to present further documentation.
    Amends section 437(c) to include a parent's eligibility 
within the false certification section.
    Amends section 439(d) by striking paragraph (3) with 
regards to the perfection of security interests in student 
loans.
    Amends section 428(a) by inserting a new subclause (III) of 
clause (v) of subparagraph (A) of paragraph (3) to prohibit a 
lender from receiving interest on a loan disbursed through an 
escrow agent for any period that precedes the date that is 3 
days before the first disbursement of the loan.
    Further amends section 428(c) by requiring a guaranty 
agency to file a claim for reimbursement with respect to losses 
under this subsection within 30 days after the agency 
discharges its insurance obligation on the loan rather than 45 
days.
    Amends section 428(i) by amending from 21 days to 10 the 
timeline for lenders to make payments into the escrow account 
prior to the date of the disbursement of the installment to the 
borrowers.
    Amends section 428G(e) by striking the reference that 
limits the applicability of this subsection to foreign 
institutions.
    Amends section 428H(e) by striking paragraph (6) and 
inserting a new paragraph (6) to prohibit a lender from 
receiving interest on a loan under this section for any period 
that precedes the dates described in section 428(a)(3)(A)(v).
    Amends section 438(b) to require the daily interest to be 
computed using the interest rate described in section 3902(a) 
of title 31, United States Code.
    Makes technical amendments.

                  PART C--FEDERAL WORK-STUDY PROGRAMS

Section 441. Authorization of appropriations

    Amends section 441(b) by extending the authorization 
through 2011.

Section 442. Community service

    Amends section 441(c) to remove the requirement that 
eligible child care services be open and accessible to the 
community.

Section 443. Allocation of funds

    Amends section 442(a) to phase out of the base guarantee 
beginning in fiscal year 2007. Further amends section 442(a) to 
permit the Secretary, should the allocation for this program 
exceed $700,000,000, to allocate not more than 10 percent of 
the excess to eligible institutions with at least 10 percent of 
students receiving Federal Pell Grants and that meet certain 
graduate rate criteria for Pell Grant-receiving students 
depending on the type of institution.
    Establishes the effective date for the amendments made here 
and funds appropriated under section 441(441b) as 2008.

Section 444. Books and supplies

    Amends section 442(c) by increasing the books and supplies 
allowance to $600.

Section 445. Job location and development

    Amends section 446(a) to increase the amount and percentage 
of funds eligible for job location and development programs to 
15 percent or $75,000, which ever is less. Further amends 
section 446(a) to specify that at least one-third of this 
amount must be specifically allocated to locate and develop 
community service jobs.

Section 446. Work college

    Amends section 448 to strike ``work-learning'' and ``work-
service'' and insert ``work-learning-service.''
    Amends section 448(e) with regards to the definition of 
``work-college.'' Further amends section 448(e) by striking 
``work-learning'' and inserting ``work-learning-service'' in 
paragraph (2) and amending the definition of ``comprehensive 
student work-learning-service'' in paragraph (2).
    Amends section 448(f) by extending the authorization 
through 2011.

                  PART D--FEDERAL DIRECT LOAN PROGRAM

Section 451. Reauthorization of the Direct Loan program

    Amends section 458(a) by increasing the authorization each 
year and extending the authorization through 2011.
    Amends section 458(b) by establishing that the calculation 
basis will be 0.10 percent of the original principal amount of 
outstanding loans on which insurance was issued under part B.
    Amends section 458(c) by striking subparagraphs (A) through 
(E) of paragraph (1) and inserting new subparagraphs (A) 
through (F) that establish new account maintenance fee caps.
    Amends section 455(e) to strike the requirement that the 
borrower files a Federal income tax return jointly with his or 
her spouse.

                  PART E--FEDERAL PERKINS LOAN PROGRAM

Section 461. Reauthorization of programs

    Amends section 461(b) to extend the authorization of the 
program through 2012. Further amends section 461(b) to extend 
the authorization for loans to students to continue or complete 
courses of study through 2017.
    Amends section 466 to extend the time frame after which an 
institution would have to return funds to the Secretary.
    Amends section 462(a) to phase out of the base guarantee 
beginning in fiscal year 2008.
    States that the effective date for the amendments to 
section 462(a) will be fiscal year 2008.
    Amends section 462(c) to increase the books and supplies 
allowance to $600.

Section 462. Loan terms and conditions

    Amends section 464(a) to increase the annual maximum loan 
limits from $4,000 to $5,500 for undergraduates and from $6,000 
to $8,000 for graduate or professional students. Further amends 
section 464(a) to increase the aggregate loan limits for 
undergraduates from $20,000 to $27,500 and for graduate and 
professional students from $40,000 to $60,000. Further amends 
section 464(a) to increase the aggregate loan limits for 
students not otherwise covered under this paragraph from $8,000 
to $11,000.
    Amends section 464(e) to strike the requirement that a 
borrower must request forbearance in writing.
    Amends section 464(f) to strike the terms schools must meet 
to allow compromise payments on defaulted loans; prohibits 
compromise payments on defaulted loans unless the Secretary 
grants approval.
    Amends section 464(h) to lower from 12 to nine the number 
of consecutive payments that are required to be made for a loan 
to be considered rehabilitated.

Section 463. Loan cancellation

    Amends section 465(a) by striking clause (iii) of 
subparagraph (A) of paragraph (3) with regards to the 
percentage of loan forgiveness for members of the Armed Forces. 
Further amends section 465(a) by allowing for loan forgiveness 
for members of the Armed Forces at the same rate as is provided 
teachers who teach in a title I local educational agency; 
special education teachers; law enforcement officers; teachers 
in math, science, foreign languages, bilingual education, or 
other high need areas as defined by the State educational 
agency; nurses or medical technicians; and employees of a 
public or private nonprofit child or family service agency.

Section 464. Technical amendments

    Amends section 462(g) to clarify that consecutive payments 
are consecutive monthly payments.
    Amends section 463(a) to require the Secretary to carry out 
the provisions of paragraph (4)(A). The Secretary is now only 
permitted to carry out these provisions.
    Amends section 464(c) to correct incorrect designations.
    Amends section 465(a) to correct a cross-reference. Further 
amends section 465(a) by making a technical correction.
    Amends section 467(b) to correct a cross-reference.
    Amends section 469(c) to correct cross-references to the 
Individuals with Disabilities Education Act.

                         PART F--NEED ANALYSIS

Section 471. Significantly simplifying the student aid application 
        process

    Amends section 479(b) by striking clause (i) of 
subparagraph (A) of paragraph (1) and inserting a new clause 
(i) to redefine the requirements a dependent student must meet 
to be eligible to file the simplified needs test. Further 
amends section 479(b) by striking clause (i) of subparagraph 
(B) of paragraph (1) to redefine the requirements an 
independent student must meet to be eligible to file the 
simplified needs test.
    Amends section 479(c) by striking subparagraph (A) of 
paragraph (1) and inserting a new subparagraph (A) to redefine 
the characteristics a dependent student must meet in order to 
be considered as having an expected family contribution of 
zero. Further amends section 479(c) by striking subparagraph 
(A) of paragraph (2) and inserting a new subparagraph (A) to 
redefine the characteristics an independent student must meet 
in order to be considered as having an expected family 
contribution of zero.
    Amends section 479 by inserting new subsections (d) and (e) 
to define the term ``Means-Tested Federal Benefit Program'' and 
require the Secretary to regularly evaluate the impact of the 
eligibility guidelines in this section to ensure that the 
simplified needs test continues to be targeted to the maximum 
number of low- and moderate-income students.
    Amends section 483(a) by striking paragraphs (1), (2), and 
(5) and redesignating certain paragraphs. Further amends 
section 483(a) by inserting new paragraphs (1) through (8). 
Paragraph (1) requires the Secretary to cooperate with student 
financial assistance organizations to produce, distribute, and 
process free of charge common financial reporting forms to be 
used for determining financial need and eligibility. The forms 
should be in both paper and electronic format and should be 
referred to as ``Free Application for Federal Student Aid'' or 
``FAFSA.'' Paragraph (2) requires the Secretary to permit 
applicants to complete such forms in the years prior to 
enrollment in order to obtain a non-binding estimate of the 
family contribution, and requires the Secretary to evaluate the 
differences between the estimates and the actual determinations 
two years after this paragraph is implemented and submit a 
report to the authorizing committees of Congress on the results 
of the evaluation. Paragraph (3) requires the Secretary to 
develop a common paper form and an EZ-FAFSA for students with 
an expected family contribution of zero. Outlines what is to be 
included in the EZ-FAFSA. Requires the Secretary to encourage 
applicants to use the electronic FAFSA forms that the Secretary 
must maintain. Outlines how the Secretary must maintain the 
electronic forms. Requires the Secretary to report annually to 
Congress on the impact of the digital divide on students 
completing applications for title IV aid and steps being taken 
to eliminate the divide. Paragraph (4) requires the Secretary 
to develop a common electronic form. Outlines what is to be 
included on the form. Requires the Secretary to develop a 
simplified electronic application for students with an expected 
family contribution of zero. Outlines what is to be included on 
the simplified form. Requires the Secretary to ensure that 
electronic data collection protects applicants' privacy and 
permits the Secretary to allow electronic forms to be submitted 
without a signature if the signature is subsequently submitted 
by the applicant. Paragraph (5) requires the Secretary to 
develop a streamlined reapplication process. The Secretary is 
also required to continue reducing the data elements on the 
FAFSA and report on this to Congress. Paragraph (6) requires 
the Secretary, in consultation with Sate agencies, to include 
on the forms such State- specific data items as the Secretary 
determines are necessary. Requires the Secretary to conduct an 
annual review. Requires the Secretary to encourage States to 
take steps to encourage the use of simplified application 
forms. Requires the Secretary to annually publish in the 
Federal Register a notice requiring State agencies to inform 
the Secretary if the State is unable to utilize the simplified 
application forms and the State-specific data that the State 
agency requires for delivery of State need-based aid. Requires 
State notification to the Secretary regarding the use of 
application forms. Requires the Secretary, if the State does 
not provide proper notice, to permit residents of the State to 
complete simplified forms and not require them to complete any 
data previously required by that State. Paragraph (7) prohibits 
the Secretary from charging students or parents for the use of 
the FAFSA in any of its forms. Requires the use of the FAFSA 
for determining need for aid under most title IV programs. 
Requires organizations that charge students and parents to 
assist them with the filing of a FAFSA to provide several 
notices regarding the nature of the FAFSA. Paragraph (8) 
requires the Secretary to initiate the processing of forms 
under this section as early as practicable prior to January 1 
of the student's planned year of enrollment.
    Amends section 482(a) to require proposed modifications, 
updates, and notices to be published in the Federal Register by 
March 1.
    Amends section 483 by inserting a new subsection (e) to 
require the Secretary to utilize savings accrued by moving more 
applicants to the electronic form to improve access to the 
electronic forms for students with an expected family 
contribution of zero.
    Amends section 480(d) by striking paragraph (2) and 
inserting a new paragraph (2) with regards to include in the 
definition of ``Independent Student'' any student who is an 
orphan, in foster care, or a ward of the court, or was in 
foster care or a ward of the court until the individual reached 
the age of 18.

Section 472. Additional need analysis amendments

    Amends section 475(g) to increase the dependent student 
work protection allowance from $2,200 to $3,000 beginning July 
1, 2006.
    Amends section 478(h) by striking an incorrect cross-
reference and clarifying what expenses are allowable under the 
employment expense allowance.
    Amends section 479A(a) by inserting a new heading for the 
subsection and a new paragraph (1). Further amends section 
479A(a) by inserting a new paragraph (2). Further amends 
section 479A(a) to include a student's status as a ward of the 
court before turning 18, a homeless or unaccompanied youth 
under section 725 of the McKinney-Vento Act, and an individual 
who was adopted at or after age 13 as special circumstances 
under the new paragraph (2). Further amends section 479A(a) by 
inserting new paragraphs (3) and (4) as technical amendments.
    Amends section 480(d) to treat active duty members of the 
military as independent students for purposes of need analysis.
    Amends section 480(e) by inserting a new paragraph (5) to 
exclude distributions from a qualified tuition program 
established under section 529 of the Internal Revenue Code of 
1986 that is not included in gross income calculations under 
section 529.
    Amends section 480(f) with regards to the definition of 
assets by including qualified tuition programs established 
under section 529 of the Internal Revenue Code of 1986. Further 
amends section 480(f) by inserting a new paragraph (2) to 
clarify that qualified tuition programs under section 529 of 
the Internal Revenue Code of 1986 will not be treated as an 
asset for a dependent student under section 475. The new 
paragraph (2) also clarifies how the value of a qualified 
tuition program will be calculated for the purposes of 
determining the assets of parents or independent students.
    Amends section 480(j) by striking ``; Tuition Prepayment 
Plans'' from the heading of the subsection, striking paragraph 
(2), and inserting language in paragraph (3) to exclude 
distributions from a qualified tuition program under section 
529 of the Internal Revenue Code of 1986 that are not 
includable in gross income calculations from counting as a 
resource. Further amends section 480(j) by inserting a new 
paragraph (3) that excludes assistance not received under this 
title from both estimated financial assistance and cost of 
attendance, if that assistance is designated by the State 
providing that assistance to offset a specific component of the 
cost of attendance. This new paragraph also states that if the 
assistance is excluded from either estimated financial 
assistance or cost of attendance, it must be excluded from 
both.
    Further amends section 480(f) by inserting a new 
subparagraph (C) in paragraph (3) that exempts small businesses 
with 100 or fewer full-time or full-time equivalent employees 
that is owned or controlled by the family.

  PART G--GENERAL PROVISIONS RELATING TO STUDENT FINANCIAL ASSISTANCE

Section 481. Definitions of academic year and eligible program

    Amends section 481(a) by amending paragraph (2) to reduce 
the 30-week requirement for clock hour schools to 26 weeks. 
Further amends section 481(a) by granting the Secretary the 
authority to reduce the 30 week minimum for credit hour schools 
to 26 weeks as appropriate on a case-by-case basis.
    Amends section 481(b) by inserting a new paragraph (3) to 
include within the definition of eligible program an 
instructional program that utilizes direct assessment of 
student learning or recognizes the direct assessment of student 
learning by others in lieu of credit hours or clock hours as 
the measure of student learning. This eligibility determination 
must be made by the Secretary for institutions being deemed 
eligible for the first time. Requires the Secretary to provide 
an annual report to Congress identifying the programs made 
eligible under this paragraph.

Section 482. Distance education

    Amends section 481(b) by inserting a new paragraph (4) to 
provide a definition of distance education as an eligible 
program for title IV purposes.
    Amends section 484(l) by striking the one year or longer 
program of study requirement for a telecommunication course to 
not be considered a correspondence course; and, by striking the 
requirement that less than 50 percent of an institution's 
courses be telecommunications or correspondence courses in 
order for telecommunications courses to not be considered 
correspondence courses. Further amends section 484(l) by 
excluding institutions described in the Carl D. Perkins 
Vocational and Technical Education Act of 1998.

Section 483. Expanding information dissemination regarding eligibility 
        for Pell Grants

    Amends section 483(a) by inserting a new paragraph (8) to 
require the Secretary to make a special effort to notify 
students and parents who qualify for free lunch, food stamps, 
or other such programs, of their potential eligibility for a 
maximum Pell grant.

Section 484. Student eligibility

    Amends section 484(a) by inserting a new paragraph (6) that 
requires students who have plead guilty or no contest to a 
crime involving fraud in obtaining funds under this title, to 
have fully repaid the funds to the Secretary or to the holder 
of a loan before being considered eligible.
    Amends section 484(r) by striking paragraph (1) and 
inserting a new paragraph (1) to clarify that only those 
students enrolled and receiving student aid under title IV at 
the time of the conviction will lose student aid eligibility.
    Amends section 484(j) to clarify that students from the 
freely associated states will only be eligible for Pell Grants.
    Amends section 484(q) to include a specific reference to 
the Internal Revenue Code of 1986 to define what information 
the Secretary will have access to.
    Amends section 484(b) to include incarcerated parents among 
those not eligible for Federal loans. Further amends section 
484(b) by prohibiting a student who is subject to an 
involuntary civil commitment upon completion of a period of 
incarceration for a sexual offense (as determined by the 
Secretary) from being eligible for a loan under this title.

Section 485. Institutional refunds

    Amends section 484B(a) to clarify that LEAP funds are 
excluded from the requirements of this section. Further amends 
section 484B(a) to allow for multiple leaves of absence. 
Further amends section 484B(a) to provide a cross-reference to 
subsection (d) to determine how the percentage of the 
enrollment period or payment period that has been completed 
will be calculated. Further amends section 484B(a) to require 
the institution to contact a student who is eligible for a late 
disbursement or post-withdrawal disbursement and obtain 
confirmation that the loan funds are still required by the 
student, explain to the student his or her obligation to repay 
the funds, and document in his or her file the result of such 
contact and the final determination.
    Amends section 484B(b) to provide an institution with 45 
days from the date of the determination that a student has 
withdrawn to return the loan funds. Further amends section 
484B(b) to clarify the rule that protects 50 percent of a 
student's grant funds. Further amends section 484B(b) by 
stating that students do not have to return amounts of $50 or 
less. Further amends section 485B(b) by inserting a new 
subparagraph (D) in paragraph (2) to permit the Secretary to 
waive the Pell Grant amounts that students are required to 
return under this section if the withdrawals are by students 
residing in, employed in, or attending an institution that is 
located in an area in which the President has declared that a 
major disaster exists and whose attendance was interrupted 
because of the impact of the disaster on the student or the 
institution; and, if the withdrawals end within the academic 
year during which the declared disaster occurred or during the 
next succeeding academic year.
    Amends section 484B(d) by making technical amendments. 
Further amends section 484B(d) by amending subparagraph B of 
paragraph (2) to mean the clock hours scheduled to be completed 
by the student in the period as of the last date of attendance, 
not to exceed 150 percent of the hours completed by the student 
in the period.

Section 486. Institutional and financial assistance information for 
        students

    Amends section 485(a) to ensure that the information 
required under this section is made publicly available through 
appropriate outlets and included in reports required by the 
institution's accrediting agency. Further amends section 485(a) 
by including information about the institution's educational 
mission and goals in the information an institution provides to 
students. Further amends section 485(a) by striking 
subparagraph (L) in paragraph (1) and inserting a new 
subparagraph (L) to expand the information institutions are 
required to provide students to include student outcomes for 
full time undergraduate students. Further amends section 485(a) 
to require institutions to include the process for registering 
any complaints with the appropriate accrediting agencies or 
associations in the information disclosed to students. Further 
amends section 485(a) by making a technical amendment to 
subparagraph (M) of paragraph (1). Further amends section 
485(a) by inserting new subparagraphs (P) and (Q) in paragraph 
(1) to expand the information institutions must provide 
students to include the penalties found in the drug provision 
in section 484(r) and the institution's policies for accepting 
transfer of credit. The information regarding transfer of 
credit must include a statement that such decisions will not be 
based solely on the accrediting agency of the sending 
institution as long as the accrediting agency is recognized by 
the Secretary. States that nothing in the transfer of credit 
amendments authorizes an officer or employee of the Department 
to exercise any direction, supervision, or control over 
curriculum, program of instruction, administration, or 
personnel of any institution or accrediting agency. Further 
amends section 485(a) by striking paragraph (6) and inserting a 
new paragraph (6) to provide institutions an opportunity to 
provide supplemental data to enrolled and prospective students 
on the completion or graduation rate for students who leave 
school to serve in the armed services, on official church 
missions, or with a recognized foreign aid service of the 
Federal Government; and, inserting a new paragraph (7) to allow 
institutions now participating in the National Survey on 
Student Engagement (NSSE), Community College Survey of Student 
Engagement (CCSSE), or other similar survey to publicly report 
that data.
    Amends section 485(b) by inserting a new paragraph (3) to 
require institutions to include in their exit counseling 
material the same consumer protection language required by 
lenders with regard to consolidation loans.
    Amends section 485(f) to clarify that foreign institutions 
are not required to report data dealing with campus crime.
    Further amends section 485(a) by inserting a new 
subparagraph (P) in paragraph (1) to include the fire safety 
report prepared by the institution.
    Amends section 485 by inserting a new subsection (h) to 
require each institution, beginning in the first academic year 
that begins after the date of enactment of the Campus Fire 
Safety Right-to-Know Act of 2005, to prepare, publish, and 
distribute through appropriate publications or mailings to all 
current students and employees, and any applicant for 
enrollment or employment, an annual fire safety report. 
Outlines what is required to be included in the report. Also 
requires each institution participating in a title IV program 
to request each recognized fraternity and sorority, and any 
other student group that is recognized by the institution and 
that owns or controls housing facilities, to collect and report 
to the institution the information described in this 
subsection. Also requires each institution participating in any 
title IV program to make, keep, and maintain a log that records 
all on-campus fires, including the nature, date, time, and 
general location of each fire and all false fire alarms. These 
entries, except where disclosure is prohibited by law, must be 
open to public inspection. Each institution must also make 
annual reports to the campus community on such fires and false 
fire alarms. Each institution participating in title IV 
programs must also submit to the Secretary a copy of the 
statistics required to be available under this subsection. 
Requires the Secretary to review the statistics, make copies of 
the statistics available to the public, and identify and 
disseminate exemplary fire safety practices. Defines the term 
``campus.''

Section 487. College access initiative

    Amends part G by inserting a new section 485D to create a 
college access initiative. This new section will require the 
Secretary to direct each guaranty agency to gather information 
on programs and student aid available in the State in which the 
agency is designated. The information must be made available to 
the public free of charge and be reported to the Secretary to 
establish a directory of programs through web sites, 
publications, and other means determined by the Secretary. The 
new section requires each guaranty agency to establish a plan 
to gather and disseminate the information required. The new 
section outlines the information required from the guarantors 
and the activities the guarantors must undertake. The new 
section permits guarantors to utilize funds from operating 
funds pursuant to section 422B and, if any funds remain, from 
earnings on the restricted accounts under section 422(h)(4). 
The new section requires the Secretary and guaranty agencies to 
publicize the availability of the information within 270 days 
of enactment of this Act, particularly to traditionally 
underrepresented populations.

Section 488. Distance Education Demonstration Program

    Amends section 486(b) to make conforming and technical 
changes.
    Amends section 486(d) by allowing the Secretary to select 
up to 100 institutions in any year after the program's first 
year rather than only 35 institutions in the third year, and to 
allow up to five degree-granting, accredited correspondence 
schools to participate.

Section 489. College Affordability Demonstration Program

    Amends part G by inserting a new section 486A. The new 
section provides for a College Affordability Demonstration 
Program to provide innovation in the delivery of higher 
education and student financial aid in a manner resulting in 
reduced costs for students and institutions and more effective 
delivery of education and financial aid. The new section 
authorizes the Secretary to select up to 100 institutions, or 
systems or consortia of institutions, to participate and 
enables the Secretary to waive requirements under this Act for 
participating institutions as the Secretary feels necessary to 
meet the purpose of this section. Limits this waiver authority 
by prohibiting the Secretary from waiving maximum award amounts 
for an academic year or loan period and requires the Secretary 
to determine that the waiver can reasonably be expected to 
result in reduced costs to students or institutions without an 
increase in Federal program costs. The new section defines what 
institutions are eligible, outlines how those institutions 
should apply, and outlines the criteria the Secretary should 
use to select participants. The new section requires the 
Secretary to report to the public and the authorizing 
committees of Congress the list of participating institutions 
and a list of the statutory or regulatory requirements being 
waived for each institution. The new section requires the 
Secretary to evaluate the program every two years and review 
the existing impediments to the implementation of innovations 
that result in cost savings and in expanding access to 
education. The new section requires the Secretary to report to 
the authorizing committees of Congress every two years on the 
progress of the demonstration program. The new section requires 
the Secretary to provide oversight of the participating 
institutions. The new section sets the termination date for the 
program as October 1, 2011.

Section 490. Program participation agreements

    Amends section 487(a) by extending the prohibition on 
employing individuals responsible for administering funds under 
this title who have been convicted of, or pled ``no contest'' 
to, crimes involving funds under this title to include other 
Federal, State or local government funds. Further amends 
section 487(a) with a technical amendment to clarify that an 
institution must comply with the ``return of title IV funds'' 
policy in section 484B. Further amends section 487(a) by 
inserting a new subparagraph (D) in paragraph (23) to clarify 
that an institution is permitted to provide voter registration 
material electronically via the form itself or with information 
and a link to the forms accepted in the institution's State. 
Further amends section 487(a) by inserting a new paragraph (24) 
that requires the institution to receive at least 10 percent of 
its revenues from sources other than those provided under this 
title.
    Amends section 487 by inserting a new subsection (f) to 
implement the non-title IV revenue requirement. Outlines how 
the 10 percent established in section 487(a)(24) must be 
calculated. States that an institution that fails to meet the 
requirement in section 487(a)(24) for three successive years 
will become ineligible to participate in the title IV programs. 
Also outlines sanctions the Secretary could impose on an 
institution that fails to meet the requirement in any given 
year. Requires the Secretary to identify on the College 
Opportunities On-Line website any institution that fails to 
meet the requirements of section 487(a)(24) in any year.
    Amends section 487(c) to permit the Secretary to modify the 
requirements for foreign schools, and to waive requirements for 
foreign institutions with loan volumes under $500,000.
    Further amends section 487(a) by inserting a new paragraph 
(25) to require institutions, within one year of the date of 
enactment of this Act, to disclose to an alleged victim of any 
crime of violence or nonforcible sex offense, the final results 
of any disciplinary proceeding. If the victim is deceased, that 
information is required to be disclosed to the victim's next of 
kin.

Section 491. Additional technical and conforming amendments

    Amends section 483(d) to correct a cross-reference to the 
Individuals with Disabilities Education Act.
    Amends section 484(a) to make a technical correction
    Amends section 484(b) to correct a cross-reference to the 
section of this title which authorizes unsubsidized Stafford 
loans for middle-income borrowers. Further amends section 
484(b) by making technical amendments to strike an unnecessary 
reference to section 428H.
    Amends section 484(l) to correct a cross-reference to the 
Carl D. Perkins Vocational and Education Act of 1998.
    Amends section 484A(b) by extending the provisions of 
paragraph (2) to loans made under parts D and E of this title.
    Amends section 485B(a) by making several technical 
amendments to correct the designations of the paragraphs within 
this subsection and to correct a cross-reference to a section 
of the United States Code.
    Amends section 487A(b) by making technical amendments. 
Further amends section 487A(b) by authorizing the Secretary to 
continue the voluntary participation of institutions 
participating as of July 1, 2005 and the participation of any 
such institution unless the Secretary determines that such 
institution's participation has not been successful in carrying 
out the purposes of this section.
    Amends section 491(c) by inserting a new paragraph (3) to 
clarify that an appointment to the Advisory Committee on 
Student Financial Assistance is effective upon appearing in the 
Congressional Record.
    Amends section 491(h) with regards to payments to members 
of the Advisory Committee on Student Financial Assistance to 
conform to requirements regarding the pay of Federal employees.
    Amends section 491(k) by extending the authorization of the 
Advisory Committee to 2011.
    Amends title IV, part G by repealing section 493A with 
regards to year 2000 requirements at the department.
    Amends section 498(c) by making a technical amendment.
    Amends section 498(d) by making a technical amendment.

                       PART H--PROGRAM INTEGRITY

Section 495. Accreditation

    Amends section 496(a) by striking subparagraph (B) in 
paragraph (3) to allow states to be able to apply to the 
Secretary to become a recognized accreditor. Further amends 
section 496(a) by inserting a new subparagraph heading (A) at 
the beginning of paragraph (4) of the subsection, by inserting 
language in the new subparagraph (A) of paragraph (4) to 
require accreditors to consider the stated missions of 
institutions of higher education, including but not limited to 
such missions as inculcation of religious values, and inserting 
a new subparagraph (B) of paragraph (4) to clarify that an 
accreditor who seeks to have distance education in the scope of 
the agency's accrediting process must demonstrate that the 
agency's standards effectively address the quality of an 
institution's distance education programs in the areas 
identified in paragraph (5) of this subsection; and, the agency 
requires that an institution that offers distance education 
programs to have processes by which it establishes that the 
student who registers in a distance education course or program 
is the same student who participates, completes the work, and 
receives the credit. Further amends section 496(a) by amending 
subparagraph (A) of paragraph (5) to require that accrediting 
agencies assess institutions' success with respect to student 
achievement in several areas. Further amends section 496(a) to 
include fiscal and administrative capacity and, under certain 
circumstances, board governance to the list of institutional 
characteristics the accreditor is required to evaluate. Further 
amends section 496(a) by striking paragraph (6) and inserting a 
new paragraph (6) that requires accreditors to establish and 
apply review procedures throughout the accrediting process and 
outlines what the procedures must provide for. Further amends 
section 496(a) by striking paragraph (8) and inserting a new 
paragraph (8) to require accreditors to make public and submit 
to the Secretary and the State licensing or authorizing agency 
a summary of agency or association actions involving any 
adverse action taken with respect to the institution.
    Amends section 496(c) by amending paragraph (1) to ensure 
that members of accrediting teams are well-trained and 
knowledgeable about distance education. Further amends section 
496(c) by inserting new paragraphs (7), (8), (9), (10), and 
(11), and (12) to require accreditors to include the 
information required in subparagraph (H) of section 485(a)(1) 
in the accreditors' reviews; to confirm that the institution 
has transfer policies that are publicly disclosed and do not 
deny transfer of credit based solely on the accreditation of 
the sending institution as long as the accreditor is recognized 
by the Secretary; to develop a summary available to the public 
of any adverse actions taken by the agency; to monitor the 
enrollment growth of distance education to ensure that an 
institution experiencing significant growth has the capacity to 
serve its students effectively; to disclose publicly a list of 
the individuals who comprised the evaluation teams during the 
prior calendar year and the title and institutional affiliation 
of each individual, a description of the agency's process for 
selecting, preparing, and evaluating such individuals, and any 
statements related to the accreditation responsibilities of 
such individuals; and, to review the record of student 
complaints resulting from the student information process 
described in section 485(a)(1)(J).
    Amends section 496(l) by inserting a new paragraph (3) to 
require the Secretary to provide an annual report to Congress 
on accrediting agencies or associations whose status has been 
limited, suspended or terminated.
    Amends section 498A(b) by inserting new paragraphs (6), 
(7), (8), and (9) to expand the requirements the Secretary must 
meet in fulfilling his or her responsibilities to include 
providing the institution an adequate opportunity to review and 
respond to any report or audit finding before a final 
determination is reached; reviewing and taking into 
consideration the institution's response in any final 
determination, and include in the final determination a written 
statement addressing the institution's response and stating the 
basis for the final determination and a copy of the 
institution's statement in response; maintaining and preserving 
the confidentiality of any report or audit until the 
requirements listed above are met; and, requiring that the 
authority to approve or issue any report or audit finding 
involving amounts that may exceed $500,000 is not delegated 
beyond the Chief Operating Officer of Federal Student Aid.

Section 496. Report to Congress on prevention of fraud and abuse in 
        student financial aid programs

    Amends title IV by inserting a new section 499. The new 
section requires the Secretary to commission an independent, 
non-partisan, comprehensive study on the prevention of fraud 
and abuse in title IV student financial aid programs and report 
the results of such study to Congress. Outlines the areas to be 
covered in the study. Establishes a deadline of December 31, 
2007 for the Secretary to transmit the report to Congress. The 
report must include clear and specific recommendations for 
legislative and regulatory actions that are likely to 
significantly reduce the fraud and abuse in title IV programs.

                    Title V--Developing Institutions


Section 501. Definitional changes

    Amends section 502(a) by clarifying that a Hispanic-Serving 
Institution must have an enrollment of undergraduate full-time 
equivalent students that is at least 25 percent Hispanic at the 
end of the award year immediately preceding the date of 
application. Further amends section 502(a) by striking the 
requirement that a Hispanic-Serving Institution provide 
assurances that at least 50 percent of the institution's 
Hispanic students are low-income.

Section 502. Assurance of enrollment of needy students

    Amends section 511(c) by striking paragraph (2) with 
regards to the 5-year improvement plan. Further amends section 
511(c) to require the institution to provide in its application 
for a grant assurances that the institution has an enrollment 
of needy students as required in section 502(b).

Section 503. Additional amendments

    Amends section 502(a) to insert the requirement that the 
institution offer not less than a two year program that is 
acceptable for full credit toward a bachelor's degree.
    Amends section 503(b) to insert within the uses of funds 
education or counseling services designed to improve financial 
and economic literacy of students and parents. Further amends 
section 503(b) by inserting within the allowable uses of funds 
the construction, maintenance, renovation, and improvement of 
instructional facilities, the purchase or rental of 
telecommunications technology equipment or services, and the 
acquisition of real property adjacent to the campus. Further 
amends section 503(b) to insert within the allowable uses of 
funds the establishment of community outreach programs and 
partnerships between institutions and local elementary or 
secondary schools.
    Amends section 504(a) by striking the 2-year wait out 
period.
    Makes a technical amendment to section 514(c).

Section 504. Postbaccalaureate opportunities for Hispanic Americans

    Amends title V by inserting a new part B, which authorizes 
the ``Promoting Postbaccalaureate Opportunities for Hispanic 
Americans'' program. Section 511 outlines the purposes of the 
program. Section 512 authorizes the Secretary to award 
competitive grants to Hispanic-serving institutions determined 
by the Secretary to be making substantive contributions to 
graduate educational opportunities for Hispanic students. 
Defines the term ``Eligible Institution.'' Section 513 lists 
the activities grantees are authorized to undertake. Section 
514 outlines how applications are to be submitted, establishes 
a duration of five years for grants awarded, limits to one the 
number of grants any single institution can receive under this 
part in one fiscal year.

Section 505. Authorization of appropriations

    Amends section 528(a) by establishing the authorization for 
appropriations for this title.

                     Title VI--Title VI Amendments


Section 601. International and foreign language studies

    Amends section 601 with regard to the findings and purposes 
of this Act.
    Amends section 602(a) by authorizing the Secretary to award 
grants to support instructors of the less commonly taught 
languages; authorizing the dissemination of materials developed 
by centers and programs to local educational agencies, public 
and private elementary and secondary schools, and institutions 
of higher education; authorizing projects that support in 
students an understanding of science and technology in 
coordination with foreign language proficiency; and encouraging 
partnerships between two- and four-year institutions of higher 
education, colleges of education, and Federal and state 
departments and agencies.
    Amends section 603(c) regarding Language Resource Centers.
    Amends section 604 by authorizing additional uses of funds 
for sending undergraduate students on educational programs 
abroad to enhance their foreign language proficiency and 
cultural knowledge; requiring grantees to submit program 
evaluations; and removing the 10 percent funding cap for this 
section.
    Amends section 605(a) by modifying authorized activities to 
encourage the Department of Education to engage in data 
collection, analysis, and dissemination of international 
education and foreign language needs and outputs.
    Amends section 606 by permitting museums to apply for 
grants under this section; by authorizing funds to be used for 
the acquisition of printed material from abroad for the 
purposes of this section, the development of standards for 
electronic access, the means for access of international data, 
the establishment of linkages with institutions abroad that 
facilitate access to foreign information, and to provide the 
Department of Education with the flexibility to establish new 
activities that are useful for carrying out the purposes of 
this section, with the idea that future technological changes 
may enhance the activities which could be conducted under this 
section; and allows the Secretary of Education to waive or 
reduce the non-Federal share for institutions that are eligible 
to receive assistance under part A or B of title III or under 
title V and have demonstrated a need for a waiver in the grant 
application.
    Amends section 607(b) by requiring the Secretary to take 
into account the degree to which grant applicants address 
national interests and generate and disseminate information 
from diverse perspectives with regard to international issues.
    Amends section 608(a) with regard to equitable 
distribution.
    Amends section 610 with regard to the authorization of 
appropriations.

Section 602. Business and international education programs

    Amends section 612 by clarifying that minority serving 
institutions are eligible for assistance under this section; 
and by allowing the Secretary to waive or reduce the non-
Federal share for institutions that receive assistance under 
part A or B of title III or under title V and have demonstrated 
a need for a waiver in the grant application.
    Amends section 613 by allowing the Secretary to waive or 
reduce the non-Federal share for institutions that receive 
assistance under part A or B of title III or under title V and 
have demonstrated a need for a waiver in the grant application.
    Amends section 614 with regard to the authorization of 
appropriations.

Section 603. Institution for International Public Policy

    Amends section 621 by clarifying that the Institute for 
International Public Policy shall include all underrepresented 
minorities in its program in order to enhance participation in 
international service; by modifying the heading of section 621 
to read ``Program for Foreign Service Professionals''; and, by 
clarifying that eligible recipients include all minority 
serving institutions and institutions that serve substantial 
numbers of underrepresented students.
    Amends section 622 by encouraging collaboration among 
colleges and universities receiving funds under this title.
    Amends section 623(a) to include Alaska Native-serving, 
Native Hawaiian-serving, and Hispanic-serving institutions in 
the study abroad program.
    Amends section 624 by modifying the heading of section 624 
to read ``Advanced Degree in International Relations;'' and by 
authorizing the Institute for International Public Policy's 
consortia of institutions to provide advanced degree programs 
in a variety of academic areas.
    Amends section 625 to include Alaska Native-serving, Native 
Hawaiian-serving, and Hispanic-serving institutions in the 
internships program; by repealing the Interagency Committee on 
Minority Careers in International Affairs; and by stating that 
students who participate in Internship programs under 
subsections (a) and (b) will be called ``Ralph J. Bunche 
Fellows.''
    Amends section 626 by requiring the Secretary to submit a 
biennial report.
    Amends section 628 with regard to the authorization of 
appropriations for this part.

Section 604. Evaluation, outreach, and dissemination

    Amends Part D of title VI to include section 632. Section 
632 authorizes the Secretary to use not more than 1 percent of 
the funds made available for this title for program evaluation, 
national outreach, and information dissemination activities.

Section 605. Advisory Board

    Amends Part D of title VI to include section 633. Section 
633 establishes the International Advisory Board and sets forth 
its mission, authorities, and purpose; clarifies that the Board 
will be independent of the Secretary and the Department of 
Education; contains provisions regarding the Board's 
organizational structure and membership; and sets forth the 
functions and operations of the Board.

Section 606. Recruiter access to students and student recruiting 
        information; safety

    Amends Part D of title VI to include sections 634 and 635. 
Section 634 sets forth provisions regarding recruiter access to 
students for the purpose of recruiting for graduate 
opportunities or prospective employment.
    Section 635 contains provisions concerning student safety.

Section 607. National study of foreign language heritage communities

    Amends Part D of title VI to include section 636. Section 
636 contains provisions requiring the Secretary, in 
consultation with the International Advisory Board, to conduct 
a study of foreign language heritage communities, particularly 
those communities that include speakers of languages that are 
critical to the national security of the United States; and 
requiring the Secretary to submit a report not later than a 
year after the date of enactment.

                    Title VII--Title VII Amendments


Section 701. Javits Fellowship program

    Amends section 701 (a) by adding language after the second 
sentence clarifying that a master's degree in fine arts shall 
be considered a terminal degree.
    Amends section 701(c) by allowing institutions of higher 
education to grant fellowship recipients an interruption of 
study due to active duty military service or a personal or 
family member illness.
    Amends section 702(a)(1) with regard to the allocation of 
fellowships within the Jacob K. Javits program and by requiring 
the Secretary to ensure that one member of the fellowship board 
will be from a minority serving institution.
    Amends section 703 with regard to stipends and by providing 
for institutional allowances.
    Amends section 705 with regard to the authorization of 
appropriations.

Section 702. Graduate Assistance in Areas of National Need

    Amends section 712(b) pertaining to the designation of 
areas of national need.
    Amends section 712 by inserting subsection (c), which 
requires the Secretary to establish a priority for grants to 
prepare faculty to train highly qualified elementary and 
secondary school teachers of math, science and special 
education, and teachers who will provide instruction for 
limited English proficient individuals.
    Amends section 713(b) to require grantees that are 
departments, programs, or units involved in teacher preparation 
to provide assurances that the grantee collaborates with other 
departments within the institution to ensure a successful 
combination of training in both teaching and content.
    Amends section 714(b) with regard to stipends.
    Amends section 714(c) by making technical amendments.
    Amends section 715(a)(1) concerning additional assistance. 
Specifies that the Consumer Price Index to be used is the 
Consumer Price Index for All Urban Consumers.
    Amends section 716 with regard to the authorization of 
appropriations.

Section 703. Thurgood Marshall Legal Educational Opportunity program

    Amends section 721(c) pertaining to contract and grant 
purposes for the Thurgood Marshall Legal Educational 
Opportunity program.
    Amends section 721(d)(1)(D) with regard to services 
provided.
    Amends section 721(h) with regard to the authorization of 
appropriations.
    Amends section 731 by repealing subsection (e).

Section 704. Fund for the improvement of postsecondary education

    Amends section 741(a) by authorizing the Secretary to 
consider applications for grants that recognize the needs of 
non-traditional student populations; focus on technology to 
deliver distance education; introduce reforms that encourage 
students to enter and reenter postsecondary institutions and 
pursue postsecondary study tied to individual needs; provide 
support for services that improve high school graduation and 
college attendance and completion rates for disadvantaged 
students, and for programs that reduce postsecondary 
remediation rates, and improve degree attainment rates, for 
low-income students and former high school dropouts; and 
assess, in partnership with a public or private nonprofit 
institution or agency, the performance of teacher preparation 
programs within institutions of higher education in a State 
using an assessment which provides comparisons across such 
schools within the State based upon indicators including 
teacher candidate knowledge in subject areas in which such 
candidate has been prepared to teach.
    Amends section 741 by prohibiting funds made available 
under this part from being used to provide financial assistance 
to students who do not meet the requirements of section 
484(a)(5).
    Amends section 744(c) by expanding the area of national 
need related to articulation agreements to include dual 
enrollment programs between secondary schools and institutions 
of higher education. Further amends section 744(c) to clarify 
that special projects may include international partnerships 
with postsecondary institutions abroad, the establishment of 
academic programs that teach traditional American history, and 
institutional efforts to address pressing community needs, 
including support for the development of coordinated curriculum 
and internship opportunities for students in disadvantaged 
communities.
    Amends section 745 with regard to the authorization of 
appropriations.

Section 705. Urban Community Service

    Amends title VII by repealing part C, Urban Community 
Service program.

Section 706. Demonstration projects to ensure students with 
        disabilities receive a quality higher education

    Amends section 762(a) by allowing grants to address the 
needs of all students with disabilities.
    Amends section 762(b)(2) by allowing grantees to assist 
students with disabilities with the transition between 
secondary and postsecondary education and to use funds to 
develop innovative, effective and efficient distance education 
programs that would enhance access of students with 
disabilities to postsecondary education programs.
    Amends section 763 by requiring the application to include 
a description of how the institution will work to replicate the 
best practices of institutions of higher education with 
demonstrated success in serving students with disabilities.
    Amends section 765 with regard to the authorization of 
appropriations.

                    Title VIII--Clerical Amendments


Section 801. Clerical amendments

    Amends section 103 by inserting a new paragraph (1) to 
define the term ``authorizing committees'' as the Committee on 
Health, Education, Labor, and Pensions of the Senate and the 
Committee on Education and the Workforce of the House of 
Representatives.
    Amends multiple sections with technical amendments that 
strike the names of the Senate and House committees and insert 
references to the authorizing committees.
    Makes several technical amendments to multiple sections to 
correct headings and cross-references.
    Amends section 435(a) by striking subparagraph (B) of 
paragraph (3) with regards to Federal Supplemental Loans for 
Students.
    States that nothing in these amendments should be construed 
to alter the terms, conditions, and benefits applicable to 
Federal supplemental loans for students under section 428A as 
in effect prior to July 1, 1994.

              Title IX--Amendments to Other Education Laws


               PART A--EDUCATION OF THE DEAF ACT OF 1986

Section 901. Laurent Clerc National Deaf Education Center

    Amends section 104(a) of the Education of the Deaf Act of 
1986 by referencing the Laurent Clerc National Deaf Education 
Center.
    Amends section 104(b) of the Education of the Deaf Act of 
1986 by referencing the Laurent Clerc National Deaf Education 
Center. Further amends section 104(b) by inserting a new 
paragraph (5) that requires Gallaudet University, in 
consultation with the Secretary, to implement standards and 
assessments for the programs operated by the Laurent Clerc 
National Deaf Education Center that are consistent with the 
Elementary and Secondary Education Act of 1965. The standards 
and assessments must be in place by the beginning of the 2007-
2008 academic year. The results of the assessments must be 
publicly reported.

Section 902. Authority

    Amends section 111 of the Education of the Deaf Act of 1986 
by naming the Rochester Institute of Technology as the 
institution responsible for the National Technological 
Institute for the Deaf.

Section 903. Agreement for the National Technical Institute for the 
        Deaf

    Amends section 112(a) of the Education of the Deaf Act of 
1986 by naming the Rochester Institute of Technology as the 
institution responsible for the National Technological 
Institute for the Deaf.
    Amends section 112(b) of the Education of the Deaf Act of 
1986 by specifying the governing body as the Rochester 
Institute of Technology's Board of Trustees. Further amends 
section 112(b) by specifying that the Board of Trustees for the 
Rochester Institute of Technology is responsible for accounting 
for the indirect costs paid by the National Technological 
Institute for the Deaf to the Rochester Institute of 
Technology. Further amends section 112(b) by correcting the 
reference to the House and Senate authorizing committees.
    Amends section 112(c) of the Education of the Deaf Act of 
1986 by referring specifically to the Rochester Institute of 
Technology.

Section 904. Definitions

    Amends section 201 of the Education of the Deaf Act of 1986 
by striking paragraph (3) with regards to the definition of 
institution of higher education. Further amends section 201 by 
inserting a new paragraph (7) that defines ``RIT'' as the 
Rochester Institute of Technology.

Section 905. Audit

    Amends section 203(a) of the Education of the Deaf Act of 
1986 by correcting the reference to the Government 
Accountability Office.
    Amends section 203(b) of the Education of the Deaf Act of 
1986 by requiring the National Technological Institute for the 
Deaf to have an annual independent financial and compliance 
audit made of the Rochester Institute of Technology's programs 
and activities, including the Institute's programs and 
activities. Further amends section 203(b) by correcting section 
references. Further amends section 203(b) by requiring a copy 
of each audit be delivered to the authorizing committees of the 
House and Senate. Further amends section 203(b) by specifically 
referring to the Rochester Institute of Technology.
    Amends section 203(c) of the Education of the Deaf Act of 
1986 by correcting the reference to the House and Senate 
authorizing committees.

Section 906. Reports

    Amends section 204 of the Education of the Deaf Act of 1986 
by specifically referring to the Rochester Institute of 
Technology. Further amends section 204 by correcting the 
reference to the House and Senate authorizing committees. 
Further amends section 204 by requiring Gallaudet University 
and the Institute to report on the disposition of enrolled 
students within one year of graduation or completion.

Section 907. Liaison for educational programs

    Amends section 206(a) of the Education of the Deaf Act of 
1986 to strike the reference to a 30 day deadline.

Section 908. Federal endowment programs for Gallaudet University and 
        the National Technical Institute for the Deaf

    Amends section 207(a) of the Education of the Deaf Act of 
1986 by specifically referring to the Rochester Institute of 
Technology.

Section 909. Oversight and effect of agreements

    Amends section 208(a) of the Education of the Deaf Act of 
1986 by specifically referring to the Rochester Institute of 
Technology. Further amends section 208(a) by correcting the 
reference to the authorizing committees.

Section 910. Authorization of appropriations

    Amends section 205(c) of the Education of the Deaf Act of 
1986 to extend the authorization through 2011.
    Amends section 207(h) of the Education of the Deaf Act of 
1986 to extend the authorizations through 2011.
    Amends section 212 of the Education of the Deaf Act of 1986 
to extend the authorizations through 2011.
    Inserts a new section (1) that establishes the short title 
of this act as the ``Gallaudet University and National 
Technical Institute for the Deaf Act.''

                   PART B--ADDITIONAL EDUCATION LAWS

Section 921. Cancellation of student loan indebtedness for survivors of 
        Victims of the September 11, 2001, attacks

    Defines the terms ``Eligible Public Servant,'' ``Eligible 
Victim,'' ``Eligible Parent,'' ``Secretary,'' and ``Federal 
Student Loan.''
    Requires the Secretary to provide for the discharge or 
cancellation of the Federal student loan indebtedness of the 
spouse of an eligible public servant, the portion of a Federal 
consolidation loan incurred on behalf of the eligible victim 
that was used jointly by the eligible victim and his or her 
spouse, the portion of the consolidation loan indebtedness of 
an eligible parent that was incurred on behalf of an eligible 
victim, and the PLUS loan indebtedness of an eligible parent 
that was incurred on behalf of an eligible victim.
    Outlines the methods to be used to cancel or discharge 
eligible loans.
    Requires the Secretary to establish procedures for the 
filing of applications and to publicize the availability of 
loan discharge or cancellation.
    States that funds available for the purposes of making 
payments to lenders in accordance with section 437(a) shall be 
available for making payments to lenders as required by this 
section.
    States that the provisions of this section shall be applied 
to loans on which amounts were owed on September 11, 2001.

Section 922. Amendment to Higher Education Amendments of 1998

    Repeals several expired studies and programs from the 
Higher Education Amendments of 1998.
    Amends section 804(b) of the Higher Education Amendments of 
1998 to provide a deadline of September 30, 2007 for the 
Secretary to report the conclusions on the study on transfer of 
credits. Further amends section 804(b) to include the policies 
of institutions of higher education in the report.
    Amends section 806(a) of the Higher Education Amendments of 
1998 to include all institutions of higher education in the 
report.
    Amends section 806(c) of the Higher Education Amendments of 
1998 by setting the deadline as September 30, 2007 for the 
submission of the report.
    Amends section 826(g) of the Higher Education Amendments of 
1998 by extending the authorization through 2011.
    Amends section 826 of the Higher Education Amendments of 
1998 by correcting the paragraph designations.
    Amends section 841(c) of the Higher Education Amendments of 
1998 to establish the authorization level as $3 million in 2006 
and such sums through 2011.
    Amends section 422(d) of the Higher Education Amendments of 
1998 to establish an effective date for the amendments of July 
1, 2006.

Section 923. Tribally Controlled College or University Assistance Act 
        of 1978

    Amends section 110(a) of the Tribally Controlled Community 
College or University
    Assistance Act of 1978 to extend the authorization through 
2011.
    Amends section 306(a) of the Tribally Controlled Community 
College or University
    Assistance Act of 1978 to extend the authorization through 
2011.
    Amends section 403 of the Tribal Economic Development and 
Technology Related Education Assistance Act of 1990 to extend 
the authorization through 2011.
    Amends section 2(a) of the Tribally Controlled Community 
College or University Assistance Act of 1978 to clarify the 
definition of ``national Indian organization.''
    Amends section 2(b) of the Tribally Controlled Community 
College or University Assistance Act of 1978 by striking 
paragraph (5) and inserting a new paragraph (5) to clarify how 
eligible credits earned in a continuing education program 
should be counted in determining the Indian student count.
    Amends section 103 of the Tribally Controlled Community 
College or University Assistance Act of 1978 by inserting a new 
paragraph (4) to require a tribally controlled college or 
university to be accredited by a nationally recognized 
accrediting agency recognized by the Secretary in order to be 
eligible for funds.

Section 924. Navajo Community College Act

    Amends section 5(a) of the Navajo Community College Act to 
extend the authorization through 2011.

Section 925. Education Amendments of 1992

    Amends section 1543(d) of the Education Amendments of 1992 
to extend the authorization through 2011.

Section 926. Study of student learning outcomes and public 
        accountability

    Requires the Secretary to provide for the conduct of a 
study of the best practices of States in assessing 
undergraduate postsecondary student learning, particularly as 
such practices relate to public accountability systems. 
Requires the study to be conducted by a national, non-partisan, 
or bi-partisan association or organization with knowledge in 
State practices and access to necessary State officials. The 
association or organization must also represent States or State 
officials. Outlines the topics to be covered by the study. 
Requires the agency or association conducting the study to 
establish and consult with a national committee that will meet 
at least twice a year to review the research, identify best 
practice models, and review recommendations. Outlines the 
membership of the national committee. Requires the association 
to consult regularly with the authorizing committees in the 
House and Senate and submit a report on the study to those 
committees no later than two years after the date of enactment 
of this Act.

Section 927. Study of minority graduation rates

    Requires the Secretary to commission a national study on 
the decreasing number of underrepresented minority males, 
particularly African American males, entering and graduating 
from colleges and universities and make recommendations to 
Congress on new approaches to increase minority male graduation 
rates and the number of minority males going into careers where 
the population is underrepresented. Requires the report to be 
submitted within one year of the enactment of this Act.

Section 928. Study of education related indebtedness of medical school 
        graduates

    Requires the Secretary to conduct a study to evaluate the 
higher education-related indebtedness of medical school 
graduates in the United States at the time of graduation. Also 
requires the Secretary to submit a report on the study to the 
respective authorizing committees of Congress within one year 
of the date of enactment of the Act and make the report widely 
available to the public.

Section 929. Study of adult learners

    Requires the Secretary to conduct a study of the developing 
trends in older adult learners attending college and how 
institutions of higher education are addressing the needs of 
this specific population in terms of outreach, accessibility, 
financing, and student support services, including online 
education. Requires the Secretary to submit a report on the 
study to the Committee on Education and the Workforce that 
includes recommendations on measures the Federal government can 
take to address the needs in regards to education and job 
training for the aging population and the changing demographics 
of our country.

Section 930. Increase in college textbook prices

    States findings of the Committee on Education and the 
Workforce related to the rising costs of textbooks. States the 
sense of the Committee that in order to make a higher education 
more accessible for all students, the following should occur to 
make college textbooks more affordable to students: textbook 
publishers should provide students with the option of buying 
materials ``a la carte'' or ``unbundled''; textbook publishers 
should work with faculty to understand the cost to students of 
purchasing the recommended textbook; college bookstores should 
work with faculty to review timelines and processes for 
ordering and stocking selected textbooks, and disclose textbook 
costs to faculty and students; and, colleges and universities 
should be encouraged to implement numerous options to address 
textbook affordability.

                       Explanation of Amendments

    The provisions of the substitute are explained in this 
report.

              Applicaiton of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. The bill amends the Higher Education Act of 1965 by 
providing increase access for students to a higher education. 
The bill reauthorizes the teacher training programs, student 
aid programs, programs that assist minority serving 
institutions, graduate study programs, international and 
foreign language programs, and various provisions that support 
and enhance student access and institutional accountability. 
The bill includes comprehensive reforms that prioritize student 
access and strengthen accountability to empower students and 
parents, the consumers of higher education. The bill does not 
prevent legislative branch employees from receiving services 
provided under this legislation.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement of 
whether the provisions of the reported bill include unfunded 
mandates. The bill reauthorizes spending programs under the 
Higher Education Act. As such, the bill does not contain any 
unfunded mandates.

                            Rollcall Votes 



  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the body of this report.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974 and with respect to 
requirements of 3(c)(3) of rule XIII of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for H.R. 609 from the Director of the Congressional Budget 
Office:
                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 16, 2005.
Hon. John A. Boehner,
Chairman, Committee on Education and the Workforce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for the direct spending 
effects of H.R. 609, the College Access and Opportunities Act 
of 2005. CBO has not completed its review of the provisions of 
the bill that would affect spending subject to appropriation.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Deborah 
Kalcevic.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

H.R. 609--College Access and Opportunities Act of 2005

    Summary: H.R. 609 would make numerous changes to federal 
higher education programs, including the student and parent 
loan programs. CBO projects that, under the current-law 
baseline, the loan programs would guarantee or disburse loans 
totaling about $360 billion over the 2006-2010 period--costing 
about $37 billion in total spending (mostly measured as subsidy 
costs). CBO estimates that enacting H.R. 609 would reduce these 
costs by $6.3 billion in 2006, $8.7 billion over the 2006-2010 
period, and $4.5 billion over the 2006-2015 period. H.R. 609 
also would affect spending subject to appropriation, but CBO 
has not completed an analysis of the bill's potential impact on 
discretionary spending.
    Provisions of H.R. 609 with significant budget effects 
include:
         Change the formulas used to calculate borrower 
        interest rates and lender yields;
         Eliminate the separate formula for lender 
        yields for loans supported with certain tax-exempt 
        funding;
         Change the insurance provided to lenders;
         Change the funding for mandatory 
        administrative costs;
         Reduce borrower origination fees and mandate 
        collection of a 1.0 percent insurance premium;
         Increase loan limits for first-year, second-
        year, and graduate students; and
         Delay the recall of the federal share of the 
        Perkins Loan Revolving Fund.
    Pursuant to section 407 of H. Con. Res. 95 (the Concurrent 
Resolution on the Budget, Fiscal Year 2006), CBO estimates that 
enacting H.R. 609 would cause an increase in direct spending 
greater than $5 billion in the 10-year period between 2016 and 
2025. CBO also expects that the direct spending costs of the 
bill would exceed the $5 billion threshold in at least one of 
the 10-year periods from 2026 through 2055.
    H.R. 609 contains no intergovernmental or private-sector 
mandates as defined by the Unfunded Mandates Reform Act (UMRA); 
any costs to state, local, or tribal governments would results 
from complying with conditions of federal assistance.
    Estimated cost to the Federal Government: The estimated 
impact of H.R. 609 on direct spending is shown in the following 
table. The costs of this legislation would fall within budget 
function 500 (education, training, and social services).
    Basis of estimate: This estimate of the direct spending 
effects of H.R. 609 assumes that the bill will be enacted in 
the fall of 2005. The CBO has not completed its review of the 
provisions of the bill that would affect spending subject to 
appropriation.

Major provisions reducing spending

    The provisions of H.R. 609 that would generate the largest 
savings include changes to the borrower interest rate and 
lender-yield formulas, reductions in the federal insurances 
rates for lenders, and modifications in the budget authority 
provided for mandatory administrative expenses. Together these 
provisions would reduce outlays by $6.3 billion in 2006, $12.4 
billion over the 2006-2010 period, and $20.1 billion over the 
2006-2015 period. Because the changes would be made in federal 
loan programs, the impacts generally are the estimated changes 
in the subsidy costs that are assessed on a net present value 
basis, as specified in the Federal Credit Reform Act.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                   By fiscal year, in millions of dollars--
                                                     ---------------------------------------------------------------------------------------------------
                                                        2006      2007      2008      2009      2010      2011      2012      2013      2014      2015
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDING
Major Provisions Reducing Spending:
Changes in Borrower Interest Rates and Lender
 Yields:
    Estimated Budget Authority......................    -5,495    -1,290    -1,190    -1,135    -1,145    -1,165    -1,195    -1,220    -1,245    -1,275
    Estimated Outlays...............................    -5,040    -1,080    -1,075    -1,005    -1,005    -1,015    -1,035    -1,065    -1,085    -1,110
Changes to Certain Loans Financed with Tax-Exempt
 Bonds:
    Estimated Budget Authority......................      -980      -265      -265      -270      -270      -275      -280      -290      -290      -290
    Estimated Outlays...............................      -850      -235      -235      -235      -240      -245      -245      -250      -255      -265
Changes in Lender Insurance:
    Estimated Budget Authority......................      -425      -145      -150      -160      -165      -170      -180      -185      -195      -200
    Estimated Outlays...............................      -385      -115      -130      -140      -145      -150      -155      -160      -170      -175
Changes in Mandatory Administrative Costs:
    Estimated Budget Authority......................       -13      -128       -66      -187      -214      -241         0         0         0         0
    Estimated Outlays...............................        17      -111       -50      -172      -198      -225       -81       -21        -8         0
    Subtotal:
        Estimated Budget Authority..................    -6,913    -1,828    -1,671    -1,752    -1,794    -1,851    -1,655    -1,695    -1,730    -1,765
        Estimated Outlays...........................    -6,258    -1,541    -1,490    -1,552    -1,558    -1,635    -1,516    -1,496    -1,518    -1,550
Major Provisions Increasing Spending:
Changes in Borrower Origination Fees and Insurance
 Premiums:
    Estimated Budget Authority......................        10       265       685     1,045     1,420     1,590     1,610     1,625     1,635     1,660
    Estimated Outlays...............................       -90        70       450       750     1,070     1,275     1,335     1,345     1,350     1,360
Increased Loan Limits:
    Estimated Budget Authority......................         0       315       540       555       580       600       620       640       660       685
    Estimated Outlays...............................         0       185       410       485       505       525       540       560       580       595
Changes in the Perkins Loan Program:
    Estimated Budget Authority......................        40        40        40        40        40        40       401       715       736       840
    Estimated Outlays...............................         0        40        40        40        40        40       401       715       736       840
    Subtotal:
        Estimated Budget Authority..................        50       620     1,265     1,640     2,040     2,230     2,631     2,980     3,031     3,185
        Estimated Outlays...........................       -90       295       900     1,275     1,615     1,840     2,276     2,620     2,666     2,795
Other Provisions With Measurable Effects:
    Estimated Budget Authority......................       245        76        33        38        53        66        66        71        66        76
    Estimated Outlays...............................       192        81        58        33        53        66        71        71        71        76
Interaction Effects:
    Estimated Budget Authority......................      -132      -163      -182      -161      -154      -145      -137      -146      -137      -146
    Estimated Outlays...............................      -104      -100      -163      -141      -130      -121      -131      -135      -129      -126
    Total Changes in Direct Spending:
        Estimated Budget Authority..................    -6,750    -1,295      -555      -235       145       300       905     1,210     1,230     1,350
        Estimated Outlays...........................    -6,260    -1,265      -695      -385       -50       150       700     1,060     1,090     1,195
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Borrower Interest Rate and Lender-Yield Formulas. Relative 
to the current-law baseline, H.R. 609 would change many of the 
formulas used to compute what borrowers owe to lenders and what 
lenders can charge. The following table outlines the current-
law formulas and the proposed changes. Borrower rates on new 
Stafford and parent loans are scheduled to switch from a 
variable-rate formula to a fixed rate (6.8 percent for students 
and 7.9 percent for parents) in July 2006; H.R. 609 would 
eliminate that change and continue the current variable-rate 
formulas. The rates on consolidated loans would change from 
being a fixed rate based on the weighted average of the loans 
being consolidated, rounded up to the nearest one-eighth 
percent, to the borrower's choice of a variable rate (91-day 
Treasury bill rate plus 2.3 percentage points for students and 
plus 3.1 percentage points for parents) or a fixed rate (set at 
the 91-day Treasury bill rate plus 3.3 percentage points for 
students and plus 4.1 percentage points for parents). The rates 
for students and for parents would be capped at 8.25 percent 
and 9.0 percent, respectively.
    The lender-yield formulas for student and parent loans 
would continue to be based on a variable-rate formula, but H.R. 
609 would no longer allow the borrowers' rates to serve as the 
minimum for the lender yield. Lenders under current law receive 
the higher of the lender-yield formula or the rate paid by 
borrowers, but the bill would require lenders to rebate the 
difference between the two rates to the government when the 
borrower rate is higher.
    The combination of these changes to borrowers and lenders 
would save $5.0 billion in 2006, $9.2 billion over the 2006-
2010 period, and $14.5 billion through 2015.
    Another change in the payment formulas for lenders affects 
loans that are funded with financing based on tax-exempt bonds 
issued between 1980 and 1993. Historically, these loans have 
had a different formula for determining payments to lenders. 
Specifically, the formula for the special allowance payments to 
the holders of these loans was 50 percent of the sum of the 91-
day Treasury bill rate plus 3.5 percentage points or 9.5 
percent, whichever was higher. In recent years, the 9.5 percent 
rate was higher. (Consequently, these have come to be referred 
to as 9.5 percent loans.) Legislation in 2004 modified this 
policy for most new loans from tax-exempt lenders during the 
October 2004 to December 2005 period, changing the lender 
formula to conform to the rates to other leaders. Under current 
law, the formula on new loans will revert back to the pre-
October 2004 structure. H.R. 609 would continue the practice in 
place on December 2005, but expand its scope to include all new 
loans supported with this type of financing. This policy would 
save an estimated $850 million in 2006, $1.8 billion over the 
2006-2010 period, $3.1 billion over the 2006-2015 period.

----------------------------------------------------------------------------------------------------------------
                                       Loans originating after                           Loans originating after
             Type of Loan                 December 1999 and     Loans originating after   June 2006 (under H.R.
                                           before July 2006     June 2006 (current law)            609)
----------------------------------------------------------------------------------------------------------------
                                             BORROWER INTEREST RATES
 
Student loans:
    In-school, grace, or deferment...  Variable rate set        Fixed rate at 6.8        Variable rate set
                                        annually at 91-day       percent.                 annually at 91-day
                                        Treasury bill plus 1.7                            Treasury bill plus 1.7
                                        percentage points                                 percentage points
                                        (8.25 percent cap).                               (8.25 percent cap).
    In repayment.....................  Variable rate set        Fixed rate at 6.8        Variable rate set
                                        annually at 91-day       percent.                 annually at 91-day
                                        Treasury bill plus 2.3                            Treasury bill plus 2.3
                                        percentage points                                 percentage points
                                        (8.25 percent cap).                               (8.25 percent cap).
Parent loans.........................  Variable rate set        Fixed rate at 7.9        Variable rate set
                                        annually at the          percent.                 annually at 91-day
                                        Treasury bill rate                                Treasury bill rate
                                        plus 3.1 percent (9.0                             plus 3.1 percent (9.0
                                        percent cap).                                     percent cap).
Consolidation loans:
    Students.........................  Fixed rate set at the    Fixed rate set at the    Choice of variable rate
                                        weighted average of      weighted average of      set annually at 91-day
                                        loans consolidated       loans consolidated       Treasury bill rate
                                        rounded up to nearest    rounded up to nearest    plus 2.3 percent (8.25
                                        \1/8\ percent.           \1/8\ percent.           percent cap) or fixed
                                                                                          rate set at 91-day
                                                                                          Treasury bill rate
                                                                                          plus 3.3 percentage
                                                                                          points.
    Parents..........................  Fixed rate set at the    Fixed rate set at the    Choice of variable rate
                                        weighted average of      weighted average of      set annually at 91-day
                                        loans consolidated       loans consolidated       Treasury bill rate
                                        rounded up to nearest    rounded up to nearest    plus 3.1 percent (9.0
                                        \1/8\ percent.           \1/8\ percent.           percent cap) or fixed
                                                                                          rate set at 91-day
                                                                                          Treasury bill rate
                                                                                          plus 4.1 percentage
                                                                                          points.
 
                                                  LENDER YIELDS
 
Student loans:
    In-school, grace, and deferment..  Greater of 3-month       Greater of 3-month       3-month commercial
                                        commercial paper rate    commercial paper rate    paper rate plus 1.74
                                        plus 1.74 percentage     plus 1.74 percentage     percentage points.
                                        points or the borrower   points or the borrower
                                        rate.                    rate.
    In-repayment.....................  Greater of 3-month       Greater of 3-month       3-month commercial
                                        commercial paper rate    commercial paper rate    paper rate plus 2.34
                                        plus 2.34 percentage     plus 2.34 percentage     percentage points.
                                        points or the borrower   points or the borrower
                                        rate.                    rate.
Parent Loans.........................  Greater of 3-month       Greater of 3-month       3-month commercial
                                        commercial paper rate    commercial paper rate    paper rate plus 2.64
                                        plus 2.64 percentage     plus 2.64 percentage     percentage points.
                                        points only when the     points only when that
                                        borrower rate is         formula exceeds 9.0
                                        capped at 9.0 percent    percent or the
                                        or the borrower rate.    borrower rate.
Consolidation loans:
    Student loans....................  Regular formula less     Regular formula less     Regular formula less
                                        1.05 percentage points.  1.05 percentage points.  1.05 percentage
                                                                                          points.
    Parent loans.....................  Regular formula less     Regular formula less     Regular formula less
                                        1.05 percentage points.  1.05 percentage points.  1.05 percentage
                                                                                          points.
----------------------------------------------------------------------------------------------------------------

    Federal Lender Insurance. H.R. 609 would reduce the portion 
of defaulted loans for which lenders are reimbursed. under 
current law, lenders are generally reimbursed for 98 percent of 
the outstanding balances on loans which go into default. 
lenders who meet certain requirements are classified as 
exceptional lenders and they receive 100 percent insurance. 
H.R. 609 would reduce the 98 percent to 96 percent, and would 
tighten eligibility for the exceptional lender designation. For 
those lenders losing exceptional lender status the insurance 
rate would drop from 100 percent to 96 percent. CBO estimates 
that these changes would reduce outlays by $385 million in 
2006, $915 million over the 2006-2010 period, and $1.7 billion 
through 2015.
    Changes to the federal reinsurance rate only affect 
intrabudgetary transactions, and have no effect on total 
federal spending or revenues.
    Funding for Mandatory Administrative Costs. Under the 
Higher Education Act of 1965, section 458 specifies a direct 
appropriation for administrative costs associated with 
operating the financial assistance programs for post-secondary 
education students. After 2002, the statue does not contain a 
limit on the amount provided for those activities; thus, CBO 
treats this account as an uncapped direct spending program. 
CBO's baseline assumes that the portion of the account that 
funds administrative activities would be equal to the actual 
amount used in 2004, adjusted for anticipated inflation. The 
other major components is an account maintenance fee payable to 
guaranty agencies equal to 0.10 percent of original principal 
on outstanding guaranteed student loans.
    H.R. 609 would establish new annual caps on total section 
458 funds, and restrict the amount that could be used for the 
agency account maintenance fees below what the formula would 
provide. CBO assumes that the entire amount of the fees will be 
paid, but a portion would be paid out of the federal student 
loans reserve fund (the on-budget guaranty agency account 
referred to in the previous section) instead of out of section 
458. As a result, the amounts that certain agencies would 
retain in the reserve fund would fall below that fund's minimum 
requirements and some of these agencies would have to collect 
the 1.0 percent insurance premium allowed guaranty agencies--
premiums that many of those agencies currently waive. The net 
effect of these changes in section 458 funding would increase 
outlays by $17 million in 2006, but reduce them by $514 million 
over the 2006-2010 period and by $849 million over the 2006-
1015 period.

Major provisions increasing spending

    The provisions in the bill that would result in the largest 
increases in spending are the changes to origination fees and 
insurance premiums paid by borrowers, increases in loan limits, 
and modifications to the Perkins Loan Revolving fund. The 
estimated costs resulting from these portions of H.R. 609 total 
$4.0 billion over the 2006-2010 period and $16.2 billion over 
the 2006-2015 period.
    Borrower Origination Fees and Premiums. H.R. 609 would 
gradually reduce borrower origination fees for both subsidized 
and unsubsidized student loans, while at the same time 
requiring guaranty agencies to charge all guaranteed students 
and parent loans borrowers the 1.0 percent premium currently 
authorized. Currently, origination fees for guaranteed loans 
are 3.0 percent and the insurance premium is up to 1.0 percent. 
In the direct loan programs, the origination fee is 3.0 percent 
(although the actual practice is to charge 1.5 percent up front 
and another 1.5 percent if the borrower fails to make payments) 
and there is no insurance fee. The changes in the bill would 
equalize the total fees charged to students borrowing through 
guaranteed loans with those borrowing through the direct loan 
program.
    Total fees on student borrowers would drop to 2.5 percent 
in July 2007, to 2.0 percent in July 2008, to 1.5 percent in 
July 2009, and to 1.0 percent in July 2010. These changes would 
reduce outlays by $90 million in 2006 because the increase 
insurance premiums are recorded more quickly than the reduced 
origination fees (fees are tied to loan disbursements that 
often fall into a subsequent year). CBO estimates that the net 
impact of the changes would be to increase outlays by $2.25 
billion over the 2006-2010 period and by $8.9 billion over the 
2006-2015 period.
    Borrower Loan Limits. H.R. 609 would increase the maximum 
amount of subsidized loans for first- and second-year students 
from $2,625 and $3,500, respectively, to $3,500 and $4,500 
beginning in 2007. In addition, the bill would increase the 
limit for unsubsidized loans for each year of graduate school 
from $10,000 to 12,000. To conform the aggregate borrowing 
limits to the latter changes, the limit on unsubsidized loans 
would be increased by $10,000. These increases would boost 
aggregate student loans borrowing and increase spending by $1.6 
billion over the 2007-2010 period and by $4.4 billion over the 
2007-2015 period.
    Perkins Loan Revolving Fund. H.R. 609 would divert certain 
default collections in the Perkins loan program to schools and 
delay the beginning of the recall to the Treasury of balances 
held by participating schools from 2012 to 2020.
    Under current loan, any collections by the Secretary of 
Education on defaulted Perkins loans--a program administered by 
colleges and universities--are returned to the Treasury. These 
collections amount to roughly $40 million per year. The bill 
would require the Secretary to reallocate these funds--in the 
following year--to other schools participating in the loan 
programs, thus increasing net federal spending by $40 million 
annually beginning in 2007.
    Beginning in 2012, schools are required to return the 
federal share of their Perkins loan repayments to the Treasury. 
H.R. 609 would delay that date until 2020. Based on data from 
the Department of Education, CBO estimates that the recall of 
the federal share would total about $2.5 billion over the 2012-
2015 period. Consequently, the delay that would result from 
enacting H.R. 609 would reduce recoveries by a like amount.

Other provisions with measurable effects

    H.R. 609 contains numerous provisions that would have much 
smaller budgetary effects than those described above. Among 
them are changes in loan cancellation programs, borrower 
repayment terms, and interest deferment eligibility. Other 
provisions with some estimated budget effects during the 2006-
2010 period include changes in the income protection allowance 
for dependent students, the restrictions on eligibility for 
certain student with drug-related convictions, the eligibility 
of schools to participate on the basis of distance learning 
programs, and the multiple disbursement requirement for certain 
loans for schools with low default rates. The total effects of 
these provisions are costs of $192 million in 2006, $417 
million over the 2006-2010 period, and $772 million for the 
2006-2015 period.

Interactions

    The overall spending reductions that H.R. 609 would yield 
are significantly larger than the sum of the individual 
provisions because many provisions interact. For example, the 
lender-yield and borrower interest rate changes save even more 
when the increased loan volume flowing from the changes in 
loans limits are considered. However, those same loan limit 
increases boost the costs of the provisions that reduce 
borrower fees. As another example, the application of the 
proposed lender yields and borrower interest rates to the 9.5 
percent loans increase the saving when compared to that 
provision alone. In total, the interactions among the various 
provisions generate an additional $104 million in savings in 
2006, $638 million over the 2006-2010 period, and $1.3 billion 
over the 2006-2015 period.
    Estimated long-term effects on direct spending: Pursuant to 
section 407 of H. Con. Res. 95 (the Concurrent Resolution on 
the Budget, Fiscal Year 2006), CBO estimates that enacting H.R. 
609 would cause an increase in direct spending greater than $5 
billion in the 10-year period between 2016 and 2025. CBO also 
expects that the direct spending costs of the bill would exceed 
the $5 billion threshold in at least one of the 10-year periods 
from 2026 through 2055.
    Intergovernment and private sector impact: H.R. 609 
contains no intergovernmental or private-sector mandates as 
directed by UMRA. The bill would authorize funding for student 
aid and higher education programs, much of which would go to 
public institutions of higher education.
    The bill also would impose several new reporting 
requirements on institutions of higher education that receive 
federal aid under Title IV of the Higher Education Act. These 
institutions would be required to submit data that would be 
used by the Department of Education to calculate an 
institution's affordability index. Institutions with indexes 
that exceed a certain threshold also would be required to 
submit management and action plans that outline steps the 
institution will take to reduce affordability index. CBO 
assumes that these requirements are effectively placed on 
institutions participating in grant programs; therefore costs 
related to these provisions would be incurred voluntarily, as a 
condition of federal assistance.
    Estimated prepared by: Federal spending: Deborah Kalcevic, 
Chad Chirico, and Justin Humphrey; Impact on state, local, and 
tribal governments: Lisa Ramirez-Branum; Impact on the private 
sector: Nabeel Alsalam.
    Estmate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

         Statement of General Performance Goals and Objectives

    In accordance with clause (3)(c) of House Rule XIII, the 
goal of the bill is to reauthorize and improve programs 
authorized under the Higher Education Act. The Committee 
expects the Department of Education to comply with these 
provisions and implement the changes to the law in accordance 
with these stated goals.

                   Constitutional Authority Statement

    Under clause 3(d)(1) of rule XIII of the Rules of the House 
of Representatives, the Committee must include a statement 
citing the specific powers granted to Congress in the 
Constitution to enact the law proposed by the bill. The 
Committee believes that the amendments, made by this bill to 
the Social Security Act, are within Congress' authority under 
Article I, section 8, clause 1 of the Constitution.

                           Committee Estimate

    Clause 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 609. However, clause 3(d)(3)(B) of that rule provides that 
this requirement does not apply when the Committee has included 
in its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                      HIGHER EDUCATION ACT OF 1965


                      TITLE I--GENERAL PROVISIONS

                          PART A--DEFINITIONS

[SEC. 101. GENERAL DEFINITION OF INSTITUTION OF HIGHER EDUCATION.

  [(a) Institution of Higher Education.--For purposes of this 
Act, other than title IV, the term ``institution of higher 
education'' means an educational institution in any State 
that--
          [(1) admits as regular students only persons having a 
        certificate of graduation from a school providing 
        secondary education, or the recognized equivalent of 
        such a certificate;
          [(2) is legally authorized within such State to 
        provide a program of education beyond secondary 
        education;
          [(3) provides an educational program for which the 
        institution awards a bachelor's degree or provides not 
        less than a 2-year program that is acceptable for full 
        credit toward such a degree;
          [(4) is a public or other nonprofit institution; and
          [(5) is accredited by a nationally recognized 
        accrediting agency or association, or if not so 
        accredited, is an institution that has been granted 
        preaccreditation status by such an agency or 
        association that has been recognized by the Secretary 
        for the granting of preaccreditation status, and the 
        Secretary has determined that there is satisfactory 
        assurance that the institution will meet the 
        accreditation standards of such an agency or 
        association within a reasonable time.
  [(b) Additional Institutions Included.--For purposes of this 
Act, other than title IV, the term ``institution of higher 
education'' also includes--
          [(1) any school that provides not less than a 1-year 
        program of training to prepare students for gainful 
        employment in a recognized occupation and that meets 
        the provision of paragraphs (1), (2), (4), and (5) of 
        subsection (a); and
          [(2) a public or nonprofit private educational 
        institution in any State that, in lieu of the 
        requirement in subsection (a)(1), admits as regular 
        students persons who are beyond the age of compulsory 
        school attendance in the State in which the institution 
        is located.
  [(c) List of Accrediting Agencies.--For purposes of this 
section and section 102, the Secretary shall publish a list of 
nationally recognized accrediting agencies or associations that 
the Secretary determines, pursuant to subpart 2 of part H of 
title IV, to be reliable authority as to the quality of the 
education or training offered.

[SEC. 102. DEFINITION OF INSTITUTION OF HIGHER EDUCATION FOR PURPOSES 
                    OF TITLE IV PROGRAMS.

  [(a) Definition of Institution of Higher Education for 
Purposes of Title IV Programs.--
          [(1) Inclusion of additional institutions.--Subject 
        to paragraphs (2) through (4) of this subsection, the 
        term ``institution of higher education'' for purposes 
        of title IV includes, in addition to the institutions 
        covered by the definition in section 101--
                  [(A) a proprietary institution of higher 
                education (as defined in subsection (b) of this 
                section);
                  [(B) a postsecondary vocational institution 
                (as defined in subsection (c) of this section); 
                and
                  [(C) only for the purposes of part B of title 
                IV, an institution outside the United States 
                that is comparable to an institution of higher 
                education as defined in section 101 and that 
                has been approved by the Secretary for the 
                purpose of part B of title IV.
          [(2) Institutions outside the united states.--
                  [(A) In general.--For the purpose of 
                qualifying as an institution under paragraph 
                (1)(C), 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 101 (except 
                that a graduate medical school, or a veterinary 
                school, located outside the United States shall 
                not be required to meet the requirements of 
                section 101(a)(4)). Such criteria shall include 
                a requirement that a student attending such 
                school outside the United States is ineligible 
                for loans made, insured, or guaranteed under 
                part B of title IV unless--
                          [(i) in the case of a graduate 
                        medical school located outside the 
                        United States--
                                  [(I)(aa) at least 60 percent 
                                of those enrolled in, and at 
                                least 60 percent of the 
                                graduates of, the graduate 
                                medical school outside the 
                                United States were not persons 
                                described in section 484(a)(5) 
                                in the year preceding the year 
                                for which a student is seeking 
                                a loan under part B of title 
                                IV; and
                                  [(bb) at least 60 percent of 
                                the individuals who were 
                                students or graduates of the 
                                graduate medical school outside 
                                the United States or Canada 
                                (both nationals of the United 
                                States and others) taking the 
                                examinations administered by 
                                the Educational Commission for 
                                Foreign Medical Graduates 
                                received a passing score in the 
                                year preceding the year for 
                                which a student is seeking a 
                                loan under part B of title IV; 
                                or
                                  [(II) the institution has a 
                                clinical training program that 
                                was approved by a State as of 
                                January 1, 1992; or
                          [(ii) in the case of a veterinary 
                        school located outside the United 
                        States that does not meet the 
                        requirements of section 101(a)(4), the 
                        institution's students complete their 
                        clinical training at an approved 
                        veterinary school located in the United 
                        States.
                  [(B) Advisory panel.--
                          [(i) In general.--For the purpose of 
                        qualifying as an institution under 
                        paragraph (1)(C) of this subsection, 
                        the Secretary shall establish an 
                        advisory panel of medical experts that 
                        shall--
                                  [(I) evaluate the standards 
                                of accreditation applied to 
                                applicant foreign medical 
                                schools; and
                                  [(II) determine the 
                                comparability of those 
                                standards to standards for 
                                accreditation applied to United 
                                States medical schools.
                          [(ii) Special rule.--If the 
                        accreditation standards described in 
                        clause (i) are determined not to be 
                        comparable, the foreign medical school 
                        shall be required to meet the 
                        requirements of section 101.
                  [(C) Failure to release information.--The 
                failure of an institution outside the United 
                States to provide, release, or authorize 
                release to the Secretary of such information as 
                may be required by subparagraph (A) shall 
                render such institution ineligible for the 
                purpose of part B of title IV.
                  [(D) Special rule.--If, pursuant to this 
                paragraph, an institution loses eligibility to 
                participate in the programs under title IV, 
                then a student enrolled at such institution 
                may, notwithstanding such loss of eligibility, 
                continue to be eligible to receive a loan under 
                part B while attending such institution for the 
                academic year succeeding the academic year in 
                which such loss of eligibility occurred.
          [(3) Limitations based on course of study or 
        enrollment.--An institution shall not be considered to 
        meet the definition of an institution of higher 
        education in paragraph (1) if such institution--
                  [(A) offers more than 50 percent of such 
                institution's courses by correspondence, unless 
                the institution is an institution that meets 
                the definition in section 521(4)(C) of the Carl 
                D. Perkins Vocational and Applied Technology 
                Education Act;
                  [(B) enrolls 50 percent or more of the 
                institution's students in correspondence 
                courses, unless the institution is an 
                institution that meets the definition in such 
                section, except that the Secretary, at the 
                request of such institution, may waive the 
                applicability of this subparagraph to such 
                institution for good cause, as determined by 
                the Secretary in the case of an institution of 
                higher education that provides a 2- or 4-year 
                program of instruction (or both) for which the 
                institution awards an associate or 
                baccalaureate degree, respectively;
                  [(C) has a student enrollment in which more 
                than 25 percent of the students are 
                incarcerated, except that the Secretary may 
                waive the limitation contained in this 
                subparagraph for a nonprofit institution that 
                provides a 2- or 4-year program of instruction 
                (or both) for which the institution awards a 
                bachelor's degree, or an associate's degree or 
                a postsecondary diploma, respectively; or
                  [(D) has a student enrollment in which more 
                than 50 percent of the students do not have a 
                secondary school diploma or its recognized 
                equivalent, and does not provide a 2- or 4-year 
                program of instruction (or both) for which the 
                institution awards a bachelor's degree or an 
                associate's degree, respectively, except that 
                the Secretary may waive the limitation 
                contained in this subparagraph if a nonprofit 
                institution demonstrates to the satisfaction of 
                the Secretary that the institution exceeds such 
                limitation because the institution serves, 
                through contracts with Federal, State, or local 
                government agencies, significant numbers of 
                students who do not have a secondary school 
                diploma or its recognized equivalent.
          [(4) Limitations based on management.--An institution 
        shall not be considered to meet the definition of an 
        institution of higher education in paragraph (1) if--
                  [(A) the institution, or an affiliate of the 
                institution that has the power, by contract or 
                ownership interest, to direct or cause the 
                direction of the management or policies of the 
                institution, has filed for bankruptcy, except 
                that this paragraph shall not apply to a 
                nonprofit institution, the primary function of 
                which is to provide health care educational 
                services (or an affiliate of such an 
                institution that has the power, by contract or 
                ownership interest, to direct or cause the 
                direction of the institution's management or 
                policies) that files for bankruptcy under 
                chapter 11 of title 11, United States Code, 
                between July 1, 1998, and December 1, 1998; or
                  [(B) the institution, the institution's 
                owner, or the institution's chief executive 
                officer has been convicted of, or has pled nolo 
                contendere or guilty to, a crime involving the 
                acquisition, use, or expenditure of funds under 
                title IV, or has been judicially determined to 
                have committed fraud involving funds under 
                title IV.
          [(5) Certification.--The Secretary shall certify an 
        institution's qualification as an institution of higher 
        education in accordance with the requirements of 
        subpart 3 of part H of title IV.
          [(6) Loss of eligibility.--An institution of higher 
        education shall not be considered to meet the 
        definition of an institution of higher education in 
        paragraph (1) if such institution is removed from 
        eligibility for funds under title IV as a result of an 
        action pursuant to part H of title IV.
  [(b) Proprietary Institution of Higher Education.--
          [(1) Principal criteria.--For the purpose of this 
        section, the term ``proprietary institution of higher 
        education'' means a school that--
                  [(A) provides an eligible program of training 
                to prepare students for gainful employment in a 
                recognized occupation;
                  [(B) meets the requirements of paragraphs (1) 
                and (2) of section 101(a);
                  [(C) does not meet the requirement of 
                paragraph (4) of section 101(a);
                  [(D) is accredited by a nationally recognized 
                accrediting agency or association recognized by 
                the Secretary pursuant to part H of title IV;
                  [(E) has been in existence for at least 2 
                years; and
                  [(F) has at least 10 percent of the school's 
                revenues from sources that are not derived from 
                funds provided under title IV, as determined in 
                accordance with regulations prescribed by the 
                Secretary.
          [(2) Additional institutions.--The term ``proprietary 
        institution of higher education'' also includes a 
        proprietary educational institution in any State that, 
        in lieu of the requirement in paragraph (1) of section 
        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.--
          [(1) Principal criteria.--For the purpose of this 
        section, the term ``postsecondary vocational 
        institution'' means a school that--
                  [(A) provides an eligible program of training 
                to prepare students for gainful employment in a 
                recognized occupation;
                  [(B) meets the requirements of paragraphs 
                (1), (2), (4), and (5) of section 101(a); and
                  [(C) has been in existence for at least 2 
                years.
          [(2) Additional institutions.--The term 
        ``postsecondary vocational institution'' also includes 
        an educational institution in any State that, in lieu 
        of the requirement in paragraph (1) of section 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. 101. DEFINITION OF INSTITUTION OF HIGHER EDUCATION.

  (a) Institution of Higher Education.--For purposes of this 
Act, the term ``institution of higher education'' means an 
educational institution in any State that--
          (1) admits as regular students only individuals who--
                  (A) meet the requirements of section 
                484(d)(3), or have a certificate of graduation 
                from a school providing secondary education, or 
                the recognized equivalent of such a 
                certificate;
                  (B) are beyond the age of compulsory school 
                attendance in the State in which the 
                institution is located; or
                  (C) will be dually enrolled in that 
                institution and a secondary school;
          (2) is legally authorized within such State to 
        provide a program of education beyond secondary 
        education;
          (3)(A) is accredited by a nationally recognized 
        accrediting agency or association; or
          (B) if not so accredited, is a public or nonprofit 
        institution that has been granted preaccreditation 
        status by such an agency or association that has been 
        recognized by the Secretary for the granting of 
        preaccreditation status, and the Secretary has 
        determined that there is satisfactory assurance that 
        the institution will meet the accreditation standards 
        of such an agency or association within a reasonable 
        time; and
          (4) meets either of the following criteria:
                  (A) is a nonprofit, for-profit, or public 
                institution that--
                          (i) provides an educational program 
                        for which the institution awards a 
                        bachelor's, graduate, or professional 
                        degree;
                          (ii) provides not less than a 2-year 
                        educational program which is acceptable 
                        for full credit towards such a degree;
                          (iii) provides not less than a 1-year 
                        program of training that prepares 
                        students for gainful employment in a 
                        recognized occupation; or
                          (iv) awards a degree that is 
                        acceptable for admission to graduate or 
                        professional degree programs, subject 
                        to the review and approval of the 
                        Secretary; or
                  (B) is a nonprofit, for-profit, or public 
                institution that provides an eligible program 
                (as defined in section 481)--
                          (i) for which the institution awards 
                        a certificate; and
                          (ii) that prepares students for 
                        gainful employment in a recognized 
                        occupation.
  (b) Additional Limitations.--
          (1) For-profit postsecondary institutions.--
                  (A) Duration of accreditation.--A for-profit 
                institution shall not be considered to be an 
                institution of higher education unless such 
                institution is accredited by a nationally 
                recognized accrediting agency or association 
                and such institution has been in existence for 
                at least 2 years.
                  (B) Institutional eligibility only for 
                competitive grants.--For the purposes of any 
                program providing grants to institutions for 
                use by the institution (and not for 
                distribution among students), a for-profit 
                institution shall not be considered to be an 
                institution of higher education under this 
                section if such grants are awarded on any basis 
                other than competition on the merits of the 
                grant proposal or application.
          (2) Postsecondary vocational institutions.--A 
        nonprofit or public institution that meets the criteria 
        of subsection (a)(4)(B) shall not be considered to be 
        an institution of higher education unless such 
        institution has been in existence for at least 2 years.
          (3) Limitations based on management.--An institution 
        shall not be considered to meet the definition of an 
        institution of higher education in this section if--
                  (A) the institution, or an affiliate of the 
                institution that has the power, by contract or 
                ownership interest, to direct or cause the 
                direction of the management or policies of the 
                institution, has filed for bankruptcy, except 
                that this paragraph shall not apply to a 
                nonprofit institution, the primary function of 
                which is to provide health care educational 
                services (or an affiliate of such an 
                institution that has the power, by contract or 
                ownership interest, to direct or cause the 
                direction of the institution's management or 
                policies) that filed for bankruptcy under 
                chapter 11 of title 11, United States Code, 
                between July 1, 1998, and December 1, 1998; or
                  (B) the institution, the institution's owner, 
                or the institution's chief executive officer 
                has been convicted of, or has pled nolo 
                contendere or guilty to, a crime involving the 
                acquisition, use, or expenditure of Federal, 
                State, or local government funds, or has been 
                judicially determined to have committed a crime 
                involving the acquisition, use, or expenditure 
                involving Federal, State, or local government 
                funds.
          (4) Limitation on course of study or enrollment.--An 
        institution shall not be considered to meet the 
        definition of an institution of higher education in 
        subsection (a) if such institution--
                  (A) offers more than 50 percent of such 
                institution's courses by correspondence 
                (excluding courses offered by 
                telecommunications as defined in section 
                484(l)(4)), unless the institution is an 
                institution that meets the definition in 
                section 3(3)(C) of the Carl D. Perkins 
                Vocational and Technical Education Act of 1998;
                  (B) enrolls 50 percent or more of the 
                institution's students in correspondence 
                courses (excluding courses offered by 
                telecommunications as defined in section 
                484(l)(4)), unless the institution is an 
                institution that meets the definition in 
                section 3(3)(C) of the Carl D. Perkins 
                Vocational and Technical Education Act of 1998, 
                except that the Secretary, at the request of 
                the institution, may waive the applicability of 
                this subparagraph to the institution for good 
                cause, as determined by the Secretary in the 
                case of an institution of higher education that 
                provides a 2- or 4-year program of instruction 
                (or both) for which the institution awards an 
                associate or baccalaureate degree, 
                respectively;
                  (C) has a student enrollment in which more 
                than 25 percent of the students are 
                incarcerated, except that the Secretary may 
                waive the limitation contained in this 
                subparagraph for an institution that provides a 
                2- or 4-year program of instruction (or both) 
                for which the institution awards a bachelor's 
                degree, or an associate's degree or a 
                postsecondary certificate, respectively; or
                  (D) has a student enrollment in which more 
                than 50 percent of the students either do not 
                meet the requirements of section 484(d)(3) or 
                do not have a secondary school diploma or its 
                recognized equivalent, and does not provide a 
                2- or 4-year program of instruction (or both) 
                for which the institution awards an associate's 
                degree or a bachelor's degree, respectively, 
                except that the Secretary may waive the 
                limitation contained in this subparagraph if an 
                institution demonstrates to the satisfaction of 
                the Secretary that the institution exceeds such 
                limitation because the institution serves, 
                through contracts with Federal, State, or local 
                government agencies, significant numbers of 
                students who do not meet the requirements of 
                section 484(d)(3) or do not have a secondary 
                school diploma or its recognized equivalent.
  (c) List of Accrediting Agencies.--For purposes of this 
section, the Secretary shall publish a list of nationally 
recognized accrediting agencies or associations that the 
Secretary determines, pursuant to subpart 2 of part H of title 
IV, to be reliable authority as to the quality of the education 
or training offered.
  (d) Certification.--The Secretary shall certify, for the 
purposes of participation in title IV, an institution's 
qualification as an institution of higher education in 
accordance with the requirements of subpart 3 of part H of 
title IV.
  (e) Loss of Eligibility.--An institution of higher education 
shall not be considered to meet the definition of an 
institution of higher education in this section for the 
purposes of participation in title IV if such institution is 
removed from eligibility for funds under title IV as a result 
of an action pursuant to part H of title IV.

SEC. 102. INSTITUTIONS OUTSIDE THE UNITED STATES.

  (a) Institutions Outside the United States.--
          (1) In general.--An institution outside the United 
        States shall be considered to be an institution of 
        higher education only for purposes of part B of title 
        IV if the institution is comparable to an institution 
        of higher education, as defined in section 101, is 
        legally authorized by the education ministry (or 
        comparable agency) of the country in which the school 
        is located, and has been approved by the Secretary for 
        purposes of that part. The Secretary shall establish 
        criteria by regulation for that approval and that 
        determination of comparability. An institution may not 
        be so approved or determined to be comparable unless 
        such institution is a public or nonprofit institution, 
        except that, subject to paragraph (2)(B), a graduate 
        medical school or veterinary school located outside the 
        United States may be a for-profit institution.
          (2) Medical and veterinary school criteria.--In the 
        case of a graduate medical or veterinary school outside 
        the United States, such criteria shall include a 
        requirement that a student attending such school 
        outside the United States is ineligible for loans made, 
        insured, or guaranteed under part B of title IV 
        unless--
                  (A) in the case of a graduate medical school 
                located outside the United States--
                          (i)(I) at least 60 percent of those 
                        enrolled in, and at least 60 percent of 
                        the graduates of, the graduate medical 
                        school outside the United States were 
                        not persons described in section 
                        484(a)(5) in the year preceding the 
                        year for which a student is seeking a 
                        loan under part B of title IV; and
                          (II) at least 60 percent of the 
                        individuals who were students or 
                        graduates of the graduate medical 
                        school outside the United States or 
                        Canada (both nationals of the United 
                        States and others) taking the 
                        examinations administered by the 
                        Educational Commission for Foreign 
                        Medical Graduates received a passing 
                        score in the year preceding the year 
                        for which a student is seeking a loan 
                        under part B of title IV; or
                          (ii) the institution has a clinical 
                        training program that was approved by a 
                        State as of January 1, 1992; or
                  (B) in the case of a veterinary school 
                located outside the United States that is not a 
                public or nonprofit institution, the 
                institution's students complete their clinical 
                training at an approved veterinary school 
                located in the United States.
  (b) Advisory Panel.--
          (1) In general.--For the purpose of qualifying a 
        foreign medical school as an institution of higher 
        education only for purposes of part B of title IV, the 
        Secretary shall publish qualifying criteria by 
        regulation and establish an advisory panel of medical 
        experts that shall--
                  (A) evaluate the standards of accreditation 
                applied to applicant foreign medical schools; 
                and
                  (B) determine the comparability of those 
                standards to standards for accreditation 
                applied to United States medical schools.
          (2) Failure to release information.--The failure of 
        an institution outside the United States to provide, 
        release, or authorize release to the Secretary of such 
        information as may be required by subsection (a)(2) 
        shall render such institution ineligible for the 
        purpose of part B of title IV.

SEC. 103. ADDITIONAL DEFINITIONS.

  In this Act:
          (1) Authorizing committees.--The term ``authorizing 
        committees'' means the Committee on Health, Education, 
        Labor, and Pensions of the Senate and the Committee on 
        Education and the Workforce of the House of 
        Representatives.
          [(1)] (2) Combination of institutions of higher 
        education.--The term ``combination of institutions of 
        higher education'' means a group of institutions of 
        higher education that have entered into a cooperative 
        arrangement for the purpose of carrying out a common 
        objective, or a public or private nonprofit agency, 
        organization, or institution designated or created by a 
        group of institutions of higher education for the 
        purpose of carrying out a common objective on the 
        group's behalf.
          [(2)] (3) Department.--The term ``Department'' means 
        the Department of Education.
          [(3)] (4) Disability.--The term ``disability'' has 
        the same meaning given that term under section 3(2) of 
        the Americans With Disabilities Act of 1990.
          [(4)] (5) Elementary school.--The term ``elementary 
        school'' has the same meaning given that term under 
        section 9101 of the Elementary and Secondary Education 
        Act of 1965.
          [(5)] (6) Gifted and talented.--The term ``gifted and 
        talented'' has the same meaning given that term under 
        section 9101 of the Elementary and Secondary Education 
        Act of 1965.
          [(6)] (7) Local educational agency.--The term ``local 
        educational agency'' has the same meaning given that 
        term under section 9101 of the Elementary and Secondary 
        Education Act of 1965.
          [(7) New borrower.--The term ``new borrower'' when 
        used with respect to any date means an individual who 
        on that date has no outstanding balance of principal or 
        interest owing on any loan made, insured, or guaranteed 
        under title IV.]
          (8) New borrower.--The term ``new borrower'' when 
        used with respect to any date for any loan under any 
        provision of--
                  (A) part B or part D of title IV means an 
                individual who on that date has no outstanding 
                balance of principal or interest owing on any 
                loan made, insured, or guaranteed under either 
                of those parts; and
                  (B) part E of title IV means an individual 
                who on that date has no outstanding balance of 
                principal or interest owing on any loan made 
                under that part.
          [(8)] (9) Nonprofit.--The term ``nonprofit'' as 
        applied to a school, agency, organization, or 
        institution means a school, agency, organization, or 
        institution owned and operated by one or more nonprofit 
        corporations or associations, no part of the net 
        earnings of which inures, or may lawfully inure, to the 
        benefit of any private shareholder or individual.
          [(9)] (10) School or department of divinity.--The 
        term ``school or department of divinity'' means an 
        institution, or a department or a branch of an 
        institution, the program of instruction of which is 
        designed for the education of students--
                  (A) * * *

           *       *       *       *       *       *       *

          [(10)] (11) Secondary school.--The term ``secondary 
        school'' has the same meaning given that term under 
        section 9101 of the Elementary and Secondary Education 
        Act of 1965.
          [(11)] (12) Secretary.--The term ``Secretary'' means 
        the Secretary of Education.
          [(12)] (13) Service-learning.--The term ``service-
        learning'' has the same meaning given that term under 
        section 101(23) of the National and Community Service 
        Act of 1990.
          [(13)] (14) Special education teacher.--The term 
        ``special education teacher'' means teachers who teach 
        children with disabilities as defined in section 602 of 
        the Individuals with Disabilities Education Act.
          [(14)] (15) State educational agency.--The term 
        ``State educational agency'' has the same meaning given 
        that term under section 9101 of the Elementary and 
        Secondary Education Act of 1965.
          [(15)] (16) State higher education agency.--The term 
        ``State higher education agency'' means the officer or 
        agency primarily responsible for the State supervision 
        of higher education.
          [(16)] (17) State; freely associated states.--
                  (A) * * *

           *       *       *       *       *       *       *


PART B--ADDITIONAL GENERAL PROVISIONS

           *       *       *       *       *       *       *


SEC. 112. PROTECTION OF STUDENT SPEECH AND ASSOCIATION RIGHTS.

  [(a) Protection of Rights.--It is the sense of Congress that 
no student attending an institution of higher education on a 
full- or part-time basis should, on the basis of participation 
in protected speech or protected association, be excluded from 
participation in, be denied the benefits of, or be subjected to 
discrimination or official sanction under any education 
program, activity, or division of the institution directly or 
indirectly receiving financial assistance under this Act, 
whether or not such program, activity, or division is sponsored 
or officially sanctioned by the institution.]
  (a) Protection of Rights.--
          (1) It is the sense of Congress that no student 
        attending an institution of higher education on a full- 
        or part-time basis should, on the basis of 
        participation in protected speech or protected 
        association, be excluded from participation in, be 
        denied the benefits of, or be subjected to 
        discrimination or official sanction under any education 
        program, activity, or division of the institution 
        directly or indirectly receiving financial assistance 
        under this Act, whether or not such program, activity, 
        or division is sponsored or officially sanctioned by 
        the institution; and
          (2) It is the sense of Congress that--
                  (A) the diversity of institutions and 
                educational missions is one of the key 
                strengths of American higher education;
                  (B) individual colleges and universities have 
                different missions and each institution should 
                design its academic program in accordance with 
                its educational goals;
                  (C) within the context of its institutional 
                mission, a college should promote intellectual 
                pluralism and facilitate the free and open 
                exchange of ideas;
                  (D) students should not be intimidated, 
                harassed, discouraged from speaking out, 
                discriminated against, or subject to official 
                sanction because of their personal political, 
                ideological, or religious beliefs; and
                  (E) students should be treated equally and 
                fairly, including evaluation and grading, 
                without regard to or consideration of their 
                personal political views or ideological 
                beliefs.
          (3) Nothing in paragraph (2) shall be construed to 
        modify, change, or infringe upon any constitutionally 
        protected religious liberty, freedom, expression, or 
        association.
  (b) Construction.--Nothing in this section shall be 
construed--
          (1) to discourage the imposition of an official 
        sanction on a student that has willfully participated 
        in the disruption or attempted disruption of a lecture, 
        class, speech, presentation, or performance made or 
        scheduled to be made under the auspices of the 
        institution of higher education, if the imposition of 
        such sanction is done objectively, fairly, and without 
        regard to the student's personal political, 
        ideological, or religious beliefs; or

           *       *       *       *       *       *       *


SEC. 114. 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 102)], to assess the process of eligibility and 
certification of such institutions under title IV and the 
provision of financial aid under title IV.
  (b) Terms of Members.--Terms of office of each member of the 
Committee shall be 3 years, except that any member appointed to 
fill a vacancy occurring prior to the expiration of the term 
for which the member's predecessor was appointed shall be 
appointed for the remainder of such term. A member of the 
Committee may continue to serve after the expiration of a term 
until a successor has been appointed.

           *       *       *       *       *       *       *

  (g) Termination.--The Committee shall cease to exist on 
September 30, [2004] 2012.

           *       *       *       *       *       *       *


SEC. 120. DRUG AND ALCOHOL ABUSE PREVENTION.

  (a) * * *

           *       *       *       *       *       *       *

  (e) Alcohol and Drug Abuse Prevention Grants.--
          (1) * * *

           *       *       *       *       *       *       *

          (5) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this 
        subsection $5,000,000 for fiscal year [1999] 2006 and 
        such sums as may be necessary for each of the [4] 5 
        succeeding fiscal years.

SEC. 121. 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] 
        2006 and for each of the 5 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] 2006 and for each of the 5 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) * * *

           *       *       *       *       *       *       *


SEC. 123. RESTRICTIONS ON FUNDS FOR FOR-PROFIT SCHOOLS.

  (a) In General.--Notwithstanding any other provision of this 
Act authorizing the use of funds by an institution of higher 
education that receives funds under this Act, none of the funds 
made available under this Act to a for-profit institution of 
higher education may be used for--
          (1) construction, maintenance, renovation, repair, or 
        improvement of classrooms, libraries, laboratories, or 
        other facilities;
          (2) establishing, improving, or increasing an 
        endowment fund; or
          (3) establishing or improving an institutional 
        development office to strengthen or improve 
        contributions from alumni and the private sector.
  (b) Exception.--Subsection (a) shall not apply to funds 
received by the institution from the grant, loan, or work 
assistance that is awarded under title IV to the students 
attending such institution.
  (c) Ineligibility for Certain Programs.--Notwithstanding 
section 101, a for-profit institution of higher education shall 
not be considered an eligible institution for the programs 
under titles III and V of this Act.

SEC. 124. LIMITATION ON CERTAIN USES OF FUNDS.

  No funds made available to carry out this Act may be used--
          (1) for publicity or propaganda purposes not 
        authorized by the Congress before the date of enactment 
        of the College Access and Opportunity Act of 2005; or
          (2) unless authorized by law in effect on such date 
        of enactment, to produce any prepackaged news story 
        intended for broadcast or distribution unless such 
        story includes a clear a notification contained within 
        the text or audio of such story stating that the 
        prepackaged news story was prepared or funded by the 
        Department of Education.

                    PART C--COST OF HIGHER EDUCATION

[SEC. 131. IMPROVEMENTS IN MARKET INFORMATION AND PUBLIC ACCOUNTABILITY 
                    IN HIGHER EDUCATION.

  [(a) Improved Data Collection.--
          [(1) Development of uniform methodology.--The 
        Secretary shall direct the Commissioner of Education 
        Statistics to convene a series of forums to develop 
        nationally consistent methodologies for reporting costs 
        incurred by postsecondary institutions in providing 
        postsecondary education.
          [(2) Redesign of data systems.--On the basis of the 
        methodologies developed pursuant to paragraph (1), the 
        Secretary shall redesign relevant parts of the 
        postsecondary education data systems to improve the 
        usefulness and timeliness of the data collected by such 
        systems.
          [(3) Information to institutions.--The Commissioner 
        of Education Statistics shall--
                  [(A) develop a standard definition for the 
                following data elements:
                          [(i) tuition and fees for a full-time 
                        undergraduate student;
                          [(ii) cost of attendance for a full-
                        time undergraduate student, consistent 
                        with the provisions of section 472;
                          [(iii) average amount of financial 
                        assistance received by an undergraduate 
                        student who attends an institution of 
                        higher education, including--
                                  [(I) each type of assistance 
                                or benefit described in section 
                                428(a)(2)(C)(i);
                                  [(II) fellowships; and
                                  [(III) institutional and 
                                other assistance; and
                          [(iv) number of students receiving 
                        financial assistance described in each 
                        of subclauses (I), (II), and (III) of 
                        clause (iii);
                  [(B) not later than 90 days after the date of 
                enactment of the Higher Education Amendments of 
                1998, report the definitions to each 
                institution of higher education and within a 
                reasonable period of time thereafter inform the 
                Committee on Labor and Human Resources of the 
                Senate and the Committee on Education and the 
                Workforce of the House of Representatives of 
                those definitions; and
                  [(C) collect information regarding the data 
                elements described in subparagraph (A) with 
                respect to at least all institutions of higher 
                education participating in programs under title 
                IV, beginning with the information from 
                academic year 2000-2001 and annually 
                thereafter.
  [(b) Data Dissemination.--The Secretary shall make available 
the data collected pursuant to subsection (a). Such data shall 
be available in a form that permits the review and comparison 
of the data submissions of individual institutions of higher 
education. Such data shall be presented in a form that is 
easily understandable and allows parents and students to make 
informed decisions based on the costs for typical full-time 
undergraduate students.
  [(c) Study.--
          [(1) In general.--The Commissioner of Education 
        Statistics shall conduct a national study of 
        expenditures at institutions of higher education. Such 
        study shall include information with respect to--
                  [(A) the change in tuition and fees compared 
                with the consumer price index and other 
                appropriate measures of inflation;
                  [(B) faculty salaries and benefits;
                  [(C) administrative salaries, benefits and 
                expenses;
                  [(D) academic support services;
                  [(E) research;
                  [(F) operations and maintenance; and
                  [(G) institutional expenditures for 
                construction and technology and the potential 
                cost of replacing instructional buildings and 
                equipment.
          [(2) Evaluation.--The study shall include an 
        evaluation of--
                  [(A) changes over time in the expenditures 
                identified in paragraph (1);
                  [(B) the relationship of the expenditures 
                identified in paragraph (1) to college costs; 
                and
                  [(C) the extent to which increases in 
                institutional financial aid and tuition 
                discounting practices affect tuition increases, 
                including the demographics of students 
                receiving such discounts, the extent to which 
                financial aid is provided to students with 
                limited need in order to attract a student to a 
                particular institution, and the extent to which 
                Federal financial aid, including loan aid, has 
                been used to offset the costs of such 
                practices.
          [(3) Final report.--The Commissioner of Education 
        Statistics shall submit a report regarding the findings 
        of the study required by paragraph (1) to the 
        appropriate committees of Congress not later than 
        September 30, 2002.
          [(4) Higher education market basket.--The Bureau of 
        Labor Statistics, in consultation with the Commissioner 
        of Education Statistics, shall develop a higher 
        education market basket that identifies the items that 
        comprise the costs of higher education. The Bureau of 
        Labor 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.
          [(5) Fines.--In addition to 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 failing to provide the information 
        described in paragraph (1) in a timely and accurate 
        manner, or for failing to otherwise cooperate with the 
        National Center for Education Statistics regarding 
        efforts to obtain data on the cost of higher education 
        under this section and pursuant to the program 
        participation agreement entered into under section 487.
  [(d) Student Aid Recipient Survey.--(1) The Secretary shall 
survey student aid recipients on a regular cycle, but not less 
than once every 3 years--
          [(A) to identify the population of students receiving 
        Federal student aid;
          [(B) to determine the income distribution and other 
        socioeconomic characteristics of federally aided 
        students;
          [(C) to describe the combinations of aid from State, 
        Federal, and private sources received by students from 
        all income groups;
          [(D) to describe the debt burden of loan recipients 
        and their capacity to repay their education debts; and
          [(E) to disseminate such information in both 
        published and machine readable form.
  [(2) The survey shall be representative of full-time and 
part-time, undergraduate, graduate, and professional and 
current and former students in all types of institutions, and 
should be designed and administered in consultation with the 
Congress and the postsecondary education community.]

SEC. 131. CONSUMER INFORMATION AND PUBLIC ACCOUNTABILITY IN HIGHER 
                    EDUCATION.

  (a) Purpose.--It is the purpose of this section to--
          (1) provide students and families with an easy-to-
        use, comprehensive web-based tool for researching and 
        comparing institutions of higher education;
          (2) increase the transparency of college cost, price, 
        and financial aid; and
          (3) raise public awareness of information available 
        about postsecondary education, particularly among low-
        income families, non-traditional student populations, 
        and first-generation college students.
  (b) College Opportunity On-Line (COOL) Website Re-Design 
Process.--In carrying out this section, the Secretary--
          (1) shall identify the data elements that are of 
        greatest importance to prospective students, enrolled 
        students, and their families, paying particular 
        attention to low-income, non-traditional student 
        populations, and first-generation college students;
          (2) shall convene a group of individuals with 
        expertise in the collection and reporting of data 
        related to institutions of higher education, the 
        measurement of institutional compliance costs, consumer 
        use of data related to institutions of higher 
        education, general consumer marketing, and college 
        intervention services to--
                  (A) determine the relevance of particular 
                data elements to prospective students, enrolled 
                students, and families;
                  (B) assess the cost-effectiveness of various 
                ways in which institutions of higher education 
                might produce the data desired by consumers;
                  (C) determine the general comparability of 
                the data across institutions of higher 
                education;
                  (D) make recommendations regarding the 
                inclusion of specific data items and the most 
                effective and least burdensome methods to 
                institutions of higher education of collecting 
                and reporting useful data; and
          (3) shall assure that the redesigned COOL website--
                  (A) uses, to the extent practicable, data 
                elements currently provided by institutions of 
                higher education to the Secretary;
                  (B) includes clear and uniform information 
                determined to be relevant to prospective 
                students, enrolled students, and families;
                  (C) provides comparable information, by 
                assuring that data is based on accepted 
                criteria and common definitions;
                  (D) includes a sorting function that permits 
                users to customize their search for and 
                comparison of institutions of higher education 
                based on the information identified through the 
                process as prescribed in paragraph (1) as being 
                of greatest relevance to choosing an 
                institution of higher education.
  (c) Data Collection.--
          (1) Data system.--The Secretary shall continue to 
        redesign the relevant parts of the Integrated 
        Postsecondary Education Data System to include 
        additional data as required by this section and to 
        continue to improve the usefulness and timeliness of 
        data collected by such systems in order to inform 
        consumers about institutions of higher education.
          (2) College consumer profile.--The Secretary shall 
        publish, for each academic year and in accordance with 
        standard definitions developed by the Commissioner of 
        Education Statistics (including definitions developed 
        under section 131(a)(3)(A) as in effect on the day 
        before the date of enactment of the College Access and 
        Opportunity Act of 2005), from at least all 
        institutions of higher education participating in 
        programs under title IV the following information:
                  (A) The tuition and fees charged for a first-
                time, full-time undergraduate student.
                  (B) The room and board charges for such a 
                student.
                  (C) The cost of attendance for a first-time, 
                full-time undergraduate student, consistent 
                with the provisions of section 472.
                  (D) The average amount of financial 
                assistance received by a first-time full-time 
                undergraduate student, including--
                          (i) each type of assistance or 
                        benefits described in 428(a)(2)(C)(ii);
                          (ii) institutional and other 
                        assistance; and
                          (iii) Federal loans under parts B, D, 
                        and E of title IV.
                  (E) The number of first-time, full-time 
                students receiving financial assistance 
                described in each clause of subparagraph (D).
                  (F) The average net price for first-time, 
                full-time students receiving Federal, State, or 
                institutional grant or loan assistance.
                  (G) The institutional instructional 
                expenditure per full-time equivalent student.
                  (H) Student enrollment information, including 
                information on the number and percentage of 
                full-time and part-time students, the number 
                and percentage of resident and non-resident 
                students.
                  (I) Faculty/student ratios.
                  (J) Faculty information, including the total 
                number of faculty and the percentage of faculty 
                who are full-time employees of the institution 
                and the percentage who are part-time.
                  (K) Completion and graduation rates, 
                identifying whether the completion or 
                graduation rates are from a 2-year or 4-year 
                program of instruction and, in the case of a 2-
                year program of instruction, the percentage of 
                students who transfer to 4-year institutions 
                prior or subsequent to completion or 
                graduation.
                  (L) A link to the institution of higher 
                education with information of interest to 
                students including mission, accreditation, 
                student services (including services for 
                students with disabilities), transfer of credit 
                policies and, if appropriate, placement rates 
                and other measures of success in preparing 
                students for entry into or advancement in the 
                workforce.
                  (M) Any additional information that the 
                Secretary may require.
  (d) Data Dissemination.--The Secretary shall make available, 
at a minimum, the data collected pursuant to this section, 
including an institution's college affordability index as 
calculated in accordance with subsection (e). Such data shall 
be made available in a manner that permits the review and 
comparison of data submissions of individual institutions of 
higher education. Such data shall be presented in a form that 
is easily accessible and understandable and allows parents and 
students to make informed decisions based on the prices for 
typical full-time undergraduate students and the institution's 
rate of cost increase. The Secretary shall work with public and 
private entities to promote broad public awareness, 
particularly among middle and high school students and their 
families, of the information made available under this section, 
including by distribution to students who participate in or 
receive benefits from Federally funded education programs and 
other Federal programs determined by the Secretary.
  (e) College Affordability Index.--
          (1) In general.--The Secretary shall, on the basis of 
        the data submitted under subsection (a), calculate a 
        college affordability index for each institution of 
        higher education submitting such data and shall make 
        the index available in accordance with subsection (d) 
        as soon as operationally possible on the Department's 
        college opportunity online Web site. Such index shall 
        be presented in a manner so that the index for any 
        institution is stated in a column or cell immediately 
        adjacent to a column or cell containing the total 
        tuition and fees of the institution.
          (2) Calculation of index.--The college affordability 
        index shall be equal to--
                  (A) the percentage increase in the tuition 
                and fees charged for a first-time, full-time, 
                full-year undergraduate student between the 
                first of the 3 most recent preceding academic 
                years and the last of those 3 academic years; 
                divided by
                  (B) the percentage increase in the Consumer 
                Price Index--All Urban Consumers (Current 
                Series) from July of the first of those 3 
                academic years to July of the last of those 3 
                academic years.
  (f) Outcomes and Actions.--
          (1) Response from institution.--Effective on June 30, 
        2009, an institution that has a college affordability 
        index that exceeds 2.0 for any 3-year interval ending 
        on or after that date shall provide a report to the 
        Secretary, in such a form, at such time, and containing 
        such information as the Secretary may require. Such 
        report shall include--
                  (A) an explanation of the factors 
                contributing to the increase in the 
                institution's costs and in the tuition and fees 
                charged to students;
                  (B) a management plan stating the specific 
                steps the institution is and will be taking to 
                reduce its college affordability index;
                  (C) an action plan, including a schedule, by 
                which the institution will reduce increases in 
                or stabilize, such costs and tuition and fees; 
                and
                  (D) if determinations of tuition and fee 
                increases are not within the exclusive control 
                of the institution, a description of the agency 
                or instrumentality of State government or other 
                entity that participates in such determinations 
                and the authority exercised by such agency, 
                instrumentality, or entity.
          (2) Information to the public.--Upon receipt of the 
        institution's report and management plan under 
        paragraph (1), the Secretary shall make the 
        institution's report required under paragraph (1) 
        available to the public in accordance with subsection 
        (b).
          (3) Quality-efficiency task forces.--
                  (A) Required.--Each institution subject to 
                paragraph (1) that has a college affordability 
                index that is in the highest 25 percent of such 
                indexes of all institutions subject to 
                paragraph (1) shall establish a quality-
                efficiency task force to review the operations 
                of such institution.
                  (B) Membership.--Such task force shall 
                include administrators and business and civic 
                leaders and may include faculty, students, 
                trustees, parents of students, and alumni of 
                such institution.
                  (C) Functions.--Such task force shall analyze 
                institutional operating costs in comparison 
                with such costs at other institutions within 
                the class of institutions. Such analysis should 
                identify areas where, in comparison with other 
                institutions in such class, the institution 
                operates more expensively to produce a similar 
                result. Any identified areas should then be 
                targeted for in-depth analysis for cost 
                reduction opportunities.
                  (D) Report.--The results of the analysis by a 
                quality-efficiency task force under this 
                paragraph shall be included in the report to 
                the Secretary under paragraph (1).
          (4) Consequences for 2-year continuation of 
        failure.--If the Secretary determines that the 
        institution has failed to comply with the management 
        plan and action plan submitted by the institution under 
        this subsection following the next 2 academic years 
        that begin after the submission of such plans, and has 
        failed to reduce the college affordability index below 
        2.0 for such 2 academic years, the Secretary--
                  (A) shall make available to the public a 
                detailed report provided by the institution on 
                all costs and expenditures, and on all tuition 
                and fees charged to students, for such 2 
                academic years;
                  (B) shall place the institution on an 
                affordability alert status and shall make the 
                information regarding the institution's failure 
                available in accordance with subsection (d);
                  (C) shall notify the institution's 
                accrediting agency of the institution's 
                failure; and
                  (D) may require the institution to submit to 
                a review and audit by the Inspector General of 
                the Department of Education to determine the 
                cause of the institution's failure.
          (5) Information to state agencies.--Any institution 
        that reports under paragraph (1)(C) that an agency or 
        instrumentality of State government or other entity 
        participates in the determinations of tuition and fee 
        increases shall, prior to submitting any information to 
        the Secretary under this subsection, submit such 
        information to, and request the comments and input of, 
        such agency, instrumentality, or entity. With respect 
        to any such institution, the Secretary shall provide a 
        copy of any communication by the Secretary with that 
        institution to such agency, instrumentality, or entity.
          (6) Exemptions.--
                  (A) Relative price exemption.--The Secretary 
                shall, for any 3-year interval for which 
                college affordability indexes are computed 
                under paragraph (1), determine and publish the 
                dollar amount that, for each class of 
                institution described in paragraph (7) 
                represents the maximum tuition and fees charged 
                for a full-time undergraduate student in the 
                least costly quartile of institutions within 
                each such class during the last year of such 3-
                year interval. An institution that has a 
                college affordability index computed under 
                paragraph (1) that exceeds 2.0 for any such 3-
                year interval, but that, on average during such 
                3-year interval, charges less than such maximum 
                tuition and fees shall not be subject to the 
                actions required by subparagraph (B) or (C) of 
                paragraph (1), or any action under paragraph 
                (4), unless such institution, for a subsequent 
                3-year interval, charges more than such maximum 
                tuition and fees.
                  (B) Dollar increase exemption.--An 
                institution that has a college affordability 
                index computed under paragraph (1) that exceeds 
                2.0 for any 3-year interval, but that exceeds 
                such 2.0 by a dollar amount that is less than 
                $500, shall not be subject to the actions 
                required by subparagraph (B) or (C) of 
                paragraph (1), or any action under paragraph 
                (4), unless such institution has a college 
                affordability index for a subsequent 3-year 
                interval that exceeds 2.0 by more than such 
                dollar amount.
          (7) Classes of institutions.--For purposes of this 
        subsection, the classes of institutions shall be those 
        sectors used by the Integrated Postsecondary Education 
        Data System, based on whether the institution is 
        public, nonprofit private, or for-profit private, and 
        whether the institution has a 4-year, 2-year, or less 
        than 2-year program of instruction.
  (g) Fines.--In addition to 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 
failing to provide the information described in this section in 
a timely and accurate manner, or for failing to otherwise 
cooperate with the National Center for Education Statistics 
regarding efforts to obtain data on the cost and price of 
higher education under this section and pursuant to the program 
participation agreement entered into under section 487.
  (h) GAO Study and Report.--
          (1) GAO study.--The Comptroller General shall conduct 
        a study of the policies and procedures implemented by 
        institutions in increasing the affordability of 
        postsecondary education. Such study shall include 
        information with respect to--
                  (A) a list of those institutions that--
                          (i) have reduced their college 
                        affordability indexes; or
                          (ii) are, as determined under 
                        subsection (f)(6)(A), within the least 
                        costly quartile of institutions within 
                        each class described in subsection 
                        (f)(7);
                  (B) policies implemented to stem the increase 
                in tuition and fees and institutional costs;
                  (C) the extent to which room and board costs 
                and prices changed;
                  (D) the extent to which other services were 
                altered to affect tuition and fees;
                  (E) the extent to which the institution's 
                policies affected student body demographics and 
                time to completion;
                  (F) what, if any, operational factors played 
                a role in reducing tuition and fees;
                  (G) the extent to which academic quality was 
                affected, and how;
                  (H) the extent to which policies and 
                practices reducing costs and prices may be 
                replicated from one institution to another; and
                  (I) other information as necessary to 
                determine best practices in increasing the 
                affordability of postsecondary education.
          (2) Interim and final reports.--The Comptroller 
        General shall submit an interim and a final report 
        regarding the findings of the study required by 
        paragraph (1) to the appropriate authorizing committees 
        of Congress. The interim report shall be submitted not 
        later than July 31, 2011, and the final report shall be 
        submitted not later than July 31, 2013.
  (i) Student Aid Recipient Survey.--
          (1) Survey required.--The Secretary shall conduct a 
        survey of student aid recipients under title IV on a 
        regular cycle and State-by-State basis, but not less 
        than once every 4 years--
                  (A) to identify the population of students 
                receiving Federal student aid;
                  (B) to describe the income distribution and 
                other socioeconomic characteristics of 
                federally aided students;
                  (C) to describe the combinations of aid from 
                State, Federal, and private sources received by 
                students from all income groups;
                  (D) to describe the debt burden of 
                educational loan recipients and their capacity 
                to repay their education debts, and the impact 
                of such debt burden on career choices;
                  (E) to describe the role played by the price 
                of postsecondary education in the determination 
                by students of what institution to attend; and
                  (F) to describe how the increased costs of 
                textbooks and other instructional materials 
                affects the costs of postsecondary education to 
                students.
          (2) Survey design.--The survey shall be 
        representative of full-time and part-time, 
        undergraduate, graduate, and professional and current 
        and former students in all types of institutions, and 
        designed and administered in consultation with the 
        Congress and the postsecondary education community.
          (3) Dissemination.--The Secretary shall disseminate 
        the information resulting from the survey in both 
        printed and electronic form.
  (j) Regulations.--The Secretary is authorized to issue such 
regulations as may be necessary to carry out the provisions of 
this section.

SEC. 132. DATABASES OF STUDENT INFORMATION PROHIBITED.

  (a) Prohibition.--Except as described in (b), nothing in this 
Act shall be construed to authorize the design, development, 
creation, implementation, or maintenance of a nationwide 
database of personally identifiable information on individuals 
receiving assistance, attending institutions receiving 
assistance, or otherwise involved in any studies or other 
collections of data under this Act, including a student unit 
record system, an education bar code system, or any other 
system that tracks individual students over time.
  (b) Exception.--The provisions of subsection (a) shall not 
affect the loan obligation enforcement activities described in 
section 485B of this Act.

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

SEC. 141. PERFORMANCE-BASED ORGANIZATION FOR THE DELIVERY OF FEDERAL 
                    STUDENT FINANCIAL ASSISTANCE.

  (a) Establishment and Purpose.--
          (1) * * *
          (2) Purposes.--The purposes of the PBO are--
                  (A) * * *
                  (B) to reduce the unit costs of administering 
                those programs and, to the extent practicable, 
                the total costs of administering those 
                programs;

           *       *       *       *       *       *       *

  (c) Performance Plan and Report.--
          (1) Performance plan.--
                  (A) In general.--Each fiscal 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 and any revision to the plan, 
                the Secretary and the Chief Operating Officer 
                shall consult with students, institutions of 
                higher education, Congress, lenders, secondary 
                markets, guaranty agencies, the Advisory 
                Committee on Student Financial Assistance, and 
                other interested parties not less than 30 days 
                prior to the implementation of the performance 
                plan or revision.

           *       *       *       *       *       *       *

          (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. The annual report shall include the 
        following:
                  (A) * * *
                  (B) Financial and performance requirements 
                applicable to the PBO under the [Chief 
                Financial Officer Act of 1990 and] Chief 
                Financial Officers Act of 1990, the Government 
                Performance and Results Act of 1993, and other 
                relevant statutes.
  (d) Chief Operating Officer.--
          (1) * * *

           *       *       *       *       *       *       *

          (4) Performance agreement.--
                  (A) * * *
                  (B) Transmittal.--The final agreement, and 
                any revision to 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] authorizing committees, and made 
                publicly available.

           *       *       *       *       *       *       *

  (f ) Student Loan Ombudsman.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Functions of ombudsman.--The Ombudsman shall--
                  (A) in accordance with regulations of the 
                Secretary, receive, review, and attempt to 
                resolve informally complaints from borrowers of 
                loans described in paragraph (1), including, as 
                appropriate, attempts to resolve such 
                complaints within the Department of Education 
                and with institutions of higher education, 
                lenders, guaranty agencies, loan servicers, and 
                other participants in the loan programs 
                described in paragraph [(1)(A)] (1); and

           *       *       *       *       *       *       *


                 TITLE II--TEACHER QUALITY ENHANCEMENT

[PART A--TEACHER QUALITY ENHANCEMENT GRANTS FOR STATES AND PARTNERSHIPS

[SEC. 201. PURPOSES; DEFINITIONS.

  [(a) Purposes.--The purposes of this part are 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;
          [(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, such as mathematics, science, English, 
        foreign languages, history, economics, art, civics, 
        Government, and geography, including training in the 
        effective uses of technology in the classroom; and
          [(4) recruit highly qualified individuals, including 
        individuals from other occupations, into the teaching 
        force.
  [(b) Definitions.--In this part:
          [(1) Arts and sciences.--The term ``arts and 
        sciences'' means--
                  [(A) when referring to an organizational unit 
                of an institution of higher education, any 
                academic unit that offers 1 or more academic 
                majors in disciplines or content areas 
                corresponding to the academic subject matter 
                areas in which teachers provide instruction; 
                and
                  [(B) when referring to a specific academic 
                subject matter area, the disciplines or content 
                areas in which academic majors are offered by 
                the arts and science organizational unit.
          [(2) High need local educational agency.--The term 
        ``high need local educational agency'' means a local 
        educational agency that serves an elementary school or 
        secondary school located in an area in which there is--
                  [(A) a high percentage of individuals from 
                families with incomes below the poverty line;
                  [(B) a high percentage of secondary school 
                teachers not teaching in the content area in 
                which the teachers were trained to teach; or
                  [(C) a high teacher turnover rate.
          [(3) Poverty line.--The term ``poverty line'' means 
        the poverty line (as defined by the Office of 
        Management and Budget, and revised annually in 
        accordance with section 673(2) of the Community 
        Services Block Grant Act (42 U.S.C. 9902(2))) 
        applicable to a family of the size involved.

[SEC. 202. STATE GRANTS.

  [(a) In General.--From amounts made available under section 
210(1) for a fiscal year, the Secretary is authorized to award 
grants under this section, on a competitive basis, to eligible 
States to enable the eligible States to carry out the 
activities described in subsection (d).
  [(b) Eligible State.--
          [(1) Definition.--In this part, the term ``eligible 
        State'' means--
                  [(A) the Governor of a State; or
                  [(B) in the case of a State for which the 
                constitution or law of such State designates 
                another individual, entity, or agency in the 
                State to be responsible for teacher 
                certification and preparation activity, such 
                individual, entity, or agency.
          [(2) Consultation.--The Governor and the individual, 
        entity, or agency designated under paragraph (1) shall 
        consult with the Governor, State board of education, 
        State educational agency, or State agency for higher 
        education, as appropriate, with respect to the 
        activities assisted under this section.
          [(3) Construction.--Nothing in this subsection 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) Application.--To be eligible to receive a grant under 
this section, an eligible State shall, at the time of the 
initial grant application, submit an application to the 
Secretary that--
          [(1) meets the requirement of this section;
          [(2) includes a description of how the eligible State 
        intends to use funds provided under this section; and
          [(3) contains such other information and assurances 
        as the Secretary may require.
  [(d) Uses of Funds.--An eligible State that receives a grant 
under this section 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, and possess strong 
        teaching skills, 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 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 with 
        alternatives to traditional preparation for teaching 
        through programs at colleges of arts and sciences or at 
        nonprofit educational organizations.
          [(4) Alternative routes to state certification.--
        Carrying out programs that--
                  [(A) include support during the initial 
                teaching 
                experience; and
                  [(B) establish, expand, or improve 
                alternative routes to State certification of 
                teachers for highly qualified individuals, 
                including mid-career professionals from other 
                occupations, paraprofessionals, former military 
                personnel and recent college graduates with 
                records of academic distinction.
          [(5) Recruitment; pay; removal.--Developing and 
        implementing effective mechanisms to ensure that local 
        educational agencies and 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 expeditiously remove incompetent 
        or unqualified teachers consistent with procedures to 
        ensure due process for the teachers.
          [(6) 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.
          [(7) Recruitment.--Activities described in section 
        204(d).

[SEC. 203. PARTNERSHIP GRANTS.

  [(a) Grants.--From amounts made available under section 
210(2) for a fiscal year, the Secretary is authorized to award 
grants under this section, on a competitive basis, to eligible 
partnerships to enable the eligible partnerships to carry out 
the activities described in subsections (d) and (e).
  [(b) Definitions.--
          [(1) Eligible partnerships.--In this part, the term 
        ``eligible partnerships'' means an entity that--
                  [(A) shall include--
                          [(i) a partner institution;
                          [(ii) a school of arts and sciences; 
                        and
                          [(iii) a high need local educational 
                        agency; and
                  [(B) may include a Governor, State 
                educational agency, the State board of 
                education, the State agency for higher 
                education, an institution of higher education 
                not described in subparagraph (A), a public 
                charter school, a public or private elementary 
                school or secondary school, a public or private 
                nonprofit educational organization, a business, 
                a teacher organization, or a prekindergarten 
                program.
          [(2) Partner institution.--In this section, the term 
        ``partner institution'' means a private independent or 
        State-supported public institution of higher education, 
        the teacher training program of which demonstrates 
        that--
                  [(A) graduates from the teacher training 
                program exhibit strong performance on State-
                determined qualifying assessments for new 
                teachers through--
                          [(i) demonstrating that 80 percent or 
                        more of the graduates of the program 
                        who intend to enter the field of 
                        teaching have passed all of the 
                        applicable State qualification 
                        assessments for new teachers, which 
                        shall include an assessment of each 
                        prospective teacher's subject matter 
                        knowledge in the content area or areas 
                        in which the teacher intends to teach; 
                        or
                          [(ii) being ranked among the highest-
                        performing teacher preparation programs 
                        in the State as determined by the 
                        State--
                                  [(I) using criteria 
                                consistent with the 
                                requirements for the State 
                                report card under section 
                                207(b); and
                                  [(II) using the State report 
                                card on teacher preparation 
                                required under section 207(b), 
                                after the first publication of 
                                such report card and for every 
                                year thereafter; or
                  [(B) the teacher training program requires 
                all the students of the program to participate 
                in intensive clinical experience, to meet high 
                academic standards, and--
                          [(i) in the case of secondary school 
                        candidates, to successfully complete an 
                        academic major in the subject area in 
                        which the candidate intends to teach or 
                        to demonstrate competence through a 
                        high level of performance in relevant 
                        content areas; and
                          [(ii) in the case of elementary 
                        school candidates, to successfully 
                        complete an academic major in the arts 
                        and sciences or to demonstrate 
                        competence through a high level of 
                        performance in core academic subject 
                        areas.
  [(c) Application.--Each eligible partnership 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 such application 
shall--
          [(1) contain a needs assessment of all the partners 
        with respect to teaching and learning and a description 
        of how the partnership will coordinate with other 
        teacher training or professional development programs, 
        and how the activities of the partnership will be 
        consistent with State, local, and other education 
        reform activities that promote student achievement;
          [(2) contain a resource assessment that describes the 
        resources available to the partnership, the intended 
        use of the grant funds, including a description of how 
        the grant funds will be fairly distributed in 
        accordance with subsection (f ), and the commitment of 
        the resources of the partnership to the activities 
        assisted under this part, including financial support, 
        faculty participation, time commitments, and 
        continuation of the activities when the grant ends; and
          [(3) contain a description of--
                  [(A) how the partnership will meet the 
                purposes of this part;
                  [(B) how the partnership will carry out the 
                activities required under subsection (d) and 
                any permissible activities under subsection 
                (e); and
                  [(C) the partnership's evaluation plan 
                pursuant to section 206(b).
  [(d) Required Uses of Funds.--An eligible partnership that 
receives a grant under this section shall use the grant funds 
to carry out the following activities:
          [(1) Reforms.--Implementing reforms within teacher 
        preparation programs to hold the programs accountable 
        for preparing teachers who are highly competent in the 
        academic content areas in which the teachers plan to 
        teach, and for promoting strong teaching skills, 
        including working with a school of arts and sciences 
        and integrating reliable research-based teaching 
        methods into the curriculum, which curriculum shall 
        include programs designed to successfully integrate 
        technology into teaching and learning.
          [(2) Clinical experience and interaction.--Providing 
        sustained and high quality preservice clinical 
        experience including the mentoring of prospective 
        teachers by veteran teachers, and substantially 
        increasing interaction between faculty at institutions 
        of higher education and new and experienced teachers, 
        principals, and other administrators at elementary 
        schools or secondary schools, and providing support, 
        including preparation time, for such interaction.
          [(3) Professional development.--Creating 
        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, and 
        that promotes strong teaching skills.
  [(e) Allowable Uses of Funds.--An eligible partnership that 
receives a grant under this section may use such funds to carry 
out the following activities:
          [(1) Teacher preparation and parent involvement.--
        Preparing teachers to work with diverse student 
        populations, including individuals with disabilities 
        and limited English proficient individuals, and 
        involving parents in the teacher preparation program 
        reform process.
          [(2) Dissemination and coordination.--Broadly 
        disseminating information on effective practices used 
        by the partnership, and coordinating with the 
        activities of the Governor, State board of education, 
        State higher education agency, and State educational 
        agency, as appropriate.
          [(3) Managerial and leadership skills.--Developing 
        and implementing proven mechanisms to provide 
        principals and superintendents with effective 
        managerial and leadership skills that result in 
        increased student achievement.
          [(4) Teacher recruitment.--Activities described in 
        section 204(d).
  [(f ) Special Rule.--No individual member of an eligible 
partnership shall retain more than 50 percent of the funds made 
available to the partnership under this section.
  [(g) Construction.--Nothing in this section shall be 
construed to prohibit an eligible partnership from using grant 
funds to coordinate with the activities of more than one 
Governor, State board of education, State educational agency, 
local educational agency, or State agency for higher education.

[SEC. 204. TEACHER RECRUITMENT GRANTS.

  [(a) Program Authorized.--From amounts made available under 
section 210(3) for a fiscal year, the Secretary is authorized 
to award grants, on a competitive basis, to eligible applicants 
to enable the eligible applicants to carry out activities 
described in subsection (d).
  [(b) Eligible Applicant Defined.--In this part, the term 
``eligible applicant'' means--
          [(1) an eligible State described in section 202(b); 
        or
          [(2) an eligible partnership described in section 
        203(b).
  [(c) Application.--Any eligible applicant desiring to receive 
a grant under this section shall submit an application to the 
Secretary at such time, in such form, and containing such 
information as the Secretary may require, including--
          [(1) a description of the assessment that the 
        eligible applicant, and the other entities with whom 
        the eligible applicant will carry out the grant 
        activities, have undertaken to determine the most 
        critical needs of the participating high-need local 
        educational agencies;
          [(2) a description of the activities the eligible 
        applicant will carry out with the grant; and
          [(3) a description of the eligible applicant's plan 
        for continuing the activities carried out with the 
        grant, once Federal funding ceases.
  [(d) Uses of Funds.--Each eligible applicant receiving a 
grant under this section shall use the grant funds--
          [(1)(A) to award scholarships to help students pay 
        the costs of tuition, room, board, and other expenses 
        of completing a teacher preparation program;
          [(B) to provide support services, if needed to enable 
        scholarship recipients to complete postsecondary 
        education programs; and
          [(C) for followup services provided to former 
        scholarship recipients during the recipients first 3 
        years of teaching; or
          [(2) to develop and implement effective mechanisms to 
        ensure that high need local educational agencies and 
        schools are able to effectively recruit highly 
        qualified teachers.
  [(e) Service Requirements.--The Secretary shall establish 
such requirements as the Secretary finds necessary to ensure 
that recipients of scholarships under this section who complete 
teacher education programs subsequently teach in a high-need 
local educational agency, for a period of time equivalent to 
the period for which the recipients receive scholarship 
assistance, or repay the amount of the scholarship. The 
Secretary shall use any such repayments to carry out additional 
activities under this section.

[SEC. 205. ADMINISTRATIVE PROVISIONS.

  [(a) Duration; One-Time Awards; Payments.--
          [(1) Duration.--
                  [(A) Eligible states and eligible 
                applicants.--Grants awarded to eligible States 
                and eligible applicants under this part shall 
                be awarded for a period not to exceed 3 years.
                  [(B) Eligible partnerships.--Grants awarded 
                to eligible partnerships under this part shall 
                be awarded for a period of 5 years.
          [(2) One-time award.--An eligible State and an 
        eligible partnership may receive a grant under each of 
        sections 202, 203, and 204 only once.
          [(3) Payments.--The Secretary shall make annual 
        payments of grant funds awarded under this part.
  [(b) Peer Review.--
          [(1) Panel.--The Secretary shall provide the 
        applications submitted under this part 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.
          [(2) Priority.--In recommending applications to the 
        Secretary for funding under this part, the panel 
        shall--
                  [(A) with respect to grants under section 
                202, give priority to eligible States serving 
                States that--
                          [(i) have initiatives to reform State 
                        teacher certification requirements that 
                        are designed 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 certified or licensed 
                        to teach;
                          [(ii) 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 area in which the teachers plan 
                        to teach and have strong teaching 
                        skills; or
                          [(iii) involve the development of 
                        innovative efforts aimed at reducing 
                        the shortage of highly qualified 
                        teachers in high poverty urban and 
                        rural areas;
                  [(B) with respect to grants under section 
                203--
                          [(i) give priority to applications 
                        from eligible partnerships that involve 
                        businesses; and
                          [(ii) take into consideration--
                                  [(I) providing an equitable 
                                geographic distribution of the 
                                grants throughout the United 
                                States; and
                                  [(II) the potential of the 
                                proposed activities for 
                                creating improvement and 
                                positive change.
          [(3) Secretarial selection.--The Secretary shall 
        determine, based on the peer review process, which 
        application shall receive funding and the amounts of 
        the grants. In determining grant amounts, the Secretary 
        shall take into account the total amount of funds 
        available for all grants under this part and the types 
        of activities proposed to be carried out.
  [(c) Matching Requirements.--
          [(1) State grants.--Each eligible State receiving a 
        grant under section 202 or 204 shall provide, from non-
        Federal sources, an amount equal to 50 percent of the 
        amount of the grant (in cash or in kind) to carry out 
        the activities supported by the grant.
          [(2) Partnership grants.--Each eligible partnership 
        receiving a grant under section 203 or 204 shall 
        provide, from non-Federal sources (in cash or in kind), 
        an amount equal to 25 percent of the grant for the 
        first year of the grant, 35 percent of the grant for 
        the second year of the grant, and 50 percent of the 
        grant for each succeeding year of the grant.
  [(d) Limitation on Administrative Expenses.--An eligible 
State or eligible partnership that receives a grant under this 
part may not use more than 2 percent of the grant funds for 
purposes of administering the grant.
  [(e) Teacher Qualifications Provided to Parents Upon 
Request.--Any local educational agency or school that benefits 
from the activities assisted under this part 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 
qualification 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.

[SEC. 206. ACCOUNTABILITY AND EVALUATION.

  [(a) State Grant Accountability Report.--An eligible State 
that receives a grant under section 202 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 eligible State, in using funds provided under such section, 
has made substantial progress in meeting the following goals:
          [(1) Student achievement.--Increasing student 
        achievement for all students as defined by the eligible 
        State.
          [(2) Raising standards.--Raising the State academic 
        standards required to enter the teaching profession, 
        including, where appropriate, through the use of 
        incentives to incorporate the requirement of an 
        academic major in the subject, or related discipline, 
        in which the teacher plans to teach.
          [(3) Initial certification or licensure.--Increasing 
        success in the pass rate for initial State teacher 
        certification or licensure, or increasing the numbers 
        of highly qualified individuals being certified or 
        licensed as teachers through alternative programs.
          [(4) Core academic subjects.--
                  [(A) Secondary school classes.--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 competence 
                        through a high level of performance in 
                        relevant content areas.
                  [(B) Elementary school classes.--Increasing 
                the percentage of elementary school classes 
                taught by teachers--
                          [(i) with academic majors in the arts 
                        and sciences; or
                          [(ii) who can demonstrate competence 
                        through a high level of performance in 
                        core academic subjects.
          [(5) Decreasing teacher shortages.--Decreasing 
        shortages of qualified teachers in poor urban and rural 
        areas.
          [(6) Increasing opportunities for professional 
        development.--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 or licensed 
        to teach or in which the teachers are working toward 
        certification or licensure to teach, and that promotes 
        strong teaching skills.
          [(7) Technology integration.--Increasing the number 
        of teachers prepared to integrate technology in the 
        classroom.
  [(b) Eligible Partnership Evaluation.--Each eligible 
partnership receiving a grant under section 203 shall establish 
and include in the application submitted under section 203(c), 
an evaluation plan that includes strong performance objectives. 
The plan shall include objectives and measures for--
          [(1) increased student achievement for all students 
        as measured by the partnership;
          [(2) increased teacher retention in the first 3 years 
        of a teacher's career;
          [(3) increased success in the pass rate for initial 
        State certification or licensure of teachers; and
          [(4) increased percentage of secondary school classes 
        taught in core academic subject areas by teachers--
                  [(A) with academic majors in the areas or in 
                a related field; and
                  [(B) who can demonstrate a high level of 
                competence through rigorous academic subject 
                area tests or who can demonstrate competence 
                through a high level of performance in relevant 
                content areas;
          [(5) increasing the percentage of elementary school 
        classes taught by teachers with academic majors in the 
        arts and sciences or who demonstrate competence through 
        a high level of performance in core academic subject 
        areas; and
          [(6) increasing the number of teachers trained in 
        technology.
  [(c) Revocation of Grant.--
          [(1) Report.--Each eligible State or eligible 
        partnership receiving a grant under this part shall 
        report annually on the progress of the eligible State 
        or eligible partnership toward meeting the purposes of 
        this part and the goals, objectives, and measures 
        described in subsections (a) and (b).
          [(2) Revocation.--
                  [(A) Eligible states and eligible 
                applicants.--If the Secretary determines that 
                an eligible State or eligible applicant is not 
                making substantial progress in meeting the 
                purposes, goals, objectives, and measures, as 
                appropriate, by the end of the second year of a 
                grant under this part, then the grant payment 
                shall not be made for the third year of the 
                grant.
                  [(B) Eligible partnerships.--If the Secretary 
                determines that an eligible partnership is not 
                making substantial progress in meeting the 
                purposes, goals, objectives, and measures, as 
                appropriate, by the end of the third year of a 
                grant under this part, then the grant payments 
                shall not be made for any succeeding year of 
                the grant.
  [(d) Evaluation and Dissemination.--The Secretary shall 
evaluate the activities funded under this part and report the 
Secretary's findings regarding the activities 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 eligible States and eligible partnerships under 
this part, and shall broadly disseminate information regarding 
such practices that were found to be ineffective.

[SEC. 207. ACCOUNTABILITY FOR PROGRAMS THAT PREPARE TEACHERS.

  [(a) Development of Definitions and Reporting Methods.--
Within 9 months of the date of enactment of the Higher 
Education Amendments of 1998, the Commissioner of the National 
Center for Education Statistics, in consultation with States 
and institutions of higher education, shall develop key 
definitions for terms, and uniform reporting methods (including 
the key definitions for the consistent reporting of pass 
rates), related to the performance of elementary school and 
secondary school teacher preparation programs.
  [(b) State Report Card on the Quality of Teacher 
Preparation.--Each State that receives funds under this Act 
shall provide to the Secretary, within 2 years of the date of 
enactment of the Higher Education Amendments of 1998, and 
annually thereafter, in a uniform and comprehensible manner 
that conforms with the definitions and methods established in 
subsection (a), a State report card on the quality of teacher 
preparation in the State, which shall include at least the 
following:
          [(1) A description of the teacher certification and 
        licensure assessments, and any other certification and 
        licensure requirements, used by the State.
          [(2) The standards and criteria that prospective 
        teachers must meet in order to attain initial teacher 
        certification or licensure and to be certified or 
        licensed to teach particular subjects or in particular 
        grades within the State.
          [(3) A description of the extent to which the 
        assessments and requirements described in paragraph (1) 
        are aligned with the State's standards and assessments 
        for students.
          [(4) The percentage of teaching candidates who passed 
        each of the assessments used by the State for teacher 
        certification and licensure, and the passing score on 
        each assessment that determines whether a candidate has 
        passed that assessment.
          [(5) The percentage of teaching candidates who passed 
        each of the assessments used by the State for teacher 
        certification and licensure, disaggregated and ranked, 
        by the teacher preparation program in that State from 
        which the teacher candidate received the candidate's 
        most recent degree, which shall be made available 
        widely and publicly.
          [(6) Information on the extent to which teachers in 
        the State are given waivers of State certification or 
        licensure requirements, including the proportion of 
        such teachers distributed across high- and low-poverty 
        school districts and across subject areas.
          [(7) A description of each State's alternative routes 
        to teacher certification, if any, and the percentage of 
        teachers certified through alternative certification 
        routes who pass State teacher certification or 
        licensure assessments.
          [(8) For each State, a description of proposed 
        criteria for assessing the performance of teacher 
        preparation programs within institutions of higher 
        education in the State, including indicators of teacher 
        candidate knowledge and skills.
          [(9) Information on the extent to which teachers or 
        prospective teachers in each State are required to take 
        examinations or other assessments of their subject 
        matter knowledge in the area or areas in which the 
        teachers provide instruction, the standards established 
        for passing any such assessments, and the extent to 
        which teachers or prospective teachers are required to 
        receive a passing score on such assessments in order to 
        teach in specific subject areas or grade levels.
  [(c) Initial Report.--
          [(1) In general.--Each State that receives funds 
        under this Act, not later than 6 months of the date of 
        enactment of the Higher Education Amendments of 1998 
        and in a uniform and comprehensible manner, shall 
        submit to the Secretary the information described in 
        paragraphs (1), (5), and (6) of subsection (b). Such 
        information shall be compiled by the Secretary and 
        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 not later 
        than 9 months after the date of enactment of the Higher 
        Education Amendments of 1998.
          [(2) Construction.--Nothing in this subsection shall 
        be construed to require a State to gather information 
        that is not in the possession of the State or the 
        teacher preparation programs in the State, or readily 
        available to the State or teacher preparation programs.
  [(d) Report of the Secretary on the Quality of Teacher 
Preparation.--
          [(1) Report card.--The Secretary shall provide to 
        Congress, and publish and make widely available, a 
        report card on teacher qualifications and preparation 
        in the United States, including all the information 
        reported in paragraphs (1) through (9) of subsection 
        (b). Such report shall identify States for which 
        eligible States and eligible partnerships received a 
        grant under this part. Such report shall be so 
        provided, published and made available not later than 2 
        years 6 months after the date of enactment of the 
        Higher Education Amendments of 1998 and annually 
        thereafter.
          [(2) Report to congress.--The Secretary shall report 
        to Congress--
                  [(A) a comparison of States' efforts to 
                improve teaching quality; and
                  [(B) regarding the national mean and median 
                scores on any standardized test that is used in 
                more than 1 State for teacher certification or 
                licensure.
          [(3) Special rule.--In the case of teacher 
        preparation programs with fewer than 10 graduates 
        taking any single initial teacher certification or 
        licensure assessment during an academic year, the 
        Secretary shall collect and publish information with 
        respect to an average pass rate on State certification 
        or licensure assessments taken over a 3-year period.
  [(e) Coordination.--The Secretary, to the extent practicable, 
shall coordinate the information collected and published under 
this part among States for individuals who took State teacher 
certification or licensure assessments in a State other than 
the State in which the individual received the individual's 
most recent degree.
  [(f ) Institutional Report Cards on the Quality of Teacher 
Preparation.--
          [(1) Report card.--Each institution of higher 
        education that conducts a teacher preparation program 
        that enrolls students receiving Federal assistance 
        under this Act, not later than 18 months after the date 
        of enactment of the Higher Education Amendments of 1998 
        and annually thereafter, shall report to the State and 
        the general public, in a uniform and comprehensible 
        manner that conforms with the definitions and methods 
        established under subsection (a), the following 
        information:
                  [(A) Pass rate.--(i) For the most recent year 
                for which the information is available, the 
                pass rate of the institution's graduates on the 
                teacher certification or licensure assessments 
                of the State in which the institution is 
                located, but only for those students who took 
                those assessments within 3 years of completing 
                the program.
                  [(ii) A comparison of the program's pass rate 
                with the average pass rate for programs in the 
                State.
                  [(iii) In the case of teacher preparation 
                programs with fewer than 10 graduates taking 
                any single initial teacher certification or 
                licensure assessment during an academic year, 
                the institution shall collect and publish 
                information with respect to an average pass 
                rate on State certification or licensure 
                assessments taken over a 3-year period.
                  [(B) Program information.--The number of 
                students in the program, the average number of 
                hours of supervised practice teaching required 
                for those in the program, and the faculty-
                student ratio in supervised practice teaching.
                  [(C) Statement.--In States that approve or 
                accredit teacher education programs, a 
                statement of whether the institution's program 
                is so approved or accredited.
                  [(D) Designation as low-performing.--Whether 
                the program has been designated as low-
                performing by the State under section 208(a).
          [(2) Requirement.--The information described in 
        paragraph (1) shall be reported through publications 
        such as school catalogs and promotional materials sent 
        to potential applicants, secondary school guidance 
        counselors, and prospective employers of the 
        institution's program graduates.
          [(3) Fines.--In addition to the actions authorized in 
        section 487(c), the Secretary may impose a fine not to 
        exceed $25,000 on an institution of higher education 
        for failure to provide the information described in 
        this subsection in a timely or accurate manner.

[SEC. 208. STATE FUNCTIONS.

  [(a) State Assessment.--In order to receive funds under this 
Act, a State, not later than 2 years after the date of 
enactment of the Higher Education Amendments of 1998, shall 
have in place a procedure to identify, and assist, through the 
provision of technical assistance, low-performing programs of 
teacher preparation within institutions of higher education. 
Such State shall provide the Secretary an annual list of such 
low-performing institutions that includes an identification of 
those institutions at-risk of being placed on such list. Such 
levels of performance shall be determined solely by the State 
and may include criteria based upon information collected 
pursuant to this part. Such assessment shall be described in 
the report under section 207(b).
  [(b) Termination of Eligibility.--Any institution of higher 
education that offers a program of teacher preparation in which 
the State has withdrawn the State's approval or terminated the 
State's financial support due to the low performance of the 
institution's teacher preparation program based upon the State 
assessment described in subsection (a)--
          [(1) shall be ineligible for any funding for 
        professional development activities awarded by the 
        Department of Education; and
          [(2) shall not be permitted to accept or enroll any 
        student that receives aid under title IV of this Act in 
        the institution's teacher preparation program.
  [(c) Negotiated Rulemaking.--If the Secretary develops any 
regulations implementing subsection (b)(2), the Secretary shall 
submit such proposed regulations to a negotiated rulemaking 
process, which shall include representatives of States, 
institutions of higher education, and educational and student 
organizations.

[SEC. 209. GENERAL PROVISIONS.

  [(a) Methods.--In complying with sections 207 and 208, the 
Secretary shall ensure that States and institutions of higher 
education use fair and equitable methods in reporting and that 
the reporting methods protect the privacy of individuals.
  [(b) Special Rule.--For each State in which there are no 
State certification or licensure assessments, or for States 
that do not set minimum performance levels on those 
assessments--
          [(1) the Secretary shall, to the extent practicable, 
        collect data comparable to the data required under this 
        part from States, local educational agencies, 
        institutions of higher education, or other entities 
        that administer such assessments to teachers or 
        prospective teachers; and
          [(2) notwithstanding any other provision of this 
        part, the Secretary shall use such data to carry out 
        requirements of this part related to assessments or 
        pass rates.
  [(c) Limitations.--
          [(1) Federal control prohibited.--Nothing in this 
        part shall be construed to permit, allow, encourage, or 
        authorize any Federal control over any aspect of any 
        private, religious, or home school, whether or not a 
        home school is treated as a private school or home 
        school under State law. This section shall not be 
        construed to prohibit private, religious, or home 
        schools from participation in programs or services 
        under this part.
          [(2) No change in state control encouraged or 
        required.--Nothing in this part shall be construed to 
        encourage or require any change in a State's treatment 
        of any private, religious, or home school, whether or 
        not a home school is treated as a private school or 
        home school under State law.
          [(3) National system of teacher certification 
        prohibited.--Nothing in this part shall be construed to 
        permit, allow, encourage, or authorize the Secretary to 
        establish or support any national system of teacher 
        certification.

[SEC. 210. 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 may be 
necessary for each of the 4 succeeding fiscal years, of which--
          [(1) 45 percent shall be available for each fiscal 
        year to award grants under section 202;
          [(2) 45 percent shall be available for each fiscal 
        year to award grants under section 203; and
          [(3) 10 percent shall be available for each fiscal 
        year to award grants under section 204.]

 PART A--TEACHER QUALITY ENHANCEMENT GRANTS FOR STATES AND PARTNERSHIPS

SEC. 201. PURPOSES; DEFINITIONS.

  (a) Purposes.--The purposes of this part are to--
          (1) improve student academic achievement;
          (2) improve the quality of the current and future 
        teaching force by improving the preparation of 
        prospective teachers and enhancing professional 
        development activities;
          (3) hold institutions of higher education accountable 
        for preparing highly qualified teachers; and
          (4) recruit qualified individuals, including 
        minorities and individuals from other occupations, into 
        the teaching force.
  (b) Definitions.--In this part:
          (1) Arts and sciences.--The term ``arts and 
        sciences'' means--
                  (A) when referring to an organizational unit 
                of an institution of higher education, any 
                academic unit that offers one or more academic 
                majors in disciplines or content areas 
                corresponding to the academic subject matter 
                areas in which teachers provide instruction; 
                and
                  (B) when referring to a specific academic 
                subject matter area, the disciplines or content 
                areas in which academic majors are offered by 
                the arts and science organizational unit.
          (2) Exemplary teacher.--The term ``exemplary 
        teacher'' has the meaning given such term in section 
        9101 of the Elementary and Secondary Education Act of 
        1965 (20 U.S.C. 7801).
          (3) Highly qualified.--The term ``highly qualified'' 
        when used with respect to an individual means that the 
        individual is highly qualified as determined under 
        section 9101 of the Elementary and Secondary Education 
        Act of 1965 (20 U.S.C. 7801) or section 602 of the 
        Individuals with Disabilities Education Act (20 U.S.C. 
        1401).
          (4) High-need local educational agency.--The term 
        ``high-need local educational agency'' means a local 
        educational agency--
                  (A)(i)(I) that serves not fewer than 10,000 
                children from families with incomes below the 
                poverty line; or
                  (II) for which not less than 25 percent of 
                the children served by the agency are from 
                families with incomes below the poverty line;
                  (ii) that is among those serving the highest 
                number or percentage of children from families 
                with incomes below the poverty line in the 
                State, but this clause applies only in a State 
                that has no local educational agency meeting 
                the requirements of clause (i); or
                  (iii) with a total of less than 600 students 
                in average daily attendance at the schools that 
                are served by the agency and all of whose 
                schools are designated with a school locale 
                code of 7, as determined by the Secretary; and
                  (B)(i) for which there is a high percentage 
                of teachers not teaching in the academic 
                subjects or grade levels that the teachers were 
                trained to teach; or
                  (ii) for which there is a high percentage of 
                teachers with emergency, provisional, or 
                temporary certification or licensing.
          (5) Poverty line.--The term ``poverty line'' means 
        the poverty line (as defined by the Office of 
        Management and Budget, and revised annually in 
        accordance with section 673(2) of the Community 
        Services Block Grant Act (42 U.S.C. 9902(2))) 
        applicable to a family of the size involved.
          (6) Professional development.--The term 
        ``professional development'' has the meaning given such 
        term in section 9101 of the Elementary and Secondary 
        Education Act of 1965 (20 U.S.C. 7801).
          (7) Scientifically based reading research.--The term 
        ``scientifically based reading research'' has the 
        meaning given such term in section 1208 of the 
        Elementary and Secondary Education Act of 1965 (20 
        U.S.C. 6368).
          (8) Scientifically based research.--The term 
        ``scientifically based research'' has the meaning given 
        such term in section 9101 of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 7801).
          (9) Teaching skills.--The term ``teaching skills'' 
        means skills that--
                  (A) are based on scientifically based 
                research;
                  (B) enable teachers to effectively convey and 
                explain subject matter content;
                  (C) lead to increased student academic 
                achievement; and
                  (D) use strategies that--
                          (i) are specific to subject matter;
                          (ii) include ongoing assessment of 
                        student learning;
                          (iii) focus on identification and 
                        tailoring of academic instruction to 
                        students's specific learning needs; and
                          (iv) focus on classroom management.

SEC. 202. STATE GRANTS.

  (a) In General.--From amounts made available under section 
210(1) for a fiscal year, the Secretary is authorized to award 
grants under this section, on a competitive basis, to eligible 
States to enable the eligible States to carry out the 
activities described in subsection (d).
  (b) Eligible State.--
          (1) Definition.--In this part, the term ``eligible 
        State'' means--
                  (A) the Governor of a State; or
                  (B) in the case of a State for which the 
                constitution or law of such State designates 
                another individual, entity, or agency in the 
                State to be responsible for teacher 
                certification and preparation activity, such 
                individual, entity, or agency.
          (2) Consultation.--The Governor or the individual, 
        entity, or agency designated under paragraph (1)(B) 
        shall consult with the Governor, State board of 
        education, State educational agency, State agency for 
        higher education, or State agency responsible for early 
        childhood education and programs, as appropriate, with 
        respect to the activities assisted under this section.
          (3) Construction.--Nothing in this subsection 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) Application.--To be eligible to receive a grant under 
this section, an eligible State shall submit an application to 
the Secretary that--
          (1) meets the requirement of this section;
          (2) demonstrates that the State is in full compliance 
        with sections 207 and 208;
          (3) includes a description of how the eligible State 
        intends to use funds provided under this section;
          (4) includes measurable objectives for the use of the 
        funds provided under the grant;
          (5) demonstrates the State has submitted and is 
        actively implementing a plan that meets the 
        requirements of sections 1111(h)(1)(C)(viii) and 1119 
        of the Elementary and Secondary Education Act of 1965 
        (20 U.S.C. 6311(h)(1)(C)(viii) and 6319); and
          (6) contains such other information and assurances as 
        the Secretary may require.
  (d) Uses of Funds.--An eligible State that receives a grant 
under this section shall use the grant funds to reform teacher 
preparation requirements, to coordinate with State activities 
under section 2113(c) of the Elementary and Secondary Education 
Act of 1965 (20 U.S.C. 6613(c)), and to ensure that current and 
future teachers are highly qualified, by carrying out one or 
more of the following activities:
          (1) Reforms.--Ensuring that all teacher preparation 
        programs in the State are preparing teachers who are 
        highly qualified, are able to understand scientifically 
        based research and its applicability, and are able to 
        use advanced technology effectively in the classroom, 
        including use for instructional techniques to improve 
        student academic achievement, by assisting such 
        programs--
                  (A) to retrain faculty; and
                  (B) to design (or redesign) teacher 
                preparation programs so they--
                          (i) are based on rigorous academic 
                        content, scientifically based research 
                        (including scientifically based reading 
                        research), and challenging State 
                        student academic content standards; and
                          (ii) promote strong teaching skills.
          (2) Certification or licensure requirements.--
        Reforming teacher certification (including 
        recertification) or licensing requirements to ensure 
        that--
                  (A) teachers have the subject matter 
                knowledge and teaching skills in the academic 
                subjects that the teachers teach that are 
                necessary to help students meet challenging 
                State student academic achievement standards; 
                and
                  (B) such requirements are aligned with 
                challenging State academic content standards.
          (3) Alternatives to traditional teacher preparation 
        and state certification.--Providing prospective 
        teachers with alternative routes to State certification 
        and traditional preparation to become highly qualified 
        teachers through--
                  (A) innovative approaches that reduce 
                unnecessary barriers to State certification 
                while producing highly qualified teachers, 
                which may include articulation agreements 
                between institutions of higher education;
                  (B) programs that provide support to teachers 
                during their initial years in the profession; 
                and
                  (C) alternative routes to State certification 
                of teachers for qualified individuals, 
                including mid-career professionals from other 
                occupations, former military personnel, and 
                recent college graduates with records of 
                academic distinction.
          (4) Innovative programs.--Planning and implementing 
        innovative programs to enhance the ability of 
        institutions of higher education to prepare highly 
        qualified teachers, such as charter colleges of 
        education or university and local educational agency 
        partnership schools, that--
                  (A) permit flexibility in meeting State 
                requirements as long as graduates, during their 
                initial years in the profession, increase 
                student academic achievement;
                  (B) provide long-term data gathered from 
                teachers' performance over multiple years in 
                the classroom on the ability to increase 
                student academic achievement;
                  (C) ensure high-quality preparation of 
                teachers from underrepresented groups; and
                  (D) create performance measures that can be 
                used to document the effectiveness of 
                innovative methods for preparing highly 
                qualified teachers.
          (5) Merit pay.--Developing, or assisting local 
        educational agencies in developing--
                  (A) merit-based performance systems that 
                reward teachers who increase student academic 
                achievement; and
                  (B) strategies that provide differential and 
                bonus pay in high-need local educational 
                agencies to retain--
                          (i) principals;
                          (ii) highly qualified teachers who 
                        teach in high-need academic subjects, 
                        such as reading, mathematics, and 
                        science;
                          (iii) highly qualified teachers who 
                        teach in schools identified for school 
                        improvement under section 1116(b) of 
                        the Elementary and Secondary Education 
                        Act of 1965 (20 U.S.C. 6316(b));
                          (iv) special education teachers;
                          (v) teachers specializing in teaching 
                        limited English proficient children; 
                        and
                          (vi) highly qualified teachers in 
                        urban and rural schools or districts.
          (6) Teacher advancement.--Developing, or assisting 
        local educational agencies in developing, teacher 
        advancement and retention initiatives that promote 
        professional growth and emphasize multiple career paths 
        (such as paths to becoming a highly qualified mentor 
        teacher or exemplary teacher) and pay differentiation.
          (7) Teacher removal.--Developing and implementing 
        effective mechanisms to ensure that local educational 
        agencies and schools are able to remove expeditiously 
        incompetent or unqualified teachers consistent with 
        procedures to ensure due process for the teachers.
          (8) Technical assistance.--Providing technical 
        assistance to low-performing teacher preparation 
        programs within institutions of higher education 
        identified under section 208(a).
          (9) Teacher effectiveness.--Developing--
                  (A) systems to measure the effectiveness of 
                teacher preparation programs and professional 
                development programs; and
                  (B) strategies to document gains in student 
                academic achievement or increases in teacher 
                mastery of the academic subjects the teachers 
                teach as a result of such programs.
          (10) Teacher recruitment and retention.--Undertaking 
        activities that--
                  (A) develop and implement effective 
                mechanisms to ensure that local educational 
                agencies and schools are able effectively to 
                recruit and retain highly qualified teachers; 
                or
                  (B) are described in section 204(d).
          (11) Early childhood educator.--Developing 
        strategies--
                  (A) to improve the qualifications of 
                preschool teachers, which may include State 
                certification for such teachers;
                  (B) to improve and expand preschool teacher 
                preparation programs; and
                  (C) to reduce unnecessary burdens to the 
                attainment of a bachelor's degree in early 
                childhood education and increase the number of 
                bilingual early childhood educators, which may 
                include developing articulation agreements 
                between institutions of higher education.
          (12) Gifted and talented students.--Incorporating the 
        learning needs of gifted and talented students into the 
        activities described in paragraph (1), (2), or (3) in 
        order to ensure that new teachers possess the basic 
        knowledge and skills necessary to meet the educational 
        needs of gifted and talented students.
          (13) New-teacher mentoring on the needs of gifted and 
        talented students.-- Establishing or expanding new-
        teacher mentoring and assessment programs (including 
        induction and evaluation programs) that are a part of a 
        licensure process which is designed to demonstrate that 
        new teachers possess basic knowledge of the classroom 
        indicators of giftedness, are able to identify student 
        learning differences among gifted students, and are 
        able to provide instruction to accommodate such 
        differences.
          (14) Special education, math, and science faculty.--
        Supporting the development of new special education, 
        math, and science faculty positions in institutions of 
        higher education dedicated to the preparation of highly 
        qualified special education, math, and science teachers 
        (as defined by section 9101 of the Elementary and 
        Secondary Education Act or section 602 of the 
        Individuals with Disabilities Education Act), with 
        matching funds from institutions of higher education 
        and a commitment to continue new faculty positions when 
        Federal funding ends.
          (15) Subject area evaluation.--Assessing the 
        performance of teacher preparation programs within 
        institutions of higher education in the State using an 
        assessment which provides comparisons across such 
        schools in the State based upon indicators including 
        teacher candidate knowledge in subject areas in which 
        such candidate has been prepared to teach. Such 
        information shall be made publicly available and widely 
        disseminated.
  (e) Evaluation.--
          (1) Evaluation system.--An eligible State that 
        receives a grant under this section shall develop and 
        utilize a system to evaluate annually the effectiveness 
        of teacher preparation programs and professional 
        development activities within the State in producing 
        gains in--
                  (A) the teacher's annual contribution to 
                improving student academic achievement, as 
                measured by State academic assessments required 
                under section 1111(b)(3) of the Elementary and 
                Secondary Education Act of 1965 (20 U.S.C. 
                6311(b)(3)); and
                  (B) teacher mastery of the academic subjects 
                they teach, as measured by pre- and post-
                participation tests of teacher knowledge, as 
                appropriate.
          (2) Use of evaluation system.--Such evaluation system 
        shall be used by the State to evaluate--
                  (A) activities carried out using funds 
                provided under this section; and
                  (B) the quality of its teacher education 
                programs.
          (3) Public reporting.--The State shall make the 
        information described in paragraph (1) widely available 
        through public means, such as posting on the Internet, 
        distribution to the media, and distribution through 
        public agencies.

SEC. 203. PARTNERSHIP GRANTS.

  (a) Grants.--From amounts made available under section 210(2) 
for a fiscal year, the Secretary is authorized to award grants 
under this section, on a competitive basis, to eligible 
partnerships to enable the eligible partnerships to carry out 
the activities described in subsections (d) and (e).
  (b) Definitions.--
          (1) Eligible partnerships.--In this part, the term 
        ``eligible partnership'' means an entity that--
                  (A) shall include--
                          (i) a partner institution;
                          (ii) a school of arts and sciences;
                          (iii) a high-need local educational 
                        agency; and
                          (iv) a public or private educational 
                        organization; and
                  (B) may include a Governor, State educational 
                agency, the State board of education, the State 
                agency for higher education, an institution of 
                higher education not described in subparagraph 
                (A), a public charter school, a public or 
                private elementary school or secondary school, 
                a public or private educational organization, a 
                business, a science-, mathematics-, or 
                technology-oriented entity, a faith-based or 
                community organization, a prekindergarten 
                program, a teacher organization, an education 
                service agency, a consortia of local 
                educational agencies, or a nonprofit 
                telecommunications entity.
          (2) Partner institution.--In this section, the term 
        ``partner institution'' means an institution of higher 
        education, the teacher training program of which 
        demonstrates that--
                  (A) graduates from the teacher training 
                program exhibit strong performance on State-
                determined qualifying assessments for new 
                teachers through--
                          (i) demonstrating that the graduates 
                        of the program who intend to enter the 
                        field of teaching have passed all of 
                        the applicable State qualification 
                        assessments for new teachers, which 
                        shall include an assessment of each 
                        prospective teacher's subject matter 
                        knowledge in the content area or areas 
                        in which the teacher intends to teach; 
                        or
                          (ii) being ranked among the highest-
                        performing teacher preparation programs 
                        in the State as determined by the 
                        State--
                                  (I) using criteria consistent 
                                with the requirements for the 
                                State report card under section 
                                207(a); and
                                  (II) using the State report 
                                card on teacher preparation 
                                required under section 207(a); 
                                or
                  (B) the teacher training program requires all 
                the students of the program to participate in 
                intensive clinical experience, to meet high 
                academic standards, and--
                          (i) in the case of secondary school 
                        candidates, to successfully complete an 
                        academic major in the subject area in 
                        which the candidate intends to teach or 
                        to demonstrate competence through a 
                        high level of performance in relevant 
                        content areas; and
                          (ii) in the case of elementary school 
                        candidates, to successfully complete an 
                        academic major in the arts and sciences 
                        or to demonstrate competence through a 
                        high level of performance in core 
                        academic subject areas.
  (c) Application.--Each eligible partnership 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 such application 
shall--
          (1) contain a needs assessment of all the partners 
        with respect to teaching and learning and a description 
        of how the partnership will coordinate with other 
        teacher training or professional development programs, 
        and how the activities of the partnership will be 
        consistent with State, local, and other education 
        reform activities that promote student academic 
        achievement;
          (2) contain a resource assessment that describes the 
        resources available to the partnership, the intended 
        use of the grant funds, including a description of how 
        the grant funds will be used in accordance with 
        subsection (f), and the commitment of the resources of 
        the partnership to the activities assisted under this 
        part, including financial support, faculty 
        participation, time commitments, and continuation of 
        the activities when the grant ends;
          (3) contain a description of--
                  (A) how the partnership will meet the 
                purposes of this part;
                  (B) how the partnership will carry out the 
                activities required under subsection (d) and 
                any permissible activities under subsection 
                (e);
                  (C) the partnership's evaluation plan 
                pursuant to section 206(b);
                  (D) how faculty of the teacher preparation 
                program at the partner institution will serve, 
                over the term of the grant, with highly 
                qualified teachers in the classrooms of the 
                high-need local educational agency included in 
                the partnership;
                  (E) how the partnership will ensure that 
                teachers, principals, and superintendents in 
                private elementary and secondary schools 
                located in the geographic areas served by an 
                eligible partnership under this section will 
                participate equitably in accordance with 
                section 9501 of the Elementary and Secondary 
                Education Act of 1965 (20 U.S.C. 7881);
                  (F) how the partnership will design and 
                implement a clinical program component that 
                includes close supervision of student teachers 
                by faculty of the teacher preparation program 
                at the partner institution and mentor teachers;
                  (G) how the partnership will design and 
                implement an induction program to support all 
                new teachers through the first 3 years of 
                teaching that includes mentors who are trained 
                and compensated by the partnership for their 
                work with new teachers; and
                  (H) how the partnership will collect, 
                analyze, and use data on the retention of all 
                teachers in schools located in the geographic 
                areas served by the partnership to evaluate the 
                effectiveness of its teacher support system; 
                and
          (4) contain a certification from the high-need local 
        educational agency included in the partnership that it 
        has reviewed the application and determined that the 
        grant proposed will comply with subsection (f).
  (d) Required Uses of Funds.--An eligible partnership that 
receives a grant under this section shall use the grant funds 
to reform teacher preparation requirements, to coordinate with 
State activities under section 2113(c) of the Elementary and 
Secondary Education Act of 1965 (20 U.S.C. 6613(c)), and to 
ensure that current and future teachers are highly qualified, 
by carrying out one or more of the following activities:
          (1) Reforms.--Implementing reforms within teacher 
        preparation programs to ensure that such programs are 
        preparing teachers who are highly qualified, are able 
        to understand scientifically based research and its 
        applicability, and are able to use advanced technology 
        effectively in the classroom, including use for 
        instructional techniques to improve student academic 
        achievement, by--
                  (A) retraining faculty; and
                  (B) designing (or redesigning) teacher 
                preparation programs so they--
                          (i) are based on rigorous academic 
                        content, scientifically based research 
                        (including scientifically based reading 
                        research), and challenging State 
                        student academic content standards; and
                          (ii) promote strong teaching skills.
          (2) Clinical experience and interaction.--Providing 
        sustained and high-quality preservice and in-service 
        clinical experience, including the mentoring of 
        prospective teachers by exemplary teachers, 
        substantially increasing interaction between faculty at 
        institutions of higher education and new and 
        experienced teachers, principals, and other 
        administrators at elementary schools or secondary 
        schools, and providing support for teachers, including 
        preparation time and release time, for such 
        interaction.
          (3) Professional development.--Creating 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, and that promotes strong 
        teaching skills.
          (4) Teacher preparation.--Developing, or assisting 
        local educational agencies in developing, professional 
        development activities that--
                  (A) provide training in how to teach and 
                address the needs of students with different 
                learning styles, particularly students with 
                disabilities, limited English proficient 
                students, gifted and talented students, and 
                students with special learning needs; and
                  (B) provide training in methods of--
                          (i) improving student behavior in the 
                        classroom; and
                          (ii) identifying early and 
                        appropriate interventions to help 
                        students described in subparagraph (A) 
                        learn.
  (e) Allowable Uses of Funds.--An eligible partnership that 
receives a grant under this section may use such funds to carry 
out the following activities:
          (1) Alternatives to traditional teacher preparation 
        and state certification.--Providing prospective 
        teachers with alternative routes to State certification 
        and traditional preparation to become highly qualified 
        teachers through--
                  (A) innovative approaches that reduce 
                unnecessary barriers to teacher preparation 
                producing highly qualified teachers, which may 
                include articulation agreements between 
                institutions of higher education;
                  (B) programs that provide support during a 
                teacher's initial years in the profession; and
                  (C) alternative routes to State certification 
                of teachers for qualified individuals, 
                including mid-career professionals from other 
                occupations, former military personnel, and 
                recent college graduates with records of 
                academic distinction.
          (2) Dissemination and coordination.--Broadly 
        disseminating information on effective practices used 
        by the partnership, and coordinating with the 
        activities of the Governor, State board of education, 
        State higher education agency, and State educational 
        agency, as appropriate.
          (3) Managerial and leadership skills.--Developing and 
        implementing professional development programs for 
        principals and superintendents that enable them to be 
        effective school leaders and prepare all students to 
        meet challenging State academic content and student 
        academic achievement standards.
          (4) Teacher recruitment.--Activities--
                  (A) to encourage students to become highly 
                qualified teachers, such as extracurricular 
                enrichment activities; and
                  (B) activities described in section 204(d).
          (5) Clinical experience in science, mathematics, and 
        technology.--Creating opportunities for clinical 
        experience and training, by participation in the 
        business, research, and work environments with 
        professionals, in areas relating to science, 
        mathematics, and technology for teachers and 
        prospective teachers, including opportunities for use 
        of laboratory equipment, in order for the teacher to 
        return to the classroom for at least 2 years and 
        provide instruction that will raise student academic 
        achievement.
          (6) Coordination with community colleges.--
        Coordinating with community colleges to implement 
        teacher preparation programs, including through 
        distance learning or articulation agreements, for the 
        purposes of allowing prospective teachers--
                  (A) to attain a bachelor's degree and State 
                certification or licensure; and
                  (B) to become highly qualified teachers.
          (7) Teacher mentoring.--Establishing or implementing 
        a teacher mentoring program that--
                  (A) includes minimum qualifications for 
                mentors;
                  (B) provides training and stipends for 
                mentors;
                  (C) provides mentoring programs for teachers 
                in their first 3 years of teaching;
                  (D) provides regular and ongoing 
                opportunities for mentors and mentees to 
                observe each other's teaching methods in 
                classroom settings during the school day;
                  (E) establishes an evaluation and 
                accountability plan for activities conducted 
                under this paragraph that includes rigorous 
                objectives to measure the impact of such 
                activities; and
                  (F) provides for a report to the Secretary on 
                an annual basis regarding the partnership's 
                progress in meeting the objectives described in 
                subparagraph (E).
          (8) Computer software for multilingual education.--
        Training teachers to use computer software for 
        multilingual education to address the needs of limited 
        English proficient students.
          (9) Gifted and talented students.--Increasing the 
        knowledge and skills of preservice teachers 
        participating in activities under subsection (d) in the 
        educational and related needs of gifted and talented 
        students by, among other strategies, infusing teacher 
        coursework with units on the characteristics of high-
        ability learners, using assessments to identify 
        preexisting knowledge and skills among students, and 
        developing teaching strategies that are driven by the 
        learner's progress.
          (10) Reducing the shortage of highly qualified 
        special education, math, and science teachers.--
        Increasing the number of highly qualified special 
        education, math, and science teachers (as defined by 
        section 9101 of the Elementary and Secondary Education 
        Act or section 602 of the Individuals with Disabilities 
        Education Act) through such activities as recruitment, 
        scholarships for tuition, and new teacher mentoring.
  (f) Special Rule.--At least 50 percent of the funds made 
available to an eligible partnership under this section shall 
be used directly to benefit the high-need local educational 
agency included in the partnership. Any entity described in 
subsection (b)(1)(A) may be the fiscal agent under this 
section.
  (g) Construction.--Nothing in this section shall be construed 
to prohibit an eligible partnership from using grant funds to 
coordinate with the activities of more than one Governor, State 
board of education, State educational agency, local educational 
agency, or State agency for higher education.
  (h) Supplement, not Supplant.--Funds made available under 
this section shall be used to supplement, and not supplant, 
other Federal, State, and local funds that would otherwise be 
expended to carry out the purposes of this section.

SEC. 204. TEACHER RECRUITMENT GRANTS.

  (a) Program Authorized.--From amounts made available under 
section 210(3) for a fiscal year, the Secretary is authorized 
to award grants, on a competitive basis, to eligible applicants 
to enable the eligible applicants to carry out activities 
described in subsection (d).
  (b) Eligible Applicant Defined.--In this part, the term 
``eligible applicant'' means--
          (1) an eligible State described in section 202(b); or
          (2) an eligible partnership described in section 
        203(b).
  (c) Application.--Any eligible applicant desiring to receive 
a grant under this section shall submit an application to the 
Secretary at such time, in such form, and containing such 
information as the Secretary may require, including--
          (1) a description of the assessment that the eligible 
        applicant, and the other entities with whom the 
        eligible applicant will carry out the grant activities, 
        have undertaken to determine the most critical needs of 
        the participating high-need local educational agencies;
          (2) a description of the activities the eligible 
        applicant will carry out with the grant, including the 
        extent to which the applicant will use funds to recruit 
        minority students to become highly qualified teachers; 
        and
          (3) a description of the eligible applicant's plan 
        for continuing the activities carried out with the 
        grant, once Federal funding ceases.
  (d) Uses of Funds.--Each eligible applicant receiving a grant 
under this section shall use the grant funds--
          (1)(A) to award scholarships to help students, such 
        as individuals who have been accepted for their first 
        year, or who are enrolled in their first or second 
        year, of a program of undergraduate education at an 
        institution of higher education, pay the costs of 
        tuition, room, board, and other expenses of completing 
        a teacher preparation program;
          (B) to provide support services, if needed to enable 
        scholarship recipients--
                  (i) to complete postsecondary education 
                programs; or
                  (ii) to transition from a career outside of 
                the field of education into a teaching career; 
                and
          (C) for followup services provided to former 
        scholarship recipients during the recipients first 3 
        years of teaching; or
          (2) to develop and implement effective mechanisms to 
        ensure that high-need local educational agencies and 
        schools are able effectively to recruit highly 
        qualified teachers.
  (e) Additional Discretionary Uses of Funds.--In addition to 
the uses described in subsection (d), each eligible applicant 
receiving a grant under this section may use the grant funds--
          (1) to develop and implement effective mechanisms to 
        recruit into the teaching profession employees from--
                  (A) high-demand industries, including 
                technology industries; and
                  (B) the fields of science, mathematics, and 
                engineering;
          (2) to conduct outreach and coordinate with inner 
        city and rural secondary schools to encourage students 
        to pursue teaching as a career;
          (3) to develop and implement dual degree programs 
        that enable students at institutions of higher 
        education to earn two undergraduate degrees 
        concurrently, one of such degrees being in education 
        and the other in the subject matter of the student's 
        choosing; and
          (4) to recruit high achieving students, bilingual 
        students, and other qualified candidates into early 
        childhood education programs.
  (f) Service Requirements.--
          (1) In general.--The Secretary shall establish such 
        requirements as the Secretary determines necessary to 
        ensure that recipients of scholarships under this 
        section who complete teacher education programs--
                  (A) subsequently teach in a high-need local 
                educational agency for a period of time 
                equivalent to--
                          (i) one year; increased by
                          (ii) the period for which the 
                        recipient received scholarship 
                        assistance; or
                  (B) repay the amount of the scholarship.
          (2) Use of repayments.--The Secretary shall use any 
        such repayments to carry out additional activities 
        under this section.
  (g) Priority.--The Secretary shall give priority under this 
section to eligible applicants who provide an assurance that 
they will recruit a high percentage of minority students to 
become highly qualified teachers.

SEC. 205. ADMINISTRATIVE PROVISIONS.

  (a) Duration; One-Time Awards; Payments.--
          (1) Duration.--
                  (A) Eligible states and eligible 
                applicants.--Grants awarded to eligible States 
                and eligible applicants under this part shall 
                be awarded for a period not to exceed 3 years.
                  (B) Eligible partnerships.--Grants awarded to 
                eligible partnerships under this part shall be 
                awarded for a period of 5 years.
          (2) One-time award.--An eligible partnership may 
        receive a grant under each of sections 203 and 204, as 
        amended by the College Access and Opportunity Act of 
        2005, only once.
          (3) Payments.--The Secretary shall make annual 
        payments of grant funds awarded under this part.
  (b) Peer Review.--
          (1) Panel.--The Secretary shall provide the 
        applications submitted under this part 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.
          (2) Priority.--In recommending applications to the 
        Secretary for funding under this part, the panel 
        shall--
                  (A) with respect to grants under section 202, 
                give priority to eligible States that--
                          (i) have initiatives to reform State 
                        teacher certification requirements that 
                        are based on rigorous academic content, 
                        scientifically based research, 
                        including scientifically based reading 
                        research, and challenging State student 
                        academic content standards;
                          (ii) have innovative reforms to hold 
                        institutions of higher education with 
                        teacher preparation programs 
                        accountable for preparing teachers who 
                        are highly qualified and have strong 
                        teaching skills; or
                          (iii) have innovative efforts aimed 
                        at reducing the shortage of highly 
                        qualified teachers in high poverty 
                        urban and rural areas; and
                  (B) with respect to grants under section 
                203--
                          (i) give priority to applications 
                        from broad-based eligible partnerships 
                        that involve businesses and community 
                        organizations; and
                          (ii) take into consideration--
                                  (I) providing an equitable 
                                geographic distribution of the 
                                grants throughout the United 
                                States; and
                                  (II) the potential of the 
                                proposed activities for 
                                creating improvement and 
                                positive change.
          (3) Secretarial selection.--The Secretary shall 
        determine, based on the peer review process, which 
        application shall receive funding and the amounts of 
        the grants. In determining grant amounts, the Secretary 
        shall take into account the total amount of funds 
        available for all grants under this part and the types 
        of activities proposed to be carried out.
  (c) Matching Requirements.--
          (1) State grants.--Each eligible State receiving a 
        grant under section 202 or 204 shall provide, from non-
        Federal sources, an amount equal to 50 percent of the 
        amount of the grant (in cash or in kind) to carry out 
        the activities supported by the grant.
          (2) Partnership grants.--Each eligible partnership 
        receiving a grant under section 203 or 204 shall 
        provide, from non-Federal sources (in cash or in kind), 
        an amount equal to 25 percent of the grant for the 
        first year of the grant, 35 percent of the grant for 
        the second year of the grant, and 50 percent of the 
        grant for each succeeding year of the grant.
  (d) Limitation on Administrative Expenses.--An eligible State 
or eligible partnership that receives a grant under this part 
may not use more than 2 percent of the grant funds for purposes 
of administering the grant.

SEC. 206. ACCOUNTABILITY AND EVALUATION.

  (a) State Grant Accountability Report.--An eligible State 
that receives a grant under section 202 shall submit an annual 
accountability report to the Secretary and the authorizing 
committees. Such report shall include a description of the 
degree to which the eligible State, in using funds provided 
under such section, has made substantial progress in meeting 
the following goals:
          (1) Percentage of highly qualified teachers.--
        Increasing the percentage of highly qualified teachers 
        in the State as required by section 1119 of the 
        Elementary and Secondary Education Act of 1965 (20 
        U.S.C. 6319) and section 602 of the Individuals with 
        Disabilities Act (20 U.S.C. 1401).
          (2) Student academic achievement.--Increasing student 
        academic achievement for all students, which may be 
        measured through the use of value-added assessments, as 
        defined by the eligible State.
          (3) Raising standards.--Raising the State academic 
        standards required to enter the teaching profession as 
        a highly qualified teacher.
          (4) Initial certification or licensure.--Increasing 
        success in the pass rate for initial State teacher 
        certification or licensure, or increasing the numbers 
        of qualified individuals being certified or licensed as 
        teachers through alternative routes to certification 
        and licensure.
          (5) Decreasing teacher shortages.--Decreasing 
        shortages of highly qualified teachers in poor urban 
        and rural areas.
          (6) Increasing opportunities for research-based 
        professional development.--Increasing opportunities for 
        enhanced and ongoing professional development that--
                  (A) improves the academic content knowledge 
                of teachers in the subject areas in which the 
                teachers are certified or licensed to teach or 
                in which the teachers are working toward 
                certification or licensure to teach; and
                  (B) promotes strong teaching skills.
          (7) Technology integration.--Increasing the number of 
        teachers prepared effectively to integrate technology 
        into curricula and instruction and who use technology 
        to collect, manage, and analyze data to improve 
        teaching, learning, decisionmaking, and parental 
        involvement for the purpose of increasing student 
        academic achievement.
  (b) Eligible Partnership Evaluation.--Each eligible 
partnership applying for a grant under section 203 shall 
establish, and include in the application submitted under 
section 203(c), an evaluation plan that includes strong 
performance objectives. The plan shall include objectives and 
measures for--
          (1) increased student achievement for all students, 
        as measured by the partnership;
          (2) increased teacher retention in the first 3 years 
        of a teacher's career;
          (3) increased success in the pass rate for initial 
        State certification or licensure of teachers;
          (4) increased percentage of highly qualified 
        teachers; and
          (5) increasing the number of teachers trained 
        effectively to integrate technology into curricula and 
        instruction and who use technology to collect, manage, 
        and analyze data to improve teaching, learning, and 
        decisionmaking for the purpose of improving student 
        academic achievement.
  (c) Revocation of Grant.--
          (1) Report.--Each eligible State or eligible 
        partnership receiving a grant under section 202 or 203 
        shall report annually on the progress of the eligible 
        State or eligible partnership toward meeting the 
        purposes of this part and the goals, objectives, and 
        measures described in subsections (a) and (b).
          (2) Revocation.--
                  (A) Eligible states and eligible 
                applicants.--If the Secretary determines that 
                an eligible State or eligible applicant is not 
                making substantial progress in meeting the 
                purposes, goals, objectives, and measures, as 
                appropriate, by the end of the second year of a 
                grant under this part, then the grant payment 
                shall not be made for the third year of the 
                grant.
                  (B) Eligible partnerships.--If the Secretary 
                determines that an eligible partnership is not 
                making substantial progress in meeting the 
                purposes, goals, objectives, and measures, as 
                appropriate, by the end of the third year of a 
                grant under this part, then the grant payments 
                shall not be made for any succeeding year of 
                the grant.
  (d) Evaluation and Dissemination.--The Secretary shall 
evaluate the activities funded under this part and report 
annually the Secretary's findings regarding the activities to 
the authorizing committees. The Secretary shall broadly 
disseminate successful practices developed by eligible States 
and eligible partnerships under this part, and shall broadly 
disseminate information regarding such practices that were 
found to be ineffective.

SEC. 207. ACCOUNTABILITY FOR PROGRAMS THAT PREPARE TEACHERS.

  (a) State Report Card on the Quality of Teacher 
Preparation.--Each State that receives funds under this Act 
shall provide to the Secretary annually, in a uniform and 
comprehensible manner that conforms with the definitions and 
methods established by the Secretary, a State report card on 
the quality of teacher preparation in the State, both for 
traditional certification or licensure programs and for 
alternative certification or licensure programs, which shall 
include at least the following:
          (1) A description of the teacher certification and 
        licensure assessments, and any other certification and 
        licensure requirements, used by the State.
          (2) The standards and criteria that prospective 
        teachers must meet in order to attain initial teacher 
        certification or licensure and to be certified or 
        licensed to teach particular subjects or in particular 
        grades within the State.
          (3) A description of the extent to which the 
        assessments and requirements described in paragraph (1) 
        are aligned with the State's standards and assessments 
        for students.
          (4) The percentage of students who have completed at 
        least 50 percent of the requirements for a teacher 
        preparation program at an institution of higher 
        education or alternative certification program and who 
        have taken and passed each of the assessments used by 
        the State for teacher certification and licensure, and 
        the passing score on each assessment that determines 
        whether a candidate has passed that assessment.
          (5) For students who have completed at least 50 
        percent of the requirements for a teacher preparation 
        program at an institution of higher education or 
        alternative certification program, and who have taken 
        and passed each of the assessments used by the State 
        for teacher certification and licensure, each such 
        institution's and each such program's average raw 
        score, ranked by teacher preparation program, which 
        shall be made available widely and publicly.
          (6) A description of each State's alternative routes 
        to teacher certification, if any, and the number and 
        percentage of teachers certified through each 
        alternative certification route who pass State teacher 
        certification or licensure assessments.
          (7) For each State, a description of proposed 
        criteria for assessing the performance of teacher 
        preparation programs in the State, including indicators 
        of teacher candidate skills, academic content 
        knowledge, and evidence of gains in student academic 
        achievement.
          (8) For each teacher preparation program in the 
        State, the number of students in the program, the 
        number of minority students in the program, the average 
        number of hours of supervised practice teaching 
        required for those in the program, and the number of 
        full-time equivalent faculty and students in supervised 
        practice teaching.
  (b) Report of the Secretary on the Quality of Teacher 
Preparation.--
          (1) Report card.--The Secretary shall provide to 
        Congress, and publish and make widely available, a 
        report card on teacher qualifications and preparation 
        in the United States, including all the information 
        reported in paragraphs (1) through (8) of subsection 
        (a). Such report shall identify which eligible States 
        received a grant under this part, and the States in 
        which eligible partnerships receiving grants are 
        located. Such report shall be published and made 
        available annually.
          (2) Report to congress.--The Secretary shall report 
        to Congress--
                  (A) a comparison of States' efforts to 
                improve teaching quality; and
                  (B) regarding the national mean and median 
                scores on any standardized test that is used in 
                more than one State for teacher certification 
                or licensure.
          (3) Special rule.--In the case of programs with fewer 
        than 10 students who have completed at least 50 percent 
        of the requirements for a teacher preparation program 
        taking any single initial teacher certification or 
        licensure assessment during an academic year, the 
        Secretary shall collect and publish information with 
        respect to an average pass rate on State certification 
        or licensure assessments taken over a 3-year period.
  (c) Coordination.--The Secretary, to the extent practicable, 
shall coordinate the information collected and published under 
this part among States for individuals who took State teacher 
certification or licensure assessments in a State other than 
the State in which the individual received the individual's 
most recent degree.
  (d) Institution and Program Report Cards on Quality of 
Teacher Preparation.--
          (1) Report card.--Each institution of higher 
        education or alternative certification program that 
        conducts a teacher preparation program that enrolls 
        students receiving Federal assistance under this Act 
        shall report annually to the State and the general 
        public, in a uniform and comprehensible manner that 
        conforms with the definitions and methods established 
        by the Secretary, both for traditional certification or 
        licensure programs and for alternative certification or 
        licensure programs, the following information:
                  (A) Pass rate.--(i) For the most recent year 
                for which the information is available, the 
                pass rate of each student who has completed at 
                least 50 percent of the requirements for the 
                teacher preparation program on the teacher 
                certification or licensure assessments of the 
                State in which the institution is located, but 
                only for those students who took those 
                assessments within 3 years of receiving a 
                degree from the institution or completing the 
                program.
                  (ii) A comparison of the institution or 
                program's pass rate for students who have 
                completed at least 50 percent of the 
                requirements for the teacher preparation 
                program with the average pass rate for 
                institutions and programs in the State.
                  (iii) A comparison of the institution or 
                program's average raw score for students who 
                have completed at least 50 percent of the 
                requirements for the teacher preparation 
                program with the average raw scores for 
                institutions and programs in the State.
                  (iv) In the case of programs with fewer than 
                10 students who have completed at least 50 
                percent of the requirements for a teacher 
                preparation program taking any single initial 
                teacher certification or licensure assessment 
                during an academic year, the institution shall 
                collect and publish information with respect to 
                an average pass rate on State certification or 
                licensure assessments taken over a 3-year 
                period.
                  (B) Program information.--The number of 
                students in the program, the average number of 
                hours of supervised practice teaching required 
                for those in the program, and the number of 
                full-time equivalent faculty and students in 
                supervised practice teaching.
                  (C) Statement.--In States that require 
                approval or accreditation of teacher education 
                programs, a statement of whether the 
                institution's program is so approved or 
                accredited, and by whom.
                  (D) Designation as low-performing.--Whether 
                the program has been designated as low-
                performing by the State under section 208(a).
          (2) Requirement.--The information described in 
        paragraph (1) shall be reported through publications 
        such as school catalogs and promotional materials sent 
        to potential applicants, secondary school guidance 
        counselors, and prospective employers of the 
        institution's program graduates, including materials 
        sent by electronic means.
          (3) Fines.--In addition to the actions authorized in 
        section 487(c), the Secretary may impose a fine not to 
        exceed $25,000 on an institution of higher education 
        for failure to provide the information described in 
        this subsection in a timely or accurate manner.
  (e) Data Quality.--Either--
          (1) the Governor of the State; or
          (2) in the case of a State for which the constitution 
        or law of such State designates another individual, 
        entity, or agency in the State to be responsible for 
        teacher certification and preparation activity, such 
        individual, entity, or agency;
shall attest annually, in writing, as to the reliability, 
validity, integrity, and accuracy of the data submitted 
pursuant to this section.

SEC. 208. STATE FUNCTIONS.

  (a) State Assessment.--In order to receive funds under this 
Act, a State shall have in place a procedure to identify and 
assist, through the provision of technical assistance, low-
performing programs of teacher preparation within institutions 
of higher education. Such State shall provide the Secretary an 
annual list of such low-performing institutions that includes 
an identification of those institutions at risk of being placed 
on such list. Such levels of performance shall be determined 
solely by the State and may include criteria based upon 
information collected pursuant to this part. Such assessment 
shall be described in the report under section 207(a). A State 
receiving Federal funds under this title shall develop plans to 
close or reconstitute underperforming programs of teacher 
preparation within institutions of higher education.
  (b) Termination of Eligibility.--Any institution of higher 
education that offers a program of teacher preparation in which 
the State has withdrawn the State's approval or terminated the 
State's financial support due to the low performance of the 
institution's teacher preparation program based upon the State 
assessment described in subsection (a)--
          (1) shall be ineligible for any funding for 
        professional development activities awarded by the 
        Department of Education; and
          (2) shall not be permitted to accept or enroll any 
        student who receives aid under title IV of this Act in 
        the institution's teacher preparation program.

SEC. 209. GENERAL PROVISIONS.

  (a) Methods.--In complying with sections 207 and 208, the 
Secretary shall ensure that States and institutions of higher 
education use fair and equitable methods in reporting and that 
the reporting methods do not allow identification of 
individuals.
  (b) Special Rule.--For each State in which there are no State 
certification or licensure assessments, or for States that do 
not set minimum performance levels on those assessments--
          (1) the Secretary shall, to the extent practicable, 
        collect data comparable to the data required under this 
        part from States, local educational agencies, 
        institutions of higher education, or other entities 
        that administer such assessments to teachers or 
        prospective teachers; and
          (2) notwithstanding any other provision of this part, 
        the Secretary shall use such data to carry out 
        requirements of this part related to assessments or 
        pass rates.
  (c) Limitations.--
          (1) Federal control prohibited.--Nothing in this part 
        shall be construed to permit, allow, encourage, or 
        authorize any Federal control over any aspect of any 
        private, religious, or home school, whether or not a 
        home school is treated as a private school or home 
        school under State law. This section shall not be 
        construed to prohibit private, religious, or home 
        schools from participation in programs or services 
        under this part.
          (2) No change in state control encouraged or 
        required.--Nothing in this part shall be construed to 
        encourage or require any change in a State's treatment 
        of any private, religious, or home school, whether or 
        not a home school is treated as a private school or 
        home school under State law.
          (3) National system of teacher certification 
        prohibited.--Nothing in this part shall be construed to 
        permit, allow, encourage, or authorize the Secretary to 
        establish or support any national system of teacher 
        certification.

SEC. 210. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated to carry out this 
part $300,000,000 for fiscal year 2006 and such sums as may be 
necessary for each of the 5 succeeding fiscal years, of which--
          (1) 45 percent shall be available for each fiscal 
        year to award grants under section 202;
          (2) 45 percent shall be available for each fiscal 
        year to award grants under section 203; and
          (3) 10 percent shall be available for each fiscal 
        year to award grants under section 204.

PART B--PREPARING TOMORROW'S TEACHERS TO USE TECHNOLOGY

           *       *       *       *       *       *       *


SEC. 222. ELIGIBILITY.

  (a) Eligible Applicants.--In order to receive a grant or 
enter into a contract or cooperative agreement under this part, 
an applicant shall be a consortium that includes the following:
          (1) * * *

           *       *       *       *       *       *       *

          (3) One or more of the following entities:
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) A professional association, foundation, 
                museum, library, for-profit business, public or 
                private nonprofit organization, community-based 
                organization, nonprofit telecommunications 
                entity, or other entity, with the capacity to 
                contribute to the technology-related reform of 
                teacher preparation programs.

           *       *       *       *       *       *       *


SEC. 223. USE OF FUNDS.

  (a) * * *
  (b) Permissible Uses.--The consortium may use funds made 
available under this part for a project, described in the 
application submitted by the consortium under this part, that 
carries out the purpose of this part, such as the following:
          (1) Developing and implementing high-quality teacher 
        preparation programs that enable educators--
                  (A) * * *

           *       *       *       *       *       *       *

                  [(E) to use technology to collect, manage, 
                and analyze data to improve teaching and 
                decisionmaking.]
                  (E) to use technology to collect, manage, and 
                analyze data to improve teaching, learning, and 
                decisionmaking for the purpose of increasing 
                student academic achievement.

           *       *       *       *       *       *       *


SEC. 224. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated to carry out this 
part such sums as may be necessary for [each of fiscal years 
2002 and 2003.] fiscal year 2006 and each of the 5 succeeding 
fiscal years.

                     PART C--CENTERS OF EXCELLENCE

SEC. 231. PURPOSES; DEFINITIONS.

  (a) Purposes.--The purposes of this part are--
          (1) to help recruit and prepare teachers, including 
        minority teachers, to meet the national demand for a 
        highly qualified teacher in every classroom; and
          (2) to increase opportunities for Americans of all 
        educational, ethnic, class, and geographic backgrounds 
        to become highly qualified teachers.
  (b) Definitions.--As used in this part:
          (1) Eligible institution.--The term ``eligible 
        institution'' means--
                  (A) an institution of higher education that 
                has a teacher preparation program that meets 
                the requirements of section 203(b)(2) and that 
                is--
                          (i) a part B institution (as defined 
                        in section 322);
                          (ii) a Hispanic-serving institution 
                        (as defined in section 502);
                          (iii) a Tribal College or University 
                        (as defined in section 316);
                          (iv) an Alaska Native-serving 
                        institution (as defined in section 
                        317(b)); or
                          (v) a Native Hawaiian-serving 
                        institution (as defined in section 
                        317(b));
                  (B) a consortium of institutions described in 
                subparagraph (A); or
                  (C) an institution described in subparagraph 
                (A), or a consortium described in subparagraph 
                (B), in partnership with any other institution 
                of higher education, but only if the center of 
                excellence established under section 232 is 
                located at an institution described in 
                subparagraph (A).
          (2) Highly qualified.--The term ``highly qualified'' 
        when used with respect to an individual means that the 
        individual is highly qualified as determined under 
        section 9101 of the Elementary and Secondary Education 
        Act of 1965 (20 U.S.C. 7801) or section 602 of the 
        Individuals with Disabilities Education Act (20 U.S.C. 
        1401).
          (3) Scientifically based reading research.--The term 
        ``scientifically based reading research'' has the 
        meaning given such term in section 1208 of the 
        Elementary and Secondary Education Act of 1965 (20 
        U.S.C. 6368).
          (4) Scientifically based research.--The term 
        ``scientifically based research'' has the meaning given 
        such term in section 9101 of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 7801).

SEC. 232. CENTERS OF EXCELLENCE.

  (a) Program Authorized.--From the amounts appropriated to 
carry out this part, the Secretary is authorized to award 
competitive grants to eligible institutions to establish 
centers of excellence.
  (b) Use of Funds.--Grants provided by the Secretary under 
this part shall be used to ensure that current and future 
teachers are highly qualified, by carrying out one or more of 
the following activities:
          (1) Implementing reforms within teacher preparation 
        programs to ensure that such programs are preparing 
        teachers who are highly qualified, are able to 
        understand scientifically based research, and are able 
        to use advanced technology effectively in the 
        classroom, including use for instructional techniques 
        to improve student academic achievement, by--
                  (A) retraining faculty; and
                  (B) designing (or redesigning) teacher 
                preparation programs that--
                          (i) prepare teachers to close student 
                        achievement gaps, are based on rigorous 
                        academic content, scientifically based 
                        research (including scientifically 
                        based reading research), and 
                        challenging State student academic 
                        content standards; and
                          (ii) promote strong teaching skills.
          (2) Providing sustained and high-quality preservice 
        clinical experience, including the mentoring of 
        prospective teachers by exemplary teachers, 
        substantially increasing interaction between faculty at 
        institutions of higher education and new and 
        experienced teachers, principals, and other 
        administrators at elementary schools or secondary 
        schools, and providing support, including preparation 
        time, for such interaction.
          (3) Developing and implementing initiatives to 
        promote retention of highly qualified teachers and 
        principals, including minority teachers and principals, 
        including programs that provide--
                  (A) teacher or principal mentoring from 
                exemplary teachers or principals; or
                  (B) induction and support for teachers and 
                principals during their first 3 years of 
                employment as teachers or principals, 
                respectively.
          (4) Awarding scholarships based on financial need to 
        help students pay the costs of tuition, room, board, 
        and other expenses of completing a teacher preparation 
        program.
          (5) Disseminating information on effective practices 
        for teacher preparation and successful teacher 
        certification and licensure assessment preparation 
        strategies.
          (6) Activities authorized under sections 202, 203, 
        and 204.
  (c) Application.--Any eligible institution desiring a grant 
under this section shall submit an application to the Secretary 
at such a time, in such a manner, and accompanied by such 
information the Secretary may require.
  (d) Minimum Grant Amount.--The minimum amount of each grant 
under this part shall be $500,000.
  (e) Limitation on Administrative Expenses.--An eligible 
institution that receives a grant under this part may not use 
more than 2 percent of the grant funds for purposes of 
administering the grant.
  (f) Regulations.--The Secretary shall prescribe such 
regulations as may be necessary to carry out this part.

SEC. 233. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated to carry out this 
part $10,000,000 for fiscal year 2006 and such sums as may be 
necessary for each of the 5 succeeding fiscal years.

                 PART D--TEACHER INCENTIVE FUND PROGRAM

SEC. 241. PURPOSE; DEFINITIONS.

  (a) Purpose.--The purpose of this part is to assist States, 
local educational agencies, and non-profit or for-profit 
organizations to develop and implement, or expand, innovative 
compensation systems to provide financial rewards for teachers 
and principals who raise student academic achievement and close 
the achievement gap, especially in the highest-need local 
educational agencies.
  (b) Definitions.--For purposes of this part:
          (1) Eligible entity.--The term ``eligible entity'' 
        means--
                  (A) a local educational agency, including a 
                charter school that is a local educational 
                agency;
                  (B) a State educational agency, or other 
                State agency designated by the chief executive 
                of the State; or
                  (C) a partnership of--
                          (i) one or more agencies described in 
                        subparagraph (A) or (B), or both; and
                          (ii) at least one non-profit or for-
                        profit organization.
          (2) High-need local educational agency.--The term 
        ``high-need local educational agency'' has the meaning 
        given that term in section 201.

SEC. 242. TEACHER INCENTIVE FUND GRANTS.

  (a) Program Authorized.--
          (1) In general.--From the amounts appropriated to 
        carry out this part, the Secretary is authorized to 
        award competitive grants of up to 5 years in length to 
        eligible entities to develop and implement, or expand, 
        a comprehensive performance-based compensation system 
        for teachers and principals for one or more local 
        educational agencies.
          (2) Comprehensive performance-based compensation 
        systems.--A comprehensive performance-based 
        compensation system developed and implemented, or 
        expanded with funds under this part--
                  (A) shall differentiate levels of 
                compensation primarily on the basis of 
                increases in student academic achievement; and
                  (B) may--
                          (i) differentiate levels of 
                        compensation on the basis of high-
                        quality teachers' and principals' 
                        employment and success in hard-to-staff 
                        schools or high-need subject areas; and
                          (ii) recognize teachers' and 
                        principals' skills and knowledge as 
                        demonstrated through--
                                  (I) successful fulfillment of 
                                additional responsibilities or 
                                job functions; and
                                  (II) evidence of high 
                                achievement and mastery of 
                                content knowledge and teaching 
                                skills.
  (b) Use of Funds.--A grantee shall use grant funds provided 
under this part only to design and implement, or expand, in 
collaboration with teachers, principals, other school 
administrators, and members of the public, a compensation 
system consistent with the requirements of this part. 
Authorized activities under this part may include the 
following:
          (1) Developing appraisal systems that reflect clear 
        and fair measures of student academic achievement.
          (2) Conducting outreach within the local educational 
        agency (or agencies) or the State to gain input on how 
        to construct the appraisal system and to develop 
        support for it.
          (3) Paying, as part of a comprehensive performance-
        based compensation system, bonuses and increased 
        salaries to teachers and principals who raise student 
        academic achievement, so long as the grantee uses an 
        increasing share of non-Federal funds to pay these 
        monetary rewards each year of the grant.
          (4) Paying, as part of a comprehensive performance-
        based compensation system, additional bonuses to 
        teachers who both raise student academic achievement 
        and either teach in high-poverty schools or teach 
        subjects that are difficult to staff, or both, so long 
        as the grantee uses an increasing share of non-Federal 
        funds to pay these monetary rewards each year of the 
        grant.
          (5) Paying, as part of a comprehensive performance-
        based compensation system, additional bonuses to 
        principals who both raise student academic achievement 
        and serve in high-poverty schools, so long as the 
        grantee uses an increasing share of non-Federal funds 
        to pay these monetary rewards each year of the grant.
  (c) Applications.--To be eligible to receive a grant under 
this part, an eligible entity shall submit an application that 
includes--
          (1) a description of the local educational agency or 
        local educational agencies to be served by the project, 
        including such demographic information as the Secretary 
        may request;
          (2) information on student academic achievement and 
        the quality of the teachers and principals in the local 
        educational agency or agencies to be served by the 
        project;
          (3) a description of the performance-based teacher 
        and principal compensation system that the applicant 
        proposes to develop and implement or expand;
          (4) a description of how the applicant will use grant 
        funds under this part in each year of the grant;
          (5) an explanation of how the applicant will meet the 
        requirement in subsection (b)(3) and how the grantee 
        will continue its performance-based compensation system 
        after the grant ends;
          (6) a description of the support and commitment from 
        teachers, the community or local educational agency or 
        agencies for the development and implementation, or 
        expansion, of a performance-based teacher and principal 
        compensation system;
          (7) a description of how teacher, principal and 
        student performance will be measured and the baseline 
        measurement units; and
          (8) a description, if applicable, of how the 
        applicant will define the term ``high-quality'' for the 
        purposes of subsection (a)(2)(B)(i), through the use of 
        measurable indicators, such as effectiveness in raising 
        student academic achievement, or demonstrated mastery 
        of subject matter knowledge.
  (d) Priority.--The Secretary shall give priority to 
applications for projects that would establish comprehensive 
performance-based compensation systems in high-need local 
educational agencies.

SEC. 243. EVALUATIONS.

  The Secretary shall conduct an independent evaluation of the 
program under this part and may use up to 1 percent of the 
funds made available under this part or $1,000,000, whichever 
is less, for any fiscal year for the cost of the evaluation.

SEC. 244. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated to carry out this 
part $100,000,000 for fiscal year 2006 and such sums as may be 
necessary for each of the 5 succeeding fiscal years.

TITLE III--INSTITUTIONAL AID

           *       *       *       *       *       *       *


                   Part A--Strengthening Institutions

SEC. 311. PROGRAM PURPOSE.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Authorized Activities.--Grants awarded under this section 
shall be used for 1 or more of the following activities:
          (1) * * *

           *       *       *       *       *       *       *

          (7) Education or counseling services designed to 
        improve the financial literacy and economic literacy of 
        students and, as appropriate, their parents.
          [(7)] (8) Funds management, administrative 
        management, and acquisition of equipment for use in 
        strengthening funds management.
          [(8)] (9) Joint use of facilities, such as 
        laboratories and libraries.
          [(9)] (10) Establishing or improving a development 
        office to strengthen or improve contributions from 
        alumni and the private sector.
          [(10)] (11) Establishing or improving an endowment 
        fund.
          [(11)] (12) Creating or improving facilities for 
        Internet or other distance learning academic 
        instruction capabilities, including purchase or rental 
        of telecommunications technology equipment or services.
          [(12)] (13) Other activities proposed in the 
        application submitted pursuant to subsection (c) that--
                  (A) * * *

           *       *       *       *       *       *       *


SEC. 312. DEFINITIONS; ELIGIBILITY.

  (a) * * *
  (b) Eligible Institution.--For the purpose of this part, the 
term ``eligible institution'' means--
          (1) an institution of higher education--
                  (A) which has an enrollment of needy students 
                as required by subsection [(c)] (d) of this 
                section;

           *       *       *       *       *       *       *

                  (E) which provides a program that is not less 
                than a 2-year educational program that is 
                acceptable for full credit toward a bachelor's 
                degree;
                  [(E)] (F) which meets such other requirements 
                as the Secretary may prescribe; and
                  [(F)] (G) which is located in a State; and

           *       *       *       *       *       *       *


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

  (a) * * *
  [(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 
        101(a), except that paragraph (2) of such section shall 
        not apply.]
  (b) Definitions.--
          (1) Eligible institutions.--For purposes of this 
        section, Tribal Colleges and Universities are the 
        following:
                  (A) any of the following institutions that 
                qualify for funding under the Tribally 
                Controlled College or University Assistance Act 
                of 1978 or is listed in Equity in Educational 
                Land Grant Status Act of 1994 (7 U.S.C. 301 
                note): Bay Mills Community College; Blackfeet 
                Community College; Cankdeska Cikana Community 
                College; Chief Dull Knife College; College of 
                Menominee Nation; Crownpoint Institute of 
                Technology; Dine College; D-Q University; Fond 
                du Lac Tribal and Community College; Fort 
                Belknap College; Fort Berthold Community 
                College; Fort Peck Community College; Haskell 
                Indian Nations University; Institute of 
                American Indian and Alaska Native Culture and 
                Arts Development; Lac Courte Oreilles Ojibwa 
                Community College; Leech Lake Tribal College; 
                Little Big Horn College; Little Priest Tribal 
                College; Nebraska Indian Community College; 
                Northwest Indian College; Oglala Lakota 
                College; Saginaw Chippewa Tribal College; 
                Salish Kootenai College; Si Tanka University--
                Eagle Butte Campus; Sinte Gleska University; 
                Sisseton Wahpeton Community College; Sitting 
                Bull College; Southwestern Indian Polytechnic 
                Institute; Stone Child College; Tohono O'Odham 
                Community College; Turtle Mountain Community 
                College; United Tribes Technical College; and 
                White Earth Tribal and Community College; and
                  (B) any other institution that meets the 
                definition of tribally controlled college or 
                university in section 2 of the Tribally 
                Controlled College or University Assistance Act 
                of 1978, and meets all other requirements of 
                this section.
          (2) Indian.--The term ``Indian'' has the meaning 
        given the term in section 2 of the Tribally Controlled 
        College or University Assistance Act of 1978.
  (c) Authorized Activities.--
          (1) * * *
          (2) Examples of authorized activities.--The 
        activities described in paragraph (1) may include--
                  (A) * * *
                  [(B) construction, maintenance, renovation, 
                and improvement in classrooms, libraries, 
                laboratories, and other instructional 
                facilities, including purchase or rental of 
                telecommunications technology equipment or 
                services;]
                  (B) construction, maintenance, renovation, 
                and improvement in classrooms, libraries, 
                laboratories, and other instructional 
                facilities, including purchase or rental of 
                telecommunications technology equipment or 
                services, and the acquisition of real property 
                adjacent to the campus of the institution on 
                which to construct such facilities;
                  (C) support of faculty exchanges, faculty 
                development, and faculty fellowships to assist 
                in attaining advanced degrees in the faculty's 
                field of instruction, or advanced degrees in 
                tribal governance or tribal public policy;
                  (D) academic instruction in disciplines in 
                which Indians are underrepresented, in tribal 
                governance, or tribal public policy;

           *       *       *       *       *       *       *

                  (G) education or counseling services designed 
                to improve the financial literacy and economic 
                literacy of students and, as appropriate, their 
                parents;
                  [(G)] (H) funds management, administrative 
                management, and acquisition of equipment for 
                use in strengthening funds management;
                  [(H)] (I) joint use of facilities, such as 
                laboratories and libraries;
                  [(I)] (J) establishing or improving a 
                development office to strengthen or improve 
                contributions from alumni and the private 
                sector;
                  [(J)] (K) 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 Indian children and youth, that 
                shall include, as part of such program, 
                preparation for teacher certification;
                  [(K)] (L) establishing community outreach 
                programs that encourage Indian elementary 
                school and secondary school students to develop 
                the academic skills and the interest to pursue 
                postsecondary education; [and]
                  (M) developing or improving facilities for 
                Internet use or other distance learning 
                academic instruction capabilities; and
                  [(L)] (N) 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)] (M); and

           *       *       *       *       *       *       *

  [(d) Application Process.--
          [(1) Institutional eligibility.--To be eligible to 
        receive assistance under this section, a Tribal College 
        or University shall be an eligible institution under 
        section 312(b).
          [(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. The Secretary shall, to the extent 
        possible, prescribe a simplified and streamlined format 
        for such applications that takes into account the 
        limited number of institutions that are eligible for 
        assistance under this section. 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 
                paragraph (1).
          [(3) Special rules.--
                  [(A) Eligibility.--No Tribal College or 
                University that receives funds under this 
                section shall concurrently receive funds under 
                other provisions of this part or part B.
                  [(B) Exemption.--Section 313(d) shall not 
                apply to institutions that are eligible to 
                receive funds under this section.
                  [(C) Distribution.--In awarding grants under 
                this section, the Secretary shall, to the 
                extent possible and consistent with the 
                competitive process under which such grants are 
                awarded, ensure maximum and equitable 
                distribution among all eligible institutions.]
  (d) Application and Allotment.--
          (1) Institutional eligibility.--To be eligible to 
        receive assistance under this section, a Tribal College 
        or University shall be an eligible institution under 
        section 312(b).
          (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 reasonably 
        require.
          (3) Allotments to institutions.--
                  (A) Allotment: pell grant basis.--From the 
                amount appropriated to carry out this section 
                for any fiscal year, the Secretary shall allot 
                to each eligible institution a sum which bears 
                the same ratio to one-half that amount as the 
                number of Pell Grant recipients in attendance 
                at such institution at the end of the award 
                year preceding the beginning of that fiscal 
                year bears to the total number of Pell Grant 
                recipients at all eligible institutions.
                  (B) Allotment: degree and certificate 
                basis.--From the amount appropriated to carry 
                out this section for any fiscal year, the 
                Secretary shall allot to each eligible 
                institution a sum which bears the same ratio to 
                one-half that amount as the number of degrees 
                or certificates awarded by such institution 
                during the preceding academic year bears to the 
                total number of degrees or certificates at all 
                eligible institutions.
                  (C) Minimum grant.--Notwithstanding 
                subparagraphs (A) and (B), the amount allotted 
                to each institution under this section shall 
                not be less than $400,000.
          (4) Special rules.--
                  (A) Concurrent funding.--For the purposes of 
                this part, no Tribal College or University that 
                is eligible for and receives funds under this 
                section shall concurrently receive funds under 
                other provisions of this part or part B.
                  (B) Exemption.--Section 313(d) shall not 
                apply to institutions that are eligible to 
                receive funds under this section.

SEC. 317. ALASKA NATIVE AND NATIVE HAWAIIAN-SERVING INSTITUTIONS.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Authorized Activities.--
          (1) * * *
          (2) Examples of authorized activities.--Such programs 
        may include--
                  (A) * * *
                  [(B) renovation and improvement in classroom, 
                library, laboratory, and other instructional 
                facilities;]
                  (B) construction, maintenance, renovation, 
                and improvement in classrooms, libraries, 
                laboratories, and other instructional 
                facilities, including purchase or rental of 
                telecommunications technology equipment or 
                services, and the acquisition of real property 
                adjacent to the campus of the institution on 
                which to construct such facilities;
                  (C) support of faculty exchanges, and faculty 
                development and faculty fellowships to assist 
                in attaining advanced degrees in the faculty's 
                field of instruction, or advanced degrees in 
                tribal governance or tribal public policy;
                  (D) curriculum development and academic 
                instruction, in tribal governance, or tribal 
                public policy;

           *       *       *       *       *       *       *

                  (G) joint use of facilities such as 
                laboratories and libraries; [and]
                  (H) academic tutoring and counseling programs 
                and student support services[.];
                  (I) development or improvement of facilities 
                for Internet use or other distance learning 
                academic instruction capabilities; and
                  (J) education or counseling services designed 
                to improve the financial literacy and economic 
                literacy of students and, as appropriate, their 
                parents.
          (3) Endowment funds.--
                  (A) In general.--An Alaska Native or Native 
                Hawaiian-serving institution 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 institution shall provide 
                to the endowment fund from non-Federal funds an 
                amount equal to the Federal funds used in 
                accordance with subparagraph (A), for the 
                establishment or increase of the endowment 
                fund.
                  (C) Applicability of other provisions.--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) * * *
          (2) Applications.--Any institution which is 
        determined by the Secretary to be an Alaska Native-
        serving institution or a Native Hawaiian-serving 
        institution may submit an application for assistance 
        under this section to the Secretary. The Secretary 
        shall, to the extent possible, prescribe a simplified 
        and streamlined format for such applications that takes 
        into account the limited number of institutions that 
        are eligible for assistance under this section. [Such 
        application shall include--
                  [(A) a 5-year plan for improving the 
                assistance provided by the Alaska Native-
                serving institution or the Native Hawaiian-
                serving institution to Alaska Native or Native 
                Hawaiian students; and
                  [(B) such other information and assurance as 
                the Secretary may require.]

           *       *       *       *       *       *       *


Part B--Strengthening Historically Black Colleges and Universities

           *       *       *       *       *       *       *


SEC. 323. GRANTS TO INSTITUTIONS.

  (a) General Authorization; Uses of Funds.--From amounts 
available under [section 360(a)(2)] section 399(a)(2) in any 
fiscal year the Secretary shall make grants (under section 324) 
to institutions which have applications approved by the 
Secretary (under section 325) for any of the following uses:
          (1) * * *
          [(2) Construction, maintenance, renovation, and 
        improvement in classroom, library, laboratory, and 
        other instructional facilities, including purchase or 
        rental of telecommunications technology equipment or 
        services.]
          (2) Construction, maintenance, renovation, and 
        improvement in classrooms, libraries, laboratories, and 
        other instructional facilities, including development 
        or improvement of facilities for Internet use or other 
        distance learning academic instruction capabilities and 
        purchase or rental of telecommunications technology 
        equipment or services, and the acquisition of real 
        property adjacent to the campus of the institution on 
        which to construct such facilities.

           *       *       *       *       *       *       *

          (7) Education or counseling services designed to 
        improve the financial literacy and economic literacy of 
        students and, as appropriate, their parents.
          [(7)] (8) Funds and administrative management, and 
        acquisition of equipment for use in strengthening funds 
        management.
          [(8)] (9) Joint use of facilities, such as 
        laboratories and libraries.
          [(9)] (10) Establishing or improving a development 
        office to strengthen or improve contributions from 
        alumni and the private sector.
          [(10)] (11) Establishing or enhancing a program of 
        teacher education designed to qualify students to teach 
        in a public elementary or secondary school in the State 
        that shall include, as part of such program, 
        preparation for teacher certification.
          [(11) Establishing community outreach programs which 
        will encourage elementary and secondary students to 
        develop the academic skills and the interest to pursue 
        postsecondary education.]
          (12) Establishing community outreach programs and 
        collaborative partnerships between part B institutions 
        and local elementary or secondary schools. Such 
        partnerships may include mentoring, tutoring, or other 
        instructional opportunities that will boost student 
        academic achievement and assist elementary and 
        secondary school students in developing the academic 
        skills and the interest to pursue postsecondary 
        education.
          [(12)] (13) Other activities proposed in the 
        application submitted pursuant to section 325 that--
                  (A) * * *

           *       *       *       *       *       *       *

  (c) Technical Assistance.--
          (1) In general.--An institution may not use more than 
        2 percent of the grant funds provided under this part 
        to secure technical assistance services.
          (2) Technical assistance services.--Technical 
        assistance services may include assistance with 
        enrollment management, financial management, and 
        strategic planning.
          (3) Report.--The institution shall report to the 
        Secretary on an annual basis, in such form as the 
        Secretary requires, on the use of funds under this 
        subsection.
  [(c)] (d) Limitations.--(1) * * *

           *       *       *       *       *       *       *


SEC. 324. ALLOTMENTS TO INSTITUTIONS.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Minimum Allotment.--(1) Notwithstanding subsections (a), 
(b), and (c), the amount allotted to each part B institution 
under this section shall not be less than $500,000, except 
that, if the amount appropriated to carry out this part for any 
fiscal year exceeds the amount required to provide to each 
institution an amount equal to the total amount received by 
such institution under subsections (a), (b), and (c) for the 
preceding fiscal year, then the amount of such excess 
appropriation shall first be applied to increase the minimum 
allotment under this subsection to $750,000.
  (2) If the amount appropriated pursuant to [section 
360(a)(2)(A)] section 399(a)(2)(A) for any fiscal year is not 
sufficient to pay the minimum allotment required by paragraph 
(1) of this subsection to all part B institutions, the amount 
of such minimum allotments shall be ratably reduced. If 
additional sums become available for such fiscal year, such 
reduced allocation shall be increased on the same basis as they 
were reduced (until the amount allotted equals the minimum 
allotment required by paragraph (1)).

           *       *       *       *       *       *       *


SEC. 326. PROFESSIONAL OR GRADUATE INSTITUTIONS.

  (a) General Authorization.--(1) Subject to the availability 
of funds appropriated to carry out this section, the Secretary 
shall award program grants to each of the postgraduate 
institutions listed in subsection (e) that (A) is determined by 
the Secretary to be making a substantial contribution to the 
legal, medical, dental, veterinary, or other graduate education 
opportunities in mathematics, engineering, or the physical or 
natural sciences for Black Americans, (B) is accredited by a 
nationally recognized accrediting agency or association 
determined by the Secretary to be a reliable authority as to 
the quality of training offered, and (C) according to such an 
agency or association, is in good standing.

           *       *       *       *       *       *       *

  (c) Uses of Funds.--A grant under this section may be used 
for--
          (1) * * *
          [(2) construction, maintenance, renovation, and 
        improvement in classroom, library, laboratory, and 
        other instructional facilities, including purchase or 
        rental of telecommunications technology equipment or 
        services;]
          (2) construction, maintenance, renovation, and 
        improvement in classrooms, libraries, laboratories, and 
        other instructional facilities, including purchase or 
        rental of telecommunications technology equipment or 
        services, and the acquisition of real property adjacent 
        to the campus of the institution on which to construct 
        such facilities;

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

                  (Q) Norfolk State University qualified 
                graduate programs; [and]
                  (R) Tennessee State University qualified 
                graduate programs[.];
                  (S) Alabama State University qualified 
                graduate program;
                  (T) Prairie View A & M University qualified 
                graduate program;
                  (U) Coppin State University qualified 
                graduate program; and
                  (V) Delaware State University qualified 
                graduate program.

           *       *       *       *       *       *       *

          (3) Special rule.--Institutions that were awarded 
        grants under this section prior to October 1, [1998] 
        2005, shall continue to receive such grants, subject to 
        the availability of appropriated funds, regardless of 
        the eligibility of the institutions described in 
        subparagraphs [(Q) and (R)] (S), (T), (U), and (V) of 
        paragraph (1).

           *       *       *       *       *       *       *

  (f) Funding Rule.--Subject to subsection (g), of the amount 
appropriated to carry out this section for any fiscal year--
          (1) the first [$26,600,000] $54,500,000 (or any 
        lesser amount appropriated) shall be available only for 
        the purposes of making grants to institutions or 
        programs described in subparagraphs (A) through [(P)] 
        (R) of subsection (e)(1);
          (2) any amount in excess of [$26,600,000, but not in 
        excess of $28,600,000] $54,500,000, but not in excess 
        of $58,500,000, shall be available for the purpose of 
        making grants to institutions or programs described in 
        [subparagraphs (Q) and (R)] subparagraphs (S), (T), 
        (U), and (V) of subsection (e)(1); and
          (3) any amount in excess of [$28,600,000] 
        $58,500,000, shall be made available to each of the 
        institutions or programs identified in subparagraphs 
        (A) through [(R)] (V) pursuant to a formula developed 
        by the Secretary that uses the following elements:
                  (A) * * *

           *       *       *       *       *       *       *

  (g) Hold Harmless Rule.--Notwithstanding paragraphs (2) and 
(3) of subsection (f ), no institution or qualified program 
identified in subsection (e)(1) that received a grant for 
fiscal year [1998] 2005 and that is eligible to receive a grant 
in a subsequent fiscal year shall receive a grant amount in any 
such subsequent fiscal year that is less than the grant amount 
received for fiscal year [1998] 2005, unless the amount 
appropriated is not sufficient to provide such grant amounts to 
all such institutions and programs, or the institution cannot 
provide sufficient matching funds to meet the requirements of 
this section.

SEC. 327. REPORTING AND AUDIT REQUIREMENTS.

  (a) * * *
  (b) Repayment of Unexpended Funds.--Any funds paid to an 
institution and not expended or used for the purposes for which 
the funds were paid within 10 years following the date of the 
[initial] grant awarded to an institution under part B of this 
title shall be repaid to the Treasury of the United States.
          * * * * * * *

  PART D--HISTORICALLY BLACK COLLEGE AND UNIVERSITY CAPITAL FINANCING

          * * * * * * *

SEC. 342. DEFINITIONS.

  For the purposes of this part:
          (1) * * *
          * * * * * * *
          (5) The term ``capital project'' means, subject to 
        section 344(b) the repair, renovation, or, in 
        exceptional circumstances, the construction or 
        acquisition, of--
                  (A) * * *
          * * * * * * *
                  (C) instructional equipment [technology,,], 
                techology, research instrumentation, and any 
                capital equipment or fixture related to 
                facilities described in subparagraph (A);
          * * * * * * *

SEC. 343. FEDERAL INSURANCE FOR BONDS.

  (a) * * *
          * * * * * * *
  (e) Sale of Qualified Bonds.--Notwithstanding any other 
provision of law, a qualified bond guaranteed under this part 
may be sold to any party that offers terms that the Secretary 
determines are in the best interest of the eligible 
institution.
          * * * * * * *

      PART E--MINORITY SCIENCE AND ENGINEERING IMPROVEMENT PROGRAM

    Subpart 1--Minority Science and Engineering Improvement Program

          * * * * * * *

SEC. 351. PURPOSE; AUTHORITY.

  (a) It is the purpose of this subpart to continue the 
authority of the Department to operate the Minority 
Institutions Science Improvement Program created under section 
3(a)(1) of the National Science Foundation Act of 1950 and 
transferred to the Department by section 304(a)(1) of the 
Department of Education Organization Act [of 1979].
          * * * * * * *

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

  [The Secretary, in cooperation with the heads of other 
departments and agencies that operate programs similar in 
purposes to the Minority Science Improvement Program which seek 
to increase minority participation and representation in 
scientific fields, shall submit a report to the President and 
Congress summarizing and evaluating such programs by January 1, 
1996.]
          * * * * * * *

                       Part F--General Provisions

SEC. 391. APPLICATIONS FOR ASSISTANCE.

  (a) * * *
  (b) Contents.--An institution, in its application for a 
grant, shall--
          (1) * * *
          * * * * * * *
          (7) describe in a comprehensive manner any proposed 
        project for which funds are sought under the 
        application and include--
                  (A) * * *
          * * * * * * *
                  (E) a detailed description of any activity 
                which involves the expenditure of more than 
                $25,000, as identified in the budget referred 
                to in [subparagraph (E)] subparagraph (D); and
          * * * * * * *

SEC. 396. LIMITATIONS.

  The funds appropriated under [section 360] section 399 may 
not be used--
          (1) * * *
          * * * * * * *

SEC. 399. 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 [1999] 2006, and such 
        sums as may be necessary for each of the [4] 5 
        succeeding fiscal years.
          (B) There are authorized to be appropriated to carry 
        out section 316, [$10,000,000] $23,800,000 for fiscal 
        year [1999] 2006 and such sums as may be necessary for 
        each of the [4] 5 succeeding fiscal years.
          (C) There are authorized to be appropriated to carry 
        out section 317, [$5,000,000] $11,900,000 for fiscal 
        year [1999] 2006 and such sums as may be necessary for 
        each of the [4] 5 succeeding fiscal years.
          (2) Part b.--(A) There are authorized to be 
        appropriated to carry out part B (other than section 
        326), [$135,000,000] $241,000,000 for fiscal year 
        [1999] 2006, and such sums as may be necessary for each 
        of the [4] 5 succeeding fiscal years.
          (B) There are authorized to be appropriated to carry 
        out section 326, [$35,000,000] $59,000,000 for fiscal 
        year [1999] 2006, and such sums as may be necessary for 
        each of the [4] 5 succeeding fiscal years.
          * * * * * * *
          (4) Part d.--(A) There are authorized to be 
        appropriated to carry out part D (other than section 
        345(7), but including section 347), [$110,000] $212,000 
        for fiscal year [1999] 2006, and such sums as may be 
        necessary for each of the [4] 5 succeeding fiscal 
        years.
          (B) There are authorized to be appropriated to carry 
        out section 345(7), such sums as may be necessary for 
        fiscal year [1999] 2006 and each of the [4] 5 
        succeeding fiscal years.
          * * * * * * *

                      TITLE IV--STUDENT ASSISTANCE

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

SEC. 400. STATEMENT OF PURPOSE; PROGRAM AUTHORIZATION.

  (a) * * *
  (b) Secretary Required To Carry Out Purposes.--The Secretary 
shall, in accordance with subparts 1 [through 8] through 7, 
carry out programs to achieve the purposes of this part.

                     Subpart 1--Federal Pell Grants

SEC. 401. FEDERAL PELL GRANTS: AMOUNT AND DETERMINATIONS; APPLICATIONS.

  (a) Program Authority and Method of Distribution.--(1) For 
each fiscal year through fiscal year [2004] 2012, the Secretary 
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 Federal Pell Grant in the 
amount for which that student is eligible, as determined 
pursuant to subsection (b). Not less than 85 percent of such 
sums shall be advanced to eligible institutions prior to the 
start of each payment period and shall be based upon an amount 
requested by the institution as needed to pay eligible students 
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.
  [(2) Nothing in this section shall be interpreted to prohibit 
the Secretary from paying directly to students, in advance of 
the beginning of the academic term, an amount for which they 
are eligible, in cases where the eligible institution elects 
not to participate in the disbursement system required by 
paragraph (1).]
  [(3)] (2) Grants made under this subpart shall be known as 
``Federal Pell Grants''.
  (b) Purpose and Amount of Grants.--(1) * * *
  [(2)(A) The amount of the Federal Pell Grant for a student 
eligible under this part shall be--
          [(i) $4,500 for academic year 1999-2000;
          [(ii) $4,800 for academic year 2000-2001;
          [(iii) $5,100 for academic year 2001-2002;
          [(iv) $5,400 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.]
  (2)(A) The amount of the Federal Pell Grant for a student 
eligible under this part shall be $6,000 for academic years 
2006-2007 through 2012-2013, 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 
$2,700, the amount of a student's basic grant shall equal 
$2,700 plus--
          [(i) one-half of the amount by which such maximum 
        basic grant exceeds $2,700; plus
          [(ii) the lesser of--
                  [(I) the remaining one-half of such excess; 
                or
                  [(II) the sum of the student's tuition 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.
  [(B) An institution that charged only fees in lieu of tuition 
as of October 1, 1998, may include in the institution's 
determination of tuition charged, fees that would normally 
constitute tuition.]
  [(4)] (3) No Federal Pell Grant under this subpart shall 
exceed the difference between the expected family contribution 
for a student and the cost of attendance (as defined in section 
472) at the institution at which that student is in attendance. 
If, with respect to any student, it is determined that the 
amount of a Federal Pell Grant plus the amount of the expected 
family contribution for that student exceeds the cost of 
attendance for that year, the amount of the Federal Pell Grant 
shall be reduced until the combination of expected family 
contribution and the amount of the Federal Pell Grant does not 
exceed the cost of attendance at such institution.
  [(5)] (4) No Federal Pell Grant shall be awarded to a student 
under this subpart if the amount of that grant for that student 
as determined under this subsection for any academic year is 
less than $400, except that a student who is eligible for a 
Federal Pell Grant that is equal to or greater than $200 but 
less than $400 shall be awarded a Federal Pell Grant of $400.
  [(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--
          [(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
          [(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.]
          (5) Year-round pell grants.--
                  (A) In general.--The Secretary shall, for 
                students enrolled full time in a baccalaureate 
                or associate's degree program of study at an 
                eligible institution, award such students two 
                Pell grants during a single award year to 
                permit such students to accelerate progress 
                toward their degree objectives by enrolling in 
                academic programs for 12 months rather than 9 
                months.
                  (B) Limitation.--The Secretary shall limit 
                the awarding of additional Pell grants under 
                this paragraph in a single award year to 
                students attending--
                          (i) baccalaureate degree granting 
                        institutions that have a graduation 
                        rate as reported by the Integrated 
                        Postsecondary Education Data System for 
                        the 4 preceding academic years of at 
                        least 30 percent; or
                          (ii) two-year institutions that have 
                        a graduation rate as reported by the 
                        Integrated Postsecondary Education Data 
                        Systems, in at least one of the last 3 
                        years for which data is available, that 
                        is above the average for the applicable 
                        year for the institution's type and 
                        control.
                  (C) Evaluation.--The Secretary shall conduct 
                an evaluation of the program under this 
                paragraph and submit to the Congress an 
                evaluation report no later than October 1, 
                2011.
                  (D) Regulations required.--The Secretary 
                shall promulgate regulations implementing this 
                paragraph.
  [(7)] (6) Notwithstanding any other provision of this 
subpart, the Secretary shall allow the amount of the Federal 
Pell Grant to be exceeded for students participating in a 
program of study abroad approved for credit by the institution 
at which the student is enrolled when the reasonable costs of 
such program are greater than the cost of attendance at the 
student's home institution, except that the amount of such 
Federal Pell Grant in any fiscal year shall not exceed the 
grant level specified in the appropriate Appropriation Act for 
this subpart for such year. If the preceding sentence applies, 
the financial aid administrator at the home institution may use 
the cost of the study abroad program, rather than the home 
institution's cost, to determine the cost of attendance of the 
student.
  [(8)] (7) No Federal Pell Grant shall be awarded under this 
subpart to any individual who is incarcerated in any Federal or 
State penal institution or who is subject to an involuntary 
civil commitment upon completion of a period of incarceration 
for a sexual offense (as determined under regulations of the 
Secretary).
  (c) Period of Eligibility for Grants.--(1) [The period] 
Subject to paragraph (5), the period during which a student may 
receive Federal Pell Grants shall be the period required for 
the completion of the first undergraduate baccalaureate course 
of study being pursued by that student at the institution at 
which the student is in attendance except that any period 
during which the student is enrolled in a noncredit or remedial 
course of study as defined in paragraph (2) shall not be 
counted for the purpose of this paragraph[.] but shall be 
subject to the limitation described in paragraph (5).
  (2) 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, for not more than one academic 
year, 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.

           *       *       *       *       *       *       *

  (5) The period during which a student may receive Federal 
Pell Grants shall not exceed the equivalent of 18 semesters or 
27 quarters in duration (as determined by the Secretary by 
regulation), without regard to whether the student is enrolled 
on a full-time basis during any portion of that period, and 
including any period of time for which the student received 
Federal Pell Grants prior to the date of enactment of the 
College Access and Opportunity Act of 2005.

           *       *       *       *       *       *       *

  (f) Calculation of Eligibility.--(1) * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *


SEC. 401A. PELL GRANTS PLUS: ACHIEVEMENT GRANTS FOR STATE SCHOLARS.

  (a) Grants Authorized.--From sums appropriated to carry out 
section 401, the Secretary shall establish a program to award 
Pell Grants Plus to students who--
          (1) have successfully completed a rigorous high 
        school program of study established by a State or local 
        educational agency in consultation with a State 
        coalition assisted by the Center for State Scholars;
          (2) are enrolled full-time in the first academic year 
        of undergraduate education, and have not been 
        previously enrolled in a program of undergraduate 
        education; and
          (3) are eligible to receive Federal Pell Grants for 
        the year in which the grant is awarded.
  (b) Amount of Grants.--
          (1) In general.--Except as provided in paragraph (2), 
        the amount of the grant awarded under this section 
        shall be $1,000.
          (2) Assistance not to exceed cost of attendance.--A 
        grant awarded under this section to any student, in 
        combination with the Federal Pell Grant assistance and 
        other student financial assistance available to such 
        student, may not exceed the student's cost of 
        attendance.
  (c) Selection of Recipients.--
          (1) Procedures established by regulation.--The 
        Secretary shall establish by regulation procedures for 
        the determination of eligibility of students for the 
        grants awarded under this section. Such procedures 
        shall include measures to ensure that eligibility is 
        determined in a timely and accurate manner consistent 
        with the requirements of section 482 and the submission 
        of the financial aid form required by section 483.
          (2) Required information.--Each eligible student 
        desiring an award under this section shall submit at 
        such time and in such manner such information as the 
        Secretary may reasonably require.
          (3) Continuation of grant requirements.--In order for 
        a student to continue to be eligible to receive an 
        award under this section for the second year of 
        undergraduate education, the eligible student must--
                  (A) maintain eligibility to receive a Federal 
                Pell Grant for that year;
                  (B) obtain a grade point average of at least 
                3.0 (or the equivalent as determined under 
                regulations prescribed by the Secretary) for 
                the first year of undergraduate education; and
                  (C) be enrolled full-time and fulfill the 
                requirements for satisfactory progress 
                described in section 484(c).
  (d) Evaluation, and Reports.--The Secretary shall monitor the 
progress, retention, and completion rates of the students to 
whom awards are provided under this section. In doing so, the 
Secretary shall evaluate the impact of the Pell Grants Plus 
Program and report, not less than biennially, to the 
authorizing committees of the House of Representatives and the 
Senate.

    Subpart 2--Federal Early Outreach and Student Services Programs

                    CHAPTER 1--FEDERAL TRIO PROGRAMS

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

  (a) * * *
  (b) Recipients, Duration, and Size.--
          (1) * * *
          [(2) Duration.--Grants or contracts made under this 
        chapter shall be awarded for a period of 4 years, 
        except that--
                  [(A) the Secretary shall award such grants or 
                contracts for 5 years to applicants whose peer 
                review scores were in the highest 10 percent of 
                scores of all applicants receiving grants or 
                contracts in each program competition for the 
                same award year;
                  [(B) grants made under section 402G shall be 
                awarded for a period of 2 years; and
                  [(C) grants under section 402H shall be 
                awarded for a period determined by the 
                Secretary.
          [(3) Minimum grants.--Unless the institution or 
        agency requests a smaller amount, individual grants 
        under this chapter shall be no less than--
                  [(A) $170,000 for programs authorized by 
                sections 402D and 402G;
                  [(B) $180,000 for programs authorized by 
                sections 402B and 402F; and
                  [(C) $190,000 for programs authorized by 
                sections 402C and 402E.]
          (2) Duration.--Grants or contracts awarded under this 
        chapter shall be awarded for a period of 5 years, 
        except that--
                  (A) grants under section 402G shall be 
                awarded for a period of 2 years; and
                  (B) grants under section 402H shall be 
                awarded for a period determined by the 
                Secretary.
          (3) Minimum grants.--Unless the institution or agency 
        requests a smaller amount, individual grants for 
        programs authorized under this chapter shall be no less 
        than $200,000, except that individual grants for 
        programs authorized under section 402G shall be no less 
        than $170,000.
  (c) Performance Measures.--
          (1) In general.--The Secretary shall establish 
        expected program outcomes and procedures for measuring, 
        annually and for longer periods, the quality and 
        effectiveness of programs operated under this chapter, 
        and the impact of the services provided through the 
        programs to support the attainment of higher education 
        for students from disadvantaged backgrounds, low-income 
        individuals, and prospective first-generation college 
        students.
          (2) Use of measures.--The performance measures 
        described in paragraph (1) shall be used to--
                  (A) assess the impact of the specific 
                services provided by recipients of grants or 
                contracts under this chapter and, to the extent 
                the Secretary finds appropriate, administrative 
                and financial management practices of such 
                programs;
                  (B) identify strengths and weaknesses in the 
                provision of services provided by grantees 
                under this chapter;
                  (C) identify project operations that may 
                require training and technical assistance 
                resources.
          (3) Additional measures.--In addition to the 
        performance measures in paragraph (1), each grant 
        recipient may establish local performance measures.
  [(c)] (d) Procedures for Awarding Grants and Contracts.--
          (1) * * *
          (2) Selection.--
                  (A) In general.--In awarding grants from 
                among qualified applicants, the Secretary shall 
                consider the effectiveness of each applicant in 
                providing services under this chapter, based 
                on--
                          (i) the plan of such applicant to 
                        deliver program services and achieve 
                        expected program outcomes established 
                        by the Secretary;
                          (ii) the plan of such applicant to 
                        coordinate program services with other 
                        programs for disadvantaged students; 
                        and
                          (iii) any prior experience of such 
                        applicant in achieving expected program 
                        outcomes under this chapter.
                  (B) Additional criteria.--The Secretary may 
                establish additional selection criteria as 
                necessary to identify the most qualified 
                applicants.
          [(2)] (3) Prior experience.--[In making grants under 
        this chapter, the Secretary shall consider each 
        applicant's prior experience of service delivery under 
        the particular program for which funds are sought. The 
        level of consideration given the factor of prior 
        experience shall not vary from the level of 
        consideration given such factor during fiscal years 
        1994 through 1997, except that grants made under 
        section 402H shall not be given prior experience 
        consideration.] (A) In making grants under this 
        chapter, the Secretary shall use the measures described 
        in subsection (c)(1) to evaluate each applicant's prior 
        experience in achieving expected program outcomes under 
        the particular program for which funds are sought.
          (B) From the amount available under subsection (h) 
        for a program under this chapter (other than a program 
        under section 402G or 402H) for any fiscal year in 
        which the Secretary conducts a competition for the 
        award of grants or contracts under such program, the 
        Secretary shall reserve 10 percent of such available 
        amount for purposes of funding applications from novice 
        applicants. If the Secretary determines that there are 
        an insufficient number of qualified novice applicants 
        to utilize the amount so reserved, the Secretary shall 
        restore the unutilized remainder of the amount reserved 
        for use by applicants qualifying under subparagraph 
        (A).
          (C) The Secretary shall not give prior experience 
        points to any current grantee that during the then most 
        recent period for which funds were provided--
                  (i) failed to meet one or more expected 
                program outcomes based on the performance 
                measures described in subsection (c); or
                  (ii) expended funds for indirect costs in an 
                amount that exceeded 8 percent of the total 
                grant award.
          [(3)] (4)  Order of awards; program fraud.--(A) 
        Except with respect to grants made under sections 402G 
        and 402H and as provided in subparagraph (B), the 
        Secretary shall award grants and contracts under this 
        chapter in the order of the scores received by the 
        application for such grant or contract in the peer 
        review process required [under paragraph (4)] under 
        paragraph (5) and adjusted for prior experience in 
        accordance [with paragraph (2)] with paragraph (3) of 
        this subsection.
          [(B) The Secretary is not required to provide 
        assistance to a program otherwise eligible for 
        assistance under this chapter, if the Secretary has 
        determined that such program has involved the 
        fraudulent use of funds under this chapter.]
          (B) The Secretary shall not provide assistance to an 
        entity if the Secretary has determined that such entity 
        has involved the fraudulent use of public or private 
        funds.
          [(4)] (5) Peer review process.--(A) * * *

           *       *       *       *       *       *       *

          [(5)] (6) Number of applications for grants and 
        contracts.--The Secretary shall not limit the number of 
        applications submitted by an entity under any program 
        authorized under this chapter if the additional 
        applications describe programs serving different 
        populations or campuses.
          [(6)] (7) Coordination with other programs for 
        disadvantaged students.--The Secretary shall encourage 
        coordination of programs assisted under this chapter 
        with other programs for disadvantaged students operated 
        by the sponsoring institution or agency, regardless of 
        the funding source of such programs. The Secretary 
        shall not limit an entity's eligibility to receive 
        funds under this chapter because such entity sponsors a 
        program similar to the program to be assisted under 
        this chapter, regardless of the funding source of such 
        program. The Secretary shall permit the Director of a 
        program receiving funds under this chapter to 
        administer one or more additional programs for 
        disadvantaged students operated by the sponsoring 
        institution or agency, regardless of the funding 
        sources of such programs.
          [(7)  Application status.--The Secretary shall inform 
        each entity operating programs under this chapter 
        regarding the status of their application for continued 
        funding at least 8 months prior to the expiration of 
        the grant or contract. The Secretary, in the case of an 
        entity that is continuing to operate a successful 
        program under this chapter, shall ensure that the 
        start-up date for a new grant or contract for such 
        program immediately follows the termination of the 
        preceding grant or contract so that no interruption of 
        funding occurs for such successful reapplicants. The 
        Secretary shall inform each entity requesting 
        assistance under this chapter for a new program 
        regarding the status of their application at least 8 
        months prior to the proposed startup date of such 
        program.]
  [(d)] (e) Outreach.--
          (1) * * *

           *       *       *       *       *       *       *

          [(3) Technical assistance.--The Secretary shall 
        provide technical training to applicants for projects 
        and programs authorized under this chapter. The 
        Secretary shall give priority to serving programs and 
        projects that serve geographic areas and eligible 
        populations which have been underserved by the programs 
        assisted under this chapter. Technical training 
        activities shall include the provision of information 
        on authorizing legislation, goals and objectives of the 
        program, required activities, eligibility requirements, 
        the application process and application deadlines, and 
        assistance in the development of program proposals and 
        the completion of program applications. Such training 
        shall be furnished at conferences, seminars, and 
        workshops to be conducted at not less than 10 sites 
        throughout the United States to ensure that all areas 
        of the United States with large concentrations of 
        eligible participants are served.]
          (3) Technical assistance.--The Secretary shall 
        provide technical assistance to applicants for projects 
        and programs authorized under this chapter. The 
        Secretary shall give priority to serving programs and 
        projects that serve geographic areas and eligible 
        populations which have been underserved by the programs 
        assisted under this chapter. Technical training 
        activities shall include the provision of information 
        on authorizing legislation, goals and objectives of the 
        program, required activities, eligibility requirements, 
        the application process and application deadlines, and 
        assistance in the development of program proposals and 
        the completion of program applications.

           *       *       *       *       *       *       *

  (f) Recordkeeping and Reporting.--
          (1) In general.--The Secretary shall establish 
        uniform reporting requirements and require each 
        recipient of funds under this chapter to submit 
        annually and in electronic form such information in 
        such manner and form and at such time as the Secretary 
        may require, except that reporting such information 
        shall not reveal personally identifiable information 
        about an individual student.
          (2) Report to congress.--At least once every 2-year 
        period, the Secretary shall prepare and submit to the 
        authorizing committees, a report on the services 
        provided to students that shall include--
                  (A) a statement for the then most recently 
                concluded fiscal year specifying--
                          (i) the amount of funds received by 
                        grantees to provide services under this 
                        chapter; and
                          (ii) the amount of funds received by 
                        new grantees to provide services under 
                        this chapter;
                  (B) a description of the specific services 
                provided to students;
                  (C) a summary of the overall success in 
                achieving specific program outcomes or progress 
                toward such outcomes;
                  (D) a report of the number of students served 
                by types of service received;
                  (E) information summarizing the types of 
                organizations that received funds under this 
                chapter; and
                  (F) a summary of the research and evaluation 
                activities under section 402H, including--
                          (i) a status report on ongoing 
                        activities; and
                          (ii) results, conclusions, and 
                        recommendations of such activities 
                        available after the then most recent 
                        report.
  [(e)] (g) Documentation of Status as a Low-Income 
Individual.--(1) Except in the case of an independent student, 
as defined in section 480(d), documentation of an individual's 
status pursuant to subsection [(g)(2)] (i)(4) shall be made by 
providing the Secretary with--
          (A) * * *

           *       *       *       *       *       *       *

  (2) In the case of an independent student, as defined in 
section 480(d), documentation of an individual's status 
pursuant to subsection [(g)(2)] (i)(4) shall be made by 
providing the Secretary with--
          (A) * * *

           *       *       *       *       *       *       *

  (3) Notwithstanding this subsection and subsection (i)(4), 
individuals who are homeless or unaccompanied youth as defined 
in section 725 of the McKinney-Vento Homeless Assistance Act 
shall be eligible to participate in programs under sections 
402B, 402C, 402D, and 402F of this chapter.
  [(f)] (h) Authorization of Appropriations.--For the purpose 
of making grants and contracts under this chapter, there are 
authorized to be appropriated [$700,000,000 for fiscal year 
1999, and such sums as may be necessary for each of the 4 
succeeding fiscal years] $836,500,000 for fiscal year 2006 and 
such sums as may be necessary for each of the 5 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.] Of the amount 
appropriated under this chapter, the Secretary may use no more 
than one half of 1 percent of such amount to support the 
administration of the Federal TRIO programs including to 
increase the level of oversight monitoring, to support impact 
studies, program assessments and reviews, and to provide 
technical assistance to prospective applicants and current 
grantees.
  [(g)] (i) Definitions.--For the purpose of this chapter:
          (1) Different campus.--The term ``different campus'' 
        means an institutional site that--
                  (A) is geographically apart from the main 
                campus of the institution;
                  (B) is permanent in nature; and
                  (C) offers courses in educational programs 
                leading to a degree, certificate, or other 
                recognized educational credential.
          (2) Different population.--The term ``different 
        population'' means a group of individuals, with respect 
        to whom an entity seeks to serve through an application 
        for funding under this chapter, that--
                  (A) is separate and distinct from any other 
                population that the entity seeks to serve 
                through an application for funding under this 
                chapter; or
                  (B) while sharing some of the same needs as 
                another population that the entity seeks to 
                serve through an application for funding under 
                this chapter, has distinct needs for 
                specialized services.
          [(1)] (3) First generation college student.--The term 
        ``first generation college student'' means--
                  (A) * * *

           *       *       *       *       *       *       *

          [(2)] (4) 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.
          [(3)] (5) Veteran eligibility.--No veteran shall be 
        deemed ineligible to participate in any program under 
        this chapter [by reason of such individual's age] who--
                  (A) * * *

           *       *       *       *       *       *       *

          [(4)] (6) Waiver.--The Secretary may waive the 
        service requirements in subparagraph (A) or (B) of 
        paragraph (3) if the Secretary determines the 
        application of the service requirements to a veteran 
        will defeat the purpose of a program under this 
        chapter.

SEC. 402B. TALENT SEARCH.

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

           *       *       *       *       *       *       *

          (3) education or counseling services designed to 
        improve the financial literacy and economic literacy of 
        students and, as appropriate, their parents;
          [(3)] (4) assistance in preparing for college 
        entrance examinations;
          [(4)] (5) guidance on and assistance in secondary 
        school reentry, entry to general educational 
        development (GED) programs, other alternative education 
        programs for secondary school dropouts, or 
        postsecondary education;
          [(5)] (6) personal and career counseling, or 
        activities designed to acquaint individuals from 
        disadvantaged backgrounds with careers in which the 
        individuals are particularly underrepresented;
          [(6)] (7) tutorial services;
          [(7)] (8) exposure to college campuses as well as 
        cultural events, academic programs and other sites or 
        activities not usually available to disadvantaged 
        youth;
          [(8)] (9) workshops and counseling for families of 
        students served;
          [(9)] (10) mentoring programs involving elementary or 
        secondary school teachers or counselors, faculty 
        members at institutions of higher education, students, 
        or any combination of such persons; and
          [(10)] (11) programs and activities as described in 
        paragraphs (1) [through (9)] through (10) which are 
        specially designed for students of limited English 
        proficiency.

           *       *       *       *       *       *       *

  (d) Expected Program Outcome.--For the purposes of assessing 
an applicant's past performance under section 402A(c)(1), and 
prior experience under section 402A(d)(3), the Secretary shall 
consider the college-going rate of the participants served by 
the program compared to that of other applicants eligible to 
receive consideration of prior experience.

SEC. 402C. UPWARD BOUND.

  (a) * * *
  (b) Permissible Services.--Any upward bound project assisted 
under this chapter may provide services such as--
          (1) * * *
          (2) education or counseling services designed to 
        improve the financial literacy and economic literacy of 
        students and, as appropriate, their parents;
          [(2)] (3) counseling and workshops;
          [(3)] (4) academic advice and assistance in secondary 
        school course selection;
          [(4)] (5) tutorial services;
          [(5)] (6) exposure to cultural events, academic 
        programs, and other activities not usually available to 
        disadvantaged youth;
          [(6)] (7) activities designed to acquaint youths 
        participating in the project with the range of career 
        options available to them;
          [(7)] (8) instruction designed to prepare youths 
        participating in the project for careers in which 
        persons from disadvantaged backgrounds are particularly 
        underrepresented;
          [(8)] (9) on-campus residential programs;
          [(9)] (10) mentoring programs involving elementary or 
        secondary school teachers or counselors, faculty 
        members at institutions of higher education, students, 
        or any combination of such persons;
          [(10)] (11) work-study positions where youth 
        participating in the project are exposed to careers 
        requiring a postsecondary degree;
          [(11)] (12) special services to enable veterans to 
        make the transition to postsecondary education, 
        specifically in the fields of math and science; and
          [(12)] (13) programs and activities as described in 
        paragraphs [(1) through (11)] (1) through (12) 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] $100 per month during June, 
July, and August, except that youth participating in a work-
study position under subsection [(b)(10)] (b)(11) 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] $60 per 
month during the remaining period of the year.
  (f) Expected Program Outcome.--For the purposes of assessing 
an applicant's past performance under section 402A(c)(1), and 
prior experience under section 402A(d)(3), the Secretary shall 
consider the college-going rate of the participants served by 
the program compared to that of other applicants eligible to 
receive consideration of prior experience.

SEC. 402D. STUDENT SUPPORT SERVICES.

  (a) * * *
  (b) Permissible Services.--A student support services project 
assisted under this chapter may provide services such as--
          (1) * * *
          (2) education or counseling services designed to 
        improve the financial literacy and economic literacy of 
        students and, as appropriate, their parents;
          [(2)] (3) personal counseling;
          [(3)] (4) academic advice and assistance in course 
        selection;
          [(4)] (5) tutorial services and counseling and peer 
        counseling;
          [(5)] (6) exposure to cultural events and academic 
        programs not usually available to disadvantaged 
        students;
          [(6)] (7) activities designed to acquaint students 
        participating in the project with the range of career 
        options available to them;
          [(7)] (8) activities designed to assist students 
        participating in the project in securing admission and 
        financial assistance for enrollment in graduate and 
        professional programs;
          [(8)] (9) activities designed to assist students 
        currently enrolled in 2-year institutions in securing 
        admission and financial assistance for enrollment in a 
        four-year program of postsecondary education;
          [(9)] (10) mentoring programs involving faculty or 
        upper class students, or a combination thereof; and
          [(10)] (11) programs and activities as described in 
        paragraphs [(1) through (9)] (1) through (10) which are 
        specially designed for students of limited English 
        proficiency.

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

          (6) 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 
                in the project; [and]
                  (B) maintaining the loan burden of each such 
                student at a manageable level[.]; and
                  (C) working with other entities that serve 
                low-income working adults to increase access to 
                and successful progress in postsecondary 
                education by low-income working adults seeking 
                their first postsecondary degree or 
                certificate.
  (e) Expected Program Outcome.--For the purposes of assessing 
an applicant's past performance under section 402A(c)(1), and 
prior experience under section 402A(d)(3), the Secretary shall 
consider the college-going rate of the participants served by 
the program compared to that of other applicants eligible to 
receive consideration of prior experience.

SEC. 402E. POSTBACCALAUREATE ACHIEVEMENT PROGRAM AUTHORITY.

  (a) * * *
  (b) Services.--A postbaccalaureate achievement project 
assisted under this section may provide services such as--
          (1) * * *

           *       *       *       *       *       *       *

          (7) education or counseling services designed to 
        improve the financial literacy and economic literacy of 
        students and, as appropriate, their parents;
          [(7)] (8) mentoring programs involving faculty 
        members at institutions of higher education, students, 
        or any combination of such persons; and
          [(8)] (9) exposure to cultural events and academic 
        programs not usually available to disadvantaged 
        students.

           *       *       *       *       *       *       *

  (e) Maximum Stipends.--Students participating in research 
under a postbaccalaureate achievement project may receive an 
award that--
          (1) shall include a stipend not to exceed [$2,800] 
        $5,000 per annum; and

           *       *       *       *       *       *       *

  [(f) Funding.--From amounts appropriated pursuant to the 
authority of section 402A(f), the Secretary shall, to the 
extent practicable, allocate funds for projects authorized by 
this section in an amount which is not less than $11,000,000 
for each of the fiscal years 1993 through 1997.]
  (f) Expected Program Outcome.--For the purposes of assessing 
an applicant's past performance under section 402A(c)(1), and 
prior experience under section 402A(d)(3), the Secretary shall 
consider the college-going rate of the participants served by 
the program compared to that of other applicants eligible to 
receive consideration of prior experience.

SEC. 402F. EDUCATIONAL OPPORTUNITY CENTERS.

  (a) * * *
  (b) Permissible Services.--An educational opportunity center 
assisted under this section may provide services such as--
          (1) * * *

           *       *       *       *       *       *       *

          (4) education or counseling services designed to 
        improve the financial literacy and economic literacy of 
        students and, as appropriate, their parents;
          [(4)] (5) assistance in preparing for college 
        entrance examinations;
          [(5)] (6) guidance on secondary school reentry or 
        entry to a general educational development (GED) 
        program or other alternative education programs for 
        secondary school dropouts;
          [(6)] (7) personal counseling;
          [(7)] (8) tutorial services;
          [(8)] (9) career workshops and counseling;
          [(9)] (10) mentoring programs involving elementary or 
        secondary school teachers, faculty members at 
        institutions of higher education, students, or any 
        combination of such persons; and
          [(10)] (11) programs and activities as described in 
        paragraphs [(1) through (9)] (1) through (10) which are 
        specially designed for students of limited English 
        proficiency.
  (c) Requirements for Approval of Applications.--In approving 
applications for educational opportunity centers under this 
section for any fiscal year the Secretary shall--
          (1) * * *
          (2) require that such participants be persons who are 
        at least nineteen years of age, unless the imposition 
        of such limitation with respect to any person would 
        defeat the purposes of this section or the purposes of 
        section 402B; [and]
          (3) require an assurance that individuals 
        participating in the project proposed in the 
        application do not have access to services from another 
        project funded under this section or under section 
        402B[.]; and
          (4) consider the extent to which the proposed project 
        would provide services to low-income working adults in 
        the region to be served, in order to increase access to 
        postsecondary education by low-income working adults.
  (d) Expected Program Outcome.--For the purposes of assessing 
an applicant's past performance under section 402A(c)(1), and 
prior experience under section 402A(d)(3), the Secretary shall 
consider the college-going rate of the participants served by 
the program compared to that of other applicants eligible to 
receive consideration of prior experience.

[SEC. 402G. STAFF DEVELOPMENT ACTIVITIES.

  [(a) Secretary's Authority.--For the purpose of improving the 
operation of the programs and projects authorized by this 
chapter, the Secretary is authorized to make grants to 
institutions of higher education and other public and private 
nonprofit institutions and organizations to provide training 
for staff and leadership personnel employed in, participating 
in, or preparing for employment in, such programs and projects.
  [(b) Contents of Training Programs.--Such training shall 
include conferences, internships, seminars, workshops, and the 
publication of manuals designed to improve the operation of 
such programs and projects and shall be carried out in the 
various regions of the Nation in order to ensure that the 
training opportunities are appropriate to meet the needs in the 
local areas being served by such programs and projects. Such 
training shall be offered annually for new directors of 
projects funded under this chapter as well as annually on the 
following topics and other topics chosen by the Secretary:
          [(1) Legislative and regulatory requirements for the 
        operation of programs funded under this chapter.
          [(2) Assisting students in receiving adequate 
        financial aid from programs assisted under this title 
        and other programs.
          [(3) The design and operation of model programs for 
        projects funded under this chapter.
          [(4) The use of appropriate educational technology in 
        the operation of projects assisted under this chapter.
  [(c) Consultation.--Grants for the purposes of this section 
shall be made only after consultation with regional and State 
professional associations of persons having special knowledge 
with respect to the needs and problems of such programs and 
projects.

[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 chapter, 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 chapter.
          [(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. Such evaluations shall also 
        investigate the effectiveness of alternative and 
        innovative methods within Federal TRIO programs of 
        increasing access to, and retention of, students in 
        postsecondary education.
  [(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 chapter 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 chapter 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 chapter; and
          [(2) provide technical assistance regarding programs 
        and projects assisted under this chapter.
  [(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.]

SEC. 402G. STAFF DEVELOPMENT ACTIVITIES.

  (a) Secretary's Authority.--For the purpose of improving the 
operation of the programs and projects authorized by this 
chapter, the Secretary is authorized to make grants to 
institutions of higher education and other public and private 
nonprofit institutions and organizations to provide training 
and technical assistance for staff and leadership personnel 
employed in, participating in, or preparing for employment in, 
such programs and projects.
  (b) Contents of Training Programs.--Such training shall be 
provided to assist programs and projects in--
          (1) achieving the expected program outcomes stated 
        under this chapter or additional outcomes identified by 
        individual programs or projects;
          (2) addressing any identified program weaknesses in 
        the overall development, conduct, or administration of 
        a grant or contract;
          (3) improving the quality of services provided to 
        eligible students; or
          (4) additional areas in need of program improvement 
        as identified by the Secretary or as requested by 
        grantees in order to enhance program operations and 
        outcomes.
  (c) Consultation.--Grants for the purposes of this section 
shall be made only after consultation with regional and State 
professional associations of persons having special knowledge 
with respect to the needs and problems of such programs and 
projects.

SEC. 402H. EVALUATIONS.

  (a) Evaluations.--
          (1) In general.--For the purpose of improving the 
        effectiveness of the programs and projects assisted 
        under this chapter, the Secretary shall make grants to 
        or enter into contracts with one or more organizations 
        to--
                  (A) evaluate the effectiveness of the 
                programs and projects assisted under this 
                chapter; and
                  (B) disseminate information on the impact of 
                the programs in increasing the education level 
                of participating students, as well as other 
                appropriate measures.
          (2) Issues to be evaluated.--The evaluations 
        described in paragraph (1) shall measure the 
        effectiveness of programs under this chapter in--
                  (A) meeting the expected program outcomes 
                stated under this chapter and all performance 
                measures identified by the Secretary;
                  (B) enhancing the access of low-income 
                individuals and first-generation college 
                students to postsecondary education;
                  (C) preparing individuals and students for 
                postsecondary education;
                  (D) comparing the level of education 
                completed by students who participate in the 
                programs funded under this chapter with the 
                level of education completed by students of 
                similar backgrounds who do not participate in 
                such programs;
                  (E) comparing the retention rates, dropout 
                rates, graduation rates, and college admission 
                and completion rates of students who 
                participate in the programs funded under this 
                chapter with the rates of students of similar 
                backgrounds who do not participate in such 
                programs; and
                  (F) such other issues as the Secretary 
                considers appropriate for inclusion in the 
                evaluation.
          (3) Program methods.--Such evaluations shall also 
        investigate the effectiveness of alternative and 
        innovative methods within Federal TRIO programs of 
        increasing access to, and retention of, students in 
        postsecondary education.
  (b) Results.--The Secretary shall submit to the authorizing 
committees--
          (1) an annual interim report on the progress and 
        preliminary results of the evaluation of each program 
        funded under this chapter no later than 2 years 
        following the date of enactment of the College Access 
        and Opportunity Act of 2005; and
          (2) a final report not later than 3 years following 
        the date of enactment of such Act.
  (c) Public Availability.--All reports and underlying data 
gathered pursuant to this section shall be made available to 
the public upon request, in a timely manner following 
submission of the applicable reports under subsection (b), 
except that any personally identifiable information on students 
participating in any TRIO program shall not be disclosed or 
made available to the public.

  CHAPTER 2--GAINING EARLY AWARENESS AND READINESS FOR UNDERGRADUATE 
                                PROGRAMS

SEC. 404A. EARLY INTERVENTION AND COLLEGE AWARENESS PROGRAM AUTHORIZED.

  (a) * * *
  (b) Awards.--
          (1) * * *
          (2) Priority.--In making awards to eligible entities 
        described in paragraph (c)(1), the Secretary shall--
                  (A) * * *
                  (B) ensure that students served under this 
                chapter on the day before the date of enactment 
                of the [Higher Education Amendments of 1998] 
                College Access and Opportunity Act of 2005 
                continue to receive assistance through the 
                completion of secondary school.
          (3) Duration.--An award made by the Secretary under 
        this chapter to an eligible entity described in 
        paragraph (1) or (2) of subsection (c) shall be for the 
        period of 6 years.

           *       *       *       *       *       *       *

  (d) Continuing Eligibility.--An eligible entity shall not 
cease to be an eligible entity upon the expiration of any grant 
under this chapter (including a continuation award).

SEC. 404B. REQUIREMENTS.

  (a) * * *

           *       *       *       *       *       *       *

  (g) Cohort Approach.--
          (1) In general.--The Secretary shall require that 
        eligible entities described in section 404A(c)(2)--
                  (A) * * *
                  (B) ensure that the services are provided 
                through the 12th grade to students in the 
                participating grade level and provide the 
                option of continued services through the 
                student's first year of attendance at an 
                eligible institution of higher education.

           *       *       *       *       *       *       *


SEC. 404C. ELIGIBLE ENTITY PLANS.

  (a) Plan Required for Eligibility.--
          (1) * * *
          (2) Contents.--Each plan submitted pursuant to 
        paragraph (1) shall be in such form, contain or be 
        accompanied by such information or assurances, and be 
        submitted at such time as the Secretary may require by 
        regulation. Each such plan shall--
                  (A) describe the activities for which 
                assistance under this chapter is sought; [and]
                  (B) describe activities for coordinating, 
                complementing, and enhancing services under 
                this chapter provided by other eligible 
                entities in the State; and
                  [(B)] (C) provide such additional assurances 
                as the Secretary determines necessary to ensure 
                compliance with the requirements of this 
                chapter.

           *       *       *       *       *       *       *


SEC. 404D. EARLY INTERVENTION.

  (a) * * *
  (b) Uses of Funds.--
          (1) * * *
          (2) Permissible activities.--Examples of activities 
        that meet the requirements of subsection (a) include 
        the following:
                  (A) Providing eligible students in preschool 
                through grade 12 and students in the first year 
                of attendance at an eligible institution of 
                higher education with a continuing system of 
                mentoring and advising that--
                          (i) * * *
                          (ii) may include such support 
                        services as after school and summer 
                        tutoring, assistance in obtaining 
                        summer jobs, career mentoring, [and 
                        academic counseling] academic 
                        counseling, and financial literacy and 
                        economic literacy education or 
                        counseling.

           *       *       *       *       *       *       *

  (c) Priority Students.--For eligible entities not using a 
cohort approach, the eligible entity shall treat as priority 
students any student in preschool through grade 12, and may 
consider students in their first year of attendance at an 
eligible institution, who is eligible--
          (1) * * *

           *       *       *       *       *       *       *

  (e) Homeless and Unaccompanied Youth.--Notwithstanding any 
other provision of this chapter, individuals who are homeless 
or unaccompanied youth as defined in section 725 of the 
McKinney-Vento Homeless Assistance Act shall be eligible to 
participate in programs under this section.

SEC. 404H. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated to carry out this 
chapter [$200,000,000 for fiscal year 1999 and such sums as may 
be necessary for each of the 4 succeeding fiscal years] 
$306,500,000 for fiscal year 2006 and such sums as may be 
necessary for each of the 5 succeeding fiscal years.

        [CHAPTER 3--ACADEMIC ACHIEVEMENT INCENTIVE SCHOLARSHIPS

[SEC. 406A. SCHOLARSHIPS AUTHORIZED.

  [The Secretary is authorized to award scholarships to 
students who graduate from secondary school after May 1, 2000, 
to enable the students to pay the cost of attendance at an 
institution of higher education during the students first 2 
academic years of undergraduate education, if the students--
          [(1) are eligible to receive Federal Pell Grants for 
        the year in which the scholarships are awarded; and
          [(2) demonstrate academic achievement by graduating 
        in the top 10 percent of their secondary school 
        graduating class.

[SEC. 406B. SCHOLARSHIP PROGRAM REQUIREMENTS.

  [(a) Amount of Award.--
          [(1) In general.--Except as provided in paragraph 
        (2), the amount of a scholarship awarded under this 
        chapter for any academic year shall be equal to 100 
        percent of the amount of the Federal Pell Grant for 
        which the recipient is eligible for the academic year.
          [(2) Adjustment for insufficient appropriations.--If, 
        after the Secretary determines the total number of 
        eligible applicants for an academic year in accordance 
        with section 406C, funds available to carry out this 
        chapter for the academic year are insufficient to fully 
        fund all awards under this chapter for the academic 
        year, the amount of the scholarship paid to each 
        student under this chapter shall be reduced 
        proportionately.
  [(b) Assistance Not To Exceed Cost of Attendance.--A 
scholarship awarded under this chapter to any student, in 
combination with the Federal Pell Grant assistance and other 
student financial assistance available to such student, may not 
exceed the student's cost of attendance.

[SEC. 406C. ELIGIBILITY OF SCHOLARS.

  [(a) Procedures Established by Regulation.--The Secretary 
shall establish by regulation procedures for the determination 
of eligibility of students for the scholarships awarded under 
this chapter. Such procedures shall include measures to prevent 
any secondary school from certifying more than 10 percent of 
the school's students for eligibility under this section.
  [(b) Coordination.--In prescribing procedures under 
subsection (a), the Secretary shall ensure that the 
determination of eligibility and the amount of the scholarship 
is determined in a timely and accurate manner consistent with 
the requirements of section 482 and the submission of the 
financial aid form required by section 483. For such purposes, 
the Secretary may provide that, for the first academic year of 
a student's 2 academic years of eligibility under this chapter, 
class rank may be determined prior to graduation from secondary 
school, at such time and in such manner as the Secretary may 
specify in regulations prescribed under this chapter.

[SEC. 406D. STUDENT REQUIREMENTS.

  [(a) In General.--Each eligible student desiring a 
scholarship under this chapter shall submit an application to 
the Secretary at such time, in such manner, and containing such 
information as the Secretary may reasonably require.
  [(b) Continuing Eligibility.--In order for a student to 
continue to be eligible to receive a scholarship under this 
chapter for the second year of undergraduate education, the 
eligible student shall maintain eligibility to receive a 
Federal Pell Grant for that year, including fulfilling the 
requirements for satisfactory progress described in section 
484(c).

[SEC. 407E. AUTHORIZATION OF APPROPRIATIONS.

  [There are authorized to be appropriated to carry out this 
chapter $200,000,000 for fiscal year 1999 and such sums as may 
be necessary for each of the 4 succeeding fiscal years.]

     Subpart 3--Federal Supplemental Educational Opportunity Grants

SEC. 413A. PURPOSE; APPROPRIATIONS AUTHORIZED.

  (a) * * *
  (b) Authorization of Appropriations.--(1) For the purpose of 
enabling the Secretary to make payments to institutions of 
higher education which have made agreements with the Secretary 
in accordance with section 413C(a), for use by such 
institutions for payments to undergraduate students of 
supplemental grants awarded to them under this subpart, there 
are authorized to be appropriated [$675,000,000 for fiscal year 
1999 and such sums as may be necessary for the 4 succeeding 
fiscal years] $779,000,000 for fiscal year 2006 and such sums 
as may be necessary for the 5 succeeding fiscal years.

           *       *       *       *       *       *       *


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

  (a) * * *

           *       *       *       *       *       *       *

  (c) Selection of Individuals and Determination of Amount of 
Awards.--(1) * * *
  [(2)(A) In carrying out paragraph (1) of this subsection, 
each institution of higher education shall, in the agreement 
made under section 487, assure that the selection procedures--
          [(i) will be designed to award supplemental grants 
        under this subpart, first, to students with exceptional 
        need, and
          [(ii) will give a priority for supplemental grants 
        under this subpart to students who receive Pell Grants 
        and meet the requirements of section 484.
  [(B) For the purpose of subparagraph (A), the term ``students 
with exceptional need'' means students with the lowest expected 
family contributions at the institution.]
  (2) In carrying out paragraph (1) of this subsection, each 
institution of higher education shall, in the agreement made 
under section 487, assure that the selection procedures--
          (A) will give a priority for supplemental grants 
        under this subpart to students who receive Pell Grants 
        and meet the requirements of section 484; and
          (B) will award no more than 10 percent of each 
        institution's allocation received under section 413D to 
        students who did not receive Federal Pell Grants in a 
        prior year.

           *       *       *       *       *       *       *


SEC. 413D. ALLOCATION OF FUNDS.

  [(a) Allocation Based on Previous Allocation.--(1) From the 
amount appropriated pursuant to section 413A(b) for each fiscal 
year, the Secretary shall first allocate to each eligible 
institution an amount equal to 100 percent of the amount such 
institution received under subsections (a) and (b) of this 
section for fiscal year 1999 (as such subsections were in 
effect with respect to allocations for such fiscal year).
  [(2)(A) From the amount so appropriated, the Secretary shall 
next allocate to each eligible institution that began 
participation in the program under this subpart after fiscal 
year 1999 but is not a first or second time participant, an 
amount equal to the greater of--
          [(i) $5,000; or
          [(ii) 90 percent of the amount received and used 
        under this subpart for the first year it participated 
        in the program.
  [(B) From the amount so appropriated, the Secretary shall 
next allocate to each eligible institution that began 
participation in the program under this subpart after fiscal 
year 1999 and is a first or second time participant, an amount 
equal to the greatest of--
          [(i) $5,000;
          [(ii) an amount equal to (I) 90 percent of the amount 
        received and used under this subpart in the second 
        preceding fiscal year by eligible institutions offering 
        comparable programs of instruction, divided by (II) the 
        number of students enrolled at such comparable 
        institutions in such fiscal year, multiplied by (III) 
        the number of students enrolled at the applicant 
        institution in such fiscal year; or
          [(iii) 90 percent of the institution's allocation 
        under this part for the preceding fiscal year.
  [(C) Notwithstanding subparagraphs (A) and (B) of this 
paragraph, the Secretary shall allocate to each eligible 
institution which
          [(i) was a first-time participant in the program in 
        fiscal year 2000 or any subsequent fiscal year, and
          [(ii) received a larger amount under this subsection 
        in the second year of participation,
an amount equal to 90 percent of the amount it received under 
this subsection in its second year of participation.
  [(3)(A) If the amount appropriated for any fiscal year is 
less than the amount required to be allocated to all 
institutions under paragraph (1) of this subsection, then the 
amount of the allocation to each such institution shall be 
ratably reduced.
  [(B) If the amount appropriated for any fiscal year is more 
than the amount required to be allocated to all institutions 
under paragraph (1) but less than the amount required to be 
allocated to all institutions under paragraph (2), then--
          [(i) the Secretary shall allot the amount required to 
        be allocated to all institutions under paragraph (1), 
        and
          [(ii) the amount of the allocation to each 
        institution under paragraph (2) shall be ratably 
        reduced.
  [(C) If additional amounts are appropriated for any such 
fiscal year, such reduced amounts shall be increased on the 
same basis as they were reduced (until the amount allocated 
equals the amount required to be allocated under paragraphs (1) 
and (2) of this subsection).
  [(4)(A) Notwithstanding any other provision of this section, 
the Secretary may allocate an amount equal to not more than 10 
percent of the amount by which the amount appropriated in any 
fiscal year to carry out this part exceeds $700,000,000 among 
eligible institutions described in subparagraph (B).
  [(B) In order to receive an allocation pursuant to 
subparagraph (A) an institution shall be an eligible 
institution from which 50 percent or more of the Pell Grant 
recipients attending such eligible institution graduate from or 
transfer to a 4-year institution of higher education.]
  (a) Allocation Based on Previous Allocation.--
          (1) Base guarantee.--From the amount appropriated 
        pursuant to section 413A(b) for each fiscal year after 
        fiscal year 2007, the Secretary shall, subject to 
        paragraph (2), first allocate to each eligible 
        institution an amount equal to the following percentage 
        of the amount such institution received under 
        subsection (a) of this section for fiscal year 2007 (as 
        such subsection was in effect with respect to 
        allocations for such fiscal year):
                  (A) 80 percent for fiscal years 2008 and 
                2009;
                  (B) 60 percent for fiscal years 2010 and 
                2011;
                  (C) 40 percent for fiscal years 2012 and 
                2013;
                  (D) 20 percent for fiscal years 2014 and 
                2015; and
                  (E) 0 percent for fiscal year 2016 and any 
                succeeding fiscal year.
          (2) Ratable reductions for insufficient 
        appropriations.--
                  (A) Reduction of base guarantee.--If the 
                amount appropriated for any fiscal year is less 
                than the amount required to be allocated to all 
                institutions under this subsection, then the 
                amount of the allocation to each such 
                institution shall be ratably reduced.
                  (B) Additional appropriations allocation.--If 
                additional amounts are appropriated for any 
                such fiscal year, such reduced amounts shall be 
                increased on the same basis as they were 
                reduced (until the amount allocated equals the 
                amount required to be allocated under this 
                subsection).
          (3) Additional allocations for certain 
        institutions.--
                  (A) Allocations permitted.--Notwithstanding 
                any other provision of this section, the 
                Secretary may allocate an amount equal to not 
                more than 10 percent of the amount by which the 
                amount appropriated in any fiscal year to carry 
                out this subpart exceeds $700,000,000 among 
                eligible institutions described in subparagraph 
                (B).
                  (B) Eligible institutions.--An otherwise 
                eligible institution may receive a portion of 
                the allocation described in subparagraph (A) 
                if--
                          (i) not less than 10 percent of the 
                        students attending the institution 
                        receive Federal Pell Grants; and
                          (ii)(I) in the case of an institution 
                        that offers programs of at least 4 
                        years in duration, if its graduation 
                        rate for Federal Pell Grant recipients 
                        attending the institution and 
                        graduating within the period of time 
                        equal to normal duration of the longest 
                        undergraduate program offered by the 
                        institution, as measured from the first 
                        day of their enrollment, exceeds the 
                        median rate for the class of 
                        institution (as defined in section 
                        131(f)(5)(C)); or
                          (II) in the case of an institution 
                        that offers programs of at least 2, but 
                        less than 4, years in duration, if its 
                        rate for Federal Pell Grant recipients 
                        attending the institution and 
                        graduating or transferring to an 
                        institution that offers programs of at 
                        least 4 years in duration within the 
                        period of time equal to the normal 
                        duration of the program offered, as 
                        measured from the first day of their 
                        enrollment, exceeds the median rate for 
                        the class of institution (as defined in 
                        section 131(f)(5)(C)).

           *       *       *       *       *       *       *

  (c) Determination of Institution's Need.--(1) * * *

           *       *       *       *       *       *       *

  (3)(A) * * *

           *       *       *       *       *       *       *

  (D) The allowance for books and supplies described in 
subparagraph (A)(iii) is equal to [$450] $600.

           *       *       *       *       *       *       *


    Subpart 4--Leveraging Educational Assistance Partnership Program

SEC. 415A. PURPOSE; APPROPRIATIONS AUTHORIZED.

  (a) * * *
  (b) Authorization of Appropriations; Availability.--
          (1) In general.--There are authorized to be 
        appropriated $105,000,000 for fiscal year [1999] 2006, 
        and such sums as may be necessary for each of the [4] 5 
        succeeding fiscal years.

           *       *       *       *       *       *       *


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

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

  (a) * * *
  (b) Services Provided by High School Equivalency Program.--
The services authorized by this subpart for the high school 
equivalency program include--
          (1) recruitment services to reach persons--
                  (A) * * *
                  (B)(i) who themselves, or whose spouse, or 
                whose parents, have spent a minimum of 75 days 
                during the past 24 months in migrant and 
                seasonal farmwork; or

           *       *       *       *       *       *       *

          (3) supportive services which include the following:
                  (A) * * *
                  (B) placement services designed to place 
                students in a university, college, or junior 
                college program, including preparation for 
                college entrance exams, or in military service 
                or career positions; and

           *       *       *       *       *       *       *

          (7) exposure to cultural events, academic programs, 
        and other educational and cultural activities usually 
        not available to migrant youth; [and]
          (8) other essential supportive services, including 
        child care and transportation, as needed to ensure the 
        success of eligible students[.]; and
          (9) follow-up activity and reporting requirements, 
        except that not more than 2 percent of the funds 
        provided under this section may be used for such 
        purposes.
  (c) Services Provided by College Assistance Migrant 
Program.--(1) Services authorized by this subpart for the 
college assistance migrant program include--
          (A) outreach and recruitment services to reach 
        persons who themselves, or whose spouse or whose 
        parents have spent a minimum of 75 days during the past 
        24 months in migrant and seasonal farmwork or who have 
        participated or are eligible to participate, in 
        programs under part C of title I of the Elementary and 
        Secondary Education Act of 1965 (or such part's 
        predecessor authority) or section 402 of the Job 
        Training Partnership Act or section 167 of the 
        Workforce Investment Act of 1998, and who meet the 
        minimum qualifications for attendance at a college or 
        university;
          (B) supportive and instructional services which 
        include:
                  [(i) personal, academic, and career 
                counseling as an ongoing part of the program;]
                  (i) personal, academic, career, and economic 
                education or personal finance counseling as an 
                ongoing part of the program;

           *       *       *       *       *       *       *

  (2) A recipient of a grant to operate a college assistance 
migrant program under this subpart shall provide followup 
services for migrant students after such students have 
completed their first year of college, and shall not use more 
than 10 percent of such grant for such followup services. Such 
followup services may include--
          (A) monitoring and reporting the academic progress of 
        students who participated in the project during such 
        student's first year of college and during such 
        student's subsequent years in college; [and]
          (B) referring such students to on- or off-campus 
        providers of counseling services (including mentoring 
        and guidance of such students), academic assistance, or 
        financial aid[.]; and
          (C) for students in any program that does not award a 
        bachelor's degree, encouraging the transfer to, and 
        persistence in, such a program, and monitoring the rate 
        of such transfer, persistence, and completion.

           *       *       *       *       *       *       *

  (e) Five-year Grant Period; Consideration of Prior 
Experience.--Except under extraordinary circumstances, the 
Secretary shall award grants for a 5-year period. For the 
purpose of making grants under this subpart, the Secretary 
shall consider the prior experience of service delivery under 
the particular project for which funds are sought by each 
applicant. Such prior experience shall be awarded the same 
level of consideration given this factor for applicants for 
programs in accordance with [section 402A(c)(1)] section 
402A(c)(2).

           *       *       *       *       *       *       *

  (h) Authorization of Appropriations.--(1) There are 
authorized to be appropriated for the high school equivalency 
program [$15,000,000 for fiscal year 1999 and such sums as may 
be necessary for each of the 4 succeeding fiscal years] 
$24,000,000 for fiscal year 2006 and such sums as may be 
necessary for each of the 5 succeeding fiscal years.
  (2) There are authorized to be appropriated for the college 
assistance migrant program [$5,000,000 for fiscal year 1999 and 
such sums as may be necessary for each of the 4 succeeding 
fiscal years] $16,000,000 for fiscal year 2006 and such sums as 
may be necessary for each of the 5 succeeding fiscal years.

         [Subpart 6--Robert C. Byrd Honors Scholarship Program

[SEC. 419A. STATEMENT OF PURPOSE.

  [It is the purpose of this subpart to establish a Robert C. 
Byrd Honors Scholarship Program to promote student excellence 
and achievement and to recognize exceptionally able students 
who show promise of continued excellence.

[SEC. 419C. SCHOLARSHIPS AUTHORIZED.

  [(a) Program Authority.--The Secretary is authorized, in 
accordance with the provisions of this subpart, to make grants 
to States to enable the States to award scholarships to 
individuals who have demonstrated outstanding academic 
achievement and who show promise of continued academic 
achievement.
  [(b) Period of Award.--Scholarships under this section shall 
be awarded for a period of not less than 1 or more than 4 years 
during the first 4 years of study at any institution of higher 
education eligible to participate in any programs assisted 
under this title. The State educational agency administering 
the program in a State shall have discretion to determine the 
period of the award (within the limits specified in the 
preceding sentence), except that--
          [(1) if the amount appropriated for this subpart for 
        any fiscal year exceeds the amount appropriated for 
        this subpart for fiscal year 1993, the Secretary shall 
        identify to each State educational agency the number of 
        scholarships available to that State under section 
        419D(b) that are attributable to such excess;
          [(2) the State educational agency shall award not 
        less than that number of scholarships for a period of 4 
        years.
  [(c) Use at any Institution Permitted.--A student awarded a 
scholarship under this subpart may attend any institution of 
higher education.
  [(d) Byrd Scholars.--Individuals awarded scholarships under 
this subpart shall be known as ``Byrd Scholars''.

[SEC. 419D. ALLOCATION AMONG STATES.

  [(a) Allocation Formula.--From the sums appropriated pursuant 
to the authority of section 419K for any fiscal year, the 
Secretary shall allocate to each State that has an agreement 
under section 419E an amount equal to $1,500 multiplied by the 
number of scholarships determined by the Secretary to be 
available to such State in accordance with subsection (b).
  [(b) Number of Scholarships Available.--The number of 
scholarships to be made available in a State for any fiscal 
year shall bear the same ratio to the number of scholarships 
made available to all States as the State's population ages 5 
through 17 bears to the population ages 5 through 17 in all the 
States, except that not less than 10 scholarships shall be made 
available to any State.
  [(c) Use of Census Data.--For the purpose of this section, 
the population ages 5 through 17 in a State and in all the 
States shall be determined by the most recently available data, 
satisfactory to the Secretary, from the Bureau of the Census.
  [(d) Consolidation by Insular Areas Prohibited.--
Notwithstanding section 501 of Public Law 95-1134 (48 U.S.C. 
1469a), funds allocated under this part to an Insular Area 
described in that section shall be deemed to be direct payments 
to classes of individuals, and the Insular Area may not 
consolidate such funds with other funds received by the Insular 
Area from any department or agency of the United States 
Government.
  [(e) FAS Eligibility.--
          [(1) Fiscal years 2000 through 2004.--Notwithstanding 
        any other provision of this subpart, in the case of 
        students from the Freely Associated States who may be 
        selected to receive a scholarship under this subpart 
        for the first time for any of the fiscal years 2000 
        through 2004--
                  [(A) there shall be 10 scholarships in the 
                aggregate awarded to such students for each of 
                the fiscal years 2000 through 2004; and
                  [(B) the Pacific Regional Educational 
                Laboratory shall administer the program under 
                this subpart in the case of scholarships for 
                students in the Freely Associated States.
          [(2) Termination of eligibility.--A student from the 
        Freely Associated States shall not be eligible to 
        receive a scholarship under this subpart after 
        September 30, 2004.

[SEC. 419E. AGREEMENTS.

  [The Secretary shall enter into an agreement with each State 
desiring to participate in the scholarship program authorized 
by this subpart. Each such agreement shall include provisions 
designed to assure that--
          [(1) the State educational agency will administer the 
        scholarship program authorized by this subpart in the 
        State;
          [(2) the State educational agency will comply with 
        the eligibility and selection provisions of this 
        subpart;
          [(3) the State educational agency will conduct 
        outreach activities to publicize the availability of 
        scholarships under this subpart to all eligible 
        students in the State, with particular emphasis on 
        activities designed to assure that students from low-
        income and moderate-income families have access to the 
        information on the opportunity for full participation 
        in the scholarship program authorized by this subpart; 
        and
          [(4) the State educational agency will pay to each 
        individual in the State who is awarded a scholarship 
        under this subpart $1,500.

[SEC. 419F. ELIGIBILITY OF SCHOLARS.

  [(a) High School Graduation or Equivalent and Admission to 
Institution Required.--Each student awarded a scholarship under 
this subpart shall be a graduate of a public or private 
secondary school or have the equivalent of a certificate of 
graduation as recognized by the State in which the student 
resides and must have been admitted for enrollment at an 
institution of higher education.
  [(b) Selection Based on Promise of Academic Achievement.--
Each student awarded a scholarship under this subpart must 
demonstrate outstanding academic achievement and show promise 
of continued academic achievement.

[SEC. 419G. SELECTION OF SCHOLARS.

  [(a) Establishment of Criteria.--The State educational agency 
is authorized to establish the criteria for the selection of 
scholars under this subpart.
  [(b) Adoption of Procedures.--The State educational agency 
shall adopt selection procedures designed to ensure an 
equitable geographic distribution of awards within the State 
(and in the case of the Federated States of Micronesia, the 
Republic of the Marshall Islands, the Virgin Islands, American 
Samoa, the Commonwealth of the Northern Mariana Islands, Guam, 
or Palau (until such time as the Compact of Free Association is 
ratified), not to exceed 10 individuals will be selected from 
such entities).
  [(c) Consultation Requirement.--In carrying out its 
responsibilities under subsections (a) and (b), the State 
educational agency shall consult with school administrators, 
school boards, teachers, counselors, and parents.
  [(d) Timing of Selection.--The selection process shall be 
completed, and the awards made, prior to the end of each 
secondary school academic year.

[SEC. 419H. STIPENDS AND SCHOLARSHIP CONDITIONS.

  [(a) Amount of Award.--Each student awarded a scholarship 
under this subpart shall receive a stipend of $1,500 for the 
academic year of study for which the scholarship is awarded, 
except that in no case shall the total amount of financial aid 
awarded to such student exceed such student's total cost-of-
attendance.
  [(b) Use of Award.--The State educational agency shall 
establish procedures to assure that a scholar awarded a 
scholarship under this subpart pursues a course of study at an 
institution of higher education.

[SEC. 419J. CONSTRUCTION OF NEEDS PROVISIONS.

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

[SEC. 419K. AUTHORIZATION OF APPROPRIATIONS.

  [There are authorized to be appropriated for this subpart 
$45,000,000 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. 419A. ROBERT C. BYRD MATHEMATICS AND SCIENCE HONORS SCHOLARSHIP 
                    PROGRAM.

  (a) Purpose.--The purpose of this section is to award 
scholarships to students who are enrolled in studies leading to 
baccalaureate and advanced degrees in physical, life, or 
computer sciences, mathematics, and engineering.
  (b) Definitions.--As used in this section--
          (1) the term ``computer science'' means the branch of 
        knowledge or study of computers, including such fields 
        of knowledge or study as computer hardware, computer 
        software, computer engineering, information systems, 
        and robotics;
          (2) the term ``eligible student'' means a student 
        who--
                  (A) is a citizen of the United States;
                  (B) is selected by the managing agent to 
                receive a scholarship;
                  (C) is enrolled full-time in an institution 
                of higher education, other than a United States 
                service academy; and
                  (D) has shown a commitment to and is pursuing 
                a major in studies leading to a baccalaureate, 
                masters, or doctoral degree (or a combination 
                thereof) in physical, life, or computer 
                sciences, mathematics, or engineering;
          (3) the term ``engineering'' means the science by 
        which the properties of matter and the sources of 
        energy in nature are made useful to humanity in 
        structures, machines, and products, as in the 
        construction of engines, bridges, buildings, mines, and 
        chemical plants, including such fields of knowledge or 
        study as aeronautical engineering, chemical 
        engineering, civil engineering, electrical engineering, 
        industrial engineering, materials engineering, 
        manufacturing engineering, and mechanical engineering;
          (4) the term ``life sciences'' means the branch of 
        knowledge or study of living things, including such 
        fields of knowledge or study as biology, biochemistry, 
        biophysics, microbiology, genetics, physiology, botany, 
        zoology, ecology, and behavioral biology, except that 
        the term does not encompass social psychology or the 
        health professions;
          (5) the term ``managing agent'' means an entity to 
        which an award is made under subsection (c) to manage a 
        program of Mathematics and Science Honors Scholarships;
          (6) the term ``mathematics'' means the branch of 
        knowledge or study of numbers and the systematic 
        treatment of magnitude, relationships between figures 
        and forms, and relations between quantities expressed 
        symbolically, including such fields of knowledge or 
        study as statistics, applied mathematics, and 
        operations research; and
          (7) the term ``physical sciences'' means the branch 
        of knowledge or study of the material universe, 
        including such fields of knowledge or study as 
        astronomy, atmospheric sciences, chemistry, earth 
        sciences, ocean sciences, physics, and planetary 
        sciences.
  (c) Award.--
          (1)(A) From funds authorized under section 419D to 
        carry out this section, the Secretary is authorized, 
        through a grant or cooperative agreement, to make an 
        award to a private, non-profit organization, other than 
        an institution of higher education or system of 
        institutions of higher education, to manage, through a 
        public and private partnership, a program of 
        Mathematics and Science Honors Scholarships under this 
        section.
          (B) The award under subparagraph (A) shall be for a 
        five-year period.
          (2)(A) One hundred percent of the funds awarded under 
        paragraph (1)(A) for any fiscal year shall be obligated 
        and expended solely on scholarships to eligible 
        students.
          (B) No Federal funds shall be used to provide more 
        than 50 percent of the cost of any scholarship to an 
        eligible student.
          (C) The maximum scholarship award shall be the 
        difference between an eligible student's cost of 
        attendance minus any non-loan based aid such student 
        receives.
          (3)(A) The secretary may establish--
                  (i) eligibility criteria for applicants for 
                managing agent, including criteria regarding 
                financial and administrative capability; and
                  (ii) operational standards for the managing 
                agent, including management and performance 
                requirements, such as audit, recordkeeping, 
                record retention, and reporting procedures and 
                requirements.
          (B) The Secretary, as necessary, may review and 
        revise any criteria, standards, and rules established 
        under this paragraph and, through the agreement with 
        the managing agent, see that any revisions are 
        implemented.
          (4) If the managing agent fails to meet the 
        requirements of this section the Secretary may 
        terminate the award to the managing agent.
          (5) The Secretary shall conduct outreach efforts to 
        help raise awareness of the Mathematics and Science 
        Honors Scholarships.
  (d) Duties of the Managing Agent.--The managing agent shall--
          (1) develop criteria to award Mathematics and Science 
        Honors Scholarships based on established measurements 
        available to secondary students who wish to pursue 
        degrees in physical, life, or computer sciences, 
        mathematics, and engineering;
          (2) establish a Mathematics and Science Honors 
        Scholarship Fund in a separate, named account that 
        clearly discloses the amount of Federal and non-Federal 
        funds deposited in the account and used for 
        scholarships under this section;
          (3) solicit funds for scholarships and for the 
        administration of the program from non-Federal sources;
          (4) solicit applicants for scholarships;
          (5) from the amounts in the Fund, award scholarships 
        to eligible students and transfer such funds to the 
        institutions of higher education that they attend; and
          (6) annually submit to the Secretary a financial 
        audit and a report on the progress of the program, and 
        such other documents as the Secretary may require to 
        determine the effective management of the program.
  (e) Applications.--
          (1) Any eligible entity that desires to be the 
        managing agent under this section shall submit an 
        application to the Secretary, in such form and 
        containing such information, as the Secretary may 
        require.
          (2) Each application shall include a description of--
                  (A) how the applicant meets or will meet 
                requirements established under subsections 
                (c)(3)(A) and (d);
                  (B) how the applicant will solicit funds for 
                scholarships and for the administration of the 
                program from non-Federal sources;
                  (C) how the applicant will provide nationwide 
                outreach to inform students about the program 
                and to encourage students to pursue degrees in 
                physical, life, or computer sciences, 
                mathematics, and engineering;
                  (D) how the applicant will solicit 
                applications for scholarships, including how 
                the applicant will balance efforts in urban and 
                rural areas;
                  (E) the selection criteria based on 
                established measurements available to secondary 
                students the applicant will use to award 
                scholarships and to renew those awards;
                  (F) how the applicant will inform the 
                institution of higher education chosen by the 
                recipient of the name and scholarship amount of 
                the recipient;
                  (G) what procedures and assurances the 
                applicant and the institution of higher 
                education that the recipient attends will use 
                to verify student eligibility, attendance, 
                degree progress, and academic performance and 
                to deliver and account for payments to such 
                institution;
                  (H) the management (including audit and 
                accounting) procedures the applicant will use 
                for the program;
                  (I) the human, financial, and other resources 
                that the applicant will need and use to manage 
                the program;
                  (J) how the applicant will evaluate the 
                program and report to the Secretary annually; 
                and
                  (K) a description of how the entity will 
                coordinate with, complement, and build on 
                similar public and private mathematics and 
                science programs.
  (f) Scholarship Recipients.--
          (1) A student receiving a scholarship under this 
        section shall be known as a ``Byrd Mathematics and 
        Science Honors Scholar''.
          (2) Any student desiring to receive a scholarship 
        under this section shall submit an application to the 
        managing agent in such form, and containing such 
        information, as the managing agent may require.
          (3) Any student that receives a scholarship under 
        this section shall enter into an agreement with the 
        managing agent to complete 5 consecutive years of 
        service to begin no later than 12 months following 
        completion of the final degree in a position related to 
        physical, life, or computer sciences, mathematics, or 
        engineering as defined under this section.
          (4) If any student that receives a scholarship under 
        this section fails to earn at least a baccalaureate 
        degree in physical, life, or computer sciences, 
        mathematics, or engineering as defined under this 
        section, the student shall repay to the managing agent 
        the amount of any financial assistance paid to such 
        student.
          (5) If any student that receives a scholarship under 
        this section fails to meet the requirements of 
        paragraph (3), the student shall repay to the managing 
        agent the amount of any financial assistance paid to 
        such student.
          (6)(A) Scholarships shall be awarded for only one 
        academic year of study at a time.
          (B)(i) A scholarship shall be renewable on an annual 
        basis for the established length of the academic 
        program if the student awarded the scholarship remains 
        eligible.
          (ii) The managing agent may condition renewal of a 
        scholarship on measures of academic progress and 
        achievement, with the approval of the Secretary.
          (C)(i) If a student fails to either remain eligible 
        or meet established measures of academic progress and 
        achievement, the managing agent shall instruct the 
        student's institution of higher education to suspend 
        payment of the student's scholarship.
          (ii) A suspension of payment shall remain in effect 
        until the student is able to demonstrate to the 
        satisfaction of the managing agent that he or she is 
        again eligible and meets the established measures of 
        academic progress and achievement.
          (iii) A student's eligibility for a scholarship shall 
        be terminated if a suspension period exceeds 12 months.
          (D)(i)(I) A student awarded a scholarship may, in a 
        manner and under the terms established by, and with the 
        approval of, the managing agent, postpone or interrupt 
        his or her enrollment at an institution of higher 
        education for up to 12 months.
                  (II) Such a postponement or interruption 
                shall not be considered a suspension for 
                purposes of subparagraph (C).
          (ii) Neither a student nor the student's institution 
        of higher education shall receive the student's 
        scholarship payments during the period of postponement 
        or interruption, but such payments shall resume upon 
        enrollment or reenrollment.
          (iii) In exceptional circumstances, such as serious 
        injury or illness or the necessity to care for family 
        members, the student's postponement or interruption 
        may, upon notification and approval of the managing 
        agent, be extended beyond the 12 month period described 
        in clause (i)(I).
  (g) Responsibilities of Institution of Higher Education.--
          (1) The managing agent shall require any institution 
        of higher education that enrolls a student who receives 
        a scholarship under this section to annually provide an 
        assurance, prior to making any payment, that the 
        student--
          (A) is eligible in accordance with subsection (b)(2); 
        and
          (B) has provided the institution with a written 
        commitment to attend, or is attending, classes and is 
        satisfactorily meeting the institution's academic 
        criteria for enrollment in its program of study.
          (2)(A) The managing agent shall provide the 
        institution of higher education with payments from the 
        Fund for selected recipients in at least two 
        installments.
          (B) An institution of higher education shall return 
        prorated amounts of any scholarship payment to the 
        managing agent, who shall deposit it in to the Fund, if 
        a recipient declines a scholarship, does not attend 
        courses, transfers to another institution of higher 
        education, or becomes ineligible for a scholarship.

SEC. 419B. MATHEMATICS AND SCIENCE INCENTIVE PROGRAM.

  (a) Program.--
          (1) In general.--The Secretary is authorized to carry 
        out a program of assuming the obligation to pay, 
        pursuant to the provisions of this section, the 
        interest on a loan made, insured, or guaranteed under 
        part B or D of this title.
          (2) Eligibility.--The Secretary may assume interest 
        payments under paragraph (1) only for a borrower who--
                  (A) has submitted an application in 
                compliance with subsection (d);
                  (B) obtained one or more loans described in 
                paragraph (1) as an undergraduate student;
                  (C) is a new borrower (within the meaning of 
                section 103(7) of this Act) on or after the 
                date of enactment of the College Access and 
                Opportunity Act of 2005;
                  (D) is a highly qualified teacher of science, 
                technology, engineering or mathematics at an 
                elementary or secondary school in a high need 
                local educational agency, or is a mathematics, 
                science, or engineering professional; and
                  (E) enters into an agreement with the 
                Secretary to complete 5 consecutive years of 
                service in a position described in subparagraph 
                (D), starting on the date of the agreement.
          (3) Prior interest limitations.--The Secretary shall 
        not make any payments for interest that--
                  (A) accrues prior to the beginning of the 
                repayment period on a loan in the case of a 
                loan made under section 428H or a Federal 
                Direct Unsubsidized Stafford Loan; or
                  (B) has accrued prior to the signing of an 
                agreement under paragraph (2)(E).
          (4) Initial selection.--In selecting participants for 
        the program under this section, the Secretary--
                  (A) shall choose among eligible applicants on 
                the basis of--
                          (i) the national security, homeland 
                        security, and economic security needs 
                        of the United States, as determined by 
                        the Secretary, in consultation with 
                        other Federal agencies, including the 
                        Departments of Labor, Defense, Homeland 
                        Security, Commerce, and Energy, the 
                        Central Intelligence Agency, and the 
                        National Science Foundation; and
                          (ii) the academic record or job 
                        performance of the applicant; and
                  (B) may choose among eligible applicants on 
                the basis of--
                          (i) the likelihood of the applicant 
                        to complete the 5-year service 
                        obligation;
                          (ii) the likelihood of the applicant 
                        to remain in science, mathematics, or 
                        engineering after the completion of the 
                        service requirement; or
                          (iii) other relevant criteria 
                        determined by the Secretary.
          (5) Availability subject to appropriations.--Loan 
        interest payments under this section shall be subject 
        to the availability of appropriations. If the amount 
        appropriated for any fiscal year is not sufficient to 
        provide interest payments on behalf of all qualified 
        applicants, the Secretary shall give priority to those 
        individuals on whose behalf interest payments were made 
        during the preceding fiscal year.
          (6) Regulations.--The Secretary is authorized to 
        prescribe such regulations as may be necessary to carry 
        out the provisions of this section.
  (b) Duration and Amount of Interest Payments.--The period 
during which the Secretary shall pay interest on behalf of a 
student borrower who is selected under subsection (a) is the 
period that begins on the effective date of the agreement under 
subsection (a)(2)(E), continues after successful completion of 
the service obligation, and ends on the earlier of--
          (1) the completion of the repayment period of the 
        loan;
          (2) payment by the Secretary of a total of $5,000 on 
        behalf of the borrower;
          (3) if the borrower ceases to fulfill the service 
        obligation under such agreement prior to the end of the 
        5-year period, as soon as the borrower is determined to 
        have ceased to fulfill such obligation in accordance 
        with regulations of the Secretary; or
          (4) 6 months after the end of any calendar year in 
        which the borrower's gross income equals or exceeds 4 
        times the national per capita disposable personal 
        income (current dollars) for such calendar year, as 
        determined on the basis of the National Income and 
        Product Accounts Tables of the Bureau of Economic 
        Analysis of the Department of Commerce, as determined 
        in accordance with regulations prescribed by the 
        Secretary.
  (c) Repayment to Eligible Lenders.--Subject to the 
regulations prescribed by the Secretary by regulation under 
subsection (a)(6), the Secretary shall pay to each eligible 
lender or holder for each payment period the amount of the 
interest that accrues on a loan of a student borrower who is 
selected under subsection (a).
  (d) Application for Repayment.--
          (1) In general.--Each eligible individual desiring 
        loan interest payment 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) Failure to complete service agreement.--Such 
        application shall contain an agreement by the 
        individual that, if the individual fails to complete 
        the 5 consecutive years of service required by 
        subsection (a)(2)(E), the individual agrees to repay 
        the Secretary the amount of any interest paid by the 
        Secretary on behalf of the individual.
  (e) Treatment of Consolidation Loans.--A consolidation loan 
made under section 428C of this Act, or a Federal Direct 
Consolidation Loan made under part D of title IV of this Act, 
may be a qualified loan for the purpose of this section only to 
the extent that such loan amount was used by a borrower who 
otherwise meets the requirements of this section to repay--
          (1) a loan made under section 428 or 428H of this 
        Act; or
          (2) a Federal Direct Stafford Loan, or a Federal 
        Direct Unsubsidized Stafford Loan, made under part D of 
        title IV of this Act.
  (f) Prevention of Double Benefits.--No borrower may, for the 
same service, receive a benefit under both this section and--
          (1) any loan forgiveness program under title IV of 
        this Act; or
          (2) subtitle D of title I of the National and 
        Community Service Act of 1990 (42 U.S.C. 12601 et 
        seq.).
  (g) Definitions.--As used in this section--
          (1) the term ``high need local educational agency'' 
        has the same meaning given such term in section 
        201(b)(4); and
          (2) the term ``mathematics, science, or engineering 
        professional'' means a person who--
                  (A) holds a baccalaureate, masters, or 
                doctoral degree (or a combination thereof) in 
                science, mathematics, or engineering; and
                  (B) works in a field the Secretary determines 
                is closely related to that degree, which shall 
                include working as a professor at a two- or 
                four-year institution of higher education.

SEC. 419C. MATHEMATICS AND SCIENCE EDUCATION COORDINATING COUNCIL 
                    GRANTS.

  (a) Purposes.--The purposes of this section include--
          (1) supporting programs that encourage students to 
        enroll in and successfully complete baccalaureate and 
        advanced degrees in science, technology, engineering, 
        and mathematics;
          (2) achieving the common objective of organizing, 
        leading, and implementing State-based reform agendas 
        that support the continuing improvement of mathematics 
        and science education; and
          (3) improving collaboration in a State among the 
        State educational agency, 2-year and 4-year 
        institutions of higher education, and the business 
        community through the development or improvement of a 
        coordinating council.
  (b) Definitions.--For the purposes of this section:
          (1) the term ``eligible State'' means--
                  (A) the Governor of a State; or
                  (B) in the case of a State for which the 
                constitution or laws of the State designate an 
                individual, entity, or agency in the State, 
                other than the Governor, to be responsible for 
                coordination among segments of the State's 
                educational systems, such individual, entity, 
                or agency.
          (2) the term ``mathematics and science education 
        coordinating council'' means an organization that is 
        charged by a State with coordinating mathematics and 
        science education in the State. Such a council shall be 
        composed of education, business, and community leaders 
        working together to increase student participation and 
        academic achievement in mathematics and science.
  (c) State Grants.--From amounts made available under section 
419D for this section, the Secretary is authorized to use not 
more than $5,000,000 to award grants on a competitive basis to 
eligible States for the purpose of carrying out activities 
described in subsection (d).
  (d) Uses of Funds.--An eligible State that receives a grant 
under this section is authorized to use grant funds to carry 
out one or more of the following activities:
          (1) In a State in which a mathematics and science 
        education coordinating council does not exist, planning 
        and establishing such a council.
          (2) In a State in which such a council exists, 
        reforming or expanding the activities of the council, 
        including implementing State-based reform agendas that 
        support the continuing improvement of mathematics and 
        science education, and support services that lead to 
        better teacher recruitment and training, increased 
        student academic achievement, and increased student 
        enrollment and degree attainment in science, 
        technology, engineering, and mathematics.
          (3) Coordinating with activities under part B of 
        title II of the Elementary and Secondary Education Act 
        of 1965 and with title II of this Act, especially as it 
        pertains to the recruitment and preparation of highly 
        qualified mathematics and science teachers.
  (e) Application.--To be eligible to receive a grant under 
this section, an eligible State shall submit an application to 
the Secretary that--
          (1) describes the activities the State will carry out 
        with the funds;
          (2) contains a plan for continuing such activities 
        once Federal funding ceases; and
          (3) contains such other information and assurances as 
        the Secretary may require.
  (f) Consultation.--The Governor of a State, or the 
individual, entity, or agency in the State described in 
subsection (b)(1)(B), shall consult with the State board of 
education, State educational agency, and the State agency for 
higher education, as appropriate, with respect to the 
activities assisted under this section. In the case of an 
individual, entity, or agency described in subsection 
(b)(1)(B), such consultation shall also include the Governor.
  (g) Construction.--Nothing in this section 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.
  (h) Administrative Provisions.--
          (1) In general.--
                  (A) Grants awarded under this section shall 
                be awarded for a period not to exceed 5 years.
                  (B) A grantee may receive a grant under this 
                part only once.
                  (C) Payments of grant funds under this 
                section shall be annual.
          (2) Secretarial selections.--The Secretary shall 
        determine which applications receive funds under this 
        section, and the amount of the grant. In determining 
        grant amounts, the Secretary shall take into account 
        the total amount of funds available for all grants 
        under this section and the nature of each grant 
        proposal, including whether funds are being sought to 
        assist in the creation of a new State mathematics and 
        science education coordinating council or to extend the 
        work of an existing council. The Secretary shall also 
        take into account the equitable geographic distribution 
        of grants throughout the United States.
          (3) Matching requirement.--Each eligible State 
        receiving a grant under this section shall provide, 
        from non-Federal sources, an amount equal to 50 percent 
        of the amount of the grant (in cash or in kind) to 
        carry out the activities supported by the grant.
  (i) Accountability and Evaluation.--
          (1) State grant accountability report.--An eligible 
        State that receives a grant under this section shall 
        submit an annual accountability report to the 
        Secretary. Such report shall include a description of 
        the degree to which the eligible State, in using grant 
        funds, has made substantial progress in meeting its 
        objectives.
          (2) Evaluation and dissemination.--The Secretary 
        shall evaluate the activities funded under this section 
        and report the Secretary's findings regarding such 
        activities to the authorizing committees. The Secretary 
        shall broadly disseminate successful practices 
        developed by eligible States under this section, and 
        shall broadly disseminate information regarding such 
        practices that were found to be ineffective.
          (3) Revocation.--If the Secretary determines that an 
        eligible State is not making substantial progress in 
        meeting the purposes, objectives, and measures, as 
        appropriate, required under this section by the end of 
        the second year of a grant, then the grant payment 
        shall not be made for the third year and subsequent 
        years of the grant.

SEC. 419D. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated $41,000,000 for 
fiscal year 2006 and such sums as may be necessary for each of 
the 5 succeeding fiscal years to carry out this subpart.

          Subpart 7--Child Care Access Means Parents in School

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

  (a) * * *

           *       *       *       *       *       *       *

  (g) Authorization of Appropriations.--There are authorized to 
be appropriated to carry out this section $45,000,000 for 
fiscal year [1999] 2006 and such sums as may be necessary for 
each of the [4] 5 succeeding fiscal years.

           *       *       *       *       *       *       *


           [Subpart 8--Learning Anytime Anywhere Partnerships

[SEC. 420D. FINDINGS.

  [Congress makes the following findings:
          [(1) The nature of postsecondary education delivery 
        is changing, and new technology and other related 
        innovations can provide promising education 
        opportunities for individuals who are currently not 
        being served, particularly for individuals without easy 
        access to traditional campus-based postsecondary 
        education or for whom traditional courses are a poor 
        match with education or training needs.
          [(2) Individuals, including individuals seeking basic 
        or technical skills or their first postsecondary 
        experience, individuals with disabilities, dislocated 
        workers, individuals making the transition from 
        welfare-to-work, and individuals who are limited by 
        time and place constraints can benefit from 
        nontraditional, noncampus-based postsecondary education 
        opportunities and appropriate support services.
          [(3) The need for high-quality, nontraditional, 
        technology-based education opportunities is great, as 
        is the need for skill competency credentials and other 
        measures of educational progress and attainment that 
        are valid and widely accepted, but neither need is 
        likely to be adequately addressed by the uncoordinated 
        efforts of agencies and institutions acting 
        independently and without assistance.
          [(4) Partnerships, consisting of institutions of 
        higher education, community organizations, or other 
        public or private agencies or organizations, can 
        coordinate and combine institutional resources--
                  [(A) to provide the needed variety of 
                education options to students; and
                  [(B) to develop new means of ensuring 
                accountability and quality for innovative 
                education methods.

[SEC. 420E. PURPOSE; PROGRAM AUTHORIZED.

  [(a) Purpose.--It is the purpose of this subpart to enhance 
the delivery, quality, and accountability of postsecondary 
education and career-oriented lifelong learning through 
technology and related innovations.
  [(b) Program Authorized.--
          [(1) Grants.--
                  [(A) In general.--The Secretary may, from 
                funds appropriated under section 420J make 
                grants to, or enter into contracts or 
                cooperative agreements with, eligible 
                partnerships to carry out the authorized 
                activities described in section 420G.
                  [(B) Duration.--Grants under this subpart 
                shall be awarded for periods that do not exceed 
                5 years.
          [(2) Definition of eligible partnership.--For 
        purposes of this subpart, the term ``eligible 
        partnership'' means a partnership consisting of 2 or 
        more independent agencies, organizations, or 
        institutions. The agencies, organizations, or 
        institutions may include institutions of higher 
        education, community organizations, and other public 
        and private institutions, agencies, and organizations.

[SEC. 420F. APPLICATION.

  [(a) Requirement.--An eligible partnership desiring to 
receive a grant under this subpart shall submit an application 
to the Secretary, in such form and containing such information, 
as the Secretary may require.
  [(b) Contents.--Each application shall include--
          [(1) the name of each partner and a description of 
        the responsibilities of the partner, including the 
        designation of a nonprofit organization as the fiscal 
        agent for the partnership;
          [(2) a description of the need for the project, 
        including a description of how the project will build 
        on any existing services and activities;
          [(3) a listing of human, financial (other than funds 
        provided under this subpart), and other resources that 
        each member of the partnership will contribute to the 
        partnership, and a description of the efforts each 
        member of the partnership will make in seeking 
        additional resources; and
          [(4) a description of how the project will operate, 
        including how funds awarded under this subpart will be 
        used to meet the purpose of this subpart.

[SEC. 420G. AUTHORIZED ACTIVITIES.

  [Funds awarded to an eligible partnership under this subpart 
shall be used to--
          [(1) develop and assess model distance learning 
        programs or innovative educational software;
          [(2) develop methodologies for the identification and 
        measurement of skill competencies;
          [(3) develop and assess innovative student support 
        services; or
          [(4) support other activities that are consistent 
        with the purpose of this subpart.

[SEC. 420H. MATCHING REQUIREMENT.

  [Federal funds shall provide not more than 50 percent of the 
cost of a project under this subpart. The non-Federal share of 
project costs may be in cash or in kind, fairly evaluated, 
including services, supplies, or equipment.

[SEC. 420I. PEER REVIEW.

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

[SEC. 420J. AUTHORIZATION OF APPROPRIATIONS.

  [There are authorized to be appropriated to carry out this 
subpart $10,000,000 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

SEC. 421. STATEMENT OF PURPOSE; NONDISCRIMINATION; AND APPROPRIATIONS 
                    AUTHORIZED.

  (a) * * *
  (b) Authorization of Appropriations.--For the purpose of 
carrying out this part--
          (1) * * *

           *       *       *       *       *       *       *

          (5) there are authorized to be appropriated such sums 
        as may be necessary for the purpose of paying [an 
        administrative cost allowance] a loan processing and 
        issuance fee in accordance with section 428(f) to 
        guaranty agencies.
Sums appropriated under paragraphs (1), (2), (4), and (5) of 
this subsection shall remain available until expended. No 
additional sums are authorized to be appropriated under 
paragraph (3) or (4) of this subsection by reason of the 
reenactment of such paragraphs by the Higher Education 
Amendments of 1986.

           *       *       *       *       *       *       *


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

  (a) Limitations on Amounts of Loans Covered by Federal 
Insurance.--The total principal amount of new loans made and 
installments paid pursuant to lines of credit (as defined in 
section 435) to students covered by Federal loan insurance 
under this part shall not exceed $2,000,000,000 for the period 
from July 1, 1976, to September 30, 1976, and for each of the 
succeeding fiscal years ending prior to October 1, [2004] 2012. 
Thereafter, Federal loan insurance pursuant to this part may be 
granted only for loans made (or for loan installments paid 
pursuant to lines of credit) to enable students, who have 
obtained prior loans insured under this part, to continue or 
complete their educational program; but no insurance may be 
granted for any loan made or installment paid after September 
30, [2008] 2016.

           *       *       *       *       *       *       *


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

  (a) Annual and Aggregate Limits.--
          (1) Annual limits.--(A) The total of loans made to a 
        student in any academic year or its equivalent (as 
        determined by the Secretary) which may be covered by 
        Federal loan insurance under this part may not exceed--
                  (i) in the case of a student at an eligible 
                institution who has not successfully completed 
                the first year of a program of undergraduate 
                education--
                          (I) [$2,625] $3,500, if such student 
                        is enrolled in a program whose length 
                        is at least one academic year in length 
                        (as determined under section 481); and

           *       *       *       *       *       *       *

                  (ii) in the case of a student at an eligible 
                institution who has successfully completed such 
                first year but has not successfully completed 
                the remainder of a program of undergraduate 
                education--
                          (I) [$3,500] $4,500; or

           *       *       *       *       *       *       *

          (2) Aggregate limits.--(A) The aggregate insured 
        unpaid principal amount for all such insured loans made 
        to any student shall not at any time exceed--
          (i) $23,000, in the case of any student who has not 
        successfully completed a program of undergraduate 
        education, excluding loans made under section [428A or 
        428B] 428B or 428H; and
          (ii) $65,500, in the case of any graduate or 
        professional student (as defined by regulations of the 
        Secretary) and (I) including any loans which are 
        insured by the Secretary under this section, or by a 
        guaranty agency, made to such student before the 
        student became a graduate or professional student), but 
        (II) excluding loans made under section [428A or 428B] 
        428B or 428H,
except that the Secretary may increase the limit applicable to 
students who are pursuing programs which the Secretary 
determines are exceptionally expensive.

           *       *       *       *       *       *       *


SEC. 427A. APPLICABLE INTEREST RATES.

  (a) * * *

           *       *       *       *       *       *       *

  (k) Interest Rates for New Loans on or After October 1, 
1998[, and Before July 1, 2006].--
          (1) In general.--Notwithstanding subsection (h) and 
        subject to paragraph (2) of this subsection, 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 October 1, 1998[, and before July 1, 2006,] 
        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) * * *

           *       *       *       *       *       *       *

          (2) In school and grace period rules.--
        Notwithstanding subsection (h), 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 October 1, 1998[, and 
        before July 1, 2006,] the applicable rate of interest 
        for interest which accrues--
                  (A) * * *

           *       *       *       *       *       *       *

          (3) PLUS loans.--Notwithstanding subsection (h), with 
        respect to any loan under section 428B for which the 
        first disbursement is made on or after October 1, 
        1998[, and before July 1, 2006,] the applicable rate of 
        interest shall be determined under paragraph (1)--
                  (A) * * *

           *       *       *       *       *       *       *

          (4) Consolidation loans before july 1, 2006.--With 
        respect to any consolidation loan under section 428C 
        for which the application is received by an eligible 
        lender on or after October 1, 1998, and before July 1, 
        2006, the applicable rate of interest shall be at an 
        annual rate on the unpaid principal balance of the loan 
        that is equal to the lesser of--
                  (A) * * *

           *       *       *       *       *       *       *

          (5) Consolidation loans on or after july 1, 2006.--
                  (A) Borrower election.--With respect to any 
                consolidation loan under section 428C for which 
                the application is received by an eligible 
                lender on or after July 1, 2006, the applicable 
                rate of interest shall, at the election of the 
                borrower at the time of application for the 
                loan, be either at the rate determined under 
                subparagraph (B) or the rate determined under 
                subparagraph (C).
                  (B) Variable rate.--Except as provided in 
                subparagraph (D), 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, 
                for such 12-month period, not be more than--
                          (i) the bond equivalent rate of 91-
                        day Treasury bills auctioned at the 
                        final auction held prior to such June 
                        1; plus
                          (ii) 2.3 percent,
                except that such rate shall not exceed 8.25 
                percent.
                  (C) Fixed rate.--Except as provided in 
                subparagraph (D), the rate determined under 
                this subparagraph shall be determined for the 
                duration of the term of the loan on the July 1 
                that is or precedes the date on which the 
                application is received by an eligible lender, 
                and shall be, for such duration, not more 
                than--
                          (i) the bond equivalent rate of 91-
                        day Treasury bills auctioned at the 
                        final auction held prior to the June 1 
                        immediately preceding such July 1; plus
                          (ii) 3.3 percent,
                except that such rate shall not exceed 8.25 
                percent.
                  (D) Consolidation of plus loans.--In the case 
                of any such consolidation loan that is used to 
                repay loans each of which was made under 
                section 428B or was a Federal Direct PLUS Loan 
                (or both), the rates determined under clauses 
                (B) and (C) shall be determined--
                          (i) by substituting ``3.1 percent'' 
                        for ``2.3 percent'';
                          (ii) by substituting ``4.1 percent'' 
                        for ``3.3 percent''; and
                          (iii) by substituting ``9.0 percent'' 
                        for ``8.25 percent''.
          [(5)] (6) 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.
  [(l) Interest Rates for New Loans on or After July 1, 2006.--
          [(1) In general.--Notwithstanding subsection (h), 
        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, 2006, the applicable rate 
        of interest shall be 6.8 percent on the unpaid 
        principal balance of the loan.
          [(2) PLUS loans.--Notwithstanding subsection (h), 
        with respect to any loan under section 428B for which 
        the first disbursement is made on or after July 1, 
        2006, the applicable rate of interest shall be 7.9 
        percent on the unpaid principal balance of the loan.
          [(3) Consolidation loans.--With respect to any 
        consolidation loan under section 428C for which the 
        application is received by an eligible lender on or 
        after July 1, 2006, the applicable rate of interest 
        shall be at an annual rate on the unpaid principal 
        balance of the loan that is equal to the lesser of--
                  [(A) the weighted average of the interest 
                rates on the loans consolidated, rounded to the 
                nearest higher one-eighth of 1 percent; or
                  [(B) 8.25 percent.]
  [(m)] (l) 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.
  [(n)] (m) Definitions.--For the purpose of subsections (a) 
and (d) of this section--
          (1) * * *

           *       *       *       *       *       *       *


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

  (a) Federal Interest Subsidies.--
          (1) * * *
          (2) Additional requirements to receive subsidy.--(A) 
        Each student qualifying for a portion of an interest 
        payment under paragraph (1) shall--
                  (i) have provided to the lender a statement 
                from the eligible institution, at which the 
                student has been accepted for enrollment, or at 
                which the student is in attendance, which--
                          (I) sets forth 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]
                  (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.

           *       *       *       *       *       *       *

          (E) For the purpose of subparagraphs (B) and (C) of 
        this paragraph, any loan obtained by a student under 
        section [428A or] 428H or a parent under section 428B 
        of this Act or under any State-sponsored or private 
        loan program for an academic year for which the 
        determination is made may be used to offset the 
        expected family contribution of the student for that 
        year.
          (3) Amount of interest subsidy.--(A)(i) * * *

           *       *       *       *       *       *       *

          (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 of the 
                loan; [or]
                  (II) in the case of a loan disbursed by 
                electronic funds transfer, 3 days before the 
                first disbursement of the loan[.]; or
                  (III) in the case of a loan disbursed through 
                an escrow agent, 3 days before the first 
                disbursement of the loan.

           *       *       *       *       *       *       *

          (5) Duration of authority to make interest subsidized 
        loans.--The period referred to in subparagraph (B) of 
        paragraph (1) of this subsection shall begin on the 
        date of enactment of this Act and end at the close of 
        September 30, [2004] 2012, except that, in the case of 
        a loan made or insured under a student loan or loan 
        insurance program to enable a student who has obtained 
        a prior loan made or insured under such program to 
        continue his or her education program, such period 
        shall end at the close of September 30, [2008] 2016.

           *       *       *       *       *       *       *

  (b) Insurance Program Agreements To Qualify Loans for 
Interest Subsidies.--
          (1) Requirements of insurance program.--Any State or 
        any nonprofit private institution or organization may 
        enter into an agreement with the Secretary for the 
        purpose of entitling students who receive loans which 
        are insured under a student loan insurance program of 
        that State, institution, or organization to have made 
        on their behalf the payments provided for in subsection 
        (a) if the Secretary determines that the student loan 
        insurance program--
                  (A) authorizes the insurance in any academic 
                year, as defined in section 481(a)(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--
                          (i) in the case of a student at an 
                        eligible institution who has not 
                        successfully completed the first year 
                        of a program of undergraduate 
                        education--
                                  (I) [$2,625] $3,500, if such 
                                student is enrolled in a 
                                program whose length is at 
                                least one academic year in 
                                length; and

           *       *       *       *       *       *       *

                          (ii) in the case of a student at an 
                        eligible institution who has 
                        successfully completed such first year 
                        but has not successfully completed the 
                        remainder of a program of undergraduate 
                        education--
                                  (I) [$3,500] $4,500; or

           *       *       *       *       *       *       *

                  (B) provides that the aggregate insured 
                unpaid principal amount for all such insured 
                loans made to any student shall be any amount 
                up to a maximum of--
                          (i) $23,000, in the case of any 
                        student who has not successfully 
                        completed a program of undergraduate 
                        education, excluding loans made under 
                        section [428A or 428B] 428B or 428H; 
                        and
                          (ii) $65,500, in the case of any 
                        graduate or professional student (as 
                        defined by regulations of the 
                        Secretary), and (I) including any loans 
                        which are insured by the Secretary 
                        under this section, or by a guaranty 
                        agency, made to such student before the 
                        student became a graduate or 
                        professional student, but (II) 
                        excluding loans made under section 
                        [428A or 428B] 428B or 428H,
                except that the Secretary may increase the 
                limit applicable to students who are pursuing 
                programs which the Secretary determines are 
                exceptionally expensive;

           *       *       *       *       *       *       *

                  (G) insures 98 percent of the unpaid 
                principal of loans insured under the program, 
                except that such program shall insure 100 
                percent of the unpaid principal of loans made 
                with funds advanced pursuant to section 428(j) 
                or 439(q) and 100 percent of the unpaid 
                principal amount of exempt claims as defined in 
                subsection (c)(1)(G), except, for any loan for 
                which the first disbursement of principal is 
                made on or after July 1, 2006, the preceding 
                provisions of this subparagraph shall be 
                applied by substituting ``96 percent'' for ``98 
                percent'';
                  [(H) provides for collection of a single 
                insurance premium equal to not more than 1.0 
                percent of the principal amount of the loan, by 
                deduction proportionately from each installment 
                payment of the proceeds of the loan to the 
                borrower, and insures that the proceeds of the 
                premium will not be used for incentive payments 
                to lenders;]
                  (H) provides--
                          (i) for loans for which the first 
                        disbursement of principal is made 
                        before July, 1, 2006, for the 
                        collection of a single insurance 
                        premium equal to not more than 1.0 
                        percent of the principal amount of the 
                        loan, by deduction proportionately from 
                        each installment payment of the 
                        proceeds of the loan to the borrower, 
                        and insures that the proceeds of the 
                        premium will not be used for incentive 
                        payments to lenders; or
                          (ii) for loans for which the first 
                        disbursement of principal is made on or 
                        after July 1, 2006, for the collection 
                        and deposit into the Federal Student 
                        Loan Reserve Fund under section 422A of 
                        a Federal default fee of 1.0 percent of 
                        the principal amount of such loan, 
                        which shall be deducted proportionately 
                        from each installment payment of the 
                        proceeds of the loan to the borrower 
                        prior to payment to the borrower, and 
                        insures that the proceeds of the 
                        Federal default fee will not be used 
                        for incentive payments to lenders;

           *       *       *       *       *       *       *

                  (M) provides that periodic installments of 
                principal need not be paid, but interest shall 
                accrue and be paid by the Secretary, during any 
                period--
                          (i) * * *
                          (ii) not in excess of 3 years during 
                        which the borrower is seeking and 
                        unable to find full-time employment, 
                        except that no borrower who provides 
                        evidence of eligibility for 
                        unemployment benefits shall be required 
                        to provide additional paperwork for a 
                        deferment under this clause; [or]
                          (iii) not in excess of 3 years during 
                        which the borrower--
                                  (I) is serving on active duty 
                                during a war or other military 
                                operation or national 
                                emergency; or
                                  (II) is performing qualifying 
                                National Guard duty during a 
                                war or other military operation 
                                or national emergency; or
                          [(iii)] (iv) not in excess of 3 years 
                        for any reason which the lender 
                        determines, in accordance with 
                        regulations prescribed by the Secretary 
                        under section 435(o), has caused or 
                        will cause the borrower to have an 
                        economic hardship;
                  (N) provides that funds borrowed by a 
                student--
                          (i) are disbursed to the institution 
                        (including an eligible foreign 
                        institution, except as provided in 
                        clause (ii)) by check or other means 
                        that is payable to, and requires the 
                        endorsement or other certification by, 
                        such student; or
                          (ii) in the case of a student who is 
                        studying outside the United States in a 
                        program of study abroad that is 
                        approved for credit by the home 
                        institution at which such student is 
                        enrolled [or at an eligible foreign 
                        institution], are, at the request of 
                        the student, disbursed directly to the 
                        student by the means described in 
                        clause (i), unless such student 
                        requests that the check be endorsed, or 
                        the funds transfer authorized, pursuant 
                        to an authorized power-of-attorney;

           *       *       *       *       *       *       *

                  (Q) provides for the guarantee of loans made 
                to students and parents under [sections 428A 
                and 428B] section 428B or 428H;

           *       *       *       *       *       *       *

          (7) Repayment period.--(A) In the case of a loan made 
        under section 427 or 428, the repayment period shall 
        exclude any period of authorized deferment or 
        forbearance and [shall begin--
                  [(i) the day after 6 months after the date 
                the student ceases to carry at least one-half 
                the normal full-time academic workload (as 
                determined by the institution); or
                  [(ii) on an earlier date if the borrower 
                requests and is granted a repayment schedule 
                that provides for repayment to commence at an 
                earlier date.] shall begin the day after 6 
                months after the date the student ceases to 
                carry at least one-half the normal full-time 
                academic workload (as determined by the 
                institution).

           *       *       *       *       *       *       *

          (C) In the case of a loan made under section [428A, 
        428B,] 428B or 428C, the repayment period shall begin 
        on the day the loan is disbursed, or, if the loan is 
        disbursed in multiple installments, on the day of the 
        last such disbursement, and shall exclude any period of 
        authorized deferment or forbearance.

           *       *       *       *       *       *       *

          (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. No 
                plan may require a borrower to repay a loan in 
                less than 5 years unless the borrower, during 
                the 6 months immediately preceding the start of 
                the repayment period, specifically requests 
                that repayment be made over of a shorter 
                period. The borrower may choose from--
                          (i) * * *
                          (ii) a graduated repayment plan paid 
                        over a fixed period of time, not to 
                        exceed 10 years, and the Secretary may 
                        not restrict the proportions or ratios 
                        by which such payments may be graduated 
                        with the informed agreement of the 
                        borrower;
                          (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) a delayed repayment plan under 
                        which the borrower makes scheduled 
                        payments for not more than 2 years that 
                        are annually not less than the amount 
                        of interest due or $600, whichever is 
                        greater, and then makes payments in 
                        accordance with clause (i), (ii), or 
                        (iii); and
                          [(iv)] (v) for new borrowers on or 
                        after the date of enactment of the 
                        Higher Education Amendments of 1998 who 
                        accumulate (after such date) 
                        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 
                        (1)(L)(i).
  (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 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] 30 days after the guaranty 
        agency discharges its insurance obligation on the loan.

           *       *       *       *       *       *       *

          (G)(i) Notwithstanding any other provisions of this 
        section, in the case of exempt claims, the Secretary 
        shall apply the provisions of--
                  (I) the fourth sentence of subparagraph (A) 
                by substituting ``100 percent'' for ``95 
                percent'';
                  (II) subparagraph (B)(i) by substituting 
                ``100 percent'' for ``85 percent''; and
                  (III) subparagraph (B)(ii) by substituting 
                ``100 percent'' for ``75 percent''.
          (ii) For purposes of clause (i) of this subparagraph, 
        the term ``exempt claims'' means claims with respect to 
        loans for which it is determined that the borrower (or 
        the student on whose behalf a parent has borrowed), 
        without the lender's or the institution's knowledge at 
        the time the loan was made, provided false or erroneous 
        information or took actions that caused the borrower or 
        the student to be ineligible for all or a portion of 
        the loan or for interest benefits thereon.
          (H) Notwithstanding subparagraphs (A) and (B), but 
        subject to subparagraphs (E) and (F), in the case of a 
        loan for which the first disbursement of principal is 
        made on or after July 1, 2006, the Secretary shall 
        apply--
                  (i) the fourth sentence of subparagraph (A) 
                by substituting ``93 percent'' for ``95 
                percent'';
                  (ii) subparagraph (B)(i) by substituting ``83 
                percent'' for ``85 percent''; and
                  (iii) subparagraph (B)(ii) by substituting 
                ``73 percent'' for ``75 percent''.
          [(G)] (I) 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).
          (2) Contents of guaranty agreements.--The guaranty 
        agreement--
                  (A) shall set forth such administrative and 
                fiscal procedures as may be necessary to 
                protect the United States from the risk of 
                unreasonable loss thereunder, to ensure proper 
                and efficient administration of the loan 
                insurance program, and to assure that due 
                diligence will be exercised in the collection 
                of loans insured under the program, including 
                (i) a requirement that each beneficiary of 
                insurance on the loan submit proof that the 
                institution was contacted and other reasonable 
                attempts were made to locate the borrower (when 
                the location of the borrower is unknown) and 
                proof that contact was made with the borrower 
                (when the location is known) and (ii) 
                requirements establishing procedures to 
                preclude consolidation lending from being an 
                excessive proportion of guaranty agency 
                recoveries on defaulted loans under this part;

           *       *       *       *       *       *       *

                  (D) shall provide that if, after the 
                Secretary has made payment under the guaranty 
                agreement pursuant to paragraph (1) of this 
                subsection with respect to any loan, any 
                payments are made in discharge of the 
                obligation incurred by the borrower with 
                respect to such loan (including any payments of 
                interest accruing on such loan after such 
                payment by the Secretary), there shall be paid 
                over to the Secretary (for deposit in the fund 
                established by section 431) such proportion of 
                the amounts of such payments as is determined 
                (in accordance with paragraph [(6)] (6)(A)) to 
                represent his equitable share thereof, but (i) 
                shall provide for subrogation of the United 
                States to the rights of any insurance 
                beneficiary only to the extent required for the 
                purpose of paragraph (8); and (ii) except as 
                the Secretary may otherwise by or pursuant to 
                regulation provide, amounts so paid by a 
                borrower on such a loan shall be first applied 
                in reduction of principal owing on such loan;

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

          (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--
                  [(A)] (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
                  [(B)] (ii) an amount equal to 24 percent of 
                such payments for use in accordance with 
                section 422B, except that, beginning on October 
                1, 2003, this subparagraph shall be applied by 
                substituting ``23 percent'' for ``24 percent''.
  (B) A guaranty agency shall--
          (i) on or after October 1, 2006--
                  (I) not charge the borrower collection costs 
                in an amount in excess of 18.5 percent of the 
                outstanding principal and interest of a 
                defaulted loan that is paid off through 
                consolidation by the borrower under this title; 
                and
                  (II) remit to the Secretary a portion of the 
                collection charge under subclause (I) equal to 
                8.5 percent of the outstanding principal and 
                interest of such defaulted loan; and
          (ii) on and after October 1, 2009, remit to the 
        Secretary the entire amount charged under clause (i)(I) 
        with respect to each defaulted loan that is paid off 
        with excess consolidation proceeds.
  (C) Excess consolidation proceeds.--For purposes of 
subparagraph (B), the term ``excess consolidation proceeds'' 
means, with respect to any guaranty agency for any Federal 
fiscal year beginning on or after October 1, 2009, the proceeds 
of consolidation of defaulted loans under this title that 
exceed 45 percent of the agency's total collections on 
defaulted loans in such Federal fiscal year.

           *       *       *       *       *       *       *

          (9) Guaranty agency reserve level.--(A) * * *

           *       *       *       *       *       *       *

          (K) The Secretary, within 3 months after the end of 
        each fiscal year, shall submit to the [House Committee 
        on Education and the Workforce and the Senate Committee 
        on Labor and Human Resources] authorizing committees a 
        report specifying the Secretary's assessment of the 
        fiscal soundness of the guaranty agency system.

           *       *       *       *       *       *       *

          (10) Documentation of forbearance agreements.--For 
        the purposes of paragraph (3), the terms of forbearance 
        agreed to by the parties shall be documented by 
        confirming the agreement of the borrower by notice to 
        the borrower from the lender, and by recording the 
        terms in the borrower's file.

           *       *       *       *       *       *       *

  (g) Action on Insurance Program and Guaranty Agreements.--If 
a nonprofit private institution or organization--
          (1) applies to enter into an agreement with the 
        Secretary under subsections (b) and (c) with respect to 
        a student loan insurance program to be carried on in a 
        State with which the Secretary does not have an 
        agreement under subsection (b), and
          (2) as provided in the application, undertakes to 
        meet the requirements of section 422(c)(6)(B) (i), 
        (ii), and (iii),
the Secretary shall consider and act upon such application 
within 180 days, and shall forthwith notify the [Committee on 
Labor and Human Resources of the Senate and the Committee on 
Education and the Workforce of the House of Representatives] 
authorizing committees of his actions.

           *       *       *       *       *       *       *

  (i) Multiple Disbursement of Loans.--
          (1) Escrow accounts administered by escrow agent.--
        Any guaranty agency or eligible lender (hereafter in 
        this subsection referred to as the ``escrow agent'') 
        may enter into an agreement with any other eligible 
        lender that is not an eligible institution or an agency 
        or instrumentality of the State (hereafter in this 
        subsection referred to as the ``lender'') for the 
        purpose of authorizing disbursements of the proceeds of 
        a loan to a student. Such agreement shall provide that 
        the lender will pay the proceeds of such loans into an 
        escrow account to be administered by the escrow agent 
        in accordance with the provisions of paragraph (2) of 
        this subsection. Such agreement may allow the lender to 
        make payments into the escrow account in amounts that 
        do not exceed the sum of the amounts required for 
        disbursement of initial or subsequent installments to 
        borrowers and to make such payments not more than [21] 
        10 days prior to the date of the disbursement of such 
        installment to such borrowers. Such agreement shall 
        require the lender to notify promptly the eligible 
        institution when funds are escrowed under this 
        subsection for a student at such institution.

           *       *       *       *       *       *       *

  (n) Blanket Certificate of Loan Guaranty.--
          (1) * * *

           *       *       *       *       *       *       *

          (4) Report required.--The Secretary shall, at the 
        conclusion of the pilot program under paragraph (3), 
        provide a report to the [Committee on Education and the 
        Workforce of the House of Representatives and the 
        Committee on Labor and Human Resources of the Senate] 
        authorizing committees on the impact of the blanket 
        certificates of guaranty on program efficiency and 
        integrity.

           *       *       *       *       *       *       *


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

  (a) Voluntary Agreements.--
          (1) Authority.--Subject to paragraph (2), the 
        Secretary may enter into a voluntary, flexible 
        agreement with a guaranty agency 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--
                  (A) any statutory requirement pertaining to 
                the terms and conditions attached to student 
                loans or default claim payments made to 
                lenders; [or]
                  (B) the prohibitions on inducements contained 
                in section 428(b)(3) [unless the Secretary 
                determines that such a waiver is consistent 
                with the purposes of this section and is 
                limited to activities of the guaranty agency 
                within the State or States for which the 
                guaranty agency serves as the designated 
                guarantor.]; or
                  (C) the Federal default fee required by 
                section 428(b)(1)(H) and the second sentence of 
                section 428H(h).
          [(2) Special rule.--If the Secretary grants a waiver 
        pursuant to paragraph (1)(B), any guaranty agency doing 
        business within the affected State or States may 
        request, and the Secretary shall grant, an identical 
        waiver to such guaranty agency under the same terms and 
        conditions (including service area limitations) as 
        govern the original waiver.]
          [(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 voluntary flexible agreement 
        with the Secretary.
          [(4)] (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] authorizing committees 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) * * *
                  (B) a list of participating guaranty agencies 
                and the specific statutory or regulatory 
                waivers provided to each guaranty agency [and 
                any waivers provided to other guaranty agencies 
                under paragraph (2)];

           *       *       *       *       *       *       *

  (c) Public Notice.--
          (1) * * *
          (2) Agreement notice.--The Secretary shall notify the 
        Chairperson and the Ranking Minority Member of the 
        [Committee on Labor and Human Resources of the Senate 
        and the Committee on Education and the Workforce of the 
        House of Representatives] authorizing committees not 
        later than 30 days prior to concluding an agreement 
        under this section. The notice shall contain--
                  (A) * * *

           *       *       *       *       *       *       *

          [(3) Waiver notice.--The Secretary shall notify the 
        Chairperson and the Ranking Minority Member of 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 30 days prior 
        to the granting of a waiver pursuant to subsection 
        (a)(2) to a guaranty agency that is not a party to a 
        voluntary flexible agreement.]
          (3) Notice to interested parties.--Once the Secretary 
        reaches a tentative agreement in principle under this 
        section, the Secretary shall publish in the Federal 
        Register a notice that invites interested parties to 
        comment on the proposed agreement. The notice shall 
        state how to obtain a copy of the tentative agreement 
        in principle and shall give interested parties no less 
        than 30 days to provide comments. The Secretary may 
        consider such comments prior to providing the notices 
        pursuant to paragraph (2).

           *       *       *       *       *       *       *

          (5) Modification notice.--The Secretary shall notify 
        the Chairperson and the Ranking Minority Members of the 
        [Committee on Labor and Human Resources of the Senate 
        and the Committee on Education and the Workforce of the 
        House of Representatives] authorizing committees 30 
        days prior to any modifications to an agreement under 
        this section.

           *       *       *       *       *       *       *


SEC. 428B. FEDERAL PLUS LOANS.

  (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[.]; and
                  (C) if either of the parents has been 
                convicted of, or has pled nolo contendere or 
                guilty to, a crime involving fraud in obtaining 
                funds under this title, such parent has 
                completed the repayment of such funds to the 
                Secretary, or to the holder in the case of a 
                loan under this title obtained by fraud.

           *       *       *       *       *       *       *


SEC. 428C. FEDERAL CONSOLIDATION LOANS.

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

           *       *       *       *       *       *       *

          (3) Definition of eligible borrower.--(A) For the 
        purpose of this section, the term ``eligible borrower'' 
        means a borrower who--
                  (i) * * *
                  (ii) at the time of application for a 
                consolidation loan--
                          (I) is in repayment status as 
                        determined under section 428(b)(7)(A);

           *       *       *       *       *       *       *

          (B)(i) An individual's status as an eligible borrower 
        under this section or under section 455(g) terminates 
        under both sections upon receipt of a consolidation 
        loan under this section or under section 455(g), except 
        that--
                  (I) * * *

           *       *       *       *       *       *       *

                  (III) loans received following the making of 
                the consolidation loan may be added during the 
                180-day period following the making of the 
                consolidation loan; [and]
                  (IV) loans received prior to the date of the 
                first consolidation loan may be added to a 
                subsequent consolidation loan[.]; and
                  (V) an individual may obtain a subsequent 
                consolidation loan under section 455(g) only 
                for the purposes of obtaining an income 
                contingent repayment plan, and only if the loan 
                has been submitted to the guaranty agency for 
                default aversion.
          (ii) Loans made under this section shall, to the 
        extent used to pay off the outstanding principal 
        balance on loans made under this title, excluding 
        capitalized interest, be counted against the applicable 
        limitations on aggregate indebtedness contained in 
        sections 425(a)(2), 428(b)(1)(B), 428H(d), 455, and 
        464(a)(2)(B).
          [(C)(i) A married couple, each of whom has eligible 
        student loans, may be treated as if such couple were an 
        individual borrowing under subparagraphs (A) and (B) if 
        such couple agrees to be held jointly and severally 
        liable for the repayment of a consolidation loan, 
        without regard to the amounts of the respective loan 
        obligations that are to be consolidated, and without 
        regard to any subsequent change that may occur in such 
        couple's marital status.
          [(ii) Only one spouse in a married couple applying 
        for a consolidation loan under this subparagraph need 
        meet any of the requirements of subsection (b) of this 
        section, except that each spouse shall--
                  [(I) individually make the initial 
                certification that no other application is 
                pending in accordance with subsection 
                (b)(1)(A); and
                  [(II) agree to notify the holder concerning 
                any change of address in accordance with 
                subsection (b)(4).]

           *       *       *       *       *       *       *

  (b) Contents of Agreements, Certificates of Insurance, and 
Loan Notes.--
          (1) Agreements with lenders.--Any lender described in 
        subparagraph (A), (B), or (C) of subsection (a)(1) who 
        wishes to make consolidation loans under this section 
        shall enter into an agreement with the Secretary or a 
        guaranty agency which provides--
                  (A) that, in the case of all lenders 
                described in subsection (a)(1), the lender will 
                make a consolidation loan to an eligible 
                borrower (on request of that borrower) only if 
                the borrower certifies that the borrower has no 
                other application pending for a loan under this 
                section [and (i) the lender holds an 
                outstanding loan of that borrower which is 
                selected by the borrower for consolidation 
                under this section, except that this clause 
                shall not apply in the case of a borrower with 
                multiple holders of loans under this part, or 
                (ii) the borrower certifies that the borrower 
                has sought and has been unable to obtain a 
                consolidation loan with income-sensitive 
                repayment terms from the holders of the 
                outstanding loans of that borrower (which are 
                so selected for consolidation);] and that, if 
                all the borrower's loans under this part are 
                held by a single holder, the borrower has 
                notified such holder that the borrower is 
                seeking to obtain a consolidation loan under 
                this section;

           *       *       *       *       *       *       *

                  (C) that each consolidation loan will be 
                made, notwithstanding any other provision of 
                this part limiting the annual or aggregate 
                principal amount for all insured loans made to 
                a borrower, in an amount [(i) which is not less 
                than the minimum amount required for 
                eligibility of the borrower under subsection 
                (a)(3), and (ii)] which is equal to the sum of 
                the unpaid principal and accrued unpaid 
                interest and late charges of all eligible 
                student loans received by the eligible borrower 
                which are selected by the borrower for 
                consolidation;

           *       *       *       *       *       *       *

                  (E) that the lender shall offer an income-
                sensitive repayment schedule, established by 
                the lender in accordance with the regulations 
                promulgated by the Secretary, to the borrower 
                of any consolidation loan made by the lender on 
                or after July 1, 1994; [and]
                  (F) that the lender of the consolidation loan 
                shall, upon application for such loan, provide 
                the borrower with a clear and conspicuous 
                notice of at least the following information:
                          (i) the effects of consolidation on 
                        total interest to be paid, fees to be 
                        paid, and length of repayment;
                          (ii) the effects of consolidation on 
                        a borrower's underlying loan benefits, 
                        including loan forgiveness, 
                        cancellation, deferment, and reduced 
                        interest rates on those underlying 
                        loans;
                          (iii) the ability of the borrower to 
                        prepay the loan, pay on a shorter 
                        schedule, and to change repayment 
                        plans;
                          (iv) that borrower benefit programs 
                        may vary among different loan holders, 
                        and a description of how the borrower 
                        benefits may vary among different loan 
                        holders;
                          (v) the tax benefits for which 
                        borrowers may be eligible;
                          (vi) the consequences of default; and
                          (vii) that by making the application 
                        the applicant is not obligated to agree 
                        to take the consolidation loan; and
                  [(F)] (G) such other terms and conditions as 
                the Secretary or the guaranty agency may 
                specifically require of the lender to carry out 
                this section.

           *       *       *       *       *       *       *

          (5) Direct loans.--[In the event that a borrower is 
        unable to obtain a consolidation loan from a lender 
        with an agreement under subsection (a)(1), or is unable 
        to obtain a consolidation loan with income-sensitive 
        repayment terms acceptable to the borrower from such a 
        lender, the Secretary shall offer any such borrower who 
        applies for it, a direct consolidation loan.] In the 
        event that a lender with an agreement under subsection 
        (a)(1) of this section denies a consolidation loan 
        application submitted to it by an eligible borrower 
        under this section, or denies an application submitted 
        to it by such a borrower for a consolidation loan with 
        income-sensitive repayment terms, the Secretary shall 
        offer any such borrower who applies for it, a direct 
        consolidation loan. The Secretary shall offer such a 
        loan to a borrower who has defaulted, for the purpose 
        of resolving the default. Such direct consolidation 
        loan shall, as requested by the borrower, be repaid 
        either pursuant to income contingent repayment under 
        part D of this title or pursuant to any other repayment 
        provision under this section. The Secretary shall not 
        offer such loans if, in the Secretary's judgment, the 
        Department of Education does not have the necessary 
        origination and servicing arrangements in place for 
        such loans.

           *       *       *       *       *       *       *

  (c) Payment of Principal and Interest.--
          (1) Interest rate.--(A) Notwithstanding subparagraphs 
        (B) and (C), with respect to any loan made under this 
        section for which the application is received by an 
        eligible lender--
                  (i) * * *
                  (ii) on or after July 1, 2006, the applicable 
                interest rate shall be determined under 
                [section 427A(l)(3)] section 427A(k)(5).

           *       *       *       *       *       *       *

  (e) Termination of Authority.--The authority to make loans 
under this section expires at the close of September 30, [2004] 
2012. Nothing in this section shall be construed to authorize 
the Secretary to promulgate rules or regulations governing the 
terms or conditions of the agreements and certificates under 
subsection (b). Loans made under this section which are insured 
by the Secretary shall be considered to be new loans made to 
students for the purpose of section 424(a).

           *       *       *       *       *       *       *


SEC. 428F. DEFAULT REDUCTION PROGRAM.

  (a) Other Repayment Incentives.--
          (1) Sale of loan.--
                  (A) Each guaranty agency shall enter into an 
                agreement with the Secretary which shall 
                provide that upon securing [consecutive 
                payments for 12 months] 9 payments made within 
                20 days of the due date during 10 consecutive 
                months of amounts owed on a loan for which the 
                Secretary has made a payment under paragraph 
                (1) of section 428(c), the guaranty agency 
                (pursuant to an agreement with the Secretary) 
                or the Secretary shall, if practicable, sell 
                the loan to an eligible lender. Such loan shall 
                not be sold to an eligible lender who has been 
                found by the guaranty agency or the Secretary 
                to have substantially failed to exercise the 
                due diligence required of lenders under this 
                part. Neither the guaranty agency nor the 
                Secretary shall demand from a borrower as 
                monthly payment amounts referred to in this 
                paragraph more than is reasonable and 
                affordable based upon the borrower's total 
                financial circumstances.

           *       *       *       *       *       *       *

                  (C) A guaranty agency may charge the borrower 
                and retain collection costs in an amount not to 
                exceed 18.5 percent of the outstanding 
                principal and interest at the time of sale of a 
                loan rehabilitated under subparagraph (A).
                  [(C)] (D) A loan which does not meet the 
                requirements of subparagraph (A) may also be 
                eligible for sale under this paragraph upon a 
                determination that the loan was in default due 
                to clerical or data processing error and would 
                not, in the absence of such error, be in a 
                delinquent status.

           *       *       *       *       *       *       *

  (c) Financial and Economic Literacy.--Where appropriate, each 
program described under subsection (b) shall include making 
available financial and economic education materials for the 
borrower.

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

  (a) * * *

           *       *       *       *       *       *       *

  (c) Method of Multiple Disbursement.--Disbursements under 
subsection (a)--
          (1) * * *
          (2) may be made directly by the lender or, in the 
        case of a loan under sections 428 and [428A] 428H, may 
        be disbursed pursuant to the escrow provisions of 
        section 428(i); and

           *       *       *       *       *       *       *

  (e) Exclusion of Consolidation and Foreign Study Loans.--The 
provisions of this section shall not apply in the case of a 
loan made under section 428C[, made to a student to cover the 
cost of attendance at an eligible institution outside the 
United States,] or made to a student to cover the cost of 
attendance in a program of study abroad approved by the home 
eligible institution if the home eligible institution has a 
cohort default rate (as calculated under section 435(m)) of 
less than 5 percent.

           *       *       *       *       *       *       *


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

  (a) * * *

           *       *       *       *       *       *       *

  (d) Loan Limits.--
          (1) * * *
          (2) Annual limits for independent, graduate, and 
        professional students.--The maximum annual amount of 
        loans under this section an independent student (or a 
        student whose parents are unable to borrow under 
        section 428B or the Federal Direct PLUS Loan Program) 
        may borrow in any academic year (as defined in section 
        481(a)(2)) or its equivalent shall be the amount 
        determined under paragraph (1), plus--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) in the case of such a student who is a 
                graduate or professional student attending an 
                eligible institution, [$10,000] $12,000; and

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

          [(6) Repayment period.--For purposes of calculating 
        the repayment period under section 428(b)(9), such 
        period shall commence at the time the first payment of 
        principal is due from the borrower.]
          (6) Time limits on billing interest.--A lender may 
        not receive interest on a loan under this section from 
        a borrower for any period that precedes the dates 
        described in section 428(a)(3)(A)(v).

           *       *       *       *       *       *       *

  (h) Insurance Premium.--Each State or nonprofit private 
institution or organization having an agreement with the 
Secretary under section 428(b)(1) may charge a borrower under 
this section an insurance premium equal to not more than 1.0 
percent of the principal amount of the loan, if such premium 
will not be used for incentive payments to lenders. In lieu of 
the insurance premium authorized under the preceding sentence, 
and effective for loans for which the first disbursement of 
principal is made on or after July 1, 2006, each State or 
nonprofit private institution or organization having an 
agreement with the Secretary under section 428(b)(1) shall 
collect and deposit into the Federal Student Loan Reserve Fund 
under section 422A a Federal default fee of 1.0 percent of the 
principal amount of the loan, obtained by deduction 
proportionately from each installment payment of the proceeds 
of the loan to the borrower.

[SEC. 428I. SPECIAL INSURANCE AND REINSURANCE RULES.

  [(a) Designation of Lenders, Servicers, and Guaranty 
Agencies.--
          [(1) Authority.--Whenever the Secretary determines 
        that an eligible lender, servicer, or guaranty agency 
        has a compliance performance rating that equals or 
        exceeds 97 percent, the Secretary shall designate the 
        eligible lender, servicer, or guaranty agency, as the 
        case may be, for exceptional performance. The Secretary 
        shall notify each appropriate guaranty agency of the 
        eligible lenders and servicers designated under this 
        section.
          [(2) Compliance performance rating.--For purposes of 
        paragraph (1), a compliance performance rating is 
        determined with respect to compliance with due 
        diligence in the collection of loans under this part 
        for each year for which the determination is made. Such 
        rating is equal to the percent of all due diligence 
        requirements applicable to each loan, on average, as 
        established by the Secretary by regulation, with 
        respect to--
                  [(A) loans serviced during the period by the 
                eligible lender or servicer; or
                  [(B) loans on which loan collection was 
                attempted by the guaranty agency.
  [(b) Payment to Lenders and Servicers.--
          [(1) 100 percent payment rule.--Each guaranty agency 
        shall pay each eligible lender or servicer (as agent 
        for an eligible lender) designated under subsection (a) 
        100 percent of the unpaid principal and interest of all 
        loans for which claims are submitted for payment by 
        that eligible lender or servicer for the one-year 
        period following the receipt by the guaranty agency of 
        the notification of designation under this section or 
        until the guaranty agency receives notice from the 
        Secretary that the designation of the lender or 
        servicer under subsection (a) has been revoked.
          [(2) Revocation authority.--The Secretary shall 
        revoke the designation of a lender or servicer under 
        subsection (a) if any quarterly audit required under 
        subsection (c)(5) is not received by the Secretary by 
        the date established by the Secretary or if the audit 
        indicates the lender or servicer failed to maintain 97 
        percent or higher compliance with program regulations, 
        as reflected in the performance of not less than 97 
        percent of all due diligence requirements applicable to 
        each loan, on average, as established by the Secretary 
        for the purpose of this section, for 2 consecutive 
        months or 90 percent for 1 month.
          [(3) Documentation.--Nothing in this section shall 
        restrict or limit the authority of guaranty agencies to 
        require the submission of claims documentation 
        evidencing servicing performed on loans, except that 
        the guaranty agency may not require greater 
        documentation than that required for lenders and 
        servicers not designated under subsection (a).
          [(4) Payments to guaranty agencies.--The Secretary 
        shall pay to each guaranty agency designated under 
        subsection (a) the appropriate percentage under this 
        subsection for the 1-year period following the receipt 
        by the guaranty agency of the notification of 
        designation under subsection (a).
  [(c) Supervision of Designated Lenders and Servicers.--
          [(1) Audits for lenders and servicers.--Each eligible 
        lender or servicer desiring a designation under 
        subsection (a) shall have a financial and compliance 
        audit of the loan portfolio of such eligible lender or 
        servicer conducted annually by a qualified independent 
        organization from a list of qualified organizations 
        promulgated by the Secretary in accordance with 
        standards established by the Comptroller General and 
        the Secretary. The standards shall measure the lender's 
        or servicer's compliance with the due diligence 
        standards and shall include a defined statistical 
        sampling technique designed to measure the performance 
        rating of the eligible lender or servicer for the 
        purpose of this section. Each eligible lender or 
        servicer shall submit the audit required by this 
        section to the Secretary and to each appropriate 
        guaranty agency.
          [(2) Additional information on lenders and 
        servicers.--Each appropriate guaranty agency shall 
        provide the Secretary with such other information in 
        its possession regarding an eligible lender or servicer 
        desiring designation as may relate to the Secretary's 
        determination under subsection (a), including but not 
        limited to any information suggesting that the 
        application of a lender or servicer for designation 
        under subsection (a) should not be approved.
          [(3) Secretary's determinations.--The Secretary shall 
        make the determination under subsection (a) based upon 
        the audits submitted under this section, such other 
        information as provided by any guaranty agency under 
        paragraph (2), and any information in the possession of 
        the Secretary or submitted by any other agency or 
        office of the Federal Government. If the results of the 
        audit are not persuasively rebutted by such other 
        information, the Secretary shall inform the eligible 
        lender or servicer and the appropriate guaranty agency 
        that its application for designation as an exceptional 
        lender or servicer has been approved.
          [(4) Cost of audit.--Each eligible lender or servicer 
        shall pay for all the costs of the audits required 
        under this section.
          [(5) Compliance audit.--In order to maintain its 
        status as an exceptional eligible lender or servicer, 
        the lender or servicer shall undergo a quarterly 
        compliance audit at the end of each quarter (other than 
        the quarter in which status as an exceptional lender or 
        servicer is established through a financial and 
        compliance audit, as described in subsection (c)(1)), 
        and submit the results of such audit to the Secretary 
        and such appropriate guaranty agency. The compliance 
        audit will review compliance with due diligence 
        requirements for the period since the last audit.
          [(6) Loss of designation.--If the audit performed 
        pursuant to paragraph (5) fails to meet the standards 
        for designation as an exceptional lender or servicer 
        under subsection (a)(1), the lender or servicer shall 
        lose its designation as an exceptional lender or 
        servicer. A lender or servicer receiving a compliance 
        audit not meeting the standard for designation as an 
        exceptional lender or servicer may reapply for 
        designation under subsection (a) at any time.
          [(7) Due diligence standards.--Due diligence 
        standards used for determining compliance under 
        paragraph (5) shall be promulgated by the Secretary 
        after consultation with lenders, guaranty agencies and 
        servicers and shall consist of a list of specific 
        elements for the Federal regulations selected to 
        provide an indication of systems degradation.
          [(8) Additional revocation authority.--
        Notwithstanding any other provision of this section, 
        designation under subsection (a) may be revoked at any 
        time by the Secretary if the Secretary determines that 
        the eligible lender or servicer has failed to maintain 
        an overall level of regulatory compliance consistent 
        with the audit submitted by the eligible lender or 
        servicer under this section or if the Secretary 
        believes the lender or servicer may have engaged in 
        fraud in securing designation under subsection (a) or 
        is failing to service loans in accordance with program 
        regulations.
  [(d) Supervision of Designated Guaranty Agencies.--
          [(1) Audit of guaranty agencies.--Each guaranty 
        agency desiring a designation under subsection (a) 
        shall have a financial and compliance audit of the 
        defaulted loan portfolio of such guaranty agency 
        conducted annually by a qualified independent 
        organization or person from a list of qualified 
        organizations or persons promulgated by the Secretary 
        in accordance with standards established by the 
        Comptroller General and the Secretary. The standards 
        shall include defined statistical sampling techniques 
        designed to measure the performance rating of the 
        guaranty agency for the purpose of this section. Each 
        guaranty agency shall submit the audit required by this 
        paragraph to the Secretary.
          [(2) Quarterly sample audits.--The Secretary may 
        require quarterly sample audits as a means of 
        determining continued qualification of the guaranty 
        agency for designation as an exceptional guaranty 
        agency.
          [(3) Secretary's determinations.--The Secretary shall 
        make the determination under subsection (a) based upon 
        the audits submitted under this section and other 
        information in his possession. If the results of the 
        audit are not persuasively rebutted by such other 
        information, the Secretary shall inform the guaranty 
        agency that its application for designation as an 
        exceptional guaranty agency has been approved.
          [(4) Costs of audits.--Each guaranty agency shall pay 
        for all of the costs of the audits regulated by this 
        section.
          [(5) Revocation for fraud.--The Secretary may revoke 
        the designation of a guaranty agency under subsection 
        (a) at any time if the Secretary has reason to believe 
        the guaranty agency secured its designation under 
        subsection (a) through fraud or fails to comply with 
        applicable regulations.
          [(6) Revocation based on performance.--Designation as 
        an exceptional guaranty agency may be revoked at any 
        time by the Secretary upon 30 days notice and an 
        opportunity for a hearing before the Secretary upon a 
        finding by the Secretary that the guaranty agency has 
        failed to maintain an acceptable overall level of 
        regulatory compliance.
  [(e) Special Rule.--Reimbursements made by the Secretary on 
loans submitted for claim by an eligible lender or loan 
servicer designated for exceptional performance under this 
section shall not be subject to additional review by the 
Secretary or repurchase by the guaranty agency for any reason 
other than a determination by the Secretary that the eligible 
lender, loan servicer, or guaranty agency engaged in fraud or 
other purposeful misconduct in obtaining designation for 
exceptional performance.
  [(f) Limitation.--Nothing in this section shall be construed 
to affect the processing of claims on student loans of eligible 
lenders not subject to this paragraph.
  [(g) Claims.--A lender, servicer, or guaranty agency 
designated under subsection (a) failing to service loans or 
otherwise comply with applicable program regulations shall be 
considered in violation of section 3729 of title 31, United 
States Code,.
  [(h) Evaluation.--Not later than 3 years after the date of 
enactment of this Act, the Comptroller General shall submit to 
the Chairman of the Senate Labor and Human Resources Committee 
and the House Committee on Education and Labor, an evaluation 
of the provisions of this section including, but not limited 
to, the following:
          [(1) The effectiveness of due diligence performed by 
        lenders and servicers receiving designation as 
        exceptional lenders or servicers from the perspective 
        of securing maximum collections from borrowers.
          [(2) A quantification of the dollar volume of claims 
        that were paid to exceptional lenders and servicers 
        that would not have been paid under applicable program 
        provisions prior to the enactment of this section.
          [(3) An assessment of the impact of this section on 
        the financial condition of guaranty agencies.
          [(4) An assessment of the savings to lenders, 
        servicers, and guaranty agencies resulting from 
        designation as exceptional performance.
          [(5) An identification of specific administration 
        steps that lenders, servicers, and guaranty agencies do 
        not have to perform as a result of designation as 
        exceptional lenders, servicers, or guaranty agencies.
          [(6) A recommendation for program modifications 
        applicable to all program participants based on the 
        findings of the evaluation.
          [(7) A recommendation for modifications to this 
        section and whether the program should be continued.
  [(i) Termination.--After receipt of the study authorized in 
subsection (h), the Secretary may terminate such program if he 
determines such termination to be in the fiscal interest of the 
United States.
  [(j) Definitions.--For the purpose of this section--
          [(1) the term ``due diligence requirements'' means 
        the activities required to be performed by lenders on 
        delinquent loans pursuant to regulations issued by the 
        Secretary;
          [(2) the term ``eligible loan'' means a loan made, 
        insured or guaranteed under part B of title IV;
          [(3) the term ``servicer'' means an entity servicing 
        and collecting student loans which--
                  [(A) has substantial experience in servicing 
                and collecting consumer loans or student loans;
                  [(B) has an independent financial audit 
                annually which is furnished to the Secretary 
                and any other parties designated by the 
                Secretary;
                  [(C) has business systems which are capable 
                of meeting the requirements of part B of title 
                IV;
                  [(D) has adequate personnel who are 
                knowledgeable about the student loan programs 
                authorized by part B of title IV; and
                  [(E) does not have any owner, majority 
                shareholder, director, or officer of the entity 
                who has been convicted of a felony.]

SEC. 428I. SPECIAL INSURANCE AND REINSURANCE RULES FOR EXCEPTIONAL 
                    PERFORMANCE.

  (a) Designation of Lenders and Servicers.--
          (1) In general.--Whenever the Secretary determines 
        that an eligible lender or servicer meets the 
        performance measures required by paragraph (2), the 
        Secretary shall designate that eligible lender or 
        servicer, as the case may be, for exceptional 
        performance. The Secretary shall notify each 
        appropriate guaranty agency of the eligible lenders and 
        servicers designated under this section.
          (2) Performance measures.--
                  (A) In determining whether to award a lender 
                or servicer the exceptional performance 
                designation, the Secretary shall require that 
                the lender or servicer be performing at or 
                above the 95 percentile of the industry, and 
                demonstrate improved performance against the 
                lender's or service's average of the last 3 
                years on the factors described in subparagraph 
                (B).
                  (B) The factors on which the Secretary shall 
                require improvement shall include--
                          (i) delinquency rates;
                          (ii) the rate at which delinquent 
                        accounts are restored to good standing;
                          (iii) default rates;
                          (iv) the rate of rejected claims; and
                          (v) any other such measures as 
                        determined by the Secretary.
                  (C) In addition, the Secretary shall not make 
                any award of such a designation unless the 
                consequence of the designation is cost-neutral 
                to the Federal Government.
          (3) Additional information on lenders and 
        servicers.--Each appropriate guaranty agency shall 
        provide the Secretary with such other information in 
        its possession regarding an eligible lender or servicer 
        desiring designation as may relate to the Secretary's 
        determination under paragraph (1), including but not 
        limited to any information suggesting that the 
        application of a lender or servicer for designation 
        should not be approved.
          (4) Determinations by the secretary.--
                  (A) The Secretary shall designate an eligible 
                lender or servicer for exceptional performance 
                if the eligible lender or servicer meets the 
                performance measures required by paragraph (2).
                  (B) The Secretary shall make the 
                determination under paragraph (1) based upon 
                the documentation submitted by the eligible 
                lender or servicer as specified in regulation, 
                such other information as provided by any 
                guaranty agency under paragraph (3), and any 
                information in the possession of the Secretary 
                or submitted by any other agency or office of 
                the Federal Government.
                  (C) The Secretary shall inform the eligible 
                lender or servicer and the appropriate guaranty 
                agency that its application for designation as 
                an exceptional performance lender or servicer 
                has been approved or disapproved.
          (5) Transition.--
                  (A) Any eligible lender or servicer 
                designated for exceptional performance as of 
                the day before the date of enactment of the 
                College Access and Opportunity Act of 2005 
                shall continue to be so designated, and subject 
                to the requirements of this section as in 
                effect on that day (including revocation), 
                until the performance standards described in 
                paragraph (2) are established.
                  (B) The Secretary shall not designate any 
                additional eligible lenders or servicers for 
                exceptional performance until those performance 
                standards are established.
  (b) Payment to Lenders and Servicers.--A guaranty agency 
shall pay, to each eligible lender or servicer (as agent for an 
eligible lender) designated under subsection (a), 98 percent of 
the unpaid principal and interest of all loans for which claims 
are submitted for payment by that eligible lender or servicer 
for the one-year period following the receipt by the guaranty 
agency of the notification of designation under this section, 
or until the guaranty agency receives notice from the Secretary 
that the designation of the lender or servicer under subsection 
(a)(2) has been revoked.
  (c) Revocation Authority.--
          (1) The Secretary shall revoke the designation of a 
        lender or a servicer under subsection (a) if the 
        Secretary determines that the lender or servicer has 
        failed to meet the performance standards required by 
        subsection (a)(2).
          (2) Notwithstanding any other provision of this 
        section, a designation under subsection (a) may be 
        revoked at any time by the Secretary, in the 
        Secretary's discretion, if the Secretary determines 
        that the eligible lender or servicer has failed to meet 
        the criteria and performance standards established by 
        the Secretary in regulation, or if the Secretary 
        believes the lender or servicer may have engaged in 
        fraud in securing designation under subsection (a), or 
        is failing to service loans in accordance with program 
        regulations.
  (d) Documentation.--Nothing in this section shall restrict or 
limit the authority of guaranty agencies to require the 
submission of claims documentation evidencing servicing 
performed on loans, except that the guaranty agency may not 
require greater documentation than that required for lenders 
and servicers not designated under subsection (a).
  (e) Special Rule.--Reimbursements made by the Secretary on 
loans submitted for claim by an eligible lender or loan 
servicer designated for exceptional performance under this 
section shall not be subject to additional review by the 
Secretary or repurchase by the guaranty agency for any reason 
other than a determination by the Secretary that the eligible 
lender or loan servicer engaged in fraud or other purposeful 
misconduct in obtaining designation for exceptional 
performance.
  (f) Limitation.--Nothing in this section shall be construed 
to affect the processing of claims on student loans of eligible 
lenders not subject to this section.
  (g) Claims.--A lender or servicer designated under subsection 
(a) failing to service loans or otherwise comply with 
applicable program regulations shall be considered in violation 
of section 3729 of title 31, United States Code.
  (h) Termination.--The Secretary may terminate the designation 
of lenders and servicers under this section if he determines 
that termination would be in the fiscal interest of the United 
States.
  (i) Definitions.--As used in this section--
          (1) the term ``eligible loan'' means a loan made, 
        insured, or guaranteed under this part; and
          (2) the term ``servicer'' means an entity servicing 
        and collecting student loans that--
                  (A) has substantial experience in servicing 
                and collecting consumer loans or student loans;
                  (B) has an independent financial audit 
                annually which is furnished to the Secretary 
                and any other parties designated by the 
                Secretary;
                  (C) has business systems which are capable of 
                meeting the requirements of this part;
                  (D) has adequate personnel who are 
                knowledgeable about the student loan programs 
                authorized by this part; and
                  (E) does not have any owner, majority 
                shareholder, director, or officer of the entity 
                who has been convicted of a felony.

SEC. 428J. LOAN FORGIVENESS FOR TEACHERS.

  (a) * * *
  (b) Program Authorized.--The Secretary shall carry out a 
program, through the holder of the loan, of assuming the 
obligation to repay a qualified loan amount for a loan made 
under section 428 or 428H, in accordance with subsection (c), 
for any new borrower on or after October 1, 1998, who--
          (1) has been employed as a full-time teacher for 5 
        consecutive complete school years--
                  (A) * * *
                  (B) if employed as an elementary school or 
                secondary school teacher, is highly qualified 
                as defined in section 9101 of the Elementary 
                Secondary Education Act of 1965, or meets the 
                requirements of subsection (g)(3); and

           *       *       *       *       *       *       *

  (c) Qualified Loans Amount.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Additional amounts for teachers in mathematics, 
        science, or special education.--Notwithstanding the 
        amount specified in paragraph (1), the aggregate amount 
        that the Secretary shall repay under this section shall 
        be not more than $17,500 in the case of--
                  (A) a secondary school teacher--
                          (i) * * *
                          (ii) whose qualifying employment for 
                        purposes of such subsection is teaching 
                        mathematics or science on a full-time 
                        basis; [and]
                  (B) an elementary school or secondary school 
                teacher--
                          (i) * * *

           *       *       *       *       *       *       *

                          (iii) who, as certified by the chief 
                        administrative officer of the public or 
                        non-profit private elementary school or 
                        secondary school in which the borrower 
                        is employed, is teaching children with 
                        disabilities that correspond with the 
                        borrower's special education training 
                        and has demonstrated knowledge and 
                        teaching skills in the content areas of 
                        the elementary school or secondary 
                        school curriculum that the borrower is 
                        teaching[.]; and
                  (C) an elementary or secondary school teacher 
                who primarily teaches reading--
                          (i) who meets the requirements of 
                        subsection (b);
                          (ii) who has obtained a separate 
                        reading instruction credential from the 
                        State in which the teacher is employed; 
                        and
                          (iii) who is certified by the chief 
                        administrative officer of the public or 
                        nonprofit private elementary or 
                        secondary school in which the borrower 
                        is employed to teach reading--
                                  (I) as being proficient in 
                                teaching the essential 
                                components of reading 
                                instruction as defined in 
                                section 1208 of the Elementary 
                                and Secondary Education Act of 
                                1965; and
                                  (II) as having such 
                                credential.

           *       *       *       *       *       *       *

  (g) Additional Eligibility Provisions.--
          (1) * * *
          (3) Private school teachers.--An individual who is 
        employed as a teacher in a private school and is exempt 
        from State certification requirements (unless otherwise 
        applicable under State law), may, in lieu of the 
        requirement of subsection (a)(1)(B), have such 
        employment treated as qualifying employment under this 
        section if such individual is permitted to and does 
        satisfy rigorous subject knowledge and skills tests by 
        taking competency tests in the applicable grade levels 
        and subject areas. For such purposes, the competency 
        tests taken by such a private school teacher must be 
        recognized by 5 or more States for the purpose of 
        fulfilling the highly qualified teacher requirements 
        under section 9101 of the Elementary and Secondary 
        Education Act of 1965, and the score achieved by such 
        teacher on each test must equal or exceed the average 
        passing score of those 5 States.

           *       *       *       *       *       *       *


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

  [(a) Purpose.--It is the purpose of this section--
          [(1) to bring more highly trained individuals into 
        the early child care profession; and
          [(2) to keep more highly trained child care providers 
        in the early child care field for longer periods of 
        time.
  [(b) 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.--
        Notwithstanding section 102, the term ``institution of 
        higher education'' has the meaning given the term in 
        section 101.
  [(c) Demonstration Program.--
          [(1) In general.--The Secretary may carry out a 
        demonstration program of assuming the obligation to 
        repay, pursuant to subsection (d), a loan made, 
        insured, or guaranteed under this part or part D 
        (excluding loans made under sections 428B and 428C or 
        comparable loans made under part D) 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) has worked full time for the 2 
                consecutive years preceding the year for which 
                the determination is made as a child care 
                provider in a low-income community.
          [(2) Low-income community.--For the purposes of this 
        subsection, the term ``low-income community'' means a 
        community in which 70 percent of households within the 
        community earn less than 85 percent of the State median 
        household income.
          [(3) 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.
          [(4) Regulations.--The Secretary is authorized to 
        prescribe such regulations as may be necessary to carry 
        out the provisions of this section.
  [(d) Loan Repayment.--
          [(1) In general.--The Secretary shall assume the 
        obligation to repay--
                  [(A) after the second consecutive year of 
                employment described in subparagraphs (B) and 
                (C) of subsection (c)(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 consecutive year of such 
                employment, 20 percent of the total amount of 
                all such loans; and
                  [(C) after each of the fourth and fifth 
                consecutive 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.).
  [(e) 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.
  [(f ) 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.
  [(g) 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 (b) 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.
  [(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.]

SEC. 428K. LOAN FORGIVENESS FOR SERVICE IN AREAS OF NATIONAL NEED.

  (a) Purposes.--The purposes of this section are--
          (1) to encourage highly trained individuals to enter 
        and continue in service in areas of national need; and
          (2) to reduce the burden of student debt for 
        Americans who dedicate their careers to service in 
        areas of national need.
  (b) Program Authorized.--
          (1) In general.--The Secretary is authorized to carry 
        out a program of assuming the obligation to repay, 
        pursuant to paragraphs (2) of subsection (c) and 
        subsection (d), a qualified loan amount for a loan 
        made, insured, or guaranteed under this part or part D 
        (other than loans made under section 428B and 428C and 
        comparable loans made under part D), for any new 
        borrower after the date of enactment of the College 
        Access and Opportunity Act of 2005, who--
                  (A) has been employed full-time for at least 
                5 consecutive complete school, academic, or 
                calendar years, as appropriate, in an area of 
                national need described in subsection (c); and
                  (B) is not in default on a loan for which the 
                borrower seeks forgiveness.
          (2) Award basis.--Loan repayment under this section 
        shall be on a first-come, first-served basis pursuant 
        to the designation under subsection (c) and subject to 
        the availability of appropriations.
          (3) Regulations.--The Secretary is authorized to 
        issue such regulations as may be necessary to carry out 
        the provisions of this section.
  (c) Areas of National Need.--
          (1) Statutory categories.--For purposes of this 
        section, an individual shall be treated as employed in 
        an area of national need if the individual is employed 
        full time and is any of the following:
                  (A) Early childhood educators.--An individual 
                who is employed as an early childhood educator 
                in an eligible preschool program or child care 
                facility in a low-income community, and who is 
                involved directly in the care, development and 
                education of infants, toddlers, or young 
                children through age five.
                  (B) Nurses.--An individual who is employed--
                          (i) as a nurse in a clinical setting; 
                        or
                          (ii) as a member of the nursing 
                        faculty at an accredited school of 
                        nursing (as those terms are defined in 
                        section 801 of the Public Health 
                        Service Act (42 U.S.C. 296)).
                  (C) Foreign language specialists.--An 
                individual who has obtained a baccalaureate 
                degree in a critical foreign language and is 
                employed--
                          (i) in an elementary or secondary 
                        school as a teacher of a critical 
                        foreign language; or
                          (ii) in an agency of the United 
                        States Government in a position that 
                        regularly requires the use of such 
                        critical foreign language.
                  (D) Librarians.--An individual who is 
                employed full-time as a libarian in--
                          (i) a public library that serves a 
                        geographic area within which the public 
                        schools have a combined average of 30 
                        percent or more of their total student 
                        enrollments composed of children 
                        counted under section 1113(a)(5) of the 
                        Elementary and Secondary Education Act 
                        of 1965; or
                          (ii) an elementary or secondary 
                        school which is in the school district 
                        of a local educational agency which is 
                        eligible in such year for assistance 
                        pursuant to title I of the Elementary 
                        and Secondary Education Act of 1965, 
                        and which for the purpose of this 
                        paragraph and for that year has been 
                        determined by the Secretary (pursuant 
                        to regulations and after consultation 
                        with the State educational agency of 
                        the State in which the school is 
                        located) to be a school in which the 
                        enrollment of children counted under 
                        section 1113(a)(5) of the Elementary 
                        and Secondary Education Act of 1965 
                        exceeds 30 percent of the total 
                        enrollment of that school.
                  (E) Highly qualified teachers: bilingual 
                education and low-income communities.--An 
                individual who--
                          (i) is highly qualified as such term 
                        is defined in section 9101 of the 
                        Elementary and Secondary Education Act 
                        of 1965; and
                          (ii)(I) is employed as a full-time 
                        teacher of bilingual education; or
                          (II) is employed as a teacher for 
                        service in a public or nonprofit 
                        private elementary or secondary school 
                        which is in the school district of a 
                        local educational agency which is 
                        eligible in such year for assistance 
                        pursuant to title I of the Elementary 
                        and Secondary Education Act of 1965, 
                        and which for the purpose of this 
                        paragraph and for that year has been 
                        determined by the Secretary (pursuant 
                        to regulations and after consultation 
                        with the State educational agency of 
                        the State in which the school is 
                        located) to be a school in which the 
                        enrollment of children counted under 
                        section 1113(a)(5) of the Elementary 
                        and Secondary Education Act of 1965 
                        exceeds 40 percent of the total 
                        enrollment of that school.
                  (F) First responders in low-income 
                communities.--An individual who--
                          (i) is employed as a firefighter, 
                        police officer, or emergency medical 
                        technician; and
                          (ii) serves as such in a low-income 
                        community.
                  (G) Child welfare workers.--An individual 
                who--
                          (i) has obtained a degree in social 
                        work or a related field with a focus on 
                        serving children and families; and
                          (ii) is employed in public or private 
                        child welfare services.
                  (H) Speech-language pathologists.--An 
                individual who is a speech-language 
                pathologist, who is employed in an eligible 
                preschool program or an elementary or secondary 
                school, and who has, at a minimum, a graduate 
                degree in speech-language pathology, or 
                communication sciences and disorders.
                  (I) Additional areas of national need.--An 
                individual who is employed in an area 
                designated by the Secretary under paragraph (2) 
                and has completed a baccalaureate or advanced 
                degree related to such area.
          (2) Designation of areas of national need.--After 
        consultation with appropriate Federal, State, and 
        community-based agencies and organizations, the 
        Secretary shall designate areas of national need. In 
        making such designations, the Secretary shall take into 
        account the extent to which--
                  (A) the national interest in the area is 
                compelling;
                  (B) the area suffers from a critical lack of 
                qualified personnel; and
                  (C) other Federal programs support the area 
                concerned.
  (d) Qualified Loan Amount.--The Secretary shall repay not 
more than $5,000 in the aggregate of the loan obligation on a 
loan made under section 428 or 428H that is outstanding after 
the completion of the fifth consecutive school, academic, or 
calendar year, as appropriate, described in subsection (b)(1).
  (e) Construction.--Nothing in this section shall be construed 
to authorize the refunding of any repayment of a loan made 
under section 428 or 428H.
  (f) Ineligibility of National Service Award Recipients.--No 
student borrower may, for the same 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.).
  (g) Ineligibility for Double Benefits.--No borrower may 
receive a reduction of loan obligations under both this section 
and section 428J or 460.
  (h) Definitions.--In this section
          (1) Child care facility.--The term ``child care 
        facility'' means a facility, including a home, that--
                  (A) provides for the education and care of 
                children from birth through age 5; and
                  (B) meets any applicable State or local 
                government licensing, certification, approval, 
                or registration requirements.
          (2) Critical foreign language.--The term ``critical 
        foreign language'' includes the languages of Arabic, 
        Korean, Japanese, Chinese, Pashto, Persian-Farsi, 
        Serbian-Croatian, Russian, Portuguese, and any other 
        language identified by the Secretary of Education, in 
        consultation with the Defense Language Institute, the 
        Foreign Service Institute, and the National Security 
        Education Program, as a critical foreign language need.
          (3) Early childhood educator.--The term ``early 
        childhood educator'' means an early childhood educator 
        employed in an eligible preschool program who has 
        completed a baccalaureate or advanced degree in early 
        childhood development, early childhood education, or in 
        a field related to early childhood education.
          (4) Eligible preschool program.--The term ``eligible 
        preschool program'' means a program that provides for 
        the care, development, and education of infants, 
        toddlers, or young children through age 5, meets any 
        applicable State or local government licensing, 
        certification, approval, and registration requirements, 
        and is operated by--
                  (A) a public or private school that may be 
                supported, sponsored, supervised, or 
                administered by a local educational agency;
                  (B) a Head Start agency serving as a grantee 
                designated under the Head Start Act (42 U.S.C. 
                9831 et seq.);
                  (C) a nonprofit or community based 
                organization; or
                  (D) a child care program, including a home.
          (5) Low-income community.--In this subsection, the 
        term ``low-income community'' means a community in 
        which 70 percent of households earn less than 85 
        percent of the State median household income.
          (6) Nurse.--The term ``nurse'' means a nurse who 
        meets all of the following:
                  (A) The nurse graduated from--
                          (i) an accredited school of nursing 
                        (as those terms are defined in section 
                        801 of the Public Health Service Act 
                        (42 U.S.C. 296));
                          (ii) a nursing center; or
                          (iii) an academic health center that 
                        provides nurse training.
                  (B) The nurse holds a valid and unrestricted 
                license to practice nursing in the State in 
                which the nurse practices in a clinical 
                setting.
                  (C) The nurse holds one or more of the 
                following:
                          (i) A graduate degree in nursing, or 
                        an equivalent degree.
                          (ii) A nursing degree from a 
                        collegiate school of nursing (as 
                        defined in section 801 of the Public 
                        Health Service Act (42 U.S.C. 296)).
                          (iii) A nursing degree from an 
                        associate degree school of nursing (as 
                        defined in section 801 of the Public 
                        Health Service Act (42 U.S.C. 296)).
                          (iv) A nursing degree from a diploma 
                        school of nursing (as defined in 
                        section 801 of the Public Health 
                        Service Act (42 U.S.C. 296)).
          (7) Speech-language pathologist.--The term ``speech-
        language pathologist'' means a speech-language 
        pathologist who meets all of the following:
                  (A) the speech-language pathologist has 
                received, at a minimum, a graduate degree in 
                speech-language pathology or communication 
                sciences and disorders from an institution of 
                higher education accredited by an agency or 
                association recognized by the Secretary 
                pursuant to section 496(a) of this Act; and
                  (B) the speech-language pathologist meets or 
                exceeds the qualifications as defined in 
                section 1861(ll) of the Social Security Act (42 
                U.S.C. 1395x).
  (i) Authorization of Appropriations.--There are authorized to 
be appropriated to carry out this section such sums as may be 
necessary for fiscal year 2006 and such sums as may be 
necessary for each of the 5 succeeding fiscal years.

           *       *       *       *       *       *       *


SEC. 430A. REPORTS TO CREDIT BUREAUS AND INSTITUTIONS OF HIGHER 
                    EDUCATION.

  (a) Agreements To Exchange Information.--For the purpose of 
promoting responsible repayment of loans covered by Federal 
loan insurance pursuant to this part or covered by a guaranty 
agreement pursuant to section 428, the Secretary, each guaranty 
agency, eligible lender, and subsequent holder shall enter into 
[agreements with credit bureau organizations] an agreement with 
each national credit bureau organization (as described in 
section 603(p) of the Fair Credit Reporting Act) to exchange 
information concerning student borrowers, in accordance with 
the requirements of this section. For the purpose of assisting 
such organizations in complying with the Fair Credit Reporting 
Act, such agreements may provide for timely response by the 
Secretary (concerning loans covered by Federal loan insurance), 
by a guaranty agency, eligible lender, or subsequent holder 
(concerning loans covered by a guaranty agreement), or to 
requests from such organizations for responses to objections 
raised by borrowers. Subject to the requirements of subsection 
(c), such agreements shall require the Secretary, the guaranty 
agency, eligible lender, or subsequent holder, as appropriate, 
to disclose to such organizations, with respect to any loan 
under this part that has not been repaid by the borrower--
          (1) * * *

           *       *       *       *       *       *       *


SEC. 432. LEGAL POWERS AND RESPONSIBILITIES.

  (a) * * *

           *       *       *       *       *       *       *

  (f) Audit of Financial Transactions.--
          (1) Comptroller General and Inspector General 
        authority.--The Comptroller General and the Inspector 
        General of the Department of Education shall each have 
        the authority to conduct an audit of the financial 
        transactions of--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) a representative sample of eligible 
                lenders under this part, upon the request of 
                the [Committee on Education and the Workforce 
                of the House of Representatives or the 
                Committee on Labor and Human Resources of the 
                Senate] either of the authorizing committees, 
                with respect to the payment of the special 
                allowance under section 438 in order to 
                evaluate the program authorized by this part.

           *       *       *       *       *       *       *

  (k) Program of Assistance for Borrowers.--
          (1) In general.--The Secretary shall undertake a 
        program to encourage corporations and other private and 
        public employers, including the Federal Government, to 
        assist borrowers in repaying loans received under this 
        title, including providing employers with options for 
        payroll deduction of loan payments [and offering loan 
        repayment matching provisions as part of employee 
        benefit packages.], offering loan repayment matching 
        provisions as part of employee benefit packages, and 
        providing employees with financial and economic 
        education and counseling.

           *       *       *       *       *       *       *

  (l) Uniform Administrative and Claims Procedures.--
          (1) In general.--The Secretary shall, by regulation 
        developed in consultation with guaranty agencies, 
        lenders, institutions of higher education, secondary 
        markets, students, third party servicers and other 
        organizations involved in providing loans under this 
        part, prescribe standardized forms and procedures 
        regarding--
                  (A) * * *

           *       *       *       *       *       *       *

                  (H) borrower status change and anticipated 
                graduation date; and

           *       *       *       *       *       *       *

  (m) Common Forms and Formats.--
          (1) Common guaranteed student loan application form 
        and promissory note.--
                  (A) * * *
                  (B) Requirements.--The forms prescribed by 
                the Secretary shall--
                          (i) use clear, concise, and simple 
                        language to facilitate understanding of 
                        loan terms and conditions by 
                        applicants; and
                          (ii) be formatted to require the 
                        applicant to clearly indicate a choice 
                        of lender[; and].

           *       *       *       *       *       *       *

  [(n) Default Reduction Management.--
          [(1) Authorization.--There are authorized to be 
        appropriated $25,000,000 for fiscal year 1999 and each 
        of the four succeeding fiscal years, for the Secretary 
        to expend for default reduction management activities 
        for the purposes of establishing a performance measure 
        that will reduce defaults by 5 percent relative to the 
        prior fiscal year. Such funds shall be in addition to, 
        and not in lieu of, other appropriations made for such 
        purposes.
          [(2) Allowable activities.--Allowable activities for 
        which such funds shall be expended by the Secretary 
        shall include the following: (A) program reviews; (B) 
        audits; (C) debt management programs; (D) training 
        activities; and (E) such other management improvement 
        activities approved by the Secretary.
          [(3) Plan for use required.--The Secretary shall 
        submit a plan, for inclusion in the materials 
        accompanying the President's budget each fiscal year, 
        detailing the expenditure of funds authorized by this 
        section to accomplish the 5 percent reduction in 
        defaults. At the conclusion of the fiscal year, the 
        Secretary shall report the Secretary's findings and 
        activities concerning the expenditure of funds and 
        whether the performance measure was met. If the 
        performance measure was not met, the Secretary shall 
        report the following:
                  [(A) why the goal was not met, including an 
                indication of any managerial deficiencies or of 
                any legal obstacles;
                  [(B) plans and a schedule for achieving the 
                established performance goal;
                  [(C) recommended legislative or regulatory 
                changes necessary to achieve the goal; and
                  [(D) if the performance standard or goal is 
                impractical or infeasible, why that is the case 
                and what action is recommended, including 
                whether the goal should be changed or the 
                program altered or eliminated.
          This report shall be submitted to the Appropriations 
        Committees of the House of Representatives and the 
        Senate and to the Committee on Education and the 
        Workforce of the House of Representatives and the 
        Committee on Labor and Human Resources of the Senate.]
  [(o)] (n) Consequences of Guaranty Agency Insolvency.--In the 
event that the Secretary has determined that a guaranty agency 
is unable to meet its insurance obligations under this part, 
the holder of loans insured by the guaranty agency may submit 
insurance claims directly to the Secretary and the Secretary 
shall pay to the holder the full insurance obligation of the 
guaranty agency, in accordance with insurance requirements no 
more stringent than those of the guaranty agency. Such 
arrangements shall continue until the Secretary is satisfied 
that the insurance obligations have been transferred to another 
guarantor who can meet those obligations or a successor will 
assume the outstanding insurance obligations.
  [(p)] (o) Reporting Requirement.--All officers and directors, 
and those employees and paid consultants of eligible 
institutions, eligible lenders, guaranty agencies, loan 
servicing agencies, accrediting agencies or associations, State 
licensing agencies or boards, and entities acting as secondary 
markets (including the Student Loan Marketing Association), who 
are engaged in making decisions as to the administration of any 
program or funds under this title or as to the eligibility of 
any entity or individual to participate under this title, shall 
report to the Secretary, in such manner and at such time as the 
Secretary shall require, on any financial interest which such 
individual may hold in any other entity participating in any 
program assisted under this title.

SEC. 433. STUDENT LOAN INFORMATION BY ELIGIBLE LENDERS.

  (a) * * *

           *       *       *       *       *       *       *

  (e) Special Disclosure Rules on [SLS Loans and] PLUS Loans 
and Unsubsidized Loans.--Loans made under sections [428A, 
428B,] 428B and 428H shall not be subject to the disclosure of 
projected monthly payment amounts required under subsection 
(b)(8) if the lender, in lieu of such disclosure, provides the 
borrower with sample projections of monthly repayment amounts 
assuming different levels of borrowing and interest accruals 
resulting from capitalization of interest while the borrower is 
in school. Such sample projections shall disclose the cost to 
the student of capitalizing--
          (1) * * *

           *       *       *       *       *       *       *


SEC. 435. DEFINITIONS FOR STUDENT LOAN INSURANCE PROGRAM.

  As used in this part:
  (a) Eligible Institution.--
          (1) In general.--Except as provided in paragraph (2), 
        the term ``eligible institution'' means an institution 
        of higher education, as defined in section [102] 101, 
        except that, for the purposes of sections 
        427(a)(2)(C)(i) and 428(b)(1)(M)(i), an eligible 
        institution includes any institution that is within 
        this definition without regard to whether such 
        institution is participating in any program under this 
        title and includes any institution ineligible for 
        participation in any program under this part pursuant 
        to paragraph (2) of this subsection.

           *       *       *       *       *       *       *

          (3) Appeals based upon allegations of improper loan 
        servicing.--An institution that--
                  (A) is subject to loss of eligibility for the 
                Federal Family Education Loan Program pursuant 
                to paragraph (2)(A) of this subsection; or
                  [(B) is subject to loss of eligibility for 
                the Federal Supplemental Loans for Students 
                pursuant to section 428A(a)(2); or]
                  [(C)] (B) is an institution whose cohort 
                default rate equals or exceeds 20 percent for 
                the most recent year for which data are 
                available;
        may include in its appeal of such loss or rate a 
        defense based on improper loan servicing (in addition 
        to other defenses). In any such appeal, the Secretary 
        shall take whatever steps are necessary to ensure that 
        such institution has access 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 used by a guaranty 
        agency in determining whether to pay a claim on a 
        defaulted loan or by the Department in determining an 
        institution's default rate in the loan program under 
        part D of this title. 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).

           *       *       *       *       *       *       *

  (d) Eligible Lender.--
          (1) In general.--Except as provided in paragraphs (2) 
        through (6), the term ``eligible lender'' means--
                  (A) * * *

           *       *       *       *       *       *       *

                  (G) for purposes of making loans under 
                sections [428A(d), 428B(d), 428C,] 428B(d), 
                428C, 428H, and 439(q), the Student Loan 
                Marketing Association or the Holding Company of 
                the Student Loan Marketing Association, 
                including any subsidiary of the Holding 
                Company, created pursuant to section 440;

           *       *       *       *       *       *       *

          [(2) Additional requirements of eligible 
        institutions.--To be an eligible lender under this 
        part, an eligible institution--
                  [(A) shall employ at least one person whose 
                full-time responsibilities are limited to the 
                administration of programs of financial aid for 
                students attending such institution;
                  [(B) shall not be a home study school;
                  [(C) shall make loans to not more than 50 
                percent of the undergraduate students at the 
                institution;
                  [(D) shall not make a loan, other than a loan 
                to a graduate or professional student, unless 
                the borrower has previously received a loan 
                from the school or has been denied a loan by an 
                eligible lender;
                  [(E) shall not have a cohort default rate (as 
                defined in section 435(m)) greater than 15 
                percent; and
                  [(F) shall use the proceeds from special 
                allowance payments and interest payments from 
                borrowers for need-based grant programs, except 
                for reasonable reimbursement for direct 
                administrative expenses;
          except that the requirements of subparagraphs (C) and 
        (D) shall not apply with respect to loans made, and 
        loan commitments made, after the date of enactment of 
        the Higher Education Amendments of 1986 and prior to 
        July 1, 1987.]
          (2) Requirements for eligible institutions.--
                  (A) In general.--To be an eligible lender 
                under this part, an eligible institution--
                          (i) shall employ at least one person 
                        whose full-time responsibilities are 
                        limited to the administration of 
                        programs of financial aid for students 
                        attending such institution;
                          (ii) shall not be a home study 
                        school;
                          (iii) shall not--
                                  (I) make a loan to any 
                                undergraduate student;
                                  (II) make a loan other than a 
                                loan under section 428 or 428H 
                                to a graduate or professional 
                                student; or
                                  (III) make a loan to a 
                                borrower who is not enrolled at 
                                that institution;
                          (iv) shall award any contract for 
                        financing, servicing, or administration 
                        of loans under this title on a 
                        competitive basis;
                          (v) shall offer loans which carry an 
                        origination fee or an interest rate, or 
                        both, that are less than such fee or 
                        rate authorized under the provisions of 
                        this title;
                          (vi) shall not have a cohort default 
                        rate (as defined in section 435(m)) 
                        greater than 10 percent;
                          (vii) shall, for any year for which 
                        the institution engages in activities 
                        as an eligible lender, provide for a 
                        compliance audit conducted in 
                        accordance with section 
                        428(b)(1)(U)(iii)(I), and the 
                        regulations thereunder, and submit the 
                        results of such audit to the Secretary; 
                        and
                          (viii) shall use any proceeds from 
                        special allowance payments and interest 
                        payments from borrowers, interest 
                        subsidies received from the Department 
                        of Education, and any proceeds from the 
                        sale or other disposition of loans, for 
                        need-based grant programs.
                  (B) Administrative expenses.--An eligible 
                lender under subparagraph (A) shall be 
                permitted to use a portion of the proceeds 
                described in subparagraph (A)(viii) for 
                reasonable and direct administrative expenses.
                  (C) Supplement, not supplant.--An eligible 
                lender under subparagraph (A) shall ensure that 
                the proceeds described in subparagraph 
                (A)(viii) are used to supplement, and not to 
                supplant, non-Federal funds that would 
                otherwise be used for need-based grant 
                programs.

           *       *       *       *       *       *       *

  (m) Cohort Default Rate.--
          (1) In general.--(A) Except as provided in paragraph 
        (2), the term ``cohort default rate'' means, for any 
        fiscal year in which 30 or more current and former 
        students at the institution enter repayment on loans 
        under section 428[, 428A,] or 428H, received for 
        attendance at the institution, the percentage of those 
        current and former students who enter repayment on such 
        loans (or on the portion of a loan made under section 
        428C that is used to repay any such loans) received for 
        attendance at that institution in that fiscal year who 
        default before the end of the following fiscal year. 
        The Secretary shall require that each guaranty agency 
        that has insured loans for current or former students 
        of the institution afford such institution a reasonable 
        opportunity (as specified by the Secretary) to review 
        and correct errors in the information required to be 
        provided to the Secretary by the guaranty agency for 
        the purposes of calculating a cohort default rate for 
        such institution, prior to the calculation of such 
        rate.
          (2) Special rules.--(A) * * *

           *       *       *       *       *       *       *

          (D) For the purposes of this subsection, a loan made 
        in accordance with section [428A] 428H (or the portion 
        of a loan made under section 428C that is used to repay 
        a loan made under section [428A] 428H) shall not be 
        considered to enter repayment until after the borrower 
        has ceased to be enrolled in a course of study leading 
        to a degree or certificate at an eligible institution 
        on at least a half-time basis (as determined by the 
        institution) and ceased to be in a period of 
        forbearance based on such enrollment. Each eligible 
        lender of a loan made under section [428A] 428H (or a 
        loan made under section 428C a portion of which is used 
        to repay a loan made under section [428A] 428H) shall 
        provide the guaranty agency with the information 
        necessary to determine when the loan entered repayment 
        for purposes of this subsection, and the guaranty 
        agency shall provide such information to the Secretary.

           *       *       *       *       *       *       *


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

  (a) Repayment in Full for Death and Disability.--If a student 
borrower who has received a loan described in subparagraph (A) 
or (B) of section 428(a)(1) dies or becomes permanently and 
totally disabled (as determined in accordance with regulations 
of the Secretary), then the Secretary shall discharge the 
borrower's liability on the loan by repaying the amount owed on 
the loan. In making such determination of permanent and total 
disability, the Secretary shall provide that a borrower who has 
been certified as permanently and totally disabled by the 
Department of Veterans Affairs or the Social Security 
Administration shall not be required to present further 
documentation for purposes of this title.

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *


SEC. 438. SPECIAL ALLOWANCES.

  (a) * * *
  (b) Computation and Payment.--
          (1) * * *
          (2) Rate of special allowance.--(A) * * *
          (B)(i) * * *

           *       *       *       *       *       *       *

          (iv) Notwithstanding clauses (i) and (ii), the 
        quarterly rate of the special allowance for holders of 
        loans which are financed with funds obtained by the 
        holder from the issuance of obligations originally 
        issued on or after October 1, 1993, or refunded after 
        September 30, 2004, [and before January 1, 2006,] the 
        income from which is excluded from gross income under 
        the Internal Revenue Code of 1986, shall be the 
        quarterly rate of the special allowance established 
        under subparagraph (A), (E), (F), (G), (H), or (I) as 
        the case may be. Such rate shall also apply to holders 
        of loans which were made or purchased with funds 
        obtained by the holder from collections or default 
        reimbursements on, or interest or other income 
        pertaining to, eligible loans made or purchased with 
        funds described in the preceding sentence of this 
        subparagraph or from income on the investment of such 
        funds.
          (v) Notwithstanding clauses (i) and (ii), the 
        quarterly rate of the special allowance shall be the 
        rate determined under subparagraph (A), (E), (F), (G), 
        (H), or (I) of this paragraph, or paragraph (4), as the 
        case may be, for a holder of loans that--
                  (I) * * *
                  (II) are--
                          (aa) financed by such an obligation 
                        that, after September 30, 2004, [and 
                        before January 1, 2006,] has matured or 
                        been retired or defeased;
                          (bb) refinanced after September 30, 
                        2004, [and before January 1, 2006,] 
                        with funds obtained from a source other 
                        than funds described in subclause (I) 
                        of this clause; or
                          (cc) sold or transferred to any other 
                        holder after September 30, 2004[, and 
                        before January 1, 2006].
          (vi) Notwithstanding clauses (i), (ii), and (v), the 
        quarterly rate of the special allowance shall be the 
        rate determined under subparagraph (A), (E), (F), (G), 
        (H), or (I) of this paragraph, as the case may be, for 
        a holder of loans--
                  (I) that were made or purchased on or after 
                October 1, 2005; or
                  (II) that were not earning a quarterly rate 
                of special allowance determined under clauses 
                (i) or (ii) of subparagraph (B) of this 
                paragraph (20 U.S.C. 1087-1(b)(2)(b)) as of 
                October 1, 2005.

           *       *       *       *       *       *       *

          (D)(i) * * *
          (ii) For the purpose of [division (i) of this 
        subparagraph] clause (i) of this subparagraph, the term 
        ``qualified State obligation'' means--
                  (I) * * *

           *       *       *       *       *       *       *

                  (I) Loans disbursed on or after january 1, 
                2000.--
                          (i) * * *
                          [(ii) In school and grace period.--In 
                        the case of any loan--
                                  [(I) for which the first 
                                disbursement is made on or 
                                after January 1, 2000, and 
                                before July 1, 2006, and for 
                                which the applicable rate of 
                                interest is described in 
                                section 427A(k)(2); or
                                  [(II) for which the first 
                                disbursement is made on or 
                                after July 1, 2006, and for 
                                which the applicable rate of 
                                interest is described in 
                                section 427A(l)(1), but only 
                                with respect to (aa) periods 
                                prior to the beginning of the 
                                repayment period of the loan; 
                                or (bb) during the periods in 
                                which principal need not be 
                                paid (whether or not such 
                                principal is in fact paid) by 
                                reason of a provision described 
                                in section 427(a)(2)(C) or 
                                428(b)(1)(M);
                        clause (i)(III) of this subparagraph 
                        shall be applied by substituting ``1.74 
                        percent'' for ``2.34 percent''.]
                          (ii) In school and grace period.--In 
                        the case of any loan for which the 
                        first disbursement is made on or after 
                        January 1, 2000, and for which the 
                        applicable interest rate is described 
                        in section 427A(k)(2), clause (i)(III) 
                        of this subparagraph shall be applied 
                        by substituting ``1.74 percent'' for 
                        ``2.34 percent''.
                          (iii) PLUS loans.--In the case of any 
                        loan for which the first disbursement 
                        is made on or after January 1, 2000, 
                        and for which the applicable rate of 
                        interest is described in section 
                        427A(k)(3) [or (l)(2)], clause (i)(III) 
                        of this subparagraph shall be applied 
                        by substituting ``2.64 percent'' for 
                        ``2.34 percent''[, subject to clause 
                        (v) of this subparagraph].
                          (iv) Consolidation loans.--In the 
                        case of any consolidation loan for 
                        which the application is received by an 
                        eligible lender on or after January 1, 
                        2000, and for which the applicable 
                        interest rate is determined under 
                        section 427A(k)(4) [or (l)(3)] or 
                        (k)(5), clause (i)(III) of this 
                        subparagraph shall be applied by 
                        substituting ``2.64 percent'' for 
                        ``2.34 percent''[, subject to clause 
                        (vi) of this subparagraph].
                          [(v) Limitation on special allowances 
                        for plus loans before july 1, 2006.--In 
                        the case of PLUS loans made under 
                        section 428B and first disbursed on or 
                        after January 1, 2000, and before July 
                        1, 2006, for which the interest rate is 
                        determined under section 427A(k)(3), a 
                        special allowance shall not be paid for 
                        such loan during any 12-month period 
                        beginning on July 1 and ending on June 
                        30 unless, on the June 1 preceding such 
                        July 1--
                                  [(I) the bond equivalent rate 
                                of 91-day Treasury bills 
                                auctioned at the final auction 
                                held prior to such June 1 (as 
                                determined by the Secretary for 
                                purposes of such section); plus
                                  [(II) 3.1 percent,
                        exceeds 9.0 percent.
                          [(vi) Limitation on special 
                        allowances for consolidation loans.--In 
                        the case of consolidation loans made 
                        under section 428C and for which the 
                        application is received on or after 
                        January 1, 2000, for which the interest 
                        rate is determined under section 
                        427A(k)(4) or (l)(3), a special 
                        allowance shall not be paid for such 
                        loan during any 3-month period ending 
                        March 31, June 30, September 30, or 
                        December 31 unless--
                                  [(I) the average of the bond 
                                equivalent rates of the quotes 
                                of the 3-month commercial paper 
                                (financial) rates in effect for 
                                each of the days in such 
                                quarter as reported by the 
                                Federal Reserve in Publication 
                                H-15 (or its successor) for 
                                such 3-month period; plus
                                  [(II) 2.64 percent,
                        exceeds the rate determined under 
                        section 427A(k)(4) or (l)(3), whichever 
                        is applicable.
                          [(vii) Limitation on special 
                        allowances for plus loans on or after 
                        july 1, 2006.--In the case of PLUS 
                        loans made under section 428B and first 
                        disbursed on or after July 1, 2006, for 
                        which the interest rate is determined 
                        under section 427A(l)(2), a special 
                        allowance shall not be paid for such 
                        loan during any 12-month period 
                        beginning on July 1 and ending on June 
                        30 unless--
                                  [(I) the average of the bond 
                                equivalent rates of the quotes 
                                of the 3-month commercial paper 
                                (financial), as published by 
                                the Board of Governors of the 
                                Federal Reserve System in 
                                Publication H-15 (or its 
                                successor), for the last 
                                calendar week ending on or 
                                before such July 1; plus
                                  [(II) 2.64 percent,
                        exceeds 9.0 percent.]
                          (v) Recapture of excess interest.--
                                  (I) Excess credited.--With 
                                respect to a loan on which the 
                                applicable interest rate is 
                                determined under section 
                                427A(k) and for which the first 
                                disbursement of principal is 
                                made on or after July 1, 2006, 
                                if the applicable interest rate 
                                for any 3-month period exceeds 
                                the special allowance support 
                                level applicable to such loan 
                                under this subparagraph for 
                                such period, then an adjustment 
                                shall be made by calculating 
                                the excess interest in the 
                                amount computed under subclause 
                                (II) of this clause, and by 
                                crediting the excess interest 
                                to the Government not less 
                                often than annually.
                                  (II) Calculation of excess.--
                                The amount of any adjustment of 
                                interest on a loan to be made 
                                under this subsection for any 
                                quarter shall be equal to--
                                          (aa) the applicable 
                                        interest rate minus the 
                                        special allowance 
                                        support level 
                                        determined under this 
                                        subparagraph; 
                                        multiplied by
                                          (bb) the average 
                                        daily principal balance 
                                        of the loan (not 
                                        including unearned 
                                        interest added to 
                                        principal) during such 
                                        calendar quarter; 
                                        divided by
                                          (cc) four.
                                  (III) Special allowance 
                                support level.--For purposes of 
                                this clause, the term ``special 
                                allowance support level'' 
                                means, for any loan, a number 
                                expressed as a percentage equal 
                                to the sum of the rates 
                                determined under subclauses (I) 
                                and (III) of clause (i), and 
                                applying any substitution rules 
                                applicable to such loan under 
                                clauses (ii), (iii), and (iv) 
                                in determining such sum.

           *       *       *       *       *       *       *

          (4) Penalty for late payment.--(A) * * *
          (B) Such daily interest [shall be computed at the 
        daily equivalent rate of the sum of the special 
        allowance rate computed pursuant to paragraph (2) and 
        the interest rate applicable to the loan] described in 
        subparagraph (A) shall be computed using the interest 
        rate described in section 3902(a) of title 31, United 
        States Code, and shall be paid for the later of (i) the 
        31st day after the receipt of such request for payment 
        from the holder, or (ii) the 31st day after the final 
        day of the period or periods covered by such request, 
        and shall be paid for each succeeding day until, and 
        including, the date on which the Secretary authorizes 
        payment.

           *       *       *       *       *       *       *

  (c) Origination Fees From Students.--
          (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 and 
        the amount the lender is authorized to collect as a 
        fixed rate offset charge in accordance with paragraph 
        (9) of this subsection--
                  (i) * * *

           *       *       *       *       *       *       *

          (B) If the Secretary collects the origination fee and 
        the fixed rate offset charge 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 and fixed rate offset 
        charges in that quarter, the Secretary shall deduct the 
        excess amount from the subsequent quarters' payments 
        until the total amount has been deducted.
          [(2) Amount of origination fees.--]
          (2) Amount of origination fees.--
                  (A) In general.--Subject to paragraph (6) of 
                this subsection, with respect to any loan 
                (including loans made under section 428H, but 
                excluding loans made under sections 428C and 
                439(o)) for which a completed note or other 
                written evidence of the loan was sent or 
                delivered to the borrower for signing on or 
                after 10 days after the date of enactment of 
                the Postsecondary Student Assistance Amendments 
                of 1981, each eligible lender under this part 
                is authorized to charge the borrower an 
                origination fee in an amount not to exceed 3.0 
                percent of the principal amount of the loan, to 
                be deducted proportionately from each 
                installment payment of the proceeds of the loan 
                prior to payment to the borrower. Except as 
                provided in paragraph (8), a lender that 
                charges an origination fee under this paragraph 
                shall assess the same fee to all student 
                borrowers.
                  (B) Subsequent reductions.--Subparagraph (A) 
                shall be applied to loans made under this part 
                (other than loans made under sections 428C and 
                439(o))--
                          (i) by substituting ``2.0 percent'' 
                        for ``3.0 percent'' with respect to 
                        loans for which the first disbursement 
                        of principal is made on or after July 
                        1, 2006, and before July 1, 2007;
                          (ii) by substituting ``1.5 percent'' 
                        for ``3.0 percent'' with respect to 
                        loans for which the first disbursement 
                        of principal is made on or after July 
                        1, 2007, and before July 1, 2008;
                          (iii) by substituting ``1.0 percent'' 
                        for ``3.0 percent'' with respect to 
                        loans for which the first disbursement 
                        of principal is made on or after July 
                        1, 2008, and before July 1, 2009;
                          (iv) by substituting ``0.5 percent'' 
                        for ``3.0 percent'' with respect to 
                        loans for which the first disbursement 
                        of principal is made on or after July 
                        1, 2009, and before July 1, 2010; and
                          (v) by substituting ``0.0 percent'' 
                        for ``3.0 percent'' with respect to 
                        loans for which the first disbursement 
                        of principal is made on or after July 
                        1, 2010.
          (3) Relation to applicable interest.--Such 
        origination fee and fixed rate offset charge shall not 
        be taken into account for purposes of determining 
        compliance with section 427A.
          (4) Disclosure required.--The lender shall disclose 
        to the borrower the amount and method of calculating 
        the origination fee and fixed rate offset charge.
          (5) Prohibition on department compelling origination 
        fee collections by lenders.--Nothing in this subsection 
        shall be construed to permit the Secretary to require 
        any lender that is making loans that are insured or 
        guaranteed under this part, but for which no amount 
        will be payable for interest under section 428(a)(3)(A) 
        or for special allowances under subsection (b) of this 
        section, to collect any origination fee or fixed rate 
        offset charge or to submit the sums collected as 
        origination fees or fixed rate offset charges to the 
        United States. The Secretary shall, not later than 
        January 1, 1987, return to any such lender any such 
        sums collected before the enactment of this paragraph, 
        together with interest thereon.
          (6) [SLS and plus] Plus loans.--With respect to any 
        loans made under section [428A or] 428B on or after 
        October 1, 1992, each eligible lender under this part 
        shall charge the borrower an origination fee of 3.0 
        percent of the principal amount of the loan, to be 
        deducted proportionately from each installment payment 
        of the proceeds of the loan prior to payments to the 
        borrower.
          (7) Distribution of origination fees.--All 
        origination fees and fixed rate offset charges 
        collected pursuant to this section on loans authorized 
        under section [428A or] 428B shall be paid to the 
        Secretary by the lender and deposited in the fund 
        authorized under section 431 of this part.

           *       *       *       *       *       *       *

          (9) Fixed rate offset charges for consolidation 
        loans.--For any loan under section 428C for which the 
        borrower elects to take a fixed rate under section 
        427A(k)(5)(C), the lender is authorized to collect a 
        fixed rate offset charge in an amount not to exceed 0.5 
        percent of the principal amount of the loan. Such 
        amount may be added to the principal amount of the loan 
        for repayment by the borrower.

SEC. 439. STUDENT LOAN MARKETING ASSOCIATION.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Authority of Association.--
          (1) In general.--The Association is authorized, 
        subject to the provisions of this section--
                  (A) * * *

           *       *       *       *       *       *       *

                  (E) to undertake any other activity which the 
                Board of Directors of the Association 
                determines to be in furtherance of the programs 
                of insured student loans authorized under this 
                part or will otherwise support the credit needs 
                of students, except that--
                          (i) * * *

           *       *       *       *       *       *       *

                          (iii) not later than 30 days prior to 
                        the initial implementation of a program 
                        undertaken pursuant to this 
                        subparagraph (E), the Association shall 
                        advise the [Chairman and the Ranking 
                        Member on the Committee on Labor and 
                        Human Resources of the Senate and the 
                        Chairman and the Ranking Member of the 
                        Committee on Education and Labor of the 
                        House of Representatives] chairpersons 
                        and ranking minority members of the 
                        authorizing committees in writing of 
                        its plans to offer such program and 
                        shall provide information relating to 
                        the general terms and conditions of 
                        such program.
        The Association is further authorized to undertake any 
        activity with regard to student loans which are not 
        insured or guaranteed as provided for in this 
        subsection as it may undertake with regard to insured 
        or guaranteed student loans. Any warehousing advance 
        made on the security of such loans shall be subject to 
        the provisions of paragraph (3) of this subsection to 
        the same extent as a warehousing advance made on the 
        security of insured loans.

           *       *       *       *       *       *       *

          [(3) Perfection of security interests in student 
        loans.--Notwithstanding the provisions of any State law 
        to the contrary, including the Uniform Commercial Code 
        as in effect in any State, a security interest in 
        insured student loans created on behalf of the 
        Association or any eligible lender as defined in 
        section 435(a) may be perfected either through the 
        taking of possession of such loans or by the filing of 
        notice of such security interest in such loans in the 
        manner provided by such State law for perfection of 
        security interests in accounts.]
          [(4)] (3) Form of securities.--Securities issued 
        pursuant to the offering of participations or pooled 
        interests under paragraph (1) of this subsection may be 
        in the form of debt obligations, or trust certificates 
        of beneficial ownership, or both. Student loans set 
        aside pursuant to the offering of participations or 
        pooled interests shall at all times be adequate to 
        ensure the timely principal and interest payments on 
        such securities.
          [(5)] (4) Restrictions on facilities and housing 
        activities.--Not less than 75 percent of the aggregate 
        dollar amount of obligations bought, sold, held, 
        insured, underwritten, and otherwise supported in 
        accordance with the authority contained in paragraph 
        (1)(C) shall be obligations which are listed by a 
        nationally recognized statistical rating organization 
        at a rating below the second highest rating of such 
        organization.

           *       *       *       *       *       *       *

  (r) Safety and Soundness of Association.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Monitoring of safety and soundness.--The 
        Secretary of the Treasury shall conduct such studies as 
        may be necessary to monitor the financial safety and 
        soundness of the Association. In the event that the 
        Secretary of the Treasury determines that the financial 
        safety and soundness of the Association is at risk, the 
        Secretary of the Treasury shall inform the [Chairman 
        and ranking minority member of the Committee on Labor 
        and Human Resources of the Senate, the Chairman and 
        ranking minority member of the Committee on Education 
        and Labor of the House of Representatives,] 
        chairpersons and ranking minority members of the 
        authorizing committees and the Secretary of Education 
        of such determination and identify any corrective 
        actions that should be taken to ensure the safety and 
        soundness of the Association.

           *       *       *       *       *       *       *

          (5) Capital restoration plan.--
                  (A) * * *
                  (B) Disapproval.--If the Secretary of the 
                Treasury does not approve a capital restoration 
                plan as provided in subparagraph (A), then not 
                later than the earlier of the date the 
                Secretary of the Treasury disapproves of such 
                plan by written notice to the Association or 
                the expiration of the 30-day consideration 
                period referred to in subparagraph (A) (as such 
                period may have been extended by mutual 
                agreement), the Secretary of the Treasury shall 
                submit the Association's capital restoration 
                plan, in the form most recently proposed to the 
                Secretary of the Treasury by the Association, 
                together with a report on the Secretary of the 
                Treasury's reasons for disapproval of such plan 
                and an alternative capital restoration plan, to 
                the [Chairman and ranking minority member of 
                the Senate Committee on Labor and Human 
                Resources and to the Chairman and ranking 
                minority member of the House Committee on 
                Education and Labor] chairpersons and ranking 
                minority members of the authorizing committees. 
                A copy of such submission simultaneously shall 
                be sent to the Association and the Secretary of 
                Education by the Secretary of the Treasury.

           *       *       *       *       *       *       *

          (6) Substantial capital ratio reduction.--
                  (A) * * *
                  (B) Disapproval.--If the Secretary of the 
                Treasury disapproves a capital restoration plan 
                or modified plan submitted pursuant to 
                subparagraph (A), then, not later than the 
                earlier of the date the Secretary of the 
                Treasury disapproves of such plan or modified 
                plan (by written notice to the Association) or 
                the expiration of the 30-day consideration 
                period described in subparagraph (A) (as such 
                period may have been extended by mutual 
                agreement), the Secretary of the Treasury shall 
                prepare and submit an alternative capital 
                restoration plan, together with a report on his 
                reasons for disapproval of the Association's 
                plan or modified plan, to the [Chairman and 
                ranking minority member of the Committee on 
                Labor and Human Resources of the Senate and to 
                the Chairman and ranking minority member of the 
                Committee on Education and Labor of the House 
                of Representatives] chairpersons and ranking 
                minority members of the authorizing committees. 
                A copy of such submission simultaneously shall 
                be sent to the Association and the Secretary of 
                Education by the Secretary of the Treasury. The 
                Association, within 5 days after receipt from 
                the Secretary of the Treasury of such 
                submission, shall submit to the Chairmen and 
                ranking minority members of such Committees, 
                and the Secretary of the Treasury, a written 
                response to such submission, setting out fully 
                the nature and extent of the Association's 
                agreement or disagreement with the Secretary of 
                the Treasury with respect to the disapproved 
                plan and the alternative plan of the Secretary 
                of the Treasury and any findings of the 
                Secretary of the Treasury.

           *       *       *       *       *       *       *

          (8) Critical capital standard.--(A) * * *

           *       *       *       *       *       *       *

          (C) Immediately upon a determination under 
        subparagraph (A) or (B) to implement a capital 
        restoration plan, the Secretary of the Treasury shall 
        submit the capital restoration plan to be implemented 
        to the [Chairman and ranking minority member of the 
        Committee on Labor and Human Resources of the Senate, 
        the Chairman and ranking minority member of the 
        Committee on Education and Labor of the House of 
        Representatives,] chairpersons and ranking minority 
        members of the authorizing committees and the Secretary 
        of Education.

           *       *       *       *       *       *       *

          (10) Review by secretary of education.--The Secretary 
        of Education shall review the Secretary of the 
        Treasury's submission required pursuant to paragraph 
        (5)(B), (6)(B), or (8) and shall submit a report within 
        30 days to the [Chairman and ranking minority member of 
        the Senate Committee on Labor and Human Resources and 
        to the Chairman and ranking minority member of the 
        House Committee on Education and Labor] chairpersons 
        and ranking minority members of the authorizing 
        committees--
                  (A) * * *

           *       *       *       *       *       *       *

  (s) Charter Sunset.--
          (1) * * *
          (2) Sunset plan.--
                  (A) Plan submission by the association.--Not 
                later than July 1, 2007, the Association shall 
                submit to the Secretary of the Treasury and to 
                the [Chairman and Ranking Member of the 
                Committee on Labor and Human Resources of the 
                Senate and the Chairman and Ranking Member of 
                the Committee on Economic and Educational 
                Opportunities of the House of Representatives] 
                chairpersons and ranking minority members of 
                the authorizing committees, a detailed plan for 
                the orderly winding up, by July 1, 2013, of 
                business activities conducted pursuant to the 
                charter set forth in this section. Such plan 
                shall--
                          (i) * * *

           *       *       *       *       *       *       *

                  (B) Amendment of the plan by the 
                association.--The Association shall from time 
                to time amend such plan to reflect changed 
                circumstances, and submit such amendments to 
                the Secretary of the Treasury and to the 
                [Chairman and Ranking Minority Member of the 
                Committee on Labor and Human Resources of the 
                Senate and Chairman and Ranking Minority Member 
                of the Committee on Economic and Educational 
                Opportunities of the House of Representatives] 
                chairpersons and ranking minority members of 
                the authorizing committees. In no case may any 
                amendment extend the date for full 
                implementation of the plan beyond the 
                dissolution date provided in paragraph (3).

           *       *       *       *       *       *       *


                  Part C--Federal Work-Study Programs

SEC. 441. PURPOSE; APPROPRIATIONS AUTHORIZED.

  (a) * * *
  (b) Authorization of Appropriations.--There are authorized to 
be appropriated to carry out this part, $1,000,000,000 for 
fiscal year [1999] 2006 and such sums as may be necessary for 
each of the [4] 5 succeeding fiscal years.
  (c) Community Services.--For purposes of this part, the term 
``community services'' means services which are identified by 
an institution of higher education, through formal or informal 
consultation with local nonprofit, governmental, and community-
based organizations, as designed to improve the quality of life 
for community residents, particularly low-income individuals, 
or to solve particular problems related to their needs, 
including--
          (1) such fields as health care, child care (including 
        child care services provided on campus [that are open 
        and accessible to the community]), 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;

           *       *       *       *       *       *       *


SEC. 442. ALLOCATION OF FUNDS.

  [(a) Allocation Based on Previous Allocation.--(1) From the 
amount appropriated pursuant to section 441(b) for each fiscal 
year, the Secretary shall first allocate to each eligible 
institution for each succeeding fiscal year, an amount equal to 
100 percent of the amount such institution received under 
subsections (a) and (b) for fiscal year 1999 (as such 
subsections were in effect with respect to allocations for such 
fiscal year).
  [(2)(A) From the amount so appropriated, the Secretary shall 
next allocate to each eligible institution that began 
participation in the program under this part after fiscal year 
1999 but is not a first or second time participant, an amount 
equal to the greater of--
          [(i) $5,000; or
          [(ii) 90 percent of the amount received and used 
        under this part for the first year it participated in 
        the program.
  [(B) From the amount so appropriated, the Secretary shall 
next allocate to each eligible institution that began 
participation in the program under this part after fiscal year 
1999 and is a first or second time participant, an amount equal 
to the greatest of--
          [(i) $5,000;
          [(ii) an amount equal to (I) 90 percent of the amount 
        received and used under this part in the second 
        preceding fiscal year by eligible institutions offering 
        comparable programs of instruction, divided by (II) the 
        number of students enrolled at such comparable 
        institutions in such fiscal year, multiplied by (III) 
        the number of students enrolled at the applicant 
        institution in such fiscal year; or
          [(iii) 90 percent of the institution's allocation 
        under this part for the preceding fiscal year.
  [(C) Notwithstanding subparagraphs (A) and (B) of this 
paragraph, the Secretary shall allocate to each eligible 
institution which--
          [(i) was a first-time participant in the program in 
        fiscal year 2000 or any subsequent fiscal year, and
          [(ii) received a larger amount under this subsection 
        in the second year of participation,
an amount equal to 90 percent of the amount it received under 
this subsection in its second year of participation.
  [(3)(A) If the amount appropriated for any fiscal year is 
less than the amount required to be allocated to all 
institutions under paragraph (1) of this subsection, then the 
amount of the allocation to each such institution shall be 
ratably reduced.
  [(B) If the amount appropriated for any fiscal year is more 
than the amount required to be allocated to all institutions 
under paragraph (1) but less than the amount required to be 
allocated to all institutions under paragraph (2), then--
          [(i) the Secretary shall allot the amount required to 
        be allocated to all institutions under paragraph (1), 
        and
          [(ii) the amount of the allocation to each 
        institution under paragraph (2) shall be ratably 
        reduced.
  [(C) If additional amounts are appropriated for any such 
fiscal year, such reduced amounts shall be increased on the 
same basis as they were reduced (until the amount allocated 
equals the amount required to be allocated under paragraphs (1) 
and (2) of this subsection).
  [(4)(A) Notwithstanding any other provision of this section, 
the Secretary may allocate an amount equal to not more than 10 
percent of the amount by which the amount appropriated in any 
fiscal year to carry out this part exceeds $700,000,000 among 
eligible institutions described in subparagraph (B).
  [(B) In order to receive an allocation pursuant to 
subparagraph (A) an institution shall be an eligible 
institution from which 50 percent or more of the Pell Grant 
recipients attending such eligible institution graduate or 
transfer to a 4-year institution of higher education.]
  (a) Allocation Based on Previous Allocation.--
          (1) Base guarantee.--From the amount appropriated 
        pursuant to section 441(b) for each fiscal year after 
        fiscal year 2007, the Secretary shall, subject to 
        paragraph (2), first allocate to each eligible 
        institution an amount equal to the following percentage 
        of the amount such institution received under 
        subsection (a) of this section for fiscal year 2007 (as 
        such subsection was in effect with respect to 
        allocations for such fiscal year):
                  (A) 80 percent for fiscal years 2008 and 
                2009;
                  (B) 60 percent for fiscal years 2010 and 
                2011;
                  (C) 40 percent for fiscal years 2012 and 
                2013;
                  (D) 20 percent for fiscal years 2014 and 
                2015; and
                  (E) 0 percent for fiscal year 2016 and any 
                succeeding fiscal year.
          (2) Ratable reductions for insufficient 
        appropriations.--
                  (A) Reduction of base guarantee.--If the 
                amount appropriated for any fiscal year is less 
                than the amount required to be allocated to all 
                institutions under this subsection, then the 
                amount of the allocation to each such 
                institution shall be ratably reduced.
                  (B) Additional appropriations allocation.--If 
                additional amounts are appropriated for any 
                such fiscal year, such reduced amounts shall be 
                increased on the same basis as they were 
                reduced (until the amount allocated equals the 
                amount required to be allocated under this 
                subsection).
          (3) Additional allocations for certain 
        institutions.--
                  (A) Allocations permitted.--Notwithstanding 
                any other provision of this section, the 
                Secretary may allocate an amount equal to not 
                more than 10 percent of the amount by which the 
                amount appropriated in any fiscal year to carry 
                out this part exceeds $700,000,000 among 
                eligible institutions described in subparagraph 
                (B).
                  (B) Eligible institutions.--An otherwise 
                eligible institution may receive a portion of 
                the allocation described in subparagraph (A) 
                if--
                          (i) not less than 10 percent of the 
                        students attending the institution 
                        receive Federal Pell Grants; and
                          (ii)(I) in the case of an institution 
                        that offers programs of at least 4 
                        years in duration, if its graduation 
                        rate for Federal Pell Grant recipients 
                        attending the institution and 
                        graduating within the period of time 
                        equal to normal duration of the longest 
                        undergraduate program offered by the 
                        institution, as measured from the first 
                        day of their enrollment, exceeds the 
                        median rate for the class of 
                        institution (as defined in section 
                        131(f)(5)(C)); or
                          (II) in the case of an institution 
                        that offers programs of at least 2, but 
                        less than 4, years in duration, if its 
                        rate for Federal Pell Grant recipients 
                        attending the institution and 
                        graduating or transferring to an 
                        institution that offers programs of at 
                        least 4 years in duration within the 
                        period of time equal to the normal 
                        duration of the program offered, as 
                        measured from the first day of their 
                        enrollment, exceeds the median rate for 
                        the class of institution (as defined in 
                        section 131(f)(5)(C)).

           *       *       *       *       *       *       *

  (c) Determination of Institution's Need.--(1) * * *

           *       *       *       *       *       *       *

  (4)(A) * * *

           *       *       *       *       *       *       *

  (D) The allowance for books and supplies described in 
subparagraph (A)(iii) is equal to [$450] $600.

           *       *       *       *       *       *       *


SEC. 446. JOB LOCATION AND DEVELOPMENT PROGRAMS.

  (a) Agreements Required.--(1) The Secretary is authorized to 
enter into agreements with eligible institutions under which 
such institution may use not more than [10 percent or $50,000] 
15 percent or $75,000 of its allotment under section 442, 
whichever is less, to establish or expand a program under which 
such institution, separately or in combination with other 
eligible institutions, locates and develops jobs, including 
community service jobs, for currently enrolled students, except 
that not less than one-third of such amount shall be 
specifically allocated to locate and develop community service 
jobs.

           *       *       *       *       *       *       *


SEC. 448. WORK COLLEGES.

  (a) Purpose.--The purpose of this section is to recognize, 
encourage, and promote the use of comprehensive [work-learning] 
work-learning-service programs as a valuable educational 
approach when it is an integral part of the institution's 
educational program and a part of a financial plan which 
decreases reliance on grants and loans.
  (b) Source and Use Funds.--
          (1) Source of funds.--In addition to the sums 
        appropriated under subsection (f), funds allocated to 
        the institution under part C and part E of this title 
        may be transferred for use under this section to 
        provide flexibility in strengthening the self-help-
        through-work element in financial aid packaging.
          (2) Activities authorized.--From the sums 
        appropriated pursuant to subsection (f), and from the 
        funds available under paragraph (1), eligible 
        institutions may, following approval of an application 
        under subsection (c) by the Secretary--
                  (A) support the educational costs of 
                qualified students through self-help payments 
                or credits provided under the [work-learning] 
                work-learning-service program of the 
                institution within the limits of part F of this 
                title;
                  (B) promote the work-learning-service 
                experience as a tool of postsecondary 
                education, financial self-help and community 
                service-learning opportunities;
                  (C) carry out activities described in section 
                443 or 446;
                  (D) be used for the administration, 
                development and assessment of comprehensive 
                [work-learning] work-learning-service programs, 
                including--
                          (i) community-based [work-learning] 
                        work-learning-service alternatives that 
                        expand opportunities for community 
                        service and career-related work; and
                          (ii) alternatives that develop sound 
                        citizenship, encourage student 
                        persistence, and make optimum use of 
                        assistance under this part in education 
                        and student development;
                  (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.
  (c) Application.--Each eligible institution may submit an 
application for funds authorized by subsection (f) to use funds 
under subsection (b)(1) at such time and in such manner as the 
Secretary, by regulation, may reasonably require.
  (d) Match Required.--Funds made available to work-colleges 
pursuant to this section shall be matched on a dollar-for-
dollar basis from non-Federal sources.
  (e) Definitions.--For the purpose of this section--
          (1) the term ``work-college'' means an eligible 
        institution that--
                  (A) has been a public or private nonprofit 
                institution with a commitment to community 
                service;
                  (B) has operated a comprehensive [work-
                learning] work-learning-service program for at 
                least 2 years;
                  [(C) requires all resident students who 
                reside on campus to participate in a 
                comprehensive work-learning program and the 
                provision of services as an integral part of 
                the institution's educational program and as 
                part of the institution's educational 
                philosophy; and]
                  (C) requires all resident students, including 
                at least one-half of all students who are 
                enrolled on a full-time basis, to participate 
                in a comprehensive work-learning-service 
                program for at least 5 hours each week, or at 
                least 80 hours during each period of 
                enrollment, unless the student is engaged in an 
                institutionally organized or approved study 
                abroad or externship program; and
                  (D) provides students participating in the 
                comprehensive [work-learning] work-learning-
                service program with the opportunity to 
                contribute to their education and to the 
                welfare of the community as a whole; and
          [(2) the term ``comprehensive student work-learning 
        program'' means a student work/service program that is 
        an integral and stated part of the institution's 
        educational philosophy and program; requires 
        participation of all resident students for enrollment, 
        participation, and graduation; includes learning 
        objectives, evaluation and a record of work performance 
        as part of the student's college record; provides 
        programmatic leadership by college personnel at levels 
        comparable to traditional academic programs; recognizes 
        the educational role of work-learning supervisors; and 
        includes consequences for nonperformance or failure in 
        the work-learning program similar to the consequences 
        for failure in the regular academic program.]
          (2) the term ``comprehensive student work-learning-
        service program''--
                  (A) means a student work-learning-service 
                program that is an integral and stated part of 
                the institution's educational philosophy and 
                program;
                  (B) requires participation of all resident 
                students for enrollment and graduation;
                  (C) includes learning objectives, evaluation, 
                and a record of work performance as part of the 
                student's college record;
                  (D) provides programmatic leadership by 
                college personnel at levels comparable to 
                traditional academic programs;
                  (E) recognizes the educational role of work-
                learning-service supervisors; and
                  (F) includes consequences for nonperformance 
                or failure in the work-learning-service program 
                similar to the consequences for failure in the 
                regular academic program.
  (f) Authorization of Appropriations.--There are authorized to 
be appropriated to carry out this section $5,000,000 for fiscal 
year [1999 and such sums as may be necessary for each of the 4 
succeeding fiscal years] 2006 and such sums as may be necessary 
for the 5 succeeding fiscal years.

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

           *       *       *       *       *       *       *


SEC. 455. TERMS AND CONDITIONS OF LOANS.

  (a) In General.--
          (1) Parallel terms, conditions, benefits, and 
        amounts.--Unless otherwise specified in this part, 
        loans made to borrowers under this part shall have the 
        same terms, conditions, and benefits, and be available 
        in the same amounts, as loans made to borrowers under 
        sections 428, 428B, 428C, and 428H of this title.
          (2) Designation of loans.--Loans made to borrowers 
        under this part that, except as otherwise specified in 
        this part, have the same terms, conditions, and 
        benefits as loans made to borrowers under--
                  (A) section 428 shall be known as ``Federal 
                Direct Stafford Loans'';
                  (B) section 428B shall be known as ``Federal 
                Direct PLUS Loans''; [and]
                  (C) section 428C shall be known as ``Federal 
                Direct Consolidation Loans''; and
                  [(C)] (D) section 428H shall be known as 
                ``Federal Direct Unsubsidized Stafford Loans''.
  (b) Interest Rate.--
          (1) * * *

           *       *       *       *       *       *       *

          (6) Interest rate provision for new loans on or after 
        october 1, 1998[, and before july 1, 2006].--
                  (A) Rates for fdsl and fdusl.--
                Notwithstanding the preceding paragraphs of 
                this subsection, for Federal Direct Stafford 
                Loans and Federal Direct Unsubsidized Stafford 
                Loans for which the first disbursement is made 
                on or after October 1, 1998[, and before July 
                1, 2006,] 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 91-
                        day Treasury bills auctioned at the 
                        final auction held prior to such June 
                        1; plus
                          (ii) 2.3 percent,
                except that such rate shall not exceed 8.25 
                percent.
                  (B) In school and grace period rules.--
                Notwithstanding the preceding paragraphs of 
                this subsection, with respect to any Federal 
                Direct Stafford Loan or Federal Direct 
                Unsubsidized Stafford Loan for which the first 
                disbursement is made on or after October 1, 
                1998[, and before July 1, 2006,] 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 be determined under subparagraph (A) by 
                substituting ``1.7 percent'' for ``2.3 
                percent''.
                  (C) PLUS loans.--Notwithstanding the 
                preceding paragraphs of this subsection, with 
                respect to Federal Direct PLUS Loan for which 
                the first disbursement is made on or after 
                October 1, 1998[, and before July 1, 2006,] the 
                applicable rate of interest shall be determined 
                under subparagraph (A)--
                          (i) by substituting ``3.1 percent'' 
                        for ``2.3 percent''; and
                          (ii) by substituting ``9.0 percent'' 
                        for ``8.25 percent''.
                  (D) Consolidation loans before july 1, 
                2006.--Notwithstanding the preceding paragraphs 
                of this subsection, any Federal Direct 
                Consolidation loan for which the application is 
                received on or after February 1, 1999, and 
                before July 1, 2006, shall bear interest at an 
                annual rate on the unpaid principal balance of 
                the loan that is equal to the lesser of--
                          (i) * * *

           *       *       *       *       *       *       *

                  (E) Consolidation loans on or after july 1, 
                2006.--
                          (i) Borrower election.--
                        Notwithstanding the preceding 
                        paragraphs of this subsection, with 
                        respect to any Federal Direct 
                        Consolidation Loan for which the 
                        application is received by an eligible 
                        lender on or after July 1, 2006, the 
                        applicable rate of interest shall, at 
                        the election of the borrower at the 
                        time of application for the loan, be 
                        either at the rate determined under 
                        clause (ii) or the rate determined 
                        under clause (iii).
                          (ii) Variable rate.--Except as 
                        provided in clause (iv), the rate 
                        determined under this clause shall, 
                        during any 12-month period beginning on 
                        July 1 and ending on June 30, be 
                        determined on the preceding June 1 and, 
                        for such 12-month period, be equal to--
                                  (I) the bond equivalent rate 
                                of 91-day Treasury bills 
                                auctioned at the final auction 
                                held prior to such June 1; plus
                                  (II) 2.3 percent,
                        except that such rate shall not exceed 
                        8.25 percent.
                          (iii) Fixed rate.--Except as provided 
                        in clause (iv), the rate determined 
                        under this clause shall be determined 
                        for the duration of the term of the 
                        loan on the July 1 that is or precedes 
                        the date on which the application is 
                        received by an eligible lender, and 
                        shall be, for such duration, equal to--
                                  (I) the bond equivalent rate 
                                of 91-day Treasury bills 
                                auctioned at the final auction 
                                held prior to the June 1 
                                immediately preceding such July 
                                1; plus
                                  (II) 3.3 percent,
                        except that such rate shall not exceed 
                        8.25 percent.
                          (iv) Consolidation of plus loans.--In 
                        the case of any such Federal Direct 
                        Consolidation Loan that is used to 
                        repay loans each of which was made 
                        under section 428B or was a Federal 
                        Direct PLUS Loan (or both), the rates 
                        determined under clauses (ii) and (iii) 
                        shall be determined--
                                  (I) by substituting ``3.1 
                                percent'' for ``2.3 percent'';
                                  (II) by substituting ``4.1 
                                percent'' for ``3.3 percent''; 
                                and
                                  (III) by substituting ``9.0 
                                percent'' for ``8.25 percent''.
                  [(E)] (F) Temporary rules for consolidation 
                loans.--Notwithstanding the preceding 
                paragraphs of this subsection, any Federal 
                Direct Consolidation loan for which the 
                application is received on or after October 1, 
                1998, and before February 1, 1999, shall bear 
                interest at an annual rate on the unpaid 
                principal balance of the loan that is equal 
                to--
                          (i) * * *

           *       *       *       *       *       *       *

          [(7) Interest rate provision for new loans on or 
        after july 1, 2006.--
                  [(A) Rates for fdsl and fdusl.--
                Notwithstanding the preceding paragraphs of 
                this subsection, for Federal Direct Stafford 
                Loans and Federal Direct Unsubsidized Stafford 
                Loans for which the first disbursement is made 
                on or after July 1, 2006, the applicable rate 
                of interest shall be 6.8 percent on the unpaid 
                principal balance of the loan.
                  [(B) PLUS loans.--Notwithstanding the 
                preceding paragraphs of this subsection, with 
                respect to any Federal Direct PLUS loan for 
                which the first disbursement is made on or 
                after July 1, 2006, the applicable rate of 
                interest shall be 7.9 percent on the unpaid 
                principal balance of the loan.
                  [(C) Consolidation loans.--Notwithstanding 
                the preceding paragraphs of this subsection, 
                any Federal Direct Consolidation loan for which 
                the application is received on or after July 1, 
                2006, shall bear interest at an annual rate on 
                the unpaid principal balance of the loan that 
                is equal to the lesser of--
                          [(i) the weighted average of the 
                        interest rates on the loans 
                        consolidated, rounded to the nearest 
                        higher one-eighth of one percent; or
                          [(ii) 8.25 percent.]
          [(8)] (7) Repayment incentives.--
                  (A) * * *
                  (B) Accountability.--Prior to publishing 
                regulations proposing repayment incentives, the 
                Secretary shall ensure the cost neutrality of 
                such reductions. The Secretary shall not 
                prescribe such regulations in final form unless 
                an official report from the Director of the 
                Office of Management and Budget to the 
                Secretary and a comparable report from the 
                Director of the Congressional Budget Office to 
                the Congress each certify that any such 
                reductions will be completely cost neutral. 
                Such 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] 
                authorizing committees not less than 60 days 
                prior to the publication of regulations 
                proposing such reductions.
          [(9)] (8) 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.
  [(c) Loan Fee.--The Secretary shall charge the borrower of a 
loan made under this part an origination fee of 4.0 percent of 
the principal amount of loan.]
  (c) Loan Fee.--
          (1) In general.--The Secretary shall charge the 
        borrower of a loan made under this part an origination 
        fee of 4.0 percent of the principal amount of loan.
          (2) Subsequent reduction.--Paragraph (1) shall be 
        applied to loans made under this part, other than 
        consolidation loans and PLUS loans--
                  (A) by substituting ``not more or less than 
                3.0 percent'' for ``4.0 percent'' with respect 
                to loans for which the first disbursement of 
                principal is made on or after July 1, 2006, and 
                before July 1, 2007;
                  (B) by substituting ``not more or less than 
                2.5 percent'' for ``4.0 percent'' with respect 
                to loans for which the first disbursement of 
                principal is made on or after July 1, 2007, and 
                before July 1, 2008;
                  (C) by substituting ``not more or less than 
                2.0 percent'' for ``4.0 percent'' with respect 
                to loans for which the first disbursement of 
                principal is made on or after July 1, 2008, and 
                before July 1, 2009;
                  (D) by substituting ``not more or less than 
                1.5 percent'' for ``4.0 percent'' with respect 
                to loans for which the first disbursement of 
                principal is made on or after July 1, 2009, and 
                before July 1, 2010; and
                  (E) by substituting ``not more or less than 
                1.0 percent'' for ``4.0 percent'' with respect 
                to loans for which the first disbursement of 
                principal is made on or after July 1, 2010.
          (3) Waivers and repayment incentives prohibited.--
        Beginning with loans made on or after July 1, 2006, the 
        Secretary is prohibited--
                  (A) from waiving any amount of the loan fee 
                prescribed under this section as part of a 
                repayment incentive in section 455(b)(7); and
                  (B) from providing any repayment incentive 
                before the borrower enters repayment.
          (4) Fixed rate offset charges for consolidation 
        loans.--For any Federal Direct Consolidation Loan for 
        which the borrower elects to take a fixed rate under 
        section 455(b)(6)(E)(iii), the Secretary shall collect 
        a fixed rate offset charge in an amount not to exceed 
        0.5 percent of the principal amount of the loan. Such 
        amount may be added to the principal amount of the loan 
        for repayment by the borrower. Such amount is not 
        subject to the requirements of paragraph (3) of this 
        subsection.
  (d) Repayment Plans.--
          (1) Design and selection.--Consistent with criteria 
        established by the Secretary, the Secretary shall offer 
        a borrower of a loan made under this part a variety of 
        plans for repayment of such loan, including principal 
        and interest on the loan. The borrower shall be 
        entitled to accelerate, without penalty, repayment on 
        the borrower's loans under this part. The borrower may 
        choose--
                  [(A) a standard repayment plan, with a fixed 
                annual repayment amount paid over a fixed 
                period of time, consistent with subsection 
                (a)(1) of this section;
                  [(B) an extended repayment plan, with a fixed 
                annual repayment amount paid over an extended 
                period of time, except that the borrower shall 
                annually repay a minimum amount determined by 
                the Secretary in accordance with section 
                428(b)(1)(L);
                  [(C) a graduated repayment plan, with annual 
                repayment amounts established at 2 or more 
                graduated levels and paid over a fixed or 
                extended period of time, except that the 
                borrower's scheduled payments shall not be less 
                than 50 percent, nor more than 150 percent, of 
                what the amortized payment on the amount owed 
                would be if the loan were repaid under the 
                standard repayment plan; and]
                  (A) a standard repayment plan, consistent 
                with subsection (a)(1) of this section and with 
                section 428(b)(9)(A)(i);
                  (B) a graduated repayment plan, consistent 
                with section 428(b)(9)(A)(ii);
                  (C) an extended repayment plan, consistent 
                with section 428(b)(9)(A)(v), except that the 
                borrower shall annually repay a minimum amount 
                determined by the Secretary in accordance with 
                section 428(b)(1)(L);
                  (D) a delayed repayment plan under which the 
                borrower makes scheduled payments for not more 
                than 2 years that are annually not less than 
                the amount of interest due or $600, whichever 
                is greater, and then makes payments in 
                accordance with subparagraph (A), (B), or (C); 
                and
                  [(D)] (E) an income contingent repayment 
                plan, with varying annual repayment amounts 
                based on the income of the borrower, paid over 
                an extended period of time prescribed by the 
                Secretary, not to exceed 25 years, except that 
                the plan described in this subparagraph shall 
                not be available to the borrower of a Federal 
                Direct PLUS loan.

           *       *       *       *       *       *       *

  (e) Income Contingent Repayment.--
          (1) * * *
          (2) Repayment based on adjusted gross income.--A 
        repayment schedule for a loan made under this part and 
        repaid pursuant to income contingent repayment shall be 
        based on the adjusted gross income (as defined in 
        section 62 of the Internal Revenue Code of 1986) of the 
        borrower or, if the borrower is married [and files a 
        Federal income tax return jointly with the borrower's 
        spouse], on the adjusted gross income of the borrower 
        and the borrower's spouse.

           *       *       *       *       *       *       *

  (f) Deferment.--
          (1) * * *
          (2) Eligibility.--A borrower of a loan made under 
        this part shall be eligible for a deferment during any 
        period--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) not in excess of 3 years during which the 
                borrower--
                          (i) is serving on active duty during 
                        a war or other military operation or 
                        national emergency; or
                          (ii) is performing qualifying 
                        National Guard duty during a war or 
                        other military operation or national 
                        emergency; or
                  [(C)] (D) not in excess of 3 years during 
                which the Secretary determines, in accordance 
                with regulations prescribed under section 
                435(o), that the borrower has experienced or 
                will experience an economic hardship.

           *       *       *       *       *       *       *

  (g) Federal Direct Consolidation Loans.--A borrower of a loan 
made under this part may consolidate such loan with the loans 
described in section 428C(a)(4). [Loans made under this 
subsection shall be known as ``Federal Direct Consolidation 
Loans''.] To be eligible for a consolidation loan under this 
part, a borrower must meet the eligibility criteria set forth 
in section 428C(a)(3). The Secretary, upon application for such 
a loan, shall comply with the requirements applicable to a 
lender under section 428C(b)(1)(F).

           *       *       *       *       *       *       *


SEC. 458. FUNDS FOR ADMINISTRATIVE EXPENSES.

  (a) Administrative Expenses.--
          (1) In general.--Each fiscal year there shall be 
        available to the Secretary, from funds not otherwise 
        appropriated, funds to be obligated for--
                  (A) * * *

           *       *       *       *       *       *       *

        not to exceed (from such funds not otherwise 
        appropriated) [$617,000,000 in fiscal year 1999, 
        $735,000,000 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] $820,000,000 in 
        fiscal year 2006, $833,000,000 in fiscal year 2007, 
        $847,000,000 in fiscal year 2008, $862,000,000 in 
        fiscal year 2009, and $878,000,000 in fiscal year 2010, 
        and $894,000,000 in fiscal year 2011.

           *       *       *       *       *       *       *

  (b) Calculation Basis.--Except as provided in subsection (c), 
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 years 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.] shall be calculated on the basis of 0.10 
        percent of the original principal amount of outstanding 
        loans on which insurance was issued under part B.
  (c) Special Rules.--
          (1) Fee cap.--The total amount of account maintenance 
        fees payable under this section--
                  [(A) for fiscal year 1999, shall not exceed 
                $177,000,000;
                  [(B) for fiscal year 2000, shall not exceed 
                $180,000,000;
                  [(C) for fiscal year 2001, shall not exceed 
                $170,000,000;
                  [(D) for fiscal year 2002, shall not exceed 
                $180,000,000; and
                  [(E) for fiscal year 2003, shall not exceed 
                $195,000,000.]
                  (A) for fiscal year 2006, shall not exceed 
                $220,000,000;
                  (B) for fiscal year 2007, shall not exceed 
                $233,000,000;
                  (C) for fiscal year 2008, shall not exceed 
                $247,000,000;
                  (D) for fiscal year 2009, shall not exceed 
                $262,000,000;
                  (E) for fiscal year 2010, shall not exceed 
                $278,000,000; and
                  (F) for fiscal year 2011, shall not exceed 
                $294,000,000.

           *       *       *       *       *       *       *


SEC. 460. LOAN CANCELLATION FOR TEACHERS.

  (a) * * *
  (b) Program Authorized.--
          (1) In general.--The Secretary shall carry out a 
        program of canceling the obligation to repay a 
        qualified loan amount in accordance with subsection (c) 
        for Federal Direct Stafford Loans and Federal Direct 
        Unsubsidized Stafford Loans made under this part for 
        any new borrower on or after October 1, 1998, who--
                  (A) has been employed as a full-time teacher 
                for 5 consecutive complete school years--
                          (i) * * *
                          (ii) if employed as an elementary 
                        school or secondary school teacher, is 
                        highly qualified as defined in section 
                        9101 of the Elementary and Secondary 
                        Education Act of 1965, or meets the 
                        requirements of subsection (g)(3); and

           *       *       *       *       *       *       *

  (c) Qualified Loan Amounts.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Additional amounts for teachers in mathematics, 
        science, or special education.--Notwithstanding the 
        amount specified in paragraph (1), the aggregate amount 
        that the Secretary shall cancel under this section 
        shall be not more than $17,500 in the case of--
                  (A) a secondary school teacher--
                          (i) * * *
                          (ii) whose qualifying employment for 
                        purposes of such subsection is teaching 
                        mathematics or science on a full-time 
                        basis; [and]
                  (B) an elementary school or secondary school 
                teacher--
                          (i) * * *

           *       *       *       *       *       *       *

                          (iii) who, as certified by the chief 
                        administrative officer of the public or 
                        non-profit private elementary school or 
                        secondary school in which the borrower 
                        is employed, is teaching children with 
                        disabilities that correspond with the 
                        borrower's special education training 
                        and has demonstrated knowledge and 
                        teaching skills in the content areas of 
                        the elementary school or secondary 
                        school curriculum that the borrower is 
                        teaching[.]; and
                  (C) an elementary or secondary school teacher 
                who primarily teaches reading--
                          (i) who meets the requirements of 
                        subsection (b);
                          (ii) who has obtained a separate 
                        reading instruction credential from the 
                        State in which the teacher is employed; 
                        and
                          (iii) who is certified by the chief 
                        administrative officer of the public or 
                        nonprofit private elementary or 
                        secondary school in which the borrower 
                        is employed to teach reading--
                                  (I) as being proficient in 
                                teaching the essential 
                                components of reading 
                                instruction as defined in 
                                section 1208 of the Elementary 
                                and Secondary Education Act of 
                                1965; and
                                  (II) as having such 
                                credential.

           *       *       *       *       *       *       *

  (g) Additional Eligibility Provisions.--
          (1) * * *
          (3) Private school teachers.--An individual who is 
        employed as a teacher in a private school and is exempt 
        from State certification requirements (unless otherwise 
        applicable under State law), may, in lieu of the 
        requirement of subsection (a)(1)(A)(ii), have such 
        employment treated as qualifying employment under this 
        section if such individual is permitted to and does 
        satisfy rigorous subject knowledge and skills tests by 
        taking competency tests in the applicable grade levels 
        and subject areas. For such purposes, the competency 
        tests taken by such a private school teacher must be 
        recognized by 5 or more States for the purpose of 
        fulfilling the highly qualified teacher requirements 
        under section 9101 of the Elementary and Secondary 
        Education Act of 1965, and the score achieved by such 
        teacher on each test must equal or exceed the average 
        passing score of those 5 States.

           *       *       *       *       *       *       *


                     Part E--Federal Perkins Loans

SEC. 461. APPROPRIATIONS AUTHORIZED.

  (a) * * *
  (b) Authorization of Appropriations.--(1) For the purpose of 
enabling the Secretary to make contributions to student loan 
funds established under this part, there are authorized to be 
appropriated $250,000,000 for fiscal year [1999] 2006 and such 
sums as may be necessary for each of the [4] 5 succeeding 
fiscal years.
  (2) In addition to the funds authorized under paragraph (1), 
there are hereby authorized to be appropriated such sums for 
fiscal year [2003] 2012 and each of the 5 succeeding fiscal 
years as may be necessary to enable students who have received 
loans for academic years ending prior to October 1, [2003] 
2012, to continue or complete courses of study.

           *       *       *       *       *       *       *


SEC. 462. ALLOCATION OF FUNDS.

  [(a) Allocation Based on Previous Allocation.--(1) From the 
amount appropriated pursuant to section 461(b) for each fiscal 
year, the Secretary shall first allocate to each eligible 
institution an amount equal to--
          [(A) 100 percent of the amount received under 
        subsections (a) and (b) of this section for fiscal year 
        1999 (as such subsections were in effect with respect 
        to allocations for such fiscal year), multiplied by
          [(B) the institution's default penalty, as determined 
        under subsection (e),
except that if the institution has a cohort default rate in 
excess of the applicable maximum cohort default rate under 
subsection (f), the institution may not receive an allocation 
under this paragraph.
  [(2)(A) From the amount so appropriated, the Secretary shall 
next allocate to each eligible institution that began 
participation in the program under this part after fiscal year 
1999 but is not a first or second time participant, an amount 
equal to the greater of--
          [(i) $5,000; or
          [(ii) 100 percent of the amount received and expended 
        under this part for the first year it participated in 
        the program.
  [(B) From the amount so appropriated, the Secretary shall 
next allocate to each eligible institution that began 
participation in the program under this part after fiscal year 
1999 and is a first or second time participant, an amount equal 
to the greatest of--
          [(i) $5,000;
          [(ii) an amount equal to (I) 90 percent of the amount 
        received and used under this part in the second 
        preceding fiscal year by eligible institutions offering 
        comparable programs of instruction, divided by (II) the 
        number of students enrolled at such comparable 
        institutions in such fiscal year, multiplied by (III) 
        the number of students enrolled at the applicant 
        institution in such fiscal year; or
          [(iii) 90 percent of the institution's allocation 
        under this part for the preceding fiscal year.
  [(C) Notwithstanding subparagraphs (A) and (B) of this 
paragraph, the Secretary shall allocate to each eligible 
institution which--
          [(i) was a first-time participant in the program in 
        fiscal year 2000 or any subsequent fiscal year, and
          [(ii) received a larger amount under this subsection 
        in the second year of participation,
an amount equal to 90 percent of the amount it received under 
this subsection in its second year of participation.
  [(D) For any fiscal year after a fiscal year in which an 
institution receives an allocation under subparagraph (A), (B), 
or (C), the Secretary shall allocate to such institution an 
amount equal to the product of--
          [(i) the amount determined under subparagraph (A), 
        (B), or (C), multiplied by
          [(ii) the institution's default penalty, as 
        determined under subsection (e),
except that if the institution has a cohort default rate in 
excess of the applicable maximum cohort default rate under 
subsection (f), the institution may not receive an allocation 
under this paragraph.
  [(3)(A) If the amount appropriated for any fiscal year is 
less than the amount required to be allocated to all 
institutions under paragraph (1) of this subsection, then the 
amount of the allocation to each such institution shall be 
ratably reduced.
  [(B) If the amount appropriated for any fiscal year is more 
than the amount required to be allocated to all institutions 
under paragraph (1) but less than the amount required to be 
allocated to all institutions under paragraph (2), then--
          [(i) the Secretary shall allot the amount required to 
        be allocated to all institutions under paragraph (1), 
        and
          [(ii) the amount of the allocation to each 
        institution under paragraph (2) shall be ratably 
        reduced.
  [(C) If additional amounts are appropriated for any such 
fiscal year, such reduced amounts shall be increased on the 
same basis as they were reduced (until the amount allocated 
equals the amount required to be allocated under paragraphs (1) 
and (2) of this subsection).]
  (a) Allocation Based on Previous Allocation.--
          (1) Base guarantee.--From the amount appropriated 
        pursuant to section 461(b) for each fiscal year after 
        fiscal year 2007, the Secretary shall, subject to 
        paragraphs (2) and (3), first allocate to each eligible 
        institution an amount equal to--
                  (A) 100 percent of the amount such 
                institution received under subsection (a) of 
                this section for fiscal year 2007 (as such 
                subsection was in effect with respect to 
                allocations for such fiscal year), multiplied 
                by
                  (B) the institution's default penalty, as 
                determined under subsection (e), except that if 
                the institution has a cohort default rate in 
                excess of the applicable maximum cohort default 
                rate under subsection (f), the institution may 
                not receive an allocation under this paragraph.
          (2) Phase out.--For each of the fiscal years after 
        fiscal year 2007, paragraph (1) shall be applied by 
        substituting for ``100 percent'':
                  (A) ``80 percent'' for fiscal years 2008 and 
                2009;
                  (B) ``60 percent'' for fiscal years 2010 and 
                2011;
                  (C) ``40 percent'' for fiscal years 2012 and 
                2013;
                  (D) ``20 percent'' for fiscal years 2014 and 
                2015; and
                  (E) ``0 percent'' for fiscal year 2016 and 
                any succeeding fiscal year.
          (3) Ratable reductions for insufficient 
        appropriations.--
                  (A) Reduction of base guarantee.--If the 
                amount appropriated for any fiscal year is less 
                than the amount required to be allocated to all 
                institutions under this subsection, then the 
                amount of the allocation to each such 
                institution shall be ratably reduced.
                  (B) Additional appropriations allocation.--If 
                additional amounts are appropriated for any 
                such fiscal year, such reduced amounts shall be 
                increased on the same basis as they were 
                reduced (until the amount allocated equals the 
                amount required to be allocated under this 
                subsection).

           *       *       *       *       *       *       *

  (c) Determination of Institution's Self-Help Need.--(1) * * *

           *       *       *       *       *       *       *

  (4)(A) * * *

           *       *       *       *       *       *       *

  (D) The allowance for books and supplies described in 
subparagraph (A)(iii) is equal to [$450] $600.

           *       *       *       *       *       *       *

  (g) Definition of Cohort Default Rate.--
          (1)(A) * * *

           *       *       *       *       *       *       *

          (E) In determining the number of students who default 
        before the end of such award year, the institution, in 
        calculating the cohort default rate, shall exclude--
                  (i) any loan on which the borrower has, after 
                the time periods specified in paragraph (2)--
                          (I) voluntarily made 6 consecutive 
                        monthly payments;

           *       *       *       *       *       *       *


SEC. 463. AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION.

  (a) Contents of Agreements.--An agreement with any 
institution of higher education for the payment of Federal 
capital contributions under this part shall--
          (1) * * *

           *       *       *       *       *       *       *

          (4) provide that where a note or written agreement 
        evidencing a loan has been in default despite due 
        diligence on the part of the institution in attempting 
        collection thereon--
                  (A) if the institution has knowingly failed 
                to maintain an acceptable collection record 
                with respect to such loan, as determined by the 
                Secretary in accordance with criteria 
                established by regulation, the Secretary [may] 
                shall--
                          (i) * * *

           *       *       *       *       *       *       *


SEC. 464. TERMS OF LOANS.

  (a) Terms and Conditions.--(1) * * *
  (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] $5,500, in the case of a student who has 
        not successfully completed a program of undergraduate 
        education; or
          (ii) [$6,000] $8,000, 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 unpaid 
principal amount for all loans made to a student by 
institutions of higher education from loan funds established 
pursuant to agreements under this part may not exceed--
          (i) [$40,000] $60,000, 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] $27,500, 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] $11,000, in the case of any other 
        student.

           *       *       *       *       *       *       *

  (c) Contents of Loan Agreement.--(1) Any agreement between an 
institution and a student for a loan from a student loan fund 
assisted under this part--
          (A) * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

  (2)(A) No repayment of principal of, or interest on, any loan 
from a student loan fund assisted under this part shall be 
required during any period--
          (i) * * *

           *       *       *       *       *       *       *

          (iii) not in excess of 3 years during which the 
        borrower--
                  (I) is serving on active duty during a war or 
                other military operation or national emergency; 
                or
                  (II) is performing qualifying National Guard 
                duty during a war or other military operation 
                or national emergency;
          [(iii)] (iv) not in excess of 3 years for any reason 
        which the lender determines, in accordance with 
        regulations prescribed by the Secretary under section 
        435(o), has caused or will cause the borrower to have 
        an economic hardship; or
          [(iv)] (v) during which the borrower is engaged in 
        service described in section 465(a)(2);
and provides that any such period shall not be included in 
determining the 10-year period described in subparagraph (A) of 
paragraph (1).

           *       *       *       *       *       *       *

  (e) Forbearance.--The Secretary shall ensure that[, upon 
written request,] an institution of higher education shall 
grant a borrower forbearance of principal and interest or 
principal only, renewable at 12-month intervals for a period 
not to exceed 3 years, on such terms as are otherwise 
consistent with the regulations issued by the Secretary and 
agreed upon in writing by the parties to the loan, if--
          (1) * * *

           *       *       *       *       *       *       *

  (f) Special Repayment Rule Authority.--(1) * * *
  [(2) No compromise repayment of a defaulted loan as 
authorized by paragraph (1) may be made unless the student 
borrower pays--
          [(A) 90 percent of the loan under this part;
          [(B) the interest due on such loan; and
          [(C) any collection fees due on such loan;
in a lump sum payment.]
  (2) No compromise repayment of a defaulted loan as authorized 
by paragraph (1) may be made unless agreed to by the Secretary.

           *       *       *       *       *       *       *

  (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] 9 on-time, consecutive, 
                monthly payments of amounts owed on the loan, 
                as determined by the institution, or by the 
                Secretary in the case of a loan held by the 
                Secretary, 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 request that 
                any credit bureau organization or credit 
                reporting agency to which the default was 
                reported remove the default from the borrower's 
                credit history.

           *       *       *       *       *       *       *


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

  (a) Cancellation of Percentage of Debt Based on Years of 
Qualifying Service.--(1) * * *
  (2) Loans shall be canceled under paragraph (1) for service--
          (A) as a full-time teacher for service in an academic 
        year in a public or other nonprofit private elementary 
        or secondary school which is in the school district of 
        a local educational agency which is eligible in such 
        year for assistance pursuant to title I of the 
        Elementary and Secondary Education Act of 1965, and 
        which for the purpose of this paragraph and for that 
        year has been determined by the Secretary (pursuant to 
        regulations and after consultation with the State 
        educational agency of the State in which the school is 
        located) to be a school in which the enrollment of 
        children counted under [section 111(c)] section 
        1113(a)(5) of the Elementary and Secondary Education 
        Act of 1965 exceeds 30 percent of the total enrollment 
        of that school;

           *       *       *       *       *       *       *

  (3)(A) The percent of a loan which shall be canceled under 
paragraph (1) of this subsection is--
          (i) in the case of service described in subparagraph 
        (A), (C), (D), (F), (G), (H), or (I) of paragraph (2), 
        at the rate of 15 percent for the first or second year 
        of such service, 20 percent for the third or fourth 
        year of such service, and 30 percent for the fifth year 
        of such service;
          (ii) in the case of service described in subparagraph 
        (B) of paragraph (2), at the rate of 15 percent for 
        each year of such service; or
          [(iii) in the case of service described in 
        subparagraph (D) of paragraph (2), not to exceed a 
        total of 50 percent of such loan at the rate of 12\1/2\ 
        percent for each year of qualifying service; or]
          [(iv)] (iii) in the case of service described in 
        subparagraph (E) of paragraph (2) at the rate of 15 
        percent for the first or second year of such service 
        and 20 percent for the third or fourth year of such 
        service.

           *       *       *       *       *       *       *


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

  (a) In General.--After September 30, [2003] 2011, and not 
later than March 31, [2004] 2012, 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, [2003] 2011, as the total amount 
        of the Federal capital contributions to such fund by 
        the Secretary under this part bears to the sum of such 
        Federal contributions and the institution's capital 
        contributions to such fund.
          (2) The remainder of such balance shall be paid to 
        the institution.
  (b) Distribution of Late Collections.--After March 31, 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, 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, [2004] 
2012, that the liquid assets of a student loan fund established 
pursuant to an agreement under this part exceed the amount 
required for loans or otherwise in the foreseeable future, and 
upon notice to such institution or to the Secretary, as the 
case may be, there shall be, subject to such limitations as may 
be included in regulations of the Secretary or in such 
agreement, a capital distribution from such fund. Such capital 
distribution shall be made as follows:
          (A) The Secretary shall first be paid an amount which 
        bears the same ratio to the total to be distributed as 
        the Federal capital contributions by the Secretary to 
        the student loan fund prior to such distribution bear 
        to the sum of such Federal capital contributions and 
        the capital contributions to the fund made by the 
        institution.
          (B) The remainder of the capital distribution shall 
        be paid to the institution.
  (2) No finding that the liquid assets of a student loan fund 
established under this part exceed the amount required under 
paragraph (1) may be made prior to a date which is 2 years 
after the date on which the institution of higher education 
received the funds from such institution's allocation under 
section 462.

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

  (a) * * *
  (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)] (4)(A), (4)(B), or (5) of section 463(a) 
until all appropriate collection efforts, as determined by the 
Secretary, have been expended.

           *       *       *       *       *       *       *


SEC. 469. DEFINITIONS.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Infants, Toddlers, Children, and Youth With 
Disabilities.--For purposes of this part, the term ``infants, 
toddlers, children, and youth with disabilities'' means 
children with disabilities and infants and toddlers with 
disabilities as defined in [sections 602 and 632] sections 
602(3) and 632(5), respectively, of the Individuals with 
Disabilities Education Act, and the term ``[qualified 
professional provider of early intervention services] early 
intervention services'' has the meaning specified in [section 
672(2)] section 632(4) of such Act.

           *       *       *       *       *       *       *


PART F--NEED ANALYSIS

           *       *       *       *       *       *       *


SEC. 475. FAMILY CONTRIBUTION FOR DEPENDENT STUDENTS.

  (a) * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

                  (D) an income protection allowance of 
                [$2,200] $3,000 (or a successor amount 
                prescribed by the Secretary under section 478);

           *       *       *       *       *       *       *


SEC. 478. REGULATIONS; UPDATED TABLES.

  (a) * * *

           *       *       *       *       *       *       *

  (h) Employment Expense Allowance.--For each award year after 
award year 1993-1994, the Secretary shall publish in the 
Federal Register a revised table of employment expense 
allowances for the purpose of sections 475(c)(5), 476(b)(4), 
and 477(b)(5). Such revised table shall be developed by 
increasing the dollar amount specified in sections 
475(c)(5)(A), 475(c)(5)(B), 476(b)(4)(A), [476(b)(4)(B),] 
477(b)(5)(A), and 477(b)(5)(B) to reflect increases in the 
amount and percent of the Bureau of Labor Statistics budget of 
the marginal costs for [meals away from home, apparel and 
upkeep, transportation, and housekeeping services] food away 
from home, apparel, transportation, and household furnishings 
and operations for a two-worker versus one-worker family.

SEC. 479. SIMPLIFIED NEEDS TESTS.

  (a) * * *
  (b) Simplified Needs Test.--
          (1) Eligibility.--An applicant is eligible to file a 
        simplified form containing the elements required by 
        paragraph (2) if--
                  (A) in the case of an applicant who is a 
                dependent student--
                          [(i) the student's parents file or 
                        are eligible to file a form described 
                        in paragraph (3) or certify that they 
                        are not required to file an income tax 
                        return and the student files or is 
                        eligible to file such a form or 
                        certifies that the student is not 
                        required to file an income tax return; 
                        and]
                          (i) the student's parents file, or 
                        are eligible to file, a form described 
                        in paragraph (3) or certify that they 
                        are not required to file an income tax 
                        return, and the student files, or is 
                        eligible to file, such a form or 
                        certifies that the student is not 
                        required to file an income tax return, 
                        or the student's parents, or the 
                        student, received benefits at some time 
                        during the previous 12-month period 
                        under a means-tested Federal benefit 
                        program as defined under subsection 
                        (d); and

           *       *       *       *       *       *       *

                  (B) in the case of an applicant who is an 
                independent student--
                          [(i) the student (and the student's 
                        spouse, if any) files or is eligible to 
                        file a form described in paragraph (3) 
                        or certifies that the student (and the 
                        student's spouse, if any) is not 
                        required to file an income tax return; 
                        and]
                          (i) the student (and the student's 
                        spouse, if any) files, or is eligible 
                        to file, a form described in paragraph 
                        (3) or certifies that the student (and 
                        the student's spouse, if any) is not 
                        required to file an income tax return, 
                        or the student (and the student's 
                        spouse, if any) received benefits at 
                        some time during the previous 12-month 
                        period under a means-tested Federal 
                        benefit program as defined under 
                        subsection (d); and

           *       *       *       *       *       *       *

          (3) Qualifying forms.--[A student or family files a 
        form described in this subsection, or subsection (c), 
        as the case may be, if the student or family, 
        respectively, files] In the case of an independent 
        student, the student, or in the case of a dependent 
        student, the parent, files a form described in this 
        subsection, or subsection (c), as the case may be, if 
        the student or parent, as appropriate, files--
                  (A) * * *

           *       *       *       *       *       *       *

  (c) Zero Expected Family Contribution.--The Secretary shall 
consider an applicant to have an expected family contribution 
equal to zero if--
          (1) in the case of a dependent student--
                  [(A) the student's parents file, or are 
                eligible to file, a form described in 
                subsection (b)(3), or certify that the parents 
                are not required to file an income tax return 
                and the student files, or is eligible to file, 
                such a form, or certifies that the student is 
                not required to file an income tax return; and]
                  (A) the student's parents file, or are 
                eligible to file, a form described in 
                subsection (b)(3) or certify that they are not 
                required to file an income tax return, and the 
                student files, or is eligible to file, such a 
                form or certifies that the student is not 
                required to file an income tax return, or the 
                student's parents, or the student, received 
                benefits at some time during the previous 12-
                month period under a means-tested Federal 
                benefit program as defined in subsection (d); 
                and

           *       *       *       *       *       *       *

          (2) in the case of an independent student with 
        dependents other than a spouse--
                  [(A) the student (and the student's spouse, 
                if any) files, or is eligible to file, a form 
                described in subsection (b)(3), or certifies 
                that the student (and the student's spouse, if 
                any) is not required to file an income tax 
                return; and]
                  (A) the student (and the student's spouse, if 
                any) files, or is eligible to file, a form 
                described in subsection (b)(3) or certifies 
                that the student (and the student's spouse, if 
                any) is not required to file an income tax 
                return, or the student (and the student's 
                spouse, if any) received benefits at some time 
                during the previous 12-month period under a 
                means-tested Federal benefit program as defined 
                in subsection (d); and

           *       *       *       *       *       *       *

  (d) Definition of Means-Tested Federal Benefit Program.--For 
the purposes of this section, the term ``means-tested Federal 
benefit program'' means a mandatory spending program of the 
Federal Government, other than a program under this title, in 
which eligibility for the program's benefits, or the amount of 
such benefits, or both, are determined on the basis of income 
or resources of the individual or family seeking the benefit, 
and may include such programs as the supplemental security 
income program under title XVI of the Social Security Act, the 
food stamp program under the Food Stamp Act of 1977, the free 
and reduced price school lunch program established under the 
Richard B. Russell National School Lunch Act, the temporary 
assistance to needy families program established under part A 
of title IV of the Social Security Act, and the women, infants 
and children program established under Section 17 of the Child 
Nutrition Act of 1966, and other programs identified by the 
Secretary.
  (e) Reporting Requirements.--The Secretary shall regularly 
evaluate the impact of the eligibility guidelines in 
subsections (b)(1)(A)(i), (b)(1)(B)(i), (c)(1)(A) and (c)(2)(A) 
of this section. In particular, the Secretary shall evaluate 
whether, under the definition of means-tested Federal benefit 
programs in subsection (d), the Simplified Needs Test continues 
to be targeted to the maximum number of low- and moderate-
income students.

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

  [(a) In General.--]
  (a) Authority To Make Adjustments.--
          (1) Adjustments for special circumstances.--Nothing 
        in this part shall be interpreted as limiting the 
        authority of the financial aid administrator, on the 
        basis of adequate documentation, to make adjustments on 
        a case-by-case basis to the cost of attendance or the 
        values of the data items required to calculate the 
        expected student or parent contribution (or both) to 
        allow for treatment of an individual eligible applicant 
        with special circumstances. However, this authority 
        shall not be construed to permit aid administrators to 
        deviate from the contributions expected in the absence 
        of special circumstances.
          (2) Special circumstances defined.--Special 
        circumstances may include tuition expenses at an 
        elementary or secondary school, medical or dental 
        expenses not covered by insurance, unusually high child 
        care costs, recent unemployment of a family member, the 
        number of parents enrolled at least half-time in a 
        degree, certificate, or other program leading to a 
        recognized educational credential at an institution 
        with a program participation agreement under section 
        487, a student's status as a ward of the court at any 
        time prior to attaining 18 years of age, a student's 
        status as an individual who was adopted at or after age 
        13, a student's status as a homeless or unaccompanied 
        youth (as defined in section 725 of the McKinney-Vento 
        Homeless Assistance Act), or other changes in a 
        family's income, a family's assets, or a student's 
        status. Special circumstances shall be conditions that 
        differentiate an individual student from a class of 
        students rather than conditions that exist across a 
        class of students.
          (3) Documentation and use of supplementary 
        information.--Adequate documentation for such 
        adjustments shall substantiate such special 
        circumstances of individual students. In addition, 
        nothing in this title shall be interpreted as limiting 
        the authority of the student financial aid 
        administrator in such cases to request and use 
        supplementary information about the financial status or 
        personal circumstances of eligible applicants in 
        selecting recipients and determining the amount of 
        awards under this title.
          (4) Fees for supplementary information prohibited.--
        No student or parent shall be charged a fee for 
        collecting, processing, or delivering such 
        supplementary information.

           *       *       *       *       *       *       *


SEC. 480. DEFINITIONS.

  As used in this part:
  (a) * * *

           *       *       *       *       *       *       *

  (d) Independent Student.--The term ``independent'', when used 
with respect to a student, means any individual who--
          (1) * * *
          [(2) is an orphan or ward of the court or was a ward 
        of the court until the individual reached the age of 
        18;]
          (2) is an orphan, in foster care, or a ward of the 
        court, or was in foster care or a ward of the court 
        until the individual reached the age of 18;
          (3) is a veteran of the Armed Forces of the United 
        States (as defined in subsection (c)(1)) or is 
        currently serving on active duty in the Armed Forces 
        for other than training purposes;

           *       *       *       *       *       *       *

  (e) Excludable Income.--The term ``excludable income'' 
means--
          (1) * * *

           *       *       *       *       *       *       *

          (3) child support payments made by the student or 
        parent; [and]
          (4) payments made and services provided under part E 
        of title IV of the Social Security Act[.]; and
          (5) any part of any distribution from a qualified 
        tuition program established under section 529 of the 
        Internal Revenue Code of 1986 that is not includable in 
        gross income under such section 529.
  (f) Assets.--(1) The term ``assets'' means cash on hand, 
including the amount in checking and savings accounts, time 
deposits, money market funds, trusts, stocks, bonds, other 
securities, mutual funds, tax shelters, qualified tuition 
programs established under section 529 of the Internal Revenue 
Code of 1986 (26 U.S.C. 529), except as provided in paragraph 
(2), and the net value of real estate, income producing 
property, and business and farm assets.
  (2) A qualified tuition program shall not be considered an 
asset of a dependent student under section 475 of this part. 
The value of a qualified tuition program for purposes of 
determining the assets of parents or independent students shall 
be--
          (A) the refund value of any tuition credits or 
        certificates purchased under section 529 of the 
        Internal Revenue Code of 1986 (26 U.S.C. 529) on behalf 
        of a beneficiary; or
          (B) the current balance of any account which is 
        established under such section for the purpose of 
        meeting the qualified higher education expenses of the 
        designated beneficiary of the account.
  [(2)] (3) With respect to determinations of need under this 
title, other than for subpart 4 of part A, the term ``assets'' 
shall not include the net value of--
          (A) the family's principal place of residence; [or]
          (B) a family farm on which the family resides[.]; or
          (C) a small business with not more than 100 full-time 
        or full-time equivalent employees (or any part of such 
        a small business) that is owned and controlled by the 
        family.

           *       *       *       *       *       *       *

  (j) Other Financial Assistance[; Tuition Prepayment Plans].--
(1) For purposes of determining a student's eligibility for 
funds under this title, estimated financial assistance not 
received under this title shall include all scholarships, 
grants, loans, or other assistance known to the institution at 
the time the determination of the student's need is made, 
including veterans' education benefits as defined in subsection 
(c), and national service educational awards or post-service 
benefits under title I of the National and Community Service 
Act of 1990 (42 U.S.C. 12571 et seq.).
  [(2)(A) Except as provided in subparagraph (B), for purposes 
of determining a student's eligibility for funds under this 
title, tuition prepayment plans shall reduce the cost of 
attendance (as determined under section 472) by the amount of 
the prepayment, and shall not be considered estimated financial 
assistance.
  [(B) If the institutional expense covered by the prepayment 
must be part of the student's cost of attendance for accounting 
purposes, the prepayment shall be considered estimated 
financial assistance.]
  [(3)] (2) Notwithstanding paragraph (1), a tax credit taken 
under section 25A of the Internal Revenue Code of 1986, or a 
distribution that is not includable in gross income under 
section 529 of such Code, shall not be treated as estimated 
financial assistance for purposes of section 471(3).
  (3) Notwithstanding paragraph (1) and section 472, assistance 
not received under this title may be excluded from both 
estimated financial assistance and cost of attendance, if that 
assistance is designated by the State providing that assistance 
to offset a specific component of the cost of attendance. If 
that assistance is excluded from either estimated financial 
assistance or cost of attendance, it shall be excluded from 
both.

           *       *       *       *       *       *       *


   Part G--General Provisions Relating to Student Assistance Programs

SEC. 481. DEFINITIONS.

  (a) Academic and Award Year.--(1) * * *
  [(2) For the purpose of any program under this title, the 
term ``academic year'' shall require a minimum of 30 weeks of 
instructional time, and, with respect to an undergraduate 
course of study, shall require that during such minimum period 
of instructional time a full-time student is expected to 
complete at least 24 semester or trimester hours or 36 quarter 
hours at an institution that measures program length in credit 
hours, or at least 900 clock hours at an institution that 
measures program length in clock hours. The Secretary may 
reduce such minimum of 30 weeks to not less than 26 weeks for 
good cause, as determined by the Secretary on a case-by-case 
basis, in the case of an institution of higher education that 
provides a 2-year or 4-year program of instruction for which 
the institution awards an associate or baccalaureate degree.]
  (2)(A) For the purpose of any program under this title, the 
term ``academic year'' shall--
          (i) require a minimum of 30 weeks of instructional 
        time for a course of study that measures its program 
        length in credit hours; or
          (ii) require a minimum of 26 weeks of instructional 
        time for a course of study that measures its program 
        length in clock hours; and
          (iii) require an undergraduate course of study to 
        contain an amount of instructional time whereby a full-
        time student is expected to complete at least--
                  (I) 24 semester or trimester hours or 36 
                quarter credit hours in a course of study that 
                measures its program length in credit hours; or
                  (II) 900 clock hours in a course of study 
                that measures its program length in clock 
                hours.
  (B) The Secretary may reduce such minimum of 30 weeks to not 
less than 26 weeks for good cause, as determined by the 
Secretary on a case-by-case basis, in the case of an 
institution of higher education that provides a 2-year or 4-
year program of instruction for which the institution awards an 
associate or baccalaureate degree.
  (b) Eligible Program.--(1) * * *

           *       *       *       *       *       *       *

  (3) For purposes of this title, an eligible program includes 
an instructional program that utilizes direct assessment of 
student learning, or recognizes the direct assessment of 
student learning, in lieu of credit hours or clock hours as the 
measure of student learning. In the case of a program being 
determined eligible for the first time under this paragraph, 
such determination shall be made by the Secretary before such 
program is considered to be eligible. The Secretary shall 
provide an annual report to Congress identifying the programs 
made eligible under this paragraph.
  (4) An otherwise eligible program that is offered in whole or 
in part through telecommunications is eligible for the purposes 
of this title if the program is offered by an institution, 
other than a foreign institution, that has been evaluated and 
determined (before or after the date of enactment of this 
paragraph) to have the capability to effectively deliver 
distance education programs by an accrediting agency or 
association that--
                  (A) is recognized by the Secretary under 
                subpart 2 of Part H; and
                  (B) has evaluation of distance education 
                programs within the scope of its recognition, 
                as described in section 496(n)(3).

           *       *       *       *       *       *       *

  (d) Definitions for Military Deferments.--For purposes of 
parts B, D, and E of this title:
          (1) Active duty.--The term ``active duty'' has the 
        meaning given such term in section 101(d)(1) of title 
        10, United States Code, except that such term does not 
        include active duty for training or attendance at a 
        service school.
          (2) Military operation.--The term ``military 
        operation'' means a contingency operation as such term 
        is defined in section 101(a)(13) of title 10, United 
        States Code.
          (3) National emergency.--The term ``national 
        emergency'' means the national emergency by reason of 
        certain terrorist attacks declared by the President on 
        September 14, 2001, or subsequent national emergencies 
        declared by the President by reason of terrorist 
        attacks.
          (4) Serving on active duty.--The term ``serving on 
        active duty during a war or other military operation or 
        national emergency'' means service by an individual who 
        is--
                  (A) a Reserve of an Armed Force ordered to 
                active duty under section 12301(a), 12301(g), 
                12302, 12304, or 12306 of title 10, United 
                States Code, or any retired member of an Armed 
                Force ordered to active duty under section 688 
                of such title, for service in connection with a 
                war or other military operation or national 
                emergency, regardless of the location at which 
                such active duty service is performed; and
                  (B) any other member of an Armed Force on 
                active duty in connection with such emergency 
                or subsequent actions or conditions who has 
                been assigned to a duty station at a location 
                other than the location at which such member is 
                normally assigned.
          (5) Qualifying national guard duty.--The term 
        ``qualifying National Guard duty during a war or other 
        military operation or national emergency'' means 
        service as a member of the National Guard on full-time 
        National Guard duty (as defined in section 101(d)(5) of 
        title 10, United States Code) under a call to active 
        service authorized by the President or the Secretary of 
        Defense for a period of more than 30 consecutive days 
        under section 502(f) of title 32, United States Code, 
        in connection with a war, other military operation, or 
        a national emergency declared by the President and 
        supported by Federal funds.

SEC. 482. MASTER CALENDAR.

  (a) Secretary Required To Comply With Schedule.--To assure 
adequate notification and timely delivery of student aid funds 
under this title, the Secretary shall adhere to the following 
calendar dates in the year preceding the award year:
          (1) Development and distribution of Federal and 
        multiple data entry forms--
                  (A) * * *
                  [(B) by March 1: proposed modifications and 
                updates pursuant to section 478 published in 
                the Federal Register;]
                  (B) by March 1: proposed modifications, 
                updates, and notices pursuant to sections 478, 
                479(c)(2)(C), and 483(a)(6) published in the 
                Federal Register;

           *       *       *       *       *       *       *

  (d) Notice to Congress.--The Secretary shall notify the 
[Committee on Labor and Human Resources of the Senate and the 
Committee on Education and Labor of the House of 
Representatives] authorizing committees when a deadline 
included in the calendar described in subsection (a) is not 
met. Nothing in this section shall be interpreted to penalize 
institutions or deny them the specified times allotted to 
enable them to return information to the Secretary based on the 
failure of the Secretary to adhere to the dates specified in 
this section.

SEC. 483. FORMS AND REGULATIONS.

  (a) Common Financial Aid 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 through E of this title (other 
        than under subpart 4 of part A). The Secretary shall 
        include on the form developed under this subsection 
        such data items as the Secretary determines are 
        appropriate for inclusion. Such items shall be selected 
        in consultation with States to assist in the awarding 
        of State financial assistance. In no case shall the 
        number of such data items be less than the number 
        included on the form on the date of enactment of the 
        Higher Education Amendments of 1998. Such form shall 
        satisfy the requirements of section 401(d) of this 
        title.
          [(2) Charges to students and parents for use of form 
        prohibited.--The common financial reporting form 
        prescribed by the Secretary under paragraph (1) shall 
        be produced, distributed, and processed by the 
        Secretary and no parent or student shall be charged a 
        fee for the collection, processing, or delivery of 
        financial aid through the use of such form. The need 
        and eligibility of a student for financial assistance 
        under parts A through E of this title (other than under 
        subpart 4 of part A) may only be determined by using 
        the form developed by the Secretary pursuant to 
        paragraph (1) of this subsection. No student may 
        receive assistance under parts A through E of this 
        title (other than under subpart 4 of part A), except by 
        use of the form developed by the Secretary pursuant to 
        this section. No data collected on a form for which a 
        fee is charged shall be used to complete the form 
        prescribed under paragraph (1).]
          (1) In general.--The Secretary, in cooperation with 
        representatives of agencies and organizations involved 
        in student financial assistance, shall produce, 
        distribute, and process free of charge common financial 
        reporting forms as described in this subsection to be 
        used for application and reapplication to determine the 
        need and eligibility of a student for financial 
        assistance under parts A through E (other than subpart 
        4 of part A). These forms shall be made available to 
        applicants in both paper and electronic formats and 
        shall be referred to as the ``Free Application for 
        Federal Student Aid'' or the ``FAFSA'' .
          (2) Early estimates.--
                  (A) In general.--The Secretary shall permit 
                applicants to complete such forms as described 
                in this subsection in the 4 years prior to 
                enrollment in order to obtain a non-binding 
                estimate of the family contribution, as defined 
                in section 473. The estimate shall clearly and 
                conspicuously indicate that it is only an 
                estimate of family contribution, and may not 
                reflect the actual family contribution of the 
                applicant that shall be used to determine the 
                grant, loan, or work assistance that the 
                applicant may receive under this title when 
                enrolled in a program of postsecondary 
                education. Such applicants shall be permitted 
                to update information submitted on forms 
                described in this subsection using the process 
                required under paragraph (5)(A).
                  (B) Evaluation.--Two years after the early 
                estimates are implemented under this paragraph 
                and from data gathered from the early 
                estimates, the Secretary shall evaluate the 
                differences between initial, non-binding early 
                estimates and the final financial aid award 
                made available under this title.
                  (C) Report.--The Secretary shall provide a 
                report to the authorizing committees on the 
                results of the evaluation.
          (3) Paper format.--
                  (A) In general.--The Secretary shall produce, 
                distribute, and process common forms in paper 
                format to meet the requirements of paragraph 
                (1). The Secretary shall develop a common paper 
                form for applicants who do not meet the 
                requirements of subparagraph (B).
                  (B) Ez fafsa.--
                          (i) In general.--The Secretary shall 
                        develop and use a simplified paper 
                        application form, to be known as the 
                        ``EZ FAFSA'', to be used for applicants 
                        meeting the requirements of section 
                        479(c).
                          (ii) Reduced data requirements.--The 
                        form under this subparagraph shall 
                        permit an applicant to submit, for 
                        financial assistance purposes, only the 
                        data elements required to make a 
                        determination of whether the applicant 
                        meets the requirements under section 
                        479(c).
                          (iii) State data.--The Secretary 
                        shall include on the form under this 
                        subparagraph such data items as may be 
                        necessary to award State financial 
                        assistance, as provided under paragraph 
                        (6), except that the Secretary shall 
                        not include a State's data if that 
                        State does not permit its applicants 
                        for State assistance to use the form 
                        under this subparagraph.
                          (iv) Free availability and 
                        processing.--The provisions of 
                        paragraph (7) shall apply to the form 
                        under this subparagraph, and the data 
                        collected by means of the form under 
                        this subparagraph shall be available to 
                        institutions of higher education, 
                        guaranty agencies, and States in 
                        accordance with paragraph (9).
                          (v) Testing.--The Secretary shall 
                        conduct appropriate field testing on 
                        the form under this subparagraph.
                  (C) Promoting the use of electronic fafsa.--
                          (i) In general.--The Secretary shall 
                        make an effort to encourage applicants 
                        to utilize the electronic forms 
                        described in paragraph (4).
                          (ii) Maintenance of the fafsa in a 
                        printable electronic file.--The 
                        Secretary shall maintain a version of 
                        the paper forms described in 
                        subparagraphs (A) and (B) in a 
                        printable electronic file that is 
                        easily portable. The printable 
                        electronic file will be made easily 
                        accessible and downloadable to students 
                        on the same website used to provide 
                        students with the electronic 
                        application forms described in 
                        paragraph (4) of this subsection. The 
                        Secretary shall enable students to 
                        submit a form created under this 
                        subparagraph that is downloaded and 
                        printed from an electronic file format 
                        in order to meet the filing 
                        requirements of this section and in 
                        order to receive aid from programs 
                        under this title.
                          (iii) Reporting requirement.--The 
                        Secretary shall report annually to 
                        Congress on the impact of the digital 
                        divide on students completing 
                        applications for title IV aid described 
                        under this paragraph and paragraph (4). 
                        The Secretary will also report on the 
                        steps taken to eliminate the digital 
                        divide and phase out the paper form 
                        described in subparagraph (A) of this 
                        paragraph. The Secretary's report will 
                        specifically address the impact of the 
                        digital divide on the following student 
                        populations: dependent students, 
                        independent students without 
                        dependents, and independent students 
                        with dependents other than a spouse.
          (4) Electronic format.--
                  (A) In general.--The Secretary shall produce, 
                distribute, and process common forms in 
                electronic format to meet the requirements of 
                paragraph (1). The Secretary shall develop 
                common electronic forms for applicants who do 
                not meet the requirements of subparagraph (C) 
                of this paragraph.
                  (B) State data.--The Secretary shall include 
                on the common electronic forms space for 
                information that needs to be submitted from the 
                applicant to be eligible for State financial 
                assistance, as provided under paragraph (6), 
                except the Secretary shall not require 
                applicants to complete data required by any 
                State other than the applicant's State of 
                residence.
                  (C) Simplified applications: fafsa on the 
                web.--
                          (i) In general.--The Secretary shall 
                        develop and use a simplified electronic 
                        application form to be used by 
                        applicants meeting the requirements 
                        under subsection (c) of section 479 and 
                        an additional, separate simplified 
                        electronic application form to be used 
                        by applicants meeting the requirements 
                        under subsection (b) of section 479.
                          (ii) Reduced data requirements.--The 
                        simplified electronic application forms 
                        shall permit an applicant to submit for 
                        financial assistance purposes, only the 
                        data elements required to make a 
                        determination of whether the applicant 
                        meets the requirements under subsection 
                        (b) or (c) of section 479.
                          (iii) State data.--The Secretary 
                        shall include on the simplified 
                        electronic application forms such data 
                        items as may be necessary to award 
                        state financial assistance, as provided 
                        under paragraph (6), except that the 
                        Secretary shall not require applicants 
                        to complete data required by any State 
                        other than the applicant's State of 
                        residence.
                          (iv) Availability and processing.--
                        The data collected by means of the 
                        simplified electronic application forms 
                        shall be available to institutions of 
                        higher education, guaranty agencies, 
                        and States in accordance with paragraph 
                        (9).
                          (v) Testing.--The Secretary shall 
                        conduct appropriate field testing on 
                        the forms developed under this 
                        subparagraph.
                  (D) Use of forms.--Nothing in this subsection 
                shall be construed to prohibit the use of the 
                forms developed by the Secretary pursuant to 
                this paragraph by an eligible institution, 
                eligible lender, guaranty agency, State grant 
                agency, private computer software provider, a 
                consortium thereof, or such other entities as 
                the Secretary may designate.
                  (E) Privacy.--The Secretary shall ensure that 
                data collection under this paragraph complies 
                with section 552a of title 5, United States 
                Code, and that any entity using the electronic 
                version of the forms developed by the Secretary 
                pursuant to this paragraph shall maintain 
                reasonable and appropriate administrative, 
                technical, and physical safeguards to ensure 
                the integrity and confidentiality of the 
                information, and to protect against security 
                threats, or unauthorized uses or disclosures of 
                the information provided on the electronic 
                version of the forms. Data collected by such 
                electronic version of the forms shall be used 
                only for the application, award, and 
                administration of aid awarded under this title, 
                State aid, or aid awarded by eligible 
                institutions or such entities as the Secretary 
                may designate. No data collected by such 
                electronic version of the forms shall be used 
                for making final aid awards under this title 
                until such data have been processed by the 
                Secretary or a contractor or designee of the 
                Secretary, except as may be permitted under 
                this title.
                  (F) Signature.--Notwithstanding any other 
                provision of this Act, the Secretary may permit 
                an electronic form under this paragraph to be 
                submitted without a signature, if a signature 
                is subsequently submitted by the applicant.
          (5) Streamlining.--
                  (A) Streamlined reapplication process.--
                          (i) In general.--The Secretary shall 
                        develop streamlined reapplication forms 
                        and processes, including both paper and 
                        electronic reapplication processes, 
                        consistent with the requirements of 
                        this subsection, for an applicant who 
                        applies for financial assistance under 
                        this title--
                                  (I) in the academic year 
                                succeeding the year in which 
                                such applicant first applied 
                                for financial assistance under 
                                this title; or
                                  (II) in any succeeding 
                                academic years.
                          (ii) Mechanisms for reapplication.--
                        The Secretary shall develop appropriate 
                        mechanisms to support reapplication.
                          (iii) Identification of updated 
                        data.--The Secretary shall determine, 
                        in cooperation with States, 
                        institutions of higher education, 
                        agencies, and organizations involved in 
                        student financial assistance, the data 
                        elements that can be updated from the 
                        previous academic year's application.
                          (iv) Reduced data authorized.--
                        Nothing in this title shall be 
                        construed as limiting the authority of 
                        the Secretary to reduce the number of 
                        data elements required of reapplicants.
                          (v) Zero family contribution.--
                        Applicants determined to have a zero 
                        family contribution pursuant to section 
                        479(c) shall not be required to provide 
                        any financial data in a reapplication 
                        form, except that which is necessary to 
                        determine eligibility under such 
                        section.
                  (B) Reduction of data elements.--
                          (i) Reduction encouraged.--Of the 
                        number of data elements on the FAFSA on 
                        the date of enactment of the College 
                        Access and Opportunity Act of 2005 
                        (including questions on the FAFSA for 
                        the purposes described in paragraph 
                        (6)), the Secretary, in cooperation 
                        with representatives of agencies and 
                        organizations involved in student 
                        financial assistance, shall continue to 
                        reduce the number of such data elements 
                        following the date of enactment. 
                        Reductions of data elements under 
                        paragraph (3)(B), (4)(C), or (5)(A)(iv) 
                        shall not be counted towards the 
                        reduction referred to in this paragraph 
                        unless those data elements are reduced 
                        for all applicants.
                          (ii) Report.--The Secretary shall 
                        annually report to the House of 
                        Representatives and the Senate on the 
                        progress made of reducing data 
                        elements.
          (6) State requirements.--
                  (A) In general.--The Secretary shall include 
                on the forms developed under this subsection, 
                such State-specific data items as the Secretary 
                determines are necessary to meet State 
                requirements for State need-based financial aid 
                under section 415C, except as provided in 
                paragraphs (3)(B)(iii) and (4)(C)(iii) of this 
                subsection. Such items shall be selected in 
                consultation with State agencies in order to 
                assist in the awarding of State financial 
                assistance in accordance with the terms of this 
                subsection, except as provided in paragraphs 
                (3)(B)(iii) and (4)(C)(iii) of this subsection. 
                The number of such data items shall not be less 
                than the number included on the form on October 
                7, 1998, unless a State notifies the Secretary 
                that the State no longer requires those data 
                items for the distribution of State need-based 
                financial aid.
                  (B) Annual review.--The Secretary shall 
                conduct an annual review process to determine 
                which forms and data items the States require 
                to award State need-based financial aid and 
                other application requirements that the States 
                may impose.
                  (C) State use of simplified forms.--The 
                Secretary shall encourage States to take such 
                steps as necessary to encourage the use of 
                simplified application forms, including those 
                described in paragraphs (3)(B) and (4)(C), to 
                meet the requirements under subsection (b) or 
                (c) of section 479.
                  (D) Federal register notice.--The Secretary 
                shall publish on an annual basis a notice in 
                the Federal Register requiring State agencies 
                to inform the Secretary--
                          (i) if the State agency is unable to 
                        permit applicants to utilize the 
                        simplified application forms described 
                        in paragraphs (3)(B) and (4)(C); and
                          (ii) of the State-specific data that 
                        the State agency requires for delivery 
                        of State need-based financial aid.
                  (E) State notification to the secretary.--
                          (i) In general.--Each State agency 
                        shall notify the Secretary--
                                  (I) whether the State permits 
                                an applicant to file a form 
                                described in paragraph (3)(B) 
                                or paragraph (4)(C) of this 
                                subsection for purposes of 
                                determining eligibility for 
                                State need-based financial aid; 
                                and
                                  (II) the State-specific data 
                                that the State agency requires 
                                for delivery of State need-
                                based financial aid.
                          (ii) Acceptance of forms.--In the 
                        event that a State does not permit an 
                        applicant to file a form described in 
                        paragraph (3)(B) or paragraph (4)(C) of 
                        this subsection for purposes of 
                        determining eligibility for State need-
                        based financial aid--
                                  (I) the State shall notify 
                                the Secretary if the State is 
                                not permitted to do so because 
                                of either State law or because 
                                of agency policy; and
                                  (II) the notification under 
                                subclause (I) shall include an 
                                estimate of the program cost to 
                                permit applicants to complete 
                                simplified application forms 
                                under paragraphs (3)(B) and 
                                paragraph (4)(C) of this 
                                subsection.
                          (iii) Lack of notification by the 
                        state.--If a State does not notify the 
                        Secretary pursuant to clause (i), the 
                        Secretary shall--
                                  (I) permit residents of that 
                                State to complete simplified 
                                application forms under 
                                paragraphs (3)(B) and paragraph 
                                (4)(C) of this subsection; and
                                  (II) not require any resident 
                                of that State to complete any 
                                data previously required by 
                                that State under this section.
          (7) Charges to students and parents for use of forms 
        prohibited.--
                  (A) Fees prohibited.--The FAFSA, in whatever 
                form (including the EZ-FAFSA, paper, 
                electronic, simplified, or reapplication), 
                shall be produced, distributed, and processed 
                by the Secretary and no parent or student shall 
                be charged a fee for the collection, 
                processing, or delivery of financial aid 
                through the use of the FAFSA. The need and 
                eligibility of a student for financial 
                assistance under parts A through E of this 
                title (other than under subpart 4 of part A) 
                may only be determined by using the FAFSA 
                developed by the Secretary pursuant to this 
                subsection. No student may receive assistance 
                under parts A through E of this title (other 
                than under subpart 4 of part A), except by use 
                of the FAFSA developed by the Secretary 
                pursuant to this subsection. No data collected 
                on a form for which a fee is charged shall be 
                used to complete the FAFSA.
                  (B) Notice.--Any entity that provides to 
                students or parents, or charges students or 
                parents for, any value-added services with 
                respect to or in connection with the FAFSA, 
                such as completion of the FAFSA, submission of 
                the FAFSA, or tracking of the FAFSA for a 
                student, shall provide to students and parents 
                clear and conspicuous notice that--
                          (i) the FAFSA is a free Federal 
                        student aid application;
                          (ii) the FAFSA can be completed 
                        without professional assistance; and
                          (iii) includes the current Internet 
                        address for the FAFSA on the 
                        Department's web site.
          (8) Application processing cycle.--The Secretary 
        shall enable students to submit a form created under 
        this subsection in order to meet the filing 
        requirements of this section and in order to receive 
        aid from programs under this title and shall initiate 
        the processing of applications under this subsection as 
        early as practicable prior to January 1 of the 
        student's planned year of enrollment.
          [(3)] (9) Distribution of data.--Institutions of 
        higher education, guaranty agencies, and States shall 
        receive, without charge, the data collected by the 
        Secretary using the form developed pursuant to this 
        section for the purposes of processing loan 
        applications and determining need and eligibility for 
        institutional and State financial aid awards. Entities 
        designated by institutions of higher education, 
        guaranty agencies, or States to receive such data shall 
        be subject to all the requirements of this section, 
        unless such requirements are waived by the Secretary.
          [(4)] (10) Contracts for collection and processing.--
        (A) The Secretary shall, to the extent practicable, 
        enter into not less than 5 contracts with States, 
        institutions of higher education, or private 
        organizations for the purposes of the timely collection 
        and processing of the form developed pursuant to 
        paragraph (1) and the timely delivery of the data 
        submitted on such form. The Secretary shall use such 
        contracts to assist States and institutions of higher 
        education with the collection of additional data 
        required to award State or institutional financial 
        assistance, except that the Secretary shall not include 
        these additional data items on the common financial 
        reporting form developed pursuant to this section. The 
        Secretary shall include in each such contract a 
        requirement that--
                  (i) * * *

           *       *       *       *       *       *       *

          [(5) Electronic forms.--(A) The Secretary, in 
        cooperation with representatives of agencies and 
        organizations involved in student financial assistance, 
        including private computer software providers, shall 
        develop an electronic version of the form described in 
        paragraph (1). As permitted by the Secretary, such an 
        electronic version shall not require a signature to be 
        collected at the time such version is submitted, if a 
        signature is subsequently submitted by the applicant. 
        The Secretary shall prescribe such version not later 
        than 120 days after the date of enactment of the Higher 
        Education Amendments of 1998.
          [(B) Nothing in this section shall be construed to 
        prohibit the use of the form developed by the Secretary 
        pursuant to subparagraph (A) by an eligible 
        institution, eligible lender, guaranty agency, State 
        grant agency, private computer software providers, a 
        consortium thereof, or such other entities as the 
        Secretary may designate.
          [(C) No fee shall be charged to students in 
        connection with the use of the electronic version of 
        the form, or of any other electronic forms used in 
        conjunction with such form in applying for Federal or 
        State student financial assistance.
          [(D) The Secretary shall ensure that data collection 
        complies with section 552a of title 5, United States 
        Code, and that any entity using the electronic version 
        of the form developed by the Secretary pursuant to 
        subparagraph (A) shall maintain reasonable and 
        appropriate administrative, technical, and physical 
        safeguards to ensure the integrity and confidentiality 
        of the information, and to protect against security 
        threats, or unauthorized uses or disclosures of the 
        information provided on the electronic version of the 
        form. Data collected by such version of the form shall 
        be used only for the application, award, and 
        administration of aid awarded under this title, State 
        aid, or aid awarded by eligible institutions or such 
        entities as the Secretary may designate. No data 
        collected by such version of the form shall be used for 
        making final aid awards under this title until such 
        data have been processed by the Secretary or a 
        contractor or designee of the Secretary.]
          [(6)] (11) Third party servicers and private software 
        providers.--To the extent practicable and in a timely 
        manner, the Secretary shall provide, to private 
        organizations and consortia that develop software used 
        by eligible institutions for the administration of 
        funds under this title, all the necessary 
        specifications that the organizations and consortia 
        must meet for the software the organizations and 
        consortia develop, produce, and distribute (including 
        any diskette, modem, or network communications) which 
        are so used. The specifications shall contain record 
        layouts for required data. The Secretary shall develop 
        in advance of each processing cycle an annual schedule 
        for providing such specifications. The Secretary, to 
        the extent practicable, shall use means of providing 
        such specifications, including conferences and other 
        meetings, outreach, and technical support mechanisms 
        (such as training and printed reference materials). The 
        Secretary shall, from time to time, solicit from such 
        organizations and consortia means of improving the 
        support provided by the Secretary.
          [(7)] (12) Parent's social security number and birth 
        date.--The Secretary is authorized to include on the 
        form developed under this subsection space for the 
        social security number and birth date of parents of 
        dependent students seeking financial assistance under 
        this title.
          (13) Expanding information dissemination regarding 
        eligibility for pell grants.--The Secretary shall make 
        special efforts, in conjunction with State efforts, to 
        notify students and their parents who qualify for a 
        free lunch under the Richard B. Russell National School 
        Lunch Act (42 U.S.C. 1751 et seq.), the Food Stamps 
        program, or such other programs as the Secretary shall 
        determine, of their potential eligibility for a maximum 
        Pell Grant, and shall disseminate such informational 
        materials as the Secretary deems appropriate.

           *       *       *       *       *       *       *

  (c) Information to Committees of Congress.--Copies of all 
rules, regulations, guidelines, instructions, and application 
forms published or promulgated pursuant to this title shall be 
provided to the [Committee on Labor and Human Resources of the 
Senate and the Committee on Education and the Workforce of the 
House of Representatives] authorizing committees at least 45 
days prior to their effective date.
  (d) Toll-Free Information.--The Secretary shall contract for, 
or establish, and publicize a toll-free telephone service to 
provide timely and accurate information to the general public. 
The information provided shall include specific instructions on 
completing the application form for assistance under this 
title. Such service shall also include a service accessible by 
telecommunications devices for the deaf (TDD's) and shall, in 
addition to the services provided for in the previous sentence, 
refer such students to the national clearinghouse on 
postsecondary education [that is authorized under section 
685(d)(2)(C)], or another appropriate provider of technical 
assistance and information on postsecondary educational 
services, that is supported under section 663 of the 
Individuals with Disabilities Education Act.

           *       *       *       *       *       *       *

  (f) Addressing the Digital Divide.--The Secretary shall 
utilize savings accrued by moving more applicants to the 
electronic forms described in subsection (a)(4) to improve 
access to the electronic forms described in subsection (a)(4) 
for applicants meeting the requirements of section 479(c).

SEC. 484. STUDENT ELIGIBILITY.

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

           *       *       *       *       *       *       *

          (4) file with the Secretary, as part of the original 
        financial aid application process, a [certification,,] 
        certification, which need not be notarized, but which 
        shall include--
                  (A) * * *

           *       *       *       *       *       *       *

          (5) be a citizen or national of the United States, a 
        permanent resident of the United States, able to 
        provide evidence from the Immigration and 
        Naturalization Service that he or she is in the United 
        States for other than a temporary purpose with the 
        intention of becoming a citizen or permanent resident, 
        a citizen of any one of the Freely Associated 
        States[.]; and
          (6) if the student has been convicted of, or has pled 
        nolo contendere or guilty to, a crime involving fraud 
        in obtaining funds under this title, have completed the 
        repayment of such funds to the Secretary, or to the 
        holder in the case of a loan under this title obtained 
        by fraud.
  (b) Eligibility for Student Loans.--(1) * * *
          (2) In order to be eligible to receive any loan under 
        [section 428A] section 428H for any period of 
        enrollment, a student shall--
                  (A) have received a determination of need for 
                a loan under section 428(a)(2)(B) of this 
                title; and
                  (B) if determined to have need for a loan 
                under section 428, have applied for such a 
                loan[; and].
                  [(C) has applied for a loan under section 
                428H, if such student is eligible to apply for 
                such a loan.]

           *       *       *       *       *       *       *

          (5) Notwithstanding any other provision of this 
        subsection, no incarcerated student or parent (on 
        behalf of a student) is eligible to receive a loan 
        under this title, and no student who is subject to an 
        involuntary civil commitment upon completion of a 
        period of incarceration for a sexual offense (as 
        determined under regulations of the Secretary) is 
        eligible to receive a loan under this title.

           *       *       *       *       *       *       *

  [(d) Students Who Are Not High School Graduates.--] (d) 
Satisfaction of Secondary Education Standards.--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 one of the 
following standards:
          (1) * * *

           *       *       *       *       *       *       *

  ( j) Assistance Under Subparts 1 and 3 of Part A, and Part 
C.--Notwithstanding any other provision of law, a student shall 
be eligible until September 30, 2004, for assistance under 
subparts 1 and 3 of part A, and part C, and shall be eligible 
only for assistance under subpart 1 of part A thereafter, if 
the student is otherwise qualified and--
          (1) * * *

           *       *       *       *       *       *       *

  (l) Courses Offered Through Telecommunications.--
          (1) Relation to correspondence courses.--
                  (A) In general.--A student enrolled in a 
                course of instruction at an institution of 
                higher education that is offered in whole or in 
                part through telecommunications and leads to a 
                recognized certificate [for a program of study 
                of 1 year or longer], or a recognized 
                associate, baccalaureate, or graduate degree, 
                conferred by such institution, shall not be 
                considered to be enrolled in correspondence 
                courses [unless the total amount of 
                telecommunications and correspondence courses 
                at such institution equals or exceeds 50 
                percent of the total amount of all courses at 
                the institution].
                  [(B) Requirement.--An institution of higher 
                education referred to in subparagraph (A) is an 
                institution of higher education--
                          [(i) that is not an institute or 
                        school described in section 521(4)(C) 
                        of the Carl D. Perkins Vocational and 
                        Applied Technology Education Act; and
                          [(ii) for which at least 50 percent 
                        of the programs of study offered by the 
                        institution lead to the award of a 
                        recognized associate, baccalaureate, or 
                        graduate degree.]
                  (B) Exception.--Subparagraph (A) does not 
                apply to an institution or school described in 
                section 3(3)(C) of the Carl D. Perkins 
                Vocational and Technical Education Act of 1998.

           *       *       *       *       *       *       *

  (q) Verification of Income Data.--
          [(1) Confirmation with irs.--The Secretary of 
        Education, in cooperation with the Secretary of the 
        Treasury, is authorized to confirm with the Internal 
        Revenue Service the adjusted gross income, Federal 
        income taxes paid, filing status, and exemptions 
        reported by applicants (including parents) under this 
        title on their Federal income tax returns for the 
        purpose of verifying the information reported by 
        applicants on student financial aid applications.]
          (1) Confirmation with irs.--The Secretary of 
        Education, in cooperation with the Secretary of the 
        Treasury, is authorized to confirm with the Internal 
        Revenue Service the information specified in section 
        6103(l)(13) of the Internal Revenue Code of 1986 
        reported by applicants (including parents) under this 
        title on their Federal income tax returns for the 
        purpose of verifying the information reported by 
        applicants on student financial aid applications.

           *       *       *       *       *       *       *

  (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:]
          (1) In general.--A student who is convicted of any 
        offense under any Federal or State law involving the 
        possession or sale of a controlled substance for 
        conduct that occurred during a period of enrollment for 
        which the student was receiving any grant, loan, or 
        work assistance under this title shall not be eligible 
        to receive any grant, loan, or work assistance under 
        this title from the date of that conviction for the 
        period of time specified in the following table:

If convicted of an offense involving:

  The  possession  o   a  con-
    trolled substancIneligibility period is:
    First offense...  1 year ...........................................
    Second offense..  2 years ..........................................
    Third offense...  Indefinite........................................

  The  sale  of  a    ntrolled
    substance:      Ineligibility period is:
    First offense...  2 years ..........................................
    Second offense..  Indefinite........................................

                    

           *       *       *       *       *       *       *
SEC. 484A. STATUTE OF LIMITATIONS, AND STATE COURT JUDGMENTS.

  (a) * * *
  (b) Assessment of Costs and Other Charges.--Notwithstanding 
any provision of State law to the contrary--
          (1) * * *
          (2) in collecting any obligation arising from a loan 
        made under [part B of this title] part B, D, or E of 
        this title, a guaranty agency or the Secretary shall 
        not be subject to a defense raised by any borrower 
        based on a claim of infancy.

           *       *       *       *       *       *       *


SEC. 484B. INSTITUTIONAL REFUNDS.

  (a) Return of Title IV Funds.--
          (1) In general.--If a recipient of assistance under 
        this title withdraws from an institution during a 
        payment period or period of enrollment in which the 
        recipient began attendance, the amount of grant or loan 
        assistance (other than assistance received under 
        subpart 4 of part A or part C) to be returned to the 
        title IV programs is calculated according to paragraph 
        (3) and returned in accordance with subsection (b).
          (2) Leave of absence.--
                  (A) Leave not treated as withdrawal.--In the 
                case of a student who [takes a leave] takes one 
                or more leaves of absence from an institution 
                for not more than a total of 180 days in any 
                12-month period, the institution may consider 
                the student as not having withdrawn from the 
                institution during the leave of absence, and 
                not calculate the amount of grant and loan 
                assistance provided under this title that is to 
                be returned in accordance with this section 
                if--
                          (i) * * *

           *       *       *       *       *       *       *

          (3) Calculation of amount of title iv assistance 
        earned.--
                  (A) * * *
                  (B) Percentage earned.--For purposes of 
                subparagraph (A)(i), the percentage of grant or 
                loan assistance under this title that has been 
                earned by the student is--
                          (i) * * *
                          (ii) 100 percent, if the day the 
                        student withdrew occurs after the 
                        student has completed (as determined in 
                        accordance with subsection (d)) 60 
                        percent of the payment period or period 
                        of enrollment.

           *       *       *       *       *       *       *

          (4) Differences between amounts earned and amounts 
        received.--
                  [(A) In general.--If the student has received 
                less grant or loan assistance than the amount 
                earned as calculated under subparagraph (A) of 
                paragraph (3), the institution of higher 
                education shall comply with the procedures for 
                late disbursement specified by the Secretary in 
                regulations.]
                  (A) In general.--After determining the 
                eligibility of the student for a late 
                disbursement or post-withdrawal disbursement 
                (as required in regulations prescribed by the 
                Secretary), the institution of higher education 
                shall contact the borrower and obtain 
                confirmation that the loan funds are still 
                required by the borrower. In making such 
                contact, the institution shall explain to the 
                borrower the borrower's obligation to repay the 
                funds following any such disbursement. The 
                institution shall document in the borrower's 
                file the result of such contact and the final 
                determination made concerning such 
                disbursement.

           *       *       *       *       *       *       *

  (b) Return of Title IV Program Funds.--
          (1) Responsibility of the institution.--The 
        institution shall return no later than 45 days from the 
        determination of withdrawal, in the order specified in 
        paragraph (3), the lesser of--
                  (A) * * *

           *       *       *       *       *       *       *

          (2) Responsibility of the student.--
                  (A) * * *

           *       *       *       *       *       *       *

                  [(C) Requirement.--Notwithstanding 
                subparagraphs (A) and (B), a student shall not 
                be required to return 50 percent of the grant 
                assistance received by the student under this 
                title, for a payment period or period of 
                enrollment, that is the responsibility of the 
                student to repay under this section.]
                  (C) Grant overpayment requirements.--
                          (i) In general.--Notwithstanding 
                        subparagraphs (A) and (B), a student 
                        shall only be required to return grant 
                        assistance in the amount (if any) by 
                        which--
                                  (I) the amount to be returned 
                                by the student (as determined 
                                under subparagraphs (A) and 
                                (B)), exceeds
                                  (II) 50 percent of the total 
                                grant assistance received by 
                                the student under this title 
                                for the payment period or 
                                period of enrollment.
                          (ii) Minimum.--A student shall not be 
                        required to return amounts of $50 or 
                        less.
                  (D) Waivers of pell grant repayment by 
                students affected by disasters.--The Secretary 
                may waive the amounts that students are 
                required to return under this section with 
                respect to Pell grants if the withdrawals on 
                which the returns are based are withdrawals by 
                students--
                          (i) who were residing in, employed 
                        in, or attending an institution of 
                        higher education that is located in an 
                        area in which the President has 
                        declared that a major disaster exists, 
                        in accordance with section 401 of the 
                        Robert T. Stafford Disaster Relief and 
                        Emergency Assistance Act (42 U.S.C. 
                        5170);
                          (ii) whose attendance was interrupted 
                        because of the impact of the disaster 
                        on the student or the institution; and
                          (iii) whose withdrawal ended within 
                        the academic year during which the 
                        designation occurred or during the next 
                        succeeding academic year.

           *       *       *       *       *       *       *

  (d) Percentage of the Payment Period or Period of Enrollment 
Completed.--For purposes of subsection [(a)(3)(B)(i)] 
(a)(3)(B), the percentage of the payment period or period of 
enrollment for which assistance was awarded that was completed, 
is determined--
          (1) * * *

           *       *       *       *       *       *       *


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

  (a) Information Dissemination Activities.--(1) Each eligible 
institution participating in any program under this title shall 
carry out information dissemination activities for prospective 
and enrolled students (including those attending or planning to 
attend less than full time) regarding the institution and all 
financial assistance under this title. [The information 
required by this section shall be produced and be made readily 
available upon request, through appropriate publications, 
mailings, and electronic media, to an enrolled student and to 
any prospective student.] The information required by this 
section shall be produced and be made publicly available to an 
enrolled student and to any prospective student, through 
appropriate publications, mailings, electronic media, and the 
reports required by the institution's accrediting agency under 
section 496(c)(9). Each eligible institution shall, on an 
annual basis, provide to all enrolled students a list of the 
information that is required to be provided by institutions to 
students by this section and section 444 of the General 
Education Provisions Act (also referred to as the Family 
Educational Rights and Privacy Act of 1974), together with a 
statement of the procedures required to obtain such 
information. The information required by this section shall 
accurately describe--
          (A) * * *

           *       *       *       *       *       *       *

          [(G) the academic program of the institution, 
        including (i) the current degree programs and other 
        educational and training programs, (ii) the 
        instructional, laboratory, and other physical plant 
        facilities which relate to the academic program, and 
        (iii) the faculty and other instructional personnel;]
          (G) the academic programs of the institution, 
        including--
                  (i) the current degree programs and other 
                educational and training programs;
                  (ii) the institution's educational mission 
                and goals;
                  (iii) the instructional, laboratory, and 
                other physical plant facilities which relate to 
                the academic programs; and
                  (iv) the faculty and other instructional 
                personnel;

           *       *       *       *       *       *       *

          (J) the names of associations, agencies, or 
        governmental bodies which accredit, approve, or license 
        the institution and its programs, and the procedures 
        under which any current or prospective student may 
        obtain or review upon request a copy of the documents 
        describing the institution's accreditation, approval, 
        or licensing, and the process for students to register 
        complaints with the accrediting agencies or 
        associations;

           *       *       *       *       *       *       *

          [(L) the completion or graduation rate of 
        certificate- or degree-seeking, full-time, 
        undergraduate students entering such institutions;]
          (L) a summary of student outcomes for full-time 
        undergraduate students, including--
                  (i) the completion or graduation rates of 
                certificate- or degree-seeking undergraduate 
                students entering such institutions; and
                  (ii) any other student outcome data, 
                qualitative or quantitative, including data 
                regarding distance education, deemed by the 
                institution to be appropriate to its stated 
                educational mission and goals, and, when 
                applicable, licensing and placement rates for 
                professional and vocational programs;
          (M) the terms and conditions under which students 
        receiving [guaranteed student loans under part B of 
        this title or direct student loans under part E of this 
        title, or both,] student loans under part B, D, or E of 
        this title may--
                  (i) * * *

           *       *       *       *       *       *       *

          (N) that enrollment in a program of study abroad 
        approved for credit by the home institution may be 
        considered enrollment in the home institution for 
        purposes of applying for Federal student financial 
        assistance; [and]
          (O) the campus crime report prepared by the 
        institution pursuant to subsection (f ), including all 
        required reporting categories[.];
          (P) the penalties contained in subsection 484(r) 
        regarding suspension of eligibility for drug related 
        offenses;
          (Q) the policies of the institution regarding the 
        acceptance or denial of academic credit earned at 
        another institution of higher education, which shall 
        include a statement that such decisions will not be 
        based solely on the source of accreditation of a 
        sending institution, provided that the sending 
        institution is accredited by an agency or association 
        that is recognized by the Secretary pursuant to section 
        496 to be a reliable authority as to the quality of the 
        education or training offered, and except that nothing 
        in this subparagraph shall be construed to--
                  (i) authorize an officer or employee of the 
                Department to exercise any direction, 
                supervision, or control over the curriculum, 
                program of instruction, administration, or 
                personnel of any institution of higher 
                education, or over any accrediting agency or 
                association;
                  (ii) limit the application of the General 
                Education Provisions Act; or
                  (iii) create any legally enforceable right; 
                and
          (R) the fire safety report prepared by the 
        institution pursuant to subsection (h).

           *       *       *       *       *       *       *

  [(6) Each institution may provide supplemental information to 
enrolled and prospective students showing the completion or 
graduation rate for students described in paragraph (4) or for 
students transferring into the institution or information 
showing the rate at which students transfer out of the 
institution.]
  (6) Each institution may provide supplemental information to 
enrolled and prospective students showing the completion or 
graduation rate for students described in paragraph (4). For 
the purpose of this paragraph, the definitions provided in the 
Integrated Postsecondary Education Data System shall apply.
  (7) Each eligible institution participating in any program 
under this title may publicly report to currently enrolled and 
prospective students the voluntary information collected by the 
National Survey of Student Engagement (NSSE), the Community 
College Survey of Student Engagement (CCSSE), or other 
instruments that provide evidence of student participation in 
educationally purposeful activities. The information shall be 
produced and made available in a uniform and comprehensible 
manner, through appropriate publications, mailings, and 
electronic media, and may be included in reports required by 
the institution's accrediting agency.
  (b) Exit Counseling for Borrowers.--(1) * * *

           *       *       *       *       *       *       *

  (3) Each eligible institution shall, during the exit 
interview required by this subsection, provide to a borrower of 
a loan made under part B, D, or E a clear and conspicuous 
notice describing the effect of using a consolidation loan to 
discharge the borrower's student loans, including--
          (A) the effects of consolidation on total interest to 
        be paid, fees to be paid, and length of repayment;
          (B) the effects of consolidation on a borrower's 
        underlying loan benefits, including loan forgiveness, 
        cancellation, and deferment;
          (C) the ability for the borrower to prepay the loan, 
        pay on a shorter schedule, and to change repayment 
        plans, and that borrower benefit programs may vary 
        among different loan holders;
          (D) the tax benefits for which the borrower may be 
        eligible; and
          (E) the consequences of default.

           *       *       *       *       *       *       *

  (f) Disclosure of Campus Security Policy and Campus Crime 
Statistics.--(1) Each eligible institution participating in any 
program under this title, other than a foreign institution of 
higher education, shall on August 1, 1991, begin to collect the 
following information with respect to campus crime statistics 
and campus security policies of that institution, and beginning 
September 1, 1992, and each year thereafter, prepare, publish, 
and distribute, through appropriate publications or mailings, 
to all current students and employees, and to any applicant for 
enrollment or employment upon request, an annual security 
report containing at least the following information with 
respect to the campus security policies and campus crime 
statistics of that institution:
          (A) * * *

           *       *       *       *       *       *       *

  (5) On an annual basis, each institution participating in any 
program under this title shall submit to the Secretary a copy 
of the statistics required to be made available under paragraph 
(1)(F). The Secretary shall--
          (A) review such statistics and report to the 
        [Committee on Education and the Workforce of the House 
        of Representatives and the Committee on Labor and Human 
        Resources of the Senate] authorizing committees on 
        campus crime statistics by September 1, 2000;

           *       *       *       *       *       *       *

  (g) Data Required.--
          (1) * * *

           *       *       *       *       *       *       *

          (4) Submission; report; information availability.--
        (A) * * *
          (B) The Secretary shall prepare a report regarding 
        the information received under subparagraph (A) and 
        submit such report to the [Committee on Education and 
        the Workforce of the House of Representatives and the 
        Committee on Labor and Human Resources of the Senate] 
        authorizing committees by April 1, 2000. The report 
        shall--
                  (i) * * *

           *       *       *       *       *       *       *

  (h) Disclosure of Fire Safety Standards and Measures.--
          (1) Annual fire safety reports required.--Each 
        institution participating in any program under this 
        title shall, beginning in the first academic year that 
        begins after the date of enactment of the College 
        Access and Opportunity Act of 2005, and each year 
        thereafter, prepare, publish, and distribute, through 
        appropriate publications (including the Internet) or 
        mailings, to all current students and employees, and to 
        any applicant for enrollment or employment upon 
        request, an annual fire safety report. Such reports 
        shall contain at least the following information with 
        respect to the campus fire safety practices and 
        standards of that institution:
                  (A) A statement that identifies each 
                institution-owned or controlled student housing 
                facility, and whether or not such facility is 
                equipped with a fire sprinkler system or other 
                fire safety system, or has fire escape planning 
                or protocols.
                  (B) Statistics for each such facility 
                concerning the occurrence of fires and false 
                alarms in such facility during the 2 preceding 
                calendar years for which data are available.
                  (C) For each such occurrence in each such 
                facility, a summary of the human injuries or 
                deaths, structural or property damage, or 
                combination thereof.
                  (D) Information regarding rules on portable 
                electrical appliances, smoking and open flames 
                (such as candles), regular mandatory supervised 
                fire drills, and planned and future 
                improvements in fire safety.
                  (E) Information about fire safety education 
                and training provided to students, faculty, and 
                staff.
                  (F) Information concerning fire safety at any 
                housing facility owned or controlled by a 
                fraternity, sorority, or student group that is 
                recognized by the institution, including--
                          (i) information reported to the 
                        institution under paragraph (4); and
                          (ii) a statement concerning whether 
                        and how the institution works with 
                        recognized student fraternities and 
                        sororities, and other recognized 
                        student groups owning or controlling 
                        housing facilities, to make each 
                        building and property owned or 
                        controlled by such fraternities, 
                        sororities, and groups more fire safe.
          (2) Fraternities, sororities, and other groups.--Each 
        institution participating in a program under this title 
        shall request each fraternity and sorority that is 
        recognized by the institution, and any other student 
        group that is recognized by the institution and that 
        owns or controls housing facilities, to collect and 
        report to the institution the information described in 
        subparagraphs (A) through (E) of paragraph (1), as 
        applied to the fraternity, sorority, or recognized 
        student group, respectively, for each building and 
        property owned or controlled by the fraternity, 
        sorority, or group, respectively.
          (3) Current information to campus community.--Each 
        institution participating in any program under this 
        title shall make, keep, and maintain a log, written in 
        a form that can be easily understood, recording all on-
        campus fires, including the nature, date, time, and 
        general location of each fire and all false fire 
        alarms. All entries that are required pursuant to this 
        paragraph shall, except where disclosure of such 
        information is prohibited by law, be open to public 
        inspection, and each such institution shall make annual 
        reports to the campus community on such fires and false 
        fire alarms in a manner that will aid the prevention of 
        similar occurrences.
          (4) Reports to the secretary.--On an annual basis, 
        each institution participating in any program under 
        this title shall submit to the Secretary a copy of the 
        statistics required to be made available under 
        paragraph (1)(B). The Secretary shall--
                  (A) review such statistics;
                  (B) make copies of the statistics submitted 
                to the Secretary available to the public; and
                  (C) in coordination with nationally 
                recognized fire organizations and 
                representatives of institutions of higher 
                education, identify exemplary fire safety 
                policies, procedures, and practices and 
                disseminate information concerning those 
                policies, procedures, and practices that have 
                proven effective in the reduction of campus 
                fires.
          (5) Rule of construction.--Nothing in this subsection 
        shall be construed to authorize the Secretary to 
        require particular policies, procedures, or practices 
        by institutions of higher education with respect to 
        fire safety.
          (6) Definitions.--In this subsection, the term 
        ``campus'' has the meaning provided in subsection 
        (f)(6).

           *       *       *       *       *       *       *


SEC. 485B. NATIONAL STUDENT LOAN DATA SYSTEM.

  (a) Development of the System.--The Secretary shall consult 
with a representative group of guaranty agencies, eligible 
lenders, and eligible institutions to develop a mutually 
agreeable proposal for the establishment of a National Student 
Loan Data System containing information regarding loans made, 
insured, or guaranteed under part B and loans made under parts 
D and E, and for allowing the electronic exchange of data 
between program participants and the system. In establishing 
such data system, the Secretary shall place a priority on 
providing for the monitoring of enrollment, student status, 
information about current loan holders and servicers, and 
internship and residency information. Such data system shall 
also permit borrowers to use the system to identify the current 
loan holders and servicers of such borrower's loan not later 
than one year after the date of enactment of the Higher 
Education Amendments of 1998. The information in the data 
system shall include (but is not limited to)--
          (1) * * *

           *       *       *       *       *       *       *

          (5) the exact amount of loans partially or totally 
        canceled or in deferment for service under the Peace 
        Corps Act [(22 U.S.C. 2501 et seq.)),] (22 U.S.C. 2501 
        et seq.), for service under the Domestic Volunteer 
        Service Act of 1973 (42 U.S.C. 4951 et seq.), and for 
        comparable full-time service as a volunteer for a tax-
        exempt organization of demonstrated effectiveness[.];
          [(5)] (6) the eligible institution in which the 
        student was enrolled or accepted for enrollment at the 
        time the loan was made, and any additional institutions 
        attended by the borrower;
          [(6)] (7) the total amount of loans made to any 
        borrower and the remaining balance of the loans;
          [(7)] (8) the lender, holder, and servicer of such 
        loans;
          [(8)] (9) information concerning the date of any 
        default on the loan and the collection of the loan, 
        including any information concerning the repayment 
        status of any defaulted loan on which the Secretary has 
        made a payment pursuant to section 430(a) or the 
        guaranty agency has made a payment to the previous 
        holder of the loan;
          [(9)] (10) information regarding any deferments or 
        forbearance granted on such loans; and
          [(10)] (11) the date of cancellation of the note upon 
        completion of repayment by the borrower of the loan or 
        payment by the Secretary pursuant to section 437.

           *       *       *       *       *       *       *


SEC. 485D. COLLEGE ACCESS INITIATIVE.

  (a) State-by-State Information.--The Secretary shall direct 
each guaranty agency with which the Secretary has an agreement 
under section 428(c) to provide to the Secretary the 
information necessary for the development of web links and 
access for students and families to a comprehensive listing of 
the postsecondary education opportunities, programs, 
publications, Internet Web sites, and other services available 
in the States for which such agency serves as the designated 
guarantor.
  (b) Guaranty Agency Activities.--
          (1) Plan and activity required.--Each guaranty agency 
        with which the Secretary has an agreement under section 
        428(c) shall develop a plan and undertake the activity 
        necessary to gather the information required under 
        subsection (a) and to make such information available 
        to the public and to the Secretary in a form and manner 
        as prescribed by the Secretary.
          (2) Activities.--Each guaranty agency shall undertake 
        such activities as are necessary to promote access to 
        postsecondary education for students through providing 
        information on college planning, career preparation, 
        and paying for college. The guaranty agency shall 
        publicize such information and coordinate such 
        activities with other entities that either provide or 
        distribute such information in the States for which 
        such guaranty agency serves as the designated 
        guarantor.
          (3) Funding.--The activities required by this section 
        may be funded from the guaranty agency's operating 
        account established pursuant to section 422B and, to 
        the extent funds remain, from earnings on the 
        restricted account established pursuant to section 
        422(h)(4).
  (c) Access to Information.--
          (1) Secretary's responsibility.--The Secretary shall 
        ensure the availability of the information provided by 
        the guaranty agencies in accordance with this section 
        to students, parents, and other interested individuals, 
        through web links or other methods prescribed by the 
        Secretary.
          (2) Guaranty agency responsibility.--The guaranty 
        agencies shall ensure that the information required by 
        this section is available without charge in printed 
        format for students and parents requesting such 
        information.
          (3) Publicity.--Within 270 days after the date of 
        enactment of the College Access and Opportunity Act of 
        2005, the Secretary and guaranty agencies shall 
        publicize the availability of the information required 
        by this section, with special emphasis on ensuring that 
        populations that are traditionally underrepresented in 
        postsecondary education are made aware of the 
        availability of such information.

SEC. 486. DISTANCE EDUCATION DEMONSTRATION PROGRAMS.

  (a) * * *
  (b) Demonstration Programs Authorized.--
          (1) * * *
          (2) Waivers.--The Secretary is authorized to waive 
        for any institution of higher education, system of 
        institutions of higher education, or consortium 
        participating in a Distance Education Demonstration 
        Program, the requirements of section 472(5) as the 
        section relates to computer costs, sections 481(a) and 
        481(b) as such sections relate to requirements for a 
        minimum number of weeks of instruction, sections 
        [102(a)(3)(A), 102(a)(3)(B)] 101(b)(4)(A), 
        101(b)(4)(B), and 484(l)(1), or one or more of the 
        regulations prescribed under this part or part F which 
        inhibit the operation of quality distance education 
        programs.
          (3) Eligible applicants.--
                  (A) * * *
                  (B) Prohibition.--An institution of higher 
                education described in [section 102(a)(1)(C)] 
                section 102 shall not be eligible to 
                participate in the demonstration program 
                authorized under this section.
                  (C) Special rule.--Subject to subparagraph 
                (B), an institution of higher education that 
                meets the requirements of [subsection (a) of 
                section 102, other than the requirement of 
                paragraph (3)(A) or (3)(B) of such subsection,] 
                section 101, other than the requirements of 
                subparagraph (A) or (B) of subsection (b)(4) of 
                such section and that provides a 2-year or 4-
                year program of instruction for which the 
                institution awards an associate or 
                baccalaureate degree, shall be eligible to 
                participate in the demonstration program 
                authorized under this section.

           *       *       *       *       *       *       *

  (d) Selection.--
          (1) In general.--For the first year of the 
        demonstration program authorized under this section, 
        the Secretary is authorized to select for participation 
        in the program not more than 15 institutions, systems 
        of institutions, or consortia of institutions. For [the 
        third year] subsequent years of the demonstration 
        program authorized under this section, the Secretary 
        may select not more than [35] 100 institutions, 
        systems, or consortia, in addition to the institutions, 
        systems, or consortia selected pursuant to the 
        preceding sentence, to participate in the demonstration 
        program if the Secretary determines that such expansion 
        is warranted based on the evaluations conducted in 
        accordance with subsections (f ) and (g). Not more than 
        5 of such institutions, systems, or consortia may be 
        accredited, degree-granting correspondence schools.

           *       *       *       *       *       *       *

  (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] authorizing committees a list of 
institutions, systems 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, 
system or consortium and a description of the distance 
education courses to be offered.
  (f ) Evaluations and Reports.--
          (1) * * *

           *       *       *       *       *       *       *

          (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] authorizing 
                committees with respect to--
                          (i) * * *

           *       *       *       *       *       *       *

                  (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] authorizing 
                committees on an annual basis regarding--
                          (i) * * *

           *       *       *       *       *       *       *


SEC. 486A. COLLEGE AFFORDABILITY DEMONSTRATION PROGRAM.

  (a) Purpose.--It is the purpose of this section--
          (1) to provide, through a college affordability 
        demonstration program, for increased innovation in the 
        delivery of higher education and student financial aid 
        in a manner resulting in reduced costs for students as 
        well as the institution by employing one or more 
        strategies including accelerating degree or program 
        completion, increasing availability of, and access to, 
        distance components of education delivery, engaging in 
        collaborative arrangements with other institutions and 
        organizations, and other alternative methodologies; and
          (2) to help determine--
                  (A) the most effective means of delivering 
                student financial aid as well as quality 
                education;
                  (B) the specific statutory and regulatory 
                requirements that should be altered to provide 
                for more efficient and effective delivery of 
                student financial aid, as well as access to 
                high quality distance education programs, 
                resulting in a student more efficiently 
                completing postsecondary education; and
                  (C) the most effective methods of obtaining 
                and managing institutional resources.
  (b) Demonstration Program Authorized.--
          (1) In general.--In accordance with the purposes 
        described in subsection (a) and the provisions of 
        subsection (d), the Secretary is authorized to select 
        not more than 100 institutions of higher education, 
        including those applying as part of systems or 
        consortia of such institutions, for voluntary 
        participation in the College Affordability 
        Demonstration Program in order to enable participating 
        institutions to carry out such purposes by providing 
        programs of postsecondary education, and making 
        available student financial assistance under this title 
        to students enrolled in those programs, in a manner 
        that would not otherwise meet the requirements of this 
        title.
          (2) Waivers.--The Secretary is authorized to waive 
        for any institutions of higher education, or any system 
        or consortia of institutions of higher education, 
        selected for participation in the College Affordability 
        Demonstration Program, any requirements of this Act or 
        the regulations thereunder as deemed necessary by the 
        Secretary to meet the purpose described in subsection 
        (a)(1), and shall make a determination that the waiver 
        can reasonably be expected to result in reduced costs 
        to students or institutions without an increase in 
        Federal program costs. The Secretary may not waive 
        under this paragraph the maximum award amounts for an 
        academic year or loan period.
          (3) Eligible applicants.--
                  (A) Eligible institutions.--Except as 
                provided in subparagraph (B), only an 
                institution of higher education that is 
                eligible to participate in programs under this 
                title shall be eligible to participate in the 
                demonstration program authorized under this 
                section.
                  (B) Prohibition.--An institution of higher 
                education described in section 102 shall not be 
                eligible to participate in the demonstration 
                program authorized under this section.
  (c) Application.--
          (1) In general.--Each institution or system of 
        institutions desiring to participate in the 
        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 of applications.--Each application for 
        the college affordability demonstration program shall 
        include at least the following:
                  (A) a description of the institution or 
                system or consortium of institutions and what 
                quality assurance mechanisms are in place to 
                insure the integrity of the Federal financial 
                aid programs;
                  (B) a description of the innovation or 
                innovations being proposed and the affected 
                programs and students, including--
                          (i) a description of any 
                        collaborative arrangements with other 
                        institutions or organizations to reduce 
                        costs;
                          (ii) a description of any expected 
                        economic impact of participation in the 
                        program within the community in which 
                        the institution is located; and
                          (iii) a description of any means the 
                        institution will employ to reduce the 
                        costs of instructional materials, such 
                        as textbooks;
                  (C) a description of each regulatory or 
                statutory requirement for which waivers are 
                sought, with a reason for each waiver;
                  (D) a description of the expected outcomes of 
                the program changes proposed, including the 
                estimated reductions in costs both for the 
                institution and for students;
                  (E) a description of the quality assurance 
                mechanisms in place to ensure the integrity of 
                the Federal financial aid programs;
                  (F) an assurance from each institution in a 
                system or consortium of a commitment to fulfill 
                its role as described in the application;
                  (G) an assurance that the participating 
                institution or system of institutions will 
                offer full cooperation with the ongoing 
                evaluations of the demonstration program 
                provided for in this section; and
                  (H) any other information or assurances the 
                Secretary may require.
  (d) Selection.--In selecting institutions to participate in 
the demonstration program under this section, the Secretary 
shall take into account--
          (1) the number and quality of applications received, 
        determined on the basis of the contents required by 
        subsection (c)(2);
          (2) the Department's capacity to oversee and monitor 
        each institution's participation;
          (3) an institution's--
                  (A) financial responsibility;
                  (B) administrative capability;
                  (C) program or programs being offered via 
                distance education, if applicable;
                  (D) student completion rates; and
                  (E) student loan default rates; and
          (4) the participation of a diverse group of 
        institutions with respect to size, mission, and 
        geographic distribution.
  (e) Notification.--The Secretary shall make available to the 
public and to the authorizing committees a list of institutions 
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 and a description of the innovations being 
demonstrated.
  (f) Evaluations and Reports.--
          (1) Evaluation.--The Secretary shall evaluate the 
        demonstration program authorized under this section on 
        a biennial basis. Such evaluations specifically shall 
        review--
                  (A) the extent to which expected outcomes, 
                including the estimated reductions in cost, 
                were achieved;
                  (B) the number and types of students 
                participating in the programs offered, 
                including the progress of participating 
                students toward recognized certificates or 
                degrees and the extent to which participation 
                in such programs increased;
                  (C) issues related to student financial 
                assistance associated with the innovations 
                undertaken;
                  (D) effective technologies and alternative 
                methodologies for delivering student financial 
                assistance;
                  (E) the extent of the cost savings to the 
                institution, the student, and the Federal 
                Government by virtue of the waivers provided, 
                and an estimate as to future cost savings for 
                the duration of the demonstration program;
                  (F) the extent to which students saved money 
                by virtue of completing their postsecondary 
                education sooner;
                  (G) the extent to which the institution 
                reduced its tuition and fees and its costs by 
                virtue of participation in the demonstration 
                program;
                  (H) the extent to which any collaborative 
                arrangements with other institutions or 
                organizations have reduced the participating 
                institution's costs; and
                  (I) the extent to which statutory or 
                regulatory requirements not waived under the 
                demonstration program present difficulties for 
                students or institutions.
          (2) Policy analysis.--The Secretary shall review 
        current policies and identify those policies that 
        present impediments to the implementation of 
        innovations that result in cost savings and in 
        expanding access to education.
          (3) Reports.--The Secretary shall provide a report to 
        the authorizing committees on a biennial basis 
        regarding--
                  (A) the demonstration program authorized 
                under this section;
                  (B) the results of the evaluations conducted 
                under paragraph (1);
                  (C) the cost savings to the Federal 
                Government by the demonstration program 
                authorized by this section; and
                  (D) recommendations for changes to increase 
                the efficiency and effective delivery of 
                financial aid.
  (g) Oversight.--In conducting the demonstration program 
authorized under this section, the Secretary shall, on a 
continuing basis--
          (1) ensure compliance of institutions or systems of 
        institutions with the requirements of this title (other 
        than the sections and regulations that are waived under 
        subsection (b)(2));
          (2) provide technical assistance to institutions in 
        their application to and participation in the 
        demonstration program;
          (3) monitor fluctuations in the student population 
        enrolled in the participating institutions or systems 
        of institutions;
          (4) monitor changes in financial assistance provided 
        at the institution; and
          (5) consult with appropriate accrediting agencies or 
        associations and appropriate State regulatory 
        authorities.
  (h) Termination of Authority.--The authority of the Secretary 
under this section shall cease to be effective on October 1, 
2011.

SEC. 487. PROGRAM PARTICIPATION AGREEMENTS.

  (a) Required for Programs of Assistance; Contents.--In order 
to be an eligible institution for the purposes of any program 
authorized under this title, an institution must be an 
institution of higher education or an eligible institution (as 
that term is defined for the purpose of that program) and 
shall, except with respect to a program under subpart 4 of part 
A, enter into a program participation agreement with the 
Secretary. The agreement shall condition the initial and 
continuing eligibility of an institution to participate in a 
program upon compliance with the following requirements:
          (1) * * *

           *       *       *       *       *       *       *

          (16)(A) The institution will not knowingly employ an 
        individual in a capacity that involves the 
        administration of programs under this title, or the 
        receipt of program funds under this title or other 
        Federal, State, or local government funds, who has been 
        convicted of, or has pled nolo contendere or guilty to, 
        a crime involving the acquisition, use, or expenditure 
        of funds under this title or other Federal, State, or 
        local government funds, or has been judicially 
        determined to have committed fraud involving funds 
        under this title or other Federal, State, or local 
        government funds or contract with an institution or 
        third party servicer that has been terminated under 
        section 432 involving the acquisition, use, or 
        expenditure of funds under this title or other Federal, 
        State, or local government funds, or who has been 
        judicially determined to have committed fraud involving 
        funds under this title or other Federal, State, or 
        local government funds.
          (B) The institution will not knowingly contract with 
        or employ any individual, agency, or organization that 
        has been, or whose officers or employees have been--
                  (i) convicted of, or pled nolo contendere or 
                guilty to, a crime involving the acquisition, 
                use, or expenditure of funds under this title 
                or other Federal, State, or local government 
                funds; or
                  (ii) judicially determined to have committed 
                fraud involving funds under this title or other 
                Federal, State, or local government funds.

           *       *       *       *       *       *       *

          (22) The institution will comply with the [refund 
        policy] policy on the return of title IV funds 
        established pursuant to section 484B.
          (23)(A) * * *

           *       *       *       *       *       *       *

          (C) This paragraph shall apply to general and special 
        elections for Federal office, as defined in section 
        301(3) of the Federal Election Campaign Act of 1971 (2 
        U.S.C. 431(3)), and to the elections for Governor or 
        other chief executive within such State).
          (D) An institution shall be considered in compliance 
        with the requirements of subparagraph (A) for any 
        student to whom the institution electronically 
        transmits a message containing a voter registration 
        form acceptable for use in the State in which the 
        institution is located, or an Internet address where 
        such a form can be downloaded, provided such 
        information is in an electronic message devoted to 
        voter registration.
          (24) The institution will, as calculated in 
        accordance with subsection (f)(1), have at least 10 
        percent of its revenues from sources other than funds 
        provided under this title, or will be subject to the 
        sanctions described in subsection (f)(2).
          (25) The institution will disclose to the alleged 
        victim of any crime of violence (as that term is 
        defined in section 16 of title 18), or a nonforcible 
        sex offense, the final results of any disciplinary 
        proceeding conducted by such institution against a 
        student who is the alleged perpetrator of such crime or 
        offense with respect to such crime or offense. If the 
        alleged victim of such crime or offense is deceased, 
        the next of kin of such victim shall be treated as the 
        alleged victim for purposes of this paragraph.

           *       *       *       *       *       *       *

  (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 clauses (ii) and (iii), 
        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 appropriate State 
        agency notifying the Secretary under subpart 1 of part 
        H, except that the Secretary may modify the 
        requirements of this clause with respect to 
        institutions of higher education that are foreign 
        institutions, and may waive such requirements with 
        respect to a foreign institution whose students receive 
        less than $500,000 in loans under this title during the 
        award year preceding the audit period;

           *       *       *       *       *       *       *

          (iii) at the discretion of the Secretary, with regard 
        to an eligible institution (other than an eligible 
        institution described in [section 102(a)(1)(C)] section 
        102) that has obtained less than $200,000 in funds 
        under this title during each of the 2 award years that 
        precede the audit period and submits a letter of credit 
        payable to the Secretary equal to not less than \1/2\ 
        of the annual potential liabilities of such institution 
        as determined by the Secretary, deeming an audit 
        conducted every 3 years to satisfy the requirements of 
        clause (i), except for the award year immediately 
        preceding renewal of the institution's eligibility 
        under section 498(g);

           *       *       *       *       *       *       *

  (d) Definition of Eligible Institution.--For the purpose of 
this section, the term ``eligible institution'' means any such 
institution described in section [102] 101 of this Act.

           *       *       *       *       *       *       *

  (f) Implementation of Non-Title IV Revenue Requirement.--
          (1) Calculation.--In carrying out subsection (a)(24), 
        an institution shall use the cash basis of accounting 
        and count the following funds toward the 10 percent of 
        revenues from sources of funds other than funds 
        provided under this title:
                  (A) funds used by students to pay tuition, 
                fees, and other institutional charges from 
                sources other than funds provided under this 
                title as long as the institution can reasonably 
                demonstrate that such funds were used for such 
                purposes;
                  (B) institutional funds used to satisfy 
                matching-fund requirements for programs under 
                this title;
                  (C) funds from savings plans for educational 
                expenses established pursuant to the Internal 
                Revenue Code of 1986;
                  (D) funds paid by a student, or on behalf of 
                a student by a party other than the 
                institution, for an education or training 
                program that is not eligible for funds under 
                this title, so long as the program is approved 
                or licensed by the appropriate State agency or 
                an accrediting agency recognized by the 
                Secretary; and
                  (E) institutional aid, as follows:
                          (i) in the case of institutional 
                        loans, only the amount of loan 
                        repayments received during the fiscal 
                        year; and
                          (ii) in the case of institutional 
                        scholarships, only those provided by 
                        the institution in the form of monetary 
                        aid or tuition discounts based upon the 
                        academic achievements or financial need 
                        of students, disbursed during the 
                        fiscal year from an established 
                        restricted account, and only to the 
                        extent that the funds in that account 
                        represent designated funds from an 
                        outside source or from income earned on 
                        those funds.
          (2) Sanctions.--An institution that fails to meet the 
        requirements of subsection (a)(24) for 3 consecutive 
        years shall become ineligible to participate in the 
        programs authorized by this title. In addition to such 
        other means of enforcing the requirements of this title 
        as may be available to the Secretary, if an institution 
        fails to meet the requirements of subsection (a)(24) in 
        any year, the Secretary may impose one or more of the 
        following sanctions on the institution:
                  (A) Place the institution on provisional 
                certification in accordance with section 498(h) 
                until the institution demonstrates, to the 
                satisfaction of the Secretary, that it is in 
                compliance with subsection (a)(24).
                  (B) Require such other increased monitoring 
                and reporting requirements as the Secretary 
                determines necessary until the institution 
                demonstrates, to the satisfaction of the 
                Secretary, that it is in compliance with 
                subsection (a)(24).
          (3) Publication on cool website.--The Secretary shall 
        identify, on the College Opportunities On-Line website 
        under section 131(b), any institution that fails to 
        meet the requirements of subsection (a)(24) in any year 
        as an institution that is failing to meet the minimum 
        non-Federal source of revenue requirements of that 
        subsection.

SEC. 487A. REGULATORY RELIEF AND IMPROVEMENT.

  (a) Quality Assurance Program.--
          (1) * * *

           *       *       *       *       *       *       *

          (5) 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] 
        authorizing committees.
  (b) Regulatory Improvement and Streamlining Experiments.--
          (1) In general.--The Secretary may continue any 
        experimental sites in existence on the date of 
        enactment of the [Higher Education Amendments of 1998] 
        College Access and Opportunity Act of 2005. [Any 
        activities approved by the Secretary prior to such date 
        that are inconsistent with this section shall be 
        discontinued not later than June 30, 1999.]
          (2) Report.--The Secretary shall review and evaluate 
        the experience of institutions participating as 
        experimental sites during the period of [1993 through 
        1998] 1998 through 2004 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] 
        authorizing committees not later than 6 months after 
        the enactment of the [Higher Education Amendments of 
        1998.] College Access and Opportunity Act of 2005. Such 
        report shall include--
                  (A) * * *

           *       *       *       *       *       *       *

          (3) Selection.--
                  (A) In general.--[Upon the submission of the 
                report required by paragraph (2), the Secretary 
                is authorized to select a limited number of 
                additional institutions for voluntary 
                participation] The Secretary is authorized to 
                continue the voluntary participation of 
                institutions participating as of July 1, 2005, 
                as experimental sites to provide 
                recommendations to the Secretary on the impact 
                and effectiveness of proposed regulations or 
                new management initiatives, and shall continue 
                the participation of any such institution 
                unless the Secretary determines that such 
                institution's participation has not been 
                successful in carrying out the purposes of this 
                section.
                  (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] authorizing committees and 
                shall provide to such Committees--
                          (i) * * *

           *       *       *       *       *       *       *


SEC. 491. ADVISORY COMMITTEE ON STUDENT FINANCIAL ASSISTANCE.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Membership.--(1) * * *

           *       *       *       *       *       *       *

  (3) The appointment of members under subparagraphs (A) and 
(B) of paragraph (1) shall be effective upon publication of the 
appointment in the Congressional Record.

           *       *       *       *       *       *       *

  (h) Personnel and Resources.--(1) The Advisory Committee may 
appoint such personnel as may 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 maximum rate 
payable under section 5376 of such title. 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.

           *       *       *       *       *       *       *

  (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, [2004] 2011.

           *       *       *       *       *       *       *


[SEC. 493A. YEAR 2000 REQUIREMENTS AT THE DEPARTMENT.

  [(a) Preparations for Year 2000.--In order to ensure that the 
processing, delivery, and administration of grant, loan, and 
work assistance provided under this title is not interrupted 
due to operational problems related to the inability of 
computer systems to indicate accurately dates after December 
31, 1999, the Secretary of Education shall--
          [(1) take such actions as are necessary to ensure 
        that all internal and external systems, hardware, and 
        data exchange infrastructure administered by the 
        Department that are necessary for the processing, 
        delivery, and administration of the grant, loan, and 
        work assistance are Year 2000 compliant by March 31, 
        1999, such that there will be no business interruption 
        after December 31, 1999;
          [(2) ensure that the Robert T. Stafford Federal 
        Student Loan Program and the William D. Ford Federal 
        Direct Loan Program are equal in level of priority with 
        respect to addressing, and that resources are managed 
        to equally provide for successful resolution of, the 
        Year 2000 computer problem in both programs by December 
        31, 1999;
          [(3) work with the Department's various data exchange 
        partners under this title to fully test all data 
        exchange routes for Year 2000 compliance via end-to-end 
        testing, and submit a report describing the parameters 
        and results of such tests to the Comptroller General 
        not later than March 31, 1999;
          [(4) ensure that the Inspector General of the 
        Department (or an external, independent entity selected 
        by the Inspector General) performs and publishes a risk 
        assessment of the systems and hardware under the 
        Department's management, that has been reviewed by an 
        independent entity, and make such assessment publicly 
        available not later than 60 days after the date of 
        enactment of the Higher Education Amendments of 1998;
          [(5) not later than June 30, 1999, ensure that the 
        Inspector General (or an external, independent entity 
        selected by the Inspector General) conducts a review of 
        the Department's Year 2000 compliance for the 
        processing, delivery, and administration of grant, 
        loan, and work assistance, and submits a report 
        reflecting the results of that review to the 
        Chairperson of the Committee on Labor and Human 
        Resources of the Senate and the Chairperson of the 
        Committee on Education and the Workforce of the House 
        of Representatives;
          [(6) develop a contingency plan to ensure the 
        programs under this title will continue to run 
        uninterrupted in the event of widespread disruptions in 
        the flow of accurate computerized data, which 
        contingency plan shall include a prioritization of 
        mission critical systems and strategies to allow data 
        partners to transfer data through alternate means; and
          [(7) alert Congress at the earliest possible time if 
        mission critical deadlines will not be met.
  [(b) Postponement Authority for the Year 2000.--
          [(1) Purpose.--It is the purpose of this subsection 
        to 
        provide the Secretary with the flexibility necessary 
        to--
                  [(A) ensure that the resources and 
                capabilities of institutions, lenders, and 
                guaranty agencies are not overburdened by the 
                combination of student aid processing and 
                delivery requirements added or modified by the 
                amendments made by the Higher Education 
                Amendments of 1998 and by the changes required 
                to ensure that the systems of the institutions, 
                lenders and guaranty agencies are Year 2000 
                compliant; and
                  [(B) avoid the disruption of grant, loan, or 
                work assistance funds awarded to students 
                because of Year 2000 compliance problems at a 
                substantial number of institutions, lenders, 
                and guaranty agencies.
          [(2) Authority to postpone.--The Secretary may 
        postpone, for a period of time described in paragraph 
        (3), the implementation of any requirements under part 
        B, D, E, or G that are added or modified by the 
        amendments made by the Higher Education Amendments of 
        1998 related to the processing or delivery of grant, 
        loan, and work assistance (which shall not include the 
        determination of need for such assistance) provided 
        under this title, if the Secretary--
                  [(A) determines that--
                          [(i) implementation of such 
                        requirements would require extensive 
                        changes to the existing systems of 
                        institutions, lenders, or guaranty 
                        agencies; and
                          [(ii) postponement is necessary to 
                        avoid jeopardizing the ability of a 
                        substantial number of institutions, 
                        lenders, or guaranty agencies to ensure 
                        that all of the systems of the 
                        institutions, lenders, or guaranty 
                        agencies related to the processing or 
                        delivery of such assistance function 
                        successfully after December 31, 1999; 
                        and
                  [(B) promptly publishes in the Federal 
                Register a list of, and notifies Congress of, 
                any provisions, the implementation of which the 
                Secretary intends to postpone, with the reasons 
                for such postponement.
          [(3) Exceptions to authority.--The Secretary may not 
        postpone the implementation of one or more provisions 
        described in this subsection longer than the earlier 
        of--
                  [(A) the period of time that the Secretary 
                determines necessary to ensure that the 
                processing and delivery systems of the 
                institutions, lenders, and guaranty agencies 
                referred to in paragraph (1)(A)(ii) are capable 
                of functioning successfully after December 31, 
                1999; or
                  [(B) one award year after the effective date 
                applicable to such provision under the Higher 
                Education Amendments of 1998.]

               Subpart 2--Accrediting Agency Recognition

SEC. 496. RECOGNITION OF ACCREDITING AGENCY OR ASSOCIATION.

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

           *       *       *       *       *       *       *

          (3) if such agency or association is an agency or 
        association described in--
                  (A) subparagraph (A)(i) of paragraph (2), 
                then such agency or association is separate and 
                independent, both administratively and 
                financially of any related, associated, or 
                affiliated trade association or membership 
                organization; or
                  [(B) subparagraph (B) of paragraph (2), then 
                such agency or association has been recognized 
                by the Secretary on or before October 1, 1991; 
                or]
                  [(C)] (B) subparagraph (C) of paragraph (2) 
                and such agency or association has been 
                recognized by the Secretary on or before 
                October 1, 1991, then the Secretary may waive 
                the requirement that such agency or association 
                is separate and independent, both 
                administratively and financially of any 
                related, associated, or affiliated trade 
                association or membership organization upon a 
                demonstration that the existing relationship 
                has not served to compromise the independence 
                of its accreditation process;
          (4)(A) such agency or association consistently 
        applies and enforces standards that consider the stated 
        missions of institutions of higher education, including 
        such missions as inculcation of religious values, and 
        that ensure that the courses or programs of 
        instruction, training, or study 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; and
          (B) if such agency or association already has or 
        seeks to include within its scope of recognition the 
        evaluation of the quality of institutions or programs 
        offering distance education, such agency or association 
        shall, in addition to meeting the other requirements of 
        this subpart, demonstrate to the Secretary that--
                  (i) the accreditation agency's or 
                association's standards effectively address the 
                quality of an institution's distance education 
                programs in the areas identified in paragraph 
                (5) of this subsection, except that the agency 
                or association shall not be required to have 
                separate standards, procedures, or policies for 
                the evaluation of distance education 
                institutions or programs in order to meet the 
                requirements of this subparagraph; and
                  (ii) the agency or association requires that 
                an institution that offers distance education 
                programs to have processes by which it 
                establishes that the student who registers in a 
                distance education course or program is the 
                same student who participates, completes 
                academic work, and receives academic credit;
          (5) the standards for 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 examinations, and job placement 
                rates;]
                  (A) success with respect to student 
                achievement in relation to the institution's 
                mission, including, as appropriate, 
                consideration of student academic achievement 
                as determined by the institution (in accordance 
                with standards of the accrediting agency or 
                association), retention, course and program 
                completion, State licensing examinations, and 
                job placement rates, and other student 
                performance information selected by the 
                institution, particularly that information used 
                by the institution to evaluate or strengthen 
                its programs;

           *       *       *       *       *       *       *

                  [(E) fiscal and administrative capacity as 
                appropriate to the specified scale of 
                operations;]
                  (E) fiscal, administrative capacity, as 
                appropriate to the specified scale of 
                operations, and, for an agency or association 
                where its approval for such institution 
                determines eligibility for student assistance 
                under this title, board governance, within the 
                context of the institution's mission;

           *       *       *       *       *       *       *

          [(6) such agency or association shall apply 
        procedures throughout the accrediting process, 
        including evaluation and withdrawal proceedings, that 
        comply with due process, including--
                  [(A) adequate specification of requirements 
                and deficiencies at the institution of higher 
                education or program being examined;
                  [(B) notice of an opportunity for a hearing 
                by any such institution;
                  [(C) the right to appeal any adverse action 
                against any such institution; and
                  [(D) the right to representation by counsel 
                for any such institution;]
          (6) such an agency or association shall establish and 
        apply review procedures throughout the accrediting 
        process, including evaluation and withdrawal 
        proceedings that comply with due process that provides 
        for--
                  (A) adequate specification of requirements 
                and deficiencies at the institution of higher 
                education or program being examined;
                  (B) an opportunity for a written response by 
                any such institution to be included in the 
                evaluation and withdrawal proceedings;
                  (C) upon the written request of an 
                institution, an opportunity for the institution 
                to appeal any adverse action at a hearing prior 
                to such action becoming final before an appeals 
                panel that--
                          (i) shall not include current members 
                        of the agency or association's 
                        underlying decision-making body that 
                        made the adverse decision; and
                          (ii) is subject to a conflict of 
                        interest of policy; and
                  (D) the right to representation by counsel 
                for an such institution;

           *       *       *       *       *       *       *

          [(8) such agency or association shall make available 
        to the public, upon request, and to the Secretary, and 
        the State licensing or authorizing agency a summary of 
        any review resulting in a final accrediting decision 
        involving denial, termination, or suspension of 
        accreditation, together with the comments of the 
        affected institution.]
          (8) such agency or association shall make available 
        to the public and submit to the Secretary and the State 
        licensing or authorizing agency, together with the 
        comments of the affected institution, a summary of 
        agency or association actions, involving--
                  (A) final denial, withdrawal, suspension, or 
                termination of accreditation; and
                  (B) any other final adverse action taken with 
                respect to an institution.

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

          (5) maintains and makes publicly available written 
        materials regarding standards and procedures for 
        accreditation, appeal procedures, and the accreditation 
        status of each institution subject to its jurisdiction; 
        [and]
          (6) discloses publicly whenever an institution of 
        higher education subject to its jurisdiction is being 
        considered for accreditation or reaccreditation[.];
          (7) ensures that its onsite comprehensive reviews for 
        accreditation or reaccreditation include evaluation of 
        the substance of the information required in 
        subparagraph (H) of section 485(a)(1);
          (8) confirms as a part of its review for 
        accreditation or reaccreditation that the institution 
        has transfer policies--
                  (A) that are publicly disclosed; and
                  (B) that do not deny transfer of credit based 
                solely on the accreditation of the sending 
                institution as long as the association or 
                agency is recognized by the Secretary pursuant 
                to section 496;
          (9) develops a brief summary, available to the 
        public, of final adverse actions in accordance with the 
        requirements of subsection (a)(8);
          (10) monitors the enrollment growth of distance 
        education to ensure that an institution experiencing 
        signficant growth has the capacity to serve its 
        students effectively;
          (11) discloses publicly, on the agency's website or 
        through other similar dissemination--
                  (A) a list of the individuals who comprised 
                the evaluation teams during the prior calendar 
                year for each agency or association and the 
                title and institutional affiliation of such 
                individuals, although such list shall not be 
                required to identify those individuals who 
                comprised the evaluation team used for any 
                specific institution;
                  (B) a description of the agency's or 
                association's process for selecting, preparing, 
                and evaluating such individuals; and
                  (C) any statements related to the 
                accreditation responsibilities of such 
                individuals; and
          (12) reviews the record of student complaints 
        resulting from the student information process 
        described in section 485(a)(1)(J).

           *       *       *       *       *       *       *

  (j) Impact of Loss of Accreditation.--An institution may not 
be certified or recertified as an institution of higher 
education under [section 102] section 101 and subpart 3 of this 
part or participate in any of the other programs authorized by 
this Act if such institution--
          (1) * * *

           *       *       *       *       *       *       *

  (k) Religious Institution Rule.--Notwithstanding subsection 
(j), the Secretary shall allow an institution that has had its 
accreditation withdrawn, revoked, or otherwise terminated, or 
has voluntarily withdrawn from an accreditation agency, to 
remain certified as an institution of higher education under 
[section 102] section 101 and subpart 3 of this part for a 
period sufficient to allow such institution to obtain 
alternative accreditation, if the Secretary determines that the 
reason for the withdrawal, revocation, or termination--
          (1) * * *

           *       *       *       *       *       *       *

  (l) Limitation, Suspension, or Termination of Recognition.--
(1) * * *

           *       *       *       *       *       *       *

  (3) The Secretary shall provide an annual report to Congress 
on the status of any agency or association for which the 
Secretary has limited, suspended or terminated recognition 
under this subsection.

          Subpart 3--Eligibility and Certification Procedures

SEC. 498. ELIGIBILITY AND CERTIFICATION PROCEDURES.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Financial Responsibility Standards.--(1) * * *
  (2) Notwithstanding paragraph (1), if an institution fails to 
meet criteria prescribed by the Secretary 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,] for-
profit, public, and nonprofit institutions. The Secretary shall 
take into account an institution's total financial 
circumstances in making a determination of its ability to meet 
the standards herein required.
  (d) Administrative Capacity Standard.--The Secretary is 
authorized--
          (1) to establish procedures and requirements relating 
        to the administrative capacities of institutions of 
        higher education, including--
                  (A) * * *
                  (B) maintenance of records; and

           *       *       *       *       *       *       *

  (g) Time Limitations on, and Renewal of, Eligibility.--
          (1) * * *

           *       *       *       *       *       *       *

          (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 
        102(a)(1)(C)] section 102 and received less than 
        $500,000 in funds under part B for the most recent year 
        for which data are available.

           *       *       *       *       *       *       *

  (i) Treatment of Changes of Ownership.--(1) An eligible 
institution of higher education that has had a change in 
ownership resulting in a change of control shall not qualify to 
participate in programs under this title after the change in 
control (except as provided in paragraph (3)) unless it 
establishes that it meets the requirements of [section 102] 
section 101 (other than the requirements in subsections (b)(5) 
and (c)(3)) and this section after such change in control.

           *       *       *       *       *       *       *

  (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 
102(b)(1)(E) and 102(c)(1)(C) prior to seeking such 
certification] except that such branch shall not be required to 
be in existence for at least 2 years 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 this title, 
prior to seeking certification as a main campus or free-
standing institution.

SEC. 498A. PROGRAM REVIEW AND DATA.

  (a) * * *
  (b) Special Administrative Rules.--In carrying out paragraphs 
(1) and (2) of subsection (a) and any other relevant provisions 
of this title, the Secretary shall--
          (1) * * *

           *       *       *       *       *       *       *

          (4) 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]
          (5) 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[.];
          (6) provide to the institution adequate opportunity 
        to review and respond to any program review report or 
        audit finding and underlying materials related thereto 
        before any final program review or audit determination 
        is reached;
          (7) review and take into consideration the 
        institution's response in any final program review or 
        audit determination, and include in the final 
        determination--
                  (A) a written statement addressing the 
                institution's response and stating the basis 
                for such final determination; and
                  (B) a copy of the institution's statement in 
                response, appropriately redacted to protect 
                confidential information;
          (8) maintain and preserve at all times the 
        confidentiality of any program review report or audit 
        finding until the requirements of paragraphs (6) and 
        (7) are met, and until a final program review or audit 
        determination has been issued, except to the extent 
        required to comply with paragraph (5), provided, 
        however, that the Secretary shall promptly disclose any 
        and all program review reports and audit findings to 
        the institution under review; and
          (9) require that the authority to approve or issue 
        any program review report or audit finding, preliminary 
        or otherwise, that contains any finding, determination, 
        or proposed assessment that exceeds or may exceed 
        $500,000 in liabilities shall not be delegated to any 
        official beyond the Chief Operating Officer of Federal 
        Student Aid.

           *       *       *       *       *       *       *


SEC. 498B. REVIEW OF REGULATIONS.

  (a) * * *
  (b) Regulatory and Statutory Relief for Small Volume 
Institutions.--The Secretary shall review and evaluate ways in 
which regulations under and provisions of this Act affecting 
institution of higher education (other than institutions 
described in [section 102(a)(1)(C)] section 102), that have 
received in each of the two most recent award years prior to 
the date of the enactment of the Higher Education Amendments of 
1998 less than $200,000 in funds through this title, may be 
improved, streamlined, or eliminated.

           *       *       *       *       *       *       *

  (d) Reports to Congress.--
          (1) In general.--The Secretary shall submit, not 
        later than 1 year after the date of the enactment of 
        the Higher Education Amendments of 1998, a 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] authorizing committees 
        detailing the Secretary's findings and recommendations 
        based on the reviews conducted under subsections (a) 
        and (b), including a timetable for implementation of 
        any recommended changes in regulations and a 
        description of any recommendations for legislative 
        changes.
          (2) Additional reports.--Not later than January 1, 
        2003, the Secretary shall submit a 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] authorizing committees 
        detailing the Secretary's findings and recommendations 
        based on the review conducted under subsection (a), 
        including a timetable for implementation of any 
        recommended changes in regulations and a description of 
        any recommendations for legislative changes.

SEC. 499. REPORT TO CONGRESS ON PREVENTION OF FRAUD AND ABUSE IN 
                    STUDENT FINANCIAL AID PROGRAMS.

  (a) Purpose.--It is the purpose of this section to require 
the Secretary to commission a nonpartisan, comprehensive study 
on the prevention of fraud and abuse in title IV student 
financial aid programs, and to report the results of such study 
to Congress.
  (b) Scope of Report.--The study under this section shall 
thoroughly identify and address the following:
          (1) The impact of fraud and abuse in title IV student 
        financial aid programs upon students and taxpayers, and 
        the nature of such fraud and abuse.
          (2) The effectiveness of existing policies and 
        requirements under this Act that were put in place to 
        prevent fraud and abuse in title IV student financial 
        aid programs, and how such policies and requirements 
        should be improved.
          (3) The extent to which existing protections against 
        fraud and abuse under this Act are adequately enforced, 
        and how enforcement should be strengthened.
          (4) Areas in which additional information is needed 
        to assess the effectiveness of current protections and 
        enforcement against fraud and abuse.
          (5) Existing policies and requirements under this Act 
        aimed at fraud and abuse that are ineffective, hinder 
        innovation, or could be eliminated without reducing 
        effectiveness.
          (6) New policies and enforcement, particularly those 
        suited for the current higher education marketplace, 
        needed to protect against fraud and abuse in title IV 
        student financial aid programs.
          (7) The extent to which States are implementing 
        regulations to protect students from fraud and abuse, 
        and whether changes to Federal law will preempt such 
        regulations.
  (c) Report.--Not later than December 31, 2007, the Secretary, 
after an opportunity for both the Secretary and the Inspector 
General of the Department of Education to review the results of 
the study, shall transmit to Congress a report on the study 
conducted under this section. Such report shall--
          (1) include clear and specific recommendations for 
        legislative and regulatory actions that are likely to 
        significantly reduce the fraud and abuse in title IV 
        student financial aid programs identified under 
        subsection (b); and
          (2) include both the Secretary's and the Inspector 
        General's comments on the report.

                    TITLE V--DEVELOPING INSTITUTIONS

PART A--HISPANIC-SERVING INSTITUTIONS

           *       *       *       *       *       *       *


SEC. 502. DEFINITIONS; ELIGIBILITY.

  (a) Definitions.--For the purpose of this title:
          (1) * * *
          (2) Eligible institution.--The term ``eligible 
        institution'' means--
                  (A) an institution of higher education--
                          (i) * * *

           *       *       *       *       *       *       *

                          (v) which provides a program of not 
                        less than 2 years that is acceptable 
                        for full credit toward a bachelor's 
                        degree;
                          [(v)] (vi) that meets such other 
                        requirements as the Secretary may 
                        prescribe; and
                          [(vi)] (vii) that is located in a 
                        State; and

           *       *       *       *       *       *       *

          (5) Hispanic-serving institution.--The term 
        ``Hispanic-serving institution'' means an institution 
        of higher education that--
                  (A) is an eligible institution; and
                  (B) at the time of application, has an 
                enrollment of undergraduate full-time 
                equivalent students that is at least 25 percent 
                Hispanic students[; and] at the end of the 
                award year immediately preceding the date of 
                application.
                  [(C) provides assurances that not less than 
                50 percent of the institution's Hispanic 
                students are low-income individuals, which 
                assurances--
                          [(i) may employ statistical 
                        extrapolation using appropriate data 
                        from the Bureau of the Census or other 
                        appropriate Federal or State sources; 
                        and
                          [(ii) the Secretary shall consider as 
                        meeting the requirements of this 
                        subparagraph, unless the Secretary 
                        determines, based on a preponderance of 
                        the evidence, that the assurances do 
                        not meet the requirements.]

           *       *       *       *       *       *       *

          [(7) 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.]

           *       *       *       *       *       *       *


SEC. 503. AUTHORIZED ACTIVITIES.

  (a) * * *
  (b) Authorized Activities.--Grants awarded under this section 
shall be used for one or more of the following activities:
          (1) * * *
          [(2) Construction, maintenance, renovation, and 
        improvement in classrooms, libraries, laboratories, and 
        other instructional facilities.]
          (2) Construction, maintenance, renovation, and 
        improvement in classrooms, libraries, laboratories, and 
        other instructional facilities, including purchase or 
        rental of telecommunications technology equipment or 
        services, and the acquisition of real property adjacent 
        to the campus of the institution on which to construct 
        such facilities.

           *       *       *       *       *       *       *

          (5) Education or counseling services designed to 
        improve the financial literacy and economic literacy of 
        students and, as appropriate, their parents.
          [(5)] (6) Tutoring, counseling, and student service 
        programs designed to improve academic success.
          [(6)] (7) Funds management, administrative 
        management, and acquisition of equipment for use in 
        strengthening funds management.
          [(7)] (8) Joint use of facilities, such as 
        laboratories and libraries.
          [(8)] (9) Establishing or improving a development 
        office to strengthen or improve contributions from 
        alumni and the private sector.
          [(9)] (10) Establishing or improving an endowment 
        fund.
          [(10)] (11) Creating or improving facilities for 
        Internet or other distance learning academic 
        instruction capabilities, including purchase or rental 
        of telecommunications technology equipment or services.
          [(11)] (12) Establishing or enhancing a program of 
        teacher education designed to qualify students to teach 
        in public elementary schools and secondary schools.
          [(12) Establishing community outreach programs that 
        will encourage elementary school and secondary school 
        students to develop the academic skills and the 
        interest to pursue postsecondary education.]
          (13) Establishing community outreach programs and 
        collaborative partnerships between Hispanic-serving 
        institutions and local elementary or secondary schools. 
        Such partnerships may include mentoring, tutoring, or 
        other instructional opportunities that will boost 
        student academic achievement and assist elementary and 
        secondary school students in developing the academic 
        skills and the interest to pursue postsecondary 
        education.
          [(13)] (14) 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.
          [(14)] (15) Other activities proposed in the 
        application submitted pursuant to section 504 that--
                  (A) * * *

           *       *       *       *       *       *       *


SEC. 504. DURATION OF GRANT.

  [(a) Award Period.--
          [(1) In general.--The Secretary]
  (a) Award Period.--The Secretary may award a grant to a 
Hispanic-serving institution under this title for 5 years.
          [(2) Waitout period.--A Hispanic-serving institution 
        shall not be eligible to secure a subsequent 5-year 
        grant award under this title until 2 years have elapsed 
        since the expiration of the institution's most recent 
        5-year grant award under this title, except that for 
        the purpose of this subsection a grant under section 
        514(a) shall not be considered a grant under this 
        title.]

           *       *       *       *       *       *       *


    PART B--PROMOTING POSTBACCALAUREATE OPPORTUNITIES FOR HISPANIC 
                               AMERICANS

SEC. 511. PURPOSES.

  The purposes of this part are--
          (1) to expand postbaccalaureate educational 
        opportunities for, and improve the academic attainment 
        of, Hispanic students; and
          (2) to expand the postbaccalaureate academic 
        offerings and enhance the program quality in the 
        institutions that are educating the majority of 
        Hispanic college students and helping large numbers of 
        Hispanic and low-income students complete postsecondary 
        degrees.

SEC. 512. PROGRAM AUTHORITY AND ELIGIBILITY.

  (a) Program Authorized.--Subject to the availability of funds 
appropriated to carry out this part, the Secretary shall award 
competitive grants to Hispanic-serving institutions determined 
by the Secretary to be making substantive contributions to 
graduate educational opportunities for Hispanic students.
  (b) Eligibility.--For the purposes of this part, an 
``eligible institution'' means an institution of higher 
education that--
          (1) is an eligible institution under section 
        502(a)(2); and
          (2) offers a postbaccalaureate certificate or degree 
        granting program.

SEC. 513. AUTHORIZED ACTIVITIES.

  Grants awarded under this part shall be used for one or more 
of the following activities:
          (1) Purchase, rental, or lease of scientific or 
        laboratory equipment for educational purposes, 
        including instructional and research purposes.
          (2) Construction, maintenance, renovation, and 
        improvement of classrooms, libraries, laboratories, and 
        other instructional facilities, including purchase or 
        rental of telecommunications technology equipment or 
        services.
          (3) Purchase of library books, periodicals, technical 
        and other scientific journals, microfilm, microfiche, 
        and other educational materials, including 
        telecommunications program materials.
          (4) Support for needy postbaccalaureate students 
        including outreach, academic support services, 
        mentoring, scholarships, fellowships, and other 
        financial assistance to permit the enrollment of such 
        students in postbaccalaureate certificate and degree 
        granting programs.
          (5) Support of faculty exchanges, faculty 
        development, faculty research, curriculum development, 
        and academic instruction.
          (6) Creating or improving facilities for Internet or 
        other distance learning academic instruction 
        capabilities, including purchase or rental of 
        telecommunications technology equipment or services.
          (7) Collaboration with other institutions of higher 
        education to expand postbaccalaureate certificate and 
        degree offerings.
          (8) Other activities proposed in the application 
        submitted pursuant to section 514 that--
                  (A) contribute to carrying out the purposes 
                of this part; and
                  (B) are approved by the Secretary as part of 
                the review and acceptance of such application.

SEC. 514. APPLICATION AND DURATION.

  (a) Application.--Any eligible institution may apply for a 
grant under this part by submitting an application to the 
Secretary at such time and in such manner as determined by the 
Secretary. Such application shall demonstrate how the grant 
funds will be used to improve postbaccalaureate education 
opportunities in programs and professions in which Hispanic 
Americans are underrepresented.
  (b) Duration.--Grants under this part shall be awarded for a 
period not to exceed 5 years.
  (c) Limitation.--The Secretary shall not award more than one 
grant under this part in any fiscal year to any Hispanic-
serving institution.

                     PART [B] C--GENERAL PROVISIONS

SEC. [511] 521. ELIGIBILITY; APPLICATIONS.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Contents.--A Hispanic-serving institution, in the 
institution's application for a grant, shall--
          (1) * * *
          [(2) include a 5-year plan for improving the 
        assistance provided by the Hispanic-serving institution 
        to Hispanic students and other low-income individuals;]
          [(3)] (2) set forth policies and procedures to ensure 
        that Federal funds made available under this title for 
        any fiscal year will be used to supplement and, to the 
        extent practical, increase the funds that would 
        otherwise be made available for the purposes of section 
        501(b), and in no case supplant those funds;
          [(4)] (3) set forth policies and procedures for 
        evaluating the effectiveness in accomplishing the 
        purpose of the activities for which a grant is sought 
        under this title;
          [(5)] (4) provide for such fiscal control and fund 
        accounting procedures as may be necessary to ensure 
        proper disbursement of and accounting for funds made 
        available to the institution under this title;
          [(6)] (5) provide that the institution will comply 
        with the limitations set forth in section 516;
          [(7)] (6) describe in a comprehensive manner any 
        proposed project for which funds are sought under the 
        application and include--
                  (A) * * *

           *       *       *       *       *       *       *

          (7) contain such assurances as the Secretary may 
        require that the institution has an enrollment of needy 
        students as required by section 502(b);

           *       *       *       *       *       *       *


SEC. [512] 522. WAIVER AUTHORITY AND REPORTING REQUIREMENT.

  (a) * * *

           *       *       *       *       *       *       *


SEC. [513] 523. APPLICATION REVIEW PROCESS.

  (a) * * *

           *       *       *       *       *       *       *


SEC. [514] 524. COOPERATIVE ARRANGEMENTS.

  (a) General Authority.--The Secretary may make grants to 
encourage cooperative arrangements with funds available to 
carry out this title, between Hispanic-serving institutions 
eligible for assistance under this title, and between such 
institutions and institutions not receiving assistance under 
this title, for the activities described in section 503 and 
section 513 so that the resources of the cooperating 
institutions might be combined and shared in order to achieve 
the purposes of this title, to avoid costly duplicative 
efforts, and to enhance the development of Hispanic-serving 
institutions.

           *       *       *       *       *       *       *

  (c) Duration.--Grants to Hispanic-serving institutions having 
a cooperative arrangement may be made under this section for a 
period determined under [section 505] section 504.

SEC. [515] 525. ASSISTANCE TO INSTITUTIONS UNDER OTHER PROGRAMS.

  (a) * * *

           *       *       *       *       *       *       *


SEC. [516] 526. LIMITATIONS.

  The funds appropriated under section 518 may not be used--
          (1) * * *

           *       *       *       *       *       *       *


SEC. [517] 527. PENALTIES.

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

SEC. [518] 528. AUTHORIZATIONS OF APPROPRIATIONS.

  [(a) Authorizations.--There are authorized to be appropriated 
to carry out this title $62,500,000 for fiscal year 1999 and 
such sums as may be necessary for each of the 4 succeeding 
fiscal years.]
  (a) Authorizations.--
          (1) Part a.--There are authorized to be appropriated 
        to carry out part A and part C of this title 
        $96,000,000 for fiscal year 2006 and such sums as may 
        be necessary for each of the 5 succeeding fiscal years.
          (2) Part b.--There are authorized to be appropriated 
        to carry out part B of this title $59,000,000 for 
        fiscal year 2006 and such sums as may be necessary for 
        each of the 5 succeeding fiscal years.

           *       *       *       *       *       *       *


               TITLE VI--INTERNATIONAL EDUCATION PROGRAMS

           PART A--INTERNATIONAL AND FOREIGN LANGUAGE STUDIES

SEC. 601. FINDINGS AND PURPOSES.

  (a) Findings.--Congress finds as follows:
          (1) * * *

           *       *       *       *       *       *       *

          (3) Dramatic [post-Cold War] changes in the world's 
        geopolitical and economic landscapes are creating needs 
        for American expertise and knowledge about a greater 
        diversity of less commonly taught foreign languages and 
        nations of the world.
          (4) The events and aftermath of September 11, 2001, 
        have underscored the need for the Nation to strengthen 
        and enhance American knowledge of international 
        relations, world regions, and foreign languages. 
        Homeland security and effective United States 
        engagement abroad depend upon an increased number of 
        Americans who have received such training and are 
        willing to serve their Nation.
          [(4)] (5) Systematic efforts are necessary to enhance 
        the capacity of institutions of higher education in the 
        United States for--
                  (A) * * *

           *       *       *       *       *       *       *

          [(5)] (6) Cooperative efforts among the Federal 
        Government, institutions of higher education, and the 
        private sector are necessary to promote the generation 
        and dissemination of information about world regions, 
        foreign languages, and international affairs throughout 
        education, government, business, civic, and nonprofit 
        sectors in the United States.
  (b) Purposes.--The purposes of this part are--
          (1)(A) * * *

           *       *       *       *       *       *       *

          (D) to promote access to research and training 
        overseas[; and], including through linkages overseas 
        with institutions of higher education and relevant 
        organizations that contribute to the educational 
        programs assisted under this part;
          (E) to advance the internationalization of a variety 
        of disciplines throughout undergraduate and graduate 
        education; and
          (F) to assist the national effort to educate and 
        train citizens to participate in the efforts of 
        homeland security;

           *       *       *       *       *       *       *

          (3) to reinforce and coordinate the programs of the 
        Federal Government in the areas of foreign language, 
        area studies, and other international studies, 
        including professional international affairs education 
        and research, and international business and trade 
        competitiveness.

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 foreign 
                        language and area or international 
                        studies 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 foreign language and area 
                        or international studies centers and 
                        programs.]
                  (A) In general.--The Secretary is authorized 
                to make grants to institutions of higher 
                education or consortia of such institutions for 
                the purpose of establishing, strengthening, and 
                operating--
                          (i) comprehensive foreign language 
                        and area or international studies 
                        centers and programs; and
                          (ii) a diverse network of 
                        undergraduate foreign language and area 
                        or international studies centers and 
                        programs.

           *       *       *       *       *       *       *

          (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) * * *

           *       *       *       *       *       *       *

                  (G) summer institutes in the United States or 
                abroad designed to provide language and area 
                training in the center's field or topic; [and]
                  (H) support for faculty, staff, and student 
                travel in foreign areas, regions, or countries, 
                and for the development and support of 
                educational programs abroad for students[.];
                  (I) supporting instructors of the less 
                commonly taught languages;
                  (J) widely disseminating materials developed 
                by the center or program to local educational 
                agencies and public and private elementary and 
                secondary education schools, and institutions 
                of higher education, presented from diverse 
                perspectives and reflective of a wide range of 
                views on the subject matter, except that no 
                more than 50 percent of funds awarded to an 
                institution of higher education or consortia of 
                such institutions for purposes under this title 
                may be associated with the costs of 
                dissemination; and
                  (K) projects that support in students an 
                understanding of science and technology in 
                coordination with foreign language proficiency.

           *       *       *       *       *       *       *

          (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) * * *
                  [(B) Programs of linkage or outreach with 2- 
                and 4-year colleges and universities.]
                  (B) Partnerships or programs of linkage and 
                outreach with 2-year and 4-year colleges and 
                universities, including colleges of education 
                and teacher professional development programs.
                  (C) Partnerships with local educational 
                agencies and public and private elementary and 
                secondary education schools that are designed 
                to increase student academic achievement in 
                foreign language and knowledge of world 
                regions, and to facilitate the wide 
                dissemination of materials related to area 
                studies, foreign languages, and international 
                studies that are reflective of a wide range of 
                views on the subject matter.
                  [(C) Programs of linkage or outreach] (D) 
                Partnerships or programs of linkage and 
                outreach with departments or agencies of 
                Federal and State governments.
                  [(D)] (E) Programs of linkage or outreach 
                with the news media, business, professional, or 
                trade associations.
                  [(E)] (F) Summer institutes in [foreign area] 
                area studies, foreign language, and other 
                international fields designed to carry out the 
                programs [of linkage and outreach] described in 
                subparagraphs (A), (B), [(C), and (D)] (D), and 
                (E).

           *       *       *       *       *       *       *


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] consortia 
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.

           *       *       *       *       *       *       *

  (c) Conditions for Grants.--Grants under this section shall 
reflect the purposes of this part and 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 Language Programs.--
          (1) Authority.--The Secretary is authorized to make 
        grants to institutions of higher education, 
        [combinations] consortia of such institutions, or 
        partnerships between nonprofit educational 
        organizations and institutions of higher education, to 
        assist such institutions, [combinations] consortia 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] 
        consortia or partnerships seeking to create new 
        programs or to strengthen existing programs in foreign 
        languages, area studies, and other international 
        fields.
          (2) Use of funds.--Grants made under this section may 
        be used for Federal share of the cost of projects and 
        activities which are an integral part of such a 
        program, such as--
                  (A) * * *
                  (B) teaching, research, curriculum 
                development, 
                faculty training in the United States or 
                abroad, and other related activities, 
                including--
                          (i) the expansion of library and 
                        teaching resources; and
                          (ii) preservice and inservice 
                        [teacher training] teacher professional 
                        development;

           *       *       *       *       *       *       *

                  (I) the provision of grants for educational 
                programs abroad that are closely linked to the 
                program's overall goals and have the purpose of 
                promoting foreign language fluency and 
                knowledge of world regions, except that not 
                more than 10 percent of a grant recipient's 
                funds may be used for this purpose;
                  [(I)] (J) the development of programs 
                designed to integrate professional and 
                technical education with foreign languages, 
                area studies, and other international fields;
                  [(J)] (K) the establishment of linkages 
                overseas with institutions of higher education 
                and organizations that contribute to the 
                educational programs assisted under this 
                subsection;
                  [(K)] (L) the conduct of summer institutes in 
                foreign area, foreign language, 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;
                  [(L)] (M) the development of partnerships 
                between--
                          (i) institutions of higher education; 
                        and
                          (ii) the private sector, government, 
                        or [elementary and secondary education 
                        institutions] local educational 
                        agencies and public and private 
                        elementary and secondary education 
                        schools,
                in order to enhance international knowledge and 
                skills; and
                  [(M)] (N) the use of innovative technology to 
                increase access to international education 
                programs.

           *       *       *       *       *       *       *

          (4) Special rule.--The Secretary may waive or reduce 
        the required non-Federal share for institutions that--
                  (A) are eligible to receive assistance under 
                part A or B of title III or under title V; and
                  (B) have submitted a grant application under 
                this section that demonstrates a need for a 
                waiver or reduction.
          (5) Priority.--In awarding grants under this section, 
        the Secretary shall give priority to applications from 
        institutions of higher education, [combinations] 
        consortia 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.
          (6) Grant conditions.--Grants under this subsection 
        shall reflect the purposes of this part and be made on 
        such conditions as the Secretary determines to be 
        necessary to carry out this subsection.

           *       *       *       *       *       *       *

          (8) Evaluation.--The Secretary [may] shall 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.

           *       *       *       *       *       *       *

  [(c) Funding Support.--The Secretary may use not more than 10 
percent of the total amount appropriated for this part for 
carrying out the purposes of this section.]

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, including 
the systematic collection, analysis, and dissemination of data. 
Such research and studies may include--
          (1) * * *

           *       *       *       *       *       *       *


SEC. 606. TECHNOLOGICAL INNOVATION AND COOPERATION FOR FOREIGN 
                    INFORMATION ACCESS.

  (a) Authority.--The Secretary is authorized to make grants to 
institutions of higher education, public or nonprofit private 
libraries, [or consortia of such institutions or libraries] 
museums, or consortia of such entities, to develop innovative 
techniques or programs using [new] electronic technologies to 
collect, organize, preserve, and widely disseminate information 
from foreign sources on world regions and countries other than 
the United States that address our Nation's teaching and 
research needs in international education and foreign 
languages.
  (b) Authorized Activities.--Grants under this section may be 
used--
          (1) to acquire and facilitate access to or preserve 
        foreign information resources in print or electronic 
        forms;
          (2) to develop new means of immediate, full-text 
        document delivery for information and scholarship from 
        abroad;
          (3) to develop [new means of] new means and standards 
        for shared electronic access to international data;

           *       *       *       *       *       *       *

          (6) to assist teachers of less commonly taught 
        languages in acquiring, via electronic and other means, 
        materials suitable for classroom use; [and]
          (7) to promote collaborative technology based 
        projects in foreign languages, area studies, and 
        international studies among grant recipients under this 
        title[.];
          (8) to establish linkages between grant recipients 
        under subsection (a) with libraries, museums, 
        organizations, or institutions of higher education 
        located overseas to facilitate carrying out the 
        purposes of this section; and
          (9) to carry out other activities deemed by the 
        Secretary to be consistent with the purposes of this 
        section.

           *       *       *       *       *       *       *

  (e) Special Rule.--The Secretary may waive or reduce the 
required non-Federal share for institutions that--
          (1) are eligible to receive assistance under part A 
        or B of title III or under title V; and
          (2) have submitted a grant application under this 
        section that demonstrates a need for a waiver or 
        reduction.

SEC. 607. SELECTION OF CERTAIN GRANT RECIPIENTS.

  (a) * * *
  (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] 
missions of graduate and undergraduate institutions. In keeping 
with the purposes of this part, the Secretary shall take into 
account the degree to which activities of centers, programs, 
and fellowships at institutions of higher education address 
national interests, generate and disseminate information, and 
foster debate on international issues from diverse 
perspectives.

           *       *       *       *       *       *       *


SEC. 608. EQUITABLE DISTRIBUTION OF CERTAIN FUNDS.

  (a) Selection Criteria.--The Secretary shall make excellence 
the criterion for selection of grants awarded under section 
602. Grants made under section 602 shall also reflect the 
purposes of this part.

           *       *       *       *       *       *       *


SEC. 610. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated to carry out this 
part $80,000,000 for fiscal year [1999] 2006, and such sums as 
may be necessary for each of the [4] 5 succeeding fiscal years.

PART B--BUSINESS AND INTERNATIONAL EDUCATION PROGRAMS

           *       *       *       *       *       *       *


SEC. 612. CENTERS FOR INTERNATIONAL BUSINESS EDUCATION.

  (a) Program Authorized.--
          (1) In general.--The Secretary is authorized to make 
        grants to institutions of higher education, or 
        [combinations] consortia of such institutions, to pay 
        the Federal share of the cost of planning, establishing 
        and operating centers for international business 
        education which--
                  (A) * * *

           *       *       *       *       *       *       *

  (c) Authorized Activities.--
          (1) Mandatory activities.--Programs and activities to 
        be conducted by centers assisted under this section 
        shall include--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) collaborative programs, activities, or 
                research involving other institutions of higher 
                education (including those that are eligible to 
                receive assistance under part A or B of title 
                III or under title V), local educational 
                agencies, professional associations, 
                businesses, firms, or [combinations] consortia 
                thereof, to promote the development of 
                international skills, awareness, and expertise 
                among current and prospective members of the 
                business community and other professionals;

           *       *       *       *       *       *       *

  (d) Advisory Council.--
          (1) Establishment.--In order to be eligible for 
        assistance under this section, an institution of higher 
        education, or [combination] consortium of such 
        institutions, shall establish a center advisory council 
        which will conduct extensive planning prior to the 
        establishment of a center concerning the scope of the 
        center's activities and the design of its programs.

           *       *       *       *       *       *       *

  (e) Grant Duration; Federal Share.--
          (1) * * *

           *       *       *       *       *       *       *

          (5) Special rule.--The Secretary may waive or reduce 
        the required non-Federal share for institutions that--
                  (A) are eligible to receive assistance under 
                part A or B of title III or under title V; and
                  (B) have submitted a grant application under 
                this section that demonstrates a need for a 
                waiver or reduction.
  (f) Grant Conditions.--Grants under this section shall be 
made on such conditions as the Secretary determines to be 
necessary to carry out the objectives of this section. Such 
conditions shall include--
          (1) evidence that the institution of higher 
        education, or [combination] consortium of such 
        institutions, will conduct extensive planning prior to 
        the establishment of a center concerning the scope of 
        the center's activities and the design of its programs 
        in accordance with subsection (d)(1);

           *       *       *       *       *       *       *

          (4) assurance that the institution of higher 
        education, or [combination] consortium of such 
        institutions, will use the assistance provided under 
        this section to supplement and not to supplant 
        activities conducted by institutions of higher 
        education described in subsection (c)(1).

           *       *       *       *       *       *       *


SEC. 613. EDUCATION AND TRAINING PROGRAMS.

  (a) * * *

           *       *       *       *       *       *       *

  (e) Special Rule.--The Secretary may waive or reduce the 
required non-Federal share for institutions that--
          (1) are eligible to receive assistance under part A 
        or B of title III or under title V; and
          (2) have submitted a grant application under this 
        section that demonstrates a need for a waiver or 
        reduction.

SEC. 614. AUTHORIZATION OF APPROPRIATIONS.

  (a) Centers for International Business Education.--There are 
authorized to be appropriated $11,000,000 for the fiscal year 
[1999] 2006 and such sums as may be necessary for each of the 
[4] 5 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 [1999] 2006, and 
such sums as may be necessary for the [4] 5 succeeding fiscal 
years, to carry out the provisions of section 613.

           PART C--INSTITUTE FOR INTERNATIONAL PUBLIC POLICY

[SEC. 621. MINORITY FOREIGN SERVICE PROFESSIONAL DEVELOPMENT PROGRAM.]

SEC. 621. PROGRAM FOR FOREIGN SERVICE PROFESSIONALS.

  (a) Establishment.--The Secretary is authorized to award a 
grant, on a competitive basis, to an eligible recipient to 
enable such recipient to establish an Institute for 
International Public Policy (hereafter in this part referred to 
as the ``Institute''). [The Institute shall conduct a program 
to significantly increase the numbers of African Americans and 
other underrepresented minorities in the international service, 
including private international voluntary organizations and the 
foreign service of the United States.] The Institute shall 
conduct a program to enhance the international competitiveness 
of the United States by increasing the participation of 
underrepresented populations in the international service, 
including private international voluntary organizations and the 
foreign service of the United States. Such program shall 
include a program for such students to study abroad in their 
junior year, fellowships for graduate study, internships, 
intensive academic programs such as summer institutes, or 
intensive language training.
  (b) Definition of Eligible Recipient.--
          (1) In general.--For the purpose of this part, the 
        term ``eligible recipient'' means a consortium 
        consisting of 1 or more of the following entities:
                  [(A) An institution eligible for assistance 
                under part B of title III of this Act.
                  [(B) An institution of higher education which 
                serves substantial numbers of African American 
                or other underrepresented minority students.]
                  (A) A Tribally Controlled College or 
                University or Alaska Native or Native Hawaiian-
                serving institution eligible for assistance 
                under title III, an institution eligible for 
                assistance under part B of title III, or a 
                Hispanic-serving institution eligible for 
                assistance under title V.
                  (B) An institution of higher education which 
                serves substantial numbers of underrepresented 
                students.

           *       *       *       *       *       *       *


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 
and promote collaboration with colleges and universities that 
receive funds under this title.

           *       *       *       *       *       *       *


SEC. 623. STUDY ABROAD PROGRAM.

  (a) Program Authority.--The Institute shall conduct, by grant 
or contract, a junior year abroad program. The junior year 
abroad program shall be open to eligible students at 
institutions of higher education, including historically Black 
colleges and universities as defined in section 322 of this 
Act, tribally controlled Indian community colleges as defined 
in the Tribally Controlled Community College Assistance Act of 
1978, Alaska Native-serving, Native Hawaiian-serving, and 
Hispanic-serving institutions, and other institutions of higher 
education with significant minority student populations. 
Eligible student expenses shall be shared by the Institute and 
the institution at which the student is in attendance. Each 
student may spend not more than 9 months abroad in a program of 
academic study, as well as social, familial and political 
interactions designed to foster an understanding of and 
familiarity with the language, culture, economics and 
governance of the host country.

           *       *       *       *       *       *       *


SEC. 624. [MASTERS] ADVANCED DEGREE IN INTERNATIONAL RELATIONS.

  The Institute shall provide, in cooperation with the other 
members participating in the eligible recipient consortium, a 
program of study leading to [a masters degree in international 
relations. The masters degree program designed by the 
consortia] an advanced degree in international relations, 
international affairs, international economics, or other 
academic areas related to the Institute fellow's career 
objectives. The advanced degree study program shall be designed 
by the consortia, consistent with the fellow's career 
objectives, and shall be reviewed and approved by the 
Secretary. The Institute may grant fellowships in an amount not 
to exceed the level of support comparable 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 
measurement of need approved by the Secretary. A fellowship 
recipient shall agree to undertake full-time study and to enter 
the international service (including work with private 
international voluntary organizations) or foreign service of 
the United States

SEC. 625. INTERNSHIPS.

  (a) In General.--The Institute shall enter into agreements 
with historically Black colleges and universities as defined in 
section 322 of this Act, tribally controlled Indian community 
colleges as defined in the Tribally Controlled Community 
College Assistance Act of 1978, Alaska Native-serving, Native 
Hawaiian-serving, and Hispanic-serving institutions, other 
institutions of higher education with significant numbers of 
minority students, and institutions of higher education with 
programs in training foreign service professionals, to provide 
academic year internships during the junior and senior year and 
summer internships following the sophomore and junior academic 
years, by work placements with an international voluntary or 
government organizations or agencies, including the Agency for 
International Development, the United States Information 
Agency, the International Monetary Fund, the National Security 
Council, the Organization of American States, the Export-Import 
Bank, the Overseas Private Investment Corporation, the 
Department of State, Office of the United States Trade 
Representative, the World Bank, and the United Nations.
  (b) Postbaccalaureate Internships.--The Institute shall enter 
into agreements with institutions of higher education described 
in the first sentence of subsection (a) to conduct internships 
for students who have completed study for a baccalaureate 
degree. The internship program authorized by this subsection 
shall--
          (1) * * *
          (2) be carried out with the assistance of the Woodrow 
        Wilson International Center for Scholars; and
          (3) contain work experience for the students designed 
        to contribute to the students' preparation for a 
        master's degree program[; and].
          [(4) be assisted by the Interagency Committee on 
        Minority Careers in International Affairs established 
        under subsection (c).
  [(c) Interagency Committee on Minority Careers in 
International Affairs.--
          [(1) Establishment.--There is established in the 
        executive branch of the Federal Government an 
        Interagency Committee on Minority Careers in 
        International Affairs composed of not less than 7 
        members, including--
                  [(A) the Under Secretary for Farm and Foreign 
                Agricultural Services of the Department of 
                Agriculture, or the Under Secretary's designee;
                  [(B) the Assistant Secretary and Director 
                General, of the United States and Foreign 
                Commercial Service of the Department of 
                Commerce, or the Assistant Secretary and 
                Director General's designee;
                  [(C) the Under Secretary of Defense for 
                Personnel and Readiness of the Department of 
                Defense, or the Under Secretary's designee;
                  [(D) the Assistant Secretary for 
                Postsecondary Education in the Department of 
                Education, or the Assistant Secretary's 
                designee;
                  [(E) the Director General of the Foreign 
                Service of the Department of State, or the 
                Director General's designee;
                  [(F) the General Counsel of the Agency for 
                International Development, or the General 
                Counsel's designee; and
                  [(G) the Associate Director for Educational 
                and Cultural Affairs of the United States 
                Information Agency, or the Associate Director's 
                designee.
          [(2) Functions.--The Interagency Committee 
        established by this section shall--
                  [(A) on an annual basis inform the Secretary 
                and the Institute regarding ways to advise 
                students participating in the internship 
                program assisted under this section with 
                respect to goals for careers in international 
                affairs;
                  [(B) locate for students potential internship 
                opportunities in the Federal Government related 
                to international affairs; and
                  [(C) promote policies in each department and 
                agency participating in the Committee that are 
                designed to carry out the objectives of this 
                part.]
  (c) Ralph J. Bunche Fellows.--In order to assure the 
recognition and commitment of individuals from underrepresented 
student populations who demonstrate special interest in 
international affairs and language study, eligible students who 
participate in the internship programs authorized under (a) and 
(b) shall be known as the ``Ralph J. Bunche Fellows''.

SEC. 626. REPORT.

  The Institute shall [annually prepare a report] prepare a 
report biennially on the activities of the Institute and shall 
submit such report to the Secretary of Education and the 
Secretary of State.

SEC. 628. AUTHORIZATION.

  There is authorized to be appropriated $10,000,000 for fiscal 
year [1999] 2006 and such sums as may be necessary for each of 
the [4] 5 succeeding fiscal years to carry out this part.

                       PART D--GENERAL PROVISIONS

          * * * * * * *

SEC. 632. EVALUATION, OUTREACH, AND DISSEMINATION.

  The Secretary may use not more than one percent of the funds 
made available for this title for program evaluation, national 
outreach, and information dissemination activities.

SEC. 633. INTERNATIONAL HIGHER EDUCATION ADVISORY BOARD.

  (a) Establishment and Purpose.--
          (1) Establishment.--There is established in the 
        Department an independent International Higher 
        Education Advisory Board (hereafter in this section 
        referred to as the ``International Advisory Board''). 
        The International Advisory Board shall provide advice, 
        counsel, and recommendations to the Secretary and the 
        Congress on international education issues for higher 
        education.
          (2) Purpose.--The purpose of the International 
        Advisory Board is--
                  (A) to provide expertise in the area of 
                national needs for proficiency in world 
                regions, foreign languages, international 
                affairs, and international business;
                  (B) to make recommendations that will promote 
                the excellence of international education 
                programs and result in the growth and 
                development of such programs at the 
                postsecondary education level that will reflect 
                diverse perspectives and a wide range of views 
                on world regions, foreign language, 
                international affairs, and international 
                business; and
                  (C) to advise the Secretary and the Congress 
                with respect to needs for expertise in 
                government, the private sector, and education 
                in order to enhance America's understanding of, 
                and engagement in, the world.
  (b) Independence of International Advisory Board.--In the 
exercise of its functions, powers, and duties, the 
International Advisory Board shall be independent of the 
Secretary and the other offices and officers of the Department. 
Except as provided in this subsection and subsection (f), the 
recommendations of the International Advisory Board shall not 
be subject to review or approval by any officer of the Federal 
Government. Nothing in this title shall be construed to 
authorize the International Advisory Board to mandate, direct, 
or control an institution of higher education's specific 
instructional content, curriculum, or program of instruction or 
instructor. The International Advisory Board is authorized to 
assess a sample of activities supported under this title, using 
materials that have been submitted to the Department of 
Education by grant recipients under this title, in order to 
provide recommendations to the Secretary and the Congress for 
the improvement of programs under the title and to ensure 
programs meet the purposes of the title to promote the study of 
and expertise in foreign language and world regions, especially 
with respect to diplomacy, national security, and international 
business and trade competitiveness. The recommendations of the 
International Advisory Board may address any area in need of 
improvement, except that any recommendation of specific 
legislation to Congress shall be made only if the President 
deems it necessary and expedient.
  (c) Membership.--
          (1) Appointment.--The International Advisory Board 
        shall have 7 members of whom--
                  (A) 3 members shall be appointed by the 
                Secretary;
                  (B) 2 members shall be appointed by the 
                Speaker of the House of Representatives, upon 
                the recommendation of the Majority Leader and 
                the Minority Leader; and
                  (C) 2 members shall be appointed by the 
                President pro tempore of the Senate, upon the 
                recommendation of the Majority Leader and the 
                Minority Leader.
          (2) Representation.--Two of the members appointed by 
        the Secretary under paragraph (1)(A) shall be appointed 
        to represent Federal agencies that have diplomacy, 
        national security, international commerce, or other 
        international activity responsibilities, after 
        consultation with the heads of such agencies. The 
        members of the International Advisory Board shall also 
        include (but not be limited to) persons with 
        international expertise representing States, 
        institutions of higher education, cultural 
        organizations, educational organizations, international 
        business, local education agencies, students, and 
        private citizens with expertise in international 
        concerns.
          (3) Qualification.--Members of the International 
        Advisory Board shall be individuals who have technical 
        qualifications, professional standing, experience 
        working in international affairs or foreign service or 
        international business occupations, or demonstrated 
        knowledge in the fields of higher education and 
        international education, including foreign languages, 
        world regions, or international affairs.
  (d) Functions of the International Advisory Board.--
          (1) In general.--The International Advisory Board 
        shall provide recommendations in accordance with 
        subsection (b) regarding improvement of programs under 
        this title to the Secretary and the Congress for their 
        review. The International Advisory Board may--
                  (A) review and comment upon the regulations 
                for grants under this title;
                  (B) assess a sample of activities supported 
                under this title based on the purposes and 
                objectives of this title, using materials that 
                have been submitted to the Department of 
                Education by grant recipients under this title, 
                in order to provide recommendations for 
                improvement of the programs under this title;
                  (C) make recommendations that will assist the 
                Secretary and the Congress to improve the 
                programs under this title to better reflect the 
                national needs related to foreign languages, 
                world regions, diplomacy, national security, 
                and international business and trade 
                competitiveness, including an assessment of the 
                national needs and the training provided by the 
                institutions of higher education that receive a 
                grant under this title for expert and non-
                expert level foreign language training;
                  (D) make recommendations to the Secretary and 
                the Congress regarding such studies, surveys, 
                and analyses of international education that 
                will provide feedback about the programs under 
                this title and assure that their relative 
                authorized activities reflect diverse 
                perspectives and a wide range of views on world 
                regions, foreign languages, diplomacy, national 
                security, and international business and trade 
                competitiveness;
                  (E) make recommendations that will strengthen 
                the partnerships between local educational 
                agencies, public and private elementary and 
                secondary education schools, and grant 
                recipients under this title to ensure that the 
                research and knowledge about world regions, 
                foreign languages, and international affairs is 
                widely disseminated to local educational 
                agencies;
                  (F) make recommendations on how institutions 
                of higher education that receive a grant under 
                this title can encourage students to serve the 
                Nation and meet national needs in an 
                international affairs, international business, 
                foreign language, or national security 
                capacity;
                  (G) make recommendations on how linkages 
                between institutions of higher education and 
                public and private organizations that are 
                involved in international education, 
                international business and trade 
                competitiveness, language training, and 
                international research capacities may fulfill 
                the manpower and information needs of United 
                States businesses; and
                  (H) make recommendations to the Secretary and 
                the Congress about opportunities for 
                underrepresented populations in the areas of 
                foreign language study, diplomacy, 
                international business and trade 
                competitiveness, and international economics, 
                in order to effectively carry out the 
                activities of the Institute under part C.
          (2) Hearings.--The International Advisory Board shall 
        provide for public hearing and comment regarding the 
        matter contained in the recommendations described in 
        paragraph (1), prior to the submission of those 
        recommendations to the Secretary and the Congress.
  (e) Operations of the Committee.--
          (1) Terms.--Each member of the International Advisory 
        Board shall be appointed for a term of 3 years, except 
        that, of the members first appointed (A) 4 shall be 
        appointed for a term of 3 years, and (B) 3 shall be 
        appointed for a term of 4 years, as designated at the 
        time of appointment by the Secretary. A member of the 
        International Advisory Board may be reappointed to 
        successive terms on the International Advisory Board.
          (2) Vacancies.--Any member appointed to fill a 
        vacancy occurring prior to the expiration of the term 
        of a predecessor shall be appointed only for the 
        remainder of such term. A member of the International 
        Advisory Board shall, upon the Secretary's request, 
        continue to serve after the expiration of a term until 
        a successor has been appointed.
          (3) No governmental members.--Except for the members 
        appointed by the Secretary under subsection (c)(1)(A), 
        no officers or full-time employees of the Federal 
        Government shall serve as members of the International 
        Advisory Board.
          (4) Meetings.--The International Advisory Board shall 
        meet not less than once each year. The International 
        Advisory Board shall hold additional meetings at the 
        call of the Chair or upon the written request of not 
        less than 3 voting members of the International 
        Advisory Board.
          (5) Quorum.--A majority of the voting members of the 
        International Advisory Board serving at the time of a 
        meeting shall constitute a quorum.
          (6) Chair.--The International Advisory Board shall 
        elect a Chairman or Chairwoman from among the members 
        of the International Advisory Board.
  (f) Submission to Department for Comment.--The International 
Advisory Board shall submit its proposed recommendations to the 
Secretary of Education for comment for a period not to exceed 
30 days in each instance.
  (g) Personnel and Resources.--
          (1) Compensation and expense.--Members of the 
        International Advisory Board shall serve without pay 
        for such service. Members of the International Advisory 
        Board who are officers or employees of the United 
        States may not receive additional pay, allowances, or 
        benefits by reason of their service on the 
        International Advisory Board. Members of the 
        International Advisory Board may each receive 
        reimbursement for travel expenses incident to attending 
        International Advisory Board 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.
          (2) Personnel.--The International Advisory Board may 
        appoint such personnel as may 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 maximum rate 
        payable under section 5376 of such title. The 
        International Advisory Board may appoint not more than 
        one full-time equivalent, nonpermanent, consultant 
        without regard to the provisions of title 5, United 
        States Code. The International Advisory Board shall not 
        be required by the Secretary to reduce personnel to 
        meet agency personnel reduction goals.
          (3) Consultation.--In carrying out its duties under 
        the Act, the International Advisory Board shall consult 
        with other Federal agencies, representatives of State 
        and local governments, and private organizations to the 
        extent feasible.
          (4) Assistance from other agencies.--
                  (A) Information.--The International Advisory 
                Board is authorized to secure directly from any 
                executive department, bureau, agency, board, 
                commission, office, independent establishment, 
                or instrumentality information, suggestions, 
                estimates, and statistics for the purpose of 
                this section and each such department, bureau, 
                agency, board, commission, office, independent 
                establishment, or instrumentality is authorized 
                and directed, to the extent permitted by law, 
                to furnish such information, suggestions, 
                estimates, and statistics directly to the 
                International Advisory Board, upon request made 
                by the Chairman for the purpose of providing 
                expertise in the area of national needs for the 
                proficiency in world regions, foreign 
                languages, and international affairs.
                  (B) Services and personnel.--The head of each 
                Federal agency shall, to the extent not 
                prohibited by law, consult with the 
                International Advisory Board in carrying out 
                this section. The International Advisory Board 
                is authorized to utilize, with their consent, 
                the services, personnel, information, and 
                facilities of other Federal, State, local, and 
                private agencies with or without reimbursement, 
                for the purpose of providing expertise in the 
                area of national needs for the proficiency in 
                world regions, foreign languages, and 
                international affairs.
          (5) Contracts; experts and consultants.--The 
        International Advisory Board may enter into contracts 
        for the acquisition of information, suggestions, 
        estimates, and statistics for the purpose of this 
        section. The International Advisory Board is authorized 
        to obtain the services of experts and consultants 
        without regard to section 3109 of title 5, United 
        States Code and to set pay in accordance with such 
        section.
  (h) Termination.--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 International 
Advisory Board shall be authorized through September 30, 2012.
  (i) Funds.--The Secretary shall use not more than one-half of 
the funds available to the Secretary under section 632 to carry 
out this section.

SEC. 634. RECRUITER ACCESS TO STUDENTS AND STUDENT RECRUITING 
                    INFORMATION.

  Each institution of higher education that receives a grant 
under this title shall assure that--
          (1) recruiters of the United States Government and 
        agencies thereof are given the same access to students 
        as is provided generally to other institutions of 
        higher education and prospective employers of those 
        students for the purpose of recruiting for graduate 
        opportunities or prospective employment; and
          (2) no undue restrictions are placed upon students 
        that seek employment with the United States Government 
        or any agency thereof.

SEC. 635. STUDENT SAFETY.

  Applicants seeking funds under this title to support student 
travel and study abroad shall submit as part of their grant 
application a description of safety policies and procedures for 
students participating in the program while abroad.

SEC. 636. NATIONAL STUDY OF FOREIGN LANGUAGE HERITAGE COMMUNITIES.

  (a) Study.--The Secretary of Education, in consultation with 
the International Advisory Board, shall conduct a study to 
identify foreign language heritage communities, particularly 
such communities that include speakers of languages that are 
critical to the national security of the United States.
  (b) Foreign Language Heritage Community.--For purposes of 
this section, the term ``foreign language heritage community'' 
means a community of residents or citizens of the United States 
who are native speakers of, or who have partial fluency in, a 
foreign language.
  (c) Report.--Not later than one year after the date of the 
enactment of this Act, the Secretary of Education shall submit 
a report to the Congress on the results of the study conducted 
under this section.

TITLE VII--GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS

           *       *       *       *       *       *       *


                  PART A--GRADUATE EDUCATION PROGRAMS

             Subpart 1--Jacob K. Javits Fellowship Program

SEC. 701. 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 subpart 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. The fellowships shall be awarded 
to 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 the terminal highest degree awarded in 
the area of study. For purposes of the exception in the 
preceding sentence, a master's degree in fine arts shall be 
considered a terminal degree. 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.

           *       *       *       *       *       *       *

  (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. In the case of other exceptional 
circumstances, such as active duty military service or personal 
or family member illness, the institution of higher education 
may also permit the fellowship recipient to interrupt periods 
of study for the duration of the tour of duty (in the case of 
military service) or not more than 12 months (in any other 
case), but without payment of the stipend.

           *       *       *       *       *       *       *


SEC. 702. ALLOCATION OF FELLOWSHIPS.

  (a) Fellowship Board.--
          (1) Appointment.--The Secretary shall appoint a Jacob 
        K. Javits Fellows Program Fellowship Board (hereinafter 
        in this subpart referred to as the ``Board'') 
        consisting of 9 individuals representative of both 
        public and private institutions of higher education 
        from diverse geographic regions 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 representative of a range of 
        disciplines in graduate education in arts, humanities, 
        and social sciences. The Secretary shall also assure 
        that at least one representative appointed to the Board 
        represents an institution that is eligible for a grant 
        under title III or V of this Act.

           *       *       *       *       *       *       *


SEC. 703. STIPENDS.

  (a) Award by Secretary.--The Secretary shall pay to 
individuals awarded fellowships under this subpart 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 subpart. In the 
case of an individual who receives such individual's first 
stipend under this subpart in academic year [1999-2000] 2006-
2007 or any succeeding academic year, such stipend [shall be 
set] may be set at a level of support equal to that provided by 
the National Science [Foundation graduate fellowships] 
Foundation Graduate Research Fellowship Program on February 1 
of such academic year, except such amount shall be adjusted as 
necessary so as not to exceed the fellow's demonstrated level 
of need 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 
        subpart) pay to the institution of higher education, 
        for each individual awarded a fellowship under this 
        subpart at such institution, an institutional 
        allowance. Except as provided in subparagraph (B), such 
        allowance shall be, for 1999-2000 and succeeding 
        academic years, the same amount as the institutional 
        payment made for 1998-1999 under section 933(b) (as 
        such section was in effect on the day before the date 
        of enactment of the Higher Education Amendments of 
        1998) adjusted for 1999-2000 and annually thereafter in 
        accordance with inflation as determined by the 
        Department of Labor's Consumer Price Index for the 
        previous calendar year.]
          (1) In general.--(A) The Secretary shall (in addition 
        to stipends paid to individuals under this subpart) pay 
        to the institution of higher education, for each 
        individual awarded a fellowship under this subpart at 
        such institution, an institutional allowance. Except as 
        provided in subparagraph (B), such allowance shall be, 
        for 2006-2007 and succeeding academic years, the same 
        amount as the institutional payment made for 2005-2006 
        adjusted for 2006-2007 and annually thereafter in 
        accordance with inflation as determined by the 
        Department of Labor's Consumer Price Index for All 
        Urban Consumers for the previous calendar year.

           *       *       *       *       *       *       *


SEC. 705. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated $30,000,000 for 
[fiscal year 1999 and such sums as may be necessary for each of 
the 4 succeeding fiscal years] fiscal year 2006 and such sums 
as may be necessary for each of the 5 succeeding fiscal years 
to carry out this subpart.

Subpart 2--Graduate Assistance in Areas of National Need

           *       *       *       *       *       *       *


SEC. 712. INSTITUTIONAL ELIGIBILITY.

  (a) * * *
  (b) Designation of Areas of National Need.--After 
consultation with appropriate Federal and nonprofit agencies 
and organizations, the Secretary shall designate areas of 
national need. In making such designations, the Secretary shall 
take into account the extent to which the interest in the area 
is compelling, the extent to which other Federal programs 
support postbaccalaureate study in the area concerned, [and] an 
assessment of how the program could achieve the most 
significant impact with available resources, and the priority 
described in subsection (c) of this section.
  (c) Priority.--The Secretary shall establish a priority for 
grants in order to prepare individuals for the professoriate 
who will train highly-qualified elementary and secondary math 
and science teachers, special education teachers, and teachers 
who provide instruction for limited English proficient 
individuals. Such grants shall offer program assistance and 
graduate fellowships for--
          (1) post-baccalaureate study related to teacher 
        preparation and pedagogy in math and science for 
        students who have completed a master's degree or are 
        pursuing a doctorate of philosophy in math and science;
          (2) post-baccalaureate study related to teacher 
        preparation and pedagogy in special education and 
        English language acquisition and academic proficiency 
        for limited English proficient individuals; and
          (3) support of dissertation research in the fields of 
        math, science, special education, or second language 
        pedagogy and second language acquisition.

SEC. 713. CRITERIA FOR APPLICATIONS.

  (a) * * *
  (b) Contents of Applications.--An academic department, 
program or unit of an institution of higher education, in the 
department, program or unit's application for a grant, shall--
          (1) * * *

           *       *       *       *       *       *       *

          (9) provide assurances that the academic department 
        will provide at least 1 year of supervised training in 
        instruction for students; [and]
          (10) in the case of an application for a grant by a 
        department, program, or unit in education or teacher 
        preparation, contain assurances that such department, 
        program, or unit collaborates with departments, 
        programs, or units in all content areas to assure a 
        successful combination of training in both teaching and 
        such content; and
          [(10)] (11) include such other information as the 
        Secretary may prescribe.

SEC. 714. AWARDS TO GRADUATE STUDENTS.

  (a) * * *
  (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 
subpart. The stipends the Secretary establishes shall reflect 
the purpose of the program under this subpart to encourage 
highly talented students to undertake graduate study as 
described in this subpart. In the case of an individual who 
receives such individual's first stipend under this subpart in 
academic year [1999-2000] 2006-2007 or any succeeding academic 
year, such stipend [shall be set] may be set at a level of 
support equal to that provided by the National Science 
[Foundation graduate fellowships] Foundation Graduate Research 
Fellowship Program on February 1 of such academic year, except 
such amount shall be adjusted as necessary so as not to exceed 
the fellow's demonstrated level of need as determined under 
part F of title IV.
  (c) Treatment of Institutional Payments.--An institution of 
higher education that makes institutional payments for tuition 
and fees on behalf of individuals supported by fellowships 
under this subpart in amounts that exceed the institutional 
payments made by the Secretary pursuant to [section 716(a)] 
section 715(a) may count such excess toward the amounts the 
institution is required to provide pursuant to [section 
714(b)(2)] section 713(b)(2).

           *       *       *       *       *       *       *


SEC. 715. ADDITIONAL ASSISTANCE FOR COST OF EDUCATION.

  (a) Institutional Payments.--
          (1) In general.--The Secretary shall (in addition to 
        stipends paid to individuals under this subpart) pay to 
        the institution of higher education, for each 
        individual awarded a fellowship under this subpart at 
        such institution, an institutional allowance. Except as 
        provided in paragraph (2), such allowance shall be, for 
        [1999-2000] 2006-2007 and succeeding academic years, 
        the same amount as the institutional payment made for 
        [1998-1999] 2005-2006 adjusted annually thereafter in 
        accordance with inflation as determined by the 
        Department of Labor's Consumer Price Index for All 
        Urban Consumers for the previous calendar year.

           *       *       *       *       *       *       *


SEC. 716. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated $35,000,000 for 
[fiscal year 1999 and such sums as may be necessary for each of 
the 4 succeeding fiscal years] fiscal year 2006 and such sums 
as may be necessary for each of the 5 succeeding fiscal years 
to carry out this subpart.

   Subpart 3--Thurgood Marshall Legal Educational Opportunity Program

SEC. 721. LEGAL EDUCATIONAL OPPORTUNITY PROGRAM.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Contract or Grant Authorized.--The Secretary is 
authorized to enter into a contract with, or make a grant to, 
the Council on Legal Education Opportunity, for a period of not 
less than 5 years--
          (1) * * *
          [(2) to prepare such students for study at accredited 
        law schools;]
          (2) to prepare such students for study at accredited 
        law schools and assist them with the development of 
        analytical skills and study methods to enhance their 
        success and promote completion of law school;

           *       *       *       *       *       *       *

          (4) to provide support services to such students who 
        are first-year law students to improve retention and 
        success in law school studies; [and]
          (5) to motivate and prepare such students with 
        respect to law school studies and practice in low-
        income communities[.]; and
          (6) to award Thurgood Marshall Fellowships to 
        eligible law school students--
                  (A) who participated in summer institutes 
                authorized by subsection (d) and who are 
                enrolled in an accredited law school; or
                  (B) who are eligible law school students who 
                have successfully completed a comparable summer 
                institute program certified by the Council on 
                Legal Educational Opportunity.
  (d) Services Provided.--In carrying out the purposes 
described in subsection (c), the contract or grant shall 
provide for the delivery of services through prelaw information 
resource centers, summer institutes, midyear seminars, and 
other educational activities, conducted under this section. 
Such services may include--
          (1) information and counseling regarding--
                  (A) * * *

           *       *       *       *       *       *       *

                  (D) undergraduate preparatory courses in 
                analytical skills and study methods and 
                curriculum selection;

           *       *       *       *       *       *       *

  (h) Authorization of Appropriations.--There are authorized to 
be appropriated to carry out this section $5,000,000 for fiscal 
year [1999 and each of the 4 succeeding fiscal years] 2006 and 
each of the 5 succeeding fiscal years.

           *       *       *       *       *       *       *


                     Subpart 4--General Provisions

SEC. 731. ADMINISTRATIVE PROVISIONS FOR SUBPARTS 1, 2, AND 3.

  (a) * * *

           *       *       *       *       *       *       *

  [(e) Continuation Awards.--The Secretary, using funds 
appropriated to carry out subparts 1 and 2, 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.]

      PART B--FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION

SEC. 741. 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, combinations of such institutions, and other public 
and private nonprofit institutions and agencies, to enable such 
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;]
          (1) the encouragement of the reform and improvement 
        of, and innovation in, postsecondary education and the 
        provision of educational opportunity for all, 
        especially for the non-traditional student populations;
          (2) the creation of institutions, programs, and joint 
        efforts involving paths to career and professional 
        training, and combinations of academic and experiential 
        learning for postsecondary students, especially 
        institutions, programs, and joint efforts that provide 
        academic credit for programs;
          [(3) the establishment of institutions and programs 
        based on the technology of communications;]
          (3) the establishment of institutions and programs 
        based on the technology of communications, including 
        delivery by distance education;

           *       *       *       *       *       *       *

          [(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;]
          (6) the introduction of institutional reforms 
        designed to expand individual opportunities for 
        entering and reentering postsecondary institutions and 
        pursuing programs of postsecondary 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[.];
          (9) the provision of support and assistance to 
        programs implementing integrated education reform 
        services in order to improve secondary school 
        graduation and college attendance and completion rates 
        for disadvantaged students, and to programs that reduce 
        postsecondary remediation rates, and improve degree 
        attainment rates, for low-income students and former 
        high school dropouts; and
          (10) the assessment, in partnership with a public or 
        private nonprofit institution or agency, of the 
        performance of teacher preparation programs within 
        institutions of higher education in a State, using an 
        assessment which provides comparisons across such 
        schools within the State based upon indicators 
        including teacher candidate knowledge in subject areas 
        in which such candidate has been prepared to teach.

           *       *       *       *       *       *       *

  (c) Prohibition.--No funds made available under this part may 
be used to provide financial assistance to students who do not 
meet the requirements of section 484(a)(5).

           *       *       *       *       *       *       *


SEC. 744. SPECIAL PROJECTS.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Areas of National Need.--Areas of national need shall 
initially include, but shall not be limited to, the following:
          (1) * * *
          [(2) Articulation between 2- and 4-year institutions 
        of higher education, including developing innovative 
        methods for ensuring the successful transfer of 
        students from 2- to 4-year institutions of higher 
        education.]
          (2)(A) Development of partnerships between local 
        educational agencies and institutions of higher 
        education to establish or expand existing dual 
        enrollment programs at institutions of higher education 
        that allow high school students to earn high school and 
        transferable college credit.
          (B) Development of consortia of institutions of 
        higher education to create dual enrollment programs 
        including academic and student support agreements and 
        comprehensive articulation agreements that would allow 
        for the seamless and timeless acquisition of college 
        credits and the transfer of postsecondary academic 
        credits between such institutions, particularly from 2-
        year to 4-year institutions of higher education.

           *       *       *       *       *       *       *

          [(4) International cooperation and student exchange 
        among postsecondary educational institutions.]
          (4) International cooperation, partnerships, or 
        student exchange among postsecondary educational 
        institutions in the United States and abroad.
          (5) Establishment of academic programs including 
        graduate and undergraduate courses, seminars and 
        lectures, support of research, and development of 
        teaching materials for the purpose of supporting 
        faculty and academic programs that teach traditional 
        American history (including significant constitutional, 
        political, intellectual, economic, diplomatic, and 
        foreign policy trends, issues, and documents; the 
        history, nature, and development of democratic 
        institutions of which American democracy is a part; and 
        significant events and individuals in the history of 
        the United States).
          (6) Support for 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 enable 
        institutions of higher education to work with private 
        and civic organizations to assist communities to meet 
        and address their pressing and severe problems, 
        including economic development, community 
        infrastructure and housing, crime prevention, 
        education, healthcare, self-sufficiency, and workforce 
        preparation. Such activities may include support for 
        the development of coordinated curriculum and 
        internship opportunities for students in disadvantaged 
        communities.

SEC. 745. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated to carry out this 
part [$30,000,000 for fiscal year 1999 and such sums as may be 
necessary for each of the 4 succeeding fiscal years] 
$40,000,000 for fiscal year 2006 and such sums as may be 
necessary for each of the 5 succeeding fiscal years.

                    [PART C--URBAN COMMUNITY SERVICE

[SEC. 751. FINDINGS.

  [The Congress finds that--
          [(1) the Nation's urban centers are facing 
        increasingly pressing problems and needs in the areas 
        of economic development, community infrastructure and 
        service, social policy, public health, housing, crime, 
        education, environmental concerns, planning and work 
        force preparation;
          [(2) there are, in the Nation's urban institutions, 
        people with underutilized skills, knowledge, and 
        experience who are capable of providing a vast range of 
        services toward the amelioration of the problems 
        described in paragraph (1);
          [(3) the skills, knowledge and experience in these 
        urban institutions, if applied in a systematic and 
        sustained manner, can make a significant contribution 
        to the solution of such problems; and
          [(4) the application of such skills, knowledge and 
        experience is hindered by the limited funds available 
        to redirect attention to solutions to such urban 
        problems.

[SEC. 752. 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 754 in accordance with the 
provisions of this part.

[SEC. 753. 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. 754. 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 753(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 in their community.
          [(14) Improving access to technology in local 
        communities.

[SEC. 755. 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, and State 
and local government, who have expertise in urban community 
service or in education.

[SEC. 756. 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 an 
equitable geographic distribution of such grants.
  [(c) Matching Requirement.--An applicant under this part and 
the local governments associated with the 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. 757. DESIGNATION OF URBAN GRANT INSTITUTIONS.

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

[SEC. 758. 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 eligible entity in the State submitting 
        an application under section 753, or, if no such entity 
        submits an application, 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. 759. AUTHORIZATION OF APPROPRIATIONS.

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

  PART D--DEMONSTRATION PROJECTS TO ENSURE STUDENTS WITH DISABILITIES 
RECEIVE A QUALITY HIGHER EDUCATION

           *       *       *       *       *       *       *


SEC. 762. GRANTS AUTHORIZED.

  (a) Competitive Grants Authorized.--The Secretary may award 
grants, contracts, and cooperative agreements, on a competitive 
basis, to institutions of higher education, of which at least 
two such grants shall be awarded to institutions that provide 
professional development and technical assistance in order for 
[students with learning disabilities] students with 
disabilities to receive a quality postsecondary education.
  (b) Duration; Activities.--
          (1) * * *
          (2) Authorized activities.--Grants under this part 
        shall be used to carry out one or more of the following 
        activities:
                  (A) Teaching methods and strategies.--The 
                development of innovative, effective, and 
                efficient teaching methods and strategies to 
                provide faculty and administrators with the 
                skills and supports necessary to teach students 
                with disabilities in order to improve retention 
                and completion. Such methods and strategies may 
                include inservice training, professional 
                development, customized and general technical 
                assistance, workshops, summer institutes, 
                distance learning, and training in the use of 
                assistive and educational technology.
                  (B) Effective transition practices.--The 
                development of innovative, effective, and 
                efficient teaching methods and strategies to 
                ensure the smooth transition of students with 
                disabilities from high school to postsecondary 
                education.
                  [(B)] (C) Synthesizing research and 
                information.--Synthesizing research and other 
                information related to the provision of 
                postsecondary educational services to students 
                with disabilities.
                  (D) Distance learning.--The development of 
                innovative, effective, and efficient teaching 
                methods and strategies to provide faculty and 
                administrators with the ability to provide 
                accessible distance education programs or 
                classes that would enhance access of students 
                with disabilities to higher education, 
                including the use of electronic communication 
                for instruction and advisement.
                  [(C)] (E) Professional development and 
                training sessions.--Conducting professional 
                development and training sessions for faculty 
                and administrators from other institutions of 
                higher education to enable the faculty and 
                administrators to meet the postsecondary 
                educational needs of students with 
                disabilities.
          (3) Mandatory evaluation and dissemination.--Grants 
        under this part shall be used for evaluation, and 
        dissemination to other institutions of higher 
        education, of the information obtained through the 
        activities described in [subparagraphs (A) through (C)] 
        subparagraphs (A) through (E).

           *       *       *       *       *       *       *


SEC. 763. APPLICATIONS.

  Each institution of higher education desiring to receive a 
grant, contract, or cooperative agreement 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 application shall include--
          [(1) a description of how such institution plans to 
        address each of the activities required under this 
        part;]
          (1) a description of how such institution plans to 
        address the activities allowed under this part;
          (2) a description of how the institution consulted 
        with a broad range of people within the institution to 
        develop activities for which assistance is sought; 
        [and]
          (3) a description of how the institution will 
        coordinate and collaborate with the office that 
        provides services to students with disabilities within 
        the institution[.]; and
          (4) a description of the extent to which an 
        institution will work to replicate the best practices 
        of institutions of higher education with demonstrated 
        success in serving students with disabilities.

           *       *       *       *       *       *       *


SEC. 765. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated for this part 
$10,000,000 for [fiscal year 1999 and such sums as may be 
necessary for each of the 4 succeeding fiscal years] fiscal 
year 2006 and such sums as may be necessary for each of the 5 
succeeding fiscal years.
                              ----------                              


        SECTION 3 OF THE TAXPAYER-TEACHER PROTECTION ACT OF 2004

SEC. 3. LOAN FORGIVENESS FOR TEACHERS.

  (a) * * *
  (b) Additional Amounts Eligible to Be Repaid.--
          (1) * * *

           *       *       *       *       *       *       *

          [(3) Effective date.--The amendments made by this 
        subsection shall apply only with respect to eligible 
        individuals who are new borrowers (as such term is 
        defined in 103 of the Higher Education Act of 1965 (20 
        U.S.C. 1003)) on or after October 1, 1998, and before 
        October 1, 2005.]

           *       *       *       *       *       *       *

                              ----------                              


                   EDUCATION OF THE DEAF ACT OF 1986

  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 ``Education of the Deaf Act of 1986''.]

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Gallaudet University and 
National Technical Institute for the Deaf Act''.

  TITLE I--GALLAUDET UNIVERSITY; NATIONAL TECHNICAL INSTITUTE FOR THE 
                                  DEAF

Part A--Gallaudet University

           *       *       *       *       *       *       *


SEC. 104. ELEMENTARY AND SECONDARY EDUCATION PROGRAMS.

  (a) General Authority.--(1)(A) The Board of Trustees of 
Gallaudet University is authorized, in accordance with the 
agreement under section 105, to maintain and operate, at the 
Laurent Clerc National Deaf Education Center, exemplary 
elementary and secondary education programs, projects, and 
activities for the primary purpose of developing, evaluating, 
and disseminating innovative curricula, instructional 
techniques and strategies, and materials that can be used in 
various educational environments serving individuals who are 
deaf or hard of hearing throughout the Nation.

           *       *       *       *       *       *       *

  (b) Administrative Requirements.--(1) The [elementary and 
secondary education programs] Laurent Clerc National Deaf 
Education Center shall--
          (A) * * *

           *       *       *       *       *       *       *

  (2) To the extent possible, the [elementary and secondary 
education programs] Laurent Clerc National Deaf Education 
Center shall provide the services required under paragraph 
(1)(B) in an equitable manner, based on the national 
distribution of students who are deaf or hard of hearing in 
educational environments as determined by the Secretary for 
purposes of section 618(a)(1) of the Individuals with 
Disabilities Education Act. Such educational environments shall 
include--
          (A) * * *

           *       *       *       *       *       *       *

  (5) The University, in consultation with the Secretary and 
consistent with the mission of the elementary and secondary 
programs operated at the Laurent Clerc National Deaf Education 
Center, shall--
          (A) not later than the beginning of the 2007-2008 
        school year, adopt and implement academic content 
        standards, academic achievement standards, and academic 
        assessments as described in paragraphs (1) and (3) of 
        section 1111(b) of the Elementary and Secondary 
        Education Act of 1965 for such Center;
          (B) develop adequate yearly progress standards for 
        such Center as described in section 1111(b)(2)(C) of 
        such Act; and
          (C) publicly report the results of such assessments, 
        except in such case in which such reporting would not 
        yield statistically reliable information or would 
        reveal personally identifiable information about an 
        individual student.

           Part B--National Technical Institute for the Deaf

SEC. 111. AUTHORITY.

  For the purpose of providing a residential facility for 
postsecondary technical training and education for individuals 
who are deaf in order to prepare them for successful 
employment, [the institution of higher education with which the 
Secretary has an agreement under this part] the Rochester 
Institute of Technology is authorized to operate and maintain a 
National Technical Institute for the Deaf.

SEC. 112. AGREEMENT FOR THE NATIONAL TECHNICAL INSTITUTE FOR THE DEAF.

  (a) General Authority.--(1) The Secretary is authorized to 
establish or continue an agreement with [an institution of 
higher education] the Rochester Institute of Technology, 
Rochester, New York, for the establishment and operation, 
including construction and equipment, [of a] of the National 
Technical Institute for the Deaf. [The Secretary, in 
considering proposals from institutions of higher education to 
enter into an agreement under this part, shall give preference 
to institutions which are located in metropolitan industrial 
areas.]
  (2) The Secretary and [the institution of higher education 
with which the Secretary has an agreement under this section] 
the Rochester Institute of Technology--
          (A) * * *
          (B) shall periodically update the agreement as 
        determined necessary by the Secretary or [the 
        institution] the Rochester Institute of Technology.
  (b) Provisions of Agreement.--The agreement shall--
          (1) * * *
          (2) provide that the Board of Trustees [or other 
        governing body of the institution] of the Rochester 
        Institute of Technology, subject to the approval of the 
        Secretary, will appoint an advisory group to advise the 
        Director of NTID in formulating and carrying out the 
        basic policies governing its establishment and 
        operation, which group shall include individuals who 
        are professionally concerned with education and 
        technical training at the postsecondary school level, 
        persons who are professionally concerned with 
        activities relating to education and training of 
        individuals who are deaf, and members of the public 
        familiar with the need for services provided by NTID;
          (3) provide that the Board of Trustees [or other 
        governing body of the institution] of the Rochester 
        Institute of Technology will prepare and submit to the 
        Secretary, not later than June 1 following the fiscal 
        year for which the report is submitted, an annual 
        report containing an accounting of all indirect costs 
        paid to [the institution of higher education under the 
        agreement with the Secretary] the Rochester Institute 
        of Technology by the National Technical Institute for 
        the Deaf, which accounting the Secretary shall transmit 
        to the [Committee on Education and Labor of the House 
        of Representatives and to the Committee on Labor and 
        Human Resources of the Senate] Committee on Education 
        and the Workforce of the House of Representatives and 
        to the Committee on Health, Education, Labor, and 
        Pensions of the Senate, with such comments and 
        recommendations as the Secretary may deem appropriate;

           *       *       *       *       *       *       *

  (c) Limitation.--If, within twenty years after the completion 
of any construction (except minor remodeling or alteration) for 
which such funds have been paid--
          (1) the facility ceases to be used for the purposes 
        for which it was constructed or the agreement is 
        terminated, unless the Secretary determines that there 
        is good cause for releasing the [institution] Rochester 
        Institute of Technology from its obligation, or
          (2) the [institution] Rochester Institute of 
        Technology ceases to be the owner of the facility,
the United States shall be entitled to recover from the 
applicant or other owner of the facility an amount which has 
the same ratio with respect to the current market value of the 
facility as the amount of Federal funds expended for 
construction of such facility bears to the total cost of 
construction of the facility. The current market value of the 
facility shall be determined by agreement of the parties or by 
action brought in the United States district court for the 
district in which the facility is situated.

                      TITLE II--GENERAL PROVISIONS

SEC. 201. DEFINITIONS.

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

           *       *       *       *       *       *       *

          [(3) The term ``institution of higher education'' 
        means an educational institution in any State which (A) 
        admits as regular students only individuals having a 
        certificate of graduation from a school providing 
        secondary education, or the recognized equivalent of 
        such a certificate; (B) is legally authorized within 
        such State to provide a program of education beyond 
        secondary education; (C) provides an educational 
        program for which it awards a bachelor's degree; (D) 
        includes one or more professional or graduate schools; 
        (E) is a public or nonprofit private institution; and 
        (F) is accredited by a nationally recognized 
        accrediting agency or association. For the purpose of 
        subparagraph (F), the Secretary shall publish a list of 
        nationally recognized accrediting agencies or 
        associations which the Secretary determines to be 
        reliable authority as to the quality of training 
        offered.]
          [(4)] (3) The term ``Secretary'' means the Secretary 
        of Education.
          [(5)] (4) The term ``State'' means each of the 
        several States, the District of Columbia, the 
        Commonwealth of Puerto Rico, Guam, American Samoa, the 
        Virgin Islands, and the Commonwealth of the Northern 
        Mariana Islands.
          [(6)] (5) The term ``NTID'' means the National 
        Technical Institute for the Deaf.
          [(7)] (6) The term ``University'' means Gallaudet 
        University.
          (7) The term ``RIT'' means the Rochester Institute of 
        Technology.

           *       *       *       *       *       *       *


SEC. 203. AUDIT.

  (a) [General Accounting Office] Government Accountability 
Office Authority.--All financial transactions and accounts of 
the corporation or institution of higher education, as the case 
may be, in connection with the expenditure of any moneys 
appropriated by any law of the United States--
          (1) * * *
          (2) for the benefit of the National Technical 
        Institute for the Deaf or for the construction of 
        facilities for its use,
shall be settled and adjusted in the [General Accounting 
Office] Government Accountability Office.
  (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.] NTID shall 
        have an annual independent financial and compliance 
        audit made of RIT programs and activities, including 
        NTID programs and activities.
          (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] sections 102(b), 
        105(b)(4), 112(b)(5), 203(c), 207(b)(2), subsections 
        (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 and the Committee on Education and the 
        Workforce of the House of Representatives and the 
        Committee on Health, Education, Labor, and Pensions of 
        the Senate 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)] or 
        RIT, as the case may be, but not later than January 10 
        of each year.
  (c) Limitations Regarding Expenditure of Funds.--
          (1) * * *
          (2) Policies.--
                  (A) Not later than 180 days after the date of 
                the enactment of the Education of the Deaf Act 
                Amendments of 1992, the University and NTID 
                shall develop policies, to be applied 
                uniformly, for the allowability of expenditures 
                for each institution. These policies should 
                reflect the unique nature of these 
                institutions. The principles established by the 
                Office of Management and Budget for costs of 
                educational institutions may be used as 
                guidance in developing these policies. General 
                principles relating to allowability and 
                reasonableness of all costs associated with the 
                operations of the institutions shall be 
                addressed. These policies shall be submitted to 
                the Secretary for review and comments, and to 
                [the Committee on Education and Labor of the 
                House of Representatives and the Committee on 
                Labor and Human Resources of the Senate] the 
                Committee on Education and the Workforce of the 
                House of Representatives and the Committee on 
                Health, Education, Labor, and Pensions of the 
                Senate.

           *       *       *       *       *       *       *


SEC. 204. REPORTS.

  The Board of Trustees of Gallaudet University and the Board 
of Trustees [or other governing body of the institution of 
higher education with which the Secretary has an agreement 
under section 112] of RIT shall prepare and submit an annual 
report to the Secretary, and to the [Committee on Education and 
Labor of the House of Representatives and the Committee on 
Labor and Human Resources of the Senate] Committee on Education 
and the Workforce of the House of Representatives and the 
Committee on Health, Education, Labor, and Pensions of the 
Senate, not later than 100 days after the end of each fiscal 
year, which shall include the following:
          (1) * * *
          (2) For the preceding academic year, and to the 
        extent possible, the following data on individuals who 
        are deaf and from minority backgrounds and who are 
        students (at all educational levels) or employees:
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) The disposition of these students [upon 
                graduation/completion] within one year of 
                graduation/completion of programs at NTID and 
                at the University and its elementary and 
                secondary schools in comparison to students 
                from non-minority backgrounds.

           *       *       *       *       *       *       *

          (3)(A) A summary of the annual audited financial 
        statements and auditor's report of the University, as 
        required under section 203, and (B) 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] of RIT programs 
        and activities, 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) * * *

           *       *       *       *       *       *       *

  (c) Authorization of Appropriations.--There are authorized to 
be appropriated such sums as may be necessary for each of the 
[fiscal years 1998 through 2003] fiscal years 2006 through 2011 
to carry out the monitoring and evaluation activities 
authorized under this section.

SEC. 206. LIAISON FOR EDUCATIONAL PROGRAMS.

  (a) Designation of Liaison.--[Not later than 30 days after 
the date of enactment of this Act, the] The Secretary shall 
designate an individual in the Office of Special Education and 
Rehabilitative Services of the Department of Education from 
among individuals who have experience in the education of 
individuals who are deaf to serve as liaison between the 
Department and Gallaudet University, the National Technical 
Institute for the Deaf, and other postsecondary educational 
programs for individuals who are deaf under the Individuals 
with Disabilities Education Act, the Rehabilitation Act of 
1973, and other Federal or non-Federal agencies, institutions, 
or organizations involved with the education or rehabilitation 
of individuals who are deaf or hard of hearing.

           *       *       *       *       *       *       *


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

  (a) Establishment of Programs.--
          (1) * * *
          (2) The Secretary and the Board of Trustees [or other 
        governing body of the institution of higher education 
        with which the Secretary has an agreement under section 
        112] of RIT are authorized to establish the National 
        Technical Institute for the Deaf Federal Endowment Fund 
        as a permanent endowment fund, in accordance with this 
        section, for the purpose of promoting the financial 
        independence of NTID. The Secretary and the Board or 
        other governing body may enter into such agreements as 
        may be necessary to carry out the purposes of this 
        section with respect to NTID.

           *       *       *       *       *       *       *

  (h) Authorization of Appropriations.--
          (1) In the case of the University, there are 
        authorized to be appropriated for the purposes of this 
        section such sums as may be necessary for each of the 
        [fiscal years 1998 through 2003] fiscal years 2006 
        through 2011.
          (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 1998 
        through 2003] fiscal years 2006 through 2011.

           *       *       *       *       *       *       *


SEC. 208. OVERSIGHT AND EFFECT OF AGREEMENTS.

  (a) Oversight Activities.--Nothing in this Act shall be 
construed to diminish the oversight activities of the 
[Committee on Labor and Human Resources of the Senate and the 
Committee on Education and the Workforce of the House of 
Representatives] Committee on Education and the Workforce of 
the House of Representatives and the Committee on Health, 
Education, Labor, and Pensions of the Senate with respect to 
any agreement entered into between the Secretary of Education 
and Gallaudet University, and [the institution of higher 
education with which the Secretary has an agreement under part 
B of title I] RIT.

           *       *       *       *       *       *       *


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] fiscal years 2006 through 2011 
to carry out the provisions of title I and this title, relating 
to--
          (1) * * *

           *       *       *       *       *       *       *

  (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] fiscal years 2006 
through 2011 to carry out the provisions of title I and this 
title relating to the National Technical Institute for the 
Deaf.
                              ----------                              


HIGHER EDUCATION AMENDMENTS OF 1998

           *       *       *       *       *       *       *


TITLE IV--STUDENT ASSISTANCE

           *       *       *       *       *       *       *


PART B--FEDERAL FAMILY EDUCATION LOAN PROGRAM

           *       *       *       *       *       *       *


SEC. 422. REQUIREMENTS FOR DISBURSEMENTS OF STUDENT LOANS.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Effective Date.--The amendments made by subsections (a) 
and (b) shall be effective during the period beginning on 
October 1, 1998, and ending on September 30, 2002. Such 
amendments shall also be effective on and after July 1, 2006.

           *       *       *       *       *       *       *


           TITLE VIII--STUDIES, REPORTS, AND RELATED PROGRAMS

                            PART A--STUDIES

[SEC. 801. STUDY OF MARKET MECHANISMS IN FEDERAL STUDENT LOAN PROGRAMS.

  [(a) Study Required.--The Comptroller General and the 
Secretary of Education shall convene a study group including 
the Secretary of the Treasury, the Director of the Office of 
Management and Budget, the Director of the Congressional Budget 
Office, representatives of entities making loans under part B 
of title IV of the Higher Education Act of 1965, 
representatives of other entities in the financial services 
community, representatives of other participants in the student 
loan programs, and such other individuals as the Comptroller 
General and the Secretary may designate. The Comptroller 
General and Secretary, in consultation with the study group, 
shall design and conduct a study to identify and evaluate means 
of establishing a market mechanism for the delivery of loans 
made pursuant to such title IV.
  [(b) Design of Study.--The study required under this section 
shall identify not fewer than 3 different market mechanisms for 
use in determining lender return on student loans while 
continuing to meet the other objectives of the programs under 
parts B and D of such title IV, including the provision of 
loans to all eligible students. Consideration may be given to 
the use of auctions and to the feasibility of incorporating 
income-contingent repayment options into the student loan 
system and requiring borrowers to repay through income tax 
withholding.
  [(c) Evaluation of Market Mechanisms.--The mechanisms 
identified under subsection (b) shall be evaluated in terms of 
the following areas:
          [(1) The cost or savings of loans to or for 
        borrowers, including parent borrowers.
          [(2) The cost or savings of the mechanism to the 
        Federal Government.
          [(3) The cost, effect, and distribution of Federal 
        subsidies to or for participants in the program.
          [(4) The ability of the mechanism to accommodate the 
        potential distribution of subsidies to students through 
        an income-contingent repayment option.
          [(5) The effect on the simplicity of the program, 
        including the effect of the plan on the regulatory 
        burden on students, institutions, lenders, and other 
        program participants.
          [(6) The effect on investment in human capital and 
        resources, loan servicing capability, and the quality 
        of service to the borrower.
          [(7) The effect on the diversity of lenders, 
        including community-based lenders, originating and 
        secondary market lenders.
          [(8) The effect on program integrity.
          [(9) The degree to which the mechanism will provide 
        market incentives to encourage continuous improvement 
        in the delivery and servicing of loans.
          [(10) The availability of loans to students by 
        region, income level, and by categories of 
        institutions.
          [(11) The proposed Federal and State role in the 
        operation of the mechanism.
          [(12) A description of how the mechanism will be 
        administered and operated.
          [(13) Transition procedures, including the effect on 
        loan availability during a transition period.
          [(14) Any other areas the study group may include.
  [(d) Preliminary Findings and Publication of Study.--Not 
later than November 15, 2000, the study group shall make the 
group's preliminary findings, including any additional or 
dissenting views, available to the public with a 60-day request 
for public comment. The study group shall review these comments 
and the Comptroller General and the Secretary shall transmit a 
final report, including any additional or dissenting views, to 
the Committee on Education and the Workforce of the House of 
Representatives, the Committee on Labor and Human Resources of 
the Senate, and the Committees on the Budget of the House of 
Representatives and the Senate not later than May 15, 2001.

[SEC. 802. STUDY OF THE FEASIBILITY OF ALTERNATIVE FINANCIAL 
                    INSTRUMENTS FOR DETERMINING LENDER YIELDS.

  [(a) Study Required.--The Comptroller General and the 
Secretary of Education shall convene a study group including 
the Secretary of the Treasury, the Director of the Office of 
Management and Budget, the Director of the Congressional Budget 
Office, representatives of entities making loans under part B 
of title IV of the Higher Education Act of 1965, 
representatives of other entities in the financial services 
community, representatives of other participants in the student 
loan programs, and such other individuals as the Comptroller 
General and the Secretary of Education may designate. The 
Comptroller General and the Secretary of Education, in 
consultation with the study group, shall evaluate the 91-day 
Treasury bill, 30-day and 90-day commercial paper, and the 90-
day London Interbank Offered Rate (in this section referred to 
as ``LIBOR'') in terms of the following:
          [(1) The historical liquidity of the market for each, 
        and a historical comparison of the spread between: (A) 
        the 30-day and 90-day commercial paper rate, 
        respectively, and the 91-day Treasury bill rate; and 
        (B) the spread between the LIBOR and the 91-day 
        Treasury bill rate.
          [(2) The historical volatility of the rates and 
        projections of future volatility.
          [(3) Recent changes in the liquidity of the market 
        for each such instrument in a balanced Federal budget 
        environment and a low-interest rate environment, and 
        projections of future liquidity assuming the Federal 
        budget remains in balance.
          [(4) The cost or savings to lenders with small, 
        medium, and large student loan portfolios of basing 
        lender yield on either the 30-day or 90-day commercial 
        paper rate or the LIBOR while continuing to base the 
        borrower rate on the 91-day Treasury bill, and the 
        effect of such change on the diversity of lenders 
        participating in the program.
          [(5) The cost or savings to the Federal Government of 
        basing lender yield on either the 30-day or 90-day 
        commercial paper rate or the LIBOR while continuing to 
        base the borrower rate on the 91-day Treasury bill.
          [(6) Any possible risks or benefits to the student 
        loan programs under the Higher Education Act of 1965 
        and to student borrowers.
          [(7) Any other areas the Comptroller General and the 
        Secretary of Education agree to include.
  [(b) Report Required.--Not later than 6 months after the date 
of enactment of this Act, the Comptroller General and the 
Secretary shall submit a final report regarding the findings of 
the study group to the Committee on Education and the Workforce 
of the House of Representatives and the Committee on Labor and 
Human Resources of the Senate.

[SEC. 803. STUDENT-RELATED DEBT STUDY REQUIRED.

  [(a) In General.--The Secretary of Education shall conduct a 
study that analyzes the distribution and increase in student-
related debt in terms of--
          [(1) demographic characteristics, such as race or 
        ethnicity, and family income;
          [(2) type of institution and whether the institution 
        is a public or private institution;
          [(3) loan source, such as Federal, State, 
        institutional or other, and, if the loan source is 
        Federal, whether the loan is or is not subsidized;
          [(4) academic field of study;
          [(5) parent loans, and whether the parent loans are 
        federally guaranteed, private, or property-secured such 
        as home equity loans; and
          [(6) relation of student debt or anticipated debt 
        to--
                  [(A) students' decisions about whether and 
                where to enroll in college and whether or how 
                much to borrow in order to attend college;
                  [(B) the length of time it takes students to 
                earn baccalaureate degrees;
                  [(C) students' decisions about whether and 
                where to attend graduate school;
                  [(D) graduates' employment decisions;
                  [(E) graduates' burden of repayment as 
                reflected by the graduates' ability to save for 
                retirement or invest in a home; and
                  [(F) students' future earnings.
  [(b) Report.--After conclusion of the study required by 
subsection (a), the Secretary of Education shall submit a final 
report regarding the findings of the study 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 18 months after the date of enactment of the Higher 
Education Amendments of 1998.
  [(c) Information.--After the study and report under this 
section are concluded, the Secretary of Education shall 
determine which information described in subsection (a) would 
be useful for families to know and shall include such 
information as part of the comparative information provided to 
families about the costs of higher education under the 
provisions of part C of title I.]

SEC. 804. STUDY OF TRANSFER OF CREDITS.

  (a) * * *
  (b) Report.--Not later than [one year after the date of 
enactment of this Act] September 30, 2007, the Secretary of 
Education shall submit a report to the Chairman and Ranking 
Minority Member of the Committee on Education and the Workforce 
of the House of Representatives and the Committee on Labor and 
Human Resources of the Senate detailing the Secretary's 
findings regarding the study conducted under subsection (a). 
The Secretary's report shall include such recommendation with 
respect to the recognition of accrediting agencies or 
associations and policies of institutions of higher education 
as the Secretary deems advisable.

[SEC. 805. STUDY OF OPPORTUNITIES FOR PARTICIPATION IN ATHLETICS 
                    PROGRAMS.

  [(a) Study.--The Comptroller General shall conduct a study of 
the opportunities for participation in intercollegiate 
athletics. The study shall address issues including--
          [(1) the extent to which the number of--
                  [(A) secondary school athletic teams has 
                increased or decreased in the 20 years 
                preceding 1998 (in aggregate terms); and
                  [(B) intercollegiate athletic teams has 
                increased or decreased in the 20 years 
                preceding 1998 (in aggregate terms) at 2-year 
                and 4-year institutions of higher education;
          [(2) the extent to which participation by student-
        athletes in secondary school and intercollegiate 
        athletics has increased or decreased in the 20 years 
        preceding 1998 (in aggregate terms);
          [(3) over the 20-year period preceding 1998, a list 
        of the men's and women's secondary school and 
        intercollegiate sports, ranked in order of the sports 
        most affected by increases or decreases in levels of 
        participation and numbers of teams (in the aggregate);
          [(4) all factors that have influenced campus 
        officials to add or discontinue sports teams at 
        secondary schools and institutions of higher education, 
        including--
                  [(A) institutional mission and priorities;
                  [(B) budgetary pressures;
                  [(C) institutional reforms and restructuring;
                  [(D) escalating liability insurance premiums;
                  [(E) changing student and community interest 
                in a sport;
                  [(F) advancement of diversity among students;
                  [(G) lack of necessary level of 
                competitiveness of the sports program;
                  [(H) club level sport achieving a level of 
                competitiveness to make the sport a viable 
                varsity level sport;
                  [(I) injuries or deaths; and
                  [(J) conference realignment;
          [(5) the actions that institutions of higher 
        education have taken when decreasing the level of 
        participation in intercollegiate sports, or the number 
        of teams, in terms of providing information, advice, 
        scholarship maintenance, counseling, advance warning, 
        and an opportunity for student-athletes to be involved 
        in the decisionmaking process;
          [(6) the administrative processes and procedures used 
        by institutions of higher education when determining 
        whether to increase or decrease intercollegiate 
        athletic teams or participation by student-athletes;
          [(7) the budgetary or fiscal impact, if any, of a 
        decision by an institution of higher education--
                  [(A) to increase or decrease the number of 
                intercollegiate athletic teams or the 
                participation of student-athletes; or
                  [(B) to be involved in a conference 
                realignment; and
          [(8) the alternatives, if any, institutions of higher 
        education have pursued in lieu of eliminating, or 
        severely reducing the funding for, an intercollegiate 
        sport, and the success of such alternatives.
  [(b) Report.--The Comptroller General shall submit a report 
regarding the results of the study to the Committee on Labor 
and Human Resources of the Senate and the Committee on 
Education and the Workforce of the House of Representatives.]

SEC. 806. STUDY OF THE EFFECTIVENESS OF COHORT DEFAULT RATES FOR 
                    INSTITUTIONS WITH FEW STUDENT LOAN BORROWERS.

  (a) Study Required.--The Secretary of Education shall conduct 
a study of the effectiveness of cohort default rates as an 
indicator of administrative capability and program quality for 
institutions of [higher education at which less] higher 
education. The study shall also review the effect of cohort 
default rates specifically on institutions of higher education 
at which less than 15 percent of students eligible to borrow 
participate in the Federal student loan programs under title IV 
of the Higher Education Act of 1965 and fewer than 30 borrowers 
enter repayment in any fiscal year. At a minimum, the study 
shall include--
          (1) * * *

           *       *       *       *       *       *       *

  (c) Report to Congress.--The Secretary of Education 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 not later than [September 30, 1999,] 
September 30, 2007, regarding the results of the study 
described in subsection (a).

           *       *       *       *       *       *       *


              [PART C--COMMUNITY SCHOLARSHIP MOBILIZATION

[SEC. 811. SHORT TITLE.

  [This part may be cited as the ``Community Scholarship 
Mobilization Act''.

[SEC. 812. FINDINGS.

  [Congress finds that--
          [(1) the local community, when properly organized and 
        challenged, is one of the best sources of academic 
        support, motivation toward achievement, and financial 
        resources for aspiring postsecondary students;
          [(2) local communities, working to complement or 
        augment services currently offered by area schools and 
        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;
          [(3) proven methods of stimulating these community 
        efforts can be promoted through 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
          [(4) 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.

[SEC. 813. DEFINITIONS.

  [In this part:
          [(1) Regional, state, or community program center.--
        The term ``regional, State, or community program 
        center'' means an organization that--
                  [(A) is a division or member of, responsible 
                to, and overseen by, a national organization; 
                and
                  [(B) is staffed by professionals trained to 
                create, develop, and sustain local entities in 
                towns, cities, and neighborhoods.
          [(2) Local entity.--The term ``local entity'' means 
        an organization that--
                  [(A) is a nonprofit organization that is 
                described in section 501(c)(3) of the Internal 
                Revenue Code of 1986, and exempt from taxation 
                under section 501(a) of such Code (or shall 
                meet this criteria through affiliation with the 
                national organization);
                  [(B) is formed for the purpose of providing 
                educational scholarships and academic support 
                for residents of the local community served by 
                such organization;
                  [(C) solicits broad-based community support 
                in its academic support and fund-raising 
                activities;
                  [(D) is broadly representative of the local 
                community in the structures of its volunteer-
                operated organization and has a board of 
                directors that includes leaders from local 
                neighborhood organizations and neighborhood 
                residents, such as school or college personnel, 
                parents, students, community agency 
                representatives, retirees, and representatives 
                of the business community;
                  [(E) awards scholarships without regard to 
                age, sex, marital status, race, creed, color, 
                religion, national origin, or disability; and
                  [(F) gives priority to awarding scholarships 
                for postsecondary education to deserving 
                students from low-income families in the local 
                community.
          [(3) National organization.--The term ``national 
        organization'' means an organization that--
                  [(A) has the capacity to create, develop and 
                sustain local entities and affiliated regional, 
                State, or community program centers;
                  [(B) has the capacity to sustain newly 
                created local entities in towns, cities, and 
                neighborhoods through ongoing training support 
                programs;
                  [(C) is described in section 501(c)(3) of the 
                Internal Revenue Code of 1986, and exempt from 
                taxation under section 501(a) of such Code;
                  [(D) is a publicly supported organization 
                within the meaning of section 170(b)(1)(A)(iv) 
                of such Code;
                  [(E) ensures that each of the organization's 
                local entities meet the criteria described in 
                subparagraphs (C) and (D); and
                  [(F) has a program for or experience in 
                cooperating with secondary and postsecondary 
                institutions in carrying out the organization's 
                scholarship and academic support activities.
          [(4) High poverty area.--The term ``high poverty 
        area'' means a community with a higher percentage of 
        children from low-income families than the national 
        average of such percentage and a lower percentage of 
        children pursuing postsecondary education than the 
        national average of such percentage.
          [(5) Secretary.--The term ``Secretary'' means the 
        Secretary of Education.
          [(6) Students from low-income families.--The term 
        ``students from low-income families'' means students 
        determined, pursuant to part F of title IV of the 
        Higher Education Act of 1965 (20 U.S.C. 1087kk et 
        seq.), to be eligible for a Federal Pell Grant under 
        subpart 1 of part A of title IV of such Act (20 U.S.C. 
        1070a).

[SEC. 814. PURPOSE; ENDOWMENT GRANT AUTHORITY.

  [(a) Purpose.--It is the purpose of this part 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--
          [(1) providing academic support, including guidance, 
        counseling, mentoring, tutoring, and recognition; and
          [(2) providing scholarship assistance for the cost of 
        postsecondary education.
  [(b) Endowment Grant Authority.--From the funds appropriated 
pursuant to the authority of section 816, the Secretary shall 
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 secondary school graduation 
rates and postsecondary attendance through the provision of 
academic support services and scholarship assistance for the 
cost of postsecondary education.

[SEC. 815. GRANT AGREEMENT AND REQUIREMENTS.

  [(a) In General.--The Secretary shall award one or more 
endowment grants described in section 814(b) pursuant to an 
agreement between the Secretary and a national organization. 
Such agreement shall--
          [(1) require a 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 the activities 
        described in paragraphs (2) and (3);
          [(2) require a national organization to use 70 
        percent of the interest income from the endowment fund 
        in any fiscal year to support the establishment or 
        ongoing work of regional, State or community program 
        centers to enable such centers to work with local 
        communities to establish local entities in high poverty 
        areas and provide ongoing technical assistance, 
        training workshops, and other activities to help ensure 
        the ongoing success of the local entities;
          [(3) require a national organization to use 30 
        percent of the interest income from the endowment fund 
        in any fiscal year to provide scholarships for 
        postsecondary education to students from low-income 
        families, which scholarships shall be matched on a 
        dollar-for-dollar basis from funds raised by the local 
        entities;
          [(4) require that at least 50 percent of all the 
        interest income from the endowment be allocated to 
        establish new local entities or support regional, State 
        or community program centers in high poverty areas;
          [(5) require a national organization to submit, for 
        each fiscal year in which such organization uses the 
        interest from the endowment fund, a report to the 
        Secretary that contains--
                  [(A) a description of the programs and 
                activities supported by the interest on the 
                endowment fund;
                  [(B) the audited financial statement of the 
                national organization for the preceding fiscal 
                year;
                  [(C) a plan for the programs and activities 
                to be supported by the interest on the 
                endowment fund as the Secretary may require;
                  [(D) an evaluation of the programs and 
                activities supported by the interest on the 
                endowment fund as the Secretary may require; 
                and
                  [(E) data indicating the number of students 
                from low-income families who receive 
                scholarships from local entities, and the 
                amounts of such scholarships;
          [(6) contain such assurances as the Secretary may 
        require with respect to the 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, then 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 
        the national organization on the date of such 
        determination.
  [(b) Returned Funds.--All funds returned to the Secretary 
pursuant to subsection (a)(7) shall be available to the 
Secretary to carry out any scholarship or grant program 
assisted under title IV of the Higher Education Act of 1965 (20 
U.S.C. 1070 et seq.).

[SEC. 816. AUTHORIZATION OF APPROPRIATIONS.

  [There are authorized to be appropriated to carry out this 
part $10,000,000 for fiscal year 2000.

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

[SEC. 821. GRANTS TO STATES FOR WORKPLACE AND COMMUNITY TRANSITION 
                    TRAINING FOR INCARCERATED YOUTH OFFENDERS.

  [(a) Findings.--Congress makes the following findings:
          [(1) Over 150,000 youth offenders age 21 and younger 
        are incarcerated in the Nation's jails, juvenile 
        facilities, and prisons.
          [(2) Most youth offenders who are incarcerated have 
        been sentenced as first-time adult felons.
          [(3) Approximately 75 percent of youth offenders are 
        high school dropouts who lack basic literacy and life 
        skills, have little or no job experience, and lack 
        marketable skills.
          [(4) The average incarcerated youth has attended 
        school only through grade 10.
          [(5) Most of these youths can be diverted from a life 
        of crime into productive citizenship with available 
        educational, vocational, work skills, and related 
        service programs.
          [(6) If not involved with educational programs while 
        incarcerated, almost all of these youths will return to 
        a life of crime upon release.
          [(7) The average length of sentence for a youth 
        offender is about 3 years. Time spent in prison 
        provides a unique opportunity for education and 
        training.
          [(8) Even with quality education and training 
        provided during incarceration, a period of intense 
        supervision, support, and counseling is needed upon 
        release to ensure effective reintegration of youth 
        offenders into society.
          [(9) Research consistently shows that the vast 
        majority of incarcerated youths will not return to the 
        public schools to complete their education.
          [(10) There is a need for alternative educational 
        opportunities during incarceration and after release.
  [(b) Definition.--For purposes of this part, the term ``youth 
offender'' means a male or female offender under the age of 25, 
who is incarcerated in a State prison, including a prerelease 
facility.
  [(c) Grant Program.--The Secretary of Education (in this 
section referred to as the ``Secretary'') shall establish a 
program in accordance with this section to provide grants to 
the State correctional education agencies in the States, from 
allocations for the States under subsection (i), to assist and 
encourage incarcerated youths to acquire functional literacy, 
life, and job skills, through the pursuit of a postsecondary 
education certificate, or an associate of arts or bachelor's 
degree while in prison, and employment counseling and other 
related services which start during incarceration and continue 
through prerelease and while on parole.
  [(d) Application.--To be eligible for a grant under this 
section, a State correctional education agency shall submit to 
the Secretary a proposal for a youth offender program that--
          [(1) identifies the scope of the problem, including 
        the number of incarcerated youths in need of 
        postsecondary education and vocational training;
          [(2) lists the accredited public or private 
        educational institution or institutions that will 
        provide postsecondary educational services;
          [(3) lists the cooperating agencies, public and 
        private, or businesses that will provide related 
        services, such as counseling in the areas of career 
        development, substance abuse, health, and parenting 
        skills;
          [(4) describes the evaluation methods and performance 
        measures that the State correctional education agency 
        will employ, which methods and measures--
                  [(A) shall be appropriate to meet the goals 
                and objectives of the proposal; and
                  [(B) shall include measures of--
                          [(i) program completion;
                          [(ii) student academic and vocational 
                        skill attainment;
                          [(iii) success in job placement and 
                        retention; and
                          [(iv) recidivism;
          [(5) describes how the proposed programs are to be 
        integrated with existing State correctional education 
        programs (such as adult education, graduate education 
        degree programs, and vocational training) and State 
        industry programs;
          [(6) addresses the educational needs of youth 
        offenders who are in alternative programs (such as boot 
        camps); and
          [(7) describes how students will be selected so that 
        only youth offenders eligible under subsection (f ) 
        will be enrolled in postsecondary programs.
  [(e) Program Requirements.--Each State correctional education 
agency receiving a grant under this section shall--
          [(1) integrate activities carried out under the grant 
        with the objectives and activities of the school-to-
        work programs of such State, including--
                  [(A) work experience or apprenticeship 
                programs;
                  [(B) transitional worksite job training for 
                vocational education students that is related 
                to the occupational goals of such students and 
                closely linked to classroom and laboratory 
                instruction;
                  [(C) placement services in occupations that 
                the students are preparing to enter;
                  [(D) employment-based learning programs; and
                  [(E) programs that address State and local 
                labor shortages;
          [(2) annually report to the Secretary and the 
        Attorney 
        General on the results of the evaluations conducted 
        using the methods and performance measures contained in 
        the proposal; and
          [(3) provide to each State for each student eligible 
        under subsection (f ) not more than $1,500 annually for 
        tuition, books, and essential materials, and not more 
        than $300 annually for related services such as career 
        development, substance abuse counseling, parenting 
        skills training, and health education, for each 
        eligible incarcerated youth.
  [(f ) Student Eligibility.--A youth offender shall be 
eligible for participation in a program receiving a grant under 
this section if the youth offender--
          [(1) is eligible to be released within 5 years 
        (including a youth offender who is eligible for parole 
        within such time); and
          [(2) is 25 years of age or younger.
  [(g) Length of Participation.--A State correctional education 
agency receiving a grant under this section shall provide 
educational and related services to each participating youth 
offender for a period not to exceed 5 years, 1 year of which 
may be devoted to study in a graduate education degree program 
or to remedial education services for students who have 
obtained a secondary school diploma or its recognized 
equivalent. Educational and related services shall start during 
the period of incarceration in prison or prerelease and may 
continue during the period of parole.
  [(h) Education Delivery Systems.--State correctional 
education agencies and cooperating institutions shall, to the 
extent practicable, use high-tech applications in developing 
programs to meet the requirements and goals of this section.
  [(i) Allocation of Funds.--From the funds appropriated 
pursuant to subsection ( j) for each fiscal year, the Secretary 
shall allot to each State an amount that bears the same 
relationship to such funds as the total number of students 
eligible under subsection (f ) in such State bears to the total 
number of such students in all States.
  [( j) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this section $17,000,000 for 
fiscal year 1999 and such sums as may be necessary for each of 
the 4 succeeding fiscal years.]

           *       *       *       *       *       *       *


   PART E--GRANTS TO COMBAT VIOLENT CRIMES AGAINST WOMEN ON CAMPUSES

SEC. 826. GRANTS TO COMBAT VIOLENT CRIMES AGAINST WOMEN ON CAMPUSES.

  (a) * * *

           *       *       *       *       *       *       *

  [(f )] (e) Definitions.--In this section--
          (1) * * *

           *       *       *       *       *       *       *

  [(g)] (f) Authorization of Appropriations.--For the purpose 
of carrying out this part, there are authorized to be 
appropriated $10,000,000 [for each of fiscal years 2001 through 
2005] fiscal year 2006 and each of the 5 succeeding fiscal 
years.

[PART F--IMPROVING UNITED STATES UNDERSTANDING OF SCIENCE, ENGINEERING, 
                      AND TECHNOLOGY IN EAST ASIA

[SEC. 831. IMPROVING UNITED STATES UNDERSTANDING OF SCIENCE, 
                    ENGINEERING, AND TECHNOLOGY IN EAST ASIA.

  [(a) Establishment.--The Director of the National Science 
Foundation is authorized, beginning in fiscal year 2000, to 
carry out an interdisciplinary program of education and 
research on East Asian science, engineering, and technology. 
The Director shall carry out the interdisciplinary program in 
consultation with the Secretary of Education.
  [(b) Purposes.--The purposes of the program established under 
this section shall be to--
          [(1) increase understanding of East Asian research, 
        and innovation for the creative application of science 
        and technology to the problems of society;
          [(2) provide scientists, engineers, technology 
        managers, and students with training in East Asian 
        languages, and with an understanding of research, 
        technology, and management of innovation, in East Asian 
        countries;
          [(3) provide program participants with opportunities 
        to be directly involved in scientific and engineering 
        research, and activities related to the management of 
        scientific and technological innovation, in East Asia; 
        and
          [(4) create mechanisms for cooperation and 
        partnerships among United States industry, 
        universities, colleges, not-for-profit institutions, 
        Federal laboratories (within the meaning of section 
        4(6) of the Stevenson-Wydler Technology Innovation Act 
        of 1980 (15 U.S.C. 3703(6))), and government, to 
        disseminate the results of the program assisted under 
        this section for the benefit of United States research 
        and innovation.
  [(c) Participation by Federal Scientists, Engineers, and 
Managers.--Scientists, engineers, and managers of science and 
engineering programs in Federal agencies and the Federal 
laboratories shall be eligible to participate in the program 
assisted under this section on a reimbursable basis.
  [(d) Requirement for Merit Review.--Awards made under the 
program established under this section shall only be made using 
a competitive, merit-based review process.
  [(e) Authorization of Appropriations.--There is authorized to 
be appropriated to carry out this section $10,000,000 for 
fiscal year 2000.]

           *       *       *       *       *       *       *


                      PART H--UNDERGROUND RAILROAD

SEC. 841. UNDERGROUND RAILROAD EDUCATIONAL AND CULTURAL PROGRAM.

  (a) * * *

           *       *       *       *       *       *       *

  [(c) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this section $6,000,000 for 
fiscal year 1999, $6,000,000 for fiscal year 2000, $6,000,000 
for fiscal year 2001, $3,000,000 for fiscal year 2002, and 
$3,000,000 for fiscal year 2003.]
  (c) Authorization of Appropriations.--There are authorized to 
be appropriated to carry out this section $3,000,000 for fiscal 
year 2006 and such sums as may be necessary for each of the 5 
succeeding fiscal years.

           *       *       *       *       *       *       *


                [PART J--WEB-BASED EDUCATION COMMISSION

[SEC. 851. DEFINITIONS.

  [(a) In General.--This part may be cited as the ``Web-Based 
Education Commission Act''.
  [(b) Definitions.--In this part:
          [(1) Commission.--The term ``Commission'' means the 
        Web-Based Education Commission established under 
        section 852.
          [(2) Information technology.--The term ``information 
        technology'' has the meaning given that term in section 
        5002 of the Information Technology Management Reform 
        Act of 1996 (110 Stat. 679).
          [(3) State.--The term ``State'' means each of the 
        several States of the United States and the District of 
        Columbia.

[SEC. 852. ESTABLISHMENT OF WEB-BASED EDUCATION COMMISSION.

  [(a) Establishment.--There is established a commission to be 
known as the Web-Based Education Commission.
  [(b) Membership.--
          [(1) Composition.--The Commission shall be composed 
        of 16 members, of which--
                  [(A) three members shall be appointed by the 
                President, from among individuals representing 
                the Internet technology industry;
                  [(B) three members shall be appointed by the 
                Secretary, from among individuals with 
                expertise in accreditation, establishing 
                statewide curricula, and establishing 
                information technology networks pertaining to 
                education curricula;
                  [(C) two members shall be appointed by the 
                Majority Leader of the Senate;
                  [(D) two members shall be appointed by the 
                Minority Leader of the Senate;
                  [(E) two members shall be appointed by the 
                Speaker of the House of Representatives;
                  [(F) two members shall be appointed by the 
                Minority Leader of the House of 
                Representatives;
                  [(G) one member shall be appointed by the 
                Chairperson of the Committee on Health, 
                Education, Labor, and Pensions of the Senate 
                from among members of the Senate; and
                  [(H) one member shall be appointed by the 
                Chairperson of the Committee on Education and 
                the Workforce of the House of Representatives 
                from among members of the House of 
                Representatives.
          [(2) Date.--The appointments of the members of the 
        Commission shall be made not later than 45 days after 
        the date of enactment of this Act.
  [(c) Period of Appointment; Vacancies.--Members shall be 
appointed for the life of the Commission. Any vacancy in the 
Commission shall not affect its powers, but shall be filled in 
the same manner as the original appointment.
  [(d) Initial Meeting.--Not later than 30 days after the date 
on which all members of the Commission have been appointed, the 
Commission shall hold the Commission's first meeting.
  [(e) Meetings.--The Commission shall meet at the call of the 
Chairperson.
  [(f ) Quorum.--A majority of the members of the Commission 
shall constitute a quorum, but a lesser number of members may 
hold hearings.
  [(g) Chairperson and Vice Chairperson.--The Commission shall 
select a chairperson and vice chairperson from among the 
members of the Commission.

[SEC. 853. DUTIES OF THE COMMISSION.

  [(a) Study.--
          [(1) In general.--The Commission shall conduct a 
        thorough study to assess the educational software 
        available in retail markets for secondary and 
        postsecondary students who choose to use such software.
          [(2) Public hearings.--As part of the study conducted 
        under this subsection, the Commission shall hold public 
        hearings in each region of the United States concerning 
        the assessment referred to in paragraph (1).
          [(3) Existing information.--To the extent 
        practicable, in carrying out the study under this 
        subsection, the Commission shall identify and use 
        existing information related to the assessment referred 
        to in paragraph (1).
  [(b) Report.--Not later than 12 months after the first 
meeting of the Commission, the Commission shall submit a report 
to the President and Congress that shall contain a detailed 
statement of the findings and conclusions of the Commission 
resulting from the study, together with the Commission's 
recommendations--
          [(1) for such legislation and administrative actions 
        as the Commission considers to be appropriate; and
          [(2) regarding the appropriate Federal role in 
        determining quality educational software products.
  [(c) Facilitation of Exchange of Information.--In carrying 
out the study under subsection (a), the Commission shall, to 
the extent practicable, facilitate the exchange of information 
concerning the issues that are the subject of the study among--
          [(1) officials of the Federal Government, and State 
        governments and political subdivisions of States; and
          [(2) educators from Federal, State, and local 
        institutions of higher education and secondary schools.

[SEC. 854. POWERS OF THE COMMISSION.

  [(a) Hearings.--The Commission may hold such hearings, sit 
and act at such times and places, take such testimony, and 
receive such evidence as the Commission considers advisable to 
carry out the duties of the Commission.
  [(b) Information From Federal Agencies.--The Commission may 
request from the head of any Federal agency or instrumentality 
such information as the Commission considers necessary to carry 
out the provisions of this part. Each such agency or 
instrumentality shall, to the extent permitted by law and 
subject to the exceptions set forth in section 552 of title 5, 
United States Code (commonly referred to as the Freedom of 
Information Act), furnish such information to the Commission 
upon request.
  [(c) Postal Services.--The Commission may use the United 
States mails in the same manner and under the same conditions 
as other departments and agencies of the Federal Government.
  [(d) Gifts.--The Commission may accept, use, and dispose of 
gifts or donations of services or property.

[SEC. 855. COMMISSION PERSONNEL MATTERS.

  [(a) Compensation of Members.--Except as provided in 
subsection (b), each member of the Commission who is not an 
officer or employee of the Federal Government shall serve 
without compensation. All members of the Commission who are 
officers or 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.
  [(b) Travel Expenses.--The members of the Commission shall be 
allowed travel expenses, including per diem in lieu of 
subsistence, at rates authorized for employees of agencies 
under subchapter I of chapter 57 of title 5, United States 
Code, while away from their homes or regular places of business 
in the performance of services for the Commission.
  [(c) Staff.--
          [(1) In general.--The Chairperson of the Commission 
        may, without regard to the civil service laws and 
        regulations, appoint and terminate an executive 
        director and such other additional personnel as may be 
        necessary to enable the Commission to perform the 
        Commission's duties. The employment of an executive 
        director shall be subject to confirmation by the 
        Commission.
          [(2) Compensation.--The Chairperson of the Commission 
        may fix the compensation of the executive director and 
        other personnel without regard to the provisions of 
        chapter 51 and subchapter III of chapter 53 of title 5, 
        United States Code, relating to classification of 
        positions and General Schedule pay rates, except that 
        the rate of pay for the executive director and other 
        personnel may not exceed the rate payable for level V 
        of the Executive Schedule under section 5316 of such 
        title.
  [(d) Detail of Government Employees.--Any Federal Government 
employee may be detailed to the Commission without 
reimbursement, and such detail shall be without interruption or 
loss of civil service status or privilege.
  [(e) 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 that 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.

[SEC. 856. TERMINATION OF THE COMMISSION.

  [The Commission shall terminate on the date that is 90 days 
after the date on which the Commission submits the Commission's 
report under section 853(b).

[SEC. 857. AUTHORIZATION OF APPROPRIATIONS.

  [(a) In General.--There are authorized to be appropriated 
$450,000 for fiscal year 1999 to the Commission to carry out 
this part.
  [(b) Availability.--Any sums appropriated under the 
authorization contained in this section shall remain available, 
without fiscal year limitation, until expended.]

           *       *       *       *       *       *       *

                              ----------                              


TRIBALLY CONTROLLED COLLEGE OR UNIVERSITY ASSISTANCE ACT OF 1978

           *       *       *       *       *       *       *


                              DEFINITIONS

  Sec. 2. (a) For purposes of this Act, the term--
          (1) * * *

           *       *       *       *       *       *       *

          (6) ``national Indian organization'' means an 
        organization which the Secretary finds is nationally 
        based, represents a substantial Indian constituency, 
        and has expertise [in the field of Indian education] in 
        the field of Tribal Colleges and Universities and 
        Indian higher education;

           *       *       *       *       *       *       *

  (b) The following conditions shall apply for the purpose of 
determining the Indian student count pursuant to paragraph (7) 
of subsection (a):
          (1) * * *

           *       *       *       *       *       *       *

          [(5) Credits earned in a continuing education program 
        shall be converted to a credit-hour basis in accordance 
        with the tribally controlled college or university's 
        system for providing credit for participation in such 
        program.]
          (5) Eligible credits earned in a continuing education 
        program shall be determined as one credit for every 10 
        contact hours for institutions on a quarter system, and 
        15 contact hours for institutions on a semester system, 
        of participation in an organized continuing education 
        experience under responsible sponsorship, capable 
        direction, and qualified instruction, as described in 
        the criteria established by the International 
        Association for Continuing Education and Training, and 
        may not exceed 20 percent of an institution's total 
        Indian student count.

           *       *       *       *       *       *       *


TITLE I--TRIBALLY CONTROLLED COLLEGES OR UNIVERSITIES

           *       *       *       *       *       *       *


                       ELIGIBLE GRANT RECIPIENTS

  Sec. 103. To be eligible for assistance under this title, a 
tribally controlled college or university must be one which--
          (1) * * *
          (2) demonstrates adherence to stated goals, a 
        philosophy, or a plan of operation which is directed to 
        meet the needs of Indians; [and]
          (3) if in operation for more than one year, has 
        students a majority of whom are Indians[.]; and
          (4) has been accredited by a nationally recognized 
        accrediting agency or association determined by the 
        Secretary of Education to be a reliable authority as to 
        the quality of training offered, or is, according to 
        such an agency or association, making reasonable 
        progress toward accreditation.

           *       *       *       *       *       *       *


                      APPROPRIATION AUTHORIZATION

  Sec. 110. (a)(1) There is authorized to be appropriated, for 
the purpose of carrying out section 105, $3,200,000 for fiscal 
year [1999] 2006 and such sums as may be necessary for each of 
the [4] 5 succeeding fiscal years.
  (2) There is authorized to be appropriated for the purpose of 
carrying out section 107, $40,000,000 for fiscal year [1999] 
2006 and such sums as may be necessary for each of the [4] 5 
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 [1999] 2006 and such sums as may be necessary for each of 
the [4] 5 succeeding fiscal years.
  (4) Funds appropriated pursuant to the authorizations under 
this section for the fiscal year [1999] 2006 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 colleges or 
universities being designated as its own certifying agency.

           *       *       *       *       *       *       *


TITLE III--TRIBALLY CONTROLLED COLLEGE OR UNIVERSITY ENDOWMENT PROGRAM

           *       *       *       *       *       *       *


                    AUTHORIZATION OF APPROPRIATIONS

  Sec. 306. (a) There are authorized to be appropriated to 
carry out the provisions of this title, $10,000,000 for fiscal 
year [1999] 2006 and such sums as may be necessary for each of 
the [4] 5 succeeding fiscal years.

           *       *       *       *       *       *       *


                 TITLE IV--TRIBAL ECONOMIC DEVELOPMENT

SEC. 401. SHORT TITLE.

  This title may be cited as the ``Tribal Economic Development 
and Technology Related Education Assistance Act of 1990''.

           *       *       *       *       *       *       *


SEC. 403. AUTHORIZATION OF APPROPRIATIONS.

  There are authorized to be appropriated for grants under this 
title, $2,000,000 for fiscal year [1999] 2006 and such sums as 
may be necessary for each of the [4] 5 succeeding fiscal years.
                              ----------                              


             SECTION 5 OF THE NAVAJO COMMUNITY COLLEGE ACT

                    AUTHORIZATION OF APPROPRIATIONS

  Sec. 5. (a)(1) For the purpose of making construction grants 
under this Act, there are authorized to be appropriated 
$2,000,000 for fiscal year [1999] 2006 and such sums as may be 
necessary for each of the [4] 5 succeeding fiscal years.

           *       *       *       *       *       *       *

                              ----------                              


            SECTION 1543 OF THE EDUCATION AMENDMENTS OF 1992

SEC. 1543. OLYMPIC SCHOLARSHIPS.

  (a) * * *

           *       *       *       *       *       *       *

  (d) Authorization of Appropriations.--There are authorized to 
be appropriated $5,000,000 for fiscal year [1999] 2006 and such 
sums as may be necessary for each of the [4] 5 succeeding 
fiscal years to carry out this section.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

                              INTRODUCTION

    Every year millions of hardworking American families and 
students fall short when paying for college costs, even after 
grants, loans, family savings and work. The weakened economy, 
huge tax cuts for the super rich, and massive federal budget 
cuts have hurt state budgets, driving up tuition prices for 
students--more than 75 percent of whom attend public 
institutions.
    The typical low-income student at a 4-year public college 
already falls short by $3,800, and the typical middle-income 
student falls $2,300 short, when paying for college each year.
    Rather than helping these students and families, H.R. 609 
makes students pay even more for their college education. The 
bill cuts $8.7 billion from the student aid programs and fails 
to significantly boost affordable college opportunities. Due to 
these shortcomings, we oppose the Committee passage of this 
legislation.
H.R. 609--Makes college more expensive by raising student loan interest 
        rate caps
    In 2002, Congress made a promise to students to lower the 
interest rate cap on student loans to 6.8 percent in 2006. H.R. 
609 goes back on this promise, and sets the cap at 8.25 
percent. As a result, the typical student borrower, with 
$17,500 in debt, would be forced to pay as much as $2,600 more 
for his or her loans.
    Democrats offered an amendment that would have maintained 
Congress' bipartisan promise to lower the student loan interest 
rate cap, with a variable interest rate (for all non-
consolidation loans), at no additional cost to taxpayers or 
students. The committee rejected this amendment.
H.R. 609--Forces students and families to pay for the National Budget 
        Crisis
    The bill saves $8.7 billion by: raising interest rates on 
student consolidation loans; raising the interest rate cap on 
student loans; eliminating borrower benefits that lower the 
cost of borrowing; cutting critical student aid delivery funds; 
and, eliminating some of the excessive subsidies paid to 
student lenders. This raid on student aid represents the single 
largest cuts to the nation's federal student aid programs ever. 
As a result of these cuts, the typical student borrower, with 
$17,500 in debt, could be forced to pay up to $5,800 more for 
his or her college loans, than compared to current law. 


    After widespread criticism from Democrats, students and 
editorial writers, the Majority finally agreed to reduce 
excessive subsidies to large lending institutions. But instead 
of recycling those dollars into low-interest loans and 
additional grants, the Majority plans to use the $8.7 billion 
in cuts--to lender subsidies and student aid--for alleged 
deficit reduction. They believed for years it was acceptable to 
spend billions in excessive subsidies on profitable banks, but 
now they refuse to spend this money on students.
    The Majority claims that these cuts must be made in the 
budget reconciliation process to reduce the federal deficit--
yet the budget reconciliation actually increases the federal 
deficit by $35 billion over 5 years.
    This budget scheme balances the irresponsible management of 
our nation's budget on the backs of students and families who 
are already struggling to pay for college. 


    We should be doing more, not less, to increase affordable 
college opportunities not just because it is the right thing to 
do but because it is critical to the economic prosperity and 
well-being of the nation.
    Since the passage of the Higher Education Act in 1965, 
Federal grants, loans and work-study have helped to send 
millions of students to college, many of whom would not have 
gone to college without the help.
    This investment has been critical in making the U.S. the 
world economic leader it is today. However, the global economy 
has become significantly more competitive since 1965. Whether 
the U.S. retains its preeminence in this fiercely competitive 
environment will depend more and more on having a highly 
skilled workforce. Higher education is the critical tool for 
building that workforce.
    This raid on student aid misses a golden opportunity to re-
direct billions of dollars in savings by recycling the 
excessive subsidies paid to student lenders into additional 
grant aid for students--without any additional costs to 
taxpayers. This opportunity is an essential step towards 
ensuring that all college qualified students receive an 
affordable top quality higher education and that the U.S. is 
competitive in the global economy.
H.R. 609--Makes student borrowers pay more for consolidation loans
    Committee members adopted a Petri-Boehner amendment that 
will give students the choice of a fixed or variable interest 
rate on consolidation--but that raises the interest rate on 
fixed consolidation loans by 1.0 percent (to 91-day Treasury 
bill + 3.3 percent, capped at 8.25 percent) and forces students 
to pay a .5 percent fee on fixed consolidation loans.
    While this change improved the base bill, it would still 
result in the typical student borrower paying $2,800 more for 
his or her college loans, than under current law.
    Democrats opposed raising rates on consolidation loans, but 
offered a 2nd degree amendment that would have kept cost 
increases to student borrowers much lower and raised almost the 
same amount of savings. The Miller 2nd degree amendment would 
have lowered the interest rate on fixed consolidation loans and 
eliminated the .5 percent origination fee. Republicans rejected 
the Democratic alternative.

                                   COMPARISON OF CONSOLIDATION LOAN AMENDMENTS
----------------------------------------------------------------------------------------------------------------
                                                                                            Miller 2nd degree
                                             Current law        Petri-Boehner amendment         amendment
----------------------------------------------------------------------------------------------------------------
Student Consolidation Interest Rate    91-Day Treasury bill +   91-Day Treasury bill +   91-Day Treasury bill +
 Formula--In Repayment.                 2.3 percent, capped at   3.3 percent, capped at   2.8 percent, capped at
                                        8.25 percent.            8.25 percent.            8.25 percent.
Student Fee for Consolidation Loan...  No fee.................  0.50%..................  No fee.
CBO Savings..........................  n/a....................  $11.5 billion over 6     $11.5 billion over 6
                                                                 years.                   years.
----------------------------------------------------------------------------------------------------------------

H.R. 609--Fails to provide a real increase in the maximum Pell Grant 
        Scholarship
    The declining buying power of Pell grant scholarships and 
rising tuition prices are forcing millions of students to 
assume high debt, work long hours or even forgo college. The 
Committee has missed another opportunity to restore the 
original buying power of Pell grant scholarships. Last year the 
maximum Pell grant scholarship was worth $800 less, in 
inflation-adjusted terms, than it was in 1975-76.
    Not only does H.R. 609 fail to restore the Pell grants to 
the level of its original value, but it fails to make good on 
the Republican promise of an actual $5,100 maximum Pell grant 
scholarship. Instead, the bill raises the authorizing level by 
a mere $200 dollars over 6 years. 


    Democrats offered an amendment that would have provided a 
guaranteed boost, with mandatory funds, of $500 the maximum 
Pell grant over 5 years, raising the overall Pell Maximum award 
to $4,500--at no new cost to taxpayers. Republicans rejected 
this modest Pell increase.
H.R. 609--Changes the formula for campus based aid allocation and as a 
        result takes aid from one needy student to pay for another 
        needy student
    H.R. 609 alters the formula for distributing funding for 
campus-based aid programs (Supplemental Educational Opportunity 
Grants, Work Study and Perkins Loans) and will significantly 
decrease aid to students in 29 states. The elimination of the 
base guarantee in the funding formula will harm thousands of 
students because it will simply take funds from disadvantaged 
students and shift those funds to another group of 
disadvantaged students. Any reallocation of the formula must 
include a significant increase in the overall investment of 
these successful programs, so that we don't rob one student in 
need to provide for another student in need.
    Reps. Tierney and Kind offered an amendment to boost and 
equalize campus based aid funding. This amendment would require 
the Secretary of Education to phase in changes to the based 
guarantee in accordance with the necessary investment to the 
programs to ensure a level playing field. This amendment was 
narrowly defeated by a vote of 24-24.

                ESTIMATED CHANGE IN CAMPUS-BASED AID FUNDING--BASE GUARANTEE ELIMINATION PROPOSAL
----------------------------------------------------------------------------------------------------------------
                                                                  Perkins change
                                  SEOG change in   FWS change in   in allocation  Total change $  Percent change
                                   allocation $    allocation $          $
----------------------------------------------------------------------------------------------------------------
Alabama.........................         319,328       1,366,249         193,908        -853,013            -2.9
Alaska..........................        -357,194        -292,672               0        -649,866           -39.1
Arizona.........................         184,692         191,795         495,118         871,605             3.5
Arkansas........................        -109,651        -847,811        -223,204      -1,180,666            -8.8
California......................       5,346,622       6,981,497       1,367,670      13,695,789             7.0
Colorado........................         354,210         -35,688        -224,410          94,112             0.4
Connecticut.....................          68,743         744,203          -2,244         810,702             3.8
Delaware........................         184,837         170,007          -4,868         349,976            10.5
District of Columbia............          17,425       1,884,291         240,916       2,142,632            11.3
Florida.........................       1,894,571       2,956,506       1,975,050       6,826,127             9.1
Georgia.........................       1,172,369        -896,299         414,028         690,098             1.7
Hawaii..........................        -109,763        -161,240         -16,180        -287,183            -7.4
Idaho...........................         -68,365         276,785        -146,554          61,866             1.2
Illinois........................       1,582,535       1,975,747        -703,749       2,854,533             3.0
Indiana.........................         875,175       1,201,143        -164,648       1,911,670             5.0
Iowa............................         268,598           1,088        -391,244        -121,558            -0.5
Kansas..........................        -609,378        -821,312        -693,636      -2,124,326           -14.6
Kentucky........................         803,328      -1,518,496         -11,330        -726,498            -3.2
Louisiana.......................         915,018      -1,193,153          99,218        -178,917            -0.7
Maine...........................      -3,346,280      -3,425,036        -460,794      -7,232,110           -46.5
Maryland........................        -262,256         272,230          43,102          53,076             0.2
Massachusetts...................      -4,398,750      -4,886,369         -96,665      -9,381,784           -11.7
Michigan........................      -1,798,914         752,152      -1,213,575      -2,260,337            -4.0
Minnesota.......................      -2,377,299      -1,248,027        -452,806      -4,078,132           -11.1
Mississippi.....................      -1,282,404      -2,487,498        -700,467      -4,470,369           -20.0
Missouri........................         923,933         945,748         -63,658       1,806,023             5.0
Montana.........................         241,460        -378,709        -177,076        -314,325            -5.2
Nebraska........................          52,045        -138,681        -268,659        -355,295            -3.1
Nevada..........................         195,286         295,456          66,199         556,941            13.2
New Hampshire...................        -769,185      -1,502,087        -156,759      -2,428,031           -18.7
New Jersey......................         501,889         450,066         106,108       1,058,063             2.8
New Mexico......................        -586,005      -2,183,573        -204,870      -2,974,448           -26.2
New York........................       7,189,176       7,766,963       3,204,027      18,160,166             9.7
North Carolina..................      -1,820,724      -1,384,785         -88,970      -3,294,479            -8.0
North Dakota....................        -965,544        -577,921       2,866,841       1,323,376            19.9
Ohio............................         775,727          46,677         620,384       1,442,788             2.0
Oklahoma........................          36,553        -619,493        -456,089      -1,039,029            -5.3
Oregon..........................      -1,738,961        -889,047        -185,769      -2,813,777           -11.2
Pennsylvania....................       2,514,303       4,595,845       1,265,707       8,375,855             7.5
Puerto Rico.....................       1,650,308         432,023         442,540       2,524,871             7.1
Rhode Island....................          21,779        -533,551          36,572        -475,200            -2.8
South Carolina..................         100,627        -789,970          97,811        -591,532            -2.5
South Dakota....................        -635,011      -1,360,964        -234,921      -2,230,896           -27.7
Tennessee.......................           5,768        -452,951          -6,719        -453,902            -1.4
Texas...........................         647,894       1,103,488      -1,236,695         514,687             0.5
Utah............................        -422,039         214,156        -477,662        -685,545            -6.4
Vermont.........................      -2,382,485      -1,778,571        -264,202      -4,425,258           -37.7
Virginia........................         854,144        -174,968          12,640         691,816             2.0
Washington......................        -844,292         771,689        -229,162        -301,765            -1.0
West Virginia...................         -76,805        -302,606        -127,184        -506,595            -4.1
Wisconsin.......................      -4,769,861      -1,419,305      -1,192,894      -7,382,060           -19.3
Wyoming.........................          16,325         112,844         -80,097          49,072             1.9
----------------------------------------------------------------------------------------------------------------
**Total 29 states would lose funding under this proposal.
Source: American Council on Education, Center for Policy Analysis.

H.R. 609--Fails to provide real relief for rising College costs

    Under the bill, the earliest that students and families 
could receive any relief from rising college costs would be 
five years after enactment, at which point colleges and 
universities with rapidly increasing tuition would be required 
to increase their reporting and disclosures to the public and 
federal government.
    In addition, the bill fails to engage states and encourage 
them to grow funds for higher education, so that college 
tuition is more affordable to the more than 75 percent of 
students who attend public, state supported institutions.
    Reps. Tierney and McCollum offered an amendment to address 
rising college tuition that would provide immediate relief to 
students and families by: promoting affordable tuition by 
encouraging states to grow funds for higher education; 
providing incentives to public and private colleges to make 
tuition more affordable; ensuring colleges curb their costs--
and tuition prices--through cost containment strategies; and, 
putting students and families in control by providing easy to 
understand information about college costs through accessible 
public disclosures.
    The Committee rejected this amendment on a party line vote 
of 27 to 19.

H.R. 609--Fails to meet the growing demand for additional investments 
        in College and Universities that serve predominantly minority, 
        low-income and first generation students

    Millions of minority and first-generation students cannot 
afford to attend college, while the institutions that 
traditionally serve these students struggle to expand their 
infrastructure, student support services and academic programs. 
Additionally, we face a shortage of minority teachers and an 
immediate need to encourage more Latinos to pursue advanced 
degrees.
    We strongly support the passage of the Hinojosa-Grijalva-
Fortuno-Tiberi amendment to establish the graduate Hispanic 
Serving Institutions program to significantly increase the 
number of Latino students earning advanced degrees--though we 
are disappointed that the full authorization level of $125 
million was not passed. We believe that the passage of this 
amendment was only a first step in boosting the college 
participation of these students. We must significantly boost 
our investment in all minority serving institutions to ensure 
that all college qualified students can access an affordable 
top quality education.

H.R. 609--Raises student loan fees

    While the bill provides for a gradual phase out of the 3 
percent origination fee charged to student and parent 
borrowers, it effectively doubles the current 1.5 percent 
origination fee that Direct Loan borrowers pay in the first 
year of the phase out (2006). In the second year of the phase 
out, the origination fee is 1 percent higher, and in the third 
year, .5 percent higher than borrowers in the Direct Loan 
program currently pay. While we strongly support elimination of 
these student taxes, which Democratic members have been urging 
for years, we cannot support legislation that raises fees, and 
the cost of college, for students, before eliminating them.
    H.R. 609 also requires guaranty agencies to charge student 
and parent borrowers a 1 percent insurance fee on their loans. 
Most guaranty agencies currently waive this fee, but the bill 
requires borrowers to pay this tax. According to the 
Congressional Budget Office, this change will raise $3.6 
billion over 10 years from borrowers.

H.R. 609--Eliminates critical borrower benefits that encourage on-time 
        repayment and lower interest rates

    The bill eliminates the Secretary of Education's authority 
to provide benefits, such as lower interest rates, to student 
borrowers in the Direct Loan program who make a certain number 
of on-time payments. Private banks who participate in the 
Federal Family Education Loan (FFEL) program currently offer 
similar benefits to their student borrowers.
    The bill also eliminates the in-school consolidation 
benefit, which allows student borrowers (in both the Direct 
Loan and FFEL programs) who are still in school or in their six 
month grace period, to consolidate their loans at a lower 
interest rate (60 basis points lower). The elimination of this 
benefit will cost the typical student borrower nearly $1,000 in 
additional interest rate charges, compared to current law.

H.R. 609--Closes the 9.5 percent loan loophole

    Led by Reps. Kildee and Van Hollen, last year Congress 
voted to partially close the loophole with student lenders to 
collect a guaranteed 9.5 percent rate of return on certain 
student loans. This rate of return is 4 percent higher (and was 
6 percent higher last year) than the return which lenders 
receive on regular student loans. However, this partial closure 
still allowed lenders to ``recycle,'' or use the interest 
payments and the excessive subsides paid on their outstanding 
9.5 percent loans to make new loans which also receive the 9.5 
percent rate of return. The Government Accountability Office 
estimated that recycling alone is responsible for up to 40 
percent of the current loan volume which is guaranteed this 9.5 
percent rate of return.
    At the urging of Committee Democrats, H.R. 609 completely 
closes the 9.5 percent loophole which generated billions of 
dollars in excessive profits to lenders. The closure of this 
loophole will generate over $2 billion dollars in savings over 
the next 6 years--money which should be reinvested into student 
aid. Unfortunately, the Majority is using these savings to pay 
for alleged deficit reduction.

H.R. 609--Promotes the suppression of free speech on College campuses

    We agree that it is critical that students, faculty and 
other members of the campus community have the ability to 
exercise their right to free speech, whether it is in the 
classroom or an event on campus.
    Democrats believe that any attempts to stifle the free 
speech rights of students and faculty should be taken 
seriously. However, without a conclusive body of evidence 
regarding this issue, it is unclear what problem this bill is 
trying to fix.

             SIGNIFICANT CHANGES TO STUDENT AID SAFEGUARDS

    Several changes were made to the key student aid 
safeguards, such as the 50 percent rules, the 90-10 rule, and 
the single definition of an institution of higher education. 
While we support expanding college opportunities for students, 
a number of our members remain concerned that some of these 
changes, absent strong alternative safeguards, may result in 
increased fraud and abuse in the student aid programs. We are 
also very concerned at the Committee's overall failure to 
perform its oversight duties to ensure that the nearly $80 
billion of federal student aid that is disbursed each year is 
done so with the utmost integrity.
    We encourage the Chairman to carry out the necessary 
oversight to ensure both the integrity of the student aid 
programs and to ensure that all students receive a top quality 
education.

                         PETRI-MILLER AMENDMENT

    Reps. Petri and Miller offered an amendment to incentivize 
colleges and universities to use the lowest-cost federal 
lending program, whether it is the Direct Loan program or the 
Federal Family Education Loan program. Under this amendment, 
colleges that switch to the cheaper of the two lending 
programs, as determined by the secretary of Education, will be 
given half of the savings generated from the switch. Colleges 
must use those savings to increase Pell grant scholarships or 
need-based graduate student fellowships.
    Colleges that already use the lowest-cost federal lending 
program at the time of enactment share the savings generated by 
the schools that switch to the less expensive program and must 
use the savings to increase Pell grant scholarships or need-
based graduate student fellowships. Analysis by the 
Congressional Budget Office found that if passed, this 
provision would boost student grant aid by $17 billion dollars 
over 10 years, at no additional cost to taxpayers. Republicans 
rejected the amendment.

                             ACCREDITATION

    Our members continue to have serious reservations about the 
McKeon Amendment to require accrediting agencies, as part of 
the accreditation process, to consider the ``stated missions of 
institutions of higher education, including but not limited to 
such missions as inculcation of religious values * * * ''. This 
amendment deserves close scrutiny as for the first time it 
would require the Federal Government, as part of their 
determination of the acceptability of accrediting agencies, to 
evaluate whether an accrediting agency has appropriately 
considered an institution's religious affiliation in its review 
of the program under consideration for accreditation. We 
believe that the amendment is not warranted in light of current 
practices by accrediting agencies and could have tremendous 
implications for the independence of accrediting agencies in 
determining appropriate standards for accreditation.
    The Majority has not presented evidence that this amendment 
is necessary. In fact, institutions of higher education, 
accrediting agencies and the faith community have, in the past, 
debated this issue and found an appropriate balance that 
preserves both religious and academic freedom. In 2000, the 
American Psychological Association (APA), the accrediting 
agency for doctoral and graduate programs in psychology, was 
presented with a proposal to eliminate an exemption \1\ for 
religiously affiliated institutions relating to the APA 
guidelines on ``cultural and individual diversity''. The 
exemption allowed such institutions to continue to uphold their 
right to safeguard their religious teachings and tenets and 
still achieve the standards set by the APA. Elimination of this 
exemption was soundly opposed by a broad coalition of groups. 
Other accrediting agencies such as the American Bar 
Association, the Middle States Association of Colleges and 
Schools and the Western Association of Colleges and Schools 
have also seen fit to provide exemptions for religiously 
affiliated institutions.
---------------------------------------------------------------------------
    \1\ Footnote 4 of the American Psychological Association's 
Guidelines and Principles for Accreditation of Programs in Professional 
Psychology states, ``This requirement does not exclude programs from 
having a religious affiliation or purpose and adopting and applying 
admission and employment policies that directly relate to this 
affiliation or purpose so long as (1) Public notice of these policies 
has been made to applicants, students, faculty, or staff before their 
application or affiliation with the program; and (2) the policies do 
not contravene the intent of other relevant portions of this document 
or the concept of academic freedom. These policies may provide a 
preference for persons adhering to the religious purpose or affiliation 
of the program, but they shall not be used to preclude the admission, 
hiring, or retention of individuals because of the personal and 
demographic characteristics described in Domain A, Section 5 of this 
document (and referred to as cultural and individual diversity). This 
footnote is intended to permit religious policies as to admission, 
retention, and employment only to the extent that they are protected by 
the U.S. Constitution. It will be administered as if the U.S. 
Constitution governed its application.''
---------------------------------------------------------------------------
    The provision currently included in the bill does not 
reflect our view that such a change from current law is 
unnecessary. We continue to support the rights of religiously 
affiliated institutions of higher education to retain their 
religious and academic freedom while according accrediting 
agencies their abilities to set appropriate academic standards 
of excellence for their programs.

                               CONCLUSION

    American students and families need more affordable college 
opportunities. Significantly boosting these opportunities is 
critical to the success of the American economy and the 
nation's ability to maintain and grow our competitive edge in 
the global economy.
    Not only does this bill fail on this account, but it 
actually makes the largest single cut to the student aid 
programs ever. As a result, students will be forced to pay 
thousands of dollars more for college.
    This bill, squanders a rare chance to re-deploy billions of 
dollars, saved from cuts to excessive lender subsidies, toward 
boosting grant aid and lowering the cost of borrowing to 
students. Rather than advance this partisan legislation, which 
is opposed by students, colleges, and consumer groups alike, we 
should be focused on increasing affordable college 
opportunities to all Americans.
    The reauthorization of the Higher Education Act offered the 
Committee an opportunity to ensure college access to all 
Americans. Unfortunately, the Majority chose to pass up this 
golden opportunity and instead, is making college students and 
families pay for the irresponsible budget management of the 
Congress.

   DEMOCRATIC AMENDMENTS OFFERED IN FULL COMMITTEE MARKUP OF H.R. 609

    Mr. Miller, Mr. Kildee, Mr. Kind, Mr. Van Hollen and Mr. 
Barrow offered an amendment that would maintain Congress' 
promise to lower the student loan interest rate caps to 6.8 
percent in 2005, offered student borrowers the choice of a 
variable or low fixed interest rate on their consolidation 
loans, and restore the value of Pell grant scholarships to 
their maximum buying power. The amendment was defeated.
    Mr. Miller offered a second degree amendment to the Petri 
amendment on loan consolidation to lower interest rates and to 
eliminate the .5 percent origination fee charged to students. 
The amendment was defeated.
    Mr. Tierney and Ms. McCollum offered an amendment to make 
college tuition more affordable. The amendment was defeated.
    Mr. Holt and Mr. Bishop offered an amendment to grant 
rebates to students who will have their Pell awards reduced or 
eliminated this fall, due to the recent student aid reduction 
from the Bush administration. The amendment was defeated.
    Mr. Tierney and Mr. Kind offered an amendment to boost and 
equalize campus based aid funding. The amendment was defeated.
    Mr. Andrews offered a hold harmless amendment on campus 
based aid. The amendment was defeated.
    Mr. Kildee and Mr. Van Hollen offered an amendment to 
provide additional safeguards to schools acting as lenders. The 
amendment was accepted under unanimous consent.
    Mr. Miller offered a second degree amendment to the Petri 
amendment on guaranty agencies to require that the Bush 
proposals on eliminating excessive subsidies to guaranty 
agencies. The amendment was defeated.
    Mr. Hinojosa and Mr. Grijalva offered an amendment on 
graduate HSI programs that would establish a program to 
significantly increase the number of Latino students earning 
advanced degrees. The amendment passed by recorded vote.
    Mr. Van Hollen offered an amendment to strike the provision 
that forces students to pay the insurance fee on their student 
loans. The amendment was defeated.
    Mr. Holt and Mr. Kind offered an amendment to provide up 
front tuition assistance for students pursuing careers in math, 
science or engineering. The amendment was defeated by voice 
vote.
    Mr. Scott offered an amendment to expand teaching centers 
of excellence at minority serving institutions. The amendment 
failed by voice vote.
    Mr. Miller and Mr. Petri offered an amendment to include 
the Student Aid Reward Act as part of the Higher Education Act. 
The amendment was defeated.
    Mr. Miller offered an amendment on teacher quality to: 
increase the supply of outstanding teachers; ensure that all 
children have teachers with expertise in the subjects they 
teach; identifying and reward our best teachers; and, keeping 
the best teachers and principals in our schools. The amendment 
was defeated.
    Mr. Grijalva and Ms. McCollum offered an amendment to 
retain the separate definitions of institutions of higher 
education. The amendment was withdrawn.
    Mr. Davis offered an amendment to create a study on 
minority males, their graduation rates, why they are not 
attending college, and ways to address the problem. The 
amendment was agreed to by voice vote.
    Mrs. Davis offered an amendment to reduce fees for student 
borrowers. The amendment was defeated.
    Mr. Kind and Mr. Van Hollen offered an amendment on FLAS 
award that would establish undergraduate scholarships to 
students studying high priority languages. The amendment was 
withdrawn.
    Mr. Holt offered an amendment to on Title 6 dealing with 
science, technology and foreign languages. The amendment was 
defeated.
    Mr. Ryan offered an amendment on the college textbook 
rental expansion program. The amendment was defeated.
    Ms. Woolsey offered an amendment on the Pasty Mink 
Fellowship that would increase the number of women and 
minorities pursuing advanced degrees in priority fields of 
study. The amendment was defeated.
    Mr. Wu offered an amendment to establish a grant program to 
encourage institutions of higher education to create 
partnerships with community colleges. The amendment was 
accepted by unanimous consent.
    Mr. Wu offered an amendment on university sustainability 
centers. The amendment was defeated.
    Mr. Bishop and Mr. Tierney offered an amendment to 
establish a cooperative education program. The amendment was 
defeated.
    Ms. Woolsey offered an amendment to prohibit the Secretary 
of Education from enforcing recent guidance that would allow 
institutions to demonstrate equal athletic opportunities solely 
on the basis of a survey and to count on non-responses to such 
a survey as a lack of interest in athletic opportunities. The 
amendment was defeated.
    Mrs. Davis offered an amendment on veterans. The amendment 
was withdrawn.
    Mr. Tierney offered an amendment on the academic bill of 
rights, striking section 103. The amendment was defeated.
    Mr. Andrews offered an amendment on campus fire safety. The 
amendment passed by recorded vote.
    Ms. McCarthy offered an amendment on graduation/completion 
rates that would add language to section (K) of the College 
Consumer Profile. The language would identify whether 
completion or graduation rates are from a 2-year or a 4-year 
school. The amendment was accepted under unanimous consent.
    Ms. McCarthy offered an amendment to clarify language in 
the affordability section. The amendment was accepted under 
unanimous consent.
    Mr. Owens offered an amendment to establish predominantly 
Black Serving Institutions under title 3 of the HEA. The 
amendment was defeated.
    Mr. Owens offered an amendment to strike minimum grants for 
HBCUs. The amendment was defeated.
    Mr. Wu offered an amendment on refinancing consolidation 
loans. The amendment was defeated.
    Mr. Grijalva offered an amendment en bloc on: (a) providing 
loan forgiveness for librarians and (b) additional areas of 
need, dealing with highly qualified teachers in bilingual 
education in low-income communities. The amendment was agreed 
to by voice vote.
    Mr. Davis offered on amendment to allow prisoners to 
receive financial aid while in prison. The amendment was 
defeated.
    Mr. Tierney offered an amendment to ensure Pell equity, 
striking the State Scholars language. The amendment was 
defeated.
    Mr. Scott and Mr. Grijalva offered an amendment on hate 
crimes so that an institution's data that is collected matches 
with data from the FBI. The amendment was defeated by voice 
vote.
    Ms. McCarthy and Mr. Tiberi offered an amendment on Project 
GRAD. The amendment was withdrawn.
    Mr. Davis, Mr. Andrews and Mr. Kucinich offered an 
amendment to repeal the drug question on the federal student 
aid application. The amendment was defeated.
    Mr. Holt offered an amendment to expand affordable child 
care assistance for low-income students. The amendment was 
defeated.
    Mr. Ryan and Mr. Tierney offered an amendment with Mr. 
McKeon to simplify the student aid application process. The 
amendment was agreed to by voice vote.
    Mr. Bishop offered an amendment to ensure the transfer of 
college credits. The amendment was defeated.
    Mr. Van Hollen offered an amendment on regulatory relief 
experimental sites. The amendment was agreed to by voice vote.
    Mr. Andrews offered an en bloc amendment on: (a) additional 
deferments up to two years for individuals who participate in 
an internship program following graduation; (b) residency 
program deferments for medical and dental residents; and 
restrict students' ability to consolidate their loans at a low 
fixed rate, eliminate origination fees, and change borrow 
repayment terms. The amendment was defeated.
    Mr. Andrews and Mr. Holt offered an amendment on over award 
that provides that federal aid be given without regard to 
university aid, which could then be given on top. The amendment 
was defeated by voice vote.
    Mr. Andrews offered an amendment on Bryan's Law, dealing 
with missing person procedures. The amendment was defeated.
    Mr. Andrews offered an amendment requiring a meningitis 
vaccine for all incoming students. The amendment was defeated.
    Mr. Andrews offered an amendment on technology asset 
disposal that would require personal computers disposed of by 
the institution of higher education to be fully scrubbed of 
personal information and also in an environmentally friendly 
manner. The amendment was defeated.
    Mr. Andrews offered an amendment to amend the definition of 
clock hours. The amendment was agreed to by voice vote.
    Mr. Andrews offered an amendment to direct the Education 
Secretary to support effort to create an American university in 
Jordan. The amendment was withdrawn.
    Mr. Bishop offered on an amendment on pre-competitive 
innovation that would develop a grant program for institutions 
of higher education to help bridge the gap between laboratory 
discoveries and community viable researching. The amendment was 
defeated.
    Mr. Wu offered an amendment on college textbook 
affordability and prices. The amendment was agreed to by voice 
vote.
    Mr. Wu offered an amendment on the National Commission on 
College Textbook Affordability. The amendment was withdrawn.
    Mr. Kind offered an amendment on creating a GAG study for 
older adult learners. The amendment was agreed to by voice 
vote.
    Mr. Kind offered an amendment on the education grant 
program. The amendment was defeated by voice vote.
    Mr. Andrews offered an amendment on uncooperative parents 
that would allow students whose parents won't provide financial 
information on the FAFSA to receive unsubsidized loans. The 
amendment was withdrawn.
    Mr. Andrews offered an amendment on student assistance. The 
amendment was withdrawn.
    Ms. McCarthy and Mr. Porter offered an amendment to provide 
up to $5,000 in loan forgiveness for individuals who have 
completed a baccalaureate or advanced degree and who serve for 
5 consecutive years in ``areas of national need'' as designated 
by the Secretary of Education. The amendment was accepted by 
voice vote.
    Ms. McCarthy offered an amendment to ensure that degrees 
from Rabbincal schools will be able to continue to be 
recognized as the equivalent of Baccalaureate degrees. This 
amendment was accepted by voice vote.
                                   George Miller.
                                   Timothy Bishop.
                                   Raul M. Grijalva.
                                   Chris Van Hollen.
                                   Dennis J. Kucinich.
                                   Rubert E. Andrews.
                                   Rush Holt.
                                   Lynn Woolsey.
                                   Susan Davis.
                                   Major R. Owens.
                                   Dale E. Kildee.
                                   John F. Tierney.
                                   Danny K. Davis.
                                   Carolyn McCarthy.
                                   Tim Ryan.
                                   Betty McCollum.
                                   Ron Kind.
                                   David Wu.
                                   Donald M. Payne.
                                   Robert C. ``Bobby'' Scott.

                                  
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