[Senate Report 109-218]
[From the U.S. Government Publishing Office]




                                                          Calendar No. 300

109th Congress                                                      Report
2d Session                         SENATE                           109-218
___________________________________________________________________________



                  HIGHER EDUCATION AMENDMENTS OF 2005

                               ----------                              

                              R E P O R T

                                 of the

                          COMMITTEE ON HEALTH,
                     EDUCATION, LABOR, AND PENSIONS
                          UNITED STATES SENATE

                              to accompany

                                S. 1614




               February 28, 2006.--Ordered to be printed








                                                          Calendar No. 300

109th Congress                                                      Report
2d Session                         SENATE                           109-218
___________________________________________________________________________


                  HIGHER EDUCATION AMENDMENTS OF 2005

                               ----------                              

                              R E P O R T

                                 of the

                          COMMITTEE ON HEALTH,
                     EDUCATION, LABOR, AND PENSIONS
                          UNITED STATES SENATE

                              to accompany

                                S. 1614




               February 28, 2006.--Ordered to be printed



                            C O N T E N T S

                              ----------                              
                                                                   Page
  I. Purpose and summary of the legislation...........................1
 II. Background and need for legislation..............................8
III. Legislative history and committee action.........................9
 IV. Explanation of bill and committee views.........................11
  V. Cost estimate...................................................54
 VI. Application of law of the legislative branch....................67
VII. Regulatory impact statement.....................................67
VIII.Section-by-section analysis.....................................67

 IX. Changes in existing law........................................105







                                                       Calendar No. 300

109th Congress                                                   Report 
 2d Session                      SENATE                         109-218

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

 
                  HIGHER EDUCATION AMENDMENTS OF 2005

                                _______
                                

               February 28, 2006.--Ordered to be printed

                                _______
                                

Mr. Enzi, from the Committee on Health, Education, Labor, and Pensions, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 1614]

    The Committee on Health, Education, Labor, and Pensions, to 
which was referred the bill (S. 1614) to exten the 
authorization of programs under the Higher Education Act of 
1965, and for other purposes, having considered the same, 
reports favorably thereon with an amendment in the nature of a 
substitute and recommends that the bill (as amended) do pass.

               I. Purpose and Summary of the Legislation

    The purpose of S. 1614, the Higher Education Act Amendments 
of 2005, is to reauthorize and improve the Federal student 
financial aid programs and other higher education programs 
established under the Higher Education Act of 1965. The bill 
also reauthorizes the Education of the Deaf Act of 1986, the 
United States Institute of Peace Act and the Navajo Community 
College Act.
    The bill authorizes such sums as may be necessary to carry 
out the programs.
    S. 1614 is the product of an extensive bipartisan effort 
and input from the major stakeholders in higher education.
    This legislation amends the Higher Education Act of 1965 
and the Higher Education Amendments Act of 1998 by making the 
changes identified below.

                      TITLE I--GENERAL PROVISIONS

    This title makes several conforming changes to the Higher 
Education Act of 1965, authorizes programs and updates terms 
and provisions. The 50 percent rules are relaxed to permit 
schools that have a good track record to expand distance 
education offerings. The definition of an institution of higher 
education is amended to clarify that students who have been 
home-schooled and students enrolled in dual or concurrent 
enrollment programs may be admitted as regular students. An 
existing grant program to reduce drug abuse and underage 
drinking/alcohol abuse has been rewritten. The Secretary is 
required to make expanded information about the costs of 
attending postsecondary education publicly available. 
Provisions for the Performance Based Organization, which 
administers the student aid programs, are updated. Eligibility 
for Federal student assistance programs for foreign medical 
schools is limited. The ``90/10'' rule is removed as an 
institutional eligibility requirement for proprietary schools, 
but the requirement is retained as condition of participation 
in the student financial assistance programs, and made 
applicable to all types of institutions.

                 TITLE II--TEACHER QUALITY ENHANCEMENT

    The legislation retains the current State grant and 
Partnership grant programs that provide funding to improve 
student achievement and the quality of the current and future 
teacher workforce. The accountability section has been revised 
to include State reports of pass rates for students completing 
teacher education programs. The uses of funds under the State 
and partnership grants are revised to meet the demand for 
highly qualified teachers under the No Child Left Behind Act. 
The use of technology in instruction and the ability of 
teachers to use data and technology to improve student 
achievement are enhanced.
    S. 1614 includes teacher recruitment as an allowable use 
under both the State grant and Partnership grant programs 
rather than retaining a separate grant program for recruitment. 
The committee continues to believe that teacher recruitment is 
important, but believes the need can be met more effectively, 
given the overall size of the Title II programs within the 
Higher Education Act, by providing more flexibility with 
respect to allowable activities under the State and partnership 
programs.

                      TITLE III--INSTITUTIONAL AID

    This title reauthorizes programs to support Historically 
Black Colleges and Universities, Alaska Native and Native 
Hawaiian-Serving Institutions, Tribal Colleges and 
Universities, and professional or graduate programs for 
minority students. The American Indian Tribally Controlled 
Colleges and Universities program has been changed to provide 
an optional 30percent set-aside for 1-year grants for 
construction, maintenance and renovation needs, and distribution of the 
remaining funds to eligible institutions according to an established 
formula. Three new minority-serving institutions that have established 
qualified graduate programs since the Higher Education Amendments of 
1998 have been added to the list of eligible professional and graduate 
programs. A new program for Native American-Serving, nontribal 
institutions is established to improve and expand their capacity to 
serve Native American students.

                      TITLE IV--STUDENT ASSISTANCE


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


                              PELL GRANTS

    The legislation establishes the maximum authorized Pell 
award at $5,100 for academic year 2006-07 and increases the 
authorization to $6,300 over the next 4 years. The ``tuition 
sensitivity'' provision, that could negatively affect award 
amounts for students attending low-cost institutions, such as 
community colleges, has been eliminated. The legislation 
changes the current year-round Pell grant provision, that 
allows the Secretary to award two Pell grants in 1 year to 
certain students on a case-by-case basis, to a requirement that 
the Secretary allow students who accelerate their progress by 
attending additional sessions to receive up to two Pell grants 
in 1 award year. After many years of having no time limitation 
on the receipt of Pell grant funds, the committee establishes a 
time limit of 18 semesters or an equivalent period of time.

                             TRIO PROGRAMS

    The Federal TRIO programs, which provide assistance for 
first generation and low-income students, have been 
reauthorized and strengthened. The legislation adds meaningful 
accountability that will ensure programs maintain high quality 
services to students.

                                GEAR UP

    The GEAR UP program provides assistance for States or 
partnerships to help low-income students in 7th grade through 
high school prepare for college. This legislation maintains the 
requirement that States provide scholarships for students. 
Emphasis is placed on efforts to reduce the need for remedial 
education at the postsecondary level and to improve completion 
rates for high school students.

           LEVERAGING EDUCATION ASSISTANCE PARTNERSHIP (LEAP)

    The LEAP program is reauthorized, but the Special LEAP is 
replaced by the Grants for Access and Persistence program that 
is designed to improve the ability of the Federal Government to 
leverage funds for students through State and private funds. 
Institutions are permitted to make in-kind contributions that 
help reduce the cost of attendance for students without 
reducing their eligibility for Federal student aid.

                     MIGRANT AND SEASONAL PROGRAMS

    The migrant and seasonal program is reauthorized. Changes 
to the program mirror language in the Senate Workforce 
Investment Act reauthorization bill: families of migrant 
workers are made eligible for services.

               ROBERT C. BYRD HONORS SCHOLARSHIP PROGRAM

    The Robert C. Byrd Honors Scholarship Program is 
reauthorized without change.

 Part B--Federal Family Education Loan Program [additional changes are 
                reflected under Title X--Reconciliation]

    Financial literacy is added to allowable default reduction 
activities. Consumer information requirements with respect to 
lending generally, and consolidation lending specifically, are 
increased. Lenders are required to provide borrower repayment 
information to all major credit bureaus.

                   Part C--Federal Work-Study Program

    The Secretary may waive the community service requirement 
for institutions under this part if they can certify that at 
least 15 percent of their student enrollment participates in 
community service activities.

Part D--William D. Ford Federal Direct Loan Program [additional changes 
              are reflected under Title X--Reconciliation]

    The William D. Ford Federal Direct Loan Program is 
reauthorized.

                     Part E--Federal Perkins Loans

    The Perkins loan program, through which institutions are 
permitted to operate revolving loan funds, is reauthorized. 
Three new cancellation categories were added, and one was 
expanded under this part: full-time faculty members at Tribal 
Colleges or Universities, librarians with a master's degree in 
library science serving in title I schools or libraries serving 
areas with title I schools, full-time speech language 
therapists with a master's degree working in title I schools 
and early childhood educators will be eligible for loan 
cancellation.

Part F--Need Analysis [additional changes are reflected under Title X--
                            Reconciliation]

    The bill provides for less than half-time students to 
include certain education related expenses for up to three 
semesters during their undergraduate study. Treatment of 
prepaid college tuition plans and education savings accounts is 
equalized and treatment of State scholarship programs, such as 
the Hathaway scholarship, is clarified.

       Part G--General Provisions Relating to Student Assistance

    The Advisory Committee for Student Financial Assistance is 
reauthorized. In addition to its other assignments and 
activities, the Advisory Committee is required to carry out a 
review and analysis of title IV regulations and conduct a study 
of innovative pathways to baccalaureate degree attainment.
    The Secretary is required to carry out activities that 
simplify the financial aid process, develop an ``EZ FAFSA,'' 
conduct early financial aid awareness activities and provide 
students with early assessments of financial aid eligibility.
    The bill clarifies that students will not be denied 
eligibility for Federal student aid because of a drug 
possession conviction unless the conviction occurs while the 
student is receiving assistance under this title. The bill 
retains the limitations on eligibility for students convicted 
of sale of a controlled substance.
    Institutions must provide information on their transfer-of-
credit policies. Transfer of credit must not be denied solely 
on the basis of the accreditation of the institution from which 
the student is transferring. In addition, institutions must 
provide a list of institutions with which they have 
articulation agreements and the percent of students who 
transfer academic credit successfully.
    The Secretary is required to provide institutions 
participating in Federal student aid programs with a calendar 
of reporting and disclosure requirements indicating both when 
certain information is due and the required recipients.
    As a condition of participation, all institutions must now 
derive at least 10 percent of their revenues from sources other 
than title IV programs.

                       Part H--Program Integrity

    Accrediting agencies are required to have expanded due 
process procedures in place to resolve disputes over adverse 
action. The bill updates accreditation processes with respect 
to online or distance education in recognition of current 
trends. The bill ensures that institutional missions are 
considered during the accreditation process.
    The Secretary is required to provide information to schools 
undergoing a program review and give those institutions an 
opportunity to review and respond to that information before a 
final determination is made.

                    TITLE V--DEVELOPING INSTITUTIONS

    The bill creates a new grant program to support graduate 
programs at Hispanic-Serving Institutions, similar to the 
existing program for Historically Black Colleges and 
Universities. Institutions are no longer required to wait 2 
years before applying for a grant again under this title. In 
addition, the bill eliminates a duplicative requirement that 
institutions certify certain students as low-income.

                   TITLE VI--INTERNATIONAL EDUCATION

    The international education programs are reauthorized. An 
interagency group to determine the priority for international 
education programs is established. The Secretary is provided 
with authority to eliminate grant funding for programs failing 
to meet grant requirements.

       TITLE VII--GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS

    Graduate education programs under this title are 
reauthorized. Areas of professional workforce shortages are 
included as areas of national need in determining priority for 
grants. The disability demonstration program is reauthorized.

                       TITLE VIII--MISCELLANEOUS

    New grant programs are established to help institutions of 
higher education develop new curriculum and services related to 
high skill, high growth occupations; to support the Teach for 
America program; to help institutions retain students and 
improve articulation agreements with other institutions of 
higher education; to provide fellowships for minority scholars 
in math and science; and to support merit-based math and 
science scholarships. The Secretary is required to enter into 
contracts for studies on the cost of postsecondary education 
and on college enrollment rate trends linked to secondary 
schools.

                   TITLE IX--AMENDMENTS TO OTHER LAWS


                       EDUCATION OF THE DEAF ACT

    The Federal grant program for Gallaudet University and 
other institutions serving deaf students at the secondary and 
postsecondary level is reauthorized.

                  UNITED STATES INSTITUTE OF PEACE ACT

    The legislation reauthorizes the Institute of Peace and 
provides for the Institute's authorization to be automatically 
extended for 1 year, if necessary, similar to other Federal 
education programs. In addition, the legislation clarifies that 
the term of members begins on the date of their confirmation 
and swearing in.

TRIBALLY CONTROLLED COLLEGE OR UNIVERSITY ASSISTANCE ACT AND THE NAVAJO 
                         COMMUNITY COLLEGE ACT

    Two programs that provide funding for tribally controlled 
institutions of higher education are reauthorized.

                        TITLE X--RECONCILIATION


                      Part A--Education Provisions

    The Concurrent Resolution on the Budget for Fiscal Year 
2006 contains a reconciliation instruction that directs the 
Senate Health, Education, Labor, and Pensions Committee to 
report changes in laws within its jurisdiction sufficient to 
reduce outlays for fiscal years 2006 through 2010. Among the 
provisions that help to reduce outlays are the following: (1) 
lender payments are limited to the lender interest rate, a 
provision also known as floor income; (2) guaranty agencies are 
required to deposit 1 percent of the amounts they guarantee 
into their Federal fund; (3) the scheduled shift to a fixed 
interest rate of 6.8 percent on undergraduate and graduate non-
consolidation borrowing, effective July 1, 2006, is retained; 
(4) lender insurance reimbursement rates are reduced to 97 
percent; (5) lenders originating consolidation loans will be 
charged an additional 50 basis point fee; and (6) the rate on 
PLUS loans is increased from 7.9 percent to 8.5 percent.
    The Taxpayer-Teacher Protection Act, which ends the 
practice of transferring and refunding 9.5 percent floor loans 
and provides loan forgiveness of up to $17,500 to math, science 
and special education teachers if they teach for 5 consecutive 
years is made permanent. The legislation also increases 
subsidized borrowing levels for first and second year students 
to $3,500 and $4,500 respectively, and unsubsidized borrowing 
amounts for graduate students by $2,000 per year. In addition, 
eligibility for PLUS loans is extended to graduate students. 
The single holder rule, which required borrowers to consolidate 
with their current lender, is repealed. Provisions allowing 
schools with low default rates to waive the 30-day wait period 
before making initial disbursements to first-time borrowers and 
to make single disbursements to students who are enrolled for 
only one term are reinstated. The Secretary is permitted to 
waive a portion of borrower origination fees. Borrowers in the 
income contingent repayment plan who hold public service jobs 
and make 120 consecutive on-time payments will have their loans 
canceled. A provision known as the SAP-gap, that limited 
special allowance payments to lenders making loans to parent 
borrowers, is repealed. A moratorium is placed on new ``school 
as lender'' program participants and new restrictions are 
placed on current school lenders. Members of the armed services 
or the reserve components of the armed services who have 
borrowed since July 1, 2001 and who serve in a combat zone will 
be eligible for loan deferment.
    The ``auto-zero'' amount is increased from $15,000 to 
$20,000. This allows families with adjusted gross income levels 
below $20,000 to receive a zero expected family contribution 
automatically. The income protection allowance was increased 
and the asset conversion rate was decreased for all categories 
of students.

   PROVISIONAL GRANT ASSISTANCE PROGRAM (PROGAP), INCLUDING NATIONAL 
     SCIENCE AND MATHEMATICS ACCESS TO RETAIN TALENT (SMART) GRANTS

    ProGAP is a temporary new mandatory program that provides 
over $8.25 billion in grant aid for students over 5 years. 
There are two separate funding streams: ProGAP and SMART 
grants.
    Under the basic ProGAP, approximately $6 billion is 
designated for low-income students to supplement other Federal 
student grant aid. Students eligible for Pell grants are also 
eligible for aid under ProGAP. The Secretary shall ensure that 
grants under this program are awarded to students with the 
greatest need. ProGAP grants shall be awarded in the same 
manner as grants under section 401 of the act.
    $2.25 billion is authorized to fund National SMART grants 
which will be awarded to students in their third and fourth 
years of college who are majoring in math, science, or foreign 
language fields. Grants of up to $1,500 will be awarded each 
award year. The program is designed to encourage matching 
contributions from businesses or other non-Federal sources to 
provide additional grant assistance for these students.

          Part B--Hurricane Katrina Higher Education Recovery


                        HURRICANE KATRINA RELIEF

    The Secretary is required to waive or modify certain 
provisions under the Higher Education Act related to student 
financial assistance for students and postsecondary education 
institutions receiving Federal financial assistance and 
affected by Hurricane Katrina. Students who were enrolled in 
affected institutions of higher education on August 29, 2005 
and received grant or loan aid, and were not able to complete 
the term, will not have to repay any of the funds they 
received. Affected institutions will not be required to return 
funds they received for or on behalf of affected students. 
Federal loans made to students or to parents of students who 
enrolled in affected institutions will be discharged or 
canceled. The Secretary is also authorized to approve 
modifications to Teacher Quality Enhancement Grants to enable 
grantees to use funds to assist States and local education 
agencies to recruit and retain highly qualified teachers in 
affected schools and faculty at affected institutions. 
Authority to approve modifications of TRIO grants and grants 
under part A or B of title III requested by the grantees is 
also provided. The Secretary is given general authority to 
accommodate other situations as they arise. These provisions 
will sunset on September 30, 2006.

                           PROGRAMS REPEALED

    The bill repeals a number of programs, including the 
following, because they are ineffective, duplicative, or have 
not been funded for several years:
          Learning Anytime, Anywhere Partnerships
          Recruitment and Retention Grants
          Academic Achievement Scholarships
          Urban Community Service program
          Preparing Teachers to Use Technology
          Commission on Web-Based Education

              II. Background and Need for the Legislation

    This legislation is needed because authorization for the 
programs in the Higher Education Act expires at the end of 
December 2006. The Federal Government must maintain its 
commitment to broad access to higher education for all 
students, despite their background.
    Our economy is on the threshold of its most significant 
transformation in history. In the next 10 years, about 12 
percent of the workforce will be leaving their careers behind 
for retirement. In addition, today's jobs are requiring more 
from workers than ever before. It is estimated that by 2015, 
three-quarters of all workers will have some postsecondary 
education or training, but by 2020, we will need 14 million 
more skilled workers in this country than we are currently able 
to provide.
    As we stand on the brink of this workforce revolution, the 
reauthorization of the Higher Education Act enables us to meet 
the coming challenges head on. American students will need a 
quality postsecondary education to compete in the global 
economy. The Higher Education Act is part of the comprehensive 
approach to education and training that this country needs. 
This approach must effectively coordinate programs, such as the 
Workforce Investment Act, the Perkins Career and Technical 
Education Act and other Federal education and training 
initiatives, to ensure that we remain competitive.
    The American postsecondary education system is renowned 
throughout the world. More than 6,000 colleges and universities 
enroll more than 14 million students, providing access to all 
types of academic and training programs. Enrollment in 
postsecondary education has increased over the past 30 years, 
and it is expected to continue to do so, particularly in 2-year 
programs. By 2008, the number of students enrolled in 
postsecondary education will have doubled from 1970 levels. At 
the same time, the face of today's average college student is 
changing. The ``average'' student enrolled in postsecondary 
education or training these days is most likely to be older 
than 24 years old. They are more likely to be independent and 
they are more likely to be female.
    Periodic reauthorizations of the Higher Education Act 
provide the opportunity to update the legislation, improve 
existing programs and address newly identified needs. S. 1614 
makes changes to the law that will help today's students attend 
and succeed in college, such as providing additional grant 
assistance to the neediest students, permitting greater access 
to distance education, and ensuring that students have reliable 
information about the cost of attending college. S. 1614 
improves accountability in the higher education programs and 
promotes partnerships among institutions of higher education, 
States and businesses.

             III. Legislative History and Committee Action

    At the beginning of the 109th Congress, Senators Enzi, 
Frist, and McConnell introduced S. 9, The Lifetime of Education 
Opportunities Act of 2005: Preparing America to Compete in the 
21st Century and Beyond. The purpose of the bill was to improve 
America's competitiveness in the global economy by improving 
and strengthening Federal education and training programs. With 
respect to postsecondary education, the bill promoted improved 
academic preparation for postsecondary education; set high 
expectations for all students; promoted lifetime learning 
opportunities for students at all stages in life; encouraged 
quality educational opportunities for all students, including 
nontraditional students; promoted improved accountability in 
the administration of the student financial aid programs; 
called for simplification of the student aid application 
process; and encouraged Congress to address the rising costs of 
higher education.
    Prior to the introduction of a bill to reauthorize the 
Higher Education Act, the committee held five hearings and one 
roundtable discussion:

   HIGHER EDUCATION ACCREDITATION: HOW CAN THE SYSTEM BETTER ENSURE 
             QUALITY AND ACCOUNTABILITY (FEBRUARY 26, 2004)

    Four witnesses appeared before the committee: Steven Crow, 
the Executive Director of the Higher Learning Commission of the 
North Central Association of Colleges and Schools, Jeffrey 
Wallin, President of the American Academy for Liberal 
Education, Jerry Martin, Chairman of the American Council of 
Trustees and Alumni, and Robert Potts, President of the 
University of North Alabama.

 HIGHER EDUCATION AND THE WORKFORCE: ISSUES FOR REAUTHORIZATION OF THE 
                  HIGHER EDUCATION ACT (MARCH 4, 2004)

    Charles Bohlen, President of Laramie County Community 
College, James Votruba, President of the University of Northern 
Kentucky, Beth Buehlmann, Vice President and Executive Director 
of the Center For Workforce Preparation, U.S. Chamber of 
Commerce, Diana G. Oblinger, Executive Director of Higher 
Education, Microsoft Corporation, and Ellen O'Brien Saunders, 
Executive Director, Washington State Workforce Training and 
Education Coordinating Board testified before the committee.

 A YEAR-'ROUND COLLEGE CALENDAR: ADVANTAGES AND IMPEDIMENTS (MARCH 9, 
                                 2004)

    The Subcommittee on Children and Families of the Committee 
on Health, Education, Labor, and Pensions heard testimony from 
Stephen Trachtenberg, President of The George Washington 
University, India McKinney, a student at Vanderbilt University, 
Michael Lomax, President of Dillard University, who spoke on 
behalf of the United Negro College Fund, Virginia Hazen, 
Director of Financial Aid at Dartmouth College, and Margaret 
Heisel, Associate to the Vice President and Executive Director, 
Admissions and Outreach, University of California Office of the 
President.

           LIFELONG EDUCATION OPPORTUNITIES (APRIL 14, 2005)

    Two sets of witnesses provided testimony at the hearing. 
The first panel consisted of the Secretary of Education, 
Margaret Spellings, and the Secretary of Labor, Elaine L. Chao. 
The second panel included the Governor of Kansas, Kathleen 
Sebelius, the Governor of Kentucky, Ernie Fletcher, the 
Director of the Washington Office of the Greystone Group, 
formerCongressman Steve Gunderson, the Executive Director of 
the Business-Higher Education Forum, Brian Fitzgerald, and the Vice 
President of the Colleges of Worcester Consortium, Pamela Boisvert.

 PROVIDING QUALITY POSTSECONDARY EDUCATION: ACCESS AND ACCOUNTABILITY 
                            (APRIL 28, 2005)

    Five witnesses appeared before the committee: Kati Haycock, 
Director of The Education Trust, Trinity Thorpe a student at 
Pepperdine University, Brian Bosworth, President of 
FutureWorks, Robert Shireman, Director of The Institute for 
College Access and Success and Phillip Van Horn, President of 
the Wyoming Student Loan Corporation.

ROUNDTABLE--HIGHER EDUCATION AND CORPORATE LEADERS: WORKING TOGETHER TO 
            STRENGTHEN THE AMERICAN WORKFORCE (MAY 19, 2005)

    The committee heard testimony from Louis Caldera, President 
of the University of New Mexico, Robert Craves, a founder of 
Costco Wholesale Corporation and currently CEO and President of 
the Washington Education Foundation, Edward Hoff, Vice 
President-Learning, IBM, Edison Jackson, President, Medgar 
Evers College, the City University of New York, Patricia 
McGuire, President of Trinity College in Washington, DC, James 
Mullen, President and CEO of Biogen IDEC, Laura Palmer-Noone, 
President of the University of Phoenix, Walter Nolte, President 
of Casper College, Charles Reed, Chancellor of the California 
State University and Patrick Sweeney, President and CEO of Odin 
Technologies. Rev. Michael Sheeran, President of Regis 
University had planned to testify but was unable to. He was 
invited to submit a statement for the record.

                      RECOMMENDATIONS AND COMMENTS

    In addition, the committee considered the written 
recommendations and comments from over 100 organizations and 
institutions involved in the field of higher education.
    On September 6, 2005, Senator Enzi introduced the Higher 
Education Amendments of 2005, S. 1614. The bill was cosponsored 
by Senator Kennedy.

                  A. AMENDMENTS ADOPTED BY VOICE VOTE

    On September 8, 2005, the committee met to consider S. 
1614. The committee took action on one amendment, unanimously 
adopting an amendment in the nature of a substitute by Senator 
Enzi that makes technical changes. Two additional amendments 
were offered and subsequently withdrawn. The bill was approved 
by a roll call vote of 20 yeas to 0 nays and ordered to be 
reported with an amendment in the nature of a substitute.

                           B. ROLL CALL VOTE

    The bill as amended was reported favorably by a vote of 20 
yeas to 0 nays.
    Yeas: Enzi, Gregg, Frist, Alexander, Burr, Isakson, DeWine, 
Ensign, Hatch, Sessions, Roberts, Kennedy, Dodd, Harkin, 
Mikulski, Jeffords, Bingaman, Murray, Reed, and Clinton.

            C. AMENDMENTS OFFERED AND SUBSEQUENTLY WITHDRAWN

    Two amendments were offered, discussed, and subsequently 
withdrawn:
    1. Senator Gregg offered and then withdrew an amendment to 
target the supplemental grant aid provided in the bill for 
ProGAP recipients more heavily toward the neediest Pell grant 
recipients.
    2. Senator Clinton offered and then withdrew an amendment 
to increase the income protection allowance provided for 
independent students in the Federal need analysis formula.

              IV. Explanation of Bill and Committee Views


                      TITLE I--GENERAL PROVISIONS

    In amending Title I of the Higher Education Act of 1965, 
the committee intends to update the law to reflect the dramatic 
changes in the field of higher education over the past 10 
years. With a growing proportion of students attending 
concurrent or dual enrollment programs, or through distance 
education programs, the committee amends the definitions of 
higher education to incorporate these larger trends. The 
committee also changes certain provisions to reduce the 
potential for fraud and abuse within the Federal higher 
education programs.

                    INSTITUTIONS OF HIGHER EDUCATION

    In the definition of an institution of higher education, 
the committee has included a reference to the section of the 
act that specifies that students who have completed a secondary 
education in a home school setting that is treated as a home 
school or private school under State law are to be considered 
regular students. This was done to clarify that an institution 
of higher education may admit home schooled students without 
endangering the institution's eligibility to participate in the 
higher education programs under this act.
    The committee action is based on guidance issued by the 
Department of Education in a ``Dear Colleague'' letter that 
stated, ``An institution can admit most home-schooled students 
as regular students without jeopardizing its eligibility to 
participate in the title IV, HEA student financial assistance 
programs. The Department considers that a home-schooled student 
is beyond the age of compulsory school attendance if the State 
in which the institution is located does not consider the 
student truant once he or she has completed a home-school 
program.''

                     DUAL AND CONCURRENT ENROLLMENT

    The committee recognizes the significant growth in dual and 
concurrent enrollment programs, which enable some secondary 
students to earn postsecondary credit in a program of study at 
an institution of higher education. According to data from the 
National Center for Education Statistics, in school year 2002-
03, 71 percent of high schools offered dual credit courses. In 
response to this trend, the committee clarifies that students 
in dual or concurrent enrollment programs may be admitted as 
regular students in institutions participating in programs 
authorized under the Higher Education Act of 1965.

                        FOREIGN MEDICAL SCHOOLS

    The committee is concerned that a large proportion of the 
student loan funds provided to students enrolled in foreign 
medical schools are being used at foreign medical schools that 
are primarily populated by American students. In general, 
medical schools qualify to participate in the Federal Family 
Education Loan program if at least 60 percent of their student 
body is non-American and at least 60 percent of their students 
or graduates taking the examinations administered by the 
Educational Commission for Foreign Medical Graduates received a 
passing score. However, current law contains an exemption to 
this dual requirement for foreign medical schools that have a 
clinical training program that was approved by a State as of 
January 1, 1992. This exemption has resulted in an inordinate 
number of students who attend otherwise non-qualifying 
institutions receiving Federal student loans. Therefore, the 
committee has removed the exemption.

                           DISTANCE EDUCATION

    The National Center for Education Statistics (NCES) has 
reported that in academic year 2000-01, 56 percent of all 
institutions of higher education offered distance education 
programs, and 68 percent either offered some online programs or 
planned to offer such programs within 3 years. Between academic 
years 1997-98 and 2000-01, enrollment in distance education 
doubled, with over half of the enrollment occurring in public, 
2-year institutions. While this information is somewhat dated, 
it is the most recent data available from NCES and it does 
provide important information about the current trend toward 
expanded use of distance education in the postsecondary 
education field.
    The committee amends the ``50 percent'' rule to facilitate 
the desire of many accredited institutions of higher education 
to pursue distance education programs as a means to increase 
postsecondary enrollment, reach adult learners and 
``nontraditional'' students, and support access to 
postsecondary education in rural areas.
    In modifying the current limitation on distance education 
enrollment, the committee retains the requirement that 
institutions not enroll more than 50 percent of their students 
in correspondence courses, and that institution not offer more 
than 50 percent of their courses through correspondence. 
However, the committee establishes clear requirements for 
institutions offering distance education programs to be exempt 
from the limitations that apply to correspondence courses. 
These minimum standards required to be met by an institution to 
waive the ``50 percent'' rules will help guard against fraud 
and abuse by schools participating in the Federal student aid 
programs. These standards are: the institution (1) must be 
accredited by an agency or association recognized by the 
Secretary that has distance education within its scope of 
recognition; (2) would otherwise be eligible to participate in 
title IV programs; (3) has not had its participation in the 
title IV programs limited, suspended, or terminated in the 
previous 5 years; (4) has not had, or failed to resolve, an 
audit finding that resulted in the institution being required 
to pay a fine of more than 25 percent of the total funds the 
institution received under title IV of the Higher Education 
Act; and (5) has met the requirements of section 487(d), having 
to do with teach-out plans in the case of a school's closure.
    The committee believes these changes will help provide 
appropriate flexibility for institutions of higher education to 
expand distance education offerings and reach more students 
while ensuring the integrity of the Federal student assistance 
programs. The committee does not believe these requirements 
will limit the participation of new, high-quality distance 
education providers.

                ALCOHOL AND DRUG ABUSE PREVENTION GRANTS

    The problem of underage drinking, binge drinking, and drug 
use in our Nation's institutions of higher education and by 
students in the communities surrounding such institutions is of 
great concern to the committee. One thousand seven hundred 
college students between the ages of 18 and 24 die each year 
from alcohol-related injuries. On college campuses, the 
combination of social and environmental influences creates a 
culture of drinking that passively or actively promotes the use 
of alcohol. Many college students themselves avoid the unsafe 
use of alcohol and drugs. However, they are still at great risk 
to suffer the effects of the high-risk behaviors of their 
peers.
    Many students who engage in underage drinking, binge 
drinking, or drug use are harming themselves as well as those 
around them. Students who do not use, or who drink legally 
andmoderately, frequently suffer secondhand effects from the behavior 
of other students who drink too much. The immediate and long-term risks 
associated with alcohol and drug use underscore the need for effective 
prevention programs. Some colleges and universities have broad 
prevention approaches that combine traditional educational programs 
with strategies aimed at changing the environment on campus and in 
surrounding communities. This approach recognizes that student behavior 
is influenced at multiple levels: personal, peer, institutional, and 
community. This is an approach supported by the committee and 
encouraged in this bill.

  PERFORMANCE-BASED ORGANIZATION (PBO) FOR FEDERAL STUDENT FINANCIAL 
                               ASSISTANCE

    The committee applauds the efforts since the last 
reauthorization to implement the PBO. Schools and individuals 
have benefited from improved efficiency in originating, 
servicing and processing grant and loan aid. The ombudsman has 
provided needed guidance to students struggling to navigate the 
complex system. There is strong support for continuation of 
these efforts to make further progress in the delivery of 
student financial aid.

                        COST OF HIGHER EDUCATION

    The committee feels strongly that the rising cost of higher 
education is undermining the Federal commitment to making 
college accessible and affordable. Although Federal 
expenditures for higher education are at an all time high, the 
purchasing power of Federal programs has been losing ground as 
colleges and universities continue to increase tuition and fees 
at rates much higher than the rate of inflation.
    The College Board, which produces a highly respected annual 
survey of college costs, reported in its 2004 report that the 
average tuition and fees for a public, 4-year institution of 
higher education had increased by 10.5 percent from the 
previous year. Even after adjusting for inflation, tuition and 
fees have increased by more than 50 percent in the 10 years 
preceding the 2004-05 academic year.
    The rapid increase in college costs has negatively impacted 
the ability of students to afford a college education, for 
students and parents to save sufficiently to prepare for the 
costs of college, and has required an increasing number of 
students to borrow high-interest loans from non-Federal 
programs, adding significant debt burden to students and their 
parents.
    Diverse explanations have been offered, but the 
consequences of these rapid increases have not been any less 
dramatic. In 1995, the maximum Pell grant award was $2,340. 
Since then, the maximum grant has increased to $4,050, yet many 
students still find themselves borrowing additional funds to 
meet the cost of attendance. While the overwhelming majority of 
public institutions charge tuition and fees of less than 
$9,000, the majority of private schools (both proprietary and 
independent) assess tuition and fees in excess of $15,000. 
Despite historic increases in Federal student assistance 
programs, cost is surpassing the ability of students to pay for 
their education, even while receiving the maximum Federal 
assistance available to them.
    As a result, many parents and students who have saved for 
college find themselves borrowing additional funds to meet the 
costs of college. The Advisory Committee on Student Financial 
Assistance suggests that cost accounts for up to 48 percent of 
college-ready high school seniors not enrolling in a 4-year 
institution of higher education, and for 22 percent of college-
ready seniors not enrolling in any postsecondary education at 
all.
    To address this challenge, the committee includes several 
separate provisions intended to provide students and their 
parents with better information about the cost of college. The 
committee expects this information to help provide students and 
their parents with a realistic set of expectations about the 
cost of postsecondary education, as well as introduce some 
incentives for institutions to control the cost of attendance. 
The public availability of this information is expected to 
support institutions and States that are committed to 
maintaining access to affordable higher education.
    The committee has taken several steps to ensure students 
and parents have access to information about the cost of 
college, by making information available to compare 
institutions, as well as to create an index that tracks the 
affordability of higher education. The committee believes this 
additional information will help parents and students make 
well-informed decisions about postsecondary attendance, so the 
greatest number of students can attend and succeed in 
postsecondary education.
    While the committee recognizes that many private sector 
firms have produced high-quality informational products with 
respect to the cost of college, the committee believes the 
Department of Education can also provide added value in making 
better use of the information collected and made available 
through the college opportunities online (COOL) Web site. The 
committee expects the added emphasis on the Department's Web 
site as a means for families and students to obtain information 
about postsecondary education will result in an effort to make 
such resources more user-friendly.

                 TITLE II--TEACHER QUALITY ENHANCEMENT

    With the passage of the No Child Left Behind Act, Congress 
took an important step to ensure that all of the Nation's 
children are taught by highly qualified teachers. The committee 
believes that improving teacher quality is an important and 
effective means to increase student achievement. By 
strengthening and developing the State and partnership grants 
in title II, the committee bill provides various mechanisms to 
our Nation's educators to receive the training and support 
necessary to strengthen our Nation's early childhood programs, 
and elementary and secondary schools. The committee expects 
activities under title II of this act will complement the 
larger teacher preparation efforts in title II of the No Child 
Left Behind Act, as well as other relevant State efforts.

          HIGH NEED ACADEMIC SUBJECT AREAS AND HIGH NEED AREAS

    Throughout title II, the committee references high-need 
academic subject areas (such as reading, mathematics, science, 
and foreign languages) and high-need areas (such as special 
education, language instruction educational programs for 
limited English proficient students, and early childhood 
education). Studies indicate that a shortage of highly 
qualified teachers exists nationally in the specific subject 
areas and services indicated above. Nevertheless, it is not the 
committee's intent for teacher training, and professional 
development supported under this title to be limited to these 
subjects and service areas alone, since shortages in particular 
subject and service areas may vary from State to State, from 
district to district, or from school to school.

                        EARLY CHILDHOOD EDUCATOR

    The committee recognizes that quality early childhood 
education programs are staffed by educators who are fully 
competent in all the essential domains of early childhood 
development including cognitive, social, emotional, and 
physical development. Given the great variation in the 
governance, funding, and standards of early childhood education 
programs including, Head Start, Early Head Start, State pre-
kindergarten programs, local education agency pre- 
kindergarten, and others, the committee has not specifically 
provided a definition of a fully competent early childhood 
educator. It is the committee's intent that early childhood 
educators meet the standards and qualifications of the program 
in which they are teaching and that all early childhood 
education programs ensure that young children receive a 
comprehensive early childhood education that prepares them to 
succeed in early elementary education and beyond.

                      PRELITERACY AND PRE-NUMERACY

    The committee believes quality early childhood education 
programs are comprehensive programs that address children's 
social, emotional, and physical development, as well as their 
cognitive development. In particular, research has shown the 
critical importance of quality early childhood instruction that 
addresses language, early literacy, and pre-numeracy skills for 
school readiness and later academic achievement. Effective 
early reading and pre-numeracy programs delivered by fully 
competent teachers are vital for later reading and mathematics 
proficiencies. All early childhood educators must be equipped 
with an understanding of how oral language, pre-reading and 
early literacy develops as well as pre-numeracy skills. Early 
childhood educators need professional development throughout 
their careers to strengthen their knowledge and skills for 
promoting children's language, pre-reading, and pre-numeracy, 
as well as other cognitive areas.

                           ELIGIBLE PARTNERS

    The bill further focuses on teaching skills and learning 
strategies by including as eligible partners in the partnership 
grants academic departments such as psychology, human 
development, or other departments with comparable expertise in 
the disciplines of teaching, learning, and child and adolescent 
development. Other academic departments are also eligible to 
participate. Additional entities added as eligible partners 
include a science-, mathematics- or technology-oriented entity; 
an early childhood education program; an educational service 
agency; and a consortium of local educational agencies.
    It is the intent of the committee that community colleges 
and tribal colleges be eligible to participate in the Teacher 
Quality Partnership grants. These institutions provide a 
critical entry point for many teachers and every effort should 
be made to strengthen the programmatic ties to 4-year 
institutions.

                            TEACHING SKILLS

    Current law provides an allowable use of funds for the 
partnership grants to prepare teachers with the knowledge and 
skills to work with and involve parents in their children's 
education, as well as to provide instruction to diverse student 
populations, including students with disabilities and with 
limited English proficiency. The committee, however, believes 
that all teachers should be prepared to work with and involve 
parents, as well as provide instruction to diverse student 
populations, and that such preparation is paramount to 
effective teaching for all teachers. Accordingly, the committee 
has defined the term ``teaching skills'' to include the ability 
to communicate and work with parents, as well as the ability to 
increase student achievement, focus on identification and 
tailoring of academic instruction to students' specific 
learning needs, (particularly students with disabilities, 
students with limited English proficiency, and gifted and 
talented students), use strategies based on scientifically 
based research, and manage a classroom effectively. Under this 
legislation, both State and eligible partnerships must use 
title II funds to promote effective teaching skills.

           TEACHING STUDENTS WITH LIMITED ENGLISH PROFICIENCY

    The committee has made several improvements in title II to 
further the success of students with limited English 
proficiency by focusing on the instruction the students receive 
in the classroom and on the instruction that teachers receive 
in their preparation program. For example, the definition of 
teaching skills now highlights that academic instruction should 
be tailored to students' specific learning needs, particularly 
for students with limited English proficiency. The bill also 
prioritizes increasing the number of highly qualified teachers 
who teach students with limited English proficiency. Further, 
partnerships may use their grant funds to increase the number 
of faculty at institutions of higher education with expertise 
in instruction of students with limited English proficiency to 
better prepare teachers to instruct these students.

           RECRUITMENT, RETENTION, AND ADVANCEMENT STRATEGIES

    Teacher attrition undermines teacher quality and drives 
teacher shortages. According to the National Commission on 
Teaching and America's Future, one-third of beginning teachers 
leave the profession within 3 years, and nearly one-half leave 
within 5 years. In high poverty schools, turnover rates are 
even worse--approximately one-third higher than the rate for 
all teachers. Research also shows that teachers who leave are 
likely to have greater skills than those who stay.
    In order to ensure the quality and capacity of high quality 
teachers, the committee encourages and supports the training 
and development of our Nation's teachers, who are the most 
important in-school influence on student learning. The 
committee includes language that permits the grantees to use 
scholarships and support for students involved in undergraduate 
teacher preparation programs. These scholarships and support 
services provide incentives for individuals to enroll in and 
complete teacher preparation programs and subsequently teach in 
high-need local educational agencies. The language also 
provides follow-up services for former scholarship recipients 
and encourages eligible partnerships to recruit minority 
students to become highly qualified teachers. This language 
strengthens teacher training and recruitment to alleviate the 
demand for high quality teachers.

                          TEACHER RECRUITMENT

    The committee has included teacher recruitment as an 
allowable use under State and partnership grants rather than 
retaining a separate grant program for recruitment. The 
committee continues to believe that teacher recruitment is 
important, but believes the need can be met more effectively, 
given the overall size of the title II programs within the 
Higher Education Act, by providing more flexibility with 
respect to allowable activities under the State and partnership 
programs.

                              RURAL AREAS

    The committee continues to recognize the unique challenges 
that school districts in rural areas face, particularly in 
recruiting and retaining high-quality teachers. Some of the 
barriers to recruitment and retention include low salaries, 
geographic, social, and professional isolation, housing 
shortages, poor physical working conditions, a paucity of 
teacher preparation programs targeted to rural schools, limited 
opportunities for professional development, and the necessity 
for teachers to teach more than one grade or subject. Each of 
these factors contributes to the reality that teachers in rural 
areas tend to be less educated, less experienced, younger, and 
more likely to teach in fields outside their area of 
certification.
    To help address these challenges, the committee authorizes 
funds under this section to be used to provide grants to rural 
school districts for the recruitment and retention of teachers 
in rural school districts. Rural school districts, or consortia 
of rural school districts, may use funds to implement a range 
of recruitment strategies, such as tuition assistance, loan 
forgiveness, housing assistance, and financial incentives for 
working in areas of greatest need, as well as retention 
strategies, such as mentoring programs and ongoing 
opportunities for professional growth and advancement. In 
addition, the bill encourages rural school districts to form 
partnerships with institutions of higher education to help 
prepare beginning teachers in rural areas and to assist 
teachers in rural areas to become highly qualified.

     PERFORMANCE BASED COMPENSATION AND TEACHER ADVANCEMENT SYSTEMS

    States are permitted to assist local educational agencies 
in developing performance based compensation systems and 
teacher advancement systems that reward teachers who increase 
student achievement and provide teacher mentoring for new 
teachers and access to ongoing professional development 
opportunities. The committee recognizes that one promising 
model for such a system is the Teacher Advancement Program 
(TAP), a comprehensive whole schoolreform that includes four 
elements: multiple career paths; ongoing, applied professional growth; 
instructionally focused accountability; and performance-based 
compensation for teachers. TAP is currently operating in over 100 
schools in 11 States and the District of Columbia. Most schools that 
have implemented TAP report that student achievement is increasing and 
that collegiality among teachers is high. Schools also report that TAP 
has reduced teacher turnover and attracted high-quality teachers to 
hard-to-staff schools.
    Furthermore, the committee has authorized States to assist 
efforts to participate in a nationally recognized advanced 
credentialing system as a permissible State grant activity. The 
committee believes that quality teaching will be advanced 
through participation by teachers in a nationally recognized 
credentialing system, such as the National Board for 
Professional Teaching Standards, which provides a national 
voluntary system of certifying teachers who meet high standards 
of knowledge and professional practice, or the American Board 
for Certification of Teacher Excellence, which is developing a 
Master Teacher certification for experienced teachers who have 
demonstrated outstanding classroom effectiveness and who 
possess superior subject area mastery.

                   SUPPORT PROGRAMS FOR NEW TEACHERS

    Title II strengthens teacher training partnership grants by 
requiring the creation of support programs for new teachers 
during their first 3 years of teaching. This program will 
provide new teachers with skills in educational interventions 
and knowledge of scientific research on teaching and learning, 
and will support new teachers through high quality teacher 
mentoring, professional development, and interdisciplinary 
collaborations.
    A focus on knowledge and application of teaching skills and 
methods of student learning based upon scientifically based 
research will equip teachers to understand and respond 
effectively to diverse student populations, including students 
with disabilities, limited English proficient students, and 
students with different learning styles or other special 
learning needs.

                               INDUCTION

    The committee intends the induction programs described in 
the bill to be formalized and comprehensive programs designed 
to provide up to 3 years of support to beginning teachers to 
improve teaching skills and promote retention in the teaching 
field. Induction includes high quality mentoring by experienced 
and qualified mentors, structured collaboration time with 
teachers in the same department, grade, or field, structured 
meeting time with administrators, and professional development 
activities. Induction programs may also provide reduced 
teaching loads, the support of a teaching aide, orientation 
seminars, and regular evaluation of the teacher inductee, the 
mentors, and the overall program.

                           RESIDENCY PROGRAM

    Teacher turnover regularly drains schools of their most 
important resource: qualified educators. This is a critical 
moment for us to address persistent teacher attrition and to 
improve teacher retention. The committee supports the 
development of educators so they have not only the credentials 
but also the skills and training to be truly effective in the 
classroom.
    This legislation allows partnerships to provide support for 
new teachers through comprehensive induction programs, such as 
a residency program. Research consistently shows that induction 
programs reduce the number of teachers who leave their schools 
or the profession.
    Residency programs also include information sharing among 
teachers, principals, administrators, and participating higher 
education faculty. This can provide essential instructional 
leadership and classroom support for teachers during induction 
and beyond.

                  TEACHER MENTORING IN RURAL DISTRICTS

    The committee recognizes the importance of teacher 
mentoring and that it may be particularly difficult to 
establish and maintain mentoring relationships in isolated, 
rural school districts, but that mentoring is no less important 
in such school districts. The committee believes that every 
effort should be made to ensure that rural teachers can fully 
participate in mentoring activities, including providing these 
opportunities through online or electronic technology, as well 
as other means.

           INNOVATIVE STRATEGIES TO TRAIN NEW SCHOOL LEADERS

    The committee includes, as an allowable use of funds for 
States and partnerships, innovative strategies to prepare new 
leaders, recognizing that school leaders have a significant 
impact on student achievement.
    The committee expects that States and partnership grantees 
using Federal funds for this purpose will work with effective 
programs that demonstrate quantifiable results, such as the New 
Leaders for New Schools program. The New Leaders program 
recognizes several core values: (1) every child can achieve the 
highest levels of academic excellence; (2) delivering high 
quality public education to all children is critical and 
affords every child the full range of opportunities in life; 
(3) great schools are led by great principals; (4) principals 
coach and inspire teachers to reach and teach every child and 
collaborate with their parents, families, and communities to 
make schools successful; and (5) with access to outstanding 
public schools, children will have a greater ability to develop 
the competence, critical thinking, social and civic skills to 
reach their highest potential.
    The committee therefore encourages States and partnership 
grantees to consider working with these programs due to their 
historic success in recruiting, training, and supporting 
outstanding leaders for high-need public schools. These 
programs have clearly shown their ability to foster higher 
levels of academic achievement, greater college readiness, and 
increased graduation rates.

                      NUMBER OF PARTNERSHIP AWARDS

    As explained in section 204, an eligible partnership is 
limited to one partnership grant during a 5-year period. The 
committee does not intend, however, to preclude an individual 
partner in a funded partnership grant from entering into 
another eligible partnership consisting of new members during 
that same 5-year period. For example, a State university might 
partner with a group of local education agencies in one part of 
the State for one partnership grant and with another, different 
group of local education agencies in another part of the State 
for another partnership grant.

                         PROGRAM EFFECTIVENESS

    The committee believes it is critical for a State to 
evaluate the effectiveness of its teacher preparation programs, 
and particularly, the impact of such programs on students' 
academic achievement. How a State measures the effectiveness of 
the teacher preparation programs, however, is just as 
important. A State must measure the effectiveness of the 
teacher preparation programs in a manner that produces 
meaningful and useful information to both the State and to the 
teacher preparation programs.
    Many States are already collecting critical information 
about student achievement. But in order to evaluate the 
effectiveness of teacher preparation programs in promoting 
student achievement, States need to do more than just collect 
data. Many States have already begun to develop comprehensive, 
integrated data systems. But many other States are constrained 
by limited budgets and competing policy priorities. The 
committee recognizes that States are at different stages in 
developing comprehensive data systems, but believes it is 
critical that all States have the capacity to accurately 
measure the effectiveness of teacher preparation programs and 
professional development activities.
    Accordingly, this bill requires a State that applies for a 
grant under this section to describe its capacity to measure 
the effectiveness of teacher preparation programs using 
statewide data systems. If a State does not have the current 
capacity to measure the effectiveness of teacher preparation 
programs, it must describe the activities it will undertake to 
either enhance or expand the integration of existing data 
systems to better measure the effectiveness of teacher 
preparation programs, or in the event such data systems do not 
exist, plans to develop such a system. Recognizing that some 
States may need Federal resources to help build the capacity, 
the committee authorizes States to use funds under this section 
to enhance or expand the integration of existing data systems, 
or develop such a system to better measure the effectiveness of 
teacher preparation programs and professional development 
activities.
    The committee believes that stronger accountability and 
comprehensive, integrated data systems will not only provide 
answers to the questions related to the impact of teacher 
preparation programs on student achievement, but will provide 
educators, policymakers, and teacher preparation programs with 
critical information on practices that lead to consistent 
student achievement gains.

                      TITLE III--INSTITUTIONAL AID

    Institutions that serve students historically denied access 
to postsecondary education because of race or national origin 
play an important role in higher education. They help preserve 
cultural traditions. At the same time they offer affordable, 
high quality college education to thousands of students as well 
as provide much needed job training. These institutions also 
provide crucial support services and add hope to communities 
that have high rates of poverty and unemployment. Recognizing 
the purpose and importance of these colleges and universities, 
it is the intent of the committee to reauthorize and strengthen 
programs supporting institutional aid for institutions with 
substantial percentages of high-need students, Tribal Colleges 
and Universities, Alaska Native and Native Hawaiian-Serving 
Institutions, Native American-Serving Institutions, and 
Historically Black Colleges and Universities.

     AMERICAN INDIAN TRIBALLY CONTROLLED COLLEGES AND UNIVERSITIES

    There are 34 federally-supported Tribal Colleges and 
Universities (TCUs) in the United States. They educate over 
30,000 students by offering associate's, bachelor's, and 
master's degrees as well as over 200 vocational certificate 
programs. Despite their significance, historically, TCUs 
possess limited financial resources. This hinders their 
capacity to maintain and update facilities and instructional 
resources. In today's world, a high quality education is very 
much dependent upon the technology and resources available to 
students. The committee recognizes TCUs do not have sufficient 
financial ability to provide these opportunities without 
Federal assistance.
    To strengthen TCUs' capacity to offer quality educational 
opportunities to their students, the committee made changes to 
the way funding is distributed under this section. The 
committee gives the Secretary the authority to reserve up to 30 
percent of awardable funds to address construction needs. If 
reserved, grants of not less than $1 million will be awarded to 
institutions for maintenance and renovation. The remaining 
money shall be awarded so that 60 percent goes to eligible TCUs 
by formula using the Indian student count and 40 percent goes 
in equal shares to those same institutions. The committee 
eliminates the wait-out period for these schools and 
establishes a minimum award of $500,000.

            NATIVE AMERICAN-SERVING, NONTRIBAL INSTITUTIONS

    The term ``Native American'' can be broad and encompassing. 
For the purpose of this legislation, the committee intends the 
term to mean a person having origins in any of the original 
peoples of North America and who maintains cultural 
identification through tribal affiliation or community 
recognition. This term may include Alaskan Natives and Native 
Hawaiians.
    Native Americans are attending college at greater rates 
than ever and many of these students are attending nontribal 
institutions of higher education. In 2002, 42 public and 
private institutions of higher education served Native American 
student populations of 10 percent or greater. However, despite 
the increasing number of Native American students eligible for 
college enrollment, only 11 percent of the population graduates 
with a bachelor's degree orhigher. Moreover, Native American 
students are disproportionately enrolled in 2-year colleges, and are 
much less likely to finish college than their non-Native American 
peers. Native American student educational attainment continues to lag 
far behind that of the total student population. Many Native American 
students come from families with low incomes, have parents with low 
levels of education, and are less likely to have completed a pre-
college curriculum in high school.
    With increasing enrollment, nontribal institutions of 
higher education that serve large populations of Native 
American students require resources to improve and expand their 
capacity to serve the unique and diverse needs of their Native 
American student population. To assist nontribal institutions 
of higher education better serve Native American students, the 
committee has established a competitive grant program for those 
institutions serving a Native American student population of 10 
percent or greater. Grants will support curriculum development 
and academic instruction, faculty development, and student 
services such as academic tutoring and counseling. The 
committee recognizes that the grant program will improve the 
capacity of Native American-serving, nontribal institutions of 
higher education to provide quality educational opportunities 
for Native American students to narrow the educational 
attainment gap and to better prepare students to meet the 
demands of a competitive workforce.

              HISTORICALLY BLACK COLLEGES AND UNIVERSITIES

    The committee believes there is great value in supporting 
programs for historically black colleges and universities 
(HBCUs). Although the Nation's HBCUs represent less than 5 
percent of all the Nation's colleges and universities, they 
award almost 30 percent of all baccalaureate degrees received 
by African-Americans. Further, in some areas of science, math, 
and engineering, HBCUs account for more than half of all such 
degrees awarded to African-Americans. HBCUs also greatly 
contribute to the overall percentage of graduate and 
professional degrees earned by African-Americans. Nine of the 
top 10 colleges that graduate the most African-Americans who go 
on to earn Ph.D.s are HBCUs. Xavier University's graduate 
programs alone produce a quarter of the Nation's African-
American pharmacists and send the largest number of African-
American students on to medical schools.

                      TITLE IV--STUDENT ASSISTANCE


                              PELL GRANTS

    The committee recognizes that Pell grants are the 
foundation for all need-based aid. In the 2003-04 award year, 
the $12.7 billion investment in the Pell grant program funded 
5.1 million students with average grants of $2,466. By making 
small changes to the program, it is the committee's intent to 
increase the utility of Pell grants in ensuring that more low-
income students are successful in postsecondary education.
    The committee heard testimony from both traditional 
students and students who are working adults that they would 
like to attend school year-round so they can complete their 
education earlier. However, these students have been unable to 
accelerate their programs because of financial need; they have 
been able to receive only one scheduled Pell grant award during 
an award year. Although the Secretary is authorized to permit a 
student to receive two Pell grants during 1 award year on a 
case by case basis, the authority has not been exercised. The 
committee's intent is to ensure that students enrolled at least 
half-time in a 2-year or 4-year program leading to an 
associate's or bachelor's degree are able to receive up to two 
Pell grants in a single award year to enable them to accelerate 
completion of their educational programs.
    The committee also established that a student would have 
eligibility for Pell grants for 18 semesters or an equivalent 
period of time if semesters are not used. Students should be 
able to complete an undergraduate degree in 18 semesters.

                             trio programs

    The committee respects the work of the TRIO programs and 
recognizes their critical contribution to the success of low-
income, first generation students as they apply, attend and 
earn degrees from undergraduate and graduate institutions. To 
ensure that information about the effectiveness of these 
programs is publicly available, the committee requires each 
program to submit information on its outcomes to the Department 
of Education, and the Secretary to prepare and submit that 
information to the Congress at least once every 2 years.
    The committee recognizes the value of high quality programs 
and expects that in evaluating applications, the Secretary will 
award prior experience points only to those applicants that 
have administered programs that demonstrate the highest 
quality.
    Controversy has arisen in recent competitions about 
applications that have been received from different campuses of 
the same institution of higher education, or multiple 
applications from one institution of higher education to serve 
distinct populations. It is the intent of the committee that a 
college or university with more than one campus be eligible to 
submit multiple applications and be considered for funding as 
long as its applications are meritorious. It is also the intent 
of the committee that an institution of higher education be 
permitted to submit more than one grant to meet the needs of 
particular populations within a program. Grantees may find that 
they need dedicated programs to serve students with 
disabilities or students with language needs; grantees should 
be given the opportunity to complete separate applications, 
each of which should be considered on its merits.
    The committee has included as permissible services under 
the TRIO programs activities specially designed for homeless 
children and youth and for students who are in foster care or 
aging out of the foster care system. These provisions are 
intended to increase the availability of services that meet the 
unique needs of homeless students and students in foster care.
    For the first time, the committee has directed that some 
activities become mandatory in the college access programs. For 
Upward Bound and Talent Search, each grantee will be required 
to provide tutoring, advisement in high school course selection 
and postsecondary course selection where possible, assistance 
in preparing for admissions tests and applications,assistance 
in identifying financial aid opportunities (including resources for 
locating public and private scholarships), and services to improve 
financial literacy.
    The committee understands that Talent Search programs often 
cannot offer direct tutoring to all participants. However, if a 
program does not provide tutoring, it should connect 
participating students with appropriate tutoring available 
directly in their high school or through community based 
organizations to ensure that Talent Search participants are 
making satisfactory progress in all academic subjects as they 
prepare to apply to college.
    Under Student Support Services programs, the committee 
changed ``personal counseling'' in current law to ``consistent, 
individualized, personal, career and academic counseling 
provided by assigned counselors'' under permissible activities 
to encourage Student Support Services programs to link students 
with at least one adult with whom a student can establish a 
long-term relationship.
    While having the same person manage cases in the 
Educational Opportunity Centers (EOCs) would be beneficial, the 
committee understands that both the numbers of those served and 
the types of services provided often do not allow that 
consistency. The committee encourages EOCs to do all that they 
can to facilitate relationships that provide the maximum 
support to their clients.

GAINING EARLY AWARENESS AND READINESS FOR UNDERGRADUATE PROGRAMS (GEAR 
                                  UP)

    Since its creation in 1998, the GEAR UP program has proved 
to be an impressive partner in improving access to 
postsecondary education for the neediest students. However, the 
committee has heard concerns that GEAR UP is difficult to 
administer and therefore the committee changes some provisions 
to make the program more flexible for institutions and helpful 
to students, thereby enabling the program to improve access to 
postsecondary education.
    The committee is concerned about the growing number of 
students requiring remedial courses in postsecondary education. 
One way to address this concern is to ensure that more students 
take rigorous and challenging coursework at the secondary 
school level. Accordingly, the legislation requires States and 
partnerships to encourage more students to enroll in a rigorous 
and challenging curriculum. It is the hope of the committee 
that appropriate academic support provided in pre-collegiate 
programs, along with improved professional development 
opportunities, will minimize the need for remedial education 
for students and encourage timely progression toward college 
degrees.
    The committee also includes, as optional activities for 
States, the use of GEAR UP funds in developing new secondary 
school models and personalized dropout recovery programs to 
improve secondary school completion and college success for 
grades 11-14. New secondary school models are coherent, whole-
school designs that provide participating students with early 
exposure to college level courses and environments. Such models 
allow students to earn an associate's degree along with a high 
school diploma (or within the next year) or transferable 
credits toward a recognized postsecondary credential (such as 
an industry certificate or apprenticeship). Also critical are 
programs to help high school drop-outs gain access to college. 
These funds could also be used to develop personalized dropout 
recovery programs at community colleges that allow students to 
complete a regular high school diploma and begin college level 
work toward a recognized postsecondary degree. These State 
level models will demonstrate ways to improve secondary school 
completion and postsecondary success for grades 11-14 that can 
be replicated in other States and districts.
    The committee recognizes that homelessness puts students at 
high risk of academic failure and dropping out of school; 
therefore, the bill gives priority status to homeless and 
foster students for the GEAR UP program. Furthermore, the 
committee intends that GEAR UP programs coordinate activities 
with school district liaisons designated under subtitle VII-B 
of the McKinney-Vento Homeless Assistance Act. McKinney-Vento 
school district liaisons are well-positioned to assist the GEAR 
UP program with the identification, outreach, and recruitment 
of homeless students, and can help GEAR UP programs maximize 
available resources for these students.
    Finally, the committee includes as permissible services 
under the GEAR UP program activities specially designed for 
homeless children and youth and for students who are in foster 
care or aging out of the foster care system. These provisions 
are intended to increase the availability of services that meet 
the unique needs of homeless students and students in foster 
care.
    The committee makes it permissible for grantees to continue 
providing services to students who have completed secondary 
school and begun postsecondary education. The committee takes 
this step to enable GEAR UP programs to make it possible for 
students to receive ongoing, consistent support from the 
program that will enable them to succeed in college.
    The scholarship is a key component of the program, not only 
because of the financial factor, but also because it serves as 
an incentive for the participating student to complete an 
academic program. The committee believes it is critical to the 
success of students served by the GEAR UP program, particularly 
State programs, that the scholarship funds be available to them 
upon completion of a secondary degree or its equivalent. To 
this end, the committee retains the requirement for State 
grantees that they dedicate a significant portion of grant 
funds for use in scholarship programs, which will be held in a 
separate trust for each cohort of students served by the State, 
or in the case of scholarships offered by partnership grantees, 
by the partnership.
    It is the consensus of the committee that it is appropriate 
that students attending previous partnership schools may be 
served in future grants as long as the application demonstrates 
continued need for funding new activities. Therefore, 
subsequent applications from current grantees should be 
considered.

      LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP (LEAP) PROGRAM

    The committee believes that the changes made to LEAP, 
including providing students with information about their 
grants and implementing the Grants for Access and 
Persistenceprogram, will strengthen LEAP by leveraging the financial 
assistance provided under this program in a way that is more effective 
for students, States, and the Federal Government. These improvements to 
LEAP will broaden participation to include all stakeholders working to 
increase the number of financially needy students who can access and 
succeed in college.
    The committee replaces the Special Leveraging Educational 
Assistance Partnership authorized under the LEAP program with 
Grants for Access and Persistence (GAP). By so doing, the 
committee seeks to reinvigorate LEAP, the only program in which 
the Federal and State governments work together to extend 
higher education opportunities to financially needy students. 
Under the GAP program, for LEAP funds above $30 million, States 
will be rewarded--via higher levels of matching dollars--for 
creating cohesive partnerships with colleges, foundations, 
businesses, and early intervention and mentoring programs. 
Access and persistence partnerships have three main purposes: 
to provide low-income students with adequate grant aid to 
ensure access to 4-year colleges and eliminate unmet need; to 
provide early notification to low-income students of their 
eligibility for financial aid; and to increase participation of 
low-income students in early information, intervention, 
mentoring, and outreach programs. Research on college access 
programs with such components has shown that participating 
students are more financially and academically prepared, and 
thus more likely to enroll in college and persist to degree 
completion.
    The committee strongly encourages States to develop strong 
and broad partnerships that contain philanthropies and 
businesses, in addition to colleges and early intervention and 
mentoring programs. The committee also specifically provides 
States with flexibility in undertaking the new responsibilities 
authorized under the GAP program, including the ability to 
tailor the partnerships in ways that meet each State's 
individual needs. The committee encourages the Secretary and 
States to coordinate the early notification components of the 
GAP program with other existing or new early financial aid 
information efforts in order to avoid duplication of services 
or information.
    The committee encourages the Secretary to provide States 
with sufficient flexibility to implement the GAP program 
efficiently and to ensure that program regulations, such as 
those regarding the portability of grants, align with existing 
LEAP program regulations. In light of the changes to LEAP with 
the addition of the GAP program, the committee also encourages 
the Secretary to provide transition time to States to assure 
the success of this new initiative.

  THE HIGH SCHOOL EQUIVALENCY PROGRAM AND COLLEGE ASSISTANCE MIGRANT 
                                PROGRAM

    The committee recognizes that migrant students are among 
the most disadvantaged youth in this Nation. Current estimates 
place the dropout rate for migrant youth at between 50 and 60 
percent. The High School Equivalency Program (HEP) and College 
Assistance Migrant Program (CAMP) have been successful in 
helping migrant students become productive members of society.
    HEP provides intensive GED instruction and support services 
to migrant students who have not completed high school. HEP 
provides personal, academic and vocational counseling, health 
services, stipends, and housing for residential programs. CAMP 
grantees provide intensive support services to help migrant 
students make the transition into college. CAMP offers academic 
support, personal and career counseling, stipends, 
scholarships, health services, and other supports necessary to 
ensure that migrant students are successful in college.
    The committee expands and improves the current programs so 
that children of migrant and seasonal farmworkers can share in 
the American dream and become more productive members of 
society.
    The Higher Education Amendments Act of 2005 expands 
eligibility for CAMP to include ``immediate family members,'' 
who would include spouses and siblings who would benefit the 
large migrant community. The bill also expands the definition 
of allowable activities and support services to include 
programs that ensure that migrant students succeed in earning 
their GED and completing college, such as transportation, child 
care and follow up services for CAMP students. The bill also 
contains other important provisions including allowing for 
technical assistance support and an increase in the amount of 
minimum grants to ensure that programs receive sufficient 
funding to be effective.

               CHILD CARE ACCESS MEANS PARENTS IN SCHOOL

    Changes to the Child Care Access Means Parents in School 
(CCAMPIS) program reflect the committee's belief in the vital 
importance of promoting and expanding campus-based child care 
for low-income students to assist them in attending and 
completing postsecondary education. To help promote greater 
expansion of campus-based child care, the committee increased 
the minimum grant award from $10,000 to $30,000, to take effect 
when the amount appropriated for the program equals or exceeds 
$20,000,000. The committee believes that raising the minimum 
grant will increase the pool of institutions applying for and 
receiving grants, which will help to expand campus-based child 
care programs. Aligned with the committee's belief in the 
importance of increasing the number of institutions offering 
campus-based child care to low-income students, inclusion of a 
funding trigger for increasing the minimum grant award reflects 
the committee's aim of not wanting a reduction in the current 
number of grantees participating in the program. The committee 
also expands the definition of a low-income student to include 
individuals who are enrolled in a graduate or professional 
course or who are in the United States for a temporary period 
of time.
    Continued support for this program demonstrates the 
committee's recognition of the benefits of campus-based 
childcare to parents enrolled in postsecondary education. These 
benefits include convenience of location, affordability, and 
high quality care. Despite the importance of campus-based child 
care, at current levels it is often not accessible to students, 
especially those who are low income. The committee believes 
that support for campus-based child care services serves the 
central goal of Federal higher education policy of improving 
access to postsecondary education.

 FEDERAL FAMILY EDUCATION LOAN AND WILLIAM D. FORD FEDERAL DIRECT LOAN 
                                PROGRAMS

    Most of the changes made to these programs are contained in 
title X; please see that section for these additional changes.

Loan benefit disclosure

    It is the opinion of the committee that borrowers and 
potential borrowers should be provided full disclosure on 
benefits and repayment options. This should include, but not be 
limited to, information on reductions in interest rates by 
repaying a title IV loan by automatic payroll or checking 
account deduction or by completing a program of on-time 
repayment. Information should include any limitations on such 
plans, explicit information on the reasons a borrower may lose 
eligibility, and a description of the number or percentage of 
borrowers who successfully participate in such benefit 
programs.

                           FEDERAL WORK-STUDY

    The committee recognizes the commitment of many colleges to 
integrate community service into their curriculum and into 
their institutional mission. In this reauthorization, the 
committee maintains the 7 percent mandatory spending of Work-
Study funds on community service related jobs, but now gives 
institutions the option of meeting the community service 
requirement by providing a statement that says that 15 percent 
of their entire student body is involved in community service. 
In addition, the committee recognizes the effort involved in 
connecting students with jobs and has increased the job 
location and development dollar amount from $50,000 to $75,000 
on each campus.

Work colleges

    The bill includes language that encourages new models of 
student organized volunteer service projects. The committee 
believes that providing students the opportunity to participate 
in volunteer service projects associated with institutions of 
higher education is an excellent way to develop leadership and 
civic engagement.

                          PERKINS LOAN PROGRAM

    The committee extends the authority of the Perkins Loan 
Program and the benefit extended through these loans to needy 
students and encourages institutions to continue to participate 
in this program.
    The committee includes language that adds staff members 
working full time in a pre-K or child care program licensed or 
regulated by the State to the list of individuals eligible for 
Perkins loan cancellation. Inclusion of these individuals for 
loan forgiveness is meant to create an incentive for entry and 
retention of highly-trained staff into State licensed or 
regulated pre-K or child care programs. Today, over 11 million 
children receive care outside of the home before kindergarten. 
For millions of children, child care is their early learning 
setting in addition to their homes. Given that current Federal 
initiatives require State child care plans to develop a 
professional development system for child care providers, the 
committee believes it is important to fulfill this goal by 
helping to provide such early educators with the assistance 
they need to get a degree and to remain in the field.
    The committee also recognized the needs of Tribally 
Controlled Colleges in recruiting faculty and added those 
faculty members to the population who are eligible for loan 
cancellation.
    Finally the committee chose to add speech and language 
therapists and librarians, with a master's degree, who work in 
a title I eligible elementary or secondary school or, in the 
case of librarians, in a public library in a geographic area 
that contains one or more eligible schools.

                             NEED ANALYSIS

    The committee recognizes the tremendous needs of working 
adults as they try to balance college with work and family 
responsibilities. In recognition of these competing factors, 
the committee amends the need calculation for students who are 
attending less than half time and allows students to use full 
cost of attendance calculations for no more than 3 semesters of 
their undergraduate studies. Students, who are forced to reduce 
their course load for not more than two consecutive semesters, 
will still be eligible for the full Pell award for which they 
are otherwise eligible.
    The committee also allows an institution the ability to 
include the cost of obtaining the first professional credential 
as an allowable cost of attendance in needs analysis for 
programs that require professional licensure or certification.
    The committee clarifies that any qualified tuition savings 
plan as defined by the IRS, or other prepaid plans offered by 
States, are treated the same as a qualified education benefit.

Professional judgment

    The committee applauds the appropriate use of professional 
judgment when assembling a student aid package at an 
institution of higher education. There are many areas that have 
come to our attention during this reauthorization that we hope 
can be addressed using professional judgment rather than by 
making statutory changes that could have unforeseen negative 
consequences. Students who have earned AmeriCorps education 
awards and veterans who have earned benefits could have the 
cash value of those awards considered over several semesters to 
diminish any negative impact on other need-based aid.
    Students and parents who are recently unemployed, 
dislocated workers should have as simple an application process 
as possible. Dislocated workers should be able to easily access 
available financial aid so they can afford to go back to school 
and get any additional training they may need to re-enter the 
workforce. A worker who has lost his or her job and enrolls in 
an educational program may well never regain his or her past 
wages. Thus, the use of prior wages in the calculation may 
reduce aid that is desperately needed to retrain for a new job. 
Thecommittee therefore clarifies the definition of special 
circumstances to enable dislocated workers to qualify for professional 
judgment.
    The committee simplifies the application process for 
students with special circumstances who are often most at risk 
of not enrolling in higher education. To this end, the 
committee bill makes it easier for homeless youth to apply for 
and receive financial aid by including homelessness as part of 
the definition of a special circumstance that can qualify a 
student for professional judgment, at the discretion of 
financial aid administrators. The committee intends to further 
expand the definition of special circumstances to include 
students who are in foster care or wards of the court. The 
committee also intends to further simplify the application 
process for students in foster care and address current 
confusion regarding the dependency status of such students. The 
committee intends to clarify the definition of an independent 
student to make it clear that students in foster care or 
students who were in foster care prior to the age of 18 qualify 
as independent students. The committee recognizes there is a 
need to continue to refine categories of students who should be 
considered independent.

Verification

    While the bill would significantly simplify the financial 
aid application process for students, the verification process 
remains burdensome for students and institutions. The committee 
therefore strongly encourages the Secretary to take steps 
necessary to simplify the verification process and increase the 
use of technology in verification.

       GENERAL PROVISIONS RELATING TO STUDENT ASSISTANCE PROGRAMS

    The committee is pleased with the efficient management of 
the financial aid system overseen by the Department of 
Education. To continue that smooth operation, the committee 
clarifies that the compliance calendar should provide all users 
with due dates for all reports and disclosures to be submitted, 
clearly defining the recipients and required method of 
transmittal and any other relevant information.

EZ FAFSA

    The committee bill creates a new highly simplified paper 
form, the EZ FAFSA, for low income students who are eligible 
for the automatic zero Expected Family Contribution (EFC), the 
income threshold of which is increased in the bill to $20,000. 
The committee bill also phases out the full paper FAFSA and 
requires the Secretary to use savings from doing so to increase 
access for low-income students to electronic forms on the 
Department of Education's Web site for the FAFSA, currently 
known as FAFSA on the Web. It is the intent of the committee 
that the Secretary will field- and pilot-test the EZ FAFSA 
prior to full implementation, and that the paper EZ FAFSA will 
be appropriately phased in as the full paper FAFSA is phased 
out. In addition, the committee expects the Secretary to 
maintain an easily downloadable and printable version of the 
full paper FAFSA, to the extent feasible, that would allow 
students who may not have adequate access to the Internet to 
download, print, and submit such forms for full processing. To 
otherwise help students eligible for the auto-zero gain access 
to the simplified forms, the committee authorizes a free 
telefile system for students without Internet access that the 
committee encourages the Secretary to quickly test and 
implement, if feasible.
    The committee bill also creates highly simplified 
electronic application forms to enable all students to answer 
the minimum number of questions necessary, including only those 
required by their State of residence. In addition, the 
committee strongly encourages more States to accept the two 
simplified need analysis formulas, the automatic zero EFC 
(auto-zero) and the Simplified Needs Test (SNT), and to 
annually communicate with the Secretary regarding their data 
requirements and use of simplified formulas. It is also the 
intent of the committee to request a study by the Government 
Accountability Office regarding the benefits and costs to 
States of increasing their acceptance of the auto-zero and SNT. 
In addition, the committee intends to further simplify 
eligibility for the auto-zero and SNT by aligning eligibility 
for these formulas with current or past participation in 
Federal means-tested benefit programs. The committee bill also 
allows students to apply for financial aid earlier and to 
complete the FAFSA at any time in order to receive early, 
nonbinding estimates of their EFC. Finally, the committee bill 
protects students by strengthening provisions regarding the 
prohibition of charges for FAFSA completion.

Early awareness of financial aid eligibility

    The committee bill creates a comprehensive system to 
provide students and families as early as middle school, as 
well as adult learners, with better information regarding 
financial aid and early estimates of their aid eligibility. It 
is the intent of the committee for students and parents to 
receive adequate estimates of their eligibility for aid from 
multiple sources, including State and institutional aid, as 
early as possible to encourage increased preparation and plans 
for college. In addition, the committee encourages the 
Secretary to conduct a feasibility study to determine the 
practicability of allowing dependent students to apply for 
financial aid in their junior year using prior year income.

Return of Title IV funds

    Under the statute, a student is not required to return 50 
percent of the aid he or she receives under the return of title 
IV aid provision. It may provide clearer interpretation if 
grant protection were determined by subtracting one-half of the 
original grant amount the student received, or was eligible to 
receive, from the amount of grant aid the student is expected 
to repay.

Information for students--exit interviews

    The committee supports institutions of higher education 
that choose to utilize the expertise of the Secretary, guaranty 
agencies or lenders who offer information to assist them in 
providing the highest quality exit interviews. The institution 
is also required to discuss the effects of consolidation, tax 
benefits and other borrower benefits.

Institutional information

    In addition to the information on college costs, the 
committee also believes it is important for students and their 
parents to have access to information regarding the transfer of 
credit, employment and graduate education outcomes. The 
committee includes these provisions in the list of information 
that must be made readily available to prospective and enrolled 
students. However, the committee recognizes the efforts of many 
institutions of higher education to provide data on these 
outcomes already, and encourages the Secretary to consider 
these efforts when implementing this section, in order to 
ensure these requirements do not become an onerous requirement 
for institutions.
    At its July 20, 2005 meeting, the Executive Committee of 
the State Higher Education Executive Officers (SHEEO) directed 
its staff to explore means of promoting the further development 
and voluntary coordination of student record systems among the 
States. The SHEEO Executive Committee action was based on the 
recognition that, in varying degrees of comprehensiveness, 39 
States already implement student unit record systems that 
enable States to inform public policies by examining 
information on college attendance patterns, completion rates, 
actual costs, and the availability of financial assistance for 
all students.
    The SHEEO Executive Committee action reflected the 
following purposes and principles: SHEEO should examine 
existing State data systems and encourage the coordination and 
consistent development of such systems to improve the accuracy 
and validity of policy information and facilitate the 
development of information-sharing systems to monitor 
postsecondary participation, costs, and student success. Such 
systems ideally should include information on: (1) Student 
characteristics (demographic data); (2) Student enrollment; (3) 
Costs and financial assistance; and (4) Degree or certificate 
completion.
    The committee encourages those 11 States that do not 
currently have an effective State data system to develop such a 
system.
    All State data systems should continue to maintain fail-
safe safeguards to protect the privacy of individuals. All data 
analysis should be used exclusively for policy research on 
groups of students, with no disclosure or reporting of data on 
individuals or small groups that might involve violating the 
privacy of individuals. The committee supports research and 
discussion to foster improved policy data systems, involving 
and informing all sectors of higher education, policymakers, 
and others seeking to improve educational attainment in the 
United States.
    Institutions are now required to report disaggregated 
information on the student body by gender, major racial or 
ethnic groups and Pell-eligibility status. In reporting 
graduation rates, institutions are allowed to take into 
consideration service in the armed forces, religious missions, 
or Government foreign service when calculating time to degree.
    The committee includes language regarding the transfer of 
credit based on the findings of a GAO study, issued in October 
of 2005, that indicates many institutions do not have a formal 
transfer of credit policy, and that many institutions do not 
accept credits from institutions accredited by certain 
accrediting bodies or associations. Institutions are required 
to have a clearly stated public disclosure of their transfer of 
credit policies, including a statement that the institution 
will not deny transfer of credit based solely on the 
accreditation of the institution from which the student 
transfers. This provision is intended to make sure that 
students have the best information possible when considering 
transferring from one institution to another. The committee 
does not expect this provision to impinge on the ability of 
institutions to develop articulation agreements with other 
institutions within the State or outside of the State, nor does 
the committee expect this provision to limit the ability of 
institutions to develop transfer of credit policies that take 
into account other factors, such as the quality, rigor, or 
relevance of the transferring students' previous coursework.

Experimental sites

    The committee retains experimental sites and suggests that 
in addition to the list of suggested areas of experimentation, 
new or existing sites may want to look at the use of modular or 
compressed coursework as a way to expedite degree completion.

Advisory Committee on Student Financial Assistance

    The Advisory Committee is charged with conducting a review 
and analysis of title IV regulations. It is the intent of the 
committee that the review and analysis of regulations will not 
take the place of the Advisory Committee's other ongoing 
charges from Congress, including those related to access and 
persistence for low- and middle-income students. The committee 
intends for the Advisory Committee to conduct the regulatory 
review and analysis while also fulfilling its existing 
responsibilities and its additional new charge to conduct a 
study on innovative pathways to degree attainment, including 
pathways for adults and out-of-school youth. It is also the 
intent of the committee for the Secretary to provide the 
Advisory Committee with the necessary resources to be able to 
conduct the review and analysis of regulations while fulfilling 
its other responsibilities to Congress.

                             ACCREDITATION

    Accrediting agencies or associations recognized by the 
Department of Education are invested with a public trust and 
perform an important public function. Congress expects that 
those receiving Department recognition will perform those 
functions with the same diligence and competence as would be 
provided by any public body and that their procedures will 
reflect the same level of transparency, due process, and 
accountability that would apply to the Department if it 
performed this function itself.
    The new language governing accrediting agencies or 
associations applying and enforcing standards that respect the 
missions of institutions of higher education, including 
religious missions, is not intended to allow an institution to 
deny a person participation in, the benefits of, or to subject 
a person to discrimination under any program or activity 
receiving Federal financial assistance under existing laws, 
including those with respect to race, color, religion, sex, 
national origin, age, or disability; or because the person has 
not complied with a standard of the institution that requires 
the person to discriminate on a basis described on any of 
these: race, color, religion, sex, national origin, age, or 
disability.

Due process

    The committee is concerned that institutions of higher 
education do not currently receive appropriate minimum due 
process protections when undergoing accreditation evaluations. 
Accordingly, the committee has added a new section which 
provides that, prior to any final action, an adversely affected 
institution may submit a written response to be included in the 
record of such decision and, further, that this institution may 
seek an appeal before a panel comprised only of members that 
did not participate in the underlying adverse decision and do 
not otherwise possess any conflict of interest.
    In regard to the awarding of accreditation or 
reaccreditation of an institution, the word ``finding'' is 
included in the committee bill. The word ``finding'' means a 
substantive conclusion related to the agency's standards or the 
Secretary's criteria that is reached in connection with a 
decision.

                    TITLE V--DEVELOPING INSTITUTIONS

    According to Census Bureau data, the Hispanic population in 
the United States grew by 25.7 million between 1970 and 2000. 
The most recent data indicate that the Hispanic population 
represents approximately 14 percent of the U.S. population, 
making it the Nation's largest minority group. Further, while 
the overall labor force is projected to slow down over the next 
decades as an increasing number of workers reach retirement 
age, the Hispanic labor force is expected to continue growing 
at a fast pace. It will expand by nearly 10 million workers 
between now and 2020. Estimates project that by the year 2050, 
one in four Americans will be of Hispanic origin. The committee 
recognizes that the Nation's economic and social success rests, 
in large part, on the level of skills and knowledge attained by 
our Hispanic population. Hispanic-serving institutions play a 
critical role in the attainment of such skills and knowledge.
    Hispanic-serving institutions (HSIs) have a record of 
increasing the number of Hispanic students enrolling in and 
graduating from college. Although HSIs account for only 5 
percent of all institutions of higher education in the United 
States, HSIs enroll over half (51 percent) of all Hispanics 
pursuing higher education degrees in the 50 States, the 
District of Columbia, and Puerto Rico. Despite this progress, 
Hispanics still lag behind their non-Hispanic peers in 
postsecondary school enrollment. In 2000, only 21.7 percent of 
all Hispanics ages 18 through 24 were enrolled in postsecondary 
degree-granting institutions in the United States. Moreover, 
Hispanic students are disproportionately enrolled in 2-year 
colleges, and are much less likely to finish college than their 
non-Hispanic peers. According to the Department of Education, 
in 2000, Hispanics earned only 6 percent of all bachelor's 
degrees awarded, 4 percent of all master's degrees, and only 3 
percent of all doctorates.
    Therefore, the capacity of institutions of higher education 
to serve the increasing number of Hispanic students must be 
expanded and improved. Building on previous success, this bill 
strengthens HSIs by establishing a competitive grant program to 
expand post-baccalaureate degree opportunities at HSIs. Current 
law provides support only for 2-year and 4-year institutions; 
this bill establishes support for graduate programs at HSIs. 
Grants will support graduate fellowships and support services 
for graduate students, as well as supporting facilities 
improvement, faculty development, technology and distance 
education, and collaborative arrangements with other 
institutions.
    The committee recognizes that current law places a number 
of unnecessary, burdensome administrative and regulatory 
barriers on HSIs. It is the committee's intent to increase 
educational opportunities for all students, and particularly 
Hispanic students, and accordingly, to eliminate bureaucratic 
barriers that limit access.
    This legislation removes the requirement that HSIs must 
wait 2 years before becoming eligible to apply for another 
grant under title V of the Higher Education Act. The current 2-
year wait-out period does not provide the opportunity for many 
HSIs to implement ongoing programs and conduct long range 
planning. As a result, many HSIs cannot maintain continuity in 
educational programming. By eliminating this wait-out period, 
the committee is focused on creating opportunities to improve 
the quality of education for Hispanic students attending HSIs.
    The bill also removes the requirement that HSIs document 
that 50 percent of their Hispanic enrollment are low-income 
individuals. As HSIs are already required to serve ``needy 
students''--meaning at least 50 percent of the degree students 
are receiving Federal need-based assistance or the 
institution's percentage of Pell grant recipients exceeds the 
median percentage for similar institutions receiving Pell 
grants--this requirement is duplicative. Further, the low-
income provision requires institutions to collect information 
and data that has not been readily available or easily 
acquirable. There is no other requirement in Federal law for 
institutions of higher education to collect this type of data. 
As a result, many institutions with large Hispanic student 
populations must divert resources and staff to acquire this 
information. Without such information they do not qualify as an 
HSI.
    Rather, the committee believes that these institutions 
should devote resources to building capacity and serving the 
growing Hispanic student population. To ensure that the 
institutions continue to serve needy student populations, this 
bill maintains the requirement that needy students must be 
served, but eliminates the additional requirement that the 
schools demonstrate that 50 percent of their Hispanic students 
are low-income.
    The bill also facilitates the transition of Hispanic 
students from 2-year colleges to 4-year colleges, including 
courses designed to retain students through program completion. 
As noted earlier, Hispanics are disproportionately enrolled in 
2-year colleges as compared to their non-Hispanic peers. To 
encourage and support these students' continued education, this 
bill adds, as an authorized activity, programs that assist a 
student's transfer from a 2-year institution to a 4-year 
institution.
    With these provisions, the committee provides institutions 
of higher education with the resources and flexibility they 
need to build capacity and serve the increasing Hispanic 
student population.

               TITLE VI--INTERNATIONAL EDUCATION PROGRAMS

    For more than 4 decades, title VI international education 
programs have served the Nation in developing and maintaining 
today's national higher education infrastructure for the study 
of more than 220 foreign languages, foreign cultures, and 
international business. As witnessed in recent years, foreign 
language and cultural knowledge needs have significantly 
increased throughout the Federal Government due to a wider 
range of security threats, the emergence of new nation states, 
and the globalization of the United States economy. Likewise, 
American business and education increasingly need 
internationally experienced employees to compete in the global 
economy, to manage a culturally diverse workforce, and to 
impart international skills and understanding to our citizens. 
In a time of heightened security needs, when our economy 
demands that we enter new markets, and when the world requires 
us to engage in diplomacy in more thoughtful and considered 
ways, it is vital that we have at our disposal a multilingual, 
multicultural, internationally experienced workforce and 
citizenry. To help meet these challenges, the committee updated 
and strengthened several title VI programs.

             DIVERSITY OF VIEWS AND RESOLUTION OF DISPUTES

    The committee is concerned about reports of bias and one-
sided treatment of subject matter in some title VI-funded 
activities and programs. The committee believes that students' 
interests are best served when they are exposed to a variety of 
perspectives on topics under consideration, particularly those 
that are controversial. Accordingly, the committee requires 
grant applicants to describe in their applications how 
activities funded by a grant will reflect diverse perspectives 
and a wide range of views, as well as generate debate on world 
regions and international affairs, where applicable. Applicants 
are also required to describe how they will address potential 
disputes concerning the extent to which funded activities 
reflect diverse perspectives and a wide range of views.
    If a complaint regarding activities funded under this title 
is not resolved under the process outlined in a grantee's 
application, and such complaint is then filed with the 
Department, the Secretary must be notified. When circumstances 
warrant, the Secretary is authorized to immediately suspend 
future funding for the grant pending the resolution of such 
dispute, which must be accomplished within 60 days. Funds must 
be returned to the university or program if at the end of 60 
days a dispute has been resolved in their favor or, in order to 
ensure that disputes are resolved within 60 days, if the 
Secretary has not rendered a final decision. Suspension of 
funds shall not apply to awards that have been made to 
individual students under the Graduate Fellowships for Foreign 
Language and Area or International Studies Program. The 
committee intends for the Secretary to provide a procedure by 
which grantees may take corrective action when a dispute is not 
ruled in their favor. The Secretary shall take into account the 
outcomes of such proceedings when determining the renewal of 
grants. It is the committee's intent thatdisputes be resolved 
at the campus level to the greatest extent possible, and that the 
Secretary suspend funding only when grantees egregiously violate the 
conditions and terms of their grants.
    Recent allegations about bias at the area studies centers 
funded under this title have been the cause of much discussion 
on the committee. The purpose of the Federal funding to these 
centers is to improve information and research about the areas 
of the world that are often in the international spotlight. It 
is imperative that funded centers offer diverse perspectives 
and a wide range of views on the issues. In order to address 
concerns it will now be required that each applicant for 
funding demonstrate how they will provide this diversity and 
how they will address any allegation of bias. Should the 
Secretary have evidence that a funded center has failed to do 
this, he or she is authorized to suspend future funding.

               INTERNATIONAL AND FOREIGN LANGUAGE STUDIES

Consultation

    The committee recognizes that programs and grants under 
this title focus on a variety of world regions, foreign 
languages, and international subjects. To ensure that grants 
are appropriately focused on areas of national need for 
expertise in such matters, the Secretary is directed to consult 
with and receive recommendations from the Secretary or 
designees of the National Security Council, the Department of 
Homeland Security, the Department of Defense, the Department of 
State, the Federal Bureau of Investigation, the Department of 
Labor, the Department of Commerce, the Director of National 
Intelligence, and other relevant agencies, such as the 
Department of Health and Human Services. These entities are 
also required to inform the Secretary of how they utilize the 
expertise and resources provided by grantees under this title. 
The Secretary must take such recommendations and information 
into account when requesting applications for funding, and make 
available to applicants a list of areas identified as areas of 
national need. The committee believes such consultation and 
information-sharing is particularly important in light of the 
war on terror, the growing range of security threats, 
increasing global economic competition, the recently documented 
shortages of individuals proficient in critical foreign 
languages and area expertise in many government agencies, 
businesses and other organizations, and the need for greater 
mutual understanding between the United States and other 
nations and cultures. Accordingly, the committee also directs 
relevant grant applicants to describe in their applications how 
they will encourage government service in the areas of national 
need identified by the Secretary.

Survey

    To better gauge the impact of programs funded under this 
title in meeting national needs for expertise in foreign 
languages and world regions in various sectors, the committee 
directs the Secretary to assist relevant grantees in developing 
a survey to administer as appropriate to students who have 
participated in title VI programs to determine post-
participation placement. The committee wishes to determine the 
number of students pursuing public service, including 
government service, health careers, careers in international 
organizations, businesses or nonprofits, and careers in 
research, as well as advanced education or other activities. 
The committee is particularly interested in determining the 
extent to which students utilize the knowledge and skills 
gained through participation in title VI programs in ways that 
contribute to meeting national needs.

Graduate and Undergraduate Language and Area Centers and Programs

    The committee has made several improvements to strengthen 
the Graduate and Undergraduate Language and Area Centers and 
Programs. Authority is added clarifying that the National 
Language and Area Resource Centers may use title VI funds for 
the purpose of hiring instructors of less commonly taught 
languages. This change addresses the increased demand for 
courses offering rare languages related to national security 
interests and for which faculty may not be readily available. 
Revisions to current law also permit additional grants to the 
National Language and Area Resource Centers to strengthen 
outreach to State and local school districts. The committee has 
restored eligibility of undergraduate students to receive 
Foreign Language and Areas Studies (FLAS) fellowships. 
Permitting undergraduate students to receive these fellowships 
serves the national interest by supporting early language and 
world area study to help individuals achieve high levels of 
proficiency in the less commonly taught languages. The 
committee intends that undergraduate students be allowed to use 
FLAS fellowships in the United States and abroad for 
intermediate or advanced study of the less commonly taught 
languages and of foreign cultures. The committee recognizes 
that foreign immersion experiences are critical for achieving 
high levels of proficiency in the less commonly taught 
languages, which are important to the Nation's national 
security interests.

Undergraduate International Studies and Foreign Language Programs

    The committee modified the Undergraduate International 
Studies and Foreign Language Programs to increase the cap on 
funding for this section to 20 percent. Institutional grants 
for enhancing the international dimension of undergraduate 
education are critical to increasing the number of Americans in 
the pipeline to foreign language fluency and international 
knowledge. Given current shortages of such personnel throughout 
government, education and the professions, the committee 
believes increased funding should be permitted to respond to 
rising demand. The committee urges the Department of Education 
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. Additionally, the committee revised 
current law to allow up to 10 percent of a project's funds to 
be used for sending undergraduate students on educational 
programs abroad that are closely linked to the project's goals 
and have the purpose of enhancing foreign language proficiency 
and deepening cultural knowledge.

Research and studies

    The committee recognizes that international and foreign 
language education represents an evolving field in the United 
States, one with increasing importance for the national 
interest. The Research and Studies program plays an important 
role in enhancing international and foreign language education. 
The committee urges 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 
regularly make the results publicly available. The committee 
also encourages the Secretary to consider projectsthat assess 
the impact of student learning abroad, develop proficiency assessments 
for the less commonly taught languages where not in existence, assess 
the relationship between gains in foreign language proficiency and 
cultural learning, and assess the use of technology for language 
acquisition and proficiency.

Technological Innovation and Cooperation for Foreign Information Access

    The committee updated and strengthened the Technological 
Innovation and Cooperation for Foreign Information Access 
program. The committee added nonprofit educational 
organizations as eligible grant recipients in consortia with 
institutions of higher education and/or public or private non-
profit libraries. The committee also clarified that funds may 
be used for the acquisition of printed materials from abroad 
for the purposes of this section. Currently authorized 
activities, such as applying new technologies to indexing, 
cataloging, preserving, disseminating, and providing access to 
foreign materials, require that the materials be available. The 
committee added new authorized activities for establishing 
linkages with institutions abroad that facilitate access to 
foreign information and provide the Department of Education 
flexibility to establish new activities deemed useful for 
carrying out the purposes of the section.

             BUSINESS AND INTERNATIONAL EDUCATION PROGRAMS

    No alterations were made to the Business and International 
Education Programs. The main purpose of the business and 
international education grants has been to support programs of 
local and State scope.

               INSTITUTE FOR INTERNATIONAL PUBLIC POLICY

    The changes to the Institute for International Public 
Policy (IIPP) grant program reflect the committee's belief in 
the continued importance of increasing the number of African-
Americans and other underrepresented minorities in the 
international service.

Minority Foreign Service Professional Development Program

    The committee included language that permits the Secretary 
of Education to waive or reduce the non-Federal matching share 
requirement of the eligible recipient. This will permit the 
successful grantee to implement all of the objectives set forth 
in part C with both federally appropriated funds and private 
in-kind and cash contributions in a post-9/11 world.

Institutional development

    The committee added language to clarify that the academic 
programs intended to receive support through the grants awarded 
by the Institute are international affairs, international 
business, and foreign language study programs. In an era of 
globalization where public policy is often driven by private 
sector considerations, it is important that IIPP's program of 
training and capacity building encompass the fullest range of 
issues and subject matter.

Advanced degree in international relations

    The committee wishes to allow eligible students to earn a 
doctoral degree, where appropriate, instead of the master's 
degree mandated by current law. The current program limitation 
to offering master's degrees may not be appropriate for some 
students in certain fields of study. The addition of the 
doctoral degree will not only increase the number of minority 
Ph.D. experts, especially in areas relating to national 
security, it will increase the depth and breadth of national 
security and international affairs expertise from which the 
Nation can benefit.

Financial assistance

    To support the goal of increasing the representation of 
African-Americans and other underrepresented minorities in 
international service, the committee included provisions 
relating to financial support for students. Under the new 
provisions, students will be eligible to receive summer 
stipends to help defray costs for participation in the summer 
institute funded under this part. The committee also authorized 
a Ralph Bunche scholarship to help finance the education of 
students enrolled in programs funded under this part. The 
scholarship honors the life and career of Ambassador Ralph 
Bunche, who became the first person of color to receive the 
Nobel Peace Prize in 1950. The committee finds it fitting that 
a scholarship to foster greater participation in international 
service by African-American and other underrepresented students 
of color should be named after Mr. Bunche.

                           GENERAL PROVISIONS

    The committee added new sections to the General Provisions 
to allow the Department of Education discretionary funding (up 
to 1 percent of title VI appropriations) for evaluation, 
national outreach, and information dissemination. The committee 
urges the Department to increase outreach to the higher 
education community about the funding opportunities available 
under title VI, as well as to find new ways to provide greater 
national accessibility to and awareness of the expertise and 
knowledge that these programs produce.

       TITLE VII--GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS


                      GRADUATE EDUCATION PROGRAMS

    Graduate and professional education programs in the United 
States are respected and emulated worldwide. They attract and 
educate the best and brightest domestic and international 
students. Our unique system of combining graduate education 
with teaching and research strengthens the American education 
system, while producing highly educated individuals who will 
become the next generation's leaders in education, government, 
medicine, and industries vital to our Nation's competitiveness, 
economy, security, and well-being.
    Unlike graduate education programs in other Federal 
agencies, the Department of Education's programs provide 
support for the entire range of academic disciplines, including 
the sciences, arts, social sciences, and the humanities. The 
Department currently administers 2graduate programs: Graduate 
Assistance in Areas of National Need (GAANN) and Jacob K. Javits 
Fellowships. GAANN provides traineeships to students of superior 
academic ability in academic departments at universities that offer a 
course of study that leads to a doctoral degree in an area of national 
need designated by the Secretary of Education. The Javits program 
competitively awards portable fellowships to top graduate students 
pursuing a doctoral or the highest degree possible in the arts, 
humanities or social sciences.
    The committee endorses the goals and success of the GAANN 
and Javits programs and seeks to further strengthen their 
achievement and purpose. It is the intent of the committee to 
make additional changes to Javits to ensure the diversity of 
its Fellowship Board in terms of institution type, range of 
disciplines, minority status and geographic location. The 
committee also seeks to establish parity between the GAANN and 
Javits award amounts and the National Science Foundation's 
Graduate Research Fellowship Program.
    In determining current and future areas of national need, 
the committee directs the Secretary to consult with various 
Federal and nonprofit agencies and organizations. The committee 
instructs the Secretary to also give serious consideration to 
employment projections by the U.S. Bureau of Labor Statistics 
in assessing current and future professional workforce needs, 
and to designate fields experiencing significant shortages, 
such as registered nursing and elementary and secondary 
education, as areas of national need. In addition, the 
committee directs the Secretary to establish a priority for 
grants in those areas of national need where there are 
significant professional workforce shortages.

          FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION

    There are a variety of issues and problems impacting 
postsecondary education. The Fund for the Improvement of 
Postsecondary Education (FIPSE) was created to identify new 
ideas and practices to address these concerns. The FIPSE 
program awards grants designed to support innovative reform 
projects to resolve relevant issues and problems impacting 
postsecondary education. Since its inception in 1973, FIPSE has 
provided grants to some of the boldest innovators in education. 
The committee supports the mission and purpose of FIPSE and 
expands several of its provisions, including the areas of 
national need under special projects.
    The committee anticipates that one of the new activities 
provided through special project grants will 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 
Project GRAD organization, community involvement and 
collaboration, and 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 4-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.
    Members of the committee are also aware of the special 
project grant awarded to the Shepherd Program at Washington and 
Lee University and support its efforts to coordinate and expand 
its activities, through the Shepherd Consortium of colleges and 
universities, to provide an integrated curricular and co-
curricular interdisciplinary study focusing on poverty and 
human capability for university and law students with 
internships in non-profit agencies in disadvantaged 
communities. The Consortium will include among others: 
Georgetown University, Vanderbilt University, Berea College, 
Morehouse College, Spelman College, Middlebury College, Morgan 
State University, the University of Arkansas at Little Rock, 
and the University of Richmond. The Secretary is authorized to 
make grants under section 741 for the Shepherd Consortium. 
Members of the committee envisioned, in the development of this 
provision, the Shepherd Consortium's combined approach of core 
academic curricula with service learning internships, as a 
means to assist those in disadvantaged communities.
    The committee encourages the Department of Education to 
explore and fund law school programs focusing on the interface 
of law and public health. The committee urges the Department to 
establish a consortium of at least four academic institutions, 
such as the University of Alaska, the University of Hawaii, the 
University of Wyoming, and Boston College, to promote the 
development and implementation of such programs and research 
activities. These educational programs should emphasize 
cultural and socioeconomic diversity, multicultural variables 
in communication, and the uniqueness of rural communities in 
training students, professors, and health and legal 
professionals in public health policy advocacy.

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

    Students with disabilities struggle to access and persist 
through higher education. Students with disabilities are 10 
percent less likely to enroll in some form of postsecondary 
education compared to students without disabilities. They are 
much less likely to be minimally qualified to enroll in 
postsecondary education than their counterparts without 
disabilities. Similarly, those students who enroll in 
postsecondary education are less likely than their counterparts 
without disabilities to stay enrolled in or earn a 
postsecondary degree or credential. Despite these shortcomings, 
those who do graduate go on to be quite successful in the 
workforce. College graduates with disabilities enroll in 
graduate school or are employed full-time on a par with 
graduates without disabilities.
    The committee recognizes the unique challenges students 
with disabilities face when trying to access higher education 
and their overall significance to our Nation's workforce. It is 
for this reason that the committee encourages institutions of 
higher education to decrease barriers to higher education for 
students with disabilities. The bill amends the authorized 
activities under part D by adding several provisions in which 
institutions of higher education may engage to accomplish this 
goal. The bill requires that the academic and programmatic 
needs of students with disabilities must be met as part of the 
development of innovative, effective, and efficient teaching 
strategies. The committee recognizes that the retention and 
completion rates of postsecondary programs for students with 
disabilities is quite poor, and added this provision in an 
attempt to improve such rates. The committee added language to 
address the insufficient postsecondary education and employment 
outcomes for students with disabilities by including the 
development of teaching strategies to ensure the successful 
transition of students with disabilities from secondary to 
postsecondary education, and aligned them with the new 
transition requirements in the Individuals with Disabilities 
Education Act and the Workforce Investment Act.
    The committee also added a new data collection requirement. 
This provision, collecting data on employment outcomes of 
students with disabilities after the receipt of postsecondary 
education, was added to gain information on the employment 
outcomes of such education for students with disabilities. The 
committee intends that such research, information, and data 
will be made broadly accessible through means such as web-based 
clearinghouses, portals or other means of cataloging and making 
available collected information. The committee recognizes that 
the use, and accessibility of technology can be a barrier to 
students with disabilities accessing distance learning courses.
    The Disability Career Pathways activity was included to 
recognize the importance of developing the next generation of 
professionals to work with individuals with disabilities. It 
provides training for postsecondary staff to enable them to 
educate young people about disability related fields of study. 
As a result, it is expected that more individuals will pursue 
careers in these fields. The committee intends that activities 
authorized under this section will focus on making 
postsecondary education more accessible to students with 
disabilities through curriculum development. The Secretary of 
Education is required to review and disseminate a report of the 
demonstration project activities funded under this section to 
provide guidance and recommendations to all institutions of 
higher education on how successful projects can be replicated.

                       TITLE VIII--MISCELLANEOUS

    This title contains the new programs that the committee 
came to agreement on within the Higher Education Amendments of 
2005.

                   MATH AND SCIENCE SCHOLARS PROGRAM

    This new initiative is designed to encourage more high 
school students to take a rigorous secondary curriculum in math 
and science. The committee believes that this effort is 
necessary to encourage more students to become interested in 
these areas to continue to allow the United States to remain 
competitive internationally. The fields of math and science are 
critical to the economic growth and national security of the 
United States. Our economy today is more reliant on workers 
with greater quantitative skills, scientific knowledge and 
technological expertise. Unfortunately, the supply of these 
qualified workers here in the United States is not keeping up 
with business demand, forcing American industries to rely on 
foreign talent to fill the gaps.
    According the National Center for Education Statistics, 
U.S. 4th graders score well in math and science against 
international competition, but they fall near the bottom or 
dead last by 12th grade in these subject areas. This may be due 
in part to the small number of high school students taking 
advanced math or science courses. A report from the Task Force 
on Mathematics and Science Achievement suggests that most U.S. 
high school students take no advanced science courses, with 
only one-quarter enrolling in physics and one-half in 
chemistry. In addition, while most countries introduce algebra 
and geometry in the middle grades, only one in four U.S. 
students take algebra before high school. Further, 
approximately 90 percent of U.S. high school students stop 
taking math before getting to calculus.
    With limited Federal resources, it is imperative that we 
make smart investments and target funding to those areas that 
are critical to our Nation's future. The committee believes the 
new Math and Science Scholars Program is one such smart 
investment. It is a competitive grant program to award merit-
based scholarships to eligible students who complete a rigorous 
high school curriculum in mathematics and science. Students are 
eligible to receive a scholarship of up to $1,000 per year for 
up to 2 years of undergraduate study. Eligible students must be 
in their first or second year to receive a scholarship.
    The committee also believes that State involvement in this 
new program is critical to its success. States will be required 
to match at least 50 percent of the Federal funds to 
participate. The committee believes that States should also be 
given flexibility in tailoring the scholarship program to State 
standards or needs. Participating States, and not the Federal 
Government, will determine what constitutes a rigorous high 
school curriculum in math and science. States may also set a 
priority in awarding these grants to eligible students, but 
such a priority is not required. Such priority could be to 
respond to specific needs in areas of the State or to address 
attracting students from groups underrepresented in the math 
and science fields. These provisions are designed to require 
participating States to make the commitment to a strong math 
and science curriculum at the secondary level and ultimately 
attract more students to pursue these fields.

                   POSTSECONDARY EDUCATION COST STUDY

    There has been ongoing debate about the spiraling cost of 
college and the appropriate Federal role. The purpose of this 
study is to give the public and the Congress an independent 
assessment of the financial factors associated with 
postsecondary tuition costs. The assessment will examine the 
key elements linked with the cost of tuition and identify and 
evaluate effective measures that may be utilized to control 
future postsecondary education costs. To carry out this study, 
the committee believes the Secretary should enter into a 
contract with an independent, bipartisan organization that has 
specific expertise in public administration and financial 
management such as the National Academy of Public 
Administration. The results of this study will inform future 
discussion on college tuition and help future congresses 
examine this complicated issue with greater clarity.

      JOB SKILL TRAINING IN HIGH-GROWTH OCCUPATIONS OR INDUSTRIES

    The needs of today's workforce have created an increased 
demand on colleges to respond quickly to the education and 
specific skills training needs of businesses. These competitive 
grants would allow institutions of higher education that offer 
a 1- or 2-year program leading to a degree or certificate to 
work with local workforce boards to create innovative programs 
to respond to high-growth industries. Colleges could develop 
curricula or customize programs to match workers with the 
skills in demand in particular industries.

 GRANT PROGRAM TO INCREASE STUDENT RETENTION AND PROMOTE ARTICULATION 
                               AGREEMENTS

    One of the most pressing issues in higher education today 
is retention and persistence toward degree. Fewer than half of 
the Black and Hispanic students who began full-time study at a 
4-year college in 1995-96 with the goal of earning their B.A. 
had completed that degree 6 years later, whereas 70 percent of 
their white and Asian-American counterparts had completed. This 
discrepancy has a direct correlation with employability and 
quality of life and the reason that the committee felt the need 
to address this problem.
    This competitive grant program would target assistance to 
colleges enrolling at least 40 percent of need-based aid 
eligible students and would direct funds to providing 
counseling and advisement on course selection and financial 
management, mentoring and direct instruction and tutoring to 
support students as they complete coursework or transition from 
2-year to 4-year colleges.

                      AMERICAN HISTORY FOR FREEDOM

    The committee bill authorizes a new ``American History for 
Freedom'' program to make competitive grants available to 
institutions of higher education for the purpose of 
establishing or strengthening programming in Traditional 
American History, Western Civilization, or Free Institutions. 
The program will help ensure that more postsecondary students 
have the opportunity to participate in courses of study and 
activities focused on these critical subjects, and that 
prospective teachers have access to a solid foundation of 
content knowledge.
    The committee notes that today, more than ever, it is 
important to preserve and defend our common heritage of freedom 
and civilization, and to ensure that future generations of 
Americans understand the importance of traditional American 
history and the principles upon which this Nation was founded 
and on which it continues to rely. In a time when our values 
and ideals are questioned, is also important to develop an 
understanding of the nature of free institutions, of the events 
and principles that brought them into existence, and of how 
they have been defended in the past.

                           TEACH FOR AMERICA

    The committee establishes and authorizes grants for Teach 
for America, a national program that recruits recent successful 
college graduates to teach for up to 2 years inunderserved 
communities in the United States. This money would be used to recruit, 
select, train and support these graduates so that they could be placed 
through an agreement in schools in districts with which there are 
agreements. In addition these funds will support a study to assess the 
quality of the Teach for America participants.

                    PATSY T. MINK FELLOWSHIP PROGRAM

    The committee bill includes authorization for a new Federal 
fellowship program linked to service in the higher education 
professoriate. The Patsy T. Mink Fellowship program honors 
Congresswoman Patsy Mink of Hawaii who served in the House of 
Representatives for more than 27 years. She was a faithful and 
dedicated member of the House Education and Labor Committee and 
the Committee on Education and the Workforce during her service 
in the House. In addition to her role as a driving force and 
the author of Title IX of the Education Amendments of 1972, 
which created equity in scholastics and in athletics for women 
and girls, including at colleges and universities, Mrs. Mink 
worked hard to expand educational opportunities at all levels 
for low-income, minority, educationally-disadvantaged, first-
generation, and disabled students.
    The committee believes that it is fitting that a program 
designed to enhance the presence of minorities and women in the 
higher education professoriate should bear Mrs. Mink's name. A 
recent Woodrow Wilson National Fellowship Foundation report, 
Diversity and the PhD: A Review of Efforts to Broaden Race and 
Ethnicity in U.S. Doctoral Education, documents the under-
representation of minorities receiving doctorates. The Mink 
Fellowship program will not only contribute to student 
persistence in obtaining the doctorate, but also will encourage 
students to continue in the professoriate beyond the service 
requirement mandated by law.

            STUDY ON COLLEGE ENROLLMENT BY SECONDARY SCHOOLS

    The committee recommends that the Department collect, in 
full compliance with FERPA, college enrollment by secondary 
institution and graduation year from postsecondary institutions 
via the Integrated Postsecondary Education System (IPEDS), and 
diploma recipients by secondary institution and graduation year 
from States via the Common Core of Data (CCD), both of which 
are existing data-collection systems within the National Center 
for Education Statistics.
    The committee intends for these data to be used purely as a 
tool for secondary institution leaders to measure the success 
of their initiatives and innovations aimed at increasing 
college enrollment. Data provided under this provision are not 
intended to be used by Federal, State, or local governments to 
hold schools, their administrators, teachers or staff, 
accountable or suffer any repercussions as a result of the 
data. The committee specifically opted to make trend data 
rather than absolute numbers available to allow for examination 
of progress over time rather than comparisons between schools.
    The committee recommends that the Department contract with 
College Summit, Inc. to calculate and make publicly available 
year-to-year college enrollment rate trends by secondary 
institution because College Summit is the preeminent national 
non-profit organization concentrating on increasing college 
enrollment rates in low-income communities, working both multi-
state and school-wide.

                   TITLE IX--AMENDMENTS TO OTHER LAWS


                   EDUCATION OF THE DEAF ACT OF 1986

Coordination with the No Child Left Behind Act and accountability for 
        student outcomes

    The committee strengthened Gallaudet's elementary and 
secondary schools' accountability by aligning such requirements 
with the accountability requirements in the No Child Left 
Behind Act of 2001 (P.L. 107-110). Specifically this provision 
requires Gallaudet to select the academic content, achievement, 
and assessment standards of a State approved by the Secretary 
of Education as its own, and implement such standards as its 
own by the 2008-09 school year and determine whether such 
programs are making yearly adequate progress. The committee 
believes that allowing Gallaudet to choose the approved 
standards from a State would relieve the University of the 
expensive and time consuming task of having to develop its own 
standards and assessments for one small school. This would 
provide a basis of comparison for the achievement of students 
in the Gallaudet program that would otherwise be lacking. 
Additionally, this requirement would make the State's 
definition of ``adequate yearly progress'' applicable to the 
University's K-12 education program. Again, the committee 
believes that this would ensure that the educational 
accountability provisions applicable to that program reflect 
the No Child Left Behind principle that the education of 
children with disabilities should be held to the same academic 
expectations as the education of all other children.

Cultural experience grants

    The committee has authorized funding for grants to 
nonprofit organizations in order to enrich the cultural 
experiences for deaf and hard of hearing children and adults 
through exposure and access to professional theatre. The 
committee believes that nationally recognized programs such as 
Deaf West Theatre and the National Theater of the Deaf have a 
long history of providing such programming to these audiences, 
and would be appropriate recipients for these grant funds.

Audit reporting

    The committee amends current law to ensure that the 
Department of Education receives an independent financial and 
compliance audit of the National Technical Institute for the 
Deaf (NTID). In order for the audit to be meaningful and useful 
to the Department, it is necessary to have the audit follow the 
cycle of the Federal fiscal year. The bill ensures the audit 
period and the fiscal year are the same.

Outcome reporting

    The committee recognizes that by modifying Gallaudet's 
reporting requirements on the disposition of secondary school 
and university graduates from ``upon graduation/completion'' 
to``approximately one year after graduation'' will provide a clearer 
picture of outcomes for students. Additionally, changing the timeline 
of the reporting requirements will make the reporting language for the 
audit the same for Gallaudet and NTID.

Surcharges for international students

    The committee acknowledges that Gallaudet University and 
NTID are the only liberal arts universities in the world 
designed exclusively for deaf and hard of hearing students and 
that the 100 percent surcharge for such students is a barrier 
to attendance for international students. Although Gallaudet 
and NTID have the capacity to serve additional international 
students, the committee also recognizes its commitment to 
students from the United States that are deaf, and assuring 
that United States tax dollars are spent on providing 
educational opportunities for United States citizens first. 
Therefore, the committee is authorizing Gallaudet and NTID to 
create a fee system in which students from non-developing 
countries must pay the 100 percent surcharge, unless they can 
demonstrate need, in which case they may have their surcharge 
reduced by 50 percent. Furthermore, a student from a developing 
country must pay a 50 percent surcharge, unless he or she can 
demonstrate need, in which case the surcharge is reduced by 50 
percent to 25 percent. Because of the initial costs associated 
with developing a distance learning course, international 
students living outside of the United States would not have to 
pay a surcharge nor count towards the enrollment cap for 
international students.

                    UNITED STATES INSTITUTE OF PEACE

Board of directors

    The committee clarifies that the term of a board member 
begins when the member is confirmed by the Senate and sworn in, 
not when the board member's nomination is made public. 
Confusion over the interpretation of this provision had led to 
vacancies on the Institute's board, and also unnecessarily 
shortened the term of service of some board members. The 
committee expects this clarification to resolve any outstanding 
concerns over board appointments.

Application of GEPA

    The committee clarifies that certain provisions under the 
General Education Provisions Act (GEPA) apply to the U.S. 
Institute of Peace, allowing the Institute to continue to 
receive appropriations for 1 fiscal year after the expiration 
of the authorization, pursuant to the authority provided under 
the GEPA for Federal education programs.

                            INDIAN EDUCATION

Tribally Controlled Colleges and Universities Act

    In response to the concerns of many tribes, the committee 
makes several changes to improve the consistency among the many 
different Federal programs providing assistance to tribally 
controlled colleges and universities. The committee recognizes 
the challenges created for these institutions by having several 
different Federal programs provide assistance, each with a 
slightly different set of definitions. The committee expects 
these amendments to improve the coordination between Federal 
programs and help tribally controlled institutions spend more 
time serving students, and less time navigating complex Federal 
requirements.

Dine College

    The committee recognizes the longstanding relationship 
between the Federal Government and the Navajo Nation. 
Legislation enacted in 1971 established a dedicated 
discretionary grant stream for the Navajo Community College, 
which has been renamed Dine College. In reauthorizing this 
program, the committee finds that the Treaty of 1868 between 
the United States of America and the Navajo Tribe of Indians 
provides for the education of the citizens of the Navajo 
Nation.
    In 1968, the Navajo Nation created and chartered the Navajo 
Community College by Resolution CN-95-68 as a wholly owned 
educational entity of the Navajo Nation. In 1971, Congress 
enacted the Navajo Community College Act (Public Law 92-189; 25 
U.S.C. 640a et seq.). In 1997, the Navajo Nation officially 
changed the name of the Navajo Community College to Dine 
College by Resolution CAP-35-97.
    The purpose of Dine College is to provide educational 
opportunities to the Navajo people and others in areas 
important to the economic and social development of the Navajo 
Nation. The mission of Dine College is to apply the principles 
of Saah Naaghai Bikeh Hozhoon (Dine Philosophy) to advance 
quality student learning through training of the mind and 
heart--(1) through Nitsahakees (Thinking), Nahata (Planning), 
Iina (Living), and Sihasin (Assurance); (2) in study of the 
Dine language, history, philosophy, and culture; (3) in 
preparation for further studies and employment in a 
multicultural and technological world; and (4) in fostering 
social responsibility, community service, and scholarly 
research that contribute to the social, economic, and cultural 
well-being of the Navajo Nation.
    The United States has a trust and treaty responsibility to 
the Navajo Nation to provide for the educational opportunities 
for Navajo people. Significant portions of the College's 
infrastructure are dilapidated and pose a serious health and 
safety risk to students, employees and the public.
    For these reasons, the committee amends the Navajo 
Community College Act, and renames it after the college, now 
known as Dine College. The committee also updates references to 
the Navajo Indian Tribe and instead replaces it with the 
appropriate term ``Navajo Nation.''
    The committee also updates a study of the facilities needs 
of the college that was last commissioned in 1979, and 
authorizes a separate set of uses of funds related to the 
construction of buildings, water and sewer facilities, roads, 
information technology and telecommunications infrastructure, 
classrooms and external structures.
    The committee also clarifies that funds made available 
through this act may be used for improving and expanding the 
college, including by providing--for the Navajo people and 
others in the community--higher education programs; vocational 
and technical education; activities relating to the 
preservation and protection of the Navajo language, philosophy, 
and culture; employment and training opportunities; economic 
development and community outreach; and a safe learning, 
working, and living environment.

                        TITLE X--RECONCILIATION


                        PROGAP AND SMART GRANTS

    From savings in the loan programs, the committee authorizes 
a new mandatory aid program through fiscal year 2010: the 
Provisional Grant Assistance Program or ProGAP. There are two 
separate funding streams under this program: ProGAP and SMART 
grants. Students eligible for Pell grants are also eligible for 
ProGAP grants. The Secretary shall ensure that grants under 
this program are awarded to students with the greatest need, so 
that the most disadvantaged students receive the most aid.
    The National Science Mathematics Access to Retain Talent 
(SMART) Grants will be made available to Pell-eligible students 
who are in their 3rd or 4th year in an institution of higher 
education and who are studying mathematics, science, technology 
or engineering or a foreign language determined by the 
Secretary to be critical to national security.

                STAFFORD LOAN LIMITS AND INTEREST RATES

    The committee, after much discussion with the higher 
education community, has agreed to increase the loan limits 
within the Federal Stafford loan programs in the first year 
from $2,625 to $3,500 and in the second year from $3,500 to 
$4,500. There is no change in the aggregate limits. These 
increases are made in response to reports of growth in lending 
outside of the Federal program. It is not the intent of the 
committee to burden students with more student loan debt. 
Instead the committee feels strongly that if students have to 
borrow they should be borrowing in the Federal system which 
offers guaranteed borrower benefits and a competitive interest 
rate to all borrowers.

Increasing graduate student loan limits

    At a time when our Nation must have the intellectual 
capability to respond to increased national security threats 
and maintain our economic competitiveness, it is vital that 
Americans seeking post-baccalaureate education be able to 
borrow adequate sums of money to finance their education. 
Today's graduate students are tomorrow's scientists, engineers, 
doctors, teachers, business and government leaders, and college 
and university faculty. The committee recognizes that Federal 
student loans offer the best lending terms and conditions--low 
interest rates, the in-school interest exemption, repayment 
options, and payment deferments--of any other source of loans. 
Federal student loans are indispensable for graduate students 
to finance their education.
    Federal Stafford loan borrowing limits for graduate and 
professional students have not been adjusted since 1992 and 
recent evidence suggests that students are borrowing increasing 
amounts of money from private sector loans and credit cards. 
According to the Department of Education NPSAS Study, in 2003-
04, 40 percent of graduate and professional students used 
Federal loans to finance their education. Of those student 
borrowers, 27 percent of master's students, 45 percent of 
doctoral students, and 76 percent of professional students 
borrowed at the current annual maximum borrowing limit of 
$18,500. The committee recommends increasing annual and 
cumulative Stafford Loan borrowing limits for graduate students 
to help them better finance their education and reduce the 
costs of obtaining graduate and professional education. This is 
one important way the Federal Government can invest in talented 
individuals who will contribute to the Nation's economic 
competitiveness and national security.

Interest rates

    The committee maintains the current provision that shifts 
all Stafford loans to a fixed rate of 6.8 percent beginning 
July 1, 2006. The committee repeals the single holder rule, 
allowing all students to consolidate their loans with any 
lender.

                               PLUS LOANS

    The committee understands that borrowers who are eligible 
for PLUS loans are in a position to repay the loans and are 
less likely to default. The committee increased the fixed 
interest rate on PLUS loans from 7.9 percent to 8.5 percent, 
effective July 1, 2006, in order to meet reconciliation 
instructions. The committee notes that a rate of 8.5 percent is 
still less than rates for other loan products over the last 30 
years.
    The committee also made graduate and professional students 
eligible to borrow PLUS loans. PLUS loans are low interest 
loans currently available to parents of undergraduates. Due to 
the high cost of graduate and professional school, graduate and 
professional students have increasingly relied on private loans 
to cover their cost of attendance upon exhausting their Federal 
student loan allotment. According to a report by the American 
Council on Education, Federal Student Loan Debt: 1993 to 2004, 
30 percent of professional students took out private loans in 
2003-04. These loans are more costly for students than those 
available through the Federal student loan program, increasing 
graduate and professional students' debt over time. Making 
graduate and professional students eligible to borrow PLUS 
loans is intended to help reduce the cost burden of obtaining 
graduate and professional education.

          LOAN DEFERMENTS FOR BORROWERS SERVING ON ACTIVE DUTY

    With the numbers of borrowers serving in Iraq, Afghanistan, 
and other areas of the world, the committee believes borrowers 
should be relieved of title IV student loan obligations while 
defending this great Nation. The committee allows borrowers in 
repayment for any Federal loan who are serving on active duty 
during a war or other military operations or national emergency 
to be placed in deferment.

        INCOME CONTINGENT REPAYMENT FOR PUBLIC SECTOR EMPLOYEES

    The committee expands the Income Contingent Repayment 
provisions on loans for public sector employees who are in 
emergency management, government, public safety, public health, 
education or public interest legal services to discharge any 
remaining principal after 10 years for any such borrower who 
has made 120 on-time payments. The committee encourages more 
college graduates to enter these important fields first by 
lowering payments, as appropriate, based on income for the 
first 10 years, then forgiving the balance remaining.

    ADDITIONAL CHANGES TO THE FEDERAL FAMILY EDUCATION LOAN PROGRAM

Guaranty agency origination fee

    Under current law, guaranty agencies are authorized, but 
not required, to charge a 1 percent insurance premium (also 
known as the guarantee fee) to subsidized, unsubsidized and 
PLUS borrowers. S. 1614 replaces the current fee arrangement 
with a new fee, called the guaranty agency origination fee. 
This new fee structure requires that a guaranty agency 
origination fee of 1 percent of each disbursement be deposited 
into the Federal fund account. However, the source of the 
guaranty agency origination fee may be the proceeds of the loan 
or non-Federal funds under the jurisdiction of the guaranty 
agency, including the agency operating fund. This was done to 
ensure the Federal fund is not depleted.

Lender reinsurance

    The committee also reduces the lender reinsurance 
reimbursement to 97 percent of the unpaid principal of loans 
insured under the program. The committee believes the decrease 
in default rates over the last 12 years has reduced the need to 
maintain the same reinsurance rate. The committee believes a 1 
percent reduction in reinsurance rates is a reasonable 
reduction.

School as lender

    The committee has heard concerns from several sources about 
some of the practices of institutions that have become lenders. 
The committee directs schools acting as lenders to continue 
acting as the lender until the student completes the required 
coursework. In addition, schools acting as lenders must use 
proceeds from the special allowance payments, interest payments 
from borrowers and proceeds from the sale of the loan only for 
need based aid or for reasonable reimbursement for direct 
administrative expenses, including interest owed on funds used 
to make loans.
    The committee believes all net revenues from Federal loans 
should be used to provide need based aid to students. The 
committee requires that this source supplement, not supplant, 
institutional, State, and local sources of support. The 
committee also recognizes that some institutions are already 
using some or all of the revenues for need based aid. In 
implementing this provision the Secretary should recognize 
current institutional efforts to help students and should apply 
the supplement, not supplant rule only to that portion of net 
revenues not currently being applied to need based aid.

Taxpayer-Teacher Protection Act extension

    The committee also makes permanent the reduction of special 
allowance payments for loans from the proceeds of tax-exempt 
bonds, as provided for in the Taxpayer-Teacher Protection Act 
of 2004.

                       NEED ANALYSIS ADJUSTMENTS

    The income protection allowance is increased for both 
dependent and independent students. This means that students 
will be able to work more without having their earnings affect 
their financial aid eligibility in future years. The asset 
conversion rate was reduced from 35 percent to 20 percent for 
dependent students and independent students without dependents 
(other than a spouse) and from 12 percent to 7 percent for 
independent students with dependents other than a spouse.

                       HURRICANE KATRINA RECOVERY

    The committee provides relief to postsecondary students, 
institutions of higher education and borrowers who have been 
affected by Hurricane Katrina. The bill requires the Secretary 
of Education to waive repayment of any Federal student 
financial aid under title IV of the HEA that affected students 
and institutions received if students were not able to complete 
the term for which the funds were received. Federal loans made 
to students or to parents of students who enrolled in affected 
institutions will be discharged or cancelled. To ensure that 
these provisions are applied only to those individuals and 
institutions on whom there was an impact, the committee 
requires the Secretary to determine the time period for which 
an institution of higher education is an affected institution 
using consistent, objective criteria. Affected students who do 
not enroll in another institution will retain their in-school 
status, which will assist them with any loans they had received 
previously. Borrowers who lived or worked in a county or parish 
in Louisiana, Mississippi, or Alabama that was declared a major 
disaster area and were in deferment or grace period as of 
August 22, 2005 will be maintained in that status until June 
30, 2006. Affected borrowers who were in repayment are eligible 
for forbearance for up to 1 year without having to provide 
documentation.
    The committee gives authority to the Secretary to approve 
modifications to Teacher Quality Enhancement Grants to enable 
grantees to use funds to assist States and local education 
agencies to recruit and retain highly qualified teachers in 
affected schools. The committee also gives the Secretary 
authority to approve modifications of TRIO grants and grants 
under part A or B of title III requested by a grantee located 
in an affected area.
    In addition to the specific waiver authority, the committee 
gives the Secretary general authority to waive other 
requirements in the Higher Education Act, upon consultation 
with the authorizing committees, to accommodate other 
situations as they arise. The committee requires the Secretary 
to make information on all waivers, modifications or extensions 
that are granted publicly available. To ensure accountability, 
the committee requires the Inspector General of the Department 
of Education to conduct an audit and investigation of each 
program that includes response and recovery activities related 
to Hurricane Katrina. The authority to waive requirements and 
modify grants expires on September 30, 2006.

                            V. Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, November 23, 2005.
Hon. Mike Enzi,
Chairman, Committee on Health, Education, Labor, and Pensions, U.S. 
        Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1614, the Higher 
Education Amendments of 2005.
    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.

S. 1614--Higher Education Amendments of 2005

    Summary: S. 1614 would make numerous changes to federal 
higher education programs, including the student and parent-
loan programs. CBO estimates that enacting the bill would 
reduce direct spending by $4.0 billion in 2006, $9.7 billion 
over the 2006-2010 period, and $28.6 billion over the 2006-2015 
period.
    The bill also would authorize spending for numerous higher 
education programs--including the Pell Grant program--but that 
spending would be subject to appropriation. CBO estimates the 
Pell Grant provisions would authorize funding of $17.9 billion 
in 2006 and $106 billion over the 2006-2010 period. 
Implementing those provisions would cost $87 billion in outlays 
over the five-year period. CBO has not completed an estimate of 
the potential cost of the other provisions for which spending 
would depend on future appropriation action.
    The legislation contains no intergovernmental or private-
sector mandates as defined by the Unfunded Mandates Reform Act 
(UMRA). The bill would benefit states and institutions of 
higher education and any costs they incur would result from 
complying with conditions of federal assistance.
     Major Provisions: Provisions addressing the student aid 
programs (Title X, Part A) with significant budget effects 
include:
         Changing parent-loan interest rates and the 
        formulas used to calculate lender yields;
         Imposing limits on when the separate formula 
        for lender yields for loans supported with certain tax-
        exempt funding would apply;
         Changing the insurance provided to lenders and 
        the fees charged by lenders;
         Reducing borrower origination fees and 
        requiring collection of a 1 percent fee from guaranty 
        agencies;
         Increasing the loan limits for first-year, 
        second-year, and graduate students, as well as allowing 
        graduate students to borrow under the parent-loan 
        program;
         Cancelling the repayment of student loans for 
        certain teachers and creating a new loan forgiveness 
        program for certain public service workers with direct 
        loans; and
         Establishing two new programs that would 
        supplement the Pell Grant program during the 2006-2010 
        period.
    Title X, Part B also would extend certain forms of relief 
to students and schools affected by Hurricane Katrina, which 
would have the effect of increasing direct spending by about 
$100 million in 2006.
    Other changes to the higher education programs (other than 
in Title X) would increase overall direct spending (by less 
than $100 million over the next five years) by postponing the 
recall of Perkins loan funds and expanding eligibility for 
student aid in several ways. The other portions of the bill 
also would authorize new discretionary spending for Pell Grants 
and other higher education programs.
    Estimated cost to the Federal Government: The estimated 
effects of S. 1614 on direct spending and on the Pell Grant 
program are shown in Table 1. (CBO has not completed an 
estimate for the numerous other higher education programs that 
are subject to annual appropriation.) The costs and savings 
from this legislation would fall within budget functions 500 
(education, employment, training, and social services).
    Basis of estimate: For this estimate, CBO assumes the bill 
will be enacted in December 2005.

                   TABLE 1.--BUDGETARY EFFECTS OF S. 1614, HIGHER EDUCATION AMENDMENTS OF 2005
----------------------------------------------------------------------------------------------------------------
                                                           By fiscal year, in millions of dollars--
                                             -------------------------------------------------------------------
                                                 2006       2007       2008       2009       2010     2006- 2010
----------------------------------------------------------------------------------------------------------------
                                           CHANGES IN DIRECT SPENDING

Title X, Part A: Education Provisions:
    Estimated Budget Authority..............     -3,468     -1,439     -1,701     -2,072     -2,363      -11,043
    Estimated Outlays.......................     -4,160       -960     -1,275     -1,601     -1,882       -9,878
Title X, Part B: Hurricane Katrina Higher
 Education Recovery:
    Estimated Budget Authority..............        105          0          0          0          0          105
    Estimate Outlays........................        105          0          0          0          0          105
    Subtotal, Title X:
        Estimated Budget Authority..........     -3,363     -1,439     -1,701     -2,072     -2,363      -10,938
        Estimated Outlays...................     -4,055       -960     -1,275     -1,601     -1,882       -9,773
Other Higher Education Act Amendments:
    Estimated Budget Authority..............         11         16         20         20         20           87
    Estimated Outlays.......................          6         11         20         20         20           77
Total Changes:
    Estimated Budget Authority..............     -3,352     -1,423     -1,681     -2,052     -2,543      -10,851
    Estimated Outlays.......................     -4,049       -949     -1,255     -1,581     -1,862       -9,696

                                 CHANGES IN SPENDING SUBJECT TO APPROPRIATION\1\

Pell Grants:
    Estimated Authorization Level...........     17,869     19,770     21,198     22,625     24,095      105,556
    Estimated Outlays.......................      4,288     17,967     20,075     21,512     22,949       86,792
----------------------------------------------------------------------------------------------------------------
\1\CBO has not estimated the provisions other than those affecting Pell Grants.

Direct Spending--Title X, Part A: Education Provisions

    Title X, Part A contains some provisions that would reduce 
direct spending and others that would increase costs. On net, 
these changes would reduce outlays by $4.2 billion in 2006, 
$9.9 billion during the 2006-2010 period, and $31.5 billion 
over the 2006-2015 period.
    Major Education Provisions That Decrease Spending. The 
major changes in Title X, Part A that would decrease direct 
spending include new formulas for lender yields, a higher 
interest rate for parent borrowers, a new fee on the guaranty 
agencies, increased fees on some lenders, and reduced insurance 
for lenders. CBO estimates that savings from these changes 
would total $4.7 billion in 2006, $19.5 billion over five 
years, and $44.8 billion over 10 years, mostly in the 
guaranteed loan program (see Table 2).
    Borrower Interest Rates and Lender-Yield Formulas. The bill 
would change some of the formulas used to compute what 
borrowers owe to lenders and what lenders receive from or pay 
the government under the guaranteed loan program. Borrower 
rates on new student 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; the bill 
would not change these rates for student loans, but would raise 
the fixed rate for parent loans to 8.5 percent.
    The lender-yield formulas for student and parent loans 
would continue to be based on a variable-rate formula, but the 
bill would no longer allow the borrowers' rates to serve as the 
minimum for the lender yield. Under current law, lenders 
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 an estimated $2.9 billion in 2006, $15.1 billion 
over the 2006-2010 period, and $36.2 billion through 2015.
    Changes in ``9.5 Percent'' Loans. Another change in the 
payment formulas for lenders would affect 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 the 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 paid to other lenders. Under current law, the formula on 
new loans will revert back to the pre-October 2004 structure. 
S. 1614 would continue the practice currently in place (instead 
of allowing it to expire at the end of December 2005). This 
policy would save an estimated $705 million in 2006, $1.4 
billion over the 2006-2010 period, and $2.3 billion over the 
2006-2015 period.

                                                           TABLE 2.--DIRECT SPENDING EFFECTS OF TITLE X, PART A--EDUCATION PROVISIONS
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          By fiscal year in millions of dollars--
                                                         ---------------------------------------------------------------------------------------------------------------------------------------
                                                             2006       2007       2008       2009       2010       2011       2012       2013       2014       2015     2006- 2010   2006- 2015
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Major Provisions Reducing Spending:
    Changes in Borrower Interest Rates and Lender
     Yields:
        Estimated Budget Authority......................     -3,530     -3,050     -3,455     -3,785     -4,050     -4,305     -4,560     -4,820     -5,090     -5,175      -17,870      -41,820
        Estimated Outlays...............................     -2,920     -2,385     -2,965     -3,280     -3,525     -3,760     -3,990     -4,225     -4,470     -4,720      -15,075      -36,240
    Changes to Certain Loans Financed with Tax-Exempt
     Bonds:
        Estimated Budget Authority......................       -800       -195       -200       -200       -200       -205       -210       -210       -215       -215       -1,595       -2,650
        Estimated Outlays...............................       -705       -170       -175       -175       -175       -180       -185       -190       -190       -195       -1,400       -2,340
    Changes in Borrower Insurance Programs and Guaranty
     Agency Fees:
        Estimated Budget Authority......................       -240       -330       -280       -305       -335       -365       -395       -430       -470       -500       -1,490       -3,650
        Estimated Outlays...............................       -240       -330       -280       -305       -335       -365       -395       -430       -470       -500       -1,490       -3,650
    Changes to Lender Insurance:
        Estimated Budget Authority......................       -410       -135       -140       -145       -155       -160       -165       -175       -180       -180         -985       -1,845
        Estimated Outlays...............................       -375       -105       -120       -130       -130       -140       -145       -150       -155       -165         -860       -1,615
    Changes in Lender Fees:
        Estimated Budget Authority......................       -445        -55        -60        -60        -60        -65        -70        -70        -75        -75         -680       -1,035
        Estimated Outlays...............................       -425        -45        -50        -50        -55        -55        -60        -60        -65        -65         -625         -930
        Subtotal:
            Estimated Budget Authority..................     -5,425     -3,765     -4,135     -4,495     -4,800     -5,100     -5,400     -5,705     -6,030     -6,145      -22,620      -51,000
            Estimated Outlays...........................     -4,665     -3,035     -3,590     -3,940     -4,220     -4,500     -4,775     -5,055     -5,350     -5,645      -19,450      -44,775
Major Provisions Increasing Spending:
    Changes in Borrower Origination Fees:
        Estimated Budget Authority......................        110        365        505        520        540        550        570        585        600        615        2,040        4,960
        Estimated Outlays...............................         65        240        305        450        465        480        490        505        520        530        1,615        4,140
    Increased Loan Limits:
        Estimated Budget Authority......................        180        515        515        530        555        575        590        615        635        655        2,295        5,365
        Estimated Outlays...............................        105        355        455        465        480        500        515        530        550        570        1,860        4,525
    ProGAP and SMART Grants Programs:
        Budget Authority................................      1,897      1,901      1,899      1,898      1,897          0          0          0          0          0        9,492        9,492
        Estimated Outlays...............................        455      1,860      1,900      1,899      1,898      1,442         38          0          0          0        8,012        9,402
        Subtotal:
            Estimated Budget Authority..................      2,187      2,781      2,919      2,948      2,992      1,125      1,160      1,200      1,235      1,270       13,827       19,817
            Estimated Outlays...........................        625      2,455      2,750      2,814      2,843      2,422      1,043      1,035      1,070      1,100       11,487       18,157
Other Provisions with Measurable Effects:
    Estimated Budget Authority..........................        -35       -147       -134       -119        -99        -91        -94        -99        -99        -99         -534       -1,016
    Estimated Outlays...................................          8       -142       -124       -124       -104        -91        -91        -96       -101        -96         -486         -961
Interaction Effects:
    Estimated Budget Authority..........................       -195       -308       -351       -406       -456       -484       -521       -566       -591       -601       -1,716       -4,499
    Estimated Outlays...................................       -128       -238       -311       -351       -401       -429       -464       -494       -519       -549       -1,429       -3,884
Total Changes:
    Estimated Budget Authority..........................     -3,468     -1,439     -1,701     -2,072     -2,363     -4,550     -4,855     -5,170     -5,480     -5,575      -11,043      -36,678
    Estimated Outlays...................................     -4,160       -960     -1,275     -1,601     -1,882     -2,598     -4,287     -4,610     -4,900     -5,190       -9,878      -31,463
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: ProGAP = Provisional Grant Assistance; SMART = National Science and Mathematics Access to Retain Talent.

    Borrower Insurance Premiums and Guaranty Agency Fees. Under 
current law, guaranty agencies may charge student and parent 
borrowers of guaranteed loans an insurance premium of up to 1 
percent. These premiums show up as part of the offsetting 
collections in the student loan reserve account. In recent 
years, many agencies have waived part or all of the premium, 
thereby reducing these receipts, which are recorded on the 
budget as offsets to direct spending. The bill would eliminate 
this premium and replace it with a 1 percent fee that the 
guaranty agencies would have to provide from their nonfederal 
resources.
    CBO estimates that the net effect of these changes, which 
would become effective on April 1, 2006, would reduce direct 
spending by $240 million in 2006, $1.5 billion over the 2006-
2010 period, and $3.7 billion over the 2006-2015 period.
    Federal Lender Insurance. S. 1614 would reduce the portion 
of defaulted loans for which lenders are reimbursed. The 
reimbursements are paid from a federal student loan reserve 
account consisting of separate reserve accounts for the various 
guaranty agencies. Under current law, lenders are generally 
reimbursed for 98 percent of the outstanding balances on loans 
that go into default. Lenders who meet certain requirements are 
classified as exceptional lenders, and they receive 100 percent 
insurance.
    S. 1614 would reduce the 98 percent insurance level to 97 
percent, and would eliminate the exceptional lender 
designation. For those lenders losing exceptional lender 
status, the insurance rate would drop from 100 percent to 97 
percent. CBO estimates that these changeswould reduce outlays 
by $375 million in 2006, $860 million over the 2006-2010 period, and 
$1.6 billion through 2015.
    The bill also would reduce the rate at which the federal 
government replenishes the reserve fund. However, these 
transfers are intrabudgetary transactions and have no effect on 
total federal spending or revenues.
    Lender Fees. The legislation would increase fees charged 
lenders on consolidation loans from 0.5 percent of the loan 
principal to 1.0 percent. The additional fees would save an 
estimated $425 million in 2006, $625 million over the 2006-2010 
period, and $930 million over the 2006-2015 period.
    Major Education Provisions Increasing Spending. The 
provisions in Title X, Part A that would result in the largest 
increases in spending are changes to origination fees paid by 
borrowers, increases in loan limits, and funding for two new 
programs to supplement the Pell Grant program. CBO estimates 
that these provisions would cost $11.5 billion over the 
20062010 period and $18.2 billion over the 2006-2015 period.
    Borrower Origination Fees. S. 1614 would reduce borrower 
origination fees for both subsidized and unsubsidized student 
loans. Currently, origination fees for guaranteed loans are 3.0 
percent (there is also an insurance premium of up to 1.0 
percent). In the direct loan program, the origination fee is 
also 3.0 percent (although in practice, the Department of 
Education generally charges 1.5 percent up front and another 
1.5 percent if the borrower fails to make timely payments).
    Origination fees for student borrowers in the guaranteed 
loan program would drop to 2.5 percent in July 2007 under the 
legislation. In the direct loan program, S. 1614 would replace 
the required 3.0 percent fee with a fee of up to 2.5 percent to 
be determined by the Secretary of Education. CBO assumes that, 
under the Secretary's discretion, the direct loan fee could 
vary from year-to-year but would average 1.25 percent. CBO 
estimates that these changes would increase outlays by $1.6 
billion over the 2006-2010 period and by $4.1 billion over the 
2006-2015 period.
    Increased Loan Limits. The bill 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. In 
addition, the legislation 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 for most 
borrowers would be increased by $10,000. Graduate students also 
would be permitted to borrow through the parent-loan program. 
In addition, students who require further undergraduate course 
work to qualify for a graduate program or to gain a 
professional license or certification would be eligible for 
higher borrowing levels. CBO estimates that these increases 
would boost aggregate student loan borrowing from both the 
direct and guaranteed loan programs, and as a result, would 
increase direct spending by $1.9 billion over the 2006-2010 
period and by $4.5 billion over the 2006-2015 period.
    ProGAP and SMART Grant Programs. S. 1614 would provide a 
total of $9.5 billion for fiscal years 2006 through 2010 for 
two programs that would supplement the Pell Grant program: the 
Provisional Grant Assistance (ProGAP) program and the National 
Science and Mathematics Access to Retain Talent (SMART) grants 
program. CBO estimates that outlays from these appropriations 
would amount to $455 million in 2006, $8.0 billion over the 
2006-2010 period, and $9.5 billion over the 2006-2015 period.
    The ProGAP program would give approximately $1.45 billion 
in additional aid each academic year from 2006 through 2010 to 
students who are eligible for the Pell Grant program and who 
have submitted their student aid applications by June 30 for 
the upcoming academic year. The Department of Education would 
award these funds in the same manner as under the current Pell 
Grant program.
    The National SMART grants program would give $450 million 
in additional aid each academic year from 2006 through 2010 to 
Pell Grant recipients in their third or fourth year at an 
institution of higher education with a major in mathematics, 
science, technology, engineering, or a foreign language deemed 
critical to the national security of the United States. 
Recipients would be eligible for up to $1,500 for each academic 
year.
    CBO estimates outlays for the ProGAP and National SMART 
grants programs based on the historical outlay rates of the 
Pell Grant program.
    Other Provisions With Measurable Effects. S. 1614 contains 
numerous provisions that would have much smaller budgetary 
effects than those described above. Among them are changes in 
loan cancellation programs and the eligibility for interest 
deferments. Other provisions with some estimated budget effects 
during the 2006-2010 period include changes in the income 
protection allowance for students and in the disbursement 
requirements for certain loans for schools with low default 
rates. Taken together, CBO estimates that these provisions 
would cost $8 million in 2006, but would reduce direct spending 
by $486 million over the 2006-2010 period and by $961 million 
over the 2006-2015 period.
    Interactions Among Education Provisions. The overall 
reductions in direct spending that Part A would yield are 
significantly larger than the sum of the individual provisions 
because many of those provisions interact. For example, the 
lender-yield and borrower interest ratechanges save even more 
when the increased loan volume from the changes in loan limits is 
considered. However, those same loan limit increases boost the costs of 
the provisions that reduce borrowers' fees. On balance, the 
interactions among the various provisions would generate additional 
estimated savings of $128 million in 2006, $1.4 billion over the 2006-
2010 period, and $3.9 billion over the 2006-2015 period.

Direct Spending--Title X, Part B: Hurricane Katrina Higher Education 
        Recovery

    S. 1614 the legislation would provide relief to certain 
student loan borrowers and educational institutions that were 
adversely affected by Hurricane Katrina. CBO estimates that the 
total costs of this relief would be $105 million in fiscal year 
2006 (with no effect after this year).
    The largest portions of the costs are attributable to two 
policies: (1) the cancellation of repayment for all student 
loans that were disbursed for cancelled enrollment periods at 
postsecondary schools that were closed, and (2) the requirement 
that lenders provide up to one year of forbearance on student 
and parent loans for borrowers affected by the hurricane and 
that borrowers in a grace period or deferment period could 
remain in that status through June 2006. CBO estimates, based 
on data provided by the Department of Education, that the costs 
of cancelling repayments for the loans that had been disbursed 
for schools that closed as a result of the storm would be $64 
million.
    CBO estimates that the subsidy costs for the deferments and 
forbearance on loans for borrowers affected by Hurricane 
Katrina would amount to about $30 million. Data were not 
available to precisely estimate the numbers of borrowers and 
amount of outstanding principal that could be affected by this 
policy. CBO used demographic and economic data from the Census 
Bureau for the jurisdictions covered by the major disaster 
designation for Hurricane Katrina to help estimate the 
potential number of affected borrowers. CBO estimates that 
student loan indebtedness for affected borrowers in the 
affected areas is roughly $5 billion. The estimated gross costs 
for requiring that lenders provide certain deferment and 
forbearance benefits were reduced to reflect the likely use of 
existing authority for deferment and forbearance of payments 
for interest and principal for economic hardship.
    S. 1614 would also waive the requirement for the return of 
federal student aid in cases where the storm resulted in a 
cancelled period of enrollment, and would exclude any 
disbursements for cancelled enrollment periods from the 
aggregate loan and grant aid limits for affected students. In 
addition, student borrowers at schools affected by Hurricane 
Katrina would be allowed to retain in-school status even if 
they do not attend another school. Together, these three 
provisions would cost an estimated $11 million in 2006.

Direct Spending--Other Amendments to the Higher Education Programs

    S. 1614 would reauthorize--through 2011--the Higher 
Education Act of 1965. Some portions of title IV of the bill 
would affect direct spending, including the postponement of the 
recall of Perkins Loan balances and changes in the eligibility 
for student loans. In total, CBO estimates that enacting this 
subtitle would increase direct spending by $6 million in 2006, 
$77 million over the 2006-2010 period, and $2.7 billion over 
the 2006-2015 period (see Table 4).
    Distance Education. Current law limits participation in the 
Title IV aid programs for institutions that provide more than 
50 percent of their education or training courses through 
distance education. S. 1614 would eliminate those restrictions 
for institutions that meet certain criteria.

                                                        TABLE 3.--DIRECT SPENDING EFFECTS OF OTHER AMENDMENTS TO THE HIGHER EDUCATION ACT
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          By fiscal year, in millions of dollars--
                                                           -------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                            2006-
                                                               2006       2007       2008       2009       2010       2011       2012       2013       2014       2015       2010     2006- 2015
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Distance Education:
    Estimated Budget Authority............................          0          0          5          5          5          5          5         10         10         10         15           55
    Estimated Outlays.....................................          0          0          5          5          5          5          5          5         10         10         15           50
Perkins Loan Revolving Fund:
    Estimated Budget Authority............................          0          0          0          0          0          0        361        675        696        800          0        2,532
    Estimated Outlays.....................................          0          0          0          0          0          0        361        675        696        800          0        2,532
Eligibility Restrictions for Certain Drug Offenders:
    Estimated Budget Authority............................         10         15         15         15         15         15         20         20         20         20         70          165
    Estimated Outlays.....................................          5         10         15         15         15         15         15         15         15         15         60          135
Other Provisions:
    Estimated Budget Authority............................          *          *          *          *          *          *          *          *          *          *          *            *
    Estimated Outlays.....................................          *          *          *          *          *          *          *          *          *          *          *            *
Total Changes:
    Estimated Budget Authority............................         11         16         20         20         20         20        386        705        726        830         87        2,754
    Estimated Outlays.....................................          6         11         20         20         20         20        381        695        721        825         77        2,719
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
NOTE: *=Less than $500,000.

    For a school to become an approved institution, it must 
meet an extensive set of institutional eligibility 
requirements. In addition, proprietary and postsecondary 
vocational institutions are restricted by a two-year rule that 
states that an institution must be legally authorized to give, 
and has been giving, postsecondary instruction for at least two 
consecutive years. Therefore, costs in the first two years 
would be insignificant. After that, new and expanded 
institutions would cause costs to rise by $15 million for the 
2008-2010 period and by $50 million over the 2008-2015 period.
    Perkins Loan Revolving Fund. Under current law, schools 
participating in the Perkins Loan program are required to 
return to the government the federal share of any balances they 
hold beginning in 2012. S. 1614 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--
under current law--about $2.5 billion over the 2012-2015 
period. Consequently, the delay that would result from enacting 
the bill would reduce federal collections by that amount.
    Eligibility Restrictions for Certain Drug Offenders. Under 
current law, students are barred from receiving federal 
financial assistance if they have been convicted of any drug 
offense. The period of ineligibility lengthens with the number 
of convictions and depends on whether the convictions were for 
the sale or possession of the drugs. If the student 
participates and successfully completes a drug rehabilitation 
program, the period of ineligibility is shortened. S. 1614 
would limit applicability of these restrictions to students 
with convictions that occur while the student is receiving 
federal aid. In addition, the Secretary could not require that 
applicants for financial aid report their convictions.
    Based on data on federal financial-aid applications, CBO 
estimates that about 28,000 students are denied aid under the 
current restrictions. CBO estimates that this provision would 
increase annual student loan borrowing by $110 million to $140 
million over the next 10 years. This borrowing would increase 
the costs of the student loan program by $5 million in 2006, 
$60 million over the 2006-2010 period, and $135 million over 
the 2006-2015 period.

Spending subject to appropriation

    S. 1614 would reauthorize the Pell Grant program through 
2012. For 2006, CBO estimates that the authorization would 
total $17.9 billion and that approximately 5.9 million students 
would participate in the program, compared with an estimated 
5.3 million in 2005. CBO estimates that S. 1614 would authorize 
the appropriation of $105.6 billion over the 2006-2010 period, 
with estimated outlays of $86.8 billion over that period.
    If S. 1614 is enacted before fiscal year 2006 
appropriations for the Department of Education, then these 
costs would be treated as discretionary--subject to 
appropriation. But if appropriations precede enactment of S. 
1614, then any increase in spending from the level set by 
appropriations for 2006 could constitute new direct spending.
    The bill would authorize a maximum award level of $5,100 
for 2006, which CBO estimates would result in approximately 5.9 
million Pell participants. It would increase the maximum award 
level by $300 for each year after 2006, up to $6,300 for 2010 
(the bill does not specify maximum award levels for 2011 or 
2012). S. 1614 would also raise the minimum and ``bump'' award 
levels to 5 percent and 10 percent of the appropriated maximum 
award level, respectively. The minimum award level, currently 
set at $200, is used to determine eligibility for a Pell Grant. 
The bump award level, currently set at $400, is the lowest 
award amount that a student actually receives, so any student 
eligible for between $200 and $399 currently receives $400.
    In addition, the bill would allow students enrolled year-
round in two-year and four-year programs to receive multiple 
awards in one academic year, limit the total period for which a 
student is eligible for Pell Grants to 18 semesters, and 
eliminate tuition sensitivity. The tuition sensitivity 
provision limits the award level if a student's tuition is 
below a specific level.
    Finally, the bill would make certain changes to the 
eligibility formula, many of which would not take effect until 
July 2007. These include raising the income protection 
allowance, reducing the asset conversion rate, raising the 
income level at which a family is not expected to pay a portion 
of education costs, and altering the eligibility restrictions 
for those students with drug convictions. These changes were 
discussed in more detail in the previous section.
    Besides the Pell Grant program, S. 1614 would amend and 
extend the authorization for numerous existing higher education 
programs and would establish new ones. These programs include 
teacher quality enhancement grants; aid to historically black, 
hispanic, Indian, and other special institutions; campus-based 
grant aid; international education; as well as various 
scholarships and fellowships. The bill also would reauthorize a 
set of outreach and support programs (formally referred to as 
the Federal TRIO programs) intended to assist disadvantaged 
students make academic progress from middle school through 
post-baccalaureate programs. For all the programs, the bill 
would authorize the appropriation of such sums as may be 
necessary through fiscal year 2011. Under theGeneral Education 
Provisions Act, the authorization for these programs would 
automatically be extended for one additional year (2012) if necessary. 
In fiscal year 2005, funding for these programs totaled over $4 
billion.
    Estimated impact on state, local, and tribal governments: 
S. 1614 contains no intergovernmental mandates as defined by 
UMRA. The bill would provide assistance to states and 
institutions of higher education affected by Hurricane Katrina. 
The bill also would authorize funding for student aid and 
higher education programs, much of which would go to public 
institutions of higher education. Any costs to those 
institutions or to state, local, or tribal governments would 
result from complying with conditions for receiving federal 
assistance.
    Estimated impact on the private sector: The provisions of 
S. 1614 do not contain any private-sector mandates as defined 
by UMRA.
    Previous CBO estimates: CBO has transmitted a number of 
cost estimates earlier this year for legislation that would 
affect higher education programs.
    CBO has provided estimates for the reconciliation 
recommendations of the Senate Committee on Health, Education, 
Labor, and Pensions on October 24, 2005. The education 
provisions in that legislation, incorporated by the Senate 
Committee on the Budget in S. 1932, are identical to those in 
S. 1614 and thus have the same estimated budgetary effects. S. 
1932, as passed by the Senate on November 3, 2005, contained 
provisions that would have reduced borrower origination fees 
more than in S. 1614, as well as create a one-time mandatory 
program for elementary and secondary education funding for 
students displaced by Hurricane Katrina.
    CBO also provided estimates for H.R. 609, the College 
Access and Opportunities Act of 2005, as ordered reported by 
the House Committee on Education and the Workforce on September 
16, 2005, and for the reconciliation recommendations of the 
House Committee on Education and the Workforce on October 31, 
2005. Those pieces of legislation contain many of the same 
provisions as in S. 1614, but also would make different changes 
to borrower interest rates, lender and borrower fees, mandatory 
administrative expenses, and payments to guaranty agencies.
    Estimate 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: Naveel Alsalam.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

          VI. Application of the Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1, the Congressional 
Accountability Act (CAA), requires a description of the 
application of this bill to the legislative branch. S. 1614 
does not amend any act that applies to the legislative branch.

                    VII. Regulatory Impact Statement

    The committee has determined that the bill may result in 
some additional paperwork, time, and costs to the Department of 
Education, which would be entrusted with implementation and 
enforcement of the act. It is difficult to estimate the volume 
of additional paperwork necessity by the bill, but the 
committee does not believe it will be significant. Pursuant to 
the requirements of paragraph 11(b) of Rule XXVI of the 
Standing Rules of the Senate, the committee has determined that 
the bill will not have a significant regulatory impact.

                   VIII. Section-by-Section Analysis

    Section 1 provides a short title and sets forth the table 
of contents.
    Section 2 clarifies that references regarding an amendment 
to or repeal of a provision or section all refer to provisions 
or sections of the Higher Education Act of 1965 (20 U.S.C. 1001 
et seq.).
    Section 3 establishes that the general effective date of 
these amendments is July 1, 2006, except as otherwise provided.

                      TITLE I--GENERAL PROVISIONS


                          Part A--Definitions


Section 101. Additional definitions

    The term ``authorizing committees'' means the Committee on 
Health, Education, Labor, and Pensions of the Senate and the 
Education and Workforce Committee of the House of 
Representatives. References to the ``Chairman'' or ``Chairmen'' 
now read ``Chairpersons of the authorizing committees.''

Section 102. General definition of institution of higher education

    The definition of an institution of higher education will 
also include institutions that award degrees that are 
acceptable for admission to a graduate or professional degree 
program, subject to the review and approval of the Secretary of 
Education. This section expands the definition of an 
institution of higher education to include a public or 
nonprofit private educational institution that admits as 
regular students those students who have completed secondary 
school in a home school setting and students who are dually or 
concurrently enrolled in the institution and a secondary 
school.

Section 103. Definition of institution of higher education for purposes 
        of Title IV programs

    Section 103 deletes a provision that excluded certain 
foreign medical schools from the requirement that 60 percent of 
their graduates be American citizens and pass the exam 
administered by the Educational Commission for Foreign Medical 
Graduates.
    This section maintains current limitations on enrollment of 
incarcerated students and students without a secondary school 
diploma or its recognized equivalent. The section modifies 
restrictions based on mode of delivery, so that an institution 
of higher education, other than a foreign institution, that 
offers education or training programs principally through 
distance education meets the definition of an institution of 
higher education if it has been accredited by an agency or 
association that the Secretary recognizes under title IV and 
that has evaluation of distance education programs within the 
scope of its recognition. The institution must also be 
otherwise eligible to participate in title IV programs, must 
not have had its participation in title IV programs suspended 
or terminated within the 5 years preceding the year for which 
the determination is made, must not have had or failed to 
resolve an audit or program review during the 2 preceding years 
that required the institution to repay an amount equal to or 
greater than 25 percent of the total funds the institution 
received under title IV programs, and must meet the other 
requirements for an institution of higher education as defined 
in section 102.
    ``Distance education'' is defined to mean a course or 
program that uses one or more kinds of technology to deliver 
instruction to students and support interaction between 
students and instructors. The technologies include the 
Internet, audio conferencing, video, DVDs, CD-ROMs, and one-way 
and two-way transmissions through open broadcasts, closed 
circuit, cable, broadband, fiber optics, or wireless 
communication devices.

                 Part B--Additional General Provisions


Section 104. Protection of student speech and association rights

    Includes a sense of Congress that: diversity of 
institutions is a key strength of higher education; individual 
colleges and universities have different missions and each 
should design its academic program in accordance with its 
educational goals; colleges should facilitate free and open 
exchange of ideas; students should not be intimidated, 
harassed, discouraged from speaking out, or discriminated 
against; and students should be treated equally and fairly. 
Clarifies that the new language should not be construed to 
modify or infringe upon any constitutionally protected 
religious liberty, freedom, expression, or association and 
should not be construed to discourage the imposition of an 
official sanction on a student that has willfully disrupted a 
lecture, class, speech, presentation, or performance scheduled 
or made under the auspices of the institution provided that the 
imposition of the sanction is objective and fair.

Section 105. National Advisory Committee on institutional quality and 
        integrity

    This section extends the authorization date from September 
30, 2004 to September 30, 2011.

Section 106. Drug and alcohol abuse prevention

    ``Grants Directed at Reducing Higher Education Drug and 
Alcohol Abuse'' will replace the old ``Alcohol and Drug Abuse 
Prevention Grants'' and ``National Recognition Awards.'' The 
purpose of these grants is to reduce the rate of drug abuse, 
underage alcohol use, and binge drinking among students at 
institutions of higher education. An eligible entity is a 
State, an institution of higher education, or a nonprofit 
entity.
    The timing, manner, and information required for 
applications will be determined by the Secretary. Each 
application will include a description of how the entity will 
enhance or build a statewide coalition, how the entity will 
target underage students, how the entity will ensure the 
coalition is implementing the purpose of the grants and moving 
toward the achievement indicators, a list of the members of the 
coalition or interested parties, how the entity will work with 
State agencies, how these funds will reduce rates of drug and 
underage alcohol abuse, and how the entity will reach out to 
students, address the needs of students and communities, and 
address community norms for students regarding drug and alcohol 
abuse.
    A ``statewide coalition'' is a coalition that works toward 
lowering the alcohol abuse rate by targeting underage students 
at institutions of higher education and the surrounding 
communities and includes institutions of higher education and a 
State and a nonprofit group, community drug and alcohol abuse 
prevention coalition, or another substance abuse prevention 
group within a State. The ``surrounding community'' surrounds 
an institution of higher education, has students from the 
institution who take part in the community and has students who 
live off campus in the community.
    When the Secretary first publishes a notice in the Federal 
Register soliciting applications for these grants, the 
Secretary will include achievement indicators for this program. 
The achievement indicators will measure the impact that the 
coalitions have on the institutions of higher education and 
surrounding communities, measure the quality and accessibility 
of the programs or information offered by the coalitions, and 
other measures as the Secretary determines appropriate.
    These funds will supplement, not supplant, Federal and non-
Federal funds available for carrying out these activities. Not 
more than 5 percent of a grant may be used for administrative 
expenses. Such sums as may be necessary are authorized for 
fiscal year 2006 and each of the 5 succeeding fiscal years.

Section 107. Prior rights and obligations

    Section 107 extends the authorization of appropriations 
under section 121 of the act from fiscal year 1999 to fiscal 
year 2006 and succeeding fiscal years.

                    Part C--Cost of Higher Education


Section 108. Cost of higher education

    Section 108 expands the information that the Secretary will 
make available to the public on an annual basis. The college 
consumer information that the Secretary will make available and 
update regularly will include the average annual cost of 
attendance for a first-time, full-time undergraduate student 
for periods of 5 and 10 years preceding the year for which the 
information is made available and a ranking of the dollar 
amount and percent increases in tuition and fees for all 
institutions for which data are available.
    The national study of expenditures at institutions of 
higher education will be conducted on an annual basis. The 
study will now include in its evaluation the average cost of 
attending an institution, disaggregated by category; the 
average annual cost of attending an institution for periods of 
5 and 10 years preceding the year for which the information is 
made available, disaggregated by category; and State assistance 
to institutions.
    The categories to be used are: all institutions of higher 
education; 4-year, public, degree-granting institutions; 2-
year, public degree-granting institutions; 4-year, non-profit, 
private degree-granting institutions; 2-year, nonprofit, 
private degree-granting institutions; 4-year, for-profit, 
private degree-granting institutions; 2-year, for-profit, 
private degree-granting institutions; and less than 2-year, 
for-profit, private institutions.
    The Bureau of Labor Statistics will now develop a higher 
education cost index, in consultation with the Commissioner of 
Education Statistics, which tracks inflation changes in the 
relevant costs associated with higher education.

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


Section 109. Performance-based organization for the delivery of Federal 
        Student Financial Assistance

    The functions of the Performance-Based Organization (PBO) 
in the Department of Education are now referred to as 
``administrative and oversight'' functions, and not 
``operational.'' The Secretary will assist the Chief Operating 
Officer in identifying goals for administration of the systems 
used to administer the student aid programs and for updating 
such systems to current technology.
    The PBO will be responsible for administration of Federal 
student financial assistance programs including the collection, 
processing and transmission of data to students, institutions, 
lenders, State agencies, and other authorized parties, and the 
design and technical specifications for software development 
and procurement for systems supporting the students financial 
assistance programs of title IV. The PBO will also be 
responsible for ensuring the integrity of the student 
assistance programs authorized under title IV.
    The PBO will be responsible for developing an annual budget 
for its activities and functions. The Chief Operating Officer 
will now consult with students in addition to other 
stakeholders such as borrowers, institutions, lenders, guaranty 
agencies, secondary markets, and others. The Chief Operating 
Officer is no longer limited to appointing not more than 25 
technical and professional employees to administer the 
functions of the PBO.

Section 110. Procurement flexibility

    The PBO will, through the Chief Operating Officer, use 
procurement systems that streamline operations, improve 
internal controls and enhance management, and assess the 
efficiency of such systems and the systems' ability to meet PBO 
requirements.
    Contracts awarded on a ``sole-source basis'' are renamed 
contracts awarded on a ``single-source basis,'' defined as a 
contract awarded to a source after soliciting an offer or 
offers from, and negotiating with, only such source (although 
such source is not the only source in the marketplace capable 
of meeting the need) because such source is the most 
advantageous source for purposes of the award.

                 TITLE II--TEACHER QUALITY ENHANCEMENT

    The purpose of title II is to improve student achievement 
and the quality of the Nation's teaching force by holding 
higher education institutions accountable for preparing 
teachers and promoting strategies to recruit qualified 
individuals.

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


Section 201. Purposes and definitions

    An ``early childhood education program'' is a Head Start or 
Early Head Start program, a State childcare program or school, 
or a State pre-kindergarten program. ``Early childhood 
educator'' is an individual responsible for the education of 
children in an early childhood education program. The term 
``teacher mentoring'' is the mentoring of teachers through 
established or implemented programs. ``Teaching skills'' are 
the ability to: increase student achievement; convey and 
explain academic subjects; conduct assessments of student 
learning; manage a classroom; work with parents; and use age 
appropriate strategies.
    ``Children from low-income families'' are children as 
described in section 1124(c)(1)(A) of ESEA. ``Scientifically 
based reading research'' is the term in section 1208 of ESEA. 
The terms ``educational service agency,'' ``exemplary 
teacher,'' ``highly qualified,'' ``professional development,'' 
and ``scientifically based research'' have the same meanings 
given to them in section 9101 of ESEA.

Section 202. State grants

    An application must demonstrate that the eligible State 
complies with the various sections in title II and is 
consistent with State, local and other education reform 
activities. It must include measurable objectives and describe 
the State's capacity to measure teacher preparation programs. 
The application must detail efforts to reduce teacher shortages 
and expand the integration of statewide data systems to measure 
the effectiveness of teacher preparation programs. Grantees 
must ensure that teacher preparation programs are preparing 
highly qualified teachers to understand scientifically based 
research and to use technology effectively. States must align 
teacher certification or license requirements with content 
standards and assessments and create requirements for high-need 
areas. A State must evaluate annually the effectiveness of 
teacher preparation programs and make the report widely 
available to the public.
    States may also use grant funds to carry out any of the 
following activities: providing alternative routes to 
certification or licensure; implementing innovative programs to 
enhance the ability of higher education institutions; 
developing mechanisms to recruit and retain teachers; creating 
teacher scholarships; removing incompetent or unqualified 
teachers; building systems to measure the effectiveness of 
teacher preparation programs and gains in student academic 
achievement; developing strategies to expand programs and 
professional development opportunities; assisting teachers to 
use technology effectively; increasing the number teachers in 
high-need areas; offering technical assistance to low-
performing teacher education programs; and performing 
evaluations of programs.
    Funds made available must be used to supplement and not 
replace other Federal, State, and local funds already 
designated for similar programs and activities.

Section 203. Partnership grants

    Eligible partnerships include: a school or department 
within a partner institution focusing on education, psychology, 
or human development; a science-, mathematics-, or technology-
oriented group; an educational service agency; a consortium of 
local educational agencies; and a non-profit telecommunications 
entity.
    Each application must contain a needs assessment of all the 
partners and include a description of the extent to which the 
teacher preparation program prepares new teachers and how the 
partnership would coordinate with other programs. An 
application must include a resource assessment of the resources 
available to the eligible partnership and an evaluation plan. 
In addition, it must describe how the partnership would do the 
following: align the teacher preparation program with academic 
achievement, early learning, and content standards; connect 
faculty at partner institutions with teachers and their 
classrooms; ensure that educators receive information about the 
various activities offered by the grant; design or enhance both 
a clinical and induction program; collect, analyze, and 
disseminate data on teacher retention.
    The focus of professional development activities under this 
program is on new teachers. Funds may be used for developing 
alternatives to traditional preparation for certification and 
licensure, recruitment, innovative programs, teacher 
scholarships, coordination with community colleges, clinical 
experience, professional development, technology, increasing 
the number of teachers in high-need areas, instruction, 
master's degree programs, and literacy training.
    Partnership members must regularly consult throughout the 
development and implementation of programs and activities. 
Funds made available must supplement and not replace other 
Federal, State, and local funds already designated for similar 
programs and activities.
    A partnership is eligible to receive only one grant during 
a 5-year period. Individual members within a partnership are 
eligible to receive another grant during this period by 
participating in other partnerships with different members.

Section 204. Administrative provisions

    Section 204 of the act, Teacher Recruitment Grants, is 
deleted.

Section 205. Accountability and evaluation

    States that receive grants under section 202 must submit 
annual reports to the Secretary of Education and the 
authorizing committees. States must report on student 
achievement, raising standards, initial certification or 
licensure, the percentage of highly qualified teachers, teacher 
shortages, and professional development opportunities.
    Partnerships must evaluate the percentage of highly 
qualified teachers hired by the high-need local education 
agencies and the percentage of highly qualified teachers 
working within the various targeted demographics.

Section 206. Accountability for programs that prepare teachers

    States annually receive reports from institutions of higher 
education that have teacher preparation programs and enroll 
students receiving Federal financial aid. The reports must 
include how the program is using technology. In addition, each 
eligible partnership receiving a grant under section 203 will 
report annually on the progress made toward meeting identified 
goals.
    States must submit annually a report card on the quality of 
teacher preparation to the Secretary of Education. The 
Secretary may not create a national list or ranking of States 
or schools based on these reports. The Secretary must provide 
Congress with a report card on teacher qualifications and 
preparation in the United States. The content of the report 
must contain a comparison of States' and eligible partnerships' 
efforts to improve the quality of the teaching force.

Section 207. State functions

    If a State terminates financial support for a teacher 
preparation program due to low performance, the program must 
provide transitional support for students enrolled at the 
institution at the time of the termination.

Section 208. General provisions

    A State educational agency must provide to a teacher 
preparation program, upon request, any education-related 
information the agency has gathered about the teacher 
preparation program.

Section 209. Authorization of appropriations

    Section 209 authorizes such sums as may be necessary for 
fiscal year 2006 and each of the 5 succeeding fiscal years. 
Fifty percent of the funds is available for each fiscal year to 
award grants to States under section 202. The remaining 50 
percent of the funds is available for each fiscal year to award 
grants to local partnerships under section 203. If there are an 
insufficient number of applications under either section 202 or 
203, the Secretary of Education may reallocate remaining funds 
to the other section.

                      TITLE III--INSTITUTIONAL AID

    There is a national interest to aid institutions that 
historically serve students who have been denied access to 
postsecondary education because of race or national origin. It 
is important to ensure these schools have sound management and 
fiscal operations and the technical capacity to offer equal 
educational opportunities to the students they serve. The 
purpose of the title is to provide Federal assistance through 
programs to institutions of higher education that serve high 
percentages of minority students and students from low-income 
backgrounds.

                   Part A--Strengthening Institutions


Section 301. Program purpose

    Special consideration for awarding grants includes student 
services. The types of grant activities are expanded to include 
using grant aid for education or counseling services designed 
to improve financial literacy of students or their parents.

Section 302. Definitions; eligibility

    Section 302 makes a technical change to existing law.

Section 303. American Indian tribally controlled colleges and 
        universities

    The definition of a ``Tribal College or University'' is 
amended to include institutions identified in section 2 of the 
Tribally Controlled College or University Assistance Act of 
1978, a tribal college or university listed in the Equity in 
Educational Land Grant Status Act of 1994, or the Navajo 
Community College Assistance Act of 1978.
    Allowable uses of grant funds are expanded. Institutions 
may use grant aid for education or counseling services designed 
to improve financial literacy of students or their parents. 
Additionally, funds may be used to develop or improve distance 
learning or Internet capabilities.
    The Secretary of Education may reserve 30 percent of a 
fiscal year's appropriated funds to award at least $1 million 
for maintenance and renovation at eligible institutions. 
Preference is given to a tribally controlled college or 
university that has never received an award under section 316.
    The Secretary of Education would use remaining appropriated 
funds to award grants on a formula basis. All such grants would 
be in the amount of at least $500,000. Sixty percent of these 
funds would be awarded proportionally, based on the number of 
Indian students enrolled at these colleges and universities. 
The remaining 40 percent would be distributed equally among all 
eligible schools.
    Colleges or universities that are eligible for and receive 
funds under section 316 would not be eligible to receive any 
additional funding, concurrently, under part A or B of title 
III. Eligible institutions would not be subject to the wait-out 
period with respect to new funding under section 316.

Section 304. Alaska native and native Hawaiian-serving institutions

    Institutions may use grant aid for education or counseling 
services designed to improve financial literacy of students or 
their parents.

Section 305. Native American-serving, nontribal institutions

    Section 305 authorizes a new grant program specifically for 
Native American-serving, nontribal colleges or universities. 
The Secretary of Education must provide grants of at least 
$200,000 for schools to improve their capacity to serve Native 
Americans. Grants may be used to fund the following types of 
activities: purchasing scientific or laboratory equipment, 
books, and other educational material; renovating classrooms, 
libraries, or other instructional facilities; and supporting 
faculty and curriculum development, tutoring and other student 
support services.
    In order to be eligible for a grant, the institution may 
not be a tribal college or university and at least 10 percent 
of the undergraduate enrollment must be composed of Native 
American students. Additionally, institutions that are eligible 
for or receive funds under section 318 would not be eligible to 
receive any additional funding, concurrently, under part A or 
part B of title III. This section waives the requirement in 
section 313(d), allowing eligible institutions to apply for new 
funding once the grant expired.

   Part B--Strengthening Historically Black Colleges and Universities


Section 306. Part B definitions

    This section adds the Commissioner for Education Statistics 
to the entities determining the ``professional and academic 
areas in which Blacks are underrepresented.''

Section 307. Grants to institutions

    Institutions may be able to use grant aid for education or 
counseling services designed to improve financial literacy of 
students or their parents.

Section 308. Allotments to institutions

    In order to receive an allotment of funds, eligible 
historically black colleges and universities must provide 
institutional data on the number of enrolled Pell grant 
recipients and graduates from the past academic year as well as 
the number of graduates in the past 5 years who enrolled in a 
graduate or professional school.

Section 309. Professional or graduate institutions

    Institutions may use grant aid for education or counseling 
services designed to improve financial literacy of students or 
their parents or for various academic student support services. 
Funds may also be used to acquire property adjacent to colleges 
and universities.
    The following three universities are added to the list of 
qualified graduate programs: Alabama State University, Coppin 
State University, and Prairie View A&M University.
    In determining awards, the Secretary shall consider the 
amount of non-Federal funds that come from the institution's 
own resources as well as private donors, State allocations and 
the amount of institutional funds designated for Federal 
matching dollars. In addition, the Secretary would determine 
funding based on the percentage of the institution's Black 
American and minority students who receive their first graduate 
or professional degree in comparison to thetotal number of 
Black American and minority students who earn their first graduate or 
professional degree.

Section 310. Authorization of appropriations

    Section 310 authorizes such sums as may be necessary for 
all programs under title III for fiscal years 2006-11.

Section 311. Technical corrections

    Section 311 makes technical and conforming changes 
throughout title III.

                      TITLE IV--STUDENT ASSISTANCE


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

    The purpose of part A is to increase participation of 
eligible students in higher education with grants for student 
financial assistance, State assistance and programs, special 
programs and projects, and institutions of higher education.

Section 401. Federal Pell grants

    Section 401 raises the authorized level for a maximum 
Federal Pell grant for eligible students to $5,100 for academic 
year 2006-07; $5,400 for academic year 2007-08; $5,700 for 
academic year 2008-09; $6,000 for academic year 2009-10; and 
$6,300 for academic year 2010-11. This section revises the 
minimum grant award from $400 to 10 percent of the maximum 
authorized award for an award year. Students eligible for an 
award less than 10 percent of the maximum award but more than 5 
percent of the maximum award would receive an award equal to 10 
percent of the maximum award. Students eligible to receive an 
award of an amount less than 5 percent of the maximum award 
authorized would not receive any Pell grant assistance.
    The Secretary of Education shall allow eligible students 
seeking to enroll in additional academic sessions (e.g., year-
round coursework or summer semester in addition to fall and 
winter semesters) to receive up to two Pell grants in a single 
award year. Students would need to be enrolled at least on a 
half-time basis in a 2- or 4-year program of instruction and 
for more than 1 academic year in order to be eligible to 
receive a second Pell grant. The total monetary amount of the 
two awards combined may exceed the mandatory maximum grant 
level specified in the Appropriations Act for that given award 
year.
    The ``tuition sensitivity'' provision, that could 
negatively affect award amounts for students attending low-cost 
institutions, such as community colleges, has been eliminated. 
Eligible students may only receive Pell grants for up to 18 
semesters, or a time period equivalent to 18 semesters.

Section 402. Federal TRIO grants

    Awarded grants or contracts may be provided for a 5-year 
period, but grants identified specifically for staff training 
and development may only be for a 2-year period. The duration 
of a grant for evaluation and assessment of a program is be 
determined by the Secretary of Education. All awards for an 
individual grant would be at least $200,000, except for staff 
training and development programs. For these particular 
programs awards would be at least $170,000.
    The Secretary must establish outcome criteria for measuring 
the quality and effectiveness of the Talent Search, Upward 
Bound, Student Support Services, Postbaccalaureate Achievement, 
and Educational Opportunity Centers programs. The Secretary is 
required to measure secondary school completion, postsecondary 
enrollment, and postsecondary completion outcomes for students 
served by the grant programs. Programs would be assessed on how 
they meet or exceed their various objectives.

Section 402B. Talent Search

    Talent Search programs must provide the following 
activities: academic tutoring; assistance in selecting 
secondary courses and applying for college; information on and 
assistance in completing financial aid forms; guidance to high 
school drop outs; and services designed to improve student or 
parent financial and economic literacy. The section also 
expands the permissible services component to include programs 
for students with disabilities and those who are homeless or in 
foster care.

Section 402C. Upward Bound

    The amendments alter and strengthen the required services 
component for Upward Bound programs. Upward Bound programs must 
provide the following activities: academic tutoring; assistance 
in selecting secondary courses and applying for college; 
information on and assistance in completing financial aid 
forms; guidance to high school drop outs; and services designed 
to improve student or parent financial and economic literacy. 
In addition to those with limited English proficiency, the 
permissible services component is expanded to include programs 
for students with disabilities and those who are homeless or in 
foster care.

Section 402D. Student Support Services

    The purpose of Student Support Services is expanded to 
include improving students' financial and economic literacy, 
such as personal income and financial planning. In addition to 
creating a supportive institutional climate for low-income and 
first generation college students as well as individuals with 
disabilities, this program may also support students with 
limited English proficiency and those who are homeless or in 
foster care.
    Student Support Services programs must provide the 
following activities: academic tutoring; assistance in 
selecting postsecondary courses, transferring from a 2-year to 
a 4-yearprogram, or enrolling in graduate programs; information 
on and assistance in completing financial aid forms; and services 
designed to improve student or parent financial and economic literacy. 
The permissible services may include securing temporary housing during 
school breaks for students who are homeless or in foster care.

Section 402E. Postbaccalaureate Achievement Program authority

    Activities under this program may include education or 
counseling services, mentoring programs, and exposure to 
cultural events and academic programs.

Section 402F. Educational Opportunity Centers

    The purpose of Educational Opportunity Centers is expanded 
to include improving student or parent financial and economic 
literacy, such as personal income and financial planning. Funds 
could be used for education or counseling designed to improve 
students' financial and economic literacy as well as personal, 
career, and academic counseling. In addition to those with 
limited English proficiency, funds may be used to assist 
students with disabilities and those who are homeless or in 
foster care.

Section 402H. Reports, evaluations, and grants for project improvement 
        and dissemination

    The title of section 402H would change from ``Evaluations 
and Grants for Project Improvement and Dissemination 
Partnership Projects'' to ``Reports, Evaluations, and Grants 
for Project Improvement and Dissemination.'' The Secretary of 
Education must submit a report at least once every 2 years, 
highlighting the number of grants awarded, the number of 
individuals served by the programs as well as information about 
these individuals, and the outcomes achieved by the various 
programs and comparing grant awards during the fiscal year to 
those from recent grant cycles.

Section 403. Gaining Early Awareness and Readiness for Undergraduate 
        Programs (GEAR UP)

    Section 403 eliminates the current law priority for 
eligible entities that had previously carried out programs 
under chapter 2 prior to the Higher Education Amendments of 
1998.
    This section requires the Secretary of Education to 
consider the geographic distribution of awards and the 
distribution of awards between urban and rural applicants.
    Section 403 also removes the current law limitation on the 
amount of funds used specifically for early intervention. The 
section shifts requirements that activities not displace other 
employees and that grantees have adequate coordinating staff 
into the list of information that must be provided as part of 
the grantee's application. Entities must ensure that grants 
awarded would be used to supplement and not supplant Federal, 
State and other local funds used for similar activities and 
programming.
    The title of section 404C is changed from ``Eligible Entity 
Plans'' to ``Applications.'' The contents of an application for 
a grant must include: description of how the entity meets the 
scholarship requirements; demonstration of adequate staffing 
for coordinating activities; assurance that activities would 
not displace employees or eliminate positions at schools; 
description of how the entity defines the targeted cohort and 
serves the cohort through grade 12; description of program 
coordination with existing Federal, State, and local projects; 
and required activities.
    The title of section 404D is changed from ``Early 
Intervention'' to ``Activities.'' Grantees are required to 
carry out the following activities: provide information on 
financial aid to the cohorts; encourage student enrollment in 
challenging secondary coursework; support activities designed 
to lead to students graduating from high school and enrolling 
in institutions of higher education; and provide scholarships. 
Grantees may also use funds for tutoring, mentors, outreach, 
secondary and postsecondary support services, development or 
implementation of rigorous secondary curricula, dual 
enrollment, college visits, extended school day programs, or 
scholarships. States would be given the option to promote 
additional activities, such as technical assistance to middle 
or secondary schools, professional development opportunities, 
strategies to increase postsecondary enrollment and graduation 
rates, alignment of secondary and postsecondary curricula and 
standards, alternatives to the traditional secondary school 
that provide a stronger link between high school and 
postsecondary options, drop out recovery programs, and 
dissemination of best practices.
    States receiving grant funds under this chapter must use at 
least 25 percent and no more than 50 percent of funds for 
scholarships for eligible students. Remaining funds would be 
used for activities described in section 404D. Grantees could 
use more than 50 percent of their funds for these activities if 
they have other means of providing financial assistance.
    Entities must notify students when they enter the programs 
of the eligibility requirements to receive a scholarship. Each 
grantee must create or organize a trust for each cohort of 
students. The trust must provide each student in the cohort 
with, at a minimum, an amount equal to the minimum Pell grant 
award described in section 401. Funds in a trust would become 
available to a student once he or she graduated from high 
school or the equivalent and enrolled in a 2- or 4-year 
institution. Students could use funds for qualifying 
educational expenses, including tuition, fees, books, supplies, 
equipment, and designated special needs.
    Trust funds not used within 6 years of the student's 
expected date of completion from secondary school could be 
redistributed to other eligible students. Excess or unused 
funds by an entity would be returned to the Secretary of 
Education. The Secretary would then redistribute the funds to 
other grantee entities.
    Section 404F of the existing law, 21st Century Scholarship 
Certificates, is repealed. Sections 404G and 404H are 
redesignated as sections 404F and 404G.
    Section 403 authorizes such sums as may be necessary for 
fiscal years 2006-11.

Section 404. Academic Achievement Incentive scholarships

    This chapter is repealed.

Section 405. Federal Supplemental Educational Opportunity grants

    The allowance of books and supplies used to compute the 
average cost of attendance is raised from $450 to $600.

Section 406. Leveraging Educational Assistance Partnership Program

    Applications for Leveraging Educational Assistance 
Partnership Programs. The monetary amount allocated by States 
for an individual student grant increased from a maximum of 
$5,000 per academic year to either a maximum of $12,500 per 
academic year or the student's cost of attendance, whichever is 
less. States must notify eligible students that aid is from 
Leveraging Educational Assistance Partnership grants and funded 
by the Federal Government, the States, and other contributing 
partners.
            Grants for access and persistence
    The title for section 415E, ``Special Leveraging 
Educational Assistance Partnership Program.'' would be changed 
to ``Grants for Access and Persistence.'' The purpose of this 
section is expanded to include college access and persistence 
by making State allotments to: expand and enhance partnerships 
with institutions of higher education; provide need-based 
grants to eligible low-income students; provide early 
notification of eligibility for financial aid; and encourage 
participation in early information, intervention, and other 
outreach programs.
    States desiring an allotment must submit an application to 
the Secretary of Education. The application must describe the 
State's plan for using the funds and the organizational 
structure to administer the various activities and assure that 
the State provides the non-Federal share and that early 
information, intervention, and other outreach programs exist. 
An application must also explain the State's methods for 
identifying and awarding grants to eligible students. State 
agencies must apply for an allotment in partnership with the 
following organizations or entities: at least one private and 
one public college or university located in the State, if 
applicable; early information, intervention, and other outreach 
State programs; and at least one State philanthropic 
organization or private corporation.
    The Secretary makes an allotment to States to pay the 
Federal share of the cost of carrying out the various 
authorized activities. The amount of the Federal share is 
determined by the percentage of full-time students enrolled in 
the State's partnership colleges and universities in comparison 
to the total number of students attending institutions of 
higher education in the State. The Federal share is 50 percent 
if enrollment in the State's partnership schools represents 
less than a majority of all students attending colleges and 
universities. The Federal share is 57 percent if enrollment in 
the State's partnership schools represents a majority of all 
students attending colleges and universities.
    Each State receiving an allotment must use funds toward the 
overall partnership to award grants for eligible low-income 
students. If the State's partnership is with institutions 
serving less than a majority of students in the State, the 
monetary amount of an individual student grant would be at 
least equal to the average undergraduate tuition and mandatory 
fees at 4-year public institutions. If the State's partnership 
is with institutions serving a majority of students in the 
State, the monetary amount of an individual student grant would 
be no more than equal to the average cost of attendance at 4-
year public institutions.
    States must annually notify low-income students in grades 7 
through 12 of their potential eligibility for financial 
assistance. To be eligible to receive a grant, students must 
meet at least two of the following criteria: have an expected 
family contribution of zero; qualify for a free or reduced 
lunch; qualify for the State's maximum undergraduate award; or 
participate in early information, intervention, or other 
outreach programs. Students would receive a grant for each year 
of their undergraduate education, as long as they remained 
financially eligible and meet the State's degree completion 
time limits.
    The State agency receiving an allotment must annually 
report to the Secretary on the partnership's progress in 
meeting identified goals and objectives. Within 3 years of the 
enactment of the Higher Education Amendments of 2005 and 
annually thereafter, the Secretary must submit a report to 
Congress describing activities and the impact of the 
partnerships.

Section 407. Special programs for students whose families are engaged 
        in migrant and seasonal farmwork

    The services provided by the college assistance migrant 
program are expanded to include internships. Program follow-up 
services with students, after they complete their first year of 
college, may include encouraging students to transfer from 2-
year to 4-year institutions of higher education.
    The Secretary of Education shall allocate an amount no 
greater than $180,000 for each project under the high school 
equivalency program or the college assistance migrant program.

Section 408. Robert C. Byrd Honors Scholarship Program

    This program is reauthorized for such sums in fiscal year 
2006 and the 5 succeeding fiscal years.

Section 409. Child Care Access Means Parents in School

    Section 409 sets the minimum grant level at $10,000 and 
$30,000 when the amount appropriated for activities under this 
section is equal to or greater than $20 million.
    The definition of a ``low-income student'' is expanded to 
include a person who would be eligible to receive a Pell grant 
except that the student is enrolled in a graduate or 
professional course or is in the United States for a temporary 
period of time.

Section 410. Learning anytime anywhere partnerships

    This entire chapter is repealed, including sections 420D, 
420E, 420F, 420G, 420H, 420I, and 420J.

             Part B--Federal Family Education Loan Program

    The purpose of part B is to encourage States and nonprofit 
private institutions and organizations to establish loan 
insurance programs for students.

Section 422. Federal payments to reduce student interest costs

    Student borrowers studying at an eligible foreign 
institution must have the institution request that the 
disbursement be made directly to the student, unless the 
student is enrolled in a program of study abroad that is 
approved for credit by their home institution. Under current 
law, any student studying outside the United States may request 
that the disbursement be made directly to them.

Section 423. Federal consolidation loans

    Lenders of consolidation loans must disclose to those who 
consolidate Federal Perkins loans that the borrower would lose 
all interest-free periods. Borrowers do not accrue interest on 
their Perkins loans when enrolled in school and during grace or 
deferment periods. Lenders must also notify borrowers that they 
would become ineligible for loan cancellation under the Perkins 
loan program.

Section 424. Default reduction program

    Section 424 requires guaranty agencies offering programs 
that allow borrowers with defaulted loans to renew eligibility 
on their loans after borrowers make six consecutive monthly 
payments to make available financial and economic educational 
materials before, during, or after rehabilitation of the loans.

Section 426. Reports to credit bureaus and institutions of higher 
        education

    The Secretary of Education, guaranty agencies, eligible 
lenders, and holders must include information about the type of 
loan made, the repayment status of the loan, and any other 
information mandated by Federal law when providing information 
to consumer reporting agencies concerning student borrowers. 
The information must be provided to all nationwide consumer 
reporting agencies.

Section 428. Student loan information by eligible lenders

    Lenders, guaranty agencies, secondary markets, consumer 
reporting agencies, or loan servicers may only sell, transfer, 
or give information about students for activities associated 
with preventing defaults on loans. Each eligible lender, 
holder, or servicer must provide the borrower with information 
on loan benefit repayment options, including comprehensive 
information on reducing interest rates.

Section 429. Consumer education information

    Guaranty agencies working with institutions of higher 
education must develop or use existing educational programs and 
materials to provide training for students in budgeting and 
financial management.

Section 430. Definition of eligible lender

    Under current law, eligible lender institutions must use 
proceeds from special allowance payments and interest payments 
from borrowers for need-based grant programs. The bill would 
require the proceeds from the sale of loans by eligible lender 
institutions and all other proceeds to be used for need-based 
grant programs as well, except for reasonable reimbursement for 
direct administrative expenses.

Section 431. Repayment by the secretary of loans of bankrupt, deceased, 
        or disabled borrowers; treatment of borrowers attending schools 
        that fail to provide a refund, attending closed schools, or 
        falsely certified as eligible to borrow

    The title of this section is changed from ``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'' to ``Repayment by the 
Secretary of Loans of Bankrupt, Deceased, or Disabled 
Borrowers; Treatment of Borrowers Attending Schools that Fail 
to Provide a Refund, Attending Closed Schools, or Falsely 
Certified as Eligible to Borrow.''

                  Part C--Federal Work-Study Programs

    The purpose of part C is to promote part-time employment of 
undergraduate and graduate students who need earnings to pursue 
their courses of study. Additionally, the goal of part C is to 
encourage students receiving Federal financial aid to 
participate in community service activities.

Section 441. Authorization of appropriations

    Section 441 authorizes such sums as may be necessary for 
fiscal year 2006 and each of the 5 succeeding fiscal years.

Section 442. Allowance for books and supplies

    An institution's eligibility for funding under this part is 
equal to the sum of the self-help need of all the school's 
undergraduate and graduate students. The self-help of a student 
is calculated using a variety of factors, including an 
allowance for books and supplies. This allowance is increased 
from $450 to $600.

Section 443. Grants for Federal work-study programs

    Section 443 permits the Secretary to waive the community 
service requirement under this part if an institution certifies 
that at least 15 percent of its full-time student enrollment 
participates in community service or tutoring or literacy 
activities.

Section 444. Job location and development programs

    Institutions may use no more than 10 percent or $75,000, 
whichever is less, of their allotments to establish or expand 
programs that locate and develop jobs for currently enrolled 
students.

Section 445. Work colleges

    Section 445 amends the purposes of this section to include 
support for existing and new model student volunteer community 
service projects associated with local institutions of higher 
education.

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


Section 451. Funds for administrative expenses

    There is authorized $904 million in fiscal year 2006, 
increasing to $1.064 billion in fiscal year 2011 for use by the 
Secretary to pay costs of administering the Direct Loan and 
FFEL programs and to pay account maintenance fees to guaranty 
agencies under the FFEL program.

                     Part E--Federal Perkins Loans


Section 461. Program authority

    There are authorized such sums as may be necessary for 
fiscal year 2006 and each of the 5 succeeding fiscal years to 
enable the Secretary to make contributions to student loan 
funds and such sums as necessary to enable students who have 
received loans prior to October 1, 2012 to continue or complete 
courses of study.

Section 462. Terms of loans

    Students with Perkins loans in default shall not be 
eligible for additional aid under title IV. Formerly, 
ineligibility was limited to additional Perkins loans. Section 
462 eliminates the requirement that requests for forbearance 
must be made in written form.

Section 463. Cancellation of loans for certain public service

    Section 463 adds to the list of those eligible for Perkins 
loan cancellation: (1) full time staff members in a 
prekindergarten or child care program that is licensed or 
regulated by the State (in addition to Head Start), (2) full-
time faculty members at tribally controlled colleges and 
universities, (3) librarians with a master's degrees in library 
science who are employed in an elementary or secondary school 
library eligible for assistance under title I of ESEA or in a 
public school library that serves a geographic area that 
contains one or more title I eligible schools, and (4) speech 
and language pathologists working with students with 
disabilities serving exclusively those schools that are 
eligible for assistance under title I of the Elementary and 
Secondary Education Assistance Act.

                         Part F--Need Analysis


Section 471. Cost of attendance

    Section 471 amends factors used in determining cost of 
attendance to include: (1) for less than half-time students, 
room and board costs for not more than three semesters or the 
equivalent, of which not more than two may be consecutive, and 
(2) at the option of the institution, for students in programs 
requiring professional licensure or certification, the one-time 
cost of obtaining the first professional credential.

Section 473. Definitions

    Section 473 strikes the provision that reduces cost of 
attendance by the amount of prepayment made through tuition 
prepayment plans and adds such plans (and other qualified 
education benefits, including Coverdell education savings 
accounts) to the definition of ``assets,'' except that such 
qualified education benefits shall not be considered assets of 
a dependent student when calculating expected family 
contribution. The section specifies that assistance provided by 
a State to offset a specific component of cost of attendance 
may be excluded from both estimated financial assistance and 
cost of attendance (and requires that if it is excluded from 
one, it shall be excluded from both).

       Part G--General Provisions Relating to Student Assistance


Section 481. Definitions

    The term ``eligible program'' is expanded to include an 
instructional program that utilizes direct assessment of 
student learning or that recognizes the direct assessment of 
student learning by others.

Section 482. Compliance calendar

    This section directs the Secretary to provide institutions 
of higher education a list of all reports and disclosures 
required under this act at the beginning of each award year. 
This information shall include the date each report is due, the 
required recipients, the method of transmission, references to 
the statutory authority, a description of the contents of the 
report and any other information that the Secretary may 
require.

Section 483. Forms and regulations

    This section establishes common financial aid forms and 
processing that are developed in cooperation with 
representatives of agencies and organizations involved in 
student financial assistance. These forms shall be produced, 
distributed and processed free of charge and made available to 
applicants in both paper and electronic formats and referred to 
as the ``Free Application for Federal Student Aid'' or 
``FAFSA''. The Secretary shall also develop and use a 
simplified paper application form, to be known as the ``EZ 
FAFSA'' to be used by families who have a zero expected family 
contribution. The Secretary shall include on the EZ FAFSA any 
data that is required by States, and publish annually in the 
Federal Register a request for States to inform the Secretary 
of questions they need on the FAFSA to gather information 
relevant to State programs. All information on the FAFSA shall 
be available to institutions of higher education, guaranty 
agencies, and States. The Secretary shall make all efforts to 
encourage all applicants to utilize the electronic forms, 
including a simplified electronic application, and should 
conduct a study on the feasibility of using downloaded forms to 
ensure sufficient quality to meet processing requirements. The 
Secretary shall use any realized savings from the phasing out 
of the paper form to improve access to the electronic form and 
make an annual report on progress in moving to the electronic 
form. The Secretary shall permit an electronic form to be 
submitted without a signature if a signature is subsequently 
submitted or if the applicant uses a personal identification 
number provided by the Secretary. The Secretary shall also 
develop a streamlined reapplication form and process, including 
both paper and electronic versions for an applicant who applies 
for financial assistance in succeeding academic years. In the 
reapplication process, families determined to have a zero 
family contribution shall not be required to provide any 
financial data.
    The Secretary shall permit an applicant to complete a FAFSA 
form in the years prior to postsecondary enrollment to obtain 
from the Secretary a non-binding estimate of the applicant's 
expected family contribution.

Section 484. Student eligibility

    This section specifies that in order to be eligible to 
receive aid under this title, a student must be a citizen or 
permanent resident enrolled in an eligible program, be making 
satisfactory progress in that program, not owe a refund or be 
in default of a previous loan and have filed a FAFSA for aid 
determination. An institution may determine that a student who 
has completed six credit hours (or the equivalent) applicable 
to a degree or certificate has the ability to benefit from the 
education or training offered by the institution.
    A student who is convicted of an offense involving the 
possession of a controlled substance while enrolled in an 
institution of higher education and receiving financial 
assistance under this title shall lose eligibility under this 
title for 1 year after the first offense; 2 years after the 
second offense and indefinitely after the third offense. A 
student who successfully completes a rehabilitation program may 
resume eligibility before the end of the ineligibility period. 
Students convicted of the sale of a controlled substance will 
be ineligible for funds under this title for 2 years after the 
first offense and indefinitely after the second offense. This 
section clarifies that the FAFSA form will not be the mechanism 
for enforcing these provisions.
    Section 484 clarifies enrollment of students through 
distance education programs, consistent with the changes made 
in section 102, so that students enrolled in distance education 
programs shall not be considered to be enrolled in 
correspondence courses.

Section 485. Statute of limitations and state court judgments

    Section 485 ensures that obligations to repay loans and 
grant overpayments are enforced. In collecting any obligation 
on Perkins loans, an institution of higher education shall not 
be denied payment due to a claim of infancy by the borrower. 
The section clarifies that payments are not due in the case of 
a student who is deceased, and that payments may not be 
required of a deceased student's estate.

Section 486. Institutional refunds

    If a recipient of aid under this title withdraws from an 
institution during a payment period or a period of enrollment, 
the amount of grant aid returned by the individual or 
institution is specified. An institution must allow for one or 
more leaves of absence. Not later than 45 days after the date 
of an institution's determination that a student withdrew from 
the institution, the institution shall return the amount 
required, and notify the student of the applicable 
requirements.

Section 487. Institutional and financial assistance for students

    This section requires that eligible institutions 
disseminate information to prospective and enrolled students. 
Each institution must disclose information on student financial 
assistance and the procedures for applying for such assistance, 
the cost of attending the institution and general information 
about the academic and non-academic aspects of the school 
programs. For the purposes of information on graduation rates, 
the institution may exclude information on students who leave 
school to serve in the Armed Forces, on official church 
missions, or with a recognized foreign aid service of the 
Federal Government or, if the students in that category exceed 
20 percent of an institution's enrollment, include such 
students, but exclude the time period the students were not 
enrolled due to their service. The institution must also 
provide an exit interview to borrowers of title IV loans which 
shall include information on loan repayment, including the 
effects of consolidation on total interest, fees and length of 
repayment and the effects of that consolidation on underlying 
loan benefits, including forgiveness, cancellation and 
deferment. Also included should be the borrower's ability to 
prepay the loan, tax benefits and the consequences of default.
    Each institution participating in title IV must also 
publicly disclose the institution's current transfer of credit 
policy that includes a statement that the institution shall not 
deny transfer of credit based solely on the accreditation of 
the sending institution and a list of institutions with which 
the institution has established articulation agreements.
    This section requires institutions to provide information 
on student body diversity, including the percentage of 
enrolled, full-time students who are male, female, from a low-
income background, and a self-identified member of a major 
racial or ethnic group.

Section 489. Early awareness of financial aid eligibility

    The Secretary shall work with institutions of higher 
education and other agencies involved in college access to 
inform students who receive or are eligible to receive means-
tested benefits that they are potentially eligible for a 
maximum Pell grant when they are in middle or high school 
students or participants in Adult Basic Education programs. 
These estimates should be as accurate as possible. In addition, 
not later than 2 years after the enactment of the Higher 
Education Amendments of 2005, the Secretary shall coordinate 
with relevant entities to implement a public awareness campaign 
on the availability of financial aid under this title.

Section 490. College access initiative

    The Secretary shall direct each guaranty agency to provide 
to the Secretary the information necessary for the development 
of Internet Web links and access for students and families to a 
comprehensive listing of postsecondary education programs, 
publications and other services available in the State to help 
interested persons access college.

Section 491. Program participation agreements

    This section requires that an eligible institution 
establish administrative and fiscal procedures and records to 
ensure orderly and efficient administration of funds under this 
title. An institution shall be considered in compliance with 
the voter registration requirements if the institution 
transmits such information electronically.
    Each eligible institution must have not less than 10 
percent of its revenues from sources other than funds provided 
under this title. In the calculation of the 10 percent, an 
institution may include funds from sources other than those 
received under this title, matching funds, student payments 
from eligible college savings plans established under section 
529 of the IRS Code of 1986, funds paid by the student or on 
behalf of the student by a third party, institutional aid and 
funds generated by the institution from institutional 
activities that are necessary for the education and training of 
the institution's students. Failure to meet this requirement 
for 1 year may result in the institution being placed on 
provisional certification and allow the Secretary to increase 
monitoring and reporting requirements. Failure to meet the 
requirements for 2 consecutive years shall mean that the 
institution is ineligible to participate in programs under this 
title. The Secretary shall make all of this information 
publicly available.
    This section clarifies if an institution is subject to an 
emergency action or its title IV participation is limited, 
suspended or terminated, the Secretary shall require that the 
institution prepare a teach-out plan for submission to the 
institution's accrediting agency.

Section 492. Regulatory relief and improvement

    This section maintains the quality assurance programs and 
the experimental sites. The Secretary has the authority to 
establish additional experimental sites in addition to 
maintaining the existing sites if they wish to continue 
participation.

Section 493. Transfer of allotments

    This section allows institutions to transfer up to 25 
percent of funds between its Federal Supplemental Educational 
Opportunity Grant and Federal Work-Study accounts.

Section 494. Wage garnishment requirement

    This section allows the Secretary and guaranty agencies to 
garnish up to 15 percent of disposable pay of an individual to 
collect the amount owed by the individual in the case of a loan 
guaranteed under this title.

Section 496. Advisory committee on student financial assistance

    This section adds to the purposes of the Advisory Committee 
by requiring it to provide knowledge and understanding of early 
intervention programs and to make recommendations that will 
result in early awareness for low- and moderate-income families 
of their eligibility for assistance under this title. It also 
authorizes the Advisory Committee to make recommendations that 
will expand partnerships among Federal and State Governments, 
institutions of higher education and the private sector.
    This section charges the Advisory Committee with reviewing 
regulations under title IV of the Higher Education Act and 
making recommendations to the Secretary to minimize regulatory 
burdens for institutions of higher education. In the review of 
regulations, the Advisory Committee shall convene not less than 
two review panels of representatives of the relevant groups to 
determine the necessity of the regulations, and recommend to 
the Secretary the elimination of regulations that are 
duplicative, unnecessary, inconsistent with other Federal 
requirements or overly burdensome. The Advisory Committee shall 
submit recommendations to the Secretary not later than 2 years 
after the completion of negotiated rulemaking.
    This section also charges the Advisory Committee with 
conducting a study of innovative pathways to baccalaureate 
degree attainment, such as dual enrollment, Pell grant program 
changes, simplification, compressed or modular scheduling, 
articulation agreements and programs that allow 2-year 
institutions to offer BA degrees.

                       Part H--Program Integrity


Section 499. Recognition of accrediting agency or association

    The criteria required for an accrediting agency to be 
determined reliable by the Secretary have been expanded for 
those agencies or associations seeking to evaluate institutions 
or programs offering distance education. In addition to meeting 
the other requirements of this part, the agency or association 
must demonstrate to the Secretary that its standards 
effectively address the quality of an institution's distance 
education in curricula, faculty, facilities and other areas 
identified in this subpart. But the agency or association will 
not be required to have separate standards or policies for 
evaluating distance education institutions or programs. The 
agency or association must also demonstrate to the Secretary 
that it requires an institution that offers distance education 
to have a process in place so that the institution can 
establish that the student who registers for a course is the 
same student who participates, completes, and receives academic 
credit for that course.
    An agency or association must include in its standards for 
accreditation consideration of student achievement, student 
retention, course and program completion and, as appropriate, 
State licensing examinations, 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.
    The agency or association must also demonstrate to the 
Secretary that it will apply review procedures throughout the 
accrediting process, including evaluation and withdrawal 
proceedings that comply with due process procedures. These 
procedures must now provide for an opportunity for written 
response by any institution to be included in the evaluation 
and withdrawal proceedings before final action. These 
procedures must now provide for an opportunity for the 
institution to appeal any adverse action, upon written request 
of the institution, such as denial, suspension or termination 
of accreditation or probation at a hearing prior to final 
action before an appeals board. The appeals board must not 
include current members of the agency or association's 
underlying decision-making body that made the adverse decision 
and it must be subject to a conflict of interest policy.
    This part expands the information that the agency or 
association must make available to the public and the State 
licensing or authorizing agency, and must submit to the 
Secretary. The information is a summary of agency or 
association actions, including the accreditation or 
reaccreditation of an institution and any findings made in 
connection with the accreditation or reaccreditation. The 
information will also include any final denial, withdrawal, 
suspension or termination of accreditation, or placement on 
probation of an institution, and any findings made in 
connection with those actions.
    This part adds distance education as a focus of reviews 
that an agency or institution must do on a regular basis in 
order to be recognized by the Secretary as a reliable 
authority.
    An agency or association must do onsite evaluations of 
institutions that include a review of the federally required 
information the institution or program provides its current and 
prospective students. The agency or association must monitor 
the growth of programs at institutions that have significant 
enrollment growth. The agency or association must require an 
institution to submit a teach-out plan for approval when any of 
the following occur: the Department notifies the accrediting 
agency of an action against the institution pursuant to section 
487(d); the accrediting agency acts to withdraw, terminate, or 
suspend the accreditation of an institution; or the institution 
notifies the accrediting agency that the institution intends to 
cease operations.
    An agency or association must confirm as part of its review 
for accreditation or reaccreditation that the institution 
publicly discloses its transfer of credit policies and does not 
deny transfer of credit based solely on the accreditation of 
the sending institution.

Section 499A. Administrative capacity standard

    Section 499A adds a subsection on the Treatment of Teach-
Outs at Additional Locations. A location of a closed 
institution of higher education will be eligible as an 
additional location of an eligible institution of higher 
education for the purpose of a teach-out, if such teach-out has 
been approved by the institution's accrediting agency.
    An institution of higher education that conducts a teach-
out through the establishment of an additional location 
described in paragraph (1) will be permitted to establish a 
permanent additional location at a closed institution and will 
not be required to meet the requirements of sections 
102(b)(1)(E) and 102(c)(1)(C) for the additional location or to 
assume the liabilities of the closed institution.

Section 499B. Program review and data

    The Secretary will provide an institution with an adequate 
opportunity to review and respond to any program review report, 
and any relevant materials related to the report, before any 
final determination is reached.
    The Secretary will review and consider an institution's 
response in any final program review determination. The 
Secretary, at all times, will maintain and preserve the 
confidentiality of any program review report or determination 
until the requirements of paragraphs (6) and (7) are met, and 
until a final program review determination is issued, other 
than to the extent required to comply with paragraph (5), 
except that the Secretary will promptly disclose any and all 
program review reports to the institution of higher education 
under review.

                    TITLE V--DEVELOPING INSTITUTIONS

    Hispanic Americans historically struggle to enroll in and 
graduate from institutions of higher education. Hispanic-
serving institutions provide a significant proportion of 
postsecondary opportunities for Hispanic students despite 
having limited resources and capacity. The purpose of this 
title is to expand educational opportunities for Hispanic 
students by enhancing academic offerings and resources of 
colleges and universities that educate the majority of these 
students.

                 Part A--Hispanic-Serving Institutions


Section 501. Definitions

    The definition of a Hispanic-serving institution is 
modified to eliminate the requirement that institutions 
demonstrate that at least 50 percent of their Hispanic students 
are low-income individuals.

Section 502. Authorized activities

    Institutions may use grant aid for education or counseling 
services designed to improve financial literacy of students or 
their parents. Funds may be used to develop articulation 
agreements and facilitate the transfer of students from 2-year 
to 4-year institutions. Institutions may also utilize grants to 
ensure support programs designed to prepare students to enroll 
in core courses and successfully complete degree and major 
requirements.

Section 503. Duration of grant

    The Secretary of Education shall award a grant to a 
Hispanic-serving institution for 5 years. These institutions 
would be able to apply for new funding once the grant expired. 
The 2-year wait-out-period before receiving an additional grant 
is deleted.

Section 504. Postbaccalaureate opportunities for Hispanic Americans

    A new program is created authorizing the Secretary of 
Education to award grants to eligible Hispanic-serving 
institutions that offer graduate certificates or degree-
granting programs.
    Grant awards may be used to fund the following types of 
activities: purchasing scientific or laboratory equipment, 
books, and other educational material; building or renovating 
classrooms, libraries, or other instructional facilities or 
capabilities; supporting faculty and curriculum development, 
tutoring and other academic student support services; and 
collaborating with other colleges and universities to expand 
graduate certificate opportunities or degree granting programs.
    An application for a grant must explain how funds would be 
utilized to improve postbaccalaureate education opportunities 
for Hispanic and low-income students. It also must articulate 
how the experience would lead to students gaining greater 
financial stability and independence. The Secretary of 
Education shall award grants to Hispanic-serving institutions 
for up to 5 years and colleges and universities are only to 
receive one award per fiscal year.

Section 505. Applications

    Section 505 makes a technical change.

Section 506. Cooperative arrangements

    Section 506 makes a conforming change.

Section 507. Authorization of appropriations

    There are authorized to be appropriated such sums as may be 
necessary for fiscal years 2006-11.

               TITLE VI--INTERNATIONAL EDUCATION PROGRAMS

    There is a national interest in enhancing the capacity of 
institutions of higher education in the United States to 
produce graduates with international and foreign language 
expertise and knowledge and to conduct research regarding such 
expertise and knowledge.

            Part A--International and Foreign Language Study


Section 601. Findings

    Section 601 revises the findings section to reflect changes 
in the world's geopolitical and economic landscapes that have 
created a need for American expertise and knowledge about a 
greater diversity of less commonly taught languages and nations 
of the world. This title supports centers, programs, and 
fellowships in American institutions of higher education, 
including programs partnering with overseas institutions, to 
increase the numbers of trained personnel and research in 
foreign language, area studies and other international studies. 
The Secretary shall consult with appropriate cabinet 
secretaries to determine national priorities in these areas and 
shall assist programs funded under this title to develop 
surveys of graduates to enable a better scope of the 
contribution of these programs in meeting the purposes of the 
title.

Section 602. Graduate and undergraduate language and area centers and 
        programs

    The Secretary is authorized to make grants to applicant 
institutions of higher education to support comprehensive 
foreign language or area study centers, including a network of 
undergraduate programs. Grants may support teaching and 
research materials, curriculum planning and development, 
linkages with foreign institutions, instructors of less 
commonly taught languages, and activities to improve 
instruction. Fellowships support students at advanced study 
levels, including doctoral and post-doctoral candidates.

Section 603. Undergraduate international studies and foreign language 
        programs

    The Secretary is authorized to make grants under this 
section to establish, strengthen and operate national language 
resource and training centers at the undergraduate level. The 
funds from these grants may provide for the development of new 
teaching materials, the conducting or dissemination of 
research, the training of teachers or the expansion of 
experiences for students in foreign countries. In the 
application, in addition to program quality information, the 
applicant must include how the grant activities will reflect 
diverse perspectives and a wide range of views and the method 
used to resolve potential disputes over those diverse opinions 
and a description of how the applicant will encourage 
participants to consider government service. Only 20 percent of 
funds may support undergraduate study, and only 10 percent of 
total awarded funds may be used for study abroad.

Section 604. Research and studies

    The Secretary may directly or through grants or contracts 
conduct research and studies that contribute to achieving the 
purposes of this part, including comparative studies, research 
on instructional strategies and studies to assess the need for 
area studies and language instruction. The Secretary may also 
direct evaluations of the diversity of the program and 
effective practices.

Section 605. Technological innovation and cooperation for foreign 
        information access

    The Secretary is authorized to make grants to institutions 
of higher education, public or non-profit private libraries or 
consortia of such institutions or libraries to develop 
innovative ways to utilize electronic technologies to collect, 
organize, preserve, and widely disseminate information from 
foreign sources. Non-profit educational organizations may be 
part of a consortium.

Section 606. Selection of certain grant recipients

    In consideration of a pending grant application under this 
title, the Secretary shall evaluate each application based on 
established criteria. The Secretary shall also consider the 
applicant's record of sending students into public service.

Section 607. American overseas research centers

    The Secretary is authorized to make grants to and enter 
into contracts with any American overseas research center that 
is a consortium of institutions of higher education. Each 
center desiring a grant shall submit the required information 
including how the center will reflect diverse and balanced 
perspectives and how they will handle policy disputes. Grant 
funds may support faculty salaries, faculty and student travel, 
teaching and research material, conferences, and publications.

Section 608. Authorization of appropriations for international and 
        foreign language studies

    There is authorized such sums as may be necessary for 
fiscal years 2006-11.

         Part B--Business and International Education Programs


Section 609. Centers for international business education

    The Secretary is authorized to award grants to institutions 
of higher education to operate international centers for 
business education that will be national resources for improved 
business techniques. Such grants will reflect diverse 
perspectives and a wide range of views on world regions and 
international affairs, when applicable.

Section 610. Education and training programs

    The Secretary is authorized to award grants to institutions 
of higher education to promote linkages between such 
institutions and the American business community engaged in 
international business. Such grants will provide diverse 
perspectives and a wide range of views on world regions and 
international affairs.

Section 611. Authorization and appropriations for business and 
        international education programs

    There is authorized such sums as may be necessary for 
fiscal years 2006-11.

           Part C--Institute for International Public Policy


Section 612. Minority foreign service professional development program

    The Secretary is authorized to award a grant to 
Historically Black Colleges or colleges that serve a 
substantial number of minority students, or an institution of 
higher education with programs in training Foreign Service 
professionals to establish an Institute for International 
Public Policy to increase the participation of underrepresented 
minorities in international service fields. Such programs shall 
reflect diverse perspectives and a wide range of views on world 
regions and international affairs, when applicable. The 
applicant must provide a 50 percent match of Federal funds 
although the Secretary has the right to waive that match 
requirement.

Section 613. Institutional development

    The Institute shall award grants to minority-serving 
institutions to strengthen international affairs, international 
business, and foreign language study programs.

Section 614. Study abroad program

    The Institute shall conduct a junior year abroad program.

Section 615. Advanced degree in international relations

    The Institute shall provide a program of study that leads 
to master's degree and, in exceptional circumstances, a 
doctoral degree.

Section 616. Internships

    The Institute shall work with eligible institutions of 
higher education to establish relevant internships for students 
in the international studies field.

Section 617. Financial assistance

    The Institute may provide financial assistance in the form 
of summer stipends of up to $3,000 or Ralph Bunche scholarships 
of up to $5,000 per academic year.

Section 618. Report

    The Institute shall submit a report biennially on the 
activities conducted until this title to the Secretary of 
Education and the Secretary of State.

Section 619. Gifts and donations

    The biennial report shall include all gifts and donations 
received by the Institution.

Section 620. Authorization of appropriations for the institute for 
        international public policy

    There is authorized such sums as may be necessary for 
fiscal years 2006-11.

                       Part D--General Provisions


Section 622. Assessment and enforcement

    The Secretary is authorized to assess and ensure compliance 
with all the conditions and terms of grants provided under this 
title.

       TITLE VII--GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS


                  Part A--Graduate Education Programs


Section 701. Purpose

    Section 701 identifies mathematics, science, engineering 
and other areas critical to the United States' national and 
homeland security needs as areas of focus for national graduate 
fellowship programs that are designed to sustain and enhance 
the capacity for graduate education.

Section 702. Allocation of Jacob K. Javits fellowships

    Section 702 adds two considerations to the qualifications 
of Board members appointed by the Secretary. The Secretary will 
appoint members to represent the various geographic regions of 
the United States and include representatives from minority-
serving institutions, as defined in section 365.

Section 703. Stipends

    Section 703 clarifies that stipends provided under this 
section are to be of an amount equal to those provided through 
the National Science Foundation's ``Graduate Research 
Fellowship Program.''

Section 704. Authorization of appropriations for the Jacob K. Javits 
        fellowship program

    There is authorized to be appropriated such sums as may be 
necessary for fiscal years 2006-11.

Section 705. Institutional eligibility under the graduate assistance in 
        areas of national need program

    In designating areas of national need, the Secretary is 
required to consult with appropriate Federal and nonprofit 
agencies and organizations, including the National Science 
Foundation, the Department of Defense, the Department of 
Homeland Security, the National Academy of Sciences, and the 
Bureau of Labor Statistics. The Secretary must also take into 
consideration an assessment of current and future professional 
workforce needs of the United States, when making these 
designations.

Section 706. Awards to graduate students

    This section requires that for individuals who receive 
their first stipend in academic year 2006-2007, the amount 
shall be set at an amount equal to that provided by the 
Graduate Research Fellowship Program administered by the 
National Science Foundation.

Section 707. Additional assistance for cost of education

    The years used in determining payments amounts are updated 
from 1999-2000 to 2006-07, and from 1998-99 to 2005-06.

Section 708. Authorization of appropriations for the graduate 
        assistance in areas of national need program

    There is authorized to be appropriated such sums as may be 
necessary for fiscal years 2006-11.

Section 709. Authorization of appropriations for the Thurgood Marshall 
        legal educational opportunity program

    There is authorized to be appropriated such sums as may be 
necessary for fiscal years 2006-11.

      Part B--Fund for the Improvement of Postsecondary Education


Section 710. Fund for the improvement of postsecondary education

    The provision regarding institutions and programs based on 
the technology of communication is expanded to include the 
establishment and continuation of institutions, programs, 
consortia, collaborations, and other joint efforts based on the 
technology of communications, including efforts that use 
distance education and technological advancements to educate 
and train postsecondary students, including health 
professionals serving medically underserved populations.
    The provision regarding the introduction of reforms in 
graduate education is expanded to include reforms in remedial 
education, including English language instruction, to customize 
remedial courses to student goals and help students progress 
into core courses and complete programs, the creation of 
consortia that join diverse institutions of higher education 
for the purpose of integrating curricular and co-curricular 
interdisciplinary study, and support and assistance to programs 
implementing reforms to improve high school graduation and 
college attendance and completion rates for disadvantaged 
students.

Section 711. Special projects

    Areas of national need are expanded to include improvements 
in academic instruction and student learning, including efforts 
designed to assess the learning gains made by postsecondary 
students. Areas of national need are expanded to include the 
development, evaluation, and dissemination of model programs 
including model core curricula that provide students with a 
broad and integrated knowledge base, include broad survey 
courses in English literature, American and world history, 
American political institutions, economics, philosophy, 
college-level mathematics and natural sciences, and sufficient 
study of a foreign language to lead to reading and writing 
competency in that language.

Section 712. Authorization of appropriations for the fund for the 
        improvement of postsecondary education

    There is authorized to be appropriated such sums as may be 
necessary for fiscal years 2006-11.

                    Part C--Urban Community Service


Section 713. Authorization of appropriations for the Urban Community 
        Service Program

    Section 713 repeals the Urban Community Service Program.

  Part D--Demonstration Projects to Ensure Students With Disabilities 
                   Receive a Quality Higher Education


Section 714. Grants authorized for demonstration projects to ensure 
        students with disabilities receive a quality higher education

    The teaching methods and strategies designed to teach 
students with disabilities must now teach and meet the academic 
and programmatic needs of students with disabilities in order 
to improve retention and completion of postsecondary education.
    The authorized activities under these grants are expanded 
to include the development of innovative and effective teaching 
methods and strategies to ensure the successful transition of 
students with disabilities from secondary schools to 
postsecondary education.
    The authorized activities under these grants are expanded 
to include, in synthesizing research and information related to 
the provision of postsecondary educational services to students 
with disabilities, the use of data on the postsecondary 
education of and impact on subsequent employment of students 
with disabilities. Such research, information and data will be 
made publicly available and accessible.
    The authorized activities under these grants are expanded 
to include making postsecondary education more accessible to 
students with disabilities through: (1) innovative and 
effective teaching methods and strategies to provide faculty 
and administrators with the ability to provide accessible 
distance education programs or classes that would enhance 
access to higher education for students with disabilities, 
including the use of accessible curriculum and electronic 
communication for instruction and advisement; (2) training and 
support to secondary and postsecondary staff to encourage 
interest in and understanding of educational opportunities in, 
teaching skills, and offer work-based opportunities in 
disability-related fields, including students with 
disabilities. This training and support may include developing 
means to offer students credit-bearing, college-level 
coursework and career and educational counseling; and (3) 
curriculum development.
    The Secretary will prepare and disseminate a report 
reviewing the demonstration projects and providing guidance and 
recommendations on how successful projects can be replicated.

Section 715. Applications for demonstration projects to ensure students 
        with disabilities receive a quality higher education

    Each application will now include a description of how the 
applicant plans to address the activities allowed under this 
part. Each application will now include a description of the 
extent to which the institution will work to replicate the 
research and best practices of institutions of higher education 
with demonstrated success in serving students with 
disabilities.

Section 716. Authorization of appropriations for the demonstration 
        projects to ensure students with disabilities receive a quality 
        higher education

    There is authorized to be appropriated such sums as may be 
necessary for fiscal years 2006-11.

                       TITLE VIII--MISCELLANEOUS

    The purpose of this title is to provide new programs to 
offer opportunities for increased success in higher education.

            Part A--Mathematics and Science Scholars Program


Section 811. Math and science scholars program

    The Secretary is authorized to award grants to States on a 
competitive basis to enable a State to award scholarships of up 
to $1,000 to students within that State who have completed a 
rigorous secondary school curriculum in mathematics or science. 
States are required to meet a 50 percent match of the Federal 
funds.
    The students are eligible for the scholarships for their 
first 2 years of college, and governors may set a priority for 
awarding these scholarships to attract students who are 
underrepresented in mathematics, engineering and science 
fields, students in high-need school districts, or students who 
attend school districts that do not meet or exceed State 
mathematics and science standards or districts in regions in 
the State that have particular need.

               Part B--Postsecondary Education Assessment


Section 821. Postsecondary education assessment

    The Secretary is authorized to enter into a contract with 
an independent, bipartisan organization with specific expertise 
in public administration to complete an assessment of the cost 
factors associated with cost of tuition at institutions of 
higher education. The contract will begin not later than 90 
days after the date of enactment of the Higher Education 
Amendments of 2005. The study shall consider the key elements 
that drive cost, identify and evaluate measures being used to 
control costs, identify other measures that should be utilized 
in the future and identify systemic approaches to monitor 
future postsecondary education cost trends and cost control 
mechanisms.

  Part C--Job Skill Training in High-Growth Occupations or Industries


Section 831. Job skill training in high-growth occupations or 
        industries

    The Secretary is authorized to award competitive grants for 
up to 5 years to partnerships of institutions of higher 
education and a local Workforce Investment Board to provide 
relevant job training in high growth industries or occupations, 
including entrepreneurial efforts. The Secretary shall award 
grants to eligible partnerships to expand or create academic 
programs or programs to train individuals for high-growth 
occupations, to purchase equipment or create or expand distance 
programs that would facilitate those programs, and to outreach 
to students and businesses to promote involvement in such 
programs. Priority is given to institutions serving 
nontraditional students.

    Part D--Grant Program to Increase Student Retention and Promote 
                        Articulation Agreements


Section 841. Grant program to increase student retention and promote 
        articulation agreements

    The Secretary is authorized to award competitive grants to 
institutions of higher education to improve the retention and 
degree completion of traditional and non-traditional students. 
Eligible institutions must have 40 percent of their enrolled 
students eligible for Federal financial aid, and must offer 
counseling and advisement, mentors, tutoring, and detailed 
financial aid counseling to student population identified in 
the application. There must also be outreach to current and 
prospective students who are eligible and services available to 
promote an effective transition from a 2-year to 4-year 
institution, or 4-year degree completion. Grantees must provide 
counseling and tutoring in native languages when the student 
population includes at least five percent of students speaking 
a specific language. Grantees may also provide childcare, 
transportation and other services that will assist students to 
successfully complete degrees.

                  Part E--American History for Freedom


Section 851. American history for freedom

    The Secretary is authorized to award 3-year competitive 
grants to eligible institutions of higher education to 
establish or strengthen postsecondary academic programs or 
centers that promote the teaching of traditional American 
history, free institutions and the history and achievements of 
Western civilization. Funds may be used to design and implement 
programs of study, courses, lecture series, seminars and 
symposia; develop, publish and disseminateinstructional 
materials; conduct research; conduct teacher preparation initiatives; 
and support fellowships. Grantees must increase access to quality 
programming that expands knowledge of American History and involve 
personnel with strong expertise in traditional American history.

                       Part F--Teach for America


Section 861. Teach for America

    The Secretary is authorized to award a non-competitive 
grant to Teach for America to conduct outreach activities to 
undergraduate and graduate students to attract them to 
participate in the Teach for America program. The program 
attracts college graduates to teach for up to 2 years in 
underserved schools. Grant funds will be used for recruitment, 
pre-service training and professional development during their 
first 2 years of teaching under this program. Teach for America 
shall submit an annual report and the Secretary shall conduct a 
study of the program outcomes.

                Part G--Patsy T. Mink Fellowship Program


Section 871. Patsy T. Mink Fellowship Program

    The Secretary shall award grants to eligible institutions 
of higher education to enable such institutions to make 
fellowship awards to assist highly qualified minorities and 
women to acquire the highest degree available in academic areas 
where such individuals are underrepresented in the 
professoriate. The Secretary shall consider the representation 
of women and minorities faculty members, the current and 
projected need for faculty and the need to prepare professors 
in areas of national need such as mathematics and science. In 
awarding grants, each institution shall award no less than 15 
fellowships. Fellows shall sign an agreement to enter a 
contract to teach at an institution of higher education not 
later than 3 years after receiving the doctoral degree or 
highest possible degree available. Individuals who do not enter 
the professoriate shall repay the fellowship.

        Part H. Study on College Enrollment By Secondary Schools


Section 881. Study on college enrollment by secondary schools

    The Secretary shall contract with a not-for-profit 
organization with demonstrated expertise in increasing college 
enrollment rates in low-income communities nationwide to make 
available year-to-year college enrollment rate trends by 
secondary schools.

                   TITLE IX--AMENDMENTS TO OTHER LAWS


                   Part A--Education of the Deaf Act


Section 901. Laurent Clerc National Deaf Education Center

    This section maintains the funding for quality education 
for deaf individuals at the Laurent Clerc Center. The 
elementary and secondary programs at the Center shall adopt and 
implement standards and assessments pursuant to section 1111(b) 
of the Elementary and Secondary Education Act and approved by 
the Secretary. Also in accordance with 1111(b) of ESEA, the 
University shall determine whether the Clerc programs are 
making adequate yearly progress and publicly report the 
findings.

Section 902. Agreement with Gallaudet University

    This bill continues the agreement with Gallaudet University 
and updates the reference to the Davis-Bacon Act.

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

    This section names the Rochester Institute of Technology as 
a partner institution for this section and specifies that if 
the Secretary or Rochester Institute terminates the agreement 
the Secretary shall consider other proposals to establish and 
operate a National Technical Institution for the Deaf.

Section 904. Cultural experiences grants

    This section authorizes the Secretary to award competitive 
grants or contracts with eligible entitles to enrich the lives 
of deaf and hard-of-hearing children and adults and promote the 
integration of hearing, deaf, and hard-of-hearing persons 
through shared cultural, educational, and social experiences.

Section 905. Audit

    This section requires an annual independent audit for the 
National Technical Institute for the Deaf activities.

Section 911. International students

    This section allows for the cost-free participation of 
international students in distance programs developed at 
Gallaudet University. For international students who attend the 
University from a non-developing country, there will be a 100 
percent surcharge and for those from a developing country the 
surcharge will be 50 percent. The University has the right to 
reduce those surcharges based on an individual student's need.

              Part B--United States Institute of Peace Act


Section 921. United States Institute of Peace Act

    This section clarifies that a member of the Board of 
Directors for the Institute shall commence their term when 
confirmed by the Senate.

                        TITLE X--RECONCILIATION


                      Part A--Education Provisions


Section 1001. Provisional Grant Assistance Program (ProGAP)

    Section 1001 authorizes and appropriates funds from fiscal 
year 2006 to fiscal year 2010 to provide approximately $6.0 
billion in additional grant assistance to all Pell-eligible 
students (ProGAP) and $2.25 billion in new grant assistance to 
Pell-eligible students studying math, science, technology, 
engineering or certain foreign languages (described in next 
section). The Secretary shall ensure that grants under this 
program are awarded to students with the greatest need.

Section 1002. National SMART grants

    Section 1002 authorizes use of up to $450 million per year 
of funding appropriated in section 1001 for the National 
Science and Mathematics Access to Retain Talent (SMART) grant 
program. SMART grants of up to $1,500 per student per academic 
year shall be awarded to Pell-eligible students in their third 
or fourth year at an institution of higher education majoring 
in math, science, technology, engineering, or a foreign 
language that is critical to the national security of the 
United States (as determined by the Secretary in consultation 
with the Director of National Intelligence). Institutions of 
higher education may match SMART grants or provide additional 
assistance with funds from private sources.

Section 1003. Loan limits

    Section 1003 increases loan limits to $3,500 and $4,500 for 
first and second year students, with no increase in aggregate 
undergraduate borrowing limits. The section also increases the 
annual graduate unsubsidized borrowing by $2,000 annually, with 
a $2,000 increase in aggregate borrowing. The section makes 
graduate students eligible for PLUS loans.

Section 1004. PLUS Loan interest rates and zero special allowance 
        payment

    Section 1004 increases the fixed interest rate on PLUS 
loans (scheduled to go into effect July 1, 2006) from 7.9 
percent to 8.5 percent. This section enacts a floor income for 
lenders (i.e., eliminates ``windfall profits'') by requiring 
that lenders rebate to the government the difference between 
the borrower rate and the lender yield rate when the borrower 
rate exceeds the lender yield rate.

Section 1005. Reduction of lender insurance reimbursement rates

    Section 1005 reduces reimbursement rate lenders receive on 
defaulted loans to 97 percent (from 98 percent for all lenders 
and from 100 percent for lenders qualifying as exceptional 
performers).

Section 1006. Guaranty agency origination fee

    Section 1006 requires guaranty agencies to deposit a one 
percent origination fee into the Federal Fund on all loans 
guaranteed. (Currently, guaranty agencies are only required to 
pay the fee if necessary to keep Federal Fund solvent.)

Section 1007. Deferment of student loans for military service

    Section 1007 provides for up to 3-year deferment on payment 
of loans made through the FFEL, Direct Loan, or Perkins loan 
programs for individuals serving on active duty or performing 
qualified National Guard duty during a war, other military 
operation or terrorist-related national emergency. This section 
applies to loans for which the first disbursement was made on 
or after July 1, 2001.

Section 1008. Rehabilitation through consolidation.

    Section 1008 requires that guaranty agencies establish 
procedures to preclude consolidation lending from being an 
excessive proportion of guaranty agency recoveries on defaulted 
loans. This section limits the borrower collection costs a 
guaranty agency may charge to 18.5 percent on defaulted loans 
paid off through consolidation; requires that the guaranty 
agency remit to the Secretary a portion of this collection 
charge, equal to 8.5 percent of the outstanding principal and 
interest of the defaulted loan; and requires that, for each 
fiscal year beginning on or after October 1, 2009, if the 
proceeds of defaulted loans paid off through consolidation 
exceed 45 percent of the agency's total collections on 
defaulted loans in that fiscal year, the guaranty agency shall 
remit to the Secretary the entire amount charged.

Section 1009. Single holder rule

    Section 1009 repeals the single holder rule, allowing 
students to consolidate with the lender of their choice.

Section 1010. Default reduction program

    Section 1010 changes the requirement regarding payments 
which must be received by guaranty agency before selling a 
defaulted loan that is rehabilitated from 12 consecutive 
payments to 9 payments made within 20 days of the due date 
within 10 consecutive months. This section limits collection 
costs charged and retained by the guaranty agency to 18.5 
percent of proceeds on sale of a defaulted loan that is 
rehabilitated.

Section 1011. Requirements for disbursements of student loans

    Section 1011 extends the provisions that allow schools with 
low default rates to disburse loans in a single installment for 
any period of enrollment and have immediate access to title IV 
funds.

Section 1012. Special insurance and reinsurance rules

    Section 1012 repeals the ``exceptional performer'' 
designation for lenders, servicers and guaranty agencies.

Section 1013. School as lender moratorium

    Section 1013 allows only those schools that have previously 
made loans to do so in the future and adds requirements that 
school must hold the loans they make until the borrower enters 
a grace period and use the proceeds from loan sales for need-
based grant aid that supplements and does not supplant other 
Federal, State, and institutional grant aid. This section 
specifies that such institutions shall not be foundations or 
alumni organizations.

Section 1014. Permanent reduction of special allowance payments for 
        loans from the proceeds of tax exempt issues

    Section 1014 makes permanent the provisions of Taxpayer-
Teacher Protection Act of 2004 (TTPA) relating to loans 
receiving special allowance payments of 9.5 percent. (Remaining 
expiring provisions of TTPA, relating to loan forgiveness for 
teachers, made permanent by section 1020.)

Section 1015. Loan fees from lenders

    Section 1015 increases the lender origination fee on new 
consolidation loans from 0.5 percent to 1.0 percent.

Section 1016. Origination fee

    Section 1016 strikes the requirement that Secretary shall 
charge all borrowers a 4 percent origination fee. Instead, this 
section authorizes Secretary to charge student borrowers a fee 
between 1 percent and 3 percent and requires that the Secretary 
shall charge the borrower of a Federal Direct PLUS loan 4 
percent. The section also reduces origination fees by one-half 
percent beginning July 1, 2007.

Section 1017. Income contingent repayment for public sector employees

    Section 1017 provides that the Secretary shall forgive the 
balance of a Federal Direct Loan for any individual who has 
made 120 payments pursuant to income contingent repayment and 
who is employed, and was employed during the 10-year period 
during which the 120payments were made, in a full-time job in 
emergency management, government, public safety, law enforcement, 
public health, education (including early childhood education), or 
public interest legal services (including prosecution or public 
defense). This section provides that a borrower who is repaying a loan 
pursuant to income contingent repayment may choose, at any time, to 
return to payment under the standard repayment plan.

Section 1018. Family contribution for dependent students

    Section 1018 increases the income protection allowance for 
dependent students to $3,000 and decreases the asset conversion 
rate for dependent students from 35 percent to 20 percent.

Section 1019. Family contribution for independent students without 
        dependents other than a spouse

    Section 1019 increases the income protection allowance by 
varying amounts for single and married students and decreases 
the asset conversion rate from 35 percent to 20 percent.

Section 1020. Family contribution for independent students with 
        dependents other than a spouse

    Section 1020 decreases the asset conversion rate from 12 
percent to 7 percent.

Section 1021. Simplified need test and automatic zero improvements

    Section 1021 increases the income level at which the 
Secretary automatically considers an applicant to have expected 
family contribution of zero to $20,000.

Section 1022. Loan forgiveness for teachers

    Section 1022 makes permanent the provisions in the 
Taxpayer-Teacher Protection Act of 2004 relating to loan 
forgiveness for math, science and special education teachers, 
providing up to $17,500 of loan forgiveness for eligible 
borrowers.

          Part B--Hurricane Katrina Higher Education Recovery


Section 1051. Short title

    This part may be cited as the Hurricane Katrina Higher 
Education Recovery Act.

Section 1052. Definitions

    Section 1052 defines affected borrowers as individuals who 
were in repayment, but not in deferment, on August 22, or who 
entered repayment after August 22, 2005 and before June 30, 
2006, who lived in a county or parish of Alabama, Louisiana or 
Mississippi in which a major disaster was declared. The section 
defines an affected institution as an institution located in an 
area declared a major disaster area due to Hurricane Katrina. 
The section also defines an affected student as a student 
enrolled on August 29, 2005 in an affected institution. 
Identifies technologies used in distance education.

Section 1053. Waiver authority and modifications to certain provisions 
        of the Higher Education Act of 1965

    Section 1053 waives the requirement that students and 
institutions return a portion of Federal student financial aid 
funds received when students withdraw before completing at 
least 60 percent of their period of enrollment or payment 
period for students and institutions affected by Hurricane 
Katrina. Stafford loans, PLUS loans and Perkins Loans 
disbursements to affected students are cancelled. The section 
provides for students who do not enroll in another institution 
and borrowers in repayment to be retained in in-school or grace 
period status, respectively until June 30, 2006. The section 
also authorizes the Secretary to modify Teacher Quality 
Enhancement, TRIO, GEAR UP, title III and other grants upon the 
request of an affected institution or other grantee located in 
an area affected by Hurricane Katrina.

Section 1054. General waiver authority and required consultation

    Section 1054 provides general authority to the Secretary of 
Education to waive or modify statutory any provision of the 
Higher Education Act the Secretary deems necessary to address 
due to the effects of Hurricane Katrina, after consulting with 
the authorizing committees.

Section 1055. Notice of waivers, modifications, or extensions

    Section 1055 requires the Secretary to make the waivers, 
modifications or extensions granted publicly available.

Section 1056. Regulatory requirements inapplicable

    Section 1056 specifies that certain provision under the 
General Education Provisions Act do not apply.

Sec. 1057. Department of Education Inspector General audit and report

    Section 1057 requires the Department of Education Inspector 
General to conduct an audit and investigation of each program 
carried out that includes response and recovery activities 
related to Hurricane Katrina and requires a weekly listing of 
audits and investigations to be provided to authorizing 
committees.

Sec. 1058. Sunset provision

    The provisions related to Hurricane Katrina recovery expire 
September 30, 2006.

                      IX. Changes in Existing Law

    In compliance with rule XXVI paragraph 12 of the Standing 
Rules of the Senate, the following provides a print of the 
statute or the part or section thereof to be amended or 
replaced (existing law proposed to be omitted is enclosed in 
black brackets, new matter is printed in italic, existing law 
in which no change is proposed is shown in roman):

HIGHER EDUCATION ACT OF 1965

           *       *       *       *       *       *       *



               PART I--GENERAL HIGHER EDUCATION PROGRAMS


                      Higher Education Act of 1965


                             (P.L. 89-329)

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

                      TITLE I--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) * * *

           *       *       *       *       *       *       *

          (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 or awards a degree that is 
        acceptable for admission to a graduate or professional 
        degree program, subject to the review and approval by 
        the Secretary.

           *       *       *       *       *       *       *

    (b) Additional Institutions Included.--For purposes of this 
Act, other than title IV, the term ``institution of higher 
education'' also includes--
          (1) * * *
          [(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.]
          (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--
                  (A) who meet the requirements of section 
                484(d)(3);
                  (B) who are beyond the age of compulsory 
                school attendance in the State in which the 
                institution is located; or
                  (C) who are dually or concurrently enrolled 
                in such institution and a secondary school.

           *       *       *       *       *       *       *


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.-- * * *

           *       *       *       *       *       *       *

          (2) Institutions outside the united states.--
                  (A) In general.-- * * *
                          [(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 
                                clinical training program that 
                                was approved by a State as of 
                                January 1, 1992; or]
                          (i) in the case of a graduate medical 
                        school located outside the United 
                        States--
                                  (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 
                                no 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 of 
                                which a student is seeking a 
                                loan under part B of title IV; 
                                or

           *       *       *       *       *       *       *

          [(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.]
          (3) Limitations based on enrollment.--An institution 
        shall not be considered to meet the definition of an 
        institution of higher education in paragraph (1) if 
        such institution--
                  (A) 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
                  (B) 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 mode of delivery.--
                  (A) In general.--An institution shall not be 
                considered to meet the definition of an 
                institution of higher education in paragraph 
                (1) if such institution--
                          (i) offers more than 50 percent of 
                        such institution's courses by 
                        correspondence, unless the institution 
                        is an institution that meets the 
                        definition in section 3(3)(C) of the 
                        Carl D. Perkins Vocational and 
                        Technical Education Act of 1998; or
                          (ii) 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 
                        3(3)(C), 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.
                  (B) Distance education program eligibility.--
                Notwithstanding subparagraph (A), an 
                institution of higher education, other than a 
                foreign institution, that offers education or 
                training programs principally through distance 
                education shall be considered to meet the 
                definition of an institution of higher 
                education in paragraph (1) if such 
                institution--
                          (i) has been evaluated and determined 
                        (before or after the date of enactment 
                        of the Higher Education Amendments of 
                        2005) to have the capability to 
                        effectively deliver distance education 
                        programs by an accrediting agency or 
                        association that--
                                  (I) is recognized by the 
                                Secretary under title IV; and
                                  (II) has evaluation of 
                                distance education programs 
                                within the scope of its 
                                recognition, as described in 
                                section 496(n)(3);
                          (ii) is otherwise eligible to 
                        participate in programs authorized 
                        under title IV;
                          (iii) has not had its participation 
                        in programs under title IV suspended or 
                        terminated within the previous 5 years;
                          (iv) has not had, or failed to 
                        resolve, an audit finding or program 
                        review finding under this Act during 
                        the 2 years preceding the year for 
                        which the determination is made that, 
                        following any appeal to the Secretary, 
                        resulted in the institution being 
                        required to repay an amount that is 
                        equal to or greater than 25 percent of 
                        the total funds the institution 
                        received under the programs authorized 
                        under title IV for the most recent 
                        award year; and
                          (v) has met the requirements of 
                        section 487(d), if applicable.
                  (C) Definition.--
                          (i) In general.--In this Act, except 
                        as otherwise provided, the term 
                        ``distance education'' means a course 
                        or program that uses 1 or more of the 
                        technologies described in clause (ii) 
                        to--
                                  (I) deliver instruction to 
                                students who are separated from 
                                the instructor; and
                                  (II) support regular and 
                                substantive interaction between 
                                the students and the 
                                instructor, either 
                                synchronously or 
                                asynchronously.
                          (ii) Inclusions.--For the purposes of 
                        clause (i), the technologies used may 
                        include--
                                  (I) the Internet;
                                  (II) one-way and two-way 
                                transmissions through open 
                                broadcast, closed circuit, 
                                cable, microwave, broadband 
                                lines, fiber optics, satellite, 
                                or wireless communications 
                                devices;
                                  (III) audio conferencing; or
                                  (IV) video cassette, DVDs, 
                                and CD-ROMs, provided that they 
                                are used in a course in 
                                conjunction with the 
                                technologies listed in 
                                subclauses (I) through (III).
          [(4)] (5) Limitations based on management.-- * * *

           *       *       *       *       *       *       *

          [(5)] (6) 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)] (7) 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) * * *

           *       *       *       *       *       *       *

                  (D) is accredited by a nationally recognized 
                accrediting agency or association recognized by 
                the Secretary pursuant to part H of title IV; 
                and
                  (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.]

           *       *       *       *       *       *       *


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.-- * * *
          [(2)](3) Department.-- * * *
          [(3)](4) Disability.-- * * *
          [(4)](5) Elementary school.-- * * *
          [(5)](6) Gifted and talented.-- * * *
          [(6)](7) Local educational agency.-- * * *
          [(7)](8) New borrower.-- * * *
          [(8)](9) Nonprofit.-- * * *
          [(9)](10) School or department or divinity.-- * * *

           *       *       *       *       *       *       *

          [(10)](11) Secondary school.-- * * *
          [(11)](12) Secretary.-- * * *
          [(12)](13) Service-learning.-- * * *
          [(13)](14) Special education teacher.-- * * *
          [(14)](15) State educational agency.-- * * *
          [(15)](16) State higher education agency.-- * * *
          [(16)](17) State; freely associated states.-- * * *

           *       *       *       *       *       *       *


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

    (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.
          (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 institutional 
                mission, a college should facilitate the free 
                and open exchange of ideas;
                  (D) students should not be intimated, 
                harassed, discouraged from speaking out, or 
                discriminated against;
                  (E) students should be treated equally and 
                fairly; and
                  (F) nothing in this paragraph 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, provided that the 
        imposition of such sanction is done objectively and 
        fairly; or

           *       *       *       *       *       *       *


SEC. 114. NATIONAL ADVISORY COMMITTEE ON INSTITUTIONAL QUALITY AND 
                    INTEGRITY.

    (a) Establishment.-- * * *

           *       *       *       *       *       *       *

    (g) Termination.--The Committee shall cease to exist on 
[September 30, 2004] September 30, 2011.

           *       *       *       *       *       *       *


SEC. 120. DRUG AND ALCOHOL ABUSE PREVENTION.

    (e) Restriction on Eligibility.--* * *

           *       *       *       *       *       *       *

    [(e) Alcohol and Drug Abuse Prevention Grants.--
          [(1) Program Authority.--The Secretary may make 
        grants to institutions of higher education or consortia 
        of such institutions, and enter into contracts with 
        such institutions, consortia, and other organizations, 
        to develop, implement, operate, improve, and 
        disseminate programs of prevention, and education 
        (including treatment-referral) to reduce and eliminate 
        the illegal use of drugs and alcohol and the violence 
        associated with such use. Such grants or contracts may 
        also be used for the support of a higher education 
        center for alcohol and drug abuse prevention that will 
        provide training, technical assistance, evaluation, 
        dissemination, and associated services and assistance 
        to the higher education community as determined by the 
        Secretary and institutions of high education.
          [(2) Awards.--Grants and contracts shall be awarded 
        under paragraph (1) on a competitive basis.
          [(3) Applications.--An institution of higher 
        education, a consortium of such institutions, or 
        another organization that desires to receive a grant or 
        contract under paragraph (1) shall submit an 
        application to the Secretary at such time, in such 
        manner, and containing or accompanied by such 
        information as the Secretary may reasonably require by 
        regulation.
          [(4) Additional requirements.--
                  [(A) Participation.--In awarding grants and 
                contracts under this subsection the Secretary 
                shall make every effort to ensure--
                          [(i) the equitable participation of 
                        private and public institutions of 
                        higher education (including community 
                        and junior colleges); and
                          [(ii) the equitable geographic 
                        participation of such institutions.
          [(B) Consideration.--In awarding grants and contracts 
        under this subsection the Secretary shall give 
        appropriate consideration to institutions of higher 
        education with limited enrollment.
          [(5) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this 
        subsection $5,000,000 for fiscal year 1999 and such 
        sums as may be necessary for each of the 4 succeeding 
        fiscal years.]
    [(f) National Recognition Awards.--
          [(1) Purpose.--It is the purpose of this subsection 
        to provide models of innovative and effective alcohol 
        and drug abuse prevention programs in higher education 
        and to focus national attention on exemplary alcohol 
        and drug abuse prevention efforts.
          [(2) Awards.--
                  [(A) In general.--The Secretary shall make 5 
                National Recognition Awards for outstanding 
                alcohol prevention programs and 5 National 
                Recognition Awards for outstanding drug abuse 
                prevention programs, on an annual basis, to 
                institutions of higher education that--
                          [(i) have developed and implemented 
                        innovative and effective alcohol 
                        prevention programs or drug abuse 
                        prevention programs; and
                          [(ii) with respect to an application 
                        for an alcohol prevention program 
                        award, demonstrate in the application 
                        submitted under paragraph (3) that the 
                        institution has undertaken efforts 
                        designed to change the culture of 
                        college drinking consistent with the 
                        review criteria described in paragraph 
                        (3)(C)(iii).
                  [(B) Ceremony.--The awards shall be made at a 
                ceremony in Washington, D.C.
                  [(C) Document.--The Secretary shall publish a 
                document describing the alcohol and drug abuse 
                prevention programs of institutions of higher 
                education that receive the awards under this 
                subsection and disseminate the document 
                nationally to all public and private secondary 
                school guidance counselors for use by secondary 
                school juniors and seniors preparing to enter 
                an institution of high education. The document 
                shall be disseminated not later than January 1 
                of each academic year.
                  [(D) Amount and use.--Each institution of 
                higher education selected to receive an award 
                under this subsection shall receive in award in 
                the amount of $50,000. Such award shall be used 
                for the maintenance and improvement of the 
                institution's outstanding prevention program 
                for the academic year following the academic 
                year for which the award is made.
          [(3) Application.--
                  [(A) In general.--Each institution of higher 
                education desiring an award under this 
                subsection 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 contain--
                          [(i) a clear description of the goals 
                        and objectives of the prevention 
                        program of the institution;
                          [(ii) a description of program 
                        activities that focus on alcohol or 
                        drug policy issues, policy development, 
                        modification, or refinement, policy 
                        dissemination and implementation, and 
                        policy enforcement;
                          [(iii) a description of activities 
                        that encourage student and employee 
                        participation and involvement in 
                        activity development and 
                        implementation;
                          [(iv) the objective criteria used to 
                        determine the effectiveness of the 
                        methods used in such programs and the 
                        means used to evaluate and improve the 
                        programs' efforts;
                          [(v) a description of special 
                        initiatives used to reduce high-risk 
                        behavior or increase low-risk behavior; 
                        and
                          [(vi) a description of coordination 
                        and networking efforts that exist in 
                        the community in which the institution 
                        is located for purposes of such 
                        programs.
                  [(B) Application review.--The Secretary shall 
                appoint a committee to review applications 
                submitted under this paragraph. The committee 
                may include representatives of Federal 
                departments or agencies the programs of which 
                include alcohol abuse prevention and education 
                efforts and drug abuse prevention and education 
                efforts, directors or heads (or their 
                representatives) of progressional associations 
                that focus on alcohol and drug abuse prevention 
                efforts,and non-Federal scientists who have 
backgrounds in social science evaluation and research methodology and 
in education. Decisions of the committee shall be made directly to the 
Secretary without review by any other entity in the Department.
                  [(C) Review criteria.--The committee 
                described in subparagraph (B) shall develop 
                specific review criteria for reviewing and 
                evaluating applications submitted under this 
                paragraph. The view criteria shall include--
                          [(i) measures of the effectiveness of 
                        the program of the institution, that 
                        includes changes in the campus alcohol 
                        or other drug environment or the 
                        climate and changes in alcohol or other 
                        drug use before and after the 
                        initiation of the program;
                          [(ii) measures of program 
                        institutionalization, including--
                                  [(I) an assessment of needs 
                                of the institution;
                                  [(II) the institution's 
                                alcohol and drug policies, 
                                staff and faculty development 
                                activities, drug prevention 
                                criteria, student, faculty, and 
                                campus community involvement; 
                                and
                                  [(III) whether the program 
                                will be continued after the 
                                cessation of Federal funding; 
                                and
                          [(iii) with respect to an application 
                        for an alcohol prevention program 
                        award, criteria for determining whether 
                        the institution has policies in effect 
                        that--
                                  [(I) prohibit alcoholic 
                                beverage sponsorship of 
                                athletic events, and prohibit 
                                alcoholic beverage advertising 
                                inside athletic facilities;
                                  [(II) prohibit alcoholic 
                                beverage marketing on campus, 
                                which may include efforts to 
                                ban alcohol advertising in 
                                institutional publications or 
                                efforts to prohibit alcohol-
                                related advertisements at 
                                campus events;
                                  [(III) establish or expand 
                                upon alcohol-free living 
                                arrangements for all college 
                                students;
                                  [(IV) establish partnerships 
                                with community members and 
                                organizations to further 
                                alcohol prevention efforts on 
                                campus and the areas 
                                surrounding campus; and
                                  [(V) establish innovative 
                                communications programs 
                                involving students and faculty 
                                in an effort to educate 
                                students about alcohol-related 
                                risks.
          [(4) Eligibility.--In order to be eligible to receive 
        a National Recognition Award an institution of higher 
        education shall--
                  [(A) offer an associate or baccalaureate 
                degree;
                  [(B) have established an alcohol abuse 
                prevention and education program or a drug 
                abuse prevention and education program;
                  [(C) nominate itself or be nominated by 
                others, such as professional associations or 
                student organizations, to receive the award; 
                and
                  [(D) not have received an award under this 
                subsection during the 5 academic years 
                preceding the academic year for which the 
                determination is made.
          [(5) Authorization of appropriations.--
                  [(A) In general.--There is authorized to be 
                appropriated to carry out this subsection 
                $750,000 for fiscal year 1999.
                  [(B) Availability.--Funds appropriated under 
                subparagraph (A) shall remain available until 
                expended.]
    (e) Grants Directed at Reducing Higher Education Drug and 
Alcohol Abuse.--
          (1) Authorization of program.--The Secretary may 
        award grants to eligible entities to enable the 
        entities to reduce the rate of drug use, underage 
        alcohol use, and binge drinking among students at 
        institutions of higher education.
          (2) Applications.--An eligible entity that desires to 
        receive a grant under this subsection 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--
                  (A) a description of how the eligible entity 
                will work to enhance an existing, or where none 
                exists to build a, statewide coalition;
                  (B) a description of how the eligible entity 
                will target underage students in the State;
                  (C) a description of how the eligible entity 
                intends to ensure that the statewide coalition 
                is actually implementing the purpose described 
                in paragraph (1) and moving toward the 
                achievement indicators described in paragraph 
                (4);
                  (D) a list of the members of the statewide 
                coalition or interested parties involved in the 
                work of the eligibility entity;
                  (E) a description of how the eligible entity 
                intends to work with State agencies on 
                substance abuse prevention and education;
                  (F) the anticipated impact of funds provided 
                under this subsection in reducing the rates of 
                drug abuse and underage alcohol use;
                  (G) outreach strategies, including ways in 
                which the eligible entity proposes to--
                          (i) reach out to students;
                          (ii) promote the purpose described in 
                        paragraph (1);
                          (iii) address the range of needs of 
                        the students and the surrounding 
                        communities; and
                          (iv) address community norms for 
                        underage students regarding drug and 
                        alcohol use; and
                  (H) such additional information as required 
                by the Secretary.
          (3) Uses of funds.--Each eligible entity that 
        receives a grant under this subsection shall use the 
        grant funds to carry out the activities described in 
        such entity's application submitted pursuant to 
        paragraph (2).
          (4) Accountability.--On the date on which the 
        Secretary first publishes a notice in the Federal 
        Register soliciting applications for grants under this 
        subsection, the Secretary shall include in the notice 
        achievement indicators for the program authorized under 
        this subsection. The achievement indicators shall be 
        designed--
                  (A) to measure the impact that the statewide 
                coalitions assisted under this subsection are 
                having on the institutions of higher education 
                and the surrounding communities, including 
                changes in the number of alcohol and drug-
                related abuse incidents of any kind (including 
                violations, physical assaults, sexual assaults, 
                reports of intimidation, disruptions of school 
                functions, disruptions of student studies, 
                mental health referrals, illnesses, or deaths);
                  (B) to measure the quality and accessibility 
                of the programs or information offered by the 
                statewide coalitions; and
                  (C) to provide such other measures of program 
                impact as the Secretary determines appropriate.
          (5) Supplement not supplant.--Grant funds provided 
        under this subsection shall be used to supplement, and 
        not supplant, Federal and non-Federal funds available 
        for carrying out the activities described in this 
        subsection.
          (6) Definitions.--In this subsection:
                  (A) Eligible entity.--The term ``eligible 
                entity'' means a State, an institution of 
                higher education as defined in section 102, or 
                a non-profit entity.
                  (B) Institution of higher education.--The 
                term ``institution of higher education'' has 
                the meaning given the term in section 101(a).
                  (C) State.--The term ``State'' means each of 
                the 50 States, the District of Columbia, and 
                the Commonwealth of Puerto Rico.
                  (D) Statewide coalition.--The term 
                ``statewide coalition'' means a coalition 
                that--
                          (i) includes--
                                  (I) institutions of higher 
                                education within a State; and
                                  (II) a nonprofit group, a 
                                community anti-drug or underage 
                                drinking prevention coalition, 
                                or another substance abuse 
                                prevention group within a 
                                State; and
                          (ii) works toward lowering alcohol 
                        abuse rates by targeting underage 
                        students at institutions of higher 
                        education throughout the State and in 
                        the surrounding communities.
                  (E) Surrounding community.--The term 
                ``surrounding community'' means the community--
                          (i) that surrounds an institution of 
                        higher education participating in a 
                        statewide coalition;
                          (ii) where the students from the 
                        institution of higher education take 
                        part in the community; and
                          (iii) where students from the 
                        institution of higher education live in 
                        off-campus housing.
                  (7) Administrative expenses.--Not more than 5 
                percent of a grant awarded under this 
                subsection may be expended for administrative 
                expenses.
                  (8) Authorization of appropriations.--There 
                are authorized to be appropriated to carry out 
                this subsection such sums as may be necessary 
                for fiscal year 2006 and each of the 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] 2006 and for each of 
        the 4 succeeding fiscal years to pay obligations 
        incurred prior to 1967 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-1996 part c of title vii.--
        There are authorized to be appropriated such sums as 
        may be necessary for fiscal year [1999] 2006 and for 
        each of the 4 succeeding fiscal years to pay 
        obligations incurred prior to the date of enactment of 
        the Higher Education Amendments of 1998 under part C of 
        title VII, as such part was in effect during the 
        period--
                  (A) after the effective date of the Higher 
                Education Amendments of 1992; and
                  (B) prior to the date of enactment of the 
                Higher Education Amendments of 1998.

           *       *       *       *       *       *       *


                    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 methodologist.-- * * *

           *       *       *       *       *       *       *

          (3) Information to institutions.--The Commissioner of 
        Education Statistics shall--
                  (A) develop a standard definition for the 
                following data elements:
                          (i) * * *

           *       *       *       *       *       *       *

                  (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] 
                authorizing committees of those definitions; 
                and

           *       *       *       *       *       *       *

    [(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.]
    (b) College Consumer Information.--
          (1) In general.--The Secretary shall make available 
        to the public the information described in paragraph 
        (2), in a form that enables the public to compare the 
        information among institutions of higher education. 
        Such information shall be made available for each of 
        the categories described in paragraph (3) and updated 
        annually.
          (2) Information.--The information described in this 
        paragraph is the following:
                  (A) Tuition and fees for a first-time, full-
                time undergraduate student.
                  (B) Cost of attendance for a first-time, 
                full-time undergraduate student.
                  (C) The average annual cost of attendance for 
                a first-time, full-time undergraduate student 
                for the preceding periods of 5 and 10 academic 
                years preceding the year for which the 
                information is made available under this 
                subsection, or if data are not available for 
                such academic years, data for as many of such 
                academic years as are available.
                  (D) The percentage of full-time undergraduate 
                students receiving financial assistance, 
                including--
                          (i) Federal grants;
                          (ii) State and local grants;
                          (iii) institutional grants; and
                          (iv) loans to students.
                  (E) The average amount of financial aid 
                received by students from sources described in 
                clause (i) through (iv) of subparagraph (D).
                  (F) Graduation rates, as described in section 
                485(a)(1)(L).
                  (G) A ranking of the dollar and percentage 
                increases in tuition and fees for all 
                institutions of higher education for which data 
                are available in each of the categories 
                described in paragraph (3).
          (3) Categories.--The categories described in this 
        paragraph are as follows:
                  (A) All institutions of higher education.
                  (B) 4-year public, degree-granting, 
                institutions of higher education.
                  (C) 2-year public, degree-granting, 
                institutions of higher education.
                  (D) 4-year, nonprofit, private, degree-
                granting institutions of higher education.
                  (E) 2-year, nonprofit, private, degree-
                granting institutions of higher education.
                  (F) 4-year, for profit, private, degree-
                granting institutions of higher education.
                  (G) 2-year, for profit, private, degree-
                granting institutions of higher education.
                  (H) Less than 2-year, for-profit, private 
                institutions of higher education.
          (4) Standard definitions.--In carrying out this 
        section, the Secretary shall use the standard 
        definitions developed under subsection (a)(3).
    (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 be conducted on an annual basis and include 
        information with respect to--

           *       *       *       *       *       *       *

          (2) Evaluation.--The study shall include an 
        evaluation of--
                  (A) * * *
                  (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[.];
                  (D) the average cost of attending an 
                institution of higher education, disaggregated 
                by category, as described in subsection (b)(3);
                  (E) the average annual cost of attending an 
                institution of higher education for the periods 
                of 5 and 10 academic years preceding the year 
                for which the study is conducted (or if data 
                are not available for such academic years, data 
                for as many of such academic years as are 
                available), disaggregated by category, as 
                described in subsection (b)(3); and
                  (F) the assistance provided to institutions 
                of higher education by each State.
          (3) [Final] Annual Report.--The Commissioner of 
        Education Statistics shall submit [a report] an annual 
        report regarding the findings of the study required by 
        paragraph (1) to the appropriate committees of Congress 
        [not later than September 30, 2002] and the public.
          [(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.]
          (4) Higher education cost index.--The Bureau of Labor 
        Statistics, in consultation with the Commissioner of 
        Education Statistics, shall develop a higher education 
        cost index that tracks inflation changes in the 
        relevant costs associated with higher education.

           *       *       *       *       *       *       *


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


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

          (a) Establishment and Purpose.--
          (1) Establishment.--There is established in the 
        Department a Performance-Based Organization (hereafter 
        referred to as the ``PBO'') which shall be a discrete 
        management unit responsible for managing the 
        [operational] administrative and oversight functions 
        supporting the program authorized under title IV of 
        this Act, as specified in subsection (b).
          (2) Purposes.--The purposes of the PBO are--
                  (A) to improve service to students and other 
                participants in the student financial 
                assistance programs authorized under title IV, 
                including making those programs more 
                understandable to students and their parents;
                  (B) * * *
                  (C) * * *
                  (D) to provide greater flexibility in the 
                management [of the operational functions] and 
                adminstration of the Federal students financial 
                assistance programs;

           *       *       *       *       *       *       *

    (b) General Authority.--
          (1) Authority of secretary.--* * *
                  (A) request the advice of, and work in 
                cooperation with, the Chief Operating Officer 
                in developing regulations, policies, 
                administrative guidance, or procedures 
                affecting [the information systems administered 
                by the PBO, and other functions performed by 
                the PBO] the Federal student financial 
                assistance programs authorized under title IV;
                  (B) * * *
                  [(C) assist the Chief Operating Officer in 
                identifying goals for the administration and 
                modernization of the delivery system for 
                student financial assistance under title IV.]
                  (C) assist the Chief Operating Officer in 
                identifying goals for--
                          (i) the administration of the systems 
                        used to administered the Federal 
                        student financial assistance programs 
                        authorized under title IV; and
                          (ii) the updating of such systems to 
                        current technology.
          (2) PBO functions.--Subject to paragraph (1), the PBO 
        shall be responsible for [administration of the 
        information and financial systems that support] the 
        administration of Federal student financial assistance 
        programs authorized under this title, excluding the 
        development of policy relating to such programs but 
        including the following:
                  (A) The administrative, accounting and 
                financial management functions [of the delivery 
                system for Federal student assistance] for the 
                Federal student assistance programs authorized 
                under title IV, including--
                          [(i) the collection, processing and 
                        transmission of applicant data to 
                        students, institutions and authorized 
                        third parties, as provided for in 
                        section 483;
                          [(ii) design and technical 
                        specifications for software development 
                        and systems supporting the delivery of 
                        student financial assistance under 
                        title IV:]
                          (i) the collection, processing, and 
                        transmission of data to students, 
                        institutions, lenders, State agencies 
                        and other authorized parties;
                          (ii) the design and technical 
                        specifications for software development 
                        and procurement for systems supporting 
                        the student financial assistance 
                        programs authorized under title IV;
                          (iii) all software and hardware 
                        acquisitions and all information 
                        technology contracts related to the 
                        [delivery] administration and 
                        management of student financial 
                        assistance under title IV;
                          (iv) all aspects of contracting for 
                        the information and financial systems 
                        supporting the student financial 
                        assistance programs under this title; 
                        [and]
                          (v) providing all customer service, 
                        training, and user support related to 
                        [systems that support those programs.] 
                        the administration of the Federal 
                        student assistance programs authorized 
                        under title IV; and
                          (vi) ensuring the integrity of the 
                        student assistance programs authorized 
                        under title IV.
                  (B) Annual development of a budget for the 
                [operations and services] activities and 
                functions of the PBO, in consultation with the 
                Secretary, and for consideration and inclusion 
                in the Department's annual budget submission.

           *       *       *       *       *       *       *

    (c) Performance Plan and Report.--
          (1) Performance plan
                  (A) In general.-- * * *
                  (B) * * *
                  (C) * * *
                          (i) * * *
                          (ii) * * *
                          (iii) Improvement and integration of 
                        support systems.--Improving and 
                        integrating the [information and 
                        delivery] systems that support those 
                        programs.
                          (iv) Delivery and information 
                        system.--[Developing an] Developing 
                        open, common, and integrated [delivery 
                        and information system] systems for 
                        programs authorized under this title.
                          (v) * * *
          (2) Annual report.-- * * *
                  (A) An independent financial audit of the 
                expenditures of both the PBO and the programs 
                administered by the PBO.
                  (B) Financial and performance requirements 
                applicable to the PBO under the Chief Financial 
                [Officer] Officers Act of 1990 and the 
                Government Performance and Results Act of 1993.

           *       *       *       *       *       *       *

          (3) Consultation with stakeholders.--The Chief 
        Operating Officer, in preparing the report described in 
        paragraph (2), shall establish appropriate means to 
        consult with students, borrowers, institutions, 
        lenders, guaranty agencies, secondary markets, and 
        others involved in the delivery system of student aid 
        under this title--

           *       *       *       *       *       *       *

    (d) Chief Operating Officer.--
          (1) Appointment.--The management of the PBO shall be 
        vested in a Chief Operating Officer who shall be 
        appointed by the Secretary to a term of not less than 3 
        and not more than 5 years, and compensated without 
        regard to chapters 33, 51, and 53 of title 5, United 
        States Code. [The Secretary shall appoint the Chief 
        Operating Officer within 6 months after the date of 
        enactment of the Higher Education Amendments of 1998.] 
        The appointment shall be made on the basis of 
        demonstrated management ability and expertise in 
        information technology, including experience with 
        financial systems, and without regard to political 
        affiliation or activity.

           *       *       *       *       *       *       *

          (4) Performance agreement.--
                  (A) In general.-- * * *
                  (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.
          (5) Compensation.--
                  (A) In general.-- * * *
                  (B) Bonus.--In addition, the Chief Operating 
                Officer may receive a bonus in an amount that 
                does not exceed 50 percent of such annual rate 
                of basic pay, based upon the Secretary's 
                evaluation of the Chief Operating Officer's 
                performance in relation to the goals set forth 
                in the performance agreement described in 
                [paragraph (2)] paragraph (4).
                  (C) Payment.--Payment of a bonus under [this] 
                subparagraph (B) may be made to the Chief 
                Operating Officer only to the extent that such 
                payment does not cause the Chief Operating 
                Officer's total aggregate compensation in a 
                calendar year to equal or exceed the amount of 
                the President's salary under section 102 of 
                title 3, United States Code.
    (e) Senior Management.--

           *       *       *       *       *       *       *

    (f) Student Loan Ombudsman.--
          (1) Appointment.-- * * *
          (2) Public information.--The Chief Operating Officer 
        shall disseminate information about the availability 
        and functions of the Ombudsman [to borrowers] to 
        students, borrowers, and potential borrowers, as well 
        as institutions of higher education, lenders, guaranty 
        agencies, loan servicers, and other participants in 
        those student loan programs.
          (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

           *       *       *       *       *       *       *

    (g) Personnel Flexibility.--
          (1) Personnel ceilings.-- * * *
          (2) * * *
          (3) Excepted service.--The Chief Operating Officer 
        may appoint, without regard to the provisions of title 
        5, United States Code, governing appointments in the 
        competitive service, [not more than 25] technical and 
        professional employees to administer the functions of 
        the PBO. These employees 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.
    (h) Establishment of a Fair and Equitable System for 
Measuring Staff Performance.--The PBO shall establish an annual 
performance management system, subject to compliance with title 
5, United States Code and consistent with applicable provisions 
of law and regulations, which strengthens the [organizational 
effectiveness] effectiveness of the PBO by providing for 
establishing goals or objectives for individual, group, or 
organizational performance (or any combination thereof), 
consistent with the performance plan of the PBO and its 
performance planning procedures, including those established 
under the Government Performance and Results Act of 1993, and 
communicating such goals or objectives to employees.
    [(i) Report.--The Secretary and the Chief Operating 
Officer, not later than 180 days after the date of enactment of 
the Higher Education Amendments of 1998, shall report to 
Congress on the proposed budget and sources of funding for the 
operation of the PBO.]
    [(j)](i) Authorization of Appropriations.--The Secretary 
shall allocate from funds made available under section 458 such 
funds as are appropriate to the functions assumed by the PBO. 
In addition, there are authorized to be appropriated such sums 
as may be necessary to carry out the purposes of this part[, 
including transition costs].

           *       *       *       *       *       *       *


SEC. 142. PROCUREMENT FLEXIBILITY.

    (a) Procurement Authority.-- * * *
      (b) In General.--Except as provided in this section, the 
PBO shall abide by all applicable Federal procurement laws and 
regulations when procuring property and services. The PBO 
shall--
          (1) enter into contracts [for information systems 
        supporting the programs authorized under title IV] to 
        carry out the functions set forth in section 141(b)(2); 
        [and]
          (2) obtain the services of experts and consultants 
        without regard to section 3109 of title 5, United 
        States Code and set pay in accordance with such 
        section[.]; and
          (3) through the Chief Operating Officer--
                  (A) to the maximum extent practicable, 
                utilize procurement systems that streamline 
                operations, improve internal controls, and 
                enhance management; and
                  (B) assess the efficiency of such systems and 
                assess such systems' ability to meet PBO 
                requirements.
    (c) Service Contracts.--
          (1) Performance-based servicing contracts.-- * * *
          [(2) Fee for service arrangements.--The Chief 
        Operating Officer shall, when appropriate and 
        consistent with the purposes of the PBO, acquire 
        services related to the title IV delivery system from 
        my entity that has the capability and capacity to meet 
        the requirements for the system. The Chief Operating 
        Officer is authorized to pay fees that are equivalent 
        to those paid by other entities to an organization that 
        provides an information system or service that meets 
        the requirements of the PBO, as determined by the Chief 
        Operating Officer.]
          (2) Fee for service arrangements.--The Chief 
        Operating Officer shall, when appropriate and 
        consistent with the purposes of the PBO, acquire 
        services related to the functions set forth in section 
        141(b)(2) from any entity that has the capability and 
        capacity to meet the requirements set by the PBO. The 
        Chief Operating Officer is authorized to pay fees that 
        are equivalent to those paid by other entities to an 
        organization that provides services that meet the 
        requirements of the PBO, as determined by the Chief 
        Operating Officer.
    (d) Two-Phase Source-Selection Procedures.--
          (1) In general.--The PBO may use a two-phase process 
        for selecting a source for a procurement of property or 
        services.
          (2) First phase.--The procedures for the first phase 
        of the process for a procurement are as follows:
                  (A) Publication of notice.-- * * *

           *       *       *       *       *       *       *

                  (B) Information submitted by offerors.--Each 
                offeror for the procurement shall submit basic 
                information, such as the procurement shall 
                submit basic information, such as information 
                on the offeror's qualifications, the proposed 
                conceptual approach, costs likely to be 
                associated with the proposed conceptual 
                approach, and past performance of the offeror 
                [on Federal Government contracts], together 
                with any additional information that is 
                requested by the contracting officer.

           *       *       *       *       *       *       *

    (e) Use of Simplified Procedures for Commercial Items.--* * 
*

           *       *       *       *       *       *       *

    (f) Flexible Wait Periods and Deadlines for Submission of 
Offers of Noncommercial Items.--

           *       *       *       *       *       *       *

    (g) Modular Contracting.--
         (1) In general.-- * * *
          (4) Procedures.-- * * *
                  (A) [Sole source.--]Single-source basis._
                Award of the contract on a [sole-source] 
                single-source module previously procured for 
                the system under competitive procedures or 
                procedures authorized under subparagraph (B).

           *       *       *       *       *       *       *

          (7) Simplified source-selection procedures.--The PBO 
        may award a contract under any other simplified 
        procedures prescribed by the PBO for the selection of 
        sources for the procurement of modules for a system, 
        after the first module, that are not to be procured 
        under a contract awarded on a [sole-source] single-
        source basis.
    (h) Use of Simplified Procedures for Small Business Set-
Asides for Services Other Than Commercial Items.--
          (1) Authority.-- * * *

           *       *       *       *       *       *       *

          (2) Inapplicability to certain procurements.--The 
        authority set forth in paragraph (1) may not be used 
        for--
                  (A) an award of a contract on a [sole-source] 
                single-source basis; or

           *       *       *       *       *       *       *

    (i) Guidance for Use of Authority.-- * * *

           *       *       *       *       *       *       *

    (l) Definitions.--In this section:
          (1) Commercial item.-- * * *

           *       *       *       *       *       *       *

          [(3) Sole-source basis.--The term ``sole-source'', 
        with respect to an award of a contract, means that the 
        contract is awarded to a source after soliciting an 
        offer or offers from, and negotiating with, only that 
        source.]
          (3) Single-source basis.--The term ``single-source 
        basis'', with respect to an award of a contract, means 
        that the contract is awarded to a source after 
        soliciting an offer or offers from, and negotiating 
        with, only such source (although such source is not the 
        only source in the marketplace capable of meeting the 
        need) because such source is the most advantageous 
        source for purposes of the award.

           *       *       *       *       *       *       *


                 TITLE II--TEACHER QUALITY ENHANCEMENT

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


[SEC. 201. [20 U.S.C. 1021] 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. [U.S.C. 1022] 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. [20 U.S.C. 1023] 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) Eligiblee 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. [20 U.S.C. 1024] 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 sue any such repayments to carry out additional 
activities under this section.

[SEC. 205. [20 U.S.C. 1025] ADMINISTRATIVE PROVISIONS.

    [(a) Duration; One-Time Awards; Payments.--
          [(1) Duration.--
                  (A) Eligible states and eligible 
                applicants.-- Grants awarded to eligible States 
                and eligible applicantsunder 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 
        applications, 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. 2056 [20 U.S.C. 1026] 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. [20 U.S.C. 1027] 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 of 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 the 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] 
        authorizing committees 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 of 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. [20 U.S.C. 1028] STATE FUNCTIONS.

    [(a) Statement 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 to 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 [20 U.S. 1029] 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 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.]

 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 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 1 or more academic 
                majors in disciplines or content areas 
                corresponding to the academic subject areas in 
                which teachers provide instruction; and
                  (B) when referring to a specific academic 
                subject area, the disciplines or content areas 
                in which academic majors are offered by the 
                arts and sciences organizational unit.
          (2) Children from low-income families.--The term 
        ``children from low-income families'' means children as 
        described in section 1124(c)(1)(A) of the Elementary 
        and Secondary Education Act of 1965.
          (3) Early childhood education program.--The term 
        ``early childhood education program'' means a Head 
        Start program or an Early Head Start program carried 
        out under the Head Start Act (42 U.S.C. 9831 et seq.), 
        a State licensed or regulated child care program or 
        school, or a State prekindergarten program that serves 
        children from birth through kindergarten and that 
        addresses the children's cognitive (including language, 
        earlyliteracy, and pre-numeracy), social, emotional, 
and physical development.
          (4) Early childhood educator.--The term ``early 
        childhood educator'' means an individual with primary 
        responsibility for the education of children in an 
        early childhood education program.
          (5) Educational service agency.--The term 
        ``educational service agency'' has the meaning given 
        such term in section 9101 of the Elementary and 
        Secondary Education Act of 1965.
          (6) Exemplary teacher.--The term ``exemplary 
        teacher'' has the meaning given such term in section 
        9101 of the Elementary and Secondary Education Act of 
        1965.
          (7) High-need local educational agency.--The term 
        ``high-need local educational agency'' means a local 
        educational agency or educational service agency--
                  (A)(i) that serves not fewer than 10,000 
                children from low-income families;
                  (ii) for which not less than 20 percent of 
                the children served by the agency are children 
                from low-income families; 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 or 8, as determined by the Secretary; 
                and
                  (B)(i) for which there is a high percentage 
                of teachers not teaching in the academic 
                subject areas or grade levels in which the 
                teachers were trained to teach; or
                  (ii) for which there is a high teacher 
                turnover rate or a high percentage of teachers 
                with emergency, provisional, or temporary 
                certification or licensure.
          (8) Highly qualified.--The term ``highly qualified'' 
        has the meaning given such term in section 9101 of the 
        Elementary and Secondary Education Act of 1965 and, 
        with respect to special education teachers, in section 
        602 of the Individuals with Disabilities Education Act.
          (9) Professional development.--The term 
        ``professional development'' has the meaning given such 
        term in section 9101 of the Elementary and Secondary 
        Education Act of 1965.
          (10) 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.
          (11) 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.
          (12) Teacher mentoring.--The term ``teacher 
        mentoring'' means mentoring of teachers through an 
        established or implemented program--
                  (A) that includes qualifications for mentors;
                  (B) that provides training for mentors;
                  (C) that provides regular and ongoing 
                opportunities for mentors and mentees to 
                observe each other's teaching methods in 
                classroom settings during the school day;
                  (D) in which the mentoring is provided by a 
                colleague who teaches in the same field, grade, 
                or subject as the mentee; and
                  (E) that includes--
                          (i) common planning time or regularly 
                        scheduled collaboration with teachers 
                        in the teachers' same field, grade, or 
                        subject area; and
                          (ii) additional professional 
                        development opportunities.
          (13) Teaching skills.--The term ``teaching skills'' 
        means the ability to--
                  (A) increase student achievement;
                  (B) effectively convey and explain academic 
                subject matter;
                  (C) employ strategies that--
                          (i) are based on scientifically based 
                        research;
                          (ii) are specific to academic subject 
                        matter; and
                          (iii) focus on identification and 
                        tailoring of academic instruction to 
                        students' specific learning needs, 
                        particularly students with 
                        disabilities, students who are limited 
                        English proficient, and students who 
                        are gifted and talented;
                  (D) conduct ongoing assessment of student 
                learning;
                  (E) effectively manage a classroom;
                  (F) communicate and work with parents and 
                guardians, and involve parents and guardians in 
                their children's education; and
                  (G) in the case of an early childhood 
                educator, use age appropriate strategies and 
                practices for children in early childhood 
                education programs.

SEC. 202. STATE GRANTS.

  (a) In General.--From amounts made available under section 
209(a)(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 subsections (d) and (e).
  (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 or licensure 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 other applicable State entities 
        (including the State agency responsible for early 
        childhood education), as appropriate, with respect to 
        the activities assisted under this section, including 
        the development of the grant application and 
        implementation of the activities.
          (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 eligible State is in full 
        compliance with--
                  (A) sections 206(b) and 207; and
                  (B) if applicable, sections 207(b) and 208, 
                as such sections were in effect on the day 
                before the date of enactment of the Higher 
                Education Amendments of 2005;
          (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 this section;
          (5) describes how funded activities will--
                  (A) reduce shortages, if any, of--
                          (i) highly qualified general and 
                        special education teachers, including 
                        in low-income urban and rural areas and 
                        in high-need academic subject areas; 
                        and
                          (ii) fully competent early childhood 
                        educators; and
                  (B) be consistent with State, local, and 
                other education reform activities that promote 
                effective teaching skills and student academic 
                achievement and consistent with State early 
                learning standards for early childhood 
                education programs, including how funded 
                activities will support carrying out the 
                applicable requirements of the eligible State 
                under sections 1111 and 1119 of the Elementary 
                and Secondary Education Act of 1965, and 
                section 612(a)(14) of the Individuals with 
                Disabilities Education Act;
          (6) contains an assurance that the eligible State 
        will carry out each of the intended uses of grant funds 
        described in paragraph (3);
          (7) describes the eligible State's--
                  (A) current capacity to measure the 
                effectiveness of teacher preparation programs 
                and professional development activities within 
                the State using available statewide data;
                  (B) activities to enhance or expand the 
                integration of existing data systems to better 
                measure the effectiveness of teacher 
                preparation programs and professional 
                development activities within the State; or
                  (C) if such data systems do not exist, plans 
                for the development of an integrated statewide 
                data system to measure the effectiveness of 
                teacher preparation programs and professional 
                development activities within the State using 
                available statewide data; and
          (8) contains such other information and assurances as 
        the Secretary may require.
  (d) Required 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 theElementary and Secondary 
Education Act of 1965 and subsections (a) and (b) of section 654 of the 
Individuals with Disabilities Education Act, and to ensure that current 
and prospective teachers are highly qualified, by carrying out each of 
the following activities:
          (1) Reforms.--Ensuring that all teacher preparation 
        programs in the State are preparing current or 
        prospective teachers to become highly qualified, to 
        understand scientifically based research and its 
        applicability, and to use technology effectively, 
        including use of instructional techniques to improve 
        student academic achievement, by assisting such 
        programs--
                  (A) in retraining faculty;
                  (B) in designing (or redesigning) teacher 
                preparation programs so that such programs--
                          (i) are based on rigorous academic 
                        content and scientifically based 
                        research (including scientifically 
                        based reading research), and aligned 
                        with challenging State academic content 
                        standards;
                          (ii) promote effective teaching 
                        skills; and
                          (iii) promote understanding of 
                        effective instructional strategies for 
                        students with special needs, including 
                        students with disabilities, students 
                        who are limited English proficient, and 
                        students who are gifted and talented;
                  (C) in ensuring collaboration with 
                departments, programs, or units outside of the 
                teacher preparation program in relevant 
                academic content areas to ensure a successful 
                combination of training in both teaching and 
                such content;
                  (D) in developing high-quality, rigorous 
                clinical experiences (that include student 
                teaching experience) in which students 
                participate while enrolled in a teacher 
                preparation program, lasting not less than 1 
                term, through dissemination of best practices, 
                technical assistance, or other relevant 
                activities; and
                  (E) in collecting and using data, in 
                collaboration with institutions of higher 
                education, schools, and local educational 
                agencies, on teacher retention rates, by 
                school, to evaluate and strengthen the 
                effectiveness of the State's teacher support 
                system.
          (2) Certification or licensure requirements.--
        Reforming teacher certification or licensure 
        requirements to ensure that--
                  (A) teachers have the academic content 
                knowledge and teaching skills in the academic 
                subject areas that the teachers teach that are 
                necessary to help students meet challenging 
                State student academic achievement standards, 
                as required under section 1111(b)(1) of the 
                Elementary and Secondary Education Act of 1965;
                  (B) such requirements are aligned with 
                challenging State academic content standards, 
                as required under section 1111(b)(1) of the 
                Elementary and Secondary Education Act of 1965;
                  (C) teacher certification and licensure 
                assessments are--
                          (i) used for purposes for which such 
                        assessments are valid and reliable;
                          (ii) consistent with relevant, 
                        professional, and technical standards; 
                        and
                          (iii) aligned with the reporting 
                        requirements of sections 205 and 206; 
                        and
                  (D) such requirements for high-need academic 
                subject areas (such as reading, mathematics, 
                science, and foreign language, including less 
                commonly taught languages) and high-need areas 
                (such as special education, language 
                instruction educational programs, and early 
                childhood education) exist and reflect 
                qualifications to help students meet high 
                standards, which may include the development of 
                a State test for such areas.
          (3) Evaluation.--
                  (A) Annual evaluation.--An eligible State 
                that receives a grant under this section shall 
                evaluate annually the effectiveness of teacher 
                preparation programs and professional 
                development activities within the State. To the 
                extent practicable, such evaluation shall 
                examine--
                          (i) teachers' contributions 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; and
                          (ii) teacher mastery of the academic 
                        subject matter the teachers teach.
                  (B) Public reporting.--The eligible State 
                shall make the information described in 
                subparagraph (A) widely available through 
                public means, such as posting on the Internet, 
                distribution to the media, and distribution 
                through public agencies, except such reporting 
                shall notbe made in a case in which the 
reporting of the data would reveal personally identifiable information 
about a teacher or student.
                  (C) Better measurement of effectiveness.--
                          (i) In general.--An eligible State 
                        that receives a grant under this 
                        section and does not have the capacity 
                        to measure the effectiveness of teacher 
                        preparation programs and professional 
                        development activities within the State 
                        using available statewide data, shall 
                        use a portion of funds received under 
                        this section to enhance or expand the 
                        integration of existing data systems, 
                        as described in subsection (c)(7)(B), 
                        or develop an integrated statewide data 
                        system, as described in subsection 
                        (c)(7)(C), to better measure and 
                        provide information that will improve 
                        the effectiveness of teacher 
                        preparation programs on student 
                        learning and achievement, and the 
                        impact of pre-service and ongoing 
                        professional development on teacher 
                        placement and retention.
                          (ii) Technical quality; student 
                        privacy; funds from other sources.--In 
                        carrying out clause (i), the eligible 
                        State shall ensure--
                                  (I) the technical quality of 
                                the data system to maximize the 
                                validity, reliability, and 
                                accessibility of the data;
                                  (II) that student privacy is 
                                protected and that individually 
                                identifiable information about 
                                students, their achievements, 
                                and their families remains 
                                confidential, in accordance 
                                with the Family Educational 
                                Rights and Privacy Act of 1974; 
                                and
                                  (III) that funds provided 
                                under this section are used to 
                                supplement State efforts to 
                                enhance or expand the 
                                integration of existing data 
                                systems or to develop an 
                                integrated statewide data 
                                system.
  (e) Allowable Uses of Funds.--An eligible State that receives 
a grant under this section may 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 and subsections (a) and (b) of 
section 654 of the Individuals withDisabilities Education Act, 
and to ensure that current and future teachers are highly qualified, by 
carrying out any of the following activities:
          (1) Alternatives to traditional preparation for 
        teaching and state certification or licensure.--
        Providing prospective teachers with alternative routes 
        to State certification or licensure and alternative 
        route programs to become highly qualified teachers 
        through--
                  (A) innovative approaches that reduce 
                unnecessary barriers to State certification or 
                licensure while producing highly qualified 
                teachers;
                  (B) a selective means for admitting 
                individuals into such programs that includes 
                passage of State approved teacher examinations 
                in appropriate subject areas;
                  (C) programs that help prospective teachers 
                develop effective teaching skills and 
                strategies through knowledge of research-based 
                information on the learning process and 
                learning practices;
                  (D) programs that provide support to teachers 
                during the teachers' initial years in the 
                profession; and
                  (E) alternative routes to State certification 
                or licensure of teachers for qualified 
                individuals, including mid-career professionals 
                from other occupations, paraprofessionals, 
                former military personnel, and recent college 
                graduates with records of academic distinction.
          (2) Innovative programs.--Planning and implementing 
        innovative programs to enhance the ability of 
        institutions of higher education, including charter 
        colleges of education, or university and local 
        educational agency partnership schools, to prepare 
        highly qualified teachers, which programs shall--
                  (A) permit flexibility in the manner in which 
                the institution of higher education meets State 
                requirements as long as graduates, during the 
                graduates' initial years in the profession, 
                increase student academic achievement;
                  (B) provide a description in the application 
                of long-term data gathered from teachers' 
                performance over multiple years in the 
                classroom regarding the teachers' ability to 
                increase student academic achievement;
                  (C) ensure high-quality preparation of 
                teachers from underrepresented groups;
                  (D) create performance measures that can be 
                used to document the effectiveness of 
                innovativemethods for preparing highly 
qualified teachers; and
                  (E) develop frameworks for exemplary 
                induction programs informed by research and 
                best practices.
          (3) Teacher recruitment and retention.--Undertaking 
        activities that develop and implement effective 
        mechanisms to ensure that local educational agencies 
        and schools are able to recruit and retain highly 
        qualified teachers, which may include the following 
        activities:
                  (A) Performance based compensation.--
                Assisting local educational agencies in 
                developing--
                          (i) performance systems that reward 
                        teachers who increase student academic 
                        achievement and take on additional 
                        responsibilities, such as teacher 
                        mentoring and serving as master 
                        teachers; and
                          (ii) strategies that provide 
                        differential and bonus pay in high-need 
                        local educational agencies to recruit 
                        and retain--
                                  (I) principals;
                                  (II) highly qualified 
                                teachers who teach in high-need 
                                academic subject areas (such as 
                                reading, mathematics, science, 
                                and foreign language, including 
                                less commonly taught 
                                languages);
                                  (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;
                                  (IV) highly qualified special 
                                education teachers;
                                  (V) highly qualified teachers 
                                specializing in teaching 
                                children who are limited 
                                English proficient; and
                                  (VI) highly qualified 
                                teachers in low-income urban 
                                and rural schools or districts.
                  (B) Additional mechanisms.--Developing and 
                implementing effective mechanisms to ensure 
                that local educational agencies and schools are 
                able to--
                          (i) address needs identified with 
                        respect to--
                                  (I) underrepresented groups;
                                  (II) high-need academic 
                                subject areas (such as reading, 
                                mathematics, science, and 
                                foreign language, including 
                                less commonly taught 
                                languages);
                                  (III) high-need areas (such 
                                as special education, language 
                                instruction educational 
                                programs for limited English 
                                proficient students, and early 
                                childhood education);
                                  (IV) high-need communities, 
                                such as rural and urban areas; 
                                and
                                  (V) high-need schools, 
                                including schools with high 
                                rates of teacher turnover;
                          (ii) offer teacher mentoring for new 
                        teachers during such teachers' initial 
                        years of teaching; and
                          (iii) provide access to ongoing 
                        professional development and innovative 
                        training opportunities for teachers and 
                        administrators.
                  (C) Teacher advancement.--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.
                  (D) Recruit qualified professionals.--
                Developing recruitment programs or assisting 
                local educational agencies in--
                          (i) recruiting qualified 
                        professionals from other fields, 
                        including highly qualified 
                        paraprofessionals (as defined in 
                        section 2102 of the Elementary and 
                        Secondary Education Act of 1965); and
                          (ii) providing such professionals 
                        with alternative routes to teacher 
                        certification or licensure.
                  (E) Underrepresented populations.--Providing 
                increased opportunities for minorities, 
                individuals with disabilities, and other 
                individuals underrepresented in the teaching 
                profession to become highly qualified teachers.
                  (F) Rural education recruitment and retention 
                programs.--Making grants to rural school 
                districts, or a consortia of rural school 
                districts, to implement--
                          (i) teacher recruitment strategies, 
                        which may include tuition assistance, 
                        studentloan forgiveness, housing 
assistance, bonus pay, and other effective approaches;
                          (ii) teacher retention strategies, 
                        such as mentoring programs and ongoing 
                        opportunities for professional growth 
                        and advancement; and
                          (iii) partnerships with institutions 
                        of higher education designed to--
                                  (I) prepare beginning 
                                teachers to teach; and
                                  (II) assist teachers 
                                (including teachers who teach 
                                multiple subjects) to become 
                                highly qualified.
          (4) Teacher scholarships and support.--Providing--
                  (A) scholarships to help students, such as 
                individuals who have been accepted by, or who 
                are enrolled in, a program of undergraduate 
                education or initial teacher preparation at an 
                institution of higher education, pay the costs 
                of tuition, room, board, and other expenses of 
                completing a teacher preparation program, if--
                          (i) the Secretary establishes such 
                        requirements as the Secretary 
                        determines necessary to ensure that 
                        recipients of scholarships under this 
                        section who complete teacher 
                        preparation programs--
                                  (I) subsequently teach in an 
                                early childhood education 
                                program or a high-need local 
                                educational agency for a period 
                                of time equivalent to the 
                                period of time for which the 
                                recipient received scholarship 
                                assistance, plus an additional 
                                1 year; or
                                  (II) repay the amount of the 
                                scholarship if the recipient 
                                does not teach as described in 
                                subclause (I); and
                          (ii) the eligible State provides an 
                        assurance that the eligible State will 
                        recruit minority students to become 
                        highly qualified teachers;
                  (B) support services, if needed, to enable 
                scholarship recipients to complete 
                postsecondary education programs, or to move 
                from a career outside of the field of education 
                into a teaching career; and
                  (C) follow-up services to former scholarship 
                recipients during the recipients' initial years 
                of teaching.
          (5) Teacher removal.--Developing and implementing 
        effective mechanisms to ensure that local educational 
        agencies and schools are able to expeditiously remove 
        incompetent or unqualified teachers consistent with 
        procedures to ensure due process for the teachers.
          (6) 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 subject matter the 
                teachers teach, as a result of such programs.
          (7) Early childhood educators.--Developing strategies 
        to improve and expand teacher preparation programs for 
        early childhood educators to teach in early childhood 
        education programs.
          (8) Professional development.--Developing and 
        enhancing high-quality professional development, 
        instructional materials, and relevant educational 
        materials.
          (9) Technology.--Assisting teachers to use technology 
        effectively, including use for instructional techniques 
        and the collection, management, and analysis of data to 
        improve teaching, learning, and decision making for the 
        purpose of increasing student academic achievement.
          (10) Areas of instructional shortage.--Increasing the 
        number of--
                  (A) teachers in the classroom providing 
                instruction in high-need academic subject areas 
                (such as reading, mathematics, science, and 
                foreign language, including less commonly 
                taught languages) and high-need areas (such as 
                special education, language instruction 
                educational programs for limited English 
                proficient students, and early childhood 
                education); and
                  (B) special education faculty dedicated to 
                preparing highly qualified special education 
                teachers at institutions of higher education.
          (11) Technical assistance.--Providing technical 
        assistance to low-performing programs of teacher 
        preparation within institutions of higher education 
        identified under section 207(a).
          (12) Evaluation support.--Performing data collection, 
        evaluation, and reporting to meet the requirements of 
        subsection (d)(3).
          (13) Professional advancement.--Developing a 
        professional advancement system to--
                  (A) initiate or enhance a system in which 
                highly qualified teachers who pursue advanced 
                licensure levels are required to demonstrate 
                increased competencies and undertake increased 
                responsibilities for increased compensation as 
                the teachers progress through levels 
                established by the State; or
                  (B) provide opportunities for professional 
                growth, including through--
                          (i) a nationally recognized advance 
                        credentialing system; or
                          (ii) special certification in 
                        advanced placement or international 
                        baccalaureate content, teaching gifted 
                        and talented students, and pedagogy.
  (f) 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 activities under this section.

SEC. 203. PARTNERSHIP GRANTS.

  (a) Grants.--From amounts made available under section 
209(a)(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 (e) and (f).
  (b) Definitions.--
          (1) Eligible partnership.--
                  (A) In general.--In this part, the term 
                ``eligible partnership'' means an entity that 
                shall include--
                          (i) a partner institution;
                          (ii) a school of arts and sciences;
                          (iii) a high-need local educational 
                        agency and a school or a consortium of 
                        schools served by the agency; and
                          (iv) at least 1 individual or entity 
                        described in subparagraph (B).
                  (B) Additional individuals and entities.--In 
                this part, the term ``eligible partnership'' 
                means an entity that shall include at least 1 
                of the following:
                          (i) A Governor.
                          (ii) A State educational agency.
                          (iii) A State board of education.
                          (iv) A State agency for higher 
                        education.
                          (v) A school or department within the 
                        partner institution focusing on 
                        education,psychology, human 
development, or a department with comparable expertise in the 
disciplines of teaching, learning, and child and adolescent 
development.
                          (vi) An institution of higher 
                        education or a department within such 
                        institution, not described in 
                        subparagraph (A).
                          (vii) A public charter school.
                          (viii) A public or private elementary 
                        school or secondary school.
                          (ix) A public or private nonprofit 
                        educational organization.
                          (x) A business.
                          (xi) A science-, mathematics-, or 
                        technology-oriented entity.
                          (xii) An early childhood education 
                        program.
                          (xiii) A teacher organization.
                          (xiv) An educational service agency.
                          (xv) A consortium of local 
                        educational agencies.
                          (xvi) A nonprofit telecommunications 
                        entity.
          (2) Partner institution.--In this section, the term 
        ``partner institution'' means an institution of higher 
        education, which may include a 2-year institution of 
        higher education offering a dual program with a 4-year 
        institution of higher education, that has a teacher 
        preparation program--
                  (A) whose graduates 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 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 
                                206(b); and
                                  (II) using the State report 
                                card on teacher preparation 
                                required under section 206(b), 
                                after the first publication of 
                                such report card and for every 
                                year thereafter; or
                  (B) that requires all the students of the 
                program to meet high academic standards and 
                participate in intensive clinical experience, 
                and--
                          (i) in the case of secondary school 
                        candidates, to successfully complete--
                                  (I) a major or its equivalent 
                                in coursework in the academic 
                                subject area in which the 
                                candidate intends to teach; or
                                  (II) a related major in the 
                                academic subject area in which 
                                the candidate intends to teach;
                          (ii) in the case of elementary school 
                        candidates, to successfully complete--
                                  (I) an academic major or its 
                                equivalent in coursework in the 
                                arts and sciences; or
                                  (II) a major in elementary 
                                education with a significant 
                                amount of coursework in the 
                                arts and sciences; and
                          (iii) in the case of early childhood 
                        educators, to become fully competent 
                        and meet degree requirements, as 
                        established by the State.
  (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 contain--
          (1) a needs assessment of all the partners with 
        respect to the preparation, induction, and professional 
        development of early childhood educators, general and 
        special education teachers, and principals;
          (2) a description of the extent to which the teacher 
        preparation program of the eligible partnership 
        prepares new teachers with effective teaching skills;
          (3) a description of how the eligible partnership 
        will coordinate with other teacher preparation or 
        professional development programs, including those 
        funded under the Elementary and Secondary Education Act 
        of 1965 and the Individuals with Disabilities Education 
        Act, and how the activities of the eligible partnership 
        will be consistent with State, local, and other 
        education reform activities that promote student 
        achievement;
          (4) a resource assessment that describes the 
        resources available to the eligible partnership, the 
        intended use of the grant funds (including a 
        description of how the grant funds will be fairly 
        distributed), and the commitment of the resources of 
        the eligible partnership to the activities assisted 
        under this part, including financial support, faculty 
        participation, time commitments, and continuation of 
        the activities when the grant period ends;
          (5) a description of--
                  (A) how the eligible partnership will meet 
                the purposes of this part;
                  (B) how the eligible partnership will carry 
                out the activities required under subsection 
                (e) and any permissible activities under 
                subsection (f);
                  (C) the eligible partnership's evaluation 
                plan pursuant to section 205(b);
                  (D) how the eligible partnership will align 
                the teacher preparation program with the 
                challenging student academic achievement 
                standards, State early learning standards for 
                early childhood education programs (where 
                applicable), andchallenging academic content 
standards, established by the State in which the partnership is 
located;
                  (E) how faculty of the teacher preparation 
                program at the partner institution will serve, 
                over the period of the grant, with highly 
                qualified teachers in the classrooms of the 
                high-need local educational agency included in 
                the eligible partnership;
                  (F) how the eligible partnership will ensure 
                that teachers, principals, and superintendents 
                in all schools (including private schools, as 
                appropriate) located in the geographic areas 
                served by an eligible partnership under this 
                section are provided information about the 
                activities carried out with funds under this 
                section, including through electronic means;
                  (G) how the eligible partnership will design, 
                implement, or enhance the clinical program 
                component, including promoting close 
                supervision of student teachers by faculty of 
                the teacher preparation program and mentor 
                teachers while in the program and during the 
                student teachers' initial years of teaching if 
                hired by schools included in the eligible 
                partnership;
                  (H) how the eligible partnership will develop 
                or enhance an induction program that includes 
                high-quality professional development to 
                support new teachers during the teachers' 
                initial years of teaching that includes teacher 
                mentoring and collaborating with teachers in 
                the same grade, department, or field; and
                  (I) how the eligible partnership will 
                collect, analyze, use, and disseminate data on 
                the retention of all teachers in schools 
                located in the geographic areas served by the 
                eligible partnership to evaluate the 
                effectiveness of its teacher support system; 
                and
          (6) an assurance that the eligible partnership will 
        carry out each of the activities described in paragraph 
        (5).
  (d) Consultation.--
          (1) In general.--Members of an eligible partnership 
        that receives a grant under this section shall engage 
        in regular consultation throughout the development and 
        implementation of programs and activities under this 
        section.
          (2) Regular communication.--To ensure timely and 
        meaningful consultation, regular communication shall 
        occur among all members of the eligiblepartnership, 
including the high-need local educational agency. Such communication 
shall continue throughout the implementation of the grant and the 
assessment of programs and activities under this section.
          (3) Written consent.--The Secretary may approve 
        changes in grant activities only if a written consent 
        signed by all members of the eligible partnership is 
        submitted to the Secretary.
  (e) Required Uses of Funds.--An eligible partnership that 
receives a grant under this section shall use the grant funds 
to carry out each of the following activities:
          (1) Reforms.--Ensuring that each teacher preparation 
        program and each early childhood educator preparation 
        program, where applicable, of the eligible partnership 
        that is assisted under this section addresses the needs 
        identified in the needs assessment of the partnership 
        and is preparing current or prospective teachers to be 
        highly qualified, and, where applicable, early 
        childhood educators to be fully competent, to 
        understand scientifically based research and its 
        applicability, and to use technology effectively, 
        including use of instructional techniques to improve 
        student academic achievement, and in the case of early 
        childhood educators, techniques to improve children's 
        cognitive, social, emotional, and physical development, 
        by assisting such programs--
                  (A) in retraining faculty;
                  (B) in designing (or redesigning) teacher 
                preparation programs so that such programs--
                          (i) are based on rigorous academic 
                        content and scientifically based 
                        research (including scientifically 
                        based reading research), and aligned 
                        with challenging State academic content 
                        standards, as required under section 
                        1111(b)(1) of the Elementary and 
                        Secondary Education Act of 1965, and 
                        for early childhood educators, aligned 
                        with State early learning standards;
                          (ii) promote effective teaching 
                        skills;
                          (iii) promote understanding of 
                        effective instructional strategies for 
                        students with special needs, including 
                        students with disabilities, students 
                        who are limited English proficient, 
                        students who are gifted and talented, 
                        and children in early childhood 
                        education programs; and
                          (iv) promote high-quality 
                        mathematics, science, and foreign 
                        language instruction, where applicable;
                  (C) in ensuring collaboration with 
                departments, programs, or units outside of the 
                teacher preparation program in all academic 
                content areas to ensure a successful 
                combination of training in both teaching and 
                such content; and
                  (D) in developing high-quality, rigorous 
                clinical experiences, lasting not less than 1 
                term, through dissemination of best practices, 
                technical assistance, or other relevant 
                activities.
          (2) Clinical experience and interaction.--Improving 
        sustained and high-quality preservice clinical 
        experiences, including--
                  (A) providing teacher mentoring; and
                  (B) 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 
                and release time, for such interaction.
          (3) Support programs for new teachers.--Creating a 
        program to support new teachers during the initial 
        years of teaching (for not less than 1 year and not 
        more than 3 years). Such program shall promote 
        effective teaching skills and may include the following 
        components:
                  (A) Development of skills in educational 
                interventions based on scientifically based 
                research.
                  (B) Development of knowledge of 
                scientifically based research on teaching and 
                learning.
                  (C) Inclusion of faculty who model the 
                integration of research and practice in the 
                classroom.
                  (D) Opportunities for--
                          (i) high-quality teacher mentoring; 
                        and
                          (ii) additional professional 
                        development, dissemination of evidence-
                        based research on educational 
                        practices, and professional development 
                        activities.
                  (E) Interdisciplinary collaboration among 
                exemplary teachers, faculty, researchers, and 
                other staff who prepare new teachers in the 
                learning process and the assessment of 
                learning.
  (f) Allowable Uses of Funds.--An eligible partnership that 
receives a grant under this section may use the grant funds to 
carry out any of the following activities that address the 
needs identified in the needs assessment:
          (1) Alternatives to traditional preparation for 
        teaching and state certification or licensure.--The 
        activity described in section 202(e)(1).
          (2) Dissemination and coordination.--Broadly 
        disseminating information on effective practices used 
        by the eligible partnership, and coordinating with the 
        recruitment and training activities of the Governor, 
        State board of education, State agency for higher 
        education, State agency responsible for early childhood 
        education, and State educational agency, as 
        appropriate.
          (3) Innovative programs.--Developing innovative 
        programs designed to provide graduates of programs 
        funded under this title with opportunities to continue 
        their education through supports and opportunities to 
        improve instructional practices in the initial years of 
        teaching, including the following:
                  (A) Internships.--
                          (i) Teacher preparation enhancement 
                        internship.--Developing a 1-year paid 
                        internship program for students who 
                        have completed an initial teacher 
                        preparation program, or alternative 
                        routes to State certification or 
                        licensure program, to enable such 
                        students to develop the skills and 
                        experience necessary for success in 
                        teaching, including providing intensive 
                        clinical training and combining in-
                        service instruction in teacher methods 
                        and assessments with classroom 
                        observations, experiences, and 
                        practices. Such interns shall have a 
                        reduced teaching load and a mentor for 
                        assistance in the classroom.
                          (ii) Mid-career professional 
                        internships.--Developing a 1-year paid 
                        internship program for mid-career 
                        professionals from other occupations, 
                        former military personnel, and recent 
                        college graduates from fields other 
                        than teacher preparation with records 
                        of academic distinction to enable such 
                        individuals to develop the skills and 
                        experience necessary for success in 
                        teaching, including providing intensive 
                        clinical training and combining in-
                        service instruction in teacher methods 
                        and assessments with classroom 
                        observations, experiences, and 
                        practices. Such interns shall have a 
                        reduced teaching load and a mentor for 
                        assistance in the classroom.
                  (B) Residency programs for new teachers.--
                Supporting teachers in a residency program that 
                provides an induction period for all new 
                general education and special education 
                teachers that includes--
                          (i) a forum for information sharing 
                        among prospective teachers, teachers, 
                        principals, administrators, and 
                        participating faculty in the partner 
                        institution; and
                          (ii) the application of 
                        scientifically based research on 
                        teaching and learning generated by 
                        entities such as the Institute of 
                        Education Sciences, and the National 
                        Research Council of the National 
                        Academies.
                  (C) Pathways for paraprofessionals to enter 
                teaching.--Creating intensive programs to 
                provide the coursework and clinical experiences 
                needed by highly qualified paraprofessionals, 
                as defined in section 2102 of the Elementary 
                and Secondary Education Act of 1965, to qualify 
                for State teacher certification or licensure to 
                become highly qualified teachers.
          (4) Managerial and leadership skills.--Developing and 
        implementing proven mechanisms to provide principals 
        and superintendents with effective managerial, 
        leadership, curricula, and instructional skills that 
        result in increased student academic achievement.
          (5) Teacher scholarships and support.--Providing--
                  (A) scholarships to help students, such as 
                individuals who have been accepted by, or who 
                are enrolled in, 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, if--
                          (i) the Secretary establishes such 
                        requirements as the Secretary 
                        determines necessary to ensure that 
                        recipients of scholarships under this 
                        paragraph who complete teacher 
                        preparation programs--
                                  (I) subsequently teach in a 
                                high-need local educational 
                                agency for a period of time 
                                equivalent to the period of 
                                time for which the recipient 
                                received the scholarship 
                                assistance, plus an additional 
                                1 year; or
                                  (II) repay the amount of the 
                                scholarship if the recipient 
                                does not teach as described in 
                                subclause (I); and
                          (ii) the eligible partnership 
                        provides an assurance that the eligible 
                        partnership will recruit minority 
                        students to become highly qualified 
                        teachers;
                  (B) support services, if needed, to enable 
                scholarship recipients to complete 
                postsecondary education programs, or to 
                transition from a career outside of the field 
                of education into a teaching career; and
                  (C) follow-up services for former scholarship 
                recipients during the recipients' initial years 
                of teaching.
          (6) Coordination with community colleges.--
                  (A) Teacher preparation programs.--
                Coordinating with 2-year institutions of higher 
                education to implement teacher preparation 
                programs, including through distance learning, 
                for the purposes of allowing prospective 
                teachers--
                          (i) to obtain a bachelor's degree and 
                        State certification or licensure; and
                          (ii) to become highly qualified 
                        teachers.
                  (B) Professional development.--Coordinating 
                with 2-year institutions of higher education to 
                provide professional development that--
                          (i) improves the academic content 
                        knowledge of teachers in the academic 
                        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
                          (ii) promotes effective teaching 
                        skills.
          (7) Clinical experience in science, mathematics, and 
        technology.--Creating opportunities for clinical 
        experience and training for teachers and prospective 
        teachers through participation with professionals in 
        business, research, and work environments in areas 
        relating to science, mathematics, and technology, 
        including opportunities for using laboratory equipment.
          (8) Professional development.--Creating opportunities 
        for enhanced and ongoing professional development for 
        experienced general education andspecial education 
teachers, early childhood educators, principals, administrators, and 
faculty.
          (9) Technology.--The activity described in section 
        202(e)(9).
          (10) Areas of instructional shortage.--Increasing the 
        number of--
                  (A) teachers in the classroom providing 
                instruction in high-need academic subject areas 
                (such as reading, mathematics, science, and 
                foreign language, including less commonly 
                taught languages), and high-need areas (such as 
                special education, language instruction 
                educational programs for limited English 
                proficient students, and early childhood 
                education);
                  (B) special education faculty dedicated to 
                preparing highly qualified special education 
                teachers at institutions of higher education; 
                and
                  (C) faculty at institutions of higher 
                education with expertise in instruction of 
                students who are limited English proficient.
          (11) Improving instruction.--Improving instruction 
        by--
                  (A) improving understanding and instruction 
                in core academic subjects and other, 
                specialized courses, such as geography, 
                American history and government, and world 
                history; and
                  (B) creating externships for teachers and 
                prospective teachers for field experience and 
                training through participation in business, 
                research, and work environments in high-need 
                academic subject areas (such as reading, 
                mathematics, science, and foreign language, 
                including less commonly taught languages) and 
                high-need areas (such as special education, 
                language instruction educational programs for 
                limited English proficient students, and early 
                childhood education).
          (12) Graduate programs.--Developing, in collaboration 
        with departments, programs, or units of both academic 
        content and teacher education within a partner 
        institution, master's degree programs that meet the 
        demonstrated needs of teachers in the high-need local 
        educational agency participating in the eligible 
        partnership for content expertise and teaching skills.
          (13) Literacy teacher training.--Establishing and 
        implementing a program that strengthens content 
        knowledge and teaching skills of secondary school 
        teachers in literacy that--
                  (A) provides teacher training and stipends 
                for literacy coaches who train classroom 
                teachers to implement literacy programs;
                  (B) develops or redesigns rigorous research-
                based curricula that are aligned with 
                challenging State academic content standards, 
                as required under section 1111(b)(1) of the 
                Elementary and Secondary Education Act of 1965, 
                and with postsecondary standards for reading 
                and writing;
                  (C) provides training and stipends for 
                teachers to tutor students with intense 
                individualized reading, writing, and subject 
                matter instruction during or beyond the school 
                day;
                  (D) provides opportunities for teachers to 
                plan and assess instruction with other 
                teachers, school leaders, and faculty at 
                institutions of higher education; and
                  (E) establishes an evaluation and 
                accountability plan for activities conducted 
                under this paragraph to measure the impact of 
                such activities.
  (g) Construction.--Nothing in this section shall be construed 
to prohibit an eligible partnership from using grant funds to 
coordinate with the activities of eligible partnerships in 
other States or on a regional basis through Governors, State 
boards of education, State educational agencies, State agencies 
responsible for early childhood education, local educational 
agencies, or State agencies 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 activities under this section.

SEC. 204. ADMINISTRATIVE PROVISIONS.

  (a) Duration; Number of Awards; Payments.--
          (1) Duration.--
                  (A) Eligible states.--Grants awarded to 
                eligible States 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) Number of awards.--An eligible partnership may 
        not receive more than 1 grant during a 5-year period. 
        Nothing in this title shall be construed to prohibit an 
        individual member, that can demonstrate need, of an 
        eligible partnership that receives a grant under this 
        title from entering into anothereligible partnership 
consisting of new members and receiving a grant with such other 
eligible partnership before the 5-year period described in the 
preceding sentence applicable to the eligible partnership with which 
the individual member has first partnered has expired.
          (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--
                          (i) that have innovative reforms to 
                        hold institutions of higher education 
                        with teacher preparation programs 
                        accountable for preparing teachers to 
                        become highly qualified and have 
                        effective teaching skills;
                          (ii) that have innovative efforts 
                        aimed at reducing the shortage of 
                        highly qualified general and special 
                        education teachers, including in low-
                        income urban and rural areas and in 
                        high-need academic subject areas (such 
                        as reading, mathematics, science, and 
                        foreign language, including less 
                        commonly taught languages); and
                          (iii) whose awards promote an 
                        equitable geographic distribution of 
                        grants among rural and urban areas; and
                  (B) with respect to grants under section 203, 
                give priority--
                          (i) to applications from broad-based 
                        eligible partnerships that involve 
                        businesses and community organizations; 
                        and
                          (ii) to eligible partnerships so that 
                        the awards promote an equitable 
                        geographic distribution of grants among 
                        rural and urban areas.
          (3) Secretarial selection.--The Secretary shall 
        determine, based on the peer review process, which 
        applications shall receive funding and theamounts 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 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 shall provide, from 
        non-Federal sources (in cash or in kind), an amount 
        equal to 25 percent of the amount of the grant for the 
        first year of the grant, 35 percent of the amount of 
        the grant for the second year of the grant, and 50 
        percent of the amount 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 use not more than 2 percent of the grant funds for purposes 
of administering the grant.
  (e) Additional Activities.--The Secretary shall use funds 
repaid pursuant to section 202(e)(4)(A)(i)(II) or section 
203(f)(5)(A)(i)(II) to carry out additional activities under 
section 202 or 203, respectively.

SEC. 205. 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 progress in meeting the purposes 
of this part and substantial progress in meeting the following 
goals, as applicable:
          (1) Student academic achievement.--Increasing student 
        academic achievement for all students as defined by the 
        eligible State.
          (2) Raising standards.--Raising the State academic 
        standards required to enter the teaching profession as 
        a highly qualified teacher, and where applicable, as a 
        fully competent early childhood educator.
          (3) Initial certification or licensure.--Improving 
        the pass rates and scaled scores for initial State 
        teacher certification or licensure, or increasing the 
        numbers of qualified individuals being certified or 
        licensed as teachers through alternative routes to 
        State certification or licensure programs.
          (4) Percentage of highly qualified teachers.--
        Providing data on the progress of the State towards 
        meeting the highly qualified teacher requirements under 
        section 1119(a)(2) of the Elementary and Secondary 
        Education Act of 1965.
          (5) Decreasing teacher shortages.--Decreasing 
        shortages of--
                  (A) highly qualified teachers in--
                          (i) low-income urban and rural areas;
                          (ii) high-need academic subject areas 
                        (such as reading, mathematics, science, 
                        and foreign language, including less 
                        commonly taught languages);
                          (iii) special education; and
                          (iv) high-need areas (such as special 
                        education, language instruction 
                        educational programs for limited 
                        English proficient students, and early 
                        childhood education); and
                  (B) fully competent early childhood 
                educators.
          (6) Increasing opportunities for professional 
        development.--Increasing opportunities for enhanced and 
        ongoing professional development that--
                  (A) improves the academic content knowledge 
                of teachers in the academic 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 effective teaching skills.
  (b) Eligible Partnership Evaluation.--Each eligible 
partnership submitting an application for a grant under section 
203 shall establish and include in such application, an 
evaluation plan that includes strong performance objectives. 
The plan shall include objectives and measures for increasing--
          (1) student achievement for all students as measured 
        by the eligible partnership;
          (2) teacher retention in the first 3 years of a 
        teacher's career;
          (3) improvement in the pass rates and scaled scores 
        for initial State certification or licensure of 
        teachers;
          (4) the percentage of highly qualified teachers hired 
        by the high-need local educational agency participating 
        in the eligible partnership; and
          (5) the percentage of--
                  (A) highly qualified teachers among 
                underrepresented groups, in high-need academic 
                subjectareas (such as reading, mathematics, 
science, and foreign language, including less commonly taught 
languages), in high-need areas (such as special education, language 
instruction educational programs for limited English proficient 
students, and early childhood education), and in high-need schools;
                  (B) elementary school, middle school, and 
                secondary school classes taught by teachers who 
                are highly qualified;
                  (C) early childhood education program classes 
                taught by providers who are fully competent; 
                and
                  (D) highly qualified special education 
                teachers.
  (c) Revocation of Grant.--
          (1) Eligible states.--If the Secretary determines 
        that an eligible State 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.
          (2) 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 
authorizing committees. The Secretary shall broadly 
disseminate--
          (1) successful practices developed by eligible States 
        and eligible partnerships under this part; and
          (2) information regarding such practices that were 
        found to be ineffective.

SEC. 206. ACCOUNTABILITY FOR PROGRAMS THAT PREPARE TEACHERS.

  (a) Institutional and Program Report Cards on the Quality of 
Teacher Preparation.--
          (1) Report card.--Each institution of higher 
        education that conducts a traditional teacher 
        preparation program or alternative routes to State 
        certification or licensure program and 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 teacher 
        preparation programs and alternative routes to State 
        certification or licensure programs, the following 
        information:
                  (A) Pass rates and scaled scores.--For the 
                most recent year for which the information is 
                available for those students who took the 
                assessments and are enrolled in the traditional 
                teacher preparation program or alternative 
                routes to State certification or licensure 
                program, and for those who have taken the 
                assessments and have completed the traditional 
                teacher preparation program or alternative 
                routes to State certification or licensure 
                program during the 2-year period preceding such 
                year, for each of the assessments used for 
                teacher certification or licensure by the State 
                in which the program is located--
                          (i) the percentage of students who 
                        have completed 100 percent of the 
                        nonclinical coursework and taken the 
                        assessment who pass such assessment;
                          (ii) the percentage of all such 
                        students who passed each such 
                        assessment;
                          (iii) the percentage of students 
                        taking an assessment who completed the 
                        teacher preparation program after 
                        enrolling in the program, which shall 
                        be made available widely and publicly 
                        by the State;
                          (iv) the average scaled score for all 
                        students who took each such assessment;
                          (v) a comparison of the program's 
                        pass rates with the average pass rates 
                        for programs in the State; and
                          (vi) a comparison of the program's 
                        average scaled scores with the average 
                        scaled scores for programs in the 
                        State.
                  (B) Program information.--The criteria for 
                admission into the program, the number of 
                students in the program (disaggregated by race 
                and gender), the average number of hours of 
                supervised clinical experience required for 
                those in the program, the number of full-time 
                equivalent faculty and students in the 
                supervised clinical experience, and the total 
                number of students who have been certified or 
                licensed as teachers, disaggregated by subject 
                and area of certification or licensure.
                  (C) Statement.--In States that require 
                approval or accreditation of teacher 
                preparation 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 207(a).
                  (E) Use of technology.--A description of the 
                activities that prepare teachers to effectively 
                integrate technology into curricula and 
                instruction and effectively use technology to 
                collect, manage, and analyze data in order to 
                improve teaching, learning, and decision making 
                for the purpose of increasing student academic 
                achievement.
          (2) Report.--Each eligible partnership receiving a 
        grant under section 203 shall report annually on the 
        progress of the eligible partnership toward meeting the 
        purposes of this part and the objectives and measures 
        described in section 205(b).
          (3) Fines.--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.
          (4) Special rule.--In the case of an institution of 
        higher education that conducts a traditional teacher 
        preparation program or alternative routes to State 
        certification or licensure program and has fewer than 
        10 scores reported on any single initial teacher 
        certification or licensure assessment during an 
        academic year, the institution shall collect and 
        publish information, as required under paragraph 
        (1)(A), with respect to an average pass rate and scaled 
        score on each State certification or licensure 
        assessment taken over a 3-year period.
  (b) State Report Card on the Quality of Teacher 
Preparation.--
          (1) In general.--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 
        teacher preparation programs and for alternative routes 
        to State certification or licensure programs, which 
        shall include not less than the following:
                  (A) A description of reliability and validity 
                of the teacher certification and licensure 
                assessments, and any other certification and 
                licensure requirements, used by the State.
                  (B) 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 academic subject areas or in 
                particular grades within the State.
                  (C) A description of how the assessments and 
                requirements described in subparagraph (A) are 
                aligned with the State's challenging academic 
                content standards required under section 
                1111(b)(1) of the Elementary and Secondary 
                Education Act of 1965 and State early learning 
                standards for early childhood education 
                programs.
                  (D) For each of the assessments used by the 
                State for teacher certification or licensure--
                          (i) for each institution of higher 
                        education located in the State and each 
                        entity located in the State that offers 
                        an alternative route for teacher 
                        certification or licensure, the 
                        percentage of students at such 
                        institution or entity who have 
                        completed 100 percent of the 
                        nonclinical courseworkand taken the 
assessment who pass such assessment;
                          (ii) the percentage of all such 
                        students at all such institutions 
                        taking the assessment who pass such 
                        assessment; and
                          (iii) the percentage of students 
                        taking an assessment who completed the 
                        teacher preparation program after 
                        enrolling in the program, which shall 
                        be made available widely and publicly 
                        by the State.
                  (E) A description of alternative routes to 
                State certification or licensure in the State 
                (including any such routes operated by entities 
                that are not institutions of higher education), 
                if any, including, for each of the assessments 
                used by the State for teacher certification or 
                licensure--
                          (i) the percentage of individuals 
                        participating in such routes, or who 
                        have completed such routes during the 
                        2-year period preceding the date of the 
                        determination, who passed each such 
                        assessment; and
                          (ii) the average scaled score of 
                        individuals participating in such 
                        routes, or who have completed such 
                        routes during the period preceding the 
                        date of the determination, who took 
                        each such assessment.
                  (F) A description of the State's criteria for 
                assessing the performance of teacher 
                preparation programs within institutions of 
                higher education in the State. Such criteria 
                shall include indicators of the academic 
                content knowledge and teaching skills of 
                students enrolled in such programs.
                  (G) For each teacher preparation program in 
                the State, the criteria for admission into the 
                program, the number of students in the program, 
                disaggregated by race and gender (except that 
                such disaggregation shall not be required in a 
                case in which the number of students in a 
                category is insufficient to yield statistically 
                reliable information or the results would 
                reveal personally identifiable information 
                about an individual student), the average 
                number of hours of supervised clinical 
                experience required for those in the program, 
                and the number of full-time equivalent faculty, 
                adjunct faculty, and students in supervised 
                clinical experience.
                  (H) For the State as a whole, and for each 
                teacher preparation program in the State, 
thenumber of teachers prepared, in the aggregate and reported 
separately by--
                          (i) area of certification or 
                        licensure;
                          (ii) academic major; and
                          (iii) subject area for which the 
                        teacher has been prepared to teach.
                  (I) Using the data generated under 
                subparagraphs (G) and (H), a description of the 
                extent to which teacher preparation programs 
                are helping to address shortages of highly 
                qualified teachers, by area of certification or 
                licensure, subject, and specialty, in the 
                State's public schools, including those areas 
                described in section 205(a)(5).
                  (J) A description of the activities that 
                prepare teachers to effectively integrate 
                technology into curricula and instruction and 
                effectively use technology to collect, manage, 
                and analyze data in order to improve teaching, 
                learning, and decision making for the purpose 
                of increasing student academic achievement.
          (2) Prohibition against creating a national list.--
        The Secretary shall not create a national list or 
        ranking of States, institutions, or schools using the 
        scaled scores provided under this subsection.
  (c) 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 subparagraphs (A) through (J) of subsection 
        (b)(1). 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 annually.
          (2) Report to congress.--The Secretary shall prepare 
        and submit a report to Congress that contains the 
        following:
                  (A) A comparison of States' efforts to 
                improve the quality of the current and future 
                teaching force.
                  (B) A comparison of eligible partnerships' 
                efforts to improve the quality of the current 
                and future teaching force.
                  (C) The national mean and median scaled 
                scores and pass rate on any standardized 
testthat is used in more than 1 State for teacher certification or 
licensure.
          (3) Special rule.--In the case of a teacher 
        preparation program with fewer than 10 scores reported 
        on any single initial teacher certification or 
        licensure assessment during an academic year, the 
        Secretary shall collect and publish information, and 
        make publicly available, with respect to an average 
        pass rate and scaled score on each State certification 
        or licensure assessment taken over a 3-year period.
  (d) 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.

SEC. 207. 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. Such State shall 
provide the Secretary an annual list of such low-performing 
teacher preparation programs that includes an identification of 
those programs at risk of being placed on such list. Such 
levels of performance shall be determined solely by the State 
and may include criteria based on information collected 
pursuant to this part. Such assessment shall be described in 
the report under section 206(b).
  (b) Termination of Eligibility.--Any program of teacher 
preparation from which the State has withdrawn the State's 
approval, or terminated the State's financial support, due to 
the low performance of the 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;
          (2) shall not be permitted to accept or enroll any 
        student that receives aid under title IV in the 
        institution's teacher preparation program; and
          (3) shall provide transitional support, including 
        remedial services if necessary, for students enrolled 
        at the institution at the time of termination of 
        financial support or withdrawal of approval.
  (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.
  (d) Application of the Requirements.--The requirements of 
this section shall apply to both traditional teacher 
preparation programs and alternative routes to State 
certification and licensure programs.

SEC. 208. GENERAL PROVISIONS.

  (a) Methods.--In complying with sections 206 and 207, 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 that does not use content 
assessments as a means of ensuring 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, as 
required under section 1119 of the Elementary and Secondary 
Education Act of 1965, and that each person employed as a 
special education teacher in the State who teaches elementary 
school, middle school, or secondary school is highly qualified 
by such deadline, as required under section 612(a)(14)(C) of 
the Individuals with Disabilities Education Act,--
          (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, pass 
        rates, and scaled scores.
  (c) Limitations.--
          (1) Federal control prohibited.--Nothing in this 
        title 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 title.
          (2) No change in state control encouraged or 
        required.--Nothing in this title 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 or 
        licensure prohibited.--Nothing in this title shall be 
        construed to permit, allow, encourage, orauthorize the 
Secretary to establish or support any national system of teacher 
certification or licensure.
  (d) Release of Information to Teacher Preparation Programs.--
          (1) In general.--For the purpose of improving teacher 
        preparation programs, a State educational agency shall 
        provide to a teacher preparation program, upon the 
        request of the teacher preparation program, any and all 
        pertinent education-related information that--
                  (A) may enable the teacher preparation 
                program to evaluate the effectiveness of the 
                program's graduates or the program itself; and
                  (B) is possessed, controlled, or accessible 
                by the State educational agency.
          (2) Content of information.--The information 
        described in paragraph (1)--
                  (A) shall include an identification of 
                specific individuals who graduated from the 
                teacher preparation program to enable the 
                teacher preparation program to evaluate the 
                information provided to the program from the 
                State educational agency with the program's own 
                data about the specific courses taken by, and 
                field experiences of, the individual graduates; 
                and
                  (B) may include--
                          (i) kindergarten through grade 12 
                        academic achievement and demographic 
                        data, without revealing personally 
                        identifiable information about an 
                        individual student, for students who 
                        have been taught by graduates of the 
                        teacher preparation program; and
                          (ii) teacher effectiveness 
                        evaluations for teachers who graduated 
                        from the teacher preparation program.

SEC. 209. AUTHORIZATION OF APPROPRIATIONS.

  (a) In General.--There are authorized to be appropriated to 
carry out this part such sums as may be necessary for fiscal 
year 2006 and each of the 5 succeeding fiscal years, of which--
          (1) 50 percent shall be available for each fiscal 
        year to award grants under section 202; and
          (2) 50 percent shall be available for each fiscal 
        year to award grants under section 203.
  (b) Special Rule.--If the Secretary determines that there is 
an insufficient number of meritorious applications for grants 
under section 202 or 203 to justify awarding the full amount 
described in paragraph (1) or (2) of subsection (a), 
respectively, the Secretary may, after funding the meritorious 
applications, use the remaining funds for grants under the 
other such section.

                   Part A--Strengthening Institutions


SEC. 311. PROGRAM PURPOSE.

    (a) General Authorization.-- * * *
    (b) Grants Awarded; Special Consideration.--(1) From the 
sums available for this part under section 399(a)(1), the 
Secretary may award grants to any eligible institution with an 
application approved under section [351] 391 in order to assist 
such an institution to plan, develop, or implement activities 
that promise to strengthen the institution.

           *       *       *       *       *       *       *

          (3) Special consideration shall be given to 
        applications which purpose, pursuant to the 
        institution's plan, to engage in--
                  (A) * * *
                  (B) * * *
                  (C) * * *
                  (D) * * *
                  (E) * * *
                  (F) students services, including services 
                that will assist in the education of special 
                populations.
    (c) Authorized Activities.-- * * *

           *       *       *       *       *       *       *

          (6) Tutoring, counseling, and student service 
        programs designed to improve academic success, 
        including innovative, customized, remedial education 
        and English language instruction courses designed to 
        help retain students and move the students rapidly into 
        core courses and through program completion.
          (7) Education or counseling services designed to 
        improve the financial literacy and economic literacy of 
        students or the student's 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 of [subsection (c)] 
        subsection (b) and section 391 that--
                  (A) contribute to carrying out the purposes 
                of the program assisted under this part; and
                  (B) are approved by the Secretary as part of 
                the review and acceptance of such application.

           *       *       *       *       *       *       *


SEC. 312. DEFINITIONS; ELIGIBILITY.

    (a) Educational and General Expenditures.-- * * *
          (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) of this 
                section] subsection (d);

           *       *       *       *       *       *       *

    (c) Endowment Fund.-- * * *

           *       *       *       *       *       *       *

    (d) Enrollment of Needy Students.-- * * *
          (1) * * *
          (2) a substantial percentage of students receiving 
        Pell Grants in the second fiscal year preceding the 
        fiscal year for which determination is being made, in 
        comparison with the percentage of students receiving 
        Pell Grants at all such institutions in the second 
        fiscal year preceding the fiscal year for which the 
        determination is made, unless the requirement of this 
        [subdivision] paragraph is waived under section 392(a).

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

     (a) Program Authorized.-- * * *
          (b) * * *
          (1) * * *
          (2) * * *
          [(3) Tribal college or university.--The term ``Tribal 
        College or University'' has the mean 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.]
          (3) Tribal college or university.--The term ``Tribal 
        College or University'' means an institution that--
                  (A) qualifies for funding under the Tribally 
                Controlled College or University Assistance Act 
                of 1978 (25 U.S.C. 1801 et seq.) or the Navajo 
                Community College Assistance Act of 1978 (25 
                U.S.C. 640a note); or
                  (B) is cited in section 532 of the Equity in 
                Educational Land-Grant Status Act of 1994 (7 
                U.S.C. 301 note).
          (4)* * *
    (c) Authorized Activities.--
          (1) In general.-- * * *
          (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 and the acquisition of real property 
                adjacent to the campus of the institution;

           *       *       *       *       *       *       *

                  (F) tutoring, counseling, and student service 
                programs designed to improve academic success;
                  (G) education or counseling services designed 
                to improve the financial literacy and economic 
                literacy of students or parents of students;
                  [(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 sub-
                          (i) contribute to carrying out the 
                        activities described in [subparagraphs 
                        (A) through (K)] subparagraphs (A) 
                        through (M); and
                          (ii) are approved by the Secretary as 
                        part of the review and acceptance of 
                        such application.

           *       *       *       *       *       *       *

    [(d) Application Process.--
          [(1) Institutional Eligibility.--To be eligible to 
        receive assistance under this section, 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, Plan, and Allocation.--
          (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.--
                  (A) In general.--A 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.
                  (B) Streamlined process.--The Secretary shall 
                establish application requirements in such a 
                manner as to simplify and streamline the 
                process for applying for grants.
          (3) Allocations to institutions.--
                  (A) Construction grants.--
                          (i) In general.--Of the amount 
                        appropriated to carry out this section 
                        for any fiscal year, the Secretary may 
                        reserve 30 percent for the purpose of 
                        awarding 1-year grants of not less than 
                        $1,000,000 to address construction, 
                        maintenance, and renovation needs at 
                        eligible institutions.
                          (ii) Preference.--In providing grants 
                        under clause (i), the Secretary shall 
                        give preference to eligible 
                        institutions that have not yet received 
                        an award under this section.
                  (B) Allotment of remaining funds.--
                          (i) In general.--Except as provided 
                        in clause (ii), the Secretary shall 
                        distribute the remaining funds 
                        appropriated for any fiscal year to 
                        each eligible institution as follows:
                                  (I) 60 percent of the 
                                remaining appropriated funds 
                                shall be distributed among the 
                                eligible Tribal Colleges and 
                                Universities on a pro rata 
                                basis, based on the respective 
                                Indian student counts (as 
                                defined in section 2(a) of the 
                                Tribally Controlled College or 
                                University Assistance Act of 
                                1978 (25 U.S.C. 1801(a)) of the 
                                Tribal Colleges and 
                                Universities; and
                                  (II) the remaining 40 percent 
                                shall be distributed in equal 
                                shares to the eligible Tribal 
                                Colleges and Universities.
                          (ii) Minimum grant.--The amount 
                        distributed to a Tribal College or 
                        University under clause (i) shall not 
                        be less than $500,000.
          (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) Program Authorized.-- * * *
    (b) Definitions.-- * * *

           *       *       *       *       *       *       *

    (c) Authorized Activities.--
          (1) * * *
          (2) Examples of authorized activities.--Such programs 
        may include--
                  (A) * * *
                  (B) * * *
                  (C) * * *
                  (D) * * *
                  (E) * * *
                  (F) * * *
                  (G) joint use of facilities such as 
                laboratories and libraries; [and]
                  (H) academic tutoring and counseling programs 
                and student support services[.]; and
                  (I) education or counseling services designed 
                to improve the financial literacy and economic 
                literacy of students or the students' parents.

           *       *       *       *       *       *       *


SEC. 318. NATIVE AMERICAN-SERVING, NONTRIBAL INSTITUTIONS.

    (a) Program Authorized.--The Secretary shall provide grants 
and related assistance to Native American-serving, nontribal 
institutions to enable such institutions to improve and expand 
their capacity to serve Native Americans.
    (b) Definitions.--In this section:
          (1) Native american.--The term ``Native American'' 
        means an individual who is of a tribe, people, or 
        culture that is indigenous to the United States.
          (2) Native american-serving, nontribal institution.--
        The term ``Native American-serving, nontribal 
        institution'' means an institution of higher education 
        that, at the time of application--
                  (A) has an enrollment of undergraduate 
                students that is not less than 10 percent 
                Native American students; and
                  (B) is not a Tribal College or University (as 
                defined in section 316).
    (c) Authorized Activities.--
          (1) Types of activities authorized.--Grants awarded 
        under this section shall be used by Native American-
        serving, nontribal institutions to assist such 
        institutions to plan, develop, undertake, and carry out 
        activities to improve and expand such institutions' 
        capacity to serve Native Americans.
          (2) Examples of authorized activities.--Such programs 
        may include--
                  (A) the purchase, rental, or lease of 
                scientific or laboratory equipment for 
                educational purposes, including instructional 
                and research purposes;
                  (B) renovation and improvement in classroom, 
                library, laboratory, and other instructional 
                facilities;
                  (C) support of faculty exchanges, and faculty 
                development and faculty fellowships to assist 
                faculty in attaining advanced degrees in the 
                faculty's field of instruction;
                  (D) curriculum development and academic 
                instruction;
                  (E) the purchase of library books, 
                periodicals, microfilm, and other educational 
                materials;
                  (F) funds and administrative management, and 
                acquisition of equipment for use in 
                strengthening funds management;
                  (G) the joint use of facilities such as 
                laboratories and libraries; and
                  (H) academic tutoring and counseling programs 
                and student support services.
  (d) Application Process.--
          (1) Institutional eligibility.--A Native American-
        serving, nontribal institution desiring to receive 
        assistance under this section shall submit to the 
        Secretary such enrollment data as may be necessary to 
        demonstrate that the institution is a Native American-
        serving, nontribal institution, along with such other 
        information and data as the Secretary may by regulation 
        require.
          (2) Applications.--
                  (A) Permission to submit applications.--Any 
                institution that is determined by the Secretary 
                to be a Native American-serving, nontribal 
                institution may submit an application for 
                assistance under this section to the Secretary.
                  (B) Simplified and streamlined format.--The 
                Secretary shall, to the extent possible, 
                prescribe a simplified and streamlined format 
                for applications under this section that takes 
                into account the limited number of institutions 
                that are eligible for assistance under this 
                section.
                  (C) Content.--An application submitted under 
                subparagraph (A) shall include--
                          (i) a 5-year plan for improving the 
                        assistance provided by the Native 
                        American-serving, nontribal institution 
                        to Native Americans; and
                          (ii) such other information and 
                        assurances as the Secretary may 
                        require.
          (3) Special rules.--
                  (A) Eligibility.--No Native American-serving, 
                nontribal institution 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.

           *       *       *       *       *       *       *


SEC. 322. DEFINITIONS.

    For the purpose of this part:
          (1) * * *
          (2) * * *
          (3) * * *
          (4) The term ``professional and academic areas in 
        which Blacks are underrepresented'' shall be determined 
        by the Secretary in consultation with the Commissioner 
        for Education Statistics and the Commissioner of the 
        Bureau of Labor Statistics, on the basis of the most 
        recent available satisfactory data, as professional and 
        academic areas in which the percentage of Black 
        Americans who have been educated, trained, and employed 
        is less than the percentage of Blacks in the general 
        population.

SEC. 323. GRANTS TO INSTITUTIONS.

    (a) General Authorization; Uses of Funds.--From amounts 
available under section [360(a)(2)] 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) * * *

           *       *       *       *       *       *       *

          (6) * * *
          (7) Education or counseling services designed to 
        improve the financial literacy and economic literacy of 
        students or the students' 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)] (12) Establishing community outreach programs 
        which will encourage elementary and secondary students 
        to develop the academic skills and the interest to 
        pursue postsecondary education.
          [(12)] (13) Other activities proposed in the 
        application submitted pursuant to section 325 that--

           *       *       *       *       *       *       *


SEC. 324. ALLOWMENTS TO INSTITUTIONS.

    (a) Allotment; Pell Grant Basis.-- * * *

           *       *       *       *       *       *       *

    (g) Special Rule for Certain District of Columbia Eligible 
Institutions.-- * * *
  (h) Special Rule on Eligibility.--Notwithstanding any other 
provision of this section, a part B institution shall not 
receive an allotment under this section unless the part B 
institution provides, on an annual basis, data indicating that 
the part B institution--
          (1) enrolled Federal Pell Grant recipients in the 
        preceding academic year;
          (2) in the preceding academic year, has graduated 
        students from a program of academic study that is 
        licensed or accredited by a nationally recognized 
        accrediting agency or association recognized by the 
        Secretary pursuant to part H of title IV where 
        appropriate; and
          (3) where appropriate, has graduated students who, 
        within the past 5 years, enrolled in graduate or 
        professional school.

           *       *       *       *       *       *       *


SEC. 326. PROFESSIONAL OR GRADUATE INSTITUTIONS.

    (a) General Authorization.-- * * *

           *       *       *       *       *       *       *

    (b) * * *
    (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, and for the acquisition and development of 
        real property that is adjacent to the campus for such 
        construction, maintenance, renovation, or improvement;
          (3) * * *
          (4) * * *
          (5) tutoring, counseling, and student service 
        programs designed to improve academic success;
          (6) education or counseling services designed to 
        improve the financial literacy and economic literacy of 
        students or the students' parents;
          [(5)] (7) [establish or improve] establishing or 
        improving a development office to strengthen and 
        increase contributions from alumni and the private 
        sector;
          [(6)] (8) [assist] assisting in the establishment or 
        maintenance of an institutional endowment to facilitate 
        financial independence pursuant to section 331; [and]
          [(7)] (9) funds and administrative management, and 
        the acquisition of equipment, including software, for 
        use in strengthening funds management and management 
        information systems[.]; and
          (10) other activities proposed in the application 
        submitted under subsection (d) 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.
    (d) * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

                  (Q) Norfolk Statement University qualified 
                graduate programs; [and]
                  (R) Tennessee State University qualified 
                graduate programs[.];
                  (S) Alabama State University qualified 
                graduate program;
                  (T) Coppin State University qualified 
                graduate program; and
                  (U) Prairie View A & M University qualified 
                graduate program.
          (2) Qualified graduate program.--(A) For the purposes 
        of this section, the term ``qualified graduate 
        program'' means a graduate or professional program that 
        provides a program of instruction in law or in the 
        physical or natural sciences, engineering, mathematics, 
        or other scientific discipline in which African 
        Americans are underrepresented and has students 
        enrolled in such program at the time of application for 
        a grant under this section.
          (B) * * *
          (3) Special rule.--Institutions that were awarded 
        grants under this section prior to October 1, [1998] 
        2006, 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), and (U) of 
        paragraph (1).
          (4) * * *
          (5) * * *
    (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 (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) * * *
          (3) any amount in excess of $28,600,000, shall be 
        made available to each of the institutions or programs 
        identified in subparagraphs (A) through (R) pursuant to 
        a formula developed by the Secretary that uses the 
        following elements:
                  [(A) The ability of the institution to match 
                Federal funds with non-Federal funds.
                  (B) The number of students enrolled in the 
                programs for which the eligible institution 
                received funding under this section in the 
                previous year.]
                  (A) The amount of non-Federal funds for the 
                fiscal year for which the determination is made 
                that the institution or program listed in 
                subsection (e)--
                          (i) allocates from institutional 
                        resources;
                          (ii) secures from non-Federal 
                        sources, including amounts appropriated 
                        by the State and amounts from the 
                        private sector; and
                          (iii) will utilize to match Federal 
                        funds awarded for the fiscal year for 
                        which the determination is made under 
                        this section to the institution or 
                        program.
                  (B) The number of students enrolled in the 
                qualified graduate programs of the eligible 
                institution or program, for which the 
                institution or program received and allocated 
                funding under this section in the preceding 
                year.
                  (C) The average cost of education per 
                student, for all full-time graduate or 
                professional students [(or the equivalent) 
                enrolled in the eligible professional or 
                graduate school, or for doctoral students 
                enrolled in the qualified graduate programs.] 
                enrolled in the qualified programs or 
                institutions listed in paragraph (1).
                  (D) The number of [students] Black American 
                students or minority students in the previous 
                year who received their first professional or 
                doctoral degree from the programs for which the 
                eligible [institution] institution or program 
                received funding under this section in the 
                previous year.
                  [(E) The contribution, on a percent basis, of 
                the programs for which the institution is 
                eligible to receive funds under this section to 
                the total number of African Americans receiving 
                graduate or professional degrees in the 
                professions or disciplines related to the 
                programs for the previous year.]
                  (E) The percentage that the total number of 
                Black American students and minority students 
                who receive their first professional, master's, 
                or doctoral degrees from the institution or 
                program in the academic year preceding the 
                academic year for which the determination is 
                made, represents of the total number of Black 
                American students and minority students in the 
                United States who receive their first 
                professional, master's, or doctoral degrees in 
                the professions or disciplines related to the 
                course of study at such institution or program, 
                respectively, in the preceding academic year.
    (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 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] 2006, 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. 342. DEFINITIONS.

    For the purpose of this part:
          (1) * * *
          (2) * * *
          (3) * * *
          (4) * * *
          (5) * * *
                  (A) * * *
                  (B) * * *
                  (C) instructional equipment technology[,,], 
                research instrumentation, and any capital 
                equipment or fixture related to facilities 
                described in subparagraph (A);

           *       *       *       *       *       *       *


SEC. 343. FEDERAL INSURANCE FOR BONDS.

    (a) General Rule.-- * * *

           *       *       *       *       *       *       *

    (d) Full Faith and Credit Provisions.-- * * *
    (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.

           *       *       *       *       *       *       *


SEC. 365. DEFINITIONS.

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

           *       *       *       *       *       *       *

          (9) The term ``special projects'' means--
                  (A) a special project grant to a minority 
                institution which [support] supports activities 
                that--

           *       *       *       *       *       *       *


                       Part F--General Provisions


SEC. 391. APPLICATION FOR ASSISTANCE.

    (a) Applications.--
          (1) Applications required.-- * * *

           *       *       *       *       *       *       *

    (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) * * *
                  (B) * * *
                  (C) * * *
                  (D) * * *
                  (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. 392. WAIVER AUTHORITY AND REPORTING REQUIREMENT.

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

           *       *       *       *       *       *       *

    (b) Waiver Determinations, Expenditures.--(1) * * *
          (2) The Secretary shall submit to the Congress every 
        other year a report concerning the institutions which, 
        although not satisfying the criterion contained in 
        section 312(b)(1)(B), have been determined to be 
        [eligible institutions under part A institutions] 
        eligible institutions under part A which enroll 
        significant numbers of Black American, Hispanic, Native 
        American, Asian American, or Native Hawaiian students 
        under part A, as the case may be. Such report shall--

           *       *       *       *       *       *       *


SEC. 396. LIMITATIONS.

    The funds appropriated under [360] 399 may not be used--

           *       *       *       *       *       *       *


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, and such sums 
        as may be necessary for each of the 4 succeeding fiscal 
        years.
          [(B) There are authorized to be appropriated to carry 
        out section 316, $10,000,000 for fiscal year 1999 and 
        such sums as may be necessary for each of the 4 
        succeeding fiscal years.
          [(C) There are authorized to be appropriated to carry 
        out section 317, $5,000,000 for fiscal year 1999 and 
        such sums as may be necessary for each of the 4 
        succeeding fiscal years.
          [(2) Part b.--(A) There are authorized to be 
        appropriated to carry out part B (other than section 
        326), $135,000,000 for fiscal year 1999, and such sums 
        as may be necessary for each of the 4 succeeding fiscal 
        years.
          [(B) There are authorized to be appropriated to carry 
        out section 326, $35,000,000 for fiscal year 1999, and 
        such sums as may be necessary for each of the 4 
        succeeding fiscal years.
          [(3) Part c.--There are authorized to be appropriated 
        to carry out part C, $10,000,000 for fiscal year 1999, 
        and such sums as may be necessary for each of the 4 
        succeeding fiscal years.
          [(4) Part d.--(A) There are authorized to be 
        appropriated to carry out part D (other than section 
        345(7), but including section 347), $110,000,000 for 
        fiscal year 1999, and such sums as may be necessary for 
        each of the 4 succeeding fiscal years.
          [(B) There are authorized to be appropriated to carry 
        out section 345(7), such sums as may be necessary for 
        fiscal year 1999 and each of the 4 succeeding fiscal 
        years.
          [(5) Part e.--There are authorized to be appropriated 
        to carry out part E, $10,000,000 for fiscal year 1999, 
        and such sums as may be necessary for each of the 4 
        succeeding fiscal years.]
  (a) Authorizations.--
          (1) Part a.--(A) There are authorized to be 
        appropriated to carry out part A (other than section 
        316) such sums as may be necessary for fiscal year 2006 
        and each of the 5 succeeding fiscal years.
          (B) There are authorized to be appropriated to carry 
        out section 316 such sums as may be necessary for 
        fiscal year 2006 and each of the 5 succeeding fiscal 
        years.
          (C) There are authorized to be appropriated to carry 
        out section 317 such sums as may be necessary for 
        fiscal year 2006 and each of the 5 succeeding fiscal 
        years.
          (D) There are authorized to be appropriated to carry 
        out section 318 such sums as may be necessary for 
        fiscal year 2006 and each of the 5 succeeding fiscal 
        years.
          (2) Part b.--(A) There are authorized to be 
        appropriated to carry out part B (other than section 
        326) such sums as may be necessary for fiscal year 2006 
        and each of the 5 succeeding fiscal years.
          (B) There are authorized to be appropriated to carry 
        out section 326 such sums as may be necessary for 
        fiscal year 2006 and each of the 5 succeeding fiscal 
        years.
          (3) Part c.--There are authorized to be appropriated 
        to carry out part C such sums as may be necessary for 
        fiscal year 2006 and each of the 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) such sums as may be 
        necessary for fiscal year 2006 and each of the 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 2006 and each of the 5 succeeding fiscal 
        years.
          (5) Part e.--There are authorized to be appropriated 
        to carry out part E such sums as may be necessary for 
        fiscal year 2006 and each of the 5 succeeding fiscal 
        years.
    (b) Use of Multiple Year Awards.--In the event of a 
multiple year award to any institution under this title, the 
Secretary shall make funds available for such award from funds 
appropriated for this title for the fiscal year in which such 
funds are to be used by the recipient.
  (c) Minimum Grant Amount.--The minimum amount of a grant 
under this title shall be $200,000.

           *       *       *       *       *       *       *


                      TITLE IV--STUDENT ASSISTANCE


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


SEC. 400. STATEMENT OF PURPOSE; PROGRAM AUTHORIZATION.

    (a) Purpose.-- * * *

           *       *       *       *       *       *       *


                     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.

           *       *       *       *       *       *       *

    (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--
          (i) $5,100 for academic year 2006-2007;
          (ii) $5,400 for academic year 2007-2008;
          (iii) $5,700 for academic year 2008-2009;
          (iv) $6,000 for academic year 2009-2010; and
          (v) $6,300 for academic year 2010-2011,
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.] 10 percent of the maximum basic grant level specified in 
the appropriate Appropriation Act for such academic year, 
except that a student who is eligible for a Federal Pell Grant 
in an amount that is equal to or greater than 5 percent of such 
level but less than 10 percent of such level shall be awarded a 
Federal Pell grant in the amount of 10 percent of such level.
    [(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) In the case of a student who is enrolled, on at least a 
half-time basis and for a period of more than 1 academic year 
in a 2-year or 4-year program of instruction for which an 
institution of higher education awards an associate or 
baccalaureate degree, the Secretary shall allow such student to 
receive not more than 2 Federal Pell Grants during a single 
award year to permit such student to accelerate the student's 
progress toward a degree by attending additional sessions. In 
the case of a student receiving more than 1 Federal Pell Grant 
in a single award year, the total amount of Federal Pell Grants 
awarded to such student for the award year may exceed the 
maximum basic grant level specified in the appropriate 
Appropriation Act for such award year.
    [(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 of such year. If the preceding sentence applies, 
the financial aid administrator at the home institution may use 
the cost of the study aboard 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.
    (c) Period of Eligibility for Grants.--(1) * * *.

           *       *       *       *       *       *       *

    (5) The period of time during which a student may receive 
Federal Pell Grants shall not exceed 18 semesters, or an 
equivalent period of time as determined by the Secretary 
pursuant to regulations, which period shall--
          (A) be determined without regard to whether the 
        student is enrolled on a full-time basis during any 
        portion of the period of time; and
          (B) include any period of time for which the student 
        received a Federal Pell Grant prior to the date of 
        enactment of the Higher Education Amendments 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 Workforce of the House of 
Representatives] to the Committee on Appropriations of the 
Senate, the Committee on Appropriations of the House of 
Representatives, and the authorizing committees.

SEC. 401A. PROVISIONAL GRANT ASSISTANCE PROGRAM.

  (a) Grants.--
          (1) In general.--From amounts appropriated under 
        subsection (e) for a fiscal year and subject to 
        subsection (b), the Secretary shall award grants to 
        students (which shall be known as ``ProGAP awards'') in 
        the same manner as the Secretary awards grants to 
        students under section 401, except that--
                  (A) at the beginning of each award year, the 
                Secretary shall establish a maximum and minimum 
                award level based on amounts made available 
                under subsection (e);
                  (B) the Secretary shall only award grants 
                under this section to students eligible for a 
                grant under section 401 for the award year; and
                  (C) when determining eligibility for the 
                awards, the Secretary shall consider only those 
                students who are eligible for a grant under 
                section 401, as of June 30 of the award year 
                for which the determination is made.
          (2) Students with the greatest need.--The Secretary 
        shall ensure grants are awarded under this section to 
        students with the greatest need as determined in 
        accordance with section 471.
  (b) Cost of Attendance Limitation.--A grant awarded under 
this section for an award year shall be awarded in an amount 
that does not exceed--
          (1) the student's cost of attendance for the award 
        year; less
          (2) an amount equal to the expected family 
        contribution for that student for the award year.
    (c) Supplement Not Supplant.--Grants awarded from funds 
made available under subsection (e) shall be used to 
supplement, and not supplant, other Federal, State, or 
institutional grant funds.
    (d) Use of Excess Funds.--
          (1) 15 percent or less.--If, at the end of a fiscal 
        year, the funds available for making grant payments 
        under this section exceed the amount necessary to make 
        the grant payments required under this section to 
        eligible students by 15 percent or less, then all of 
        the excess funds shall remain available for making 
        grant payments under this section during the next 
        succeeding fiscal year.
          (2) More than 15 percent.--If, at the end of a fiscal 
        year, the funds available for making grant payments 
        under this section exceed the amount necessary to make 
        the grant payments required under this section to 
        eligible students by more than 15 percent, then all of 
        such funds shall remain available for making such grant 
        payments but grant payments may be made under this 
        paragraph only with respect to awards for that fiscal 
        year.
    (e) Authorization and Appropriation of Funds.--There are 
authorized to be appropriated, and there are appropriated, out 
of any money in the Treasury not otherwise appropriated, for 
the Department of Education to carry out this section and 
section 401B--
          (1) $1,897,000,000 for fiscal year 2006;
          (2) $1,901,000,000 for fiscal year 2007;
          (3) $1,899,000,000 for fiscal year 2008;
          (4) $1,898,000,000 for fiscal year 2009; and
          (5) $1,897,000,000 for fiscal year 2010.
  (f) Sunset Provision.--This section shall be effective with 
respect to amounts appropriated for fiscal year 2006 and each 
of the 4 succeeding fiscal years.

           *       *       *       *       *       *       *


SEC. 401B. NATIONAL SMART GRANTS.

    (a) Findings.--Congress makes the following findings:
          (1) If the United States is to remain a world leader 
        in the global economy, its college students must have 
        the training they need to compete for the best jobs of 
        the 21st century.
          (2) The United States intelligence community faces 
        major shortages in foreign languages critical 
tonational security, and will also require major incentives to fill 
projected workforce needs.
          (3) Increasingly, the best jobs of the 21st century 
        will require baccalaureate degrees in the sciences, 
        mathematics, technology, engineering, and foreign 
        languages critical to national security, or be 
        generated by people who have such degrees.
          (4) Congress should establish a National Science and 
        Mathematics Access to Retain Talent (SMART) grant 
        program to meet the goals described in paragraphs (1) 
        through (3).
  (b) Purpose.--The purpose of this section is to increase the 
number of postsecondary students from low-income backgrounds 
who are enrolled in studies leading to baccalaureate degrees in 
physical, life, or computer sciences, mathematics, technology, 
engineering, and foreign languages critical to national 
security.
  (c) Grants Authorized.--From amounts appropriated under 
section 401A(c) for a fiscal year, the Secretary shall award 
grants to eligible students to assist the eligible students in 
paying their college education expenses.
  (d) Designation.--A grant under this section shall be known 
as a ``National Science and Mathematics Access to Retain Talent 
Grant'' or a ``National SMART Grant''.
  (e) Definition of Eligible Student.--In this section the term 
``eligible student'' means a student who, for the academic year 
for which the determination is made--
          (1) is eligible for a Federal Pell Grant; and
          (2) is in the student's 3rd or 4th year at an 
        institution of higher education majoring in--
                  (A) mathematics, science, technology, or 
                engineering (as determined by the Secretary 
                pursuant to regulations); or
                  (B) a foreign language that the Secretary, in 
                consultation with the Director of National 
                Intelligence, determines is critical to the 
                national security of the United States.
  (f) Grant Amount.--The Secretary shall award a grant under 
this section in an amount that does not exceed $1,500 for an 
academic year.
  (g) Funding Rule.--The Secretary shall use not more than 
$450,000,000 of the funds appropriated under section 401A(c) 
for each of the fiscal years 2006 through 2010 to carry out 
this section.
  (h) Unobligated Funds Available for Federal Grant 
Assistance.--The Secretary shall make any funds made available 
under subsection (g) for a fiscal year that remain unobligated 
at the end of the fiscal year available to carry out section 
401A.
  (i) Matching Assistance.--An institution of higher education 
may, from funds provided from private sources, provide 
additional assistance to a student receiving a grant under this 
section, except that the total assistance provided under this 
title to a student shall not exceed the student's cost of 
attendance.

           *       *       *       *       *       *       *


     Subpart 2--Federal Early Outreach and Student Service Programs

                    CHAPTER 1--FEDERAL TRIO PROGRAMS

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

    (a) Grants and Contracts Authorized.-- * * *
    (b) Recipients, Duration, and Size.--
          (1) Recipients.-- * * *
          (2) Duration.--Grants or contracts made under this 
        chapter shall be awarded for a period of [4] 5 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)] (A) grants made under section 402G 
                shall be awarded for a period of 2 years; and
                  [(C)] (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 
        under this chapter shall be no less than--
                  [(A) $170,000 for programs authorized by 
                sections 402D and 402G;
                  [(B) $180,000 for programs authorized by 
                sections 402B and 402F; and
                  [(C) $190,000 for programs authorized by 
                sections 402C and 402E.]
          (3) Minimum grants.--Unless the institution or agency 
        requests a smaller amount, an individual grant 
        authorized under this chapter shall be awarded in an 
        amount that is not less than $200,000, except that an 
        individual grant authorized under section 402G shall be 
        awarded in an amount that is not less than $170,000.
    (c) Procedures for Awarding Grants and Contracts.--
          (1) Application requirements.-- * * *
          (2) Prior experience.--In making grants under this 
        chapter, the Secretary shall consider each applicant's 
        prior experience of [service delivery] high quality 
        service delivery, as determined under subsection (f), 
        under the particular program for which funds are 
        sought. The level of consideration given the factor of 
        prior experience shall not vary from the level of 
        consideration given such factor during fiscal years 
        1994 through 1997, except that grants made under 
        section 402H shall not be given prior experience 
        consideration.
          (3) Order of awards; program fraud.--(A) * * *
          (B) The Secretary [is not required to] shall not 
        provide assistance to a program otherwise eligible for 
        assistance under this chapter, if the Secretary has 
        determined that such program has involved the 
        fraudulent use of funds under this chapter.
          (4) Peer review process.--(A) * * *

           *       *       *       *       *       *       *

          (5) Number of applications for grants and 
        contracts.--The Secretary shall not limit the number of 
        applications submitted by an entity under any program 
        authorized under this chapter if the additional 
        applications describe programs serving different 
        populations or [campuses] different campuses.

           *       *       *       *       *       *       *

    (e) Documentation of Status as a Low-Income Individual.--
(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)] (h)(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)] (h)(4) shall be made by 
providing the Secretary with--
          (A) * * *

           *       *       *       *       *       *       *

  (f) Outcome Criteria.--
          (1) In general.--The Secretary, by regulation, shall 
        establish outcome criteria for measuring, annually and 
        for longer periods, the quality and effectiveness of 
        programs authorized under this chapter.
          (2) Use for prior experience determination.--The 
        outcome criteria under paragraph (1) shall be used to 
        evaluate the programs provided by a recipient of a 
        grant under this chapter, and the Secretary shall 
        determine an eligible entity's prior experience of high 
        quality service delivery, as required in subsection 
        (c)(2), based on the outcome criteria.
          (3) Consideration of relevant data.--The outcome 
        criteria under this subsection shall take into account 
        data pertaining to secondary school completion, 
        postsecondary education enrollment, and postsecondary 
        education completion for low-income students, first 
        generation college students, and individuals with 
        disabilities, in the schools and institutions of higher 
        education served by the program to be evaluated.
          (4) Contents of outcome criteria.--The outcome 
        criteria shall include the following:
                  (A) For programs authorized under section 
                402B, whether the eligible entity met or 
                exceeded the entity's objectives established in 
                the entity's application for such program 
                regarding--
                          (i) the delivery of service to a 
                        total number of students served by the 
                        program;
                          (ii) the continued secondary school 
                        enrollment of such students;
                          (iii) the graduation of such students 
                        from secondary school; and
                          (iv) the enrollment of such students 
                        in an institution of higher education.
                  (B) For programs authorized under section 
                402C, whether the eligible entity met or 
                exceeded its objectives for such program 
                regarding--
                          (i) the delivery of service to a 
                        total number of students served by the 
                        program, as agreed upon by the entity 
                        and the Secretary for the period;
                          (ii) such students' school 
                        performance, as measured by the grade 
                        point average, or its equivalent;
                          (iii) such students' academic 
                        performance, as measured by 
                        standardized tests, including tests 
                        required by the students' State;
                          (iv) the retention in, and graduation 
                        from, secondary school of such 
                        students; and
                          (v) the enrollment of such students 
                        in an institution of higher education.
                  (C) For programs authorized under section 
                402D--
                          (i) whether the eligible entity met 
                        or exceeded the entity's objectives 
                        regarding the retention in 
                        postsecondary education of the students 
                        served by the program;
                          (ii)(I) in the case of an entity that 
                        is an institution of higher education 
                        offering a baccalaureate degree, the 
                        extent to which the entity met or 
                        exceeded the entity's objectives 
                        regarding such students' completion of 
                        the degree programs in which such 
                        students were enrolled; or
                          (II) in the case of an entity that is 
                        an institution of higher education that 
                        does not offer a baccalaureate degree, 
                        the extent to which the entity met or 
                        exceeded the entity's objectives 
                        regarding--
                                  (aa) the completion of a 
                                degree or certificate by such 
                                students; and
                                  (bb) the transfer of such 
                                students to institutions of 
                                higher education that offer 
                                baccalaureate degrees;
                          (iii) whether the entity met or 
                        exceeded the entity's objectives 
                        regarding the delivery of service to a 
                        total number of students, as agreed 
                        upon by the entity and the Secretary 
                        for the period; and
                          (iv) whether the applicant met or 
                        exceeded the entity's objectives 
                        regarding suchstudents remaining in 
good academic standing.
                  (D) For programs authorized under section 
                402E, whether the entity met or exceeded the 
                entity's objectives for such program 
                regarding--
                          (i) the delivery of service to a 
                        total number of students, as agreed 
                        upon by the entity and the Secretary 
                        for the period;
                          (ii) the provision of appropriate 
                        scholarly and research activities for 
                        the students served by the program;
                          (iii) the acceptance and enrollment 
                        of such students in graduate programs; 
                        and
                          (iv) the attainment of doctoral 
                        degrees by former program participants.
                  (E) For programs authorized under section 
                402F, whether the entity met or exceeded the 
                entity's objectives for such program 
                regarding--
                          (i) the enrollment of students 
                        without a secondary school diploma or 
                        its recognized equivalent, who were 
                        served by the program, in programs 
                        leading to such diploma or equivalent;
                          (ii) the enrollment of secondary 
                        school graduates who were served by the 
                        program in programs of postsecondary 
                        education;
                          (iii) the delivery of service to a 
                        total number of students, as agreed 
                        upon by the entity and the Secretary 
                        for the period; and
                          (iv) the provision of assistance to 
                        students served by the program in 
                        completing financial aid applications 
                        and college admission applications.
    [(f)] (g) 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.] such sums as may be necessary for 
fiscal year 2006 and 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.]
    [(g)] (h) Definitions.--For the purpose of this chapter:
          (1) Different campus.--The term ``different campus'' 
        means a site of an institution of higher education 
        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 eligible entity desires to serve through an 
        application for a grant under this chapter, that--
                  (A) is separate and distinct from any other 
                population that the entity has applied for a 
                grant under this chapter to serve; or
                  (B) while sharing some of the same needs as 
                another population that the eligible entity has 
                applied for a grant under this chapter to 
                serve, has distinct needs for specialized 
                services.
          [(1)] (3) First generation college student.--The term 
        ``first generation college student'' means--
                  (A) * * *
                  (B) * * *
          [(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) served on active duty for a period of 
                more than 180 days, any part of which occurred 
                after January 31, 1955, and was discharged or 
                released therefrom under conditions other than 
                dishonorable; [or]
                  (B) served on active duty after January 31, 
                1955, and was discharged or released therefrom 
                because of a service connected disability[.]; 
                or
                  ``(C) was a member of a reserve component of 
                the Armed Forces called to active duty for a 
                period of more than 180 days.
          [(4)] (6) Waiver.--The Secretary may waive the 
        service requirements in [subparagraph (A) or (B) of 
        paragraph (3)] subparagraph (A), (B), or (C) of 
        paragraph (5) 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) Program Authority.--The Secretary shall carry out a 
program to be known as talent search which shall be designed--
          (1) [to identify qualified youths with potential for 
        education at the postsecondary level and to encourage 
        such youths] to encourage eligible youths to complete 
        secondary school and to undertake a program of 
        postsecondary education;
          (2) to publicize the availability of, and facilitate 
        the application for, student financial assistance 
        available to persons who pursue a program of 
        postsecondary education; and
          (3) to encourage persons who have not completed 
        programs of education at the secondary or postsecondary 
        level[, but who have the ability to complete such 
        programs, to reenter] to enter or reenter, and complete 
        such programs.
    [(b) Permissible Services.--Any talent search project 
assisted under this chapter may provide services such as--
          [(1) academic advice and assistance in secondary 
        school and college course selection;
          [(2) assistance in completing college admission and 
        financial aid applications;
          [(3) assistance in preparing for college entrance 
        examinations;
          [(4) guidance on and assistance in secondary school 
        reentry, entry to general educational development (GED) 
        programs, other alternative education programs for 
        secondary school dropouts, or postsecondary education;
          [(5) personal and career counseling, or activities 
        designed to acquaint individuals from disadvantaged 
        backgrounds with careers in which the individuals are 
        particularly underrepresented;
          [(6) tutorial services;
          [(7) exposure to college campuses as well as cultural 
        events, academic programs and other sites or activities 
        no usually available to disadvantaged youth;
          [(8) workshops and counseling for families of 
        students served;
          [(9) 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) programs and activities as described in 
        paragraphs (1) through (9) which are specially designed 
        for students of limited English proficiency.]
  (b) Required Services.--Any project assisted under this 
section shall provide--
          (1) academic tutoring, or connections to high quality 
        academic tutoring services, to enable students to 
        complete secondary or postsecondary courses, which may 
        include instruction in reading, writing, study skills, 
        mathematics, science, and other subjects;
          (2) advice and assistance in secondary course 
        selection and, if applicable, initial postsecondary 
        course selection;
          (3) assistance in preparing for college entrance 
        examinations and completing college admission 
        applications;
          (4)(A) information on both the full range of Federal 
        student financial aid programs (including Federal Pell 
        Grant awards and loan forgiveness) and resources for 
        locating public and private scholarships; and
          (B) assistance in completing financial aid 
        applications, including the Free Application for 
        Federal Student Aid described in section 483(a);
          (5) guidance on and assistance in--
                  (A) secondary school reentry;
                  (B) alternative education programs for 
                secondary school dropouts that lead to the 
                receipt of a regular secondary school diploma;
                  (C) entry into general educational 
                development (GED) programs; or
                  (D) postsecondary education; and
          (6) education or counseling services designed to 
        improve the financial literacy and economic literacy of 
        students or their parents, including financial planning 
        for postsecondary education.
  (c) Permissible Services.--Any project assisted under this 
section may provide services such as--
          (1) personal and career counseling or activities;
          (2) information and activities designed to acquaint 
        youths with the range of career options available to 
        the youths;
          (3) exposure to the campuses of institutions of 
        higher education, as well as cultural events, academic 
        programs, and other sites or activities not usually 
        available to disadvantaged youth;
          (4) workshops and counseling for families of students 
        served;
          (5) 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
          (6) programs and activities as described in 
        subsection (b) or paragraphs (1) through (5) of this 
        subsection that are specially designed for students who 
        are limited English proficient, students with 
        disabilities, students who are homeless children and 
        youths (as such term is defined in section 725 of the 
        McKinney-Vento Homeless Assistance Act (42 U.S.C. 
        11434a)), or students who are in foster care or are 
        aging out of the foster care system.
    [(c)] (d) Requirements for Approval of Applications.--In 
approving applications for [talent search projects under this 
chapter] projects under this section for any fiscal year the 
Secretary shall--* * *

           *       *       *       *       *       *       *


SEC. 402C. UPWARD BOUND.

    (a) Program Authority.--* * *
    [(b) Permissible Services.--Any upward bound project 
assisted under this chapter may provide services such as--
          [(1) instruction in reading, writing, study skills, 
        mathematics, and other subjects necessary for success 
        beyond secondary school;
          [(2) counseling and workshops;
          [(3) academic advice and assistance in secondary 
        school course selection;
          [(4) tutorial services;
          [(5) exposure to cultural events, academic programs, 
        and other activities not usually available to 
        disadvantaged youth;
          [(6) activities designed to acquaint youths 
        participating in the project with the range of career 
        options available to them;
          [(7) instruction designed to prepare youths 
        participating in the project for careers in which 
        persons from disadvantaged backgrounds are particularly 
        underrepresented;
          [(8) on-campus residential programs;
          [(9) 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) work-study positions where youth participating 
        in the project are exposed to careers requiring a 
        postsecondary degree;
          [(11) special services to enable veterans to make the 
        transition to postsecondary education; and
          [(12) programs and activities as described in 
        paragraphs (1) through (11) which are specially 
        designed for students of limited English proficiency.]
    (b) Requiried Services.--Any project assisted under this 
section shall provide--
          (1) academic tutoring to enable students to complete 
        secondary or postsecondary courses, which may include 
        instruction in reading, writing, study skills, 
        mathematics, science, and other subjects;
          (2) advice and assistance in secondary and 
        postsecondary course selection;
          (3) assistance in preparing for college entrance 
        examinations and completing college admission 
        applications;
          (4)(A) information on both the full range of Federal 
        student financial aid programs (including Federal Pell 
        Grant awards and loan forgiveness) and resources for 
        locating public and private scholarships; and
          (B) assistance in completing financial aid 
        applications, including the Free Application for 
        Federal Student Aid described in section 483(a);
          (5) guidance on and assistance in--
                  (A) secondary school reentry;
                  (B) alternative education programs for 
                secondary school dropouts that lead to the 
                receipt of a regular secondary school diploma;
                  (C) entry into general educational 
                development (GED) programs; or
                  (D) postsecondary education; and
          (6) education or counseling services designed to 
        improve the financial literacy and economic literacy of 
        students, including financial planning for 
        postsecondary education.
    (c) [Required Services] Additional Required Services for 
Multiple Year Grant Recipients.--Any [upward bound project 
assisted under this chapter] project assisted under this 
section which has received funding for two or more years shall 
include, as part of the core curriculum in the next and 
succeeding years, instruction in mathematics through 
precalculus, laboratory science, foreign language, composition, 
and literature.
  (d) Permissible Services.--Any project assisted under this 
section may provide such services as--
          (1) exposure to cultural events, academic programs, 
        and other activities not usually available to 
        disadvantaged youth;
          (2) information, activities and instruction designed 
        to acquaint youths participating in the project with 
        the range of career options available to the youths;
          (3) on-campus residential programs;
          (4) mentoring programs involving elementary school or 
        secondary school teachers or counselors, faculty 
        members at institutions of higher education, students, 
        or any combination of such persons;
          (5) work-study positions where youth participating in 
        the project are exposed to careers requiring a 
        postsecondary degree;
          (6) special services to enable veterans to make the 
        transition to postsecondary education; and
          (7) programs and activities as described in 
        subsection (b), subsection (c), or paragraphs (1) 
        through (6) of this subsection that are specially 
        designed for students who are limited English 
        proficient, students with disabilities, students who 
        are homeless children and youths (as such term is 
        defined in section 725 of the McKinney-Vento Homeless 
        Assistance Act (42 U.S.C. 11434a)), or students who are 
        in foster care or are aging out of the foster care 
        system.
    [(d)] (e) Requirements for Approval of Applications.--In 
approving applications for [upward bound projects under this 
chapter] projects under this section for any fiscal year, the 
Secretary shall-- * * *

           *       *       *       *       *       *       *

    [(e)] (f) Maximum Stipends.--Youths participating in a 
project proposed to be carried out under any application may be 
paid stipends not in excess of $60 per month [during June, 
July, and August] during the summer school recess, for a period 
not to exceed 3 months, except that youth participating in a 
work-study position under subsection [(b)(10)] (d)(5) may be 
paid a stipend of $300 per month [during June, July, and 
August] during the summer school recess, for a period not to 
exceed 3 months. Youths participating in a project proposed to 
be carried out under any application may be paid stipends not 
in excess of $40 per month during the remaining period of the 
year.

           *       *       *       *       *       *       *


SEC. 402D. STUDENT SUPPORT SERVICES.

    (a) Program Authority.--The Secretary shall carry out a 
program to be known as student support services which shall be 
designed--
          (1) * * *
          (2) to increase the transfer rates of eligible 
        students from 2-year to 4-year institutions; [and]
          [(3) to foster an institutional climate supportive of 
        the success of low-income and first generation college 
        students and individuals with disabilities.]
          (3) to foster an institutional climate supportive of 
        the success of low-income and first generation college 
        students, students with disabilities, students who are 
        limited English proficient, students who are homeless 
        children and youths (as such term is defined in section 
        725 of the McKinney-Vento Homeless Assistance Act (42 
        U.S.C. 11434a)), and students who are in foster care or 
        are aging out of the foster care system.
          (4) to improve the financial literacy and economic 
        literacy of students, including--
                  (A) basic personal income, household money 
                management, and financial planning skills; and
                  (B) basic economic decisionmaking skills.
    [(b) Permissible Services.--A student support services 
project assisted under this chapter may provide services such 
as--
          [(1) instruction in reading, writing, study skills, 
        mathematics, and other subjects necessary for success 
        beyond secondary school;
          [(2) personal counseling;
          [(3) academic advice and assistance in course 
        selection;
          [(4) tutorial services and counseling and peer 
        counseling;
          [(5) exposure to cultural events and academic 
        programs not usually available to disadvantaged 
        students;
          [(6) activities designed to acquaint students 
        participating in the project with the range of career 
        options available to them;
          [(7) activities designed to assist students 
        participating in the project in securing admission and 
        financial assistance for enrollment in graduate and 
        professional programs;
          [(8) 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) mentoring programs involving faculty or upper 
        class students, or a combination thereof; and
          [(10) programs and activities as described in 
        paragraphs (1) through (9) which are specially designed 
        for students of limited English proficiency.]
    (b) Required Services.--A project assisted under this 
section shall provide--
          (1) academic tutoring to enable students to complete 
        postsecondary courses, which may include instruction in 
        reading, writing, study skills, mathematics, science, 
        and other subjects;
          (2) advice and assistance in postsecondary course 
        selection;
          (3)(A) information on both the full range of Federal 
        student financial aid programs (including Federal Pell 
        Grant awards and loan forgiveness) and resources for 
        locating public and private scholarships; and
          (B) assistance in completing financial aid 
        applications, including the Free Application for 
        Federal Student Aid described in section 483(a);
          (4) education or counseling services designed to 
        improve the financial literacy and economic literacy of 
        students, including financial planning for 
        postsecondary education;
          (5) activities designed to assist students 
        participating in the project in securing college 
        admission and financial assistance for enrollment in 
        graduate and professional programs; and
          (6) activities designed to assist students enrolled 
        in 2-year institutions of higher education in securing 
        admission and financial assistance for enrollment in a 
        4-year program of postsecondary education.
  (c) Permissible Services.--A project assisted under this 
section may provide services such as--
          (1) consistent, individualized personal, career, and 
        academic counseling, provided by assigned counselors;
          (2) information, activities, and instruction designed 
        to acquaint youths participating in the project with 
        the range of career options available to the students;
          (3) exposure to cultural events and academic programs 
        not usually available to disadvantaged students;
          (4) activities designed to acquaint students 
        participating in the project with the range of career 
        options available to the students;
          (5) mentoring programs involving faculty or upper 
        class students, or a combination thereof;
          (6) securing temporary housing during breaks in the 
        academic year for students who are homeless children 
        and youths (as such term is defined in section 725 of 
        the McKinney-Vento Homeless Assistance Act (42 U.S.C. 
        11434a)) or were formerly homeless children and youths 
        and students who are in foster care or are aging out of 
        the foster care system; and
          (7) programs and activities as described in 
        subsection (b) or paragraphs (1) through (5) of this 
        subsection that are specially designed for students who 
        are limited English proficient, students with 
        disabilities, students who are homeless children and 
        youths (as such term is defined in section 725 of the 
        McKinney-Vento Homeless Assistance Act (42 U.S.C. 
        11434a)) or were formerly homeless children and youths, 
        or students who are in foster care or are aging out of 
        the foster care system.
    [(c)] (d) Special Rule.--
          (1) Use for student aid.--A recipient of a grant that 
        undertakes any of the permissible services identified 
        in [subsection (b)] subsection (c) may, in addition, 
        use such funds to provide grant aid to students. A 
        grant provided under this paragraph shall not exceed 
        the maximum appropriated Pell Grant or, be less than 
        the minimum appropriated Pell Grant, for the current 
        academic year. In making grants to students under this 
        subsection, an institution shall ensure that adequate 
        consultation takes place between the student support 
        service program office and the institution's financial 
        aid office.

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *


SEC. 402E. POSTBACCALAUREATE ACHIEVEMENT PROGRAM AUTHORITY.

    (a) Program Authority.-- * * *
    (b) Required Services.--[A postbaccalaureate achievement 
project assisted under this section may provide services such 
as--] A project assisted under this section shall provide--
          (1) * * *

           *       *       *       *       *       *       *

          (5) academic counseling; and
          (6) activities designed to assist students 
        participating in the project in securing admission to 
        and financial assistance for enrollment in graduate 
        programs[;] .
          [(7) mentoring programs involving faculty members at 
        institutions of higher education, students, or any 
        combination of such persons; and
          [(8) exposure to cultural events and academic 
        programs not usually available to disadvantaged 
        students.]
    (c) Permissible Services.--A project assisted under this 
section may provide services such as--
          (1) education or counseling services designed to 
        improve the financial literacy and economic literacy of 
        students or their parents, including financial planning 
        for postsecondary education;
          (2) mentoring programs involving faculty members at 
        institutions of higher education, students, or any 
        combination of such persons; and
          (3) exposure to cultural events and academic programs 
        not usually available to disadvantaged students.
    [(c)] (d) Requirements.--In approving applications for 
[postbaccalaureate achievement] projects assisted under this 
section for any fiscal year, the Secretary shall require--
          (1) * * *

           *       *       *       *       *       *       *

    [(d)] (e) Award Considerations.--In addition to such other 
selection criteria as may be prescribed by regulations, the 
Secretary shall consider in making awards to institutions under 
this section--
          (1) * * *

           *       *       *       *       *       *       *

    [(e)] (f) Maximum Stipends.--Students participating in 
research under a [postbaccalaureate achievement project] 
project under this section may receive an award that--
          (1) * * *

           *       *       *       *       *       *       *

    [(f)] (g) Funding.--From amounts appropriated pursuant to 
the authority of section [402A(f)] 402A(g), 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] 
2006 through 2010.

           *       *       *       *       *       *       *


SEC. 402F. EDUCATIONAL OPPORTUNITY CENTERS.

    (a) Program Authority; Services Provided.--* * *
          (1) to provide information with respect to financial 
        and academic assistance available for individuals 
        desiring to pursue a program of postsecondary 
        education; [and]
          (2) to provide assistance to such persons in applying 
        for admission to institutions at which a program of 
        postsecondary education is offered, including preparing 
        necessary applications for use by admissions and 
        financial aid officers[.] ; and
          (3) to improve the financial literacy and economic 
        literacy of students, including--
                  (A) basic personal income, household money 
                management, and financial planning skills; and
                  (B) basic economic decisionmaking skills.
    (b) Permissible Services.--An educational opportunity 
center assisted under this section may provide services such 
as--
          (1) * * *

           *       *       *       *       *       *       *

          (4) * * *
          (5) education or counseling services designed to 
        improve the financial literacy and economic literacy of 
        students;
          [(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) individualized personal, career, and academic 
        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) which are specially designed 
        for students of limited English proficiency.]
          (11) programs and activities as described in 
        paragraphs (1) through (10) that are specially designed 
        for students who are limited English proficient, 
        students with disabilities, or students who are 
        homeless children and youths (as such term is defined 
        in section 725 of the McKinney-Vento Homeless 
        Assistance Act (42 U.S.C. 11434(a)), or programs and 
        activities for students who are in foster care or are 
        aging out of the foster care system.

           *       *       *       *       *       *       *


SEC. 402G. STAFF DEVELOPMENT ACTIVITIES.

    (a) Secretary's Authority.-- * * *
    (b) Contents of Training Programs.-- * * *
          (1) * * *

           *       *       *       *       *       *       *

          (3) The design and operation of model programs for 
        projects funded under this chapter, including 
        strategies for recruiting and serving students who are 
        homeless children and youths (as such term is defined 
        in section 725 of the McKinney-Vento Homeless 
        Assistance Act (42 U.S.C. 11434a)) and students who are 
        in foster care or are aging out of the foster care 
        system.

           *       *       *       *       *       *       *


SEC. 402H. [EVALUATIONS AND GRANTS FOR PROJECT IMPROVEMENT AND 
                    DISSEMINATION PARTNERSHIP PROJECTS.] REPORTS, 
                    EVALUATIONS, AND GRANTS FOR PROJECT IMPROVEMENT AND 
                    DISSEMINATION.

    (a) Report to Congress.--At least once every 2-year period, 
the Secretary shall prepare and submit to Congress a report on 
the outcomes achieved by the programs authorized under this 
chapter. Such report shall include a statement for the 
preceding fiscal year specifying--
          (1) the number of grants awarded during each fiscal 
        year, and the number of individuals served by the 
        programs carried out under such grants;
          (2) the number of entities that received grants 
        during the fiscal year, including the number of 
        entities that--
                  (A) received a grant to carry out a program 
                under this chapter for the fiscal year; and
                  (B) had not received funding for that 
                particular program during the previous grant 
                cycle;
          (3) a comparison of the number and percentage of 
        grant awards made to entities described in paragraph 
        (2), with the number of such entities funded through 
        discretionary grant competitions conducted by the 
        Secretary under this chapter in the 3 grant cycles 
        preceding the fiscal year;
          (4) information on the number of individuals served 
        in each program authorized under this chapter; and
          (5) information on the outcomes achieved by each 
        program authorized under this chapter, including the 
        outcome criteria described in section 402A(f) for each 
        program.
    [(a)] (b) Evaluations.--
          (1) In general.-- * * *

           *       *       *       *       *       *       *

    [(b)] (c) Grants.-- * * *

           *       *       *       *       *       *       *

    [(c)] (d) Results.--* * *

           *       *       *       *       *       *       *


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


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

    [(a) Program Authorized.--The Secretary is authorized, in 
accordance with the requirements of this chapter, to establish 
a program that--
          [(1) encourages eligible entities to provide or 
        maintain a guarantee to eligible low-income students 
        who obtain a secondary school diploma (or its 
        recognized equivalent), of the financial assistance 
        necessary to permit the students to attend an 
        institution of higher education; and
          [(2) supports eligible entities in providing--
                  [(A) additional counseling, mentoring, 
                academic support, outreach, and supportive 
                services to elementary school, middle school, 
                and secondary school students who are at risk 
                of dropping out of school; and
                  [(B) information to students and their 
                parents about the advantages of obtaining a 
                postsecondary education and the college 
                financing options for the students and their 
                parents.]
    (a) Program Authorized.--The Secretary is authorized, in 
accordance with the requirements of this chapter, to establish 
a program that encourages eligible entities to provide support 
to eligible low-income students to assist the students in 
obtaining a secondary school diploma (or its recognized 
equivalent) and to prepare for and succeed in postsecondary 
education, by providing--
          (1) financial assistance, academic support, 
        additional counseling, mentoring, outreach, and 
        supportive services to middle school and secondary 
        school students to reduce--
                  (A) the risk of such students dropping out of 
                school; or
                  (B) the need for remedial education for such 
                students at the postsecondary level; and
          (2) information to students and their parents about 
        the advantages of obtaining a postsecondary education 
        and the college financing options for the students and 
        their parents.
    (b) Awards.--
          (1) In general.--From funds appropriated under 
        section [404H] 404G for each fiscal year, the Secretary 
        shall make awards to eligible entities described in 
        paragraphs (1) and (2) of subsection (c) to enable the 
        entities to carry out the program authorized under 
        subsection (a).
          (2) Priority.--In making awards to eligible entities 
        described in paragraph (c)(1), the Secretary shall--
                  [(A) give priority to eligible entities 
                that--
                          [(i) on the day before the date of 
                        enactment of the Higher Education 
                        Amendments of 1998, carried out 
                        successful educational opportunity 
                        programs under this chapter (as this 
                        chapter was in effect on such day); and
                          [(ii) have a prior, demonstrated 
                        commitment to early intervention 
                        leading to college access through 
                        collaboration and replication of 
                        successful strategies;]
                  (A) give priority to eligible entities that 
                have a prior, demonstrated commitment to early 
                intervention leading to college access through 
                collaboration and replication of successful 
                strategies;

           *       *       *       *       *       *       *

    (c) Definition of Eligible Entity.--For the purposes of 
this chapter, the term ``eligible entity'' means--
          (1) a State; or
          [(2) a partnership consisting of--
                  [(A) one or more local educational agencies 
                acting on behalf of--
                          [(i) one or more elementary schools 
                        or secondary schools; and
                          [(ii) the secondary schools that 
                        students from the schools described in 
                        clause (i) would normally attend;
                  [(B) one or more degree granting institutions 
                of higher education; and
                  [(C) at least two community organizations or 
                entities, such as business, professional 
                associations, community-based organizations, 
                philanthropic organizations, State agencies, 
                institutions or agencies sponsoring programs 
                authorized under subpart 4, or other public or 
                private agencies or organizations.]
          (2) a partnership--
                  (A) consisting of--
                          (i) 1 or more local educational 
                        agencies; and
                          (ii) 1 or more degree granting 
                        institutions of higher education; and
                  (B) which may include not less than 2 other 
                community organizations or entities, such as 
                businesses, professional organizations, State 
                agencies, institutions or agencies sponsoring 
                programs authorized under subpart 4, or other 
                public or private agencies or organizations.

           *       *       *       *       *       *       *


SEC. 404B. REQUIREMENTS

    [(a) Funding Rules.--
          [(1) Continuation awards.--From the amount 
        appropriated under section [404H] 404 G for a fiscal 
        year, the Secretary shall continue to award grants to 
        States under this chapter (as this chapter was in 
        effect on the day before the date of enactment of the 
        Higher Education Amendments on 1998) in accordance with 
        the terms and conditions of such grants.
          [(2) Distribution.--From the amount appropriated 
        under section 404H that remains after making 
        continuation awards under paragraph (1) for a fiscal 
        year, the Secretary shall--
                  [(A) make available--
                          [(i) not less than 33 percent of the 
                        amount to eligible entities described 
                        in section 404A(c)(1); and
                          [(ii) not less than 33 percent of the 
                        amount to eligible entities described 
                        in section 404A(c)(2); and
                  [(B) award the remainder of the amount to 
                eligible entities described in paragraph (1) or 
                (2) of section 404A(c).
          [(3) Special rule.--The Secretary shall annually 
        reevaluate the distribution of funds described in 
        paragraph (2)(B) based on number, quality, and promise 
        of the applications and adjust the distribution 
        accordingly.]
  (a) Funding Rules.--
          (1) Distribution.--In awarding grants from the amount 
        appropriated under section 404G for a fiscal year, the 
        Secretary shall take into consideration--
                  (A) the geographic distribution of such 
                awards; and
                  (B) the distribution of such awards between 
                urban and rural applicants.
          (2) Special rule.--The Secretary shall annually 
        reevaluate the distribution of funds described in 
        paragraph (1) based on number, quality, and promise of 
        the applications.
    [(b) Limitation.--Each eligible entity described in section 
404A(c)(1), and each eligible described in section 404A(c)(2) 
that conducts a scholarship component under section 404E, shall 
use not less than 25 percent and not more than 50 percent of 
grant funds received under this chapter for the early 
intervention component of an eligible entity's program under 
this chapter, except that the Secretary may waive the 50 
percent limitation if the eligible entity demonstrate that the 
eligible entity has another means of providing the students 
with financial assistance that is described in the plan 
submitted under section 404C.]
    [(c)](b) Coordination.-- * * *

           *       *       *       *       *       *       *

    [(d)](c) Designation of Fiscal Agent.-- * * *
    [(e) Coordinators.--An eligible entity described in section 
404A(c)(2) shall have a full-time program coordinator or a 
part-time program coordinator, whose primary responsibility is 
a project under section 404C.
    [(f) Displacement.--An eligible entity descried in 
404A(c)(2) shall ensure that the activities assisted under this 
chapter will not displace an employee or eliminate a position 
at a school assisted under this chapter, including a partial 
displacement such as reduction in hours, wages or employment 
benefits.]
    [(g)(d) Cohort Approach.--
          (1) In general.--The Secretary shall require that 
        eligible entities described in section 404A(c)(2)--
                  (A) * * *

           *       *       *       *       *       *       *

    (e) Supplement, Not Supplant.--Grant funds awarded under 
this chapter shall be used to supplement, and not supplant, 
other Federal, State, and local funds that would otherwise be 
expended to carry out activities assisted under this chapter.

SEC. 404C. [ELIGIBLE ENTITY PLANS] APPLICATIONS.

    (a) [Plan] Application Required for Eligibility.--
          [(1) In general.--In order for an eligible entity to 
        qualify for a grant under this chapter, the eligible 
        entity shall submit to the Secretary [a plan] an 
        application for carrying out the program under this 
        chapter. [Such plan shall provide for the conduct of a 
        scholarship component if required or undertaken 
        pursuant to section 404E and an early intervention 
        component required pursuant to section 404D.]
          [(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) provide such additional assurances as 
                the Secretary determines necessary to ensure 
                compliance with the requirements of this 
                chapter.]
          (2) Contents.--Each application 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. 
        Each such application shall, at a minimum--
                  (A) describe the activities for which 
                assistance under this chapter is sought, 
                including how the eligible entity will carry 
                out the required activities described in 
                section 404D(a);
                  (B) describe how the eligible agency will 
                meet the requirements of section 404E;
                  (C) provide assurances that adequate 
                administrative and support staff will be 
                responsible for coordinating the activities 
                described in section 404D;
                  (D) ensure that activities assisted under 
                this chapter will not displace an employee or 
                eliminate a position at a school assisted under 
                this chapter, including a partial 
displacementsuch as a reduction in hours, wages or employment benefits;
                  (E) describe, in the case of an eligible 
                entity described in section 404A(c)(2), how the 
                eligible entity will define the cohorts of the 
                students served by the eligible entity pursuant 
                to section 404B(d), and how the eligible entity 
                will serve the cohort through grade 12, 
                including--
                          (i) how vacancies in the program 
                        under this chapter will be filled; and
                          (ii) how the eligible entity will 
                        serve students attending different 
                        secondary schools;
                  (F) describe how the eligible entity will 
                coordinate programs with other existing 
                Federal, State, or local programs to avoid 
                duplication and maximize the number of students 
                served;
                  (G) provide such additional assurances as the 
                Secretary determines necessary to ensure 
                compliance with the requirements of this 
                chapter; and
                  (H) provide information about the activities 
                that will be carried out by the eligible entity 
                to support systemic changes from which future 
                cohorts of students will benefit.
    (b) Matching Requirement.--
          (1) In general.--The Secretary shall not approve [a 
        plan] an application submitted under subsection (a) 
        unless [such plan] such application--
                  (A) * * *

           *       *       *       *       *       *       *

    (c) Methods for Complying With Matching Requirement.--An 
eligible entity may count toward the matching requirement 
described in subsection (b)(1)(A)--
          (1) the amount of the financial assistance paid to 
        students from State, local, institutional, or private 
        funds under this chapter[;] including--
                  (A) the amount contributed to a student 
                scholarship fund established under section 
                404E; and
                  (B) the amount of the costs of administering 
                the scholarship program under section 404E;

           *       *       *       *       *       *       *


[SEC. 404D. EARLY INTERVENTION.

    [(a) Services.--
          [(1) In general.--In order to receive a grant under 
        this chapter, an eligible entity shall demonstrate to 
        the satisfaction of the Secretary, in the plan 
        submitted under section 404C, that the eligible entity 
        will provide comprehensive mentoring, counseling, 
        outreach, and supportive services to students 
        participating in programs under this chapter. Such 
        counseling shall include--
                  [(A) financial aid counseling and information 
                regarding the opportunities for financial 
                assistance under this title; and
                  [(B) activities or information regarding--
                          [(i) fostering and improving parent 
                        involvement in promoting the advantages 
                        of a college education, academic 
                        admission requirements, and the need to 
                        take college preparation courses;
                          [(ii) college admissions and 
                        achievement tests; and
                          [(iii) college application 
                        procedures.
          [(2) Methods.--The eligible entity shall demonstrate 
        in such plan, pursuant to regulations of the Secretary, 
        the methods by which the eligible entity will target 
        services on priority students described in subsection 
        (c), if applicable.
    [(b) Uses of Funds.--
          [(1) In general.--The Secretary shall, by regulation, 
        establish criteria for determining whether 
        comprehensive mentoring, counseling, outreach, and 
        supportive services programs may be used to meet the 
        requirements of subsection (a).
          [(2) Permissible activities.--Examples of activities 
        that meet the requirements of subsection (a) include 
        the following:
                  [(A) Providing eligible students in preschool 
                through grade 12 with a continuing system of 
                mentoring and advising that--
                          [(i) is coordinated with the Federal 
                        and State community service 
                        initiatives; and
                          [(ii) may include such support 
                        services as after school and summer 
                        tutoring, assistance in obtaining 
                        summer jobs, career mentoring, and 
                        academic counseling.
                  [(B) Requiring each student to enter into an 
                agreement under which the student agrees to 
                achieve certain academic milestones, such as 
                completing a prescribed set of courses and 
                maintaining satisfactory progress described in 
                section 484(c), in exchange for receiving 
                tuition assistance for a period of time to be 
                established by each eligible entity.
                  [(C) Activities designed to ensure secondary 
                school completion and college enrollment of at-
                risk children, such as identification of at-
                risk children, after school and summer 
                tutoring, assistance in obtaining summer jobs, 
                academic counseling, volunteer and parent 
                involvement, providing former or current 
                scholarship recipients as mentor or peer 
                counselors, skills assessment, providing access 
                to rigorous core courses that reflect 
                challenging academic standards, personal 
                counseling, family counseling and home visits, 
                staff development, and programs and activities 
                described in this subparagraph that are 
                specially designed for students of limited 
                English proficiency.
                  [(D) Summer programs for individuals who are 
                in their sophomore or junior years of secondary 
                school or are planning to attend an institution 
                of higher education in the succeeding academic 
                year that--
                          [(i) are carried out at an 
                        institution of higher education that 
                        has programs of academic year 
                        supportive services for disadvantaged 
                        students through projects authorized 
                        under section 402D or through 
                        comparable projects funded by the State 
                        or other sources;
                          [(ii) provide for the participation 
                        of the individuals who are eligible for 
                        assistance under section 402D or who 
                        are eligible for comparable programs 
                        funded by the State;
                          [(iii)(I) provide summer instruction 
                        in remedial, developmental or 
                        supportive courses;
                                  [(II) provide such summer 
                                services as counseling, 
                                tutoring, or orientation; and
                                  [(III) provide financial 
                                assistance to the individuals 
                                to cover the individuals' 
                                summer costs for books, 
                                supplies, living costs, and 
                                personal expenses; and
                          [(iv) provide the individuals with 
                        financial assistance during each 
                        academic year the individuals are 
                        enrolled at the participating 
                        institution after the summer program.
                  [(E) Requiring eligible students to meet 
                other standards or requirements as the State 
                determines necessary to meet the purpose of 
                this section.
    [(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 who is 
eligible--
          [(1) to be counted under section 1124(c) of the 
        Elementary and Secondary Education Act of 1965;
          [(2) for free or reduced price meals under the 
        Richard B. Russell National School Lunch Act; or
          [(3) for assistance pursuant to part A of title IV of 
        the Social Security Act.
    [(d) Allowable Providers.--In the case of eligible entities 
described in section 404(c)(1), the activities required by this 
section may be provided by service providers such as community-
based organizations, schools, institutions of higher education, 
public and private agencies, nonprofit and philanthropic 
organizations, businesses, institutions and agencies sponsoring 
programs authorized under subpart 4, and other organizations 
the State deems appropriate.]

SEC. 404D. ACTIVITIES.

    (a) Required Activities.--Each eligible entity receiving a 
grant under this chapter shall carry out the following:
          (1) Provide information regarding financial aid for 
        postsecondary education to participating students in 
        the cohort described in subsection 404B(d)(1)(A).
          (2) Encourage student enrollment in rigorous and 
        challenging curricula and coursework, in order to 
        reduce the need for remedial coursework at the 
        postsecondary level.
          (3) Support activities designed to improve the number 
        of participating students who--
                  (A) obtain a secondary school diploma; and
                  (B) complete applications for and enroll in a 
                program of postsecondary education.
          (4) In the case of an eligible entity described in 
        section 404A(c)(1), provide for the scholarships 
        described in section 404E.
  (b) Optional Activities for States and Partnerships.--An 
eligible entity that receives a grant under this chapter may 
use grant funds to carry out 1 or more of the following 
activities:
          (1) Providing tutoring and supporting mentors, 
        including adults or former participants of a program 
        under this chapter, for eligible students.
          (2) Conducting outreach activities to recruit 
        priority students described in subsection (d) to 
        participate in program activities.
          (3) Providing supportive services to eligible 
        students.
          (4) Supporting the development or implementation of 
        rigorous academic curricula, which may include college 
        preparatory, Advanced Placement, or International 
        Baccalaureate programs, and providing participating 
        students access to rigorous core courses that reflect 
        challenging State academic standards.
          (5) Supporting dual or concurrent enrollment programs 
        between the secondary school and institution of higher 
        education partners of an eligible entity described in 
        section 404A(c)(2), and other activities that support 
        participating students in--
                  (A) meeting challenging academic standards;
                  (B) successfully applying for postsecondary 
                education;
                  (C) successfully applying for student 
                financial aid; and
                  (D) developing graduation and career plans.
          (6) Providing support for scholarships described in 
        section 404E.
          (7) Introducing eligible students to institutions of 
        higher education, through trips and school-based 
        sessions.
          (8) Providing an intensive extended school day, 
        school year, or summer program that offers--
                  (A) additional academic classes; or
                  (B) assistance with college admission 
                applications.
          (9) Providing other activities designed to ensure 
        secondary school completion and postsecondary education 
        enrollment of at-risk children, such as--
                  (A) the identification of at-risk children;
                  (B) after-school and summer tutoring;
                  (C) assistance to at-risk children in 
                obtaining summer jobs;
                  (D) academic counseling;
                  (E) volunteer and parent involvement;
                  (F) encouraging former or current 
                participants of a program under this chapter to 
                serve as peer counselors;
                  (G) skills assessments;
                  (H) personal counseling;
                  (I) family counseling and home visits;
                  (J) staff development; and
                  (K) programs and activities described in this 
                subsection that are specially designed for 
                students who are limited English proficient.
                  (10) Enabling eligible students to enroll in 
                Advanced Placement or International 
                Baccalaureate courses, or college entrance 
                examination preparation courses.
                  (11) Providing services to eligible students 
                in the participating cohort described in 
                section 404B(d)(1)(A), through the first year 
                of attendance at an institution of higher 
                education.
    (c) Additional Optional Activities for States.--In addition 
to the required activities described in subsection (a) and the 
optional activities described in subsection (b), an eligible 
entity described in section 404A(c)(1) receiving funds under 
this chapter may use grant funds to carry out 1 or more of the 
following activities:
          (1) Providing technical assistance to--
                  (A) middle schools or secondary schools that 
                are located within the State; or
                  (B) partnerships described in section 
                404A(c)(2) that are located within the State.
          (2) Providing professional development opportunities 
        to individuals working with eligible cohorts of 
        students described in section 404B(d)(1)(A).
          (3) Providing strategies and activities that align 
        efforts in the State to prepare eligible studentsfor 
attending and succeeding in postsecondary education, which may include 
the development of graduation and career plans.
          (4) Disseminating information on the use of 
        scientifically based research and best practices to 
        improve services for eligible students.
          (5)(A) Disseminating information on effective 
        coursework and support services that assist students in 
        obtaining the goals described in subparagraph (B)(ii).
          (B) Identifying and disseminating information on best 
        practices with respect to--
                  (i) increasing parental involvement; and
                  (ii) preparing students, including students 
                with disabilities and students who are limited 
                English proficient, to succeed academically in, 
                and prepare financially for, postsecondary 
                education.
          (6) Working to align State academic standards and 
        curricula with the expectations of postsecondary 
        institutions and employers.
          (7) Developing alternatives to traditional secondary 
        school that give students a head start on attaining a 
        recognized postsecondary credential (including an 
        industry certificate, an apprenticeship, or an 
        associate's or a bachelor's degree), including school 
        designs that give students early exposure to college-
        level courses and experiences and allow students to 
        earn transferable college credits or an associate's 
        degree at the same time as a secondary school diploma.
          (8) Creating community college programs for drop-outs 
        that are personalized drop-out recovery programs that 
        allow drop-outs to complete a regular secondary school 
        diploma and begin college-level work.
    (d) Priority Students.--For eligible entities not using a 
cohort approach, the eligible entity shall treat as priority 
students any student in middle or secondary school who is 
eligible--
          (1) to be counted under section 1124(c) of the 
        Elementary and Secondary Education Act of 1965;
          (2) for free or reduced price meals under the Richard 
        B. Russell National School Lunch Act;
          (3) for assistance under a State program funded under 
        part A or E of title IV of the Social Security Act (42 
        U.S.C. 601 et seq., 670 et seq.); or
          (4) for assistance under subtitle B of title VII of 
        the McKinney-Vento Homeless Assistance Act (42 U.S.C. 
        11431 et seq.).
    (e) Allowable Providers.--In the case of eligible entities 
described in section 404A(c)(1), the activities required by 
this section may be provided by service providers such as 
community-based organizations, schools, institutions of higher 
education, public and private agencies, nonprofit and 
philanthropic organizations, businesses, institutions and 
agencies sponsoring programs authorized under subpart 4, and 
other organizations the State determines appropriate.

SEC. 404E. SCHOLARSHIP COMPONENT.

    (a) In General.--
          (1) States.-- * * *

           *       *       *       *       *       *       *

    (b) Limitation.--
          (1) In general.--Subject to paragraph (2), each 
        eligible entity described in section 404A(c)(1) that 
        receives a grant under this chapter shall use not less 
        than 25 percent and not more than 50 percent of the 
        grant funds for activities described in section 
        404D(c), with the remainder of such funds to be used 
        for a scholarship program under this section.
          (2) Exception.--Notwithstanding paragraph (1), the 
        Secretary may allow an eligible entity to use more than 
        50 percent of grant funds received under this chapter 
        for such activities, if the eligible entity 
        demonstrates that the eligible entity has another means 
        of providing the students with the financial assistance 
        described in this section and describes such means in 
        the application submitted under section 404C.
    (c) Notification of Eligibility.--Each eligible entity 
providing scholarships under this section shall provide 
information on the eligibility requirements for the 
scholarships to all participating students upon the students' 
entry into the programs assisted under this chapter.
    [(b)] (d) Grant Amounts.--The maximum amount of a 
scholarship that an eligible student shall be eligible to 
receive under this section shall be established by the eligible 
entity. The minimum amount of the scholarship fo each fiscal 
year shall not be less than [the lesser of--
          [(1) 75 percent of the average cost of attendance for 
        an in-State student, in a 4-year program of 
        instruction, at public institutions of higher education 
        in such State, as determined in accordance with 
        regulations prescribed by the Secretary; or
          [(2) the maximum Federal Pell Grant funded under 
        section 401 for such fiscal year.] the minimum Federal 
        Pell Grant award under section 401 for such award year.
    (e) Portability of Assistance.--
          (1) In general.--Each eligible entity described in 
        section 404A(c)(1) that receives a grant under this 
        chapter shall create or organize a trust for each 
        cohort described in section 404B(d)(1)(A) for which the 
        grant is sought in the application submitted by the 
        entity, which trust shall be an amount that is not less 
        than the minimum scholarship amount described in 
        subsection (d), multiplied by the number of students 
        participating in the cohort.
          (2) Requirement for portability.--Funds contributed 
        to the trust for a cohort shall be available to a 
        student in the cohort when the student has--
                  (A) completed a secondary school diploma, its 
                recognized equivalent, or other recognized 
                alternative standard for individuals with 
                disabilities; and
                  (B) enrolled in an institution of higher 
                education.
          (3) Qualified educational expenses.--Funds available 
        to an eligible student from a trust may be used for--
                  (A) tuition, fees, books, supplies, and 
                equipment required for the enrollment or 
                attendance of the eligible student at an 
                institution of higher education; and
                  (B) in the case of an eligible student with 
                special needs, expenses for special needs 
                services which are incurred in connection with 
                such enrollment or attendance.
          (4) Return of funds.--
                  (A) Redistribution.--
                          (i) In general.--Trust funds that are 
                        not used by an eligible student within 
                        6 years of the student's scheduled 
                        completion of secondary school may be 
                        redistributed by the eligible entity to 
                        other eligible students.
                          (ii) Return of excess to the 
                        secretary.--If, after meeting the 
                        requirements of paragraph (1) and, if 
                        applicable, redistributing excess funds 
                        in accordance with clause (i), an 
                        eligible entity has funds remaining, 
                        the eligible entity shall return excess 
                        funds to the Secretary for distribution 
                        to other grantees under this chapter.
                  (B) Nonparticipating entity.--Notwithstanding 
                subparagraph (A), in the case of an eligible 
                entity described in section 404A(c)(1)(A) that 
                does not receive assistance under this subpart 
                for 6 fiscal years, the eligible entity shall 
                return any trust funds not awarded or obligated 
                to eligible students to the Secretary for 
                distribution to other grantees under this 
                chapter.
    [(c)] (f) Relation to Other Assistance.-- * * *
    [(d)] (g) Eligible Students.--A student eligible for 
assistance under this section is a student who--
          (1) is less than 22 years old at time of first 
        scholarship award under this section;
          (2) receives a secondary school diploma or its 
        recognized equivalent on or after January 1, [1993] 
        2000;
          (3) is enrolled or accepted for enrollment in a 
        program of undergraduate instruction at an institution 
        of higher education that is located within the State's 
        boundaries, except that, at the State's option, an 
        eligible entity may offer scholarship program 
        portability for recipients who attend institutions of 
        higher education outside such State; and
          (4) who participated in the [early intervention 
        component required under section 404D] activities 
        required under section 404D(a).
    [(e) Priority.--The Secretary shall ensure that each 
eligible entity places a priority on awarding scholarships to 
students who will receive a Federal Pell Grant for the academic 
year for which the scholarship is awarded under this section.
    [(f) Special Rule.--An eligible entity may consider 
students who have successfully participated in programs funded 
under chapter 1 to have met the requirements of subsection 
(d)(4).]

SEC. 404F. 21ST CENTURY SCHOLAR CERTIFICATES.

    [(a) Authority.--The Secretary, using funds appropriated 
under section 404H that do not exceed $200,000 for a fiscal 
year--
          [(1) shall ensure that certificates, to be known as 
        21st Century Scholar Certificates, are provided to all 
        students participating in programs under this chapter; 
        and
          [(2) may, as practicable, ensure that such 
        certificates are provided to all students in grades 6 
        through 12 who attend schools at which at least 50 
        percent of the students enrolled are eligible for a 
        free or reduced price lunch under the Richard B. 
        Russell National School Lunch Act.
    [(b) Information Required.--A 21st Century Scholar 
Certificate shall be personalized for each student and indicate 
the amount of Federal financial aid for college which a student 
may be eligible to receive.]

           *       *       *       *       *       *       *


SEC. [404G] 404F. EVALUATION AND REPORT.

    [(a) Evaluation.--* * *

           *       *       *       *       *       *       *

    (c) Federal Evaluation.--In order to evaluate and improve 
the impact of the activities assisted under this chapter, the 
Secretary shall, from not more than 0.75 percent of the funds 
appropriated under section [404H] 404G for a fiscal year, award 
one or more grants, contracts, or cooperative agreements to or 
with public and private institutions and organizations, to 
enable the institutions and organizations to evaluate the 
effectiveness of the program and, as appropriate, disseminate 
the results of the evaluation.

           *       *       *       *       *       *       *


SEC. [404H] 404G 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.] such 
sums as may be necessary for fiscal year 2006 and each of the 5 
succeeding fiscal years.

           *       *       *       *       *       *       *


     Subpart 3--Federal Supplemental Educational Opportunity Grants


SEC. 413A. PURPOSE; APPROPRIATIONS AUTHORIZED.

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

           *       *       *       *       *       *       *


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).] 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).

           *       *       *       *       *       *       *

          [(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.]
    (b) * * *

           *       *       *       *       *       *       *

    (c) Determination of Institution's Need.--(1) The amount of 
an institution's need is equal to--
          (A) * * *

           *       *       *       *       *       *       *

          (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) Purpose of Subpart.--It is the purpose of this subpart 
to make incentive grants available to States to assist States 
in--
          (1) providing grants to--
                  (A) * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *


SEC. 415C. APPLICATIONS FOR LEVERAGING EDUCATIONAL ASSISTANCE 
                    PARTNERSHIP PROGRAMS.

    (a) Submission and Contents of Applications.--* * *
    (b) Payment of Federal Share of Grants Made by Qualified 
Program.--From a State's allotment under this subpart for any 
fiscal year the Secretary is authorized to make payments to 
such State for paying up to 50 percent of the amount of student 
grants pursuant to a State program which--
          (1) * * *
          (2) provides that such grants will be in amounts [not 
        in excess of $5,000 per academic year] not to exceed 
        the lesser of $12,500 or the student's cost of 
        attendance per academic year (A) for attendance on a 
        full-time basis at an institution of higher education, 
        and (B) for campus-based community service work 
        learning study jobs;

           *       *       *       *       *       *       *

          [(10) for any academic year beginning after June 30, 
        1987, provides the non-Federal share of the amount of 
        student grants or work-study jobs under this subpart 
        through a direct appropriation of State funds for the 
        program under this subpart.]
          (10) provides notification to eligible students that 
        such grants are--
                  (A) Leveraging Educational Assistance 
                Partnership grants; and
                  (B) funded by the Federal Government, the 
                State, and other contributing partners.

           *       *       *       *       *       *       *


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

  [(a) In General.--From amounts reserved under section 
415A(b)(2) for each fiscal year, the Secretary shall--
          [(1) make allotments among States in the same manner 
        as the Secretary makes allotments among States under 
        section 415B; and
          [(2) award grants to States, from allotments under 
        paragraph (1), to enable the States to pay the Federal 
        share of the cost of the authorized activities 
        described in subsection (c).
    [(b) Applicability Rule.--The provisions of this subpart 
which are not inconsistent with this section shall apply to the 
program authorized by this section.
    [(c) Authorized Activities.--Each State receiving a grant 
under this section may use the grant funds for--
          [(1) making awards that--
                  [(A) supplement grants received under section 
                415C(b)(2) by eligible students who demonstrate 
                financial need; or
                  [(B) provide grants under section 415C(b)(2) 
                to additional eligible students who demonstrate 
                financial need;
          [(2) providing scholarships for eligible students--
                  [(A) who demonstrate financial need; and
                  [(B) who--
                          [(i) desire to enter a program of 
                        study leading to a career in--
                                  [(I) information technology;
                                  [(II) mathematics, computer 
                                science, or engineering;
                                  [(III) teaching; or
                                  [(IV) another field 
                                determined by the State to be 
                                critical to the State's 
                                workforce needs; or
                          [(ii) demonstrate merit or academic 
                        achievement; and
          [(3) making awards that--
                  [(A) supplement community service work-study 
                awards received under section 415C(b)(2) by 
                eligible students who demonstrate financial 
                need; or
                  [(B) provide community service work-study 
                awards under section 415C(b)(2) to additional 
                eligible students who demonstrate financial 
                need.
    [(d) Maintenance of Effort Requirement.--Each State 
receiving a grant under this section for a fiscal year shall 
provide the Secretary an assurance that the aggregate amount 
expended per student or the aggregate expenditures by the 
State, from funds derived from non-Federal sources, for the 
authorized activities described in subsection (c) for the 
preceding fiscal year were not less than the amount expended 
per student or the aggregate expenditures by the State for the 
activities for the second preceding fiscal year.
    [(e) Federal Share.--The Federal share of the cost of the 
authorized activities described in subsection (c) for any 
fiscal year shall be not more than 33\1/3\ percent.
    [(f) Special Rule.--Notwithstanding subsection (d), for 
purposes of determining a State's share of the cost of the 
authorized activities described in subsection (c), the State 
shall consider only those expenditures from non-Federal sources 
that exceed its total expenditures for need-based grants, 
scholarships, and work-study assistance for fiscal year 1999 
(including any such assistance provided under this subpart).
    [(g) Use of Funds for Administrative Costs Prohibited.--A 
State receiving a grant under this section shall not use any of 
the grant funds to pay administrative costs associated with any 
of the authorized activities described in subsection (c).]

[SEC. 415E. GRANTS FOR ACCESS AND PERSISTENCE.

  (a) Purpose.--It is the purpose of this section to expand 
college access and increase college persistence by making 
allotments to States to enable the States to--
          (1) expand and enhance partnerships with institutions 
        of higher education, early information and 
        intervention, mentoring, or outreach programs, private 
        corporations, philanthropic organizations, and other 
        interested parties in order to--
                  (A) carry out activities under this section; 
                and
                  (B) provide coordination and cohesion among 
                Federal, State, and local governmental and 
                private efforts that provide financial 
                assistance to help low-income students attend 
                an institution of higher education;
          (2) provide need-based grants for access and 
        persistence to eligible low-income students;
          (3) provide early notification to low-income students 
        of the students' eligibility for financial aid; and
          (4) encourage increased participation in early 
        information and intervention, mentoring, or outreach 
        programs.
  (b) Allotments to States.--
          (1) In general.--
                  (A) Authorization.--From sums reserved under 
                section 415A(b)(2) for each fiscal year, the 
                Secretary shall make an allotment to each State 
                that submits an application for an allotment in 
                accordance with subsection (c) to enable the 
                State to pay the Federal share, as described in 
                paragraph (2), of the cost of carrying out the 
                activities under subsection (d).
                  (B) Determination of allotment.--In making 
                allotments under subparagraph (A), the 
                Secretary shall consider the following:
                          (i) Continuation of award.--If a 
                        State continues to meet the 
                        specifications established in such 
                        State's application under subsection 
                        (c), the Secretary shall make an 
                        allotment to such State that is not 
                        less than the allotment made to such 
                        State for the previous fiscal year.
                          (ii) Priority.--The Secretary shall 
                        give priority in making allotments to 
                        Statesthat meet the requirements 
described in paragraph (2)(A)(ii).
          (2) Federal share.--
                  (A) In general.--The Federal share under this 
                section shall be determined in accordance with 
                the following:
                          (i) If a State applies for an 
                        allotment under this section in 
                        partnership with--
                                  (I) any number of degree 
                                granting institutions of higher 
                                education in the State whose 
                                combined full-time enrollment 
                                represents less than a majority 
                                of all students attending 
                                institutions of higher 
                                education in the State; and
                                  (II)(aa) philanthropic 
                                organizations that are located 
                                in, or that provide funding in, 
                                the State; or
                                  (bb) private corporations 
                                that are located in, or that do 
                                business in, the State,
then the Federal share of the cost of carrying out the 
activities under subsection (d) shall be equal to 50 percent.
                          (ii) If a State applies for an 
                        allotment under this section in 
                        partnership with--
                                  (I) any number of degree 
                                granting institutions of higher 
                                education in the State whose 
                                combined full-time enrollment 
                                represents a majority of all 
                                students attending institutions 
                                of higher education in the 
                                State; and
                                  (II)(aa) philanthropic 
                                organizations that are located 
                                in, or that provide funding in, 
                                the State; or
                                  (bb) private corporations 
                                that are located in, or that do 
                                business in, the State,
then the Federal share of the cost of carrying out the 
activities under subsection (d) shall be equal to 57 percent.
                  (B) Non-federal share.--
                          (i) In general.--The non-Federal 
                        share under this section may be 
                        provided in cash or in kind, fully 
                        evaluated and in accordance with this 
                        subparagraph.
                          (ii) In kind contribution.--For the 
                        purpose of calculating the non-Federal 
                        shareunder this section, an in kind 
contribution is a non-cash award that has monetary value, such as 
provision of room and board and transportation passes, and that helps a 
student meet the cost of attendance.
                          (iii) Effect on need analysis.--For 
                        the purpose of calculating a student's 
                        need in accordance with part F of this 
                        title, an in-kind contribution 
                        described in clause (ii) shall not be 
                        considered an asset or income.
    (c) Application for Allotment.--
          (1) In general.--
                  (A) Submission.--A State that desires to 
                receive an allotment under this section on 
                behalf of a partnership described in paragraph 
                (3) shall submit an application to the 
                Secretary at such time, in such manner, and 
                containing such information as the Secretary 
                may require.
                  (B) Content.--An application submitted under 
                subparagraph (A) shall include the following:
                          (i) A description of the State's plan 
                        for using the allotted funds.
                          (ii) Assurances that the State will 
                        provide the non-Federal share from 
                        State, institutional, philanthropic, or 
                        private funds, of not less than the 
                        required share of the cost of carrying 
                        out the activities under subsection 
                        (d), as determined under subsection 
                        (b), in accordance with the following:
                                  (I) The State shall specify 
                                the methods by which non-
                                Federal share funds will be 
                                paid and include provisions 
                                designed to ensure that funds 
                                provided under this section 
                                will be used to supplement, and 
                                not supplant, Federal and non-
                                Federal funds available for 
                                carrying out the activities 
                                under this title.
                                  (II) A State that uses non-
                                Federal funds to create or 
                                expand existing partnerships 
                                with nonprofit organizations or 
                                community-based organizations 
                                in which such organizations 
                                match State funds for student 
                                scholarships, may apply such 
                                matching funds from such 
                                organizations toward fulfilling 
                                the State's non-Federal share 
                                obligation under this clause.
                          (iii) Assurances that early 
                        information and intervention, 
                        mentoring, or outreach programs exist 
                        within the State or that there is a 
                        plan to make such programs widely 
                        available.
                          (iv) A description of the 
                        organizational structure that the State 
                        has in place to administer the 
                        activities under subsection (d), 
                        including a description of the system 
                        the State will use to track the 
                        participation of students who receive 
                        grants under this section to degree 
                        completion.
                          (v) Assurances that the State has a 
                        method in place, such as acceptance of 
                        the automatic zero expected family 
                        contribution determination described in 
                        section 479, to identify eligible low-
                        income students and award State grant 
                        aid to such students.
                          (vi) Assurances that the State will 
                        provide notification to eligible low-
                        income students that grants under this 
                        section are--
                                  (I) Leveraging Educational 
                                Assistance Partnership Grants; 
                                and
                                  (II) funded by the Federal 
                                Government, the State, and 
                                other contributing partners.
          (2) State agency.--The State agency that submits an 
        application for a State under section 415C(a) shall be 
        the same State agency that submits an application under 
        paragraph (1) for such State.
          (3) Partnership.--In applying for an allotment under 
        this section, the State agency shall apply for the 
        allotment in partnership with--
                  (A) not less than 1 public and 1 private 
                degree granting institution of higher education 
                that are located in the State, if applicable;
                  (B) new or existing early information and 
                intervention, mentoring, or outreach programs 
                located in the State; and
                  (C) not less than 1--
                          (i) philanthropic organization 
                        located in, or that provides funding 
                        in, the State; or
                          (ii) private corporation located in, 
                        or that does business in, the State.
          (4) Roles of partners.--
                  (A) State agency.--A State agency that is in 
                a partnership receiving an allotment under this 
                section--
                          (i) shall--
                                  (I) serve as the primary 
                                administrative unit for the 
                                partnership;
                                  (II) provide or coordinate 
                                non-Federal share funds, and 
                                coordinate activities among 
                                partners;
                                  (III) encourage each 
                                institution of higher education 
                                in the State to participate in 
                                the partnership;
                                  (IV) make determinations and 
                                early notifications of 
                                assistance as described under 
                                subsection (d)(2); and
                                  (V) annually report to the 
                                Secretary on the partnership's 
                                progress in meeting the purpose 
                                of this section; and
                          (ii) may provide early information 
                        and intervention, mentoring, or 
                        outreach programs.
                  (B) Degree granting institutions of higher 
                education.--A degree granting institution of 
                higher education that is in a partnership 
                receiving an allotment under this section--
                          (i) shall--
                                  (I) recruit and admit 
                                participating qualified 
                                students and provide such 
                                additional institutional grant 
                                aid to participating students 
                                as agreed to with the State 
                                agency;
                                  (II) provide support services 
                                to students who receive grants 
                                for access and persistence 
                                under this section and are 
                                enrolled at such institution; 
                                and
                                  (III) assist the State in the 
                                identification of eligible 
                                students and the dissemination 
                                of early notifications of 
                                assistance as agreed to with 
                                the State agency; and
                          (ii) may provide funding for early 
                        information and intervention, 
                        mentoring, or outreach programs or 
                        provide such services directly.
                  (C) Programs.--An early information and 
                intervention, mentoring, or outreach program 
                that is in a partnership receiving an allotment 
                under this section shall provide direct 
                services,support, and information to 
participating students.
                  (D) Philanthropic organization or private 
                corporation.--A philanthropic organization or 
                private corporation that is in a partnership 
                receiving an allotment under this section shall 
                provide funds for grants for access and 
                persistence for participating students, or 
                provide funds or support for early information 
                and intervention, mentoring, or outreach 
                programs.
    (d) Authorized Activities.--
          (1) In general.--
                  (A) Establishment of partnership.--Each State 
                receiving an allotment under this section shall 
                use the funds to establish a partnership to 
                award grants for access and persistence to 
                eligible low-income students in order to 
                increase the amount of financial assistance 
                such students receive under this subpart for 
                undergraduate education expenses.
                  (B) Amount of grants.--
                          (i) Partnerships with institutions 
                        serving less than a majority of 
                        students in the state.--
                                  (I) In general.--In the case 
                                where a State receiving an 
                                allotment under this section is 
                                in a partnership described in 
                                subsection (b)(2)(A)(i), the 
                                amount of a grant for access 
                                and persistence awarded by such 
                                State shall be not less than 
                                the amount that is equal to the 
                                average undergraduate tuition 
                                and mandatory fees at 4-year 
                                public institutions of higher 
                                education in the State where 
                                the student resides (less any 
                                other Federal or State 
                                sponsored grant amount, work 
                                study amount, and scholarship 
                                amount received by the 
                                student), and such amount shall 
                                be used toward the cost of 
                                attendance at an institution of 
                                higher education located in the 
                                State.
                                  (II) Cost of attendance.--A 
                                State that has a program, apart 
                                from the partnership under this 
                                section, of providing eligible 
                                low-income students with grants 
                                that are equal to the average 
                                undergraduate tuition and 
                                mandatory fees at 4-year public 
                                institutionsof higher education 
in the State, may increase the amount of grants for access and 
persistence awarded by such State up to an amount that is equal to the 
average cost of attendance at 4-year public institutions of higher 
education in the State (less any other Federal or State sponsored grant 
amount, work study amount, and scholarship amount received by the 
student).
                          (ii) Partnerships with institutions 
                        serving the majority of students in the 
                        state.--In the case where a State 
                        receiving an allotment under this 
                        section is in a partnership described 
                        in subsection (b)(2)(A)(ii), the amount 
                        of a grant for access and persistence 
                        awarded by such State shall be not more 
                        than an amount that is equal to the 
                        average cost of attendance at 4-year 
                        public institutions of higher education 
                        in the State where the student resides 
                        (less any other Federal or State 
                        sponsored grant amount, college work 
                        study amount, and scholarship amount 
                        received by the student), and such 
                        amount shall be used by the student to 
                        attend an institution of higher 
                        education located in the State.
                  (C) Special rules.--
                          (i) Partnership institutions.--A 
                        State receiving an allotment under this 
                        section may restrict the use of grants 
                        for access and persistence under this 
                        section by awarding the grants only to 
                        students attending institutions of 
                        higher education that are participating 
                        in the partnership.
                          (ii) Out-of-state institutions.--If a 
                        State provides grants through another 
                        program under this subpart to students 
                        attending institutions of higher 
                        education located in another State, 
                        such agreement may also apply to grants 
                        awarded under this section.
          (2) Early notification.--
                  (A) In general.--Each State receiving an 
                allotment under this section shall annually 
                notify low-income students, such as students 
                who are eligible to receive a free lunch under 
                the school lunch program established under the 
                Richard B. Russell National School Lunch Act, 
                in grade 7 through grade 12 in the State, of 
                the students' potential eligibility for student 
                financial assistance, including a grant for 
                access and persistence, to attend an 
                institution of higher education.
                  (B) Content of notice.--The notification 
                under subparagraph (A)--
                          (i) shall include--
                                  (I) information about early 
                                information and intervention, 
                                mentoring, or outreach programs 
                                available to the student;
                                  (II) information that a 
                                student's candidacy for a grant 
                                for access and persistence is 
                                enhanced through participation 
                                in an early information and 
                                intervention, mentoring, or 
                                outreach program;
                                  (III) an explanation that 
                                student and family eligibility 
                                and participation in other 
                                Federal means-tested programs 
                                may indicate eligibility for a 
                                grant for access and 
                                persistence and other student 
                                aid programs;
                                  (IV) a nonbinding estimation 
                                of the total amount of 
                                financial aid alow-income 
student with a similar income level may expect to receive, including an 
estimation of the amount of a grant for access and persistence and an 
estimation of the amount of grants, loans, and all other available 
types of aid from the major Federal and State financial aid programs;
                                  (V) an explanation that in 
                                order to be eligible for a 
                                grant for access and 
                                persistence, at a minimum, a 
                                student shall--
                                          (aa) meet the 
                                        requirement under 
                                        paragraph (3);
                                          (bb) graduate from 
                                        secondary school; and
                                          (cc) enroll at an 
                                        institution of higher 
                                        education that is a 
                                        partner in the 
                                        partnership or 
                                        qualifies under 
                                        subsection 
                                        (d)(1)(C)(ii);
                                  (VI) information on any 
                                additional requirements (such 
                                as a student pledge detailing 
                                student responsibilities) that 
                                the State may impose for 
                                receipt of a grant for access 
                                and persistence under this 
                                section; and
                                  (VII) instructions on how to 
                                apply for a grant for access 
                                and persistence and an 
                                explanation that a student is 
                                required to file a Free 
                                Application for Federal Student 
                                Aid authorized under section 
                                483(a) to be eligible for such 
                                grant and assistance from other 
                                Federal and State financial aid 
                                programs; and
                          (ii) may include a disclaimer that 
                        grant awards for access and persistence 
                        are contingent upon--
                                  (I) a determination of the 
                                student's financial eligibility 
                                at the time of the student's 
                                enrollment at an institution of 
                                higher education that is a 
                                partner in the partnership or 
                                qualifies under subsection 
                                (d)(1)(C)(ii);
                                  (II) annual Federal and State 
                                appropriations; and
                                  (III) other aid received by 
                                the student at the time of the 
                                student's enrollmentat such 
institution of higher education.
          (3) Eligibility.--In determining which students are 
        eligible to receive grants for access and persistence, 
        the State shall ensure that each such student meets not 
        less than 1 of the following:
                  (A) Meets not less than 2 of the following 
                criteria, with priority given to students 
                meeting all of the following criteria:
                          (i) Has an expected family 
                        contribution equal to zero (as 
                        described in section 479) or a 
                        comparable alternative based upon the 
                        State's approved criteria in section 
                        415C(b)(4).
                          (ii) Has qualified for a free lunch, 
                        or at the State's discretion a reduced 
                        price lunch, under the school lunch 
                        program established under the Richard 
                        B. Russell National School Lunch Act.
                          (iii) Qualifies for the State's 
                        maximum undergraduate award, as 
                        authorized under section 415C(b).
                          (iv) Is participating in, or has 
                        participated in, a Federal, State, 
                        institutional, or community early 
                        information and intervention, 
                        mentoring, or outreach program, as 
                        recognized by the State agency 
                        administering activities under this 
                        section.
                  (B) Is receiving, or has received, a grant 
                for access and persistence under this section, 
                in accordance with paragraph (5).
          (4) Grant award.--Once a student, including those 
        students who have received early notification under 
        paragraph (2) from the State, applies for admission to 
        an institution that is a partner in the partnership, 
        files a Free Application for Federal Student Aid and 
        any related existing State form, and is determined 
        eligible by the State under paragraph (3), the State 
        shall--
                  (A) issue the student a preliminary award 
                certificate for a grant for access and 
                persistence with tentative award amounts; and
                  (B) inform the student that payment of the 
                grant for access and persistence award amounts 
                is subject to certification of enrollment and 
                award eligibility by the institution of higher 
                education.
          (5) Duration of award.--An eligible student that 
        receives a grant for access and persistence under this 
        section shall receive such grant award for each year of 
        such student's undergraduate education in which the 
        student remains eligible for assistance under this 
        title, including pursuant to section 484(c), and 
        remains financially eligible as determined by the 
        State, except that the State may impose reasonable time 
        limits to degree completion.
    (e) Use of Funds for Administrative Costs Prohibited.--A 
State that receives an allotment under this section shall not 
use any of the allotted funds to pay administrative costs 
associated with any of the authorized activities described in 
subsection (d).
    (f) Statutory and Regulatory Relief for Institutions of 
Higher Education.--The Secretary may grant, upon the request of 
an institution of higher education that is in a partnership 
described in subsection (b)(2)(A)(ii) and that receives an 
allotment under this section, a waiver for such institution 
from statutory or regulatory requirements that inhibit the 
ability of the institution to successfully and efficiently 
participate in the activities of the partnership.
    (g) Applicability Rule.--The provisions of this subpart 
which are not inconsistent with this section shall apply to the 
program authorized by this section.
    (h) Maintenance of Effort Requirement.--Each State 
receiving an allotment under this section fora fiscal year 
shall provide the Secretary with an assurance that the aggregate amount 
expended per student or the aggregate expenditures by the State, from 
funds derived from non-Federal sources, for the authorized activities 
described in subsection (d) for the preceding fiscal year were not less 
than the amount expended per student or the aggregate expenditure by 
the State for the activities for the second preceding fiscal year.
    (i) Special Rule.--Notwithstanding subsection (h), for 
purposes of determining a State's share of the cost of the 
authorized activities described in subsection (d), the State 
shall consider only those expenditures from non-Federal sources 
that exceed the State's total expenditures for need-based 
grants, scholarships, and work-study assistance for fiscal year 
1999 (including any such assistance provided under this 
subpart).
    (j) Continuation and Transition.--For the 2-year period 
that begins on the date of enactment of the Higher Education 
Amendments of 2005, the Secretary shall continue to award 
grants under section 415E of the Higher Education Act of 1965 
as such section existed on the day before the date of enactment 
of such Act to States that choose to apply for grants under 
such predecessor section.
    (k) Reports.--Not later than 3 years after the date of 
enactment of the Higher Education Amendments of 2005 and 
annually thereafter, the Secretary shall submit a report 
describing the activities and the impact of the partnerships 
under this section to the authorizing committees.

           *       *       *       *       *       *       *


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


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

    (a) Program Authority.--The Secretary shall maintain and 
expand (including providing outreach and technical assistance) 
existing secondary and postsecondary high school equivalency 
program and college assistance migrant program projects located 
at institutions of higher education or at private nonprofit 
organizations working in cooperation with institutions of 
higher education.
    (b) Services Provided by High School Equivalency Program.--
The services authorized by this subpart for the high school 
equivalency program include--
          (1) recruitment services to reach persons--
                  (A)(i) * * *

           *       *       *       *       *       *       *

                  (B)(i) who themselves, or whose [parents] 
                immediate family, have spent a minimum of 75 
                days during the past 24 months in migrant and 
                seasonal farmwork; or
                  (ii) * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

          (5) [weekly] stipends for high school equivalency 
        program participants;
          (6) * * *
          (7) exposure to cultural events, academic programs, 
        and other educational and cultural activities usually 
        not available to migrant youth; [and]
          (8) other essential supportive services, as needed to 
        ensure the success of eligible students[.]; and
          (9) other activities to improve persistence and 
        retention in postsecondary education.
    (c) Services Provided by College Assistance Migrant 
Program.--(1) Services authorized by this subpart for the 
college assistance migrant program include--
          (A) * * *
          (B) supportive and instructional services to improve 
        placement, persistence, and retention in postsecondary 
        education which include:
                  (i) personal, academic, [and career] career, 
                and economic education or personal finance 
                counseling as an ongoing part of the program.

           *       *       *       *       *       *       *

          (E) exposure to cultural events, academic programs, 
        and other activities not usually available to migrant 
        youth; [and]
          (F) internships; and
          [(F)] (G) other support services as necessary to 
        ensure the success of eligible students.
    (2) * * *
          (A) monitoring and reporting the academic progress of 
        students who participated in the project during such 
        student's first year of college and during such 
        student's subsequent years in college; [and]
          (B) referring such students to on- or off-campus 
        providers of counseling services, academic assistance, 
        or financial aid [.], and coordinating such services, 
        assistance, and aid with other non-program services, 
        assistance, and aid, including services, assistance, 
        and aid provided by community-based organizations, 
        which may include mentoring and guidance; and
          (C) for students attending 2-year institutions of 
        higher education, encouraging the students to transfer 
        to 4-year institutions of higher education, where 
        appropriate, and monitoring the rate of transfer of 
        such students.
    (d) * * *
    (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).
    (f) Minimum Allocations.--The Secretary shall not allocate 
an amount less than--
          (1) [$150,000] $180,000 for each project under the 
        high school equivalency program, and
          (2) [$150,000] $180,000 for each project under the 
        college assistance migrant program.
    (g) * * *
    (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.] such 
sums as may be necessary for fiscal year 2006 and 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.] such sums as 
        may be necessary for fiscal year 2006 and each of the 5 
        succeeding fiscal years.

           *       *       *       *       *       *       *


          Subpart 6--Robert C. Byrd Honors Scholarship Program


SEC. 419A. STATEMENT OF PURPOSE.

           *       *       *       *       *       *       *


SEC. 419F. ELIGIBILITY OF SCHOLARS.

    (1) 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 a home school, whether treated as a home 
school or a private school under State law) 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 or higher education.

           *       *       *       *       *       *       *


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.] such sums 
as may be necessary for fiscal year 2006 and each of the 5 
succeeding fiscal years.

           *       *       *       *       *       *       *


          Subpart 7--Child Care Access Means Parents in School


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

    (a) Purpose.-- * * *
    (b) Program Authorized.--
          (1) Authorized.-- * * *
          (2) Amount of Grants.--
                  (A) In general.-- * * *
                  (B) Minimum.--[A grant]
                          (i) In general.--Except as provided 
                        in clause (ii), a grant under this 
                        section shall be awarded in an amount 
                        that is not less than $10,000.
                          (ii) Increase trigger.--For any 
                        fiscal year for which the amount 
                        appropriated under the authority of 
                        subsection (g) is equal to or greater 
                        than $20,000,000, a grant under this 
                        section shall be awarded in an amount 
                        that is not less than $30,000.

           *       *       *       *       *       *       *

          [(7) Definition of low-income student.--For the 
        purpose of this section, the term ``low-income 
        student'' means a student who is eligible to receive a 
        Federal Pell Grant for the fiscal year for which the 
        determination is made.]
          (7) Definition of low-income student.--For the 
        purpose of this section, the term ``low-income 
        student'' means a student who--
                  (A) is eligible to receive a Federal Pell 
                Grant for the fiscal year for which the 
                determination is made; or
                  (B) would otherwise be eligible to receive a 
                Federal Pell Grant for the fiscal year for 
                which the determination is made, except that 
                the student fails to meet the requirements of--
                          (i) section 401(c)(1) because the 
                        student is enrolled in a graduate or 
                        first professional course of study; or
                          (ii) section 484(a)(5) because the 
                        student is in the United States for a 
                        temporary purpose.

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *


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 loans 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) * * *
                  (i) * * *
                          (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) * * *
                          (I) [$3,500] $4,500; or

           *       *       *       *       *       *       *


SEC. 427A. APPLICABLE INTEREST RATES.

    (a) Rates To Be Consistent for Borrower's Entire Debt.--* * 
*

           *       *       *       *       *       *       *

    (l) Interest Rates for New Loans on or After July 1, 
2006.--
          (1) In general.--* * *
          (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] 
        8.5 percent on the unpaid principal balance of the 
        loan.

           *       *       *       *       *       *       *


SEC. 438. SPECIAL ALLOWANCES.

    (a) Findings.-- * * *
    (b) Computation and Payment.--
          (1) Quarterly payment based on unpaid balance.-- * * 
        *

           *       *       *       *       *       *       *

          (2) Rate of special allowance.--(A) * * *

           *       *       *       *       *       *       *

                  (I)\1\Loans disbursed on or after january 1, 
                2000.--
                          (i) In general.-- * * *

           *       *       *       *       *       *       *

                          (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 (1)(3), 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] 
                        april 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] April 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) * * *

           *       *       *       *       *       *       *

                          [(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 (1)(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 inPublication 
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]
                          (vi) Recapture of excess interest.--
                                  (I) Excess credited.--With 
                                respect to a loan on which the 
                                applicable interest rate is 
                                determined under subsection (k) 
                                or (l) of section 427A and for 
                                which the first disbursement of 
                                principal is made on or after 
                                April 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.

           *       *       *       *       *       *       *


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

    (a) Federal Interest Subsidies.--
          (1) Types of loans that qualify.-- * * *

           *       *       *       *       *       *       *

          (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 Quality Loan for 
Interest Subsidies.--
          (1) Requirements of insurance program.-- * * *
                  (A) * * *
                          (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

           *       *       *       *       *       *       *

                  [(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);]
                  (G) insures 97 percent of unpaid principal of 
                loans insured under the program;
                  [(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 for the collection, and the 
                deposit in the Federal fund established under 
                section 422A(a), of a guaranty agency 
                origination fee of 1.0 percent of each 
                disbursement of the proceeds of the loan, which 
                fee may be provided from funds in the guaranty 
                agency's operating fund under section 422B or 
                from other non-Federal funds;

           *       *       *       *       *       *       *

                  (M) provides that periodic installments of 
                principal need not be paid, but interest shall 
                accrue and be paid by the Secretary, during any 
                period--
                          (i) during which the borrower-- * * *

           *       *       *       *       *       *       *

                          (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 
                        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;]
                          (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, and only after verification 
                        of the student's enrollment by the 
                        lender or guaranty agency, 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 be 
                        authorized, pursuant to an authorized 
                        power-of-attorney; or
                          (iii) in the case of a student who is 
                        studying outside the United States in a 
                        program of study at an eligible foreign 
                        institution, are, at the request of the 
                        foreign institution, disbursed directly 
                        to the student, only after verification 
                        of the student's enrollment by the 
                        lender or guaranty agency by the means 
                        described in clause (i);

           *       *       *       *       *       *       *

                  (Y) provides that--
                          (i) the lender shall determine the 
                        eligibility of a borrower for a 
                        deferment described in subparagraph 
                        (M)(i) based on receipt of--
                                  (I) * * *
                                  (II) * * *
                                  (III) student status 
                                information received by the 
                                lender that the borrower is 
                                enrolled on at least a half-
                                time basis, except that, if 
                                requested by an institution of 
                                higher education, the lender 
                                shall confirm such status 
                                through the use of the National 
                                Student Loan Data System; and

           *       *       *       *       *       *       *

    (c) Guaranty Agreements for Reimbursing Losses.--
          (1) Authority to enter into agreements.--(A) * * *

           *       *       *       *       *       *       *

          [(D) Reimbursements of loses made by the Secretary on 
        loans submitted for claim by an eligible lender, 
        servicer, or guaranty agency designated for exceptional 
        performance under section 428I shall not be subject to 
        additional review by the Secretary or repurchase by the 
        guaranty agency for any reason other than a 
        determination by the Secretary that the eligible 
        lender, servicer, or guaranty agency engaged in fraud 
        or other purposeful misconduct in obtaining designation 
        for exceptional performance.]
          [(E)] (D) Notwithstanding any other provisions of 
        this section, in the case of a loan made pursuant to a 
        lender-of-last-resort program, the Secretary shall 
        apply the provisions of--
                  (i) * * *

           *       *       *       *       *       *       *

          [(F)] (E) Notwithstanding any other provisions of 
        this section, in the case of an outstanding loan 
        transferred to a guaranty agency from another guaranty 
        agency pursuant to a plan approved by the Secretary in 
        response to the insolvency of the latter such guarantee 
        agency, the Secretary shall apply the provision of--
                  (i) * * *

           *       *       *       *       *       *       *

          (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)] paragraph 
                (6)(A)) to represent

           *       *       *       *       *       *       *

                  (H) set forth assurances that--
                          (i) upon the request of an eligible 
                        institution, the guaranty agency shall, 
                        subject to clauses (ii) and (iii), 
                        furnish to the institution information 
                        with respect to students (including the 
                        names and addresses of such students) 
                        who received loans made, insured, or 
                        guaranteed under this part for 
                        attendance at the eligible institution 
                        and for whom [preclaims] default 
                        aversion assistance activities have 
                        been requested under subsection (1);

           *       *       *       *       *       *       *

          (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) Guaranty agency obligations.--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.

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

          (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.-- * * *

           *       *       *       *       *       *       *

          (4) 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) * * *

           *       *       *       *       *       *       *

    (c) Public Notice.--
          (1) In general.-- * * *

           *       *       *       *       *       *       *

          (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] Chairpersons and Ranking 
        Members of the 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] Chairpersons and Ranking 
        Members of the authorizing committees 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.

           *       *       *       *       *       *       *

          (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] Chairpersons and 
        Ranking Members of the 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] A graduate 
        or professional student or the parents of a dependent 
        student shall be eligible to borrow funds under this 
        section in amounts specified in subsection (b), if--
                  (A) [the parents] the graduate or 
                professional student or the parents do not have 
                an adverse credit history as determined 
                pursuant to regulations promulgated by the 
                Secretary; and
                  (B) [the parents] the graduate or 
                professional student or 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.

           *       *       *       *       *       *       *

    (b) Limitation Based on Need.--Any loan under this section 
may be counted as part of the expected family contribution in 
the determination of need under this title, but no loan may be 
made to [any parent] any graduate or professional student or 
any parent under this section for any academic year in excess 
of (A) the student's estimated cost of attendance, minus (B) 
other financial aid as certified by the eligible institution 
under section 428(a)(2)(A). The annual insurable limit on 
account of any student shall not be deemed to be exceeded by a 
line of credit under which actual payments to the borrower will 
not be made in any year in excess of the annual limit.
    (c) PLUS Loan Disbursement.-- * * *
          (1) * * *
          (2) a check copayable to the eligible institution and 
        the [parent] graduate or professional student or parent 
        borrower.
    (d) Payment of Principal and Interest.--
          (1) Commencement of repayment.--Repayment of 
        principal on loans made under this section shall 
        commence not later than 60 days after the date such 
        loan is disbursed by the lender, subject to deferral 
        during any period during which [the parent] the 
        graduate or professional student or the parent meets 
        the conditions required for a deferral under section 
        427(a)(2)(C) or 428(b)(1)(M).

           *       *       *       *       *       *       *


SEC. 428C. FEDERAL CONSOLIDATION LOANS.

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

           *       *       *       *       *       *       *

    (b) Contents of Agreements, Certificates of Insurance, and 
Loan Notes.--
          (1) Agreements with lenders.-- * * *
                  (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];

           *       *       *       *       *       *       *

                  (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 will disclose, in a clear 
                and conspicuous manner, to borrowers who 
                consolidate loans made under part E of this 
                title--
                          (i) that once the borrower adds the 
                        borrower's Federal Perkins Loan to a 
                        Federal Consolidation Loan, the 
                        borrower will lose all interest-free 
                        periods that would have been available, 
                        such as those periods when no interest 
                        accrues on the Federal Perkins Loan 
                        while the borrower is enrolled in 
                        school at least half-time, during the 
                        grace period, and during periods when 
                        the borrower's student loan repayments 
                        are deferred;
                          (ii) that the borrower will no longer 
                        be eligible for loan forgiveness of 
                        Federal Perkins Loans under any 
                        provision of section 465; and
                          (iii) the occupations described in 
                        section 465(a)(2), individually and in 
                        detail, for which the borrower will 
                        lose eligibility for Federal Perkins 
                        Loan forgiveness; 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.

           *       *       *       *       *       *       *

    (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.
                  (B) * * *
                  (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).

           *       *       *       *       *       *       *

      (b) * * *

           *       *       *       *       *       *       *

    (c) Financial and Economic Literacy.--Where appropriate as 
determined by the institution of higher education in which a 
borrower is enrolled, each program described in subsection (b) 
shall include making available financial and economic education 
materials for the borrower, including making the materials 
available before, during, or after rehabilitation of a loan.

           *       *       *       *       *       *       *


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

    (a) Multiple Disbursement Required.--
          (1) Two disbursements required.-- * * *

           *       *       *       *       *       *       *

          (3) Special rule.--An institution whose cohort 
        default rate (as determined under section 435(m)) for 
        each of the 3 most recent fiscal years for which data 
        are available is less than 10 percent may disburse any 
        loan made, insured, or guaranteed under this part in a 
        single installment for any period of enrollment that is 
        not more than 1 semester, 1 trimester, 1 quarter, or 4 
        months. Notwithstanding section 422(d) of the Higher 
        Education amendments of 1998, this paragraph shall be 
        effective beginning on the date of enactment of the 
        Higher Education Amendments of 2005.
    (b) Disbursement and Endorsement Requirements.--
          (1) First year students.--The first installment of 
        the proceeds of any loan made, insured, or guaranteed 
        under this part that is made to a student borrower who 
        is entering the first year of a program of 
        undergraduate education, and who has not previously 
        obtained a loan under this part, shall not (regardless 
        of the amount of such loan or the duration of the 
        period of enrollment) be presented by the institution 
        to the student for endorsement until 30 days after the 
        borrower begins a course of study, but may be delivered 
        to the eligible institution prior to the end of that 
        30-day period. An institution whose cohort default rate 
        (as determined under section 435(m)) for each of the 
        three most recent fiscal years for which data are 
        available is less than 10 percent shall be exempt form 
        the requirements of this paragraph. Notwithstanding 
        section 422(d) of the Higher Education Amendments of 
        1998, the second sentence of this paragraph shall be 
        effective beginning on the date of enactment of the 
        Higher Education Amendments of 2005.

           *       *       *       *       *       *       *

    (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) In General.-- * * *

           *       *       *       *       *       *       *

    (d) Loan Limits.--
          (1) In general.-- * * *
          (2) Annual limits for independent, graduate, and 
        professional students.-- * * *
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) in the case of such student who is a 
                graduate or professional student attending an 
                eligible institution, [$10,000] $12,000; and
                  (D) in the case of a student enrolled in 
                coursework specified in sections 484(b)(3)(B) 
                and 484(b)(4)(B)--
                          (i) $4,000 for coursework necessary 
                        or enrollment in an undergraduate 
                        degree or certificate program, and, in 
                        the case of a student who has obtained 
                        a bac-calaureate degree, [$5,000] 
                        $7,000 for coursework necessary for 
                        enrollment in a graduate or 
                        professional program; and
                          (ii) in the case of a student who has 
                        obtained a baccalaureate degree, 
                        [$5,000] $7,000 for coursework 
                        necessary for a professional credential 
                        or certification from a State required 
                        for employment as a teacher in an 
                        elementary or secondary school;
except in cases where the Secretary determines, that a higher 
amount is warranted in order to carry out the purpose of this 
part with respect to students engaged in specialized training 
requiring exceptionally high costs of education, but the annual 
insurable limit per student shall not be deemed to be exceeded 
by a line of credit under which actual payments by the lender 
to the borrower will not be made in any years in excess of the 
annual limit.

           *       *       *       *       *       *       *


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 guaranty 
agreement pursuant to section 428, the Secretary, each guaranty 
agency, eligible lender, and subsequent holder shall enter into 
agreements [with credit bureau organizations] with each 
consumer reporting agency that compiles and maintains files on 
consumers on a nationwide basis (as defined in section 603(p) 
of the Fair Credit Reporting Act (15 U.S.C. 1681a(p)) 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 response 
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) the type of loan made, insured, or guaranteed 
        under this title;
          [1] (2) the total amount of loans made to any 
        borrower under this part and the remaining balance of 
        the loans;
          (3) information concerning the repayment status of 
        the loan, which information shall be included in the 
        file of the borrower, except that nothing in this 
        subsection shall be construed to affect any otherwise 
        applicable provision of the Fair Credit Reporting Act 
        (15 U.S.C. 1681 et seq.)
          [(2)] (4) information concerning the date of any 
        default on the loan and the collection of the loan, 
        including 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; [and]
          [(3)] (5) 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[.] ; 
        and
          (6) any other information required to be reported by 
        Federal law.

           *       *       *       *       *       *       *


SEC. 432. LEGAL POWERS AND RESPONSIBILITIES.

    (a) General Powers.-- * * *

           *       *       *       *       *       *       *

    (f) Audit of Financial Transactions.--
          (1) Comptroller general and inspector general 
        authority.-- * * *
                  (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.

           *       *       *       *       *       *       *

    (m) Common Forms and Formats.--
          (1) Common guaranteed student loan application form 
        and promissory note.--
                  (A) In general.-- * * *

           *       *       *       *       *       *       *

                  (D) Master promissory note.--
                          (i) In general.--The Secretary shall 
                        develop and require the use of master 
                        promissory note forms for loans made 
                        under this part and part D. Such forms 
                        shall be available for periods of 
                        enrollment beginning not later than 
                        July 1, 2000. Each form shall allow 
                        eligible borrowers to receive, in 
                        addition to initial loans, additional 
                        loans for the same or subsequent 
                        periods of enrollment through a student 
                        confirmation process approved by the 
                        Secretary. Such forms shall be used for 
                        loans made under this part or part D as 
                        directed by the Secretary. Unless 
                        otherwise notified by the Secretary, 
                        each institution of higher education 
                        that participates in the program under 
                        this part or part D may use a master 
                        promissory note for loans under this 
                        part and part D.

           *       *       *       *       *       *       *

    (n) Default Reduction Management.--
          (1) Authorization.-- * * *

           *       *       *       *       *       *       *

          (3) Plan for use required.-- * * *
                  (A) * * *

           *       *       *       *       *       *       *

                  (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] authorizing committees.

           *       *       *       *       *       *       *


SEC. 433. STUDENT LOAN INFORMATION BY ELIGIBLE LENDERS.

    (a) Required Disclosure Before Disbursement.-- * * *

           *       *       *       *       *       *       *

    (e) * * *

           *       *       *       *       *       *       *

    (f) Borrower Information and Privacy.--Each entity 
participating in a program under this part that is subject to 
subtitle A of title V of the Gramm-Leach-Bliley Act (15 U.S.C. 
6801 et seq.) shall only use, release, disclose, sell, 
transfer, or give student information, including the name, 
address, social security number, or amount borrowed by a 
borrower or a borrower's parent, in accordance with the 
provisions of such subtitle.
    (g) Loan Benefit Disclosures.--
          (1) In general.--Each eligible lender, holder, or 
        servicer of a loan made, insured, or guaranteed under 
        this part shall provide the borrower with information 
        on the loan benefit repayment options the lender, 
        holder, or servicer offer, including information on 
        reductions in interest rates--
                  (A) by repaying the loan by automatic payroll 
                or checking account deduction;
                  (B) by completing a program of on-time 
                repayment; and
                  (C) under any other interest rate reduction 
                program.
          (2) Information.--Such borrower information shall 
        include--
                  (A) any limitations on such options;
                  (B) explicit information on the reasons a 
                borrower may lose eligibility for such an 
                option;
                  (C) examples of the impact the interest rate 
                reductions will have on a borrower's time for 
                repayment and amount of repayment;
                  (D) upon the request of the borrower, the 
                effect the reductions in interest rates will 
                have with respect to the borrower's payoff 
                amount and time for repayment; and
                  (E) information on borrower recertification 
                requirements.

           *       *       *       *       *       *       *


SEC. 433A. CONSUMER EDUCATION INFORMATION.

    Each guaranty agency participating in a program under this 
part working with the institutions of higher education served 
by such guaranty agency (or in the case of an institution of 
higher education that provides loans exclusively through part 
D, the institution working with a guaranty agency or with the 
Secretary) shall develop and make available a quality 
educational program and materials to provide training for 
students in budgeting and financial management, including debt 
management and other aspects of financial literacy, such as the 
cost of using very high interest loans to pay for postsecondary 
education, particularly as budgeting and financial management 
relates to student loan programs authorized by this title. 
Nothing in this section shall be construed to prohibit a 
guaranty agency from using an existing program or existing 
materials to meet the requirement of this section. The 
activities described in this section shall be considered 
default reduction activities for the purposes of section 422.

           *       *       *       *       *       *       *


SEC. 435. DEFINITIONS FOR STUDENT LOAN INSURANCE PROGRAM.

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

           *       *       *       *       *       *       *

    (d) Eligible Lender.--
          (1) In general.-- * * *

           *       *       *       *       *       *       *

          (2) Additional requirements of eligible 
        institutions.--To be an eligible lender under this 
        part, an eligible institution--
                  (A) * * *

           *       *       *       *       *       *       *

                  (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;]
                  (F) shall use the proceeds from special 
                allowance payments, interest payments from 
                borrowers, proceeds from the sale of a loan 
                made, insured, or guaranteed under this part, 
                and all other proceeds related to such a loan 
                that are furnished to the eligible institution 
                or any entity affiliated (directly or 
                indirectly) with the eligible institution, for 
                need based grant programs, except that such 
                payments and proceeds may be used for 
                reasonable reimbursement for direct 
                administrative expenses;
                  (G) shall have met the requirements of 
                subparagraphs (A) through (F), and made loans 
                under this part, on or before August 31, 2005;
                  (H) shall hold each loan the eligible 
                institution makes under this part to a student 
                enrolled at the eligible institution until the 
                student enters into a grace period described in 
                section 427(a)(2)(B) or 428(b)(7);
                  (I) shall use the proceeds from the sale of a 
                loan made under this part, for need based grant 
                aid programs, except that such proceeds--
                          (i) shall not be used to provide a 
                        grant to a student for an academic year 
                        in an amount that is more than the 
                        student's cost of attendance for the 
                        academic year; and
                          (ii) shall supplement and not 
                        supplant other Federal, State, and 
                        institutional grant aid; and
                  (J) shall not be a foundation or alumni 
                organization;

           *       *       *       *       *       *       *


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] SCHOOLS THAT FAIL TO PROVIDE A 
                    REFUND, ATTENDING CLOSED SCHOOLS, OR FALSELY 
                    CERTIFIED AS ELIGIBLE TO BORROW.

    (a) Repayment in Full for Death and Disability.-- * * *

           *       *       *       *       *       *       *

    (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 to borrow under this part 
        was falsely certified by the eligible institution or 
        was falsely certified as a result of a crime of 
        identity theft, 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) Findings.-- * * *

           *       *       *       *       *       *       *

    (b) Computation and Payment.--
          (1) Quarterly payment based on unpaid balance.-- * * 
        *

           *       *       *       *       *       *       *

          (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].

           *       *       *       *       *       *       *

          (5) Definition of eligible loan.-- * * *
                  (A)(i) * * *

           *       *       *       *       *       *       *

                  (B) which is insured under this part, or made 
                under a program covered by an agreement under 
                section 428(b) of this Act.
[As used in this section the term ``eligible loan'' includes 
all loans subject to section 428I.]

           *       *       *       *       *       *       *

    (c) Origination Fees From Students.--
          (1) Deduction from interest and special allowance 
        subsidies.-- * * *

           *       *       *       *       *       *       *

          [(2) Amount of origination fees.--] (2) Amount of 
        origination fees._Subject to paragraph (6) of this 
        subsection, with respect to any loan (including loans 
        made under sections 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.
                  (A) In general.--
                  (B) Subsequent reductions.--Subparagraph (A) 
                shall be applied to loans made under this part 
                (other than loans made under sections 428C and 
                439(o)) by substituting ``2.50 percent'' for 
                ``3.0 percent'' with respect to loans for which 
                the first disbursement of principal is made on 
                or after July 1, 2007.

           *       *       *       *       *       *       *

    (d) Loan Fees From Lenders.--
          (1) Deduction from interest and special allowance 
        subsidies.--
                  (A) In general.-- * * *

           *       *       *       *       *       *       *

          [(2) Amount of loan fees.--With respect to any loan 
        under this part for which the first disbursement was 
        made on or after October 1, 1993, the amount of the 
        loan fee which shall be deducted under paragraph (1) 
        shall be equal to 0.50 percent of the principal amount 
        of the loan.]
          (2) Amount of loan fees.--
                  (A) In general.--Except as provided in 
                subparagraph (B), with respect to any loan made 
                under this part for which the first 
                disbursement was made on or after October 1, 
                1993, the amount of the loan fee that shall be 
                deducted under paragraph (1) shall be equal to 
                0.50 percent of the principal amount of the 
                loan.
                  (B) Consolidation loans.--With respect to any 
                loan made under section 428C on or after April 
                1, 2006, the amount of the loan fee that shall 
                be deducted under paragraph (1) shall be equal 
                to 1.0 percent of the principal amount of the 
                loan.

           *       *       *       *       *       *       *


SEC. 439. STUDENT LOAN MARKETING ASSOCIATION.

    (a) Purpose.-- * * *

           *       *       *       *       *       *       *

    (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] advise the 
                        Chairpersons and Ranking 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.

           *       *       *       *       *       *       *

    (r) Safety and Soundness of Association.--
          (1) Reports by the association.-- * * *

           *       *       *       *       *       *       *

          (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,] inform the 
        Chairpersons and Ranking 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) Submission, approval, and 
                implementation.--* * *
                  (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] plan, to the Chairpersons 
                and Ranking 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) Additional plan required.-- * * *
                  (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] plan, to the Chairpersons 
                and Ranking 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] Chairpersons and Ranking 
                Members of the authorizing 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, and] implemented to the Chairpersons 
        and Ranking Members of the authorizing committees, and 
        to 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] days to the 
        Chairpersons and Ranking Members of the authorizing 
        committees--
                  (A) * * *

           *       *       *       *       *       *       *

    (s) Charter Sunset.--
          (1) Application of provisions.-- * * *
          (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] 
                Treasury and to the Chairpersons and Ranking 
                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] 
                Treasury and to the Chairpersons and Ranking 
                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) Purpose.-- * * *
    (b) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this part, [$1,000,000,000 for 
fiscal year 1999 and such sums as may be necessary for each of 
the 4 succeeding fiscal years.] such sums as may be necessary 
for fiscal year 2006 and each of the 5 succeeding fiscal years.

           *       *       *       *       *       *       *


SEC. 442. ALLOCATION OF FUNDS.

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

           *       *       *       *       *       *       *

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

    (a) Agreements Required.-- * * *
    (b) Contents of Agreements.--An agreement entered into 
pursuant to this section shall--
          (1) * * *

           *       *       *       *       *       *       *

          (2) provide that funds granted an institution of 
        higher education, pursuant to section 443, may be used 
        only to make payments to students participating in 
        work-study programs, except that--
                  [(A) for fiscal year 1999, an institution 
                shall use at least 5 percent of the total 
                amount of funds granted to such institution 
                under this section in any fiscal year to 
                compensate students employed in community 
                service (including a reasonable amount of time 
                spent in travel or training directly related to 
                such community service), except that the 
                Secretary may waive this subparagraph if the 
                Secretary determines that enforcing it would 
                cause hardship for students at an institution;]
                  [(B)] (A) for fiscal year 2000 and succeeding 
                fiscal years, an institution shall use at least 
                7 percent of the total amount of funds granted 
                to such institution under this section for such 
                fiscal year to compensate students employed in 
                community service, and shall ensure that not 
                less than 1 tutoring or family literacy project 
                (as described in subsection (d)) is included in 
                meeting the requirement of this subparagraph, 
                except that the Secretary may waive [this 
                subparagraph if the Secretary determines that 
                enforcing this subparagraph would cause 
                hardship for students at the institution;] and 
                this subparagraph if--
                          (i) the Secretary determines that 
                        enforcing this subparagraph would cause 
                        hardship for students at the 
                        institution; or
                          (ii) the institution certifies to the 
                        Secretary that 15 percent or more of 
                        its total full-time enrollment 
                        participates in community service 
                        activities described in section 441(c) 
                        or tutoring and literacy activities 
                        described in subsection (d) of this 
                        section;
                  [(C)] (B) an institution may use a portion of 
                the sums granted to it to meet administrative 
                expenses in accordance with section 489 of this 
                Act, may use a portion of the sums granted to 
                it to meet the cost of a job location and 
                development program in accordance with section 
                446 of this part, and may transfer funds in 
                accordance with the provisions of section 488 
                of this Act;

           *       *       *       *       *       *       *


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] 
$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.

           *       *       *       *       *       *       *


SEC. 448. WORK COLLEGES.

    (a) Purpose.-- * * *
    (b) Sources and Use Funds.--
          (1) Source of funds.--In addition to the sums 
        appropriated [under subsection (f)] for this section 
        under section 441(b), 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)] for this 
        section under section 441(b), and from the funds 
        available under paragraph (1), eligible institutions 
        may, following approval of an application under 
        subsection (c) by the Secretary--
                  (A) * * *
                  (B) * * *
                  (C) support existing and new model student 
                volunteer community service projects associated 
                with local institutions of higher education, 
                such as operating drop-in resource centers that 
                are staffed by students and that link people in 
                need with the resources and opportunities 
                necessary to become self-sufficient;
                  [(C)] (D) carry out activities described in 
                section 443 or 446;
                  [(D)] (E) be used for the administration, 
                development and assessment of comprehensive 
                work-learning programs, including--
                          (i) * * *

           *       *       *       *       *       *       *

                  [(E)] (F) coordinate and carry out joint 
                projects and activities to promote work service 
                learning; and
                  [(F)] (G) * * *
    (c) Application.--Each eligible institution may submit an 
application for funds authorized [by subsection (f) to use 
funds under subsection (b)(1)] for this section under section 
441(b) or to use funds under subsection (b)(1),

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *


SEC. 455. TERMS AND CONDITIONS OF LOANS.

    (a) In General.--
          (1) Parallel terms, conditions, benefits, and 
        amounts.-- * * *

           *       *       *       *       *       *       *

    (b) Interest Rate.--
          (1) Rates for fdsl and fdusl.-- * * *

           *       *       *       *       *       *       *

          (8) Repayment incentives.--
                  (A) In general.-- * * *
                  (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.

           *       *       *       *       *       *       *

    (c) Loan Fee.--The Secretary [shall] is authorized to 
charge the borrower of a loan made under this part an 
origination fee of [4.0 percent of the principal amount of 
loan] not less than 1 percent and not more than 3 percent of 
the principal amount of the loan, except that the Secretary 
shall charge the borrower of a Federal Direct PLUS Loan an 
origination fee of 4.0 percent of the principal amount of the 
loan. Beginning on July 1, 2007, the preceding sentence shall 
be applied by substituting ``2.5 percent'' for ``3 percent''.

           *       *       *       *       *       *       *

    (e) Income Contingent Repayment.--
          (1) Information and procedures.-- * * *

           *       *       *       *       *       *       *

          (7) Repayment plan for public sector employees.--
                  (A) In general.--The Secretary shall forgive 
                the balance due on any loan made under this 
                part or section 428C(b)(5) for a borrower--
                          (i) who has made 120 payments on such 
                        loan pursuant to income contingent 
                        repayment; and
                          (ii) who is employed, and was 
                        employed for the 10-year period in 
                        which the borrower made the 120 
                        payments described in clause (i), in a 
                        public sector job.
                  (B) Public sector job.--In this paragraph, 
                the term `public sector job' means a full-time 
                job in emergency management, government, public 
                safety, law enforcement, public health, 
                education (including early childhood 
                education), or public interest legal services 
                (including prosecution or public defense).
          (8) Return to standard repayment.--A borrower who is 
        repaying a loan made under this part pursuant to income 
        contingent repayment may choose, at any time, to 
        terminate repayment pursuant to income contingent 
        repayment and repay such loan under the standard 
        repayment plan.

           *       *       *       *       *       *       *

    (f) Deferment.--
          (1) Effect on principal and interest.-- * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

                  (B) * * *
                  (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.

           *       *       *       *       *       *       *


SEC. 458. FUNDS FOR ADMINISTRATIVE EXPENSES.

    (a) Administrative Expenses.--
          (1) In general.-- * * *
                  (A) * * *
                  (B) account maintenance fees payable to 
                guaranty agencies under part B and calculated 
                in accordance with subsections (b) and (c),
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.] $904,000,000 
in fiscal year 2006, $943,000,000 in fiscal year 2007, 
$983,000,000 in fiscal year 2008, $1,023,000,000 in fiscal year 
2009, $1,064,000,000 in fiscal year 2010, and $1,106,000,000 in 
fiscal year 2011.

           *       *       *       *       *       *       *

    (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 
                $271,000,000;
                  (B) for fiscal year 2007, shall not exceed 
                $293,000,000;
                  (C) for fiscal year 2008, shall not exceed 
                $315,000,000;
                  (D) for fiscal year 2009, shall not exceed 
                $336,000,000;
                  (E) for fiscal year 2010, shall not exceed 
                $356,000,000; and
                  (F) for fiscal year 2011, shall not exceed 
                $378,000,000.

           *       *       *       *       *       *       *


                     PART E--FEDERAL PERKINS LOANS


SEC. 461. APPROPRIATIONS AUTHORIZED.

    (a) Program Authority.-- * * *
    (b) Authorization of Appropriations.--(1) For the purpose 
of enabling the Secretary to make contributions to student loan 
funds established under this part, there are authorized to be 
appropriated [$250,000,000 for fiscal year 1999 and such sums 
as may be necessary for each of the 4 succeeding fiscal years.] 
such sums as may be necessary for fiscal year 2006 and each of 
the 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] fiscal year 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] October 1, 2012, to continue or complete 
courses of study.

           *       *       *       *       *       *       *


SEC. 464. TERMS OF LOANS.

    (a) Terms and Conditions.--(1) * * *

           *       *       *       *       *       *       *

    (b) Demonstration of Need and Eligibility Required.--(1) A 
loan from a student loan fund assisted under this part may be 
made only to a student who demonstrates financial need in 
accordance with part F of this title, who meets the 
requirements of section 484, and who provides the institution 
with the student's drivers license number, if any, at the time 
of application for the loan. A student who is in default on a 
loan under this part shall not be eligible [for an additional 
loan under this part] for additional aid under this title 
unless such loan meets one of the conditions for exclusion 
under section 462(g)(1)(E).

           *       *       *       *       *       *       *

    (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-- * * *

           *       *       *       *       *       *       *

    (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) during which the borrower-- * * *

           *       *       *       *       *       *       *

          (ii) * * *
          (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) * * *

           *       *       *       *       *       *       *


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) * * *
          (B) as a full-time staff member in a preschool 
        program carried on under the [Head Start Act which] 
        Head Start Act, or in a prekindergarten or child care 
        program that is licensed or regulated by the State, 
        that is operated for a period which is comparable to a 
        full school year in the locality if the salary of such 
        staff member is not more than the salary of a 
        comparable employee of the local educational agency;

           *       *       *       *       *       *       *

          (H) as a full-time nurse or medical technician 
        providing health care services; [or]
          (I) as a full-time employee of a public or private 
        nonprofit child or family service agency who is 
        providing, or supervising the provision of, services to 
        high-risk children who are from low-income communities 
        and the families of such children[.];
          (J) as a full-time faculty member at a Tribal College 
        or University, as that term is defined in section 316;
          (K) as a librarian, if the librarian has a master's 
        degree in library science and is employed in--
                  (i) an elementary school or secondary school 
                that is eligible for assistance under title I 
                of the Elementary and Secondary Education Act 
                of 1965; or
                  (ii) a public library that serves a 
                geographic area that contains 1 or more schools 
                eligible for assistance under title I of the 
                Elementary and Secondary Education Act of 1965; 
                or
          (L) as a full-time speech language therapist, if the 
        therapist has a master's degree and is working 
        exclusively with schools that are eligible for 
        assistance under title I of the Elementary and 
        Secondary Education Act of 1965.

           *       *       *       *       *       *       *

    (3)(A) The percent of a loan which shall be canceled under 
paragraph (a) of this subsection is--
          (i) in the case of service described in subparagraph 
        (A), (C), (F), (G), (H), [or (I)] (I), (J), (K), or (L) 
        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;

           *       *       *       *       *       *       *


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.

           *       *       *       *       *       *       *

    (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) * * *

           *       *       *       *       *       *       *


SEC. 372. COST OF ATTENDANCE.

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

           *       *       *       *       *       *       *

          [(4) for less than half-time students (as determined 
        by the institution) tuition and fees and an allowance 
        for only books, supplies, and transportation (as 
        determined by the institution) and dependent care 
        expenses (in accordance with paragraph (8));]
          (4) for less than half-time students (as determined 
        by the institution), tuition and fees and an allowance 
        for only--
                  (A) books, supplies, and transportation (as 
                determined by the institution);
                  (B) dependent care expenses (determined in 
                accordance with paragraph (8)); and
                  (C) room and board costs (determined in 
                accordance with paragraph (3)), except that a 
                student may receive an allowance for such costs 
                under this subparagraph for not more than 3 
                semesters or the equivalent, of which not more 
                than 2 semesters or the equivalent may be 
                consecutive;

           *       *       *       *       *       *       *

          (11) for a student engaged in a work experience under 
        a cooperative education program, an allowance for 
        reasonable costs associated with such employment (as 
        determined by the institution); [and]
          (12) for a student who receives a loan under this or 
        any other Federal law, or, at the option of the 
        institution, a conventional student loan incurred by 
        the student to cover a student's cost of attendance at 
        the institution, an allowance for the actual cost of 
        any loan fee, origination fee, or insurance premium 
        charged to such student or such parent on such loan, or 
        the average cost for any such fee or premium charged by 
        the Secretary, lender, or guaranty agency making or 
        insuring such loan, as the case may be[.] ; and
          (13) at the option of the institution, for a student 
        in a program requiring professional licensure or 
        certification, the one time cost of obtaining the first 
        professional credentials (as determined by the 
        institution).

           *       *       *       *       *       *       *


SEC. 475. FAMILY CONTRIBUTION FOR DEPENDENT STUDENTS.

    (a) Computation of Expected Family Contribution.-- * * *

           *       *       *       *       *       *       *

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

           *       *       *       *       *       *       *

          (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);

           *       *       *       *       *       *       *

    (h) Student Contribution From Assets.--The student 
contribution from assets is determined by calculating the net 
assets of the student and multiplying such amount by [35] 20 
percent, except that the result shall not be less than zero.

           *       *       *       *       *       *       *


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

    (a) Computation of Expected Family Contribution.-- * * *

           *       *       *       *       *       *       *

    (b) Family's Contribution From Available Income.--
          (1) In general.--The family's contribution from 
        income is determined by--
                  (A) deducting from total income (as defined 
                in section 480)--
                          (i) * * *

           *       *       *       *       *       *       *

                          (iv) an income protection allowance 
                        of the following amount (or a successor 
                        amount prescribed by the Secretary 
                        under section 478)--
                                  (I) [$5,000] $6,050 for 
                                single students;
                                  (II) [$5,000] $6,050 for 
                                married students where both are 
                                enrolled pursuant to subsection 
                                (a)(2); and
                                  (III) [$8,000] $9,700 for 
                                married students where one is 
                                enrolled pursuant to subsection 
                                (a)(2);

           *       *       *       *       *       *       *

    (c) Family Contribution From Assets.--
          (1) In general.-- * * *

           *       *       *       *       *       *       *

          (4) Asset conversion rate.--The asset conversion rate 
        is [35] 20 percent.

           *       *       *       *       *       *       *


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

    (a) Computation of Expected Family Contribution.-- * * *

           *       *       *       *       *       *       *

    (c) Family's Contribution From Assets.--
          (1) In general.-- * * *

           *       *       *       *       *       *       *

          (4) Asset conversion rate.--The asset conversion rate 
        is [12] 7 percent.

           *       *       *       *       *       *       *


SEC. 478. REGULATIONS; UPDATED TABLES.

    (a) Authority To Prescribe Regulations Restricted.-- * * *

           *       *       *       *       *       *       *

    (b) Income Protection Allowance.--
          (1) Revised tables.--For each academic year after 
        academic year 1993-1994, the Secretary shall publish in 
        the Federal Register a revised table of income 
        protection allowances for the purpose of sections 
        475(c)(4) and 477(b)(4). Such revised table shall be 
        developed by increasing each of the dollar amounts 
        contained in the table in each such section by a 
        percentage equal to the estimated percentage increase 
        in the Consumer Price Index (as determined by the 
        Secretary) between December 1992 and the December next 
        preceding the beginning of such academic year, and 
        rounding the result to the nearest $10. For the 2007-
        2008 academic year, the Secretary shall revise the 
        tables in accordance with this paragraph, except that 
        the Secretary shall increase the amounts contained in 
        the table in section 477(b)(4) by a percentage equal to 
        the greater of the estimated percentage increase in the 
        Consumer Price Index (as determined under the preceding 
        sentence) or 5 percent.
          (2) Revised amounts.--For each academic year after 
        academic year [2000-2001] 2007-2008, the Secretary 
        shall publish in the Federal Register revised income 
        protection allowances for the purpose of sections 
        475(g)(2)(D) and 476(b)(1)(A)(iv). Such revised 
        allowances shall be developed by increasing each of the 
        dollar amounts contained in such section by a 
        percentage equal to the estimated percentage increase 
        in the Consumer Price Index (as determined by the 
        Secretary) between December 1999 and the December next 
        preceding the beginning of such academic year, and 
        rounding the result to the nearest $10.

           *       *       *       *       *       *       *


SEC. 479. SIMPLIFIED NEEDS TESTS.

    (a) Simplified Application Section.--
          (1) In general.-- * * *

           *       *       *       *       *       *       *

    (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--
                                  (I) file, or are eligible to 
                                file, a form described in 
                                paragraph (3);
                                  (II) certify that the parents 
                                are not required to file a 
                                Federal income tax return; or
                                  (III) received, 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)--
                                  (I) files, or is eligible to 
                                1 file, a form described in 
                                paragraph (3);
                                  (II) certifies that the 
                                student (and the student's 
                                spouse, if any) is not required 
                                to file a Federal income tax 
                                return; or
                                  (III) 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 family, files a form described in this 
        subsection, or subsection (c), as the case may be, if 
        the student or family, as appropriate, files--

           *       *       *       *       *       *       *

    (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--
                          (i) file, or are eligible to file, a 
                        form described in subsection (b)(3);
                          (ii) certify that the parents are not 
                        required to file a Federal income tax 
                        return; or
                          (iii) received, 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) the sum of the adjusted gross income of 
                the parents is less than or equal to the 
                maximum amount of income (rounded annually to 
                the nearest thousand dollars) that may be 
                earned in 1992 or the current year, whichever 
                is higher, in order to claim the maximum 
                Federal earned income credit; or]
                  (B) the sum of the adjusted gross income of 
                the parents is less than or equal to $20,000; 
                or
          [(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
                  [(B) the sum of the adjusted gross income of 
                the student and spouse (if appropriate) is less 
                than or equal to the maximum amount of income 
                (rounded annually to the nearest thousand 
                dollars) that may be earned in 1992 or the 
                current year, whichever is higher, in order to 
                claim the maximum Federal earned income 
                credit.]
                  (A) the student (and the student's spouse, if 
                any)--
                          (i) files, or is eligible to file, a 
                        form described in subsection (b)(3);
                          (ii) certifies that the student (and 
                        the student's spouse, if any) is not 
                        required to file a Federal income tax 
                        return; or
                          (iii) 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) the sum of the adjusted gross income of 
                the student and spouse (if appropriate) is less 
                than or equal to $20,000.
An individual is not required to qualify or file for the earned 
income credit in order to be eligible under this subsection.
  (d) Definitions.--In this section:
          (1) Means-tested federal benefit program.--In 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, are determined on the 
        basis of income or resources of the individual or 
        family seeking the benefit, and may include such 
        programs as--
                  (A) the supplemental security income program 
                under title XVI of the Social Security Act (42 
                U.S.C. 1381 et seq.);
                  (B) the food stamp program under the Food 
                Stamp Act of 1977 (7 U.S.C. 2011 et seq.);
                  (C) the free and reduced price school lunch 
                program established under the Richard B. 
                Russell National School Lunch Act (42 U.S.C. 
                1751 et seq.);
                  (D) the program of block grants for States 
                for temporary assistance for needy families 
                established under part A of title IV of the 
                Social Security Act (42 U.S.C. 601 et seq.);
                  (E) the special supplemental nutrition 
                program for women, infants, and children 
                established by section 17 of the Child 
                Nutrition Act of 1966 (42 U.S.C. 1786); and
                  (F) other programs identified by the 
                Secretary.

           *       *       *       *       *       *       *


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

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

           *       *       *       *       *       *       *


SEC. 480. DEFINITIONS.

    As used in this part:
    (a) Total Income.--(1) * * *

           *       *       *       *       *       *       *

    (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 education 
benefits (except as provided in paragraph (3)), and the net 
value of real estate, income producing property, and business 
and farm assets.

           *       *       *       *       *       *       *

  (3) A qualified education benefit shall not be considered an 
asset of a student for purposes of section 475.
  (4) In determining the value of assets in a determination of 
need under this title (other than for subpart 4 of part A), the 
value of a qualified education benefit shall be--
          (A) the refund value of any tuition credits or 
        certificates purchased under a qualified education 
        benefit; and
          (B) in the case of a program in which contributions 
        are made to an account that is established for the 
        purpose of meeting the qualified higher education 
        expenses of the designated beneficiary of the account, 
        the current balance of such account.
  (5) In this subsection:
          (A) Qualified education benefit.--The term `qualified 
        education benefit' means--
                  (i) a qualified tuition program (as defined 
                in section 529(b)(1)(A) of the Internal Revenue 
                Code of 1986) or other prepaid tuition plan 
                offered by a State; and
                  (ii) a Coverdell education savings account 
                (as defined in section 530(b)(1) of the 
                Internal Revenue Code of 1986).
          (B) Qualified higher education expenses.--The term 
        ``qualified higher education expenses'' has the meaning 
        given the term in section 529(e) of the Internal 
        Revenue Code of 1986.
    (j) Other Financial Assistance[; Tuition Prepayment 
Plans].--(1) * * *
    [(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 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 estimated 
financial assistance or cost of attendance, that assistance 
shall be excluded from both calculations.

           *       *       *       *       *       *       *


   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 and 
that measures program length in credit hours or clock hours.
    (b) Eligible Program.--(1) * * *

           *       *       *       *       *       *       *

    (2)(A) * * *

           *       *       *       *       *       *       *

  (3) For purposes of this title, the term ``eligible program'' 
includes an instructional program that utilizes direct 
assessment of student learning or recognizes the direct 
assessment of student learning by others, if such assessment is 
consistent with the accreditation of the institution or program 
utilizing the results of the assessment, 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 an eligible 
program.
    (c) Third Party Servicer.-- * * *

           *       *       *       *       *       *       *

    (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.-- * * *

           *       *       *       *       *       *       *

    (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.
  (e) Compliance Calendar.--Prior to the beginning of each 
award year, the Secretary shall provide to institutions of 
higher education a list of all the reports and disclosures 
required under this Act. The list shall include--
          (1) the date each report or disclosure is required to 
        be completed and to be submitted, made available, or 
        disseminated;
          (2) the required recipients of each report or 
        disclosure;
          (3) any required method for transmittal or 
        dissemination of each report or disclosure;
          (4) a description of the content of each report or 
        disclosure sufficient to allow the institution to 
        identify the appropriate individuals to be assigned the 
        responsibility for such report or disclosure;
          (5) references to the statutory authority, applicable 
        regulations, and current guidance issued by the 
        Secretary regarding each report or disclosure; and
          (6) any other information which is pertinent to the 
        content or distribution of the report or disclosure.

           *       *       *       *       *       *       *


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 reuirements 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).
          [(3) 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) 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) any charges by the contractor to the 
                student of parent for additional data items 
                required by a State or institution for any 
                purpose (regardless of the method of 
                collection) shall be reasonable and shall not 
                exceed the marginal cost of collecting, 
                processing, and delivering such additional 
                data, taking into account any payment received 
                by the contractor to produce, distribute, and 
                process the common financial reporting form 
                prescribed by the Secretary pursuant to 
                paragraph (1); and
                  [(ii) the contractor will require any person 
                or entity to whom the contractor provides such 
                additional data to agree not to collect from 
                any student or parent any charge that would not 
                be permitted under this subparagraph for any 
                such additional data.
          [(B) To the extent practicable, the Secretary shall 
        ensure that at least one contractor, or a portion of 
        one contract, under this paragraph will serve graduate 
        and professional students.
          [(C) As part of the procurement process for the 1993-
        1994 award year, and for all procurements thereafter 
        pertaining to the contracts under this paragraph, the 
        Secretary shall require all entities competing for such 
        contracts to comply with all requirements of this 
        subsection and to--
                  [(i) use the common financial reporting form 
                as prescribed in paragraph (1), which shall be 
                clearly identified as the ``Free Application 
                for Federal Student Aid''; and
                  [(ii) use a common, simplified reapplication 
                form as the Secretary shall prescribe pursuant 
                to subsection (b), in each award year.
          [(D) The Secretary shall reimburse all approved 
        contractors at a reasonable predetermined rate for 
        processing such applications, for issuing eligibility 
        reports, and for carrying out other services of 
        requirements that may be prescribed by the Secretary.
          [(E) All approved contractors shall be required to 
        adhere to all editing, processing, and reporting 
        requirements established by the Secretary to ensure 
        consistency.
          [(F) No approved contractor shall enter into 
        exclusive arrangements with guarantors, lenders, 
        secondary markets, or institutions of higher education 
        for the purpose of reselling or sharing of data 
        collected for the multiple data entry process. All data 
        collected under a contract issued by the Secretary 
        pursuant to this paragraph for the multiple data entry 
        process is the exclusive property of the Secretary and 
        may not be transferred to a third party by an approved 
        contractor without the Secretary's express written 
        approval.
          [(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 thatany 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) 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) 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.
    [(b) Streamlined Reapplication Process.--(1) The Secretary 
shall develop a streamlined reapplication form and process, 
including electronic reapplication process, consistent with the 
requirements of subsection (a), for those recipients who apply 
for financial aid funds under this title in the next succeeding 
academic year subsequent to the initial year in which such 
recipients apply.
    [(2) The Secretary shall develop appropriate mechanisms to 
support reapplication.
    [(3) 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.
    [(4) Nothing in this title shall be interpreted as limiting 
the authority of the Secretary to reduce the number of data 
elements required of reapplicants.
    [(5) Individuals determined to have a zero family 
contribution pursuant to section 479 shall not be required to 
provide any financial data, except that which is necessary to 
determine eligibility under that section.]
    (a) Common Financial Aid Form Development and Processing.--
          (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 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 
        forms shall be made available to applicants in both 
        paper and electronic formats and shall be referred to 
        (except as otherwise provided in this subsection) as 
        the ``Free Application for Federal Student Aid'', or 
        ``FAFSA''.
          (2) Paper format.--
                  (A) In general.--Subject to subparagraph (C), 
                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 
                or do not wish to use the process described in 
                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 under section 
                        479(c).
                          (ii) Reduced data requirements.--The 
                        EZ FAFSA shall permit an applicant to 
                        submit for purposes of determining 
                        financial need and eligibility, only 
                        the data elements required to make a 
                        determination of student eligibility 
                        and whether the applicant meets the 
                        requirements of section 479(c).
                          (iii) State data.--The Secretary 
                        shall include on the EZ FAFSA such data 
                        items as may be necessary to award 
                        State financial assistance, as provided 
                        under paragraph (5), except the 
                        Secretary shall not include a State's 
                        data if that State does not permit its 
                        applicants for State assistance to use 
                        the EZ FAFSA.
                          (iv) Free availability and 
                        processing.--The provisions of 
                        paragraph (6) shall apply to the EZ 
                        FAFSA, and the data collected by means 
                        of the EZ FAFSA 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 EZ FAFSA.
                  (C) Phasing out the full paper form for 
                students who do not meet the requirements of 
                the ez fafsa.--
                          (i) In general.--The Secretary shall 
                        make all efforts to encourage all 
                        applicants to utilize the electronic 
                        forms described in paragraph (3).
                          (ii) Phaseout of full paper fafsa.--
                        Not later than 5 years after the date 
                        of enactment of the Higher Education 
                        Amendments of 2005, to the extent 
                        practicable, the Secretary shall phase 
                        out the printing of the long paper form 
                        created under subparagraph (A) and used 
                        by applicants who do not meet the 
                        requirements of the EZ FAFSA described 
                        in subparagraph (B).
                          (iii) Availability of full paper 
                        fafsa.--
                                  (I) In general.--Both prior 
                                to and after the phaseout 
                                described in clause (ii), the 
                                Secretary shall maintain on the 
                                Internet printable versions of 
                                the paper forms described in 
                                subparagraphs (A) and (B).
                                  (II) Accessibility.--The 
                                printable versions described in 
                                subclause (I) shall be made 
                                easily accessible and 
                                downloadable to students on the 
                                same Web site used to provide 
                                students with the common 
                                electronic forms described in 
                                paragraph (3).
                                  (III) Submission of forms.--
                                The Secretary shall conduct a 
                                study to determine the 
                                feasibility of using downloaded 
                                forms to ensure sufficient 
                                quality to meet the processing 
                                requirements of this section. 
                                Following the completion of the 
                                study, the Secretary shall 
                                enable, to the extent 
                                practicable, students to submit 
                                a form described in this clause 
                                that is downloaded from the 
                                Internet and printed, in order 
                                to meet the filing requirements 
                                of this section and to receive 
                                financial assistance under this 
                                title.
                          (iv) Use of savings.--
                                  (I) In general.--The 
                                Secretary shall utilize any 
                                realized savings accrued by 
                                phasing out the full paper 
                                FAFSA and moving more 
                                applicants to the common 
                                electronic forms, to improve 
                                access to the electronic forms 
                                for applicants meeting the 
                                requirements of section 479(c).
                                  (II) Report.--The Secretary 
                                shall report annually to the 
                                authorizing committees on--
                                          (aa) the steps taken 
                                        to improve access to 
                                        the common electronic 
                                        forms for applicants 
                                        meeting the 
                                        requirements of section 
                                        479(c); and
                                          (bb) the phaseout of 
                                        the long common paper 
                                        form described in 
                                        subparagraph (A).
          (3) Electronic format.--
                  (A) In general.--The Secretary shall produce, 
                distribute, and process common forms in 
                electronic format and make such forms available 
                through a broadly accessible website to meet 
                the requirements of paragraph (1). The 
                Secretary shall develop common electronic forms 
                for applicants who do not meet the requirements 
                of subparagraph (B). 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 (5), except the Secretary shall not 
                require applicants to complete data required by 
                any State other than the applicant's State of 
                residence. The Secretary shall use all 
                available technology to ensure that a student 
                using a common electronic form answers only the 
                minimum number of questions necessary.
                  (B) Simplified electronic applications.--
                          (i) In general.--The Secretary shall 
                        develop and use a simplified electronic 
                        application form to be used by 
                        applicants meeting the requirements of 
                        section 479(c) and an additional, 
                        separate simplified electronic 
                        application form to be used by 
                        applicants meeting the requirements 
                        under section 479(b).
                          (ii) Reduced data requirements.--The 
                        simplified electronic application forms 
                        shall permit an applicant to submit for 
                        purposes of determining financial need 
                        and eligibility, only the data elements 
                        required to make a determination of 
                        student eligibility and whether the 
                        applicant meets the requirements of 
                        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 (5), except the 
                        Secretary shall not require applicants 
                        to complete data required by any State 
                        other than the applicant's State of 
                        residence and shall not include a 
                        State's data if such State does not 
                        permit its applicants for State 
                        assistance to use the simplified 
                        electronic application form described 
                        in this subparagraph.
                          (iv) Free availability and 
                        processing.--The provisions of 
                        paragraph (6) shall apply to the 
                        simplified electronic application 
                        forms, and 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.
                  (C) 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, a guaranty agency, a State 
                grant agency, a private computer software 
                provider, a consortium of such entities, or 
                such other entity as the Secretary may 
                designate. Data collected by 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.
                  (D) 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.
                  (E) 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 or 
                if the applicant uses a personal identification 
                number provided by the Secretary under 
                subparagraph (F).
                  (F) Personal identification numbers 
                authorized.--The Secretary is authorized to 
                assign to applicants personal identification 
                numbers--
                          (i) to enable the applicants to use 
                        such numbers as a signature for 
                        purposes of completing a form under 
                        this paragraph; and
                          (ii) for any purpose determined by 
                        the Secretary to enable the Secretary 
                        to carry out this title.
          (4) Streamlined reapplication process.--
                  (A) 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 in the next succeeding 
                academic year subsequent to an academic year in 
                which such applicant applied for financial 
                assistance under this title.
                  (B) Mechanisms for reapplication.--The 
                Secretary shall develop appropriate mechanisms 
                to support reapplication.
                  (C) Identification of updated data.--The 
                Secretary shall determine, in cooperation with 
                States, institutions of higher education, and 
                agencies and organizations involved in student 
                financial assistance, the data elements that 
                can be updated from the previous academic 
                year's application.
                  (D) 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.
                  (E) 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 
                replication form, except that which is 
                necessary to determine eligibility under such 
                section.
          (5) State requirements.--
                  (A) In general.--Except as provided in 
                paragraphs (2)(B)(iii), (3)(A), and 
                (3)(B)(iii), 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 need-based State aid. 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 (2)(B)(iii), 
                (3)(A), and (3)(B)(iii). The number of such 
                data items shall not be less than the number 
                included on the form for the 2005-2006 award 
                year unless a State notifies the Secretary that 
                the State no longer requires those data items 
                for the distribution of State need-based aid.
                  (B) Annual review.--The Secretary shall 
                conduct an annual review process to determine 
                which data items the States require to award 
                need-based State aid.
                  (C) Encourage use of forms.--The Secretary 
                shall encourage States to take such steps as 
                are necessary to encourage the use of 
                simplified application forms, including those 
                described in paragraphs (2)(B) and (3)(B), for 
                applicants who meet the requirements of 
                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 States to inform 
                the Secretary--
                          (i) if the State plans to use the 
                        FAFSA to collect data to determine 
                        eligibility for State need-based 
                        financial aid;
                          (ii) of the State-specific data that 
                        the State requires for delivery of 
                        State need-based financial aid; and
                          (iii) if the State agency is unable 
                        to permit applicants to utilize the 
                        simplified application forms described 
                        in paragraph (2)(B) or (3)(B).
                  (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 (2)(B) 
                                or (3)(B) for purposes of 
                                determining eligibility for 
                                State need-based financial aid; 
                                and
                                  (II) of the State-specific 
                                data that the State requires 
                                for delivery of State need-
                                based financial aid.
                          (ii) Acceptance of forms.--If a State 
                        does not permit an applicant to file a 
                        form described in paragraph (2)(B) or 
                        (3)(B) for purposes of determining 
                        eligibility for State need-based 
                        financial aid, then the State shall 
                        notify the Secretary if it is not 
                        permitted to do so because of State law 
                        or agency policy. The notification 
                        shall include an acknowledgment that 
                        State-specific questions will not be 
                        included on a form described in 
                        paragraph (2)(B) or (3)(B).
                          (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 (2)(B) and (3)(B); 
                                and
                                  (II) not require any resident 
                                of such State to complete any 
                                data previously required by 
                                that State under this section.
                  (F) Restriction.--The Secretary shall not 
                require applicants to complete any financial or 
                non-financial data that are not required by the 
                applicant's State, except as may be required 
                for applicants who use the paper forms 
                described in subparagraphs (A) and (B) of 
                paragraph (2).
          (6) Charges to students and parents for use of forms 
        prohibited.--The common financial reporting forms 
        prescribed by the Secretary under this subsection shall 
        be produced, distributed, and processed by the 
        Secretary, and no parent or student shall be charged a 
        fee by the Secretary, a contractor, a third-party 
        servicer or private software provider, or any other 
        public or private entity for the collection, 
        processing, or delivery of financial aid through the 
        use of such forms. The need and eligibility of a 
        student for financial assistance under parts A through 
        E (other than under subpart 4 of part A) may be 
        determined only by using a form developed by the 
        Secretary pursuant to this subsection. No student may 
        receive financial assistance under parts A through E 
        (other than under subpart 4 of part A), except by use 
        of a form developed by the Secretary pursuant to this 
        subsection. No data collected on a paper or electronic 
        form or other document that the Secretary determines 
        was created to replace a form prescribed under this 
        subsection and therefore violates the integrity of a 
        simplified and free financial aid application process 
        and for which a fee is charged shall be used to 
        complete the form prescribed under this subsection. No 
        person, commercial entity, or other entity shall 
        request, obtain, or utilize an applicant's personal 
        identification number assigned under paragraph (3)(F) 
        for purposes of submitting an application on an 
        applicant's behalf.
          (7) Application processing cycle.--The Secretary 
        shall--
                  (A) enable students to submit forms created 
                under this subsection in order to meet the 
                filing requirements of this section and in 
                order to receive financial assistance from 
                programs under this title; and
                  (B) enable students to submit forms created 
                under this subsection and initiate the 
                processing of such forms under this subsection, 
                as early as practicable prior to January 1 of 
                the student's planned year of enrollment.
          (8) Early estimates.--The Secretary shall permit an 
        applicant to complete a form described in this 
        subsection in the years prior to enrollment in order to 
        obtain from the Secretary a nonbinding estimate of the 
        applicant's expected family contribution, as defined in 
        section 473. Such applicant shall be permitted to 
        update information submitted on a form described in 
        this subsection using the process required under 
        paragraph (4).
          (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 subsection 
        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.
          (10) 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 institutions of higher education 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.
          (11) 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.
    [(c)] (b) 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)] (c) 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) of the Individuals with Disabilities 
Education Act.] or other appropriate provider of technical 
assistance and information on postsecondary educational 
services that is authorized under section 663(a) of the 
Individuals with Disabilities Education Act. Not later than 2 
years after the date of enactment of the Higher Education 
Amendments of 2005, the Secretary shall test and implement, to 
the extent practicable, a toll-free telephone based system to 
permit applicants who meet the requirements of 479(c) to submit 
an application over such system.
    [(e)] (d) Preparer.--Any financial aid application required 
to be made under this title shall include the name, signature, 
address or employer's address, social security number or 
employer identification number, and organizational affiliation 
of the preparer of such financial aid application.]
  (e) Assistance in Preparation of Financial Aid Application.--
          (1) Preparation authorized.--Notwithstanding any 
        provision of this Act, an applicant may use a preparer 
        for consultative or preparation services for the 
        completion of the common financial reporting forms 
        described in subsection (a) if the preparer satisfies 
        the requirements of this subsection.
          (2) Preparer identification.--Any common financial 
        reporting form required to be made under this title 
        shall include the name, signature, address or 
        employer's address, social security number or employer 
        identification number, and organizational affiliation 
        of the preparer of such common financial reporting 
        form.
          (3) Additional requirements.--A preparer that 
        provides consultative or preparation services pursuant 
        to this subsection shall--
                  (A) clearly inform individuals upon initial 
                contact (including advertising in clear and 
                conspicuous language on the website of the 
                preparer, including by providing a link 
                directly to the website described in subsection 
                (a)(3), if the preparer provides such services 
                through a website) that the common financial 
                reporting forms that are required to determine 
                eligibility for financial assistance under 
                parts A through E (other than subpart 4 of part 
                A) may be completed for free via paper or 
                electronic forms provided by the Secretary;
                  (B) refrain from producing or disseminating 
                any form other than the forms produced by the 
                Secretary under subsection (a); and
                  (C) not charge any fee to any individual 
                seeking such services who meets the 
                requirements of subsection (b) or (c) of 
                section 479.
          (4) Special rule.--Nothing in this Act shall be 
        construed to limit preparers of the common financial 
        reporting forms required to be made under this title 
        who meet the requirements of this subsection from 
        collecting source information from a student or parent, 
        including Internal Revenue Service tax forms, in 
        providing consultative and preparation services in 
        completing the forms.

           *       *       *       *       *       *       *


SEC. 484. STUDENT ELIGIBILITY.

    (a) In General.--* * *

           *       *       *       *       *       *       *

    (d) Students Who Are Not High School Graduates.--* * *
          (1) * * *

           *       *       *       *       *       *       *

          (3) * * *
          (4) The student shall be determined by the 
        institution of higher education as having the ability 
        to benefit from the education or training offered by 
        the institution of higher education, upon satisfactory 
        completion of 6 credit hours or the equivalent 
        coursework that are applicable toward a degree or 
        certificate offered by the institution of higher 
        education.

           *       *       *       *       *       *       *

    [(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.
          [(2) Restriction or reductions of financial aid.--A 
        student's eligibility to receive grants, loans, or work 
        assistance under this title shall be reduced if a 
        financial aid officer determines under the 
        discretionary authority provided in section 479A that 
        telecommunications instruction results in a 
        substantially reduced cost of attendance to such 
        student.
          [(3) Special rule.--For award years prior to the date 
        of enactment of this subsection, the Secretary shall 
        not take any compliance, disallowance, penalty, or 
        other action against a student or an eligible 
        institution when such action arises out of such 
        institution's prior award of student assistance under 
        this title if the institution demonstrates to the 
        satisfaction of the Secretary that its course of 
        instruction would have been in conformance with the 
        requirements of this subsection.
          [(4) Definition.--For the purposes of this 
        subsection, the term ``telecommunications'' means the 
        use of television, audio, or computer transmission, 
        including open broadcast, closed circuit, cable, 
        microwave, or satellite, audio conferencing, computer 
        conferencing, or video cassettes or discs, except that 
        such term does not include a course that is delivered 
        using video cassette or disc recordings at such 
        institution and that is not delivered in person to 
        other students of that institution.]
  (l) Courses Offered Through Distance Education.--
          (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 principally 
                through distance education and leads to a 
                recognized certificate, or associate, 
                baccalaureate, or graduate degree, conferred by 
                such institution, shall not be considered to be 
                enrolled in correspondence courses.
                  (B) Exception.--An institution of higher 
                education referred to in subparagraph (A) shall 
                not include an institution or school described 
                in section 3(3)(C) of the Carl D. Perkins 
                Vocational and Technical Education Act of 1998.
          (2) Restriction or reductions of financial aid.--A 
        student's eligibility to receive grants, loans, or work 
        assistance under this title shall be reduced if a 
        financial aid officer determines under the 
        discretionary authority provided in section 479A that 
        distance education results in a substantially reduced 
        cost of attendance to such student.
          (3) Special rule.--For award years prior to the date 
        of enactment of this subsection, the Secretary shall 
        not take any compliance, disallowance, penalty, or 
        other action against a student or an eligible 
        institution when such action arises out of such 
        institution's prior award of student assistance under 
        this title if the institution demonstrates to the 
        satisfaction of the Secretary that its course of 
        instruction would have been in conformance with the 
        requirements of this subsection.
          (4) Definition.--In this subsection, the term 
        ``distance education'' has the meaning given the term 
        in section 102.

           *       *       *       *       *       *       *

    (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 of a controlled substance, while such 
        student is enrolled in an institution of higher 
        education and receiving financial assistance under this 
        title, or sale of a controlled substance shall not be 
        eligible to receive any grant, loan, or work assistance 
        under this title during the period beginning on the 
        date of such conviction and ending after the interval 
        specified in the following table:


If convicted of an offense
 involving:
    The possession of a          Ineligibility period is:
     controlled substance while
     the student is enrolled in
     an institution of higher
     education and receiving
     financial assistance under
     this title:
        First offense..........      1 year
        Second offense.........      2 years
        Third offense..........      Indefinite.

    The sale of a controlled     Ineligibility period is:
     substance:
        First offense..........      2 years
        Second offense.........      Indefinite.


          (2) * * *

           *       *       *       *       *       *       *

          (3) Interaction with fafsa.--The Secretary shall not 
        require a student to provide information regarding the 
        student's possession of a controlled substance on the 
        Free Application for Federal Student Aid described in 
        section 483(a).
          [(3)] (4) Definitions.--In this subsection, the term 
        ``controlled substance'' has the meaning given the term 
        in section 102(6) of the Controlled Substances Act (21 
        U.S.C. 802(6)).

SEC. 484A. STATUTE OF LIMITATIONS, AND STATE COURT JUDGMENTS.

    (a) In General.-- * * *

           *       *       *       *       *       *       *

    (b) Assessment of Costs and Other Charges.--Notwithstanding 
any provision of State law to the contrary--
          (1) a borrower who has defaulted on a loan made under 
        this title shall be required to pay, in addition to 
        other charges specified in this title, reasonable cost; 
        [and]
          (2) in collection any obligation arising from a loan 
        made under part B 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[.]; and 
          (3) in collecting any obligation arising from a loan 
        made under part E of this title, an institution of 
        higher education that has an agreement with the 
        Secretary pursuant to section 463(a) shall not be 
        subject to a defense raised by any borrower based on a 
        claim of infancy.
    (c) * * *
    (d) Special Rule.--This section shall not apply in the case 
of a student who is deceased or to a deceased student's estate 
or the estate of such student's family. If a student is 
deceased, then the student's estate or the estate of the 
student's family shall not be required to repay any financial 
assistance under this title, including interest paid on the 
student's behalf, collection costs, or other charges specified 
in this title.

           *       *       *       *       *       *       *


SEC. 484B. INSTITUTIONAL REFUNDS.

    (a) Return of Title IV Funds.--
          (1) In general.-- * * *
          (2) Leave of absence.--
                  (A) Leave not treated as withdrawal.--In the 
                case of a student who takes [a leave of] 1 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) In general.-- * * *

           *       *       *       *       *       *       *

                  (C) Percentage and amount not earned.-- * * *
                          [(i) determining the complement of 
                        the percentage of grant or loan 
                        assistance under this title] grant 
                        assistance under subparts 1 and 3 of 
                        part A, or loan assistance under parts 
                        B, D, and E, that has been earned by 
                        the student described in subparagraph 
                        (B); and
    (b) Return of Title IV Program Funds.--
          (1) Responsibility of the institution.-- * * *

           *       *       *       *       *       *       *

          (3) * * *

           *       *       *       *       *       *       *

          (4) Time frame.--Not later than 45 days after the 
        date of an institution's determination that a student 
        withdrew from the institution, the institution shall--
                  (A) return the amount required under 
                paragraph (1);
                  (B) notify the student of the applicable 
                requirements regarding the overpayment of grant 
                and loan assistance and
                  (C) notify the student of the student's 
                eligibility for post-withdrawal disbursements.
    (c) Withdrawal Date.--
          (1) In general.-- * * *

           *       *       *       *       *       *       *

          (2) Special rule.--Notwithstanding paragraph (1), if 
        the institution determines that a student did not begin 
        the withdrawal process, or otherwise notify the 
        institution of the intent to withdraw, due to illness, 
        accident, grevious personal loss, or other such 
        circumstances beyond the student's control, the 
        institution [may determine the appropriate withdrawal 
        date.] may determine--
                  (A) the appropriate withdrawal date; and
                  (B) that the requirements of this section do 
                not apply to the student.
    (d) Percentage of the Payment Period or Period of 
Enrollment Completed.-- * * *
          (1) * * *
          (2) in the case of a program that is measured in 
        clock hours, by dividing the total number of clock 
        hours comprising the payment period or period of 
        enrollment for which assistance is awarded into the 
        number of [clock hours--
                  [(A) completed by the student in that period 
                as of the day the student withdrew; or
                  [(B) scheduled to be completed as of the day 
                the student withdrew, if the clock hours 
                completed in the period are not less than a 
                percentage, to be determined by the Secretary 
                in regulations, of the hours that were 
                scheduled to be completed by the student in the 
                period.] clock hours scheduled to be completed 
                by the student in that period as of the day the 
                student withdrew.

           *       *       *       *       *       *       *


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

    (a) Information Dissemination Activities.--(1) * * *
          (A) * * *

           *       *       *       *       *       *       *

          (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) student body diversity at the institution, 
        including information on the percentage of enrolled, 
        full-time students who are--
                  (i) male;
                  (ii) female;
                  (iii) from a low-income background; and
                  (iv) a self-identified member of a major 
                racial or ethnic group;
          (Q) the placement in employment of, and types of 
        employment obtained by, graduates of the institution's 
        degree or certificate programs, gathered from such 
        sources as alumni surveys, student satisfaction 
        surveys, the National Survey of Student Engagement, the 
        Community College Survey of Student Engagement, State 
        data systems, or other relevant sources; and
          (R) the types of graduate and professional education 
        in which graduates of the institution's 4-year degree 
        programs enrolled, gathered from such sources as alumni 
        surveys, student satisfaction surveys, the National 
        Survey of Student Engagement, State data systems, or 
        other relevant sources.

           *       *       *       *       *       *       *

    [(4) For purposes of this section, institutions may exclude 
from the information disclosed in accordance with subparagraph 
(L) of paragraph (1) the completion or graduation rates of 
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.]
    (4) For purposes of this section, institutions may--
          (A) exclude from the information disclosed in 
        accordance with subparagraph (L) of paragraph (1) the 
        completion or graduation rates of students who leave 
        school to serve in the Armed Forces, on official church 
        missions, or with a recognized foreign aid service of 
        the Federal Government; or
          (B) in cases where the students described in 
        subparagraph (A) represent 20 percent or more of the 
        certificate- or degree-seeking, full-time, 
        undergraduate students at the institution, the 
        institution may recalculate the completion or 
        graduation rates of such students by excluding from the 
        calculation described in paragraph (3) the time period 
        such students were not enrolled due to their service in 
        the Armed Forces, on official church missions, or with 
        a recognized foreign aid service of the Federal 
        Government.

           *       *       *       *       *       *       *

    (6) * * *
    (7) The information disclosed under subparagraph (L) of 
paragraph (1), or reported under subsection (e), shall include 
information disaggregated by gender, by each major racial and 
ethnic subgroup, and by low-income background status as 
measured by Federal Pell Grant eligibility, if the number of 
students in such subgroup or with such status is sufficient to 
yield statistically reliable information and reporting would 
not reveal personally identifiable information about an 
individual student. If such number is not sufficient for such 
purposes, then the institution shall note that the institution 
enrolled too few of such students to so disclose or report with 
confidence and confidentiality.
    (b) Exit Counseling for Borrowers.--(1)(A) * * *

           *       *       *       *       *       *       *

    (2)(A) * * *

           *       *       *       *       *       *       *

    (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 general effects 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) Departmental Publication of Descriptions of Assistance 
Programs.--(1) * * *
    (2) The Secretary, to the extent the information is 
available, shall compile information describing State grant 
assistance, as well as State and other prepaid tuition programs 
and savings programs and disseminate such information to 
States, eligible institutions, students, and parents in 
departmental publications and other means, including through 
the Internet.

           *       *       *       *       *       *       *

    (e) Disclosures Required With Respect to Athletically 
Related Student Aid.--(1) * * *

           *       *       *       *       *       *       *

    [(3) For purposes of this subsection, institutions may 
exclude from the reporting requirements under paragraphs (1) 
and (2) the completion or graduation rates of students and 
student athletes who leave school to serve in the armed 
services, on official church missions, or with a recognized 
foreign aid service of the Federal Government.]
    (3) For purposes of this subsection, institutions may--
          (A) exclude from the reporting requirements under 
        paragraphs (1) and (2) the completion or graduation 
        rates of students and student athletes who leave school 
        to serve in the Armed Forces, on official church 
        missions, or with a recognized foreign aid service of 
        the Federal Government; or
          (B) in cases where the students described in 
        subparagraph (A) represent 20 percent or more of the 
        certificate- or degree-seeking, full-time, 
        undergraduate students at the institution, the 
        institution may calculate the completion or graduation 
        rates of such students by excluding from the 
        calculations described in paragraph (1) the time period 
        such students were not enrolled due to their service in 
        the Armed Forces, on official church missions, or with 
        a recognized foreign aid service of the Federal 
        Government.

           *       *       *       *       *       *       *

    (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) In general.-- * * *

           *       *       *       *       *       *       *

          (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) Transfer of Credit Policies.--
          (1) Disclosure.--Each institution of higher education 
        participating in any program under this title shall 
        publicly disclose in a readable and comprehensible 
        manner the institution's transfer of credit policies 
        which shall include a statement of the institution's 
        current transfer of credit policies that includes, at a 
        minimum--
                  (A) a statement that transfer of credit shall 
                not be denied solely on the basis of the agency 
                or association that accredited such other 
                institution of higher education, if that agency 
                or association is recognized by the Secretary 
                pursuant to section 496 to be a reliable 
                authority as to the quality of the education or 
                training offered;
                  (B) a list of institutions of higher 
                education with which the institution has 
                established an articulation agreement; and
                  (C) the percentage of students at the 
                institution who successfully transfer academic 
                credits, updated on an annual basis.
          (2) Rule of construction.--Nothing in this subsection 
        shall be construed to--
                  (A) 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;
                  (B) limit the application of the General 
                Education Provisions Act; or
                  (C) create any legally enforceable right on 
                the part of a student to require an institution 
                of higher education to accept a transfer of 
                credit from another institution.

           *       *       *       *       *       *       *


SEC. 485B. NATIONAL STUDENT LOAN DATA SYSTEM.

    (a) Development of the System. * * *
          (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.)), 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.] 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. 485C. SIMPLIFICATION OF THE LENDING PROCESS FOR BORROWERS.

           *       *       *       *       *       *       *


SEC. 485D. EARLY AWARENESS OF FINANCIAL AID ELIGIBILITY.

    (a) In General.--The Secretary shall implement, in 
cooperation with States, institutions of higher education, 
secondary schools, middle schools, early intervention and 
outreach programs under this title, other agencies and 
organizations involved in student financial assistance and 
college access, public libraries, community centers, employers, 
and businesses, a comprehensive system of early financial aid 
information in order to provide students and families with 
early information about financial aid and early estimates of 
such students' eligibility for financial aid from multiple 
sources. Such system shall include the activities described in 
subsections (b) and (c).
    (b) Communication of Availability of Aid and Aid 
Eligibility.--
          (1) Students who receive benefits.--The Secretary 
        shall--
                  (A) make special efforts to notify students 
                who receive or are eligible to receive benefits 
                under Federal means-tested benefit programs 
                (including the school lunch program established 
                under the Richard B. Russell National School 
                Lunch Act (42 U.S.C. 1751 et seq.), the food 
                stamp program under the Food Stamp Act of 1977 
                (7 U.S.C. 2011 et seq.), and other such 
                programs as determined by the Secretary) of 
                such students' potential eligibility for a 
                maximum Federal Pell Grant under subpart 1 of 
                part A; and
                  (B) disseminate such informational materials 
                as the Secretary determines necessary.
          (2) Middle school students.--The Secretary, in 
        cooperation with States, institutions of higher 
        education, other organizations involved in college 
        access and student financial aid, middle schools, and 
        programs under this title that serve middle school 
        students, shall make special efforts to notify students 
        and their parents of the availability of financial aid 
        under this title and, in accordance with subsection 
        (c), shall provide nonbinding estimates of grant and 
        loan aid that an individual may be eligible for under 
        this title upon completion of an application formunder 
section 483(a). The Secretary shall ensure that such information is as 
accurate as possible and that such information is provided in an age-
appropriate format using dissemination mechanisms suitable for students 
in middle school.
          (3) Secondary school students.--The Secretary, in 
        cooperation with States, institutions of higher 
        education, other organizations involved in college 
        access and student financial aid, secondary schools, 
        and programs under this title that serve secondary 
        school students, shall make special efforts to notify 
        students in secondary school and their parents, as 
        early as possible but not later than such students' 
        junior year of secondary school, of the availability of 
        financial aid under this title and, in accordance with 
        subsection (c), shall provide nonbinding estimates of 
        the amounts of grant and loan aid that an individual 
        may be eligible for under this title upon completion of 
        an application form under section 483(a). The Secretary 
        shall ensure that such information is as accurate as 
        possible and that such information is provided in an 
        age-appropriate format using dissemination mechanisms 
        suitable for students in secondary school.
          (4) Adult learners.--The Secretary, in cooperation 
        with States, institutions of higher education, other 
        organizations involved in college access and student 
        financial aid, employers, workforce investment boards 
        and public libraries, shall make special efforts to 
        provide individuals who would qualify as independent 
        students, as defined in section 480(d), with 
        information regarding the availability of financial aid 
        under this title and, in accordance with subsection 
        (c), with nonbinding estimates of the amounts of grant 
        and loan aid that an individual may be eligible for 
        under this title upon completion of an application form 
        under section 483(a). The Secretary shall ensure that 
        such information--
                  (A) is as accurate as possible;
                  (B) includes specific information regarding 
                the availability of financial aid for students 
                qualified as independent students, as defined 
                in section 480(d); and
                  (C) uses dissemination mechanisms suitable 
                for adult learners.
          (5) Public awareness campaign.--Not later than 2 
        years after the date of enactment of the Higher 
        Education Amendments of 2005, the Secretary, in 
        coordination with States, institutions of higher 
        education, early intervention and outreach programs 
        under this title, other agencies and organizations 
        involved in student financial aid, local educational 
        agencies, public libraries, community centers, 
        businesses, employers, employment services, workforce 
        investment boards, and movie theaters, shall implement 
        a public awareness campaign in order to increase 
        national awareness regarding the availability of 
        financial aid under this title. The public awareness 
        campaign shall disseminate accurate information 
        regarding the availability of financial aid under this 
        title and shall be implemented, to the extent 
        practicable, using a variety of media, including print, 
        television, radio and the Internet. The Secretary shall 
        design and implement the public awareness campaign 
        based upon relevant independent research and the 
        information and dissemination strategies found most 
        effective in implementing paragraphs (1) through (4).
  (c) Availability of Nonbinding Estimates of Federal Financial 
Aid Eligibility.--
          (1) In general.--The Secretary, in cooperation with 
        States, institutions of higher education, and other 
        agencies and organizations involved in student 
        financial aid, shall provide, via a printed form and 
        the Internet or other electronic means, the capability 
        for individuals to determine easily, by entering 
        relevant data, nonbinding estimates of amounts of grant 
        and loan aid an individual may be eligible for under 
        this title upon completion and processing of an 
        application and enrollment in an institution of higher 
        education.
          (2) Data elements.--The Secretary, in cooperation 
        with States, institutions of higher education, and 
        other agencies and organizations involved in student 
        financial aid, shall determine the data elements that 
        are necessary to create a simplified form that 
        individuals can use to obtain easily nonbinding 
        estimates of the amounts of grant and loan aid an 
        individual may be eligible for under this title.
          (3) Qualification to use simplified application.--The 
        capability provided under this paragraph shall include 
        the capability to determine whether the individual is 
        eligible to submit a simplified application form under 
        paragraph (2)(B) or (3)(B) of section 483(a).

           *       *       *       *       *       *       *


SEC. 485E. 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 Internet 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 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 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 Fund 
        established pursuant to section 422B and to the extent 
        funds remain, from earnings on the restricted account 
        established pursuant to section 422(h)(4).
          (4) Rule of construction.--Nothing in this subsection 
        shall require a guaranty agency to duplicate any 
        efforts currently underway that meet the requirements 
        of this subsection.
  (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.--Not later than 270 days after the 
        date of enactment of the Higher Education Amendments 
        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) Purpose.-- * * *

           *       *       *       *       *       *       *

    (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) Evaluation.-- * * *

           *       *       *       *       *       *       *

          (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. 487. PROGRAM PARTICIPATION AGREEMENTS.

    (a) Required for Programs of Assistance; Contents.-- * * *
          (1) * * *

           *       *       *       *       *       *       *

          (23)(A) The institution, if located in a State to 
        which section 4(b) of the National Voter Registration 
        Act (42 U.S.C. 1973gg-2(b)) does not apply, will make a 
        good faith effort to distribute a mail voter 
        registration form, requested and a received from the 
        State, to each student enrolled in a degree or 
        certificate program and physically in attendance at the 
        institution, and to make such forms widely available to 
        students at the institution.

           *       *       *       *       *       *       *

          (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, if such information is 
        in an electronic message devoted solely to voter 
        registration.
          (24) The institution will, as calculated in 
        accordance with subsection (g)(1), have not less than 
        10 percent of its revenues from sources other than 
        funds provided under this title, or will be subject to 
        the sanctions described in subsection (g)(2).

           *       *       *       *       *       *       *

    (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 regard to an 
        institution outside the United States;
    (d) Institutional Requirements for Teach-Outs.--
          (1) In general.--In the event the Secretary initiates 
        the limitation, suspension, or termination of the 
        participation of an institution of higher education in 
        any program under this title under the authority of 
        subsection (c)(1)(F) or initiates an emergency action 
        for termination under the authority of subsection 
        (c)(1)(G) and its prescribed regulations, the Secretary 
        shall require that institution to prepare a teach-out 
        plan for submission to the institution's accrediting 
        agency or association in compliance with section 
        496(c)(4), the Secretary's regulations on teach-out 
        plans, and the standards of the institution's 
        accrediting agency or association.
          (2) Teach-out plan defined.--In this subsection, the 
        term `teach-out plan' means a written plan that 
        provides for the equitable treatment of students if an 
        institution of higher education ceases to operate 
        before all students have completed their program of 
        study, and may include, if required by the 
        institution's accrediting agency or association, an 
        agreement between institutions for such a teach-out 
        plan.
    [(d)] (e) Definition of Eligible Institution.-- * * *
    [(e)] (f) Construction.-- * * *
  (g) Implementation of Nontitle 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 as from sources of funds 
        other than funds provided under this title:
                  (A) Funds used by students from sources other 
                than funds received under this title to pay 
                tuition, fees, and other institutional charges 
                to the institution, provided the institution 
                can reasonably demonstrate that such funds were 
                used for such purposes.
                  (B) Funds used by the institution to satisfy 
                matching-fund requirements for programs under 
                this title.
                  (C) Funds used by a student from savings 
                plans for educational expenses established by 
                or on behalf of the student and which qualify 
                for special tax treatment under 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, to the institution for an 
                education or training program that is not 
                eligible for funds under this title, provided 
                that the program is approved or licensed by the 
                appropriate State agency or an accrediting 
                agency recognized by the Secretary.
                  (E) Funds generated by the institution from 
                institutional activities that are necessary for 
                the education and training of the institution's 
                students, if such activities are--
                          (i) conducted on campus or at a 
                        facility under the control of the 
                        institution;
                          (ii) performed under the supervision 
                        of a member of the institution's 
                        faculty; and
                          (iii) required to be performed by all 
                        students in a specific educational 
                        program at the institution.
                  (F) Institutional aid, as follows:
                          (i) In the case of loans made by the 
                        institution, only the amount of loan 
                        repayments received by the institution 
                        during the fiscal year for which the 
                        determination is made.
                          (ii) In the case of scholarships 
                        provided by the institution, only those 
                        scholarship funds provided by the 
                        institution that are--
                                  (I) in the form of monetary 
                                aid based upon the academic 
                                achievements or financial need 
                                of students; and
                                  (II) disbursed during the 
                                fiscal year for which the 
                                determination is made from an 
                                established restricted account 
                                and only to the extent that the 
                                funds in that account represent 
                                designated funds from an 
                                outside source or income earned 
                                on those funds.
                          (iii) In the case of tuition 
                        discounts, only those tuition discounts 
                        based upon the academic achievement or 
                        financial need of students.
          (2) Sanctions.--
                  (A) Failure to meet requirement for 1 year.--
                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 1 
                or both of the following sanctions on the 
                institution:
                          (i) 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).
                          (ii) 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).
                  (B) Failure to meet requirement for 2 
                years.--An institution that fails to meet the 
                requirements of subsection (a)(24) for 2 
                consecutive years shall be ineligible to 
                participate in the programs authorized under 
                this title.
          (3) Public availability of information.--The 
        Secretary shall make publicly available, through the 
        means described in subsection (b) of section 131, 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 such subsection (a)(24).

SEC. 487A. REGULATORY RELIEF AND IMPROVEMENT.

    (a) Quality Assurance Program.--
          (1) In general.-- * * *

           *       *       *       *       *       *       *

          (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] 
        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] 2006.
          [(2) Report.--The Secretary shall review and evaluate 
        the experience of institutions participating as 
        experimental sites during the period of 1993 through 
        1998 under this section (as such section was in effect 
        on the day before the date of enactment of the Higher 
        Education Amendments of 1998), and shall submit a 
        report based on this review and evaluation to the 
        Committee on Labor and Human Resources of the Senate 
        and the Committee on Education and the Workforce of the 
        House of Representatives not later than 6 months after 
        the enactment of the Higher Education Amendments of 
        1998. Such report shall include--]
                  (A) * * *
          (2) Report.--The Secretary shall review and evaluate 
        the experience of institutions participating as 
        experimental sites and shall, on a biennial basis, 
        submit a report based on the review and evaluation to 
        the authorizing committees. Such report shall include--

           *       *       *       *       *       *       *

          (3) Selection.--
                  (A) In general.--[Upon the submission of the 
                report required by paragraph (2), the] The 
                Secretary is authorized to periodically select 
                a limited number of additional institutions for 
                voluntary participation as experimental sites 
                to provide recommendations to the Secretary on 
                the impact and effectiveness of proposed 
                regulations or new management initiatives.
                  [(B) Consultation.--Prior to approving any 
                additional experimental sites, the Secretary 
                shall consult with the Committee on Labor and 
                Human Resources of the Senate and the Committee 
                on Education and the Workforce of the House of 
                Representatives and shall provide to such 
                Committees--
                          [(i) a list of institutions proposed 
                        for participation in the experiment and 
                        the specific statutory or regulatory 
                        waivers proposed to be granted to each 
                        institution;
                          [(ii) a statement of the objectives 
                        to be achieved through the experiment; 
                        and
                          [(iii) an identification of the 
                        period of time over which the 
                        experiment is to be conducted.]
                  [(C)] (B) Waivers.--The Secretary is 
                authorized to waive, for any institution 
                participating as an experimental site under 
                subparagraph (A), any requirements in this 
                title, including requirements related to the 
                award process and disbursement of student 
                financial aid (such as innovative delivery 
                systems for modular or compressed courses, or 
                other innovative systems), verification of 
                student financial aid application data, 
                entrance and exit interviews, or other 
                management procedures or processes as 
                determined in the negotiated rulemaking process 
                under section 492, or regulations prescribed 
                under this title, that will bias the results of 
                the experiment, except that the Secretary shall 
                not waive any provisions with respect to award 
                rules (other than an award rule related to an 
                experiment in modular or compressed schedules), 
                grant and loan maximum award amounts, and need 
                analysis requirements unless the waiver of such 
                provisions is authorized by another provision 
                under this title.

           *       *       *       *       *       *       *


SEC. 488. TRANSFER OF ALLOTMENTS.

    In order to offer an arrangement of types of aid, including 
institutional and State aid which best fits the needs of each 
individual student, an institution may (1) transfer a total of 
25 percent of the institutions allotment under section 462 to 
the institution's allotment under section 413D or 442 (or 
both); [and] (2) transfer 25 percent of the institution's 
allotment under section 442 to the institution's allotment 
under section [413D.] 413D; and Funds transferred to an 
institution's allotment under another section may be used as a 
part of and for the same purposes as funds allotted under that 
section. The Secretary shall have no control over such 
transfer, except as specifically authorized, except for the 
collection and dissemination of information. (3) transfer 25 
percent of the institution's allotment under section 413D to 
the institution's allotment under section 442.

           *       *       *       *       *       *       *


SEC. 488A. WAGE GARNISHMENT REQUIREMENT.

    (a) Garnishment Requirements.-- * * *
          (1) the amount deducted for any pay period may not 
        exceed [10 percent] 15 percent of disposable pay, 
        except that a greater percentage may be deducted with 
        the written consent of the individual involved;

           *       *       *       *       *       *       *


SEC. 489. ADMINISTRATIVE EXPENSES.

    (a) Amount of Payments.-- * * *
    (b) Purpose of Payments.--(1) The sums paid to institutions 
under this part are for the sole purpose of [offsetting the 
administrative costs of] administering the programs described 
in subsection (a).

           *       *       *       *       *       *       *


SEC. 491. ADVISORY COMMITTEE ON STUDENT FINANCIAL ASSISTANCE.

    (a) Establishment and Purpose.--(1) * * *
          (2) The purpose of the Advisory Committee is--
                  (A) to provide extensive knowledge and 
                understanding of the Federal, State, and 
                institutional programs of postsecondary student 
                assistance;
                  (B) to provide technical expertise with 
                regard to systems of needs analysis and 
                application forms; [and]
                  (C) to make recommendations that will result 
                in the maintenance of access to postsecondary 
                education for low- and middle-income 
                students[.];
                  (D) to provide knowledge and understanding of 
                early intervention programs, and to make 
                recommendations that will result in early 
                awareness by low- and moderate-income students 
                and families--
                          (i) of their eligibility for 
                        assistance under this title; and
                          (ii) to the extent practicable, of 
                        their eligibility for other forms of 
                        State and institutional need-based 
                        student assistance; and
                  (E) to make recommendations that will expand 
                and improve partnerships among the Federal 
                Government, States, institutions of higher 
                education, and private entities to increase the 
                awareness and the total amount of need-based 
                student assistance available to low- and 
                moderate-income students.

           *       *       *       *       *       *       *

    (c) Membership.-- * * *

           *       *       *       *       *       *       *

          (3) The appointment of a member under subparagraph 
        (A) or (B) of paragraph (1) shall be effective upon 
        confirmation of the member by the Senate and 
        publication of such appointment in the Congressional 
        Record.
    (d) Functions of the Committee.--The Advisory Committee 
shall--
          (1) * * *

           *       *       *       *       *       *       *

          (6) recommend to the Congress and to the Secretary 
        such studies, surveys, and analyses of student 
        financial assistance programs, policies, and practices, 
        including the special needs of low-income, 
        disadvantaged, and nontraditional students, and the 
        means by which the needs may be met[, but nothing in 
        this section shall authorize the committee to perform 
        such studies, surveys, or analyses];

           *       *       *       *       *       *       *

    (j) Special Analyses and Activities.--The Advisory 
Committee shall.--
          (1) monitor and evaluate the modernization and 
        simplification of student financial aid systems and 
        delivery processes, [including the implementation of a 
        performance-based organization within the Department,] 
        and report to Congress regarding such modernization, or 
        not less than an annual basis, including 
        recommendations for improvement;

           *       *       *       *       *       *       *

          [(4) assess the implications of distance education on 
        student eligibility and other requirements for 
        financial assistance under this title, and make 
        recommendations that will enhance access to 
        postsecondary education through distance education 
        while maintaining access, through on-campus instruction 
        at eligible institutions, and program integrity; and
          [(5) make recommendations to the Secretary regarding 
        redundant or outdated provisions of and regulations 
        under this Act, consistent with the Secretary's 
        requirements under section 498B.]
          (4) conduct a review and analysis of regulations in 
        accordance with subsection (l); and
          (5) conduct a study in accordance with subsection 
        (m).
    (k) Term of the Committee.--Notwithstanding the sunset 
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] 2010.
  (l) Review and Analysis of Regulations.--
          (1) Recommendations.--The Advisory Committee shall 
        make recommendations to the Secretary and Congress for 
        consideration of future legislative action regarding 
        redundant or outdated regulations under this title, 
        consistent with the Secretary's requirements under 
        section 498B.
          (2) Review and analysis of regulations.--The Advisory 
        Committee shall conduct a review and analysis of the 
        regulations issued under this title that are in effect 
        at the time of the review and that apply to the 
        operations or activities of participants in the 
        programs assisted under this title. The review and 
        analysis may include a determination of whether the 
        regulation is duplicative, is no longer necessary, is 
        inconsistent with other Federal requirements, or is 
        overly burdensome. In conducting the review, the 
        Advisory Committee shall pay specific attention to 
        evaluating ways in which regulations under this title 
        affecting institutions of higher education (other than 
        institutions described in section 102(a)(1)(C)), that 
        have received in each of the 2 most recent award years 
        prior to the date of enactment of the Higher Education 
        Amendments of 2005 less than $200,000 in funds through 
        this title, may be improved, streamlined, or 
        eliminated.
          (3) Consultation.--
                  (A) In general.--In carrying out the review 
                and analysis under paragraph (2), the Advisory 
                Committee shall consult with the Secretary, 
                relevant representatives of institutions of 
                higher education, and individuals who have 
                expertise and experience with the regulations 
                issued under this title, in accordance with 
                subparagraph (B).
                  (B) Review panels.--The Advisory Committee 
                shall convene not less than 2 review panels of 
                representatives of the groups involved in 
                student financial assistance programs under 
                this title who have experience and expertise in 
                the regulations issued under this title to 
                review the regulations under this title, and to 
                provide recommendations to the Advisory 
                Committee with respect to the review and 
                analysis under paragraph (2). The panels shall 
                be made up of experts in areas such as the 
                operations of the financial assistance 
                programs, the institutional eligibility 
                requirements for the financial assistance 
                programs, regulations not directly related to 
                the operations or the institutional eligibility 
                requirements of the financial assistance 
                programs, and regulations for dissemination of 
                information to students about the financial 
                assistance programs.
          (4) Reports to congress.--The Advisory Committee 
        shall submit, not later than 2 years after the 
        completion of the negotiated rulemaking process 
        required under section 492 resulting from the 
        amendments to this Act made by the Higher Education 
        Amendments of 2005, a report to the authorizing 
        committees and the Secretary detailing the expert 
        panels' findings and recommendations with respect to 
        the review and analysis under paragraph (2).
          (5) Additional support.--The Secretary and the 
        Inspector General of the Department shall provide such 
        assistance and resources to the Advisory Committee as 
        the Secretary and Inspector General determine are 
        necessary to conduct the review required by this 
        subsection.
  (m) Study of Innovative Pathways to Baccalaureate Degree 
Attainment.--
          (1) Study required.--The Advisory Committee shall 
        conduct a study of the feasibility of increasing 
        baccalaureate degree attainment rates by reducing the 
        costs and financial barriers to attaining a 
        baccalaureate degree through innovative programs.
          (2) Scope of study.--The Advisory Committee shall 
        examine new and existing programs that promote 
        baccalaureate degree attainment through innovative 
        ways, such as dual or concurrent enrollment programs, 
        changes made to the Federal Pell Grant program, 
        simplification of the needs analysis process, 
        compressed or modular scheduling, articulation 
        agreements, and programs that allow 2-year institutions 
        of higher education to offer baccalaureate degrees.
          (3) Required aspects of the study.--In performing the 
        study described in this subsection, the Advisory 
        Committee shall examine the following aspects of such 
        innovative programs:
                  (A) The impact of such programs on 
                baccalaureate attainment rates.
                  (B) The degree to which a student's total 
                cost of attaining a baccalaureate degree can be 
                reduced by such programs.
                  (C) The ways in which low- and moderate-
                income students can be specifically targeted by 
                such programs.
                  (D) The ways in which nontraditional students 
                can be specifically targeted by such programs.
                  (E) The cost-effectiveness for the Federal 
                Government, States, and institutions of higher 
                education to implement such programs.
          (4) Consultation.--
                  (A) In general.--In performing the study 
                described in this subsection the Advisory 
                Committee shall consult with a broad range of 
                interested parties in higher education, 
                including parents, students, appropriate 
                representatives of secondary schools and 
                institutions of higher education, appropriate 
                State administrators, administrators of dual 
                enrollment programs, and appropriate officials 
                from the Department.
                  (B) Congressional consultation.--The Advisory 
                Committee shall consult on a regular basis with 
                the authorizing committees in carrying out the 
                study required by this section.
          (5) Reports to congress.--
                  (A) Interim report.--The Advisory Committee 
                shall prepare and submit to the authorizing 
                committees and the Secretary 1 interim report, 
                not later than 1 year after the date of 
                enactment of the Higher Education Amendments of 
                2005, describing the progress that has been 
                made in conducting the study required by this 
                subsection and any preliminary findings on the 
                topics identified under paragraph (2).
                  (B) Final report.--The Advisory Committee 
                shall, not later than 3 years after the date of 
                enactment of the Higher Education Amendments of 
                2005, prepare and submit to the authorizing 
                committees and the Secretary a final report on 
                the study, including recommendations for 
                legislative, regulatory, and administrative 
                changes based on findings related to the topics 
                identified under paragraph (2).

SEC. 492. REGIONAL MEETINGS AND NEGOTIATED RULEMAKING.

    (a) Meetings.--
          (1) In general.--The Secretary shall obtain public 
        involvement in the development of proposed regulations 
        for this title. The Secretary shall obtain the advice 
        of and recommendations from individuals and 
        representatives of the groups involved in student 
        financial assistance programs under this title, such as 
        students, legal assistance organizations that represent 
        students, institutions of higher education, State 
        student grant agencies, guaranty agencies, lenders, 
        secondary markets, loan services, guaranty agency 
        servicers, and collection agencies.

           *       *       *       *       *       *       *


               Subpart 2--Accrediting Agency Recognition


SEC. 496. RECOGNITION OF ACCREDITING AGENCY OR ASSOCIATION

    (a) Criteria Required.-- * * *
          (1) * * *

           *       *       *       *       *       *       *

          [(4) such agency or association consistently applies 
        and enforces standards 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;]
          (4)(A) such agency or association consistently 
        applies and enforces standards that respect the stated 
        mission of the institution of higher education, 
        including religious missions, 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 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 agency or association's standards 
                effectively address the quality of an 
                institution's distance education in the areas 
                identified in section 496(a)(5), 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 an 
                institution that offers distance education to 
                have processes through which the institution 
                establishes that the student who registers in a 
                distance education course or program is the 
                same student who participates, completes and 
                receives the 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--
                          (i) consideration of student academic 
                        achievement as determined by the 
                        institution;
                          (ii) student retention;
                          (iii) course and program completion;
                          (iv) as appropriate, State licensing 
                        examinations;
                          (v) as appropriate, job placement 
                        rates or enrollment in graduate or 
                        professional programs; and
                          (vi) as appropriate, other student 
                        performance information selected by the 
                        institution, particularly that 
                        information used by the institution to 
                        evaluate or strengthen its programs;

           *       *       *       *       *       *       *

          [(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 which comply with due process procedures 
        that provide for--
                  (A) adequate specification of requirements 
                and deficiencies at the institution of higher 
                education or program examined;
                  (B) an opportunity for a written response by 
                any such institution to be included, prior to 
                final action, in the evaluation and withdrawal 
                proceedings;
                  (C) upon the written request of an 
                institution, an opportunity for the institution 
                to appeal any adverse action, including denial, 
                withdrawal, suspension, or termination of 
                accreditation, or placement on probation of an 
                institution, 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 policy; and
                  (D) the right to representation by counsel 
                for such an institution during an appeal of the 
                adverse action;

           *       *       *       *       *       *       *

          [(8) such agency or association shall make available 
        to the public, upon request, and 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 the State licensing or authorizing 
        agency, and submit to the Secretary, a summary of 
        agency or association actions, including--
                  (A) the award of accreditation or 
                reaccreditation of an institution;
                  (B) final denial, withdrawal, suspension, or 
                termination of accreditation, or placement on 
                probation of an institution, and any findings 
                made in connection with the action taken, 
                together with the official comments of the 
                affected institution; and
                  (C) any other adverse action taken with 
                respect to an institution.

           *       *       *       *       *       *       *

    (c) Operating Procedures Required.-- * * *
          (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;
          (2) ensures that the agency or association's on-site 
        evaluation for accreditation or reaccreditation 
        includes review of the Federally required information 
        the institution or program provides its current and 
        prospective students;
          (3) monitors the growth of programs at institutions 
        that are experiencing significant enrollment growth;
          (4) requires an institution to submit a teach-out 
        plan for approval to the accrediting agency upon the 
        occurrence of any of the following events:
                  (A) The Department notifies the accrediting 
                agency of an action against the institution 
                pursuant to section 487(d).
                  (B) The accrediting agency acts to withdraw, 
                terminate, or suspend the accreditation of an 
                institution.
                  (C) The institution notifies the accrediting 
                agency that the institution intends to cease 
                operations.
          [(2)] (5) requires that any institution of higher 
        education subject to its jurisdiction which plans to 
        establish a branch campus submit a business plan, 
        including projected revenues and expenditures, prior to 
        opening the branch campus;
          [(3)] (6) agrees to conduct, as soon as practicable, 
        but within a period of not more than 6 months of the 
        establishment of a new branch campus or a change of 
        ownership of an institution of higher education, an on-
        site visit of that branch campus or of the institution 
        after a change of ownership;
          [(4)] (7) requires that teach-out agreements among 
        institutions are subject to approval by the accrediting 
        agency or association consistent with standards 
        promulgated by such agency or association;
          [(5)] (8) remains 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)] (9) discloses publicly whenever an institution 
        of higher education subject to its jurisdiction is 
        being considered for accreditation or 
        reaccreditation[.]; and
          (10) confirms, as a part of the agency or 
        association's review for accreditation or 
        reaccreditation, that the institution has transfer of 
        credit policies--
                  (A) that are publicly disclosed;
                  (B) that do not deny transfer of credit based 
                solely on the accreditation of the sending 
                institution, if the agency or association 
                accrediting the sending institution is 
                recognized by the Secretary pursuant to this 
                section; and
                  (C) in which acceptance or denial of transfer 
                of credit is decided according to criteria 
                established in guidelines developed by the 
                institution's admissions committee.

           *       *       *       *       *       *       *


          Subpart 3--Eligibility and Certification Procedures


SEC. 498. ELIGIBILITY AND CERTIFICATION PROCEDURES.

    (a) General Requirement.-- * * *

           *       *       *       *       *       *       *

    (d) Administrative Capacity Standard.-- * * *
          (1) * * *
                  (A) * * *
                  (B) maintenance of records; and

           *       *       *       *       *       *       *

    (j) Treatment of Branches.-- * * *

           *       *       *       *       *       *       *

  (k) Treatment of Teach-Outs at Additional Locations.--
          (1) In general.--A location of a closed institution 
        of higher education shall be eligible as an additional 
        location of an eligible institution of higher 
        education, as defined pursuant to regulations of the 
        Secretary, for the purposes of a teach-out, if such 
        teach-out has been approved by the institution's 
        accrediting agency.
          (2) Special rule.--An institution of higher education 
        that conducts a teach-out through the establishment of 
        an additional location described in paragraph (1) shall 
        be permitted to establish a permanent additional 
        location at a closed institution and shall not be 
        required--
                  (A) to meet the requirements of sections 
                102(b)(1)(E) and 102(c)(1)(C) for such 
                additional location; or
                  (B) to assume the liabilities of the closed 
                institution.

SEC. 498A. PROGRAM REVIEW AND DATA.

    (a) General Authority.-- * * *

           *       *       *       *       *       *       *

    (b) Special Administrative Rules.-- * * *
          (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 an institution of higher education an 
        adequate opportunity to review and respond to any 
        program review report and relevant materials related to 
        the report before any final program review is reached;
          (7) review and take into consideration an institution 
        of higher education's response in any final program 
        review; and
          (8) maintain and preserve at all times the 
        confidentiality of any program review report until the 
        requirements of paragraphs (6) and (7) are met, and 
        until a final program review is issued, other than to 
        the extent required to comply with paragraph (5), 
        except that the Secretary shall promptly disclose any 
        and all program review reports to the institution of 
        higher education under review.

SEC. 498B. REVIEW OF REGULATIONS.

    (a) Review Required.-- * * *

           *       *       *       *       *       *       *

    (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. 502. DEFINITIONS; ELIGIBILITY.

    (a) Definitions.-- For the purpose of this title:
          (1) Educational and general expenditures.-- * * *

           *       *       *       *       *       *       *

          (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].
                  [(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) Types of activities authorized.-- * * *
    (b) Authorized Activities.--Grants awarded under this 
section shall be used for one or more of the following 
activities:
          (1) * * *

           *       *       *       *       *       *       *

          (5) Tutoring, counseling, and student service 
        programs designed to improve academic success, 
        including innovative, customized remedial education and 
        English language instruction courses designed to help 
        retain students and move the students rapidly into core 
        courses and through program completion.
          (6) Education or counseling services designed to 
        improve the financial literacy and economic literacy of 
        students or the students' parents.
          (7) Articulation agreements and student support 
        programs designed to facilitate the transfer from 2-
        year to 4-year institutions.
          [(6)] (8) Funds management, administrative 
        management, and acquisition of equipment for use in 
        strengthening funds management.
          [(7)] (9) Joint use of facilities, such as 
        laboratories and libraries.
          [(8)] (10) Establishing or improving a development 
        office to strengthen or improve contributions from 
        alumni and the private sector.
          [(9)] (11) Establishing or improving an endowment 
        fund.
          [(10)] (12) Creating or improving facilities for 
        Internet or other distance learning academic 
        instruction capabilities, including purchase or rental 
        of telecommunications technology equipment or services.
          [(11)] (13) Establishing or enhancing a program of 
        teacher education designed to qualify students to teach 
        in a public elementary or secondary schools.
          [(12)] (14) 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)] (15) 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)] (16) Other activities proposed in the 
        application submitted pursuant to section 504 that--

           *       *       *       *       *       *       *


SEC. 504. DURATION OF GRANT.

    [(a) Award Period.--]
  (a) Award Period.--The Secretary may award a grant to a 
Hispanic-serving institution under this title for 5 years.

           *       *       *       *       *       *       *


    PART B--PROMOTING POSTBACCALAUREATE OPPORTUNITIES FOR HISPANIC 
                               AMERICANS

SEC. 511. PROGRAM AUTHORITY AND ELIGIBILITY.

  (a) Program Authorized.--Subject to the availability of funds 
appropriated to carry out this part, the Secretary shall award 
grants, on a competitive basis, to eligible institutions to 
enable the eligible institutions to carry out the authorized 
activities described in section 512.
  (b) Eligibility.--For the purposes of this part, an 
``eligible institution'' means an institution of higher 
education that--
          (1) is a Hispanic-serving institution (as defined in 
        section 502); and
          (2) offers a postbaccalaureate certificate or degree 
        granting program.

SEC. 512. AUTHORIZED ACTIVITIES.

  Grants awarded under this part shall be used for 1 or more of 
the following activities:
          (1) Purchase, rental, or lease of scientific or 
        laboratory equipment for educational purposes, 
        including instructional and research purposes.
          (2) Construction, maintenance, renovation, and 
        improvement in classroom, library, laboratory, 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 513 that are approved by 
        the Secretary as part of the review and acceptance of 
        such application.

SEC. 513. 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 the Secretary may 
require. Such application shall demonstrate how the grant funds 
will be used to improve postbaccalaureate education 
opportunities for Hispanic and low-income students and will 
lead to such students' greater financial independence.
  (b) Duration.--Grants under this part shall be awarded for a 
period not to exceed 5 years.
  (c) Limitation.--The Secretary may not award more than 1 
grant under this part in any fiscal year to any Hispanic-
serving institution.

                     PART [B] C--GENERAL PROVISIONS

SEC. [511] 521. ELIGIBILITY; APPLICATIONS.

    (a) Institutional Eligibility.-- * * *

           *       *       *       *       *       *       *

    (b) Applications.--
          (1) Applications requested.-- * * *

           *       *       *       *       *       *       *

                  (A) the application meets the requirements of 
                [subsection (b)] subsection (c); and

           *       *       *       *       *       *       *


SEC. [512] 522. WAIVER AUTHORITY AND REPORTING REQUIREMENT.

           *       *       *       *       *       *       *


SEC. [513] 523. APPLICATION REVIEW PROCESS.

           *       *       *       *       *       *       *


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] 
sections 503 and 512 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.

SEC. [515] 525. ASSISTANCE TO INSTITUTIONS UNDER OTHER PROGRAMS.

           *       *       *       *       *       *       *


SEC. [516] 526. LIMITATIONS.

           *       *       *       *       *       *       *


SEC. [517] 527. PENALTIES.

           *       *       *       *       *       *       *


SEC. [518] 528. AUTHORIZATIONS OF APPROPRIATIONS.

    [(a) Authorizations.--There are] (a) Authorizations.--(1) 
Part a.--There are authorized to be appropriated to [carry out] 
part A of this title [$62,500,000 for fiscal year 1999 and such 
sums as may be necessary for reach of the 4 succeeding fiscal 
years.] such sums as may be necessary for fiscal year 2006 and 
each of the 5 succeeding fiscal years.

           *       *       *       *       *       *       *

    (2) Part b.--There are authorized to be appropriated to 
carry out part B of this title such sums as may be necessary 
for fiscal year 2006 and each of the 5 succeeding fiscal years.

           *       *       *       *       *       *       *


               TITLE VI--INTERNATIONAL EDUCATION PROGRAMS

           PART A--INTERNATIONAL AND FOREIGN LANGUAGE STUDIES


SEC. 601. FINDINGS [AND PURPOSES]; PURPOSES; CONSULTATION; SURVEY.

    (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.

           *       *       *       *       *       *       *

    (b) Purposes.--The purposes of this part are--
          (1)(A) * * *

           *       *       *       *       *       *       *

          (D) to promote access to research and training 
        overseas, including through linkages with overseas 
        institutions;

           *       *       *       *       *       *       *

    (c) Consultation.--The Secretary shall, prior to requesting 
applications for funding under this title during each grant 
cycle, consult with and receive recommendations regarding 
national need for expertise in foreign languages and world 
regions from the head official, or a designee of such head 
official, of the National Security Council, the Department of 
Homeland Security, the Department of Defense, the Department of 
State, the Federal Bureau of Investigation, the Department of 
Labor, and the Department of Commerce, the Director of National 
Intelligence, and other relevant agencies. These entities shall 
provide information to the Secretary regarding how the entities 
utilize expertise and resources provided by grantees under this 
title. The Secretary shall take into account such 
recommendations and information when requesting applications 
for funding under this title, and shall make available to 
applicants a list of areas identified as areas of national 
need.
    (d) Survey.--The Secretary shall assist grantees in 
developing a survey to administer to students who have 
participated in programs under this title to determine 
postparticipation placement. All grantees, where applicable, 
shall administer such survey not less often than annually and 
report such data to the Secretary.

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) * * *

           *       *       *       *       *       *       *

          (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[.] ; 
                and
                  (I) support for instructors of the less 
                commonly taught languages.

           *       *       *       *       *       *       *

          (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) * * *

           *       *       *       *       *       *       *

                  (C) Programs of linkage or outreach between 
                or among--
                          (i) foreign language, area studies, 
                        or other international fields; and
                          (ii) State educational agencies or 
                        local educational agencies.
                  [(C)] (D) Programs of linkage or 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, 
                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).
    (b) [Graduate] Fellowships for Foreign Language and Area or 
International Studies.--
          (1) In general.-- * * *

           *       *       *       *       *       *       *

          [(2) Eligible students.--Students receiving stipends 
        described in paragraph (1) shall be individuals who are 
        engaged in an instructional program with stated 
        performance goals for functional foreign language use 
        or in a program developing such performance goals, in 
        combination with area studies, international studies, 
        or the international aspects of a professional studies 
        program, including predissertation level studies, 
        preparation for dissertation research, dissertation 
        research abroad, and dissertation writing.]
          (2) Eligible students.--A student receiving a stipend 
        described in paragraph (1) shall be engaged--
                  (A) in an instructional program with stated 
                performance goals for functional foreign 
                language use or in a program developing such 
                performance goals, in combination with area 
                studies, international studies, or the 
                international aspects of a professional studies 
                program; and
                  (B)(i) in the case of an undergraduate 
                student, in the intermediate or advanced study 
                of a less commonly taught language; or
                  (ii) in the case of a graduate student, in 
                graduate study in connection with a program 
                described in subparagraph (A), including--
                          (I) predissertation level study;
                          (II) preparation for dissertation 
                        research;
                          (III) dissertation research abroad; 
                        or
                          (IV) dissertation writing.

           *       *       *       *       *       *       *

    [(d) Allowances.--Stipends awarded to graduate level 
recipients may include allowances for dependents and for travel 
for research and study in the United States and abroad.]
  (d) Allowances.--
          (1) Graduate level recipients.--A stipend awarded to 
        a graduate level recipient may include allowances for 
        dependents and for travel for research and study in the 
        United States and abroad.
          (2) Undergraduate level recipients.--A stipend 
        awarded to an undergraduate level recipient may include 
        an allowance for educational programs in the United 
        States or educational programs abroad that--
                  (A) are closely linked to the overall goals 
                of the recipient's course of study; and
                  (B) have the purpose of promoting foreign 
                language fluency and knowledge of foreign 
                cultures.
  (e) Application.--Each institution or combination of 
institutions desiring a grant under this section shall submit 
an application to the Secretary at such time, in such manner, 
and accompanied by such information and assurances as the 
Secretary may require. Each application shall include an 
explanation of how the activities funded by the grant will 
reflect diverse perspectives and a wide range of views and 
generate debate on world regions and international affairs. 
Each application shall also describe how the applicant will 
address disputes regarding whether activities funded under the 
application reflect diverse perspectives and a wide range of 
views. Each application shall also include a description of how 
the applicant will encourage government service in areas of 
national need as identified by the Secretary.

           *       *       *       *       *       *       *


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.-- * * *

           *       *       *       *       *       *       *

          (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) * * *

           *       *       *       *       *       *       *

                  (I) providing subgrants to undergraduate 
                students for educational programs abroad that--
                          (i) are closely linked to the overall 
                        goals of the program for which the 
                        grant is awarded; and
                          (ii) have the purpose of promoting 
                        foreign language fluency and knowledge 
                        of foreign cultures;
                  [(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,
                in order to enhance international knowledge and 
                skills; and
                  [(M)] (N) the use of innovative technology to 
                increase access to international education 
                programs.

           *       *       *       *       *       *       *

          (7) Application.--Each application for assistance 
        under this subsection shall include--
                  (A) * * *

           *       *       *       *       *       *       *

                  (C) an assurance that students at the 
                applicant institutions, as appropriate, will 
                have equal access to, and derive benefits from, 
                the program assisted under this subsection; 
                [and]
                  (D) an assurance that each institution, 
                combination or partnership will use the Federal 
                assistance provided under this subsection to 
                supplement and not supplant non-Federal funds 
                the institution expends for programs to improve 
                undergraduate instruction in international 
                studies and foreign language[s.];
                  (E) an explanation of how the activities 
                funded by the grant will reflect diverse 
                perspectives and a wide range of views and 
                generate debate on world regions and 
                international affairs, where applicable;
                  (F) a description of how the applicant will 
                address disputes regarding whether the 
                activities funded under the application reflect 
                diverse perspectives and a wide range of views; 
                and
                  (G) a description of how the applicant will 
                encourage government service in areas of 
                national need as identified by the Secretary.

           *       *       *       *       *       *       *

    (c) [Funding Support.--The Secretary] Funding Rules.--(1) 
The secretary.--The Secretary may use not more than [10] 20 
percent of the total amount appropriated for this part for 
carrying out the purposes of this section.
      (2) Grantees.--Of the total amount of grant funds awarded 
to a grantee under this section, the grantee may use not more 
than 10 percent of such funds for the activity described in 
subsection (a)(2)(I).

SEC. 605. RESEARCH; STUDIES; ANNUAL REPORT.

    (a) Authorized Activities.--The Secretary may, directly or 
through grants or contracts, conduct research and studies that 
contribute to achieving the purposes of this part. Such 
research and studies may include--
          (1) * * *

           *       *       *       *       *       *       *

          (8) studies and evaluations of effective practices in 
        the dissemination of international information, 
        materials, research, teaching strategies, and testing 
        techniques throughout the education community, 
        including elementary and secondary schools; [and]
          (9) the application of performance tests and 
        standards across all areas of foreign language 
        instruction and classroom use[.];
          (10) evaluation of the extent to which programs 
        assisted under this title reflect diverse perspectives 
        and a wide range of views and generate debate on world 
        regions and international affairs;
          (11) the systematic collection, analysis, and 
        dissemination of data that contribute to achieving the 
        purposes of this part; and
          (12) support for programs or activities to make data 
        collected, analyzed, or disseminated under this section 
        publicly available and easy to understand.

           *       *       *       *       *       *       *


SEC. 606. TECHNOLOGICAL INNOVATION AND COOPERATION FOR FOREIGN 
                    INFORMATION ACCESS.

    (a) [Authority.--The Secretary] Authority._
          (1) In general--The Secretary is authorized to make 
        grants to institutions of higher education, public or 
        nonprofit private libraries, or consortia of such 
        institutions or libraries, to develop innovative 
        techniques or programs using [new electronic 
        technologies]  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.
          (1) In general.--The Secretary
          (2) Partnerships with not-for-profit educational 
        organizations.--The Secretary may award grants under 
        this section to carry out the activities authorized 
        under this section to the following:
                  (A) An institution of higher education.
                  (B) A public or nonprofit private library.
                  (C) A consortium of an institution of higher 
                education and 1 or more of the following:
                          (i) Another institution of higher 
                        education.
                          (ii) A library.
                          (iii) A not-for-profit educational 
                        organization.
    (b) Authorized Activities.--Grants under this section may 
be used--
          (1) [to facilitate access to] to acquire, facilitate 
        access to, or preserve foreign information resources in 
        print or electronic forms;
          (2) to develop new means of or standards for 
        immediate, full-text document delivery for information 
        and scholarship from abroad;

           *       *       *       *       *       *       *

          (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 to facilitate carrying out 
        the activities described in this subsection between--
                  (A) the institutions of higher education, 
                libraries, and consortia receiving grants under 
                this section; and
                  (B) institutions of higher education, not-
                for-profit educational organizations, and 
                libraries overseas; and
          (9) to carry out other activities that the Secretary 
        determines are consistent with the purpose of the 
        grants or contracts awarded under this section.
    (c) Application.--Each [institution or consortium] 
institution of higher education, library, or consortium 
desiring a grant under this section shall submit an application 
to the Secretary at such time, in such manner, and accompanied 
by such information and assurances as the Secretary may 
reasonably require.

           *       *       *       *       *       *       *


SEC. 607. SELECTION OF CERTAIN GRANT RECIPIENTS.

    (a) Competitive Grants.--The Secretary shall award grants 
under section 602 competitively on the basis of criteria that 
separately, but not less rigorously, [evaluate the applications 
for comprehensive and undergraduate language and area centers 
and programs.] evaluate--
          (1) the applications for comprehensive foreign 
        language and area or international studies centers and 
        programs; and
          (2) the applications for undergraduate foreign 
        language and area or international studies centers and 
        programs.
     (b) Selection Criteria.--The Secretary shall set criteria 
for grants awarded under section 602 by which a determination 
of excellence shall be made to meet the differing objective of 
graduate and undergraduate institutions. The Secretary shall 
also consider an applicant's record of sending students into 
public service and an applicant's stated efforts to increase 
the number of students that go into public service.

           *       *       *       *       *       *       *


SEC. 609. AMERICAN OVERSEAS RESEARCH CENTERS.

    (a) Centers Authorized.-- * * *

           *       *       *       *       *       *       *

    (e) Application.--Each center desiring a grant under this 
section shall submit an application to the Secretary at such 
time, in such manner, and accompanied by such information and 
assurances as the Secretary may require. Each application shall 
include how the activities funded by the grant will reflect 
diverse perspectives and a wide range of views and generate 
debate on world regions and international affairs, where 
applicable. Each application shall also describe how the 
applicant will address disputes regarding whether the 
activities funded under the application reflect diverse 
perspectives and a wide range of views.

SEC. 610. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this 
part [$80,000,000 for fiscal year 1999, and such sums as may be 
necessary for each of the 4 succeeding fiscal years.] such sums 
as may be necessary for fiscal year 2006 and each of the 5 
succeeding fiscal years.

           *       *       *       *       *       *       *


SEC. 612. CENTERS FOR INTERNATIONAL BUSINESS EDUCATION.

    (a) Program Authorized.--
          (1) In general.-- * * *

           *       *       *       *       *       *       *

    (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) * * *

           *       *       *       *       *       *       *

          (3) assurance that the education and training 
        programs of the center will be open to students 
        concentrating in each of these respective areas, as 
        appropriate; [and]
          (4) assurance that the institution of higher 
        education, or combination 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)[.] ; and
          (5) assurances that activities funded by the grant 
        will reflect diverse perspectives and a wide range of 
        views and generate debate on world regions and 
        international affairs, where applicable.

SEC. 613. EDUCATION AND TRAINING PROGRAMS.

    (a) Program Authorized.-- * * *

           *       *       *       *       *       *       *

    (c) Applications.--No grant may be made and no contract may 
be entered into under this section unless an institution of 
higher education submits an application to the Secretary at 
such time and in such manner as the Secretary may reasonably 
require. Each such application shall be accompanied by a copy 
of the agreement entered into by the institution of higher 
education with a business enterprise, trade organization or 
association engaged in international economic activity, or a 
combination or consortium of such enterprises, organizations, 
or associations, for the purpose of establishing, developing, 
improving or expanding activities eligible for assistance under 
subsection (b) of this section. Each such application shall 
contain assurances that the institution of higher education 
will use the assistance provided under this section to 
supplement and not to supplant activities conducted by 
institutions of higher education described in subsection (b). 
Each such application shall include an assurance that, where 
applicable, the activities funded by the grant will reflect 
diverse perspectives and a wide range of views on world regions 
and international affairs.

           *       *       *       *       *       *       *


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 and such sums as may be necessary for each of the 4 
succeeding fiscal years] such sums as may be necessary for 
fiscal year 2006 and each of the 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, and such 
sums as may be necessary for the 4 succeeding fiscal years,] 
such sums as may be necessary for fiscal year 2006 and each of 
the 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.

    (a) Establishment.-- * * *

           *       *       *       *       *       *       *

    (c) Application.--Each eligible recipient desiring a grant 
under this section shall submit an application at such time, in 
such manner, and accompanied by such information as the 
Secretary may reasonably require. Each application shall 
include a description of how the activities funded by the grant 
will reflect diverse perspectives and a wide range of views on 
world regions and international affairs, where applicable.

           *       *       *       *       *       *       *

    (e) [Match Required.--The eligible] Matching Funds.--
          (1) In general.--Subject to paragraph (2), the 
        eligible;
          (2) Waiver.--The Secretary may waive the requirement 
        of paragraph (1) for an eligible recipient if the 
        Secretary determines such waiver is appropriate.

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,] 
tribally controlled colleges or universities, and minority 
institutions, to enable such colleges, universities, and 
institutions to strengthen [international affairs programs.] 
international affairs, international business, and foreign 
language study programs, including the teaching of foreign 
languages, at such colleges, universities, and institutions, 
respectively, through increased collaboration with institutions 
of higher education that receive funding under this title.

           *       *       *       *       *       *       *

    (c) Definitions.--In this section--
          [(1) the term ``historically Black college and 
        university'' has the meaning given the term in section 
        322;]
          [(2)] (1) the term ``Hispanic-serving instutition'' 
        has the meaning given the term in section 502; and
          [(3) the term ``Tribally Controlled College or 
        University'' has the meaning given the term in section 
        2 of the Tribally Controlled College or University 
        Assistance Act of 1978 (25 U.S.C. 1801); and]
          [(4)] (2) the term ``minority institution'' has the 
        meaning given the term in section 365.

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] tribally controlled colleges or universities, 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, and in 
exceptional circumstances, a doctoral degree, in international 
relations. The [masters degree] advanced degree program 
designed by the consortia 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] 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] tribally controlled 
colleges or universities, 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] international, 
voluntary or government organizations or agencies, including 
the Agency for International Development, [the United States 
Information Agency] the Department of State, 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.

           *       *       *       *       *       *       *

    (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) * * *

           *       *       *       *       *       *       *

                  (E) the Director General of the Foreign 
                Service of the Department of State, or the 
                Director General's designee; and
                  (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.]

           *       *       *       *       *       *       *


SEC. 626. FINANCIAL ASSISTANCE.

  (a) Authority.--The Institute may provide financial 
assistance, in the form of summer stipends described in 
subsection (b) and Ralph Bunche scholarship assistance 
described in subsection (c), to needy students to facilitate 
the participation of the students in the Institute's programs 
under this part.
  (b) Summer Stipends.--
          (1) Requirements.--A student receiving a summer 
        stipend under this section shall use such stipend to 
        defray the student's cost of participation in a summer 
        institute program funded under this part, including the 
        costs of travel, living, and educational expenses 
        necessary for the student's participation in such 
        program.
          (2) Amount.--A summer stipend awarded to a student 
        under this section shall not exceed $3,000 per summer.
  (c) Ralph Bunche Scholarship.--
          (1) Requirements.--A student receiving a Ralph Bunche 
        scholarship under this section--
                  (A) shall be a full-time student at an 
                institution of higher education who is accepted 
                into a program funded under this part; and
                  (B) shall use such scholarship to pay costs 
                related to the cost of attendance, as defined 
                in section 472, at the institution of higher 
                education in which the student is enrolled.
          (2) Amount and duration.--A Ralph Bunche scholarship 
        awarded to a student under this section shall not 
        exceed $5,000 per academic year.

           *       *       *       *       *       *       *


SEC. [626] 627. REPORT.

    The Institute shall [annually] biennially prepare a report 
on the activities of the Institute and shall submit such report 
to the Secretary of Education and the Secretary of State.

SEC. [627] 628. GIFTS AND DONATIONS.

    The Institute is authorized to receive money and other 
property donated, bequeathed, or devised to the Institute with 
or without a condition of restriction, for the purpose of 
providing financial support for the fellowships or underwriting 
the cost of the Junior Year Abroad Program. All funds or 
property given, devised, or bequeathed shall be retained in a 
separate account, and an accounting of those funds and property 
shall be included in the [annual report described in section 
626] biennial report described in section 627.

           *       *       *       *       *       *       *


SEC. [628] 629. AUTHORIZATION.

    There is authorized to be appropriated [$10,000,000 for 
fiscal year 1999 and such sums as may necessary for each of the 
4 succeeding fiscal years to carry out this part.] such sums as 
may be necessary for fiscal year 2006 and each of the 5 
succeeding fiscal years.

           *       *       *       *       *       *       *


                       PART D--GENERAL PROVISIONS


SEC. 631. DEFINITIONS.

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

           *       *       *       *       *       *       *

          [(5)] (2) the term [``comprehensive language and a 
        area center''] comprehensive foreign language and area 
        or international studies center means an administrative 
        unit of a university that contributes significantly to 
        the national interest in advanced research and 
        scholarship, employs a critical mass of scholars in 
        diverse disciplines related to a geographic 
        concentration, offers intensive language training in 
        languages of its area specialization, maintains 
        important library collections related to the area, and 
        makes training available in language and area studies 
        to a graduate, postgraduate, and undergraduate 
        clientele; and
          [(7)] (3) the term [``critical languages''] critical 
        foreign languages means each of the languages contained 
        in the list of critical languages designated by the 
        Secretary pursuant to section 212(d) of the Education 
        for Economic Security Act (50 Fed. Reg. 149, 31413), 
        except that, in the implementation of this definition, 
        the Secretary may set priorities according to the 
        purposes of this title:
          [(9)] (4) the term ``educational programs abroad'' 
        means programs of study, internships, or service 
        learning outside the United States which are part of a 
        foreign language or other international curriculum at 
        the undergraduate or graduate education levels[.];
          [(3)] (5) the term ``export education'' means 
        educating, teaching and training to provide general 
        knowledge and specific skills pertinent to the selling 
        of goods and services to other countries, including 
        knowledge of market conditions, financial arrangements, 
        laws and procedures;
          (6) the term ``historically Black college and 
        university'' has the meaning given the term ``part B 
        institution'' in section 322;
          [(8)] (7) the term ``institution of higher 
        education'' means, in addition to institutions which 
        meet the definition of section 101 of this Act, 
        institutions which meet the requirements of section 101 
        of this Act except that (1) they are not located in the 
        United States, and (2) they apply for assistance under 
        this title in consortia with institutions which meet 
        the definition of section 101 of this act; [and]
          [(2)] (8) the term ``international business'' means 
        profit-oriented business relationships conducted across 
        national boundaries and includes activities such as the 
        buying and selling of goods, investments in industries, 
        the licensing of processes, patents and trademarks, and 
        the supply of services;
          [(4)] (9) the term ``internationalization of 
        curricula'' means the incorporation of international or 
        comparative perspectives in existing courses of study 
        or the addition of new components to the curricula to 
        provide an international context for American business 
        education;
          (10) the term ``tribally controlled college or 
        university'' has the meaning given the term in section 
        2 of the Tribally Controlled College or University 
        Assistance Act of 1978 (25 U.S.C. 1801); and
          [(6)] (11) the term [``undergraduate language and 
        area center''] undergraduate foreign language and area 
        or international studies center means an administrative 
        unit of an institution of higher education, including 
        but not limited to 4-year colleges, that contributes 
        significantly to the national interest through the 
        education and training of students who matriculate into 
        advanced language and area studies programs, 
        professional school programs, or incorporates 
        substantial international and foreign language content 
        into baccalaureate degree programs, engages in 
        research, curriculum development and community outreach 
        activities designed to broaden international and 
        foreign language knowledge, employs faculty with strong 
        language, area, and international studies credentials, 
        maintains library holdings, including basic reference 
        works, journals, and works in translation, and makes 
        training available predominantly to undergraduate 
        students;

           *       *       *       *       *       *       *


SEC. 632. ASSESSMENT; ENFORCEMENT; RULE OF CONSTRUCTION.

    (a) In General.--The Secretary is authorized to assess and 
ensure compliance with all the conditions and terms of grants 
provided under this title. If a complaint regarding activities 
funded under this title is not resolved under the process 
outlined in the relevant grantee's application, and such 
complaint is filed with the Department, the Secretary shall be 
notified, and is authorized, when circumstances warrant, to 
immediately suspend future funding for the grant pending 
resolution of such dispute. Such resolution shall not exceed 60 
days. The Secretary shall take the outcomes of such complaints 
into account when determining the renewal of grants.
    (b) Rule of Construction.--Nothing in this title shall be 
construed to authorize the Secretary to mandate, direct, or 
control an institution of higher education's specific 
instructional content, curriculum, or program of instruction.

SEC. 633. EVALUATION, OUTREACH, AND INFORMATION.

    The Secretary may use not more than 1 percent of the funds 
made available under this title to carry out program 
evaluation, national outreach, and information dissemination 
activities relating to the programs authorized under this 
title.

       TITLE VII--GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS

SEC. 700. PURPOSE.

    It is the purpose of this title--
          (1) to authorize national graduate fellowship 
        programs--
                  (A) in order to attract students of superior 
                ability and achievement, exceptional promise, 
                and demonstrated financial need, into high-
                quality graduate programs and provide the 
                students with the financial support necessary 
                to complete advanced degrees; and
                  (B) that are designed to--
                          (i) sustain and enhance the capacity 
                        for graduate education in areas of 
                        national need, including those areas 
                        critical to United States national and 
                        homeland security needs such as 
                        mathematics, science, and engineering; 
                        and

           *       *       *       *       *       *       *


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 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.]
          (1) Appointment.--
                  (A) In general.--The Secretary shall appoint 
                a Jacob K. Javits Fellows Program Fellowship 
                Board (referred to in this subpart as the 
                ``Board'') consisting of 9 individuals 
                representative of both public and private 
                institutions of higher education who are 
                especially qualified to serve on the Board.
                  (B) Qualifications.--In making appointments 
                under subparagraph (A), the Secretary shall--
                          (i) give due consideration to the 
                        appointment of individuals who are 
                        highly respected in the academic 
                        community;
                          (ii) assure that individuals 
                        appointed to the Board are broadly 
                        representative of a range of 
                        disciplines in graduate education in 
                        arts, humanities, and social sciences;
                          (iii) appoint members to represent 
                        the various geographic regions of the 
                        United States; and
                          (iv) include representatives from 
                        minority institutions, as defined in 
                        section 365.

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 or any 
succeeding academic year, such stipend shall be set at a level 
of support equal to that provided by the National Science 
Foundation [graduate fellowships] Graduate Research Fellowship 
Program, 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 or title IV.

           *       *       *       *       *       *       *


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 to carry out this subpart.] such 
sums as may be necessary for fiscal year 2006 and each of the 5 
succeeding fiscal years to carry out this subpart.

           *       *       *       *       *       *       *


SEC. 712. INSTITUTIONAL ELIGIBILITY.

    (a) Eligibility Criteria.-- * * *
    [(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.]
  (b) Designation of Areas of National Need.--After 
consultation with appropriate Federal and nonprofit agencies 
and organizations, including the National Science Foundation, 
the Department of Defense, the Department of Homeland Security, 
the National Academy of Sciences, and the Bureau of Labor 
Statistics, the Secretary shall designate areas of national 
need. In making such designations, the Secretary shall take 
into consideration--
          (1) the extent to which the interest in the area is 
        compelling;
          (2) the extent to which other Federal programs 
        support postbaccalaureate study in the area concerned;
          (3) an assessment of how the program may achieve the 
        most significant impact with available resources; and
          (4) an assessment of current and future professional 
        workforce needs of the United States.

           *       *       *       *       *       *       *


SEC. 714. AWARDS TO GRADUATE STUDENTS.

    (a) Commitments to Graduate Students.--
          (1) In general.-- * * *

           *       *       *       *       *       *       *

    (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 supbart 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 at a level of support equal to 
that provided by the National Science Foundation [graduate 
fellowships] Graduate Research Fellowship Program, 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)] 
715(a) may count such excess toward the amounts the institution 
is required to provide pursuant to section [714(b)(2)] 
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 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 to carry out this subpart.] such 
sums as may be necessary for fiscal year 2006 and 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) Program Authority.-- * * *

           *       *       *       *       *       *       *

    (g) Stipends.-- * * *
    (h) Authorization of Appropriations.--Thre 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.] 
such sums as may be necessary for fiscal year 2006 and each of 
the 5 succeeding fiscal years.

           *       *       *       *       *       *       *


      PART B--FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION


SEC. 741. FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION.

    (a) Authority.-- * * *
          (1) * * *
          (2) * * *
          [(3) the establishment of institutions and programs 
        based on the technology of communications;]
          (3) the establishment and continuation of 
        institutions, programs, consortia, collaborations, and 
        other joint efforts based on the technology of 
        communications, including those efforts that utilize 
        distance education and technological advancements to 
        educate and train postsecondary students (including 
        health professionals serving medically underserved 
        populations);
          (4) * * *
          (5) * * *
          (6) * * *
          (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 introduction of reforms in remedial 
        education, including English language instruction, to 
        customize remedial courses to student goals and help 
        students progress rapidly from remedial courses into 
        core courses and through program completion;
          (10) the creation of consortia that join diverse 
        institutions of higher education for the purpose of 
        integrating curricular and co-curricular 
        interdisciplinary study; and
          (11) providing 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.

           *       *       *       *       *       *       *


SEC. 744. SPECIAL PROJECTS.

    (a) Grant Authority.-- * * *
    (b) * * *
    [(c) Areas of National Need.--Areas of national need shall 
initially included, but shall not be limited to, the following:
          [(1) Institutional restructuring to improve learning 
        and promote productivity, efficiency, quality 
        improvement, and cost and price control.
          [(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.
          [(3) Evaluation and dissemination of model programs.
          [(4) International cooperation and student exchange 
        among postsecondary educational institutions.]
  (c) Areas of National Need.--Areas of national need shall 
include, at a minimum, the following:
          (1) Institutional restructuring to improve learning 
        and promote productivity, efficiency, quality 
        improvement, and cost and price control.
          (2) Improvements in academic instruction and student 
        learning, including efforts designed to assess the 
        learning gains made by postsecondary students.
          (3) 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.
          (4) Development, evaluation and dissemination of 
        model programs, including model core curricula that--
                  (A) provide students with a broad and 
                integrated knowledge base;
                  (B) include, at a minimum, broad survey 
                courses in English literature, American and 
                world history, American political institutions, 
                economics, philosophy, college-level 
                mathematics, and the natural sciences; and
                  (C) include sufficient study of a foreign 
                language to lead to reading and writing 
                competency in the foreign language.
          (5) International cooperation and student exchanges 
        among postsecondary educational institutions.

           *       *       *       *       *       *       *


SEC. 745. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this 
part [$30,000,00 for fiscal year 1999 and such sums as may be 
necessary for each of the 4 succeeding fiscal years.] such sums 
as may be necessary for fiscal year 2006 and each of the 5 
succeeding fiscal years.

           *       *       *       *       *       *       *


SEC. 762. GRANTS AUTHORIZED.

    (a) Competitive Grants Authorized.-- * * *
    (b) Duration; Activities.--
          (1) Duration.--Grants under this part shall be 
        awarded for a period of 3 years.
          (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] to teach and meet 
                the academic and programmatic needs of students 
                with disabilities in order to improve retention 
                and completion of postsecondary education. 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 education 
                technology.
                  (B) Effective transition practices.--The 
                development of innovative and effective 
                teaching methods and strategies to ensure the 
                successful transition of students with 
                disabilities from secondary 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[.], including data on the 
                postsecondary education of and impact on 
                subsequent employment of students with 
                disabilities. Such research, information, and 
                data shall be made publicly available and 
                accessible.
                  (D) Distance learning.--The development of 
                innovative and effective 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 accessible curriculum and 
                electronic communication for instruction and 
                advisement.
                  (E) Disability career pathways.--Training and 
                providing support to secondary and 
                postsecondary staff to encourage interest in, 
                enhance awareness and understanding of, provide 
                educational opportunities in, teach practical 
                skills related to, and offer work-based 
                opportunities in, disability related fields, 
                among students, including students with 
                disabilities. Such training and support may 
                include developing means to offer students 
                credit-bearing, college-level coursework, and 
                career and educational counseling.
                  [(C)] (F) 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.
                  (G) Accessibility of education.--Making 
                postsecondary education more accessible to 
                students with disabilities through curriculum 
                development.
          (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 (G).
    (c) Considerations in Making Awards.--In awarding grants, 
contracts, or cooperative agreements under this section, the 
Secretary shall consider the following:
          (1) * * *

           *       *       *       *       *       *       *

  (d) Report.--The Secretary shall prepare and disseminate a 
report reviewing the activities of the demonstration projects 
authorized under this part and providing guidance and 
recommendations on how successful projects can be replicated.

           *       *       *       *       *       *       *


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 the 
        institution will work to replicate the research based 
        and 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.] such sums 
as may be necessary for fiscal year 2006 and each of the 5 
succeeding fiscal years.

           *       *       *       *       *       *       *


                       TITLE VIII--MISCELLANEOUS

            PART A--MATHEMATICS AND SCIENCE SCHOLARS PROGRAM

SEC. 811. MATHEMATICS AND SCIENCE SCHOLARS PROGRAM.

  (a) Program Authorized.--The Secretary is authorized to award 
grants to States, on a competitive basis, to enable the States 
to award eligible students, who complete a rigorous secondary 
school curriculum in mathematics and science, scholarships for 
undergraduate study.
  (b) Eligible Students.--A student is eligible for a 
scholarship under this section if the student is a full-time 
undergraduate student in the student's first and second year of 
study who has completed a rigorous secondary school curriculum 
in mathematics and science.
  (c) Rigorous Curriculum.--Each participating State shall 
determine the requirements for a rigorous secondary school 
curriculum in mathematics and science described in subsection 
(b).
  (d) Priority for Scholarships.--The Governor of a State may 
set a priority for awarding scholarships under this section for 
particular eligible students, such as students attending 
schools in high-need areas, students who are from groups 
underrepresented in the fields of mathematics, science, and 
engineering, students served by local educational agencies that 
do not meet or exceed State standards in mathematics and 
science, or students with regional or geographic needs as 
determined appropriate by the Governor.
  (e) Amount and Duration of Scholarship.--The Secretary shall 
award a grant under this section--
          (1) in an amount that does not exceed $1,000; and
          (2) for not more than 2 years of undergraduate study.
  (f) Matching Requirement.--In order to receive a grant under 
this section, a State shall provide matching funds for the 
scholarships awarded under this section in an amount equal to 
50 percent of the Federal funds received.
  (g) Authorization.--There are authorized to be appropriated 
to carry out this section such sums as may be necessary for 
fiscal year 2006 and each of the 5 succeeding fiscal years.

               PART B--POSTSECONDARY EDUCATION ASSESSMENT

SEC. 821. POSTSECONDARY EDUCATION ASSESSMENT.

  (a) Contract for Assessment.--The Secretary shall enter into 
a contract, with an independent, bipartisan organization with 
specific expertise in public administration and financial 
management, to carry out an independent assessment of the cost 
factors associated with the cost of tuition at institutions of 
higher education.
  (b) Timeframe.--The Secretary shall enter into the contract 
described in subsection (a) not later than 90 days after the 
date of enactment of the Higher Education Amendments of 2005.
  (c) Matters Assessed.--The assessment described in subsection 
(a) shall--
          (1) examine the key elements driving the cost factors 
        associated with the cost of tuition at institutions of 
        higher education during academic year 2000 and 
        succeeding academic years;
          (2) identify and evaluate measures being used to 
        control postsecondary education costs;
          (3) identify and evaluate effective measures that may 
        be utilized to control postsecondary education costs in 
        the future; and
          (4) identify systemic approaches to monitor future 
        postsecondary education cost trends and postsecondary 
        education cost control mechanisms.

  PART C--JOB SKILL TRAINING IN HIGH-GROWTH OCCUPATIONS OR INDUSTRIES

SEC. 831. JOB SKILL TRAINING IN HIGH-GROWTH OCCUPATIONS OR INDUSTRIES.

  (a) Grants Authorized.--The Secretary is authorized to award 
grants, on a competitive basis, to eligible partnerships to 
enable the eligible partnerships to provide relevant job skill 
training in high-growth industries or occupations.
  (b) Definitions.--In this section:
          (1) Eligible partnership.--The term ``eligible 
        partnership'' means a partnership--
                  (A) between an institution of higher 
                education and a local board (as such term is 
                defined in section 101 of the Workforce 
                Investment Act of 1998); or
                  (B) if an institution of higher education is 
                located within a State that does not operate 
                local boards, between the institution of higher 
                education and a State board (as such term is 
                defined in section 101 of the Workforce 
                Investment Act of 1998).
          (2) Nontraditional student.--The term 
        ``nontraditional student'' means a student who--
                  (A) is independent, as defined in section 
                480(d);
                  (B) attends an institution of higher 
                education--
                          (i) on less than a full-time basis;
                          (ii) via evening, weekend, modular, 
                        or compressed courses; or
                          (iii) via distance learning methods; 
                        or
                  (C) has delayed enrollment at an institution 
                of higher education.
          (3) Institution of higher education.--The term 
        ``institution of higher education'' means an 
        institution of higher education, as defined in section 
        101(b), that offers a 1- or 2-year program of study 
        leading to a degree or certificate.
  (c) Application.--
          (1) In general.--Each eligible partnership that 
        desires a grant under this section shall submit an 
        application to the Secretary at such time, in such 
        manner, and accompanied by such additional information 
        as the Secretary may require.
          (2) Contents.--Each application submitted under 
        paragraph (1) shall include a description of--
                  (A) how the eligible partnership, through the 
                institution of higher education, will provide 
                relevant job skill training for students to 
                enter high-growth occupations or industries;
                  (B) local high-growth occupations or 
                industries; and
                  (C) the need for qualified workers to meet 
                the local demand of high-growth occupations or 
                industries.
  (d) Award Basis.--In awarding grants under this section, the 
Secretary shall--
          (1) ensure an equitable distribution of grant funds 
        under this section among urban and rural areas of the 
        United States; and
          (2) take into consideration the capability of the 
        institution of higher education--
                  (A) to offer relevant, high quality 
                instruction and job skill training for students 
                entering a high-growth occupation or industry;
                  (B) to involve the local business community 
                and to place graduates in the community in 
                employment in high-growth occupations or 
                industries;
                  (C) to provide secondary students with dual-
                enrollment or concurrent enrollment options;
                  (D) to serve nontraditional or low-income 
                students, or adult or displaced workers; and
                  (E) to serve students from rural or remote 
                communities.
  (e) Use of Funds.--Grant funds provided under this section 
may be used--
          (1) to expand or create academic programs or programs 
        of training that provide relevant job skill training 
        for high-growth occupations or industries;
          (2) to purchase equipment which will facilitate the 
        development of academic programs or programs of 
        training that provide training for high-growth 
        occupations or industries;
          (3) to support outreach efforts that enable students 
        to attend institutions of higher education with 
        academic programs or programs of training focused on 
        high-growth occupations or industries;
          (4) to expand or create programs for distance, 
        evening, weekend, modular, or compressed learning 
        opportunities that provide relevant job skill training 
        in high-growth occupations or industries;
          (5) to build partnerships with local businesses in 
        high-growth occupations or industries;
          (6) to support curriculum development related to 
        entrepreneurial training; and
          (7) for other uses that the Secretary determines to 
        be consistent with the intent of this section.
  (f) Requirements.--
          (1) Fiscal agent.--For the purpose of this section, 
        the institution of higher education in an eligible 
        partnership shall serve as the fiscal agent and grant 
        recipient for the eligible partnership.
          (2) Duration.--The Secretary shall award grants under 
        this section for periods that may not exceed 5 years.
          (3) Supplement, not supplant.--Funds made available 
        under this section shall be used to supplement and not 
        supplant other Federal, State, and local funds 
        available to the eligible partnership for carrying out 
        the activities described in subsection (e).
  (g) Authorization of Appropriations.--There are authorized to 
be appropriated to carry out this part such sums as may be 
necessary for fiscal year 2006 and each of the 5 succeeding 
fiscal years.

    PART D--GRANT PROGRAM TO INCREASE STUDENT RETENTION AND PROMOTE 
                        ARTICULATION AGREEMENTS

SEC. 841. GRANT PROGRAM TO INCREASE STUDENT RETENTION AND PROMOTE 
                    ARTICULATION AGREEMENTS.

  (a) Authorization of Program.--The Secretary shall award 
grants, on a competitive basis, to eligible institutions to 
enable the institutions to--
          (1) focus on increasing traditional and 
        nontraditional student retention at such institutions; 
        and
          (2) promote articulation agreements among different 
        institutions that will increase the likelihood of 
        progression of students at such institutions to 
        baccalaureate degrees.
  (b) Definition of Eligible Institution.--In this section, the 
term ``eligible institution'' means an institution of higher 
education (as defined in section 101(a)) where not less than 40 
percent of such institution's student body receives financial 
aid under subpart 1 of part A of title IV.
  (c) Application.--An eligible institution that desires a 
grant under this section shall submit an application to the 
Secretary at such time, in such manner, and containing such 
information as the Secretary may require, including the number 
of students proposed to be served and a description of the 
services that will be provided.
  (d) Mandatory Activities.--An eligible institution that 
receives a grant under this section shall use the grant funds 
to carry out each of the following:
          (1) Offering counseling and advisement services to 
        help students adapt to postsecondary education and 
        select appropriate coursework.
          (2) Making mentors available to students who are at 
        risk for not completing a degree.
          (3) Providing detailed assistance to students who 
        request help in understanding--
                  (A) the options for financing their 
                education, including information on grants, 
                loans, and loan repayment programs;
                  (B) the process of applying for financial 
                assistance;
                  (C) the outcome of their financial assistance 
                application; and
                  (D) any unanticipated problems related to 
                financing their education that arise.
          (4) Offering tutoring to students at risk of dropping 
        out of school with any course or subject.
          (5) Designing and implementing innovative ways to 
        improve retention in and completion of courses, such as 
        enrolling students in cohorts, providing counseling, or 
        creating bridge programs that customize courses to the 
        needs of special population students.
          (6) Conducting outreach activities so that all 
        students know that these services are available and are 
        aware of how to access the services.
          (7) Creating articulation agreements to promote 
        smooth transition from two year to four year programs.
          (8) Making services listed in paragraphs (1) through 
        (5) available in students' native languages, if it is 
        not English, if the percentage of students needing 
        translation services in a specific language exceeds 5 
        percent.
  (e) Permissible Activities.--An eligible institution that 
receives a grant under this section may use grant funds to 
carry out any of the following activities:
          (1) Designing innovative course schedules to meet the 
        needs of working adults, such as online, modular, 
        compressed, or other alternative methods.
          (2) Offering childcare during the hours when students 
        have class or are studying.
          (3) Providing transportation assistance to students 
        that helps such students manage their schedules.
          (4) Partnering with local businesses to create 
        flexible work-hour programs so that students can 
        balance work and school.
          (5) Offering time management or financial literacy 
        seminars to help students improve their management 
        skills.
          (6) Improving professional development to align 
        instruction with innovative program designs.
          (7) Any other activities the Secretary believes will 
        promote retention of students attending eligible 
        institutions.
  (f) Technical Assistance.--The Secretary may enter into a 
contract with a private entity to provide such technical 
assistance to grantees under this section as the Secretary 
determines appropriate.
  (g) Evaluation.--The Secretary shall conduct an evaluation of 
program impacts under the demonstration program, and shall 
disseminate to the public the findings from the evaluation and 
information on best practices.
  (h) Authorization of Appropriations.--There is authorized to 
be appropriated to carry out this and such sums as may be 
necessary for fiscal year 2006 and each of the 5 succeeding 
fiscal years.

                  PART E--AMERICAN HISTORY FOR FREEDOM

SEC. 851. AMERICAN HISTORY FOR FREEDOM.

  (a) Grants Authorized.--The Secretary is authorized to award 
3-year grants, on a competitive basis, to eligible institutions 
to establish or strengthen postsecondary academic programs or 
centers that promote and impart knowledge of--
          (1) traditional American history;
          (2) the history and nature of, and threats to, free 
        institutions; or
          (3) the history and achievements of Western 
        civilization.
  (b) Definitions.--In this section:
          (1) Eligible institution.--The term ``eligible 
        institution'' means an institution of higher education 
        as defined in section 101.
          (2) Free institution.--The term ``free institution'' 
        means an institution that emerged out of Western 
        civilization, such as democracy, constitutional 
        government, individual rights, market economics, 
        religious freedom and religious tolerance, and freedom 
        of thought and inquiry.
          (3) Traditional american history.--The term 
        ``traditional American history'' means--
                  (A) the significant constitutional, 
                political, intellectual, economic, and foreign 
                policy trends and issues that have shaped the 
                course of American history; and
                  (B) the key episodes, turning points, and 
                leading figures involved in the constitutional, 
                political, intellectual, diplomatic, and 
                economic history of the United States.
  (c) Application.--
          (1) In general.--Each eligible institution that 
        desires a grant under this part shall submit an 
        application to the Secretary at such time, in such 
        manner, and accompanied by such additional information 
        as the Secretary may require.
          (2) Contents.--Each application submitted under 
        subsection (a) shall include a description of --
                  (A) how funds made available under this part 
                will be used for the activities set forth under 
                subsection (e), including how such activities 
                will increase knowledge with respect to 
                traditional American history, free 
                institutions, or Western civilization;
                  (B) how the eligible institution will ensure 
                that information about the activities funded 
                under this part is widely disseminated pursuant 
                to subsection (e)(1)(B);
                  (C) any activities to be undertaken pursuant 
                to subsection (e)(2)(A), including 
                identification of entities intended to 
                participate;
                  (D) how funds made available under this part 
                shall be used to supplement and not supplant 
                non-Federal funds available for the activities 
                described in subsection (e); and
                  (E) such fiscal controls and accounting 
                procedures as may be necessary to ensure proper 
                disbursement of and accounting for funding made 
                available to the eligible institution under 
                this part.
  (d) Award Basis.--In awarding grants under this part, the 
Secretary shall take into consideration the capability of the 
eligible institution to--
          (1) increase access to quality programming that 
        expands knowledge of traditional American history, free 
        institutions, or Western civilization;
          (2) involve personnel with strong expertise in 
        traditional American history, free institutions, or 
        Western civilization; and
          (3) sustain the activities funded under this part 
        after the grant has expired.
  (e) Use of Funds.--
          (1) Required use of funds.--Funds provided under this 
        part shall be used to--
                  (A) establish or strengthen academic programs 
                or centers focused on traditional American 
                history, free institutions, or Western 
                civilization, which may include--
                          (i) design and implementation of 
                        programs of study, courses, lecture 
                        series, seminars, and symposia;
                          (ii) development, publication, and 
                        dissemination of instructional 
                        materials;
                          (iii) research;
                          (iv) support for faculty teaching in 
                        undergraduate and, if applicable, 
                        graduate programs;
                          (v) support for graduate and 
                        postgraduate fellowships, if 
                        applicable; or
                          (vi) teacher preparation initiatives 
                        that stress content mastery regarding 
                        traditionalAmerican history, free 
institutions, or Western civilization; and
                  (B) conduct outreach activities to ensure 
                that information about the activities funded 
                under this part is widely disseminated--
                          (i) to undergraduate students 
                        (including students enrolled in teacher 
                        education programs, if applicable);
                          (ii) to graduate students (including 
                        students enrolled in teacher education 
                        programs), if applicable;
                          (iii) to faculty;
                          (iv) to local educational agencies; 
                        and
                          (v) within the local community.
          (2) Allowable uses of funds.--Funds provided under 
        this part may be used to support--
                  (A) collaboration with entities such as--
                          (i) local educational agencies, for 
                        the purpose of providing elementary, 
                        middle and secondary school teachers an 
                        opportunity to enhance their knowledge 
                        of traditional American history, free 
                        institutions, or Western civilization; 
                        and
                          (ii) nonprofit organizations whose 
                        mission is consistent with the purpose 
                        of this part, such as academic 
                        organizations, museums, and libraries, 
                        for assistance in carrying out 
                        activities described under subsection 
                        (a); and
                  (B) other activities that meet the purposes 
                of this part.
  (f) Authorization of Appropriations.--For the purpose of 
carrying out this part, there are authorized to be appropriated 
such sums as may be necessary for fiscal year 2006 and each of 
the 5 succeeding fiscal years.

                       PART F--TEACH FOR AMERICA

SEC. 861. TEACH FOR AMERICA.

  (a) Definitions.--
          (1) In general.--The terms ``highly qualified'', 
        ``local educational agency'', and ``Secretary'' have 
        the meanings given the terms in section 9101 of the 
        Elementary and Secondary Education Act of 1965 (20 
        U.S.C. 7801).
          (2) Grantee.--The term ``grantee'' means Teach For 
        America, Inc.
          (3) High need.--The term ``high need'', when used 
        with respect to a local educational agency, means a 
        local educational agency experiencing a shortage of 
        highly qualified teachers.
  (b) Grants Authorized.--The Secretary is authorized to award 
a grant to Teach For America, Inc., the national teacher corps 
of outstanding recent college graduates who commit to teach for 
2 years in underserved communities in the United States, to 
implement and expand its program of recruiting, selecting, 
training, and supporting new teachers.
  (c) Requirements.--In carrying out the grant program under 
subsection (b), the Secretary shall enter into an agreement 
with the grantee under which the grantee agrees to use the 
grant funds provided under this section--
          (1) to provide highly qualified teachers to high need 
        local educational agencies in urban and rural 
        communities;
          (2) to pay the cost of recruiting, selecting, 
        training, and supporting new teachers; and
          (3) to serve a substantial number and percentage of 
        underserved students.
  (d) Authorized Activities.--
          (1) In general.--Grant funds provided under this 
        section shall be used by the grantee to carry out each 
        of the following activities:
                  (A) Recruiting and selecting teachers through 
                a highly selective national process.
                  (B) Providing preservice training to the 
                teachers through a rigorous summer institute 
                that includes hands-on teaching experience and 
                significant exposure to education coursework 
                and theory.
                  (C) Placing the teachers in schools and 
                positions designated by partner local 
                educational agencies as high need placements 
                serving underserved students.
                  (D) Providing ongoing professional 
                development activities for the teachers' first 
                2 years in the classroom, including regular 
                classroom observations and feedback, and 
                ongoing training and support.
          (2) Limitation.--The grantee shall use all grant 
        funds received under this section to support activities 
        related directly to the recruitment, selection, 
        training, and support of teachers as described in 
        subsection (a).
  (e) Reports and Evaluations.--
          (1) Annual report.--The grantee shall provide to the 
        Secretary an annual report that includes--
                  (A) data on the number and quality of the 
                teachers provided to local educational agencies 
                through a grant under this section;
                  (B) an externally conducted analysis of the 
                satisfaction of local educational agencies and 
                principals with the teachers so provided; and
                  (C) comprehensive data on the background of 
                the teachers chosen, the training the teachers 
                received, the placement sites of the teachers, 
                the professional development of the teachers, 
                and the retention of the teachers.
          (2) Study.--
                  (A) In general.--From funds appropriated 
                under subsection (f), the Secretary shall 
                provide for a study that examines the 
                achievement levels of the students taught by 
                the teachers assisted under this section.
                  (B) Achievement gains compared.--The study 
                shall compare, within the same schools, the 
                achievement gains made by students taught by 
                teachers who are assisted under this section 
                with the achievement gains made by students 
                taught by teachers who are not assisted under 
                this section.
          (3) Requirements.--The Secretary shall provide for 
        such a study not less than once every 3 years, and each 
        such study shall include multiple placement sites and 
        multiple schools within placement sites.
          (4) Peer review standards.--Each such study shall 
        meet the peer review standards of the education 
        research community.
  (f) Authorization of Appropriations.--
          (1) In general.--There are authorized to be 
        appropriated to carry out this section such sums as may 
        be necessary for fiscal year 2006 and each of the 5 
        succeeding fiscal years.
          (2) Limitation.--The grantee shall not use more than 
        25 percent of Federal funds from any source for 
        administrative costs.

                PART G--PATSY T. MINK FELLOWSHIP PROGRAM

SEC. 871. PATSY T. MINK FELLOWSHIP PROGRAM.

  (a) Purpose.--
          (1) In general.--It is the purpose of this section to 
        provide, through eligible institutions, a program of 
        fellowship awards to assist highly qualified minorities 
        and women to acquire the doctoral degree, or highest 
        possible degree available, in academic areas in which 
        such individuals are underrepresented for the purpose 
        of enabling such individuals to enter the higher 
        education professoriate.
          (2) Designation.--Each recipient of a fellowship 
        award from an eligible institution receiving a grant 
        under this section shall be known as a ``Patsy T. Mink 
        Graduate Fellow''.
  (b) Definitions.--In this section, the term ``eligible 
institution'' means an institution of higher education, or a 
consortium of such institutions, that offers a program of 
postbaccalaureate study leading to a graduate degree.
  (c) Program Authorized.--
          (1) Grants by secretary.--
                  (A) In general.--The Secretary shall award 
                grants to eligible institutions to enable such 
                institutions to make fellowship awards to 
                individuals in accordance with the provisions 
                of this section.
                  (B) Priority consideration.--In awarding 
                grants under this section, the Secretary shall 
                consider the eligible institution's prior 
                experience in producing doctoral degree, or 
                highest possible degree available, holders who 
                are minorities and women, and shall give 
                priority consideration in making grants under 
                this section to those eligible institutions 
                with a demonstrated record of producing 
                minorities and women who have earned such 
                degrees.
          (2) Applications.--
                  (A) In general.--An eligible institution that 
                desires a grant under this section shall submit 
                an application to the Secretary at such time, 
                in such manner, and containing such information 
                as the Secretary may require.
                  (B) Applications made on behalf.--
                          (i) In general.--The following 
                        entities may submit an application on 
                        behalf of an eligible institution:
                                  (I) A graduate school or 
                                department of such institution.
                                  (II) A graduate school or 
                                department of such institution 
                                in collaboration with an 
                                undergraduate college or 
                                university of such institution.
                                  (III) An organizational unit 
                                within such institution that 
                                offers a program of 
                                postbaccalaureate study leading 
                                to a graduate degree, including 
                                an interdisciplinary or an 
                                interdepartmental program.
                                  (IV) A nonprofit organization 
                                with a demonstrated record of 
                                helping minorities and women 
                                earn postbaccalaureate degrees.
                          (ii) Nonprofit organizations.--
                        Nothing in this paragraph shall be 
                        construed to permit the Secretary to 
                        award a grant under this section to an 
                        entity other than an eligible 
                        institution.
          (3) Selection of applications.--In awarding grants 
        under subsection (a), the Secretary shall--
                  (A) take into account--
                          (i) the number and distribution of 
                        minority and female faculty nationally;
                          (ii) the current and projected need 
                        for highly trained individuals in all 
                        areas of the higher education 
                        professoriate; and
                          (iii) the present and projected need 
                        for highly trained individuals in 
                        academic career fields in which 
                        minorities and women are 
                        underrepresented in the higher 
                        education professoriate; and
                  (B) consider the need to prepare a large 
                number of minorities and women generally in 
                academic career fields of high national 
                priority, especially in areas in which such 
                individuals are traditionally underrepresented 
                in college and university faculties, such as 
                mathematics, science, technology, and 
                engineering.
          (4) Distribution and amounts of grants.--
                  (A) Equitable distribution.--In awarding 
                grants under this section, the Secretary shall, 
                to the maximum extent feasible, ensure an 
                equitable geographic distribution of awards and 
                an equitable distribution among public and 
                independent eligible institutions that apply 
                for grants under this section and that 
                demonstrate an ability to achieve the purpose 
                of this section.
                  (B) Special rule.--To the maximum extent 
                practicable, the Secretary shall use not less 
                than 30 percent of the amount appropriated 
                pursuant to subsection (f) to award grants to 
                eligible institutions that--
                          (i) are eligible for assistance under 
                        title III or title V; or
                          (ii) have formed a consortium that 
                        includes both non-minority serving 
                        institutions and minority serving 
                        institutions.
                  (C) Allocation.--In awarding grants under 
                this section, the Secretary shall allocate 
                appropriate funds to those eligible 
                institutions whose applications indicate an 
                ability to significantly increase the numbers 
                of minorities and women entering the higher 
                education professoriate and that commit 
                institutional resources to the attainment of 
                the purpose of this section.
                  (D) Number of fellowship awards.--An eligible 
                institution that receives a grant under this 
                section shall make not less than 15 fellowship 
                awards.
                  (E) Reallotment.--If the Secretary determines 
                that an eligible institution awarded a grant 
                under this section is unable to use all of the 
                grant funds awarded to the institution, the 
                Secretary shall reallot, on such date during 
                each fiscal year as the Secretary may fix, the 
                unused funds to other eligible institutions 
                that demonstrate that such institutions can use 
                any reallocated grant funds to make fellowship 
                awards to individuals under this section.
          (5) Institutional allowance.--
                  (A) In general.--
                          (i) Number of allowances.--In 
                        awarding grants under this section, the 
                        Secretary shall pay to each eligible 
                        institution awarded a grant, for each 
                        individual awarded a fellowship by such 
                        institution under this section, an 
                        institutional allowance.
                          (ii) Amount.--Except as provided in 
                        paragraph (3), an institutional 
                        allowance shall be in an amount equal 
                        to, for academic year 2006-2007 and 
                        succeeding academic years, the amount 
                        of institutional allowance made to an 
                        institution of higher education under 
                        section 715 for such academic year.
                  (B) Use of funds.--Institutional allowances 
                may be expended in the discretion of the 
                eligible institution and may be used to 
                provide, except as prohibited under paragraph 
                (4), academic support and career transition 
                services for individuals awarded fellowships by 
                such institution.
                  (C) Reduction.--The institutional allowance 
                paid under paragraph (1) shall be reduced by 
                the amount the eligible institution charges and 
                collects from a fellowship recipient for 
                tuition and other expenses as part of the 
                recipient's instructional program.
                  (D) Use for overhead prohibited.--Funds made 
                available under this section may not be used 
                for general operational overhead of the 
                academic department or institution receiving 
                funds under this section.
  (d) Fellowship Recipients.--
          (1) Authorization.--An eligible institution that 
        receives a grant under this section shall use the grant 
        funds to make fellowship awards to minorities and women 
        who are enrolled at such institution in a doctoral 
        degree, or highest possible degree available, program 
        and--
                  (A) intend to pursue a career in instruction 
                at--
                          (i) an institution of higher 
                        education (as the term is defined in 
                        section 101);
                          (ii) an institution of higher 
                        education (as the term is defined in 
                        section 102(a)(1));
                          (iii) an institution of higher 
                        education outside the United States (as 
                        the term is described in section 
                        102(a)(2)); or
                          (iv) a proprietary institution of 
                        higher education (as the term is 
                        defined in section 102(b)); and
                  (B) sign an agreement with the Secretary 
                agreeing--
                          (i) to begin employment at an 
                        institution described in paragraph (1) 
                        not later than 3 years after receiving 
                        the doctoral degree or highest possible 
                        degree available, which 3-year period 
                        may be extended by the Secretary for 
                        extraordinary circumstances; and
                          (ii) to be employed by such 
                        institution for 1 year for each year of 
                        fellowship assistance received under 
                        this section.
          (2) Failure to comply.--If an individual who receives 
        a fellowship award under this section fails to comply 
        with the agreement signed pursuant to subsection 
        (a)(2), then the Secretary shall do one or both of the 
        following:
                  (A) Require the individual to repay all or 
                the applicable portion of the total fellowship 
                amount awarded to the individual by converting 
                the balance due to a loan at the interest rate 
                applicable to loans made under part B of title 
                IV.
                  (B) Impose a fine or penalty in an amount to 
                be determined by the Secretary.
          (3) Waiver and modification.--
                  (A) Regulations.--The Secretary shall 
                promulgate regulations setting forth criteria 
                to be considered in granting a waiver for the 
                service requirement under subsection (a)(2).
                  (B) Content.--The criteria under paragraph 
                (1) shall include whether compliance with the 
                service requirement by the fellowship recipient 
                would be--
                          (i) inequitable and represent an 
                        extraordinary hardship; or
                          (ii) deemed impossible because the 
                        individual is permanently and totally 
                        disabled at the time of the waiver 
                        request.
          (4) Amount of fellowship awards.--Fellowship awards 
        under this section shall consist of a stipend in an 
        amount equal to the level of support provided to the 
        National Science Foundation graduate fellows, except 
        that such stipend shall be adjusted as necessary so as 
        not to exceed the fellow's tuition and fees or 
        demonstrated need (as determined by the institution of 
        higher education where the graduate student is 
        enrolled), whichever is greater.
          (5) Academic progress required.--An individual 
        student shall not be eligible to receive a fellowship 
        award--
                  (A) except during periods in which such 
                student is enrolled, and such student is 
                maintaining satisfactory academic progress in, 
                and devoting essentially full time to, study or 
                research in the pursuit of the degree for which 
                the fellowship support was awarded; and
                  (B) if the student is engaged in gainful 
                employment, other than part-time employment in 
                teaching, research, or similar activity 
                determined by the eligible institution to be 
                consistent with and supportive of the student's 
                progress toward the appropriate degree.
      (e) Rule of Construction.--Nothing in this section shall 
be construed to require an eligible institution that receives a 
grant under this section--
          (1) to grant a preference or to differentially treat 
        any applicant for a faculty position as a result of the 
        institution's participation in the program under this 
        section; or
          (2) to hire a Patsy T. Mink Fellow who completes this 
        program and seeks employment at such institution.
      (f) Authorization of Appropriations.--There is authorized 
to be appropriated to carry out this section such sums as may 
be necessary for fiscal year 2006 for each of the 5 succeeding 
fiscal years.

        PART H--STUDY ON COLLEGE ENROLLMENT BY SECONDARY SCHOOLS

SEC. 881. STUDY ON COLLEGE ENROLLMENT BY SECONDARY SCHOOLS.

      The Secretary shall contract with a not-for-profit 
organization, with demonstrated expertise in increasing college 
enrollment rates in low-income communities nationwide, to make 
publicly available year-to-year college enrollment rate trends 
by secondary schools, in full compliance with the Family 
Educational Rights and Privacy Act of 1974 (FERPA).

           *       *       *       *       *       *       *


                           20 U.S.C. 1078-10


HISTORICAL AND STATUTORY NOTES

           *       *       *       *       *       *       *



                 Effective and Applicability Provisions

    2004 Acts. Pub. L. 108-409, Sec. 3(b)(3), Oct. 30, 2004, 
118 Stat. 2301, provided that: ``The amendments made by this 
subsection [amending subsec. (c)(3) of this section and 20 
U.S.C.A. Sec. 1087j] 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

           *       *       *       *       *       *       *


  TITLE I--GALLAUDET UNIVERSITY; NATIONAL TECHNICAL INSTITUTE FOR THE 
DEAF; OTHER PROGRAMS

           *       *       *       *       *       *       *


SEC. 104. [ELEMENTARY AND SECONDARY EDUCATION PROGRAMS] LAURENT CLERC 
                    NATIONAL DEAF EDUCATION CENTER.

    (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 the 
Laurent Clerc National Deaf Education Center (referred to in 
this section as the ``Clerc Center'') to carry out 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] Clerc Center shall--
          (A) * * *

           *       *       *       *       *       *       *

    (2) To the extent possible, the [elementary and secondary 
education programs] Clerc 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)\1\ of the 
Individuals with Disabilities Education Act. Such educational 
environments shall include--
          (A) regular classes;
          (B) resource rooms;
          (C) separate classes;
          (D) separate, public or private, nonresidential 
        schools; and
          (E) separate, public or private, residential schools 
        and homebound or hospital environments.

           *       *       *       *       *       *       *

    (4) * * *

           *       *       *       *       *       *       *

    (5) The University, for purposes of the elementary and 
secondary education programs carried out at the Clerc Center, 
shall--
          (A)(i) select challenging academic content standards, 
        challenging student academic achievement standards, and 
        academic assessments of a State, adopted and 
        implemented, as appropriate, pursuant to paragraphs (1) 
        and (3) of section 1111(b) of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 6311(b)(1) 
        and (3)) and approved by the Secretary; and
          (ii) implement such standards and assessments for 
        such programs by not later than the beginning of the 
        2008-2009 academic year;
          (B) annually determine whether such programs at the 
        Clerc Center are making adequate yearly progress, as 
        determined according to the definition of adequate 
        yearly progress defined (pursuant to section 
        1111(b)(2)(C) of such Act (20 U.S.C. 6311(b)(2)(C))) by 
        the State that has adopted and implemented the 
        standards and assessments selected under subparagraph 
        (A)(i); and
          (C) publicly report the results of the academic 
        assessments implemented under subparagraph (A) and 
        whether the programs at the Clerc Center are making 
        adequate yearly progress, as determined under 
        subparagraph (B).

           *       *       *       *       *       *       *


SEC. 105. AGREEMENT WITH GALLAUDET UNIVERSITY.

    (a) General Authority.-- * * *

           *       *       *       *       *       *       *

    (b) Provisions of Agreement.-- * * *

           *       *       *       *       *       *       *

          (4) provide that any laborer or mechanic employed by 
        any contractor or subcontractor in the performance of 
        work on any construction aided by Federal funds 
        appropriated for the benefit of the Kendall 
        Demonstration Elementary School or the Model Secondary 
        School for the Deal will be paid wages at rates not 
        less than those prevailing on similar construction in 
        the locality as determined by the Secretary of Labor in 
        accordance with [the Act of March 3, 1931 (40 U.S.C. 
        276a-276a-5) commonly referred to as the Davis-Bacon 
        Act] subchapter IV of chapter 31 of title 40, United 
        States Code, commonly referred to as the Davis-Bacon 
        Act; except that the Secretary of Labor shall have, 
        with respect to the labor standards specified in this 
        paragraph, the authority and functions set forth in 
        Reorganization Plan Numbered 14 of 1950 (5 U.S.C. App.) 
        and [section 2 of the Act of June 13, 1934 (40 U.S.C. 
        276c] section 3145 of title 40, United States Code; and

           *       *       *       *       *       *       *


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) Notwithstanding the requirement under paragraph (1), if 
the Secretary or the Rochester Institute of Technology 
terminates the agreement under paragraph (1), the Secretary 
shall consider proposals from other institutions of higher 
education and enter into an agreement with 1 of such 
institutions for the establishment and operation of a National 
Technical Institution for the Deaf.
    [(2)] (3) * * *

           *       *       *       *       *       *       *

    (b) Provisions of Agreement.-- * * *
          (1) * * *

           *       *       *       *       *       *       *

          (3) provide that the Board of Trustees or other 
        governing body of the institution will prepare and 
        submit to the Secretary, no later than June 1 following 
        the fiscal year for which the report is submitted, an 
        annual report containing an accounting of all indirect 
        costs paid to the institution of higher education under 
        the agreement with the Secretary, which accounting the 
        Secretary shall transmit to the [Committee on Education 
        and Labor 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;

           *       *       *       *       *       *       *

          (5) provide that any laborer or mechanic employed by 
        any contractor or subcontractor in the performance of 
        work on any construction aided by Federal funds 
        appropriated for the benefit of NTID will be paid wages 
        at rates not less than those prevailing on similar 
        construction in the locality as determined by the 
        Secretary of Labor in accordance with [the Act of March 
        3, 1931 (40 U.S.C. 276a-276a-5) commonly referred to as 
        the Davis-Bacon Act]; subchapter IV of chapter 31 of 
        title 40, United States Code, commonly referred to as 
        the Davis-Bacon Act; except that the Secretary of Labor 
        shall have, with respect to the labor standards 
        specified in this paragraph, the authority and 
        functions set forth in Reorganization Plan Numbered 14 
        of 1950 (5 U.S.C. App.) and [section 2 of the Act of 
        June 13, 1934 (40 U.S.C. 276c] section 3145 of title 
        40, United States Code; and

           *       *       *       *       *       *       *


                         PART C--OTHER PROGRAMS

SEC. 121. CULTURAL EXPERIENCES GRANTS.

  (a) In General.--The Secretary shall, on a competitive basis, 
make grants to, and enter into contracts and cooperative 
agreements with, eligible entities to support the activities 
described in subsection (b).
  (b) Activities.--In carrying out this section, the Secretary 
shall support activities providing cultural experiences, 
through appropriate nonprofit organizations with a demonstrated 
proficiency in providing such activities, that--
          (1) enrich the lives of deaf and hard-of-hearing 
        children and adults;
          (2) increase public awareness and understanding of 
        deafness and of the artistic and intellectual 
        achievements of deaf and hard-of-hearing persons; or
          (3) promote the integration of hearing, deaf, and 
        hard-of-hearing persons through shared cultural, 
        educational, and social experiences.
  (c) Applications.--An eligible entity that desires to receive 
a grant, or enter into a contract or cooperative agreement, 
under this section shall submit an application to the Secretary 
at such time, in such manner, and containing such information 
as the Secretary may require.
  (d) 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 each of the 5 succeeding 
fiscal years.

           *       *       *       *       *       *       *


SEC. 203. AUDIT.

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

           *       *       *       *       *       *       *

    (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 of all 
        NTID funds, as determined by the Secretary.] The 
        institution of higher education that the Secretary has 
        an agreement with under section 112 shall have an 
        annual independent financial and compliance audit made 
        of NTID programs and activities. The audit shall follow 
        the cycle of the Federal fiscal year.
          (2) Compliance.--As used in paragraph (1), compliance 
        means compliance with [sections 102(b), 105(b)(4), 
        112(b)(5), and 203(c), paragraphs (2) and (3) of 
        section 207(b), subsections (b)(2), (b)(3), and (c) 
        through f, of section 207, and subsections (b) and (c) 
        of section 210.] 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 
        209.
          (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 of the institution authorized to 
        establish and operate the NTID under section 112(a), as 
        the case may be, but not later than January 10 of each 
        year.
    (c) Limitations Regarding Expenditure of Funds.--
          (1) In general.-- * * *

           *       *       *       *       *       *       *

          (2) Policies.--
                  (A) Not later than 180 days after the date of 
                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] 
                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 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) The number of students during the preceding 
        academic year who enrolled and whether these were 
        first-time enrollments, who graduated, who found 
        employment, or who left without completing a program of 
        study, reported under each of the programs of the 
        University (elementary, secondary, [preparatory,] 
        undergraduate, and graduate) and of NTID.
          (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] on the date that is 1 
                year after the date of graduation or 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, and such 
        supplementary schedules presenting financial 
        information for NTID for the end of the Federal fiscal 
        year as determined by the Secretary.] of NTID programs 
        and activities.

           *       *       *       *       *       *       *


SEC. 205. MONITORING, EVALUATION, AND REPORTING.

    (a) Activities.-- * * *
    (b) Report.--[The Secretary, as part of the annual report 
required under section 426 of the Department of Education 
Organization Act, shall include a description of] The Secretary 
shall annually transmit information to Congress on the 
monitoring and evaluation activities pursuant to subsection 
(a), together with such recommendations, including 
recommendations for legislation, as the Secretary may consider 
necessary.
    (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 
2010 to carry out the monitoring and evaluation activities 
authorized under this section.

           *       *       *       *       *       *       *


SEC. 206. LIAISON FOR EDUCATION 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.-- * * *

           *       *       *       *       *       *       *

    (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 through2003] fiscal years 2006 
        through 2010.
          (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 2010.

           *       *       *       *       *       *       *


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.

           *       *       *       *       *       *       *


SEC. 209. INTERNATIONAL STUDENTS.

    (a) Enrollment.--[Effective with]
          (1) In general.--Except as provided in paragraph (2), 
        effective with new admissions for academic year 1993-
        1994 and each succeeding academic year, the University 
        (including [preparatory, undergraduate,] undergraduate 
        and graduate students) and NTID shall limit the 
        enrollment of international students to approximately 
        15 percent of the total postsecondary student 
        population enrolled respectively at the University or 
        NTID, except that in any school year no United States 
        citizen who is qualified to be admitted to the 
        University or NTID and applies for admission to the 
        University or NTID shall be denied admission because of 
        the admission of an international student.
          (2) Distance learning.--International students who 
        participate in distance learning courses that are at 
        NTID or the University and who are residing outside of 
        the United States shall--
                  (A) not be counted as international students 
                for purposes of the cap on international 
                students under paragraph (1), except that in 
                any school year no United States citizen who 
                applies to participate in distance learning 
                courses that are at the University or NTID 
                shall be denied participation in such courses 
                because of the participation of an 
                international student in such courses; and
                  (B) not be charged a tuition surcharge, as 
                described in subsection (b).
    [(b) Tuition Surcharge.--Effective with new admissions, the 
tuition for postsecondary international students enrolled in 
the University (including preparatory, undergraduate, and 
graduate students) or NTID shall include a surcharge of 100 
percent for the academic year 1999-2000 and any succeeding 
academic year.
    [(c) Reduction of Surcharge.--Beginning with the academic 
year 1993-1994, the University or NTID may reduce the surcharge 
under subsection (b) to 50 percent if--
          [(1) a student described under subsection (b) is from 
        a developing country;
          [(2) such student is unable to pay the tuition 
        surcharge under subsection (b); and
          [(3) such student has made a good faith effort to 
        secure aid through such student's government or other 
        sources.
    [(d) Definition.--For purposes of subsection (c), the term 
``developing country'' means a country that has a 1990 per 
capita income not in excess of $4,000 in 1990 United States 
dollars.]
    (b) Tuition Surcharge.--Except as provided in subsections 
(a)(2)(B) and (c), the tuition for postsecondary international 
students enrolled in the University (including undergraduate 
and graduate students) or NTID shall include, for academic year 
2007-2008 and any succeeding academic year, a surcharge of--
          (1) 100 percent for a postsecondary international 
        student from a non-developing country; and
          (2) 50 percent for a postsecondary international 
        student from a developing country.
  (c) Reduction of Surcharge.--
          (1) In general.--Beginning with the academic year 
        2007-2008, the University or NTID may reduce the 
        surcharge--
                  (A) under subsection (b)(1) to 50 percent 
                if--
                          (i) a student described under 
                        subsection (b)(1) demonstrates need; 
                        and
                          (ii) such student has made a good 
                        faith effort to secure aid through such 
                        student's government or other sources; 
                        and
                  (B) under subsection (b)(2) to 25 percent 
                if--
                          (i) a student described under 
                        subsection (b)(2) demonstrates need; 
                        and
                          (ii) such student has made a good 
                        faith effort to secure aid through such 
                        student's government or other sources.
          (2) Development of sliding scale.--The University and 
        NTID shall develop a sliding scale model that--
                  (A) will be used to determine the amount of a 
                tuition surcharge reduction pursuant to 
                paragraph (1); and
                  (B) shall be approved by the Secretary.
  (d) Definition.--In this section, the term `developing 
country' means a country with a per-capita income of not more 
than $4,825, measured in 1999 United States dollars, as 
adjusted by the Secretary to reflect inflation since 1999.

           *       *       *       *       *       *       *


SEC. 210. RESEARCH PRIORITIES.

    (a) Research Priorities.-- * * *
    (b) Research Reports.--The University and NTID shall each 
prepare and submit an annual research report, to the Secretary, 
the Committee on Education and the Workforce of the House of 
Representatives, and the [Committee on Labor and Human 
Resources of the Senate] Committee on Health, Education, Labor, 
and Pensions of the Senate, not later than January 10 of each 
year, that shall include--
          (1) * * *

           *       *       *       *       *       *       *


SEC. 212. AUTHORIZATION OF APPROPRIATIONS.

    (a) Galludet 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) Gallaudet University;
          (2) Kendall Demonstration Elementary School; and
          (3) the Model Secondary School for the Deaf.
    (b) National Technical Institute for the Deaf.--There are 
authorized to be appropriated such sums as may be necessary for 
each of the [fiscal years 1998 through 2003] 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.

           *       *       *       *       *       *       *


UNITED STATES INSTITUTE OF PEACE ACT

           *       *       *       *       *       *       *


                   22 U.S.C. 4604. Powers and duties

    (a) * * *

           *       *       *       *       *       *       *

    (b) Description of Specific Activities.--The Institute, 
acting through the Board, may--
          (1) * * *

           *       *       *       *       *       *       *

          (3) establish a Jeannette Rankin Research Program on 
        Peace to conduct research and make studies, 
        particularly of an interdisciplinary or of a 
        multidisciplinary nature, into the causes of war and 
        other international conflicts and the elements of peace 
        among the nations and peoples of the world, including 
        peace theories, methods, techniques, programs, and 
        systems, and into the experiences of the United States 
        and other nations in resolving conflicts with justice 
        and dignity and without violence as they pertain to the 
        advancement of international peace and conflict 
        resolution, placing particular emphasis on realistic 
        approaches to past successes and failures in the quest 
        for peace and arms control and utilizing to the maximum 
        extent possible United States Government documents and 
        classified materials from the Department of State, the 
        Department of Defense, [the Arms Control and 
        Disarmament Agency,] and the intelligence community;

           *       *       *       *       *       *       *


                   22 U.S.C. 4605. Board of Directors

    (a) Vested Powers.-- * * *
    (d) Qualifications.--
          (1) Each individual appointed to the Board under 
        subsection [(b)(5)] (b)(4) of this section shall have 
        appropriate practical or academic experience in peace 
        and conflict resolution efforts of the United States.
          (2) Officers and employees of the United States 
        Government may not be appointed to the Board under 
        subsection [(b)(5)] (b)(4) of this section.
    (e) Term of Office: Commencement and Termination, Interim 
and Remainder Service, Limitation.--
          (1) Members of the Board appointed under subsection 
        [(b)(5)] (b)(4) of this section shall be appointed to 
        four year terms, except that
                  (A) the term of six of the members initially 
                appointed shall be two years, as designated by 
                the President at the time of their nomination;
                  (B) a member may continue to serve until his 
                or her successor is appointed; and
                  (C) a member appointed to replace a member 
                whose term has not expired shall be appointed 
                to serve the remainder of that term.
          (2) The terms of the members of the Board initially 
        appointed under subsection [(b)(5)] (b)(4) of this 
        section shall begin on January 20, 1985, and subsequent 
        terms shall begin upon the expiration of the preceding 
        term, regardless of when a member is appointed to fill 
        that term.
          (3) The President may not nominate an individual for 
        appointment to the Board under subsection [(b)(5)] 
        (b)(4) of this section prior to January 20, 1985, but 
        shall submit the names of eleven nominees for initial 
        Board membership under subsection [(b)(5)] (b)(4) of 
        this section not later than ninety days after that 
        date. If the Senate rejects such a nomination or if 
        such a nomination is withdrawn, the President shall 
        submit the name of a new nominee within fifteen days.
          (4) An individual appointed as a member of the Board 
        under subsection [(b)(5)] (b)(4) of this section may 
        not be appointed to more than two terms on the Board.
          (5) The term of a member of the Board shall not 
        commence until the member is confirmed by the Senate 
        and sworn in as a member of the Board.
    (f) Removal From Office.--A member of the Board appointed 
under subsection [(b)(5)] (b)(4) of this section may be removed 
by the President--
          (1) * * *

           *       *       *       *       *       *       *

    (h) Meetings; Chairman; Vice Chairman; Quorum; Notice in 
Federal Register; Closure.--Meetings of the Board shall be 
conducted as follows:
          (1) The President shall stipulate by name the nominee 
        who shall be the first Chairman of the Board. The first 
        Chairman shall serve for a term of three years. 
        Thereafter, the Board shall elect a Chairman every 
        three years from among the directors appointed by the 
        President under subsection [(b)(5)] (b)(4) of this 
        section and may elect a Vice Chairman if so provided by 
        the Institute's bylaws.

           *       *       *       *       *       *       *

    (i) Compensation.--A director appointed by the President 
under subsection [(b)(5)] (b)(4) of this section shall be 
entitled to receive the daily equivalent of the annual rate of 
basic pay in effect for grade GS-18 of the General Schedule 
under section 5332 of title 5 for each day during which the 
director is engaged in the performance of duties as a member of 
the Board.

           *       *       *       *       *       *       *


                        22 U.S.C. 4609. Funding

    (a) Authorization of Appropriations.--
          (1) In general.-- * * *

           *       *       *       *       *       *       *

    (c) Contractual Authority.-- * * *
  (d) Extension.--Any authorization of appropriations made for 
the purposes of carrying out this title shall be extended in 
the same manner as applicable programs are extended under 
section 422 of the General Education Provisions Act.

           *       *       *       *       *       *       *


HIGHER EDUCATION AMENDMENTS OF 1998

           *       *       *       *       *       *       *


    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.-- * * *

           *       *       *       *       *       *       *

    (b) Definition.--For purposes of this part, the term 
``youth offender'' means a male or female offender under the 
age of [25] 35, who is incarcerated in a State prison, 
including a prerelease facility.

           *       *       *       *       *       *       *


    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 fields of tribally controlled colleges and 
        universities and Indian higher education;
          (7) ``Indian student'' means a student who is--
                  (A) a member of an Indian tribe; or
                  (B) a biological child of a member of an 
                Indian tribe, living or deceased;
          [(7)] (8) * * *
          [(8)] (9) * * *
    (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) Determination of credits.--Eligible credits 
        earned in a continuing education program--
                  (A) shall be determined as 1 credit for every 
                10 contact hours in the case of an institution 
                on a quarter system, or 15 contact hours in the 
                case of an institution 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
                  (B) shall be limited to 10 percent of the 
                Indian student count of a tribally controlled 
                college or university.

           *       *       *       *       *       *       *


                       ELIGIBLE GRANT RECIPIENTS

    Sec. 103. To be eligible for assistance under this title, a 
tribally controlled college or university must be one which--
          (1) is governed by a board of directors or board of 
        trustees a majority of which are Indians;
          (2) demonstrates adherence to stated goals, a 
        philosophy, or a plan of operation which is directed to 
        meet the needs of Indians; [and]
          (3) if in operation for more than one year, has 
        students a majority of whom are Indians[.] ; and
          (4)(A) is accredited by a nationally recognized 
        accrediting agency or association determined by the 
        Secretary of Education to be a reliable authority with 
        regard to the quality of training offered; or
          (B) is, according to such an agency or association, 
        making reasonable progress toward accreditation.

           *       *       *       *       *       *       *


                     TECHNICAL ASSISTANCE CONTRACTS

    Sec. 105. The Secretary shall provide, upon request from a 
tribally controlled college or university which is receiving 
funds under section 108, technical assistance either directly 
or through contract. [In the awarding of contracts for 
technical assistance, preference shall be given] The Secretary 
shall direct that contracts for technical assistance be awarded 
to an organization designated by the tribally controlled 
college or university to be assisted. No authority to enter 
into contracts provided by this section shall be effective 
except to the extent authorized in advance by appropriations 
Acts.

           *       *       *       *       *       *       *


                      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 succeeding] 5 succeeding fiscal years.
    (2) There is authorized to be appropriated for the purpose 
of carrying out section 107, [$40,000,000] such sums as may be 
necessary for fiscal year [1999] 2006 and such sums as may be 
necessary for each of the [4 succeeding] 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] such 
sums as may be necessary for fiscal year [1999] 2006 and such 
sums as may be necessary for each of the [4 succeeding] 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] 5 succeeding 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.

           *       *       *       *       *       *       *


                    AUTHORIZATION OF APPROPRIATIONS

    Sec. 306. (1) 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 succeeding] 5 succeeding fiscal years.

           *       *       *       *       *       *       *


SEC. 403. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated for grants under 
this title, [$2,000,000 for fiscal year 1999] such sums as may 
be necessary for fiscal year 2006 and such sums as may be 
necessary for each of the [4 succeeding] 5 succeeding fiscal 
years.

           *       *       *       *       *       *       *


NAVAJO COMMUNITY COLLEGE ACT

           *       *       *       *       *       *       *


                                PURPOSE

    Sec. 2. It is the purpose of this Act to assist the [Navajo 
Tribe of Indians] Navajo Nation in providing education to the 
members of the tribe and other qualified applicants through a 
community college, established by that tribe, known as [the 
Navajo Community College] Dine College.

                                 GRANTS

    Sec. 3. The Secretary of the Interior is authorized to make 
grants to the [Navajo Tribe of Indians] Navajo Nation to assist 
the tribe in the construction, maintenance, and operation of 
[the Navajo Community College] Dine College. Such college shall 
be designed and operated by the [Navajo Tribe] Navajo Nation to 
insure that the [Navajo Indians] Navajo people and other 
qualified applicants have educational opportunities which are 
suited to their unique needs and interests.

                       STUDY OF FACILITIES NEEDS

    Sec. 4. (a) The Secretary shall conduct a detailed survey 
and study of the academic facilities needs of [the Navajo 
Community College] Dine College, and shall report to the 
Congress not later than [August 1, 1979] October 31, 2009, the 
results of such survey and study. Such report shall include any 
recommendations or views submitted by the governing body of 
such College and by the governing body of the [Navajo Tribe] 
Navajo Nation, and shall include detailed recommendations by 
the Secretary as to the number, type, and cost of academic 
facilities which are required, ranking each such required 
facility by relative need.
    (b) Funds to carry out the purposes of this section may be 
drawn from general administrative appropriations to the 
Secretary made after [the date of enactment of the Tribally 
Controlled Community College Assistance Act of 1978] October 1, 
2006.
    (c) No later than March 1991, an inventory prepared by [the 
Navajo Community College] Dine College identifying repairs, 
alterations, and renovations to facilities required to meet 
health and safety standards shall be submitted to the Secretary 
and appropriate committees of Congress. Within 60 days 
following the receipt of such inventory, the Secretary shall 
review the inventory, evaluating the needs identified, and 
transmit the written comments of the Department of the Interior 
to the appropriate committees of Congress, together with the 
Department's evaluation prepared by the health and safety 
division of the Bureau of Indian Affairs.

           *       *       *       *       *       *       *


                    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 and such sums as may be 
necessary for each of the 4 succeeding fiscal years.] such sums 
as are necessary for fiscal years 2006 through 2011.
    (2) * * *
    (3) Sums described in paragraph (2) shall be used to 
provide grants for construction activities, including the 
construction of buildings, water and sewer facilities, roads, 
information technology and telecommunications infrastructure, 
classrooms, and external structures (such as walkways).
    (b)(1) There are authorized to be appropriated for grants 
to [the Navajo Community College] Dine College[, for each 
fiscal year, an amount necessary to pay expenses incurred for--
] such sums as are necessary for fiscal years 2006 through 2011 
to pay the cost of--
          (A) the maintenance and operation of the [college] 
        College, including--
                  (i) basic, special, developmental, 
                vocational, technical, and special handicapped 
                education costs[,];
                  (ii) annual capital expenditures, including 
                equipment needs, minor capital improvements and 
                remodeling projects, physical plant maintenance 
                and operation costs, and exceptions and 
                supplemental need account[, and]; and
                  (iii) summer and special interest 
                programs[,];
          (B) major capital improvements, including internal 
        capital outlay funds and capital improvement 
        projects[,];
          (C) mandatory payments, including payments due on 
        bonds, loans, notes, or lease purchases[, and];
          (D) supplemental student services, including student 
        housing, food service, and the provision of access to 
        books and services[.]; and
          (E) improving and expanding the College, including by 
        providing, for the Navajo people and others in the 
        community of the College--
                  (i) higher education programs;
                  (ii) vocational and technical education;
                  (iii) activities relating to the preservation 
                and protection of the Navajo language, 
                philosophy, and culture;
                  (iv) employment and training opportunities;
                  (v) economic development and community 
                outreach; and
                  (vi) a safe learning, working, and living 
                environment.

           *       *       *       *       *       *       *

    (c) The Secretary of the Interior is authorized and 
directed to establish by rule procedures to insure that all 
funds appropriated under this Act are properly identified for 
grants to [the Navajo Community College] Dine College and that 
such funds are not commingled with appropriations historically 
expended by the Bureau of Indian Affairs for programs and 
projects normally provided on the Navajo Reservation for Navajo 
beneficiaries.

           *       *       *       *       *       *       *


                          EFFECT ON OTHER LAWS

    Sec. 6. (a) Except as specifically provided by law, 
eligibility for assistance under this Act shall not, by itself, 
preclude the eligibility of [the Navajo Community College] Dine 
College to receive Federal financial assistance under any 
program authorized under the Higher Education Act of 1965 or 
any other applicable program for the benefit of institutions of 
higher education, community colleges, or postsecondary 
educational institutions.
    (b) Notwithstanding any other provision of law, funds 
provided under this Act to [the Navajo Community College] Dine 
College may be treated as non-Federal, private funds of the 
College for purposes of any provision of Federal law which 
requires that non-Federal or private funds of the [college] 
College be used in a project or for a specific purpose.

           *       *       *       *       *       *       *


                           PAYMENTS; INTEREST

    Sec. 7. (a) Notwithstanding any other provision of law, the 
Secretary of the Interior shall not, in disbursing funds 
provided under this Act, use any method of payment which was 
not used during fiscal year 1987 in the disbursement of funds 
provided under this Act.
    (b)(1)(A) Notwithstanding any provision of law other than 
subparagraph (B), any interest or investment income that 
accrues on any funds provided under this Act after such funds 
are paid to [the Navajo Community College] Dine College and 
before such funds are expended for the purpose for which such 
funds were provided under this Act shall be the property of 
[the Navajo Community College] Dine College and shall not be 
taken into account by any officer or employee of the Federal 
Government in determining whether to provide assistance, or the 
amount of assistance, to [the Navajo Community College] Dine 
College under any provision of Federal law.
    (B) All interest or investment income described in 
subparagraph (A) shall be expended by [the Navajo Community 
College] Dine College by no later than the close of the fiscal 
year succeeding the fiscal year in which such interest or 
investment income accrues.
    (2) Funds provided under this Act may only be invested by 
[the Navajo Community College] Dine College in obligations of 
the United States or in obligations or securities that are 
guaranteed or insured by the United States.

           *       *       *       *       *       *       *


                           PUBLIC LAW 108-409

TAXPAYER-TEACHER PROTECTION ACT OF 2004

           *       *       *       *       *       *       *


SEC. 2. REDUCTION OF SPECIAL ALLOWANCE PAYMENTS FOR LOANS FROM THE 
                    PROCEEDS OF TAX EXEMPT ISSUES.

    Section 438(b)(2)(B) of the Higher Education Act of 1965 
(20 U.S.C. 1087-1(b)(2)(B)) is amended--
          (1) * * *

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