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PART I—GENERAL HIGHER EDUCATION PROGRAMS
Higher Education Act of 1965
(P.L. 89–329)
[As Amended Through P.L. 113–4, Enacted March 7, 2013]
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’’.
[The table of contents is not part of the law and is provided for the convenience of
the reader.]
TITLE I—GENERAL PROVISIONS
PART A—DEFINITIONS
Sec. 101. ø20 u.s.c. 1001¿ general definition of institution of higher education.
Sec. 102. ø20 u.s.c. 1002¿ definition of institution of higher education for purposes
of title iv programs.
Sec. 103. ø20 u.s.c. 1003¿ additional definitions.
Sec.
Sec.
Sec.
Sec.
111.
112.
113.
114.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
115.
116.
117.
118.
119.
120.
121.
122.
123.
PART B—ADDITIONAL GENERAL PROVISIONS
ø20 u.s.c. 1011¿ antidiscrimination.
ø20 u.s.c. 1011a¿ protection of student speech and association rights.
ø20 u.s.c. 1011b¿ territorial waiver authority.
ø20 u.s.c. 1011c¿ national advisory committee on institutional quality
and integrity.
ø20 u.s.c. 1011d¿ student representation.
ø20 u.s.c. 1011e¿ financial responsibility of foreign students.
ø20 u.s.c. 1011f¿ disclosures of foreign gifts.
ø20 u.s.c. 1011g¿ application of peer review process.
ø20 u.s.c. 1011h¿ binge drinking on college campuses.
ø20 u.s.c. 1011i¿ drug and alcohol abuse prevention.
ø20 u.s.c. 1011j¿ prior rights and obligations.
ø20 u.s.c. 1011k¿ recovery of payments.
ø20 u.s.c. 1011l¿ diploma mills.
PART C—COST OF HIGHER EDUCATION
Sec. 131. ø20 u.s.c. 1015¿ improvements in market information and public accountability in higher education.
Sec. 132. ø20 u.s.c. 1015a¿ transparency in college tuition for consumers.
Sec. 133. ø20 u.s.c. 1015b¿ textbook information.
Sec. 134. ø20 u.s.c. 1015c¿ database of student information prohibited.
Sec. 135. ø20 u.s.c. 1015d¿ in-state tuition rates for members of the armed forces
on active duty, spouses, and dependent children.
Sec. 136. ø20 u.s.c. 1015e¿ State higher education information system pilot program.
Sec. 137. ø20 u.s.c. 1015f¿ State commitment to affordable college education.
PART D—ADMINISTRATIVE PROVISIONS FOR DELIVERY OF STUDENT FINANCIAL
ASSISTANCE
Sec. 141. ø20 u.s.c. 1018¿ performance-based organization for the delivery of Federal student financial assistance.
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HIGHER EDUCATION ACT OF 1965
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Sec. 142. ø20 u.s.c. 1018a¿ procurement flexibility.
Sec. 143. ø20 u.s.c. 1018b¿ administrative simplification of student aid delivery.
PART E—LENDER AND INSTITUTION REQUIREMENTS RELATING TO EDUCATION LOANS
Sec. 151. ø20 u.s.c. 1019¿ definitions.
Sec. 152. ø20 u.s.c. 1019a¿ responsibilities of covered institutions, institution-affiliated organizations, and lenders.
Sec. 153. ø20 u.s.c. 1019b¿ loan information to be disclosed and model disclosure
form for covered institutions, institution-affiliated organizations, and
lenders participating in preferred lender arrangements.
Sec. 154. ø20 u.s.c. 1019c¿ loan information to be disclosed and model disclosure
form for institutions participating in the william. D. Ford Federal direct loan program.
Sec. 155. ø20 u.s.c. 1019d¿ self-certification form for private education loans.
TITLE II—TEACHER QUALITY ENHANCEMENT
Sec. 200. ø20 u.s.c. 1021¿ definitions.
Sec.
Sec.
Sec.
Sec.
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Sec.
Sec.
Sec.
Sec.
201.
202.
203.
204.
205.
206.
207.
208.
209.
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ø20
ø20
ø20
ø20
ø20
ø20
ø20
ø20
PART A—TEACHER QUALITY PARTNERSHIP GRANTS
u.s.c. 1022¿ purposes.
u.s.c. 1022a¿ partnership grants.
u.s.c. 1022b¿ administrative provisions.
u.s.c. 1022c¿ accountability and evaluation.
u.s.c. 1022d¿ accountability for programs that prepare teachers.
u.s.c. 1022e¿ teacher development.
u.s.c. 1022f¿ State functions.
u.s.c. 1022g¿ general provisions.
u.s.c. 1022h¿ authorization of appropriations.
PART B—ENHANCING TEACHER EDUCATION
Sec. 230. ø20 u.s.c. 1031¿ authorization of appropriations.
SUBPART 1—PREPARING TEACHERS FOR DIGITAL AGE LEARNERS
Sec.
Sec.
Sec.
Sec.
231.
232.
233.
234.
ø20
ø20
ø20
ø20
u.s.c.
u.s.c.
u.s.c.
u.s.c.
1032¿ program authorized.
1032a¿ uses of funds.
1032b¿ application requirements.
1032c¿ evaluation.
SUBPART 2—HONORABLE AUGUSTUS F. HAWKINS CENTERS OF EXCELLENCE
Sec. 241. ø20 u.s.c. 1033¿ definitions.
Sec. 242. ø20 u.s.c. 1033a¿ augustus f. Hawkins centers of excellence.
SUBPART 3—PREPARING GENERAL EDUCATION TEACHERS TO MORE EFFECTIVELY
EDUCATE STUDENTS WITH DISABILITIES
Sec. 251. ø20 u.s.c. 1034¿ teach to reach grants.
SUBPART 4—ADJUNCT TEACHER
Sec. 255. ø20 u.s.c. 1035¿ adjunct teacher corps.
CORPS
SUBPART 5—GRADUATE FELLOWSHIPS TO PREPARE FACULTY IN HIGH-NEED AREAS AT
COLLEGES OF EDUCATION
Sec. 258. ø20 u.s.c. 1036¿ graduate fellowships to prepare faculty in high-need
areas at colleges of education.
PART C—GENERAL PROVISIONS
Sec. 261. ø20 u.s.c. 1041¿ limitations.
TITLE III—INSTITUTIONAL AID
Sec. 301. ø20 u.s.c. 1051¿ findings and purposes.
Sec.
Sec.
Sec.
Sec.
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311.
312.
313.
314.
ø20
ø20
ø20
ø20
u.s.c.
u.s.c.
u.s.c.
u.s.c.
PART A—STRENGTHENING INSTITUTIONS
1057¿ program purpose.
1058¿ definitions; eligibility.
1059¿ duration of grant.
1059a¿ applications.
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HIGHER EDUCATION ACT OF 1965
Sec. 315. ø20 u.s.c.
Sec. 316. ø20 u.s.c.
sities.
Sec. 317. ø20 u.s.c.
Sec. 318. ø20 u.s.c.
Sec. 319. ø20 u.s.c.
Sec. 320. ø20 u.s.c.
serving
1059b¿ goals for financial management and academic program.
1059c¿ american indian tribally controlled colleges and univer1059d¿ alaska native and native hawaiian-serving institutions.
1059e¿ predominantly black institutions.
1059f¿ native american-serving, nontribal institutions.
1059g¿ asian american and native american pacific islanderinstitutions.
PART B—STRENGTHENING HISTORICALLY BLACK COLLEGES AND UNIVERSITIES
Sec. 321. ø20 u.s.c. 1060¿ findings and purposes.
Sec. 322. ø20 u.s.c. 1061¿ definitions.
Sec. 323. ø20 u.s.c. 1062¿ grants to institutions.
Sec. 324. ø20 u.s.c. 1063¿ allotments to institutions.
Sec. 325. ø20 u.s.c. 1063a¿ applications.
Sec. 326. ø20 u.s.c. 1063b¿ professional or graduate institutions.
Sec. 327. ø20 u.s.c. 1063c¿ reporting and audit requirements.
PART C—ENDOWMENT CHALLENGE GRANTS FOR INSTITUTIONS ELIGIBLE
ASSISTANCE UNDER PART A OR PART B
Sec. 331. ø20 u.s.c. 1065¿ endowment challenge grants.
FOR
PART D—HISTORICALLY BLACK COLLEGE AND UNIVERSITY CAPITAL FINANCING
Sec. 341. ø20 u.s.c. 1066¿ findings.
Sec. 342. ø20 u.s.c. 1066a¿ definitions.
Sec. 343. ø20 u.s.c. 1066b¿ Federal insurance for bonds.
Sec. 344. ø20 u.s.c. 1066c¿ limitations on Federal insurance for bonds issued by
the designated bonding authority.
Sec. 345. ø20 u.s.c. 1066d¿ authority of the secretary.
Sec. 347. ø20 u.s.c. 1066f¿ hbcu capital financing advisory board.
Sec. 348. ø20 u.s.c. 1066g¿ minority business enterprise utilization.
PART E—MINORITY SCIENCE
Sec.
Sec.
Sec.
Sec.
AND
ENGINEERING IMPROVEMENT PROGRAM
SUBPART 1—MINORITY SCIENCE AND ENGINEERING IMPROVEMENT PROGRAM
350. ø20 u.s.c. 1067¿ findings.
351. ø20 u.s.c. 1067a¿ purpose; authority.
352. ø20 u.s.c. 1067b¿ grant recipient selection.
353. ø20 u.s.c. 1067c¿ use of funds.
SUBPART 2—PROGRAMS IN STEM FIELDS
Sec. 355. ø20 u.s.c. 1067e¿ yes partnerships grant program.
Sec. 356. ø20 u.s.c. 1067e–1¿ promotion of entry into stem fields.
Sec. 357. ø20 u.s.c. 1067e–2¿ evaluation and accountability plan.
Sec.
Sec.
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362.
363.
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365.
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SUBPART 3—ADMINISTRATIVE AND GENERAL PROVISIONS
u.s.c. 1067g¿ eligibility for grants.
u.s.c. 1067h¿ grant application.
u.s.c. 1067i¿ cross program and cross agency cooperation.
u.s.c. 1067j¿ administrative provisions.
u.s.c. 1067k¿ definitions.
PART F—STRENGTHENING HISTORICALLY BLACK COLLEGES AND UNIVERSITIES AND
OTHER MINORITY-SERVING INSTITUTIONS
Sec. 371. ø20 u.s.c. 1067q¿ investment in historically black colleges and universities and other minority-serving institutions.
Sec.
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u.s.c.
PART G—GENERAL PROVISIONS
1068¿ applications for assistance.
1068a¿ waiver authority and reporting requirement.
1068b¿ application review process.
1068c¿ cooperative arrangements.
1068d¿ assistance to institutions under other programs.
1068e¿ limitations.
1068f¿ penalties.
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HIGHER EDUCATION ACT OF 1965
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Sec. 398. ø20 u.s.c. 1068g¿ continuation awards.
Sec. 399. ø20 u.s.c. 1068h¿ authorizations of appropriations.
TITLE IV—STUDENT ASSISTANCE
PART A—GRANTS
ATTENDANCE AT INSTITUTIONS OF HIGHER
EDUCATION
Sec. 400. ø20 u.s.c. 1070¿ Statement of purpose; program authorization.
TO
STUDENTS
IN
SUBPART 1—FEDERAL PELL GRANTS
Sec. 401. ø20 u.s.c. 1070a¿ Federal pell grants: amount and determinations; applications.
Sec. 401A. Academic competitiveness grants.
SUBPART 2—FEDERAL EARLY OUTREACH AND STUDENT SERVICES PROGRAMS
CHAPTER 1—FEDERAL TRIO PROGRAMS
Sec. 402A. ø20 u.s.c. 1070a–11¿ program authority; authorization of appropriations.
Sec. 402B. ø20 u.s.c. 1070a–12¿ talent search.
Sec. 402C. ø20 u.s.c. 1070a–13¿ upward bound.
Sec. 402D. ø20 u.s.c. 1070a–14¿ student support services.
Sec. 402E. ø20 u.s.c. 1070a–15¿ postbaccalaureate achievement program authority.
Sec. 402F. ø20 u.s.c. 1070a–16¿ educational opportunity centers.
Sec. 402G. ø20 u.s.c. 1070a–17¿ staff development activities.
Sec. 402H. ø20 u.s.c. 1070a–18¿ reports, evaluations, and grants for project improvement and dissemination.
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CHAPTER 2—GAINING EARLY AWARENESS AND READINESS FOR
UNDERGRADUATE PROGRAMS
404A. ø20 u.s.c. 1070a–21¿ early intervention and college awareness program
authorized.
404B. ø20 u.s.c. 1070a–22¿ requirements.
404C. ø20 u.s.c. 1070a–23¿ applications.
404D. ø20 u.s.c. 1070a–24¿ activities.
404E. ø20 u.s.c. 1070a–25¿ scholarship component.
404F. ø20 u.s.c. 1070a–26¿ 21st century scholar certificates.
404G. ø20 u.s.c. 1070a–27¿ evaluation and report.
404H. ø20 u.s.c. 1070a–28¿ authorization of appropriations.
SUBPART 3—FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS
Sec. 413A. ø20 u.s.c. 1070b¿ purpose; appropriations authorized.
Sec. 413B. ø20 u.s.c. 1070b–1¿ amount and duration of grants.
Sec. 413C. ø20 u.s.c. 1070b–2¿ agreements with institutions; selection of recipients.
Sec. 413D. ø20 u.s.c. 1070b–3¿ allocation of funds.
Sec. 413E. ø20 u.s.c. 1070b–4¿ carryover and carryback authority.
SUBPART 4—LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP PROGRAM
Sec. 415A. ø20 u.s.c. 1070c¿ purpose; appropriations authorized.
Sec. 415B. ø20 u.s.c. 1070c–1¿ allotment among States.
Sec. 415C. ø20 u.s.c. 1070c–2¿ applications for leveraging educational assistance
partnership programs.
Sec. 415D. ø20 u.s.c. 1070c–3¿ administration of State programs; judicial review.
Sec. 415E. ø20 u.s.c. 1070c–3a¿ grants for access and persistence.
Sec. 415F. ø20 u.s.c. 1070c–4¿ definition.
SUBPART 5—SPECIAL PROGRAMS FOR STUDENTS WHOSE FAMILIES ARE ENGAGED IN
MIGRANT AND SEASONAL FARMWORK
Sec. 418A. ø20 u.s.c. 1070d–2¿ maintenance and expansion of existing programs.
Sec.
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419A.
419C.
419D.
419E.
SUBPART 6—ROBERT C. BYRD HONORS SCHOLARSHIP PROGRAM
ø20 u.s.c. 1070d–31¿ Statement of purpose.
ø20 u.s.c. 1070d–33¿ scholarships authorized.
ø20 u.s.c. 1070d–34¿ allocation among States.
ø20 u.s.c. 1070d–35¿ agreements.
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419F. ø20 u.s.c. 1070d–36¿ eligibility of scholars.
419G. ø20 u.s.c. 1070d–37¿ selection of scholars.
419H. ø20 u.s.c. 1070d–38¿ stipends and scholarship conditions.
419J. ø20 u.s.c. 1070d–40¿ construction of needs provisions.
419K. ø20 u.s.c. 1070d–41¿ authorization of appropriations.
SUBPART 7—CHILD CARE ACCESS MEANS PARENTS IN SCHOOL
Sec. 419N. ø20 u.s.c. 1070e¿ child care access means parents in school.
Sec.
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SUBPART 9—TEACH GRANTS
420L. ø20 u.s.c. 1070g¿ definitions.
420M. ø20 u.s.c. 1070g–1¿ program established.
420N. ø20 u.s.c. 1070g–2¿ applications; eligibility.
420O. ø20 u.s.c. 1070g–3¿ program period and funding.
420P. ø20 u.s.c. 1070g–4¿ program report.
SUBPART 10—SCHOLARSHIPS FOR VETERAN’S DEPENDENTS
Sec. 420R. ø20 u.s.c. 1070h¿ scholarships for veteran’s dependents.
PART B—FEDERAL FAMILY EDUCATION LOAN PROGRAM
Sec. 421. ø20 u.s.c. 1071¿ Statement of purpose; nondiscrimination; and appropriations authorized.
Sec. 422. ø20 u.s.c. 1072¿ advances for reserve funds of State and nonprofit private
loan insurance programs.
Sec. 422A. ø20 u.s.c. 1072a¿ Federal student loan reserve fund.
Sec. 422B. ø20 u.s.c. 1072b¿ agency operating fund.
Sec. 423. ø20 u.s.c. 1073¿ effects of adequate non-Federal programs.
Sec. 424. ø20 u.s.c. 1074¿ scope and duration of Federal loan insurance program.
Sec. 425. ø20 u.s.c. 1075¿ limitations on individual federally insured loans and on
Federal loan insurance.
Sec. 426. ø20 u.s.c. 1076¿ sources of funds.
Sec. 427. ø20 u.s.c. 1077¿ eligibility of student borrowers and terms of federally insured student loans.
Sec. 427A. ø20 u.s.c. 1077a¿ applicable interest rates.
Sec. 428. ø20 u.s.c. 1078¿ Federal payments to reduce student interest costs.
Sec. 428A. ø20 u.s.c. 1078–1¿ voluntary flexible agreements with guaranty agencies.
Sec. 428B. ø20 u.s.c. 1078–2¿ Federal plus loans.
Sec. 428C. ø20 u.s.c. 1078–3¿ Federal consolidation loans.
Sec. 428D. ø20 u.s.c. 1078–4¿ commingling of funds.
Sec. 428F. ø20 u.s.c. 1078–6¿ default reduction program.
Sec. 428G. ø20 u.s.c. 1078–7¿ requirements for disbursement of student loans.
Sec. 428H. ø20 u.s.c. 1078–8¿ unsubsidized stafford loans for middle-income borrowers.
Sec. 428J. ø20 u.s.c. 1078–10¿ loan forgiveness for teachers.
Sec. 428K. ø20 u.s.c. 1078–11¿ loan forgiveness for service in areas of national
need.
Sec. 428L. ø20 u.s.c. 1078–12¿ loan repayment for civil legal assistance attorneys.
Sec. 429. ø20 u.s.c. 1079¿ certificate of Federal loan insurance—effective date of insurance.
Sec. 430. ø20 u.s.c. 1080¿ default of student under Federal loan insurance program.
Sec. 430A. ø20 u.s.c. 1080a¿ reports to consumer reporting agencies and institutions of higher education.
Sec. 431. ø20 u.s.c. 1081¿ insurance fund.
Sec. 432. ø20 u.s.c. 1082¿ legal powers and responsibilities.
Sec. 433. ø20 u.s.c. 1083¿ student loan information by eligible lenders.
Sec. 433A. ø20 u.s.c. 1083a¿ consumer education information.
Sec. 434. ø20 u.s.c. 1084¿ participation by Federal credit unions in federal, State,
and private student loan insurance programs.
Sec. 435. ø20 u.s.c. 1085¿ definitions for student loan insurance program.
Sec. 436. ø20 u.s.c. 1086¿ delegation of functions.
Sec. 437. ø20 u.s.c. 1087¿ 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.
Sec. 438. ø20 u.s.c. 1087–1¿ special allowances.
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HIGHER EDUCATION ACT OF 1965
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Sec. 439. ø20 u.s.c. 1087–2¿ student loan marketing association.
Sec. 440. reorganization of the student loan marketing association through the formation of a holding company.
Sec. 440A. Discrimination in secondary markets prohibited.
PART C—FEDERAL WORK-STUDY PROGRAMS
ø42 u.s.c. 2751¿ purpose; appropriations authorized.
ø42 u.s.c. 2752¿ allocation of funds.
ø42 u.s.c. 2753¿ grants for Federal work-study programs.
ø20 u.s.c. 2754¿ sources of matching funds.
ø42 u.s.c. 2755¿ flexible use of funds.
ø42 u.s.c. 2756¿ job location and development programs.
ø42 u.s.c. 2756a¿ additional funds to conduct community service workstudy programs.
Sec. 448. ø42 u.s.c. 2756b¿ work colleges.
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447.
PART D—WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM
Sec. 451. ø20 u.s.c. 1087a¿ program authority.
Sec. 452. ø20 u.s.c. 1087b¿ funds for origination of direct student loans.
Sec. 453. ø20 u.s.c. 1087c¿ selection of institutions for participation and origination.
Sec. 454. ø20 u.s.c. 1087d¿ agreements with institutions.
Sec. 455. ø20 u.s.c. 1087e¿ terms and conditions of loans.
Sec. 456. ø20 u.s.c. 1087f¿ contracts.
Sec. 458. ø20 u.s.c. 1087h¿ funds for administrative expenses.
Sec. 459. ø20 u.s.c. 1087i¿ authority to sell loans.
Sec. 459A. ø20 u.s.c. 1087i–1¿ temporary authority to purchase student loans.
Sec. 459B. ø20 u.s.c. 1087i–2¿ temporary loan consolidation authority.
Sec. 460. ø20 u.s.c. 1087j¿ loan cancellation for teachers.
PART E—FEDERAL PERKINS LOANS
461. ø20 u.s.c. 1087aa¿ appropriations authorized.
462. ø20 u.s.c. 1087bb¿ allocation of funds.
463. ø20 u.s.c. 1087cc¿ agreements with institutions of higher education.
463A. ø20 u.s.c. 1087cc–1¿ student loan information by eligible institutions.
464. ø20 u.s.c. 1087dd¿ terms of loans.
465. ø20 u.s.c. 1087ee¿ cancellation of loans for certain public service.
466. ø20 u.s.c. 1087ff¿ distribution of assets from student loan funds.
467. ø20 u.s.c. 1087gg¿ collection of defaulted loans: perkins loan revolving
fund.
Sec. 468. ø20 u.s.c. 1087hh¿ general authority of secretary.
Sec. 469. ø20 u.s.c. 1087ii¿ definitions.
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PART F—NEED ANALYSIS
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ø20 u.s.c. 1087kk¿ amount of need.
ø20 u.s.c. 1087ll¿ cost of attendance.
ø20 u.s.c. 1087mm¿ family contribution.
ø20 u.s.c. 1087nn¿ determination of expected family contribution; data
elements.
475. ø20 u.s.c. 1087oo¿ family contribution for dependent students.
476. ø20 u.s.c. 1087pp¿ family contribution for independent students without
dependents other than a spouse.
477. ø20 u.s.c. 1087qq¿ family contribution for independent students with dependents other than a spouse.
478. ø20 u.s.c. 1087rr¿ regulations; updated tables.
479. ø20 u.s.c. 1087ss¿ simplified needs tests.
479A. ø20 u.s.c. 1087tt¿ discretion of student financial aid administrators.
479B. ø20 u.s.c. 1087uu¿ disregard of student aid in other Federal programs.
479C. ø20 u.s.c. 1087uu–1¿ native american students
480. ø20 u.s.c. 1087vv¿ definitions.
PART G—GENERAL PROVISIONS RELATING TO STUDENT ASSISTANCE PROGRAMS
Sec. 481. ø20 u.s.c. 1088¿ definitions.
Sec. 481A. ø20 u.s.c. 1088a¿ clock and credit hour treatment of diploma nursing
schools.
Sec. 482. ø20 u.s.c. 1089¿ master calendar.
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483. ø20 u.s.c. 1090¿ forms and regulations.
484. ø20 u.s.c. 1091¿ student eligibility.
484A. ø20 u.s.c. 1091a¿ statute of limitations, and State court judgments.
484B. ø20 u.s.c. 1091b¿ institutional refunds.
484C. ø20 u.s.c. 1091c¿ readmission requirements for servicemembers.
485. ø20 u.s.c. 1092¿ institutional and financial assistance information for
students.
485A. ø20 u.s.c. 1092a¿ combined payment plan.
485B. ø20 u.s.c. 1092b¿ national student loan data system.
485C. ø20 u.s.c. 1092c¿ simplification of the lending process for borrowers.
485D. ø20 u.s.c. 1092e¿ college access initiative.
485E. ø20 u.s.c. 1092f¿ early awareness of financial aid eligibility.
486. ø20 u.s.c. 1093¿ distance education demonstration programs.
486A. ø20 u.s.c. 1093a¿ articulation agreements.
487. ø20 u.s.c. 1094¿ program participation agreements.
487A. ø20 u.s.c. 1094a¿ regulatory relief and improvement.
487B. ø20 u.s.c. 1094b¿ assignment of identification numbers.
488. ø20 u.s.c. 1095¿ transfer of allotments.
488A. ø20 u.s.c. 1095a¿ wage garnishment requirement.
489. ø20 u.s.c. 1096¿ administrative expenses.
490. ø20 u.s.c. 1097¿ criminal penalties.
490A. ø20 u.s.c. 1097a¿ administrative subpoenas.
491. ø20 u.s.c. 1098¿ advisory committee on student financial assistance.
492. ø20 u.s.c. 1098a¿ regional meetings and negotiated rulemaking.
493. ø20 u.s.c. 1098b¿ authorization of appropriations for administrative expenses.
493B. ø20 u.s.c. 1098d¿ procedures for cancellations and deferments for eligible disabled veterans.
493C. ø20 u.s.c. 1098e¿ income-based repayment.
493D. ø20 u.s.c. 1098f¿ deferral of loan repayment following active duty.
PART H—PROGRAM INTEGRITY
SUBPART 1—STATE ROLE
Sec. 495. ø20 u.s.c. 1099a¿ State responsibilities.
SUBPART 2—ACCREDITING AGENCY RECOGNITION
Sec. 496. ø20 u.s.c. 1099b¿ recognition of accrediting agency or association.
SUBPART 3—ELIGIBILITY AND CERTIFICATION PROCEDURES
Sec. 498. ø20 u.s.c. 1099c¿ eligibility and certification procedures.
Sec. 498A. ø20 u.s.c. 1099c–1¿ program review and data.
Sec. 498B. ø20 u.s.c. 1099c–2¿ review of regulations.
PART I—COMPETITIVE LOAN AUCTION PILOT PROGRAM
Sec. 499. ø20 u.s.c. 1099d¿ competitive loan auction pilot program.
TITLE V—DEVELOPING INSTITUTIONS
Sec.
Sec.
Sec.
Sec.
Sec.
501.
502.
503.
504.
505.
ø20
ø20
ø20
ø20
ø20
u.s.c.
u.s.c.
u.s.c.
u.s.c.
u.s.c.
PART A—HISPANIC-SERVING INSTITUTIONS
1101¿ findings; purpose; and program authority.
1101a¿ definitions; eligibility.
1101b¿ authorized activities.
1101c¿ duration of grant.
1101d¿ special rule.
PART B—PROMOTING POSTBACCALAUREATE OPPORTUNITIES FOR HISPANIC AMERICANS
Sec. 511. ø20 u.s.c. 1102¿ purposes.
Sec. 512. ø20 u.s.c. 1102a¿ program authority and eligibility.
Sec. 513. ø20 u.s.c. 1102b¿ authorized activities.
Sec. 514. ø20 u.s.c. 1102c¿ application and duration.
PART C—GENERAL PROVISIONS
Sec. 521. ø20 u.s.c. 1103¿ eligibility; applications.
Sec. 522. ø20 u.s.c. 1103a¿ waiver authority and reporting requirement.
Sec. 523. ø20 u.s.c. 1103b¿ application review process.
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HIGHER EDUCATION ACT OF 1965
Sec.
Sec.
Sec.
Sec.
Sec.
524.
525.
526.
527.
528.
ø20
ø20
ø20
ø20
ø20
u.s.c.
u.s.c.
u.s.c.
u.s.c.
u.s.c.
8
1103c¿ cooperative arrangements.
1103d¿ assistance to institutions under other programs.
1103e¿ limitations.
1103f¿ penalties.
1103g¿ authorizations of appropriations.
TITLE VI—INTERNATIONAL EDUCATION PROGRAMS
Sec.
Sec.
Sec.
Sec.
607.
608.
609.
610.
PART A—INTERNATIONAL AND FOREIGN LANGUAGE STUDIES
ø20 u.s.c. 1121¿ findings; purposes; consultation; survey.
ø20 u.s.c. 1122¿ graduate and undergraduate language and area centers
and programs.
ø20 u.s.c. 1123¿ language resource centers.
ø20 u.s.c. 1124¿ undergraduate international studies and foreign language programs.
ø20 u.s.c. 1125¿ research; studies; annual report.
ø20 u.s.c. 1126¿ technological innovation and cooperation for foreign information access.
ø20 u.s.c. 1127¿ selection of certain grant recipients.
ø20 u.s.c. 1128¿ equitable distribution of certain funds.
ø20 u.s.c. 1128a¿ american overseas research centers.
ø20 u.s.c. 1128b¿ authorization of appropriations.
Sec.
Sec.
Sec.
Sec.
611.
612.
613.
614.
PART B—BUSINESS AND INTERNATIONAL EDUCATION PROGRAMS
ø20 u.s.c. 1130¿ findings and purposes.
ø20 u.s.c. 1130–1¿ centers for international business education.
ø20 u.s.c. 1130a¿ education and training programs.
ø20 u.s.c. 1130b¿ authorization of appropriations.
Sec. 601.
Sec. 602.
Sec. 603.
Sec. 604.
Sec. 605.
Sec. 606.
PART C—INSTITUTE FOR INTERNATIONAL PUBLIC POLICY
Sec. 621. ø20 u.s.c. 1131¿ minority foreign service professional development program.
Sec. 622. ø20 u.s.c. 1131–1¿ institutional development.
Sec. 623. ø20 u.s.c. 1131a¿ study abroad program.
Sec. 624. ø20 u.s.c. 1131b¿ advanced degree in international relations.
Sec. 625. ø20 u.s.c. 1131c¿ internships.
Sec. 626. ø20 u.s.c. 1131c–1¿ financial assistance.
Sec. 627. ø20 u.s.c. 1131d¿ report.
Sec. 628. ø20 u.s.c. 1131e¿ gifts and donations.
Sec. 629. ø20 u.s.c. 1131f¿ authorization.
PART D—GENERAL PROVISIONS
ø20 u.s.c. 1132¿ definitions.
ø20 u.s.c. 1132–1¿ special rule.
ø20 u.s.c. 1132–2¿ rule of construction.
ø20 u.s.c. 1132–3¿ assessment.
ø20 u.s.c. 1132–4¿ evaluation, outreach, and information.
ø20 u.s.c. 1132–5¿ report.
ø20 u.s.c. 1132–6¿ science and technology advanced foreign language
education grant program.
Sec. 638. ø20 u.s.c. 1132–7¿ reporting by institutions.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
Sec.
631.
632.
633.
634.
635.
636.
637.
TITLE VII—GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS
Sec. 700. ø20 u.s.c. 1133¿ purpose.
PART A—GRADUATE EDUCATION PROGRAMS
SUBPART 1—JACOB K. JAVITS FELLOWSHIP PROGRAM
Sec.
Sec.
Sec.
Sec.
Sec.
701.
702.
703.
704.
705.
ø20
ø20
ø20
ø20
ø20
u.s.c.
u.s.c.
u.s.c.
u.s.c.
u.s.c.
1134¿ award of jacob k. Javits fellowships.
1134a¿ allocation of fellowships.
1134b¿ stipends.
1134c¿ fellowship conditions.
1134d¿ authorization of appropriations.
SUBPART 2—GRADUATE ASSISTANCE IN AREAS OF NATIONAL NEED
Sec. 711. ø20 u.s.c. 1135¿ grants to academic departments and programs of institutions.
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9
HIGHER EDUCATION ACT OF 1965
Sec.
Sec.
Sec.
Sec.
Sec.
712.
713.
714.
715.
716.
ø20
ø20
ø20
ø20
ø20
u.s.c.
u.s.c.
u.s.c.
u.s.c.
u.s.c.
1135a¿ institutional eligibility.
1135b¿ criteria for applications.
1135c¿ awards to graduate students.
1135d¿ additional assistance for cost of education.
1135e¿ authorization of appropriations.
SUBPART 3—THURGOOD MARSHALL LEGAL EDUCATIONAL OPPORTUNITY
Sec. 721. ø20 u.s.c. 1136¿ legal educational opportunity program.
PROGRAM
SUBPART 4—MASTERS DEGREE PROGRAMS AT HISTORICALLY BLACK COLLEGES AND
UNIVERSITIES AND PREDOMINANTLY BLACK INSTITUTIONS
Sec. 723. ø20 u.s.c. 1136a¿ masters degree programs at historically black colleges
and universities.
Sec. 724. ø20 u.s.c. 1136b¿ masters degree programs at predominantly black institutions.
Sec. 725. ø20 u.s.c. 1136c¿ authorization of appropriations.
SUBPART 5—GENERAL PROVISIONS
Sec. 731. ø20 u.s.c. 1137¿ administrative provisions for subparts 1 through 4.
PART B—FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION
Sec. 741. ø20 u.s.c. 1138¿ fund for the improvement of postsecondary
education.
Sec. 742. ø20 u.s.c. 1138a¿ board of the fund for the improvement of postsecondary
education.
Sec. 743. ø20 u.s.c. 1138b¿ administrative provisions.
Sec. 744. ø20 u.s.c. 1138c¿ special projects.
Sec. 745. ø20 u.s.c. 1138d¿ authorization of appropriations.
PART D—PROGRAMS
TO
PROVIDE STUDENTS WITH DISABILITIES WITH
HIGHER EDUCATION
A
QUALITY
Sec. 760. ø20 u.s.c. 1140¿ definitions.
SUBPART 1—DEMONSTRATION PROJECTS TO SUPPORT POSTSECONDARY FACULTY, STAFF,
AND ADMINISTRATORS IN EDUCATING STUDENTS WITH DISABILITIES
Sec. 761. ø20 u.s.c.
Sec. 762. ø20 u.s.c.
ized.
Sec. 763. ø20 u.s.c.
Sec. 764. ø20 u.s.c.
Sec. 765. ø20 u.s.c.
1140a¿ purpose.
1140b¿ grants, contracts, and cooperative agreements author1140c¿ applications.
1140d¿ rule of construction.
1140e¿ authorization of appropriations.
SUBPART 2—TRANSITION PROGRAMS FOR STUDENTS WITH INTELLECTUAL DISABILITIES
INTO HIGHER EDUCATION
Sec. 766. ø20 u.s.c. 1140f¿ purpose.
Sec. 767. ø20 u.s.c. 1140g¿ model comprehensive transition and postsecondary programs for students with intellectual disabilities.
Sec. 768. ø20 u.s.c. 1140h¿ rule of construction.
Sec. 769. ø20 u.s.c. 1140i¿ authorization of appropriations and reservation.
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HIGHER EDUCATION ACT OF 1965
10
SUBPART 3—COMMISSION ON ACCESSIBLE MATERIALS; PROGRAMS TO SUPPORT
IMPROVED ACCESS TO MATERIALS
Sec. 771. ø20 u.s.c. 1140k¿ definition of student with a print disability.
Sec. 772. ø20 u.s.c. 1140l¿ establishment of advisory commission on accessible instructional materials in postsecondary education for students with disabilities.
Sec. 773. ø20 u.s.c. 1140m¿ model demonstration programs to support improved
access to postsecondary instructional materials for students with print
disabilities.
Sec. 774. ø20 u.s.c. 1140n¿ rule of construction.
Sec. 775. ø20 u.s.c. 1140o¿ authorization of appropriations.
SUBPART 4—NATIONAL TECHNICAL ASSISTANCE CENTER; COORDINATING CENTER
Sec. 776. ø20 u.s.c. 1140p¿ purpose.
Sec. 777. ø20 u.s.c. 1140q¿ national technical assistance center; coordinating center.
Sec. 778. ø20 u.s.c. 1140r¿ authorization of appropriations.
PART E—COLLEGE ACCESS CHALLENGE GRANT PROGRAM
Sec. 781. ø20 u.s.c. 1141¿ college access challenge grant program.
TITLE VIII—ADDITIONAL PROGRAMS
PART A—PROJECT GRAD
Sec. 801. ø20 u.s.c. 1161a¿ project grad.
PART B—MATHEMATICS AND SCIENCE SCHOLARS PROGRAM
Sec. 802. ø20 u.s.c. 1161b¿ mathematics and science scholars program.
PART C—BUSINESS WORKFORCE PARTNERSHIPS FOR JOB SKILL TRAINING IN HIGHGROWTH OCCUPATIONS OR INDUSTRIES
Sec. 803. ø20 u.s.c. 1161c¿ business workforce partnerships for job skill training in
high-growth occupations or industries.
PART D—CAPACITY FOR NURSING STUDENTS AND FACULTY
Sec. 804. ø20 u.s.c. 1161d¿ capacity for nursing students and faculty.
PART E—AMERICAN HISTORY FOR FREEDOM
Sec. 805. ø20 u.s.c. 1161e¿ american history for freedom.
PART F—TEACH FOR AMERICA
Sec. 806. ø20 u.s.c. 1161f¿ teach for america.
PART G—PATSY T. MINK FELLOWSHIP PROGRAM
Sec. 807. ø20 u.s.c. 1161g¿ patsy t. Mink fellowship program.
PART H—IMPROVING COLLEGE ENROLLMENT BY SECONDARY SCHOOLS
Sec. 808. ø20 u.s.c. 1161h¿ improving college enrollment by secondary schools.
PART I—EARLY CHILDHOOD EDUCATION PROFESSIONAL DEVELOPMENT AND CAREER
TASK FORCE
Sec. 811. ø20 u.s.c. 1161i¿ purpose.
Sec. 812. ø20 u.s.c. 1161i–1¿ definition of early childhood education program.
Sec. 813. ø20 u.s.c. 1161i–2¿ grants authorized.
Sec. 814. ø20 u.s.c. 1161i–3¿ State task force establishment.
Sec. 815. ø20 u.s.c. 1161i–4¿ State task force activities.
Sec. 816. ø20 u.s.c. 1161i–5¿ State application and report.
Sec. 817. ø20 u.s.c. 1161i–6¿ evaluations.
Sec. 818. ø20 u.s.c. 1161i–7¿ authorization of appropriations.
PART J—IMPROVING SCIENCE, TECHNOLOGY, ENGINEERING, AND MATHEMATICS
EDUCATION WITH A FOCUS ON ALASKA NATIVE AND NATIVE HAWAIIAN STUDENTS
Sec. 819. ø20 u.s.c. 1161j¿ improving science, technology, engineering, and mathematics education with a focus on alaska native and native hawaiian
students.
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11
HIGHER EDUCATION ACT OF 1965
PART K—PILOT PROGRAMS TO INCREASE COLLEGE PERSISTENCE AND SUCCESS
Sec. 820. ø20 u.s.c. 1161k¿ pilot programs to increase college persistence and success.
PART L—STUDENT SAFETY AND CAMPUS EMERGENCY MANAGEMENT
Sec. 821. ø20 u.s.c. 1161l¿ student safety and campus emergency management.
Sec. 822. ø20 u.s.c. 1161l–1¿ model emergency response policies, procedures, and
practices.
Sec. 823. ø20 u.s.c. 1161l–2¿ preparation for future disasters plan by the secretary.
Sec. 824. ø20 u.s.c. 1161l–3¿ education disaster and emergency relief loan program.
Sec. 825. ø20 u.s.c. 1161l–4¿ guidance on mental health disclosures for student
safety.
Sec. 826. ø20 u.s.c. 1161l–5¿ rule of construction.
PART M—LOW TUITION
Sec. 830. ø20 u.s.c. 1161m¿ incentives and rewards for low tuition.
PART N—COOPERATIVE EDUCATION
ø20 u.s.c. 1161n¿ Statement of purpose; definition.
ø20 u.s.c. 1161n–1¿ reservations.
ø20 u.s.c. 1161n–2¿ grants for cooperative education.
ø20 u.s.c. 1161n–3¿ demonstration and innovation projects; training and
resource centers; and research.
Sec. 835. ø20 u.s.c. 1161n–4¿ authorization of appropriations.
Sec.
Sec.
Sec.
Sec.
831.
832.
833.
834.
PART O—COLLEGE PARTNERSHIP GRANTS
Sec. 841. ø20 u.s.c. 1161o¿ college partnership grants authorized.
PART P—JOBS TO CAREERS
Sec. 851. ø20 u.s.c. 1161p¿ grants to create bridges from jobs to careers.
PART Q—RURAL DEVELOPMENT GRANTS FOR RURAL-SERVING COLLEGES AND
UNIVERSITIES
Sec. 861. ø20 u.s.c. 1161q¿ grants to rural-serving institutions of higher education.
PART R—CAMPUS-BASED DIGITAL THEFT PREVENTION
Sec. 871. ø20 u.s.c. 1161r¿ campus-based digital theft prevention.
PART S—TRAINING FOR REALTIME WRITERS
Sec. 872. ø20 u.s.c. 1161s¿ program to promote training and job placement of
realtime writers.
PART T—CENTERS OF EXCELLENCE FOR VETERAN STUDENT SUCCESS
Sec. 873. ø20 u.s.c. 1161t¿ model programs for centers of excellence for veteran
student success.
PART U—UNIVERSITY SUSTAINABILITY PROGRAMS
Sec. 881. ø20 u.s.c. 1161u¿ sustainability planning grants authorized.
PART V—MODELING AND SIMULATION PROGRAMS
Sec. 891. ø20 u.s.c. 1161v¿ modeling and simulation.
PART W—PATH TO SUCCESS
Sec. 892. ø20 u.s.c. 1161w¿ path to success.
PART X—SCHOOL OF VETERINARY MEDICINE COMPETITIVE GRANT PROGRAM
Sec. 893. ø20 u.s.c. 1161x¿ school of veterinary medicine competitive grant program.
PART Y—EARLY FEDERAL PELL GRANT COMMITMENT DEMONSTRATION PROGRAM
Sec. 894. ø20 u.s.c. 1161y¿ early Federal pell grant commitment demonstration
program.
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Sec. 101
HIGHER EDUCATION ACT OF 1965
12
PART Z—HENRY KUUALOHA GIUGNI KUPUNA MEMORIAL ARCHIVES
Sec. 895. ø20 u.s.c. 1161z¿ henry kuualoha giugni kupuna memorial archives.
PART AA—MASTERS AND POSTBACCALAUREATE PROGRAMS
Sec. 897. ø20 u.s.c. 1161aa¿ masters degree programs.
Sec. 898. ø20 u.S.C. 1161aa–1¿ POSTBACCALAUREATE PROGRAMS.
TITLE I—GENERAL PROVISIONS
PART A—DEFINITIONS
SEC. 101. ø20 U.S.C. 1001¿ GENERAL DEFINITION OF INSTITUTION OF
HIGHER EDUCATION.
(a) INSTITUTION OF HIGHER EDUCATION.—For purposes of this
Act, other than title IV, the term ‘‘institution of higher education’’
means an educational institution in any State that—
(1) admits as regular students only persons having a certificate of graduation from a school providing secondary education, or the recognized equivalent of such a certificate, or
persons who meet the requirements of section 484(d);
(2) is legally authorized within such State to provide a program of education beyond secondary education;
(3) provides an educational program for which the institution awards a bachelor’s degree or provides not less than a 2year 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 review
and approval by the Secretary;
(4) is a public or other nonprofit institution; and
(5) is accredited by a nationally recognized accrediting
agency or association, or if not so accredited, is an institution
that has been granted preaccreditation status by such an agency or association that has been recognized by the Secretary for
the granting of preaccreditation status, and the Secretary has
determined that there is satisfactory assurance that the institution will meet the accreditation standards of such an agency
or association within a reasonable time.
(b) ADDITIONAL INSTITUTIONS INCLUDED.—For purposes of this
Act, other than title IV, the term ‘‘institution of higher education’’
also includes—
(1) any school that provides not less than a 1-year program
of training to prepare students for gainful employment in a
recognized occupation and that meets the provision of paragraphs (1), (2), (4), and (5) of subsection (a); and
(2) a public or nonprofit private educational institution in
any State that, in lieu of the requirement in subsection (a)(1),
admits as regular students individuals—
(A) who are beyond the age of compulsory school attendance in the State in which the institution is located;
or
(B) who will be dually or concurrently enrolled in the
institution and a secondary school.
(c) LIST OF ACCREDITING AGENCIES.—For purposes of this section and section 102, the Secretary shall publish a list of nationally
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13
HIGHER EDUCATION ACT OF 1965
Sec. 102
recognized accrediting agencies or associations that the Secretary
determines, pursuant to subpart 2 of part H of title IV, to be reliable authority as to the quality of the education or training offered.
SEC. 102. ø20 U.S.C. 1002¿ DEFINITION OF INSTITUTION OF HIGHER
EDUCATION FOR PURPOSES OF TITLE IV PROGRAMS.
(a) DEFINITION OF INSTITUTION OF HIGHER EDUCATION FOR
PURPOSES OF TITLE IV PROGRAMS.—
(1) INCLUSION OF ADDITIONAL INSTITUTIONS.—Subject to
paragraphs (2) through (4) of this subsection, the term ‘‘institution of higher education’’ for purposes of title IV includes, in
addition to the institutions covered by the definition in section
101—
(A) a proprietary institution of higher education (as
defined in subsection (b) of this section);
(B) a postsecondary vocational institution (as defined
in subsection (c) of this section); and
(C) only for the purposes of part D of title IV, an institution outside the United States that is comparable to an
institution of higher education as defined in section 101
and that has been approved by the Secretary for the purpose of part D of title IV, consistent with the requirements
of section 452(d).
(2) INSTITUTIONS OUTSIDE THE UNITED STATES.—
(A) IN GENERAL.—For the purpose of qualifying as an
institution under paragraph (1)(C), the Secretary shall establish criteria by regulation for the approval of institutions outside the United States and for the determination
that such institutions are comparable to an institution of
higher education as defined in section 101 (except that a
graduate medical school, nursing school, or a veterinary
school, located outside the United States shall not be required to meet the requirements of section 101(a)(4)). Such
criteria shall include a requirement that a student attending such school outside the United States is ineligible for
loans made under part D of title IV unless—
(i) except as provided in subparagraph (B)(iii)(IV),
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 D of title IV; and
(bb) at least 75 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 D of title IV; or
(II) the institution—
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Sec. 102
HIGHER EDUCATION ACT OF 1965
14
(aa) has or had a clinical training program that was approved by a State as of January 1, 1992; and
(bb) continues to operate a clinical training program in at least one State that is approved by that State;
(ii) in the case of a veterinary school located outside the United States that does not meet the requirements of section 101(a)(4), the institution’s students
complete their clinical training at an approved veterinary school located in the United States; or
(iii) in the case of a nursing school located outside
of the United States—
(I) the nursing school has an agreement with
a hospital, or accredited school of nursing (as such
terms are defined in section 801 of the Public
Health Service Act (42 U.S.C. 296)), located in the
United States that requires the students of the
nursing school to complete the students’ clinical
training at such hospital or accredited school of
nursing;
(II) the nursing school has an agreement with
an accredited school of nursing located in the
United States providing that the students graduating from the nursing school located outside of
the United States also receive a degree from the
accredited school of nursing located in the United
States;
(III) the nursing school certifies only Federal
Direct Stafford Loans under section 455(a)(2)(A),
Federal Direct Unsubsidized Stafford Loans under
section 455(a)(2)(D), or Federal Direct PLUS
Loans under section 455(a)(2)(B) for students attending the institution;
(IV) the nursing school reimburses the Secretary for the cost of any loan defaults for current
and former students included in the calculation of
the institution’s cohort default rate during the
previous fiscal year; and
(V) not less than 75 percent of the individuals
who were students or graduates of the nursing
school, and who took the National Council Licensure Examination for Registered Nurses in the
year preceding the year for which the institution
is certifying a Federal Direct Stafford Loan under
section 455(a)(2)(A), a Federal Direct Unsubsidized Stafford Loan under section 455(a)(2)(D),
or a Federal Direct PLUS Loan under section
455(a)(2)(B), received a passing score on such examination.
(B) ADVISORY PANEL.—
(i) IN GENERAL.—For the purpose of qualifying as
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HIGHER EDUCATION ACT OF 1965
Sec. 102
section, the Secretary shall establish an advisory
panel of medical experts that shall—
(I) evaluate the standards of accreditation applied to applicant foreign medical schools; and
(II) determine the comparability of those
standards to standards for accreditation applied to
United States medical schools.
(ii) SPECIAL RULE.—If the accreditation standards
described in clause (i) are determined not to be comparable, the foreign medical school shall be required to
meet the requirements of section 101.
(iii) REPORT.—
(I) IN GENERAL.—Not later than 1 year after
the date of enactment of the Higher Education
Opportunity Act, the advisory panel described in
clause (i) shall submit a report to the Secretary
and to the authorizing committees recommending
eligibility criteria for participation in the loan programs under part D of title IV for graduate medical schools that—
(aa) are located outside of the United
States;
(bb) do not meet the requirements of subparagraph (A)(i); and
(cc) have a clinical training program approved by a State prior to January 1, 2008.
(II) RECOMMENDATIONS.—In the report described in subclause (I), the advisory panel’s eligibility criteria shall include recommendations regarding the appropriate levels of performance for
graduate medical schools described in such subclause in the following areas:
(aa) Entrance requirements.
(bb) Retention and graduation rates.
(cc) Successful placement of students in
United States medical residency programs.
(dd) Passage rate of students on the
United States Medical Licensing Examination.
(ee) The extent to which State medical
boards have assessed the quality of such
school’s program of instruction, including
through on-site reviews.
(ff) The extent to which graduates of such
schools would be unable to practice medicine
in 1 or more States, based on the judgment of
a State medical board.
(gg) Any areas recommended by the
Comptroller General of the United States
under section 1101 of the Higher Education
Opportunity Act.
(hh) Any additional areas the Secretary
may require.
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Sec. 102
HIGHER EDUCATION ACT OF 1965
16
(III) MINIMUM ELIGIBILITY REQUIREMENT.—In
the recommendations described in subclause (II),
the
criteria
described
in
subparagraph
(A)(i)(I)(bb), as amended by section 102(b) of the
Higher Education Opportunity Act, shall be a
minimum eligibility requirement for a graduate
medical school described in subclause (I) to participate in the loan programs under part D of title
IV.
(IV) AUTHORITY.—The Secretary may—
(aa) not earlier than 180 days after the
submission of the report described in subclause (I), issue proposed regulations establishing criteria for the eligibility of graduate
medical schools described in such subclause to
participate in the loan programs under part D
of title IV based on the recommendations of
such report; and
(bb) not earlier than one year after the
issuance of proposed regulations under item
(aa), issue final regulations establishing such
criteria for eligibility.
(C) FAILURE TO RELEASE INFORMATION.—The failure of
an institution outside the United States to provide, release, or authorize release to the Secretary of such information as may be required by subparagraph (A) shall
render such institution ineligible for the purpose of part D
of title IV.
(D) SPECIAL RULE.—If, pursuant to this paragraph, an
institution loses eligibility to participate in the programs
under title IV, then a student enrolled at such institution
may, notwithstanding such loss of eligibility, continue to
be eligible to receive a loan under part D of title IV while
attending such institution for the academic year succeeding the academic year in which such loss of eligibility
occurred.
(3) LIMITATIONS BASED ON COURSE OF STUDY OR ENROLLMENT.—An institution shall not be considered to meet the definition of an institution of higher education in paragraph (1) if
such institution—
(A) offers more than 50 percent of such institution’s
courses by correspondence (excluding courses offered by
telecommunications as defined in section 484(l)(4)), unless
the institution is an institution that meets the definition
in section 3(3)(C) of the Carl D. Perkins Career and Technical Education Act of 2006;
(B) enrolls 50 percent or more of the institution’s students in correspondence courses (excluding courses offered
by telecommunications as defined in section 484(l)(4)), unless the institution is an institution that meets the definition in 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
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of higher education that provides a 2- or 4-year program
of instruction (or both) for which the institution awards an
associate or baccalaureate degree, respectively;
(C) has a student enrollment in which more than 25
percent of the students are incarcerated, except that the
Secretary may waive the limitation contained in this subparagraph for a nonprofit institution that provides a 2- or
4-year program of instruction (or both) for which the institution awards a bachelor’s degree, or an associate’s degree
or a postsecondary diploma, respectively; or
(D) has a student enrollment in which more than 50
percent of the students do not have a secondary school diploma or its recognized equivalent, and does not provide a
2- or 4-year program of instruction (or both) for which the
institution awards a bachelor’s degree or an associate’s degree, respectively, except that the Secretary may waive the
limitation contained in this subparagraph if a nonprofit institution demonstrates to the satisfaction of the Secretary
that the institution exceeds such limitation because the institution serves, through contracts with Federal, State, or
local government agencies, significant numbers of students
who do not have a secondary school diploma or its recognized equivalent.
(4) LIMITATIONS BASED ON MANAGEMENT.—An institution
shall not be considered to meet the definition of an institution
of higher education in paragraph (1) if—
(A) the institution, or an affiliate of the institution
that has the power, by contract or ownership interest, to
direct or cause the direction of the management or policies
of the institution, has filed for bankruptcy, except that this
paragraph shall not apply to a nonprofit institution, the
primary function of which is to provide health care educational services (or an affiliate of such an institution that
has the power, by contract or ownership interest, to direct
or cause the direction of the institution’s management or
policies) that files for bankruptcy under chapter 11 of title
11, United States Code, between July 1, 1998, and December 1, 1998; or
(B) the institution, the institution’s owner, or the institution’s chief executive officer has been convicted of, or has
pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of funds under title IV, or
has been judicially determined to have committed fraud involving funds under title IV.
(5) CERTIFICATION.—The Secretary shall certify an institution’s qualification as an institution of higher education in accordance with the requirements of subpart 3 of part H of title
IV.
(6) LOSS OF ELIGIBILITY.—An institution of higher education shall not be considered to meet the definition of an institution of higher education in paragraph (1) if such institution
is removed from eligibility for funds under title IV as a result
of an action pursuant to part H of title IV.
(b) PROPRIETARY INSTITUTION OF HIGHER EDUCATION.—
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(1) PRINCIPAL CRITERIA.—For the purpose of this section,
the term ‘‘proprietary institution of higher education’’ means a
school that—
(A)(i) provides an eligible program of training to prepare students for gainful employment in a recognized occupation; or
(ii)(I) provides a program leading to a baccalaureate
degree in liberal arts, and has provided such a program
since January 1, 2009; and
(II) is accredited by a recognized regional accrediting
agency or association, and has continuously held such accreditation since October 1, 2007, or earlier;
(B) meets the requirements of paragraphs (1) and (2)
of section 101(a);
(C) does not meet the requirement of paragraph (4) of
section 101(a);
(D) is accredited by a nationally recognized accrediting
agency or association recognized by the Secretary pursuant
to part H of title IV; and
(E) has been in existence for at least 2 years.
(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 section 101(a)(1), admits as regular students individuals—
(A) who are beyond the age of compulsory school attendance in the State in which the institution is located;
or
(B) who will be dually or concurrently enrolled in the
institution and a secondary school.
(c) POSTSECONDARY VOCATIONAL INSTITUTION.—
(1) PRINCIPAL CRITERIA.—For the purpose of this section,
the term ‘‘postsecondary vocational institution’’ means a school
that—
(A) provides an eligible program of training to prepare
students for gainful employment in a recognized occupation;
(B) meets the requirements of paragraphs (1), (2), (4),
and (5) of section 101(a); and
(C) has been in existence for at least 2 years.
(2) ADDITIONAL INSTITUTIONS.—The term ‘‘postsecondary
vocational institution’’ also includes an educational institution
in any State that, in lieu of the requirement in section
101(a)(1), admits as regular students individuals—
(A) who are beyond the age of compulsory school attendance in the State in which the institution is located;
or
(B) who will be dually or concurrently enrolled in
the institution and a secondary school.
SEC. 103. ø20 U.S.C. 1003¿ ADDITIONAL DEFINITIONS.
In this Act:
(1) AUTHORIZING COMMITTEES.—The term ‘‘authorizing
committees’’ means the Committee on Health, Education,
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Labor, and Pensions of the Senate and the Committee on Education and Labor of the House of Representatives.
(2) COMBINATION OF INSTITUTIONS OF HIGHER EDUCATION.—The term ‘‘combination of institutions of higher education’’ means a group of institutions of higher education that
have entered into a cooperative arrangement for the purpose of
carrying out a common objective, or a public or private nonprofit agency, organization, or institution designated or created
by a group of institutions of higher education for the purpose
of carrying out a common objective on the group’s behalf.
(3) CRITICAL FOREIGN LANGUAGE.—Except as otherwise
provided, the term ‘‘critical foreign language’’ means each of
the languages contained in the list of critical languages designated by the Secretary in the Federal Register on August 2,
1985 (50 Fed. Reg. 31412; promulgated under the authority of
section 212(d) of the Education for Economic Security Act (repealed by section 2303 of the Augustus F. Hawkins-Robert T.
Stafford Elementary and Secondary School Improvement
Amendments of 1988)), as updated by the Secretary from time
to time and published in the Federal Register, except that in
the implementation of this definition with respect to a specific
title, the Secretary may set priorities according to the purposes
of such title and the national security, economic competitiveness, and educational needs of the United States.
(4) DEPARTMENT.—The term ‘‘Department’’ means the Department of Education.
(5) DIPLOMA MILL.—The term ‘‘diploma mill’’ means an entity that—
(A)(i) offers, for a fee, degrees, diplomas, or certificates, that may be used to represent to the general public
that the individual possessing such a degree, diploma, or
certificate has completed a program of postsecondary education or training; and
(ii) requires such individual to complete little or no
education or coursework to obtain such degree, diploma, or
certificate; and
(B) lacks accreditation by an accrediting agency or association that is recognized as an accrediting agency or association of institutions of higher education (as such term
is defined in section 102) by—
(i) the Secretary pursuant to subpart 2 of part H
of title IV; or
(ii) a Federal agency, State government, or other
organization or association that recognizes accrediting
agencies or associations.
(6) DISABILITY.—The term ‘‘disability’’ has the same meaning given that term under section 3(2) of the Americans With
Disabilities Act of 1990.
(7) DISTANCE EDUCATION.—
(A) IN GENERAL.—Except as otherwise provided, the
term‘‘distance education’’means education that uses one or
more of the technologies described in subparagraph (B)—
(i) to deliver instruction to students who are separated from the instructor; and
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(ii) to support regular and substantive interaction
between the students and the instructor, synchronously or asynchronously.
(B) INCLUSIONS.—For the purposes of subparagraph
(A), 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 cassettes, DVDs, and CD–ROMs, if the
cassettes, DVDs, or CD–ROMs are used in a course in
conjunction with any of the technologies listed in
clauses (i) through (iii).
(8) EARLY CHILDHOOD EDUCATION PROGRAM.—The term
‘‘early childhood education program’’ means—
(A) a Head Start program or an Early Head Start program carried out under the Head Start Act (42 U.S.C.
9831 et seq.), including a migrant or seasonal Head Start
program, an Indian Head Start program, or a Head Start
program or an Early Head Start program that also receives State funding;
(B) a State licensed or regulated child care program;
or
(C) a program that—
(i) serves children from birth through age six that
addresses the children’s cognitive (including language,
early literacy, and early mathematics), social, emotional, and physical development; and
(ii) is—
(I) a State prekindergarten program;
(II) a program authorized under section 619
or part C of the Individuals with Disabilities Education Act; or
(III) a program operated by a local educational agency.
(9) ELEMENTARY SCHOOL.—The term ‘‘elementary school’’
has the same meaning given that term under section 9101 of
the Elementary and Secondary Education Act of 1965.
(10) GIFTED AND TALENTED.—The term ‘‘gifted and talented’’ has the same meaning given that term under section
9101 of the Elementary and Secondary Education Act of 1965.
(11) LOCAL EDUCATIONAL AGENCY.—The term ‘‘local educational agency’’ has the same meaning given that term under
section 9101 of the Elementary and Secondary Education Act
of 1965.
(12) NEW BORROWER.—The term ‘‘new borrower’’ when
used with respect to any date means an individual who on that
date has no outstanding balance of principal or interest owing
on any loan made, insured, or guaranteed under title IV.
(13) NONPROFIT.—The term ‘‘nonprofit’’ as applied to a
school, agency, organization, or institution means a school,
agency, organization, or institution owned and operated by one
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HIGHER EDUCATION ACT OF 1965
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or more nonprofit corporations or associations, no part of the
net earnings of which inures, or may lawfully inure, to the
benefit of any private shareholder or individual.
(14) POVERTY LINE.—The term ‘‘poverty line’’ means the
poverty line (as defined in section 673(2) of the Community
Services Block Grant Act (42 U.S.C. 9902(2)) applicable to a
family of the size involved.
(15) SCHOOL OR DEPARTMENT OF DIVINITY.—The term
‘‘school or department of divinity’’ means an institution, or a
department or a branch of an institution, the program of instruction of which is designed for the education of students—
(A) to prepare the students to become ministers of religion or to enter upon some other religious vocation (or to
provide continuing training for any such vocation); or
(B) to prepare the students to teach theological subjects.
(16) SECONDARY SCHOOL.—The term ‘‘secondary school’’
has the same meaning given that term under section 9101 of
the Elementary and Secondary Education Act of 1965.
(17) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of Education.
(18) SERVICE-LEARNING.—The term ‘‘service-learning’’ has
the same meaning given that term under section 101(23) of the
National and Community Service Act of 1990.
(19) SPECIAL EDUCATION TEACHER.—The term ‘‘special education teacher’’ means teachers who teach children with disabilities as defined in section 602 of the Individuals with Disabilities Education Act.
(20) 1 STATE; FREELY ASSOCIATED STATES.—
(A) STATE.—The term ‘‘State’’ includes, in addition to
the several States of the United States, the Commonwealth of Puerto Rico, the District of Columbia, Guam,
American Samoa, the United States Virgin Islands, the
Commonwealth of the Northern Mariana Islands, and the
Freely Associated States.
(B) FREELY ASSOCIATED STATES.—The term ‘‘Freely Associated States’’ means the Republic of the Marshall Islands, the Federated States of Micronesia, and the Republic of Palau.
(21) STATE EDUCATIONAL AGENCY.—The term ‘‘State educational agency’’ has the same meaning given that term under
section 9101 of the Elementary and Secondary Education Act
of 1965.
(22) STATE HIGHER EDUCATION AGENCY.—The term ‘‘State
higher education agency’’ means the officer or agency primarily
responsible for the State supervision of higher education.
1 The placement of paragraph (20) does not necessarily reflect the placement of such paragraph in alphabetical order. Section 103(a)(2) of PL 110–315 provides as follows:
(2) REDESIGNATION AND REORDERING OF DEFINITIONS.—Section 103 (as amended by paragraph (1)) (20 U.S.C. 1003) is further amended by reordering paragraphs (1) through (16)
and the paragraphs added by paragraph (1) of this subsection in alphabetical order based
on the headings of such paragraphs, and renumbering such paragraphs as so reordered.
The amendment was carried out by sorting such term as if the first word ‘‘State’’ was the
only word that appears in the heading.
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22
(23) UNIVERSAL DESIGN.—The term‘‘universal design’’has
the meaning given the term in section 3 of the Assistive Technology Act of 1998 (29 U.S.C. 3002).
(24) UNIVERSAL DESIGN FOR LEARNING.—The term ‘‘universal design for learning’’ means a scientifically valid framework for guiding educational practice that—
(A) provides flexibility in the ways information is presented, in the ways students respond or demonstrate
knowledge and skills, and in the ways students are engaged; and
(B) reduces barriers in instruction, provides appropriate accommodations, supports, and challenges, and
maintains high achievement expectations for all students,
including students with disabilities and students who are
limited English proficient.
PART B—ADDITIONAL GENERAL PROVISIONS
SEC. 111. ø20 U.S.C. 1011¿ ANTIDISCRIMINATION.
(a) IN GENERAL.—Institutions of higher
education receiving
Federal financial assistance may not use such financial assistance,
directly or indirectly, to undertake any study or project or fulfill
the terms of any contract containing an express or implied provision that any person or persons of a particular race, religion, sex,
or national origin be barred from performing such study, project,
or contract, except that nothing in this subsection shall be construed to prohibit an institution from conducting objective studies
or projects concerning the nature, effects, or prevention of discrimination, or to have the institution’s curriculum restricted on the
subject of discrimination.
(b) LIMITATIONS ON STATUTORY CONSTRUCTION.—Nothing in
this Act shall be construed to limit the rights or responsibilities of
any individual under the Americans with Disabilities Act of 1990,
the Rehabilitation Act of 1973, or any other law.
SEC. 112. ø20 U.S.C. 1011a¿ 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 institutions of higher education have different missions and each institution should design its academic
program in accordance with its educational goals;
(C) an institution of higher education should facilitate the
free and open exchange of ideas;
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HIGHER EDUCATION ACT OF 1965
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(D) students should not be intimidated, 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
(2) to prevent an institution of higher education from taking appropriate and effective action to prevent violations of
State liquor laws, to discourage binge drinking and other alcohol abuse, to protect students from sexual harassment including assault and date rape, to prevent hazing, or to regulate unsanitary or unsafe conditions in any student residence.
(c) DEFINITIONS.—For the purposes of this section:
(1) OFFICIAL SANCTION.—The term ‘‘official sanction’’—
(A) means expulsion, suspension, probation, censure,
condemnation, reprimand, or any other disciplinary, coercive, or adverse action taken by an institution of higher
education or administrative unit of the institution; and
(B) includes an oral or written warning made by an official of an institution of higher education acting in the official capacity of the official.
(2) PROTECTED ASSOCIATION.—The term ‘‘protected association’’ means the joining, assembling, and residing with others
that is protected under the first and 14th amendments to the
Constitution, or would be protected if the institution of higher
education involved were subject to those amendments.
(3) PROTECTED SPEECH.—The term ‘‘protected speech’’
means speech that is protected under the first and 14th
amendments to the Constitution, or would be protected if the
institution of higher education involved were subject to those
amendments.
SEC. 113. ø20 U.S.C. 1011b¿ TERRITORIAL WAIVER AUTHORITY.
The Secretary is required to waive the eligibility criteria of any
postsecondary education program administered by the Department
where such criteria do not take into account the unique circumstances in Guam, the United States Virgin Islands, American
Samoa, the Commonwealth of the Northern Mariana Islands, and
the Freely Associated States.
SEC. 114. ø20 U.S.C. 1011c¿ NATIONAL ADVISORY COMMITTEE ON INSTITUTIONAL QUALITY AND INTEGRITY.
(a) ESTABLISHMENT.—There is established in the Department a
National Advisory Committee on Institutional Quality and Integrity (in this section referred to as the ‘‘Committee’’) to assess the
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cation of institutions of higher education (as defined in section 102)
under title IV.
(b) MEMBERSHIP.—
(1) IN GENERAL.—The Committee shall have 18 members,
of which—
(A) six members shall be appointed by the Secretary;
(B) six members shall be appointed by the Speaker of
the House of Representatives, three of whom shall be appointed on the recommendation of the majority leader of
the House of Representatives, and three of whom shall be
appointed on the recommendation of the minority leader of
the House of Representatives; and
(C) six members shall be appointed by the President
pro tempore of the Senate, three of whom shall be appointed on the recommendation of the majority leader of
the Senate, and three of whom shall be appointed on the
recommendation of the minority leader of the Senate.
(2) QUALIFICATIONS.—Individuals shall be appointed as
members of the Committee—
(A) on the basis of the individuals’ experience, integrity, impartiality, and good judgment;
(B) from among individuals who are representatives
of, or knowledgeable concerning, education and training
beyond secondary education, representing all sectors and
types of institutions of higher education (as defined in section 102); and
(C) on the basis of the individuals’ technical qualifications, professional standing, and demonstrated knowledge
in the fields of accreditation and administration in higher
education.
(3) TERMS OF MEMBERS.—Except as provided in paragraph
(5), the term of office of each member of the Committee shall
be for six years, except that any member appointed to fill a vacancy occurring prior to the expiration of the term for which
the member’s predecessor was appointed shall be appointed for
the remainder of such term.
(4) VACANCY.—A vacancy on the Committee shall be filled
in the same manner as the original appointment was made not
later than 90 days after the vacancy occurs. If a vacancy occurs
in a position to be filled by the Secretary, the Secretary shall
publish a Federal Register notice soliciting nominations for the
position not later than 30 days after being notified of the vacancy.
(5) INITIAL TERMS.—The terms of office for the initial members of the Committee shall be—
(A) three years for members appointed under paragraph (1)(A);
(B) four years for members appointed under paragraph
(1)(B); and
(C) six years for members appointed under paragraph
(1)(C).
(6) CHAIRPERSON.—The members of the Committee shall
select a chairperson from among the members.
(c) FUNCTIONS.—The Committee shall—
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HIGHER EDUCATION ACT OF 1965
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(1) advise the Secretary with respect to establishment and
enforcement of the standards of accrediting agencies or associations under subpart 2 of part H of title IV;
(2) advise the Secretary with respect to the recognition of
a specific accrediting agency or association;
(3) advise the Secretary with respect to the preparation
and publication of the list of nationally recognized accrediting
agencies and associations;
(4) advise the Secretary with respect to the eligibility and
certification process for institutions of higher education under
title IV, together with recommendations for improvements in
such process;
(5) advise the Secretary with respect to the relationship
between—
(A) accreditation of institutions of higher education
and the certification and eligibility of such institutions;
and
(B) State licensing responsibilities with respect to such
institutions; and
(6) carry out such other advisory functions relating to accreditation and institutional eligibility as the Secretary may
prescribe by regulation.
(d) MEETING PROCEDURES.—
(1) SCHEDULE.—
(A) BIANNUAL MEETINGS.—The Committee shall meet
not less often than twice each year, at the call of the
Chairperson.
(B) PUBLICATION OF DATE.—The Committee shall submit the date and location of each meeting in advance to
the Secretary, and the Secretary shall publish such information in the Federal Register not later than 30 days before the meeting.
(2) AGENDA.—
(A) ESTABLISHMENT.—The agenda for a meeting of the
Committee shall be established by the Chairperson and
shall be submitted to the members of the Committee upon
notification of the meeting.
(B) OPPORTUNITY FOR PUBLIC COMMENT.—The agenda
shall include, at a minimum, opportunity for public comment during the Committee’s deliberations.
(3) SECRETARY’S DESIGNEE.—The Secretary shall designate
an employee of the Department to serve as the Secretary’s designee to the Committee, and the Chairperson shall invite the
Secretary’s designee to attend all meetings of the Committee.
(4) FEDERAL ADVISORY COMMITTEE ACT.—The Federal Advisory Committee Act (5 U.S.C. App.) shall apply to the Committee, except that section 14 of such Act shall not apply.
(e) REPORT AND NOTICE.—
(1) NOTICE.—The Secretary shall annually publish in the
Federal Register—
(A) a list containing, for each member of the Committee—
(i) the member’s name;
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(ii) the date of the expiration of the member’s
term of office; and
(iii) the name of the individual described in subsection (b)(1) who appointed the member; and
(B) a solicitation of nominations for each expiring term
of office on the Committee of a member appointed by the
Secretary.
(2) REPORT.—Not later than the last day of each fiscal
year, the Committee shall make available an annual report to
the Secretary, the authorizing committees, and the public. The
annual report shall contain—
(A) a detailed summary of the agenda and activities of,
and the findings and recommendations made by, the Committee during the fiscal year preceding the fiscal year in
which the report is made;
(B) a list of the date and location of each meeting during the fiscal year preceding the fiscal year in which the
report is made;
(C) a list of the members of the Committee; and
(D) a list of the functions of the Committee, including
any additional functions established by the Secretary
through regulation.
(f) TERMINATION.—The Committee shall terminate on September 30, 2014.
SEC. 115. ø20 U.S.C. 1011d¿ STUDENT REPRESENTATION.
The Secretary shall, in appointing individuals to any commission, committee, board, panel, or other body in connection with the
administration of this Act, include individuals who are, at the time
of appointment, attending an institution of higher education.
SEC. 116. ø20 U.S.C. 1011e¿ FINANCIAL RESPONSIBILITY OF FOREIGN
STUDENTS.
Nothing in this Act or any other Federal law shall be construed to prohibit any institution of higher education from requiring a student who is a foreign national (and not admitted to permanent residence in the United States) to guarantee the future payment of tuition and fees to such institution by—
(1) making advance payment of such tuition and fees;
(2) making deposits in an escrow account administered by
such institution for such payments; or
(3) obtaining a bond or other insurance that such payments will be made.
SEC. 117. ø20 U.S.C. 1011f¿ DISCLOSURES OF FOREIGN GIFTS.
(a) DISCLOSURE REPORT.—Whenever any institution
is owned
or controlled by a foreign source or receives a gift from or enters
into a contract with a foreign source, the value of which is $250,000
or more, considered alone or in combination with all other gifts
from or contracts with that foreign source within a calendar year,
the institution shall file a disclosure report with the Secretary on
January 31 or July 31, whichever is sooner.
(b) CONTENTS OF REPORT.—Each report to the Secretary required by this section shall contain the following:
(1) For gifts received from or contracts entered into with
a foreign source other than a foreign government, the aggre-
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gate dollar amount of such gifts and contracts attributable to
a particular country. The country to which a gift is attributable
is the country of citizenship, or if unknown, the principal residence for a foreign source who is a natural person, and the
country of incorporation, or if unknown, the principal place of
business, for a foreign source which is a legal entity.
(2) For gifts received from or contracts entered into with
a foreign government, the aggregate amount of such gifts and
contracts received from each foreign government.
(3) In the case of an institution which is owned or controlled by a foreign source, the identity of the foreign source,
the date on which the foreign source assumed ownership or
control, and any changes in program or structure resulting
from the change in ownership or control.
(c) ADDITIONAL DISCLOSURES FOR RESTRICTED AND CONDITIONAL GIFTS.—Notwithstanding the provisions of subsection (b),
whenever any institution receives a restricted or conditional gift or
contract from a foreign source, the institution shall disclose the following:
(1) For such gifts received from or contracts entered into
with a foreign source other than a foreign government, the
amount, the date, and a description of such conditions or restrictions. The report shall also disclose the country of citizenship, or if unknown, the principal residence for a foreign source
which is a natural person, and the country of incorporation, or
if unknown, the principal place of business for a foreign source
which is a legal entity.
(2) For gifts received from or contracts entered into with
a foreign government, the amount, the date, a description of
such conditions or restrictions, and the name of the foreign
government.
(d) RELATION TO OTHER REPORTING REQUIREMENTS.—
(1) STATE REQUIREMENTS.—If an institution described
under subsection (a) is within a State which has enacted requirements for public disclosure of gifts from or contracts with
a foreign source that are substantially similar to the requirements of this section, a copy of the disclosure report filed with
the State may be filed with the Secretary in lieu of a report
required under subsection (a). The State in which the institution is located shall provide to the Secretary such assurances
as the Secretary may require to establish that the institution
has met the requirements for public disclosure under State law
if the State report is filed.
(2) USE OF OTHER FEDERAL REPORTS.—If an institution receives a gift from, or enters into a contract with, a foreign
source, where any other department, agency, or bureau of the
executive branch requires a report containing requirements
substantially similar to those required under this section, a
copy of the report may be filed with the Secretary in lieu of a
report required under subsection (a).
(e) PUBLIC INSPECTION.—All disclosure reports required by this
section shall be public records open to inspection and copying during business hours.
(f ) ENFORCEMENT.—
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(1) COURT ORDERS.—Whenever it appears that an institution has failed to comply with the requirements of this section,
including any rule or regulation promulgated under this section, a civil action may be brought by the Attorney General, at
the request of the Secretary, in an appropriate district court of
the United States, or the appropriate United States court of
any territory or other place subject to the jurisdiction of the
United States, to request such court to compel compliance with
the requirements of this section.
(2) COSTS.—For knowing or willful failure to comply with
the requirements of this section, including any rule or regulation promulgated thereunder, an institution shall pay to the
Treasury of the United States the full costs to the United
States of obtaining compliance, including all associated costs of
investigation and enforcement.
(g) REGULATIONS.—The Secretary may promulgate regulations
to carry out this section.
(h) DEFINITIONS.—For the purpose of this section—
(1) the term ‘‘contract’’ means any agreement for the acquisition by purchase, lease, or barter of property or services by
the foreign source, for the direct benefit or use of either of the
parties;
(2) the term ‘‘foreign source’’ means—
(A) a foreign government, including an agency of a foreign government;
(B) a legal entity, governmental or otherwise, created
solely under the laws of a foreign state or states;
(C) an individual who is not a citizen or a national of
the United States or a trust territory or protectorate thereof; and
(D) an agent, including a subsidiary or affiliate of a
foreign legal entity, acting on behalf of a foreign source;
(3) the term ‘‘gift’’ means any gift of money or property;
(4) the term ‘‘institution’’ means any institution, public or
private, or, if a multicampus institution, any single campus of
such institution, in any State, that—
(A) is legally authorized within such State to provide
a program of education beyond secondary school;
(B) provides a program for which the institution
awards a bachelor’s degree (or provides not less than a 2year program which is acceptable for full credit toward
such a degree) or more advanced degrees; and
(C) is accredited by a nationally recognized accrediting
agency or association and to which institution Federal financial assistance is extended (directly or indirectly
through another entity or person), or which institution receives support from the extension of Federal financial assistance to any of the institution’s subunits; and
(5) the term ‘‘restricted or conditional gift or contract’’
means any endowment, gift, grant, contract, award, present, or
property of any kind which includes provisions regarding—
(A) the employment, assignment, or termination of faculty;
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(B) the establishment of departments, centers, research or lecture programs, or new faculty positions;
(C) the selection or admission of students; or
(D) the award of grants, loans, scholarships, fellowships, or other forms of financial aid restricted to students
of a specified country, religion, sex, ethnic origin, or political opinion.
SEC. 118. ø20 U.S.C. 1011g¿ APPLICATION OF PEER REVIEW PROCESS.
All applications submitted under the provisions of this Act
which require peer review shall be read by a panel of readers composed of individuals selected by the Secretary, which shall include
outside readers who are not employees of the Federal Government.
The Secretary shall ensure that no individual assigned under this
section to review any application has any conflict of interest with
regard to that application which might impair the impartiality with
which that individual conducts the review under this section.
SEC. 119. ø20 U.S.C. 1011h¿ BINGE DRINKING ON COLLEGE CAMPUSES.
(a) SHORT TITLE.—This section may be cited as the ‘‘Collegiate
Initiative To Reduce Binge Drinking and Illegal Alcohol Consumption’’.
(b) SENSE OF CONGRESS.—It is the sense of Congress that, in
an effort to change the culture of alcohol consumption on college
campuses, all institutions of higher education should carry out the
following:
(1) The president of the institution should appoint a task
force consisting of school administrators, faculty, students,
Greek system representatives, and others to conduct a full examination of student and academic life at the institution. The
task force should make recommendations for a broad range of
policy and program changes that would serve to reduce alcohol
and other drug-related problems. The institution should provide resources to assist the task force in promoting the campus
policies and proposed environmental changes that have been
identified.
(2) The institution should provide maximum opportunities
for students to live in an alcohol-free environment and to engage in stimulating, alcohol-free recreational and leisure activities.
(3) The institution should enforce a ‘‘zero tolerance’’ policy
on the illegal consumption of alcohol by students at the institution.
(4) The institution should vigorously enforce the institution’s code of disciplinary sanctions for those who violate campus alcohol policies. Students with alcohol or other drug-related problems should be referred for assistance, including oncampus counseling programs if appropriate.
(5) The institution should adopt a policy to discourage alcoholic beverage-related sponsorship of on-campus activities. It
should adopt policies limiting the advertisement and promotion
of alcoholic beverages on campus.
(6) The institution should work with the local community,
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courage responsible policies toward alcohol consumption and to
address illegal alcohol use by students.
SEC. 120. ø20 U.S.C. 1011i¿ DRUG AND ALCOHOL ABUSE PREVENTION.
(a) RESTRICTION ON ELIGIBILITY.—Notwithstanding any other
provision of law, no institution of higher education shall be eligible
to receive funds or any other form of financial assistance under any
Federal program, including participation in any federally funded or
guaranteed student loan program, unless the institution certifies to
the Secretary that the institution has adopted and has implemented a program to prevent the use of illicit drugs and the abuse
of alcohol by students and employees that, at a minimum, includes—
(1) the annual distribution to each student and employee
of—
(A) standards of conduct that clearly prohibit, at a
minimum, the unlawful possession, use, or distribution of
illicit drugs and alcohol by students and employees on the
institution’s property or as part of any of the institution’s
activities;
(B) a description of the applicable legal sanctions
under local, State, or Federal law for the unlawful possession or distribution of illicit drugs and alcohol;
(C) a description of the health-risks associated with
the use of illicit drugs and the abuse of alcohol;
(D) a description of any drug or alcohol counseling,
treatment, or rehabilitation or re-entry programs that are
available to employees or students; and
(E) a clear statement that the institution will impose
sanctions on students and employees (consistent with
local, State, and Federal law), and a description of those
sanctions, up to and including expulsion or termination of
employment and referral for prosecution, for violations of
the standards of conduct required by subparagraph (A);
and
(2) a biennial review by the institution of the institution’s
program to—
(A) determine the program’s effectiveness and implement changes to the program if the changes are needed;
(B) determine the number of drug and alcohol-related
violations and fatalities that—
(i) occur on the institution’s campus (as defined in
section 485(f)(6)), or as part of any of the institution’s
activities; and
(ii) are reported to campus officials;
(C) determine the number and type of sanctions described in paragraph (1)(E) that are imposed by the institution as a result of drug and alcohol-related violations
and fatalities on the institution’s campus or as part of any
of the institution’s activities; and
(D) ensure that the sanctions required by paragraph
(1)(E) are consistently enforced.
(b) INFORMATION AVAILABILITY.—Each institution of higher
education that provides the certification required by subsection (a)
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shall, upon request, make available to the Secretary and to the
public a copy of each item required by subsection (a)(1) as well as
the results of the biennial review required by subsection (a)(2).
(c) REGULATIONS.—
(1) IN GENERAL.—The Secretary shall publish regulations
to implement and enforce the provisions of this section, including regulations that provide for—
(A) the periodic review of a representative sample of
programs required by subsection (a); and
(B) a range of responses and sanctions for institutions
of higher education that fail to implement their programs
or to consistently enforce their sanctions, including information and technical assistance, the development of a
compliance agreement, and the termination of any form of
Federal financial assistance.
(2) REHABILITATION PROGRAM.—The sanctions required by
subsection (a)(1)(E) may include the completion of an appropriate rehabilitation program.
(d) APPEALS.—Upon determination by the Secretary to terminate financial assistance to any institution of higher education
under this section, the institution may file an appeal with an administrative law judge before the expiration of the 30-day period
beginning on the date such institution is notified of the decision to
terminate financial assistance under this section. Such judge shall
hold a hearing with respect to such termination of assistance before
the expiration of the 45-day period beginning on the date that such
appeal is filed. Such judge may extend such 45-day period upon a
motion by the institution concerned. The decision of the judge with
respect to such termination shall be considered to be a final agency
action.
(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 higher 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.—
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(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 such sums
as may be necessary for fiscal year 2009 and each of the five
succeeding fiscal years.
SEC. 121. ø20 U.S.C. 1011j¿ 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 2009 and for each succeeding fiscal year to pay obligations incurred prior to 1987 under parts C and D of title VII,
as such parts were in effect before the effective date of the
Higher Education Amendments of 1992.
(2) POST-1992 AND PRE-1998 PART C OF TITLE VII.—There are
authorized to be appropriated such sums as may be necessary
for fiscal year 2009 and for each succeeding fiscal year to pay
obligations incurred prior to the date of enactment of the Higher Education Amendments of 1998 under part C of title VII, as
such part was in effect during the period—
(A) after the effective date of the Higher Education
Amendments of 1992; and
(B) prior to the date of enactment of the Higher Education Amendments of 1998.
(b) LEGAL RESPONSIBILITIES.—
(1) PRE-1987 TITLE VII.—All entities with continuing obligations incurred under parts A, B, C, and D of title VII, as such
parts were in effect before the effective date of the Higher Education Amendments of 1992, shall be subject to the requirements of such part as in effect before the effective date of the
Higher Education Amendments of 1992.
(2) POST-1992 AND PRE-1998 PART C OF TITLE VII.—All entities with continuing obligations incurred under part C of title
VII, as such part was in effect during the period—
(A) after the effective date of the Higher Education
Amendments of 1992; and
(B) prior to the date of enactment of the Higher Education Amendments of 1998,
shall be subject to the requirements of such part as such part
was in effect during such period.
SEC. 122. ø20 U.S.C. 1011k¿ RECOVERY OF PAYMENTS.
(a) PUBLIC BENEFIT.—Congress declares that,
if a facility constructed with the aid of a grant under part A of title VII as such
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part A was in effect prior to the date of enactment of the Higher
Education Amendments of 1998, or part B of such title as part B
was in effect prior to the date of enactment of the Higher Education Amendments of 1992, is used as an academic facility for 20
years following completion of such construction, the public benefit
accruing to the United States will equal in value the amount of the
grant. The period of 20 years after completion of such construction
shall therefore be deemed to be the period of Federal interest in
such facility for the purposes of such title as so in effect.
(b) RECOVERY UPON CESSATION OF PUBLIC BENEFIT.—If, within
20 years after completion of construction of an academic facility
which has been constructed, in part with a grant under part A of
title VII as such part A was in effect prior to the date of enactment
of the Higher Education Amendments of 1998, or part B of title VII
as such part B was in effect prior to the date of enactment of the
Higher Education Amendments of 1992—
(1) the applicant under such parts as so in effect (or the
applicant’s successor in title or possession) ceases or fails to be
a public or nonprofit institution; or
(2) the facility ceases to be used as an academic facility,
or the facility is used as a facility excluded from the term ‘‘academic facility’’ (as such term was defined under title VII, as so
in effect), unless the Secretary determines that there is good
cause for releasing the institution from its obligation,
the United States shall be entitled to recover from such applicant
(or successor) an amount which bears to the value of the facility
at that time (or so much thereof as constituted an approved project
or projects) the same ratio as the amount of Federal grant bore to
the cost of the facility financed with the aid of such grant. The
value shall be determined by agreement of the parties or by action
brought in the United States district court for the district in which
such facility is situated.
(c) PROHIBITION ON USE FOR RELIGION.—Notwithstanding the
provisions of subsections (a) and (b), no project assisted with funds
under title VII (as in effect prior to the date of enactment of the
Higher Education Amendments of 1998) shall ever be used for religious worship or a sectarian activity or for a school or department
of divinity.
SEC. 123. ø20 U.S.C. 1011l¿ DIPLOMA MILLS.
(a) INFORMATION TO THE PUBLIC.—The
Secretary shall maintain information and resources on the Department’s website to assist students, families, and employers in understanding what a diploma mill is and how to identify and avoid diploma mills.
(b) COLLABORATION.—The Secretary shall continue to collaborate with the United States Postal Service, the Federal Trade Commission, the Department of Justice (including the Federal Bureau
of Investigation), the Internal Revenue Service, and the Office of
Personnel Management to maximize Federal efforts to—
(1) prevent, identify, and prosecute diploma mills; and
(2) broadly disseminate to the public information about diploma mills, and resources to identify diploma mills.
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HIGHER EDUCATION ACT OF 1965
34
PART C—COST OF HIGHER EDUCATION
SEC. 131. ø20 U.S.C. 1015¿ IMPROVEMENTS IN MARKET INFORMATION
AND PUBLIC ACCOUNTABILITY IN HIGHER EDUCATION.
(a) IMPROVED DATA COLLECTION.—
(1) DEVELOPMENT OF UNIFORM METHODOLOGY.—The Sec-
retary shall direct the Commissioner of Education Statistics to
convene a series of forums to develop nationally consistent
methodologies for reporting costs incurred by postsecondary institutions in providing postsecondary education.
(2) REDESIGN OF DATA SYSTEMS.—On the basis of the methodologies developed pursuant to paragraph (1), the Secretary
shall redesign relevant parts of the postsecondary education
data systems to improve the usefulness and timeliness of the
data collected by such systems.
(3) INFORMATION TO INSTITUTIONS.—The Commissioner of
Education Statistics shall—
(A) develop a standard definition for the following data
elements:
(i) tuition and fees for a full-time undergraduate
student;
(ii) cost of attendance for a full-time undergraduate student, consistent with the provisions of
section 472;
(iii) average amount of financial assistance received by an undergraduate student who attends an
institution of higher education, including—
(I) each type of assistance or benefit described
in section 428(a)(2)(C)(ii);
(II) fellowships; and
(III) institutional and other assistance; and
(iv) number of students receiving financial assistance described in each of subclauses (I), (II), and (III)
of clause (iii);
(B) not later than 90 days after the date of enactment
of the Higher Education Amendments of 1998, report the
definitions to each institution of higher education and
within a reasonable period of time thereafter inform the
authorizing committees of those definitions; and
(C) collect information regarding the data elements described in subparagraph (A) with respect to at least all institutions of higher education participating in programs
under title IV, beginning with the information from academic year 2000–2001 and annually thereafter.
(b) DATA DISSEMINATION.—The Secretary shall make available
the data collected pursuant to subsection (a). Such data shall be
available in a form that permits the review and comparison of the
data submissions of individual institutions of higher education.
Such data shall be presented in a form that is easily understandable and allows parents and students to make informed decisions
based on the costs for typical full-time undergraduate students.
(c) STUDY.—
(1) IN GENERAL.—The Commissioner of Education Statistics shall conduct a national study of expenditures at instituMay 7, 2013
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HIGHER EDUCATION ACT OF 1965
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tions of higher education. Such study shall include information
with respect to—
(A) the change in tuition and fees compared with the
consumer price index and other appropriate measures of
inflation;
(B) faculty salaries and benefits;
(C) administrative salaries, benefits and expenses;
(D) academic support services;
(E) research;
(F) operations and maintenance; and
(G) institutional expenditures for construction and
technology and the potential cost of replacing instructional
buildings and equipment.
(2) EVALUATION.—The study shall include an evaluation
of—
(A) changes over time in the expenditures identified in
paragraph (1);
(B) the relationship of the expenditures identified in
paragraph (1) to college costs; and
(C) the extent to which increases in institutional financial aid and tuition discounting practices affect tuition
increases, including the demographics of students receiving such discounts, the extent to which financial aid is provided to students with limited need in order to attract a
student to a particular institution, and the extent to which
Federal financial aid, including loan aid, has been used to
offset the costs of such practices.
(3) FINAL REPORT.—The Commissioner of Education Statistics shall submit a report regarding the findings of the study
required by paragraph (1) to the appropriate committees of
Congress not later than September 30, 2002.
(4) HIGHER EDUCATION MARKET BASKET.—The Bureau of
Labor Statistics, in consultation with the Commissioner of
Education Statistics, shall develop a higher education market
basket that identifies the items that comprise the costs of higher education. The Bureau of Labor Statistics shall provide a report on the market basket to the Committee on Labor and
Human Resources of the Senate and the Committee on Education and the Workforce of the House of Representatives not
later than September 30, 2002.
(5) FINES.—In addition to actions authorized in section
487(c), the Secretary may impose a fine in an amount not to
exceed $25,000 on an institution of higher education for failing
to provide the information described in paragraph (1) in a
timely and accurate manner, or for failing to otherwise cooperate with the National Center for Education Statistics regarding
efforts to obtain data on the cost of higher education under this
section and pursuant to the program participation agreement
entered into under section 487.
(d) PROMOTION OF THE DEPARTMENT OF EDUCATION FEDERAL
STUDENT FINANCIAL AID WEBSITE.—The Secretary shall display a
link to the Federal student financial aid website of the Department
in a prominent place on the homepage of the Department’s website.
(e) ENHANCED STUDENT FINANCIAL AID INFORMATION.—
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(1) IMPLEMENTATION.—The Secretary shall continue to improve the usefulness and accessibility of the information provided by the Department on college planning and student financial aid.
(2) DISSEMINATION.—The Secretary shall continue to make
the availability of the information on the Federal student financial aid website of the Department widely known, through
a major media campaign and other forms of communication.
(3) COORDINATION.—As a part of the efforts required under
this subsection, the Secretary shall create one website accessible from the Department’s website that fulfills the requirements under subsections (b), (f), and (g).
(f) IMPROVED AVAILABILITY AND COORDINATION OF INFORMATION CONCERNING STUDENT FINANCIAL AID PROGRAMS FOR MILITARY MEMBERS AND VETERANS.—
(1) COORDINATION.—The Secretary, in coordination with
the Secretary of Defense and the Secretary of Veterans Affairs,
shall create a searchable website that—
(A) contains information, in simple and understandable terms, about all Federal and State student financial
assistance, readmission requirements under section 484C,
and other student services, for which members of the
Armed Forces (including members of the National Guard
and Reserves), veterans, and the dependents of such members or veterans may be eligible; and
(B) is easily accessible through the website described
in subsection (e)(3).
(2) IMPLEMENTATION.—Not later than one year after the
date of enactment of the Higher Education Opportunity Act,
the Secretary shall make publicly available the Armed Forces
information website described in paragraph (1).
(3) DISSEMINATION.—The Secretary, in coordination with
the Secretary of Defense and the Secretary of Veterans Affairs,
shall make the availability of the Armed Forces information
website described in paragraph (1) widely known to members
of the Armed Forces (including members of the National Guard
and Reserves), veterans, the dependents of such members or
veterans, States, institutions of higher education, and the general public.
(4) DEFINITION.—In this subsection, the term ‘‘Federal and
State student financial assistance’’ means any grant, loan,
work assistance, tuition assistance, scholarship, fellowship, or
other form of financial aid for pursuing a postsecondary education that is—
(A) administered, sponsored, or supported by the Department of Education, the Department of Defense, the
Department of Veterans Affairs, or a State; and
(B) available to members of the Armed Forces (including members of the National Guard and Reserves), veterans, or the dependents of such members or veterans.
(g) PROMOTION OF AVAILABILITY OF INFORMATION CONCERNING
OTHER STUDENT FINANCIAL AID PROGRAMS.—
(1) DEFINITION.—For purposes of this subsection, the term
‘‘nondepartmental student financial assistance program’’ means
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HIGHER EDUCATION ACT OF 1965
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any grant, loan, scholarship, fellowship, or other form of financial aid for students pursuing a postsecondary education that
is—
(A) distributed directly to the student or to the student’s account at an institution of higher education; and
(B) operated, sponsored, or supported by a Federal department or agency other than the Department of Education.
(2) AVAILABILITY OF OTHER STUDENT FINANCIAL AID INFORMATION.—The Secretary shall ensure that—
(A) not later than 90 days after the Secretary receives
the information required under paragraph (3), the eligibility requirements, application procedures, financial terms
and conditions, and other relevant information for each
nondepartmental student financial assistance program are
searchable and accessible through the Federal student financial aid website in a manner that is simple and understandable for students and the students’ families; and
(B) the website displaying the information described in
subparagraph (A) includes a link to the National Database
on Financial Assistance for the Study of Science, Technology, Engineering, and Mathematics pursuant to paragraph (4), and the information on military benefits under
subsection (f), once such Database and information are
available.
(3) NONDEPARTMENTAL STUDENT FINANCIAL ASSISTANCE
PROGRAMS.—The Secretary shall request all Federal departments and agencies to provide the information described in
paragraph (2)(A), and each Federal department or agency
shall—
(A) promptly respond to surveys or other requests
from the Secretary for the information described in such
paragraph; and
(B) identify for the Secretary any nondepartmental
student financial assistance program operated, sponsored,
or supported by such Federal department or agency.
(4) NATIONAL STEM DATABASE.—
(A) IN GENERAL.—The Secretary shall establish and
maintain, on the website described in subsection (e)(3), a
National Database on Financial Assistance for the Study
of Science, Technology, Engineering, and Mathematics (in
this paragraph referred to as the ‘‘STEM Database’’). The
STEM Database shall consist of information on scholarships, fellowships, and other programs of Federal, State,
local, and, to the maximum extent practicable, private financial assistance available for the study of science, technology, engineering, or mathematics at the postsecondary
and postbaccalaureate levels.
(B) DATABASE CONTENTS.—The information maintained on the STEM Database shall be displayed on the
website in the following manner:
(i) SEPARATE INFORMATION.—The STEM Database
shall provide separate information for each of the
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38
matics, and for postsecondary and postbaccalaureate
programs of financial assistance.
(ii) INFORMATION ON TARGETED ASSISTANCE.—The
STEM Database shall provide specific information on
any program of financial assistance that is targeted to
individuals based on financial need, merit, or student
characteristics.
(iii) CONTACT AND WEBSITE INFORMATION.—The
STEM Database shall provide—
(I) standard contact information that an interested person may use to contact a sponsor of any
program of financial assistance included in the
STEM Database; and
(II) if such sponsor maintains a public
website, a link to the website.
(iv) SEARCH AND MATCH CAPABILITIES.—The STEM
Database shall—
(I) have a search capability that permits an
individual to search for information on the basis of
each category of the information provided through
the STEM Database and on the basis of combinations of categories of the information provided, including—
(aa) whether the financial assistance is
need- or merit-based; and
(bb) by relevant academic majors; and
(II) have a match capability that—
(aa) searches the STEM Database for all
financial assistance opportunities for which
an individual may be qualified to apply, based
on the student characteristics provided by
such individual; and
(bb) provides information to an individual
for only those opportunities for which such individual is qualified, based on the student
characteristics provided by such individual.
(v) RECOMMENDATION AND DISCLAIMER.—The
STEM Database shall provide, to the users of the
STEM Database—
(I) a recommendation that students and families should carefully review all of the application
requirements prior to applying for any aid or program of student financial assistance; and
(II) a disclaimer that the non-Federal programs of student financial assistance presented in
the STEM Database are not provided or endorsed
by the Department or the Federal Government.
(C) COMPILATION OF FINANCIAL ASSISTANCE INFORMATION.—In carrying out this paragraph, the Secretary
shall—
(i) consult with public and private sources of
scholarships, fellowships, and other programs of student financial assistance; and
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HIGHER EDUCATION ACT OF 1965
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(ii) make easily available a process for such entities to provide regular and updated information about
the scholarships, fellowships, or other programs of student financial assistance.
(D) CONTRACT AUTHORIZED.—In carrying out the requirements of this paragraph, the Secretary is authorized
to enter into a contract with a private entity with demonstrated expertise in creating and maintaining databases
such as the one required under this paragraph, under
which contract the entity shall furnish, and regularly update, all of the information required to be maintained on
the STEM Database.
(5) DISSEMINATION OF INFORMATION.—The Secretary shall
take such actions, on an ongoing basis, as may be necessary to
disseminate information under this subsection and to encourage the use of the information by interested parties, including
sending notices to secondary schools and institutions of higher
education.
(h) NO USER FEES FOR DEPARTMENT FINANCIAL AID
WEBSITES.—No fee shall be charged to any individual to access—
(1) a database or website of the Department that provides
information about higher education programs or student financial assistance, including the College Navigator website (or
successor website) and the websites and databases described in
this section and section 132; or
(2) information about higher education programs or student financial assistance available through a database or
website of the Department.
SEC. 132. ø20 U.S.C. 1015a¿ TRANSPARENCY IN COLLEGE TUITION FOR
CONSUMERS.
(a) DEFINITIONS.—In this section:
(1) COLLEGE NAVIGATOR WEBSITE.—The term ‘‘College Nav-
igator website’’ means the College Navigator website operated
by the Department and includes any successor website.
(2) COST OF ATTENDANCE.—The term ‘‘cost of attendance’’
means the average annual cost of tuition and fees, room and
board, books, supplies, and transportation for an institution of
higher education for a first-time, full-time undergraduate student enrolled in the institution.
(3) NET PRICE.—The term ‘‘net price’’ means the average
yearly price actually charged to first-time, full-time undergraduate students receiving student aid at an institution of
higher education after deducting such aid, which shall be determined by calculating the difference between—
(A) the institution’s cost of attendance for the year for
which the determination is made; and
(B) the quotient of—
(i) the total amount of need-based grant aid and
merit-based grant aid, from Federal, State, and institutional sources, provided to such students enrolled in
the institution for such year; and
(ii) the total number of such students receiving
such need-based grant aid or merit-based grant aid for
such year.
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(4) TUITION AND FEES.—The term ‘‘tuition and fees’’ means
the average annual cost of tuition and fees for an institution
of higher education for first-time, full-time undergraduate students enrolled in the institution.
(b) CALCULATIONS FOR PUBLIC INSTITUTIONS.—In making the
calculations regarding cost of attendance, net price, and tuition and
fees under this section with respect to a public institution of higher
education, the Secretary shall calculate the cost of attendance, net
price, and tuition and fees at such institution in the manner described in subsection (a), except that—
(1) the cost of attendance, net price, and tuition and fees
shall be calculated for first-time, full-time undergraduate students enrolled in the institution who are residents of the State
in which such institution is located; and
(2) in determining the net price, the average need-based
grant aid and merit-based grant aid described in subsection
(a)(3)(B) shall be calculated based on the average total amount
of such aid received by first-time, full-time undergraduate students who are residents of the State in which such institution
is located, divided by the total number of such resident students receiving such need-based grant aid or merit-based grant
aid at such institution.
(c) COLLEGE AFFORDABILITY AND TRANSPARENCY LISTS.—
(1) AVAILABILITY OF LISTS.—Beginning July 1, 2011, the
Secretary shall make publicly available on the College Navigator website, in a manner that is sortable and searchable by
State, the following:
(A) A list of the five percent of institutions in each category described in subsection (d) that have the highest tuition and fees for the most recent academic year for which
data are available.
(B) A list of the five percent of institutions in each
such category that have the highest net price for the most
recent academic year for which data are available.
(C) A list of the five percent of institutions in each
such category that have the largest increase, expressed as
a percentage change, in tuition and fees over the most recent three academic years for which data are available,
using the first academic year of the three-year period as
the base year to compute such percentage change.
(D) A list of the five percent of institutions in each
such category that have the largest increase, expressed as
a percentage change, in net price over the most recent
three academic years for which data are available, using
the first academic year of the three-year period as the base
year to compute such percentage change.
(E) A list of the ten percent of institutions in each
such category that have the lowest tuition and fees for the
most recent academic year for which data are available.
(F) A list of the ten percent of institutions in each
such category that have the lowest net price for the most
recent academic year for which data are available.
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(2) ANNUAL UPDATES.—The Secretary shall annually update the lists described in paragraph (1) on the College Navigator website.
(d) CATEGORIES OF INSTITUTIONS.—The lists described in subsection (c)(1) shall be compiled according to the following categories
of institutions that participate in programs under title IV:
(1) Four-year public institutions of higher education.
(2) Four-year private, nonprofit institutions of higher education.
(3) Four-year private, for-profit institutions of higher education.
(4) Two-year public institutions of higher education.
(5) Two-year private, nonprofit institutions of higher education.
(6) Two-year private, for-profit institutions of higher education.
(7) Less than two-year public institutions of higher education.
(8) Less than two-year private, nonprofit institutions of
higher education.
(9) Less than two-year private, for-profit institutions of
higher education.
(e) REPORTS BY INSTITUTIONS.—
(1) REPORT TO SECRETARY.—If an institution of higher education is included on a list described in subparagraph (C) or
(D) of subsection (c)(1), the institution shall submit to the Secretary a report containing the following information:
(A) A description of the major areas in the institution’s
budget with the greatest cost increases.
(B) An explanation of the cost increases described in
subparagraph (A).
(C) A description of the steps the institution will take
toward the goal of reducing costs in the areas described in
subparagraph (A).
(D) In the case of an institution that is included on the
same list under subparagraph (C) or (D) of subsection
(c)(1) for two or more consecutive years, a description of
the progress made on the steps described in subparagraph
(C) of this paragraph that were included in the institution’s report for the previous year.
(E) If the determination of any cost increase described
in subparagraph (A) is not within the exclusive control of
the institution—
(i) an explanation of the extent to which the institution participates in determining such cost increase;
(ii) the identification of the agency or instrumentality of State government responsible for determining
such cost increase; and
(iii) any other information the institution considers relevant to the report.
(2) INFORMATION TO THE PUBLIC.—The Secretary shall—
(A) issue an annual report that summarizes all of the
reports by institutions required under paragraph (1) to the
authorizing committees; and
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(B) publish such report on the College Navigator
website.
(f) EXEMPTIONS.—
(1) IN GENERAL.—An institution shall not be placed on a
list described in subparagraph (C) or (D) of subsection (c)(1),
and shall not be subject to the reporting required under subsection (e), if the dollar amount of the institution’s increase in
tuition and fees, or net price, as applicable, is less than $600
for the three-year period described in such subparagraph.
(2) UPDATE.—Beginning in 2014, and every three years
thereafter, the Secretary shall update the dollar amount described in paragraph (1) based on annual increases in inflation,
using the Consumer Price Index for each of the three most recent preceding years.
(g) STATE HIGHER EDUCATION SPENDING CHART.—The Secretary shall annually report on the College Navigator website, in
charts for each State, comparisons of—
(1) the percentage change in spending by such State per
full-time equivalent student at all public institutions of higher
education in such State, for each of the five most recent preceding academic years;
(2) the percentage change in tuition and fees for such students for all public institutions of higher education in such
State for each of the five most recent preceding academic
years; and
(3) the percentage change in the total amount of needbased aid and merit-based aid provided by such State to fulltime students enrolled in the public institutions of higher education in the State for each of the five most recent preceding
academic years.
(h) NET PRICE CALCULATOR.—
(1) DEVELOPMENT OF NET PRICE CALCULATOR.—Not later
than one year after the date of enactment of theHigher Education Opportunity Act, the Secretary shall, in consultation
with institutions of higher education and other appropriate experts, develop a net price calculator to help current and prospective students, families, and other consumers estimate the
individual net price of an institution of higher education for a
student. The calculator shall be developed in a manner that
enables current and prospective students, families, and consumers to determine an estimate of a current or prospective
student’s individual net price at a particular institution.
(2) CALCULATION OF INDIVIDUAL NET PRICE.—For purposes
of this subsection, an individual net price of an institution of
higher education shall be calculated in the same manner as the
net price of such institution is calculated under subsection
(a)(3), except that the cost of attendance and the amount of
need-based and merit-based aid available shall be calculated
for the individual student as much as practicable.
(3) USE OF NET PRICE CALCULATOR BY INSTITUTIONS.—Not
later than two years after the date on which the Secretary
makes the calculator developed under paragraph (1) available
to institutions of higher education, each institution of higher
education that receives Federal funds under title IV shall
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make publicly available on the institution’s website a net price
calculator to help current and prospective students, families,
and other consumers estimate a student’s individual net price
at such institution of higher education. Such calculator may be
a net price calculator developed—
(A) by the Department pursuant to paragraph (1); or
(B) by the institution of higher education, if the institution’s calculator includes, at a minimum, the same data
elements included in the calculator developed under paragraph (1).
(4) DISCLAIMER.—Estimates of an individual net price determined using a net price calculator required under paragraph (3) shall be accompanied by a clear and conspicuous notice—
(A) stating that the estimate—
(i) does not represent a final determination, or actual award, of financial assistance;
(ii) shall not be binding on the Secretary, the institution of higher education, or the State; and
(iii) may change;
(B) stating that the student must complete the Free
Application for Federal Student Aid described in section
483 in order to be eligible for, and receive, an actual financial aid award that includes Federal grant, loan, or workstudy assistance under title IV; and
(C) including a link to the website of the Department
that allows students to access the Free Application for
Federal Student Aid described in section 483.
(i) CONSUMER INFORMATION.—
(1) AVAILABILITY OF TITLE IV INSTITUTION INFORMATION.—
Not later than one year after the date of enactment of
theHigher Education Opportunity Act, the Secretary shall
make publicly available on the College Navigator website, in
simple and understandable terms, the following information
about each institution of higher education that participates in
programs under title IV, for the most recent academic year for
which satisfactory data are available:
(A) A statement of the institution’s mission.
(B) The total number of undergraduate students who
applied to, were admitted by, and enrolled in the institution.
(C) For institutions that require SAT or ACT scores to
be submitted, the reading, writing, mathematics, and combined scores on the SAT or ACT, as applicable, for the
middle 50 percent range of the institution’s freshman
class.
(D) The number of first-time, full-time, and part-time
students enrolled at the institution, at the undergraduate
and (if applicable) graduate levels.
(E) The number of degree- or certificate-seeking undergraduate students enrolled at the institution who have
transferred from another institution.
(F) The percentages of male and female undergraduate
students enrolled at the institution.
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(G) Of the first-time, full-time, degree- or certificateseeking undergraduate students enrolled at the institution—
(i) the percentage of such students who are from
the State in which the institution is located;
(ii) the percentage of such students who are from
other States; and
(iii) the percentage of such students who are international students.
(H) The percentages of first-time, full-time, degree- or
certificate-seeking students enrolled at the institution,
disaggregated by race and ethnic background.
(I) The percentage of undergraduate students enrolled
at the institution who are formally registered with the office of disability services of the institution (or the equivalent office) as students with disabilities, except that if such
percentage is three percent or less, the institution shall report ‘‘three percent or less’’.
(J) The percentages of first-time, full-time, degree- or
certificate-seeking undergraduate students enrolled at the
institution who obtain a degree or certificate within—
(i) the normal time for completion of, or graduation from, the student’s program;
(ii) 150 percent of the normal time for completion
of, or graduation from, the student’s program; and
(iii) 200 percent of the normal time for completion
of, or graduation from, the student’s program;
(K) The number of certificates, associate degrees, baccalaureate degrees, master’s degrees, professional degrees,
and doctoral degrees awarded by the institution.
(L) The undergraduate major areas of study at the institution with the highest number of degrees awarded.
(M) The student-faculty ratio, the number of full-time
and part-time faculty, and the number of graduate assistants with primarily instructional responsibilities, at the institution.
(N)(i) The cost of attendance for first-time, full-time
undergraduate students enrolled in the institution who
live on campus;
(ii) the cost of attendance for first-time, full-time undergraduate students enrolled in the institution who live
off campus; and
(iii) in the case of a public institution of higher education and notwithstanding subsection (b)(1), the costs described in clauses (i) and (ii), for—
(I) first-time, full-time students enrolled in the institution who are residents of the State in which the
institution is located; and
(II) first-time, full-time students enrolled in the
institution who are not residents of such State.
(O) The average annual grant amount (including Federal, State, and institutional aid) awarded to a first-time,
full-time undergraduate student enrolled at the institution
who receives financial aid.
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(P) The average annual amount of Federal student
loans provided through the institution to undergraduate
students enrolled at the institution.
(Q) The total annual grant aid awarded to undergraduate students enrolled at the institution, from the
Federal Government, a State, the institution, and other
sources known by the institution.
(R) The percentage of first-time, full-time undergraduate students enrolled at the institution receiving
Federal, State, and institutional grants, student loans, and
any other type of student financial assistance known by
the institution, provided publicly or through the institution, such as Federal work-study funds.
(S) The number of students enrolled at the institution
receiving Federal Pell Grants.
(T) The institution’s cohort default rate, as defined
under section 435(m).
(U) The information on campus safety required to be
collected under section 485(i).
(V) A link to the institution’s website that provides, in
an easily accessible manner, the following information:
(i) Student activities offered by the institution.
(ii) Services offered by the institution for individuals with disabilities.
(iii) Career and placement services offered by the
institution to students during and after enrollment.
(iv) Policies of the institution related to transfer of
credit from other institutions.
(W) A link to the appropriate section of the Bureau of
Labor Statistics website that provides information on regional data on starting salaries in all major occupations.
(X) Information required to be submitted under paragraph (4) and a link to the institution pricing summary
page described in paragraph (5).
(Y) In the case of an institution that was required to
submit a report under subsection (e)(1), a link to such report.
(Z) The availability of alternative tuition plans, which
may include guaranteed tuition plans.
(2) ANNUAL UPDATES.—The Secretary shall annually update the information described in paragraph (1) on the College
Navigator website.
(3) CONSULTATION.—The Secretary shall regularly consult
with current and prospective college students, family members
of such students, institutions of higher education, and other experts to improve the usefulness and relevance of the College
Navigator website, with respect to the presentation of the consumer information collected in paragraph (1).
(4) DATA COLLECTION.—The Commissioner for Education
Statistics shall continue to update and improve the Integrated
Postsecondary Education Data System (referred to in this section as ‘‘IPEDS’’), including the reporting of information by institutions and the timeliness of the data collected.
(5) INSTITUTION PRICING SUMMARY PAGE.—
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(A) AVAILABILITY OF LIST OF PARTICIPATING INSTITUTIONS.—The Secretary shall make publicly available on the
College Navigator website in a sortable and searchable format a list of all institutions of higher education that participate in programs under title IV, which list shall, for
each institution, include the following:
(i) The tuition and fees for each of the three most
recent academic years for which data are available.
(ii) The net price for each of the three most recent
available academic years for which data are available.
(iii)(I) During the period beginning July 1, 2010,
and ending June 30, 2013, the net price for students
receiving Federal student financial aid under title IV,
disaggregated by the income categories described in
paragraph (6), for the most recent academic year for
which data are available.
(II) Beginning July 1, 2013, the net price for students receiving Federal student financial aid under
title IV, disaggregated by the income categories described in paragraph (6), for each of the three most recent academic years for which data are available.
(iv) The average annual percentage change and
average annual dollar change in such institution’s tuition and fees for each of the three most recent academic years for which data are available.
(v) The average annual percentage change and average annual dollar change in such institution’s net
price for each of the three most recent preceding academic years for which data are available.
(vi) A link to the webpage on the College Navigator website that provides the information described
in paragraph (1) for the institution.
(B) ANNUAL UPDATES.—The Secretary shall annually
update the lists described in subparagraph (A) on the College Navigator website.
(6) INCOME CATEGORIES.—
(A) IN GENERAL.—For purposes of reporting the information required under this subsection, the following income categories shall apply for students who receive Federal student financial aid under title IV:
(i) $0–30,000.
(ii) $30,001–48,000.
(iii) $48,001–75,000.
(iv) $75,001–110,000.
(v) $110,001 and more.
(B) ADJUSTMENT.—The Secretary may adjust the income categories listed in subparagraph (A) using the Consumer Price Index if the Secretary determines such adjustment is necessary.
(j) MULTI-YEAR TUITION CALCULATOR.—
(1) DEVELOPMENT OF MULTI-YEAR TUITION CALCULATOR.—
Not later than one year after the date of enactment of
theHigher Education Opportunity Act, the Secretary shall, in
consultation with institutions of higher education, financial
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planners, and other appropriate experts, develop a multi-year
tuition calculator to help current and prospective students,
families of such students, and other consumers estimate the
amount of tuition an individual may pay to attend an institution of higher education in future years.
(2) CALCULATION OF MULTI-YEAR TUITION.—The multi-year
tuition calculator described in paragraph (1) shall—
(A) allow an individual to select an institution of higher education for which the calculation shall be made;
(B) calculate an estimate of tuition and fees for each
year of the normal duration of the program of study at
such institution by—
(i) using the tuition and fees for such institution,
as reported under subsection (i)(5)(A)(i), for the most
recent academic year for which such data are reported;
and
(ii) determining an estimated annual percentage
change for each year for which the calculation is
made, based on the annual percentage change in such
institution’s tuition and fees, as reported under subsection (i)(5)(A)(iv), for the most recent three-year period for which such data are reported;
(C) calculate an estimate of the total amount of tuition
and fees to complete a program of study at such institution, based on the normal duration of such program, using
the estimate calculated under subparagraph (B) for each
year of the program of study;
(D) provide the individual with the option to replace
the estimated annual percentage change described in subparagraph (B)(ii) with an alternative annual percentage
change specified by the individual, and calculate an estimate of tuition and fees for each year and an estimate of
the total amount of tuition and fees using the alternative
percentage change;
(E) in the case of an institution that offers a multiyear tuition guarantee program, allow the individual to
have the estimates of tuition and fees described in subparagraphs (B) and (C) calculated based on the provisions
of such guarantee program for the tuition and fees charged
to a student, or cohort of students, enrolled for the duration of the program of study; and
(F) include any other features or information determined to be appropriate by the Secretary.
(3) AVAILABILITY AND COMPARISON.—The multi-year tuition
calculator described in paragraph (1) shall be available on the
College Navigator website and shall allow current and prospective students, families of such students, and consumers to compare information and estimates under this subsection for multiple institutions of higher education.
(4) DISCLAIMER.—Each calculation of estimated tuition and
fees made using the multi-year tuition calculator described in
paragraph (1) shall be accompanied by a clear and conspicuous
notice—
(A) stating that the calculation—
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(i) is only an estimate and not a guarantee of the
actual amount the student may be charged;
(ii) is not binding on the Secretary, the institution
of higher education, or the State; and
(iii) may change, subject to the availability of financial assistance, State appropriations, and other
factors;
(B) stating that the student must complete the Free
Application for Federal Student Aid described in section
483 in order to be eligible for, and receive, an actual financial aid award that includes Federal grant, loan, or workstudy assistance under title IV; and
(C) including a link to the website of the Department
that allows students to access the Free Application for
Federal Student Aid described in section 483.
(k) STUDENT AID RECIPIENT SURVEY.—
(1) SURVEY REQUIRED.—The Secretary, acting through the
Commissioner for Education Statistics, shall conduct, on a
State-by-State basis, a survey of recipients of Federal student
financial aid under title IV—
(A) to identify the population of students receiving
such Federal student financial aid;
(B) to describe the income distribution and other socioeconomic characteristics of recipients of such Federal student financial aid;
(C) to describe the combinations of aid from Federal,
State, and private sources received by such recipients from
all income categories;
(D) to describe the—
(i) debt burden of such loan recipients, and their
capacity to repay their education debts; and
(ii) the impact of such debt burden on the recipients’ course of study and post-graduation plans;
(E) to describe the impact of the cost of attendance of
postsecondary education in the determination by students
of what institution of higher education to attend; and
(F) to describe how the costs of textbooks and other instructional materials affect the costs of postsecondary education for students.
(2) FREQUENCY.—The survey shall be conducted on a regular cycle and not less often than once every four years.
(3) SURVEY DESIGN.—The survey shall be representative of
students from all types of institutions, including full-time and
part-time students, undergraduate, graduate, and professional
students, and current and former students.
(4) DISSEMINATION.—The Commissioner for Education Statistics shall disseminate to the public, in printed and electronic
form, the information resulting from the survey.
(l) REGULATIONS.—The Secretary is authorized to issue such
regulations as may be necessary to carry out this section.
SEC. 133. ø20 U.S.C. 1015b¿ TEXTBOOK INFORMATION.
(a) PURPOSE AND INTENT.—The purpose of this
section is to ensure that students have access to affordable course materials by de-
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creasing costs to students and enhancing transparency and disclosure with respect to the selection, purchase, sale, and use of course
materials. It is the intent of this section to encourage all of the involved parties, including faculty, students, administrators, institutions of higher education, bookstores, distributors, and publishers,
to work together to identify ways to decrease the cost of college
textbooks and supplemental materials for students while supporting the academic freedom of faculty members to select high
quality course materials for students.
(b) DEFINITIONS.—In this section:
(1) BUNDLE.—The term ‘‘bundle’’ means one or more college textbooks or other supplemental materials that may be
packaged together to be sold as course materials for one price.
(2) COLLEGE TEXTBOOK.—The term ‘‘college textbook’’
means a textbook or a set of textbooks, used for, or in conjunction with, a course in postsecondary education at an institution
of higher education.
(3) COURSE SCHEDULE.—The term ‘‘course schedule’’ means
a listing of the courses or classes offered by an institution of
higher education for an academic period, as defined by the institution.
(4) CUSTOM TEXTBOOK.—The term ‘‘custom textbook’’—
(A) means a college textbook that is compiled by a
publisher at the direction of a faculty member or other
person or adopting entity in charge of selecting course materials at an institution of higher education; and
(B) may include, alone or in combination, items such
as selections from original instructor materials, previously
copyrighted publisher materials, copyrighted third-party
works, and elements unique to a specific institution, such
as commemorative editions.
(5) INSTITUTION OF HIGHER EDUCATION.—The term ‘‘institution of higher education’’ has the meaning given the term in
section 102.
(6) INTEGRATED TEXTBOOK.—The term ‘‘integrated textbook’’ means a college textbook that is—
(A) combined with materials developed by a third
party and that, by third-party contractual agreement, may
not be offered by publishers separately from the college
textbook with which the materials are combined; or
(B) combined with other materials that are so interrelated with the content of the college textbook that the
separation of the college textbook from the other materials
would render the college textbook unusable for its intended purpose.
(7) PUBLISHER.—The term ‘‘publisher’’ means a publisher
of college textbooks or supplemental materials involved in or
affecting interstate commerce.
(8) SUBSTANTIAL CONTENT.—The term ‘‘substantial content’’ means parts of a college textbook such as new chapters,
new material covering additional eras of time, new themes, or
new subject matter.
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(9) SUPPLEMENTAL MATERIAL.—The term ‘‘supplemental
material’’ means educational material developed to accompany
a college textbook that—
(A) may include printed materials, computer disks,
website access, and electronically distributed materials;
and
(B) is not being used as a component of an integrated
textbook.
(c) PUBLISHER REQUIREMENTS.—
(1) COLLEGE TEXTBOOK PRICING INFORMATION.—When a
publisher provides a faculty member or other person or adopting entity in charge of selecting course materials at an institution of higher education receiving Federal financial assistance
with information regarding a college textbook or supplemental
material, the publisher shall include, with any such information and in writing (which may include electronic communications), the following:
(A) The price at which the publisher would make the
college textbook or supplemental material available to the
bookstore on the campus of, or otherwise associated with,
such institution of higher education and, if available, the
price at which the publisher makes the college textbook or
supplemental material available to the public.
(B) The copyright dates of the three previous editions
of such college textbook, if any.
(C) A description of the substantial content revisions
made between the current edition of the college textbook
or supplemental material and the previous edition, if any.
(D)(i) Whether the college textbook or supplemental
material is available in any other format, including paperback and unbound; and
(ii) for each other format of the college textbook or
supplemental material, the price at which the publisher
would make the college textbook or supplemental material
in the other format available to the bookstore on the campus of, or otherwise associated with, such institution of
higher education and, if available, the price at which the
publisher makes such other format of the college textbook
or supplemental material available to the public.
(2) UNBUNDLING OF COLLEGE TEXTBOOKS FROM SUPPLEMENTAL MATERIALS.—A publisher that sells a college textbook
and any supplemental material accompanying such college
textbook as a single bundle shall also make available the college textbook and each supplemental material as separate and
unbundled items, each separately priced.
(3) CUSTOM TEXTBOOKS.—To the maximum extent practicable, a publisher shall provide the information required
under this subsection with respect to the development and provision of custom textbooks.
(d) PROVISION OF ISBN COLLEGE TEXTBOOK INFORMATION IN
COURSE SCHEDULES.—To the maximum extent practicable, each institution of higher education receiving Federal financial assistance
shall—
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(1) disclose, on the institution’s Internet course schedule
and in a manner of the institution’s choosing, the International
Standard Book Number and retail price information of required and recommended college textbooks and supplemental
materials for each course listed in the institution’s course
schedule used for preregistration and registration purposes, except that—
(A) if the International Standard Book Number is not
available for such college textbook or supplemental material, then the institution shall include in the Internet
course schedule the author, title, publisher, and copyright
date for such college textbook or supplemental material;
and
(B) if the institution determines that the disclosure of
the information described in this subsection is not practicable for a college textbook or supplemental material,
then the institution shall so indicate by placing the designation ‘‘To Be Determined’’ in lieu of the information required under this subsection; and
(2) if applicable, include on the institution’s written course
schedule a notice that textbook information is available on the
institution’s Internet course schedule, and the Internet address
for such schedule.
(e) AVAILABILITY OF INFORMATION FOR COLLEGE BOOKSTORES.—An institution of higher education receiving Federal financial assistance shall make available to a college bookstore that
is operated by, or in a contractual relationship or otherwise affiliated with, the institution, as soon as is practicable upon the request of such college bookstore, the most accurate information
available regarding—
(1) the institution’s course schedule for the subsequent
academic period; and
(2) for each course or class offered by the institution for
the subsequent academic period—
(A) the information required by subsection (d)(1) for
each college textbook or supplemental material required or
recommended for such course or class;
(B) the number of students enrolled in such course or
class; and
(C) the maximum student enrollment for such course
or class.
(f) ADDITIONAL INFORMATION.—An institution disclosing the information required by subsection (d)(1) is encouraged to disseminate to students information regarding—
(1) available institutional programs for renting textbooks
or for purchasing used textbooks;
(2) available institutional guaranteed textbook buy-back
programs;
(3) available institutional alternative content delivery programs; or
(4) other available institutional cost-saving strategies.
(g) GAO REPORT.—Not later than July 1, 2013, the Comptroller General of the United States shall report to the authorizing
committees on the implementation of this section by institutions of
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higher education, college bookstores, and publishers. The report
shall particularly examine—
(1) the availability of college textbook information on
course schedules;
(2) the provision of pricing information to faculty of institutions of higher education by publishers;
(3) the use of bundled and unbundled material in the college textbook marketplace, including the adoption of
unbundled materials by faculty and the use of integrated textbooks by publishers; and
(4) the implementation of this section by institutions of
higher education, including the costs and benefits to such institutions and to students.
(h) RULE OF CONSTRUCTION.—Nothing in this section shall be
construed to supercede the institutional autonomy or academic
freedom of instructors involved in the selection of college textbooks,
supplemental materials, and other classroom materials.
(i) NO REGULATORY AUTHORITY.—The Secretary shall not promulgate regulations with respect to this section.
SEC. 134. ø20 U.S.C. 1015c¿ DATABASE OF STUDENT INFORMATION PROHIBITED.
(a) PROHIBITION.—Except as described in subsection (b), noth-
ing in this Act shall be construed to authorize the development, implementation, or maintenance of a Federal database of personally
identifiable information on individuals receiving assistance under
this Act, attending institutions receiving assistance under this Act,
or otherwise involved in any studies or other collections of data
under this Act, including a student unit record system, an education bar code system, or any other system that tracks individual
students over time.
(b) EXCEPTION.—The provisions of subsection (a) shall not
apply to a system (or a successor system) that—
(1) is necessary for the operation of programs authorized
by title II, IV, or VII; and
(2) was in use by the Secretary, directly or through a contractor, as of the day before the date of enactment of theHigher
Education Opportunity Act.
(c) STATE DATABASES.—Nothing in this Act shall prohibit a
State or a consortium of States from developing, implementing, or
maintaining State-developed databases that track individuals over
time, including student unit record systems that contain information related to enrollment, attendance, graduation and retention
rates, student financial assistance, and graduate employment outcomes.
SEC. 135. ø20 U.S.C. 1015d¿ IN-STATE TUITION RATES FOR MEMBERS OF
THE ARMED FORCES ON ACTIVE DUTY, SPOUSES, AND DEPENDENT CHILDREN.
(a) REQUIREMENT.—In the case of a member of the armed
forces who is on active duty for a period of more than 30 days and
whose domicile or permanent duty station is in a State that receives assistance under this Act, such State shall not charge such
member (or the spouse or dependent child of such member) tuition
for attendance at a public institution of higher education in the
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State at a rate that is greater than the rate charged for residents
of the State.
(b) CONTINUATION.—If a member of the armed forces (or the
spouse or dependent child of a member) pays tuition at a public institution of higher education in a State at a rate determined by
subsection (a), the provisions of subsection (a) shall continue to
apply to such member, spouse, or dependent while continuously enrolled at that institution, notwithstanding a subsequent change in
the permanent duty station of the member to a location outside the
State.
(c) EFFECTIVE DATE.—This section shall take effect at each
public institution of higher education in a State that receives assistance under this Act for the first period of enrollment at such
institution that begins after July 1, 2009.
(d) DEFINITIONS.—In this section, the terms ‘‘armed forces’’ and
‘‘active duty for a period of more than 30 days’’ have the meanings
given those terms insection 101of title 10, United States Code.
SEC. 136. ø20 U.S.C. 1015e¿ STATE HIGHER EDUCATION INFORMATION
SYSTEM PILOT PROGRAM.
(a) PURPOSE.—It is the purpose of this section to carry out a
pilot program to assist not more than five States to develop Statelevel postsecondary student data systems to—
(1) improve the capacity of States and institutions of higher education to generate more comprehensive and comparable
data, in order to develop better-informed educational policy at
the State level and to evaluate the effectiveness of institutional
performance while protecting the confidentiality of students’
personally identifiable information; and
(2) identify how to best minimize the data-reporting burden placed on institutions of higher education, particularly
smaller institutions, and to maximize and improve the information institutions receive from the data systems, in order to
assist institutions in improving educational practice and postsecondary outcomes.
(b) DEFINITION OF ELIGIBLE ENTITY.—In this section, the term
‘‘eligible entity’’ means—
(1) a State higher education system; or
(2) a consortium of State higher education systems, or a
consortium of individual institutions of higher education, that
is broadly representative of institutions in different sectors and
geographic locations.
(c) COMPETITIVE GRANTS.—
(1) GRANTS AUTHORIZED.—The Secretary shall award
grants, on a competitive basis, to not more than five eligible
entities to enable the eligible entities to—
(A) design, test, and implement systems of postsecondary student data that provide the maximum benefits to
States, institutions of higher education, and State policymakers; and
(B) examine the costs and burdens involved in implementing a State-level postsecondary student data system.
(2) DURATION.—A grant awarded under this section shall
be for a period of not more than three years.
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(d) APPLICATION REQUIREMENTS.—An eligible entity desiring 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 reasonably require, including a description of—
(1) how the eligible entity will ensure that student privacy
is protected and that individually identifiable information
about students, the students’ achievements, and the students’
families remains confidential in accordance with section 444 of
the General Education Provisions Act (commonly known as the
‘‘Family Educational Rights and Privacy Act of 1974’’) (20
U.S.C. 1232g); and
(2) how the activities funded by the grant will be supported after the three-year grant period.
(e) USE OF FUNDS.—A grant awarded under this section shall
be used to—
(1) design, develop, and implement the components of a
comprehensive postsecondary student data system with the capacity to transmit student information within a State;
(2) improve the capacity of institutions of higher education
to analyze and use student data;
(3) select and define common data elements, data quality,
and other elements that will enable the data system to—
(A) serve the needs of institutions of higher education
for institutional research and improvement;
(B) provide students and the students’ families with
useful information for decision-making about postsecondary education; and
(C) provide State policymakers with improved information to monitor and guide efforts to improve student
outcomes and success in higher education;
(4) estimate costs and burdens at the institutional level for
the reporting system for different types of institutions; and
(5) test the feasibility of protocols and standards for maintaining data privacy and data access.
(f) EVALUATION; REPORTS.—Not later than six months after the
end of the projects funded by grants awarded under this section,
the Secretary shall—
(1) conduct a comprehensive evaluation of the pilot program authorized by this section; and
(2) report the Secretary’s findings, as well as recommendations regarding the implementation of State-level postsecondary student data systems, to the authorizing committees.
(g) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
SEC. 137. ø20 U.S.C. 1015f¿ STATE COMMITMENT TO AFFORDABLE COLLEGE EDUCATION.
(a) MAINTENANCE OF EFFORT REQUIRED.—A State shall pro-
vide—
(1) for public institutions of higher education in such State
for any academic year beginning on or after July 1, 2008, an
amount which is equal to or greater than the average amount
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HIGHER EDUCATION ACT OF 1965
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provided for non-capital and non-direct research and development expenses or costs by such State to such institutions of
higher education during the five most recent preceding academic years for which satisfactory data are available; and
(2) for private institutions of higher education in such
State for any academic year beginning on or after July 1, 2008,
an amount which is equal to or greater than the average
amount provided for student financial aid for paying costs associated with postsecondary education by such State to such
institutions during the five most recent preceding academic
years for which satisfactory data are available.
(b) ADJUSTMENTS FOR BIENNIAL APPROPRIATIONS.—The Secretary shall take into consideration any adjustments to the calculations under subsection (a) that may be required to accurately reflect funding levels for postsecondary education in States with biennial appropriation cycles.
(c) WAIVER.—The Secretary shall waive the requirements of
subsection (a), if the Secretary determines that such a waiver
would be equitable due to exceptional or uncontrollable circumstances, such as a natural disaster or a precipitous and
unforseen decline in the financial resources of a State or State educational agency, as appropriate.
(d) VIOLATION OF MAINTENANCE OF EFFORT.—Notwithstanding
any other provision of law, the Secretary shall withhold from any
State that violates subsection (a) and does not receive a waiver
pursuant to subsection (c) any amount that would otherwise be
available to the State under section 781 until such State has made
significant efforts to correct such violation.
PART D—ADMINISTRATIVE PROVISIONS FOR
DELIVERY OF STUDENT FINANCIAL ASSISTANCE
SEC. 141. ø20 U.S.C. 1018¿ PERFORMANCE-BASED ORGANIZATION FOR
THE DELIVERY OF FEDERAL STUDENT FINANCIAL ASSISTANCE.
(a) ESTABLISHMENT AND PURPOSE.—
(1) ESTABLISHMENT.—There is established in the Depart-
ment a Performance-Based Organization (hereafter referred to
as the ‘‘PBO’’) which shall be a discrete management unit responsible for managing the administrative and oversight functions supporting the programs authorized under title IV of this
Act, as specified in subsection (b).
(2) PURPOSES.—The purposes of the PBO are—
(A) to improve 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) to reduce the costs of administering those programs;
(C) to increase the accountability of the officials responsible for administering the operational aspects of
these programs;
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(D) to provide greater flexibility in the management
and administration of the Federal student financial assistance programs;
(E) to integrate the information systems supporting
the Federal student financial assistance programs;
(F) to implement an open, common, integrated system
for the delivery of student financial assistance under title
IV; and
(G) to develop and maintain a student financial assistance system that contains complete, accurate, and timely
data to ensure program integrity.
(b) GENERAL AUTHORITY.—
(1) AUTHORITY OF SECRETARY.—Notwithstanding any other
provision of this part, the Secretary shall maintain responsibility for the development and promulgation of policy and regulations relating to the programs of student financial assistance
under title IV. In the exercise of its functions, the PBO shall
be subject to the direction of the Secretary. The Secretary
shall—
(A) request the advice of, and work in cooperation
with, the Chief Operating Officer in developing regulations, policies, administrative guidance, or procedures affecting the Federal student financial assistance programs
authorized under title IV;
(B) request cost estimates from the Chief Operating
Officer for system changes required by specific policies proposed by the Secretary; and
(C) assist the Chief Operating Officer in identifying
goals for—
(i) the administration of the systems used to administer 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 the administration of Federal student
financial assistance programs authorized under title IV, excluding the development of policy relating to such programs
but including the following:
(A) The administrative, accounting, and financial management functions for the Federal student financial assistance programs authorized under title IV, including—
(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 Federal student financial assistance programs authorized under title IV;
(iii) all software and hardware acquisitions and all
information technology contracts related to the administration and management of student financial assistance under title IV;
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HIGHER EDUCATION ACT OF 1965
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(iv) all aspects of contracting for the information
and financial systems supporting the Federal student
financial assistance programs authorized under title
IV;
(v) providing all customer service, training, and
user support related to the administration of the Federal student financial assistance programs authorized
under title IV; and
(vi) ensuring the integrity of the Federal student
financial assistance programs authorized under title
IV.
(B) Annual development of a budget for the activities
and functions of the PBO, in consultation with the Secretary, and for consideration and inclusion in the Department’s annual budget submission.
(3) ADDITIONAL FUNCTIONS.—The Secretary may allocate to
the PBO such additional functions as the Secretary and the
Chief Operating Officer determine are necessary or appropriate
to achieve the purposes of the PBO.
(4) INDEPENDENCE.—Subject to paragraph (1), in carrying
out its functions, the PBO shall exercise independent control of
its budget allocations and expenditures, personnel decisions
and processes, procurements, and other administrative and
management functions.
(5) AUDITS AND REVIEW.—The PBO shall be subject to the
usual and customary Federal audit procedures and to review
by the Inspector General of the Department.
(6) CHANGES.—
(A) IN GENERAL.—The Secretary and the Chief Operating Officer shall consult concerning the effects of policy,
market, or other changes on the ability of the PBO to
achieve the goals and objectives established in the performance plan described in subsection (c).
(B) REVISIONS TO AGREEMENT.—The Secretary and the
Chief Operating Officer may revise the annual performance agreement described in subsection (d)(4) in light of
policy, market, or other changes that occur after the Secretary and the Chief Operating Officer enter into the
agreement.
(c) PERFORMANCE PLAN, REPORT, AND BRIEFING.—
(1) PERFORMANCE PLAN.—
(A) IN GENERAL.—Each year, the Secretary and Chief
Operating Officer shall agree on, and make available to
the public, a performance plan for the PBO for the succeeding 5 years that establishes measurable goals and objectives for the organization.
(B) CONSULTATION.—In developing the 5-year performance plan and any revision to the plan, the Secretary and
the Chief Operating Officer shall consult with students, institutions of higher education, Congress, lenders, the Advisory Committee on Student Financial Assistance, and
other interested parties not less than 30 days prior to the
implementation of the performance plan or revision.
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(C) AREAS.—The plan shall include a concise statement of the goals for a modernized system for the delivery
of student financial assistance under title IV and identify
action steps necessary to achieve such goals. The plan
shall address the PBO’s responsibilities in the following
areas:
(i) IMPROVING SERVICE.—Improving service to students and other participants in student financial aid
programs authorized under under 1 title IV, including
making those programs more understandable to students and their parents.
(ii) REDUCING COSTS.—Reducing the costs of administering those programs.
(iii) IMPROVEMENT AND INTEGRATION OF SUPPORT
SYSTEMS.—Improving and integrating the systems that
support those programs.
(iv) DELIVERY AND INFORMATION SYSTEM.—Developing open, common, and integrated systems for programs authorized under under 1 title IV.
(v) OTHER AREAS.—Any other areas identified by
the Secretary.
(2) ANNUAL REPORT.—Each year, the Chief Operating
Officer shall prepare and submit to Congress, through the Secretary, an annual report on the performance of the PBO, including an evaluation of the extent to which the PBO met the
goals and objectives contained in the 5-year performance plan
described in paragraph (1) for the preceding year. The annual
report shall include the following:
(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 Officers Act of
1990 and the Government Performance and Results Act of
1993.
(C) The results achieved by the PBO during the year
relative to the goals established in the organization’s performance plan.
(D) The evaluation rating of the performance of the
Chief Operating Officer and senior managers under subsections (d)(4) and (e)(2), including the amounts of bonus
compensation awarded to these individuals.
(E) Recommendations for legislative and regulatory
changes to improve service to students and their families,
and to improve program efficiency and integrity.
(F) Other such information as the Director of the Office of Management and Budget shall prescribe for performance based organizations.
(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
1 So
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HIGHER EDUCATION ACT OF 1965
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markets, and others involved in the delivery system of student
aid under title IV—
(A) regarding the degree of satisfaction with the
delivery system; and
(B) to seek suggestions on means to improve the
delivery system.
(4) BRIEFING ON ENFORCEMENT OF STUDENT LOAN PROVISIONS.—The Secretary shall, upon request, provide a briefing
to the members of the authorizing committees on the steps the
Department has taken to ensure—
(A) the integrity of the student loan programs; and
(B) that lenders and guaranty agencies are adhering
to the requirements of title IV.
(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 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.
(2) REAPPOINTMENT.—The Secretary may reappoint the
Chief Operating Officer to subsequent terms of not less than
3 and not more than 5 years, so long as the performance of the
Chief Operating Officer, as set forth in the performance agreement described in paragraph (4), is satisfactory.
(3) REMOVAL.—The Chief Operating Officer may be removed by—
(A) the President; or
(B) the Secretary, for misconduct or failure to meet
performance goals set forth in the performance agreement
in paragraph (4).
The President or Secretary shall communicate the reasons for
any such removal to the authorizing committees.
(4) PERFORMANCE AGREEMENT.—
(A) IN GENERAL.—Each year, the Secretary and the
Chief Operating Officer shall enter into an annual performance agreement, that shall set forth measurable organization and individual goals for the Chief Operating Officer.
(B) TRANSMITTAL.—The final agreement, and any revision to the final agreement, shall be transmitted to the authorizing committees, and made publicly available.
(5) COMPENSATION.—
(A) IN GENERAL.—The Chief Operating Officer is authorized to be paid at an annual rate of basic pay not to
exceed the maximum rate of basic pay for the Senior Executive Service under section 5382 of title 5, United States
Code, including any applicable locality-based comparability
payment that may be authorized under section
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tion 207(c)(2)(A) of title 18, United States Code, to be the
equivalent of that described under clause (ii) of section
207(c)(2)(A) of such title.
(B) BONUS.—In addition, the Chief Operating Officer
may receive a bonus in an amount that does not exceed 50
percent of such annual rate of basic pay, based upon the
Secretary’s evaluation of the Chief Operating Officer’s performance in relation to the goals set forth in the performance agreement described in paragraph (4).
(C) PAYMENT.—Payment of a bonus under 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.—
(1) APPOINTMENT.—
(A) IN GENERAL.—The Chief Operating Officer may appoint such senior managers as that officer determines necessary without regard to the provisions of title 5, United
States Code, governing appointments in the competitive
service.
(B) COMPENSATION.—The senior managers described
in subparagraph (A) may be paid without regard to the
provisions of chapter 51 and subchapter III of chapter 53
of such title relating to classification and General Schedule
pay rates.
(2) PERFORMANCE AGREEMENT.—Each year, the Chief Operating Officer and each senior manager appointed under this
subsection shall enter into an annual performance agreement
that sets forth measurable organization and individual goals.
The agreement shall be subject to review and renegotiation at
the end of each term.
(3) COMPENSATION.—
(A) IN GENERAL.—A senior manager appointed under
this subsection may be paid at an annual rate of basic pay
of not more than the maximum rate of basic pay for the
Senior Executive Service under section 5382 of title 5,
United States Code, including any applicable locality-based
comparability payment that may be authorized under section 5304(h)(2)(C) of such title. The compensation of a senior manager shall be considered for purposes of section
207(c)(2)(A) of title 18, United States Code, to be the
equivalent of that described under clause (ii) of section
207(c)(2)(A) of such title.
(B) BONUS.—In addition, a senior manager may receive a bonus in an amount such that the manager’s total
annual compensation does not exceed 125 percent of the
maximum rate of basic pay for the Senior Executive Service, including any applicable locality-based comparability
payment, based upon the Chief Operating Officer’s evaluation of the manager’s performance in relation to the goals
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set forth in the performance agreement described in paragraph (2).
(4) REMOVAL.—A senior manager shall be removable by
the Chief Operating Officer, or by the Secretary if the position
of Chief Operating Officer is vacant.
(f ) STUDENT LOAN OMBUDSMAN.—
(1) APPOINTMENT.—The Chief Operating Officer, in consultation with the Secretary, shall appoint a Student Loan
Ombudsman to provide timely assistance to borrowers of loans
made, insured, or guaranteed under title IV by performing the
functions described in paragraph (3).
(2) PUBLIC INFORMATION.—The Chief Operating Officer
shall disseminate information about the availability and functions of the Ombudsman 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); and
(B) compile and analyze data on borrower complaints
and make appropriate recommendations.
(4) REPORT.—Each year, the Ombudsman shall submit a
report to the Chief Operating Officer, for inclusion in the annual report under subsection (c)(2), that describes the activities, and evaluates the effectiveness of the Ombudsman during
the preceding year.
(g) PERSONNEL FLEXIBILITY.—
(1) PERSONNEL CEILINGS.—The PBO shall not be subject to
any ceiling relating to the number or grade of employees.
(2) ADMINISTRATIVE FLEXIBILITY.—The Chief Operating Officer shall work with the Office of Personnel Management to
develop and implement personnel flexibilities in staffing, classification, and pay that meet the needs of the PBO, subject to
compliance with title 5, United States Code.
(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, 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 effectiveness of
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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) 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.
SEC. 142. ø20 U.S.C. 1018a¿ PROCUREMENT FLEXIBILITY.
(a) PROCUREMENT AUTHORITY.—Subject to the authority
of the
Secretary, the Chief Operating Officer of a PBO may exercise the
authority of the Secretary to procure property and services in the
performance of functions managed by the PBO. For the purposes
of this section, the term ‘‘PBO’’ includes the Chief Operating Officer
of the PBO and any employee of the PBO exercising procurement
authority under the preceding sentence.
(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 to carry out the functions set forth
in section 141(b)(2);
(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.—The
Chief Operating Officer shall, to the extent practicable, maximize the use of performance-based servicing contracts, consistent with guidelines for such contracts published by the Office of Federal Procurement Policy, to achieve cost savings and
improve service.
(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.
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(2) FIRST PHASE.—The procedures for the first phase of the
process for a procurement are as follows:
(A) PUBLICATION OF NOTICE.—The contracting officer
for the procurement shall publish a notice of the procurement in accordance with section 18 of the Office of Federal
Procurement Policy Act (41 U.S.C. 416) and subsections
(e), (f ), and (g) of section 8 of the Small Business Act (15
U.S.C. 637), except that the notice shall include only the
following:
(i) A general description of the scope or purpose of
the procurement that provides sufficient information
on the scope or purpose for sources to make informed
business decisions regarding whether to participate in
the procurement.
(ii) A description of the basis on which potential
sources are to be selected to submit offers in the second phase.
(iii) A description of the information that is to be
required under subparagraph (B).
(iv) Any additional information that the contracting officer determines appropriate.
(B) INFORMATION SUBMITTED BY OFFERORS.—Each offeror for 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, together with any additional information that is requested by the contracting officer.
(C) SELECTION FOR SECOND PHASE.—The contracting
officer shall select the offerors that are to be eligible to
participate in the second phase of the process. The contracting officer shall limit the number of the selected
offerors to the number of sources that the contracting officer determines is appropriate and in the best interests of
the Federal Government.
(3) SECOND PHASE.—
(A) IN GENERAL.—The contracting officer shall conduct
the second phase of the source selection process in accordance with sections 303A and 303B of the Federal Property
and Administrative Services Act of 1949 (41 U.S.C. 253a
and 253b).
(B) ELIGIBLE PARTICIPANTS.—Only the sources selected
in the first phase of the process shall be eligible to participate in the second phase.
(C) SINGLE OR MULTIPLE PROCUREMENTS.—The second
phase may include a single procurement or multiple procurements within the scope, or for the purpose, described
in the notice pursuant to paragraph (2)(A).
(4) PROCEDURES CONSIDERED COMPETITIVE.—The procedures used for selecting a source for a procurement under this
subsection shall be considered competitive procedures for all
purposes.
(e) USE OF SIMPLIFIED PROCEDURES FOR COMMERCIAL ITEMS.—
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fered for a procurement, the PBO may use (consistent with the special rules for commercial items) the special simplified procedures
for the procurement without regard to—
(1) any dollar limitation otherwise applicable to the use of
those procedures; and
(2) the expiration of the authority to use special simplified
procedures under section 4202(e) of the Clinger-Cohen Act of
1996 (110 Stat. 654; 10 U.S.C. 2304 note).
(f ) FLEXIBLE WAIT PERIODS AND DEADLINES FOR SUBMISSION
OF OFFERS OF NONCOMMERCIAL ITEMS.—
(1) AUTHORITY.—In carrying out a procurement, the PBO
may—
(A) apply a shorter waiting period for the issuance of
a solicitation after the publication of a notice under section
18 of the Office of Federal Procurement Policy Act (41
U.S.C. 416) than is required under subsection (a)(3)(A) of
such section; and
(B) notwithstanding subsection (a)(3) of such section,
establish any deadline for the submission of bids or proposals that affords potential offerors a reasonable opportunity to respond to the solicitation.
(2) INAPPLICABILITY TO COMMERCIAL ITEMS.—Paragraph (1)
does not apply to a procurement of a commercial item.
(3) CONSISTENCY WITH APPLICABLE INTERNATIONAL AGREEMENTS.—If an international agreement is applicable to the procurement, any exercise of authority under paragraph (1) shall
be consistent with the international agreement.
(g) MODULAR CONTRACTING.—
(1) IN GENERAL.—The PBO may satisfy the requirements
of the PBO for a system incrementally by carrying out successive procurements of modules of the system. In doing so, the
PBO may use procedures authorized under this subsection to
procure any such module after the first module.
(2) UTILITY REQUIREMENT.—A module may not be procured
for a system under this subsection unless the module is useful
independently of the other modules or useful in combination
with another module previously procured for the system.
(3) CONDITIONS FOR USE OF AUTHORITY.—The PBO may
use procedures authorized under paragraph (4) for the procurement of an additional module for a system if—
(A) competitive procedures were used for awarding the
contract for the procurement of the first module for the
system; and
(B) the solicitation for the first module included—
(i) a general description of the entire system that
was sufficient to provide potential offerors with reasonable notice of the general scope of future modules;
(ii) other information sufficient for potential
offerors to make informed business judgments regarding whether to submit offers for the contract for the
first module; and
(iii) a statement that procedures authorized under
this subsection could be used for awarding subsequent
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contracts for the procurement of additional modules
for the system.
(4) PROCEDURES.—If the procurement of the first module
for a system meets the requirements set forth in paragraph (3),
the PBO may award a contract for the procurement of an additional module for the system using any of the following procedures:
(A) SINGLE-SOURCE BASIS.—Award of the contract on a
single-source basis to a contractor who was awarded a contract for a module previously procured for the system
under competitive procedures or procedures authorized
under subparagraph (B).
(B) ADEQUATE COMPETITION.—Award of the contract
on the basis of offers made by—
(i) a contractor who was awarded a contract for a
module previously procured for the system after having been selected for award of the contract under this
subparagraph or other competitive procedures; and
(ii) at least one other offeror that submitted an
offer for a module previously procured for the system
and is expected, on the basis of the offer for the previously procured module, to submit a competitive offer
for the additional module.
(C) OTHER.—Award of the contract under any other
procedure authorized by law.
(5) NOTICE REQUIREMENT.—
(A) PUBLICATION.—Not less than 30 days before
issuing a solicitation for offers for a contract for a module
for a system under procedures authorized under subparagraph (A) or (B) of paragraph (4), the PBO shall publish
in the Commerce Business Daily a notice of the intent to
use such procedures to enter into the contract.
(B) EXCEPTION.—Publication of a notice is not required
under this paragraph with respect to a use of procedures
authorized under paragraph (4) if the contractor referred
to in that subparagraph (who is to be solicited to submit
an offer) has previously provided a module for the system
under a contract that contained cost, schedule, and performance goals and the contractor met those goals.
(C) CONTENT OF NOTICE.—A notice published under
subparagraph (A) with respect to a use of procedures described in paragraph (4) shall contain the information required under section 18(b) of the Office of Federal Procurement Policy Act (41 U.S.C. 416(b)), other than paragraph
(4) of such section, and shall invite the submission of any
assertion that the use of the procedures for the procurement involved is not in the best interest of the Federal
Government together with information supporting the assertion.
(6) DOCUMENTATION.—The basis for an award of a contract
under this subsection shall be documented. However, a justification pursuant to section 303(f ) of the Federal Property
and Administrative Services Act of 1949 (41 U.S.C. 253(f )) or
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section 8(h) of the Small Business Act (15 U.S.C. 637(h)) is not
required.
(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 singlesource basis.
(h) USE OF SIMPLIFIED PROCEDURES FOR SMALL BUSINESS SETASIDES FOR SERVICES OTHER THAN COMMERCIAL ITEMS.—
(1) AUTHORITY.—The PBO may use special simplified procedures for a procurement of services that are not commercial
items if—
(A) the procurement is in an amount not greater than
$1,000,000;
(B) the procurement is conducted as a small business
set-aside pursuant to section 15(a) of the Small Business
Act (15 U.S.C. 644(a)); and
(C) the price charged for supplies associated with the
services procured are items of supply expected to be less
than 20 percent of the total contract price.
(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 single-source basis; or
(B) a contract for construction.
(i) GUIDANCE FOR USE OF AUTHORITY.—
(1) ISSUANCE BY PBO.—The Chief Operating Officer of the
PBO, in consultation with the Administrator for Federal Procurement Policy, shall issue guidance for the use by PBO personnel of the authority provided in this section.
(2) GUIDANCE FROM OFPP.—As part of the consultation required under paragraph (1), the Administrator for Federal Procurement Policy shall provide the PBO with guidance that is
designed to ensure, to the maximum extent practicable, that
the authority under this section is exercised by the PBO in a
manner that is consistent with the exercise of the authority by
the heads of the other performance-based organizations.
(3) COMPLIANCE WITH OFPP GUIDANCE.—The head of the
PBO shall ensure that the procurements of the PBO under this
section are carried out in a manner that is consistent with the
guidance provided for the PBO under paragraph (2).
( j) LIMITATION ON MULTIAGENCY CONTRACTING.—No department or agency of the Federal Government may purchase property
or services under contracts entered into or administered by a PBO
under this section unless the purchase is approved in advance by
the senior procurement official of that department or agency who
is responsible for purchasing by the department or agency.
(k) LAWS NOT AFFECTED.—Nothing in this section shall be construed to waive laws for the enforcement of civil rights or for the
establishment and enforcement of labor standards that are applicable to contracts of the Federal Government.
(l) DEFINITIONS.—In this section:
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(1) COMMERCIAL ITEM.—The term ‘‘commercial item’’ has
the meaning given the term in section 4(12) of the Office of
Federal Procurement Policy Act (41 U.S.C. 403(12)).
(2) COMPETITIVE PROCEDURES.—The term ‘‘competitive procedures’’ has the meaning given the term in section 309(b) of
the Federal Property and Administrative Services Act of 1949
(41 U.S.C. 259(b)).
(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.
(4) SPECIAL RULES FOR COMMERCIAL ITEMS.—The term
‘‘special rules for commercial items’’ means the regulations set
forth in the Federal Acquisition Regulation pursuant to section
303(g)(1) of the Federal Property and Administrative Services
Act of 1949 (41 U.S.C. 253(g)(1)) and section 31 of the Office
of Federal Procurement Policy Act (41 U.S.C. 427).
(5) SPECIAL SIMPLIFIED PROCEDURES.—The term ‘‘special
simplified procedures’’ means the procedures applicable to purchases of property and services for amounts not greater than
the simplified acquisition threshold that are set forth in the
Federal Acquisition Regulation pursuant to section 303(g)(1)(B)
of the Federal Property and Administrative Services Act of
1949 (41 U.S.C. 253(g)(1)(A)) and section 31(a)(1) of the Office
of Federal Procurement Policy Act (41 U.S.C. 427(a)(1)).
SEC. 143. ø20 U.S.C. 1018b¿ ADMINISTRATIVE SIMPLIFICATION OF STUDENT AID DELIVERY.
(a) IN GENERAL.—In order to improve the efficiency and effec-
tiveness of the student aid delivery system, the Secretary and the
Chief Operating Officer shall encourage and participate in the establishment of voluntary consensus standards and requirements for
the electronic transmission of information necessary for the administration of programs under title IV.
(b) PARTICIPATION IN STANDARD SETTING ORGANIZATIONS.—
(1) The Chief Operating Officer shall participate in the activities of standard setting organizations in carrying out the
provisions of this section.
(2) The Chief Operating Officer shall encourage higher
education groups seeking to develop common forms, standards,
and procedures in support of the delivery of Federal student financial assistance to conduct these activities within a standard
setting organization.
(3) The Chief Operating Officer may pay necessary dues
and fees associated with participating in standard setting organizations pursuant to this subsection.
(c) ADOPTION OF VOLUNTARY CONSENSUS STANDARDS.—Except
with respect to the common financial reporting form under section
483(a), the Secretary shall consider adopting voluntary consensus
standards agreed to by the organization described in subsection (b)
for transactions required under title IV, and common data elements
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tronically between systems administered by the Department and
among participants in the Federal student aid delivery system.
(d) USE OF CLEARINGHOUSES.—Nothing in this section shall restrict the ability of participating institutions and lenders from
using a clearinghouse or servicer to comply with the standards for
the exchange of information established under this section.
(e) DATA SECURITY.—Any entity that maintains or transmits
information under a transaction covered by this section shall maintain reasonable and appropriate administrative, technical, and
physical safeguards—
(1) to ensure the integrity and confidentiality of the information; and
(2) to protect against any reasonably anticipated security
threats, or unauthorized uses or disclosures of the information.
(f ) DEFINITIONS.—
(1) CLEARINGHOUSE.—The term ‘‘clearinghouse’’ means a
public or private entity that processes or facilitates the processing of nonstandard data elements into data elements conforming to standards adopted under this section.
(2) STANDARD SETTING ORGANIZATION.—The term ‘‘standard setting organization’’ means an organization that—
(A) is accredited by the American National Standards
Institute;
(B) develops standards for information transactions,
data elements, or any other standard that is necessary to,
or will facilitate, the implementation of this section; and
(C) is open to the participation of the various entities
engaged in the delivery of Federal student financial assistance.
(3) VOLUNTARY CONSENSUS STANDARD.—The term ‘‘voluntary consensus standard’’ means a standard developed or
used by a standard setting organization described in paragraph
(2).
PART E—LENDER AND INSTITUTION REQUIREMENTS RELATING TO EDUCATION LOANS
SEC. 151. ø20 U.S.C. 1019¿ DEFINITIONS.
In this part:
(1) AGENT.—The term ‘‘agent’’ means an officer or employee of a covered institution or an institution-affiliated organization.
(2) COVERED INSTITUTION.—The term ‘‘covered institution’’
means any institution of higher education, as such term is defined in section 102, that receives any Federal funding or assistance.
(3) EDUCATION LOAN.—The term ‘‘education loan’’ (except
when used as part of the term ‘‘private education loan’’)
means—
(A) any loan made, insured, or guaranteed under part
B of title IV;
(B) any loan made under part D of title IV; or
(C) a private education loan.
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(4) ELIGIBLE LENDER.—The term ‘‘eligible lender’’ has the
meaning given such term in section 435(d).
(5) INSTITUTION-AFFILIATED ORGANIZATION.—The term ‘‘institution-affiliated organization’’—
(A) means any organization that—
(i) is directly or indirectly related to a covered institution; and
(ii) is engaged in the practice of recommending,
promoting, or endorsing education loans for students
attending such covered institution or the families of
such students;
(B) may include an alumni organization, athletic organization, foundation, or social, academic, or professional
organization, of a covered institution; and
(C) notwithstanding subparagraphs (A) and (B), does
not include any lender with respect to any education loan
secured, made, or extended by such lender.
(6) LENDER.—The term ‘‘lender’’ (except when used as part
of the terms ‘‘eligible lender’’ and ‘‘private educational lender’’)—
(A) means—
(i) in the case of a loan made, insured, or guaranteed under part B of title IV, an eligible lender;
(ii) in the case of any loan issued or provided to
a student under part D of title IV, the Secretary; and
(iii) in the case of a private education loan, a private educational lender as defined in section 140 of
the Truth in Lending Act; and
(B) includes any other person engaged in the business
of securing, making, or extending education loans on behalf of the lender.
(7) OFFICER.—The term ‘‘officer’’ includes a director or
trustee of a covered institution or institution-affiliated organization, if such individual is treated as an employee of such covered institution or institution-affiliated organization, respectively.
(8) PREFERRED LENDER ARRANGEMENT.—The term ‘‘preferred lender arrangement’’—
(A) means an arrangement or agreement between a
lender and a covered institution or an institution-affiliated
organization of such covered institution—
(i) under which a lender provides or otherwise
issues education loans to the students attending such
covered institution or the families of such students;
and
(ii) that relates to such covered institution or such
institution-affiliated organization recommending, promoting, or endorsing the education loan products of
the lender; and
(B) does not include—
(i) arrangements or agreements with respect to
loans under part D of title IV; or
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(ii) arrangements or agreements with respect to
loans that originate through the auction pilot program
under section 499(b).
(9) PRIVATE EDUCATION LOAN.—The term ‘‘private education loan’’ has the meaning given the term in section 140 of
the Truth in Lending Act.
SEC. 152. ø20 U.S.C. 1019a¿ RESPONSIBILITIES OF COVERED INSTITUTIONS, INSTITUTION-AFFILIATED ORGANIZATIONS, AND
LENDERS.
(a) RESPONSIBILITIES OF COVERED INSTITUTIONS AND INSTITUTION-AFFILIATED ORGANIZATIONS.—
(1) DISCLOSURES BY COVERED INSTITUTIONS AND INSTITUTION-AFFILIATED ORGANIZATIONS.—
(A) PREFERRED LENDER ARRANGEMENT DISCLOSURES.—
In addition to the disclosures required by subsections
(a)(27) and (h) of section 487 (if applicable), a covered institution, or an institution-affiliated organization of such
covered institution, that participates in a preferred lender
arrangement shall disclose—
(i) on such covered institution’s or institution-affiliated organization’s website and in all informational
materials described in subparagraph (C) that describe
or discuss education loans—
(I) the maximum amount of Federal grant and
loan aid under title IV available to students, in an
easy to understand format;
(II) the information required to be disclosed
pursuant to section 153(a)(2)(A)(i), for each type of
loan described in section 151(3)(A) that is offered
pursuant to a preferred lender arrangement of the
institution or organization to students of the institution or the families of such students; and
(III) a statement that such institution is required to process the documents required to obtain a loan under part B of title IV from any eligible lender the student selects; and
(ii) on such covered institution’s or institution-affiliated organization’s website and in all informational
materials described in subparagraph (C) that describe
or discuss private education loans—
(I) in the case of a covered institution, the information that the Board of Governors of the Federal Reserve System requires to be disclosed
under section 128(e)(11) of the Truth in Lending
Act (15 U.S.C. 1638(e)(11)), for each type of private education loan offered pursuant to a preferred lender arrangement of the institution to
students of the institution or the families of such
students; and
(II) in the case of an institution-affiliated organization of a covered institution, the information the Board of Governors of the Federal Reserve System requires to be disclosed under section 128(e)(1) of the Truth in Lending Act (15
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U.S.C. 1638(e)(1)), for each type of private education loan offered pursuant to a preferred lender
arrangement of the organization to students of
such institution or the families of such students.
(B) PRIVATE EDUCATION LOAN DISCLOSURES.—A covered institution, or an institution-affiliated organization of
such covered institution, that provides information regarding a private education loan from a lender to a prospective
borrower shall—
(i) provide the prospective borrower with the information the Board of Governors of the Federal Reserve
System requires to be disclosed under section 128(e)(1)
of the Truth in Lending Act (15 U.S.C. 1638(e)(1)) for
such loan;
(ii) inform the prospective borrower that—
(I) the prospective borrower may qualify for
loans or other assistance under title IV; and
(II) the terms and conditions of loans made,
insured, or guaranteed under title IV may be
more favorable than the provisions of private education loans; and
(iii) ensure that information regarding private
education loans is presented in such a manner as to
be distinct from information regarding loans that are
made, insured, or guaranteed under title IV.
(C) INFORMATIONAL MATERIALS.—The informational
materials described in this subparagraph are publications,
mailings, or electronic messages or materials that—
(i) are distributed to prospective or current students of a covered institution and families of such students; and
(ii) describe or discuss the financial aid opportunities available to students at an institution of higher
education.
(2) USE OF INSTITUTION NAME.—A covered institution, or
an institution-affiliated organization of such covered institution, that enters into a preferred lender arrangement with a
lender regarding private education loans shall not agree to the
lender’s use of the name, emblem, mascot, or logo of such institution or organization, or other words, pictures, or symbols
readily identified with such institution or organization, in the
marketing of private education loans to students attending
such institution in any way that implies that the loan is offered or made by such institution or organization instead of the
lender.
(3) USE OF LENDER NAME.—A covered institution, or an institution-affiliated organization of such covered institution,
that enters into a preferred lender arrangement with a lender
regarding private education loans shall ensure that the name
of the lender is displayed in all information and documentation
related to such loans.
(b) LENDER RESPONSIBILITIES.—
(1) DISCLOSURES BY LENDERS.—
(A) DISCLOSURES TO BORROWERS.—
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(i) FEDERAL EDUCATION LOANS.—For each education loan that is made, insured, or guaranteed under
part B or D of title IV (other than a loan made under
section 428C or a Federal Direct Consolidation Loan),
at or prior to the time the lender disburses such loan,
the lender shall provide the prospective borrower or
borrower, in writing (including through electronic
means), with the disclosures described in subsections
(a) and (c) of section 433.
(ii) PRIVATE EDUCATION LOANS.—For each of a
lender’s private education loans, the lender shall comply with the disclosure requirements under section
128(e) of the Truth in Lending Act (15 U.S.C. 1638(e)).
(B) DISCLOSURES TO THE SECRETARY.—
(i) IN GENERAL.—Each lender of a loan made, insured, or guaranteed under part B of title IV shall, on
an annual basis, report to the Secretary—
(I) any reasonable expenses paid or provided
under section 435(d)(5)(D) or paragraph (3)(B) or
(7) of section 487(e) to any agent of a covered institution who—
(aa) is employed in the financial aid office
of a covered institution; or
(bb) otherwise has responsibilities with
respect to education loans or other financial
aid of the institution; and
(II) any similar expenses paid or provided to
any agent of an institution-affiliated organization
who is involved in the practice of recommending,
promoting, or endorsing education loans.
(ii) CONTENTS OF REPORTS.—Each report described
in clause (i) shall include—
(I) the amount for each specific instance in
which the lender provided such expenses;
(II) the name of any agent described in clause
(i) to whom the expenses were paid or provided;
(III) the dates of the activity for which the expenses were paid or provided; and
(IV) a brief description of the activity for
which the expenses were paid or provided.
(iii) REPORT TO CONGRESS.—The Secretary shall
summarize the information received from the lenders
under this subparagraph in a report and transmit
such report annually to the authorizing committees.
(2) CERTIFICATION BY LENDERS.—Not later than 18 months
after the date of enactment of theHigher Education Opportunity Act—
(A) in addition to any other disclosure required under
Federal law, each lender of a loan made, insured, or guaranteed under part B of title IV that participates in one or
more preferred lender arrangements shall annually certify
the lender’s compliance with the requirements of this Act;
and
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(B) if an audit of a lender is required pursuant to section 428(b)(1)(U)(iii), the lender’s compliance with the requirements under this section shall be reported on and attested to annually by the auditor of such lender.
SEC. 153. ø20 U.S.C. 1019b¿ LOAN INFORMATION TO BE DISCLOSED AND
MODEL DISCLOSURE FORM FOR COVERED INSTITUTIONS,
INSTITUTION-AFFILIATED ORGANIZATIONS, AND LENDERS PARTICIPATING IN PREFERRED LENDER ARRANGEMENTS.
(a) DUTIES OF THE SECRETARY.—
(1) DETERMINATION OF MINIMUM DISCLOSURES.—
(A) IN GENERAL.—Not later than 18 months after the
date of enactment of theHigher Education Opportunity
Act, the Secretary, in coordination with the Board of Governors of the Federal Reserve System, shall determine the
minimum information that lenders, covered institutions,
and institution-affiliated organizations of such covered institutions participating in preferred lender arrangements
shall make available regarding education loans described
in section 151(3)(A) that are offered to students and the
families of such students.
(B) CONSULTATION AND CONTENT OF MINIMUM DISCLOSURES.—In carrying out subparagraph (A), the Secretary
shall—
(i) consult with students, the families of such students, representatives of covered institutions (including financial aid administrators, admission officers,
and business officers), representatives of institution-affiliated organizations, secondary school guidance counselors, lenders, loan servicers, and guaranty agencies;
(ii) include, in the minimum information under
subparagraph (A) that is required to be made available, the information that the Board of Governors of
the Federal Reserve System requires to be disclosed
under section 128(e)(1) of the Truth in Lending Act (15
U.S.C. 1638(e)(1)), modified as necessary to apply to
such loans; and
(iii) consider the merits of requiring each covered
institution, and each institution-affiliated organization
of such covered institution, with a preferred lender arrangement to provide to prospective borrowers and the
families of such borrowers the following information
for each type of education loan offered pursuant to
such preferred lender arrangement:
(I) The interest rate and terms and conditions
of the loan for the next award year, including loan
forgiveness and deferment.
(II) Information on any charges, such as origination and Federal default fees, that are payable
on the loan, and whether those charges will be—
(aa) collected by the lender at or prior to
the disbursal of the loan, including whether
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ceeds of the loan or paid separately by the
borrower; or
(bb) paid in whole or in part by the lender.
(III) The annual and aggregate maximum
amounts that may be borrowed.
(IV) The average amount borrowed from the
lender by students who graduated from such institution in the preceding year with certificates, undergraduate degrees, graduate degrees, and professional degrees, as applicable, and who obtained
loans of such type from the lender for the preceding year.
(V) The amount the borrower may pay in interest, based on a standard repayment plan and
the average amount borrowed from the lender by
students who graduated from such institution in
the preceding year and who obtained loans of such
type from the lender for the preceding year, for—
(aa) borrowers of loans made under section 428;
(bb) borrowers of loans made under section 428B or 428H, who pay the interest while
in school; and
(cc) borrowers of loans made under section 428B or 428H, who do not pay the interest while in school.
(VI) The consequences for the borrower of defaulting on a loan, including limitations on the
discharge of an education loan in bankruptcy.
(VII) Contact information for the lender.
(VIII) Other information suggested by the persons and entities with whom the Secretary has
consulted under clause (i).
(2) REQUIRED DISCLOSURES.—After making the determinations under paragraph (1), the Secretary, in coordination with
the Board of Governors of the Federal Reserve System and
after consultation with the public, shall—
(A)(i) provide that the information determined under
paragraph (1) shall be disclosed by covered institutions,
and institution-affiliated organizations of such covered institutions, with preferred lender arrangements to prospective borrowers and the families of such borrowers regarding the education loans described in section 151(3)(A) that
are offered pursuant to such preferred lender arrangements; and
(ii) make clear that such covered institutions and institution-affiliated organizations may provide the required
information on a form designed by the institution or organization instead of the model disclosure form described in
subparagraph (B);
(B) develop a model disclosure form that may be used
by covered institutions, institution-affiliated organizations,
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and preferred lenders that includes all of the information
required under subparagraph (A)(i) in a format that—
(i) is easily usable by students, families, institutions, institution-affiliated organizations, lenders, loan
servicers, and guaranty agencies; and
(ii) is similar in format to the form developed by
the Board of Governors of the Federal Reserve System
under paragraphs (1) and (5)(A) of section 128(e), in
order to permit students and the families of students
to easily compare private education loans and education loans described in section 151(3)(A); and
(C) update such model disclosure form periodically, as
necessary.
(b) DUTIES OF LENDERS.—Each lender that has a preferred
lender arrangement with a covered institution, or an institution-affiliated organization of such covered institution, with respect to
education loans described in section 151(3)(A) shall annually, by a
date determined by the Secretary, provide to such covered institution or such institution-affiliated organization, and to the Secretary, the information the Secretary requires pursuant to subsection (a)(2)(A)(i) for each type of education loan described in section 151(3)(A) that the lender plans to offer pursuant to such preferred lender arrangement to students attending such covered institution, or to the families of such students, for the next award
year.
(c) DUTIES OF COVERED INSTITUTIONS AND INSTITUTION-AFFILIATED ORGANIZATIONS.—
(1) PROVIDING INFORMATION TO STUDENTS AND FAMILIES.—
(A) IN GENERAL.—Each covered institution, and each
institution-affiliated organization of such covered institution, that has a preferred lender arrangement shall provide the following information to students attending such
institution, or the families of such students, as applicable:
(i) The information the Secretary requires pursuant to subsection (a)(2)(A)(i), for each type of education
loan described in section 151(3)(A) offered pursuant to
a preferred lender arrangement to students of such institution or the families of such students.
(ii)(I) In the case of a covered institution, the information that the Board of Governors of the Federal
Reserve System requires to be disclosed under section
128(e)(11) of the Truth in Lending Act (15 U.S.C.
1638(e)(11)) to the covered institution, for each type of
private education loan offered pursuant to such preferred lender arrangement to students of such institution or the families of such students.
(II) In the case of an institution-affiliated organization, the information the Board of Governors of the
Federal Reserve System requires to be disclosed under
section 128(e)(1) of the Truth in Lending Act (15
U.S.C. 1638(e)(1)), for each type of private education
loan offered pursuant to such preferred lender arrangement to students of the institution with which
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such organization is affiliated or the families of such
students.
(B) TIMELY PROVISION OF INFORMATION.—The information described in subparagraph (A) shall be provided in a
manner that allows for the students or the families to take
such information into account before selecting a lender or
applying for an education loan.
(2) ANNUAL REPORT.—Each covered institution, and each
institution-affiliated organization of such covered institution,
that has a preferred lender arrangement, shall—
(A) prepare and submit to the Secretary an annual report, by a date determined by the Secretary, that includes,
for each lender that has a preferred lender arrangement
with such covered institution or organization—
(i) the information described in clauses (i) and (ii)
of paragraph (1)(A); and
(ii) a detailed explanation of why such covered institution or institution-affiliated organization entered
into a preferred lender arrangement with the lender,
including why the terms, conditions, and provisions of
each type of education loan provided pursuant to the
preferred lender arrangement are beneficial for students attending such institution, or the families of
such students, as applicable; and
(B) ensure that the report required under subparagraph (A) is made available to the public and provided to
students attending or planning to attend such covered institution and the families of such students.
(3) CODE OF CONDUCT.—
(A) IN GENERAL.—Each covered institution, and each
institution-affiliated organization of such covered institution, that has a preferred lender arrangement, shall comply with the code of conduct requirements of subparagraphs (A) through (C) of section 487(a)(25).
(B) APPLICABLE CODE OF CONDUCT.—For purposes of
subparagraph (A), an institution-affiliated organization of
a covered institution shall—
(i) comply with the code of conduct developed and
published by such covered institution under subparagraphs (A) and (B) of section 487(a)(25);
(ii) if such institution-affiliated organization has a
website, publish such code of conduct prominently on
the website; and
(iii) administer and enforce such code of conduct
by, at a minimum, requiring that all of such organization’s agents with responsibilities with respect to education loans be annually informed of the provisions of
such code of conduct.
SEC. 154. ø20 U.S.C. 1019c¿ LOAN INFORMATION TO BE DISCLOSED AND
MODEL DISCLOSURE FORM FOR INSTITUTIONS PARTICIPATING IN THE WILLIAM. D. FORD FEDERAL DIRECT
LOAN PROGRAM.
(a) PROVISION OF DISCLOSURES TO INSTITUTIONS BY THE SECRETARY.—Not later than 180 days after the development of the
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model disclosure form under section 153(a)(2)(B), the Secretary
shall provide each institution of higher education participating in
the William D. Ford Direct Loan Program under part D of title IV
with a completed model disclosure form including the same information for Federal Direct Stafford Loans, Federal Direct Unsubsidized Stafford Loans, and Federal Direct PLUS loans made to, or
on behalf of, students attending each such institution as is required
on such form for loans described in section 151(3)(A).
(b) DUTIES OF INSTITUTIONS.—
(1) IN GENERAL.—Each institution of higher education participating in the William D. Ford Direct Loan Program under
part D of title IV shall—
(A) make the information the Secretary provides to the
institution under subsection (a) available to students attending or planning to attend the institution, or the families of such students, as applicable; and
(B) if the institution provides information regarding a
private education loan to a prospective borrower, concurrently provide such borrower with the information the Secretary provides to the institution under subsection (a).
(2) CHOICE OF FORMS.—In providing the information required under paragraph (1), an institution of higher education
may use a comparable form designed by the institution instead
of the model disclosure form developed under section
153(a)(2)(B).
SEC. 155. ø20 U.S.C. 1019d¿ SELF-CERTIFICATION FORM FOR PRIVATE
EDUCATION LOANS.
(a) IN GENERAL.—The Secretary, in consultation with the
Board of Governors of the Federal Reserve System, shall develop
the self-certification form for private education loans that shall be
used to satisfy the requirements of section 128(e)(3) of the Truth
in Lending Act. Such form shall—
(1) be developed in a standardized format;
(2) be made available to the applicant by the relevant institution of higher education, in written or electronic form,
upon request of the applicant;
(3) contain only disclosures that—
(A) the applicant may qualify for Federal student financial assistance through a program under title IV of this
Act, or State or institutional student financial assistance,
in place of, or in addition to, a private education loan;
(B) the applicant is encouraged to discuss the availability of Federal, State, and institutional student financial assistance with financial aid officials at the applicant’s
institution of higher education;
(C) a private education loan may affect the applicant’s
eligibility for free or low-cost Federal, State or institutional
student financial assistance; and
(D) the information that the applicant is required to
provide on the form is available from officials at the financial aid office of the institution of higher education;
(4) include a place to provide information on—
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(A) the applicant’s cost of attendance at the institution
of higher education, as determined by the institution
under part F of title IV;
(B) the applicant’s estimated financial assistance, including amounts of financial assistance used to replace the
expected family contribution, as determined by the institution, in accordance with title IV, for students who have
completed the Free Application for Federal Student Aid;
and
(C) the difference between the amounts under subparagraphs (A) and (B), as applicable; and
(5) include a place for the applicant’s signature, in written
or electronic form.
(b) LIMIT ON LIABILITY.—Nothing in this section shall be construed to create a private right of action against an institution of
higher education with respect to the form developed under subsection (a).
TITLE II—TEACHER QUALITY
ENHANCEMENT
SEC. 200. ø20 U.S.C. 1021¿ DEFINITIONS.
In this title:
(1) ARTS AND SCIENCES.—The term ‘‘arts and sciences’’
means—
(A) when referring to an organizational unit of an institution of higher education, any academic unit that offers
one or more academic majors in disciplines or content
areas corresponding to the academic subject matter areas
in which teachers provide instruction; and
(B) when referring to a specific academic subject 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 described
in section 1124(c)(1)(A) of the Elementary and Secondary Education Act of 1965 .
(3) CORE ACADEMIC SUBJECTS.—The term ‘‘core academic
subjects’’ has the meaning given the term in section 9101 of
the Elementary and Secondary Education Act of 1965.
(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 the term in section
9101 of the Elementary and Secondary Education Act of 1965.
(6) ELIGIBLE PARTNERSHIP.—Except as otherwise provided
in section 251, the term ‘‘eligible partnership’’ means an entity
that—
(A) shall include—
(i) a high-need local educational agency;
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(ii)(I) a high-need school or a consortium of highneed schools served by the high-need local educational
agency; or
(II) as applicable, a high-need early childhood education program;
(iii) a partner institution;
(iv) a school, department, or program of education
within such partner institution, which may include an
existing teacher professional development program
with proven outcomes within a four-year institution of
higher education that provides intensive and sustained collaboration between faculty and local educational agencies consistent with the requirements of
this title; and
(v) a school or department of arts and sciences
within such partner institution; and
(B) may include any of the following:
(i) The Governor of the State.
(ii) The State educational agency.
(iii) The State board of education.
(iv) The State agency for higher education.
(v) A business.
(vi) A public or private nonprofit educational organization.
(vii) An educational service agency.
(viii) A teacher organization.
(ix) A high-performing local educational agency, or
a consortium of such local educational agencies, that
can serve as a resource to the partnership.
(x) A charter school (as defined in section 5210 of
the Elementary and Secondary Education Act of 1965).
(xi) A school or department within the partner institution that focuses on psychology and human development.
(xii) A school or department within the partner institution with comparable expertise in the disciplines
of teaching, learning, and child and adolescent development.
(xiii) An entity operating a program that provides
alternative routes to State certification of teachers.
(7) ESSENTIAL COMPONENTS OF READING INSTRUCTION.—
The term ‘‘essential components of reading instruction’’ has the
meaning given the term in section 1208 of the Elementary and
Secondary Education Act of 1965.
(8) EXEMPLARY TEACHER.—The term ‘‘exemplary teacher’’
has the meaning given the term in section 9101 of the Elementary and Secondary Education Act of 1965 .
(9) HIGH-NEED EARLY CHILDHOOD EDUCATION PROGRAM.—
The term ‘‘high-need early childhood education program’’
means an early childhood education program serving children
from low-income families that is located within the geographic
area served by a high-need local educational agency.
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(10) HIGH-NEED LOCAL EDUCATIONAL AGENCY.—The term
‘‘high-need local educational agency’’ means a local educational
agency—
(A)(i) for which not less than 20 percent of the children served by the agency are children from low-income
families;
(ii) that serves not fewer than 10,000 children from
low-income families;
(iii) that meets the eligibility requirements for funding
under the Small, Rural School Achievement Program
under section 6211(b) of the Elementary and Secondary
Education Act of 1965; or
(iv) that meets the eligibility requirements for funding
under the Rural and Low-Income School Program under
section 6221(b) of the Elementary and Secondary Education Act of 1965; 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.
(11) HIGH-NEED SCHOOL.—
(A) IN GENERAL.—The term ‘‘high-need school’’ means
a school that, based on the most recent data available,
meets one or both of the following:
(i) The school is in the highest quartile of schools
in a ranking of all schools served by a local educational agency, ranked in descending order by percentage of students from low-income families enrolled
in such schools, as determined by the local educational
agency based on one of the following measures of poverty:
(I) The percentage of students aged 5 through
17 in poverty counted in the most recent census
data approved by the Secretary.
(II) The percentage of students eligible for a
free or reduced price school lunch under the Richard B. Russell National School Lunch Act.
(III) The percentage of students in families receiving assistance under the State program funded under part A of title IV of the Social Security
Act.
(IV) The percentage of students eligible to receive medical assistance under the Medicaid program.
(V) A composite of two or more of the measures described in subclauses (I) through (IV).
(ii) In the case of—
(I) an elementary school, the school serves
students not less than 60 percent of whom are eligible for a free or reduced price school lunch
under the Richard B. Russell National School
Lunch Act; or
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(II) any other school that is not an elementary
school, the other school serves students not less
than 45 percent of whom are eligible for a free or
reduced price school lunch under the Richard B.
Russell National School Lunch Act.
(B) SPECIAL RULE.—
(i) DESIGNATION BY THE SECRETARY.—The Secretary may, upon approval of an application submitted
by an eligible partnership seeking a grant under this
title, designate a school that does not qualify as a
high-need school under subparagraph (A) as a highneed school for the purpose of this title. The Secretary
shall base the approval of an application for designation of a school under this clause on a consideration of
the information required under clause (ii), and may
also take into account other information submitted by
the eligible partnership.
(ii) APPLICATION REQUIREMENTS.—An application
for designation of a school under clause (i) shall include—
(I) the number and percentage of students attending such school who are—
(aa) aged 5 through 17 in poverty counted
in the most recent census data approved by
the Secretary;
(bb) eligible for a free or reduced price
school lunch under the Richard B. Russell National School Lunch Act;
(cc) in families receiving assistance under
the State program funded under part A of
title IV of the Social Security Act; or
(dd) eligible to receive medical assistance
under the Medicaid program;
(II) information about the student academic
achievement of students at such school; and
(III) for a secondary school, the graduation
rate for such school.
(12) HIGHLY COMPETENT.—The term ‘‘highly competent’’,
when used with respect to an early childhood educator, means
an educator—
(A) with specialized education and training in development and education of young children from birth until
entry into kindergarten;
(B) with—
(i) a baccalaureate degree in an academic major in
the arts and sciences; or
(ii) an associate’s degree in a related educational
area; and
(C) who has demonstrated a high level of knowledge
and use of content and pedagogy in the relevant areas associated with quality early childhood education.
(13) 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
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special education teachers, in section 602 of the Individuals
with Disabilities Education Act.
(14) INDUCTION PROGRAM.—The term ‘‘induction program’’
means a formalized program for new teachers during not less
than the teachers’ first two years of teaching that is designed
to provide support for, and improve the professional performance and advance the retention in the teaching field of, beginning teachers. Such program shall promote effective teaching
skills and shall include the following components:
(A) High-quality teacher mentoring.
(B) Periodic, structured time for collaboration with
teachers in the same department or field, including mentor
teachers, as well as time for information-sharing among
teachers, principals, administrators, other appropriate instructional staff, and participating faculty in the partner
institution.
(C) The application of empirically-based practice and
scientifically valid research on instructional practices.
(D) Opportunities for new teachers to draw directly on
the expertise of teacher mentors, faculty, and researchers
to support the integration of empirically-based practice
and scientifically valid research with practice.
(E) The development of skills in instructional and behavioral interventions derived from empirically-based
practice and, where applicable, scientifically valid research.
(F) Faculty who—
(i) model the integration hof research and practice
in the classroom; and
(ii) assist new teachers with the effective use and
integration of technology in the classroom.
(G) Interdisciplinary collaboration among exemplary
teachers, faculty, researchers, and other staff who prepare
new teachers with respect to the learning process and the
assessment of learning.
(H) Assistance with the understanding of data, particularly student achievement data, and the applicability
of such data in classroom instruction.
(I) Regular and structured observation and evaluation
of new teachers by multiple evaluators, using valid and reliable measures of teaching skills.
(15) LIMITED ENGLISH PROFICIENT.—The term ‘‘limited
English proficient’’ has the meaning given the term in section
9101 of the Elementary and Secondary Education Act of 1965.
(16) PARENT.—The term ‘‘parent’’ has the meaning given
the term in section 9101 of the Elementary and Secondary
Education Act of 1965.
(17) PARTNER INSTITUTION.—The term ‘‘partner institution’’
means an institution of higher education, which may include a
two-year institution of higher education offering a dual program with a four-year institution of higher education, participating in an eligible partnership that has a teacher preparation program—
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(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
205(b) before the first publication of such report
card; and
(II) using the State report card on teacher
preparation required under section 205(b), after
the first publication of such report card and for
every year thereafter; and
(B) that requires—
(i) each student in the program to meet high academic standards or demonstrate a record of success, as
determined by the institution (including prior to entering and being accepted into a program), and participate in intensive clinical experience;
(ii) each student in the program preparing to become a teacher to become highly qualified; and
(iii) each student in the program preparing to become an early childhood educator to meet degree requirements, as established by the State, and become
highly competent.
(18) PRINCIPLES OF SCIENTIFIC RESEARCH.—The term ‘‘principles of scientific research’’ means principles of research
that—
(A) apply rigorous, systematic, and objective methodology to obtain reliable and valid knowledge relevant to
education activities and programs;
(B) present findings and make claims that are appropriate to, and supported by, the methods that have been
employed; and
(C) include, appropriate to the research being conducted—
(i) use of systematic, empirical methods that draw
on observation or experiment;
(ii) use of data analyses that are adequate to support the general findings;
(iii) reliance on measurements or observational
methods that provide reliable and generalizable findings;
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peting explanations for observed results, such as, but
not limited to, random-assignment experiments;
(v) presentation of studies and methods in sufficient detail and clarity to allow for replication or, at
a minimum, to offer the opportunity to build systematically on the findings of the research;
(vi) acceptance by a peer-reviewed journal or critique by a panel of independent experts through a
comparably rigorous, objective, and scientific review;
and
(vii) consistency of findings across multiple studies
or sites to support the generality of results and conclusions.
(19) PROFESSIONAL DEVELOPMENT.—The term ‘‘professional
development’’ has the meaning given the term in section 9101
of the Elementary and Secondary Education Act of 1965.
(20) SCIENTIFICALLY VALID RESEARCH.—The term ‘‘scientifically valid research’’ includes applied research, basic research,
and field-initiated research in which the rationale, design, and
interpretation are soundly developed in accordance with principles of scientific research.
(21) TEACHER MENTORING.—The term ‘‘teacher mentoring’’
means the mentoring of new or prospective teachers through a
program that—
(A) includes clear criteria for the selection of teacher
mentors who will provide role model relationships for
mentees, which criteria shall be developed by the eligible
partnership and based on measures of teacher effectiveness;
(B) provides high-quality training for such mentors,
including instructional strategies for literacy instruction
and classroom management (including approaches that improve the schoolwide climate for learning, which may include positive behavioral interventions and supports);
(C) provides regular and ongoing opportunities for
mentors and mentees to observe each other’s teaching
methods in classroom settings during the day in a highneed school in the high-need local educational agency in
the eligible partnership;
(D) provides paid release time for mentors, as applicable;
(E) provides mentoring to each mentee by a colleague
who teaches in the same field, grade, or subject as the
mentee;
(F) promotes empirically-based practice of, and scientifically valid research on, where applicable—
(i) teaching and learning;
(ii) assessment of student learning;
(iii) the development of teaching skills through the
use of instructional and behavioral interventions; and
(iv) the improvement of the mentees’ capacity to
measurably advance student learning; and
(G) includes—
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(i) common planning time or regularly scheduled
collaboration for the mentor and mentee; and
(ii) joint professional development opportunities.
(22) TEACHING RESIDENCY PROGRAM.—The term ‘‘teaching
residency program’’ means a school-based teacher preparation
program in which a prospective teacher—
(A) for one academic year, teaches alongside a mentor
teacher, who is the teacher of record;
(B) receives concurrent instruction during the year described in subparagraph (A) from the partner institution,
which courses may be taught by local educational agency
personnel or residency program faculty, in the teaching of
the content area in which the teacher will become certified
or licensed;
(C) acquires effective teaching skills; and
(D) prior to completion of the program—
(i) attains full State certification or licensure and
becomes highly qualified; and
(ii) acquires a master’s degree not later than 18
months after beginning the program.
(23) TEACHING SKILLS.—The term ‘‘teaching skills’’ means
skills that enable a teacher to—
(A) increase student learning, achievement, and the
ability to apply knowledge;
(B) effectively convey and explain academic subject
matter;
(C) effectively teach higher-order analytical, evaluation, problem-solving, and communication skills;
(D) employ strategies grounded in the disciplines of
teaching and learning that—
(i) are based on empirically-based practice and scientifically valid research, where applicable, related to
teaching and learning;
(ii) are specific to academic subject matter; and
(iii) focus on the identification of students’ specific
learning needs, particularly students with disabilities,
students who are limited English proficient, students
who are gifted and talented, and students with low literacy levels, and the tailoring of academic instruction
to such needs;
(E) conduct an ongoing assessment of student learning, which may include the use of formative assessments,
performance-based assessments, project-based assessments, or portfolio assessments, that measures higherorder thinking skills (including application, analysis, synthesis, and evaluation);
(F) effectively manage a classroom, including the ability to implement positive behavioral interventions and
support strategies;
(G) communicate and work with parents, and involve
parents in their children’s education; and
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gies and practices for children in early childhood education
programs.
PART A—TEACHER QUALITY PARTNERSHIP
GRANTS
SEC. 201. ø20 U.S.C. 1022¿ PURPOSES.
The purposes of this part are to—
(1) improve student achievement;
(2) improve the quality of prospective and new teachers by
improving the preparation of prospective teachers and enhancing professional development activities for new teachers;
(3) hold teacher preparation programs at institutions of
higher education accountable for preparing highly qualified
teachers; and
(4) recruit highly qualified individuals, including minorities and individuals from other occupations, into the teaching
force.
SEC. 202. ø20 U.S.C. 1022a¿ PARTNERSHIP GRANTS.
(a) PROGRAM AUTHORIZED.—From amounts
made available
under section 209, the Secretary is authorized to award grants, on
a competitive basis, to eligible partnerships, to enable the eligible
partnerships to carry out the activities described in subsection (c).
(b) 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 the partners in the eligible partnership with respect to the preparation, ongoing training, professional development, and retention of general education and
special education teachers, principals, and, as applicable, early
childhood educators;
(2) a description of the extent to which the program to be
carried out with grant funds, as described in subsection (c),
will prepare prospective and new teachers with strong teaching
skills;
(3) a description of how such program will prepare prospective and new teachers to understand and use research and
data to modify and improve classroom instruction;
(4) a description of—
(A) how the eligible partnership will coordinate strategies and activities assisted under the grant with other
teacher preparation or professional development programs,
including programs funded under the Elementary and Secondary Education Act of 1965 and the Individuals with
Disabilities Education Act, and through the National
Science Foundation; and
(B) how the activities of the partnership will be consistent with State, local, and other education reform activities that promote teacher quality and student academic
achievement;
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(5) an assessment that describes the resources available to
the eligible partnership, including—
(A) the integration of funds from other related sources;
(B) the intended use of the grant funds; and
(C) the commitment of the resources of the partnership to the activities assisted under this section, including
financial support, faculty participation, and time commitments, and to the continuation of the activities when the
grant ends;
(6) a description of—
(A) how the eligible partnership will meet the purposes of this part;
(B) how the partnership will carry out the activities
required under subsection (d) or (e), based on the needs
identified in paragraph (1), with the goal of improving student academic achievement;
(C) if the partnership chooses to use funds under this
section for a project or activities under subsection (f) or (g),
how the partnership will carry out such project or required
activities based on the needs identified in paragraph (1),
with the goal of improving student academic achievement;
(D) the partnership’s evaluation plan under section
204(a);
(E) how the partnership will align the teacher preparation program under subsection (c) with the—
(i) State early learning standards for early childhood education programs, as appropriate, and with the
relevant domains of early childhood development; and
(ii) student academic achievement standards and
academic content standards under section 1111(b)(1) of
the Elementary and Secondary Education Act of 1965,
established by the State in which the partnership is
located;
(F) how the partnership will prepare general education
teachers to teach students with disabilities, including
training related to participation as a member of individualized education program teams, as defined in section
614(d)(1)(B) of the Individuals with Disabilities Education
Act;
(G) how the partnership will prepare general education and special education teachers to teach students
who are limited English proficient;
(H) how faculty at the partner institution will work,
during the term of the grant, with highly qualified teachers in the classrooms of high-need schools served by the
high-need local educational agency in the partnership to—
(i) provide high-quality professional development
activities to strengthen the content knowledge and
teaching skills of elementary school and secondary
school teachers; and
(ii) train other classroom teachers to implement
literacy programs that incorporate the essential components of reading instruction;
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(I) how the partnership will design, implement, or enhance a year-long and rigorous teaching preservice clinical
program component;
(J) how the partnership will support in-service professional development strategies and activities; and
(K) how the partnership will collect, analyze, and use
data on the retention of all teachers and early childhood
educators in schools and early childhood education programs located in the geographic area served by the partnership to evaluate the effectiveness of the partnership’s
teacher and educator support system; and
(7) with respect to the induction program required as part
of the activities carried out under this section—
(A) a demonstration that the schools and departments
within the institution of higher education that are part of
the induction program will effectively prepare teachers, including providing content expertise and expertise in teaching, as appropriate;
(B) a demonstration of the eligible partnership’s capability and commitment to, and the accessibility to and involvement of faculty in, the use of empirically-based practice and scientifically valid research on teaching and learning;
(C) a description of how the teacher preparation program will design and implement an induction program to
support, through not less than the first two years of teaching, all new teachers who are prepared by the teacher
preparation program in the partnership and who teach in
the high-need local educational agency in the partnership,
and, to the extent practicable, all new teachers who teach
in such high-need local educational agency, in the further
development of the new teachers’ teaching skills, including
the use of mentors who are trained and compensated by
such program for the mentors’ work with new teachers;
and
(D) a description of how faculty involved in the induction program will be able to substantially participate in an
early childhood education program or an elementary school
or secondary school classroom setting, as applicable, including release time and receiving workload credit for such
participation.
(c) USE OF GRANT FUNDS.—An eligible partnership that receives a grant under this section—
(1) shall use grant funds to carry out a program for the
preparation of teachers under subsection (d), a teaching residency program under subsection (e), or a combination of such
programs; and
(2) may use grant funds to carry out a leadership development program under subsection (f).
(d) PARTNERSHIP GRANTS FOR THE PREPARATION OF TEACHERS.—An eligible partnership that receives a grant to carry out a
program for the preparation of teachers shall carry out an effective
pre-baccalaureate teacher preparation program or a 5th year initial
licensing program that includes all of the following:
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(1) REFORMS.—
(A) IN GENERAL.—Implementing reforms, described in
subparagraph (B), within each teacher preparation program and, as applicable, each preparation program for
early childhood education programs, of the eligible partnership that is assisted under this section, to hold each
program accountable for—
(i) preparing—
(I) new or prospective teachers to be highly
qualified (including teachers in rural school districts who may teach multiple subjects, special
educators, and teachers of students who are limited English proficient who may teach multiple
subjects);
(II) such teachers and, as applicable, early
childhood educators, to understand empiricallybased practice and scientifically valid research related to teaching and learning and the applicability of such practice and research, including
through the effective use of technology, instructional techniques, and strategies consistent with
the principles of universal design for learning, and
through positive behavioral interventions and support strategies to improve student achievement;
and
(III) as applicable, early childhood educators
to be highly competent; and
(ii) promoting strong teaching skills and, as applicable, techniques for early childhood educators to improve children’s cognitive, social, emotional, and physical development.
(B) REQUIRED REFORMS.—The reforms described in
subparagraph (A) shall include—
(i) implementing teacher preparation program curriculum changes that improve, evaluate, and assess
how well all prospective and new teachers develop
teaching skills;
(ii) using empirically-based practice and scientifically valid research, where applicable, about teaching
and learning so that all prospective teachers and, as
applicable, early childhood educators—
(I) understand and can implement researchbased teaching practices in classroom instruction;
(II) have knowledge of student learning methods;
(III) possess skills to analyze student academic achievement data and other measures of
student learning, and use such data and measures
to improve classroom instruction;
(IV) possess teaching skills and an understanding of effective instructional strategies across
all applicable content areas that enable general
education and special education teachers and
early childhood educators to—
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(aa) meet the specific learning needs of
all students, including students with disabilities, students who are limited English proficient, students who are gifted and talented,
students with low literacy levels and, as applicable, children in early childhood education
programs; and
(bb) differentiate instruction for such students;
(V) can effectively participate as a member of
the individualized education program team, as defined in section 614(d)(1)(B) of the Individuals
with Disabilities Education Act; and
(VI) can successfully employ effective strategies for reading instruction using the essential
components of reading instruction;
(iii) ensuring collaboration with departments, programs, or units of a partner institution outside of the
teacher preparation program in all academic content
areas to ensure that prospective teachers receive
training in both teaching and relevant content areas
in order to become highly qualified, which may include
training in multiple subjects to teach multiple grade
levels as may be needed for individuals preparing to
teach in rural communities and for individuals preparing to teach students with disabilities as described
in section 602(10)(D) of the Individuals with Disabilities Education Act;
(iv) developing and implementing an induction
program;
(v) developing admissions goals and priorities
aligned with the hiring objectives of the high-need
local educational agency in the eligible partnership;
and
(vi) implementing program and curriculum
changes, as applicable, to ensure that prospective
teachers have the requisite content knowledge, preparation, and degree to teach Advanced Placement or
International Baccalaureate courses successfully.
(2) CLINICAL EXPERIENCE AND INTERACTION.—Developing
and improving a sustained and high-quality preservice clinical
education program to further develop the teaching skills of all
prospective teachers and, as applicable, early childhood educators, involved in the program. Such program shall do the following:
(A) Incorporate year-long opportunities for enrichment,
including—
(i) clinical learning in classrooms in high-need
schools served by the high-need local educational
agency in the eligible partnership, and identified by
the eligible partnership; and
(ii) closely supervised interaction between prospective teachers and faculty, experienced teachers, principals, other administrators, and school leaders at
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early childhood education programs (as applicable), elementary schools, or secondary schools, and providing
support for such interaction.
(B) Integrate pedagogy and classroom practice and
promote effective teaching skills in academic content
areas.
(C) Provide high-quality teacher mentoring.
(D) Be offered over the course of a program of teacher
preparation.
(E) Be tightly aligned with course work (and may be
developed as a fifth year of a teacher preparation program).
(F) Where feasible, allow prospective teachers to learn
to teach in the same local educational agency in which the
teachers will work, learning the instructional initiatives
and curriculum of that local educational agency.
(G) As applicable, provide training and experience to
enhance the teaching skills of prospective teachers to better prepare such teachers to meet the unique needs of
teaching in rural or urban communities.
(H) Provide support and training for individuals participating in an activity for prospective or new teachers described in this paragraph or paragraph (1) or (3), and for
individuals who serve as mentors for such teachers, based
on each individual’s experience. Such support may include—
(i) with respect to a prospective teacher or a mentor, release time for such individual’s participation;
(ii) with respect to a faculty member, receiving
course workload credit and compensation for time
teaching in the eligible partnership’s activities; and
(iii) with respect to a mentor, a stipend, which
may include bonus, differential, incentive, or performance pay, based on the mentor’s extra skills and responsibilities.
(3) INDUCTION PROGRAMS FOR NEW TEACHERS.—Creating
an induction program for new teachers or, in the case of an
early childhood education program, providing mentoring or
coaching for new early childhood educators.
(4) SUPPORT AND TRAINING FOR PARTICIPANTS IN EARLY
CHILDHOOD EDUCATION PROGRAMS.—In the case of an eligible
partnership focusing on early childhood educator preparation,
implementing initiatives that increase compensation for early
childhood educators who attain associate or baccalaureate degrees in early childhood education.
(5) TEACHER RECRUITMENT.—Developing and implementing
effective mechanisms (which may include alternative routes to
State certification of teachers) to ensure that the eligible partnership is able to recruit qualified individuals to become highly
qualified teachers through the activities of the eligible partnership, which may include an emphasis on recruiting into the
teaching profession—
(A) individuals from under represented populations;
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(B) individuals to teach in rural communities and
teacher shortage areas, including mathematics, science,
special education, and the instruction of limited English
proficient students; and
(C) mid-career professionals from other occupations,
former military personnel, and recent college graduates
with a record of academic distinction.
(6) LITERACY TRAINING.—Strengthening the literacy teaching skills of prospective and, as applicable, new elementary
school and secondary school teachers—
(A) to implement literacy programs that incorporate
the essential components of reading instruction;
(B) to use screening, diagnostic, formative, and
summative assessments to determine students’ literacy
levels, difficulties, and growth in order to improve classroom instruction and improve student reading and writing
skills;
(C) to provide individualized, intensive, and targeted
literacy instruction for students with deficiencies in literacy skills; and
(D) to integrate literacy skills in the classroom across
subject areas.
(e) PARTNERSHIP GRANTS FOR THE ESTABLISHMENT OF TEACHRESIDENCY PROGRAMS.—
(1) IN GENERAL.—An eligible partnership receiving a grant
to carry out an effective teaching residency program shall carry
out a program that includes all of the following activities:
(A) Supporting a teaching residency program described
in paragraph (2) for high-need subjects and areas, as determined by the needs of the high-need local educational
agency in the partnership.
(B) Placing graduates of the teaching residency program in cohorts that facilitate professional collaboration,
both among graduates of the teaching residency program
and between such graduates and mentor teachers in the
receiving school.
(C) Ensuring that teaching residents who participate
in the teaching residency program receive—
(i) effective preservice preparation as described in
paragraph (2);
(ii) teacher mentoring;
(iii) support required through the induction program as the teaching residents enter the classroom as
new teachers; and
(iv) the preparation described in subparagraphs
(A), (B), and (C) of subsection (d)(2).
(2) TEACHING RESIDENCY PROGRAMS.—
(A) ESTABLISHMENT AND DESIGN.—A teaching residency program under this paragraph shall be a program
based upon models of successful teaching residencies that
serves as a mechanism to prepare teachers for success in
the high-need schools in the eligible partnership, and shall
be designed to include the following characteristics of successful programs:
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(i) The integration of pedagogy, classroom practice, and teacher mentoring.
(ii) Engagement of teaching residents in rigorous
graduate-level course work leading to a master’s degree while undertaking a guided teaching apprenticeship.
(iii) Experience and learning opportunities alongside a trained and experienced mentor teacher—
(I) whose teaching shall complement the residency program so that classroom clinical practice
is tightly aligned with coursework;
(II) who shall have extra responsibilities as a
teacher leader of the teaching residency program,
as a mentor for residents, and as a teacher coach
during the induction program for new teachers,
and for establishing, within the program, a learning community in which all individuals are expected to continually improve their capacity to advance student learning; and
(III) who may be relieved from teaching duties
as a result of such additional responsibilities.
(iv) The establishment of clear criteria for the selection of mentor teachers based on measures of teacher effectiveness and the appropriate subject area
knowledge. Evaluation of teacher effectiveness shall be
based on, but not limited to, observations of the following:
(I) Planning and preparation, including demonstrated knowledge of content, pedagogy, and assessment, including the use of formative and diagnostic assessments to improve student learning.
(II) Appropriate instruction that engages students with different learning styles.
(III) Collaboration with colleagues to improve
instruction.
(IV) Analysis of gains in student learning,
based on multiple measures that are valid and reliable and that, when feasible, may include valid,
reliable, and objective measures of the influence of
teachers on the rate of student academic progress.
(V) In the case of mentor candidates who will
be mentoring new or prospective literacy and
mathematics coaches or instructors, appropriate
skills in the essential components of reading instruction, teacher training in literacy instructional
strategies across core subject areas, and teacher
training in mathematics instructional strategies,
as appropriate.
(v) Grouping of teaching residents in cohorts to facilitate professional collaboration among such residents.
(vi) The development of admissions goals and priorities—
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(I) that are aligned with the hiring objectives
of the local educational agency partnering with
the program, as well as the instructional initiatives and curriculum of such agency, in exchange
for a commitment by such agency to hire qualified
graduates from the teaching residency program;
and
(II) which may include consideration of applicants who reflect the communities in which they
will teach as well as consideration of individuals
from underrepresented populations in the teaching profession.
(vii) Support for residents, once the teaching residents are hired as teachers of record, through an induction program, professional development, and networking opportunities to support the residents
through not less than the residents’ first two years of
teaching.
(B) SELECTION OF INDIVIDUALS AS TEACHER RESIDENTS.—
(i) ELIGIBLE INDIVIDUAL.—In order to be eligible to
be a teacher resident in a teaching residency program
under this paragraph, an individual shall—
(I) be a recent graduate of a four-year institution of higher education or a mid-career professional from outside the field of education possessing strong content knowledge or a record of
professional accomplishment; and
(II) submit an application to the teaching residency program.
(ii) SELECTION CRITERIA.—An eligible partnership
carrying out a teaching residency program under this
subsection shall establish criteria for the selection of
eligible individuals to participate in the teaching residency program based on the following characteristics:
(I) Strong content knowledge or record of accomplishment in the field or subject area to be
taught.
(II) Strong verbal and written communication
skills, which may be demonstrated by performance
on appropriate tests.
(III) Other attributes linked to effective teaching, which may be determined by interviews or
performance assessments, as specified by the eligible partnership.
(C) STIPENDS OR SALARIES; APPLICATIONS; AGREEMENTS; REPAYMENTS.—
(i) STIPENDS OR SALARIES.—A teaching residency
program under this subsection shall provide a oneyear living stipend or salary to teaching residents during the teaching residency program.
(ii) APPLICATIONS FOR STIPENDS OR SALARIES.—
Each teacher residency candidate desiring a stipend or
salary during the period of residency shall submit an
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application to the eligible partnership at such time,
and containing such information and assurances, as
the eligible partnership may require.
(iii) AGREEMENTS TO SERVE.—Each application
submitted under clause (ii) shall contain or be accompanied by an agreement that the applicant will—
(I) serve as a full-time teacher for a total of
not less than three academic years immediately
after successfully completing the teaching residency program;
(II) fulfill the requirement under subclause (I)
by teaching in a high-need school served by the
high-need local educational agency in the eligible
partnership and teach a subject or area that is
designated as high need by the partnership;
(III) provide to the eligible partnership a certificate, from the chief administrative officer of the
local educational agency in which the resident is
employed, of the employment required in subclauses (I) and (II) at the beginning of, and upon
completion of, each year or partial year of service;
(IV) meet the requirements to be a highly
qualified teacher, as defined in section 9101 of the
Elementary and Secondary Education Act of 1965,
or section 602 of the Individuals with Disabilities
Education Act, when the applicant begins to fulfill
the service obligation under this clause; and
(V) comply with the requirements set by the
eligible partnership underclause (iv)if the applicant is unable or unwilling to complete the service
obligation required by this clause.
(iv) REPAYMENTS.—
(I) IN GENERAL.—A grantee carrying out a
teaching residency program under this paragraph
shall require a recipient of a stipend or salary
under clause (i) who does not complete, or who notifies the partnership that the recipient intends
not to complete, the service obligation required
byclause (iii)to repay such stipend or salary to the
eligible partnership, together with interest, at a
rate specified by the partnership in the agreement, and in accordance with such other terms
and conditions specified by the eligible partnership, as necessary.
(II) OTHER TERMS AND CONDITIONS.—Any
other terms and conditions specified by the eligible partnership may include reasonable provisions
for pro-rata repayment of the stipend or salary described in clause (i) or for deferral of a teaching
resident’s service obligation required byclause
(iii),on grounds of health, incapacitation, inability
to secure employment in a school served by the eligible partnership, being called to active duty in
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the Armed Forces of the United States, or other
extraordinary circumstances.
(III) USE OF REPAYMENTS.—An eligible partnership shall use any repayment received under
this clause to carry out additional activities that
are consistent with the purposes of this subsection.
(f) PARTNERSHIP GRANTS FOR THE DEVELOPMENT OF LEADERSHIP PROGRAMS.—
(1) IN GENERAL.—An eligible partnership that receives a
grant under this section may carry out an effective school leadership program, which may be carried out in partnership with
a local educational agency located in a rural area and that
shall include all of the following activities:
(A) Preparing individuals enrolled or preparing to enroll in school leadership programs for careers as superintendents, principals, early childhood education program
directors, or other school leaders (including individuals
preparing to work in local educational agencies located in
rural areas who may perform multiple duties in addition
to the role of a school leader).
(B) Promoting strong leadership skills and, as applicable, techniques for school leaders to effectively—
(i) create and maintain a data-driven, professional
learning community within the leader’s school;
(ii) provide a climate conducive to the professional
development of teachers, with a focus on improving
student academic achievement and the development of
effective instructional leadership skills;
(iii) understand the teaching and assessment
skills needed to support successful classroom instruction and to use data to evaluate teacher instruction
and drive teacher and student learning;
(iv) manage resources and school time to improve
student academic achievement and ensure the school
environment is safe;
(v) engage and involve parents, community members, the local educational agency, businesses, and
other community leaders, to leverage additional resources to improve student academic achievement; and
(vi) understand how students learn and develop in
order to increase academic achievement for all students.
(C) Ensuring that individuals who participate in the
school leadership program receive—
(i) effective preservice preparation as described in
subparagraph (D);
(ii) mentoring; and
(iii) if applicable, full State certification or licensure to become a school leader.
(D) Developing and improving a sustained and highquality preservice clinical education program to further develop the leadership skills of all prospective school leaders
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involved in the program. Such clinical education program
shall do the following:
(i) Incorporate year-long opportunities for enrichment, including—
(I) clinical learning in high-need schools
served by the high-need local educational agency
or a local educational agency located in a rural
area in the eligible partnership and identified by
the eligible partnership; and
(II) closely supervised interaction between
prospective school leaders and faculty, new and
experienced teachers, and new and experienced
school leaders, in such high-need schools.
(ii) Integrate pedagogy and practice and promote
effective leadership skills, meeting the unique needs of
urban, rural, or geographically isolated communities,
as applicable.
(iii) Provide for mentoring of new school leaders.
(E) Creating an induction program for new school
leaders.
(F) Developing and implementing effective mechanisms to ensure that the eligible partnership is able to recruit qualified individuals to become school leaders
through the activities of the eligible partnership, which
may include an emphasis on recruiting into school leadership professions—
(i) individuals from underrepresented populations;
(ii) individuals to serve as superintendents, principals, or other school administrators in rural and geographically isolated communities and school leader
shortage areas; and
(iii) mid-career professionals from other occupations, former military personnel, and recent college
graduates with a record of academic distinction.
(2) SELECTION OF INDIVIDUALS FOR THE LEADERSHIP PROGRAM.—In order to be eligible for the school leadership program under this subsection, an individual shall be enrolled in
or preparing to enroll in an institution of higher education, and
shall—
(A) be a—
(i) recent graduate of an institution of higher education;
(ii) mid-career professional from outside the field
of education with strong content knowledge or a record
of professional accomplishment;
(iii) current teacher who is interested in becoming
a school leader; or
(iv) school leader who is interested in becoming a
superintendent; and
(B) submit an application to the leadership program.
(g) PARTNERSHIP WITH DIGITAL EDUCATION CONTENT DEVELOPER.—An eligible partnership that receives a grant under this section may use grant funds provided to carry out the activities described in subsection (d) or (e), or both, to partner with a television
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public broadcast station, as defined in section 397(6) of the Communications Act of 1934 (47 U.S.C. 397(6)), or another entity that
develops digital educational content, for the purpose of improving
the quality of pre-baccalaureate teacher preparation programs or to
enhance the quality of preservice training for prospective teachers.
(h) EVALUATION AND REPORTING.—The Secretary shall—
(1) evaluate the programs assisted under this section; and
(2) make publicly available a report detailing the Secretary’s evaluation of each such program.
(i) 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 carried out under this section.
(2) REGULAR COMMUNICATION.—To ensure timely and
meaningful consultation as described in paragraph (1), regular
communication shall occur among all members of the eligible
partnership, 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 of a grant under this section only
if the eligible partnership submits to the Secretary a written
consent to such changes signed by all members of the eligible
partnership.
(j) 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.
(k) 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. ø20 U.S.C. 1022b¿ ADMINISTRATIVE PROVISIONS.
(a) DURATION; NUMBER OF AWARDS; PAYMENTS.—
(1) DURATION.—A grant awarded under this part
shall be
awarded for a period of five years.
(2) NUMBER OF AWARDS.—An eligible partnership may not
receive more than one grant during a five-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 another eligible partnership consisting of new members and receiving a
grant with such other eligible partnership before the five-year
period described in the preceding sentence applicable to the eligible partnership with which the individual member has first
partnered has expired.
(b) PEER REVIEW.—
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(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.—The Secretary, in funding applications
under this part, shall give priority—
(A) to eligible partnerships that include an institution
of higher education whose teacher preparation program
has a rigorous selection process to ensure the highest quality of students entering such program; and
(B)(i) to applications from broad-based eligible partnerships that involve businesses and community organizations; or
(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 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 by
the eligible partnership.
(c) MATCHING REQUIREMENTS.—
(1) IN GENERAL.—Each eligible partnership receiving a
grant under this part shall provide, from non-Federal sources,
an amount equal to 100 percent of the amount of the grant,
which may be provided in cash or in-kind, to carry out the activities supported by the grant.
(2) WAIVER.—The Secretary may waive all or part of the
matching requirement described in paragraph (1) for any fiscal
year for an eligible partnership if the Secretary determines
that applying the matching requirement to the eligible partnership would result in serious hardship or an inability to
carry out the authorized activities described in this part.
(d) LIMITATION ON ADMINISTRATIVE EXPENSES.—An eligible
partnership that receives a grant under this part may use not more
than two percent of the funds provided to administer the grant.
SEC. 204. ø20 U.S.C. 1022c¿ ACCOUNTABILITY AND EVALUATION.
(a) ELIGIBLE PARTNERSHIP EVALUATION.—Each eligible
partnership submitting an application for a grant under this part shall
establish, and include in such application, an evaluation plan that
includes strong and measurable performance objectives. The plan
shall include objectives and measures for increasing—
(1) achievement for all prospective and new teachers, as
measured by the eligible partnership;
(2) teacher retention in the first three years of a teacher’s
career;
(3) improvement in the pass rates and scaled scores for initial State certification or licensure of teachers; and
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(4)(A) the percentage of highly qualified teachers hired by
the high-need local educational agency participating in the eligible partnership;
(B) the percentage of highly qualified teachers hired by the
high-need local educational agency who are members of underrepresented groups;
(C) the percentage of highly qualified teachers hired by the
high-need local educational agency who teach high-need academic subject areas (such as reading, mathematics, science,
and foreign language, including less commonly taught languages and critical foreign languages);
(D) the percentage of highly qualified teachers hired by the
high-need local educational agency who teach in high-need
areas (including special education, language instruction educational programs for limited English proficient students, and
early childhood education);
(E) the percentage of highly qualified teachers hired by the
high-need local educational agency who teach in high-need
schools, disaggregated by the elementary school and secondary
school levels;
(F) as applicable, the percentage of early childhood education program classes in the geographic area served by the eligible partnership taught by early childhood educators who are
highly competent; and
(G) as applicable, the percentage of teachers trained—
(i) to integrate technology effectively into curricula
and instruction, including technology consistent with the
principles of universal design for learning; and
(ii) to use technology effectively to collect, manage, and
analyze data to improve teaching and learning for the purpose of improving student academic achievement.
(b) INFORMATION.—An eligible partnership receiving a grant
under this part shall ensure that teachers, principals, school superintendents, faculty, and leadership at institutions of higher education located in the geographic areas served by the eligible partnership are provided information, including through electronic
means, about the activities carried out with funds under this part.
(c) REVISED APPLICATION.—If the Secretary determines that an
eligible partnership receiving a grant under this part is not making
substantial progress in meeting the purposes, goals, objectives, and
measures of the grant, as appropriate, by the end of the third year
of a grant under this part, then the Secretary—
(1) shall cancel the grant; and
(2) may use any funds returned or available because of
such cancellation under paragraph (1) to—
(A) increase other grant awards under this part; or
(B) award new grants to other eligible partnerships
under this part.
(d) EVALUATION AND DISSEMINATION.—The Secretary shall
evaluate the activities funded under this part and report the findings regarding the evaluation of such activities to the authorizing
committees. The Secretary shall broadly disseminate—
(1) successful practices developed by eligible partnerships
under this part; and
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(2) information regarding such practices that were found to
be ineffective.
SEC. 205. ø20 U.S.C. 1022d¿ 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, the
following:
(A) GOALS AND ASSURANCES.—
(i) For the most recent year for which the information is available for the institution—
(I) whether the goals set under section 206
have been met; and
(II) a description of the activities the institution implemented to achieve such goals.
(ii) A description of the steps the institution is
taking to improve its performance in meeting the annual goals set under section 206.
(iii) A description of the activities the institution
has implemented to meet the assurances provided
under section 206.
(B) PASS RATES AND SCALED SCORES.—For the most recent year for which the information is available for those
students who took the assessments used for teacher certification or licensure by the State in which the program is
located and are enrolled in the traditional teacher preparation program or alternative routes to State certification or
licensure program, and for those who have taken such assessments and have completed the traditional teacher
preparation program or alternative routes to State certification or licensure program during the two-year period
preceding such year, for each of such assessments—
(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 students who passed such
assessment;
(iii) the percentage of students who have taken
such assessment who enrolled in and completed the
traditional teacher preparation program or alternative
routes to State certification or licensure program, as
applicable;
(iv) the average scaled score for all students who
took such assessment;
(v) a comparison of the program’s pass rates with
the average pass rates for programs in the State; and
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(vi) a comparison of the program’s average scaled
scores with the average scaled scores for programs in
the State.
(C) PROGRAM INFORMATION.—A description of—
(i) the criteria for admission into the program;
(ii) the number of students in the program
(disaggregated by race, ethnicity, and gender);
(iii) the average number of hours of supervised
clinical experience required for those in the program;
(iv) the number of full-time equivalent faculty and
students in the supervised clinical experience; and
(v) the total number of students who have been
certified or licensed as teachers, disaggregated by subject and area of certification or licensure.
(D) 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.
(E) DESIGNATION AS LOW-PERFORMING.—Whether the
program has been designated as low-performing by the
State under section 207(a).
(F) USE OF TECHNOLOGY.—A description of the activities, including activities consistent with the principles of
universal design for learning, that prepare teachers to integrate technology effectively into curricula and instruction, and to use technology effectively to collect, manage,
and analyze data in order to improve teaching and learning for the purpose of increasing student academic achievement.
(G) TEACHER TRAINING.—A description of the activities
that prepare general education and special education
teachers to teach students with disabilities effectively, including training related to participation as a member of individualized education program teams, as defined in section 614(d)(1)(B) of the Individuals with Disabilities Education Act, and to effectively teach students who are limited English proficient.
(2) REPORT.—Each eligible partnership receiving a grant
under section 202 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 204(a).
(3) FINES.—The Secretary may impose a fine not to exceed
$27,500 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)(B), with respect to an
average pass rate and scaled score on each State certification
or licensure assessment taken over a three-year period.
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(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, and make widely available to the general public, in a uniform and comprehensible
manner that conforms with the definitions and methods established by the Secretary, an annual 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 the 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 to attain initial teacher certification or licensure and to be certified or licensed to teach particular
academic subjects, areas, or 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, as applicable, 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, including those that offer 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 coursework and taken the
assessment who pass such assessment;
(ii) the percentage of all such students at all such
institutions and entities who have taken the assessment who pass such assessment;
(iii) the percentage of students who have taken
the assessment who enrolled in and completed a
teacher preparation program; and
(iv) the average scaled score of individuals participating in such a program, or who have completed such
a program during the two-year period preceding the
first year for which the annual State report card is
provided, who took each such assessment.
(E) A description of alternative routes to teacher 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 two-year period preceding the date for which the
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determination is made, 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 two-year period preceding the first
year for which the annual State report card is provided, 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—
(i) the criteria for admission into the program;
(ii) the number of students in the program,
disaggregated by race, ethnicity, 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);
(iii) the average number of hours of supervised
clinical experience required for those in the program;
and
(iv) 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, the number 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) A description of the extent to which teacher preparation programs are addressing shortages of highly qualified teachers, by area of certification or licensure, subject,
and specialty, in the State’s public schools.
(J) The extent to which teacher preparation programs
prepare teachers, including general education and special
education teachers, to teach students with disabilities effectively, including training related to participation as a
member of individualized education program teams, as defined in section 614(d)(1)(B) of the Individuals with Disabilities Education Act.
(K) A description of the activities that prepare teachers to—
(i) integrate technology effectively into curricula
and instruction, including activities consistent with
the principles of universal design for learning; and
(ii) use technology effectively to collect, manage,
and analyze data to improve teaching and learning for
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the purpose of increasing student academic achievement.
(L) The extent to which teacher preparation programs
prepare teachers, including general education and special
education teachers, to effectively teach students who are
limited English proficient.
(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) DATA QUALITY.—The Secretary shall prescribe regulations
to ensure the reliability, validity, integrity, and accuracy of the
data submitted pursuant to this section.
(d) REPORT OF THE SECRETARY ON THE QUALITY OF TEACHER
PREPARATION.—
(1) REPORT CARD.—The Secretary shall annually provide to
the authorizing committees, 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 (L) of subsection (b)(1).
Such report shall identify States for which eligible partnerships received a grant under this part.
(2) REPORT TO CONGRESS.—The Secretary shall prepare
and submit a report to the authorizing committees 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 test that is used in more
than one State for teacher certification or licensure.
(3) SPECIAL RULE.—In the case of a teacher preparation
program with fewer than ten scores reported on any single initial teacher certification or licensure assessment during an academic year, the Secretary shall collect and publish, and make
publicly available, information with respect to an average pass
rate and scaled score on each State certification or licensure
assessment taken over a three-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.
SEC. 206. ø20 U.S.C. 1022e¿ TEACHER DEVELOPMENT.
(a) ANNUAL GOALS.—Each institution of higher
education that
conducts a traditional teacher preparation program (including programs that offer any ongoing professional development programs)
or alternative routes to State certification or licensure program,
and that enrolls students receiving Federal assistance under this
Act, shall set annual quantifiable goals for increasing the number
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cluding mathematics, science, special education, and instruction of
limited English proficient students.
(b) ASSURANCES.—Each institution described in subsection
(a)shall provide assurances to the Secretary that—
(1) training provided to prospective teachers responds to
the identified needs of the local educational agencies or States
where the institution’s graduates are likely to teach, based on
past hiring and recruitment trends;
(2) training provided to prospective teachers is closely
linked with the needs of schools and the instructional decisions
new teachers face in the classroom;
(3) prospective special education teachers receive course
work in core academic subjects and receive training in providing instruction in core academic subjects;
(4) general education teachers receive training in providing
instruction to diverse populations, including children with disabilities, limited English proficient students, and children from
low-income families; and
(5) prospective teachers receive training on how to effectively teach in urban and rural schools, as applicable.
(c) RULE OF CONSTRUCTION.—Nothing in this section shall be
construed to require an institution to create a new teacher preparation area of concentration or degree program or adopt a specific
curriculum in complying with this section.
SEC. 207. ø20 U.S.C. 1022f¿ STATE FUNCTIONS.
(a) STATE ASSESSMENT.—In order to receive
funds under this
Act, a State shall conduct an assessment to identify low-performing
teacher preparation programs in the State and to assist such programs through the provision of technical assistance. Each such
State shall provide the Secretary with an annual list of low-performing teacher preparation programs and an identification of
those programs at risk of being placed on such list, as applicable.
Such assessment shall be described in the report under section
205(b). Levels of performance shall be determined solely by the
State and may include criteria based on information collected pursuant to this part, including progress in meeting the goals of—
(1) increasing the percentage of highly qualified teachers
in the State, including increasing professional development opportunities;
(2) improving student academic achievement for elementary and secondary students; and
(3) raising the standards for entry into the teaching profession.
(b) TERMINATION OF ELIGIBILITY.—Any teacher preparation
program 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) may not be permitted to accept or enroll any student
who receives aid under title IV in the institution’s teacher
preparation program;
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(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; and
(4) shall be reinstated upon demonstration of improved
performance, as determined by the State.
(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. ø20 U.S.C. 1022g¿ GENERAL PROVISIONS.
(a) METHODS.—In complying with sections
205 and 206, 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 reveal personally identifiable information.
(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, as required under section 1119 of the Elementary and Secondary Education Act of 1965, in accordance with the State plan submitted or
revised under section 1111 of such Act , and that each person employed as a special education teacher in the State who teaches elementary school or secondary school is highly qualified by the deadline, as required under section 612(a)(14)(C) of the Individuals with
Disabilities Education Act, the Secretary shall—
(1) 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, use
such data to carry out requirements of this part related to assessments, pass rates, and scaled scores.
(c) RELEASE OF INFORMATION TO TEACHER PREPARATION PROGRAMS.—
(1) IN GENERAL.—For the purpose of improving teacher
preparation programs, a State that receives funds under this
Act, or that participates as a member of a partnership, consortium, or other entity that receives such funds, 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.
(2) CONTENT OF INFORMATION.—The information described
in paragraph (1)—
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(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 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. ø20 U.S.C. 1022h¿ AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this part
$300,000,000 for fiscal year 2009 and such sums as may be necessary for each of the two succeeding fiscal years.
PART B—ENHANCING TEACHER EDUCATION
SEC. 230. ø20 U.S.C. 1031¿ AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this part
such sums as may be necessary for fiscal year 2009 and each of the
five succeeding fiscal years.
Subpart 1—Preparing Teachers for Digital Age
Learners
SEC. 231. ø20 U.S.C. 1032¿ PROGRAM AUTHORIZED.
(a) PROGRAM AUTHORITY.—The Secretary
is authorized to
award grants to, or enter into contracts or cooperative agreements
with, eligible consortia to pay the Federal share of the costs of
projects to—
(1) assist in the graduation of teacher candidates who are
prepared to use modern information, communication, and
learning tools to—
(A) improve student learning, assessment, and learning
management; and
(B) help students develop learning skills to succeed in
higher education and to enter the workforce;
(2) strengthen and develop partnerships among the stakeholders in teacher preparation to transform teacher education
and ensure technology-rich teaching and learning environments throughout a teacher candidate’s preservice education,
including clinical experiences; and
(3) assess the effectiveness of departments, schools, and
colleges of education at institutions of higher education in preparing teacher candidates for successful implementation of
technology-rich teaching and learning environments, including
environments consistent with the principles of universal design
for learning, that enable kindergarten through grade 12 stu-
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dents to develop learning skills to succeed in higher education
and to enter the workforce.
(b) AMOUNT AND DURATION.—A grant, contract, or cooperative
agreement under this subpart—
(1) shall be for not more than $2,000,000;
(2) shall be for a three-year period; and
(3) may be renewed for one additional year.
(c) NON-FEDERAL SHARE REQUIREMENT.—The Federal share of
the cost of any project funded under this subpart shall not exceed
75 percent. The non-Federal share of the cost of such project may
be provided in cash or in kind, fairly evaluated, including services.
(d) DEFINITION OF ELIGIBLE CONSORTIUM.—In this subpart, the
term ‘‘eligible consortium’’ means a consortium of members that includes the following:
(1) Not less than one institution of higher education that
awards baccalaureate or masters degrees and prepares teachers for initial entry into teaching.
(2) Not less than one State educational agency or local
educational agency.
(3) A department, school, or college of education at an institution of higher education.
(4) A department, school, or college of arts and sciences at
an institution of higher education.
(5) Not less than one entity with the capacity to contribute
to the technology-related reform of teacher preparation programs, which may be a professional association, foundation,
museum, library, for-profit business, public or private nonprofit
organization, community-based organization, or other entity.
SEC. 232. ø20 U.S.C. 1032a¿ USES OF FUNDS.
(a) IN GENERAL.—An eligible consortium
that receives a grant
or enters into a contract or cooperative agreement under this subpart shall use funds made available under this subpart to carry out
a project that—
(1) develops long-term partnerships among members of the
consortium that are focused on effective teaching with modern
digital tools and content that substantially connect preservice
preparation of teacher candidates with high-need schools; or
(2) transforms the way departments, schools, and colleges
of education teach classroom technology integration, including
the principles of universal design, to teacher candidates.
(b) USES OF FUNDS FOR PARTNERSHIP GRANTS.—In carrying out
a project under subsection (a)(1), an eligible consortium shall—
(1) provide teacher candidates, early in their preparation,
with field experiences with technology in educational settings;
(2) build the skills of teacher candidates to support technology-rich instruction, assessment and learning management
in content areas, technology literacy, an understanding of the
principles of universal design, and the development of other
skills for entering the workforce;
(3) provide professional development in the use of technology for teachers, administrators, and content specialists
who participate in field placement;
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(4) provide professional development of technology pedagogical skills for faculty of departments, schools, and colleges
of education and arts and sciences;
(5) implement strategies for the mentoring of teacher candidates by members of the consortium with respect to technology implementation;
(6) evaluate teacher candidates during the first years of
teaching to fully assess outcomes of the project;
(7) build collaborative learning communities for technology
integration within the consortium to sustain meaningful applications of technology in the classroom during teacher preparation and early career practice; and
(8) evaluate the effectiveness of the project.
(c) USES OF FUNDS FOR TRANSFORMATION GRANTS.—In carrying
out a project under subsection (a)(2), an eligible consortium shall—
(1) redesign curriculum to require collaboration between
the department, school, or college of education faculty and the
department, school, or college of arts and sciences faculty who
teach content or methods courses for training teacher candidates;
(2) collaborate between the department, school, or college
of education faculty and the department, school, or college of
arts and science faculty and academic content specialists at the
local educational agency to educate preservice teachers who
can integrate technology and pedagogical skills in content
areas;
(3) collaborate between the department, school, or college
of education faculty and the department, school, or college of
arts and sciences faculty who teach courses to preservice teachers to—
(A) develop and implement a plan for preservice teachers
and continuing educators that demonstrates effective instructional strategies and application of such strategies in the use
of digital tools to transform the teaching and learning process;
and
(B) better reach underrepresented preservice teacher populations with programs that connect such preservice teacher
populations with applications of technology;
(4) collaborate among faculty and students to create and
disseminate case studies of technology applications in classroom settings with a goal of improving student academic
achievement in high-need schools;
(5) provide additional technology resources for preservice
teachers to plan and implement technology applications in
classroom settings that provide evidence of student learning;
and
(6) bring together expertise from departments, schools, or
colleges of education, arts and science faculty, and academic
content specialists at the local educational agency to share and
disseminate technology applications in the classroom through
teacher preparation and into early career practice.
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SEC. 233. ø20 U.S.C. 1032b¿ APPLICATION REQUIREMENTS.
To be eligible to receive a grant or enter into a contract or cooperative agreement under this subpart, an eligible consortium
shall submit an application to the Secretary at such time, in such
manner, and containing such information as the Secretary may require. Such application shall include the following:
(1) A description of the project to be carried out with the
grant, including how the project will—
(A) develop a long-term partnership focused on effective teaching with modern digital tools and content that
substantially connects preservice preparation of teacher
candidates with high-need schools; or
(B) transform the way departments, schools, and colleges of education teach classroom technology integration,
including the principles of universal design, to teacher candidates.
(2) A demonstration of—
(A) the commitment, including the financial commitment, of each of the members of the consortium for the
proposed project; and
(B) the support of the leadership of each organization
that is a member of the consortium for the proposed
project.
(3) A description of how each member of the consortium
will participate in the project.
(4) A description of how the State educational agency or
local educational agency will incorporate the project into the
agency’s technology plan, if such a plan already exists.
(5) A description of how the project will be continued after
Federal funds are no longer available under this subpart for
the project.
(6) A description of how the project will incorporate—
(A) State teacher technology standards; and
(B) State student technology standards.
(7) A plan for the evaluation of the project, which shall include benchmarks to monitor progress toward specific project
objectives.
SEC. 234. ø20 U.S.C. 1032c¿ EVALUATION.
Not less than ten percent of the funds awarded to an eligible
consortium to carry out a project under this subpart shall be used
to evaluate the effectiveness of such project.
Subpart 2—Honorable Augustus F. Hawkins
Centers of Excellence
SEC. 241. ø20 U.S.C. 1033¿ DEFINITIONS.
In this subpart:
(1) ELIGIBLE INSTITUTION.—The term ‘‘eligible institution’’
means—
(A) an institution of higher education that has a teacher preparation program that is a qualified teacher preparation program and that is—
(i) a part B institution (as defined in section 322);
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(ii) a Hispanic-serving institution (as defined in
section 502);
(iii) a Tribal College or University (as defined in
section 316);
(iv) an Alaska Native-serving institution (as defined in section 317(b));
(v) a Native Hawaiian-serving institution (as defined in section 317(b));
(vi) a Predominantly Black Institution (as defined
in section 318);
(vii) an Asian American and Native American Pacific Islander-serving institution (as defined in section
320(b)); or
(viii) a Native American-serving, nontribal institution (as defined in section 319);
(B) a consortium of institutions described in subparagraph (A); or
(C) an institution described in subparagraph (A), or a
consortium described in subparagraph (B), in partnership
with any other institution of higher education, but only if
the center of excellence established under section 242 is located at an institution described in subparagraph (A).
(2) 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.
SEC. 242. ø20 U.S.C. 1033a¿ AUGUSTUS F. HAWKINS CENTERS OF EXCELLENCE.
(a) PROGRAM AUTHORIZED.—From the amounts appropriated to
carry out this part, the Secretary is authorized to award competitive grants to eligible institutions to establish centers of excellence.
(b) USE OF FUNDS.—Grants provided by the Secretary under
this subpart shall be used to ensure that current and future teachers are highly qualified by carrying out one or more of the following
activities:
(1) Implementing reforms within teacher preparation programs to ensure that such programs are preparing teachers
who are highly qualified, are able to understand scientifically
valid research, and are able to use advanced technology effectively in the classroom, including use of instructional techniques to improve student academic achievement, by—
(A) retraining or recruiting faculty; and
(B) designing (or redesigning) teacher preparation programs that—
(i) prepare teachers to serve in low-performing
schools and close student achievement gaps, and that
are based on rigorous academic content, scientifically
valid research (including scientifically based reading
research and mathematics research, as it becomes
available), and challenging State academic content
standards and student academic achievement standards; and
(ii) promote strong teaching skills.
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(2) Providing sustained and high-quality preservice clinical
experience, including the mentoring of prospective teachers by
exemplary teachers, substantially increasing interaction between faculty at institutions of higher education and new and
experienced teachers, principals, and other administrators at
elementary schools or secondary schools, and providing support, including preparation time, for such interaction.
(3) Developing and implementing initiatives to promote retention of highly qualified teachers and principals, including
minority teachers and principals, including programs that provide—
(A) teacher or principal mentoring from exemplary
teachers or principals, respectively; or
(B) induction and support for teachers and principals
during their first three years of employment as teachers or
principals, respectively.
(4) Awarding scholarships based on financial need to help
students pay the costs of tuition, room, board, and other expenses of completing a teacher preparation program, not to exceed the cost of attendance.
(5) Disseminating information on effective practices for
teacher preparation and successful teacher certification and licensure assessment preparation strategies.
(6) Activities authorized under section 202.
(c) APPLICATION.—Any eligible institution desiring a grant
under this subpart shall submit an application to the Secretary at
such a time, in such a manner, and accompanied by such information as the Secretary may require.
(d) MINIMUM GRANT AMOUNT.—The minimum amount of each
grant under this subpart shall be $500,000.
(e) LIMITATION ON ADMINISTRATIVE EXPENSES.—An eligible institution that receives a grant under this subpart may use not
more than two percent of the funds provided to administer the
grant.
(f) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessary to carry out this subpart.
Subpart 3—Preparing General Education Teachers to More Effectively Educate Students with
Disabilities
SEC. 251. ø20 U.S.C. 1034¿ TEACH TO REACH GRANTS.
(a) AUTHORIZATION OF PROGRAM.—
(1) IN GENERAL.—The Secretary is authorized
to award
grants, on a competitive basis, to eligible partnerships to improve the preparation of general education teacher candidates
to ensure that such teacher candidates possess the knowledge
and skills necessary to effectively instruct students with disabilities in general education classrooms.
(2) DURATION OF GRANTS.—A grant under this section shall
be awarded for a period of not more than five years.
(3) NON-FEDERAL SHARE.—An eligible partnership that receives a grant under this section shall provide not less than 25
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percent of the cost of the activities carried out with such grant
from non-Federal sources, which may be provided in cash or in
kind.
(b) DEFINITION OF ELIGIBLE PARTNERSHIP.—In this section, the
term ‘‘eligible partnership’’ means a partnership that—
(1) shall include—
(A) one or more departments or programs at an institution of higher education—
(i) that prepare elementary or secondary general
education teachers;
(ii) that have a program of study that leads to an
undergraduate degree, a master’s degree, or completion of a postbaccalaureate program required for
teacher certification; and
(iii) the graduates of which are highly qualified;
(B) a department or program of special education at
an institution of higher education;
(C) a department or program at an institution of higher education that provides degrees in core academic subjects; and
(D) a high-need local educational agency; and
(2) may include a department or program of mathematics,
earth or physical science, foreign language, or another department at the institution that has a role in preparing teachers.
(c) ACTIVITIES.—An eligible partnership that receives a grant
under this section—
(1) shall use the grant funds to—
(A) develop or strengthen an undergraduate,
postbaccalaureate, or master’s teacher preparation program by integrating special education strategies into the
general education curriculum and academic content;
(B) provide teacher candidates participating in the
program under subparagraph (A) with skills related to—
(i) response to intervention, positive behavioral
interventions and supports, differentiated instruction,
and data driven instruction;
(ii) universal design for learning;
(iii) determining and utilizing accommodations for
instruction and assessments;
(iv) collaborating with special educators, related
services providers, and parents, including participation in individualized education program development
and implementation; and
(v) appropriately utilizing technology and assistive
technology for students with disabilities; and
(C) provide extensive clinical experience for participants described in subparagraph (B) with mentoring and
induction support throughout the program that continues
during the first two years of full-time teaching; and
(2) may use grant funds to develop and administer alternate assessments of students with disabilities.
(d) APPLICATION.—An eligible partnership seeking a grant
under this section shall submit an application to the Secretary at
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such time, in such manner, and containing such information as the
Secretary may require. Such application shall include—
(1) a self-assessment by the eligible partnership of the existing teacher preparation program at the institution of higher
education and needs related to preparing general education
teacher candidates to instruct students with disabilities; and
(2) an assessment of the existing personnel needs for general education teachers who instruct students with disabilities,
performed by the local educational agency in which most graduates of the teacher preparation program are likely to teach
after completion of the program under subsection (c)(1).
(e) PEER REVIEW.—The Secretary shall convene a peer review
committee to review applications for grants under this section and
to make recommendations to the Secretary regarding the selection
of grantees. Members of the peer review committee shall be recognized experts in the fields of special education, teacher preparation,
and general education and shall not be in a position to benefit financially from any grants awarded under this section.
(f) EVALUATIONS.—
(1) BY THE PARTNERSHIP.—
(A) IN GENERAL.—An eligible partnership receiving a
grant under this section shall conduct an evaluation at the
end of the grant period to determine—
(i) the effectiveness of the general education
teachers who completed a program under subsection
(c)(1) with respect to instruction of students with disabilities in general education classrooms; and
(ii) the systemic impact of the activities carried
out by such grant on how each institution of higher
education that is a member of the partnership prepares teachers for instruction in elementary schools
and secondary schools.
(B) REPORT TO THE SECRETARY.—Each eligible partnership performing an evaluation under subparagraph (A)
shall report the findings of such evaluation to the Secretary.
(2) REPORT BY THE SECRETARY.—Not later than 180 days
after the last day of the grant period under this section, the
Secretary shall make available to Congress and the public the
findings of the evaluations submitted under paragraph (1), and
information on best practices related to effective instruction of
students with disabilities in general education classrooms.
Subpart 4—Adjunct Teacher Corps
SEC. 255. ø20 U.S.C. 1035¿ ADJUNCT TEACHER CORPS.
(a) PURPOSE.—The purpose of this section is to
create opportunities for professionals and other individuals with subject matter
expertise in mathematics, science, or critical foreign languages to
provide such subject matter expertise to secondary school students
on an adjunct basis.
(b) PROGRAM AUTHORIZED.—The Secretary is authorized to
award grants on a competitive basis to eligible entities to identify,
recruit, and train qualified individuals with subject matter exper-
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tise in mathematics, science, or critical foreign languages to serve
as adjunct content specialists.
(c) DURATION OF GRANTS.—The Secretary may award grants
under this section for a period of not more than five years.
(d) ELIGIBLE ENTITY.—In this section, the term ‘‘eligible entity’’
means—
(1) a local educational agency; or
(2) a partnership consisting of a local educational agency,
serving as a fiscal agent, and a public or private educational
organization or business.
(e) USES OF FUNDS.—An eligible entity that receives a grant
under this section is authorized to use such grant to carry out one
or both of the following activities:
(1) To develop the capacity of the eligible entity to identify,
recruit, and train individuals with subject matter expertise in
mathematics, science, or critical foreign languages who are not
employed in the elementary and secondary education system
(including individuals in business and government, and individuals who would participate through distance-learning arrangements) to become adjunct content specialists.
(2) To provide preservice training and on-going professional development to adjunct content specialists.
(f) APPLICATIONS.—
(1) APPLICATION REQUIRED.—An eligible entity 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.
(2) CONTENTS.—An application submitted under paragraph
(1) shall include—
(A) a description of—
(i) the need for, and expected benefits of using, adjunct content specialists in the schools served by the
local educational agency, which may include information on the difficulty the local educational agency faces
in recruiting qualified faculty in mathematics, science,
and critical foreign language courses;
(ii) measurable objectives for the activities supported by the grant, including the number of adjunct
content specialists the eligible entity intends to place
in schools and classrooms, and the gains in academic
achievement expected as a result of the addition of
such specialists;
(iii) how the eligible entity will establish criteria
for and recruit the most qualified individuals and public or private organizations and businesses to participate in the activities supported by the grant;
(iv) how the eligible entity will provide preservice
training and on-going professional development to adjunct content specialists to ensure that such specialists
have the capacity to serve effectively;
(v) how the eligible entity will use funds received
under this section, including how the eligible entity
will evaluate the success of the activities supported by
the grant; and
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(vi) how the eligible entity will support and continue the activities supported by the grant after the
grant has expired, including how such entity will seek
support from other sources, such as State and local
government and the private sector; and
(B) an assurance that the use of adjunct content specialists will not result in the displacement or transfer of
currently employed teachers nor a reduction in the number
of overall teachers in the district.
(g) PRIORITIES.—In awarding grants under this section, the
Secretary shall give priority to eligible entities that demonstrate in
the application for such a grant a plan to—
(1) serve the schools served by the local educational agency
that have a large number or percentage of students performing
below grade level in mathematics, science, or critical foreign
language courses;
(2) serve local educational agencies that have a large number or percentage of students from low-income families; and
(3) recruit and train individuals to serve as adjunct content specialists in schools that have an insufficient number of
teachers in mathematics, science, or critical foreign languages.
(h) MATCHING REQUIREMENT.—Each eligible entity that receives a grant under this section shall provide, from non-Federal
sources, an amount equal to 100 percent of the amount of such
grant (in cash or in kind) to carry out the activities supported by
such grant.
(i) PERFORMANCE REPORT.—Each eligible entity receiving a
grant under this section shall prepare and submit to the Secretary
a final report on the results of the activities supported by such
grant, which shall contain such information as the Secretary may
require, including any improvements in student academic achievement as a result of the use of adjunct content specialists.
(j) EVALUATION.—The Secretary shall evaluate the activities
supported by grants under this section, including the impact of
such activities on student academic achievement, and shall report
the results of such evaluation to the authorizing committees.
(k) DEFINITION.—In this section, the term ‘‘adjunct content specialist’’ means an individual who—
(1) meets the requirements of section 9101(23)(B)(ii) of the
Elementary and Secondary Education Act of 1965;
(2) has demonstrated expertise in mathematics, science, or
a critical foreign language, as determined by the local educational agency; and
(3) is not the primary provider of instructional services to
a student, unless the adjunct content specialist is under the direct supervision of a teacher who meets the requirements of
section 9101(23) of such Act.
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Subpart 5—Graduate Fellowships to Prepare Faculty in High-Need Areas at Colleges of Education
SEC. 258. ø20 U.S.C. 1036¿ GRADUATE FELLOWSHIPS TO PREPARE FACULTY IN HIGH-NEED AREAS AT COLLEGES OF EDUCATION.
(a) GRANTS BY SECRETARY.—The Secretary shall make grants
to eligible institutions to enable such institutions to make graduate
fellowship awards to qualified individuals in accordance with the
provisions of this section.
(b) ELIGIBLE INSTITUTIONS.—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 doctoral degree.
(c) APPLICATIONS.—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 reasonably require.
(d) TYPES OF FELLOWSHIPS SUPPORTED.—
(1) IN GENERAL.—An eligible institution that receives a
grant under this section shall use the grant funds to provide
graduate fellowships to individuals who are preparing for the
professorate in order to prepare individuals to become highly
qualified elementary school and secondary school mathematics
and science teachers, special education teachers, and teachers
who provide instruction for limited English proficient students.
(2) TYPES OF STUDY.—A graduate fellowship provided
under this section shall support an individual in pursuing
postbaccalaureate study, which leads to a doctoral degree and
may include a master’s degree as part of such study, related
to teacher preparation and pedagogy in one of the following
areas:
(A) Science, technology, engineering, or mathematics,
if the individual has completed a master’s degree in mathematics or science and is pursuing a doctoral degree in
mathematics, science, or education.
(B) Special education.
(C) The instruction of limited English proficient students, including postbaccalaureate study in language instruction educational programs.
(e) FELLOWSHIP TERMS AND CONDITIONS.—
(1) SELECTION OF FELLOWS.—The Secretary shall ensure
that an eligible institution that receives a grant under this section—
(A) shall provide graduate fellowship awards to individuals who plan to pursue a career in instruction at an
institution of higher education that has a teacher preparation program; and
(B) may not provide a graduate fellowship to an otherwise eligible individual—
(i) during periods in which such individual is enrolled at an institution of higher education unless such
individual is maintaining satisfactory academic
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progress in, and devoting full-time study or research
to, the pursuit of the degree for which the fellowship
support was provided; or
(ii) if the individual is engaged in gainful employment, other than part-time employment related to
teaching, research, or a similar activity determined by
the institution to be consistent with and supportive of
the individuals’s progress toward the degree for which
the fellowship support was provided.
(2) AMOUNT OF FELLOWSHIP AWARDS.—
(A) IN GENERAL.—An eligible institution that receives
a grant under this section shall award stipends to individuals who are provided graduate fellowships under this section.
(B) AWARDS BASED ON NEED.—A stipend provided
under this section shall be in an amount equal to the level
of support provided by the National Science Foundation
graduate fellowships, except that such stipend shall be adjusted as necessary so as not to exceed the fellowship recipient’s demonstrated need, as determined by the institution of higher education where the fellowship recipient is
enrolled.
(3) SERVICE REQUIREMENT.—
(A) TEACHING REQUIRED.—Each individual who receives a graduate fellowship under this section and earns
a doctoral degree shall teach for one year at an institution
of higher education that has a teacher preparation program for each year of fellowship support received under
this section.
(B) INSTITUTIONAL OBLIGATION.—Each eligible institution that receives a grant under this section shall provide
an assurance to the Secretary that the institution has inquired of and determined the decision of each individual
who has received a graduate fellowship to, within three
years of receiving a doctoral degree, begin employment at
an institution of higher education that has a teacher preparation program, as required by this section.
(C) AGREEMENT REQUIRED.—Prior to receiving an initial graduate fellowship award, and upon the annual renewal of the graduate fellowship award, an individual selected to receive a graduate fellowship under this section
shall sign an agreement with the Secretary agreeing to
pursue a career in instruction at an institution of higher
education that has a teacher preparation program in accordance with subparagraph (A).
(D) FAILURE TO COMPLY.—If an individual who receives a graduate fellowship award under this section fails
to comply with the agreement signed pursuant to subparagraph (C), the sum of the amounts of any graduate fellowship award received by such recipient shall, upon a determination of such a failure, be treated as a Federal Direct
Unsubsidized Stafford Loan under part D of title IV, and
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cordance with terms and conditions specified by the Secretary in regulations under this subpart.
(E) MODIFIED SERVICE REQUIREMENT.—The Secretary
may waive or modify the service requirement of this paragraph in accordance with regulations promulgated by the
Secretary with respect to the criteria to determine the circumstances under which compliance with such service requirement is inequitable or represents a substantial hardship. The Secretary may waive the service requirement if
compliance by the fellowship recipient is determined to be
inequitable or represent a substantial hardship—
(i) because the individual is permanently and totally disabled at the time of the waiver request; or
(ii) based on documentation presented to the Secretary of substantial economic or personal hardship.
(f) INSTITUTIONAL SUPPORT FOR FELLOWS.—An eligible institution that receives a grant under this section may reserve not more
than ten percent of the grant amount for academic and career transition support for graduate fellowship recipients and for meeting
the institutional obligation described in subsection (e)(3)(B).
(g) RESTRICTION ON USE OF FUNDS.—An eligible institution
that receives a grant under this section may not use grant funds
for general operational overhead of the institution.
PART C—GENERAL PROVISIONS
SEC. 261. ø20 U.S.C. 1041¿ LIMITATIONS.
(a) 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.
(b) 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.
(c) NATIONAL SYSTEM OF TEACHER CERTIFICATION OR LICENSURE PROHIBITED.—Nothing in this title shall be construed to permit, allow, encourage, or authorize the Secretary to establish or
support any national system of teacher certification or licensure.
(d) RULE OF CONSTRUCTION.—Nothing in this title shall be construed to alter or otherwise affect the rights, remedies, and procedures afforded to the employees of local educational agencies under
Federal, State, or local laws (including applicable regulations or
court orders) or under the terms of collective bargaining agreements, memoranda of understanding, or other agreements between
such employees and their employers.
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TITLE III—INSTITUTIONAL AID
SEC. 301. ø20 U.S.C. 1051¿ FINDINGS AND PURPOSES.
(a) FINDINGS.—The Congress finds that—
(1) there are a significant number of institutions of higher
education serving high percentages of minority students and
students from low-income backgrounds, that face problems that
threaten their ability to survive;
(2) the problems relate to the management and fiscal operations of certain institutions of higher education, as well as to
an inability to engage in long-range planning and development
activities, including endowment building;
(3) in order to be competitive and provide a high-quality
education for all, institutions of higher education should improve their technological capacity and make effective use of
technology;
(4) the title III program prior to 1985 did not always meet
the specific development needs of historically Black colleges
and universities and other institutions with large concentrations of minority, low-income students;
(5) the solution of the problems of these institutions would
enable them to become viable, fiscally stable and independent,
thriving institutions of higher education;
(6) providing assistance to eligible institutions will enhance the role of such institutions in providing access and
quality education to low-income and minority students;
(7) these institutions play an important role in the American system of higher education, and there is a strong national
interest in assisting them in solving their problems and in stabilizing their management and fiscal operations, and in becoming financially independent; and
(8) there is a particular national interest in aiding those
institutions of higher education that have historically served
students who have been denied access to postsecondary education because of race or national origin and whose participation in the American system of higher education is in the Nation’s interest so that equality of access and quality of postsecondary education opportunities may be enhanced for all students.
(b) PURPOSE.—It is the purpose of this title to assist such institutions in equalizing educational opportunity through a program of
Federal assistance.
PART A—STRENGTHENING INSTITUTIONS
SEC. 311. ø20 U.S.C. 1057¿ PROGRAM PURPOSE.
(a) GENERAL AUTHORIZATION.—The Secretary
shall carry out a
program, in accordance with this part, to improve the academic
quality, institutional management, and fiscal stability of eligible institutions, in order to increase their self-sufficiency and strengthen
their capacity to make a substantial contribution to the higher education resources of the Nation.
(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
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approved under section 391 in order to assist such an institution
to plan, develop, or implement activities that promise to strengthen
the institution.
(2) Special consideration shall be given to any eligible institution—
(A) which has endowment funds (other than any endowment fund built under section 332 of this Act as in effect on
September 30, 1986, and under part B) the market value of
which, per full-time equivalent student, is less than the average current market value of the endowment funds, per fulltime equivalent student (other than any endowment fund built
under section 332 of this Act as in effect on September 30,
1986, and under part B) at similar institutions; or
(B) which has expenditures per full-time equivalent student for library materials which is less than the average of the
expenditures for library materials per full-time equivalent student by other similarly situated institutions.
(3) Special consideration shall be given to applications which
propose, pursuant to the institution’s plan, to engage in—
(A) faculty development;
(B) funds and administrative management;
(C) development and improvement of academic programs;
(D) acquisition of equipment for use in strengthening
funds management and academic programs;
(E) joint use of facilities such as libraries and laboratories;
and
(F) student services, including services that will assist in
the education of special populations.
(c) AUTHORIZED ACTIVITIES.—Grants awarded under this section 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 classrooms, libraries, laboratories, and other instructional facilities, including the integration of computer technology into institutional facilities to create smart buildings.
(3) Support of faculty exchanges, faculty development, and
faculty fellowships to assist in attaining advanced degrees in
the field of instruction of the faculty.
(4) Development and improvement of academic programs.
(5) Purchase of library books, periodicals, and other educational materials, including telecommunications program material.
(6) Tutoring, counseling, and student service programs designed to improve academic success, including innovative, customized, instruction courses designed to help retain students
and move the students rapidly into core courses and through
program completion, which may include remedial education
and English language instruction.
(7) Education or counseling services designed to improve
the financial literacy and economic literacy of students or the
students’ families.
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(8) Funds management, administrative management, and
acquisition of equipment for use in strengthening funds management.
(9) Joint use of facilities, such as laboratories and libraries.
(10) Establishing or improving a development office to
strengthen or improve contributions from alumni and the private sector.
(11) Establishing or improving an endowment fund.
(12) Creating or improving facilities for Internet or other
distance education technologies, including purchase or rental of
telecommunications technology equipment or services.
(13) Other activities proposed in the application submitted
pursuant to 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.
(d) ENDOWMENT FUND.—
(1) IN GENERAL.—An eligible institution may use not more
than 20 percent of the grant funds provided under this part to
establish or increase an endowment fund at such institution.
(2) MATCHING REQUIREMENT.—In order to be eligible to use
grant funds in accordance with paragraph (1), the eligible institution shall provide matching funds from non-Federal
sources, in an amount equal to or greater than the Federal
funds used in accordance with paragraph (1), for the establishment or increase of the endowment fund.
(3) COMPARABILITY.—The provisions of part C, regarding
the establishment or increase of an endowment fund, that the
Secretary determines are not inconsistent with this subsection,
shall apply to funds used under paragraph (1).
SEC. 312. ø20 U.S.C. 1058¿ DEFINITIONS; ELIGIBILITY.
(a) EDUCATIONAL AND GENERAL EXPENDITURES.—For
the purpose of this part, the term ‘‘educational and general expenditures’’
means the total amount expended by an institution of higher education for instruction, research, public service, academic support
(including library expenditures), student services, institutional support, scholarships and fellowships, operation and maintenance expenditures for the physical plant, and any mandatory transfers
which the institution is required to pay by law.
(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 (d);
(B) except as provided in section 392(b), the average
educational and general expenditures of which are low, per
full-time equivalent undergraduate student, in comparison
with the average educational and general expenditures per
full-time equivalent undergraduate student of institutions
that offer similar instruction;
(C) which is—
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(i) legally authorized to provide, and provides
within the State, an educational program for which
such institution awards a bachelor’s degree;
(ii) a junior or community college; or
(iii) the College of the Marshall Islands, the College of Micronesia/Federated States of Micronesia, and
Palau Community College;
(D) which is accredited by a nationally recognized accrediting agency or association determined by the Secretary to be reliable authority as to the quality of training
offered or which is, according to such an agency or association, making reasonable progress toward accreditation;
(E) which meets such other requirements as the Secretary may prescribe; and
(F) located in a State; and
(2) any branch of any institution of higher education described under paragraph (1) which by itself satisfies the requirements contained in subparagraphs (A) and (B) of such
paragraph.
For purposes of the determination of whether an institution is an
eligible institution under this paragraph, the factor described
under paragraph (1)(A) shall be given twice the weight of the factor
described under paragraph (1)(B).
(c) ENDOWMENT FUND.—For the purpose of this part, the term
‘‘endowment fund’’ means a fund that—
(1) is established by State law, by an institution of higher
education, or by a foundation that is exempt from Federal income taxation;
(2) is maintained for the purpose of generating income for
the support of the institution; and
(3) does not include real estate.
(d) ENROLLMENT OF NEEDY STUDENTS.—Except as provided in
section 318(b), for the purpose of this part, the term ‘‘enrollment
of needy students’’ means an enrollment at an institution of higher
education or a junior or community college which includes—
(1) at least 50 percent of the degree students so enrolled
who are receiving need-based assistance under title IV of this
Act in the second fiscal year preceding the fiscal year for which
the determination is being made (other than loans for which an
interest subsidy is paid pursuant to section 428), or
(2) a substantial percentage of students receiving Pell
Grants in the second fiscal year preceding the fiscal year for
which determination is being made, in comparison with the
percentage of students receiving Pell Grants at all such institutions in the second fiscal year preceding the fiscal year for
which the determination is made, unless the requirement of
this paragraph is waived under section 392(a).
(e) FULL-TIME EQUIVALENT STUDENTS.—For the purpose of this
part, the term ‘‘full-time equivalent students’’ means the sum of the
number of students enrolled full time at an institution, plus the
full-time equivalent of the number of students enrolled part time
(determined on the basis of the quotient of the sum of the credit
hours of all part-time students divided by 12) at such institution.
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(f) JUNIOR OR COMMUNITY COLLEGE.—For the purpose of this
part, the term ‘‘junior or community college’’ means an institution
of higher education—
(1) that admits as regular students persons who are beyond the age of compulsory school attendance in the State in
which the institution is located and who have the ability to
benefit from the training offered by the institution;
(2) that does not provide an educational program for which
it awards a bachelor’s degree (or an equivalent degree); and
(3) that—
(A) provides an educational program of not less than
2 years that is acceptable for full credit toward such a degree, or
(B) offers a 2-year program in engineering, mathematics, or the physical or biological sciences, designed to
prepare a student to work as a technician or at the
semiprofessional level in engineering, scientific, or other
technological fields requiring the understanding and application of basic engineering, scientific, or mathematical
principles of knowledge.
(g) LOW-INCOME INDIVIDUAL.—For the purpose of this part, 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.
(h) HISTORICALLY BLACK COLLEGE OR UNIVERSITY.—For the
purposes of this section, no historically black college or university
which is eligible for and receives funds under part B of this title
is eligible for or may receive funds under this part.
SEC. 313. ø20 U.S.C. 1059¿ DURATION OF GRANT.
(a) AWARD PERIOD.—The Secretary may
award a grant to an
eligible institution under this part for 5 years.
(b) LIMITATIONS.—In awarding grants under this part the Secretary shall give priority to applicants who are not already receiving a grant under this part, except that for the purpose of this subsection a grant under subsection (c) and a grant under section
394(a)(1) shall not be considered a grant under this part.
(c) PLANNING GRANTS.—Notwithstanding subsection (a), the
Secretary may award a grant to an eligible institution under this
part for a period of one year for the purpose of preparation of plans
and applications for a grant under this part.
(d) WAIT-OUT-PERIOD.—Each eligible institution that received
a grant under this part for a 5-year period shall not be eligible to
receive an additional grant under this part until 2 years after the
date on which the 5-year grant period terminates.
SEC. 314. ø20 U.S.C. 1059a¿ APPLICATIONS.
Each eligible institution desiring to receive assistance under
this part shall submit an application in accordance with the requirements of section 391.
SEC. 315. ø20 U.S.C. 1059b¿ GOALS FOR FINANCIAL MANAGEMENT AND
ACADEMIC PROGRAM.
(a) GOALS.—Any application for a grant under this part shall
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ment and academic programs, and include a plan of how the applicant intends to achieve those goals.
(b) CONTINUATION REQUIREMENTS.—Any continuation application shall demonstrate the progress made toward achievement of
the goals described pursuant to subsection (a).
SEC. 316. ø20 U.S.C. 1059c¿ AMERICAN INDIAN TRIBALLY CONTROLLED
COLLEGES AND UNIVERSITIES.
(a) PROGRAM AUTHORIZED.—The Secretary shall provide grants
and related assistance to Tribal Colleges and Universities to enable
such institutions to improve and expand their capacity to serve Indian students.
(b) DEFINITIONS.—In this section:
(1) INDIAN.—The term ‘‘Indian’’ has the meaning given the
term in section 2 of the Tribally Controlled Colleges and Universities Assistance Act of 1978.
(2) INDIAN TRIBE.—The term ‘‘Indian tribe’’ has the meaning given the term in section 2 of the Tribally Controlled Colleges and Universities Assistance Act of 1978.
(3) TRIBAL COLLEGE OR UNIVERSITY.—The term ‘‘Tribal College or University’’ means an institution that—
(A) qualifies for funding under the Tribally Controlled
Colleges and Universities Assistance Act of 1978 (25
U.S.C. 1801 et seq.) or the Navajo Community College Act
(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) INSTITUTION OF HIGHER EDUCATION.—The term ‘‘institution of higher education’’ means an institution of higher education as defined in section 101(a), except that paragraph (2)
of such section shall not apply.
(c) AUTHORIZED ACTIVITIES.—
(1) IN GENERAL.—Grants awarded under this section shall
be used by Tribal Colleges or Universities to assist such institutions to plan, develop, undertake, and carry out activities to
improve and expand such institutions’ capacity to serve Indian
students.
(2) EXAMPLES OF AUTHORIZED ACTIVITIES.—The activities
described in paragraph (1) may include—
(A) purchase, rental, or lease of scientific or laboratory
equipment for educational purposes, including instructional and research purposes;
(B) construction, maintenance, renovation, and improvement in classrooms, libraries, laboratories, and other
instructional facilities, including purchase or rental of telecommunications technology equipment or services, and the
acquisition of real property adjacent to the campus of the
institution on which to construct such facilities;
(C) support of faculty exchanges, faculty development,
and faculty fellowships to assist in attaining advanced degrees in the faculty’s field of instruction or in tribal governance or tribal public policy;
(D) academic instruction in disciplines in which Indians are underrepresented and instruction in tribal governance or tribal public policy;
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(E) purchase of library books, periodicals, and other
educational materials, including telecommunications program material;
(F) tutoring, counseling, and student service programs
designed to improve academic success;
(G) education or counseling services designed to improve the financial literacy and economic literacy of students or the students’ families;
(H) funds management, administrative management,
and acquisition of equipment for use in strengthening
funds management;
(I) joint use of facilities, such as laboratories and libraries;
(J) establishing or improving a development office to
strengthen or improve contributions from alumni and the
private sector;
(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;
(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;
(M) developing or improving facilities for Internet use
or other distance education technologies; and
(N) other activities proposed in the application submitted pursuant to subsection (d) that—
(i) contribute to carrying out the activities described in subparagraphs (A) through (M); and
(ii) are approved by the Secretary as part of the
review and acceptance of such application.
(3) ENDOWMENT FUND.—
(A) IN GENERAL.—A Tribal College or University may
use not more than 20 percent of the grant funds provided
under this section to establish or increase an endowment
fund at the institution.
(B) MATCHING REQUIREMENT.—In order to be eligible
to use grant funds in accordance with subparagraph (A),
the Tribal College or University shall provide matching
funds, in an amount equal to the Federal funds used in accordance with subparagraph (A), for the establishment or
increase of the endowment fund.
(C) COMPARABILITY.—The provisions of part C regarding the establishment or increase of an endowment fund,
that the Secretary determines are not inconsistent with
this paragraph, shall apply to funds used under subparagraph (A).
(d) APPLICATION, 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).
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(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, in such manner,
and containing such information 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
under this section.
(3) AWARDS AND 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
one-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) for any fiscal year, the Secretary shall give
preference to eligible institutions that have not received an award under this section for a previous fiscal year.
(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
Colleges and Universities Assistance Act of 1978
(25 U.S.C. 1801(a)) of the Tribal Colleges and Universities.
(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.—No Tribal College or University that receives funds under this section shall concurrently receive funds under any other provision of this part,
part B, or part A of title V.
(B) EXEMPTION.—Section 313(d) shall not apply to institutions that are eligible to receive funds under this section.
SEC. 317. ø20 U.S.C. 1059d¿ ALASKA NATIVE AND NATIVE HAWAIIANSERVING INSTITUTIONS.
(a) PROGRAM AUTHORIZED.—The Secretary shall provide grants
and related assistance to Alaska Native-serving institutions and
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Native Hawaiian-serving institutions to enable such institutions to
improve and expand their capacity to serve Alaska Natives and Native Hawaiians.
(b) DEFINITIONS.—For the purpose of this section—
(1) the term ‘‘Alaska Native’’ has the meaning given the
term in section 7306 of the Elementary and Secondary Education Act of 1965;
(2) the term ‘‘Alaska Native-serving institution’’ means an
institution of higher education that—
(A) is an eligible institution under section 312(b); and
(B) at the time of application, has an enrollment of undergraduate students that is at least 20 percent Alaska
Native students;
(3) the term ‘‘Native Hawaiian’’ has the meaning given the
term in section 7207 of the Elementary and Secondary Education Act of 1965; and
(4) the term ‘‘Native Hawaiian-serving institution’’ means
an institution of higher education which—
(A) is an eligible institution under section 312(b); and
(B) at the time of application, has an enrollment of undergraduate students that is at least 10 percent Native
Hawaiian students.
(c) AUTHORIZED ACTIVITIES.—
(1) TYPES OF ACTIVITIES AUTHORIZED.—Grants awarded
under this section shall be used by Alaska Native-serving institutions and Native Hawaiian-serving institutions to assist such
institutions to plan, develop, undertake, and carry out activities to improve and expand such institutions’ capacity to serve
Alaska Natives or Native Hawaiians.
(2) EXAMPLES OF AUTHORIZED ACTIVITIES.—Such programs
may include—
(A) purchase, rental, or lease of scientific or laboratory
equipment for educational purposes, including instructional and research purposes;
(B) renovation and improvement in classroom, library,
laboratory, and other instructional facilities;
(C) support of faculty exchanges, and faculty development and faculty fellowships to assist in attaining advanced degrees in the faculty’s field of instruction;
(D) curriculum development and academic instruction;
(E) purchase of library books, periodicals, microfilm,
and other educational materials;
(F) funds and administrative management, and acquisition of equipment for use in strengthening funds management;
(G) joint use of facilities such as laboratories and libraries;
(H) academic tutoring and counseling programs and
student support services; and
(I) education or counseling services designed to improve the financial literacy and economic literacy of students or the students’ families.
(d) APPLICATION PROCESS.—
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(1) INSTITUTIONAL ELIGIBILITY.—Each Alaska Native-serving institution and Native Hawaiian-serving 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 an Alaska Native-serving institution or a Native Hawaiian-serving institution as defined in
subsection (b), along with such other information and data as
the Secretary may by regulation require.
(2) APPLICATIONS.—Any institution which is determined by
the Secretary to be an Alaska Native-serving institution or a
Native Hawaiian-serving institution may submit an application
for assistance under this section to the Secretary. The Secretary shall, to the extent possible, prescribe a simplified and
streamlined format for such applications that takes into account the limited number of institutions that are eligible for
assistance under this section. Such application shall include—
(A) a 5-year plan for improving the assistance provided by the Alaska Native-serving institution or the Native Hawaiian-serving institution to Alaska Native or Native Hawaiian students; and
(B) such other information and assurance as the Secretary may require.
(3) SPECIAL RULES.—
(A) ELIGIBILITY.—No Alaskan Native-serving institution or Native Hawaiian-serving 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. 318. ø20 U.S.C. 1059e¿ PREDOMINANTLY BLACK INSTITUTIONS.
(a) PURPOSE.—It is the purpose of this section to assist Pre-
dominantly Black Institutions in expanding educational opportunity through a program of Federal assistance.
(b) DEFINITIONS.—In this section:
(1) ELIGIBLE INSTITUTION.—The term ‘‘eligible institution’’
means an institution of higher education that—
(A) has an enrollment of needy undergraduate students;
(B) has an average educational and general expenditure that is low, per full-time equivalent undergraduate
student, in comparison with the average educational and
general expenditure per full-time equivalent undergraduate student of institutions that offer similar instruction, except that the Secretary may apply the waiver requirements described in section 392(b) to this subparagraph in the same manner as the Secretary applies the
waiver requirements to section 312(b)(1)(B);
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(C) has an enrollment of undergraduate students that
is not less than 40 percent Black American students;
(D) is legally authorized to provide, and provides,
within the State an educational program for which the institution of higher education awards a baccalaureate degree or, in the case of a junior or community college, an
associate’s degree;
(E) is accredited by a nationally recognized accrediting
agency or association determined by the Secretary to be a
reliable authority as to the quality of training offered or is,
according to such an agency or association, making reasonable progress toward accreditation; and
(F) is not receiving assistance under—
(i) part B;
(ii) part A of title V; or
(iii) an annual authorization of appropriations
under the Act of March 2, 1867 (14 Stat. 438; 20
U.S.C. 123).
(2) ENROLLMENT OF NEEDY STUDENTS.—The term ‘‘enrollment of needy students’’ means the enrollment at an eligible
institution with respect to which not less than 50 percent of
the undergraduate students enrolled in an academic program
leading to a degree—
(A) in the second fiscal year preceding the fiscal year
for which the determination is made, were Federal Pell
Grant recipients for such year;
(B) come from families that receive benefits under a
means-tested Federal benefit program;
(C) attended a public or nonprofit private secondary
school that—
(i) is in the school district of a local educational
agency that was eligible for assistance under part A of
title I of the Elementary and Secondary Education Act
of 1965 for any year during which the student attended such secondary school; and
(ii) for the purpose of this paragraph and for such
year of attendance, was determined by the Secretary
(pursuant to regulations and after consultation with
the State educational agency of the State in which the
school is located) to be a school in which the enrollment of children meeting a measure of poverty under
section 1113(a)(5) of such Act exceeds 30 percent of the
total enrollment of such school; or
(D) are first-generation college students and a majority of such first-generation college students are low-income
individuals.
(3) FIRST-GENERATION COLLEGE STUDENT.—The term ‘‘firstgeneration college student’’ has the meaning given the term in
section 402A(h).
(4) LOW-INCOME INDIVIDUAL.—The term ‘‘low-income individual’’ has the meaning given such term in section 402A(h).
(5) MEANS-TESTED FEDERAL BENEFIT PROGRAM.—The term
‘‘means-tested Federal benefit program’’ means a program of
the Federal Government, other than a program under title IV,
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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.
(6) PREDOMINANTLY BLACK INSTITUTION.—The term ‘‘Predominantly Black Institution’’ means an institution of higher
education, as defined in section 101(a)—
(A) that is an eligible institution with not less than
1,000 undergraduate students;
(B) at which not less than 50 percent of the undergraduate students enrolled at the eligible institution are
low-income individuals or first-generation college students;
and
(C) at which not less than 50 percent of the undergraduate students are enrolled in an educational program
leading to a bachelor’s or associate’s degree that the eligible institution is licensed to award by the State in which
the eligible institution is located.
(7) STATE.—The term ‘‘State’’ means each of the 50 States
and the District of Columbia.
(c) GRANT AUTHORITY.—
(1) IN GENERAL.—The Secretary is authorized to award
grants, from allotments under subsection (e), to Predominantly
Black Institutions to enable the Predominantly Black Institutions to carry out the authorized activities described in subsection (d).
(2) PRIORITY.—In awarding grants under this section the
Secretary shall give priority to Predominantly Black Institutions with large numbers or percentages of students described
in subsections (b)(1)(A) or (b)(1)(C). The level of priority given
to Predominantly Black Institutions with large numbers or
percentages of students described in subsection (b)(1)(A) shall
be twice the level of priority given to Predominantly Black Institutions with large numbers or percentages of students described in subsection (b)(1)(C).
(d) AUTHORIZED ACTIVITIES.—
(1) REQUIRED ACTIVITIES.—Grant funds provided under
this section shall be used—
(A) to assist the Predominantly Black Institution to
plan, develop, undertake, and implement programs to enhance the institution’s capacity to serve more low- and
middle-income Black American students;
(B) to expand higher education opportunities for students eligible to participate in programs under title IV by
encouraging college preparation and student persistence in
secondary school and postsecondary education; and
(C) to strengthen the financial ability of the Predominantly Black Institution to serve the academic needs of the
students described in subparagraphs (A) and (B).
(2) ADDITIONAL ACTIVITIES.—Grant funds provided under
this section shall be used for one or more of the following activities:
(A) The activities described in paragraphs (1) through
(12) of section 311(c).
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(B) Academic instruction in disciplines in which Black
Americans are underrepresented.
(C) Establishing or enhancing a program of teacher
education designed to qualify students to teach in a public
elementary school or secondary school in the State that
shall include, as part of such program, preparation for
teacher certification or licensure.
(D) 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.
(E) Other activities proposed in the application submitted pursuant to subsection (f) that—
(i) contribute to carrying out the purpose of this
section; and
(ii) are approved by the Secretary as part of the
review and approval of an application submitted under
subsection (f).
(3) ENDOWMENT FUND.—
(A) IN GENERAL.—A Predominantly Black Institution
may use not more than 20 percent of the grant funds provided under this section to establish or increase an endowment fund at the institution.
(B) MATCHING REQUIREMENT.—In order to be eligible
to use grant funds in accordance with subparagraph (A), a
Predominantly Black Institution shall provide matching
funds from non-Federal sources, in an amount equal to or
greater than the Federal funds used in accordance with
subparagraph (A), for the establishment or increase of the
endowment fund.
(C) COMPARABILITY.—The provisions of part C, regarding the establishment or increase of an endowment fund,
that the Secretary determines are not inconsistent with
this subsection, shall apply to funds used under subparagraph (A).
(4) LIMITATION.—Not more than 50 percent of the grant
funds provided to a Predominantly Black Institution under this
section may be available for the purpose of constructing or
maintaining a classroom, library, laboratory, or other instructional facility.
(e) ALLOTMENTS TO PREDOMINANTLY BLACK INSTITUTIONS.—
(1) FEDERAL PELL GRANT BASIS.—From the amounts appropriated to carry out this section for any fiscal year, the Secretary shall allot to each Predominantly Black Institution having an application approved under subsection (f) a sum that
bears the same ratio to one-half of that amount as the number
of Federal Pell Grant recipients in attendance at such institution at the end of the academic year preceding the beginning
of that fiscal year, bears to the total number of Federal Pell
Grant recipients at all such institutions at the end of such academic year.
(2) GRADUATES BASIS.—From the amounts appropriated to
carry out this section for any fiscal year, the Secretary shall
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cation approved under subsection (f) a sum that bears the
same ratio to one-fourth of that amount as the number of graduates for such academic year at such institution, bears to the
total number of graduates for such academic year at all such
institutions.
(3) GRADUATES SEEKING A HIGHER DEGREE BASIS.—From
the amounts appropriated to carry out this section for any fiscal year, the Secretary shall allot to each Predominantly Black
Institution having an application approved under subsection (f)
a sum that bears the same ratio to one-fourth of that amount
as the percentage of graduates from such institution who are
admitted to and in attendance at, not later than two years
after graduation with an associate’s degree or a baccalaureate
degree, a baccalaureate degree-granting institution or a graduate or professional school in a degree program in disciplines
in which Black American students are underrepresented, bears
to the percentage of such graduates for all such institutions.
(4) MINIMUM ALLOTMENT.—
(A) IN GENERAL.—Notwithstanding paragraphs (1), (2),
and (3), the amount allotted to each Predominantly Black
Institution under this section may not be less than
$250,000.
(B) INSUFFICIENT AMOUNT.—If the amounts appropriated to carry out this section for a fiscal year are not
sufficient to pay the minimum allotment provided under
subparagraph (A) for the fiscal year, then the amount of
such minimum allotment shall be ratably reduced. If additional sums become available for such fiscal year, such reduced allotment shall be increased on the same basis as
the allotment was reduced until the amount allotted
equals the minimum allotment required under subparagraph (A).
(5) REALLOTMENT.—The amount of a Predominantly Black
Institution’s allotment under paragraph (1), (2), (3), or (4) for
any fiscal year that the Secretary determines will not be needed for such institution for the period for which such allotment
is available, shall be available for reallotment to other Predominantly Black Institutions in proportion to the original allotments to such other institutions under this section for such
fiscal year. The Secretary shall reallot such amounts from time
to time, on such date and during such period as the Secretary
determines appropriate.
(f) APPLICATIONS.—Each Predominantly Black Institution desiring a grant under this section 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.
(g) APPLICATION REVIEW PROCESS.—Section 393 shall not apply
to applications under this section.
(h) DURATION AND CARRYOVER.—Any grant funds paid to a
Predominantly Black Institution under this section that are not expended or used for the purposes for which the funds were paid
within ten years following the date on which the grant was awarded, shall be repaid to the Treasury.
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(i) SPECIAL RULE ON ELIGIBILITY.—No Predominantly Black Institution that receives funds under this section shall concurrently
receive funds under any other provision of this part, part B, or part
A of title V.
SEC. 319. ø20 U.S.C. 1059f¿ 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 and low-income individuals.
(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, as defined in section
101(a), that, at the time of application—
(A) is an eligible institution under section 312(b);
(B) has an enrollment of undergraduate students that
is not less than 10 percent Native American students; and
(C) 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 and
low-income individuals.
(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;
(H) academic tutoring and counseling programs and
student support services; and
(I) education or counseling services designed to improve the financial and economic literacy of students or the
students’ families.
(d) APPLICATION PROCESS.—
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(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 reasonably require.
(2) APPLICATIONS.—
(A) AUTHORITY 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, continue to 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 five-year plan for improving the assistance
provided by the Native American-serving, nontribal institution to Native Americans and low-income individuals; and
(ii) such other information and assurances as the
Secretary may reasonably require.
(3) SPECIAL RULES.—
(A) ELIGIBILITY.—No Native American-serving, nontribal institution that receives funds under this section
shall concurrently receive funds under any other provision
of this part, part B, or part A of title V.
(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) MINIMUM GRANT AMOUNT.—The minimum amount
of a grant under this section shall be $200,000.
SEC. 320. ø20 U.S.C. 1059g¿ ASIAN AMERICAN AND NATIVE AMERICAN
PACIFIC ISLANDER-SERVING INSTITUTIONS.
(a) PROGRAM AUTHORIZED.—The Secretary shall provide grants
and related assistance to Asian American and Native American Pacific Islander-serving institutions to enable such institutions to improve and expand their capacity to serve Asian Americans and Native American Pacific Islanders and low-income individuals.
(b) DEFINITIONS.—In this section:
(1) ASIAN AMERICAN.—The term ‘‘Asian American’’ has the
meaning given the term ‘‘Asian’’ in the Office of Management
and Budget’s Standards for Maintaining, Collecting, and Presenting Federal Data on Race and Ethnicity as published on
October 30, 1997 (62 Fed. Reg. 58789).
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(2) ASIAN AMERICAN AND NATIVE AMERICAN PACIFIC ISLANDER-SERVING INSTITUTION.—The term ‘‘Asian American and
Native American Pacific Islander-serving institution’’ means an
institution of higher education that—
(A) is an eligible institution under section 312(b); and
(B) at the time of application, has an enrollment of undergraduate students that is not less than 10 percent students who are Asian American or Native American Pacific
Islander.
(3) NATIVE AMERICAN PACIFIC ISLANDER.—The term ‘‘Native American Pacific Islander’’ means any descendant of the
aboriginal people of any island in the Pacific Ocean that is a
territory or possession of the United States.
(c) AUTHORIZED ACTIVITIES.—
(1) TYPES OF ACTIVITIES AUTHORIZED.—Grants awarded
under this section shall be used by Asian American and Native
American Pacific Islander-serving institutions to assist such institutions to plan, develop, undertake, and carry out activities
to improve and expand such institutions’ capacity to serve
Asian Americans and Native American Pacific Islanders and
low-income individuals.
(2) EXAMPLES OF AUTHORIZED ACTIVITIES.—Such programs
may include—
(A) purchase, rental, or lease of scientific or laboratory
equipment for educational purposes, including instructional and research purposes;
(B) renovation and improvement in classroom, library,
laboratory, and other instructional facilities;
(C) support of faculty exchanges, and faculty development and faculty fellowships to assist in attaining advanced degrees in the faculty’s field of instruction;
(D) curriculum development and academic instruction;
(E) purchase of library books, periodicals, microfilm,
and other educational materials;
(F) funds and administrative management, and acquisition of equipment for use in strengthening funds management;
(G) joint use of facilities such as laboratories and libraries;
(H) academic tutoring and counseling programs and
student support services;
(I) 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;
(J) establishing or improving an endowment fund;
(K) academic instruction in disciplines in which Asian
Americans and Native American Pacific Islanders are
underrepresented;
(L) conducting research and data collection for Asian
American and Native American Pacific Islander populations and subpopulations;
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(M) establishing partnerships with community-based
organizations serving Asian Americans and Native American Pacific Islanders; and
(N) education or counseling services designed to improve the financial and economic literacy of students or the
students’ families.
(d) APPLICATION PROCESS.—
(1) INSTITUTIONAL ELIGIBILITY.—Each Asian American and
Native American Pacific Islander-serving 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 an Asian American and Native
American Pacific Islander-serving institution as defined in subsection (b), along with such other information and data as the
Secretary may reasonably require.
(2) APPLICATIONS.—Any institution that is determined by
the Secretary to be an Asian American and Native American
Pacific Islander-serving institution may submit an application
for assistance under this section to the Secretary. Such application shall include—
(A) a five-year plan for improving the assistance provided by the Asian American and Native American Pacific
Islander-serving institution to Asian American and Native
American Pacific Islander students and low-income individuals; and
(B) such other information and assurances as the Secretary may reasonably require.
(3) SPECIAL RULES.—
(A) ELIGIBILITY.—No Asian American and Native
American Pacific Islander-serving institution that receives
funds under this section shall concurrently receive funds
under any other provision of this part, part B, or title V.
(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—
(i) 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; and
(ii) give priority consideration to institutions for
which not less than 10 percent of such institution’s
Asian American and Native American Pacific Islander
students are low-income individuals.
PART B—STRENGTHENING HISTORICALLY BLACK COLLEGES
UNIVERSITIES
AND
SEC. 321. ø20 U.S.C. 1060¿ FINDINGS AND PURPOSES.
The Congress finds that—
(1) the historically Black colleges and universities have
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tunity through postsecondary education for Black, low-income,
and educationally disadvantaged Americans;
(2) States and the Federal Government have discriminated
in the allocation of land and financial resources to support
Black public institutions under the Morrill Act of 1862 and its
progeny, and against public and private Black colleges and universities in the award of Federal grants and contracts, and the
distribution of Federal resources under this Act and other Federal programs which benefit institutions of higher education;
(3) the current state of Black colleges and universities is
partly attributable to the discriminatory action of the States
and the Federal Government and this discriminatory action requires the remedy of enhancement of Black postsecondary institutions to ensure their continuation and participation in fulfilling the Federal mission of equality of educational opportunity; and
(4) financial assistance to establish or strengthen the physical plants, financial management, academic resources, and endowments of the historically Black colleges and universities are
appropriate methods to enhance these institutions and facilitate a decrease in reliance on governmental financial support
and to encourage reliance on endowments and private sources.
SEC. 322. ø20 U.S.C. 1061¿ DEFINITIONS.
For the purpose of this part:
(1) The term ‘‘graduate’’ means an individual who has attended an institution for at least three semesters and fulfilled
academic requirements for undergraduate studies in not more
than 5 consecutive school years.
(2) The term ‘‘part B institution’’ means any historically
Black college or university that was established prior to 1964,
whose principal mission was, and is, the education of Black
Americans, and that is accredited by a nationally recognized
accrediting agency or association determined by the Secretary
to be a reliable authority as to the quality of training offered
or is, according to such an agency or association, making reasonable progress toward accreditation, except that any branch
campus of a southern institution of higher education that prior
to September 30, 1986, received a grant as an institution with
special needs under section 321 of this title and was formally
recognized by the National Center for Education Statistics as
a Historically Black College or University but was determined
not to be a part B institution on or after October 17, 1986,
shall, from the date of enactment of this exception, be considered a part B institution.
(3) The term ‘‘Pell Grant recipient’’ means a recipient of financial aid under subpart 1 of part A of title IV of this Act.
(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
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ployed is less than the percentage of Blacks in the general population.
(5) The term ‘‘school year’’ means the period of 12 months
beginning July 1 of any calendar year and ending June 30 of
the following calendar year.
SEC. 323. ø20 U.S.C. 1062¿ GRANTS TO INSTITUTIONS.
(a) GENERAL AUTHORIZATION; USES OF FUNDS.—From
amounts
available under section 399(a)(2) for 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) 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) Support of faculty exchanges, and faculty development
and faculty fellowships to assist in attaining advanced degrees
in their field of instruction.
(4) Academic instruction in disciplines in which Black
Americans are underrepresented.
(5) Purchase of library books, periodicals, microfilm, and
other educational materials, including telecommunications program materials.
(6) Tutoring, counseling, and student service programs designed to improve academic success.
(7) Funds and administrative management, and acquisition of equipment for use in strengthening funds management.
(8) Joint use of facilities, such as laboratories and libraries.
(9) Establishing or improving a development office to
strengthen or improve contributions from alumni and the private sector.
(10) Establishing or enhancing a program of teacher education designed to qualify students to teach in a public elementary or secondary school in the State that shall include, as part
of such program, preparation for teacher certification.
(11) Establishing community outreach programs which will
encourage elementary and secondary students to develop the
academic skills and the interest to pursue postsecondary education.
(12) Acquisition of real property in connection with the
construction, renovation, or addition to or improvement of campus facilities.
(13) Education or financial information designed to improve the financial literacy and economic literacy of students
or the students’ families, especially with regard to student indebtedness and student assistance programs under title IV.
(14) Services necessary for the implementation of projects
or activities that are described in the grant application and
that are approved, in advance, by the Secretary, except that
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not more than two percent of the grant amount may be used
for this purpose.
(15) Other activities proposed in the application submitted
pursuant to section 325 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.
(b) ENDOWMENT FUND.—
(1) IN GENERAL.—An institution may use not more than 20
percent of the grant funds provided under this part to establish
or increase an endowment fund at the institution.
(2) MATCHING REQUIREMENT.—In order to be eligible to use
grant funds in accordance with paragraph (1), the eligible institution shall provide matching funds from non-Federal
sources, in an amount equal to or greater than the Federal
funds used in accordance with paragraph (1), for the establishment or increase of the endowment fund.
(3) COMPARABILITY.—The provisions of part C regarding
the establishment or increase of an endowment fund, that the
Secretary determines are not inconsistent with this subsection,
shall apply to funds used under paragraph (1).
(c) LIMITATIONS.—(1) No grant may be made under this Act for
any educational program, activity, or service related to sectarian
instruction or religious worship, or provided by a school or department of divinity. For the purpose of this subsection, the term
‘‘school or department of divinity’’ means an institution whose program is specifically for the education of students to prepare them
to become ministers of religion or to enter upon some other religious vocation, or to prepare them to teach theological subjects.
(2) Not more than 50 percent of the allotment of any institution may be available for the purpose of constructing or maintaining a classroom, library, laboratory, or other instructional facility.
SEC. 324. ø20 U.S.C. 1063¿ ALLOTMENTS TO INSTITUTIONS.
(a) ALLOTMENT; PELL GRANT BASIS.—From the amounts
appropriated to carry out this part for any fiscal year, the Secretary shall
allot to each part B institution a sum which bears the same ratio
to one-half that amount as the number of Pell Grant recipients in
attendance at such institution at the end of the school year preceding the beginning of that fiscal year bears to the total number
of Pell Grant recipients at all part B institutions.
(b) ALLOTMENT; GRADUATES BASIS.—From the amounts appropriated to carry out this part for any fiscal year, the Secretary shall
allot to each part B institution a sum which bears the same ratio
to one-fourth that amount as the number of graduates for such
school year at such institution bears to the total number of graduates for such school year at all part B institutions.
(c) ALLOTMENT; GRADUATE AND PROFESSIONAL STUDENT
BASIS.—From the amounts appropriated to carry out this part for
any fiscal year, the Secretary shall allot to each part B institution
a sum which bears the same ratio to one-fourth of that amount as
the percentage of graduates per institution, who are admitted to
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laureate degree, a graduate or professional school in a degree program in disciplines in which Blacks are underrepresented, bears to
the percentage of such graduates per institution for all part B institutions.
(d) MINIMUM ALLOTMENT.—(1) Notwithstanding subsections (a)
through (c), and subject to subsection (h), if the amount of an
award under this section for a part B institution, based on the data
provided by the part B institution and the formula under subsections (a) through (c), would be—
(A) an amount that is greater than $250,000 but less than
$500,000, the Secretary shall award the part B institution an
allotment in the amount of $500,000; and
(B) an amount that is equal to or less than $250,000, the
Secretary shall award the part B institution an allotment in
the amount of $250,000.
(2) If the amount appropriated pursuant to section 399(a)(2)(A)
for any fiscal year is not sufficient to pay the minimum allotment
required by paragraph (1) to all part B institutions, the amount of
such minimum allotments shall be ratably reduced. If additional
sums become available for such fiscal year, such reduced allocations shall be increased on the same basis as the basis on which
they were reduced (until the amount allotted equals the minimum
allotment required by paragraph (1)).
(e) REALLOTMENT.—The amount of any part B institution’s allotment under subsection (a), (b), (c), or (d) for any fiscal year
which the Secretary determines will not be required for such institution for the period such allotment is available shall be available
for reallotment from time to time on such date during such period
as the Secretary may determine to other part B institutions in proportion to the original allotment to such other institutions under
this section for such fiscal year.
(f) SPECIAL MERGER RULE.—(1) The Secretary shall permit any
eligible institution for a grant under part B in any fiscal year prior
to the fiscal year 1986 to apply for a grant under this part if the
eligible institution has merged with another institution of higher
education which is not so eligible or has merged with an eligible
institution.
(2) The Secretary may establish such regulations as may be
necessary to carry out the requirement of paragraph (1) of this subsection.
(g) SPECIAL RULE FOR CERTAIN DISTRICT OF COLUMBIA ELIGIBLE INSTITUTIONS.—In any fiscal year that the Secretary determines that Howard University or the University of the District of
Columbia will receive an allotment under subsections (b) and (c) of
this section which is not in excess of amounts received by Howard
University under the Act of March 2, 1867 (14 Stat. 438; 20 U.S.C.
123), relating to annual authorization of appropriations for Howard
University, or by the University of the District of Columbia under
the District of Columbia Self-Government and Governmental Reorganization Act (87 Stat. 774) for such fiscal year, then Howard University and the University of the District of Columbia, as the case
may be, shall be ineligible to receive an allotment under this section.
(h) CONDITIONS FOR ALLOTMENTS.—
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(1) STUDENT REQUIREMENTS FOR ALLOTMENT.—Notwithstanding any other provision of this section, a part B institution that would otherwise be eligible for funds under this part
shall not receive an allotment under this part for a fiscal year,
including the minimum allotment under subsection (d), if the
part B institution, in the academic year preceding such fiscal
year—
(A) did not have any enrolled students who were Pell
Grant recipients;
(B) did not graduate any students; or
(C) where appropriate, did not have any students who,
within 5 years of graduation from the part B institution,
were admitted to and in attendance at a graduate or professional school in a degree program in disciplines in
which Blacks are underrepresented.
(2) DATA REQUIREMENTS FOR ALLOTMENTS.—Notwithstanding any other provision of this section, a part B institution shall not receive an allotment under this part for a fiscal
year, including the minimum allotment under subsection (d),
unless the institution provides the Secretary with the data required by the Secretary and for purposes of the formula described in subsections (a) through (c), including—
(A) the number of Pell Grant recipients enrolled in the
part B institution in the academic year preceding such fiscal year;
(B) the number of students who earned an associate or
baccalaureate degree from the part B institution in the
academic year preceding such fiscal year; and
(C) where appropriate, the percentage of students who,
within 5 years of graduation from the part B institution,
were admitted to and in attendance at a graduate or professional school in a degree program in disciplines in
which Blacks are underrepresented in the academic year
preceding such fiscal year.
SEC. 325. ø20 U.S.C. 1063a¿ APPLICATIONS.
(a) CONTENTS.—No part B institution
shall be entitled to its allotment of Federal funds for any grant under section 324 for any
period unless that institution meets the requirements of subparagraphs (C), (D), and (E) of section 312(b)(1) and submits an application to the Secretary at such time, in such manner, and containing
or accompanied by such information, as the Secretary may reasonably require. Each such application shall—
(1) provide that the payments under this Act will be used
for the purposes set forth in section 323; and
(2) provide for making an annual report to the Secretary
and provide for—
(A) conducting, except as provided in subparagraph
(B), a financial and compliance audit of an eligible institution, with regard to any funds obtained by it under this
title at least once every 2 years 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
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of governmental organizations, programs, and functions,
and as prescribed in regulations of the Secretary, the results of which shall be submitted to the Secretary; or
(B) with regard to an eligible institution which is audited under chapter 75 of title 31, United States Code,
deeming such audit to satisfy the requirements of subparagraph (A) for the period covered by such audit.
(b) APPROVAL.—The Secretary shall approve any application
which meets the requirements of subsection (a) and shall not disapprove any application submitted under this part, or any modification thereof, without first affording such institution reasonable
notice and opportunity for a hearing.
(c) GOALS FOR FINANCIAL MANAGEMENT AND ACADEMIC PROGRAMS.—Any application for a grant under this part shall describe
measurable goals for the institution’s financial management and
academic programs and include a plan of how the applicant intends
to achieve those goals.
SEC. 326. ø20 U.S.C. 1063b¿ PROFESSIONAL OR GRADUATE INSTITUTIONS.
(a) GENERAL AUTHORIZATION.—(1) Subject to the availability of
funds appropriated to carry out this section, the Secretary shall
award program grants to each of the postgraduate institutions listed in subsection (e) that is determined by the Secretary to be making a substantial contribution to the legal, medical, dental, veterinary, or other graduate education opportunities in mathematics,
engineering, or the physical or natural sciences for Black Americans.
(2) No grant in excess of $1,000,000 may be made under this
section unless the postgraduate institution provides assurances
that 50 percent of the cost of the purposes for which the grant is
made will be paid from non-Federal sources, except that no institution shall be required to match any portion of the first $1,000,000
of the institution’s award from the Secretary. After funds are made
available to each eligible institution under the funding rules described in subsection (f ), the Secretary shall distribute, on a pro
rata basis, any amounts which were not so made available (by reason of the failure of an institution to comply with the matching requirements of this paragraph) among the institutions that have
complied with such matching requirement.
(b) DURATION.—Grants shall be made for a period not to exceed
5 years. Any funds awarded for such five-year grant period that are
obligated during such five-year period may be expended during the
10-year period beginning on the first day of such five-year period.
(c) USES OF FUNDS.—A grant under this section may be used
for—
(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
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cational materials, including telecommunications program materials;
(4) scholarships, fellowships, and other financial assistance
for needy graduate and professional students to permit the enrollment of the students in and completion of the doctoral degree in medicine, dentistry, pharmacy, veterinary medicine,
law, and the doctorate degree in the physical or natural
sciences, engineering, mathematics, or other scientific disciplines in which African Americans are underrepresented;
(5) establishing or improving a development office to
strengthen and increase contributions from alumni and the private sector;
(6) assisting in the establishment or maintenance of an institutional endowment to facilitate financial independence pursuant to section 331;
(7) funds and administrative management, and the acquisition of equipment, including software, for use in strengthening funds management and management information systems;
(8) acquisition of real property that is adjacent to the campus in connection with the construction, renovation, or addition
to or improvement of campus facilities;
(9) education or financial information designed to improve
the financial literacy and economic literacy of students or the
students’ families, especially with regard to student indebtedness and student assistance programs under title IV;
(10) services necessary for the implementation of projects
or activities that are described in the grant application and
that are approved, in advance, by the Secretary, except that
not more than two percent of the grant amount may be used
for this purpose;
(11) tutoring, counseling, and student service programs designed to improve academic success; and
(12) 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) APPLICATION.—Any institution eligible for a grant under
this section shall submit an application which—
(1) demonstrates how the grant funds will be used to improve graduate educational opportunities for Black and low-income students, and lead to greater financial independence; and
(2) provides, in the case of applications for grants in excess
of $1,000,000, the assurances required by subsection (a)(2) and
specifies the manner in which the eligible institution is going
to pay the non-Federal share of the cost of the application.
(e) ELIGIBILITY.—
(1) IN GENERAL.—Independent professional or graduate institutions and programs eligible for grants under subsection (a)
are the following:
(A) Morehouse School of Medicine;
(B) Meharry Medical School;
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(C) Charles R. Drew Postgraduate Medical School;
(D) Clark-Atlanta University;
(E) Tuskegee University School of Veterinary Medicine
and other qualified graduate programs;
(F) Xavier University School of Pharmacy and other
qualified graduate programs;
(G) Southern University School of Law and other
qualified graduate programs;
(H) Texas Southern University School of Law and
School of Pharmacy and other qualified graduate programs;
(I) Florida A&M University School of Pharmaceutical
Sciences and other qualified graduate programs;
(J) North Carolina Central University School of Law
and other qualified graduate programs;
(K) Morgan State University qualified graduate program;
(L) Hampton University qualified graduate program;
(M) Alabama A&M qualified graduate program;
(N) North Carolina A&T State University qualified
graduate program;
(O) University of Maryland Eastern Shore qualified
graduate program;
(P) Jackson State University qualified graduate program;
(Q) Norfolk State University qualified graduate programs;
(R) Tennessee State University qualified graduate programs;
(S) Alabama State University qualified graduate programs;
(T) Prairie View A&M University qualified graduate
programs;
(U) Delaware State University qualified graduate programs;
(V) Langston University qualified graduate programs;
(W) Bowie State University qualified graduate programs; and
(X) University of the District of Columbia David A.
Clarke School of Law.
(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, psychometrics, 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) Notwithstanding the enrollment requirement contained
in subparagraph (A), an institution may use an amount equal
to not more than 10 percent of the institution’s grant under
this section for the development of a new qualified graduate
program.
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(3) SPECIAL RULE.—Institutions that were awarded grants
under this section prior to October 1, 2008, shall continue to
receive such grants, subject to the availability of appropriated
funds, regardless of the eligibility of the institutions described
in subparagraphs (S) through (X) of paragraph (1).
(4) ONE GRANT PER INSTITUTION.—The Secretary shall not
award more than 1 grant under this section in any fiscal year
to any institution of higher education.
(5) INSTITUTIONAL CHOICE.—The president or chancellor of
the institution may decide which graduate or professional
school or qualified graduate program will receive funds under
the grant in any 1 fiscal year, if the allocation of funds among
the schools or programs is delineated in the application for
funds submitted to the Secretary under this section.
(f) FUNDING RULE.—Subject to subsection (g), of the amount
appropriated to carry out this section for any fiscal year—
(1) the first $56,900,000 (or any lesser amount appropriated) shall be available only for the purposes of making
grants to institutions or programs described in subparagraphs
(A) through (R) of subsection (e)(1);
(2) any amount in excess of $56,900,000, but not in excess
of $62,900,000, shall be available for the purpose of making
grants to institutions or programs described in subparagraphs
(S) through (X) of subsection (e)(1); and
(3) any amount in excess of $62,900,000, shall be made
available to each of the institutions or programs identified in
subparagraphs (A) through (X) 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.
(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.
(D) The number of students in the previous year who
received their first professional or doctoral degree from the
programs for which the eligible institution 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.
(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 2008
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 2008, unMay 7, 2013
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less 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.
(h) INTERACTION WITH OTHER GRANT PROGRAMS.—No institution that is eligible for and receives an award under section 512,
723, or 724 for a fiscal year shall be eligible to apply for a grant,
or receive grant funds, under this section for the same fiscal year.
SEC. 327. ø20 U.S.C. 1063c¿ REPORTING AND AUDIT REQUIREMENTS.
(a) RECORDKEEPING.—Each recipient of a grant under this part
shall keep such records as the Secretary shall prescribe, including
records which fully disclose—
(1) the amount and disposition by such recipient of the
proceeds of such assistance;
(2) the cost of the project or undertaking in connection
with which such assistance is given or used;
(3) the amount of that portion of the cost of the project or
undertaking supplied by other sources; and
(4) such other records as will facilitate an effective audit.
(b) USE OF UNEXPENDED FUNDS.—Any funds paid to an institution and not expended or used for the purposes for which the funds
were paid during the five-year period following the date of the initial grant award, may be carried over and expended during the succeeding five-year period, if such funds were obligated for a purpose
for which the funds were paid during the five-year period following
the date of the initial grant award.
PART C—ENDOWMENT CHALLENGE GRANTS FOR INSTITUTIONS
ELIGIBLE FOR ASSISTANCE UNDER PART A OR PART B
SEC. 331. ø20 U.S.C. 1065¿ ENDOWMENT CHALLENGE GRANTS.
(a) PURPOSE; DEFINITIONS.—(1) The purpose of this section
is
to establish a program to provide matching grants to eligible institutions in order to establish or increase endowment funds at such
institutions, to provide additional incentives to promote fund raising activities by such institutions, and to foster increased independence and self-sufficiency at such institutions.
(2) For the purpose of this section:
(A) The term ‘‘endowment fund’’ means a fund established
by State law, by an institution of higher education, or by a
foundation which is exempt from taxation and is maintained
for the purpose of generating income for the support of the institution, but which shall not include real estate.
(B) The term ‘‘endowment fund corpus’’ means an amount
equal to the grant or grants awarded under this section plus
an amount equal to such grant or grants provided by the institution.
(C) The term ‘‘endowment fund income’’ means an amount
equal to the total value of the endowment fund established
under this section minus the endowment fund corpus.
(D)(i) The term ‘‘eligible institution’’ means an institution
that is an—
(I) eligible institution under part A or would be considered to be such an institution if section 312(b)(1)(C) re-
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ferred to a postgraduate degree rather than a bachelor’s
degree;
(II) institution eligible for assistance under part B or
would be considered to be such an institution if section 324
referred to a postgraduate degree rather than a baccalaureate degree; or
(III) institution of higher education that makes a substantial contribution to postgraduate medical educational
opportunities for minorities and the economically disadvantaged.
(ii) The Secretary may waive the requirements of subclauses (I) and (II) of clause (i) with respect to a postgraduate
degree in the case of any institution otherwise eligible under
clause (i) for an endowment challenge grant upon determining
that the institution makes a substantial contribution to medical education opportunities for minorities and the economically disadvantaged.
(b) GRANTS AUTHORIZED.—(1) From sums available for this section under section 399, the Secretary is authorized to award endowment challenge grants to eligible institutions to establish or increase an endowment fund at such institution. Such grants shall
be made only to eligible institutions described in paragraph (4)
whose applications have been approved pursuant to subsection (g).
(2)(A) Except as provided in subparagraph (B), no institution
shall receive a grant under this section, unless such institution has
deposited in its endowment fund established under this section an
amount equal to the amount of such grant. The source of funds for
this institutional match shall not include Federal funds or funds
from an existing endowment fund.
(B) The Secretary may make a grant under this part to an eligible institution in any fiscal year if the institution—
(i) applies for a grant in an amount not exceeding
$1,000,000; and
(ii) has deposited in the eligible institution’s endowment
fund established under this section an amount which is equal
to 1⁄2 of the amount of such grant.
(C) An eligible institution of higher education that is awarded
a grant under subparagraph (B) shall not be eligible to receive an
additional grant under subparagraph (B) until 10 years after the
date on which the grant period terminates.
(3) The period of a grant under this section shall be not more
than 20 years. During the grant period, an institution may not
withdraw or expend any of the endowment fund corpus. After the
termination of the grant period, an institution may use the endowment fund corpus plus any endowment fund income for any educational purpose.
(4)(A) An institution of higher education is eligible to receive
a grant under this section if it is an eligible institution as described
in subsection (a)(2)(D) of this section.
(B) No institution shall be ineligible for an endowment challenge grant under this section for a fiscal year by reason of the previous receipt of such a grant but no institution shall be eligible to
receive such a grant for more than 2 fiscal years out of any period
of 5 consecutive fiscal years.
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(5) An endowment challenge grant awarded under this section
to an eligible institution shall be in an amount which is not less
than $100,000 in any fiscal year.
(6)(A) An eligible institution may designate a foundation,
which was established for the purpose of raising money for the institution, as the recipient of the grant awarded under this section.
(B) The Secretary shall not award a grant to a foundation on
behalf of an institution unless—
(i) the institution assures the Secretary that the foundation is legally authorized to receive the endowment fund corpus
and is legally authorized to administer the fund in accordance
with this section and any implementing regulation;
(ii) the foundation agrees to administer the fund in accordance with the requirements of this section and any implementing regulation; and
(iii) the institution agrees to be liable for any violation by
the foundation of the provisions of this section and any implementing regulation, including any monetary liability that may
arise as a result of such violation.
(c) GRANT AGREEMENT; ENDOWMENT FUND PROVISIONS.—(1)
An institution awarded a grant under this section shall enter into
an agreement with the Secretary containing satisfactory assurances that it will (A) immediately comply with the matching requirements of subsection (b)(2), (B) establish an endowment fund
independent of any other such fund of the institution, (C) invest
the endowment fund corpus, and (D) meet the other requirements
of this section.
(2)(A) An institution shall invest the endowment fund corpus
and endowment fund income in low-risk securities in which a regulated insurance company may invest under the law of the State in
which the institution is located such as a federally insured bank
savings account or comparable interest-bearing account, certificate
of deposit, money market fund, mutual fund, or obligations of the
United States.
(B) The institution, in investing the endowment fund established under this section, shall exercise the judgment and care,
under the circumstances then prevailing, which a person of prudence, discretion, and intelligence would exercise in the management of such person’s own affairs.
(3)(A) An institution may withdraw and expend the endowment fund income to defray any expenses necessary to the operation of such college, including expenses of operations and maintenance, administration, academic and support personnel, construction and renovation, community and student services programs,
and technical assistance.
(B)(i) Except as provided in clause (ii), an institution may not
spend more than 50 percent of the total aggregate endowment fund
income earned prior to the time of expenditure.
(ii) The Secretary may permit an institution to spend more
than 50 percent of the endowment fund income notwithstanding
clause (i) if the institution demonstrates such an expenditure is
necessary because of (I) a financial emergency, such as a pending
insolvency or temporary liquidity problem; (II) a life-threatening
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situation occasioned by a natural disaster or arson; or (III) any
other unusual occurrence or exigent circumstance.
(d) REPAYMENT PROVISIONS.—(1) If at any time an institution
withdraws part of the endowment fund corpus, the institution shall
repay to the Secretary an amount equal to 50 percent of the withdrawn amount, which represents the Federal share, plus income
earned thereon. The Secretary may use such repaid funds to make
additional challenge grants, or to increase existing endowment
grants, to other eligible institutions.
(2) If an institution expends more of the endowment fund income than is permitted under subsection (c), the institution shall
repay the Secretary an amount equal to 50 percent of the amount
improperly expended (representing the Federal share thereof). The
Secretary may use such repaid fund to make additional challenge
grants, or to increase existing challenge grants, to other eligible institutions.
(e) AUDIT INFORMATION.—An institution receiving a grant
under this section shall provide to the Secretary (or a designee
thereof) such information (or access thereto) as may be necessary
to audit or examine expenditures made from the endowment fund
corpus or income in order to determine compliance with this section.
(f) SELECTION CRITERIA.—In selecting eligible institutions for
grants under this section for any fiscal year, the Secretary shall—
(1) give priority to an applicant that is receiving assistance
under part A or part B or has received a grant under part A
or part B of this title within the 5 fiscal years preceding the
fiscal year in which the applicant is applying for a grant under
this section;
(2) give priority to an applicant with a greater need for
such a grant, based on the current market value of the applicant’s existing endowment in relation to the number of fulltime equivalent students enrolled at such institution; and
(3) consider—
(A) the effort made by the applicant to build or maintain its existing endowment fund; and
(B) the degree to which an applicant proposes to
match the grant with nongovernmental funds.
(g) APPLICATION.—Any institution which is eligible for assistance under this section may submit to the Secretary a grant application at such time, in such form, and containing such information
as the Secretary may prescribe, including a description of the longand short-term plans for raising and using the funds under this
part. Subject to the availability of appropriations to carry out this
section and consistent with the requirement of subsection (f), the
Secretary may approve an application for a grant if an institution,
in its application, provides adequate assurances that it will comply
with the requirements of this section.
(h) TERMINATION AND RECOVERY PROVISIONS.—(1) After notice
and an opportunity for a hearing, the Secretary may terminate and
recover a grant awarded under this section if the grantee
institution—
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(A) expends portions of the endowment fund corpus or expends more than the permissible amount of the endowment
funds income as prescribed in subsection (c)(3);
(B) fails to invest the endowment fund in accordance with
the investment standards set forth in subsection (c)(2); or
(C) fails to properly account to the Secretary concerning
the investment and expenditures of the endowment funds.
(2) If the Secretary terminates a grant under paragraph (1),
the grantee shall return to the Secretary an amount equal to the
sum of each original grant under this section plus income earned
thereon. The Secretary may use such repaid funds to make additional endowment grants, or to increase existing challenge grants,
to other eligible institutions under this part.
(i) TECHNICAL ASSISTANCE.—The Secretary, directly or by grant
or contract, may provide technical assistance to eligible institutions
to prepare the institutions to qualify, apply for, and maintain a
grant, under this section.
PART D—HISTORICALLY BLACK COLLEGE AND
UNIVERSITY CAPITAL FINANCING
SEC. 341. ø20 U.S.C. 1066¿ FINDINGS.
The Congress finds that—
(1) a significant part of the Federal mission in education
has been to attain equal opportunity in higher education for
low-income, educationally disadvantaged Americans and African Americans;
(2) the Nation’s historically Black colleges and universities
have played a prominent role in American history and have an
unparalleled record of fostering the development of African
American youth by recognizing their potential, enhancing their
academic and technical skills, and honing their social and political skills through higher education;
(3) the academic and residential facilities on the campuses
of all historically Black colleges and universities have suffered
from neglect, deferred maintenance and are in need of capital
improvements in order to provide appropriate settings for
learning and social development through higher education;
(4) due to their small enrollments, limited endowments
and other financial factors normally considered by lenders in
construction financing, historically Black colleges and universities often lack access to the sources of funding necessary to
undertake the necessary capital improvements through borrowing and bond financing;
(5) despite their track record of long-standing and remarkable institutional longevity and viability, historically Black colleges and universities often lack the financial resources necessary to gain access to traditional sources of capital financing
such as bank loans and bond financing; and
(6) Federal assistance to facilitate low-cost capital basis for
historically Black colleges and universities will enable such colleges and universities to continue and expand their educational
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mission and enhance their significant role in American higher
education.
SEC. 342. ø20 U.S.C. 1066a¿ DEFINITIONS.
For the purposes of this part:
(1) The term ‘‘eligible institution’’ means a ‘‘part B institution’’ as that term is defined in section 322(2) of the Higher
Education Act of 1965 (20 U.S.C. 1061(2)).
(2) The term ‘‘loan’’ means a loan made to an eligible institution under the provisions of this part and pursuant to an
agreement with the Secretary.
(3) The term ‘‘qualified bond’’ means any obligation issued
by the designated bonding authority at the direction of the Secretary, the net proceeds of which are loaned to an eligible institution for the purposes described in section 343(b).
(4) The term ‘‘funding’’ means any payment under this
part from the Secretary to the eligible institution or its assignee in fulfillment of the insurance obligations of the Secretary pursuant to an agreement under section 343.
(5) The term ‘‘capital project’’ means, subject to section
344(b), the repair, renovation, or, in exceptional circumstances,
the construction or acquisition, of—
(A) any classroom facility, library, laboratory facility,
dormitory (including dining facilities) or other facility customarily used by colleges and universities for instructional
or research purposes or for housing students, faculty, and
staff;
(B) a facility for the administration of an educational
program, or a student center or student union, except that
not more than 5 percent of the loan proceeds provided
under this part may be used for the facility, center or
union if the facility, center or union is owned, leased, managed, or operated by a private business, that, in return for
such use, makes a payment to the eligible institution;
(C) instructional equipment, technology, research instrumentation, and any capital equipment or fixture related to facilities described in subparagraph (A);
(D) a maintenance, storage, or utility facility that is
essential to the operation of a facility, a library, a dormitory, equipment, instrumentation, a fixture, real property or an interest therein, described in this paragraph;
(E) a facility designed to provide primarily outpatient
health care for students or faculty;
(F) physical infrastructure essential to support the
projects authorized under this paragraph, including roads,
sewer and drainage systems, and water, power, lighting,
telecommunications, and other utilities;
(G) any other facility, equipment or fixture which is
essential to the maintaining of accreditation of the member institution by an accrediting agency or association recognized by the Secretary under subpart 2 of part H of title
IV; and
(H) any real property or interest therein underlying
facilities described in subparagraph (A) or (G).
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(6) The term ‘‘interest’’ includes accredited value or any
other payment constituting interest on an obligation.
(7) The term ‘‘outstanding’’, when used with respect to
bonds, shall not include bonds the payment of which shall have
been provided for by the irrevocable deposit in trust of obligations maturing as to principal and interest in such amounts
and at such times as will ensure the availability of sufficient
moneys to make payments on such bonds.
(8) The term ‘‘designated bonding authority’’ means the
private, for-profit corporation selected by the Secretary pursuant to section 345(1) for the purpose of issuing taxable capital
project construction bonds in furtherance of the purposes of
this part.
(9) The term ‘‘Advisory Board’’ means the Advisory Board
established by section 347 of this part.
SEC. 343. ø20 U.S.C. 1066b¿ FEDERAL INSURANCE FOR BONDS.
(a) GENERAL RULE.—Subject to the limitations in section
344,
the Secretary is authorized to enter into insurance agreements to
provide financial insurance to guarantee the full payment of principal and interest on qualified bonds upon the conditions set forth
in subsections (b), (c) and (d).
(b) RESPONSIBILITIES OF THE DESIGNATED BONDING AUTHORITY.—The Secretary may not enter into an insurance agreement described in subsection (a) unless the Secretary designates a qualified
bonding authority in accordance with sections 345(1) and 346 and
the designated bonding authority agrees in such agreement to—
(1) use the proceeds of the qualified bonds, less costs of
issuance not to exceed 2 percent of the principal amount thereof, to make loans to eligible institutions or for deposit into an
escrow account for repayment of the bonds;
(2) provide in each loan agreement with respect to a loan
that not less than 95 percent of the proceeds of the loan will
be used—
(A) to finance the repair, renovation, and, in exceptional cases, construction or acquisition, of a capital
project; or
(B) to refinance an obligation the proceeds of which
were used to finance the repair, renovation, and, in exceptional cases, construction or acquisition, of a capital
project;
(3)(A) charge such interest on loans, and provide for such
a schedule of repayments of loans, as will, upon the timely repayment of the loans, provide adequate and timely funds for
the payment of principal and interest on the bonds; and
(B) require that any payment on a loan expected to be necessary to make a payment of principal and interest on the
bonds be due not less than 60 days prior to the date of the payment on the bonds for which such loan payment is expected to
be needed;
(4) prior to the making of any loan, provide for a credit review of the institution receiving the loan and assure the Secretary that, on the basis of such credit review, it is reasonable
to anticipate that the institution receiving the loan will be able
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to repay the loan in a timely manner pursuant to the terms
thereof;
(5) provide in each loan agreement with respect to a loan
that, if a delinquency on such loan results in a funding under
the insurance agreement, the institution obligated on such loan
shall repay the Secretary, upon terms to be determined by the
Secretary, for such funding;
(6) assign any loans to the Secretary, upon the demand of
the Secretary, if a delinquency on such loan has required a
funding under the insurance agreement;
(7) in the event of a delinquency on a loan, engage in such
collection efforts as the Secretary shall require for a period of
not less than 45 days prior to requesting a funding under the
insurance agreement;
(8) establish an escrow account—
(A) into which each eligible institution shall deposit 5
percent of the proceeds of any loan made under this part,
with each eligible institution required to maintain in the
escrow account an amount equal to 5 percent of the outstanding principal of all loans made to such institution
under this part; and
(B) the balance of which—
(i) shall be available to the Secretary to pay principal and interest on the bonds in the event of delinquency in loan repayment; and
(ii) shall be used to return to an eligible institution an amount equal to any remaining portion of such
institution’s 5 percent deposit of loan proceeds within
120 days following scheduled repayment of such institution’s loan;
(9) provide in each loan agreement with respect to a loan
that, if a delinquency on such loan results in amounts being
withdrawn from the escrow account to pay principal and interest on bonds, subsequent payments on such loan shall be available to replenish such escrow account;
(10) comply with the limitations set forth in section 344 of
this part;
(11) make loans only to eligible institutions under this part
in accordance with conditions prescribed by the Secretary to
ensure that loans are fairly allocated among as many eligible
institutions as possible, consistent with making loans of
amounts that will permit capital projects of sufficient size and
scope to significantly contribute to the educational program of
the eligible institutions; and
(12) limit loan collateralization, with respect to any loan
made under this part, to 100 percent of the loan amount, except as otherwise required by the Secretary.
(c) ADDITIONAL AGREEMENT PROVISIONS.—Any insurance
agreement described in subsection (a) of this section shall provide
as follows:
(1) The payment of principal and interest on bonds shall
be insured by the Secretary until such time as such bonds have
been retired or canceled.
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(2) The Federal liability for delinquencies and default for
bonds guaranteed under this part shall only become effective
upon the exhaustion of all the funds held in the escrow account
described in subsection (b)(8).
(3) The Secretary shall create a letter of credit authorizing
the Department of the Treasury to disburse funds to the designated bonding authority or its assignee.
(4) The letter of credit shall be drawn upon in the amount
determined by paragraph (5) of this subsection upon the certification of the designated bonding authority to the Secretary or
the Secretary’s designee that there is a delinquency on 1 or
more loans and there are insufficient funds available from loan
repayments and the escrow account to make a scheduled payment of principal and interest on the bonds.
(5) Upon receipt by the Secretary or the Secretary’s designee of the certification described in paragraph (4) of this subsection, the designated bonding authority may draw a funding
under the letter of credit in an amount equal to—
(A) the amount required to make the next scheduled
payment of principal and interest on the bonds, less
(B) the amount available to the designated bonding
authority from loan repayments and the escrow account.
(6) All funds provided under the letter of credit shall be
paid to the designated bonding authority within 2 business
days following receipt of the certification described in paragraph (4).
(d) FULL FAITH AND CREDIT PROVISIONS.—Subject to section
343(c)(1) the full faith and credit of the United States is pledged
to the payment of all funds which may be required to be paid under
the provisions of this section.
(e) 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. 344. ø20 U.S.C. 1066c¿ LIMITATIONS ON FEDERAL INSURANCE FOR
BONDS ISSUED BY THE DESIGNATED BONDING AUTHORITY.
(a) LIMIT ON AMOUNT.—At no time shall the aggregate prin-
cipal amount of outstanding bonds insured under this part together
with any accrued unpaid interest thereon exceed $1,100,000,000, of
which—
(1) not more than $733,333,333 shall be used for loans to
eligible institutions that are private historically Black colleges
and universities; and
(2) not more than $366,666,667 shall be used for loans to
eligible institutions which are historically Black public colleges
and universities.
For purposes of paragraphs (1) and (2), Lincoln University of Pennsylvania is an historically Black public institution. No institution
of higher education that has received assistance under section 8 of
the Act of March 2, 1867 (20 U.S.C. 123) shall be eligible to receive
assistance under this part.
(b) LIMITATION ON CREDIT AUTHORITY.—The authority of the
Secretary to issue letters of credit and insurance under this part
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is effective only to the extent provided in advance by appropriations Acts.
(c) RELIGIOUS ACTIVITY PROHIBITION.—No loan may be made
under this part for any educational program, activity or service related to sectarian instruction or religious worship or provided by a
school or department of divinity or to an institution in which a substantial portion of its functions is subsumed in a religious mission.
(d) DISCRIMINATION PROHIBITION.—No loan may be made to an
institution under this part if the institution discriminates on account of race, color, religion, national origin, sex (to the extent provided in title IX of the Education Amendments of 1972), or disabling condition; except that the prohibition with respect to religion
shall not apply to an institution which is controlled by or which is
closely identified with the tenets of a particular religious organization if the application of this section would not be consistent with
the religious tenets of such organization.
SEC. 345. ø20 U.S.C. 1066d¿ AUTHORITY OF THE SECRETARY.
In the performance of, and with respect to, the functions vested
in the Secretary by this part, the Secretary—
(1) shall, within 120 days of the date of enactment of the
Higher Education Opportunity Act, publish in the Federal Register a notice and request for proposals for any private for-profit organization or entity wishing to serve as the designated
bonding authority under this part, which notice shall—
(A) specify the time and manner for submission of proposals; and
(B) specify any information, qualifications, criteria, or
standards the Secretary determines to be necessary to
evaluate the financial capacity and administrative capability of any applicant to carry out the responsibilities of
the designated bonding authority under this part;
(2) shall ensure that—
(A) the selection process for the designated bonding
authority is conducted on a competitive basis; and
(B) the evaluation and selection process is transparent;
(3) shall—
(A) review the performance of the designated bonding
authority after the third year of the insurance agreement;
and
(B) following the review described in subparagraph
(A), implement a revised competitive selection process, if
determined necessary by the Secretary in consultation
with the Advisory Board established pursuant to section
347;
(4) shall require that the first loans for capital projects authorized under section 343 be made no later than March 31,
1994;
(5) may sue and be sued in any court of record of a State
having general jurisdiction or in any district court of the
United States, and such district courts shall have jurisdiction
of civil actions arising under this part without regard to the
amount in controversy, and any action instituted under this
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part without regard to the amount in controversy, and any action instituted under this section by or against the Secretary
shall survive notwithstanding any change in the person occupying the office of the Secretary or any vacancy in such office;
(6)(A) may foreclose on any property and bid for and purchase at any foreclosure, or any other sale, any property in
connection with which the Secretary has been assigned a loan
pursuant to this part; and
(B) in the event of such an acquisition, notwithstanding
any other provisions of law relating to the acquisition, handling, or disposal of real property by the United States, complete, administer, remodel and convert, dispose of, lease, and
otherwise deal with, such property, except that—
(i) such action shall not preclude any other action by
the Secretary to recover any deficiency in the amount of a
loan assigned to the Secretary; and
(ii) any such acquisition of real property shall not deprive any State or political subdivision thereof of its civil
or criminal jurisdiction in and over such property or impair the civil rights under the State or local laws of the inhabitants on such property;
(7) may sell, exchange, or lease real or personal property
and securities or obligations;
(8) may include in any contract such other covenants, conditions, or provisions necessary to ensure that the purposes of
this part will be achieved;
(9) may, directly or by grant or contract, provide technical
assistance to eligible institutions to prepare the institutions to
qualify, apply for, and maintain a capital improvement loan,
including a loan under this part; and
(10) not later than 120 days after the date of enactment
of theHigher Education Opportunity Act, shall submit to the
authorizing committees a report on the progress of the Department in implementing the recommendations made by the Government Accountability Office in October 2006 for improving
the Historically Black College and Universities Capital Financing Program.
øSection 346 repealed by section 306(d) of P.L. 105–244.¿
SEC. 347. ø20 U.S.C. 1066f¿ HBCU CAPITAL FINANCING ADVISORY
BOARD.
(a) ESTABLISHMENT AND PURPOSE.—There is established within
the Department of Education, the Historically Black College and
Universities Capital Financing Advisory Board (hereinafter in this
part referred to as the ‘‘Advisory Board’’) which shall provide advice and counsel to the Secretary and the designated bonding authority as to the most effective and efficient means of implementing
construction financing on African American college campuses, and
advise the Congress of the United States regarding the progress
made in implementing this part. The Advisory Board shall meet
with the Secretary at least twice each year to advise him as to the
capital needs of historically Black colleges and universities, how
those needs can be met through the program authorized by this
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part, and what additional steps might be taken to improve the operation and implementation of the construction financing program.
(b) BOARD MEMBERSHIP.—
(1) COMPOSITION.—The Advisory Board shall be appointed
by the Secretary and shall be composed of 11 members as follows:
(A) The Secretary or the Secretary’s designee.
(B) Three members who are presidents of private historically Black colleges or universities.
(C) Three members who are presidents of public historically Black colleges or universities.
(D) The president of the United Negro College Fund,
Inc., or the president’s designee.
(E) The president of the National Association for
Equal Opportunity in Higher Education, or the designee of
the Association.
(F) The executive director of the White House Initiative on historically Black colleges and universities.
(G) The president of the Thurgood Marshall College
Fund, or the designee of the president.
(2) TERMS.—The term of office of each member appointed
under paragraphs (1)(B) and (1)(C) shall be 3 years, except
that—
(A) of the members first appointed pursuant to paragraphs (1)(B) and (1)(C), 2 shall be appointed for terms of
1 year, and 3 shall be appointed for terms of 2 years;
(B) members appointed to fill a vacancy occurring before the expiration of a term of a member shall be appointed to serve the remainder of that term; and
(C) a member may continue to serve after the expiration of a term until a successor is appointed.
(c) ADDITIONAL RECOMMENDATIONS FROM ADVISORY BOARD.—
(1) IN GENERAL.—In addition to the responsibilities of the
Advisory Board described in subsection (a), the Advisory Board
shall advise the Secretary and the authorizing committees regarding—
(A) the fiscal status and strategic financial condition of
not less than ten historically Black colleges and universities that have—
(i) obtained construction financing through the
program under this part and seek additional financing
or refinancing under such program; or
(ii) applied for construction financing through the
program under this part but have not received financing under such program; and
(B) the feasibility of reducing borrowing costs associated with the program under this part, including reducing
interest rates.
(2) REPORT.—Not later than six months after the date of
enactment of theHigher Education Opportunity Act, the Advisory Board shall prepare and submit a report to the authorizing committees regarding the historically Black colleges and
universities described in paragraph (1)(A) that includes administrative and legislative recommendations for addressing the
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issues related to construction financing facing such historically
Black colleges and universities.
SEC. 348. ø20 U.S.C. 1066g¿ MINORITY BUSINESS ENTERPRISE UTILIZATION.
In the performance of and with respect to the Secretary’s effectuation of his responsibilities under section 345(1) and to the maximum extent feasible in the implementation of the purposes of this
part, minority business persons, including bond underwriters and
credit enhancers, bond counsel, marketers, accountants, advisors,
construction contractors, and managers should be utilized.
PART E—MINORITY SCIENCE AND
ENGINEERING IMPROVEMENT PROGRAM
SUBPART 1—MINORITY SCIENCE AND ENGINEERING IMPROVEMENT
PROGRAM
SEC. 350. ø20 U.S.C. 1067¿ FINDINGS.
Congress makes the following findings:
(1) It is incumbent on the Federal Government to support
the technological and economic competitiveness of the United
States by improving and expanding the scientific and technological capacity of the United States. More and better prepared
scientists, engineers, and technical experts are needed to improve and expand such capacity.
(2) As the Nation’s population becomes more diverse, it is
important that the educational and training needs of all Americans are met. Underrepresentation of minorities in science
and technological fields diminishes our Nation’s competitiveness by impairing the quantity of well prepared scientists, engineers, and technical experts in these fields.
(3) Despite significant limitations in resources, minority
institutions provide an important educational opportunity for
minority students, particularly in science and engineering
fields. Aid to minority institutions is a good way to address the
underrepresentation of minorities in science and technological
fields.
(4) There is a strong Federal interest in improving science
and engineering programs at minority institutions as such programs lag behind in program offerings and in student enrollment compared to such programs at other institutions of higher education.
SEC. 351. ø20 U.S.C. 1067a¿ PURPOSE; AUTHORITY.
(a) It is the purpose of this subpart to continue the authority
of the Department to operate the Minority Institutions Science Improvement Program created under section 3(a)(1) of the National
Science Foundation Act of 1950 and transferred to the Department
by section 303(a)(1) of the Department of Education Organization
Act.
(b) The Secretary shall, in accordance with the provisions of
this subpart, carry out a program of making grants to institutions
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ity institutions and to increase the participation of underrepresented ethnic minorities, particularly minority women, in scientific and technological careers.
SEC. 352. ø20 U.S.C. 1067b¿ GRANT RECIPIENT SELECTION.
(a) ESTABLISHMENT OF CRITERIA.—Grants under this
subpart
shall be awarded on the basis of criteria established by the Secretary by regulations.
(b) PRIORITIES TO BE GIVEN IN CRITERIA.—In establishing criteria under subsection (a), the Secretary shall give priority to applicants which have not previously received funding from the Minority Institutions Science Improvement Program and to previous
grantees with a proven record of success, as well as to applications
that contribute to achieving balance among projects with respect to
geographic region, academic discipline, and project type.
(c) REQUIRED CRITERIA.—In establishing criteria under subsection (a), the Secretary may consider the following selection criteria in making grants:
(1) plan of operation;
(2) quality of key personnel;
(3) budget and cost effectiveness;
(4) evaluation plan;
(5) adequacy of resources;
(6) identification of need for the project;
(7) potential institutional impact of the project;
(8) institutional commitment to the project;
(9) expected outcomes; and
(10) scientific and educational value of the proposed
project.
SEC. 353. ø20 U.S.C. 1067c¿ USE OF FUNDS.
(a) TYPES OF GRANTS.—Funds appropriated
to carry out this
subpart may be made available as—
(1) institutional grants (as defined in section 365(6));
(2) cooperative grants (as defined in section 365(7));
(3) design projects (as defined in section 365(8)); or
(4) special projects (as defined in section 365(9)).
(b) AUTHORIZED USES FOR EACH TYPE OF GRANT.—(1) The authorized uses of funds made available as institutional grants include (but are not limited to)—
(A) faculty development programs; or
(B) development of curriculum materials.
(2) The authorized uses of funds made available as cooperative
grants include (but are not limited to)—
(A) assisting institutions in sharing facilities and personnel;
(B) disseminating information about established programs
in science and engineering;
(C) supporting cooperative efforts to strengthen the institutions’ science and engineering programs; or
(D) carrying out a combination of any of the activities in
subparagraphs (A) through (C).
(3) The authorized uses of funds made available as design
projects include (but are not limited to)—
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(A) developing planning, management, and evaluation systems; or
(B) developing plans for initiating scientific research and
for improving institutions’ capabilities for such activities.
Funds used for design project grants may not be used to pay more
than 50 percent of the salaries during any academic year of faculty
members involved in the project.
(4) The authorized uses of funds made available as special
projects include (but are not limited to)—
(A) advanced science seminars;
(B) science faculty workshops and conferences;
(C) faculty training to develop specific science research or
education skills;
(D) research in science education;
(E) programs for visiting scientists;
(F) preparation of films or audio-visual materials in
science;
(G) development of learning experiences in science beyond
those normally available to minority undergraduate students;
(H) development of pre-college enrichment activities in
science; or
(I) any other activities designed to address specific barriers
to the entry of minorities into science.
Subpart 2—Programs in STEM Fields
SEC. 355. ø20 U.S.C. 1067e¿ YES PARTNERSHIPS GRANT PROGRAM.
(a) GRANT PROGRAM AUTHORIZED.—Subject to the availability
of appropriations to carry out this subpart, the Secretary shall
make grants to eligible partnerships (as described in subsection (f))
to support the engagement of underrepresented minority youth and
youth who are low-income individuals (as such term is defined in
section 312) in science, technology, engineering, and mathematics
through outreach and hands-on, experiential-based learning
projects that encourage students in kindergarten through grade 12
who are underrepresented minority youth or low-income individuals to pursue careers in science, technology, engineering, and
mathematics.
(b) MINIMUM GRANT AMOUNT.—A grant awarded to a partnership under this subpart shall be for an amount that is not less
than $500,000.
(c) DURATION.—A grant awarded under this subpart shall be
for a period of five years.
(d) NON-FEDERAL MATCHING SHARE REQUIRED.—A partnership
receiving a grant under this subpart shall provide, from non-Federal sources, in cash or in-kind, an amount equal to 50 percent of
the costs of the project supported by such grant.
(e) DISTRIBUTION OF GRANTS.—In awarding grants under this
subpart, the Secretary shall ensure that, to the maximum extent
practicable, the projects funded under this subpart are located in
diverse geographic regions of the United States.
(f) ELIGIBLE PARTNERSHIPS.—Notwithstanding the general eligibility provision in section 361, eligibility to receive grants under
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this subpart is limited to partnerships described in paragraph (5)
of such section.
SEC. 356. ø20 U.S.C. 1067e–1¿ PROMOTION OF ENTRY INTO STEM
FIELDS.
(a) AUTHORITY TO CONTRACT, SUBJECT TO APPROPRIATIONS.—
The Secretary is authorized to enter into a contract with a firm
with a demonstrated record of success in advertising to implement
a campaign to expand the population of qualified individuals in
science, technology, engineering, and mathematics fields (referred
to in this section as ‘‘STEM fields’’) by encouraging young Americans to enter such fields.
(b) DESIGN OF CAMPAIGN.—The campaign under this section
shall be designed to enhance the image of education and professions in the STEM fields and promote participation in the STEM
fields, and may include—
(1) monitoring trends in youths’ attitudes toward pursuing
education and professions in the STEM fields and their propensity toward entering the STEM fields;
(2) determining what factors contribute to encouraging and
discouraging Americans from pursuing study in STEM fields
and entering the STEM fields professionally;
(3) determining what specific factors limit the participation
of groups currently underrepresented in STEM fields, including
Latinos, African-Americans, and women; and
(4) drawing from the market research performed under
this section and implementing an advertising campaign to encourage young Americans to take up studies in STEM fields,
beginning at an early age.
(c) REQUIRED COMPONENTS.—The campaign under this section
shall—
(1) include components that focus tailored messages on appropriate age groups, starting with elementary school students;
and
(2) link participation in the STEM fields to the concept of
service to one’s country, so that young people will be encouraged to enter the STEM fields in order fulfill the obligation to
be of service to their country.
(d) PRIORITY.—The campaign under this section shall hold as
a high priority making specific appeals to Hispanic Americans, African Americans, Native Americans, students with disabilities, and
women, who are currently underrepresented in the STEM fields, in
order to increase their numbers in the STEM fields, and shall tailor recruitment efforts to each specific group.
(e) USE OF VARIETY OF MEDIA.—The campaign under this section shall make use of a variety of media, with an emphasis on television advertising, to reach its intended audience.
(f) TEACHING.—The campaign under this section shall include
a narrowly focused effort to attract current professionals in the
STEM fields, through advertising in mediums likely to reach that
specific group, into teaching in a STEM field in elementary schools
and secondary schools.
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SEC. 357. ø20 U.S.C. 1067e–2¿ EVALUATION AND ACCOUNTABILITY PLAN.
The Secretary shall develop an evaluation and accountability
plan for projects funded under this subpart. Such plan shall include, if the Secretary determines that it is practical, an objective
measure of the impact of such projects, such as a measure of
whether underrepresented minority student enrollment in courses
related to science, technology, engineering, and mathematics increases at the secondary and postsecondary levels.
SUBPART 3—ADMINISTRATIVE
AND
GENERAL PROVISIONS
SEC. 361. ø20 U.S.C. 1067g¿ ELIGIBILITY FOR GRANTS.
Eligibility to receive grants under this part is limited to—
(1) public and private nonprofit institutions of higher education that—
(A) award baccalaureate degrees; and
(B) are minority institutions;
(2) public or private nonprofit institutions of higher education that—
(A) award associate degrees; and
(B) are minority institutions that—
(i) have a curriculum that includes science or engineering subjects; and
(ii) enter into a partnership with public or private
nonprofit institutions of higher education that award
baccalaureate degrees in science and engineering;
(3) 2 nonprofit science-oriented organizations, professional
scientific societies, and institutions of higher education that
award baccalaureate degrees, that—
(A) provide a needed service to a group of minority institutions; or
(B) provide in-service training for project directors, scientists, and engineers from minority institutions;
(4) consortia of organizations, that provide needed services
to one or more minority institutions, the membership of which
may include—
(A) public and private nonprofit institutions of higher
education which have a curriculum in science or engineering;
(B) institutions of higher education that have a graduate or professional program in science or engineering;
(C) research laboratories of, or under contract with,
the Department of Energy, the Department of Defense, or
the National Institutes of Health;
(D) relevant offices of the National Aeronautics and
Space Administration, National Oceanic and Atmospheric
Administration, National Science Foundation, and National Institute of Standards and Technology;
(E) quasi-governmental entities that have a significant
scientific or engineering mission; or
2 This paragraph does not reflect amendments made by section 301(b) or 301(c)(9) of the Higher Education Amendments of 1998 (P.L. 105–244; 112 Stat. 1636) as those amendments were
superseded by the amendment made by section 307(b) of that Act (112 Stat. 1636).
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(F) institutions of higher education that have Statesponsored centers for research in science, technology, engineering, and mathematics; or
(5) only with respect to grants under subpart 2, partnerships of organizations, the membership of which shall include—
(A) at least one institution of higher education eligible
for assistance under this title or title V;
(B) at least one high-need local educational agency (as
defined in section 200); and
(C) at least two community organizations or entities,
such as businesses, professional associations, communitybased organizations, philanthropic organizations, or State
agencies.
SEC. 362. ø20 U.S.C. 1067h¿ GRANT APPLICATION.
(a) SUBMISSION AND CONTENTS OF APPLICATIONS.—An
eligible
applicant (as determined under section 361) that desires to receive
a grant under this part shall submit to the Secretary an application therefor at such time or times, in such manner, and containing
such information as the Secretary may prescribe by regulation.
Such application shall set forth—
(1) a program of activities for carrying out one or more of
the purposes described in section 351(b) in such detail as will
enable the Secretary to determine the degree to which such
program will accomplish such purpose or purposes; and
(2) such other policies, procedures, and assurances as the
Secretary may require by regulation.
(b) APPROVAL BASED ON LIKELIHOOD OF PROGRESS.—The Secretary shall approve an application only if the Secretary determines that the application sets forth a program of activities which
are likely to make substantial progress toward achieving the purposes of this part.
SEC. 363. ø20 U.S.C. 1067i¿ CROSS PROGRAM AND CROSS AGENCY COOPERATION.
The Minority Science and Engineering Improvement Programs
shall cooperate and consult with other programs within the Department and within Federal, State, and private agencies which carry
out programs to improve the quality of science, mathematics, and
engineering education.
SEC. 364. ø20 U.S.C. 1067j¿ ADMINISTRATIVE PROVISIONS.
(a) TECHNICAL STAFF.—The Secretary shall appoint,
without
regard to the provisions of title 5 of the United States Code governing appointments in the competitive service, not less than 2
technical employees with appropriate scientific and educational
background to administer the programs under this part who may
be paid without regard to the provisions of chapter 51 and subchapter III of chapter 53 of such title relating to classification and
General Schedule pay rates.
(b) PROCEDURES FOR GRANT REVIEW.—The Secretary shall establish procedures for reviewing and evaluating grants and contracts made or entered into under such programs. Procedures for
reviewing grant applications, based on the peer review system, or
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ject to any review outside of officials responsible for the administration of the Minority Science and Engineering Improvement Programs.
SEC. 365. ø20 U.S.C. 1067k¿ DEFINITIONS.
For the purpose of this part—
(1) The term ‘‘accredited’’ means currently certified by a
nationally recognized accrediting agency or making satisfactory
progress toward achieving accreditation.
(2) The term ‘‘minority’’ means American Indian, Alaskan
Native, Black (not of Hispanic origin), Hispanic (including persons of Mexican, Puerto Rican, Cuban, and Central or South
American origin), Pacific Islander or other ethnic group underrepresented in science and engineering.
(3) The term ‘‘minority institution’’ means an institution of
higher education whose enrollment of a single minority or a
combination of minorities (as defined in paragraph (2)) exceeds
50 percent of the total enrollment. The Secretary shall verify
this information from the data on enrollments in the higher
education general information surveys (HEGIS) furnished by
the institution to the Office for Civil Rights, Department of
Education.
(4) The term ‘‘science’’ means, for the purpose of this program, the biological, engineering, mathematical, physical, behavioral, and social sciences, and history and philosophy of
science; also included are interdisciplinary fields which are
comprised of overlapping areas among two or more sciences.
(5) The term ‘‘underrepresented in science and engineering’’ means a minority group whose number of scientists and
engineers per 10,000 population of that group is substantially
below the comparable figure for scientists and engineers who
are white and not of Hispanic origin.
(6) The term ‘‘institutional grant’’ means a grant that supports the implementation of a comprehensive science improvement plan, which may include any combination of activities for
improving the preparation of minority students for careers in
science.
(7) The term ‘‘cooperative grant’’ means a grant that assists groups of nonprofit accredited colleges and universities to
work together to conduct a science improvement program.
(8) The term ‘‘design projects’’ means projects that assist
minority institutions that do not have their own appropriate
resources or personnel to plan and develop long-range science
improvement programs.
(9) The term ‘‘special projects’’ means—
(A) a special project grant to a minority institution
which supports activities that—
(i) improve the quality of training in science and
engineering at minority institutions; or
(ii) enhance the minority institutions’ general scientific research capabilities; or
(B) a special project grant to any eligible applicant
which supports activities that—
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(i) provide a needed service to a group of eligible
minority institutions; or
(ii) provide in-service training for project directors,
scientists, and engineers from eligible minority institutions.
PART
F—STRENGTHENING
HISTORICALLY
BLACK COLLEGES AND UNIVERSITIES AND
OTHER MINORITY-SERVING INSTITUTIONS
SEC. 371. ø20 U.S.C. 1067q¿ INVESTMENT IN HISTORICALLY BLACK COLLEGES AND UNIVERSITIES AND OTHER MINORITY-SERVING INSTITUTIONS.
(a) ELIGIBLE INSTITUTION.—An institution of higher education
is eligible to receive funds from the amounts made available under
this section if such institution is—
(1) a part B institution (as defined in section 322 (20
U.S.C. 1061));
(2) a Hispanic-serving institution (as defined in section 502
(20 U.S.C. 1101a));
(3) a Tribal College or University (as defined in section 316
(20 U.S.C. 1059c));
(4) an Alaska Native-serving institution or a Native Hawaiian-serving institution (as defined in section 317(b) (20
U.S.C. 1059d(b)));
(5) a Predominantly Black Institution (as defined in subsection (c));
(6) an Asian American and Native American Pacific Islander-serving institution (as defined in subsection (c)); or
(7) a Native American-serving nontribal institution (as defined in subsection (c)).
(b) NEW INVESTMENT OF FUNDS.—
(1) IN GENERAL.—
(A) PROVISION OF FUNDS.—There shall be available to
the Secretary to carry out this section, from funds in the
Treasury not otherwise appropriated, $255,000,000 for
each of the fiscal years 2008 through 2019. The authority
to award grants under this section shall expire at the end
of fiscal year 2019.
(B) AVAILABILITY.—Funds made available under subparagraph (A) for a fiscal year shall remain available for
the next succeeding fiscal year.
(2) ALLOCATION AND ALLOTMENT.—
(A) IN GENERAL.—Of the amounts made available
under paragraph (1) for each fiscal year—
(i) $100,000,000 shall be available for allocation
under subparagraph (B);
(ii) $100,000,000 shall be available for allocation
under subparagraph (C); and
(iii) $55,000,000 shall be available for allocation
under subparagraph (D).
(B) HSI STEM AND ARTICULATION PROGRAMS.—The
amount made available for allocation under this subparagraph by subparagraph (A)(i) for any fiscal year shall be
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available for Hispanic-serving Institutions for activities described in section 503, with a priority given to applications
that propose—
(i) to increase the number of Hispanic and other
low income students attaining degrees in the fields of
science, technology, engineering, or mathematics; and
(ii) to develop model transfer and articulation
agreements between 2-year Hispanic-serving institutions and 4-year institutions in such fields.
(C) ALLOCATION AND ALLOTMENT HBCUS AND PBIS.—
From the amount made available for allocation under this
subparagraph by subparagraph (A)(ii) for any fiscal year—
(i) 85 percent shall be available to eligible institutions described in subsection (a)(1) and shall be made
available as grants under section 323 and allotted
among such institutions under section 324, treating
such amount, plus the amount appropriated for such
fiscal year in a regular or supplemental appropriation
Act to carry out part B of this title, as the amount appropriated to carry out part B of this title for purposes
of allotments under section 324, for use by such institutions with a priority for—
(I) activities described in paragraphs (1), (2),
(4), (5), and (10) of section 323(a); and
(II) other activities, consistent with the institution’s comprehensive plan and designed to increase the institution’s capacity to prepare students for careers in the physical or natural
sciences, mathematics, computer science or information technology or sciences, engineering, language instruction in the less-commonly taught
languages or international affairs, or nursing or
allied health professions; and
(ii) 15 percent shall be available to eligible institutions described in subsection (a)(5) and shall be available for a competitive grant program to award 25
grants of $600,000 annually for programs in any of the
following areas:
(I) science, technology, engineering, or mathematics (STEM);
(II) health education;
(III) internationalization or globalization;
(IV) teacher preparation; or
(V) improving educational outcomes of African
American males.
(D) ALLOCATION AND ALLOTMENT TO OTHER MINORITYSERVING INSTITUTIONS.—From the amount made available
for allocation under this subparagraph by subparagraph
(A)(iii) for any fiscal year—
(i) $30,000,000 for such fiscal year shall be available to eligible institutions described in subsection
(a)(3) and shall be made available as grants under section 316, treating such $30,000,000 as part of the
amount appropriated for such fiscal year in a regular
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or supplemental appropriation Act to carry out such
section, and using such $30,000,000 for purposes described in subsection (c) of such section;
(ii) $15,000,000 for such fiscal year shall be available to eligible institutions described in subsection
(a)(4) and shall be made available as grants under section 317, treating such $15,000,000 as part of the
amount appropriated for such fiscal year in a regular
or supplemental appropriation Act to carry out such
section and using such $15,000,000 for purposes described in subsection (c) of such section;
(iii) $5,000,000 for such fiscal year shall be available to eligible institutions described in subsection
(a)(6) for activities described in section 311(c); and
(iv) $5,000,000 for such fiscal year shall be available to eligible institutions described in subsection
(a)(7)—
(I) to plan, develop, undertake, and carry out
activities to improve and expand such institutions’
capacity to serve Native Americans, which may include—
(aa) the purchase, rental, or lease of scientific or laboratory equipment for educational purposes, including instructional and
research purposes;
(bb) renovation and improvement in classroom, library, laboratory, and other instructional facilities;
(cc) support of faculty exchanges, faculty
development, and faculty fellowships to assist
faculty in attaining advanced degrees in the
faculty’s field of instruction;
(dd) curriculum development and academic instruction;
(ee) the purchase of library books, periodicals, microfilm, and other educational materials;
(ff) funds and administrative management, and acquisition of equipment for use in
strengthening funds management;
(gg) the joint use of facilities such as laboratories and libraries; and
(hh) academic tutoring and counseling
programs and student support services; and
(II) to which the Secretary, to the extent possible and consistent with a competitive process
under which such grants are awarded, allocates
funds under this clause to ensure maximum and
equitable distribution among all such eligible institutions.
(c) DEFINITIONS.—
(1) ASIAN AMERICAN.—The term ‘‘Asian American’’ has the
meaning given the term ‘‘Asian’’ in the Office of Management
and Budget’s Standards for Maintaining, Collecting, and PreMay 7, 2013
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senting Federal Data on Race and Ethnicity as published on
October 30, 1997 (62 Fed. Reg. 58789).
(2) ASIAN AMERICAN AND NATIVE AMERICAN PACIFIC ISLANDER-SERVING INSTITUTION.—The term ‘‘Asian American and
Native American Pacific Islander-serving institution’’ means an
institution of higher education that—
(A) is an eligible institution under section 312(b); and
(B) at the time of application, has an enrollment of undergraduate students that is at least 10 percent Asian
American and Native American Pacific Islander students.
(3) ENROLLMENT OF NEEDY STUDENTS.—The term ‘‘enrollment of needy students’’ means the enrollment at an institution of higher education with respect to which not less than 50
percent of the undergraduate students enrolled in an academic
program leading to a degree—
(A) in the second fiscal year preceding the fiscal year
for which the determination is made, were Federal Pell
Grant recipients for such year;
(B) come from families that receive benefits under a
means-tested Federal benefit program (as defined in paragraph (5));
(C) attended a public or nonprofit private secondary
school—
(i) that is in the school district of a local educational agency that was eligible for assistance under
part A of title I of the Elementary and Secondary Education Act of 1965 for any year during which the student attended such secondary school; and
(ii) which for the purpose of this paragraph and
for that year was determined by the Secretary (pursuant to regulations and after consultation with the
State educational agency of the State in which the
school is located) to be a school in which the enrollment of children counted under a measure of poverty
described in section 1113(a)(5) of such Act exceeds 30
percent of the total enrollment of such school; or
(D) are first-generation college students (as that term
is defined in section 402A(h)), and a majority of such firstgeneration college students are low-income individuals.
(4) LOW-INCOME INDIVIDUAL.—The term ‘‘low-income individual’’ has the meaning given such term in section 402A(h).
(5) MEANS-TESTED FEDERAL BENEFIT PROGRAM.—The term
‘‘means-tested Federal benefit program’’ means a program of
the Federal Government, other than a program under title IV,
in which eligibility for the programs’ benefits or the amount of
such benefits are determined on the basis of income or resources of the individual or family seeking the benefit.
(6) NATIVE AMERICAN.—The term ‘‘Native American’’
means an individual who is of a tribe, people, or culture that
is indigenous to the United States.
(7) NATIVE AMERICAN PACIFIC ISLANDER.—The term ‘‘Native American Pacific Islander’’ means any descendant of the
aboriginal people of any island in the Pacific Ocean that is a
territory or possession of the United States.
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(8) NATIVE AMERICAN-SERVING NONTRIBAL INSTITUTION.—
The term ‘‘Native American-serving nontribal institution’’
means an institution of higher education that—
(A) at the time of application—
(i) has an enrollment of undergraduate students
that is not less than 10 percent Native American students; and
(ii) is not a Tribal College or University (as defined in section 316); and
(B) submits to the Secretary such enrollment data as
may be necessary to demonstrate that the institution is described in subparagraph (A), along with such other information and data as the Secretary may by regulation require.
(9) PREDOMINANTLY BLACK INSTITUTION.—The term ‘‘Predominantly Black institution’’ means an institution of higher
education that—
(A) has an enrollment of needy students as defined by
paragraph (3);
(B) has an average educational and general expenditure which is low, per full-time equivalent undergraduate
student in comparison with the average educational and
general expenditure per full-time equivalent undergraduate student of institutions of higher education that
offer similar instruction, except that the Secretary may
apply the waiver requirements described in section 392(b)
to this subparagraph in the same manner as the Secretary
applies the waiver requirements to section 312(b)(1)(B);
(C) has an enrollment of undergraduate students—
(i) that is at least 40 percent Black American students;
(ii) that is at least 1,000 undergraduate students;
(iii) of which not less than 50 percent of the undergraduate students enrolled at the institution are
low-income individuals or first-generation college students (as that term is defined in section 402A(h)); and
(iv) of which not less than 50 percent of the undergraduate students are enrolled in an educational program leading to a bachelor’s or associate’s degree that
the institution is licensed to award by the State in
which the institution is located;
(D) is legally authorized to provide, and provides within the State, an educational program for which the institution of higher education awards a bachelor’s degree, or in
the case of a junior or community college, an associate’s
degree;
(E) is accredited by a nationally recognized accrediting
agency or association determined by the Secretary to be a
reliable authority as to the quality of training offered, or
is, according to such an agency or association, making reasonable progress toward accreditation; and
(F) is not receiving assistance under—
(i) part B;
(ii) part A of title V; or
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(iii) an annual authorization of appropriations
under the Act of March 2, 1867 (14 Stat. 438; 20
U.S.C. 123).
PART G—GENERAL PROVISIONS
SEC. 391. ø20 U.S.C. 1068¿ APPLICATIONS FOR ASSISTANCE.
(a) APPLICATIONS.—
(1) APPLICATIONS REQUIRED.—Any institution which
is eligible for assistance under this title shall submit to the Secretary an application for assistance at such time, in such form,
and containing such information, as may be necessary to enable the Secretary to evaluate the institution’s need for the assistance. Subject to the availability of appropriations to carry
out this title, the Secretary may approve an application for assistance under this title only if the Secretary determines
that—
(A) the application meets the requirements of subsection (b);
(B) the applicant is eligible for assistance in accordance with the part of this title under which the assistance
is sought; and
(C) the applicant’s performance goals are sufficiently
rigorous as to meet the purposes of this title and the performance objectives and indicators for this title established
by the Secretary pursuant to the Government Performance
and Results Act of 1993 and the amendments made by
such Act.
(2) PRELIMINARY APPLICATIONS.—In carrying out paragraph (1), the Secretary may develop a preliminary application
for use by eligible institutions applying under part A prior to
the submission of the principal application.
(b) CONTENTS.—An institution, in its application for a grant,
shall—
(1) set forth, or describe how the institution (other than an
institution applying under part C, D or E) will develop, a comprehensive development plan to strengthen the institution’s
academic quality and institutional management, and otherwise
provide for institutional self-sufficiency and growth (including
measurable objectives for the institution and the Secretary to
use in monitoring the effectiveness of activities under this
title);
(2) set forth policies and procedures to ensure that Federal
funds made available under this title for any fiscal year will
be used to supplement and, to the extent practical, increase the
funds that would otherwise be made available for the purposes
of section 311(b) or 323, and in no case supplant those funds;
(3) set forth policies and procedures for evaluating the effectiveness in accomplishing the purpose of the activities for
which a grant is sought under this title;
(4) provide for such fiscal control and fund accounting procedures as may be necessary to ensure proper disbursement of
and accounting for funds made available to the applicant under
this title;
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(5) provide (A) for making such reports, in such form and
containing such information, as the Secretary may require to
carry out the functions under this title, including not less than
one report annually setting forth the institution’s progress toward achieving the objectives for which the funds were awarded, and (B) for keeping such records and affording such access
thereto, as the Secretary may find necessary to assure the correctness and verification of such reports;
(6) provide that the institution will comply with the limitations set forth in section 396, except that for purposes of section 316, paragraphs (2) and (3) of section 396 shall not apply;
(7) describe in a comprehensive manner any proposed
project for which funds are sought under the application and
include—
(A) a description of the various components of the proposed project, including the estimated time required to
complete each such component;
(B) in the case of any development project which consists of several components (as described by the applicant
pursuant to subparagraph (A)), a statement identifying
those components which, if separately funded, would be
sound investments of Federal funds and those components
which would be sound investments of Federal funds only
if funded under this title in conjunction with other parts
of the development project (as specified by the applicant);
(C) an evaluation by the applicant of the priority given
any proposed project for which funds are sought in relation
to any other projects for which funds are sought by the applicant under this title, and a similar evaluation regarding
priorities among the components of any single proposed
project (as described by the applicant pursuant to subparagraph (A));
(D) a detailed budget showing the manner in which
funds for any proposed project would be spent by the applicant; and
(E) a detailed description of any activity which involves the expenditure of more than $25,000, as identified
in the budget referred to in subparagraph (D); and
(8) include such other information as the Secretary may
prescribe.
(c) PRIORITY CRITERIA PUBLICATION REQUIRED.—The Secretary
shall publish in the Federal Register, pursuant to chapter 5 of title
5, United States Code, all policies and procedures required to exercise the authority set forth in subsection (a). No other criteria, policies, or procedures shall apply.
(d) ELIGIBILITY DATA.—The Secretary shall use the most recent
and relevant data concerning the number and percentage of students receiving need-based assistance under title IV of this Act in
making eligibility determinations under section 312 and shall advance the base-year forward following each annual grant cycle.
(e) TECHNICAL ASSISTANCE.—The Secretary, directly or by
grant or contract, may provide technical assistance to eligible institutions to prepare the institutions to qualify, apply for, and maintain a grant, under this title.
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SEC. 392. ø20 U.S.C. 1068a¿ 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) which is extensively subsidized by the State in which
it is located and charges low or no tuition;
(2) which serves a substantial number of low-income students as a percentage of its total student population;
(3) which is contributing substantially to increasing higher
education opportunities for educationally disadvantaged,
underrepresented, or minority students, who are low-income
individuals;
(4) which is substantially increasing higher educational opportunities for individuals in rural or other isolated areas
which are unserved by postsecondary institutions;
(5) located on or near an Indian reservation or a substantial population of Indians, if the Secretary determines that the
waiver will substantially increase higher education opportunities appropriate to the needs of American Indians;
(6) that is a tribally controlled college or university as defined in section 2 of the Tribally Controlled Colleges and Universities Assistance Act of 1978; or
(7) wherever located, if the Secretary determines that the
waiver will substantially increase higher education opportunities appropriate to the needs of Black Americans, Hispanic
Americans, Native Americans, Asian Americans, or Pacific Islanders, including Native Hawaiians.
(b) WAIVER DETERMINATIONS; EXPENDITURES.—(1) The Secretary may waive the requirements set forth in section 312(b)(1)(B)
if the Secretary determines, based on persuasive evidence submitted by the institution, that the institution’s failure to meet that
criterion is due to factors which, when used in the determination
of compliance with such criterion, distort such determination, and
that the institution’s designation as an eligible institution under
part A is otherwise consistent with the purposes of such parts.
(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 which enroll significant numbers of Black American, Hispanic, Native American,
Asian American, or Native Hawaiian students under part A, as the
case may be. Such report shall—
(A) identify the factors referred to in paragraph (1) which
were considered by the Secretary as factors that distorted the
determination of compliance with subparagraphs (A) and (B) of
section 312(b)(1); and
(B) contain a list of each institution determined to be an
eligible institution under part A including a statement of the
reasons for each such determination.
(3) The Secretary may waive the requirement set forth in section 312(b)(1)(E) in the case of an institution located on or near an
Indian reservation or a substantial population of Indians, if the
Secretary determines that the waiver will substantially increase
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higher education opportunities appropriate to the needs of American Indians.
(c) WAIVER AUTHORITY WITH RESPECT TO INSTITUTIONS LOCATED IN AN AREA AFFECTED BY A GULF HURRICANE DISASTER.—
(1) WAIVER AUTHORITY.—Notwithstanding any other provision of law, unless enacted with specific reference to this section, for any affected institution that was receiving assistance
under this title at the time of a Gulf hurricane disaster, the
Secretary shall, for each of the fiscal years 2009 through 2011
(and may, for each of the fiscal years 2012 and 2013)—
(A) waive—
(i) the eligibility data requirements set forth in
section 391(d);
(ii) the wait-out period set forth in section 313(d);
(iii) the allotment requirements under section 324;
and
(iv) the use of the funding formula developed pursuant to section 326(f)(3);
(B) waive or modify any statutory or regulatory provision to ensure that affected institutions that were receiving assistance under this title at the time of a Gulf hurricane disaster are not adversely affected by any formula
calculation for fiscal year 2009 or for any of the four succeeding fiscal years, as necessary; and
(C) make available to each affected institution an
amount that is not less than the amount made available
to such institution under this title for fiscal year 2006, except that for any fiscal year for which the funds appropriated for payments under this title are less than the appropriated level for fiscal year 2006, the amount made
available to such institutions shall be ratably reduced
among the institutions receiving funds under this title.
(2) DEFINITIONS.—In this subsection:
(A) AFFECTED INSTITUTION.—The term ‘‘affected institution’’ means an institution of higher education that—
(i) is—
(I) a part A institution (which term shall have
the meaning given the term ‘‘eligible institution’’
under section 312(b)); or
(II) a part B institution, as such term is defined in section 322(2), or as identified in section
326(e);
(ii) is located in an area affected by a Gulf hurricane disaster; and
(iii) is able to demonstrate that, as a result of the
impact of a Gulf hurricane disaster, the institution—
(I) incurred physical damage;
(II) has pursued collateral source compensation from insurance, the Federal Emergency Management Agency, and the Small Business Administration, as appropriate; and
(III) was not able to fully reopen in existing
facilities or to fully reopen to the pre-hurricane
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enrollment levels during the 30-day period beginning on August 29, 2005.
(B) AREA AFFECTED BY A GULF HURRICANE DISASTER;
GULF HURRICANE DISASTER.—The terms ‘‘area affected by a
Gulf hurricane disaster’’ and ‘‘Gulf hurricane disaster’’
have the meanings given such terms in section 209 of the
Higher Education Hurricane Relief Act of 2005 (Public
Law 109–148, 119 Stat. 2809).
SEC. 393. ø20 U.S.C. 1068b¿ APPLICATION REVIEW PROCESS.
(a) REVIEW PANEL.—(1) All applications submitted
under this
title by institutions of higher education shall be read by a panel of
readers composed of individuals selected by the Secretary. The Secretary shall assure that no individual assigned under this section
to review any application has any conflict of interest with regard
to the application which might impair the impartiality with which
the individual conducts the review under this section.
(2) The Secretary shall take care to assure that representatives
of historically and predominantly Black colleges, Hispanic institutions, Tribal Colleges and Universities, and institutions with substantial numbers of Hispanics, Native Americans, Asian Americans, and Native American Pacific Islanders (including Native Hawaiians) are included as readers.
(3) All readers selected by the Secretary shall receive thorough
instruction from the Secretary regarding the evaluation process for
applications submitted under this title and consistent with the provisions of this title, including—
(A) explanations and examples of the types of activities referred to in section 311(b) that should receive special consideration for grants awarded under part A and of the types of activities referred to in section 323 that should receive special
consideration for grants awarded under part B;
(B) an enumeration of the factors to be used to determine
the quality of applications submitted under this title; and
(C) an enumeration of the factors to be used to determine
whether a grant should be awarded for a project under this
title, the amount of any such grant, and the duration of any
such grant.
(b) RECOMMENDATIONS OF PANEL.—In awarding grants under
this title, the Secretary shall take into consideration the recommendations of the panel made under subsection (a).
(c) NOTIFICATION.—Not later than June 30 of each year, the
Secretary shall notify each institution of higher education making
an application under this title of—
(1) the scores given the applicant by the panel pursuant to
this section;
(2) the recommendations of the panel with respect to such
application; and
(3) the reasons for the decision of the Secretary in awarding or refusing to award a grant under this title, and any
modifications, if any, in the recommendations of the panel
made by the Secretary.
(d) EXCLUSION.—The provisions of this section shall not apply
to applications submitted under part D.
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SEC. 394. ø20 U.S.C. 1068c¿ COOPERATIVE ARRANGEMENTS.
(a) GENERAL AUTHORITY.—The Secretary may make
grants to
encourage cooperative arrangements—
(1) with funds available to carry out part A, between institutions eligible for assistance under part A and between such
institutions and institutions not receiving assistance under this
title; or
(2) with funds available to carry out part B, between institutions eligible for assistance under part B and institutions not
receiving assistance under this title;
for the activities described in section 311(b) or section 323, as the
case may be, so that the resources of the cooperating institutions
might be combined and shared to achieve the purposes of such
parts and avoid costly duplicative efforts and to enhance the development of part A and part B eligible institutions.
(b) PRIORITY.—The Secretary shall give priority to grants for
the purposes described under subsection (a) whenever the Secretary determines that the cooperative arrangement is geographically and economically sound or will benefit the applicant institution.
(c) DURATION.—Grants to institutions having a cooperative arrangement may be made under this section for a period as determined under section 313 or section 323.
SEC. 395. ø20 U.S.C. 1068d¿ ASSISTANCE TO INSTITUTIONS UNDER
OTHER PROGRAMS.
(a) ASSISTANCE ELIGIBILITY.—Each institution which the Sec-
retary determines to be an institution eligible under part A or an
institution eligible under part B may be eligible for waivers in accordance with subsection (b).
(b) WAIVER APPLICABILITY.—(1) Subject to, and in accordance
with, regulations promulgated for the purpose of this section, in the
case of any application by an institution referred to in subsection
(a) for assistance under any programs specified in paragraph (2),
the Secretary is authorized, if such application is otherwise approvable, to waive any requirement for a non-Federal share of the cost
of the program or project, or, to the extent not inconsistent with
other law, to give, or require to be given, priority consideration of
the application in relation to applications from other institutions.
(2) The provisions of this section shall apply to any program
authorized by part D or title IV of this Act.
(c) LIMITATION.—The Secretary shall not waive, under subsection (b), the non-Federal share requirement for any program for
applications which, if approved, would require the expenditure of
more than 10 percent of the appropriations for the program for any
fiscal year.
SEC. 396. ø20 U.S.C. 1068e¿ LIMITATIONS.
The funds appropriated under section 399 may not be used—
(1) for a school or department of divinity or any religious
worship or sectarian activity;
(2) for an activity that is inconsistent with a State plan for
desegregation of higher education applicable to such institution;
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(3) for an activity that is inconsistent with a State plan of
higher education applicable to such institution; or
(4) for purposes other than the purposes set forth in the
approved application under which the funds were made available to the institution.
SEC. 397. ø20 U.S.C. 1068f¿ PENALTIES.
Whoever, being an officer, director, agent, or employee of, or
connected in any capacity with, any recipient of Federal financial
assistance or grant pursuant to this title embezzles, willfully
misapplies, steals, or obtains by fraud any of the funds which are
the subject of such grant or assistance, shall be fined not more
than $10,000 or imprisoned for not more than 2 years, or both.
SEC. 398. ø20 U.S.C. 1068g¿ CONTINUATION AWARDS.
The Secretary shall make continuation awards under this title
for the second and succeeding years of a grant only after determining that the recipient is making satisfactory progress in carrying out the grant.
SEC. 399. ø20 U.S.C. 1068h¿ AUTHORIZATIONS OF APPROPRIATIONS.
(a) AUTHORIZATIONS.—
(1) PART A.—(A) There are authorized to be appropriated
to carry out part A (other than sections 316 through 320),
$135,000,000 for fiscal year 2009, and such sums as may be
necessary for each of the five succeeding fiscal years.
(B) There are authorized to be appropriated to carry out
section 316, $30,000,000 for fiscal year 2009, and such sums as
may be necessary for each of the five succeeding fiscal years.
(C) There are authorized to be appropriated to carry out
section 317, $15,000,000 for fiscal year 2009, and such sums as
may be necessary for each of the five succeeding fiscal years.
(D) There are authorized to be appropriated to carry out
section 318, $75,000,000 for fiscal year 2009 and each of the
five succeeding fiscal years.
(E) There are authorized to be appropriated to carry out
section 319, $25,000,000 for fiscal year 2009, and such sums as
may be necessary for each of the five succeeding fiscal years.
(F) There are authorized to be appropriated to carry out
section 320, $30,000,000 for fiscal year 2009, and such sums as
may be necessary for each of the five succeeding fiscal years.
(2) PART B.—(A) There are authorized to be appropriated
to carry out part B (other than section 326), $375,000,000 for
fiscal year 2009, and such sums as may be necessary for each
of the five succeeding fiscal years.
(B) There are authorized to be appropriated to carry out
section 326, $125,000,000 for fiscal year 2009, and such sums
as may be necessary for each of the five succeeding fiscal
years.
(3) PART C.—There are authorized to be appropriated to
carry out part C, $10,000,000 for fiscal year 2009, and such
sums as may be necessary for each of the five succeeding fiscal
years.
(4) PART D.—(A) There are authorized to be appropriated
to carry out part D (other than section 345(9), but including
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HIGHER EDUCATION ACT OF 1965
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section 347), $185,000 for fiscal year 2009, and such sums as
may be necessary for each of the five succeeding fiscal years.
(B) There are authorized to be appropriated to carry out
section 345(9) such sums as may be necessary for fiscal year
2009 and each of the five succeeding fiscal years.
(5) PART E.—(A) There are authorized to be appropriated
to carry out subpart 1 of part E, $12,000,000 for fiscal year
2009, and such sums as may be necessary for each of the five
succeeding fiscal years.
(B) There are authorized to be appropriated to carry out
subpart 2 of part E, such sums as may be necessary for fiscal
year 2009 and each of the five succeeding fiscal years.
(b) USE OF MULTIPLE YEAR AWARDS.—In the event of a multiple year award to any institution under this title, the Secretary
shall make funds available for such award from funds appropriated
for this title for the fiscal year in which such funds are to be used
by the recipient.
TITLE IV—STUDENT ASSISTANCE
PART A—GRANTS
TO
STUDENTS IN ATTENDANCE
HIGHER EDUCATION
AT INSTITUTIONS OF
SEC. 400. ø20 U.S.C. 1070¿ STATEMENT OF PURPOSE; PROGRAM AUTHORIZATION.
(a) PURPOSE.—It is the purpose of this part, to assist in mak-
ing available the benefits of postsecondary education to eligible students (defined in accordance with section 484) in institutions of
higher education by—
(1) providing Federal Pell Grants to all eligible students;
(2) providing supplemental educational opportunity grants
to those students who demonstrate financial need;
(3) providing for payments to the States to assist them in
making financial aid available to such students;
(4) providing for special programs and projects designed
(A) to identify and encourage qualified youths with financial or
cultural need with a potential for postsecondary education, (B)
to prepare students from low-income families for postsecondary
education, and (C) to provide remedial (including remedial language study) and other services to students; and
(5) providing assistance to institutions of higher education.
(b) SECRETARY REQUIRED TO CARRY OUT PURPOSES.—The Secretary shall, in accordance with subparts 1 through 9, carry out
programs to achieve the purposes of this part.
Subpart 1—Federal Pell Grants
SEC. 401. ø20 U.S.C. 1070a¿ FEDERAL PELL GRANTS: AMOUNT AND DETERMINATIONS; APPLICATIONS.
(a) PROGRAM AUTHORITY AND METHOD OF DISTRIBUTION.—(1)
For each fiscal year through fiscal year 2017, 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
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ance at an institution of higher education, as an undergraduate, a
Federal Pell Grant in the amount for which that student is eligible,
as determined pursuant to subsection (b). Not less than 85 percent
of such sums shall be advanced to eligible institutions prior to the
start of each payment period and shall be based upon an amount
requested by the institution as needed to pay eligible students until
such time as the Secretary determines and publishes in the Federal
Register with an opportunity for comment, an alternative payment
system that provides payments to institutions in an accurate and
timely manner, except that this sentence shall not be construed to
limit the authority of the Secretary to place an institution on a reimbursement system of payment.
(2) Nothing in this section shall be interpreted to prohibit the
Secretary from paying directly to students, in advance of the beginning of the academic term, an amount for which they are eligible,
in cases where the eligible institution elects not to participate in
the disbursement system required by paragraph (1).
(3) Grants made under this subpart shall be known as ‘‘Federal
Pell Grants’’.
(b) PURPOSE AND AMOUNT OF GRANTS.—(1) The purpose of this
subpart is to provide a Federal Pell Grant that in combination with
reasonable family and student contribution and supplemented by
the programs authorized under subparts 3 and 4 of this part, will
meet at least 75 percent of a student’s cost of attendance (as defined in section 472), unless the institution determines that a
greater amount of assistance would better serve the purposes of
this section.
(2)
(A) 1 The amount of the Federal Pell Grant for a student eligible under this part shall be—
(i) the maximum Federal Pell Grant, as specified
in the last enacted appropriation Act applicable to
that award year, plus
(ii) the amount of the increase calculated under
paragraph (7)(B) for that year, less
(iii) an amount equal to the amount determined to
be the expected family contribution with respect to
that student for that year.
(B) In any case where a student attends an institution of higher education on less than a full-time basis (including a student who
attends an institution of higher education on less than a half-time
basis) during any academic year, the amount of the Federal Pell
Grant to which that student is entitled shall be reduced in proportion to the degree to which that student is not so attending on a
full-time basis, in accordance with a schedule of reductions established by the Secretary for the purposes of this division, computed
in accordance with this subpart. Such schedule of reductions shall
be established by regulation and published in the Federal Register
in accordance with section 482 of this Act.
(3) No Federal Pell Grant under this subpart shall exceed the
difference between the expected family contribution for a student
1 Margin so in law of subparagraph (A). See amendment made by section 2101(a)(1) of Public
Law 111–152. Subparagraph (A) probably should have been run-in to paragraph (2) designation.
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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.
(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 ten
percent of the maximum amount of a Federal Pell Grant award determined under paragraph (2)(A) for such academic year.
[Note: This paragraph was amended by section 309(a)(1) of division F of Public Law 112–74 and was effective on July 1, 2012.
Prior to July 1, 2012, the paragraph that is applicable reads as follows:]
(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 ten
percent of the maximum amount of a Federal Pell Grant award determined under paragraph (2)(A) 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 five percent of such Federal Pell
Grant amount but less than ten percent of such Federal Pell Grant
amount shall be awarded a Federal Pell grant in the amount of ten
percent of such Federal Pell Grant amount.
(5) 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 maximum amount of a Federal Pell Grant award determined under paragraph (2)(A), for which a student is eligible during such award year. If the preceding sentence applies, the financial aid administrator at the home institution may use the cost of
the study abroad program, rather than the home institution’s cost,
to determine the cost of attendance of the student.
(6) No Federal Pell Grant shall be awarded under this subpart
to any individual who is incarcerated in any Federal or State penal
institution or who is subject to an involuntary civil commitment
upon completion of a period of incarceration for a forcible or nonforcible sexual offense (as determined in accordance with the Federal Bureau of Investigation’s Uniform Crime Reporting Program).
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(7) ADDITIONAL FUNDS.—
(A) IN GENERAL.—There are authorized to be appropriated, and there are appropriated (in addition to any
other amounts appropriated to carry out this section and
out of any money in the Treasury not otherwise appropriated) the following amounts—
(i) $2,030,000,000 for fiscal year 2008;
(ii) $2,090,000,000 for fiscal year 2009;
(iii) to carry out subparagraph (B) of this paragraph, such sums as may be necessary for fiscal year
2010 and each subsequent fiscal year to provide the
amount of increase of the maximum Federal Pell
Grant required by clauses (ii) and (iii) of subparagraph
(B); and
(iv) to carry out this section—
(I) $13,500,000,000 for fiscal year 2011;
(II) $13,795,000,000 for fiscal year 2012;
(III) $7,587,000,000 for fiscal year 2013;
(IV) $588,000,000 for fiscal year 2014;
(V) $0 for fiscal year 2015;
(VI) $0 for fiscal year 2016;
(VII) $1,574,000,000 for fiscal year 2017;
(VIII) $1,382,000,000 for fiscal year 2018;
(IX) $1,409,000,000 for fiscal year 2019;
(X) $1,430,000,000 for fiscal year 2020; and
(XI) $1,145,000,000 for fiscal year 2021 and
each succeeding fiscal year.
(B) INCREASE IN FEDERAL PELL GRANTS.—The amounts
made available pursuant to clauses (i) through (iii) of subparagraph (A) of this paragraph shall be used to increase
the amount of the maximum Federal Pell Grant for which
a student shall be eligible during an award year, as specified in the last enacted appropriation Act applicable to
that award year, by—
(i) $490 for each of the award years 2008–2009
and 2009–2010;
(ii) $690 for each of the award years 2010–2011,
2011–2012, and 2012–2013; and
(iii) the amount determined under subparagraph
(C) for each succeeding award year.
(C) ADJUSTMENT AMOUNTS.—
(i) AWARD YEAR 2013–2014.—For award year 2013–
2014, the amount determined under this subparagraph for purposes of subparagraph (B)(iii) shall be
equal to—
(I) $5,550 or the total maximum Federal Pell
Grant for the preceding award year (as determined under clause (iv)(II)), whichever is greater,
increased by a percentage equal to the annual adjustment percentage for award year 2013–2014,
reduced by
(II) $4,860 or the maximum Federal Pell
Grant for which a student was eligible for the preceding award year, as specified in the last enacted
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appropriation Act applicable to that year, whichever is greater; and
(III) rounded to the nearest $5.
(ii) AWARD YEARS 2014–2015 THROUGH 2017–2018.—
For each of the award years 2014–2015 through 2017–
2018, the amount determined under this subparagraph for purposes of subparagraph (B)(iii) shall be
equal to—
(I) the total maximum Federal Pell Grant for
the preceding award year (as determined under
clause (iv)(II)), increased by a percentage equal to
the annual adjustment percentage for the award
year for which the amount under this subparagraph is being determined, reduced by
(II) $4,860 or the maximum Federal Pell
Grant for which a student was eligible for the preceding award year, as specified in the last enacted
appropriation Act applicable to that year, whichever is greater; and
(III) rounded to the nearest $5.
(iii) SUBSEQUENT AWARD YEARS.—For award year
2018–2019 and each subsequent award year, the
amount determined under this subparagraph for purposes of subparagraph (B)(iii) shall be equal to the
amount determined under clause (ii) for award year
2017–2018.
(iv) DEFINITIONS.—For purposes of this subparagraph—
(I) the term ‘‘annual adjustment percentage’’
as applied to an award year, is equal to the estimated percentage change in the Consumer Price
Index (as determined by the Secretary, using the
definition in section 478(f)) for the most recent
calendar year ending prior to the beginning of
that award year; and
(II) the term ‘‘total maximum Federal Pell
Grant’’ as applied to a preceding award year, is
equal to the sum of—
(aa) the maximum Federal Pell Grant for
which a student is eligible during an award
year, as specified in the last enacted appropriation Act applicable to that preceding
award year; and
(bb) the amount of the increase in the
maximum Federal Pell Grant required by this
paragraph for that preceding award year.
(D) PROGRAM REQUIREMENTS AND OPERATIONS OTHERWISE UNAFFECTED.—Except as provided in subparagraphs
(B) and (C), nothing in this paragraph shall be construed
to alter the requirements and operations of the Federal
Pell Grant Program as authorized under this section, or
authorize the imposition of additional requirements or operations for the determination and allocation of Federal
Pell Grants under this section.
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(E) RATABLE INCREASES AND DECREASES.—The
amounts specified in subparagraph (B) shall be ratably increased or decreased to the extent that funds available
under subparagraph (A) exceed or are less than (respectively) the amount required to provide the amounts specified in subparagraph (B).
(F) AVAILABILITY OF FUNDS.—The amounts made
available by subparagraph (A) for any fiscal year shall be
available beginning on October 1 of that fiscal year, and
shall remain available through September 30 of the succeeding fiscal year.
(c) PERIOD OF ELIGIBILITY FOR GRANTS.—(1) The period during
which a student may receive Federal Pell Grants shall be the period required for the completion of the first undergraduate baccalaureate course of study being pursued by that student at the institution at which the student is in attendance except that any period
during which the student is enrolled in a noncredit or remedial
course of study as defined in paragraph (2) shall not be counted for
the purpose of this paragraph.
(2) Nothing in this section shall exclude from eligibility courses
of study which are noncredit or remedial in nature (including
courses in English language instruction) which are determined by
the institution to be necessary to help the student be prepared for
the pursuit of a first undergraduate baccalaureate degree or certificate or, in the case of courses in English language instruction, to
be necessary to enable the student to utilize already existing
knowledge, training, or skills. Nothing in this section shall exclude
from eligibility programs of study abroad that are approved for
credit by the home institution at which the student is enrolled.
(3) No student is entitled to receive Pell Grant payments concurrently from more than one institution or from the Secretary and
an institution.
(4) Notwithstanding paragraph (1), the Secretary may allow,
on a case-by-case basis, a student to receive a basic grant if the
student—
(A) is carrying at least one-half the normal full-time work
load for the course of study the student is pursuing, as determined by the institution of higher education; and
(B) is enrolled or accepted for enrollment in a
postbaccalaureate program that does not lead to a graduate degree, and in courses required by a State in order for the student to receive a professional certification or licensing credential that is required for employment as a teacher in an elementary school or secondary school in that State,
except that this paragraph shall not apply to a student who is enrolled in an institution of higher education that offers a baccalaureate degree in education.
(5) The period during which a student may receive Federal Pell
Grants shall not exceed 12 semesters, or the equivalent of 12 semesters, as determined by the Secretary by regulation. Such regulations shall provide, with respect to a student who received a Federal Pell Grant for a term but was enrolled at a fraction of fulltime, that only that same fraction of such semester or equivalent
shall count towards such duration limits.
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[Note: This paragraph was amended by section 309(a)(2) of division F of Public Law 112–74 and was effective on July 1, 2012.
Prior to July 1, 2012, the paragraph that is applicable reads as follows:]
(5) The period during which a student may receive Federal Pell
Grants shall not exceed 18 semesters, or the equivalent of 18 semesters, as determined by the Secretary by regulation. Such regulations
shall provide, with respect to a student who received a Federal Pell
Grant for a term but was enrolled at a fraction of full-time, that
only that same fraction of such semester or equivalent shall count
towards such duration limits. The provisions of this paragraph
shall apply only to a student who receives a Federal Pell Grant for
the first time on or after July 1, 2008.
(d) APPLICATIONS FOR GRANTS.—(1) The Secretary shall from
time to time set dates by which students shall file applications for
Federal Pell Grants under this subpart.
(2) Each student desiring a Federal Pell Grant for any year
shall file an application therefor containing such information and
assurances as the Secretary may deem necessary to enable the Secretary to carry out the functions and responsibilities of this subpart.
(e) DISTRIBUTION OF GRANTS TO STUDENTS.—Payments under
this section shall be made in accordance with regulations promulgated by the Secretary for such purpose, in such manner as will
best accomplish the purpose of this section. Any disbursement allowed to be made by crediting the student’s account shall be limited to tuition and fees and, in the case of institutionally owned
housing, room and board. The student may elect to have the institution provide other such goods and services by crediting the student’s account.
(f) CALCULATION OF ELIGIBILITY.—(1) Each contractor processing applications for awards under this subpart (including a central processor, if any, designated by the Secretary) shall, in a timely manner, furnish to the student financial aid administrator (at
each institution of higher education which a student awarded a
Federal Pell Grant under this subpart is attending), as a part of
its regular output document, the expected family contribution for
each such student. Each such student financial aid administrator
shall—
(A) examine and assess the data used to calculate the expected family contribution of the student furnished pursuant to
this subsection;
(B) recalculate the expected family contribution of the student if there has been a change in circumstances of the student
or in the data submitted;
(C) make the award to the student in the correct amount;
and
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(D) after making such award report the corrected data to
such contractor and to a central processor (if any) designated
by the Secretary for a confirmation of the correct computation
of amount of the expected family contribution for each such
student.
(2) Whenever a student receives an award under this subpart
that, due to recalculation errors by the institution of higher education, is in excess of the amount which the student is entitled to
receive under this subpart, such institution of higher education
shall pay to the Secretary the amount of such excess unless such
excess can be resolved in a subsequent disbursement to the institution.
(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 of the Senate, the Committee on Appropriations of the House of Representatives, and the
authorizing committees.
(g) INSUFFICIENT APPROPRIATIONS.—If, for any fiscal year, the
funds appropriated for payments under this subpart are insufficient to satisfy fully all entitlements, as calculated under subsection (b) (but at the maximum grant level specified in such appropriation), the Secretary shall promptly transmit a notice of such
insufficiency to each House of the Congress, and identify in such
notice the additional amount that would be required to be appropriated to satisfy fully all entitlements (as so calculated at such
maximum grant level).
(h) USE OF EXCESS FUNDS.—(1) If, at the end of a fiscal year,
the funds available for making payments under this subpart exceed
the amount necessary to make the payments required under this
subpart to eligible students by 15 percent or less, then all of the
excess funds shall remain available for making payments under
this subpart during the next succeeding fiscal year.
(2) If, at the end of a fiscal year, the funds available for making payments under this subpart exceed the amount necessary to
make the payments required under this subpart to eligible students by more than 15 percent, then all of such funds shall remain
available for making such payments but payments may be made
under this paragraph only with respect to entitlements for that fiscal year.
(i) TREATMENT OF INSTITUTIONS AND STUDENTS UNDER OTHER
LAWS.—Any institution of higher education which enters into an
agreement with the Secretary to disburse to students attending
that institution the amounts those students are eligible to receive
under this subpart shall not be deemed, by virtue of such agreement, a contractor maintaining a system of records to accomplish
a function of the Secretary. Recipients of Pell Grants shall not be
considered to be individual grantees for purposes of subtitle D of
title V of Public Law 100–690.
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(j) INSTITUTIONAL INELIGIBILITY BASED ON DEFAULT RATES.—
(1) IN GENERAL.—No institution of higher education shall
be an eligible institution for purposes of this subpart if such
institution of higher education is ineligible to participate in a
loan program under part B or D as a result of a final default
rate determination made by the Secretary under part B or D
after the final publication of cohort default rates for fiscal year
1996 or a succeeding fiscal year.
(2) SANCTIONS SUBJECT TO APPEAL OPPORTUNITY.—No institution may be subject to the terms of this subsection unless
the institution has had the opportunity to appeal the institution’s default rate determination under regulations issued by
the Secretary for the loan program authorized under part B or
D, as applicable. This subsection shall not apply to an institution that was not participating in the loan program authorized
under part B or D on the date of enactment of the Higher Education Amendments of 1998, unless the institution subsequently participates in the loan programs.
SEC. 401A. ACADEMIC COMPETITIVENESS GRANTS.
(a) ACADEMIC COMPETITIVENESS GRANT PROGRAM
IZED.—The Secretary shall award grants, in the amounts
AUTHORspecified
in subsection (d)(1), to eligible students to assist the eligible students in paying their college education expenses.
(b) DESIGNATION.—A grant under this section—
(1) for the first or second year of a program of undergraduate education shall be known as an ‘‘Academic Competitiveness Grant’’; and
(2) for the third, fourth, or fifth year of a program of undergraduate education shall be known as a ‘‘National Science
and Mathematics Access to Retain Talent Grant’’ or a ‘‘National SMART Grant’’.
(c) DEFINITION OF ELIGIBLE STUDENT.—In this section the term
‘‘eligible student’’ means a student who, for the award year for
which the determination of eligibility is made for a grant under
this section—
(1) is eligible for a Federal Pell Grant;
(2) is enrolled or accepted for enrollment in an institution
of higher education on not less than a half-time basis; and
(3) in the case of a student enrolled or accepted for enrollment in—
(A) the first year of a program of undergraduate
education at a two- or four-year degree-granting institution of higher education (including a program of not less
than one year for which the institution awards a
certificate)—
(i)(I) successfully completes, after January 1,
2006, but before July 1, 2009, a rigorous secondary
school program of study established by a State or local
educational agency and recognized as such by the Secretary; or
(II) successfully completes, on or after July 1,
2009, a rigorous secondary school program of study
that prepares students for college—
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(aa)(AA) that is recognized as such by the official designated for such recognition consistent
with State law; and
(BB) about which the designated official has
reported to the Secretary, at such time as the Secretary may reasonably require, in order to assist
financial aid administrators to determine that the
student is an eligible student under this section;
or
(bb) that is recognized as such by the Secretary in regulations promulgated to carry out
this section, as such regulations were in effect on
May 6, 2008; and
(ii) has not been previously enrolled in a program
of undergraduate education, except as part of a secondary school program of study;
(B) the second year of a program of undergraduate
education at a two- or four-year degree-granting institution of higher education (including a program of not less
than two years for which the institution awards a certificate)—
(i)(I) successfully completes, after January 1,
2005, but before July 1, 2009, a rigorous secondary
school program of study established by a State or local
educational agency and recognized as such by the Secretary; or
(II) successfully completes, on or after July 1,
2009, a rigorous secondary school program of study
that prepares students for college—
(aa)(AA) that is recognized as such by the official designated for such recognition consistent
with State law; and
(BB) about which the designated official has
reported to the Secretary, at such time as the Secretary may reasonably require, in order to assist
financial aid administrators to determine that the
student is an eligible student under this section;
or
(bb) that is recognized as such by the Secretary in regulations promulgated to carry out
this section, as such regulations were in effect on
May 6, 2008; and
(ii) has obtained a cumulative grade point average
of at least 3.0 (or the equivalent as determined under
regulations prescribed by the Secretary) at the end of
the first year of such program of undergraduate education;
(C) the third or fourth year of a program of undergraduate education at a four-year degree-granting institution of higher education—
(i) is certified by the institution to be pursuing a
major in—
(I) the physical, life, or computer sciences,
mathematics, technology, or engineering (as deterMay 7, 2013
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mined by the Secretary pursuant to regulations);
or
(II) a critical foreign language; and
(ii) has obtained a cumulative grade point average
of at least 3.0 (or the equivalent as determined under
regulations prescribed by the Secretary) in the
coursework required for the major described in clause
(i);
(D) the third or fourth year of a program of undergraduate education at an institution of higher education
(as defined in section 101(a)), is attending an institution
that demonstrates, to the satisfaction of the Secretary,
that the institution—
(i) offers a single liberal arts curriculum leading to
a baccalaureate degree, under which students are not
permitted by the institution to declare a major in a
particular subject area, and the student—
(I)(aa) studies, in such years, a subject described in subparagraph (C)(i) that is at least
equal to the requirements for an academic major
at an institution of higher education that offers a
baccalaureate degree in such subject, as certified
by an appropriate official from the institution; and
(bb) has obtained a cumulative grade point
average of at least 3.0 (or the equivalent as determined under regulations prescribed by the Secretary) in the relevant coursework; or
(II) is required, as part of the student’s degree
program, to undertake a rigorous course of study
in mathematics, biology, chemistry, and physics,
which consists of at least—
(aa) 4 years of study in mathematics; and
(bb) 3 years of study in the sciences, with
a laboratory component in each of those years;
and
(ii) offered such curriculum prior to February 8,
2006; or
(E) the fifth year of a program of undergraduate education that requires 5 full years of coursework, as certified
by the appropriate official of the degree-granting institution of higher education, for which a baccalaureate degree
is awarded by a degree-granting institution of higher education—
(i) is certified by the institution of higher education to be pursuing a major in—
(I) the physical, life, or computer sciences,
mathematics, technology, or engineering (as determined by the Secretary pursuant to regulations);
or
(II) a critical foreign language; and
(ii) has obtained a cumulative grade point average
of at least 3.0 (or the equivalent, as determined under
regulations prescribed by the Secretary) in the
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coursework required for the major described in clause
(i).
(d) GRANT AWARD.—
(1) AMOUNTS.—
(A) IN GENERAL.—The Secretary shall award a grant
under this section in the amount of—
(i) $750 for an eligible student under subsection
(c)(3)(A);
(ii) $1,300 for an eligible student under subsection
(c)(3)(B);
(iii) $4,000 for an eligible student under subparagraph (C) or (D) of subsection (c)(3), for each of the
two years described in such subparagraphs; or
(iv) $4,000 for an eligible student under subsection (c)(3)(E).
(B) LIMITATION; RATABLE REDUCTION.—Notwithstanding subparagraph (A)—
(i) in any case in which a student attends an institution of higher education on less than a full-time
basis, the amount of the grant that such student may
receive shall be reduced in the same manner as a Federal Pell Grant is reduced under section 401(b)(2)(B);
(ii) the amount of such grant, in combination with
the Federal Pell Grant assistance and other student financial assistance available to such student, shall not
exceed the student’s cost of attendance;
(iii) if the amount made available under subsection (e) for any fiscal year is less than the amount
required to be provided grants to all eligible students
in the amounts determined under subparagraph (A)
and clause (i) of this subparagraph, then the amount
of the grant to each eligible student shall be ratably
reduced; and
(iv) if additional amounts are appropriated for any
such fiscal year, such reduced amounts shall be increased
on the same basis as they were reduced.
(2) LIMITATIONS.—
(A) NO GRANTS FOR PREVIOUS CREDIT.—The Secretary
may not award a grant under this section to any student
for any year of a program of undergraduate education for
which the student received credit before the date of enactment of the Higher Education Reconciliation Act of 2005.
(B) NUMBER OF GRANTS.—The Secretary may not
award more than one grant to a student described in subsection (c)(3) for each year of study described in such subsection.
(3) CALCULATION OF GRANT PAYMENTS.—An institution of
higher education shall make payments of a grant awarded
under this section in the same manner, using the same payment periods, as such institution makes payments for Federal
Pell Grants under section 401.
(e) FUNDING.—
(1) AUTHORIZATION AND APPROPRIATION OF FUNDS.—There
are authorized to be appropriated, and there are appropriated,
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out of any money in the Treasury not otherwise appropriated,
for the Department of Education to carry out this section—
(A) $790,000,000 for fiscal year 2006;
(B) $850,000,000 for fiscal year 2007;
(C) $920,000,000 for fiscal year 2008;
(D) $960,000,000 for fiscal year 2009; and
(E) $1,010,000,000 for fiscal year 2010.
(2) AVAILABILITY OF FUNDS.—The amounts made available
by paragraph (1) for any fiscal year shall be available from October 1 of that fiscal year and remain available through September 30 of the succeeding fiscal year.
(f) RECOGNITION OF PROGRAMS OF STUDY.—The Secretary shall
recognize not less than one rigorous secondary school program of
study in each State under subparagraphs (A) and (B) of subsection
(c)(3) for the purpose of determining student eligibility under such
subsection.
(g) SUNSET PROVISION.—The authority to make grants under
this section shall expire at the end of award year 2010–2011.
Subpart 2—Federal Early Outreach and Student
Services Programs
CHAPTER 1—FEDERAL TRIO PROGRAMS
SEC. 402A. ø20 U.S.C. 1070a–11¿ PROGRAM AUTHORITY; AUTHORIZATION OF APPROPRIATIONS.
(a) GRANTS AND CONTRACTS AUTHORIZED.—The Secretary
shall, in accordance with the provisions of this chapter, carry out
a program of making grants and contracts designed to identify
qualified individuals from disadvantaged backgrounds, to prepare
them for a program of postsecondary education, to provide support
services for such students who are pursuing programs of postsecondary education, to motivate and prepare students for doctoral
programs, and to train individuals serving or preparing for service
in programs and projects so designed.
(b) RECIPIENTS, DURATION, AND SIZE.—
(1) RECIPIENTS.—For the purposes described in subsection
(a), the Secretary is authorized, without regard to section 3709
of the Revised Statutes (41 U.S.C. 5), to make grants to, and
contracts with, institutions of higher education, public and private agencies and organizations, including community-based
organizations with experience in serving disadvantaged youth,
combinations of such institutions, agencies and organizations,
and, as appropriate to the purposes of the program, secondary
schools, for planning, developing, or carrying out one or more
of the services assisted under this chapter.
(2) DURATION.—Grants or contracts made under this chapter shall be awarded for a period of 5 years, except that—
(A) in order to synchronize the awarding of grants for
programs under this chapter, the Secretary may, under
such terms as are consistent with the purposes of this
chapter, provide a one-time, limited extension of the length
of such an award;
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(B) grants made under section 402G shall be awarded
for a period of 2 years; and
(C) grants under section 402H shall be awarded for a
period determined by the Secretary.
(3) MINIMUM GRANTS.—Unless the institution or agency requests a smaller amount, 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.—An eligible entity that
desires to receive a grant or contract under this chapter shall
submit an application to the Secretary in such manner and
form, and containing such information and assurances, as the
Secretary may reasonably require.
(2) CONSIDERATIONS.—
(A) PRIOR EXPERIENCE.—In making grants under this
chapter, the Secretary shall consider each applicant’s prior
experience of 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.
(B) PARTICIPANT NEED.—In making grants under this
chapter, the Secretary shall consider the number, percentages, and needs of eligible participants in the area, institution of higher education, or secondary school to be served
to aid such participants in preparing for, enrolling in, or
succeeding in postsecondary education, as appropriate to
the particular program for which the eligible entity is applying.
(3) ORDER OF AWARDS; PROGRAM FRAUD.—(A) Except with
respect to grants made under sections 402G and 402H and as
provided in subparagraph (B), the Secretary shall award
grants and contracts under this chapter in the order of the
scores received by the application for such grant or contract in
the peer review process required under paragraph (4) and adjusted for prior experience in accordance with paragraph (2) of
this subsection.
(B) The Secretary 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) The Secretary shall ensure
that, to the extent practicable, members of groups underrepresented in higher education, including African Americans,
Hispanics, Native Americans, Alaska Natives, Asian Americans, and Native American Pacific Islanders (including Native
Hawaiians), are represented as readers of applications submitted under this chapter. The Secretary shall also ensure that
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persons from urban and rural backgrounds are represented as
readers.
(B) The Secretary shall ensure that each application submitted under this chapter is read by at least three readers who
are not employees of the Federal Government (other than as
readers of applications).
(5) NUMBER OF APPLICATIONS FOR GRANTS AND CONTRACTS.—The Secretary shall not limit the number of applications submitted by an entity under any program authorized
under this chapter if the additional applications describe programs serving different populations or different campuses.
(6) COORDINATION WITH OTHER PROGRAMS FOR DISADVANTAGED STUDENTS.—The Secretary shall encourage coordination
of programs assisted under this chapter with other programs
for disadvantaged students operated by the sponsoring institution or agency, regardless of the funding source of such programs. The Secretary shall not limit an entity’s eligibility to
receive funds under this chapter because such entity sponsors
a program similar to the program to be assisted under this
chapter, regardless of the funding source of such program. The
Secretary shall permit the Director of a program receiving
funds under this chapter to administer one or more additional
programs for disadvantaged students operated by the sponsoring institution or agency, regardless of the funding sources
of such programs. The Secretary shall, as appropriate, require
each applicant for funds under the programs authorized by this
chapter to identify and make available services under such
program, including mentoring, tutoring, and other services provided by such program, to foster care youth (including youth
in foster care and youth who have left foster care after reaching age 13) or to homeless children and youths as defined in
section 725 of the McKinney-Vento Homeless Assistance Act.
(7) APPLICATION STATUS.—The Secretary shall inform each
entity operating programs under this chapter regarding the
status of their application for continued funding at least 8
months prior to the expiration of the grant or contract. The
Secretary, in the case of an entity that is continuing to operate
a successful program under this chapter, shall ensure that the
start-up date for a new grant or contract for such program immediately follows the termination of the preceding grant or
contract so that no interruption of funding occurs for such successful reapplicants. The Secretary shall inform each entity requesting assistance under this chapter for a new program regarding the status of their application at least 8 months prior
to the proposed startup date of such program.
(8) REVIEW AND NOTIFICATION BY THE SECRETARY.—
(A) GUIDANCE.—Not later than 180 days after the date
of enactment of the Higher Education Opportunity Act, the
Secretary shall issue nonregulatory guidance regarding the
rights and responsibilities of applicants with respect to the
application and evaluation process for programs and
projects assisted under this chapter, including applicant
access to peer review comments. The guidance shall describe the procedures for the submission, processing, and
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scoring of applications for grants under this chapter, including—
(i) the responsibility of applicants to submit materials in a timely manner and in accordance with the
processes established by the Secretary under the authority of the General Education Provisions Act;
(ii) steps the Secretary will take to ensure that
the materials submitted by applicants are processed in
a proper and timely manner;
(iii) steps the Secretary will take to ensure that
prior experience points for high quality service delivery are awarded in an accurate and transparent manner;
(iv) steps the Secretary will take to ensure the
quality and integrity of the peer review process, including assurances that peer reviewers will consider
applications for grants under this chapter in a thorough and complete manner consistent with applicable
Federal law; and
(v) steps the Secretary will take to ensure that the
final score of an application, including prior experience
points for high quality service delivery and points
awarded through the peer review process, is determined in an accurate and transparent manner.
(B) UPDATED GUIDANCE.—Not later than 45 days before the date of the commencement of each competition for
a grant under this chapter that is held after the expiration
of the 180-day period described in subparagraph (A), the
Secretary shall update and publish the guidance described
in such subparagraph.
(C) REVIEW.—
(i) IN GENERAL.—With respect to any competition
for a grant under this chapter, an applicant may request a review by the Secretary if the applicant—
(I) has evidence of a specific technical, administrative, or scoring error made by the Department, an agent of the Department, or a peer reviewer, with respect to the scoring or processing of
a submitted application; and
(II) has otherwise met all of the requirements
for submission of the application.
(ii) TECHNICAL OR ADMINISTRATIVE ERROR.—In the
case of evidence of a technical or administrative error
listed in clause (i)(I), the Secretary shall review such
evidence and provide a timely response to the applicant. If the Secretary determines that a technical or
administrative error was made by the Department or
an agent of the Department, the application of the applicant shall be reconsidered in the peer review process for the applicable grant competition.
(iii) SCORING ERROR.—In the case of evidence of a
scoring error listed in clause (i)(I), when the error relates to either prior experience points for high quality
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service delivery or to the final score of an application,
the Secretary shall—
(I) review such evidence and provide a timely
response to the applicant; and
(II) if the Secretary determines that a scoring
error was made by the Department or a peer reviewer, adjust the prior experience points or final
score of the application appropriately and quickly,
so as not to interfere with the timely awarding of
grants for the applicable grant competition.
(iv) ERROR IN PEER REVIEW PROCESS.—
(I) REFERRAL TO SECONDARY REVIEW.—In the
case of a peer review process error listed in clause
(i)(I), if the Secretary determines that points were
withheld for criteria not required in Federal statute, regulation, or guidance governing a program
assisted under this chapter or the application for
a grant for such program, or determines that information pertaining to selection criteria was
wrongly determined to be missing from an application by a peer reviewer, then the Secretary shall
refer the application to a secondary review panel.
(II) TIMELY REVIEW; REPLACEMENT SCORE.—
The secondary review panel described in subclause (I) shall conduct a secondary review in a
timely fashion, and the score resulting from the
secondary review shall replace the score from the
initial peer review.
(III) COMPOSITION OF SECONDARY REVIEW
PANEL.—The secondary review panel shall be composed of reviewers each of whom—
(aa) did not review the application in the
original peer review;
(bb) is a member of the cohort of peer reviewers for the grant program that is the subject of such secondary review; and
(cc) to extent practicable, has conducted
peer reviews in not less than two previous
competitions for the grant program that is the
subject of such secondary review.
(IV) FINAL SCORE.—The final peer review
score of an application subject to a secondary review under this clause shall be adjusted appropriately and quickly using the score awarded by
the secondary review panel, so as not to interfere
with the timely awarding of grants for the applicable grant competition.
(V) QUALIFICATION FOR SECONDARY REVIEW.—
To qualify for a secondary review under this
clause, an applicant shall have evidence of a scoring error and demonstrate that—
(aa) points were withheld for criteria not
required in statute, regulation, or guidance
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governing the Federal TRIO programs or the
application for a grant for such programs; or
(bb) information pertaining to selection
criteria was wrongly determined to be missing
from the application.
(v) FINALITY.—
(I) IN GENERAL.—A determination by the Secretary under clause (i), (ii), or (iii) shall not be reviewable by any officer or employee of the Department.
(II) SCORING.—The score awarded by a secondary review panel under clause (iv) shall not be
reviewable by any officer or employee of the Department other than the Secretary.
(vi) FUNDING OF APPLICATIONS WITH CERTAIN ADJUSTED SCORES.—To the extent feasible based on the
availability of appropriations, the Secretary shall fund
applications with scores that are adjusted upward
under clauses (ii), (iii), and (iv) to equal or exceed the
minimum cut off score for the applicable grant competition.
(d) OUTREACH.—
(1) IN GENERAL.—The Secretary shall conduct outreach activities to ensure that entities eligible for assistance under this
chapter submit applications proposing programs that serve geographic areas and eligible populations which have been underserved by the programs assisted under this chapter.
(2) NOTICE.—In carrying out the provisions of paragraph
(1), the Secretary shall notify the entities described in subsection (b) of the availability of assistance under this subsection not less than 120 days prior to the deadline for submission of applications under this chapter and shall consult national, State, and regional organizations about candidates for
notification.
(3) TECHNICAL ASSISTANCE.—The Secretary shall provide
technical training to applicants for projects and programs authorized under this chapter. The Secretary shall give priority
to serving programs and projects that serve geographic areas
and eligible populations which have been underserved by the
programs assisted under this chapter. Technical training activities shall include the provision of information on authorizing legislation, goals and objectives of the program, required
activities, eligibility requirements, the application process and
application deadlines, and assistance in the development of
program proposals and the completion of program applications.
Such training shall be furnished at conferences, seminars, and
workshops to be conducted at not less than 10 sites throughout
the United States to ensure that all areas of the United States
with large concentrations of eligible participants are served.
(4) SPECIAL RULE.—The Secretary may contract with eligible entities to conduct the outreach activities described in this
subsection.
(e) DOCUMENTATION OF STATUS AS A LOW-INCOME INDIVIDUAL.—(1) Except in the case of an independent student, as deMay 7, 2013
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fined in section 480(d), documentation of an individual’s status pursuant to subsection (h)(4) shall be made by providing the Secretary
with—
(A) a signed statement from the individual’s parent or
legal guardian;
(B) verification from another governmental source;
(C) a signed financial aid application; or
(D) a signed United States or Puerto Rico income tax return.
(2) In the case of an independent student, as defined in section
480(d), documentation of an individual’s status pursuant to subsection (h)(4) shall be made by providing the Secretary with—
(A) a signed statement from the individual;
(B) verification from another governmental source;
(C) a signed financial aid application; or
(D) a signed United States or Puerto Rico income tax return.
(3) Notwithstanding this subsection and subsection (h)(4), individuals who are foster care youth (including youth in foster care
and youth who have left foster care after reaching age 13), or
homeless children and youths as defined in section 725 of the
McKinney-Vento Homeless Assistance Act, shall be eligible to participate in programs under sections 402B, 402C, 402D, and 402F.
(f) OUTCOME CRITERIA.—
(1) USE FOR PRIOR EXPERIENCE DETERMINATION.—For competitions for grants under this chapter that begin on or after
January 1, 2009, the Secretary shall determine an eligible entity’s prior experience of high quality service delivery, as required under subsection (c)(2), based on the outcome criteria
described in paragraphs (2) and (3).
(2) DISAGGREGATION OF RELEVANT DATA.—The outcome criteria under this subsection shall be disaggregated by 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.
(3) CONTENTS OF OUTCOME CRITERIA.—The outcome criteria under this subsection shall measure, annually and for
longer periods, the quality and effectiveness of programs authorized under this chapter and shall include the following:
(A) For programs authorized under section 402B, the
extent to which 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 with a regular secondary school diploma
in the standard number of years;
(iv) the completion by such students of a rigorous
secondary school program of study that will make such
students eligible for programs such as the Academic
Competitiveness Grants Program;
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(v) the enrollment of such students in an institution of higher education; and
(vi) to the extent practicable, the postsecondary
education completion of such students.
(B) For programs authorized under section 402C, the
extent to which the eligible entity met or exceeded the entity’s 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;
(v) the completion by such students of a rigorous
secondary school program of study that will make such
students eligible for programs such as the Academic
Competitiveness Grants Program;
(vi) the enrollment of such students in an institution of higher education; and
(vii) to the extent practicable, the postsecondary
education completion of such students.
(C) For programs authorized under section 402D—
(i) the extent to which 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 the percentage of 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 such students 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) the extent to which 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) the extent to which the entity met or exceeded
the entity’s objectives regarding the students served
under the program who remain in good academic
standing.
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(D) For programs authorized under section 402E, the
extent to which the entity met or exceeded the entity’s 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) 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 continued enrollment of such students in
graduate study and the attainment of doctoral degrees
by former program participants.
(E) For programs authorized under section 402F, the
extent to which 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 served by the program, 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.
(4) MEASUREMENT OF PROGRESS.—In order to determine
the extent to which each outcome criterion described in paragraph (2) or (3) is met or exceeded, the Secretary shall compare
the agreed upon target for the criterion, as established in the
eligible entity’s application approved by the Secretary, with the
results for the criterion, measured as of the last day of the applicable time period for the determination for the outcome criterion.
(g) AUTHORIZATION OF APPROPRIATIONS.—For the purpose of
making grants and contracts under this chapter, there are authorized to be appropriated $900,000,000 for fiscal year 2009 and such
sums as may be necessary for each of the five 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.
(h) DEFINITIONS.—For the purpose of this chapter:
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(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 that an eligible entity desires to serve through an application for a grant under this
chapter, and 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.
(3) FIRST GENERATION COLLEGE STUDENT.—The term ‘‘first
generation college student’’ means—
(A) an individual both of whose parents did not complete a baccalaureate degree; or
(B) in the case of any individual who regularly resided
with and received support from only one parent, an individual whose only such parent did not complete a baccalaureate degree.
(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.
(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 and was discharged or released therefrom under conditions other than dishonorable;
(B) served on active duty and was discharged or released therefrom because of a service connected disability;
(C) was a member of a reserve component of the
Armed Forces called to active duty for a period of more
than 30 days; or
(D) was a member of a reserve component of the
Armed Forces who served on active duty in support of a
contingency operation (as that term is defined in section
101(a)(13) of title 10, United States Code) on or after September 11, 2001.
(6) WAIVER.—The Secretary may waive the service requirements in 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.
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SEC. 402B. ø20 U.S.C. 1070a–12¿ TALENT SEARCH.
(a) PROGRAM AUTHORITY.—The Secretary
Sec. 402B
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
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 to enter
or reenter, and complete such programs.
(b) REQUIRED SERVICES.—Any project assisted under this section shall provide—
(1) connections to high quality academic tutoring services,
to enable students to complete secondary or postsecondary
courses;
(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 the full range of Federal student financial aid programs and benefits (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) connections to education or counseling services designed to improve the financial literacy and economic literacy
of students or the students’ parents, including financial planning for postsecondary education.
(c) PERMISSIBLE SERVICES.—Any project assisted under this
section may provide services such as—
(1) academic tutoring, which may include instruction in
reading, writing, study skills, mathematics, science, and other
subjects;
(2) personal and career counseling or activities;
(3) information and activities designed to acquaint youth
with the range of career options available to the youth;
(4) 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;
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(5) workshops and counseling for families of students
served;
(6) 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
(7) programs and activities as described in subsection (b)
or paragraphs (1) through (6) of this subsection that are specially designed for students who are limited English proficient,
students from groups that are traditionally underrepresented
in postsecondary education, 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)), students who are in foster care or are
aging out of the foster care system, or other disconnected students.
(d) REQUIREMENTS FOR APPROVAL OF APPLICATIONS.—In approving applications for projects under this section for any fiscal
year the Secretary shall—
(1) require an assurance that not less than two-thirds of
the individuals participating in the project proposed to be carried out under any application be low-income individuals who
are first generation college students;
(2) require that such participants be persons who either
have completed 5 years of elementary education or are at least
11 years of age but not more than 27 years of age, unless the
imposition of any such limitation with respect to any person
would defeat the purposes of this section or the purposes of
section 402F;
(3) require an assurance that individuals participating in
the project proposed in the application do not have access to
services from another project funded under this section or
under section 402F; and
(4) require an assurance that the project will be located in
a setting accessible to the persons proposed to be served by the
project.
SEC. 402C. ø20 U.S.C. 1070a–13¿ UPWARD BOUND.
(a) PROGRAM AUTHORITY.—The Secretary
shall carry out a program to be known as upward bound which shall be designed to
generate skills and motivation necessary for success in education
beyond secondary school.
(b) REQUIRED 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 the full range of Federal student financial aid programs and benefits (including Federal Pell
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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 the
students’ parents, including financial planning for postsecondary education.
(c) ADDITIONAL REQUIRED SERVICES FOR MULTIPLE-YEAR
GRANT RECIPIENTS.—Any 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 youth participating in the project with the range of career options available to the youth;
(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, including mathematics and science
preparation, 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 from groups that are traditionally
underrepresented in postsecondary education, 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)), students who are
in foster care or are aging out of the foster care system, or
other disconnected students.
(e) REQUIREMENTS FOR APPROVAL OF APPLICATIONS.—In approving applications for projects under this section for any fiscal
year, the Secretary shall—
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(1) require an assurance that not less than two-thirds of
the youths participating in the project proposed to be carried
out under any application be low-income individuals who are
first generation college students;
(2) require an assurance that the remaining youths participating in the project proposed to be carried out under any application be low-income individuals, first generation college
students, or students who have a high risk for academic failure;
(3) require that there be a determination by the institution, with respect to each participant in such project that the
participant has a need for academic support in order to pursue
successfully a program of education beyond secondary school;
(4) require that such participants be persons who have
completed 8 years of elementary education and are at least 13
years of age but not more than 19 years of age, unless the imposition of any such limitation would defeat the purposes of
this section; and
(5) require an assurance that no student will be denied
participation in a project assisted under this section because
the student will enter the project after the 9th grade.
(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 the summer school recess,
for a period not to exceed three months, except that youth participating in a work-study position under subsection (d)(5) may be paid
a stipend of $300 per month during the summer school recess, for
a period not to exceed three 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.
(g) ADDITIONAL FUNDS.—
(1) AUTHORIZATION AND APPROPRIATION.—There are authorized to be appropriated, and there are appropriated to the
Secretary, from funds not otherwise appropriated, $57,000,000
for each of the fiscal years 2008 through 2011 to carry out
paragraph (2), except that any amounts that remain unexpended for such purpose for each of such fiscal years may be
available for technical assistance and administration costs for
the Upward Bound program. The authority to award grants
under this subsection shall expire at the end of fiscal year
2011.
(2) USE OF FUNDS.—The amounts made available by paragraph (1) shall be available to provide assistance to all Upward
Bound projects that did not receive assistance in fiscal year
2007 and that have a grant score above 70. Such assistance
shall be made available in the form of 4-year grants.
(h) ABSOLUTE PRIORITY PROHIBITED IN UPWARD BOUND PROGRAM.—Upon enactment of this subsection and except as otherwise
expressly provided by amendment to this section, the Secretary
shall not continue, implement, or enforce the absolute priority for
the Upward Bound Program published by the Department of Education in the Federal Register on September 22, 2006 (71 Fed. Reg.
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HIGHER EDUCATION ACT OF 1965
Sec. 402D
55447 et seq.). This subsection shall not be applied retroactively.
In implementing this subsection, the Department shall allow the
programs and participants chosen in the grant cycle to which the
priority applies to continue their grants and participation without
a further recompetition. The entities shall not be required to apply
the absolute priority conditions or restrictions to future participants.
SEC. 402D. ø20 U.S.C. 1070a–14¿ 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) to increase college retention and graduation rates for
eligible students;
(2) to increase the transfer rates of eligible students from
2-year to 4-year institutions;
(3) to foster an institutional climate supportive of the success of students who are limited English proficient, students
from groups that are traditionally underrepresented in postsecondary education, 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)), students who are in foster care or are aging
out of the foster care system, or other disconnected students;
and
(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) REQUIRED SERVICES.—A project assisted under this section
shall provide—
(1) academic tutoring, directly or through other services
provided by the institution, 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 and benefits (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 applying for admission to, and obtaining financial assistance for enrollment in, graduate and professional
programs; and
(6) activities designed to assist students enrolled in twoyear institutions of higher education in applying for admission
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to, and obtaining financial assistance for enrollment in, a fouryear program of postsecondary education.
(c) PERMISSIBLE SERVICES.—A project assisted under this section may provide services such as—
(1) individualized counseling for personal, career, and academic matters provided by assigned counselors;
(2) information, activities, and instruction designed to acquaint students 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) mentoring programs involving faculty or upper class
students, or a combination thereof;
(5) securing temporary housing during breaks in the academic year for—
(A) 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
(B) students who are in foster care or are aging out of
the foster care system; and
(6) programs and activities as described in subsection (b)
or paragraphs (1) through (4) of this subsection that are specially designed for students who are limited English proficient,
students from groups that are traditionally underrepresented
in postsecondary education, 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)), students who are in foster care or are
aging out of the foster care system, or other disconnected students.
(d) SPECIAL RULE.—
(1) USE FOR STUDENT AID.—A recipient of a grant that undertakes any of the permissible services identified in subsection (c) may, in addition, use such funds to provide grant
aid to students. A grant provided under this paragraph shall
not exceed the Federal Pell Grant amount, determined under
section 401(b)(2)(A), for which a student is eligible, or be less
than the minimum Federal Pell Grant amount described in
section 401(b)(4), 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.
(2) ELIGIBLE STUDENTS.—For purposes of receiving grant
aid under this subsection, eligible students shall be current
participants in the student support services program offered by
the institution and be—
(A) students who are in their first 2 years of postsecondary education and who are receiving Federal Pell
Grants under subpart 1; or
(B) students who have completed their first 2 years of
postsecondary education and who are receiving Federal
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Pell Grants under subpart 1 if the institution demonstrates to the satisfaction of the Secretary that—
(i) these students are at high risk of dropping out;
and
(ii) it will first meet the needs of all its eligible
first- and second-year students for services under this
paragraph.
(3) DETERMINATION OF NEED.—A grant provided to a student under paragraph (1) shall not be considered in determining that student’s need for grant or work assistance under
this title, except that in no case shall the total amount of student financial assistance awarded to a student under this title
exceed that student’s cost of attendance, as defined in section
472.
(4) MATCHING REQUIRED.—A recipient of a grant who uses
such funds for the purpose described in paragraph (1) shall
match the funds used for such purpose, in cash, from non-Federal funds, in an amount that is not less than 33 percent of the
total amount of funds used for that purpose. This paragraph
shall not apply to any grant recipient that is an institution of
higher education eligible to receive funds under part A or B of
title III or title V.
(5) RESERVATION.—In no event may a recipient use more
than 20 percent of the funds received under this section for
grant aid.
(6) SUPPLEMENT, NOT SUPPLANT.—Funds received by a
grant recipient that are used under this subsection shall be
used to supplement, and not supplant, non-Federal funds expended for student support services programs.
(e) REQUIREMENTS FOR APPROVAL OF APPLICATIONS.—In approving applications for projects under this section for any fiscal
year, the Secretary shall—
(1) require an assurance that not less than two-thirds of
the persons participating in the project proposed to be carried
out under any application—
(A) be individuals with disabilities; or
(B) be low-income individuals who are first generation
college students;
(2) require an assurance that the remaining students participating in the project proposed to be carried out under any
application be low-income individuals, first generation college
students, or individuals with disabilities;
(3) require an assurance that not less than one-third of the
individuals with disabilities participating in the project be lowincome individuals;
(4) require that there be a determination by the institution, with respect to each participant in such project, that the
participant has a need for academic support in order to pursue
successfully a program of education beyond secondary school;
(5) require that such participants be enrolled or accepted
for enrollment at the institution which is the recipient of the
grant or contract; and
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(6) consider, in addition to such other criteria as the Secretary may prescribe, the institution’s effort, and where applicable past history, in—
(A) providing sufficient financial assistance to meet
the full financial need of each student in the project; and
(B) maintaining the loan burden of each such student
at a manageable level.
SEC. 402E. ø20 U.S.C. 1070a–15¿ POSTBACCALAUREATE ACHIEVEMENT
PROGRAM AUTHORITY.
(a) PROGRAM AUTHORITY.—The Secretary shall carry out a pro-
gram to be known as the ‘‘Ronald E. McNair Postbaccalaureate
Achievement Program’’ that shall be designed to provide disadvantaged college students with effective preparation for doctoral study.
(b) REQUIRED SERVICES.—A project assisted under this section
shall provide—
(1) opportunities for research or other scholarly activities
at the institution or at graduate centers designed to provide
students with effective preparation for doctoral study;
(2) summer internships;
(3) seminars and other educational activities designed to
prepare students for doctoral study;
(4) tutoring;
(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.
(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, 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.
(d) REQUIREMENTS.—In approving applications for projects assisted under this section for any fiscal year, the Secretary shall require—
(1) an assurance that not less than two-thirds of the individuals participating in the project proposed to be carried out
under any application be low-income individuals who are first
generation college students;
(2) an assurance that the remaining persons participating
in the project proposed to be carried out be from a group that
is underrepresented in graduate education, including—
(A) Alaska Natives, as defined in section 7306 of the
Elementary and Secondary Education Act of 1965;
(B) Native Hawaiians, as defined in section 7207 of
such Act; and
(C) Native American Pacific Islanders, as defined in
section 320;
(3) an assurance that participants be enrolled in a degree
program at an eligible institution having an agreement with
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the Secretary in accordance with the provisions of section 487;
and
(4) an assurance that participants in summer research internships have completed their sophomore year in postsecondary education.
(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) the quality of research and other scholarly activities in
which students will be involved;
(2) the level of faculty involvement in the project and the
description of the research in which students will be involved;
and
(3) the institution’s plan for identifying and recruiting participants including students enrolled in projects authorized
under this section.
(f) MAXIMUM STIPENDS.—Students participating in research
under a project under this section may receive an award that—
(1) shall include a stipend not to exceed $2,800 per annum;
and
(2) may include, in addition, the costs of summer tuition,
summer room and board, and transportation to summer programs.
(g) FUNDING.—From amounts appropriated pursuant to the authority of section 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 2009 through 2014.
SEC. 402F. ø20 U.S.C. 1070a–16¿ EDUCATIONAL OPPORTUNITY CENTERS.
(a) PROGRAM AUTHORITY; SERVICES PROVIDED.—The Secretary
shall carry out a program to be known as educational opportunity
centers which shall be designed—
(1) to provide information with respect to financial and
academic assistance available for individuals desiring to pursue a program of postsecondary education;
(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) public information campaigns designed to inform the
community regarding opportunities for postsecondary education and training;
(2) academic advice and assistance in course selection;
(3) assistance in completing college admission and financial aid applications;
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HIGHER EDUCATION ACT OF 1965
210
(4) assistance in preparing for college entrance examinations;
(5) education or counseling services designed to improve
the financial literacy and economic literacy of students;
(6) guidance on secondary school reentry or entry to a general educational development (GED) program or other alternative education programs for secondary school dropouts;
(7) individualized personal, career, and academic counseling;
(8) tutorial services;
(9) career workshops and counseling;
(10) mentoring programs involving elementary or secondary school teachers, faculty members at institutions of
higher education, students, or any combination of such persons; and
(11) programs and activities as described in paragraphs (1)
through (10) that are specially designed for students who are
limited English proficient, students from groups that are traditionally underrepresented in postsecondary education, 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)), students who are in foster care or are aging out of the foster care
system, or other disconnected students.
(c) REQUIREMENTS FOR APPROVAL OF APPLICATIONS.—In approving applications for educational opportunity centers under this
section for any fiscal year the Secretary shall—
(1) require an assurance that not less than two-thirds of
the persons participating in the project proposed to be carried
out under any application be low-income individuals who are
first generation college students;
(2) require that such participants be persons who are at
least nineteen years of age, unless the imposition of such limitation with respect to any person would defeat the purposes of
this section or the purposes of section 402B; and
(3) require an assurance that individuals participating in
the project proposed in the application do not have access to
services from another project funded under this section or
under section 402B.
SEC. 402G. ø20 U.S.C. 1070a–17¿ STAFF DEVELOPMENT ACTIVITIES.
(a) SECRETARY’S AUTHORITY.—For the purpose of improving
the
operation of the programs and projects authorized by this chapter,
the Secretary is authorized to make grants to institutions of higher
education and other public and private nonprofit institutions and
organizations to provide training for staff and leadership personnel
employed in, participating in, or preparing for employment in, such
programs and projects.
(b) CONTENTS OF TRAINING PROGRAMS.—Such training shall include conferences, internships, seminars, workshops, and the publication of manuals designed to improve the operation of such programs and projects and shall be carried out in the various regions
of the Nation in order to ensure that the training opportunities are
appropriate to meet the needs in the local areas being served by
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such programs and projects. Such training shall be offered annually for new directors of projects funded under this chapter as well
as annually on the following topics and other topics chosen by the
Secretary:
(1) Legislative and regulatory requirements for the operation of programs funded under this chapter.
(2) Assisting students in receiving adequate financial aid
from programs assisted under this title and other programs.
(3) The design and operation of model programs for
projects funded under this chapter.
(4) The use of appropriate educational technology in the
operation of projects assisted under this chapter.
(5) Strategies for recruiting and serving hard to reach populations, including students who are limited English proficient,
students from groups that are traditionally underrepresented
in postsecondary education, 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)), students who are in foster care or are
aging out of the foster care system, or other disconnected students.
(c) CONSULTATION.—Grants for the purposes of this section
shall be made only after consultation with regional and State professional associations of persons having special knowledge with respect to the needs and problems of such programs and projects.
SEC. 402H. ø20 U.S.C. 1070a–18¿ REPORTS, EVALUATIONS, AND GRANTS
FOR PROJECT IMPROVEMENT AND DISSEMINATION.
(a) REPORTS TO THE AUTHORIZING COMMITTEES.—
(1) IN GENERAL.—The Secretary shall submit annually, to
the authorizing committees, a report that documents the performance of all programs funded under this chapter. Such report shall—
(A) be submitted not later than 12 months after the eligible entities receiving funds under this chapter are required to report their performance to the Secretary;
(B) focus on the programs’ performance on the relevant outcome criteria determined under section
402A(f)(4);
(C) aggregate individual project performance data on
the outcome criteria in order to provide national performance data for each program;
(D) include, when appropriate, descriptive data, multiyear data, and multi-cohort data; and
(E) include comparable data on the performance nationally of low-income students, first-generation students,
and students with disabilities.
(2) INFORMATION.—The Secretary shall provide, with each
report submitted under paragraph (1), information on the impact of the secondary review process described in section
402A(c)(8)(C)(iv), including the number and type of secondary
reviews, the disposition of the secondary reviews, the effect on
timing of awards, and any other information the Secretary determines is necessary.
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(b) EVALUATIONS.—
(1) IN GENERAL.—
(A) AUTHORIZATION OF GRANTS AND CONTRACTS.—For
the purpose of improving the effectiveness of the programs
and projects assisted under this chapter, the Secretary
shall make grants to, or enter into contracts with, institutions of higher education and other public and private institutions and organizations to rigorously evaluate the effectiveness of the programs and projects assisted under
this chapter, including a rigorous evaluation of the programs and projects assisted under section 402C. The evaluation of the programs and projects assisted under section
402C shall be implemented not later than June 30, 2010.
(B) CONTENT OF UPWARD BOUND EVALUATION.—The
evaluation of the programs and projects assisted under
section 402C that is described in subparagraph (A) shall
examine the characteristics of the students who benefit
most from the Upward Bound program under section 402C
and the characteristics of the programs and projects that
most benefit students.
(C) IMPLEMENTATION.—Each evaluation described in
this paragraph shall be implemented in accordance with
the requirements of this section.
(2) PRACTICES.—
(A) IN GENERAL.—The evaluations described in paragraph (1) shall identify institutional, community, and program or project practices that are effective in—
(i) enhancing the access of low-income individuals
and first-generation college students to postsecondary
education;
(ii) the preparation of such individuals and students for postsecondary education; and
(iii) fostering the success of the individuals and
students in postsecondary education.
(B) PRIMARY PURPOSE.—Any evaluation conducted
under this chapter shall have as the evaluation’s primary
purpose the identification of particular practices that further the achievement of the outcome criteria determined
under section 402A(f)(4).
(C) DISSEMINATION AND USE OF EVALUATION FINDINGS.—The Secretary shall disseminate to eligible entities
and make available to the public the practices identified
under subparagraph (B). The practices may be used by eligible entities that receive assistance under this chapter
after the dissemination.
(3) SPECIAL RULE RELATED TO EVALUATION PARTICIPATION.—The Secretary shall not require an eligible entity, as a
condition for receiving, or that receives, assistance under any
program or project under this chapter to participate in an evaluation under this section that—
(A) requires the eligible entity to recruit additional
students beyond those the program or project would normally recruit; or
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(B) results in the denial of services for an eligible student under the program or project.
(4) CONSIDERATION.—When designing an evaluation under
this subsection, the Secretary shall continue to consider—
(A) the burden placed on the program participants or
the eligible entity; and
(B) whether the evaluation meets generally accepted
standards of institutional review boards.
(c) GRANTS.—The Secretary may award grants to institutions
of higher education or other private and public institutions and organizations, that are carrying out a program or project assisted
under this chapter prior to the date of enactment of the Higher
Education Amendments of 1998, to enable the institutions and organizations to expand and leverage the success of such programs
or projects by working in partnership with other institutions, community-based organizations, or combinations of such institutions
and organizations, that are not receiving assistance under this
chapter and are serving low-income students and first generation
college students, in order to—
(1) disseminate and replicate best practices of programs or
projects assisted under this chapter; and
(2) provide technical assistance regarding programs and
projects assisted under this chapter.
(d) RESULTS.—In order to improve overall program or project
effectiveness, the results of evaluations and grants described in
this section shall be disseminated by the Secretary to similar programs or projects assisted under this subpart, as well as other individuals concerned with postsecondary access for and retention of
low-income individuals and first-generation college students.
CHAPTER 2—GAINING EARLY AWARENESS
AND READINESS FOR UNDERGRADUATE
PROGRAMS
SEC. 404A. ø20 U.S.C. 1070a–21¿ EARLY INTERVENTION AND COLLEGE
AWARENESS PROGRAM AUTHORIZED.
(a) PROGRAM AUTHORIZED.—The Secretary is authorized, in ac-
cordance with the requirements of this chapter, to establish a program that encourages eligible entities to provide support, and
maintain a commitment, to eligible low-income students, including
students with disabilities, 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 secondary school students, including students with disabilities, 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 families about the advantages of obtaining a postsecondary education and, college financing options for the students and their families.
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(b) AWARDS.—
(1) IN GENERAL.—From funds appropriated under section
404H 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) AWARD PERIOD.—The Secretary may award a grant
under this chapter to an eligible entity described in paragraphs
(1) and (2) of subsection (c) for—
(A) six years; or
(B) in the case of an eligible entity that applies for a
grant under this chapter for seven years to enable the eligible entity to provide services to a student through the
student’s first year of attendance at an institution of higher education, seven years.
(3) PRIORITY.—In making awards to eligible entities described in subsection (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 Opportunity Act, 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;
and
(B) ensure that students served under this chapter on
the day before the date of enactment of the Higher Education Opportunity Act continue to receive assistance
through the completion of secondary school.
(c) DEFINITION OF ELIGIBLE ENTITY.—For the purposes of this
chapter, the term ‘‘eligible entity’’ means—
(1) a State; or
(2) a partnership—
(A) consisting of—
(i) one or more local educational agencies; and
(ii) one or more degree granting institutions of
higher education; and
(B) which may include not less than two 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. ø20 U.S.C. 1070a–22¿ REQUIREMENTS.
(a) FUNDING RULES.—In awarding grants
from the amount appropriated under section 404H for a fiscal year, the Secretary shall
make available—
(1) to eligible entities described in section 404A(c)(1), not
less than 33 percent of such amount;
(2) to eligible entities described in section 404A(c)(2), not
less than 33 percent of such amount; and
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(3) to eligible entities described in paragraph (1) or (2) of
section 404A(c), the remainder of such amount taking into consideration the number, quality, and promise of the applications
for the grants, and, to the extent practicable—
(A) the geographic distribution of such grant awards;
and
(B) the distribution of such grant awards between
urban and rural applicants.
(b) COORDINATION.—Each eligible entity shall ensure that the
activities assisted under this chapter are, to the extent practicable,
coordinated with, and complement and enhance—
(1) services under this chapter provided by other eligible
entities serving the same school district or State; and
(2) related services under other Federal or non-Federal
programs.
(c) DESIGNATION OF FISCAL AGENT.—An eligible entity described in section 404A(c)(2) shall designate an institution of higher
education or a local educational agency as the fiscal agent for the
eligible entity.
(d) COHORT APPROACH.—
(1) IN GENERAL.—The Secretary shall require that eligible
entities described in section 404A(c)(2)—
(A) provide services under this chapter to at least one
grade level of students, beginning not later than 7th grade,
in a participating school that has a 7th grade and in which
at least 50 percent of the students enrolled are eligible for
free or reduced-price lunch under the Richard B. Russell
National School Lunch Act (or, if an eligible entity determines that it would promote the effectiveness of a program, an entire grade level of students, beginning not later
than the 7th grade, who reside in public housing as defined in section 3(b)(1) of the United States Housing Act
of 1937);
(B) ensure that the services are provided through the
12th grade to students in the participating grade level and
provide the option of continued services through the student’s first year of attendance at an institution of higher
education to the extent the provision of such services was
described in the eligible entity’s application for assistance
under this chapter; and
(C) provide services under this chapter to students
who have received services under a previous GEAR UP
grant award but have not yet completed the 12th grade.
(2) COORDINATION REQUIREMENT.—In order for the Secretary to require the cohort approach described in paragraph
(1), the Secretary shall, where applicable, ensure that the cohort approach is done in coordination and collaboration with
existing early intervention programs and does not duplicate
the services already provided to a school or community.
(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.
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HIGHER EDUCATION ACT OF 1965
SEC. 404C. ø20 U.S.C. 1070a–23¿ APPLICATIONS.
(a) APPLICATION REQUIRED FOR ELIGIBILITY.—
(1) IN GENERAL.—In order for an eligible
216
entity to qualify
for a grant under this chapter, the eligible entity shall submit
to the Secretary an application for carrying out the program
under 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 reasonably 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, in the case of an eligible entity described
in section 404A(c)(2) that chooses to provide scholarships,
or an eligible entity described in section 404A(c)(1), how
the eligible entity will meet the requirements of section
404E;
(C) describe, in the case of an eligible entity described
in section 404A(c)(2) that requests a reduced match percentage under subsection (b)(2), how such reduction will
assist the entity to provide the scholarships described in
subsection (b)(2)(A)(ii);
(D) provide assurances that adequate administrative
and support staff will be responsible for coordinating the
activities described in section 404D;
(E) provide assurances 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 displacement such as a reduction in hours,
wages, or employment benefits;
(F) describe, in the case of an eligible entity described
in section 404A(c)(1) that chooses to use a cohort approach,
or 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 cohorts 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;
(G) describe how the eligible entity will coordinate programs under this chapter with other existing Federal,
State, or local programs to avoid duplication and maximize
the number of students served;
(H) provide such additional assurances as the Secretary determines necessary to ensure compliance with the
requirements of this chapter;
(I) provide information about the activities that will be
carried out by the eligible entity to support systemic
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HIGHER EDUCATION ACT OF 1965
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changes from which future cohorts of students will benefit;
and
(J) describe the sources of matching funds that will enable the eligible entity to meet the matching requirement
described in subsection (b).
(b) MATCHING REQUIREMENT.—
(1) IN GENERAL.—The Secretary shall not approve an application submitted under subsection (a) unless such application—
(A) provides that the eligible entity will provide, from
State, local, institutional, or private funds, not less than
50 percent of the cost of the program, which matching
funds may be provided in cash or in kind and may be accrued over the full duration of the grant award period, except that the eligible entity shall make substantial
progress towards meeting the matching requirement in
each year of the grant award period;
(B) specifies the methods by which matching funds
will be paid; and
(C) includes provisions designed to ensure that funds
provided under this chapter shall supplement and not supplant funds expended for existing programs.
(2) SPECIAL RULE.—Notwithstanding the matching requirement described in paragraph (1)(A), the Secretary may by regulation modify the percentage requirement described in paragraph (1)(A) for eligible entities described in section 404A(c)(2).
The Secretary may approve an eligible entity’s request for a reduced match percentage—
(A) at the time of application—
(i) if the eligible entity demonstrates significant
economic hardship that precludes the eligible entity
from meeting the matching requirement; or
(ii) if the eligible entity is described in section
404A(c)(2) and requests that contributions to the eligible entity’s scholarship fund established under section
404E be matched on a two to one basis; or
(B) in response to a petition by an eligible entity subsequent to a grant award under this section if the eligible
entity demonstrates that the matching funds described in
its application are no longer available and the eligible entity has exhausted all revenues for replacing such matching
funds.
(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 obligated to students from State, local, institutional, or private funds under
this chapter, including pre-existing non-Federal financial assistance programs, 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;
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HIGHER EDUCATION ACT OF 1965
218
(2) the amount of tuition, fees, room or board waived or reduced for recipients of financial assistance under this chapter;
(3) the amount expended on documented, targeted, longterm mentoring and counseling provided by volunteers or paid
staff of nonschool organizations, including businesses, religious
organizations, community groups, postsecondary educational
institutions, nonprofit and philanthropic organizations, and
other organizations; and
(4) other resources recognized by the Secretary, including
equipment and supplies, cash contributions from non-Federal
sources, transportation expenses, in-kind or discounted program services, indirect costs, and facility usage.
(d) PEER REVIEW PANELS.—The Secretary shall convene peer
review panels to assist in making determinations regarding the
awarding of grants under this chapter.
SEC. 404D. ø20 U.S.C. 1070a–24¿ ACTIVITIES.
(a) REQUIRED ACTIVITIES.—Each eligible
entity receiving a
grant under this chapter shall provide comprehensive mentoring,
outreach, and supportive services to students participating in the
programs under this chapter. Such activities shall include the following:
(1) Providing information regarding financial aid for postsecondary education to participating students in the cohort described in section 404B(d)(1)(A) or to priority students described in subsection (d).
(2) Encouraging student enrollment in rigorous and challenging curricula and coursework, in order to reduce the need
for remedial coursework at the postsecondary level.
(3) Improving 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), providing for the scholarships described in section
404E.
(b) PERMISSIBLE ACTIVITIES FOR STATES AND PARTNERSHIPS.—
An eligible entity that receives a grant under this chapter may use
grant funds to carry out one or more of the following activities:
(1) Providing tutors and mentors, who may include 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 academic courses that reflect challenging State academic standards.
(5) Supporting dual or concurrent enrollment programs between the secondary school and institution of higher education
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HIGHER EDUCATION ACT OF 1965
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partners of an eligible entity described in section 404A(c)(2),
and other activities that support participating students in—
(A) meeting challenging State academic standards;
(B) successfully applying for postsecondary education;
(C) successfully applying for student financial aid; and
(D) developing graduation and career plans.
(6) Providing special programs or tutoring in science, technology, engineering, or mathematics.
(7) In the case of an eligible entity described in section
404A(c)(2), providing support for scholarships described in section 404E.
(8) Introducing eligible students to institutions of higher
education, through trips and school-based sessions.
(9) Providing an intensive extended school day, school
year, or summer program that offers—
(A) additional academic classes; or
(B) assistance with college admission applications.
(10) 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) financial literacy and economic literacy education
or counseling;
(F) volunteer and parent involvement;
(G) encouraging former or current participants of a
program under this chapter to serve as peer counselors;
(H) skills assessments;
(I) personal and 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.
(11) Enabling eligible students to enroll in Advanced
Placement or International Baccalaureate courses, or college
entrance examination preparation courses.
(12) 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.
(13) Fostering and improving parent and family involvement in elementary and secondary education by promoting the
advantages of a college education, and emphasizing academic
admission requirements and the need to take college preparation courses, through parent engagement and leadership activities.
(14) Disseminating information that promotes the importance of higher education, explains college preparation and admission requirements, and raises awareness of the resources
and services provided by the eligible entities to eligible students, their families, and communities.
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Sec. 404D
HIGHER EDUCATION ACT OF 1965
220
(15) In the event that matching funds described in the application are no longer available, engaging entities described in
section 404A(c)(2) in a collaborative manner to provide matching resources and participate in other activities authorized
under this section.
(c) ADDITIONAL PERMISSIBLE ACTIVITIES FOR STATES.—In addition to the required activities described in subsection (a) and the
permissible 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 one or more of the following activities:
(1) Providing technical assistance to—
(A) 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 administrative support to help build the capacity of eligible entities described in section 404A(c)(2) to compete for and manage grants awarded under this chapter.
(4) Providing strategies and activities that align efforts in
the State to prepare eligible students to attend and succeed in
postsecondary education, which may include the development
of graduation and career plans.
(5) Disseminating information on the use of scientifically
valid research and best practices to improve services for eligible students.
(6)(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.
(7) Working to align State academic standards and curricula with the expectations of postsecondary institutions and
employers.
(8) Developing alternatives to traditional secondary school
that give students a head start on attaining a recognized postsecondary credential (including an industry-recognized 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.
(9) 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.
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(d) PRIORITY STUDENTS.—For eligible entities not using a cohort approach, the eligible entity shall treat as a priority student
any student in secondary school who is—
(1) eligible to be counted under section 1124(c) of the Elementary and Secondary Education Act of 1965 ;
(2) eligible 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.);
(3) eligible for assistance under subtitle B of title VII of
the McKinney-Vento Homeless Assistance Act (42 U.S.C. 11431
et seq.); or
(4) otherwise considered by the eligible entity to be a disconnected student.
(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. ø20 U.S.C. 1070a–25¿ SCHOLARSHIP COMPONENT. 1
(a) IN GENERAL.—
(1) STATES.—In order to receive a grant under this
chapter, an eligible entity described in section 404A(c)(1) shall establish or maintain a financial assistance program that awards
scholarships to students in accordance with the requirements
of this section. The Secretary shall encourage the eligible entity to ensure that a scholarship provided pursuant to this section is available to an eligible student for use at any institution
of higher education.
(2) PARTNERSHIPS.—An eligible entity described in section
404A(c)(2) may award scholarships to eligible students in accordance with the requirements of this section.
(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 (except for the activity described in subsection
(a)(4) of such section), with the remainder of such funds to be
used for a scholarship program under this section in accordance with such subsection.
1 Subsection
(i) of section 404 of Public Law 110–315 provides as follows:
(i) ø20 U.S.C. 1070a–25 note¿ EFFECTIVE DATE; TRANSITION.—
(1) IN GENERAL.—The amendments made by subsection (e) shall apply to grants made
under chapter 2 of subpart 2 of part A of title IV of the Higher Education Act of 1965 (20
U.S.C. 1070a–21 et seq.) on or after the date of enactment of this Act, except that a recipient of a grant under such chapter that is made prior to such date may elect to apply the
requirements contained in the amendments made by subsection (e) to that grant if the grant
recipient informs the Secretary of the election.
(2) SPECIAL RULE.—A grant recipient may make the election described in paragraph (1)
only if the election does not decrease the amount of the scholarship promised to an individual student under the grant.
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(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.
(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 for each fiscal year shall not be less than
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 hold
in reserve, for the students served by such grant as described
in section 404B(d)(1)(A) or 404D(d), an amount that is not less
than the minimum scholarship amount described in subsection
(d), multiplied by the number of students the eligible entity estimates will meet the requirements of paragraph (2).
(2) REQUIREMENT FOR PORTABILITY.—Funds held in reserve
under paragraph (1) shall be made available to an eligible student when the eligible student has—
(A) completed a secondary school diploma, its recognized equivalent, or another 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 under this subsection 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 that are incurred in connection with such enrollment or attendance.
(4) RETURN OF FUNDS.—
(A) REDISTRIBUTION.—
(i) IN GENERAL.—Funds held in reserve under
paragraph (1) that are not used by an eligible student
within six 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) of this subparagraph, an eligible entity
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maining reserved funds to the Secretary for distribution to other grantees under this chapter in accordance with the funding rules described in section
404B(a).
(B) NONPARTICIPATING ENTITY.—Notwithstanding subparagraph (A), in the case of an eligible entity that does
not receive assistance under this subpart for six fiscal
years, the eligible entity shall return any funds held in reserve under paragraph (1) that are not awarded or obligated to eligible students to the Secretary for distribution
to other grantees under this chapter.
(f) RELATION TO OTHER ASSISTANCE.—Scholarships provided
under this section shall not be considered for the purpose of awarding Federal grant assistance under this title, except that in no case
shall the total amount of student financial assistance awarded to
a student under this title exceed such student’s total cost of attendance.
(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;
(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 activities required under section 404D(a).
SEC. 404F. ø20 U.S.C. 1070a–26¿ 21ST CENTURY SCHOLAR CERTIFICATES.
(a) IN GENERAL.—An eligible entity that receives a grant under
this chapter shall provide certificates, to be known as 21st Century
Scholar Certificates, to all students served by the eligible entity
who are participating in a program under this chapter.
(b) INFORMATION REQUIRED.—A 21st Century Scholar Certificate shall be personalized for each student and indicate the amount
of Federal financial aid for college and the estimated amount of
any scholarship provided under section 404E, if applicable, that a
student may be eligible to receive.
SEC. 404G. ø20 U.S.C. 1070a–27¿ EVALUATION AND REPORT.
(a) EVALUATION.—Each eligible entity receiving a grant
under
this chapter shall biennially evaluate the activities assisted under
this chapter in accordance with the standards described in subsection (b) and shall submit to the Secretary a copy of such evaluation. The evaluation shall permit service providers to track eligible
student progress during the period such students are participating
in the activities and shall be consistent with the standards developed by the Secretary pursuant to subsection (b).
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(b) EVALUATION STANDARDS.—The Secretary shall prescribe
standards for the evaluation described in subsection (a). Such
standards shall—
(1) provide for input from eligible entities and service providers; and
(2) ensure that data protocols and procedures are consistent and uniform.
(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 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. Such
evaluation shall include a separate analysis of—
(1) the implementation of the scholarship component described in section 404E; and
(2) the use of methods for complying with matching requirements described in paragraphs (1) and (2) of section
404C(c).
(d) REPORT.—The Secretary shall biennially report to Congress
regarding the activities assisted under this chapter and the evaluations conducted pursuant to this section.
SEC. 404H. ø20 U.S.C. 1070a–28¿ AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this chapter $400,000,000 for fiscal year 2009 and such sums as may be necessary for each of the five succeeding fiscal years.
øChapter 3 was repealed by section 405 of P.L. 110–315¿
øChapters 4 through 8 repealed by section 405 of P.L. 105–244¿
SUBPART 3—FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY
GRANTS
SEC. 413A. ø20 U.S.C. 1070b¿ PURPOSE; APPROPRIATIONS AUTHORIZED.
(a) PURPOSE OF SUBPART.—It is the purpose of this subpart to
provide, through institutions of higher education, supplemental
grants to assist in making available the benefits of postsecondary
education to qualified students who demonstrate financial need in
accordance with the provisions of part F of this title.
(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 such sums as may be necessary for fiscal year 2009 and
each of the five succeeding fiscal years.
(2) Sums appropriated pursuant to this subsection for any fiscal year shall be available for payments to institutions until the
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end of the second fiscal year succeeding the fiscal year for which
such sums were appropriated.
SEC. 413B. ø20 U.S.C. 1070b–1¿ AMOUNT AND DURATION OF GRANTS.
(a) AMOUNT OF GRANT.—(1) Except as provided in paragraph
(3), from the funds received by it for such purpose under this subpart, an institution which awards a supplemental grant to a student for an academic year under this subpart shall, for each year,
pay to that student an amount not to exceed the lesser of (A) the
amount determined by the institution, in accordance with the provisions of part F of this title, to be needed by that student to enable
the student to pursue a course of study at the institution or in a
program of study abroad that is approved for credit by the institution at which the student is enrolled, or (B) $4,000.
(2) If the amount determined under paragraph (1) with respect
to a student for any academic year is less than $100, no payment
shall be made to that student for that year. For a student enrolled
for less than a full academic year, the minimum payment required
shall be reduced proportionately.
(3) For students participating in study abroad programs, the
institution shall consider all reasonable costs associated with such
study abroad when determining student eligibility. The amount of
grant to be awarded in such cases may exceed the maximum
amount of $4,000 by as much as $400 if reasonable study abroad
costs exceed the cost of attendance at the home institution.
(b) PERIOD FOR RECEIPT OF GRANTS; CONTINUING ELIGIBILITY.—(1) The period during which a student may receive supplemental grants shall be the period required for the completion of the
first undergraduate baccalaureate course of study being pursued by
that student.
(2) A supplemental grant awarded under this subpart shall entitle the student (to whom it is awarded) to payments pursuant to
such grant only if the student meets the requirements of section
484, except as provided in section 413C(c).
(c) DISTRIBUTION OF GRANT DURING ACADEMIC YEAR.—Nothing
in this section shall be construed to prohibit an institution from
making payments of varying amounts from a supplemental grant
to a student during an academic year to cover costs for a period
which are not applicable to other periods of such academic year.
SEC. 413C. ø20 U.S.C. 1070b–2¿ AGREEMENTS WITH INSTITUTIONS; SELECTION OF RECIPIENTS.
(a) INSTITUTIONAL ELIGIBILITY.—Assistance may be made
available under this subpart only to an institution which—
(1) has, in accordance with section 487, an agreement with
the Secretary applicable to this subpart;
(2) agrees that the Federal share of awards under this subpart will not exceed 75 percent of such awards, except that the
Federal share may be exceeded if the Secretary determines,
pursuant to regulations establishing objective criteria for such
determinations, that a larger Federal share is required to further the purpose of this subpart; and
except that the Federal share may be exceeded if the Secretary
determines, pursuant to regulations establishing objective criMay 7, 2013
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226
teria for such determinations, that a larger Federal share is required to further the purpose of this subpart; and
(3) agrees that the non-Federal share of awards made
under this subpart shall be made from the institution’s own resources, including—
(A) institutional grants and scholarships;
(B) tuition or fee waivers;
(C) State scholarships; and
(D) foundation or other charitable organization funds.
(b) ELIGIBILITY FOR SELECTION.—Awards may be made under
this subpart only to a student who—
(1) is an eligible student under section 484; and
(2) makes application at a time and in a manner consistent
with the requirements of the Secretary and that institution.
(c) SELECTION OF INDIVIDUALS AND DETERMINATION OF
AMOUNT OF AWARDS.—(1) From among individuals who are eligible
for supplemental grants for each fiscal year, the institution shall,
in accordance with the agreement under section 487, and within
the amount allocated to the institution for that purpose for that
year under section 413D, select individuals who are to be awarded
such grants and determine, in accordance with section 413B, the
amounts to be paid to them.
(2)(A) In carrying out paragraph (1) of this subsection, each institution of higher education shall, in the agreement made under
section 487, assure that the selection procedures—
(i) will be designed to award supplemental grants under
this subpart, first, to students with exceptional need, and
(ii) will give a priority for supplemental grants under this
subpart to students who receive Pell Grants and meet the requirements of section 484.
(B) For the purpose of subparagraph (A), the term ‘‘students
with exceptional need’’ means students with the lowest expected
family contributions at the institution.
(d) USE OF FUNDS FOR LESS-THAN-FULL-TIME STUDENTS.—If
the institution’s allocation under this subpart is directly or indirectly based in part on the financial need demonstrated by students
who are independent students or attending the institution on less
than a full-time basis, then a reasonable proportion of the allocation shall be made available to such students.
(e) USE AND TRANSFER OF FUNDS FOR ADMINISTRATIVE EXPENSES.—An agreement entered into pursuant to this section shall
provide that funds granted to an institution of higher education
may be used only to make payments to students participating in
a grant program authorized under this subpart, except that an institution may use a portion of the sums allocated to it under this
subpart to meet administrative expenses in accordance with section
489 of this title.
SEC. 413D. ø20 U.S.C. 1070b–3¿ ALLOCATION OF FUNDS.
(a) ALLOCATION BASED ON PREVIOUS ALLOCATION 1.—(1)
From
the amount appropriated pursuant to section 413A(b) for each fis-
1 The allocation provisions of section 413D of the Higher Education Act of 1965 were amended
by section 406(c) of the Higher Education Amendments of 1998 (P.L. 105–244; 112 Stat. 1665).
Paragraph (3) of that section 406(c) contained the following effective date provision:
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cal year, the Secretary shall first allocate to each eligible institution an amount equal to 100 percent of the amount such institution
received under subsections (a) and (b) of this section for fiscal year
1999 (as such subsections were in effect with respect to allocations
for such fiscal year).
(2)(A) From the amount so appropriated, the Secretary shall
next allocate to each eligible institution that began participation in
the program under this subpart after fiscal year 1999 but is not a
first or second time participant, an amount equal to the greater
of—
(i) $5,000; or
(ii) 90 percent of the amount received and used under this
subpart for the first year it participated in the program.
(B) From the amount so appropriated, the Secretary shall next
allocate to each eligible institution that began participation in the
program under this subpart after fiscal year 1999 and is a first or
second time participant, an amount equal to the greatest of—
(i) $5,000;
(ii) an amount equal to (I) 90 percent of the amount received and used under this subpart in the second preceding fiscal year by eligible institutions offering comparable programs
of instruction, divided by (II) the number of students enrolled
at such comparable institutions in such fiscal year, multiplied
by (III) the number of students enrolled at the applicant institution in such fiscal year; or
(iii) 90 percent of the institution’s allocation under this
part for the preceding fiscal year.
(C) Notwithstanding subparagraphs (A) and (B) of this paragraph, the Secretary shall allocate to each eligible institution which
(i) was a first-time participant in the program in fiscal
year 2000 or any subsequent fiscal year, and
(ii) received a larger amount under this subsection in the
second year of participation,
an amount equal to 90 percent of the amount it received under this
subsection in its second year of participation.
(3)(A) If the amount appropriated for any fiscal year is less
than the amount required to be allocated to all institutions under
paragraph (1) of this subsection, then the amount of the allocation
to each such institution shall be ratably reduced.
(B) If the amount appropriated for any fiscal year is more than
the amount required to be allocated to all institutions under paragraph (1) but less than the amount required to be allocated to all
institutions under paragraph (2), then—
(i) the Secretary shall allot the amount required to be allocated to all institutions under paragraph (1), and
(ii) the amount of the allocation to each institution under
paragraph (2) shall be ratably reduced.
(C) If additional amounts are appropriated for any such fiscal
year, such reduced amounts shall be increased on the same basis
as they were reduced (until the amount allocated equals the
(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply with respect
to allocations of amounts appropriated pursuant to section 413A(b) of the Higher Education
Act of 1965 for fiscal year 2000 or any succeeding fiscal year.
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amount required to be allocated under paragraphs (1) and (2) of
this subsection).
(4)(A) Notwithstanding any other provision of this section, the
Secretary may allocate an amount equal to not more than 10 percent of the amount by which the amount appropriated in any fiscal
year to carry out this part exceeds $700,000,000 among eligible institutions described in subparagraph (B).
(B) In order to receive an allocation pursuant to subparagraph
(A) an institution shall be an eligible institution from which 50 percent or more of the Pell Grant recipients attending such eligible institution graduate from or transfer to a 4-year institution of higher
education.
(b) ALLOCATION OF EXCESS BASED ON FAIR SHARE.—(1) From
the remainder of the amount appropriated pursuant to section
413A(b) for each year (after making the allocations required by
subsection (a)), the Secretary shall allocate to each eligible institution which has an excess eligible amount an amount which bears
the same ratio to such remainder as such excess eligible amount
bears to the sum of the excess eligible amounts of all such eligible
institutions (having such excess eligible amounts).
(2) For any eligible institution, the excess eligible amount is
the amount, if any, by which—
(A)(i) the amount of that institution’s need (as determined
under subsection (c)), divided by (ii) the sum of the need of all
institutions (as so determined), multiplied by (iii) the amount
appropriated pursuant to section 413A(b) of the fiscal year; exceeds
(B) the amount required to be allocated to that institution
under subsection (a).
(c) DETERMINATION OF INSTITUTION’S NEED.—(1) The amount of
an institution’s need is equal to—
(A) the sum of the need of the institution’s eligible undergraduate students; minus
(B) the sum of grant aid received by students under subparts 1 and 3 of this part.
(2) To determine the need of an institution’s eligible undergraduate students, the Secretary shall—
(A) establish various income categories for dependent and
independent undergraduate students;
(B) establish an expected family contribution for each income category of dependent and independent undergraduate
students, determined on the basis of the average expected family contribution (computed in accordance with part F of this
title) of a representative sample within each income category
for the second preceding fiscal year;
(C) compute 75 percent of the average cost of attendance
for all undergraduate students;
(D) multiply the number of eligible dependent students in
each income category by 75 percent of the average cost of attendance for all undergraduate students determined under
subparagraph (C), minus the expected family contribution determined under subparagraph (B) for that income category, except that the amount computed by such subtraction shall not
be less than zero;
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HIGHER EDUCATION ACT OF 1965
Sec. 413E
(E) add the amounts determined under subparagraph (D)
for each income category of dependent students;
(F) multiply the number of eligible independent students
in each income category by 75 percent of the average cost of
attendance for all undergraduate students determined under
subparagraph (C), minus the expected family contribution determined under subparagraph (B) for that income category, except that the amount computed by such subtraction shall not
be less than zero;
(G) add the amounts determined under subparagraph (F)
for each income category of independent students; and
(H) add the amounts determined under subparagraphs (E)
and (G).
(3)(A) For purposes of paragraph (2), the term ‘‘average cost of
attendance’’ means the average of the attendance costs for undergraduate students which shall include (i) tuition and fees determined in accordance with subparagraph (B), (ii) standard living expenses determined in accordance with subparagraph (C), and (iii)
books and supplies determined in accordance with subparagraph
(D).
(B) The average undergraduate tuition and fees described in
subparagraph (A)(i) shall be computed on the basis of information
reported by the institution to the Secretary, which shall include (i)
total revenue received by the institution from undergraduate tuition and fees for the second year preceding the year for which it
is applying for an allocation, and (ii) the institution’s enrollment for
such second preceding year.
(C) The standard living expense described in subparagraph
(A)(ii) is equal to 150 percent of the difference between the income
protection allowance for a family of five with one in college and the
income protection allowance for a family of six with one in college
for a single independent student.
(D) The allowance for books and supplies described in subparagraph (A)(iii) is equal to $600.
(d) REALLOCATION OF EXCESS ALLOCATIONS.—(1) If an institution returns to the Secretary any portion of the sums allocated to
such institution under this section for any fiscal year the Secretary
shall, in accordance with regulations, reallocate such excess to
other institutions.
(2) If under paragraph (1) of this subsection an institution returns more than 10 percent of its allocation, the institution’s allocation for the next fiscal year shall be reduced by the amount returned. The Secretary may waive this paragraph for a specific institution if the Secretary finds that enforcing this paragraph would
be contrary to the interest of the program.
(e) FILING DEADLINES.—The Secretary shall, from time to time,
set dates before which institutions must file applications for allocations under this part.
SEC. 413E. ø20 U.S.C. 1070b–4¿ CARRYOVER AND CARRYBACK AUTHORITY.
(a) CARRYOVER AUTHORITY.—Of the sums made available to an
eligible institution under this subpart for a fiscal year, not more
than 10 percent may, at the discretion of the institution, remain
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HIGHER EDUCATION ACT OF 1965
230
available for expenditure during the succeeding fiscal year to carry
out the program under this subpart.
(b) CARRYBACK AUTHORITY.—
(1) IN GENERAL.—Of the sums made available to an eligible institution under this subpart for a fiscal year, not more
than 10 percent may, at the discretion of the institution, be
used by the institution for expenditure for the fiscal year preceding the fiscal year for which the sums were appropriated.
(2) USE OF CARRIED-BACK FUNDS.—An eligible institution
may make grants to students after the end of the academic
year, but prior to the beginning of the succeeding fiscal year,
from such succeeding fiscal year’s appropriations.
SUBPART 4—LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP
PROGRAM
SEC. 415A. ø20 U.S.C. 1070c¿ 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) eligible students attending institutions of higher
education or participating in programs of study abroad
that are approved for credit by institutions of higher education at which such students are enrolled; and
(B) eligible students for campus-based community
service work-study; and
(2) carrying out the activities described in section 415E.
(b) AUTHORIZATION OF APPROPRIATIONS; AVAILABILITY.—
(1) IN GENERAL.—There are authorized to be appropriated
to carry out this subpart $200,000,000 for fiscal year 2009 and
such sums as may be necessary for each of the five succeeding
fiscal years.
(2) RESERVATION.—For any fiscal year for which the
amount appropriated under paragraph (1) exceeds $30,000,000,
the excess amount shall be available to carry out section 415E.
(3) AVAILABILITY.—Sums appropriated pursuant to the authority of paragraph (1) for any fiscal year shall remain available for payments to States under this subpart until the end
of the fiscal year succeeding the fiscal year for which such
sums were appropriated.
SEC. 415B. ø20 U.S.C. 1070c–1¿ ALLOTMENT AMONG STATES.
(a) ALLOTMENT BASED ON NUMBER OF ELIGIBLE STUDENTS IN
ATTENDANCE.—(1) From the sums appropriated pursuant to section
415A(b)(1) and not reserved under section 415A(b)(2) for any fiscal
year, the Secretary shall allot to each State an amount which bears
the same ratio to such sums as the number of students who are
deemed eligible in such State for participation in the grant program authorized by this subpart bears to the total number of such
students in all the States, except that no State shall receive less
than the State received for fiscal year 1979.
(2) For the purpose of this subsection, the number of students
who are deemed eligible in a State for participation in the grant
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dents in all the States, shall be determined for the most recent
year for which satisfactory data are available.
(b) REALLOTMENT.—The amount of any State’s allotment under
subsection (a) for any fiscal year which the Secretary determines
will not be required for such fiscal year for the leveraging educational assistance partnership program of that State shall be
available for reallotment from time to time, on such dates during
such year as the Secretary may fix, to other States in proportion
to the original allotments to such States under such part for such
year, but with such proportionate amount for any of such States
being reduced to the extent it exceeds the sum the Secretary estimates such State needs and will be able to use for such year for
carrying out the State plan. The total of such reductions shall be
similarly reallotted among the States whose proportionate amounts
were not so reduced. Any amount reallotted to a State under this
part during a year from funds appropriated pursuant to section
415A(b)(1) shall be deemed part of its allotment under subsection
(a) for such year.
(c) ALLOTMENTS SUBJECT TO CONTINUING COMPLIANCE.—The
Secretary shall make payments for continuing incentive grants
only to States which continue to meet the requirements of section
415C(b).
SEC. 415C. ø20 U.S.C. 1070c–2¿ APPLICATIONS FOR LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP PROGRAMS.
(a) SUBMISSION AND CONTENTS OF APPLICATIONS.—A State
which desires to obtain a payment under this subpart for any fiscal
year shall submit annually an application therefor through the
State agency administering its program under this subpart as of
July 1, 1985, unless the Governor of that State so designates, in
writing, a different agency to administer the program. The application shall contain such information as may be required by, or pursuant to, regulation for the purpose of enabling the Secretary to
make the determinations required under this subpart.
(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) is administered by a single State agency;
(2) provides that such grants will be in amounts 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;
(3) provides that—
(A) not more than 20 percent of the allotment to the
State for each fiscal year may be used for the purpose described in paragraph (2)(B);
(B) grants for the campus-based community work
learning study jobs may be made only to students who are
otherwise eligible for assistance under this subpart; and
(C) grants for such jobs be made in accordance with
the provisions of section 443(b)(1);
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(4) provides for the selection of recipients of such grants or
of such State work-study jobs on the basis of substantial financial need determined annually on the basis of criteria established by the State and approved by the Secretary, except that
for the purpose of collecting data to make such determination
of financial need, no student or parent shall be charged a fee
that is payable to an entity other than such State;
(5) provides that, effective with respect to any academic
year beginning on or after October 1, 1978, all nonprofit institutions of higher education in the State are eligible to participate in the State program, except in any State in which participation of nonprofit institutions of higher education is in violation of the constitution of the State or in any State in which
participation of nonprofit institutions of higher education is in
violation of a statute of the State which was enacted prior to
October 1, 1978;
(6) provides for the payment of the non-Federal portion of
such grants or of such work-study jobs from funds supplied by
such State which represent an additional expenditure for such
year by such State for grants or work-study jobs for students
attending institutions of higher education over the amount expended by such State for such grants or work-study jobs, if
any, during the second fiscal year preceding the fiscal year in
which such State initially received funds under this subpart;
(7) provides that if the State’s allocation under this subpart is based in part on the financial need demonstrated by
students who are independent students or attending the institution less than full time, a reasonable proportion of the
State’s allocation shall be made available to such students;
(8) provides for State expenditures under such program of
an amount not less than the average annual aggregate expenditures for the preceding three fiscal years or the average annual expenditure per full-time equivalent student for such
years;
(9) provides (A) for such fiscal control and fund accounting
procedures as may be necessary to assure proper disbursement
of and accounting for Federal funds paid to the State agency
under this subpart, and (B) for the making of such reports, in
such form and containing such information, as may be reasonably necessary to enable the Secretary to perform his functions
under this subpart;
(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 State
funds for the program under this subpart; and
(11) 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,
where applicable, other contributing partners.
(c) RESERVATION AND DISBURSEMENT OF ALLOTMENTS AND REALLOTMENTS.—Upon his approval of any application for a payment
under this subpart, the Secretary shall reserve from the applicable
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allotment (including any applicable reallotment) available therefor,
the amount of such payment, which (subject to the limits of such
allotment or reallotment) shall be equal to the Federal share of the
cost of the students’ incentive grants or work-study jobs covered by
such application. The Secretary shall pay such reserved amount, in
advance or by way of reimbursement, and in such installments as
the Secretary may determine. The Secretary may amend the reservation of any amount under this section, either upon approval of
an amendment of the application or upon revision of the estimated
cost of the student grants or work-study jobs with respect to which
such reservation was made. If the Secretary approves an upward
revision of such estimated cost, the Secretary may reserve the Federal share of the added cost only from the applicable allotment (or
reallotment) available at the time of such approval.
SEC. 415D. ø20 U.S.C. 1070c–3¿ ADMINISTRATION OF STATE PROGRAMS;
JUDICIAL REVIEW.
(a) DISAPPROVAL OF APPLICATIONS; SUSPENSION OF ELIGIBILITY.—(1) The Secretary shall not finally disapprove any applica-
tion for a State program submitted under section 415C, or any
modification thereof, without first affording the State agency submitting the program reasonable notice and opportunity for a hearing.
(2) Whenever the Secretary, after reasonable notice and opportunity for hearing to the State agency administering a State program approved under this subpart, finds—
(A) that the State program has been so changed that it no
longer complies with the provisions of this subpart, or
(B) that in the administration of the program there is a
failure to comply substantially with any such provisions,
the Secretary shall notify such State agency that the State will not
be regarded as eligible to participate in the program under this
subpart until he is satisfied that there is no longer any such failure
to comply.
(b) REVIEW OF DECISIONS.—(1) If any State is dissatisfied with
the Secretary’s final action with respect to the approval of its State
program submitted under this subpart or with his final action
under subsection (a), such State may appeal to the United States
court of appeals for the circuit in which such State is located. The
summons and notice of appeal may be served at any place in the
United States. The Commissioner shall forthwith certify and file in
the court the transcript of the proceedings and the record on which
he based his action.
(2) The findings of fact by the Secretary, if supported by substantial evidence, shall be conclusive; but the court, for good cause
shown, may remand the case to the Secretary to take further evidence, and the Secretary may thereupon make new or modified
findings of fact and may modify his previous action, and shall certify to the court the transcript and record of further proceedings.
Such new or modified findings of fact shall likewise be conclusive
if supported by substantial evidence.
(3) The court shall have jurisdiction to affirm the action of the
Secretary or to set it aside, in whole or in part. The judgment of
the court shall be subject to review by the Supreme Court of the
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United States upon certiorari or certification as provided in title
28, United States Code, section 1254.
SEC. 415E. ø20 U.S.C. 1070c–3a¿ GRANTS FOR ACCESS AND PERSISTENCE.
(a) PURPOSE.—It is the purpose of this section to expand col-
lege 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, including
community-based organizations, 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.—Except as provided
in clause (ii), 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) SPECIAL CONTINUATION AND TRANSITION
RULE.—If a State that applied for and received an allotment under this section for fiscal year 2010 pursuant to subsection (j) meets the specifications established in the State’s application under subsection (c)
for fiscal year 2011, then the Secretary shall make an
allotment to such State for fiscal year 2011 that is not
less than the allotment made pursuant to subsection
(j) to such State for fiscal year 2010 under this section
(as this section was in effect on the day before the
date of enactment of the Higher Education Opportunity Act (Public Law 110–315)).
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(iii) PRIORITY.—The Secretary shall give priority
in making allotments to States that meet the requirements described in paragraph (2)(B)(ii).
(2) FEDERAL SHARE.—
(A) IN GENERAL.—The Federal share of the cost of carrying out the activities under subsection (d) for any fiscal
year shall not exceed 66.66 percent.
(B) DIFFERENT PERCENTAGES.—The Federal share
under this section shall be determined in accordance with
the following:
(i) The Federal share of the cost of carrying out
the activities under subsection (d) shall be 57 percent
if a State applies for an allotment under this section
in partnership with 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—
(I) philanthropic organizations that are located in, or that provide funding in, the State; or
(II) private corporations that are located in, or
that do business in, the State.
(ii) The Federal share of the cost of carrying out
the activities under subsection (d) shall be 66.66 percent if a State applies for an allotment under this section in partnership with 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—
(I) philanthropic organizations that are located in, or that provide funding in, the State; or
(II) private corporations that are located in, or
that do business in, the State.
(C) NON-FEDERAL SHARE.—
(i) IN GENERAL.—The non-Federal share under
this section may be provided in cash or in kind, fairly
evaluated.
(ii) IN-KIND CONTRIBUTION.—For the purpose of
calculating the non-Federal share under this subparagraph, an in-kind contribution is a non-cash contribution that—
(I) has monetary value, such as the provision
of—
(aa) room and board; or
(bb) transportation passes; and
(II) helps a student meet the cost of attendance at an institution of higher education.
(iii) EFFECT ON NEED ANALYSIS.—For the purpose
of calculating a student’s need in accordance with part
F, an in-kind contribution described in clause (ii) shall
not be considered an asset or income of the student or
the student’s parent.
(c) APPLICATION FOR ALLOTMENT.—
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HIGHER EDUCATION ACT OF 1965
236
(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) An assurance that the State will provide
matching funds, in cash or in kind, from State, institutional, philanthropic, or private funds, of not less than
33.33 percent of the cost of carrying out the activities
under subsection (d). The State shall specify the methods by which matching funds will be paid. A State
that uses non-Federal funds to create or expand partnerships with entities described in subsection (a)(1), in
which such entities match State funds for student
scholarships, may apply such matching funds from
such entities toward fulfilling the State’s matching obligation under this clause.
(iii) An assurance that the State will use funds
provided under this section to supplement, and not
supplant, Federal and State funds available for carrying out the activities under this title.
(iv) An assurance 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.
(v) A description of the organizational structure
that the State has in place to administer the activities
under subsection (d), including a description of how
the State will compile information on degree completion of students receiving grants under this section.
(vi) A description of the steps the State will take
to ensure that students who receive grants under this
section persist to degree completion.
(vii) An assurance that the State has a method in
place, such as acceptance of the automatic zero expected family contribution determination described in
section 479(c), to identify eligible low-income students
and award State grant aid to such students.
(viii) An assurance 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 and
the State, and, where applicable, other contributing partners.
(2) STATE AGENCY.—The State agency that submits an application for a State under section 415C(a) shall be the same
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HIGHER EDUCATION ACT OF 1965
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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 one public and one private degreegranting 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 one—
(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.
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(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.—The amount of a grant for
access and persistence awarded by a State to a student
under this section shall be not less than—
(i) the average undergraduate tuition and mandatory fees at the public institutions of higher education
in the State where the student resides that are of the
same type of institution as the institution of higher
education the student attends; minus
(ii) other Federal and State aid the student receives.
(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, grants awarded under
this section may be used at institutions of higher education located in another State.
(2) EARLY NOTIFICATION.—
(A) IN GENERAL.—Each State receiving an allotment
under this section shall annually notify low-income students in grades seven through 12 in the State, and their
families, of their potential eligibility for student financial
assistance, including an access and persistence grant, to
attend an institution of higher education.
(B) CONTENT OF NOTICE.—The notice under subparagraph (A)—
(i) shall include—
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HIGHER EDUCATION ACT OF 1965
Sec. 415E
(I) information about early information and
intervention, mentoring, or outreach programs
available to the student;
(II) information that a student’s eligibility 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 for, 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 estimate of the total
amount of financial aid that a low-income student
with a similar income level may expect to receive,
including an estimate of the amount of a grant for
access and persistence and an estimate 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—
(AA) that is a partner in the partnership; or
(BB) with respect to which attendance is permitted 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 on—
(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 spending for
higher education; and
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HIGHER EDUCATION ACT OF 1965
240
(III) other aid received by the student at the
time of the student’s enrollment at 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 complies with the following subparagraph (A) or (B):
(A) Meets not less than two 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 determined under part F, or a comparable alternative based upon the State’s approved criteria in
section 415C(b)(4).
(ii) Qualifies for the State’s maximum undergraduate award, as authorized under section 415C(b).
(iii) 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 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 estimated
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 who 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) ADMINISTRATIVE COST ALLOWANCE.—A State that receives
an allotment under this section may reserve not more than two
percent of the funds made available annually through the allotment for State administrative functions required to carry out this
section.
(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 deMay 7, 2013
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HIGHER EDUCATION ACT OF 1965
Sec. 415F
scribed in subsection (b)(2)(B)(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 that
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 for a 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 two-year period
that begins on the date of enactment of the Higher Education Opportunity Act, 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 the Higher Education Opportunity Act to States that choose to apply for grants
under such predecessor section.
(k) REPORTS.—Not later than three years after the date of enactment of the Higher Education Opportunity Act 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.
SEC. 415F. ø20 U.S.C. 1070c–4¿ DEFINITION.
For the purpose of this subpart, the term ‘‘community service’’
means services, including direct service, planning, and applied research which are identified by an institution of higher education,
through formal or informal consultation with local nonprofit, governmental, and community-based organizations, and which—
(1) are designed to improve the quality of life for community residents, particularly low-income individuals, or to solve
particular problems related to the needs of such residents, including but not limited to, such fields as health care, child
care, education, literacy training, welfare, social services, public safety, crime prevention and control, transportation, recreation, housing and neighborhood improvement, rural development, and community improvement; and
(2) provide participating students with work-learning opportunities related to their educational or vocational programs
or goals.
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HIGHER EDUCATION ACT OF 1965
242
SUBPART 5—SPECIAL PROGRAMS FOR STUDENTS WHOSE FAMILIES
ARE ENGAGED IN MIGRANT AND SEASONAL FARMWORK
SEC. 418A. ø20 U.S.C. 1070d–2¿ MAINTENANCE AND EXPANSION OF EXISTING PROGRAMS.
(a) PROGRAM AUTHORITY.—The Secretary shall maintain and
expand existing secondary and postsecondary high school equivalency program and college assistance migrant program projects located at institutions of higher education or at private nonprofit organizations working in cooperation with institutions of higher education.
(b) SERVICES PROVIDED BY HIGH SCHOOL EQUIVALENCY PROGRAM.—The services authorized by this subpart for the high school
equivalency program include—
(1) recruitment services to reach persons—
(A)(i) who are 16 years of age and over; or
(ii) who are beyond the age of compulsory school attendance in the State in which such persons reside and are
not enrolled in school;
(B)(i) who themselves, or whose immediate family,
have spent a minimum of 75 days during the past 24
months in migrant and seasonal farmwork; or
(ii) who are eligible to participate, or have participated
within the preceding 2 years, in programs under part C of
title I of the Elementary and Secondary Education Act of
1965 or section 167 of the Workforce Investment Act of
1998; and
(C) who lack a high school diploma or its equivalent;
(2) educational services which provide instruction designed
to help students obtain a general education diploma which
meets the guidelines established by the State in which the
project is located for high school equivalency;
(3) supportive services which include the following:
(A) personal, vocational, and academic counseling;
(B) placement services designed to place students in a
university, college, or junior college program (including
preparation for college entrance examinations), or in military service or career positions; and
(C) health services;
(4) information concerning, and assistance in obtaining,
available student financial aid;
(5) stipends for high school equivalency program participants;
(6) housing for those enrolled in residential programs;
(7) exposure to cultural events, academic programs, and
other educational and cultural activities usually not available
to migrant youth;
(8) other essential supportive services (such as transportation and child care), as needed to ensure the success of eligible students; and
(9) other activities to improve persistence and retention in
postsecondary education.
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HIGHER EDUCATION ACT OF 1965
(c) SERVICES PROVIDED BY COLLEGE
GRAM.—(1) Services authorized by this
Sec. 418A
ASSISTANCE MIGRANT PROsubpart for the college as-
sistance migrant program include—
(A) outreach and recruitment services to reach persons
who themselves or whose immediate family have spent a minimum of 75 days during the past 24 months in migrant and
seasonal farmwork or who have participated or are eligible to
participate, in programs under part C of title I of the Elementary and Secondary Education Act of 1965 or section 167 of the
Workforce Investment Act of 1998, and who meet the minimum qualifications for attendance at a college or university;
(B) supportive and instructional services to improve placement, persistence, and retention in postsecondary education,
which include:
(i) personal, academic, career, and economic education
or personal finance counseling as an ongoing part of the
program;
(ii) tutoring and academic skill building instruction
and assistance;
(iii) assistance with special admissions;
(iv) health services; and
(v) other services as necessary to assist students in
completing program requirements;
(C) assistance in obtaining student financial aid which includes, but is not limited to:
(i) stipends;
(ii) scholarships;
(iii) student travel;
(iv) career oriented work study;
(v) books and supplies;
(vi) tuition and fees;
(vii) room and board; and
(viii) other assistance necessary to assist students in
completing their first year of college;
(D) housing support for students living in institutional facilities and commuting students;
(E) exposure to cultural events, academic programs, and
other activities not usually available to migrant youth;
(F) internships; and
(G) other essential supportive services (such as transportation and child care) as necessary to ensure the success of eligible students.
(2) A recipient of a grant to operate a college assistance migrant program under this subpart shall provide followup services
for migrant students after such students have completed their first
year of college, and shall not use more than 10 percent of such
grant for such followup services. Such followup services may include—
(A) monitoring and reporting the academic progress of students who participated in the project during such student’s
first year of college and during such student’s subsequent
years in college;
(B) referring such students to on- or off-campus providers
of counseling services, academic assistance, or financial aid,
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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 two-year institutions of higher
education, encouraging the students to transfer to four-year institutions of higher education, where appropriate, and monitoring the rate of transfer of such students.
(d) MANAGEMENT PLAN REQUIRED.—Each project application
shall include a management plan which contains assurances that
the grant recipient will coordinate the project, to the extent feasible, with other local, State, and Federal programs to maximize
the resources available for migrant students, and that staff shall
have a demonstrated knowledge and be sensitive to the unique
characteristics and needs of the migrant and seasonal farmworker
population, and provisions for:
(1) staff in-service training;
(2) training and technical assistance;
(3) staff travel;
(4) student travel;
(5) interagency coordination; and
(6) an evaluation plan.
(e) FIVE-YEAR GRANT PERIOD; CONSIDERATION OF PRIOR EXPERIENCE.—Except under extraordinary circumstances, the Secretary
shall award grants for a 5-year period. For the purpose of making
grants under this subpart, the Secretary shall consider the prior
experience of service delivery under the particular project for which
funds are sought by each applicant. Such prior experience shall be
awarded the same level of consideration given this factor for applicants for programs in accordance with section 402A(c)(2).
(f) MINIMUM ALLOCATIONS.—The Secretary shall not allocate
an amount less than—
(1) $180,000 for each project under the high school equivalency program, and
(2) $180,000 for each project under the college assistance
migrant program.
(g) RESERVATION AND ALLOCATION OF FUNDS.—From the
amounts made available under subsection (i), the Secretary—
(1) may reserve not more than a total of 1⁄2 of one percent
for outreach activities, technical assistance, and professional
development programs relating to the programs under subsection (a);
(2) for any fiscal year for which the amount appropriated
to carry out this section is equal to or greater than
$40,000,000, shall, in awarding grants from the remainder of
such amounts—
(A) make available not less than 45 percent of such remainder for the high school equivalency programs and not
less than 45 percent of such remainder for the college assistance migrant programs;
(B) award the rest of such remainder for high school
equivalency programs or college assistance migrant programs based on the number, quality, and promise of the
applications; and
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(C) consider the need to provide an equitable geographic distribution of such grants; and
(3) for any fiscal year for which the amount appropriated
to carry out this section is less than $40,000,000, shall, in
awarding grants from the remainder of such amounts make
available the same percentage of funds to the high school
equivalency program and to the college assistance migrant program as was made available for each such program for the fiscal year preceding the fiscal year for which the grant was
made.
(h) DATA COLLECTION.—The Secretary shall—
(1) annually collect data on persons receiving services authorized under this subpart regarding such persons’ rates of
secondary school graduation, entrance into postsecondary education, and completion of postsecondary education, as applicable;
(2) not less often than once every two years, prepare and
submit to the authorizing committees a report based on the
most recently available data under paragraph (1); and
(3) make such report available to the public.
(i) AUTHORIZATION OF APPROPRIATIONS.—For the purpose of
making grants and contracts under this section, there are authorized to be appropriated $75,000,000 for fiscal year 2009 and such
sums as may be necessary for the each of the five succeeding fiscal
years.
SUBPART 6—ROBERT C. BYRD HONORS SCHOLARSHIP PROGRAM
SEC. 419A. ø20 U.S.C. 1070d–31¿ STATEMENT OF PURPOSE.
It is the purpose of this subpart to establish a Robert C. Byrd
Honors Scholarship Program to promote student excellence and
achievement and to recognize exceptionally able students who show
promise of continued excellence.
[Section 419B was repealed by P.L. 102–325, sec. 406(a), 106
Stat. 508.]
SEC. 419C. ø20 U.S.C. 1070d–33¿ SCHOLARSHIPS AUTHORIZED.
(a) PROGRAM AUTHORITY.—The Secretary is authorized,
in accordance with the provisions of this subpart, to make grants to
States to enable the States to award scholarships to individuals
who have demonstrated outstanding academic achievement and
who show promise of continued academic achievement.
(b) PERIOD OF AWARD.—Scholarships under this section shall
be awarded for a period of not less than 1 or more than 4 years
during the first 4 years of study at any institution of higher education eligible to participate in any programs assisted under this
title. The State educational agency administering the program in
a State shall have discretion to determine the period of the award
(within the limits specified in the preceding sentence), except
that—
(1) if the amount appropriated for this subpart for any fiscal year exceeds the amount appropriated for this subpart for
fiscal year 1993, the Secretary shall identify to each State educational agency the number of scholarships available to that
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State under section 419D(b) that are attributable to such excess; and
(2) the State educational agency shall award not less than
that number of scholarships for a period of 4 years.
(c) USE AT ANY INSTITUTION PERMITTED.—A student awarded
a scholarship under this subpart may attend any institution of
higher education.
(d) BYRD SCHOLARS.—Individuals awarded scholarships under
this subpart shall be known as ‘‘Byrd Scholars’’.
SEC. 419D. ø20 U.S.C. 1070d–34¿ ALLOCATION AMONG STATES.
(a) ALLOCATION FORMULA.—From the sums appropriated
pursuant to the authority of section 419K for any fiscal year, the Secretary shall allocate to each State that has an agreement under
section 419E an amount equal to $1,500 multiplied by the number
of scholarships determined by the Secretary to be available to such
State in accordance with subsection (b).
(b) NUMBER OF SCHOLARSHIPS AVAILABLE.—The number of
scholarships to be made available in a State for any fiscal year
shall bear the same ratio to the number of scholarships made available to all States as the State’s population ages 5 through 17 bears
to the population ages 5 through 17 in all the States, except that
not less than 10 scholarships shall be made available to any State.
(c) USE OF CENSUS DATA.—For the purpose of this section, the
population ages 5 through 17 in a State and in all the States shall
be determined by the most recently available data, satisfactory to
the Secretary, from the Bureau of the Census.
(d) CONSOLIDATION BY INSULAR AREAS PROHIBITED.—Notwithstanding section 501 of Public Law 95–134 (48 U.S.C. 1469a), funds
allocated under this part to an Insular Area described in that section shall be deemed to be direct payments to classes of individuals, and the Insular Area may not consolidate such funds with
other funds received by the Insular Area from any department or
agency of the United States Government.
(e) FAS ELIGIBILITY.—
(1) FISCAL YEARS 2000 THROUGH 2004.—Notwithstanding
any other provision of this subpart, in the case of students
from the Freely Associated States who may be selected to receive a scholarship under this subpart for the first time for any
of the fiscal years 2000 through 2004—
(A) there shall be 10 scholarships in the aggregate
awarded to such students for each of the fiscal years 2000
through 2004; and
(B) the Pacific Regional Educational Laboratory shall
administer the program under this subpart in the case of
scholarships for students in the Freely Associated States.
(2) TERMINATION OF ELIGIBILITY.—A student from the
Freely Associated States shall not be eligible to receive a scholarship under this subpart after September 30, 2004.
SEC. 419E. ø20 U.S.C. 1070d–35¿ AGREEMENTS.
The Secretary shall enter into an agreement with each State
desiring to participate in the scholarship program authorized by
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this subpart. Each such agreement shall include provisions designed to assure that—
(1) the State educational agency will administer the scholarship program authorized by this subpart in the State;
(2) the State educational agency will comply with the eligibility and selection provisions of this subpart;
(3) the State educational agency will conduct outreach activities to publicize the availability of scholarships under this
subpart to all eligible students in the State, with particular
emphasis on activities designed to assure that students from
low-income and moderate-income families have access to the
information on the opportunity for full participation in the
scholarship program authorized by this subpart; and
(4) the State educational agency will pay to each individual in the State who is awarded a scholarship under this
subpart $1,500.
SEC. 419F. ø20 U.S.C. 1070d–36¿ ELIGIBILITY OF SCHOLARS.
(a) HIGH SCHOOL GRADUATION OR EQUIVALENT AND ADMISSION
TO INSTITUTION REQUIRED.—Each student awarded a scholarship
under this subpart shall be a graduate of a public or private secondary school (or 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 of higher education.
(b) SELECTION BASED ON PROMISE OF ACADEMIC ACHIEVEMENT.—Each student awarded a scholarship under this subpart
must demonstrate outstanding academic achievement and show
promise of continued academic achievement.
SEC. 419G. ø20 U.S.C. 1070d–37¿ SELECTION OF SCHOLARS.
(a) ESTABLISHMENT OF CRITERIA.—The State educational
agency is authorized to establish the criteria for the selection of scholars
under this subpart.
(b) ADOPTION OF PROCEDURES.—The State educational agency
shall adopt selection procedures designed to ensure an equitable
geographic distribution of awards within the State (and in the case
of the Federated States of Micronesia, the Republic of the Marshall
Islands, the Virgin Islands, American Samoa, the Commonwealth
of the Northern Mariana Islands, Guam, or Palau (until such time
as the Compact of Free Association is ratified), not to exceed 10 individuals will be selected from such entities).
(c) CONSULTATION REQUIREMENT.—In carrying out its responsibilities under subsections (a) and (b), the State educational agency shall consult with school administrators, school boards, teachers,
counselors, and parents.
(d) TIMING OF SELECTION.—The selection process shall be completed, and the awards made, prior to the end of each secondary
school academic year.
SEC. 419H. ø20 U.S.C. 1070d–38¿ STIPENDS AND SCHOLARSHIP CONDITIONS.
(a) AMOUNT OF AWARD.—Each student awarded a scholarship
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demic year of study for which the scholarship is awarded, except
that in no case shall the total amount of financial aid awarded to
such student exceed such student’s total cost-of-attendance.
(b) USE OF AWARD.—The State educational agency shall establish procedures to assure that a scholar awarded a scholarship
under this subpart pursues a course of study at an institution of
higher education.
SEC. 419J. ø20 U.S.C. 1070d–40¿ 1 CONSTRUCTION OF NEEDS PROVISIONS.
Except as provided in section 471, nothing in this subpart, or
any other Act, shall be construed to permit the receipt of a scholarship under this subpart to be counted for any needs test in connection with the awarding of any grant or the making of any loan
under this Act or any other provision of Federal law relating to
educational assistance.
SEC. 419K. ø20 U.S.C. 1070d–41¿ AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated for this subpart such
sums as may be necessary for fiscal year 2009 and each of the five
succeeding fiscal years.
Subpart 7—Child Care Access Means Parents in
School
SEC. 419N. ø20 U.S.C. 1070e¿ CHILD CARE ACCESS MEANS PARENTS IN
SCHOOL.
(a) PURPOSE.—The purpose of this section is to support the
participation of low-income parents in postsecondary education
through the provision of campus-based child care services.
(b) PROGRAM AUTHORIZED.—
(1) AUTHORITY.—The Secretary may award grants to institutions of higher education to assist the institutions in providing campus-based child care services to low-income students.
(2) AMOUNT OF GRANTS.—
(A) IN GENERAL.—The amount of a grant awarded to
an institution of higher education under this section for a
fiscal year shall not exceed 1 percent of the total amount
of all Federal Pell Grant funds awarded to students enrolled at the institution of higher education for the preceding fiscal year.
(B) MINIMUM.—
(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.
(3) DURATION; RENEWAL; AND PAYMENTS.—
1 Section
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(A) DURATION.—The Secretary shall award a grant
under this section for a period of 4 years.
(B) PAYMENTS.—Subject to subsection (e)(2), the Secretary shall make annual grant payments under this section.
(4) ELIGIBLE INSTITUTIONS.—An institution of higher education shall be eligible to receive a grant under this section for
a fiscal year if the total amount of all Federal Pell Grant funds
awarded to students enrolled at the institution of higher education for the preceding fiscal year equals or exceeds $350,000,
except that for any fiscal year for which the amount appropriated to carry out this section is equal to or greater than
$20,000,000, this sentence shall be applied by substituting
‘‘$250,000’’ for ‘‘$350,000’’.
(5) USE OF FUNDS.—Grant funds under this section shall
be used by an institution of higher education to support or establish a campus-based child care program primarily serving
the needs of low-income students enrolled at the institution of
higher education. Grant funds under this section may be used
to provide before and after school services to the extent necessary to enable low-income students enrolled at the institution of higher education to pursue postsecondary education.
(6) CONSTRUCTION.—Nothing in this section shall be construed to prohibit an institution of higher education that receives grant funds under this section from serving the child
care needs of the community served by the institution.
(7) DEFINITION OF LOW-INCOME STUDENT.—For the purpose
of this section, the term ‘‘low-income student’’ means a student—
(A) who is eligible to receive a Federal Pell Grant for
the award year for which the determination is made; or
(B) who would otherwise be eligible to receive a Federal Pell Grant for the award 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.
(8) PUBLICITY.—The Secretary shall publicize the availability of grants under this section in appropriate periodicals,
in addition to publication in the Federal Register, and shall inform appropriate educational organizations of such availability.
(c) APPLICATIONS.—An institution of higher education desiring
a grant under this section shall submit an application to the Secretary at such time, in such manner, and accompanied by such information as the Secretary may require. Each application shall—
(1) demonstrate that the institution is an eligible institution described in subsection (b)(4);
(2) specify the amount of funds requested;
(3) demonstrate the need of low-income students at the institution for campus-based child care services by including in
the application—
(A) information regarding student demographics;
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(B) an assessment of child care capacity on or near
campus;
(C) information regarding the existence of waiting lists
for existing child care;
(D) information regarding additional needs created by
concentrations of poverty or by geographic isolation; and
(E) other relevant data;
(4) contain a description of the activities to be assisted, including whether the grant funds will support an existing child
care program or a new child care program;
(5) identify the resources, including technical expertise and
financial support, the institution will draw upon to support the
child care program and the participation of low-income students in the program, such as accessing social services funding,
using student activity fees to help pay the costs of child care,
using resources obtained by meeting the needs of parents who
are not low-income students, and accessing foundation, corporate or other institutional support, and demonstrate that the
use of the resources will not result in increases in student tuition;
(6) contain an assurance that the institution will meet the
child care needs of low-income students through the provision
of services, or through a contract for the provision of services;
(7) describe the extent to which the child care program will
coordinate with the institution’s early childhood education curriculum, to the extent the curriculum is available, to meet the
needs of the students in the early childhood education program
at the institution, and the needs of the parents and children
participating in the child care program assisted under this section;
(8) in the case of an institution seeking assistance for a
new child care program—
(A) provide a timeline, covering the period from receipt
of the grant through the provision of the child care services, delineating the specific steps the institution will take
to achieve the goal of providing low-income students with
child care services;
(B) specify any measures the institution will take to
assist low-income students with child care during the period before the institution provides child care services; and
(C) include a plan for identifying resources needed for
the child care services, including space in which to provide
child care services, and technical assistance if necessary;
(9) contain an assurance that any child care facility assisted under this section will meet the applicable State or local
government licensing, certification, approval, or registration requirements; and
(10) contain a plan for any child care facility assisted
under this section to become accredited within 3 years of the
date the institution first receives assistance under this section.
(d) PRIORITY.—The Secretary shall give priority in awarding
grants under this section to institutions of higher education that
submit applications describing programs that—
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(1) leverage significant local or institutional resources, including in-kind contributions, to support the activities assisted
under this section; and
(2) utilize a sliding fee scale for child care services provided under this section in order to support a high number of
low-income parents pursuing postsecondary education at the
institution.
(e) REPORTING REQUIREMENTS; CONTINUING ELIGIBILITY.—
(1) REPORTING REQUIREMENTS.—
(A) REPORTS.—Each institution of higher education receiving a grant under this section shall report to the Secretary annually.
(B) CONTENTS.—The report shall include—
(i) data on the population served under this
section;
(ii) information on campus and community resources and funding used to help low-income students
access child care services;
(iii) information on progress made toward accreditation of any child care facility; and
(iv) information on the impact of the grant on the
quality, availability, and affordability of campus-based
child care services.
(2) CONTINUING ELIGIBILITY.—The Secretary shall make
continuation awards under this section to an institution of
higher education only if the Secretary determines, on the basis
of the reports submitted under paragraph (1), that the institution is making a good faith effort to ensure that low-income
students at the institution have access to affordable, quality
child care services.
(f ) CONSTRUCTION.—No funds provided under this section shall
be used for construction, except for minor renovation or repair to
meet applicable State or local health or safety requirements.
(g) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
øSubpart 8 of part A of title IV was repealed by section 411
of Public Law 110–315.¿
Subpart 9—TEACH Grants
SEC. 420L. ø20 U.S.C. 1070g¿ DEFINITIONS.
For the purposes of this subpart:
(1) ELIGIBLE INSTITUTION.—The term ‘‘eligible institution’’
means an institution of higher education, as defined in section
102, that the Secretary determines—
(A) provides high quality teacher preparation and professional development services, including extensive clinical
experience as a part of pre-service preparation;
(B) is financially responsible;
(C) provides pedagogical course work, or assistance in
the provision of such coursework, including the monitoring
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of student performance, and formal instruction related to
the theory and practices of teaching; and
(D) provides supervision and support services to teachers, or assistance in the provision of such services, including mentoring focused on developing effective teaching
skills and strategies.
(2) POST-BACCALAUREATE.—The term ‘‘post-baccalaureate’’
means a program of instruction for individuals who have completed a baccalaureate degree, that does not lead to a graduate
degree, and that consists of courses required by a State in
order for a teacher candidate to receive a professional certification or licensing credential that is required for employment
as a teacher in an elementary school or secondary school in
that State, except that such term shall not include any program of instruction offered by an eligible institution that offers
a baccalaureate degree in education.
(3) TEACHER CANDIDATE.—The term ‘‘teacher candidate’’
means a student or teacher described in subparagraph (A) or
(B) of section 420N(a)(2).
SEC. 420M. ø20 U.S.C. 1070g–1¿ PROGRAM ESTABLISHED.
(a) PROGRAM AUTHORITY.—
(1) PAYMENTS REQUIRED.—The Secretary shall
pay to each
eligible institution such sums as may be necessary to pay to
each teacher candidate who files an application and agreement
in accordance with section 420N, and who qualifies under
paragraph (2) of section 420N(a), a TEACH Grant in the
amount of $4,000 for each year during which that teacher candidate is in attendance at the institution.
(2) REFERENCES.—Grants made under paragraph (1) shall
be known as ‘‘Teacher Education Assistance for College and
Higher Education Grants’’ or ‘‘TEACH Grants’’.
(b) PAYMENT METHODOLOGY.—
(1) PREPAYMENT.—Not less than 85 percent of any funds
provided to an eligible institution under subsection (a) shall be
advanced to the eligible institution prior to the start of each
payment period and shall be based upon an amount requested
by the institution as needed to pay teacher candidates until
such time as the Secretary determines and publishes in the
Federal Register with an opportunity for comment, an alternative payment system that provides payments to institutions
in an accurate and timely manner, except that this sentence
shall not be construed to limit the authority of the Secretary
to place an institution on a reimbursement system of payment.
(2) DIRECT PAYMENT.—Nothing in this section shall be interpreted to prohibit the Secretary from paying directly to
teacher candidates, in advance of the beginning of the academic term, an amount for which teacher candidates are eligible, in cases where the eligible institution elects not to participate in the disbursement system required by paragraph (1).
(3) DISTRIBUTION OF GRANTS TO TEACHER CANDIDATES.—
Payments under this subpart shall be made, in accordance
with regulations promulgated by the Secretary for such purpose, in such manner as will best accomplish the purposes of
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HIGHER EDUCATION ACT OF 1965
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this subpart. Any disbursement allowed to be made by crediting the teacher candidate’s account shall be limited to tuition
and fees and, in the case of institutionally-owned housing,
room and board. The teacher candidate may elect to have the
institution provide other such goods and services by crediting
the teacher candidate’s account.
(c) REDUCTIONS IN AMOUNT.—
(1) PART-TIME STUDENTS.—In any case where a teacher
candidate attends an eligible institution on less than a fulltime basis (including a teacher candidate who attends an eligible institution on less than a half-time basis) during any year,
the amount of a grant under this subpart for which that teacher candidate is eligible shall be reduced in proportion to the degree to which that teacher candidate is not attending on a fulltime basis, in accordance with a schedule of reductions established by the Secretary for the purposes of this subpart, computed in accordance with this subpart. Such schedule of reductions shall be established by regulation and published in the
Federal Register in accordance with section 482 of this Act.
(2) NO EXCEEDING COST.—The amount of a grant awarded
under this subpart, in combination with Federal assistance and
other assistance the student may receive, shall not exceed the
cost of attendance (as defined in section 472) at the eligible institution at which that teacher candidate is in attendance.
(d) PERIOD OF ELIGIBILITY FOR GRANTS.—
(1) UNDERGRADUATE AND POST-BACCALAUREATE STUDENTS.—The period during which an undergraduate or postbaccalaureate student may receive grants under this subpart
shall be the period required for the completion of the first undergraduate baccalaureate or post-baccalaureate course of
study being pursued by the teacher candidate at the eligible institution at which the teacher candidate is in attendance, except that—
(A) any period during which the teacher candidate is
enrolled in a noncredit or remedial course of study as described in paragraph (3) shall not be counted for the purpose of this paragraph; and
(B) the total amount that a teacher candidate may receive under this subpart for undergraduate or post-baccalaureate study shall not exceed $16,000.
(2) GRADUATE STUDENTS.—The period during which a
graduate student may receive grants under this subpart shall
be the period required for the completion of a master’s degree
course of study pursued by the teacher candidate at the eligible
institution at which the teacher candidate is in attendance, except that the total amount that a teacher candidate may receive under this subpart for graduate study shall not exceed
$8,000.
(3) REMEDIAL COURSE; STUDY ABROAD.—Nothing in this
section shall be construed to exclude from eligibility courses of
study which are noncredit or remedial in nature (including
courses in English language acquisition) which are determined
by the eligible institution to be necessary to help the teacher
candidate be prepared for the pursuit of a first undergraduate
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baccalaureate or post-baccalaureate degree or certificate or, in
the case of courses in English language instruction, to be necessary to enable the teacher candidate to utilize already existing knowledge, training, or skills. Nothing in this section shall
be construed to exclude from eligibility programs of study
abroad that are approved for credit by the home institution at
which the teacher candidate is enrolled.
SEC. 420N. ø20 U.S.C. 1070g–2¿ APPLICATIONS; ELIGIBILITY.
(a) APPLICATIONS; DEMONSTRATION OF ELIGIBILITY.—
(1) FILING REQUIRED.—The Secretary shall periodically
set
dates by which teacher candidates shall file applications for
grants under this subpart. Each teacher candidate desiring a
grant under this subpart for any year shall file an application
containing such information and assurances as the Secretary
may determine necessary to enable the Secretary to carry out
the functions and responsibilities of this subpart.
(2) DEMONSTRATION OF TEACH GRANT ELIGIBILITY.—Each
application submitted under paragraph (1) shall contain such
information as is necessary to demonstrate that—
(A) if the applicant is an enrolled student—
(i) the student is an eligible student for purposes
of section 484;
(ii) the student—
(I) has a grade point average that is determined, under standards prescribed by the Secretary, to be comparable to a 3.25 average on a
zero to 4.0 scale, except that, if the student is in
the first year of a program of undergraduate education, such grade point average shall be determined on the basis of the student’s cumulative
secondary school grade point average; or
(II) displayed high academic aptitude by receiving a score above the 75th percentile on at
least one of the batteries in an undergraduate,
post-baccalaureate, or graduate school admissions
test; and
(iii) the student is completing coursework and
other requirements necessary to begin a career in
teaching, or plans to complete such coursework and requirements prior to graduating; or
(B) if the applicant is a current or prospective teacher
applying for a grant to obtain a graduate degree—
(i) the applicant is a teacher or a retiree from another occupation with expertise in a field in which
there is a shortage of teachers, such as mathematics,
science, special education, English language acquisition, or another high-need subject; or
(ii) the applicant is or was a teacher who is using
high-quality alternative certification routes, such as
Teach for America, to get certified.
(b) AGREEMENTS TO SERVE.—Each application under subsection
(a) shall contain or be accompanied by an agreement by the applicant that—
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(1) the applicant will—
(A) serve as a full-time teacher for a total of not less
than 4 academic years within 8 years after completing the
course of study for which the applicant received a TEACH
Grant under this subpart;
(B) teach in a school described in section 465(a)(2)(A);
(C) teach in any of the following fields—
(i) mathematics;
(ii) science;
(iii) a foreign language;
(iv) bilingual education;
(v) special education;
(vi) as a reading specialist; or
(vii) another field documented as high-need by the
Federal Government, State government, or local educational agency, and approved by the Secretary;
(D) submit evidence of such employment in the form
of a certification by the chief administrative officer of the
school upon completion of each year of such service; and
(E) comply with the requirements for being a highly
qualified teacher as defined in section 9101 of the Elementary and Secondary Education Act of 1965;
(2) in the event that the applicant is determined to have
failed or refused to carry out such service obligation, the sum
of the amounts of any TEACH Grants received by such applicant will be treated as a loan and collected from the applicant
in accordance with subsection (c) and the regulations thereunder; and
(3) contains, or is accompanied by, a plain-language disclosure form developed by the Secretary that clearly describes the
nature of the TEACH Grant award, the service obligation, and
the loan repayment requirements that are the consequence of
the failure to complete the service obligation.
(c) REPAYMENT FOR FAILURE TO COMPLETE SERVICE.—In the
event that any recipient of a grant under this subpart fails or refuses to comply with the service obligation in the agreement under
subsection (b), the sum of the amounts of any TEACH Grants received by such recipient shall, upon a determination of such a failure or refusal in such service obligation, be treated as a Federal
Direct Unsubsidized Stafford Loan under part D of title IV, and
shall be subject to repayment, together with interest thereon accruing from the date of the grant award, in accordance with terms and
conditions specified by the Secretary in regulations under this subpart.
(d) ADDITIONAL ADMINISTRATIVE PROVISIONS.—
(1) CHANGE OF HIGH-NEED DESIGNATION.—If a recipient of
an initial grant under this subpart has acquired an academic
degree, or expertise, in a field that was, at the time of the recipient’s application for that grant, designated as high need in
accordance with subsection (b)(1)(C)(vii), but is no longer so
designated, the grant recipient may fulfill the service obligation described in subsection (b)(1) by teaching in that field.
(2) EXTENUATING CIRCUMSTANCES.—The Secretary shall establish, by regulation, categories of extenuating circumstances
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under which a recipient of a grant under this subpart who is
unable to fulfill all or part of the recipient’s service obligation
may be excused from fulfilling that portion of the service obligation.
SEC. 420O. ø20 U.S.C. 1070g–3¿ PROGRAM PERIOD AND FUNDING.
Beginning on July 1, 2008, there shall be available to the Secretary to carry out this subpart, from funds not otherwise appropriated, such sums as may be necessary to provide TEACH Grants
in accordance with this subpart to each eligible applicant.
SEC. 420P. ø20 U.S.C. 1070g–4¿ PROGRAM REPORT.
Not later than two years after the date of enactment of the
Higher Education Opportunity Act and every two years thereafter,
the Secretary shall prepare and submit to the authorizing committees a report on TEACH grants with respect to the schools and students served by recipients of such grants. Such report shall take
into consideration information related to—
(1) the number of TEACH grant recipients;
(2) the degrees obtained by such recipients;
(3) the location, including the school, local educational
agency, and State, where the recipients completed the service
agreed to under section 420N(b) and the subject taught;
(4) the duration of such service; and
(5) any other data necessary to conduct such evaluation.
Subpart 10—Scholarships for Veteran’s
Dependents
SEC. 420R. ø20 U.S.C. 1070h¿ SCHOLARSHIPS FOR VETERAN’S DEPENDENTS.
(a) DEFINITION OF ELIGIBLE VETERAN’S DEPENDENT.—The term
‘‘eligible veteran’s dependent’’ means a dependent or an independent student—
(1) whose parent or guardian was a member of the Armed
Forces of the United States and died as a result of performing
military service in Iraq or Afghanistan after September 11,
2001; and
(2) who, at the time of the parent or guardian’s death,
was—
(A) less than 24 years of age; or
(B) enrolled at an institution of higher education on a
part-time or full-time basis.
(b) GRANTS.—
(1) IN GENERAL.—The Secretary shall award a grant to
each eligible veteran’s dependent to assist in paying the eligible veteran’s dependent’s cost of attendance at an institution
of higher education.
(2) DESIGNATION.—Grants made under this section shall be
known as ‘‘Iraq and Afghanistan Service Grants’’.
(c) PREVENTION OF DOUBLE BENEFITS.—No eligible veteran’s
dependent may receive a grant under both this section and section
401.
(d) TERMS AND CONDITIONS.—The Secretary shall award grants
under this section in the same manner, and with the same terms
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and conditions, including the length of the period of eligibility, as
the Secretary awards Federal Pell Grants under section 401, except
that—
(1) the award rules and determination of need applicable
to the calculation of Federal Pell Grants, shall not apply to
grants made under this section;
(2) the provisions of subsection (a)(3), subsection (b)(1), the
matter following subsection (b)(2)(A)(v), subsection (b)(3), and
subsection (f), of section 401 shall not apply; and
(3) a grant made under this section to an eligible veteran’s
dependent for any award year shall equal the maximum Federal Pell Grant available for that award year, except that such
a grant under this section—
(A) shall not exceed the cost of attendance of the eligible veteran’s dependent for that award year; and
(B) shall be adjusted to reflect the attendance by the
eligible veteran’s dependent on a less than full-time basis
in the same manner as such adjustments are made under
section 401.
(e) ESTIMATED FINANCIAL ASSISTANCE.—For purposes of determinations of need under part F, a grant awarded under this section
shall not be treated as estimated financial assistance as described
in sections 471(3) and 480(j).
(f) AUTHORIZATION AND APPROPRIATIONS OF FUNDS.—There are
authorized to be appropriated, and there are appropriated, out of
any money in the Treasury not otherwise appropriated, for the Secretary to carry out this section, such sums as may be necessary for
fiscal year 2010 and each succeeding fiscal year.
PART B—FEDERAL FAMILY EDUCATION LOAN PROGRAM
SEC. 421. ø20 U.S.C. 1071¿ STATEMENT OF PURPOSE; NONDISCRIMINATION; AND APPROPRIATIONS AUTHORIZED.
(a) PURPOSE; DISCRIMINATION PROHIBITED.—
(1) PURPOSE.—The purpose of this part is to enable the
Secretary—
(A) to encourage States and nonprofit private institutions and organizations to establish adequate loan insurance programs for students in eligible institutions (as defined in section 435),
(B) to provide a Federal program of student loan insurance for students or lenders who do not have reasonable access to a State or private nonprofit program of student loan insurance covered by an agreement under section 428(b),
(C) to pay a portion of the interest on loans to qualified students which are insured under this part, and
(D) to guarantee a portion of each loan insured
under a program of a State or of a nonprofit private institution or organization which meets the requirements of
section 428(a)(1)(B).
(2) DISCRIMINATION BY CREDITORS PROHIBITED.—No agency, organization, institution, bank, credit union, corporation, or
other lender who regularly extends, renews, or continues credit
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ceipt or deny the benefits of, or discriminate against any borrower or applicant in obtaining, such credit or insurance on the
basis of race, national origin, religion, sex, marital status, age,
or handicapped status.
(b) AUTHORIZATION OF APPROPRIATIONS.—For the purpose of
carrying out this part—
(1) there are authorized to be appropriated to the student
loan insurance fund (established by section 431) (A) the sum
of $1,000,000, and (B) such further sums, if any, as may become necessary for the adequacy of the student loan insurance
fund,
(2) there are authorized to be appropriated, for payments
under section 428 with respect to interest on student loans and
for payments under section 437, such sums for the fiscal year
ending June 30, 1966, and succeeding fiscal years, as may be
required therefor,
(3) there is authorized to be appropriated the sum of
$17,500,000 for making advances pursuant to section 422 for
the reserve funds of State and nonprofit private student loan
insurance programs,
(4) there are authorized to be appropriated (A) the sum of
$12,500,000 for making advances after June 30, 1968, pursuant to sections 422 (a) and (b), and (B) such sums as may be
necessary for making advances pursuant to section 422(c), for
the reserve funds of State and nonprofit private student loan
insurance programs,
(5) there are authorized to be appropriated such sums as
may be necessary for the purpose of paying a loan processing
and issuance fee in accordance with section 428(f) to guaranty
agencies, and
(6) there is authorized to be appropriated, and there are
appropriated, out of any money in the Treasury not otherwise
appropriated, such sums as may be necessary for the purpose
of carrying out section 422(c)(7).
Sums appropriated under paragraphs (1), (2), (4), and (5) of this
subsection shall remain available until expended, except that no
sums may be expended after June 30, 2010, with respect to loans
under this part for which the first disbursement is after such date.
No additional sums are authorized to be appropriated under paragraph (3) or (4) of this subsection by reason of the reenactment of
such paragraphs by the Higher Education Amendments of 1986.
(c) DESIGNATION.—The program established under this part
shall be referred to as the ‘‘Robert T. Stafford Federal Student
Loan Program’’. Loans made pursuant to sections 427 and 428
shall be known as ‘‘Federal Stafford Loans’’.
(d) TERMINATION OF AUTHORITY TO MAKE OR INSURE NEW
LOANS.—Notwithstanding paragraphs (1) through (6) of subsection
(b) or any other provision of law—
(1) no new loans (including consolidation loans) may be
made or insured under this part after June 30, 2010; and
(2) no funds are authorized to be appropriated, or may be
expended, under this Act or any other Act to make or insure
loans under this part (including consolidation loans) for which
the first disbursement is after June 30, 2010,
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except as expressly authorized by an Act of Congress enacted after
the date of enactment of the SAFRA Act.
SEC. 422. ø20 U.S.C. 1072¿ ADVANCES FOR RESERVE FUNDS OF STATE
AND NONPROFIT PRIVATE LOAN INSURANCE PROGRAMS.
(a) PURPOSE OF AND AUTHORITY FOR ADVANCES TO RESERVE
FUNDS.—
(1) PURPOSE; ELIGIBLE RECIPIENTS.—From sums appro-
priated pursuant to paragraphs (3) and (4)(A) of section 421(b),
the Secretary is authorized to make advances to any State
with which the Secretary has made an agreement pursuant to
section 428(b) for the purpose of helping to establish or
strengthen the reserve fund of the student loan insurance program covered by that agreement. If for any fiscal year a State
does not have a student loan insurance program covered by an
agreement made pursuant to section 428(b), and the Secretary
determines after consultation with the chief executive officer of
that State that there is no reasonable likelihood that the State
will have such a student loan insurance program for such year,
the Secretary may make advances for such year for the same
purpose to one or more nonprofit private institutions or organizations with which the Secretary has made an agreement pursuant to section 428(b) in order to enable students in the State
to participate in a program of student loan insurance covered
by such an agreement. The Secretary may make advances
under this subsection both to a State program (with which he
has such an agreement) and to one or more nonprofit private
institutions or organizations (with which he has such an agreement) in that State if he determines that such advances are
necessary in order that students in each eligible institution
have access through such institution to a student loan insurance program which meets the requirements of section
428(b)(1).
(2) MATCHING REQUIREMENT.—No advance shall be made
after June 30, 1968, unless matched by an equal amount from
non-Federal sources. Such equal amount may include the
unencumbered non-Federal portion of a reserve fund. As used
in the preceding sentence, the term ‘‘unencumbered non-Federal portion’’ means the amount (determined as of the time immediately preceding the making of the advance) of the reserve
fund less the greater of—
(A) the sum of—
(i) advances made under this section prior to July
1, 1968;
(ii) an amount equal to twice the amount of advances made under this section after June 30, 1968,
and before the advance for purposes of which the determination is made; and
(iii) the proceeds of earnings on advances made
under this section; or
(B) any amount which is required to be maintained in
such fund pursuant to State law or regulation, or by agreement with lenders, as a reserve against the insurance of
outstanding loans.
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Except as provided in section 428(c)(9)(E) or (F), such
unencumbered non-Federal portion shall not be subject to recall, repayment, or recovery by the Secretary.
(3) TERMS AND CONDITIONS; REPAYMENT.—Advances pursuant to this subsection shall be upon such terms and conditions
(including conditions relating to the time or times of payment)
consistent with the requirements of section 428(b) as the Secretary determines will best carry out the purpose of this section. Advances made by the Secretary under this subsection
shall be repaid within such period as the Secretary may deem
to be appropriate in each case in the light of the maturity and
solvency of the reserve fund for which the advance was made.
(b) LIMITATIONS ON TOTAL ADVANCES.—
(1) IN GENERAL.—The total of the advances from the sums
appropriated pursuant to paragraph (4)(A) of section 421(b) to
nonprofit private institutions and organizations for the benefit
of students in any State and to such State may not exceed an
amount which bears the same ratio to such sums as the population of such State aged 18 to 22, inclusive, bears to the population of all the States aged 18 to 22 inclusive, but such advances may otherwise be in such amounts as the Secretary determines will best achieve the purposes for which they are
made. The amount available for advances to any State shall
not be less than $25,000 and any additional funds needed to
meet this requirement shall be derived by proportionately reducing (but not below $25,000) the amount available for advances to each of the remaining States.
(2) CALCULATION OF POPULATION.—For the purpose of this
subsection, the population aged 18 to 22, inclusive, of each
State and of all the States shall be determined by the Secretary on the basis of the most recent satisfactory data available to him.
(c) ADVANCES FOR INSURANCE OBLIGATIONS.—
(1) USE FOR PAYMENT OF INSURANCE OBLIGATIONS.—From
sums appropriated pursuant to section 421(b)(4)(B), the Secretary shall advance to each State which has an agreement
with the Secretary under section 428(c) with respect to a student loan insurance program, an amount determined in accordance with paragraph (2) of this subsection to be used for the
purpose of making payments under the State’s insurance obligations under such program.
(2) AMOUNT OF ADVANCES.—(A) Except as provided in subparagraph (B), the amount to be advanced to each such State
shall be equal to 10 percent of the principal amount of loans
made by lenders and insured by such agency on those loans on
which the first payment of principal became due during the fiscal year immediately preceding the fiscal year in which the advance is made.
(B) The amount of any advance determined according to
subparagraph (A) of this paragraph shall be reduced by—
(i) the amount of any advance or advances made to
such State pursuant to this subsection at an earlier date;
and
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(ii) the amount of the unspent balance of the advances
made to a State pursuant to subsection (a).
Notwithstanding subparagraph (A) and the preceding sentence
of this subparagraph, but subject to subparagraph (D) of this
paragraph, the amount of any advance to a State described in
paragraph (5)(A) for the first year of its eligibility under such
paragraph, and the amount of any advance to any State described in paragraph (5)(B) for each year of its eligibility under
such paragraph, shall not be less than $50,000.
(C) For the purpose of subparagraph (B), the unspent balance of the advances made to a State pursuant to subsection
(a) shall be that portion of the balance of the State’s reserve
fund (remaining at the time of the State’s first request for an
advance pursuant to this subsection) which bears the same
ratio to such balance as the Federal advances made and not returned by such State, pursuant to subsection (a), bears to the
total of all past contributions to such reserve funds from all
sources (other than interest on investment of any portion of the
reserve fund) contributed since the date such State executed
an agreement pursuant to section 428(b).
(D) If the sums appropriated for any fiscal year for paying
the amounts determined under subparagraphs (A) and (B) are
not sufficient to pay such amounts in full, then such amounts
shall be reduced—
(i) by ratably reducing that portion of the amount allocated to each State which exceeds $50,000; and
(ii) if further reduction is required, by equally reducing the $50,000 minimum allocation of each State.
If additional sums become available for paying such amounts
for any fiscal year during which the preceding sentence has
been applied, such reduced amounts shall be increased on the
same basis as they were reduced.
(3) USE OF EARNINGS FOR INSURANCE OBLIGATIONS.—The
earnings, if any, on any investments of advances received pursuant to this subsection must be used for making payments
under the State’s insurance obligations.
(4) REPAYMENT OF ADVANCES.—Advances made by the Secretary under this subsection shall, subject to subsection (d), be
repaid within such period as the Secretary may deem to be appropriate and shall be deposited in the fund established by section 431.
(5) LIMITATION ON NUMBER OF ADVANCES.—Except as provided in paragraph (7), advances pursuant to this subsection
shall be made to a State—
(A) in the case of a State which is actively carrying on
a program under an agreement pursuant to section 428(b)
which was entered into before October 12, 1976, upon such
date as such State may request, but not before October 1,
1977, and on the same day of each of the 2 succeeding calendar years after the date so requested; and
(B) in the case of a State which enters into an agreement pursuant to section 428(b) on or after October 12,
1976, or which is not actively carrying on a program under
an agreement pursuant to such section on such date, upon
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such date as such State may request, but not before October 1, 1977, and on the same day of each of the 4 succeeding calendar years after the date so requested of the
advance.
(6) PAYMENT OF ADVANCES WHERE NO STATE PROGRAM.—
(A) If for any fiscal year a State does not have a student loan
insurance program covered by an agreement made pursuant to
section 428(b), and the Secretary determines after consultation
with the chief executive officer of that State that there is no
reasonable likelihood that the State will have such a student
loan insurance program for such year, the Secretary may make
advances pursuant to this subsection for such year for the
same purpose to one or more nonprofit private institutions or
organizations with which he has made an agreement pursuant
to subsection (c), as well as subsection (b), of section 428 and
subparagraph (B) of this paragraph in order to enable students
in that State to participate in a program of student loan insurance covered by such agreements.
(B) The Secretary may enter into an agreement with a private nonprofit institution or organization for the purpose of
this paragraph under which such institution or organization—
(i) agrees to establish within such State at least one
office with sufficient staff to handle written, electronic, and
telephone inquiries from students, eligible lenders, and
other persons in the State, to encourage maximum commercial lender participation within the State, and to conduct periodic visits to at least the major eligible lenders
within the State;
(ii) agrees that its insurance will not be denied any
student because of his or her choice of eligible institutions;
and
(iii) certifies that it is neither an eligible institution,
nor has any substantial affiliation with an eligible institution.
(7) EMERGENCY ADVANCES.—The Secretary is authorized to
make advances, on terms and conditions satisfactory to the
Secretary, to a guaranty agency—
(A) in accordance with section 428(j), in order to ensure that the guaranty agency shall make loans as the
lender-of-last-resort; or
(B) if the Secretary is seeking to terminate the guaranty agency’s agreement, or assuming the guaranty agency’s functions, in accordance with section 428(c)(9)(F)(v), in
order to assist the agency in meeting its immediate cash
needs, ensure the uninterrupted payment of claims, or ensure that the guaranty agency shall make loans as described in subparagraph (A).
(d) RECOVERY OF ADVANCES DURING FISCAL YEARS 1988 AND
1989.—
(1) AMOUNT AND USE OF RECOVERED FUNDS.—Notwithstanding any other provision of this section, advances made by
the Secretary under this section shall be repaid in accordance
with this subsection and shall be deposited in the fund established by section 431. The Secretary shall, in accordance with
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the requirements of paragraph (2), recover (and so deposit) an
amount equal to $75,000,000 during fiscal year 1988 and an
amount equal to $35,000,000 for fiscal year 1989.
(2) DETERMINATION OF GUARANTY AGENCY OBLIGATIONS.—
In determining the amount of advances which shall be repaid
by a guaranty agency under paragraph (1), the Secretary—
(A) shall consider the solvency and maturity of the reserve and insurance funds of the guaranty agency assisted
by such advances, as determined by the Comptroller General taking into account the requirements of State law as
in effect on the date of enactment of the Higher Education
Amendments of 1986;
(B) shall not seek repayment of such advances from
any State described in subsection (c)(5)(B) during any year
of its eligibility under such subsection; and
(C) shall not seek repayment of such advances from
any State if such repayment encumbers the reserve fund
requirement of State law as in effect on such date of enactment.
(e) CORRECTION FOR ERRORS UNDER REDUCTION OF EXCESS
CASH RESERVES.—
(1) IN GENERAL.—The Secretary shall pay any guaranty
agency the amount of reimbursement of claims under section
428(c)(1), filed between September 1, 1988, and December 31,
1989, which were previously withheld or canceled in order to
be applied to satisfy such agency’s obligation to eliminate excess cash reserves held by such agency, based on the maximum
cash reserve (as described in subsection (e) of this section as
in effect on September 1, 1988) permitted at the end of 1986,
if such maximum cash reserve was miscalculated because of erroneous financial information provided by such agency to the
Secretary and if (A) such erroneous information is verified by
an audited financial statement of the reserve fund, signed by
a certified public accountant, and (B) such audited financial
statement is provided to the Secretary prior to January 1,
1993.
(2) AMOUNT.—The amount of reimbursement for claims
shall be equal to the amount of reimbursement for claims withheld or canceled in order to be applied to such agency’s obligation to eliminate excess cash reserves which exceeds the
amount of that which would have been withheld or canceled if
the maximum excess cash reserves had been accurately calculated.
(f) REFUND OF CASH RESERVE PAYMENTS.—The Secretary shall,
within 30 days after the date of enactment of the Higher Education
Amendments of 1992, pay the full amount of payments withheld or
canceled under paragraph (3) of this subsection to any guaranty
agency which—
(1) was required to eliminate excess cash reserves, based
on the maximum cash reserve (as described in subsection (e)
of this section as in effect on September 1, 1988) permitted at
the end of 1986;
(2) appealed the Secretary’s demand that such agency
should eliminate such excess cash reserves and received a
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waiver of a portion of the amount of such excess cash reserves
to be eliminated;
(3) had payments under section 428(c)(1) or section 428(f)
previously withheld or canceled in order to be applied to satisfy
such agency’s obligation to eliminate excess cash reserves held
by such agency, based on the maximum cash reserve (as described in subsection (e) of this section as in effect on September 1, 1988) permitted at the end of 1986; and
(4) according to a Department of Education review that
was completed and forwarded to such guaranty agency prior to
January 1, 1992, is expected to become insolvent during or before 1996 and the payments withheld or canceled under paragraph (3) of this subsection are a factor in such agency’s impending insolvency.
(g) PRESERVATION AND RECOVERY OF GUARANTY AGENCY RESERVES.—
(1) AUTHORITY TO RECOVER FUNDS.—Notwithstanding any
other provision of law, the reserve funds of the guaranty agencies, and any assets purchased with such reserve funds, regardless of who holds or controls the reserves or assets, shall
be considered to be the property of the United States to be
used in the operation of the program authorized by this part.
However, the Secretary may not require the return of all reserve funds of a guaranty agency to the Secretary unless the
Secretary determines that such return is in the best interest
of the operation of the program authorized by this part, or to
ensure the proper maintenance of such agency’s funds or assets
or the orderly termination of the guaranty agency’s operations
and the liquidation of its assets. The reserves shall be maintained by each guaranty agency to pay program expenses and
contingent liabilities, as authorized by the Secretary, except
that—
(A) the Secretary may direct a guaranty agency to return to the Secretary a portion of its reserve fund which
the Secretary determines is unnecessary to pay the program expenses and contingent liabilities of the guaranty
agency;
(B) the Secretary may direct the guaranty agency to
require the return, to the guaranty agency or to the Secretary, of any reserve funds or assets held by, or under the
control of, any other entity, which the Secretary determines are necessary to pay the program expenses and contingent liabilities of the guaranty agency, or which are required for the orderly termination of the guaranty agency’s operations and the liquidation of its assets;
(C) the Secretary may direct a guaranty agency, or
such agency’s officers or directors, to cease any activities
involving expenditure, use or transfer of the guaranty
agency’s reserve funds or assets which the Secretary determines is a misapplication, misuse, or improper expenditure
of such funds or assets; and
(D) any such determination under subparagraph (A) or
(B) shall be based on standards prescribed by regulations
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that are developed through negotiated rulemaking and
that include procedures for administrative due process.
(2) TERMINATION PROVISIONS IN CONTRACTS.—(A) To ensure that the funds and assets of the guaranty agency are preserved, any contract with respect to the administration of a
guaranty agency’s reserve funds, or the administration of any
assets purchased or acquired with the reserve funds of the
guaranty agency, that is entered into or extended by the guaranty agency, or any other party on behalf of or with the concurrence of the guaranty agency, after the date of enactment
of this subsection shall provide that the contract is terminable
by the Secretary upon 30 days notice to the contracting parties
if the Secretary determines that such contract includes an impermissible transfer of the reserve funds or assets, or is otherwise inconsistent with the terms or purposes of this section.
(B) The Secretary may direct a guaranty agency to suspend or cease activities under any contract entered into by or
on behalf of such agency after January 1, 1993, if the Secretary
determines that the misuse or improper expenditure of such
guaranty agency’s funds or assets or such contract provides unnecessary or improper benefits to such agency’s officers or directors.
(3) PENALTIES.—Violation of any direction issued by the
Secretary under this subsection may be subject to the penalties
described in section 490 of this Act.
(4) AVAILABILITY OF FUNDS.—Any funds that are returned
or otherwise recovered by the Secretary pursuant to this subsection shall be available for expenditure for expenses pursuant to section 458 of this Act.
(h) RECALL OF RESERVES; LIMITATIONS ON USE OF RESERVE
FUNDS AND ASSETS.—
(1) IN GENERAL.—Notwithstanding any other provision of
law, the Secretary shall, except as otherwise provided in this
subsection, recall $1,000,000,000 from the reserve funds held
by guaranty agencies on September 1, 2002.
(2) DEPOSIT.—Funds recalled by the Secretary under this
subsection shall be deposited in the Treasury.
(3) REQUIRED SHARE.—The Secretary shall require each
guaranty agency to return reserve funds under paragraph (1)
based on the agency’s required share of recalled reserve funds
held by guaranty agencies as of September 30, 1996. For purposes of this paragraph, a guaranty agency’s required share of
recalled reserve funds shall be determined as follows:
(A) The Secretary shall compute each guaranty agency’s reserve ratio by dividing (i) the amount held in the
agency’s reserve funds as of September 30, 1996 (but reflecting later accounting or auditing adjustments approved
by the Secretary), by (ii) the original principal amount of
all loans for which the agency has an outstanding insurance obligation as of such date, including amounts of outstanding loans transferred to the agency from another
guaranty agency.
(B) If the reserve ratio of any guaranty agency as computed under subparagraph (A) exceeds 2.0 percent, the
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agency’s required share shall include so much of the
amounts held in the agency’s reserve funds as exceed a reserve ratio of 2.0 percent.
(C) If any additional amount is required to be recalled
under paragraph (1) (after deducting the total of the required shares calculated under subparagraph (B)), such
additional amount shall be obtained by imposing on each
guaranty agency an equal percentage reduction in the
amount of the agency’s reserve funds remaining after deduction of the amount recalled under subparagraph (B),
except that such percentage reduction under this subparagraph shall not result in the agency’s reserve ratio being
reduced below 0.58 percent. The equal percentage reduction shall be the percentage obtained by dividing—
(i) the additional amount required to be recalled
(after deducting the total of the required shares calculated under subparagraph (B)), by
(ii) the total amount of all such agencies’ reserve
funds remaining (after deduction of the required
shares calculated under such subparagraph).
(D) If any additional amount is required to be recalled
under paragraph (1) (after deducting the total of the required shares calculated under subparagraphs (B) and
(C)), such additional amount shall be obtained by imposing
on each guaranty agency with a reserve ratio (after deducting the required shares calculated under such subparagraphs) in excess of 0.58 percent an equal percentage
reduction in the amount of the agency’s reserve funds remaining (after such deduction) that exceed a reserve ratio
of 0.58 percent. The equal percentage reduction shall be
the percentage obtained by dividing—
(i) the additional amount to be recalled under
paragraph (1) (after deducting the amount recalled
under subparagraphs (B) and (C)), by
(ii) the total amount of all such agencies’ reserve
funds remaining (after deduction of the required
shares calculated under such subparagraphs) that exceed a reserve ratio of 0.58 percent.
(4) RESTRICTED ACCOUNTS REQUIRED.—
(A) IN GENERAL.—Within 90 days after the beginning
of each of the fiscal years 1998 through 2002, each guaranty agency shall transfer a portion of the agency’s required share determined under paragraph (3) to a restricted account established by the agency that is of a type
selected by the agency with the approval of the Secretary.
Funds transferred to such restricted accounts shall be invested in obligations issued or guaranteed by the United
States or in other similarly low-risk securities.
(B) REQUIREMENT.—A guaranty agency shall not use
the funds in such a restricted account for any purpose
without the express written permission of the Secretary,
except that a guaranty agency may use the earnings from
such restricted account for default reduction activities.
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(C) INSTALLMENTS.—In each of fiscal years 1998
through 2002, each guaranty agency shall transfer the
agency’s required share to such restricted account in 5
equal annual installments, except that—
(i) a guaranty agency that has a reserve ratio (as
computed under subparagraph (3)(A)) equal to or less
than 1.10 percent may transfer the agency’s required
share to such account in 4 equal installments beginning in fiscal year 1999; and
(ii) a guaranty agency may transfer such required
share to such account in accordance with such other
payment schedules as are approved by the Secretary.
(5) SHORTAGE.—If, on September 1, 2002, the total amount
in the restricted accounts described in paragraph (4) is less
than the amount the Secretary is required to recall under
paragraph (1), the Secretary shall require the return of the
amount of the shortage from other reserve funds held by guaranty agencies under procedures established by the Secretary.
The Secretary shall first attempt to obtain the amount of such
shortage from each guaranty agency that failed to transfer the
agency’s required share to the agency’s restricted account in
accordance with paragraph (4).
(6) ENFORCEMENT.—
(A) IN GENERAL.—The Secretary may take such reasonable measures, and require such information, as may
be necessary to ensure that guaranty agencies comply with
the requirements of this subsection.
(B) PROHIBITION.—If the Secretary determines that a
guaranty agency has failed to transfer to a restricted account any portion of the agency’s required share under this
subsection, the agency may not receive any other funds
under this part until the Secretary determines that the
agency has so transferred the agency’s required share.
(C) WAIVER.—The Secretary may waive the requirements of subparagraph (B) for a guaranty agency described in such subparagraph if the Secretary determines
that there are extenuating circumstances beyond the control of the agency that justify such waiver.
(7) LIMITATION.—
(A) RESTRICTION ON OTHER AUTHORITY.—The Secretary
shall not have any authority to direct a guaranty agency
to return reserve funds under subsection (g)(1)(A) during
the period from the date of enactment of the Balanced
Budget Act of 1997 through September 30, 2002.
(B) USE OF TERMINATION COLLECTIONS.—Any reserve
funds directed by the Secretary to be returned to the Secretary under subsection (g)(1)(B) during such period that
do not exceed a guaranty agency’s required share of recalled reserve funds under paragraph (3)—
(i) shall be used to satisfy the agency’s required
share of recalled reserve funds; and
(ii) shall be deposited in the restricted account established by the agency under paragraph (4), without
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regard to whether such funds exceed the next installment required under such paragraph.
(C) USE OF SANCTIONS COLLECTIONS.—Any reserve
funds directed by the Secretary to be returned to the Secretary under subsection (g)(1)(C) during such period that
do not exceed a guaranty agency’s next installment under
paragraph (4)—
(i) shall be used to satisfy the agency’s next installment; and
(ii) shall be deposited in the restricted account established by the agency under paragraph (4).
(D) BALANCE AVAILABLE TO SECRETARY.—Any reserve
funds directed by the Secretary to be returned to the Secretary under subparagraph (B) or (C) of subsection (g)(1)
that remain after satisfaction of the requirements of subparagraphs (B) and (C) of this paragraph shall be deposited in the Treasury.
(8) DEFINITIONS.—For the purposes of this subsection:
(A) DEFAULT REDUCTION ACTIVITIES.—The term ‘‘default reduction activities’’ means activities to reduce student loan defaults that improve, strengthen, and expand
default prevention activities, such as—
(i) establishing a program of partial loan cancellation to reward disadvantaged borrowers for good repayment histories with their lenders;
(ii) establishing a financial and debt management
counseling program for high-risk borrowers that provides long-term training (beginning prior to the first
disbursement of the borrower’s first student loan and
continuing through the completion of the borrower’s
program of education or training) in budgeting and
other aspects of financial management, including debt
management;
(iii) establishing a program of placement counseling to assist high-risk borrowers in identifying employment or additional training opportunities; and
(iv) developing public service announcements that
would detail consequences of student loan default and
provide information regarding a toll-free telephone
number established by the guaranty agency for use by
borrowers seeking assistance in avoiding default.
(B) RESERVE FUNDS.—The term ‘‘reserve funds’’ when
used with respect to a guaranty agency—
(i) includes any reserve funds in cash or liquid assets held by the guaranty agency, or held by, or under
the control of, any other entity; and
(ii) does not include buildings, equipment, or other
nonliquid assets.
(i) ADDITIONAL RECALL OF RESERVES.—
(1) IN GENERAL.—Notwithstanding any other provision of
law and subject to paragraph (4), the Secretary shall recall,
from reserve funds held in the Federal Student Loan Reserve
Funds established under section 422A by guaranty agencies—
(A) $85,000,000 in fiscal year 2002;
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HIGHER EDUCATION ACT OF 1965
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(B) $82,500,000 in fiscal year 2006; and
(C) $82,500,000 in fiscal year 2007.
(2) DEPOSIT.—Funds recalled by the Secretary under this
subsection shall be deposited in the Treasury.
(3) REQUIRED SHARE.—The Secretary shall require each
guaranty agency to return reserve funds under paragraph (1)
on the basis of the agency’s required share. For purposes of
this paragraph, a guaranty agency’s required share shall be determined as follows:
(A) EQUAL PERCENTAGE.—The Secretary shall require
each guaranty agency to return an amount representing
an equal percentage reduction in the amount of reserve
funds held by the agency on September 30, 1996.
(B) CALCULATION.—The equal percentage reduction
shall be the percentage obtained by dividing—
(i) $250,000,000, by
(ii) the total amount of all guaranty agencies’ reserve funds held on September 30, 1996, less any
amounts subject to recall under subsection (h).
(C) SPECIAL RULE.—Notwithstanding subparagraphs
(A) and (B), the percentage reduction under subparagraph
(B) shall not result in the depletion of the reserve funds
of any agency which charges the 1.0 percent insurance premium pursuant to section 428(b)(1)(H) below an amount
equal to the amount of lender claim payments paid during
the 90 days prior to the date of the return under this subsection. If any additional amount is required to be returned after deducting the total of the required shares
under subparagraph (B) and as a result of the preceding
sentence, such additional amount shall be obtained by imposing on each guaranty agency to which the preceding
sentence does not apply, an equal percentage reduction in
the amount of the agency’s remaining reserve funds.
(4) OFFSET OF REQUIRED SHARES.—If any guaranty agency
returns to the Secretary any reserve funds in excess of the
amount required under this subsection or subsection (h), the
total amount required to be returned under paragraph (1) shall
be reduced by the amount of such excess reserve funds returned.
(5) 1 DEFINITION OF RESERVE FUNDS.—The term ‘‘reserve
funds’’ when used with respect to a guaranty agency—
(A) includes any reserve funds in cash or liquid assets
held by the guaranty agency, or held by, or under the control of, any other entity; and
(B) does not include buildings, equipment, or other
nonliquid assets.
SEC. 422A. ø20 U.S.C. 1072a¿ FEDERAL STUDENT LOAN RESERVE FUND.
(a) ESTABLISHMENT.—Each guaranty agency shall, not later
than 60 days after the date of enactment of this section, deposit all
funds, securities, and other liquid assets contained in the reserve
fund established pursuant to section 422 into a Federal Student
1 Identical
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HIGHER EDUCATION ACT OF 1965
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Loan Reserve Fund (in this section and section 422B referred to as
the ‘‘Federal Fund’’), which shall be an account of a type selected
by the agency, with the approval of the Secretary.
(b) INVESTMENT OF FUNDS.—Funds transferred to the Federal
Fund shall be invested in obligations issued or guaranteed by the
United States or a State, or in other similarly low-risk securities
selected by the guaranty agency, with the approval of the Secretary. Earnings from the Federal Fund shall be the sole property
of the Federal Government.
(c) ADDITIONAL DEPOSITS.—After the establishment of the Federal Fund, a guaranty agency shall deposit into the Federal Fund—
(1) all amounts received from the Secretary as payment of
reinsurance on loans pursuant to section 428(c)(1);
(2) from amounts collected on behalf of the obligation of a
defaulted borrower, a percentage amount equal to the complement of the reinsurance percentage in effect when payment
under the guaranty agreement was made—
(A) with respect to the defaulted loan pursuant to sections 428(c)(6)(A) and 428F(a)(1)(B); and
(B) with respect to a loan that the Secretary has repaid or discharged under section 437;
(3) insurance premiums collected from borrowers pursuant
to sections 428(b)(1)(H) and 428H(h);
(4) all amounts received from the Secretary as payment for
supplemental preclaims activity performed prior to the date of
enactment of this section;
(5) 70 percent of amounts received after such date of enactment from the Secretary as payment for administrative cost allowances for loans upon which insurance was issued prior to
such date of enactment; and
(6) other receipts as specified in regulations of the Secretary.
(d) USES OF FUNDS.—Subject to subsection (f ), the Federal
Fund may only be used by a guaranty agency—
(1) to pay lender claims pursuant to sections 428(b)(1)(G),
428( j), and 437; and
(2) to pay into the Agency Operating Fund established pursuant to section 422B (in this section and section 422B referred
to as the ‘‘Operating Fund’’) a default aversion fee in accordance with section 428(l).
(e) OWNERSHIP OF FEDERAL FUND.—The Federal Fund, and
any nonliquid asset (such as a building or equipment) developed or
purchased by the guaranty agency in whole or in part with Federal
reserve funds, regardless of who holds or controls the Federal reserve funds or such asset, shall be considered to be the property
of the United States, prorated based on the percentage of such
asset developed or purchased with Federal reserve funds, which
property shall be used in the operation of the program authorized
by this part, as provided in subsection (d). The Secretary may restrict or regulate the use of such asset only to the extent necessary
to reasonably protect the Secretary’s prorated share of the value of
such asset. The Secretary may direct a guaranty agency, or such
agency’s officers or directors, to cease any activity involving expenditures, use, or transfer of the Federal Fund administered by
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HIGHER EDUCATION ACT OF 1965
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the guaranty agency that the Secretary determines is a
misapplication, misuse, or improper expenditure of the Federal
Fund or the Secretary’s share of such asset.
(f ) TRANSITION.—
(1) IN GENERAL.—In order to establish the Operating Fund,
each guaranty agency may transfer not more than 180 days’
cash expenses for normal operating expenses (not including
claim payments) as a working capital reserve as defined in Office of Management and Budget Circular A–87 (Cost Accounting Standards) from the Federal Fund for deposit into the Operating Fund for use in the performance of the guaranty agency’s duties under this part. Such transfers may occur during
the first 3 years following the establishment of the Operating
Fund. However, no agency may transfer in excess of 45 percent
of the balance, as of September 30, 1998, of the agency’s Federal Fund to the agency’s Operating Fund during such 3-year
period. In determining the amount that may be transferred,
the agency shall ensure that sufficient funds remain in the
Federal Fund to pay lender claims within the required time periods and to meet the reserve recall requirements of this section and subsections (h) and (i) of section 422.
(2) SPECIAL RULE.—A limited number of guaranty agencies
may transfer interest earned on the Federal Fund to the Operating Fund during the first 3 years after the date of enactment
of this section if the guaranty agency demonstrates to the Secretary that—
(A) the cash flow in the Operating Fund will be negative without the transfer of such interest; and
(B) the transfer of such interest will substantially improve the financial circumstances of the guaranty agency.
(3) REPAYMENT PROVISIONS.—Each guaranty agency shall
begin repayment of sums transferred pursuant to this subsection not later than the start of the fourth year after the establishment of the Operating Fund, and shall repay all
amounts transferred not later than 5 years from the date of
the establishment of the Operating Fund. With respect to
amounts transferred from the Federal Fund, the guaranty
agency shall not be required to repay any interest on the funds
transferred and subsequently repaid. The guaranty agency
shall provide to the Secretary a reasonable schedule for repayment of the sums transferred and an annual financial analysis
demonstrating the agency’s ability to comply with the schedule
and repay all outstanding sums transferred.
(4) PROHIBITION.—If a guaranty agency transfers funds
from the Federal Fund in accordance with this section, and
fails to make scheduled repayments to the Federal Fund, the
agency may not receive any other funds under this part until
the Secretary determines that the agency has made such repayments. The Secretary shall pay to the guaranty agency any
funds withheld in accordance with this paragraph immediately
upon making the determination that the guaranty agency has
made all such repayments.
(5) WAIVER.—The Secretary may—
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(A) waive the requirements of paragraph (3), but only
with respect to repayment of interest that was transferred
in accordance with paragraph (2); and
(B) waive paragraph (4);
for a guaranty agency, if the Secretary determines that there
are extenuating circumstances (such as State constitutional
prohibitions) beyond the control of the agency that justify such
a waiver.
(6) EXTENSION OF REPAYMENT PERIOD FOR INTEREST.—
(A) EXTENSION PERMITTED.—The Secretary shall extend the period for repayment of interest that was transferred in accordance with paragraph (2) from 2 years to 5
years if the Secretary determines that—
(i) the cash flow of the Operating Fund will be
negative as a result of repayment as required by paragraph (3);
(ii) the repayment of the interest transferred will
substantially diminish the financial circumstances of
the guaranty agency; and
(iii) the guaranty agency has demonstrated—
(I) that the agency is able to repay all transferred funds by the end of the 8th year following
the date of establishment of the Operating Fund;
and
(II) that the agency will be financially sound
on the completion of repayment.
(B) REPAYMENT OF INCOME ON TRANSFERRED FUNDS.—
All repayments made to the Federal Fund during the 6th,
7th, and 8th years following the establishment of the Operating Fund of interest that was transferred shall include
the sums transferred plus any income earned from the investment of the sums transferred after the 5th year.
(7) INVESTMENT OF FEDERAL FUNDS.—Funds transferred
from the Federal Fund to the Operating Fund for operating expenses shall be invested in obligations issued or guaranteed by
the United States or a State, or in other similarly low-risk securities selected by the guaranty agency, with the approval of
the Secretary.
(8) SPECIAL RULE.—In calculating the minimum reserve
level required by section 428(c)(9)(A), the Secretary shall include all amounts owed to the Federal Fund by the guaranty
agency in the calculation.
SEC. 422B. ø20 U.S.C. 1072b¿ AGENCY OPERATING FUND.
(a) ESTABLISHMENT.—Each guaranty agency shall,
not later
than 60 days after the date of enactment of this section, establish
a fund designated as the Operating Fund.
(b) INVESTMENT OF FUNDS.—Funds deposited into the Operating Fund shall be invested at the discretion of the guaranty
agency in accordance with prudent investor standards.
(c) ADDITIONAL DEPOSITS.—After the establishment of the Operating Fund, the guaranty agency shall deposit into the Operating
Fund—
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(1) the loan processing and issuance fee paid by the
Secretary pursuant to section 428(f );
(2) 30 percent of amounts received after the date of enactment of this section from the Secretary as payment for administrative cost allowances for loans upon which insurance was
issued prior to such date of enactment;
(3) the account maintenance fee paid by the Secretary in
accordance with section 458;
(4) the default aversion fee paid in accordance with section
428(l);
(5) amounts remaining pursuant to section 428(c)(6)(B)
from collection on defaulted loans held by the agency, after
payment of the Secretary’s equitable share, excluding amounts
deposited in the Federal Fund pursuant to section 422A(c)(2);
and
(6) other receipts as specified in regulations of the
Secretary.
(d) USES OF FUNDS.—
(1) IN GENERAL.—Funds in the Operating Fund shall be
used for application processing, loan disbursement, enrollment
and repayment status management, default aversion activities
(including those described in section 422(h)(8)), default collection activities, school and lender training, financial aid awareness and related outreach activities, compliance monitoring,
and other student financial aid related activities, as selected by
the guaranty agency.
(2) SPECIAL RULE.—The guaranty agency may, in the agency’s discretion, transfer funds from the Operating Fund to the
Federal Fund for use pursuant to section 422A. Such transfer
shall be irrevocable, and any funds so transferred shall become
the sole property of the United States.
(3) DEFINITIONS.—For purposes of this subsection:
(A) DEFAULT COLLECTION ACTIVITIES.—The term ‘‘default collection activities’’ means activities of a guaranty
agency that are directly related to the collection of the loan
on which a default claim has been paid to the participating
lender, including the due diligence activities required pursuant to regulations of the Secretary.
(B) DEFAULT AVERSION ACTIVITIES.—The term ‘‘default
aversion activities’’ means activities of a guaranty agency
that are directly related to providing collection assistance
to the lender on a delinquent loan, prior to the loan’s being
legally in a default status, including due diligence activities required pursuant to regulations of the Secretary.
(C) ENROLLMENT AND REPAYMENT STATUS MANAGEMENT.—The term ‘‘enrollment and repayment status management’’ means activities of a guaranty agency that are
directly related to ascertaining the student’s enrollment
status, including prompt notification to the lender of such
status, an audit of the note or written agreement to determine if the provisions of that note or agreement are consistent with the records of the guaranty agency as to the
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tion of the note or agreement to assure that the repayment
provisions are consistent with the provisions of this part.
(e) OWNERSHIP AND REGULATION OF OPERATING FUND.—
(1) OWNERSHIP.—The Operating Fund, with the exception
of funds transferred from the Federal Fund in accordance with
section 422A(f ), shall be considered to be the property of the
guaranty agency.
(2) REGULATION.—Except as provided in paragraph (3), the
Secretary may not regulate the uses or expenditure of moneys
in the Operating Fund, but the Secretary may require such
necessary reports and audits as provided in section 428(b)(2).
(3) EXCEPTION.—Notwithstanding paragraphs (1) and (2),
during any period in which funds are owed to the Federal
Fund as a result of transfer under section 422A(f )—
(A) moneys in the Operating Fund may only be used
for expenses related to the student loan programs authorized under this part; and
(B) the Secretary may regulate the uses or expenditure of moneys in the Operating Fund.
SEC. 423. ø20 U.S.C. 1073¿ EFFECTS OF ADEQUATE NON-FEDERAL PROGRAMS.
(a) FEDERAL INSURANCE BARRED TO LENDERS WITH ACCESS TO
STATE OR PRIVATE INSURANCE.—Except as provided in subsection
(b), the Secretary shall not issue certificates of insurance under
section 429 to lenders in a State if the Secretary determines that
every eligible institution has reasonable access in that State to a
State or private nonprofit student loan insurance program which is
covered by an agreement under section 428(b).
(b) EXCEPTIONS.—The Secretary may issue certificates of insurance under section 429 to a lender in a State—
(1) for insurance of a loan made to a student borrower who
does not, by reason of the borrower’s residence, have access to
loan insurance under the loan insurance program of such State
(or under any private nonprofit loan insurance program which
has received an advance under section 422 for the benefit of
students in such State);
(2) for insurance of all the loans made to student borrowers by a lender who satisfies the Secretary that, by reason
of the residence of such borrowers, such lender will not have
access to any single State or nonprofit private loan insurance
program which will insure substantially all of the loans such
lender intends to make to such student borrowers; or
(3) under such circumstances as may be approved by the
guaranty agency in such State, for the insurance of a loan to
a borrower for whom such lender previously was issued such
a certificate if the loan covered by such certificate is not yet repaid.
SEC. 424. ø20 U.S.C. 1074¿ 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 in-
stallments paid pursuant to lines of credit (as defined in section
435) to students covered by Federal loan insurance under this part
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HIGHER EDUCATION ACT OF 1965
Sec. 425
shall not exceed $2,000,000,000 for the period from July 1, 1976,
to September 30, 1976, for each of the succeeding fiscal years ending prior to October 1, 2009, and for the period from October 1,
2009, to June 30, 2010, for loans first disbursed on or before June
30, 2010.
(b) APPORTIONMENT OF AMOUNTS.—The Secretary may, if he or
she finds it necessary to do so in order to assure an equitable distribution of the benefits of this part, assign, within the maximum
amounts specified in subsection (a), Federal loan insurance quotas
applicable to eligible lenders, or to States or areas, and may from
time to time reassign unused portions of these quotas.
SEC. 425. ø20 U.S.C. 1075¿ LIMITATIONS ON INDIVIDUAL FEDERALLY INSURED LOANS AND ON FEDERAL LOAN INSURANCE.
(a) ANNUAL AND AGGREGATE LIMITS.—
(1) ANNUAL LIMITS.—(A) The total of loans made to a stu-
dent in any academic year or its equivalent (as determined by
the Secretary) which may be covered by Federal loan insurance
under this part may not exceed—
(i) in the case of a student at an eligible institution
who has not successfully completed the first year of a program of undergraduate education—
(I) $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) if such student is enrolled in a program of undergraduate education which is less than one academic year, the maximum annual loan amount that
such student may receive may not exceed the amount
that bears the same ratio to the amount specified in
subclause (I) as the length of such program measured
in semester, trimester, quarter, or clock hours bears to
one academic year;
(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) $4,500; or
(II) if such student is enrolled in a program of undergraduate education, the remainder of which is less
than one academic year, the maximum annual loan
amount that such student may receive may not exceed
the amount that bears the same ratio to the amount
specified in subclause (I) as such remainder measured
in semester, trimester, quarter, or clock hours bears to
one academic year;
(iii) in the case of a student at an eligible institution
who has successfully completed the first and second years
of a program of undergraduate education but has not successfully completed the remainder of such program—
(I) $5,500; or
(II) if such student is enrolled in a program of undergraduate education, the remainder of which is less
than one academic year, the maximum annual loan
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HIGHER EDUCATION ACT OF 1965
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amount that such student may receive may not exceed
the amount that bears the same ratio to the amount
specified in subclause (I) as such remainder measured
in semester, trimester, quarter, or clock hours bears to
one academic year; and
(iv) in the case of a graduate or professional student
(as defined in regulations of the Secretary) at an eligible
institution, $8,500.
(B) The annual insurable limits contained in subparagraph
(A) shall not apply in cases where the Secretary determines,
pursuant to regulations, 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. 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 year in excess of the annual limit.
(C) For the purpose of subparagraph (A), the number of
years that a student has completed in a program of undergraduate education shall include any prior enrollment in an eligible program of undergraduate education for which the student was awarded an associate or baccalaureate degree, if such
degree is required by the institution for admission to the program in which the student is enrolled.
(2) AGGREGATE LIMITS.—(A) The aggregate insured unpaid
principal amount for all such insured loans made to any student shall not at any time exceed—
(i) $23,000, in the case of any student who has not successfully completed a program of undergraduate education, excluding loans made under section 428A or 428B; and
(ii) $65,500, in the case of any graduate or professional
student (as defined by regulations of the Secretary) and (I) including any loans which are insured by the Secretary under
this section, or by a guaranty agency, made to such student before the student became a graduate or professional student),
but (II) excluding loans made under section 428A or 428B,
except that the Secretary may increase the limit applicable to students who are pursuing programs which the Secretary determines
are exceptionally expensive.
(B) The Secretary may increase the aggregate insurable
limit applicable to students who are pursuing programs which
the Secretary determines are exceptionally expensive.
(b) LEVEL OF INSURANCE COVERAGE BASED ON DEFAULT
RATE.—
(1) REDUCTION FOR DEFAULTS IN EXCESS OF 5 OR 9 PERCENT.—(A) Except as provided in subparagraph (B), the insurance liability on any loan insured by the Secretary under this
part shall be 100 percent of the unpaid balance of the principal
amount of the loan plus interest, except that—
(i) if, for any fiscal year, the total amount of payments
under section 430 by the Secretary to any eligible lender
as described in section 435(d)(1)(D) exceeds 5 percent of
the sum of the loans made by such lender which are insured by the Secretary and which were in repayment at
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the end of the preceding fiscal year, the insurance liability
under this subsection for that portion of such excess which
represents loans insured after the applicable date with respect to such loans, as determined under subparagraph
(C), shall be equal to 90 percent of the amount of such portion; or
(ii) if, for any fiscal year, the total amount of such payments to such a lender exceeds 9 percent of such sum, the
insurance liability under this subsection for that portion of
such excess which represents loans insured after the applicable date with respect to such loans, as determined under
subparagraph (C), shall be equal to 80 percent of the
amount of such portion.
(B) Notwithstanding subparagraph (A), the provisions of
clauses (i) and (ii) of such subparagraph shall not apply to an
eligible lender as described in section 435(d)(1)(D) for the fiscal
year in which such lender begins to carry on a loan program
insured by the Secretary, or for any of the 4 succeeding fiscal
years.
(C) The applicable date with respect to a loan made by an
eligible lender as described in section 435(d)(1)(D) shall be—
(i) the 90th day after the adjournment of the next regular session of the appropriate State legislature which convenes after the date of enactment of the Education Amendments of 1976, or
(ii) if the primary source of lending capital for such
lender is derived from the sale of bonds, and the constitution of the appropriate State prohibits a pledge of such
State’s credit as security against such bonds, the day
which is one year after such 90th day.
(2) COMPUTATION OF AMOUNTS IN REPAYMENT.—For the
purpose of this subsection, the sum of the loans made by a
lender which are insured by the Secretary and which are in repayment shall be the original principal amount of loans made
by such lender which are insured by the Secretary reduced
by—
(A) the amount the Secretary has been required to pay
to discharge his or her insurance obligations under this
part;
(B) the original principal amount of loans insured by
the Secretary which have been fully repaid;
(C) the original principal amount insured on those
loans for which payment of first installment of principal
has not become due pursuant to section 427(a)(2)(B) or
such first installment need not be paid pursuant to section
427(a)(2)(C); and
(D) the original principal amount of loans repaid by
the Secretary under section 437.
(3) PAYMENTS TO ASSIGNEES.—For the purpose of this subsection, payments by the Secretary under section 430 to an assignee of the lender with respect to a loan shall be deemed
payments made to such lender.
(4) PLEDGE OF FULL FAITH AND CREDIT.—The full faith and
credit of the United States is pledged to the payment of all
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amounts which may be required to be paid under the provisions of section 430 or 437 of this part.
SEC. 426. ø20 U.S.C. 1076¿ SOURCES OF FUNDS.
Loans made by eligible lenders in accordance with this part
shall be insurable by the Secretary whether made from funds fully
owned by the lender or from funds held by the lender in a trust
or similar capacity and available for such loans.
SEC. 427. ø20 U.S.C. 1077¿ ELIGIBILITY OF STUDENT BORROWERS AND
TERMS OF FEDERALLY INSURED STUDENT LOANS.
(a) LIST OF REQUIREMENTS.—Except as provided in section
428C, a loan by an eligible lender shall be insurable by the Secretary under the provisions of this part only if—
(1) made to a student who (A) is an eligible student under
section 484, (B) has agreed to notify promptly the holder of the
loan concerning any change of address, and (C) is carrying at
least one-half the normal full-time academic workload for the
course of study the student is pursuing (as determined by the
institution); and
(2) evidenced by a note or other written agreement
which—
(A) is made without security and without endorsement;
(B) provides for repayment (except as provided in subsection (c)) of the principal amount of the loan in installments over a period of not less than 5 years (unless sooner
repaid or unless the student, during the 6 months preceding the start of the repayment period, specifically requests that repayment be made over a shorter period) nor
more than 10 years beginning 6 months after the month
in which the student ceases to carry at an eligible institution at least one-half the normal full-time academic workload as determined by the institution, except—
(i) as provided in subparagraph (C);
(ii) that the note or other written instrument may
contain such reasonable provisions relating to repayment in the event of default in the payment of interest
or in the payment of the cost of insurance premiums,
or other default by the borrower, as may be authorized
by regulations of the Secretary in effect at the time
the loan is made; and
(iii) that the lender and the student, after the student ceases to carry at an eligible institution at least
one-half the normal full-time academic workload as
determined by the institution, may agree to a repayment schedule which begins earlier, or is of shorter
duration, than required by this subparagraph, but in
the event a borrower has requested and obtained a repayment period of less than 5 years, the borrower may
at any time prior to the total repayment of the loan,
have the repayment period extended so that the total
repayment period is not less than 5 years;
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(C) provides that periodic installments of principal
need not be paid, but interest shall accrue and be paid,
during any period—
(i) during which the borrower—
(I) is pursuing at least a half-time course of
study as determined by an eligible institution; or
(II) is pursuing a course of study pursuant to
a graduate fellowship program approved by the
Secretary, or pursuant to a rehabilitation training
program for individuals with disabilities approved
by the Secretary,
except that no borrower shall be eligible for a
deferment under this clause, or a loan made under
this part (other than a loan made under section 428B
or 428C), while serving in a medical internship or residency program;
(ii) not in excess of 3 years during which the borrower is seeking and unable to find full-time employment; or
(iii) 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;
and provides that any such period shall not be included in
determining the 10-year period described in subparagraph
(B);
(D) provides for interest on the unpaid principal balance of the loan at a yearly rate, not exceeding the applicable maximum rate prescribed in section 427A, which interest shall be payable in installments over the period of the
loan except that, if provided in the note or other written
agreement, any interest payable by the student may be deferred until not later than the date upon which repayment
of the first installment of principal falls due, in which case
interest accrued during that period may be added on that
date to the principal;
(E) provides that the lender will not collect or attempt
to collect from the borrower any portion of the interest on
the note which is payable by the Secretary under this part,
and that the lender will enter into such agreements with
the Secretary as may be necessary for the purpose of section 437;
(F) entitles the student borrower to accelerate without
penalty repayment of the whole or any part of the loan;
(G)(i) contains a notice of the system, of disclosure of
information concerning such loan to consumer reporting
agencies under section 430A, and (ii) provides that the
lender on request of the borrower will provide information
on the repayment status of the note to such consumer reporting agencies;
(H) provides that, no more than 6 months prior to the
date on which the borrower’s first payment on a loan is
due, the lender shall offer the borrower the option of reMay 7, 2013
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paying the loan in accordance with a graduated or incomesensitive repayment schedule established by the lender
and in accordance with the regulations of the Secretary;
and
(I) contains such other terms and conditions, consistent with the provisions of this part and with the regulations issued by the Secretary pursuant to this part, as
may be agreed upon by the parties to such loan, including,
if agreed upon, a provision requiring the borrower to pay
the lender, in addition to principal and interest, amounts
equal to the insurance premiums payable by the lender to
the Secretary with respect to such loan;
(3) the funds borrowed by a student are disbursed to the
institution by check or other means that is payable to and requires the endorsement or other certification by such student,
except—
(A) that nothing in this title shall be interpreted—
(i) to allow the Secretary to require checks to be
made copayable to the institution and the borrower; or
(ii) to prohibit the disbursement of loan proceeds
by means other than by check; and
(B) in the case of any 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, the funds shall, at the request of the
borrower, be delivered directly to the student and the
checks may be endorsed, and fund transfers authorized,
pursuant to an authorized power-of-attorney; and
(4) the funds borrowed by a student are disbursed in accordance with section 428G.
(b) SPECIAL RULES FOR MULTIPLE DISBURSEMENT.—For the
purpose of subsection (a)(4)—
(1) all loans issued for the same period of enrollment shall
be considered as a single loan; and
(2) the requirements of such subsection shall not apply in
the case of a loan made under section 428B or 428C, or made
to a student to cover the cost of attendance at an eligible institution outside the United States.
(c) SPECIAL REPAYMENT RULES.—Except as provided in subsection (a)(2)(H), the total of the payments by a borrower during
any year of any repayment period with respect to the aggregate
amount of all loans to that borrower which are insured under this
part shall not, unless the borrower and the lender otherwise agree,
be less than $600 or the balance of all such loans (together with
interest thereon), whichever amount is less (but in no instance less
than the amount of interest due and payable).
SEC. 427A. ø20 U.S.C. 1077a¿ APPLICABLE INTEREST RATES.
(a) RATES TO BE CONSISTENT FOR BORROWER’S ENTIRE
DEBT.—
With respect to any loan to cover the cost of instruction for any period of instruction beginning on or after January 1, 1981, the rate
of interest applicable to any borrower shall—
(1) not exceed 7 percent per year on the unpaid principal
balance of the loan in the case of any borrower who, on the
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date of entering into the note or other written evidence of that
loan, has an outstanding balance of principal or interest on any
loan made, insured, or guaranteed under this part, for which
the interest rate does not exceed 7 percent;
(2) except as provided in paragraph (3), be 9 percent per
year on the unpaid principal balance of the loan in the case of
any borrower who, on the date of entering into the note or
other written evidence of that loan, has no outstanding balance
of principal or interest on any loan described in paragraph (1)
or any loan for which the interest rate is determined under
paragraph (1); or
(3) be 8 percent per year on the unpaid principal balance
of the loan for a loan to cover the cost of education for any period of enrollment beginning on or after a date which is 3
months after a determination made under subsection (b) in the
case of any borrower who, on the date of entering into the note
or other written evidence of the loan, has no outstanding balance of principal or interest on any loan for which the interest
rate is determined under paragraph (1) or (2) of this subsection.
(b) REDUCTION FOR NEW BORROWERS AFTER DECLINE IN
TREASURY BILL RATES.—If for any 12-month period beginning on or
after January 1, 1981, the Secretary, after consultation with the
Secretary of the Treasury, determines that the average of the bond
equivalent rates of 91-day Treasury bills auctioned for such 12month period is equal to or less than 9 percent, the interest rate
for loans under this part shall be the rate prescribed in subsection
(a)(3) for borrowers described in such subsection.
(c) RATES FOR SUPPLEMENTAL LOANS FOR STUDENTS AND
LOANS FOR PARENTS.—
(1) IN GENERAL.—Except as otherwise provided in this subsection, the applicable rate of interest on loans made pursuant
to section 428A or 428B on or after October 1, 1981, shall be
14 percent per year on the unpaid principal balance of the
loan.
(2) REDUCTION OF RATE AFTER DECLINE IN TREASURY BILL
RATES.—If for any 12-month period beginning on or after October 1, 1981, the Secretary, after consultation with the Secretary of the Treasury, determines that the average of the
bond equivalent rates of 91-day Treasury bills auctioned for
such 12-month period is equal to or less than 14 percent, the
applicable rate of interest for loans made pursuant to section
428A or 428B on and after the first day of the first month beginning after the date of publication of such determination
shall be 12 percent per year on the unpaid principal balance
of the loan.
(3) INCREASE OF RATE AFTER INCREASE IN TREASURY BILL
RATES.—If for any 12-month period beginning on or after the
date of publication of a determination under paragraph (2), the
Secretary, after consultation with the Secretary of the Treasury, determines that the average of the bond equivalent rates
of 91-day Treasury bills auctioned for such 12-month period exceeds 14 percent, the applicable rate of interest for loans made
pursuant to section 428A or 428B on and after the first day of
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the first month beginning after the date of publication of that
determination under this paragraph shall be 14 percent per
year on the unpaid principal balance of the loan.
(4) AVAILABILITY OF VARIABLE RATES.—(A) For any loan
made pursuant to section 428A or 428B and disbursed on or
after July 1, 1987, or any loan made pursuant to such section
prior to such date that is refinanced pursuant to section
428A(d) or 428B(d), the applicable rate of interest during any
12-month period beginning on July 1 and ending on June 30
shall be determined under subparagraph (B), except that such
rate shall not exceed 12 percent.
(B)(i) For any 12-month period beginning on July 1
and ending on or before June 30, 2001, the rate determined under this subparagraph is determined on the preceding June 1 and is equal to—
(I) the bond equivalent rate of 52-week Treasury
bills auctioned at the final auction held prior to such
June 1; plus
(II) 3.25 percent.
(ii) For any 12-month period beginning on July 1 of
2001 or any succeeding year, the rate determined under
this subparagraph is determined on the preceding June 26
and is equal to—
(I) the weekly average 1-year constant maturity
Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the last calendar week ending on or before such June 26; plus
(II) 3.25 percent.
(C) The Secretary shall determine the applicable rate of interest under subparagraph (B) after consultation with the Secretary of the Treasury and shall publish such rate in the Federal Register as soon as practicable after the date of determination.
(D) Notwithstanding subparagraph (A)—
(i) for any loan made pursuant to section 428A for
which the first disbursement is made on or after October
1, 1992—
(I) subparagraph (B) shall be applied by substituting ‘‘3.1’’ for ‘‘3.25’’; and
(II) the interest rate shall not exceed 11 percent;
and
(ii) for any loan made pursuant to section 428B for
which the first disbursement is made on or after October
1, 1992—
(I) subparagraph (B) shall be applied by substituting ‘‘3.1’’ for ‘‘3.25’’; and
(II) the interest rate shall not exceed 10 percent.
(E) Notwithstanding subparagraphs (A) and (D) for any
loan made pursuant to section 428B for which the first disbursement is made on or after July 1, 1994—
(i) subparagraph (B) shall be applied by substituting
‘‘3.1’’ for ‘‘3.25’’; and
(ii) the interest rate shall not exceed 9 percent.
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(d) INTEREST RATES FOR NEW BORROWERS AFTER JULY 1,
1988.—Notwithstanding subsections (a) and (b) of this section, with
respect to any loan (other than a loan made pursuant to sections
428A, 428B, and 428C) to cover the cost of instruction for any period of enrollment beginning on or after July 1, 1988, to any borrower who, on the date of entering into the note or other written
evidence of the loan, has no outstanding balance of principal or interest on any loan made, insured, or guaranteed under this part,
the applicable rate of interest shall be—
(1) 8 percent per year on the unpaid principal balance of
the loan during the period beginning on the date of the disbursement of the loan and ending 4 years after the commencement of repayment; and
(2) 10 percent per year on the unpaid principal balance of
the loan during the remainder of the repayment period.
(e) INTEREST RATES FOR NEW BORROWERS AFTER OCTOBER 1,
1992.—
(1) IN GENERAL.—Notwithstanding subsections (a), (b), and
(d) of this section, with respect to any loan (other than a loan
made pursuant to sections 428A, 428B and 428C) for which the
first disbursement is made on or after October 1, 1992, to any
borrower who, on the date of entering into the note or other
written evidence of the loan, has no outstanding balance of
principal or interest on any loan made, insured, or guaranteed
under section 427, 428, or 428H of this part, the applicable
rate of interest shall, during any 12-month period beginning on
July 1 and ending on June 30, be determined on the preceding
June 1 and be equal to—
(A) the bond equivalent rate of 91-day Treasury bills
auctioned at the final auction held prior to such June 1;
plus
(B) 3.10 percent,
except that such rate shall not exceed 9 percent.
(2) CONSULTATION.—The Secretary shall determine the applicable rate of interest under paragraph (1) after consultation
with the Secretary of the Treasury and shall publish such rate
in the Federal Register as soon as practicable after the date of
determination.
(f) INTEREST RATES FOR NEW LOANS AFTER JULY 1, 1994.—
(1) IN GENERAL.—Notwithstanding subsections (a), (b), (d),
and (e) of this section, with respect to any loan made, insured,
or guaranteed under this part (other than a loan made pursuant to section 428B or 428C) for which the first disbursement
is made on or after July 1, 1994, the applicable rate of interest
shall, during any 12-month period beginning on July 1 and
ending on June 30, be determined on the preceding June 1 and
be equal to—
(A) the bond equivalent rate of 91-day Treasury bills
auctioned at the final auction held prior to such June 1;
plus
(B) 3.10 percent,
except that such rate shall not exceed 8.25 percent.
(2) CONSULTATION.—The Secretary shall determine the applicable rate of interest under paragraph (1) after consultation
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284
with the Secretary of the Treasury and shall publish such rate
in the Federal Register as soon as practicable after the date of
determination.
(g) IN SCHOOL AND GRACE PERIOD RULES.—
(1) GENERAL RULE.—Notwithstanding the provisions of
subsection (f), but subject to subsection (h), with respect to any
loan under section 428 or 428H of this part for which the first
disbursement is made on or after July 1, 1995, the applicable
rate of interest for interest which accrues—
(A) prior to the beginning of the repayment period of
the loan; or
(B) during the period in which principal need not be
paid (whether or not such principal is in fact paid) by reason of a provision described in section 428(b)(1)(M) or
427(a)(2)(C),
shall not exceed the rate determined under paragraph (2).
(2) RATE DETERMINATION.—For purposes of paragraph (1),
the rate determined under this paragraph shall, during any
12-month period beginning on July 1 and ending on June 30,
be determined on the preceding June 1 and be equal to—
(A) the bond equivalent rate of 91-day Treasury bills
auctioned at the final auction prior to such June 1; plus
(B) 2.5 percent,
except that such rate shall not exceed 8.25 percent.
(3) CONSULTATION.—The Secretary shall determine the applicable rate of interest under this subsection after consultation with the Secretary of the Treasury and shall publish such
rate in the Federal Register as soon as practicable after the
date of determination.
(h) INTEREST RATES FOR NEW LOANS AFTER JULY 1, 1998.—
(1) IN GENERAL.—Notwithstanding subsections (a), (b), (d),
(e), (f), and (g) of this section, with respect to any loan made,
insured, or guaranteed under this part (other than a loan made
pursuant to sections 428B and 428C) for which the first disbursement is made on or after July 1, 1998, the applicable rate
of interest shall, during any 12-month period beginning on
July 1 and ending on June 30, be determined on the preceding
June 1 and be equal to—
(A) the bond equivalent rate of the securities with a
comparable maturity as established by the Secretary; plus
(B) 1.0 percent,
except that such rate shall not exceed 8.25 percent.
(2) INTEREST RATES FOR NEW PLUS LOANS AFTER JULY 1,
1998.—Notwithstanding subsections (a), (b), (d), (e), (f), and (g),
with respect to any loan made under section 428B for which
the first disbursement is made on or after July 1, 1998, paragraph (1) shall be applied—
(A) by substituting ‘‘2.1 percent’’ for ‘‘1.0 percent’’ in
subparagraph (B); and
(B) by substituting ‘‘9.0 percent’’ for ‘‘8.25 percent’’ in
the matter following such subparagraph.
(3) CONSULTATION.—The Secretary shall determine the applicable rate of interest under this subsection after consultation with the Secretary of the Treasury and shall publish such
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HIGHER EDUCATION ACT OF 1965
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rate in the Federal Register as soon as practicable after the
date of determination.
(i) TREATMENT OF EXCESS INTEREST PAYMENTS ON NEW BORROWER ACCOUNTS RESULTING FROM DECLINE IN TREASURY BILL
RATES.—
(1) EXCESS INTEREST ON 10 PERCENT LOANS.—If, with respect to a loan for which the applicable interest rate is 10 percent under subsection (d) of this section at the close of any calendar quarter, the sum of the average of the bond equivalent
rates of 91-day Treasury bills auctioned for that quarter and
3.25 percent is less than 10 percent, then an adjustment shall
be made to a borrower’s account—
(A) by calculating excess interest in the amount computed under paragraph (2) of this subsection; and
(B)(i) during any period in which a student is eligible
to have interest payments paid on his or her behalf by the
Government pursuant to section 428(a), by crediting the
excess interest to the Government; or
(ii) during any other period, by crediting such excess
interest to the reduction of principal to the extent provided
in paragraph (5) of this subsection.
(2) AMOUNT OF ADJUSTMENT FOR 10 PERCENT LOANS.—The
amount of any adjustment of interest on a loan to be made
under this subsection for any quarter shall be equal to—
(A) 10 percent minus the sum of (i) the average of the
bond equivalent rates of 91-day Treasury bills auctioned
for such calendar quarter, and (ii) 3.25 percent; multiplied
by
(B) the average daily principal balance of the loan (not
including unearned interest added to principal) during
such calendar quarter; divided by
(C) four.
(3) EXCESS INTEREST ON LOANS AFTER 1992 AMENDMENTS,
TO BORROWERS WITH OUTSTANDING BALANCES.—If, with respect
to a loan made on or after the date of enactment of the Higher
Education Amendments of 1992 to a borrower, who on the date
of entering into the note or other written evidence of the loan,
has an outstanding balance of principal or interest on any
other loan made, insured, or guaranteed under this part, the
sum of the average of the bond equivalent rates of 91-day
Treasury bills auctioned for that quarter and 3.1 percent is
less than the applicable interest rate, then an adjustment shall
be made—
(A) by calculating excess interest in the amount computed under paragraph (4) of this subsection; and
(B)(i) during any period in which a student is eligible
to have interest payments paid on his or her behalf by the
Government pursuant to section 428(a), by crediting the
excess interest to the Government; or
(ii) during any other period, by crediting such excess
interest to the reduction of principal to the extent provided
in paragraph (5) of this subsection.
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(4) AMOUNT OF ADJUSTMENT.—The amount of any adjustment of interest on a loan to be made under this subsection for
any quarter shall be equal to—
(A) the applicable interest rate minus the sum of (i)
the average of the bond equivalent rates of 91-day Treasury bills auctioned for such calendar quarter, and (ii) 3.1
percent; multiplied by
(B) the average daily principal balance of the loan (not
including unearned interest added to principal) during
such calendar quarter; divided by
(C) four.
(5) ANNUAL ADJUSTMENT OF INTEREST AND BORROWER ELIGIBILITY FOR CREDIT.—Any adjustment amount computed pursuant to paragraphs (2) and (4) of this subsection for any quarter shall be credited, by the holder of the loan on the last day
of the calendar year in which such quarter falls, to the loan account of the borrower so as to reduce the principal balance of
such account. No such credit shall be made to the loan account
of a borrower who on the last day of the calendar year is delinquent for more than 30 days in making a required payment on
the loan, but the excess interest shall be calculated and credited to the Secretary. Any credit which is to be made to a borrower’s account pursuant to this subsection shall be made effective commencing no later than 30 days following the last
day of the calendar year in which the quarter falls for which
the credit is being made. Nothing in this subsection shall be
construed to require refunding any repayment of a loan. At the
option of the lender, the amount of such adjustment may be
distributed to the borrower either by reduction in the amount
of the periodic payment on the loan, by reducing the number
of payments that shall be made with respect to the loan, or by
reducing the amount of the final payment of the loan. Nothing
in this paragraph shall be construed to require the lender to
make additional disclosures pursuant to section 433(b).
(6) PUBLICATION OF TREASURY BILL RATE.—For the purpose
of enabling holders of loans to make the determinations and
adjustments provided for in this subsection, the Secretary shall
for each calendar quarter commencing with the quarter beginning on July 1, 1987, publish a notice of the average of the
bond equivalent rates of 91-day Treasury bills auctioned for
such quarter. Such notice shall be published not later than 7
days after the end of the quarter to which the notice relates.
(7) CONVERSION TO VARIABLE RATE.—(A) Subject to subparagraphs (C) and (D), a lender or holder shall convert the interest rate on a loan that is made pursuant to this part and
is subject to the provisions of this subsection to a variable rate.
Such conversion shall occur not later than January 1, 1995,
and, commencing on the date of conversion, the applicable interest rate for each 12-month period beginning on July 1 and
ending on June 30 shall be determined by the Secretary on the
June 1 preceding each such 12-month period and be equal to
the sum of (i) the bond equivalent rate of the 91-day Treasury
bills auctioned at the final auction prior to such June 1; and
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(ii) 3.25 percent in the case of loans described in paragraph (1),
or 3.10 percent in the case of loans described in paragraph (3).
(B) In connection with the conversion specified in subparagraph (A) for any period prior to such conversion, and subject
to paragraphs (C) and (D), a lender or holder shall convert the
interest rate to a variable rate on a loan that is made pursuant
to this part and is subject to the provisions of this subsection
to a variable rate. The interest rates for such period shall be
reset on a quarterly basis and the applicable interest rate for
any quarter or portion thereof shall equal the sum of (i) the average of the bond equivalent rates of 91-Treasury bills auctioned for the preceding 3-month period, and (ii) 3.25 percent
in the case of loans described in paragraph (1) or 3.10 percent
in the case of loans described in paragraph (3). The rebate of
excess interest derived through this conversion shall be provided to the borrower as specified in paragraph (5) for loans
described in paragraph (1) or to the Government and borrower
as specified in paragraph (3).
(C) A lender or holder of a loan being converted pursuant
to this paragraph shall complete such conversion on or before
January 1, 1995. The lender or holder shall notify the borrower
that the loan shall be converted to a variable interest rate and
provide a description of the rate to the borrower not later than
30 days prior to the conversion. The notice shall advise the
borrower that such rate shall be calculated in accordance with
the procedures set forth in this paragraph and shall provide
the borrower with a substantially equivalent benefit as the adjustment otherwise provided for under this subsection. Such
notice may be incorporated into the disclosure required under
section 433(b) if such disclosure has not been previously made.
(D) The interest rate on a loan converted to a variable rate
pursuant to this paragraph shall not exceed the maximum interest rate applicable to the loan prior to such conversion.
(E) Loans on which the interest rate is converted in accordance with subparagraph (A) or (B) shall not be subject to
any other provisions of this subsection.
(j) INTEREST RATES FOR NEW LOANS BETWEEN JULY 1, 1998
AND OCTOBER 1, 1998.—
(1) IN GENERAL.—Notwithstanding subsection (h), but subject to paragraph (2), with respect to any loan made, insured,
or guaranteed under this part (other than a loan made pursuant to section 428B or 428C) for which the first disbursement
is made on or after July 1, 1998, and before October 1, 1998,
the applicable rate of interest shall, during any 12-month period beginning on July 1 and ending on June 30, be determined
on the preceding June 1 and be equal to—
(A) the bond equivalent rate of 91-day Treasury bills
auctioned at the final auction held prior to such June 1;
plus
(B) 2.3 percent,
except that such rate shall not exceed 8.25 percent.
(2) IN SCHOOL AND GRACE PERIOD RULES.—Notwithstanding subsection (h), with respect to any loan under this
part (other than a loan made pursuant to section 428B or
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428C) for which the first disbursement is made on or after July
1, 1998, and before October 1, 1998, the applicable rate of interest for interest which accrues—
(A) prior to the beginning of the repayment period of
the loan; or
(B) during the period in which principal need not be
paid (whether or not such principal is in fact paid) by reason of a provision described in section 428(b)(1)(M) or
427(a)(2)(C),
shall be determined under paragraph (1) by substituting ‘‘1.7
percent’’ for ‘‘2.3 percent’’.
(3) PLUS LOANS.—Notwithstanding subsection (h), with respect to any loan under section 428B for which the first disbursement is made on or after July 1, 1998, and before October
1, 1998, the applicable rate of interest shall, during any 12month period beginning on July 1 and ending on June 30, be
determined on the preceding June 1 and be equal to the lesser
of—
(A)(i) the bond equivalent rate of 91-day Treasury bills
auctioned at the final auction held prior to such June 1;
plus
(ii) 3.1 percent; or
(B) 9.0 percent.
(4) CONSULTATION.—The Secretary shall determine the applicable rate of interest under this subsection after consultation with the Secretary of the Treasury and shall publish such
rate in the Federal Register as soon as practicable after the
date of determination.
(k) INTEREST RATES FOR NEW LOANS ON OR AFTER OCTOBER 1,
1998, AND BEFORE JULY 1, 2006.—
(1) IN GENERAL.—Notwithstanding subsection (h) and subject to paragraph (2) of this subsection, with respect to any
loan made, insured, or guaranteed under this part (other than
a loan made pursuant to section 428B or 428C) for which the
first disbursement is made on or after October 1, 1998, and before July 1, 2006, the applicable rate of interest shall, during
any 12-month period beginning on July 1 and ending on June
30, be determined on the preceding June 1 and be equal to—
(A) the bond equivalent rate of 91-day Treasury bills
auctioned at the final auction held prior to such June 1;
plus
(B) 2.3 percent,
except that such rate shall not exceed 8.25 percent.
(2) IN SCHOOL AND GRACE PERIOD RULES.—Notwithstanding subsection (h), with respect to any loan under this
part (other than a loan made pursuant to section 428B or
428C) for which the first disbursement is made on or after October 1, 1998, and before July 1, 2006, the applicable rate of
interest for interest which accrues—
(A) prior to the beginning of the repayment period of
the loan; or
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son of a provision described in section 427(a)(2)(C) or
428(b)(1)(M),
shall be determined under paragraph (1) by substituting ‘‘1.7
percent’’ for ‘‘2.3 percent’’.
(3) PLUS LOANS.—Notwithstanding subsection (h), with respect to any loan under section 428B for which the first disbursement is made on or after October 1, 1998, and before July
1, 2006, the applicable rate of interest shall be determined
under paragraph (1)—
(A) by substituting ‘‘3.1 percent’’ for ‘‘2.3 percent’’; and
(B) by substituting ‘‘9.0 percent’’ for ‘‘8.25 percent’’.
(4) CONSOLIDATION LOANS.—With respect to any consolidation loan under section 428C for which the application is received by an eligible lender on or after October 1, 1998, and
before July 1, 2006, the applicable rate of interest shall be at
an annual rate on the unpaid principal balance of the loan that
is equal to the lesser of—
(A) the weighted average of the interest rates on the
loans consolidated, rounded to the nearest higher oneeighth of 1 percent; or
(B) 8.25 percent.
(5) CONSULTATION.—The Secretary shall determine the applicable rate of interest under this subsection after consultation with the Secretary of the Treasury and shall publish such
rate in the Federal Register as soon as practicable after the
date of determination.
(l) INTEREST RATES FOR NEW LOANS ON OR AFTER JULY 1, 2006
and Before July 1, 2010.—
(1) IN GENERAL.—Notwithstanding subsection (h), with respect to any loan made, insured, or guaranteed under this part
(other than a loan made pursuant to section 428B or 428C) for
which the first disbursement is made on or after July 1, 2006,
and before July 1, 2010, the applicable rate of interest shall be
6.8 percent on the unpaid principal balance of the loan.
(2) PLUS LOANS.—Notwithstanding subsection (h), with respect to any loan under section 428B for which the first disbursement is made on or after July 1, 2006, and before July
1, 2010, the applicable rate of interest shall be 8.5 percent on
the unpaid principal balance of the loan.
(3) CONSOLIDATION LOANS.—With respect to any consolidation loan under section 428C for which the application is received by an eligible lender on or after July 1, 2006, and that
was disbursed before July 1, 2010, the applicable rate of interest shall be at an annual rate on the unpaid principal balance
of the loan that is equal to the lesser of—
(A) the weighted average of the interest rates on the
loans consolidated, rounded to the nearest higher oneeighth of 1 percent; or
(B) 8.25 percent.
(4) REDUCED RATES FOR UNDERGRADUATE SUBSIDIZED
LOANS.—Notwithstanding subsection (h) and paragraph (1) of
this subsection, with respect to any loan to an undergraduate
student made, insured, or guaranteed under this part (other
than a loan made pursuant to section 428B, 428C, or 428H) for
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which the first disbursement is made on or after July 1, 2006,
and before July 1, 2010, the applicable rate of interest shall be
as follows:
(A) For a loan for which the first disbursement is
made on or after July 1, 2006, and before July 1, 2008, 6.8
percent on the unpaid principal balance of the loan.
(B) For a loan for which the first disbursement is
made on or after July 1, 2008, and before July 1, 2009, 6.0
percent on the unpaid principal balance of the loan.
(C) For a loan for which the first disbursement is
made on or after July 1, 2009, and before July 1, 2010, 5.6
percent on the unpaid principal balance of the loan.
(m) LESSER RATES PERMITTED.—Nothing in this section or section 428C shall be construed to prohibit a lender from charging a
borrower interest at a rate less than the rate which is applicable
under this part.
(n) DEFINITIONS.—For the purpose of subsections (a) and (d) of
this section—
(1) the term ‘‘period of instruction’’ shall, at the discretion
of the lender, be any academic year, semester, trimester, quarter, or other academic period; or shall be the period for which
the loan is made as determined by the institution of higher
education; and
(2) the term ‘‘period of enrollment’’ shall be the period for
which the loan is made as determined by the institution of
higher education and shall coincide with academic terms such
as academic year, semester, trimester, quarter, or other academic period as defined by such institution.
SEC. 428. ø20 U.S.C. 1078¿ FEDERAL PAYMENTS TO REDUCE STUDENT
INTEREST COSTS.
(a) FEDERAL INTEREST SUBSIDIES.—
(1) TYPES OF LOANS THAT QUALIFY.—Each student who has
received a loan for study at an eligible institution for which the
first disbursement is made before July 1, 2010, and—
(A) which is insured by the Secretary under this part;
or
(B) which is insured under a program of a State or of
a nonprofit private institution or organization which was
contracted for, and paid to the student, within the period
specified in paragraph (5), and which—
(i) in the case of a loan insured prior to July 1,
1967, was made by an eligible lender and is insured
under a program which meets the requirements of
subparagraph (E) of subsection (b)(1) and provides
that repayment of such loan shall be in installments
beginning not earlier than 60 days after the student
ceases to pursue a course of study (as described in
subparagraph (D) of subsection (b)(1)) at an eligible institution, or
(ii) in the case of a loan insured after June 30,
1967, was made by an eligible lender and is insured
under a program covered by an agreement made pursuant to subsection (b),
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shall be entitled to have paid on his or her behalf and for his
or her account to the holder of the loan a portion of the interest on such loan under circumstances described in paragraph
(2).
(2) ADDITIONAL REQUIREMENTS TO RECEIVE SUBSIDY.—(A)
Each student qualifying for a portion of an interest payment
under paragraph (1) shall—
(i) have provided to the lender a statement from the
eligible institution, at which the student has been accepted
for enrollment, or at which the student is in attendance,
which—
(I) sets forth the loan amount for which the student shows financial need; and
(II) sets forth a schedule for disbursement of the
proceeds of the loan in installments, consistent with
the requirements of section 428G;
(ii) meet the requirements of subparagraph (B); and
(iii) 1 have provided to the lender at the time of
application for a loan made, insured, or guaranteed
under this part, the student’s driver’s number, if any.
(B) For the purpose of clause (ii) of subparagraph (A), a
student shall qualify for a portion of an interest payment
under paragraph (1) if the eligible institution has determined
and documented the student’s amount of need for a loan based
on the student’s estimated cost of attendance, estimated financial assistance, and, for the purpose of an interest payment
pursuant to this section, expected family contribution (as determined under part F), subject to the provisions of subparagraph (D).
(C) For the purpose of this paragraph—
(i) a student’s cost of attendance shall be determined
under section 472;
(ii) a student’s estimated financial assistance means,
for the period for which the loan is sought—
(I) the amount of assistance such student will receive under subpart 1 of part A (as determined in accordance with section 484(b)), subpart 3 of part A, and
parts C and E; plus
(II) other scholarship, grant, or loan assistance,
but excluding—
(aa) any national service education award or
post-service benefit under title I of the National
and Community Service Act of 1990; and
(bb) any veterans’ education benefits as defined in section 480(c); and
(iii) the determination of need and of the amount of a
loan by an eligible institution under subparagraph (B)
with respect to a student shall be calculated in accordance
with part F.
(D) An eligible institution may not, in carrying out the provisions of subparagraphs (A) and (B) of this paragraph, provide
a statement which certifies the eligibility of any student to re1 Margin
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ceive any loan under this part in excess of the maximum
amount applicable to such loan.
(E) For the purpose of subparagraphs (B) and (C) of this
paragraph, any loan obtained by a student under section 428A
or 428H or a parent under section 428B of this Act or under
any State-sponsored or private loan program for an academic
year for which the determination is made may be used to offset
the expected family contribution of the student for that year.
(3) AMOUNT OF INTEREST SUBSIDY.—(A)(i) Subject to section 438(c), the portion of the interest on a loan which a student is entitled to have paid, on behalf of and for the account
of the student, to the holder of the loan pursuant to paragraph
(1) of this subsection shall be equal to the total amount of the
interest on the unpaid principal amount of the loan—
(I) 1 which accrues prior to the date the student ceases to carry at least one-half the normal
full-time academic workload (as determined by the
institution), or
(II) which accrues during a period in which principal
need not be paid (whether or not such principal is in fact
paid) by reason of a provision described in subsection
(b)(1)(M) of this section or in section 427(a)(2)(C).
(ii) Such portion of the interest on a loan shall not exceed,
for any period, the amount of the interest on that loan which
is payable by the student after taking into consideration the
amount of any interest on that loan which the student is entitled to have paid on his or her behalf for that period under any
State or private loan insurance program.
(iii) The holder of a loan with respect to which payments
are required to be made under this section shall be deemed to
have a contractual right, as against the United States, to receive from the Secretary the portion of interest which has been
so determined without administrative delay after the receipt
by the Secretary of an accurate and complete request for payment pursuant to paragraph (4).
(iv) The Secretary shall pay this portion of the interest to
the holder of the loan on behalf of and for the account of the
borrower at such times as may be specified in regulations in
force when the applicable agreement entered into pursuant to
subsection (b) was made, or, if the loan was made by a State
or is insured under a program which is not covered by such an
agreement, at such times as may be specified in regulations in
force at the time the loan was paid to the student.
(v) A lender may not receive interest on a loan for any period that precedes the date that is—
(I) in the case of a loan disbursed by check, 10 days
before the first disbursement of the loan;
1 Subclause (I) of section 428(a)(3)(A)(i) was amended ‘‘to read as follows:’’ by section 309(d)(1)
of division F of Public Law 112–74, which has been carried out above. Paragraph (2) of such
section 309(d) reads: ‘‘The amendment made by paragraph (1) shall apply to new Federal Direct
Stafford Loans made on or after July 1, 2012 and before July 1, 2014’’. For loans made before
July 1, 2012, the applicable provision of law is as follows:
‘‘(I) which accrues prior to the beginning of the repayment period of the loan, or’’
Margin of new subclause (I) (as added by such Public Law is so in law.
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(II) in the case of a loan disbursed by electronic funds
transfer, 3 days before the first disbursement of the loan;
or
(III) in the case of a loan disbursed through an escrow
agent, 3 days before the first disbursement of the loan.
(B) If—
(i) a State student loan insurance program is covered
by an agreement under subsection (b),
(ii) a statute of such State limits the interest rate on
loans insured by such program to a rate which is less than
the applicable interest rate under this part, and
(iii) the Secretary determines that subsection (d) does
not make such statutory limitation inapplicable and that
such statutory limitation threatens to impede the carrying
out of the purpose of this part,
then the Secretary may pay an administrative cost allowance
to the holder of each loan which is insured under such program
and which is made during the period beginning on the 60th
day after the date of enactment of the Higher Education
Amendments of 1968 and ending 120 days after the adjournment of such State’s first regular legislative session which adjourns after January 1, 1969. Such administrative cost allowance shall be paid over the term of the loan in an amount per
year (determined by the Secretary) which shall not exceed 1
percent of the unpaid principal balance of the loan.
(4) SUBMISSION OF STATEMENTS BY HOLDERS ON AMOUNT OF
PAYMENT.—Each holder of a loan with respect to which payments of interest are required to be made by the Secretary
shall submit to the Secretary, at such time or times and in
such manner as the Secretary may prescribe, statements containing such information as may be required by or pursuant to
regulation for the purpose of enabling the Secretary to determine the amount of the payment which he must make with respect to that loan.
(5) DURATION OF AUTHORITY TO MAKE INTEREST SUBSIDIZED
LOANS.—The period referred to in subparagraph (B) of paragraph (1) of this subsection shall begin on the date of enactment of this Act and end at the close of June 30, 2010.
(6) ASSESSMENT OF BORROWER’S FINANCIAL CONDITION NOT
PROHIBITED OR REQUIRED.—Nothing in this or any other Act
shall be construed to prohibit or require, unless otherwise specifically provided by law, a lender to evaluate the total financial situation of a student making application for a loan under
this part, or to counsel a student with respect to any such loan,
or to make a decision based on such evaluation and counseling
with respect to the dollar amount of any such loan.
(7) LOANS THAT HAVE NOT BEEN CONSUMMATED.—Lenders
may not charge interest or receive interest subsidies or special
allowance payments for loans for which the disbursement
checks have not been cashed or for which electronic funds
transfers have not been completed.
(b) INSURANCE PROGRAM AGREEMENTS TO QUALIFY LOANS FOR
INTEREST SUBSIDIES.—
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(1) REQUIREMENTS OF INSURANCE PROGRAM.—Any State or
any nonprofit private institution or organization may enter
into an agreement with the Secretary for the purpose of entitling students who receive loans which are insured under a
student loan insurance program of that State, institution, or
organization to have made on their behalf the payments provided for in subsection (a) if the Secretary determines that the
student loan insurance program—
(A) authorizes the insurance in any academic year, as
defined in section 481(a)(2), or its equivalent (as determined under regulations of the Secretary) for any student
who is carrying at an eligible institution or in a program
of study abroad approved for credit by the eligible home institution at which such student is enrolled at least one-half
the normal full-time academic workload (as determined by
the institution) in any amount up to a maximum of—
(i) in the case of a student at an eligible institution who has not successfully completed the first year
of a program of undergraduate education—
(I) $3,500, if such student is enrolled in a program whose length is at least one academic year
in length; and
(II) if such student is enrolled in a program of
undergraduate education which is less than 1 academic year, the maximum annual loan amount
that such student may receive may not exceed the
amount that bears the same ratio to the amount
specified in subclause (I) as the length of such program measured in semester, trimester, quarter, or
clock hours bears to 1 academic year;
(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) $4,500; or
(II) if such student is enrolled in a program of
undergraduate education, the remainder of which
is less than one academic year, the maximum annual loan amount that such student may receive
may not exceed the amount that bears the same
ratio to the amount specified in subclause (I) as
such remainder measured in semester, trimester,
quarter, or clock hours bears to one academic
year;
(iii) in the case of a student at an eligible institution who has successfully completed the first and second years of a program of undergraduate education
but has not successfully completed the remainder of
such program—
(I) $5,500; or
(II) if such student is enrolled in a program of
undergraduate education, the remainder of which
is less than one academic year, the maximum annual loan amount that such student may receive
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may not exceed the amount that bears the same
ratio to the amount specified in subclause (I) as
such remainder measured in semester, trimester,
quarter, or clock hours bears to one academic
year;
(iv) in the case of a student who has received an
associate or baccalaureate degree and is enrolled in an
eligible program for which the institution requires
such degree for admission, the number of years that a
student has completed in a program of undergraduate
education shall, for the purposes of clauses (ii) and
(iii), include any prior enrollment in the eligible program of undergraduate education for which the student was awarded such degree;
(v) in the case of a graduate or professional student (as defined in regulations of the Secretary) at an
eligible institution, $8,500; and
(vi) in the case of a student enrolled in coursework
specified in sections 484(b)(3)(B) and 484(b)(4)(B)—
(I) $2,625 for coursework necessary for enrollment in an undergraduate degree or certificate
program, and, in the case of a student who has obtained a baccalaureate degree, $5,500 for
coursework necessary for enrollment in a graduate
or professional degree or certification program;
and
(II) in the case of a student who has obtained
a baccalaureate degree, $5,500 for coursework necessary for a professional credential or certification
from a State required for employment as a teacher
in an elementary school or secondary school;
except in cases where the Secretary determines, pursuant
to regulations, that a higher amount is warranted in order
to carry out the 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;
(B) provides that the aggregate insured unpaid principal amount for all such insured loans made to any student shall be any amount up to a maximum of—
(i) $23,000, in the case of any student who has not
successfully completed a program of undergraduate
education, excluding loans made under section 428A or
428B; and
(ii) $65,500, in the case of any graduate or professional student (as defined by regulations of the Secretary), and (I) including any loans which are insured
by the Secretary under this section, or by a guaranty
agency, made to such student before the student became a graduate or professional student, but (II) excluding loans made under section 428A or 428B,
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except that the Secretary may increase the limit applicable
to students who are pursuing programs which the Secretary determines are exceptionally expensive;
(C) authorizes the insurance of loans to any individual
student for at least 6 academic years of study or their
equivalent (as determined under regulations of the Secretary);
(D) provides that (i) the student borrower shall be entitled to accelerate without penalty the whole or any part
of an insured loan, (ii) the student borrower may annually
change the selection of a repayment plan under this part,
and (iii) the note, or other written evidence of any loan,
may contain such reasonable provisions relating to repayment in the event of default by the borrower as may be authorized by regulations of the Secretary in effect at the
time such note or written evidence was executed, and shall
contain a notice that repayment may, following a default
by the borrower, be subject to income contingent repayment in accordance with subsection (m);
(E) subject to subparagraphs (D) and (L), and except
as provided by subparagraph (M), provides that—
(i) not more than 6 months prior to the date on
which the borrower’s first payment is due, the lender
shall offer the borrower of a loan made, insured, or
guaranteed under this section or section 428H, the option of repaying the loan in accordance with a standard, graduated, income-sensitive, or extended repayment schedule (as described in paragraph (9)) established by the lender in accordance with regulations of
the Secretary; and
(ii) repayment of loans shall be in installments in
accordance with the repayment plan selected under
paragraph (9) and commencing at the beginning of the
repayment period determined under paragraph (7);
(F) authorizes interest on the unpaid balance of the
loan at a yearly rate not in excess (exclusive of any premium for insurance which may be passed on to the borrower) of the rate required by section 427A;
(G) insures 98 percent of the unpaid principal of loans
insured under the program, except that—
(i) such program shall insure 100 percent of the
unpaid principal of loans made with funds advanced
pursuant to section 428(j);
(ii) for any loan for which the first disbursement
of principal is made on or after July 1, 2006, and before July 1, 2010, the preceding provisions of this subparagraph shall be applied by substituting ‘‘97 percent’’ for ‘‘98 percent’’; and
(iii) notwithstanding the preceding provisions of
this subparagraph, such program shall insure 100 percent of the unpaid principal amount of exempt claims
as defined in subsection (c)(1)(G);
(H) provides—
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(i) for loans for which the date of guarantee of
principal is before July 1, 2006, for the collection of a
single insurance premium equal to not more than 1.0
percent of the principal amount of the loan, by deduction proportionately from each installment payment of
the proceeds of the loan to the borrower, and ensures
that the proceeds of the premium will not be used for
incentive payments to lenders; or
(ii) for loans for which the date of guarantee of
principal is on or after July 1, 2006, and that are first
disbursed before July 1, 2010, for the collection, and
the deposit into the Federal Student Loan Reserve
Fund under section 422A of a Federal default fee of an
amount equal to 1.0 percent of the principal amount
of the loan, which fee shall be collected either by deduction from the proceeds of the loan or by payment
from other non-Federal sources, and ensures that the
proceeds of the Federal default fee will not be used for
incentive payments to lenders;
(I) provides that the benefits of the loan insurance program will not be denied any student who is eligible for interest benefits under subsection (a) (1) and (2);
(J) provides that a student may obtain insurance
under the program for a loan for any year of study at an
eligible institution;
(K) in the case of a State program, provides that such
State program is administered by a single State agency, or
by one or more nonprofit private institutions or organizations under supervision of a single State agency;
(L) provides that the total of the payments by a borrower—
(i) except as otherwise provided by a repayment
plan selected by the borrower under clause (ii), (iii), or
(v) of paragraph (9)(A), during any year of any repayment period with respect to the aggregate amount of
all loans to that borrower which are insured under
this part shall not, unless the borrower and the lender
otherwise agree, be less than $600 or the balance of all
such loans (together with interest thereon), whichever
amount is less (but in no instance less than the
amount of interest due and payable, notwithstanding
any payment plan under paragraph (9)(A)); and
(ii) for a monthly or other similar payment period
with respect to the aggregate of all loans held by the
lender may, when the amount of a monthly or other
similar payment is not a multiple of $5, be rounded to
the next highest whole dollar amount that is a multiple of $5;
(M) provides that periodic installments of principal
need not be paid, but interest shall accrue and be paid by
the Secretary, during any period—
(i) during which the borrower—
(I) is pursuing at least a half-time course of
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cept that no borrower, notwithstanding the provisions of the promissory note, shall be required to
borrow an additional loan under this title in order
to be eligible to receive a deferment under this
clause; or
(II) is pursuing a course of study pursuant to
a graduate fellowship program approved by the
Secretary, or pursuant to a rehabilitation training
program for disabled individuals approved by the
Secretary,
except that no borrower shall be eligible for a
deferment under this clause, or loan made under this
part (other than a loan made under section 428B or
428C), while serving in a medical internship or residency program;
(ii) 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;
(iii) 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,
and for the 180-day period following the demobilization date for the service described in subclause (I) or
(II); or
(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;
(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
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lender or guaranty agency by the means described in
clause (i).
(O) provides that the proceeds of the loans will be disbursed in accordance with the requirements of section
428G;
(P) requires the borrower to notify the institution concerning any change in local address during enrollment and
requires the borrower and the institution at which the borrower is in attendance promptly to notify the holder of the
loan, directly or through the guaranty agency, concerning
(i) any change of permanent address, (ii) when the student
ceases to be enrolled on at least a half-time basis, and (iii)
any other change in status, when such change in status affects the student’s eligibility for the loan;
(Q) provides for the guarantee of loans made to students and parents under sections 428A and 428B;
(R) with respect to lenders which are eligible institutions, provides for the insurance of loans by only such institutions as are located within the geographic area served
by such guaranty agency;
(S) provides no restrictions with respect to the insurance of loans for students who are otherwise eligible for
loans under such program if such a student is accepted for
enrollment in or is attending an eligible institution within
the State, or if such a student is a legal resident of the
State and is accepted for enrollment in or is attending an
eligible institution outside that State;
(T) authorizes (i) the limitation of the total number of
loans or volume of loans, made under this part to students
attending a particular eligible institution during any academic year; and (ii) the emergency action, limitation, suspension, or termination of the eligibility of an eligible institution if—
(I) such institution is ineligible for the emergency
action, limitation, suspension, or termination of eligible institutions under regulations issued by the Secretary or is ineligible pursuant to criteria, rules, or
regulations issued under the student loan insurance
program which are substantially the same as regulations with respect to emergency action, limitation, suspension, or termination of such eligibility issued by
the Secretary;
(II) there is a State constitutional prohibition affecting the eligibility of such an institution;
(III) such institution fails to make timely refunds
to students as required by regulations issued by the
Secretary or has not satisfied within 30 days of
issuance a final judgment obtained by a student seeking such a refund;
(IV) such institution or an owner, director, or officer of such institution is found guilty in any criminal,
civil, or administrative proceeding, or such institution
or an owner, director, or officer of such institution is
found liable in any civil or administrative proceeding,
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regarding the obtaining, maintenance, or disbursement of State or Federal grant, loan, or work assistance funds; or
(V) such institution or an owner, director, or officer of such institution has unpaid financial liabilities
involving the improper acquisition, expenditure, or refund of State or Federal financial assistance funds;
except that, if a guaranty agency limits, suspends, or terminates the participation of an eligible institution, the Secretary shall apply that limitation, suspension, or termination to all locations of such institution, unless the Secretary finds, within 30 days of notification of the action by
the guaranty agency, that the guaranty agency’s action did
not comply with the requirements of this section;
(U) provides (i) for the eligibility of all lenders described in section 435(d)(1) under reasonable criteria, unless (I) that lender is eliminated as a lender under regulations for the emergency action, limitation, suspension, or
termination of a lender under the Federal student loan insurance program or is eliminated as a lender pursuant to
criteria issued under the student loan insurance program
which are substantially the same as regulations with respect to such eligibility as a lender issued under the Federal student loan insurance program, or (II) there is a
State constitutional prohibition affecting the eligibility of a
lender, (ii) assurances that the guaranty agency will report
to the Secretary concerning changes in such criteria, including any procedures in effect under such program to
take emergency action, limit, suspend, or terminate lenders, and (iii) for (I) a compliance audit of each lender that
originates or holds more than $5,000,000 in loans made
under this title for any lender fiscal year (except that each
lender described in section 435(d)(1)(A)(ii)(III) shall annually submit the results of an audit required by this clause),
at least once a year and covering the period since the most
recent audit, conducted by a qualified, independent organization or person in accordance with standards established
by the Comptroller General for the audit of governmental
organizations, programs, and functions, and as prescribed
in regulations of the Secretary, the results of which shall
be submitted to the Secretary, or (II) with regard to a
lender that is audited under chapter 75 of title 31, United
States Code, such audit shall be deemed to satisfy the requirements of subclause (I) for the period covered by such
audit, except that the Secretary may waive the requirements of this clause (iii) if the lender submits to the Secretary the results of an audit conducted for other purposes
that the Secretary determines provides the same information as the audits required by this clause;
(V) provides authority for the guaranty agency to require a participation agreement between the guaranty
agency and each eligible institution within the State in
which it is designated, as a condition for guaranteeing
loans made on behalf of students attending the institution;
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(W) provides assurances that the agency will implement all requirements of the Secretary for uniform claims
and procedures pursuant to section 432(l);
(X) provides information to the Secretary in accordance with section 428(c)(9) and maintains reserve funds
determined by the Secretary to be sufficient in relation to
such agency’s guarantee obligations; and
(Y) provides that—
(i) the lender shall determine the eligibility of a
borrower for a deferment described in subparagraph
(M)(i) based on—
(I) receipt of a request for deferment from the
borrower and documentation of the borrower’s eligibility for the deferment;
(II) receipt of a newly completed loan application that documents the borrower’s eligibility for a
deferment;
(III) receipt of student status information documenting that the borrower is enrolled on at least
a half-time basis; or
(IV) the lender’s confirmation of the borrower’s half-time enrollment status through use of
the National Student Loan Data System, if the
confirmation is requested by the institution of
higher education;
(ii) the lender will notify the borrower of the
granting of any deferment under clause (i)(II) or (III)
of this subparagraph and of the option to continue
paying on the loan; and
(iii) the lender shall, at the time the lender grants
a deferment to a borrower who received a loan under
section 428H and is eligible for a deferment under
subparagraph (M) of this paragraph, provide information to the borrower to assist the borrower in understanding the impact of the capitalization of interest on
the borrower’s loan principal and on the total amount
of interest to be paid during the life of the loan.
(2) CONTENTS OF INSURANCE PROGRAM AGREEMENT.—Such
an agreement shall—
(A) provide that the holder of any such loan will be required to submit to the Secretary, at such time or times
and in such manner as the Secretary may prescribe, statements containing such information as may be required by
or pursuant to regulation for the purpose of enabling the
Secretary to determine the amount of the payment which
must be made with respect to that loan;
(B) include such other provisions as may be necessary
to protect the United States from the risk of unreasonable
loss and promote the purpose of this part, including such
provisions as may be necessary for the purpose of section
437, and as are agreed to by the Secretary and the guaranty agency, as the case may be;
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tion, as the Secretary may reasonably require to carry out
the Secretary’s functions under this part and protect the financial interest of the United States, and for keeping such
records and for affording such access thereto as the Secretary may find necessary to assure the correctness and
verification of such reports;
(D) provide for—
(i) conducting, except as provided in clause (ii), financial and compliance audits of the guaranty agency
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; or
(ii) with regard to a guaranty program of a State
which is audited under chapter 75 of title 31, United
States Code, deeming such audit to satisfy the requirements of clause (i) for the period of time covered by
such audit;
(E)(i) provide that any guaranty agency may transfer
loans which are insured under this part to any other guaranty agency with the approval of the holder of the loan
and such other guaranty agency; and
(ii) provide that the lender (or the holder of the loan)
shall, not later than 120 days after the borrower has left
the eligible institution, notify the borrower of the date on
which the repayment period begins; and
(F) provide that, if the sale, other transfer, or assignment of a loan made under this part to another holder will
result in a change in the identity of the party to whom the
borrower must send subsequent payments or direct any
communications concerning the loans, then—
(i) the transferor and the transferee will be required, not later than 45 days from the date the transferee acquires a legally enforceable right to receive
payment from the borrower on such loan, either jointly
or separately to provide a notice to the borrower of—
(I) the sale or other transfer;
(II) the identity of the transferee;
(III) the name and address of the party to
whom subsequent payments or communications
must be sent;
(IV) the telephone numbers of both the transferor and the transferee;
(V) the effective date of the transfer;
(VI) the date on which the current servicer (as
of the date of the notice) will stop accepting payments; and
(VII) the date on which the new servicer will
begin accepting payments; and
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(ii) the transferee will be required to notify the
guaranty agency, and, upon the request of an institution of higher education, the guaranty agency shall notify the last such institution the student attended
prior to the beginning of the repayment period of any
loan made under this part, of—
(I) any sale or other transfer of the loan; and
(II) the address and telephone number by
which contact may be made with the new holder
concerning repayment of the loan,
except that this subparagraph (F) shall only apply if the
borrower is in the grace period described in section
427(a)(2)(B) or 428(b)(7) or is in repayment status.
(3) RESTRICTIONS ON INDUCEMENTS, PAYMENTS, MAILINGS,
AND ADVERTISING.—A guaranty agency shall not—
(A) offer, directly or indirectly, premiums, payments,
stock or other securities, prizes, travel, entertainment expenses, tuition payment or reimbursement, or other inducements to—
(i) any institution of higher education, any employee of an institution of higher education, or any individual or entity in order to secure applicants for
loans made under this part; or
(ii) any lender, or any agent, employee, or independent contractor of any lender or guaranty agency,
in order to administer or market loans made under
this part (other than a loan made as part of the guaranty agency’s lender-of-last-resort program pursuant
to section 428(j)), for the purpose of securing the designation of the guaranty agency as the insurer of such
loans;
(B) conduct unsolicited mailings, by postal or electronic means, of student loan application forms to students
enrolled in secondary schools or postsecondary educational
institutions, or to the families of such students, except that
applications may be mailed, by postal or electronic means,
to students or borrowers who have previously received
loans guaranteed under this part by the guaranty agency;
(C) perform, for an institution of higher education participating in a program under this title, any function that
such institution is required to perform under this title, except that the guaranty agency may perform functions on
behalf of such institution in accordance with section 485(b)
or 485(l);
(D) pay, on behalf of an institution of higher education, another person to perform any function that such
institution is required to perform under this title, except
that the guaranty agency may perform functions on behalf
of such institution in accordance with section 485(b) or
485(l); or
(E) conduct fraudulent or misleading advertising concerning loan availability, terms, or conditions.
It shall not be a violation of this paragraph for a guaranty
agency to provide technical assistance to institutions of higher
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education comparable to the technical assistance provided to
institutions of higher education by the Department.
(4) SPECIAL RULE.—With respect to the graduate fellowship
program referred to in paragraph (1)(M)(i)(II), the Secretary
shall approve any course of study at a foreign university that
is accepted for the completion of a recognized international fellowship program by the administrator of such a program. Requests for deferment of repayment of loans under this part by
students engaged in graduate or postgraduate fellowship-supported study (such as pursuant to a Fulbright grant) outside
the United States shall be approved until completion of the period of the fellowship.
(5) GUARANTY AGENCY INFORMATION TRANSFERS.—(A) Until
such time as the Secretary has implemented section 485B and
is able to provide to guaranty agencies the information required by such section, any guaranty agency may request information regarding loans made after January 1, 1987, to students who are residents of the State for which the agency is
the designated guarantor, from any other guaranty agency insuring loans to such students.
(B) Upon a request pursuant to subparagraph (A), a guaranty agency shall provide—
(i) the name and the social security number of the borrower; and
(ii) the amount borrowed and the cumulative amount
borrowed.
(C) Any costs associated with fulfilling the request of a
guaranty agency for information on students shall be paid by
the guaranty agency requesting the information.
(6) STATE GUARANTY AGENCY INFORMATION REQUEST OF
STATE LICENSING BOARDS.—Each guaranty agency is authorized
to enter into agreements with each appropriate State licensing
board under which the State licensing board, upon request,
will furnish the guaranty agency with the address of a student
borrower in any case in which the location of the student borrower is unknown or unavailable to the guaranty agency.
(7) REPAYMENT PERIOD.—(A) In the case of a loan made
under section 427 or 428, the repayment period shall exclude
any period of authorized deferment or forbearance and shall
begin the day after 6 months after the date the student ceases
to carry at least one-half the normal full-time academic workload (as determined by the institution).
(B) In the case of a loan made under section 428H, the repayment period shall exclude any period of authorized
deferment or forbearance, and shall begin as described in subparagraph (A), but interest shall begin to accrue or be paid by
the borrower on the day the loan is disbursed.
(C) In the case of a loan made under section 428B or 428C,
the repayment period shall begin on the day the loan is disbursed, or, if the loan is disbursed in multiple installments, on
the day of the last such disbursement, and shall exclude any
period of authorized deferment or forbearance.
(D) There shall be excluded from the 6-month period that
begins on the date on which a student ceases to carry at least
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one-half the normal full-time academic workload as described
in subparagraph (A) any period not to exceed 3 years during
which a borrower who is a member of a reserve component of
the Armed Forces named in section 10101 of title 10, United
States Code, is called or ordered to active duty for a period of
more than 30 days (as defined in section 101(d)(2) of such
title). Such period of exclusion shall include the period necessary to resume enrollment at the borrower’s next available
regular enrollment period.
(8) MEANS OF DISBURSEMENT OF LOAN PROCEEDS.—Nothing
in this title shall be interpreted to prohibit the disbursement
of loan proceeds by means other than by check or to allow the
Secretary to require checks to be made co-payable to the institution and the borrower.
(9) REPAYMENT PLANS.—
(A) DESIGN AND SELECTION.—In accordance with regulations promulgated by the Secretary, the lender shall
offer a borrower of a loan made under this part the plans
described in this subparagraph for repayment of such loan,
including principal and interest thereon. No plan may require a borrower to repay a loan in less than 5 years unless the borrower, during the 6 months immediately preceding the start of the repayment period, specifically requests that repayment be made over of a shorter period.
The borrower may choose from—
(i) a standard repayment plan, with a fixed annual repayment amount paid over a fixed period of
time, not to exceed 10 years;
(ii) a graduated repayment plan paid over a fixed
period of time, not to exceed 10 years;
(iii) an income-sensitive repayment plan, with income-sensitive repayment amounts paid over a fixed
period of time, not to exceed 10 years, except that the
borrower’s scheduled payments shall not be less than
the amount of interest due;
(iv) for new borrowers on or after the date of enactment of the Higher Education Amendments of 1998
who accumulate (after such date) outstanding loans
under this part totaling more than $30,000, an extended repayment plan, with a fixed annual or graduated repayment amount paid over an extended period
of time, not to exceed 25 years, except that the borrower shall repay annually a minimum amount determined in accordance with paragraph (1)(L)(i); and
(v) beginning July 1, 2009, an income-based repayment plan that enables a borrower who has a partial financial hardship to make a lower monthly payment in accordance with section 493C, except that the
plan described in this clause shall not be available to
a borrower for a loan under section 428B made on behalf of a dependent student or for a consolidation loan
under section 428C, if the proceeds of such loan were
used to discharge the liability of a loan under section
428B made on behalf of a dependent student.
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(B) LENDER SELECTION OF OPTION IF BORROWER DOES
NOT SELECT.—If a borrower of a loan made under this part
does not select a repayment plan described in subparagraph (A), the lender shall provide the borrower with a repayment plan described in subparagraph (A)(i).
(c) GUARANTY AGREEMENTS FOR REIMBURSING LOSSES.—
(1) AUTHORITY TO ENTER INTO AGREEMENTS.—(A) The Secretary may enter into a guaranty agreement with any guaranty agency, whereby the Secretary shall undertake to reimburse it, under such terms and conditions as the Secretary
may establish, with respect to losses (resulting from the default of the student borrower) on the unpaid balance of the
principal and accrued interest of any insured loan. The guaranty agency shall, be deemed to have a contractual right
against the United States, during the life of such loan, to receive reimbursement according to the provisions of this subsection. Upon receipt of an accurate and complete request by
a guaranty agency for reimbursement with respect to such
losses, the Secretary shall pay promptly and without administrative delay. Except as provided in subparagraph (B) of this
paragraph and in paragraph (7), the amount to be paid a guaranty agency as reimbursement under this subsection shall be
equal to 95 percent of the amount expended by it in discharge
of its insurance obligation incurred under its loan insurance
program. A guaranty agency shall file a claim for reimbursement with respect to losses under this subsection within 30
days after the guaranty agency discharges its insurance obligation on the loan.
(B) Notwithstanding subparagraph (A)—
(i) if, for any fiscal year, the amount of such reimbursement payments by the Secretary under this subsection exceeds 5 percent of the loans which are insured by
such guaranty agency under such program and which were
in repayment at the end of the preceding fiscal year, the
amount to be paid as reimbursement under this subsection
for such excess shall be equal to 85 1 percent of the amount
of such excess; and
(ii) if, for any fiscal year, the amount of such reimbursement payments exceeds 9 percent of such loans, the
amount to be paid as reimbursement under this subsection
for such excess shall be equal to 75 1 percent of the amount
of such excess.
(C) For the purpose of this subsection, the amount of loans
of a guaranty agency which are in repayment shall be the
original principal amount of loans made by a lender which are
insured by such a guaranty agency reduced by—
(i) the amount the insurer has been required to pay to
discharge its insurance obligations under this part;
(ii) the original principal amount of loans insured by
it which have been fully repaid; and
1 The amendments made by section 417(c)(1) of P.L. 105–244, changing the reimbursement
percentages, apply to loans for which the first disbursement is made on or after October 1, 1998.
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(iii) the original principal amount insured on those
loans for which payment of the first installment of principal has not become due pursuant to subsection (b)(1)(E)
of this section or such first installment need not be paid
pursuant to subsection (b)(1)(M) of this section.
(D) Notwithstanding any other provisions of this section,
in the case of a loan made pursuant to a lender-of-last-resort
program, the Secretary shall apply the provisions of—
(i) the fourth sentence of subparagraph (A) by substituting ‘‘100 percent’’ for ‘‘95 percent’’;
(ii) subparagraph (B)(i) by substituting ‘‘100 percent’’
for ‘‘85 percent’’; and
(iii) subparagraph (B)(ii) by substituting ‘‘100 percent’’
for ‘‘75 percent’’.
(E) 1 Notwithstanding any other provisions of this section,
in the case of an outstanding loan transferred to a guaranty
agency from another guaranty agency pursuant to a plan approved by the Secretary in response to the insolvency of the
latter such guarantee agency, the Secretary shall apply the
provision of—
(i) the fourth sentence of subparagraph (A) by substituting ‘‘100 percent’’ for ‘‘95 percent’’;
(ii) subparagraph (B)(i) by substituting ‘‘90 percent’’
for ‘‘85 percent’’; and
(iii) subparagraph (B)(ii) by substituting ‘‘80 percent’’
for ‘‘75 percent’’.
(F)(i) Notwithstanding any other provisions of this section,
in the case of exempt claims, the Secretary shall apply the provisions of—
(I) the fourth sentence of subparagraph (A) by substituting ‘‘100 percent’’ for ‘‘95 percent’’;
(II) subparagraph (B)(i) by substituting ‘‘100 percent’’
for ‘‘85 percent’’; and
(III) subparagraph (B)(ii) by substituting ‘‘100 percent’’
for ‘‘75 percent’’.
(ii) For purposes of clause (i) of this subparagraph, the
term ‘‘exempt claims’’ means claims with respect to loans for
which it is determined that the borrower (or the student on
whose behalf a parent has borrowed), without the lender’s or
the institution’s knowledge at the time the loan was made, provided false or erroneous information or took actions that
caused the borrower or the student to be ineligible for all or
a portion of the loan or for interest benefits thereon.
(G) Notwithstanding any other provision of this section,
the Secretary shall exclude a loan made pursuant to a lenderof-last-resort program when making reimbursement payment
calculations under subparagraphs (B) and (C).
(2) CONTENTS OF GUARANTY AGREEMENTS.—The guaranty
agreement—
(A) shall set forth such administrative and fiscal procedures as may be necessary to protect the United States
from the risk of unreasonable loss thereunder, to ensure
1 See
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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;
(B) shall provide for making such reports, in such form
and containing such information, as the Secretary may
reasonably require to carry out the Secretary’s functions
under this subsection, and for keeping such records and for
affording such access thereto as the Secretary may find
necessary to assure the correctness and verification of such
reports;
(C) shall set forth adequate assurances that, with respect to so much of any loan insured under the loan insurance program as may be guaranteed by the Secretary pursuant to this subsection, the undertaking of the Secretary
under the guaranty agreement is acceptable in full satisfaction of State law or regulation requiring the maintenance of a reserve;
(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)(A)) to represent his equitable share thereof, but (i) shall provide for
subrogation of the United States to the rights of any insurance beneficiary only to the extent required for the purpose of paragraph (8); and (ii) except as the Secretary may
otherwise by or pursuant to regulation provide, amounts
so paid by a borrower on such a loan shall be first applied
in reduction of principal owing on such loan;
(E) shall set forth adequate assurance that an amount
equal to each payment made under paragraph (1) will be
promptly deposited in or credited to the accounts maintained for the purpose of section 422(c);
(F) set forth adequate assurances that the guaranty
agency will not engage in any pattern or practice which results in a denial of a borrower’s access to loans under this
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cational program, or the borrower’s academic year in
school;
(G) shall prohibit the Secretary from making any reimbursement under this subsection to a guaranty agency
when a default claim is based on an inability to locate the
borrower, unless the guaranty agency, at the time of filing
for reimbursement, certifies to the Secretary that diligent
attempts, including contact with the institution, have been
made to locate the borrower through the use of reasonable
skip-tracing techniques in accordance with regulations prescribed by the Secretary; and
(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 default aversion assistance
activities have been requested under subsection (l);
(ii) the guaranty agency shall not require the payment from the institution of any fee for such information; and
(iii) the guaranty agency will require the institution to use such information only to assist the institution in reminding students of their obligation to repay
student loans and shall prohibit the institution from
disseminating the information for any other purpose.
(I) may include such other provisions as may be necessary to promote the purpose of this part.
(3) FORBEARANCE.—A guaranty agreement under this subsection—
(A) shall contain provisions providing that—
(i) upon request, a lender shall grant a borrower
forbearance, renewable at 12-month intervals, on
terms agreed to by the parties to the loan with the approval of the insurer and documented in accordance
with paragraph (10), and otherwise consistent with
the regulations of the Secretary, if the borrower—
(I) is serving in a medical or dental internship
or residency program, the successful completion of
which is required to begin professional practice or
service, or is serving in a medical or dental internship or residency program leading to a degree or
certificate awarded by an institution of higher
education, a hospital, or a health care facility that
offers postgraduate training, provided that if the
borrower qualifies for a deferment under section
427(a)(2)(C)(vii) or subsection (b)(1)(M)(vii) of this
section as in effect prior to the enactment of the
Higher Education Amendments of 1992, or section
427(a)(2)(C) or subsection (b)(1)(M) of this section
as amended by such amendments, the borrower
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has exhausted his or her eligibility for such
deferment;
(II) has a debt burden under this title that
equals or exceeds 20 percent of income;
(III) is serving in a national service position
for which the borrower receives a national service
educational award under the National and Community Service Trust Act of 1993; or
(IV) is eligible for interest payments to be
made on such loan for service in the Armed Forces
under section 2174 of title 10, United States Code,
and, pursuant to that eligibility, the interest is
being paid on such loan under subsection (o);
(ii) the length of the forbearance granted by the
lender—
(I) under clause (i)(I) shall equal the length of
time remaining in the borrower’s medical or dental internship or residency program, if the borrower is not eligible to receive a deferment described in such clause, or such length of time remaining in the program after the borrower has exhausted the borrower’s eligibility for such
deferment;
(II) under clause (i)(II) or (IV) shall not exceed
3 years; or
(III) under clause (i)(III) shall not exceed the
period for which the borrower is serving in a position described in such clause; and
(iii) no administrative or other fee may be charged
in connection with the granting of a forbearance under
clause (i), and no adverse information regarding a borrower may be reported to a consumer reporting agency
solely because of the granting of such forbearance;
(B) may, to the extent provided in regulations of the
Secretary, contain provisions that permit such forbearance
for the benefit of the student borrower as may be agreed
upon by the parties to an insured loan and approved by
the insurer;
(C) shall contain provisions that specify that—
(i) the form of forbearance granted by the lender
pursuant to this paragraph, other than subparagraph
(A)(i)(IV), shall be temporary cessation of payments,
unless the borrower selects forbearance in the form of
an extension of time for making payments, or smaller
payments than were previously scheduled;
(ii) the form of forbearance granted by the lender
pursuant to subparagraph (A)(i)(IV) shall be the temporary cessation of all payments on the loan other
than payments of interest on the loan that are made
under subsection (o);
(iii) the lender shall, at the time of granting a borrower forbearance, provide information to the borrower to assist the borrower in understanding the impact of capitalization of interest on the borrower’s loan
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principal and total amount of interest to be paid during the life of the loan; and
(iv) the lender shall contact the borrower not less
often than once every 180 days during the period of
forbearance to inform the borrower of—
(I) the amount of unpaid principal and the
amount of interest that has accrued since the last
statement of such amounts provided to the borrower by the lender;
(II) the fact that interest will accrue on the
loan for the period of forbearance;
(III) the amount of interest that will be capitalized, and the date on which capitalization will
occur;
(IV) the option of the borrower to pay the interest that has accrued before the interest is capitalized; and
(V) the borrower’s option to discontinue the
forbearance at any time; and
(D) shall contain provisions that specify that—
(i) forbearance for a period not to exceed 60 days
may be granted if the lender reasonably determines
that such a suspension of collection activity is warranted following a borrower’s request for deferment,
forbearance, a change in repayment plan, or a request
to consolidate loans, in order to collect or process appropriate supporting documentation related to the request, and
(ii) during such period interest shall accrue but
not be capitalized.
Guaranty agencies shall not be precluded from permitting the
parties to such a loan from entering into a forbearance agreement solely because the loan is in default. The Secretary shall
permit lenders to exercise administrative forbearances that do
not require the agreement of the borrower, under conditions
authorized by the Secretary. Such forbearances shall include (i)
forbearances for borrowers who are delinquent at the time of
the granting of an authorized period of deferment under section 428(b)(1)(M) or 427(a)(2)(C), and (ii) if the borrower is less
than 60 days delinquent on such loans at the time of sale or
transfer, forbearances for borrowers on loans which are sold or
transferred.
(4) DEFINITIONS.—For the purpose of this subsection, the
terms ‘‘insurance beneficiary’’ and ‘‘default’’ have the meanings
assigned to them by section 435.
(5) APPLICABILITY TO EXISTING LOANS.—In the case of any
guaranty agreement with a guaranty agency, the Secretary
may, in accordance with the terms of this subsection, undertake to guarantee loans described in paragraph (1) which are
insured by such guaranty agency and are outstanding on the
date of execution of the guaranty agreement, but only with respect to defaults occurring after the execution of such guaranty
agreement or, if later, after its effective date.
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(6) SECRETARY’S EQUITABLE SHARE.—(A) For the purpose of
paragraph (2)(D), the Secretary’s equitable share of payments
made by the borrower shall be that portion of the payments remaining after the guaranty agency with which the Secretary
has an agreement under this subsection has deducted from
such payments—
(i) a percentage amount equal to the complement of
the reinsurance percentage in effect when payment under
the guaranty agreement was made with respect to the
loan; and
(ii) 1 an amount equal to 24 percent of such payments for use in accordance with section 422B, except
that—
(I) beginning October 1, 2003 and ending September 30, 2007, this clause shall be applied by
substituting ‘‘23 percent’’ for ‘‘24 percent’’; and
(II) beginning October 1, 2007, this clause
shall be applied by substituting ‘‘16 percent’’ for
‘‘24 percent’’.
(B) A guaranty agency shall—
(i) on or after October 1, 2006—
(I) not charge the borrower collection costs in an
amount in excess of 18.5 percent of the outstanding
principal and interest of a defaulted loan that is paid
off through consolidation by the borrower under this
title; and
(II) remit to the Secretary a portion of the collection charge under subclause (I) equal to 8.5 percent of
the outstanding principal and interest of such defaulted loan; and
(ii) on and after October 1, 2009, remit to the Secretary the entire amount charged under clause (i)(I) with
respect to each defaulted loan that is paid off with excess
consolidation proceeds.
(C) 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.
(7) NEW PROGRAMS ELIGIBLE FOR 100 PERCENT REINSURANCE.—(A) Notwithstanding paragraph (1)(C), the amount to
be paid a guaranty agency for any fiscal year—
(i) which begins on or after October 1, 1977 and ends
before October 1, 1991; and
(ii) which is either the fiscal year in which such guaranty agency begins to actively carry on a student loan insurance program which is subject to a guaranty agreement
under subsection (b) of this section, or is one of the 4 succeeding fiscal years,
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shall be 100 percent of the amount expended by such guaranty
agency in discharge of its insurance obligation insured under
such program.
(B) Notwithstanding the provisions of paragraph (1)(C),
the Secretary may pay a guaranty agency 100 percent of the
amount expended by such agency in discharge of such agency’s
insurance obligation for any fiscal year which—
(i) begins on or after October 1, 1991; and
(ii) is the fiscal year in which such guaranty agency
begins to actively carry on a student loan insurance program which is subject to a guaranty agreement under subsection (b) or is one of the 4 succeeding fiscal years.
(C) The Secretary shall continuously monitor the operations of those guaranty agencies to which the provisions of
subparagraph (A) or (B) are applicable and revoke the application of such subparagraph to any such guaranty agency which
the Secretary determines has not exercised reasonable prudence in the administration of such program.
(8) ASSIGNMENT TO PROTECT FEDERAL FISCAL INTEREST.—If
the Secretary determines that the protection of the Federal fiscal interest so requires, a guaranty agency shall assign to the
Secretary any loan of which it is the holder and for which the
Secretary has made a payment pursuant to paragraph (1) of
this subsection.
(9) GUARANTY AGENCY RESERVE LEVEL.—(A) Each guaranty
agency which has entered into an agreement with the Secretary pursuant to this subsection shall maintain in the agency’s Federal Student Loan Reserve Fund established under section 422A a current minimum reserve level of at least 0.25 percent of the total attributable amount of all outstanding loans
guaranteed by such agency. For purposes of this paragraph,
such total attributable amount does not include amounts of
outstanding loans transferred to the guaranty agency from another guaranty agency pursuant to a plan of the Secretary in
response to the insolvency of the latter such guaranty agency.
(B) The Secretary shall collect, on an annual basis, information from each guaranty agency having an agreement under
this subsection to enable the Secretary to evaluate the financial solvency of each such agency. The information collected
shall include the level of such agency’s current reserves, cash
disbursements and accounts receivable.
(C) If (i) any guaranty agency falls below the required minimum reserve level in any 2 consecutive years, (ii) any guaranty agency’s Federal reimbursement payments are reduced to
85 percent pursuant to paragraph (1)(B)(i), or (iii) the Secretary determines that the administrative or financial condition of a guaranty agency jeopardizes such agency’s continued
ability to perform its responsibilities under its guaranty agreement, then the Secretary shall require the guaranty agency to
submit and implement a management plan acceptable to the
Secretary within 45 working days of any such event.
(D)(i) If the Secretary is not seeking to terminate the guaranty agency’s agreement under subparagraph (E), or assuming
the guaranty agency’s functions under subparagraph (F), a
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management plan described in subparagraph (C) shall include
the means by which the guaranty agency will improve its financial and administrative condition to the required level
within 18 months.
(ii) If the Secretary is seeking to terminate the guaranty
agency’s agreement under subparagraph (E), or assuming the
guaranty agency’s functions under subparagraph (F), a management plan described in subparagraph (C) shall include the
means by which the Secretary and the guaranty agency shall
work together to ensure the orderly termination of the operations, and liquidation of the assets, of the guaranty agency.
(E) The Secretary may terminate a guaranty agency’s
agreement in accordance with subparagraph (F) if—
(i) a guaranty agency required to submit a management plan under this paragraph fails to submit a plan that
is acceptable to the Secretary;
(ii) the Secretary determines that a guaranty agency
has failed to improve substantially its administrative and
financial condition;
(iii) the Secretary determines that the guaranty agency is in danger of financial collapse;
(iv) the Secretary determines that such action is necessary to protect the Federal fiscal interest; or
(v) the Secretary determines that such action is necessary to ensure the continued availability of loans to student or parent borrowers.
(F) If a guaranty agency’s agreement under this subsection
is terminated pursuant to subparagraph (E), then the Secretary shall assume responsibility for all functions of the guaranty agency under the loan insurance program of such agency.
In performing such functions the Secretary is authorized to—
(i) permit the transfer of guarantees to another guaranty agency;
(ii) revoke the reinsurance agreement of the guaranty
agency at a specified date, so as to require the merger,
consolidation, or termination of the guaranty agency;
(iii) transfer guarantees to the Department of Education for the purpose of payment of such claims and process such claims using the claims standards of the guaranty
agency, if such standards are determined by the Secretary
to be in compliance with this Act;
(iv) design and implement a plan to restore the guaranty agency’s viability;
(v) provide the guaranty agency with additional advance funds in accordance with section 422(c)(7), with such
restrictions on the use of such funds as is determined appropriate by the Secretary, in order to—
(I) meet the immediate cash needs of the guaranty
agency;
(II) ensure the uninterrupted payment of claims;
or
(III) ensure that the guaranty agency will make
loans as the lender-of-last-resort, in accordance with
subsection (j);
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(vi) use all funds and assets of the guaranty agency to
assist in the activities undertaken in accordance with this
subparagraph and take appropriate action to require the
return, to the guaranty agency or the Secretary, of any
funds or assets provided by the guaranty agency, under
contract or otherwise, to any person or organization; or
(vii) take any other action the Secretary determines
necessary to ensure the continued availability of loans
made under this part to residents of the State or States in
which the guaranty agency did business, the full honoring
of all guarantees issued by the guaranty agency prior to
the Secretary’s assumption of the functions of such agency,
and the proper servicing of loans guaranteed by the guaranty agency prior to the Secretary’s assumption of the
functions of such agency, and to avoid disruption of the
student loan program.
(G) Notwithstanding any other provision of Federal or
State law, if the Secretary has terminated or is seeking to terminate a guaranty agency’s agreement under subparagraph
(E), or has assumed a guaranty agency’s functions under subparagraph (F)—
(i) no State court may issue any order affecting the
Secretary’s actions with respect to such guaranty agency;
(ii) any contract with respect to the administration of
a guaranty agency’s reserve funds, or the administration of
any assets purchased or acquired with the reserve funds of
the guaranty agency, that is entered into or extended by
the guaranty agency, or any other party on behalf of or
with the concurrence of the guaranty agency, after the
date of enactment of this subparagraph shall provide that
the contract is terminable by the Secretary upon 30 days
notice to the contracting parties if the Secretary determines that such contract includes an impermissible transfer of the reserve funds or assets, or is otherwise inconsistent with the terms or purposes of this section; and
(iii) no provision of State law shall apply to the actions
of the Secretary in terminating the operations of a guaranty agency.
(H) Notwithstanding any other provision of law, the Secretary’s liability for any outstanding liabilities of a guaranty
agency (other than outstanding student loan guarantees under
this part), the functions of which the Secretary has assumed,
shall not exceed the fair market value of the reserves of the
guaranty agency, minus any necessary liquidation or other administrative costs.
(I) The Secretary shall not take any action under subparagraph (E) or (F) without giving the guaranty agency notice and
the opportunity for a hearing that, if commenced after September 24, 1998, shall be on the record.
(J) Notwithstanding any other provision of law, the information transmitted to the Secretary pursuant to this paragraph shall be confidential and exempt from disclosure under
section 552 of title 5, United States Code, relating to freedom
of information, or any other Federal law.
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(K) The Secretary, within 6 months after the end of each
fiscal year, shall submit to the authorizing committees a report
specifying the Secretary’s assessment of the fiscal soundness of
the guaranty agency system.
(10) DOCUMENTATION OF FORBEARANCE AGREEMENTS.—For
the purposes of paragraph (3), the terms of forbearance agreed
to by the parties shall be documented by confirming the agreement of the borrower by notice to the borrower from the lender, and by recording the terms in the borrower’s file.
(d) USURY LAWS INAPPLICABLE.—No provision of any law of the
United States (other than this Act and section 207 of the
Servicemembers Civil Relief Act (50 U.S.C. App. 527)) or of any
State (other than a statute applicable principally to such State’s
student loan insurance program) which limits the rate or amount
of interest payable on loans shall apply to a loan—
(1) which bears interest (exclusive of any premium for insurance) on the unpaid principal balance at a rate not in excess of the rate specified in this part; and
(2) which is insured (i) by the United States under this
part, or (ii) by a guaranty agency under a program covered by
an agreement made pursuant to subsection (b) of this section.
(f) 1 PAYMENTS OF CERTAIN COSTS.—
(1) PAYMENT FOR CERTAIN ACTIVITIES.—
(A) IN GENERAL.—The Secretary—
(i) for loans originated during fiscal years beginning on or after October 1, 1998, and before October
1, 2003, and in accordance with the provisions of this
paragraph, shall, except as provided in subparagraph
(C), pay to each guaranty agency, a loan processing
and issuance fee equal to 0.65 percent of the total
principal amount of the loans on which insurance was
issued under this part during such fiscal year by such
agency; and
(ii) for loans originated on or after October 1,
2003, and first disbursed before July 1, 2010, and in
accordance with the provisions of this paragraph,
shall, except as provided in subparagraph (C), pay to
each guaranty agency, a loan processing and issuance
fee equal to 0.40 percent of the total principal amount
of the loans on which insurance was issued under this
part during such fiscal year by such agency.
(B) PAYMENT.—The payment required by subparagraph (A) shall be paid on a quarterly basis. The guaranty
agency shall be deemed to have a contractual right against
the United States to receive payments according to the
provisions of this paragraph. Payments shall be made
promptly and without administrative delay to any guaranty agency submitting an accurate and complete application under this subparagraph.
(C) REQUIREMENT FOR PAYMENT.—No payment may be
made under this paragraph for loans for which the dis1 So
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bursement checks have not been cashed or for which electronic funds transfers have not been completed.
(g) ACTION ON INSURANCE PROGRAM AND GUARANTY AGREEMENTS.—If a nonprofit private institution or organization—
(1) applies to enter into an agreement with the Secretary
under subsections (b) and (c) with respect to a student loan insurance program to be carried on in a State with which the
Secretary does not have an agreement under subsection (b),
and
(2) as provided in the application, undertakes to meet the
requirements of section 422(c)(6)(B) (i), (ii), and (iii),
the Secretary shall consider and act upon such application within
180 days, and shall forthwith notify the authorizing committees of
his actions.
(i) 1 MULTIPLE DISBURSEMENT OF LOANS.—
(1) ESCROW ACCOUNTS ADMINISTERED BY ESCROW AGENT.—
Any guaranty agency or eligible lender (hereafter in this subsection referred to as the ‘‘escrow agent’’) may enter into an
agreement with any other eligible lender that is not an eligible
institution or an agency or instrumentality of the State (hereafter in this subsection referred to as the ‘‘lender’’) for the purpose of authorizing disbursements of the proceeds of a loan to
a student. Such agreement shall provide that the lender will
pay the proceeds of such loans into an escrow account to be administered by the escrow agent in accordance with the provisions of paragraph (2) of this subsection. Such agreement may
allow the lender to make payments into the escrow account in
amounts that do not exceed the sum of the amounts required
for disbursement of initial or subsequent installments to borrowers and to make such payments not more than 10 days
prior to the date of the disbursement of such installment to
such borrowers. Such agreement shall require the lender to notify promptly the eligible institution when funds are escrowed
under this subsection for a student at such institution.
(2) AUTHORITY OF ESCROW AGENT.—Each escrow agent entering into an agreement under paragraph (1) of this subsection is authorized to—
(A) make the disbursements in accordance with the
note evidencing the loan;
(B) commingle the proceeds of all loans paid to the escrow agent pursuant to the escrow agreement entered into
under such paragraph (1);
(C) invest the proceeds of such loans in obligations of
the Federal Government or obligations which are insured
or guaranteed by the Federal Government;
(D) retain interest or other earnings on such investment; and
(E) return to the lender undisbursed funds when the
student ceases to carry at an eligible institution at least
one-half of the normal full-time academic workload as determined by the institution.
(j) LENDERS-OF-LAST-RESORT.—
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(1) GENERAL REQUIREMENT.—In each State, the guaranty
agency or an eligible lender in the State described in section
435(d)(1)(D) of this Act shall, before July 1, 2010, make loans
directly, or through an agreement with an eligible lender or
lenders, to eligible students and parents who are otherwise unable to obtain loans under this part (except for consolidation
loans under section 428C) or who attend an institution of higher education in the State that is designated under paragraph
(4). Loans made under this subsection shall not exceed the
amount of the need of the borrower, as determined under subsection (a)(2)(B), nor be less than $200. No loan under section
428, 428B, or 428H that is made pursuant to this subsection
shall be made with interest rates, origination or default fees,
or other terms and conditions that are more favorable to the
borrower than the maximum interest rates, origination or default fees, or other terms and conditions applicable to that type
of loan under this part. The guaranty agency shall consider the
request of any eligible lender, as defined under section
435(d)(1)(A) of this Act, to serve as the lender-of-last-resort
pursuant to this subsection.
(2) RULES AND OPERATING PROCEDURES.—The guaranty
agency shall develop rules and operating procedures for the
lender-of-last-resort program designed to ensure that—
(A) the program establishes operating hours and methods of application designed to facilitate application by students and ensure a response within 60 days after the student’s original complete application is filed under this subsection;
(B) consistent with standards established by the Secretary, students applying for loans under this subsection
shall not be subject to additional eligibility requirements
or requests for additional information beyond what is required under this title in order to receive a loan under this
part from an eligible lender, nor, in the case of students
and parents applying for loans under this subsection because of an inability to otherwise obtain loans under this
part (except for consolidation loans under section 428C), be
required to receive more than two rejections from eligible
lenders in order to obtain a loan under this subsection;
(C) information about the availability of loans under
the program is made available to institutions of higher
education in the State; and
(D) appropriate steps are taken to ensure that borrowers receiving loans under the program are appropriately counseled on their loan obligation.
(3) ADVANCES TO GUARANTY AGENCIES FOR LENDER-OFLAST-RESORT SERVICES.—(A) In order to ensure the availability
of loan capital, the Secretary is authorized to provide a guaranty agency designated for a State with additional advance
funds in accordance with subparagraph (C) and section
422(c)(7), with such restrictions on the use of such funds as are
determined appropriate by the Secretary, in order to ensure
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resort. Such agency shall make such loans in accordance with
this subsection and the requirements of the Secretary.
(B) Notwithstanding any other provision in this part, a
guaranty agency serving as a lender-of-last-resort under this
paragraph shall be paid a fee, established by the Secretary, for
making such loans in lieu of interest and special allowance
subsidies, and shall be required to assign such loans to the
Secretary on demand. Upon such assignment, the portion of
the advance represented by the loans assigned shall be considered repaid by such guaranty agency.
(C) The Secretary shall exercise the authority described in
subparagraph (A) only if the Secretary determines that eligible
borrowers are seeking and are unable to obtain loans under
this part or designates an institution of higher education for
participation in the program under this subsection under paragraph (4), and that the guaranty agency designated for that
State has the capability to provide lender-of-last-resort loans in
a timely manner, in accordance with the guaranty agency’s obligations under paragraph (1), but cannot do so without advances provided by the Secretary under this paragraph. If the
Secretary makes the determinations described in the preceding
sentence and determines that it would be cost-effective to do
so, the Secretary may provide advances under this paragraph
to such guaranty agency. If the Secretary determines that such
guaranty agency does not have such capability, or will not provide such loans in a timely fashion, the Secretary may provide
such advances to enable another guaranty agency, that the
Secretary determines to have such capability, to make lenderof-last-resort loans to eligible borrowers in that State who are
experiencing loan access problems or to eligible borrowers who
attend an institution in the State that is designated under
paragraph (4).
(4) INSTITUTION-WIDE STUDENT QUALIFICATION.—Upon the
request of an institution of higher education and pursuant to
standards developed by the Secretary, the Secretary shall designate such institution for participation in the lender-of-last-resort program under this paragraph. If the Secretary designates
an institution under this paragraph, the guaranty agency designated for the State in which the institution is located shall
make loans, in the same manner as such loans are made under
paragraph (1), to students and parent borrowers of the designated institution, regardless of whether the students or parent borrowers are otherwise unable to obtain loans under this
part (other than a consolidation loan under section 428C).
(5) STANDARDS DEVELOPED BY THE SECRETARY.—In developing standards with respect to paragraph (4), the Secretary
may require—
(A) an institution of higher education to demonstrate
that, despite due diligence on the part of the institution,
the institution has been unable to secure the commitment
of eligible lenders willing to make loans under this part to
a significant number of students attending the institution;
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last-resort program, an institution of higher education
shall demonstrate that the institution has met a minimum
threshold, as determined by the Secretary, for the number
or percentage of students at such institution who have received rejections from eligible lenders for loans under this
part; and
(C) any other standards and guidelines the Secretary
determines to be appropriate.
(6) EXPIRATION OF AUTHORITY.—The Secretary’s authority
under paragraph (4) to designate institutions of higher education for participation in the program under this subsection
shall expire on June 30, 2010.
(7) EXPIRATION OF DESIGNATION.—The eligibility of an institution of higher education, or borrowers from such institution, to participate in the program under this subsection pursuant to a designation of the institution by the Secretary under
paragraph (4) shall expire on June 30, 2010. After such date,
borrowers from an institution designated under paragraph (4)
shall be eligible to participate in the program under this subsection as such program existed on the day before the date of
enactment of the Ensuring Continued Access to Student Loans
Act of 2008.
(8) PROHIBITION ON INDUCEMENTS AND MARKETING.—Each
guaranty agency or eligible lender that serves as a lender-oflast-resort under this subsection—
(A) shall be subject to the prohibitions on inducements
contained in subsection (b)(3) and the requirements of section 435(d)(5); and
(B) shall not advertise, market, or otherwise promote
loans under this subsection, except that nothing in this
paragraph shall prohibit a guaranty agency from fulfilling
its responsibilities under paragraph (2)(C).
(9) DISSEMINATION AND REPORTING.—
(A) IN GENERAL.—The Secretary shall—
(i) broadly disseminate information regarding the
availability of loans made under this subsection;
(ii) during the period beginning July 1, 2008 and
ending June 30, 2011, provide to the authorizing committees and make available to the public—
(I) copies of any new or revised plans or
agreements made by guaranty agencies or the Department related to the authorities under this
subsection;
(II) quarterly reports on—
(aa) the number and amounts of loans
originated or approved pursuant to this subsection by each guaranty agency and eligible
lender; and
(bb) any related payments by the Department, a guaranty agency, or an eligible lender; and
(III) a budget estimate of the costs to the Federal Government (including subsidy and administrative costs) for each 100 dollars loaned, of loans
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made pursuant to this subsection between the
date of enactment of the Ensuring Continued Access to Student Loans Act of 2008 and June 30,
2010, disaggregated by type of loan, compared to
such costs to the Federal Government during such
time period of comparable loans under this part
and part D, disaggregated by part and by type of
loan; and
(iii) beginning July 1, 2011, provide to the authorizing committees and make available to the public—
(I) copies of any new or revised plans or
agreements made by guaranty agencies or the Department related to the authorities under this
subsection; and
(II) annual reports on—
(aa) the number and amounts of loans
originated or approved pursuant to this subsection by each guaranty agency and eligible
lender; and
(bb) any related payments by the Department, a guaranty agency, or an eligible lender.
(B) SEPARATE REPORTING.—The information required
to be reported under subparagraph (A)(ii)(II) shall be reported separately for loans originated or approved pursuant to paragraph (4), or payments related to such loans,
for the time period in which the Secretary is authorized to
make designations under paragraph (4).
(k) INFORMATION ON DEFAULTS.—
(1) PROVISION OF INFORMATION TO ELIGIBLE INSTITUTIONS.—Notwithstanding any other provision of law, in order
to notify eligible institutions of former students who are in default of their continuing obligation to repay student loans, each
guaranty agency shall, upon the request of an eligible institution, furnish information with respect to students who were enrolled at the eligible institution and who are in default on the
repayment of any loan made, insured, or guaranteed under
this part. The information authorized to be furnished under
this subsection shall include the names and addresses of such
students.
(2) PUBLIC DISSEMINATION NOT AUTHORIZED.—Nothing in
paragraph (1) of this subsection shall be construed to authorize
public dissemination of the information described in paragraph
(1).
(3) BORROWER LOCATION INFORMATION.—Any information
provided by the institution relating to borrower location shall
be used by the guaranty agency in conducting required skiptracing activities.
(4) PROVISION OF INFORMATION TO BORROWERS IN DEFAULT.—Each guaranty agency that has received a default
claim from a lender regarding a borrower, shall provide the
borrower in default, on not less than two separate occasions,
with a notice, in simple and understandable terms, of not less
than the following information:
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(A) The options available to the borrower to remove
the borrower’s loan from default.
(B) The relevant fees and conditions associated with
each option.
(l) DEFAULT AVERSION ASSISTANCE.—
(1) ASSISTANCE REQUIRED.—Upon receipt of a complete request from a lender received not earlier than the 60th day of
delinquency, a guaranty agency having an agreement with the
Secretary under subsection (c) shall engage in default aversion
activities designed to prevent the default by a borrower on a
loan covered by such agreement.
(2) REIMBURSEMENT.—
(A) IN GENERAL.—A guaranty agency, in accordance
with the provisions of this paragraph, may transfer from
the Federal Student Loan Reserve Fund under section
422A to the Agency Operating Fund under section 422B a
default aversion fee. Such fee shall be paid for any loan on
which a claim for default has not been paid as a result of
the loan being brought into current repayment status by
the guaranty agency on or before the 300th day after the
loan becomes 60 days delinquent.
(B) AMOUNT.—The default aversion fee shall be equal
to 1 percent of the total unpaid principal and accrued interest on the loan at the time the request is submitted by
the lender. A guaranty agency may transfer such fees
earned under this subsection not more frequently than
monthly. Such a fee shall not be paid more than once on
any loan for which the guaranty agency averts the default
unless—
(i) at least 18 months has elapsed between the
date the borrower entered current repayment status
and the date the lender filed a subsequent default
aversion assistance request; and
(ii) during the period between such dates, the borrower was not more than 30 days past due on any
payment of principal and interest on the loan.
(C) DEFINITION.—For the purpose of earning the default aversion fee, the term ‘‘current repayment status’’
means that the borrower is not delinquent in the payment
of any principal or interest on the loan.
(m) INCOME CONTINGENT AND INCOME-BASED REPAYMENT.—
(1) AUTHORITY OF SECRETARY TO REQUIRE.—The Secretary
may require borrowers who have defaulted on loans made
under this part that are assigned to the Secretary under subsection (c)(8) to repay those loans under an income contingent
repayment plan or income-based repayment plan, the terms
and conditions of which shall be established by the Secretary
and the same as, or similar to, an income contingent repayment plan established for purposes of part D of this title or an
income-based repayment plan under section 493C, as the case
may be.
(2) LOANS FOR WHICH INCOME CONTINGENT OR INCOMEBASED REPAYMENT MAY BE REQUIRED.—A loan made under this
part may be required to be repaid under this subsection if the
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HIGHER EDUCATION ACT OF 1965
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note or other evidence of the loan has been assigned to the Secretary pursuant to subsection (c)(8).
(n) BLANKET CERTIFICATE OF LOAN GUARANTY.—
(1) IN GENERAL.—Subject to paragraph (3), any guaranty
agency that has entered into or enters into any insurance program agreement with the Secretary under this part may—
(A) offer eligible lenders participating in the agency’s
guaranty program a blanket certificate of loan guaranty
that permits the lender to make loans without receiving
prior approval from the guaranty agency of individual
loans for eligible borrowers enrolled in eligible programs at
eligible institutions; and
(B) provide eligible lenders with the ability to transmit
electronically data to the agency concerning loans the lender has elected to make under the agency’s insurance program via standard reporting formats, with such reporting
to occur at reasonable and standard intervals.
(2) LIMITATIONS ON BLANKET CERTIFICATE OF GUARANTY.—
(A) An eligible lender may not make a loan to a borrower
under this section after such lender receives a notification from
the guaranty agency that the borrower is not an eligible borrower.
(B) A guaranty agency may establish limitations or restrictions on the number or volume of loans issued by a lender
under the blanket certificate of guaranty.
(3) PARTICIPATION LEVEL.—During fiscal years 1999 and
2000, the Secretary may permit, on a pilot basis, a limited
number of guaranty agencies to offer blanket certificates of
guaranty under this subsection. Beginning in fiscal year 2001,
any guaranty agency that has an insurance program agreement with the Secretary may offer blanket certificates of guaranty under this subsection.
(4) REPORT REQUIRED.—The Secretary shall, at the conclusion of the pilot program under paragraph (3), provide a report
to the authorizing committees on the impact of the blanket certificates of guaranty on program efficiency and integrity.
(o) ARMED FORCES STUDENT LOAN INTEREST PAYMENT PROGRAM.—
(1) AUTHORITY.—Using funds received by transfer to the
Secretary under section 2174 of title 10, United States Code,
for the payment of interest and any special allowance on a loan
to a member of the Armed Forces that is made, insured, or
guaranteed under this part, the Secretary shall pay the interest and special allowance on such loan as due for a period not
in excess of 36 consecutive months. The Secretary may not pay
interest or any special allowance on such a loan out of any
funds other than funds that have been so transferred.
(2) FORBEARANCE.—During the period in which the Secretary is making payments on a loan under paragraph (1), the
lender shall grant the borrower forbearance in accordance with
the guaranty agreement under subsection (c)(3)(A)(i)(IV).
(3) SPECIAL ALLOWANCE DEFINED.—For the purposes of this
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324
lowance that is payable with respect to a loan under section
438.
SEC. 428A. ø20 U.S.C. 1078–1¿ VOLUNTARY FLEXIBLE AGREEMENTS
WITH GUARANTY AGENCIES.
(a) VOLUNTARY AGREEMENTS.—
(1) AUTHORITY.—Subject to paragraph (2), the Secretary
may enter into a voluntary, flexible agreement with a guaranty
agency under this section, in lieu of agreements with a guaranty agency under subsections (b) and (c) of section 428. The
Secretary may waive or modify any requirement under such
subsections, except that the Secretary may not waive—
(A) any statutory requirement pertaining to the terms
and conditions attached to student loans or default claim
payments made to lenders;
(B) the prohibitions on inducements contained in section 428(b)(3); or
(C) the Federal default fee required by section
428(b)(1)(H) and the second sentence of section 428H(h).
(2) ELIGIBILITY.—During fiscal years 1999, 2000, and 2001,
the Secretary may enter into a voluntary, flexible agreement
with not more than 6 guaranty agencies that had 1 or more
agreements with the Secretary under subsections (b) and (c) of
section 428 as of the day before the date of enactment of the
Higher Education Amendments of 1998. Beginning in fiscal
year 2002, any guaranty agency or consortium thereof may
enter into a voluntary flexible agreement with the Secretary.
(3) REPORT REQUIRED.—
(A) IN GENERAL.—The Secretary, in consultation with
the guaranty agencies operating under voluntary flexible
agreements, shall report on an annual basis to the authorizing committees regarding the program outcomes that the
voluntary flexible agreements have had with respect to—
(i) program integrity and program and cost efficiencies, delinquency prevention, and default aversion,
including a comparison of such outcomes to such outcomes for each guaranty agency operating under an
agreement under subsection (b) or (c) of section 428;
(ii) consumer education programs described in section 433A; and
(iii) the availability and delivery of student financial aid.
(B) CONTENTS.—Each report described in subparagraph (A) shall include—
(i) a description of each voluntary flexible agreement and the performance goals established by the
Secretary for each agreement;
(ii) a list of—
(I) guaranty agencies operating under voluntary flexible agreements;
(II) the specific statutory or regulatory waivers provided to each such guaranty agency; and
(III) any other waivers provided to other guaranty agencies under paragraph (1);
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HIGHER EDUCATION ACT OF 1965
Sec. 428A
(iii) a description of the standards by which each
guaranty agency’s performance under the guaranty
agency’s voluntary flexible agreement was assessed
and the degree to which each guaranty agency
achieved the performance standards;
(iv) an analysis of the fees paid by the Secretary,
and the costs and efficiencies achieved under each voluntary flexible agreement; and
(v) an identification of promising practices for program improvement that could be replicated by other
guaranty agencies.
(b) TERMS OF AGREEMENT.—An agreement between the Secretary and a guaranty agency under this section—
(1) shall be developed by the Secretary, in consultation
with the guaranty agency, on a case-by-case basis;
(2) may only include provisions—
(A) specifying the responsibilities of the guaranty
agency under the agreement, with respect to—
(i) administering the issuance of insurance on
loans made under this part on behalf of the Secretary;
(ii) monitoring insurance commitments made
under this part;
(iii) default aversion activities;
(iv) review of default claims made by lenders;
(v) payment of default claims;
(vi) collection of defaulted loans;
(vii) adoption of internal systems of accounting
and auditing that are acceptable to the Secretary, and
reporting the result thereof to the Secretary in a timely manner, and on an accurate, and auditable basis;
(viii) timely and accurate collection and reporting
of such other data as the Secretary may require to
carry out the purposes of the programs under this
title;
(ix) monitoring of institutions and lenders participating in the program under this part; and
(x) informational outreach to schools and students
in support of access to higher education;
(B) regarding the fees the Secretary shall pay, in lieu
of revenues that the guaranty agency may otherwise receive under this part, to the guaranty agency under the
agreement, and other funds that the guaranty agency may
receive or retain under the agreement, except that in no
case may the cost to the Secretary of the agreement, as
reasonably projected by the Secretary, exceed the cost to
the Secretary, as similarly projected, in the absence of the
agreement;
(C) regarding the use of net revenues, as described in
the agreement under this section, for such other activities
in support of postsecondary education as may be agreed to
by the Secretary and the guaranty agency;
(D) regarding the standards by which the guaranty
agency’s performance of the agency’s responsibilities under
the agreement will be assessed, and the consequences for
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a guaranty agency’s failure to achieve a specified level of
performance on 1 or more performance standards;
(E) regarding the circumstances in which a guaranty
agency’s agreement under this section may be ended in advance of the agreement’s expiration date;
(F) regarding such other businesses, previously purchased or developed with reserve funds, that relate to the
program under this part and in which the Secretary permits the guaranty agency to engage; and
(G) such other provisions as the Secretary may determine to be necessary to protect the United States from the
risk of unreasonable loss and to promote the purposes of
this part;
(3) shall provide for uniform lender participation with the
guaranty agency under the terms of the agreement; and
(4) shall not prohibit or restrict borrowers from selecting
a lender of the borrower’s choosing, subject to the prohibitions
and restrictions applicable to the selection under this Act.
(c) PUBLIC NOTICE.—
(1) IN GENERAL.—The Secretary shall publish in the
Federal Register a notice to all guaranty agencies that sets
forth—
(A) an invitation for the guaranty agencies to enter
into agreements under this section; and
(B) the criteria that the Secretary will use for selecting
the guaranty agencies with which the Secretary will enter
into agreements under this section.
(2) AGREEMENT NOTICE.—The Secretary shall notify the
members of the authorizing committees not later than 30 days
prior to concluding an agreement under this section. The notice
shall contain—
(A) a description of the voluntary flexible agreement
and the performance goals established by the Secretary for
the agreement;
(B) a list of participating guaranty agencies and the
specific statutory or regulatory waivers provided to each
guaranty agency;
(C) a description of the standards by which each guaranty agency’s performance under the agreement will be assessed; and
(D) a description of the fees that will be paid to each
participating guaranty agency.
(3) WAIVER NOTICE.—The Secretary shall notify the 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.
(4) PUBLIC AVAILABILITY.—The text of any voluntary flexible agreement, and any subsequent revisions, and any waivers
related to section 428(b)(3) that are not part of such an agreement, shall be readily available to the public.
(5) MODIFICATION NOTICE.—The Secretary shall notify the
members of the authorizing committees 30 days prior to any
modifications to an agreement under this section.
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HIGHER EDUCATION ACT OF 1965
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(d) TERMINATION.—At the expiration or early termination of an
agreement under this section, the Secretary shall reinstate the
guaranty agency’s prior agreements under subsections (b) and (c)
of section 428, subject only to such additional requirements as the
Secretary determines to be necessary in order to ensure the efficient transfer of responsibilities between the agreement under this
section and the agreements under subsections (b) and (c) of section
428, and including the guaranty agency’s compliance with reserve
requirements under sections 422 and 428.
SEC. 428B. ø20 U.S.C. 1078–2¿ FEDERAL PLUS LOANS.
(a) AUTHORITY TO BORROW.—
(1) AUTHORITY AND ELIGIBILITY.—Prior to
July 1, 2010, 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 graduate or professional student or the parents
do not have an adverse credit history as determined pursuant to regulations promulgated by the Secretary;
(B) in the case of a graduate or professional student
or parent who has been convicted of, or has pled nolo
contendere or guilty to, a crime involving fraud in obtaining funds under this title, such graduate or professional
student or parent has completed the repayment of such
funds to the Secretary, or to the holder in the case of a
loan under this title obtained by fraud; and
(C) 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.
(2) TERMS, CONDITIONS, AND BENEFITS.—Except as provided in subsections (c), (d), and (e), loans made under this section shall have the same terms, conditions, and benefits as all
other loans made under this part.
(3) SPECIAL RULES.—
(A) PARENT BORROWERS.—Whenever necessary to
carry out the provisions of this section, the terms ‘‘student’’
and ‘‘borrower’’ as used in this part shall include a parent
borrower under this section.
(B)(i) EXTENUATING CIRCUMSTANCES.—An eligible lender may determine that extenuating circumstances exist
under the regulations promulgated pursuant to paragraph
(1)(A) if, during the period beginning January 1, 2007, and
ending December 31, 2009, an applicant for a loan under
this section—
(I) is or has been delinquent for 180 days or fewer
on mortgage loan payments or on medical bill payments during such period; and
(II) does not otherwise have an adverse credit history, as determined by the lender in accordance with
the regulations promulgated pursuant to paragraph
(1)(A), as such regulations were in effect on the day
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HIGHER EDUCATION ACT OF 1965
328
before the date of enactment of the Ensuring Continued Access to Student Loans Act of 2008.
(ii) DEFINITION OF MORTGAGE LOAN.—In this subparagraph, the term ‘‘mortgage loan’’ means an extension of
credit to a borrower that is secured by the primary residence of the borrower.
(iii) RULE OF CONSTRUCTION.—Nothing in this subparagraph shall be construed to limit an eligible lender’s
authority under the regulations promulgated pursuant to
paragraph (1)(A) to determine that extenuating circumstances exist.
(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 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.—All loans made under this
section shall be disbursed in accordance with the requirements of
section 428G and shall be disbursed by—
(1) an electronic transfer of funds from the lender to the
eligible institution; or
(2) a check copayable to the eligible institution and the
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—
(A)(i) during any period during which the parent borrower or the graduate or professional student borrower
meets the conditions required for a deferral under section
427(a)(2)(C) or 428(b)(1)(M); and
(ii) upon the request of the parent borrower, during
any period during which the student on whose behalf the
loan was borrowed by the parent borrower meets the conditions
required
for
a
deferral
under
section
427(a)(2)(C)(i)(I) or 428(b)(1)(M)(i)(I); and
(B)(i) in the case of a parent borrower, upon the request of the parent borrower, during the 6-month period
beginning on the later of—
(I) the day after the date the student on whose behalf the loan was borrowed ceases to carry at least
one-half the normal full-time academic workload (as
determined by the institution); or
(II) if the parent borrower is also a student, the
day after the date such parent borrower ceases to
carry at least one-half such a workload; and
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HIGHER EDUCATION ACT OF 1965
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(ii) in the case of a graduate or professional student
borrower, during the 6-month period beginning on the day
after the date such student ceases to carry at least onehalf the normal full-time academic workload (as determined by the institution).
(2) CAPITALIZATION OF INTEREST.—
(A) IN GENERAL.—Interest on loans made under this
section for which payments of principal are deferred pursuant to paragraph (1) shall, if agreed upon by the borrower
and the lender—
(i) be paid monthly or quarterly; or
(ii) be added to the principal amount of the loan
not more frequently than quarterly by the lender.
(B) INSURABLE LIMITS.—Capitalization of interest
under this paragraph shall not be deemed to exceed the
annual insurable limit on account of the borrower.
(3) SUBSIDIES PROHIBITED.—No payments to reduce interest costs shall be paid pursuant to section 428(a) of this part
on loans made pursuant to this section.
(4) APPLICABLE RATES OF INTEREST.—Interest on loans
made pursuant to this section shall be at the applicable rate
of interest provided in section 427A for loans made under this
section. 1
(5) AMORTIZATION.—The amount of the periodic payment
and the repayment schedule for any loan made pursuant to
this section shall be established by assuming an interest rate
equal to the applicable rate of interest at the time the repayment of the principal amount of the loan commences. At the
option of the lender, the note or other written evidence of the
loan may require that—
(A) the amount of the periodic payment will be adjusted annually, or
(B) the period of repayment of principal will be lengthened or shortened,
in order to reflect adjustments in interest rates occurring as a
consequence of section 427A(c)(4).
(e) REFINANCING.—
(1) REFINANCING TO SECURE COMBINED PAYMENT.—An eligible lender may at any time consolidate loans held by it which
are made under this section to a borrower, including loans
which were made under section 428B as in effect prior to the
enactment of the Higher Education Amendments of 1986,
under a single repayment schedule which provides for a single
principal payment and a single payment of interest, and shall
calculate the repayment period for each included loan from the
date of the commencement of repayment of the most recent included loan. Unless the consolidated loan is obtained by a borrower who is electing to obtain variable interest under paragraph (2) or (3), such consolidated loan shall bear interest at
the weighted average of the rates of all included loans. The ex1 Section 416(a)(2) of the Higher Education Amendments of 1998 (P.L. 105–244; 112 Stat.
1680) contained an amendment that could not be executed and was redundant because of an
earlier amendment in section 8301(a)(2) of the Transportation Equity Act for the 21st Century
(P.L. 105–178; 112 Stat. 497).
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tension of any repayment period of an included loan pursuant
to this paragraph shall be reported (if required by them) to the
Secretary or guaranty agency insuring the loan, as the case
may be, but no additional insurance premiums shall be payable with respect to any such extension. The extension of the
repayment period of any included loan shall not require the
formal extension of the promissory note evidencing the included loan or the execution of a new promissory note, but
shall be treated as an administrative forbearance of the repayment terms of the included loan.
(2) REFINANCING TO SECURE VARIABLE INTEREST RATE.—An
eligible lender may reissue a loan which was made under this
section before July 1, 1987, or under section 428B as in effect
prior to the enactment of the Higher Education Amendments
of 1986 in order to permit the borrower to obtain the interest
rate provided under section 427A(c)(4). A lender offering to reissue a loan or loans for such purpose may charge a borrower
an amount not to exceed $100 to cover the administrative costs
of reissuing such loan or loans, not more than one-half of
which shall be paid to the guarantor of the loan being reissued
to cover costs of reissuance. Reissuance of a loan under this
paragraph shall not affect any insurance applicable with respect to the loan, and no additional insurance fee may be
charged to the borrower with respect to the loan.
(3) REFINANCING BY DISCHARGE OF PREVIOUS LOAN.—A borrower who has applied to an original lender for reissuance of
a loan under paragraph (2) and who is denied such reissuance
may obtain a loan from another lender for the purpose of discharging the loan from such original lender. A loan made for
such purpose—
(A) shall bear interest at the applicable rate of interest
provided under section 427A(c)(4);
(B) shall not result in the extension of the duration of
the note (other than as permitted under subsection
(d)(5)(B));
(C) may be subject to an additional insurance fee but
shall not be subject to the administrative cost charge permitted by paragraph (2) of this subsection; and
(D) shall be applied to discharge the borrower from
any remaining obligation to the original lender with respect to the original loan.
(4) CERTIFICATION IN LIEU OF PROMISSORY NOTE PRESENTATION.—Each new lender may accept certification from the
original lender of the borrower’s original loan in lieu of presentation of the original promissory note.
(f ) VERIFICATION OF IMMIGRATION STATUS AND SOCIAL
SECURITY NUMBER.—A parent who wishes to borrow funds under
this section shall be subject to verification of the parent’s—
(1) immigration status in the same manner as immigration
status is verified for students under section 484(g); and
(2) social security number in the same manner as social security numbers are verified for students under section 484(p).
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HIGHER EDUCATION ACT OF 1965
Sec. 428C
SEC. 428C. ø20 U.S.C. 1078–3¿ FEDERAL CONSOLIDATION LOANS.
(a) AGREEMENTS WITH ELIGIBLE LENDERS.—
(1) AGREEMENT REQUIRED FOR INSURANCE COVERAGE.—For
the purpose of providing loans to eligible borrowers for consolidation of their obligations with respect to eligible student
loans, the Secretary or a guaranty agency shall enter into
agreements in accordance with subsection (b) with the following eligible lenders:
(A) the Student Loan Marketing Association or the
Holding Company of the Student Loan Marketing Association, including any subsidiary of the Holding Company,
created pursuant to section 440;
(B) State agencies described in subparagraphs (D) and
(F) of section 435(d)(1); and
(C) other eligible lenders described in subparagraphs
(A), (B), (C), (E), and (J) of such section.
(2) INSURANCE COVERAGE OF CONSOLIDATION LOANS.—Except as provided in section 429(e), no contract of insurance
under this part shall apply to a consolidation loan unless such
loan is made under an agreement pursuant to this section and
is covered by a certificate issued in accordance with subsection
(b)(2). Loans covered by such a certificate that is issued by a
guaranty agency shall be considered to be insured loans for the
purposes of reimbursements under section 428(c), but no payment shall be made with respect to such loans under section
428(f) to any such agency.
(3) DEFINITION OF ELIGIBLE BORROWER.—(A) For the
purpose of this section, the term ‘‘eligible borrower’’ means a
borrower who—
(i) is not subject to a judgment secured through litigation with respect to a loan under this title or to an order
for wage garnishment under section 488A; and
(ii) at the time of application for a consolidation loan—
(I) is in repayment status as determined under
section 428(b)(7)(A);
(II) is in a grace period preceding repayment; or
(III) is a defaulted borrower who has made arrangements to repay the obligation on the defaulted
loans satisfactory to the holders of the defaulted loans.
(B)(i) An individual’s status as an eligible borrower under
this section or under section 455(g) terminates under both sections upon receipt of a consolidation loan under this section or
under section 455(g), except that—
(I) an individual who receives eligible student loans
after the date of receipt of the consolidation loan may receive a subsequent consolidation loan;
(II) loans received prior to the date of the consolidation loan may be added during the 180-day period following the making of the consolidation loan;
(III) loans received following the making of the consolidation loan may be added during the 180-day period following the making of the consolidation loan;
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HIGHER EDUCATION ACT OF 1965
332
(IV) loans received prior to the date of the first consolidation loan may be added to a subsequent consolidation
loan; and
(V) 1 an individual may obtain a subsequent
consolidation loan under section 455(g) only—
(aa) for the purposes of obtaining income
contingent repayment or income-based repayment, and only if the loan has been submitted
to the guaranty agency for default aversion or
if the loan is already in default;
(bb) for the purposes of using the public
service loan forgiveness program under section 455(m); or
(cc) 3 for the purpose of using the no accrual of interest for active duty service members benefit offered
under section 455(o).
(4) DEFINITION OF ELIGIBLE STUDENT LOANS.—For the purpose of paragraph (1), the term ‘‘eligible student loans’’ means
loans—
(A) made, insured, or guaranteed under this part, and
first disbursed before July 1, 2010, including loans on
which the borrower has defaulted (but has made arrangements to repay the obligation on the defaulted loans satisfactory to the Secretary or guaranty agency, whichever insured the loans);
(B) made under part E of this title;
(C) made under part D of this title;
(D) made under subpart II of part A of title VII of the
Public Health Service Act; or
(E) made under part E of title VIII of the Public
Health Service Act.
(b) CONTENTS OF AGREEMENTS, CERTIFICATES OF INSURANCE,
AND LOAN NOTES.—
(1) AGREEMENTS WITH LENDERS.—Any lender described in
subparagraph (A), (B), or (C) of subsection (a)(1) who wishes to
make consolidation loans under this section shall enter into an
agreement with the Secretary or a guaranty agency which provides—
(A) that, in the case of all lenders described in subsection (a)(1), the lender will make a consolidation loan to
an eligible borrower (on request of that borrower) only if
the borrower certifies that the borrower has no other application pending for a loan under this section;
(B) that each consolidation loan made by the lender
will bear interest, and be subject to repayment, in accordance with subsection (c);
(C) that each consolidation loan will be made, notwithstanding any other provision of this part limiting the annual or aggregate principal amount for all insured loans
made to a borrower, in an amount (i) which is not less
than the minimum amount required for eligibility of the
1 Margins
3 Margin
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of subclause (V) so in law.
so in law.
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HIGHER EDUCATION ACT OF 1965
Sec. 428C
borrower under subsection (a)(3), and (ii) which is equal to
the sum of the unpaid principal and accrued unpaid interest and late charges of all eligible student loans received
by the eligible borrower which are selected by the borrower
for consolidation;
(D) that the proceeds of each consolidation loan will be
paid by the lender to the holder or holders of the loans so
selected to discharge the liability on such loans;
(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 before July 1, 2010;
(F) that the lender shall disclose to a prospective borrower, in simple and understandable terms, at the time
the lender provides an application for a consolidation
loan—
(i) whether consolidation would result in a loss of
loan benefits under this part or part D, including loan
forgiveness, cancellation, and deferment;
(ii) with respect to Federal Perkins Loans under
part E—
(I) that if a borrower includes a Federal Perkins Loan under part E in the consolidation loan,
the borrower will lose all interest-free periods that
would have been available for the Federal Perkins
Loan, such as—
(aa) the periods during which no interest
accrues on such loan while the borrower is enrolled in school at least half-time;
(bb) the grace period under section
464(c)(1)(A); and
(cc) the periods during which the borrower’s student loan repayments are deferred
under section 464(c)(2);
(II) that if a borrower includes a Federal Perkins Loan in the consolidation loan, the borrower
will no longer be eligible for cancellation of part or
all of the Federal Perkins Loan under section
465(a); and
(III) the occupations listed in section 465 that
qualify for Federal Perkins Loan cancellation
under section 465(a);
(iii) the repayment plans that are available to the
borrower;
(iv) the options of the borrower to prepay the consolidation loan, to pay such loan on a shorter schedule,
and to change repayment plans;
(v) that borrower benefit programs for a consolidation loan may vary among different lenders;
(vi) the consequences of default on the consolidation loan; and
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(vii) that by applying for a consolidation loan, the
borrower is not obligated to agree to take the consolidation loan; and
(G) such other terms and conditions as the Secretary
or the guaranty agency may specifically require of the
lender to carry out this section.
(2) ISSUANCE OF CERTIFICATE OF COMPREHENSIVE INSURANCE COVERAGE.—The Secretary shall issue a certificate of
comprehensive insurance coverage under section 429(b) to a
lender which has entered into an agreement with the Secretary
under paragraph (1) of this subsection. The guaranty agency
may issue a certificate of comprehensive insurance coverage to
a lender with which it has an agreement under such paragraph. The Secretary shall not issue a certificate to a lender
described in subparagraph (B) or (C) of subsection (a)(1) unless
the Secretary determines that such lender has first applied to,
and has been denied a certificate of insurance by, the guaranty
agency which insures the preponderance of its loans (by value).
(3) CONTENTS OF CERTIFICATE.—A certificate issued under
paragraph (2) shall, at a minimum, provide—
(A) that all consolidation loans made by such lender in
conformity with the requirements of this section will be insured by the Secretary or the guaranty agency (whichever
is applicable) against loss of principal and interest;
(B) that a consolidation loan will not be insured unless
the lender has determined to its satisfaction, in accordance
with reasonable and prudent business practices, for each
loan being consolidated—
(i) that the loan is a legal, valid, and binding obligation of the borrower;
(ii) that each such loan was made and serviced in
compliance with applicable laws and regulations; and
(iii) in the case of loans under this part, that the
insurance on such loan is in full force and effect;
(C) the effective date and expiration date of the certificate;
(D) the aggregate amount to which the certificate applies;
(E) the reporting requirements of the Secretary on the
lender and an identification of the office of the Department
of Education or of the guaranty agency which will process
claims and perform other related administrative functions;
(F) the alternative repayment terms which will be offered to borrowers by the lender;
(G) that, if the lender prior to the expiration of the
certificate no longer proposes to make consolidation loans,
the lender will so notify the issuer of the certificate in
order that the certificate may be terminated (without affecting the insurance on any consolidation loan made prior
to such termination); and
(H) the terms upon which the issuer of the certificate
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HIGHER EDUCATION ACT OF 1965
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fecting the insurance on any consolidation loan made prior
to such limitation, suspension, or termination).
(4) TERMS AND CONDITIONS OF LOANS.—A consolidation
loan made pursuant to this section shall be insurable by the
Secretary or a guaranty agency pursuant to paragraph (2) only
if the loan is made to an eligible borrower who has agreed to
notify the holder of the loan promptly concerning any change
of address and the loan is evidenced by a note or other written
agreement which—
(A) is made without security and without endorsement, except that if the borrower is a minor and such note
or other written agreement executed by him or her would
not, under applicable law, create a binding obligation, endorsement may be required;
(B) provides for the payment of interest and the repayment of principal in accordance with subsection (c) of this
section;
(C)(i) provides that periodic installments of principal
need not be paid, but interest shall accrue and be paid in
accordance with clause (ii), during any period for which
the borrower would be eligible for a deferral under section
428(b)(1)(M), and that any such period shall not be included in determining the repayment schedule pursuant to
subsection (c)(2) of this section; and
(ii) provides that interest shall accrue and be paid during any such period—
(I) by the Secretary, in the case of a consolidation
loan for which the application is received by an eligible lender before the date of enactment of the Emergency Student Loan Consolidation Act of 1997 that
consolidated only Federal Stafford Loans for which the
student borrower received an interest subsidy under
section 428;
(II) by the Secretary, in the case of a consolidation
loan for which the application is received by an eligible lender on or after the date of enactment of the
Emergency Student Loan Consolidation Act of 1997
except that the Secretary shall pay such interest only
on that portion of the loan that repays Federal Stafford Loans for which the student borrower received an
interest subsidy under section 428 or Federal Direct
Stafford Loans for which the borrower received an interest subsidy under section 455; or
(III) by the borrower, or capitalized, in the case of
a consolidation loan other than a loan described in
subclause (I) or (II);
(D) entitles the borrower to accelerate without penalty
repayment of the whole or any part of the loan; and
(E)(i) contains a notice of the system of disclosure concerning such loan to consumer reporting agencies under
section 430A, and (ii) provides that the lender on request
of the borrower will provide information on the repayment
status of the note to such consumer reporting agencies.
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(5) DIRECT LOANS.—If, before July 1, 2010, a borrower is
unable to obtain a consolidation loan from a lender with an
agreement under subsection (a)(1), or is unable to obtain a consolidation loan with income-sensitive repayment terms or income-based repayment terms acceptable to the borrower from
such a lender, or chooses to obtain a consolidation loan for the
purposes of using the public service loan forgiveness program
offered under section 455(m), the Secretary shall offer any such
borrower who applies for it, a Federal Direct Consolidation
loan. In addition, in the event that a borrower chooses to obtain a consolidation loan for the purposes of using the no accrual of interest for active duty service members program offered under section 455(o), the Secretary shall offer a Federal
Direct Consolidation loan to any such borrower who applies for
participation in such program. A direct consolidation loan offered under this paragraph shall, as requested by the borrower, be repaid either pursuant to income contingent repayment under part D of this title, pursuant to income-based repayment under section 493C, or pursuant to any other repayment provision under this section, except that if a borrower intends to be eligible to use the public service loan forgiveness
program under section 455(m), such loan shall be repaid using
one of the repayment options described in section 455(m)(1)(A).
The Secretary shall not offer such loans if, in the Secretary’s
judgment, the Department of Education does not have the necessary origination and servicing arrangements in place for
such loans.
(6) NONDISCRIMINATION IN LOAN CONSOLIDATION.—An eligible lender that makes consolidation loans under this section
shall not discriminate against any borrower seeking such a
loan—
(A) based on the number or type of eligible student
loans the borrower seeks to consolidate, except that a lender is not required to consolidate loans described in subparagraph (D) or (E) of subsection (a)(4) or subsection
(d)(1)(C)(ii);
(B) based on the type or category of institution of higher education that the borrower attended;
(C) based on the interest rate to be charged to the borrower with respect to the consolidation loan; or
(D) with respect to the types of repayment schedules
offered to such borrower.
(c) PAYMENT OF PRINCIPAL AND INTEREST.—
(1) INTEREST RATE.—(A) Notwithstanding subparagraphs
(B) and (C), with respect to any loan made under this section
for which the application is received by an eligible lender—
(i) on or after October 1, 1998, and before July 1, 2006,
the applicable interest rate shall be determined under section 427A(k)(4); or
(ii) on or after July 1, 2006, and that is disbursed before July 1, 2010, the applicable interest rate shall be determined under section 427A(l)(3).
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HIGHER EDUCATION ACT OF 1965
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(B) A consolidation loan made before July 1, 1994, shall
bear interest at an annual rate on the unpaid principal balance
of the loan that is equal to the greater of—
(i) the weighted average of the interest rates on the
loans consolidated, rounded to the nearest whole percent;
or
(ii) 9 percent.
(C) A consolidation loan made on or after July 1, 1994, and
disbursed before July 1, 2010, shall bear interest at an annual
rate on the unpaid principal balance of the loan that is equal
to the weighted average of the interest rates on the loans consolidated, rounded upward to the nearest whole percent.
(D) A consolidation loan for which the application is received by an eligible lender on or after the date of enactment
of the Emergency Student Loan Consolidation Act of 1997 and
before October 1, 1998, shall bear interest at an annual rate
on the unpaid principal balance of the loan that is equal to the
rate specified in section 427A(f), except that the eligible lender
may continue to calculate interest on such a loan at the rate
previously in effect and defer, until not later than April 1,
1998, the recalculation of the interest on such a loan at the
rate required by this subparagraph if the recalculation is applied retroactively to the date on which the loan is made.
(2) REPAYMENT SCHEDULES.—(A) Notwithstanding any
other provision of this part, to the extent authorized by its certificate of insurance under subsection (b)(2) and approved by
the issuer of such certificate, the lender of a consolidation loan
shall establish repayment terms as will promote the objectives
of this section, which shall include the establishment of graduated, income-sensitive, or income-based repayment schedules,
established by the lender in accordance with the regulations of
the Secretary. Except as required by such income-sensitive or
income-based repayment schedules, or by the terms of repayment pursuant to income contingent repayment offered by the
Secretary under subsection (b)(5), such repayment terms shall
require that if the sum of the consolidation loan and the
amount outstanding on other student loans to the individual—
(i) is less than $7,500, then such consolidation loan
shall be repaid in not more than 10 years;
(ii) is equal to or greater than $7,500 but less than
$10,000, then such consolidation loan shall be repaid in
not more than 12 years;
(iii) is equal to or greater than $10,000 but less than
$20,000, then such consolidation loan shall be repaid in
not more than 15 years;
(iv) is equal to or greater than $20,000 but less than
$40,000, then such consolidation loan shall be repaid in
not more than 20 years;
(v) is equal to or greater than $40,000 but less than
$60,000, then such consolidation loan shall be repaid in
not more than 25 years; or
(vi) is equal to or greater than $60,000, then such consolidation loan shall be repaid in not more than 30 years.
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(B) The amount outstanding on other student loans which
may be counted for the purpose of subparagraph (A) may not
exceed the amount of the consolidation loan.
(3) ADDITIONAL REPAYMENT REQUIREMENTS.—Notwithstanding paragraph (2)—
(A) except in the case of an income-based repayment
schedule under section 493C, a repayment schedule established with respect to a consolidation loan shall require
that the minimum installment payment be an amount
equal to not less than the accrued unpaid interest;
(B) except as required by the terms of repayment pursuant to income contingent repayment offered by the Secretary under subsection (b)(5), the lender of a consolidation
loan may, with respect to repayment on the loan, when the
amount of a monthly or other similar payment on the loan
is not a multiple of $5, round the payment to the next
highest whole dollar amount that is a multiple of $5; and
(C) an income-based repayment schedule under section
493C shall not be available to a consolidation loan borrower who used the proceeds of the loan to discharge the
liability on a loan under section 428B, or a Federal Direct
PLUS loan, made on behalf of a dependent student.
(4) COMMENCEMENT OF REPAYMENT.—Repayment of a consolidation loan shall commence within 60 days after all holders
have, pursuant to subsection (b)(1)(D), discharged the liability
of the borrower on the loans selected for consolidation.
(5) INSURANCE PREMIUMS PROHIBITED.—No insurance premium shall be charged to the borrower on any consolidation
loan, and no insurance premium shall be payable by the lender
to the Secretary with respect to any such loan, but a fee may
be payable by the lender to the guaranty agency to cover the
costs of increased or extended liability with respect to such
loan.
(d) SPECIAL PROGRAM AUTHORIZED.—
(1) GENERAL RULE AND DEFINITION OF ELIGIBLE STUDENT
LOAN.—
(A) IN GENERAL.—Subject to the provisions of this subsection, the Secretary or a guaranty agency shall enter
into agreements with eligible lenders described in subparagraphs (A), (B), and (C) of subsection (a)(1) for the consolidation of eligible student loans.
(B) APPLICABILITY RULE.—Unless otherwise provided
in this subsection, the agreements entered into under subparagraph (A) and the loans made under such agreements
for the consolidation of eligible student loans under this
subsection shall have the same terms, conditions, and benefits as all other agreements and loans made under this
section.
(C) DEFINITION.—For the purpose of this subsection,
the term ‘‘eligible student loans’’ means loans—
(i) of the type described in subparagraphs (A), (B),
and (C) of subsection (a)(4); and
(ii) made under subpart I of part A of title VII of
the Public Health Service Act.
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(2) INTEREST RATE RULE.—
(A) IN GENERAL.—The portion of each consolidated
loan that is attributable to an eligible student loan described in paragraph (1)(C)(ii) shall bear interest at a rate
not to exceed the rate determined under subparagraph (B).
(B) DETERMINATION OF THE MAXIMUM INTEREST
RATE.—For the 12-month period beginning after July 1,
1992, and for each 12-month period thereafter, beginning
on July 1 and ending on June 30, the interest rate applicable under subparagraph (A) shall be equal to the average
of the bond equivalent rates of the 91-day Treasury bills
auctioned for the quarter prior to July 1, for each 12month period for which the determination is made, plus 3
percent.
(C) PUBLICATION OF MAXIMUM INTEREST RATE.—The
Secretary shall determine the applicable rate of interest
under subparagraph (B) after consultation with the Secretary of the Treasury and shall publish such rate in the
Federal Register as soon as practicable after the date of
such determination.
(3) SPECIAL RULES.—
(A) NO SPECIAL ALLOWANCE RULE.—No special allowance under section 438 shall be paid with respect to the
portion of any consolidated loan under this subsection that
is attributable to any loan described in paragraph
(1)(C)(ii).
(B) NO INTEREST SUBSIDY RULE.—No interest subsidy
under section 428(a) shall be paid on behalf of any eligible
borrower for any portion of a consolidated loan under this
subsection that is attributable to any loan described in
paragraph (1)(C)(ii).
(C) ADDITIONAL RESERVE RULE.—Notwithstanding any
other provision of this Act, additional reserves shall not be
required for any guaranty agency with respect to a loan
made under this subsection.
(D) INSURANCE RULE.—Any insurance premium paid
by the borrower under subpart I of part A of title VII of
the Public Health Service Act with respect to a loan made
under that subpart and consolidated under this subsection
shall be retained by the student loan insurance account established under section 710 of the Public Health Service
Act.
(4) REGULATIONS.—The Secretary is authorized to promulgate such regulations as may be necessary to facilitate carrying
out the provisions of this subsection.
(e) TERMINATION OF AUTHORITY.—The authority to make loans
under this section expires at the close of June 30, 2010. No loan
may be made under this section for which the disbursement is on
or after July 1, 2010. 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).
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340
(f) INTEREST PAYMENT REBATE FEE.—
(1) IN GENERAL.—For any month beginning on or after October 1, 1993, each holder of a consolidation loan under this
section for which the first disbursement was made on or after
October 1, 1993, shall pay to the Secretary, on a monthly basis
and in such manner as the Secretary shall prescribe, a rebate
fee calculated on an annual basis equal to 1.05 percent of the
principal plus accrued unpaid interest on such loan.
(2) SPECIAL RULE.—For consolidation loans based on applications received during the period from October 1, 1998
through January 31, 1999, inclusive, the rebate described in
paragraph (1) shall be equal to 0.62 percent of the principal
plus accrued unpaid interest on such loan.
(3) DEPOSIT.—The Secretary shall deposit all fees collected
pursuant to this subsection into the insurance fund established
in section 431.
SEC. 428D. ø20 U.S.C. 1078–4¿ COMMINGLING OF FUNDS.
Notwithstanding any other provision of this part regarding
permissible uses of funds from any source, funds received by a
guaranty agency under any provision of this part may be commingled with funds received under any other provision of this part and
may be used to carry out the purposes of such other provision, except that—
(1) the total amount expended for the purposes of such
other provision shall not exceed the amount the guaranty
agency would otherwise be authorized to expend; and
(2) the authority to commingle such funds shall not relieve
such agency of any accounting or auditing obligations under
this part.
øSection 428E was repealed by section 605(b) of Public Law
102–164; 105 Stat. 1068.¿
SEC. 428F. ø20 U.S.C. 1078–6¿ DEFAULT REDUCTION PROGRAM.
(a) OTHER REPAYMENT INCENTIVES.—
(1) SALE OR ASSIGNMENT OF LOAN.—
(A) IN GENERAL.—Each guaranty agency, upon
securing 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), shall—
(i) if practicable, sell the loan to an eligible lender;
or
(ii) on or before September 30, 2011, assign the
loan to the Secretary if—
(I) the Secretary has determined that market
conditions unduly limit a guaranty agency’s ability to sell loans under clause (i); and
(II) the guaranty agency has been unable to
sell loans under clause (i).
(B) MONTHLY PAYMENTS.—Neither the guaranty agency nor the Secretary shall demand from a borrower as
monthly payment amounts described in subparagraph (A)
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HIGHER EDUCATION ACT OF 1965
Sec. 428F
more than is reasonable and affordable based on the borrower’s total financial circumstances.
(C) CONSUMER REPORTING AGENCIES.—Upon the sale
or assignment of the loan, the Secretary, guaranty agency
or other holder of the loan shall request any consumer reporting agency to which the Secretary, guaranty agency or
holder, as applicable, reported the default of the loan, to
remove the record of the default from the borrower’s credit
history.
(D) DUTIES UPON SALE.—With respect to a loan sold
under subparagraph (A)(i)—
(i) the guaranty agency—
(I) shall repay the Secretary 81.5 percent of
the amount of the principal balance outstanding
at the time of such sale, multiplied by the reinsurance percentage in effect when payment under the
guaranty agreement was made with respect to the
loan; and
(II) may, in order to defray collection costs—
(aa) charge to the borrower an amount
not to exceed 18.5 percent of the outstanding
principal and interest at the time of the loan
sale; and
(bb) retain such amount from the proceeds of the loan sale; and
(ii) the Secretary shall reinstate the Secretary’s
obligation to—
(I) reimburse the guaranty agency for the
amount that the agency may, in the future, expend to discharge the guaranty agency’s insurance
obligation; and
(II) pay to the holder of such loan a special allowance pursuant to section 438.
(E) DUTIES UPON ASSIGNMENT.—With respect to a loan
assigned under subparagraph (A)(ii)—
(i) the guaranty agency shall add to the principal
and interest outstanding at the time of the assignment
of such loan an amount equal to the amount described
in subparagraph (D)(i)(II)(aa); and
(ii) the Secretary shall pay the guaranty agency,
for deposit in the agency’s Operating Fund established
pursuant to section 422B, an amount equal to the
amount added to the principal and interest outstanding at the time of the assignment in accordance
with clause (i).
(F) ELIGIBLE LENDER LIMITATION.—A loan shall not be
sold to an eligible lender under subparagraph (A)(i) if such
lender 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.
(G) DEFAULT DUE TO ERROR.—A loan that does not
meet the requirements of subparagraph (A) may also be eligible for sale or assignment under this paragraph upon a
determination that the loan was in default due to clerical
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or data processing error and would not, in the absence of
such error, be in a delinquent status.
(2) USE OF PROCEEDS OF SALES.—Amounts received by the
Secretary pursuant to the sale of such loans by a guaranty
agency under paragraph (1)(A)(i) shall be deducted from the
calculations of the amount of reimbursement for which the
agency is eligible under paragraph (1)(D)(ii)(I) for the fiscal
year in which the amount was received, notwithstanding the
fact that the default occurred in a prior fiscal year.
(3) BORROWER ELIGIBILITY.—Any borrower whose loan is
sold or assigned under paragraph (1)(A) shall not be precluded
by section 484 from receiving additional loans or grants under
this title (for which he or she is otherwise eligible) on the basis
of defaulting on the loan prior to such loan sale or assignment.
(4) APPLICABILITY OF GENERAL LOAN CONDITIONS.—A loan
that is sold or assigned under paragraph (1) shall, so long as
the borrower continues to make scheduled repayments thereon,
be subject to the same terms and conditions and qualify for the
same benefits and privileges as other loans made under this
part.
(5) LIMITATION.—A borrower may obtain the benefits available under this subsection with respect to rehabilitating a loan
(whether by loan sale or assignment) only one time per loan.
(b) SATISFACTORY REPAYMENT ARRANGEMENTS TO RENEW ELIGIBILITY.—Each guaranty agency shall establish a program which
allows a borrower with a defaulted loan or loans to renew eligibility
for all title IV student financial assistance (regardless of whether
the defaulted loan has been sold to an eligible lender or assigned
to the Secretary) upon the borrower’s payment of 6 consecutive
monthly payments. The guaranty agency shall not demand from a
borrower as a monthly payment amount under this subsection
more than is reasonable and affordable based upon the borrower’s
total financial circumstances. A borrower may only obtain the benefit of this subsection with respect to renewed eligibility once.
(c) FINANCIAL AND ECONOMIC LITERACY.—Each program described in subsection (b) shall include making available financial
and economic education materials for a borrower who has rehabilitated a loan.
SEC. 428G. ø20 U.S.C. 1078–7¿ REQUIREMENTS FOR DISBURSEMENT OF
STUDENT LOANS.
(a) MULTIPLE DISBURSEMENT REQUIRED.—
(1) TWO DISBURSEMENTS REQUIRED.—The proceeds of any
loan made, insured, or guaranteed under this part that is
made for any period of enrollment shall be disbursed in 2 or
more installments, none of which exceeds one-half of the loan.
(2) MINIMUM INTERVAL REQUIRED.—The interval between
the first and second such installments shall be not less than
one-half of such period of enrollment, except as necessary to
permit the second installment to be disbursed at the beginning
of the second semester, quarter, or similar division of such period of enrollment.
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HIGHER EDUCATION ACT OF 1965
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(3) 1 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 Reconciliation Act of 2005.
(4) AMENDMENT TO SPECIAL RULE.—Beginning on October
1, 2011, the special rule under paragraph (3) shall be applied
by substituting ‘‘15 percent’’ for ‘‘10 percent’’.
(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 from the requirements of this paragraph. 1 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 Reconciliation Act of
2005.
(2) OTHER STUDENTS.—The proceeds of any loan made, insured, or guaranteed under this part that is made to any student other than a student described in paragraph (1) shall not
be disbursed more than 30 days prior to the beginning of the
period of enrollment for which the loan is made.
(3) AMENDMENT TO COHORT DEFAULT RATE EXEMPTION.—
Beginning on October 1, 2011, the exemption to the requirements of paragraph (1) in the second sentence of such paragraph shall be applied by substituting ‘‘15 percent’’ for ‘‘10 percent’’.
(c) METHOD OF MULTIPLE DISBURSEMENT.—Disbursements
under subsection (a)—
(1) shall be made in accordance with a schedule provided
by the institution (under section 428(a)(2)(A)(i)(II)) that complies with the requirements of this section;
1 Section 422(a) of Public Law 105–244 added paragraph (3). Section 422(d) of such Act states
the amendments made by subsections (a) and (b) of section 422 shall be effective during the
period beginning on October 1, 1998, and ending on September 30, 2002.
1 Section 422(b) of Public Law 105–244 added a new sentence at the end. Section 422(d) of
such Act states the amendments made by subsections (a) and (b) shall be effective during the
period beginning on October 1, 1998, and ending on September 30, 2002.
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(2) may be made directly by the lender or, in the case of
a loan under sections 428 and 428A, may be disbursed pursuant to the escrow provisions of section 428(i); and
(3) notwithstanding subsection (a)(2), may, with the permission of the borrower, be disbursed by the lender on a weekly or monthly basis, provided that the proceeds of the loan are
disbursed by the lender in substantially equal weekly or
monthly installments, as the case may be, over the period of
enrollment for which the loan is made.
(d) WITHHOLDING OF SECOND DISBURSEMENT.—
(1) WITHDRAWING STUDENTS.—A lender or escrow agent
that is informed by the borrower or the institution that the
borrower has ceased to be enrolled before the disbursement of
the second or any succeeding installment shall withhold such
disbursement. Any disbursement which is so withheld shall be
credited to the borrower’s loan and treated as a prepayment
thereon.
(2) STUDENTS RECEIVING OVER-AWARDS.—If the sum of a
disbursement for any student and the other financial aid obtained by such student exceeds the amount of assistance for
which the student is eligible under this title, the institution
such student is attending shall withhold and return to the
lender or escrow agent the portion (or all) of such installment
that exceeds such eligible amount, except that overawards permitted pursuant to section 443(b)(4) of the Act shall not be construed to be overawards for purposes of this paragraph. Any
portion (or all) of a disbursement installment which is so returned shall be credited to the borrower’s loan and treated as
a prepayment thereon.
(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, 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.
(f) BEGINNING OF PERIOD OF ENROLLMENT.—For purposes of
this section, a period of enrollment begins on the first day that
classes begin for the applicable period of enrollment.
(g) SALES PRIOR TO DISBURSEMENT PROHIBITED.—An eligible
lender shall not sell or transfer a promissory note for any loan
made, insured, or guaranteed under this part until the final disbursement of such loan has been made, except that the prohibition
of this subsection shall not apply if—
(1) the sale of the loan does not result in a change in the
identity of the party to whom payments will be made for the
loan; and
(2) the first disbursement of such loan has been made.
SEC. 428H. ø20 U.S.C. 1078–8¿ UNSUBSIDIZED STAFFORD LOANS FOR
MIDDLE-INCOME BORROWERS.
(a) IN GENERAL.—It is the purpose of this section to authorize
insured loans under this part that are first disbursed before July
1, 2010, for borrowers who do not qualify for Federal interest subMay 7, 2013
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HIGHER EDUCATION ACT OF 1965
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sidy payments under section 428 of this Act. Except as provided in
this section, all terms and conditions for Federal Stafford loans established under section 428 shall apply to loans made pursuant to
this section.
(b) ELIGIBLE BORROWERS.—Prior to July 1, 2010, any student
meeting the requirements for student eligibility under section 484
(including graduate and professional students as defined in regulations promulgated by the Secretary) shall be entitled to borrow an
unsubsidized Federal Stafford Loan for which the first disbursement is made before such date if the eligible institution at which
the student has been accepted for enrollment, or at which the student is in attendance, has—
(1) determined and documented the student’s need for the
loan based on the student’s estimated cost of attendance (as
determined under section 472) and the student’s estimated financial assistance, including a loan which qualifies for interest
subsidy payments under section 428; and
(2) provided the lender a statement—
(A) certifying the eligibility of the student to receive a
loan under this section and the amount of the loan for
which such student is eligible, in accordance with subsection (c); and
(B) setting forth a schedule for disbursement of the
proceeds of the loan in installments, consistent with the
requirements of section 428G.
(c) DETERMINATION OF AMOUNT OF LOAN.—The determination
of the amount of a loan by an eligible institution under subsection
(b) shall be calculated by subtracting from the estimated cost of attendance at the eligible institution any estimated financial assistance reasonably available to such student. An eligible institution
may not, in carrying out the provisions of subsection (b) of this section, provide a statement which certifies the eligibility of any student to receive any loan under this section in excess of the amount
calculated under the preceding sentence.
(d) LOAN LIMITS.—
(1) IN GENERAL.—Except as provided in paragraphs (2), (3),
and (4), the annual and aggregate limits for loans under this
section shall be the same as those established under section
428(b)(1), less any amount received by such student pursuant
to the subsidized loan program established under section 428.
(2) LIMITS FOR GRADUATE, PROFESSIONAL, AND INDEPENDENT POSTBACCALAUREATE STUDENTS.—
(A) ANNUAL LIMITS.—The maximum annual amount of
loans under this section a graduate or professional student, or a student described in clause (ii), may borrow in
any academic year (as defined in section 481(a)(2)) or its
equivalent shall be the amount determined under paragraph (1), plus—
(i) in the case of such a student who is a graduate
or professional student attending an eligible institution, $12,000; and
(ii) notwithstanding paragraph (4), in the case of
an independent student, or a dependent student whose
parents are unable to borrow under section 428B or
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Sec. 428H
HIGHER EDUCATION ACT OF 1965
346
the Federal Direct PLUS Loan Program, who has obtained a baccalaureate degree and who is enrolled in
coursework specified in paragraph (3)(B) or (4)(B) of
section 484(b)—
(I) $7,000 for coursework necessary for enrollment in a graduate or professional program; and
(II) $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.
(B) AGGREGATE LIMIT.—The maximum aggregate
amount of loans under this section a student described in
subparagraph (A) may borrow shall be the amount described in paragraph (1), adjusted to reflect the increased
annual limits described in subparagraph (A), as prescribed
by the Secretary by regulation.
(3) LIMITS FOR UNDERGRADUATE DEPENDENT STUDENTS.—
(A) ANNUAL LIMITS.—The maximum annual amount of
loans under this section an undergraduate dependent student (except an undergraduate dependent student whose
parents are unable to borrow under section 428B or the
Federal Direct PLUS Loan Program) may borrow in any
academic year (as defined in section 481(a)(2)) or its equivalent shall be the sum of the amount determined under
paragraph (1), plus $2,000.
(B) AGGREGATE LIMITS.—The maximum aggregate
amount of loans under this section a student described in
subparagraph (A) may borrow shall be $31,000.
(4) LIMITS FOR UNDERGRADUATE INDEPENDENT STUDENTS.—
(A) ANNUAL LIMITS.—The maximum annual amount of
loans under this section an undergraduate independent
student, or an undergraduate dependent student whose
parents are unable to borrow under section 428B or the
Federal Direct PLUS Loan Program, may borrow in any
academic year (as defined in section 481(a)(2)) or its equivalent shall be the sum of the amount determined under
paragraph (1), plus—
(i) in the case of such a student attending an eligible institution who has not completed such student’s
first 2 years of undergraduate study—
(I) $6,000, if such student is enrolled in a program whose length is at least one academic year
in length; or
(II) if such student is enrolled in a program of
undergraduate education which is less than one
academic year, the maximum annual loan amount
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HIGHER EDUCATION ACT OF 1965
Sec. 428H
that such student may receive may not exceed the
amount that bears the same ratio to the amount
specified in subclause (I) as the length of such program measured in semester, trimester, quarter, or
clock hours bears to one academic year;
(ii) in the case of such a student at an eligible institution who has successfully completed such first
and second years but has not successfully completed
the remainder of a program of undergraduate education—
(I) $7,000; or
(II) if such student is enrolled in a program of
undergraduate education, the remainder of which
is less than one academic year, the maximum annual loan amount that such student may receive
may not exceed the amount that bears the same
ratio to the amount specified in subclause (I) as
such remainder measured in semester, trimester,
quarter, or clock hours bears to one academic
year; and
(iii) in the case of such a student enrolled in
coursework specified in—
(I) section 484(b)(3)(B), $6,000; or
(II) section 484(b)(4)(B), $7,000.
(B) AGGREGATE LIMITS.—The maximum aggregate
amount of loans under this section a student described in
subparagraph (A) may borrow shall be $57,500.
(5) CAPITALIZED INTEREST.—Interest capitalized shall not
be deemed to exceed a maximum aggregate amount determined under subparagraph (B) of paragraph (2), (3), or (4).
(e) PAYMENT OF PRINCIPAL AND INTEREST.—
(1) COMMENCEMENT OF REPAYMENT.—Repayment of principal on loans made under this section shall begin at the beginning of the repayment period described in section 428(b)(7).
Not less than 30 days prior to the anticipated commencement
of such repayment period, the holder of such loan shall provide
notice to the borrower that interest will accrue before repayment begins and of the borrower’s option to begin loan repayment at an earlier date.
(2) CAPITALIZATION OF INTEREST.—(A) Interest on loans
made under this section for which payments of principal are
not required during the in-school and grace periods or for
which payments are deferred under sections 427(a)(2)(C) and
428(b)(1)(M) shall, if agreed upon by the borrower and the
lender—
(i) be paid monthly or quarterly; or
(ii) be added to the principal amount of the loan by the
lender only—
(I) when the loan enters repayment;
(II) at the expiration of a grace period, in the case
of a loan that qualifies for a grace period;
(III) at the expiration of a period of deferment or
forbearance; or
(IV) when the borrower defaults.
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Sec. 428H
HIGHER EDUCATION ACT OF 1965
348
(B) The capitalization of interest described in subparagraph (A) shall not be deemed to exceed the annual insurable
limit on account of the student.
(3) SUBSIDIES PROHIBITED.—No payments to reduce interest costs shall be paid pursuant to section 428(a) of this part
on loans made pursuant to this section.
(4) APPLICABLE RATES OF INTEREST.—Interest on loans
made pursuant to this section shall be at the applicable rate
of interest provided in section 427A.
(5) AMORTIZATION.—The amount of the periodic payment
and the repayment schedule for any loan made pursuant to
this section shall be established by assuming an interest rate
equal to the applicable rate of interest at the time the repayment of the principal amount of the loan commences. At the
option of the lender, the note or other written evidence of the
loan may require that—
(A) the amount of the periodic payment will be adjusted annually; or
(B) the period of repayment of principal will be lengthened or shortened,
in order to reflect adjustments in interest rates occurring as a
consequence of section 427A(c)(4).
(6) REPAYMENT PERIOD.—For purposes of calculating the
repayment period under section 428(b)(9), such period shall
commence at the time the first payment of principal is due
from the borrower.
(7) QUALIFICATION FOR FORBEARANCE.—A lender may
grant the borrower of a loan under this section a forbearance
for a period not to exceed 60 days if the lender reasonably determines that such a forbearance from collection activity is
warranted following a borrower’s request for forbearance,
deferment, or a change in repayment plan, or a request to consolidate loans in order to collect or process appropriate supporting documentation related to the request. During any such
period, interest on the loan shall accrue but not be capitalized.
ø(f) Repealed¿
(g) SINGLE APPLICATION FORM AND LOAN REPAYMENT SCHEDULE.—A guaranty agency shall use a single application form and
a single repayment schedule for subsidized Federal Stafford loans
made pursuant to section 428 and for unsubsidized Federal Stafford loans made pursuant to this section.
(h) INSURANCE PREMIUM.—Each State or nonprofit private institution or organization having an agreement with the Secretary
under section 428(b)(1) may charge a borrower under this section
an insurance premium equal to not more than 1.0 percent of the
principal amount of the loan, if such premium will not be used for
incentive payments to lenders. Effective for loans for which the
date of guarantee of principal is on or after July 1, 2006, and that
are first disbursed before July 1, 2010, in lieu of the insurance premium authorized under the preceding sentence, each State or nonprofit private institution or organization having an agreement with
the Secretary under section 428(b)(1) shall collect and deposit into
the Federal Student Loan Reserve Fund under section 422A, a Federal default fee of an amount equal to 1.0 percent of the principal
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HIGHER EDUCATION ACT OF 1965
Sec. 428J
amount of the loan, which fee shall be collected either by deduction
from the proceeds of the loan or by payment from other non-Federal sources. The Federal default fee shall not be used for incentive
payments to lenders.
SEC. 428J. 1 ø20 U.S.C. 1078–10¿ LOAN FORGIVENESS FOR TEACHERS.
(a) STATEMENT OF PURPOSE.—It is the purpose of this section
to encourage individuals to enter and continue in the teaching profession.
(b) PROGRAM AUTHORIZED.—The Secretary shall carry out a
program, through the holder of the loan, of assuming the obligation
to repay a qualified loan amount for a loan made under section 428
or 428H, in accordance with subsection (c), for any new borrower
on or after October 1, 1998, who—
(1) has been employed as a full-time teacher for 5 consecutive complete school years—
(A) in a school or location that qualifies under section
465(a)(2)(A) for loan cancellation for Perkins loan recipients who teach in such schools or locations; and
(B) if employed as an elementary school or secondary
school teacher, is highly qualified as defined in section
9101 of the Elementary Secondary Education Act of 1965,
or meets the requirements of subsection (g)(3); and
(2) is not in default on a loan for which the borrower seeks
forgiveness.
(c) QUALIFIED LOANS AMOUNT.—
(1) IN GENERAL.—The Secretary shall repay not more than
$5,000 in the aggregate of the loan obligation on a loan made
under section 428 or 428H that is outstanding after the completion of the fifth complete school year of teaching described
in subsection (b)(1). No borrower may receive a reduction of
loan obligations under both this section and section 460.
(2) TREATMENT OF CONSOLIDATION LOANS.—A loan amount
for a loan made under section 428C may be a qualified loan
amount for the purposes of this subsection only to the extent
that such loan amount was used to repay a Federal Direct
Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, or
a loan made under section 428 or 428H for a borrower who
meets the requirements of subsection (b), as determined in accordance with regulations prescribed by the Secretary.
(3) ADDITIONAL AMOUNTS FOR TEACHERS IN MATHEMATICS,
SCIENCE,
OR
SPECIAL
EDUCATION.—Notwithstanding
the
amount specified in paragraph (1), the aggregate amount that
the Secretary shall repay under this section shall be not more
than $17,500 in the case of—
(A) a secondary school teacher—
(i) who meets the requirements of subsection (b);
and
(ii) whose qualifying employment for purposes of
such subsection is teaching mathematics or science on
a full-time basis; and
(B) an elementary school or secondary school teacher—
(i) who meets the requirements of subsection (b);
1 Section
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428I was repealed by section 302(a) of Public Law 110–84 (121 Stat. 796).
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HIGHER EDUCATION ACT OF 1965
350
(ii) whose qualifying employment for purposes of
such subsection is as a special education teacher
whose primary responsibility is to provide special education to children with disabilities (as those terms are
defined in section 602 of the Individuals with Disabilities Education Act); and
(iii) who, as certified by the chief administrative
officer of the public or non-profit private elementary
school or secondary school in which the borrower is
employed, or, in the case of a teacher who is employed
by an educational service agency, as certified by the
chief administrative officer of such agency, is teaching
children with disabilities that correspond with the borrower’s special education training and has demonstrated knowledge and teaching skills in the content
areas of the elementary school or secondary school curriculum that the borrower is teaching.
(d) REGULATIONS.—The Secretary is authorized to issue such
regulations as may be necessary to carry out the provisions of this
section.
(e) CONSTRUCTION.—Nothing in this section shall be construed
to authorize any refunding of any repayment of a loan.
(f ) LIST.—If the list of schools in which a teacher may perform
service pursuant to subsection (b) is not available before May 1 of
any year, the Secretary may use the list for the year preceding the
year for which the determination is made to make such service determination.
(g) ADDITIONAL ELIGIBILITY PROVISIONS.—
(1) CONTINUED ELIGIBILITY.—Any teacher who performs
service in a school that—
(A) meets the requirements of subsection (b)(1)(A) in
any year during such service; and
(B) in a subsequent year fails to meet the requirements of such subsection,
may continue to teach in such school and shall be eligible for
loan forgiveness pursuant to subsection (b).
(2) PREVENTION OF DOUBLE BENEFITS.—No borrower may,
for the same service, receive a benefit under both this section
and—
(A) section 428K;
(B) section 455(m); or
(C) subtitle D of title I of the National and Community
Service Act of 1990 (42 U.S.C. 12601 et seq.).
(3) PRIVATE SCHOOL TEACHERS.—An individual who is employed as a teacher in a private school and is exempt from
State certification requirements (unless otherwise applicable
under State law), may, in lieu of the requirement of subsection
(b)(1)(B), have such employment treated as qualifying employment under this section if such individual is permitted to and
does satisfy rigorous subject knowledge and skills tests by taking competency tests in the applicable grade levels and subject
areas. For such purposes, the competency tests taken by such
a private school teacher shall be recognized by 5 or more
States for the purpose of fulfilling the highly qualified teacher
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HIGHER EDUCATION ACT OF 1965
Sec. 428K
requirements under section 9101 of the Elementary and Secondary Education Act of 1965, and the score achieved by such
teacher on each test shall equal or exceed the average passing
score of those 5 States.
(h) DEFINITION.—For purposes of this section, the term ‘‘year’’,
where applied to service as a teacher, means an academic year as
defined by the Secretary.
SEC. 428K. ø20 U.S.C. 1078–11¿ LOAN FORGIVENESS FOR SERVICE IN
AREAS OF NATIONAL NEED.
(a) PROGRAM AUTHORIZED.—
(1) LOAN FORGIVENESS AUTHORIZED.—The Secretary shall
forgive, in accordance with this section, the qualified loan
amount described in subsection (c) of the student loan obligation of a borrower who—
(A) is employed full-time in an area of national need,
as described in subsection (b); and
(B) is not in default on a loan for which the borrower
seeks forgiveness.
(2) METHOD OF LOAN FORGIVENESS.—To provide loan forgiveness under paragraph (1), the Secretary is authorized to
carry out a program—
(A) through the holder of the loan, to assume the obligation to repay a qualified loan amount for a loan made,
insured, or guaranteed under this part (other than an excepted PLUS loan or an excepted consolidation loan (as
such terms are defined in section 493C(a))); and
(B) to cancel a qualified loan amount for a loan made
under part D of this title (other than an excepted PLUS
loan or an excepted consolidation loan).
(3) REGULATIONS.—The Secretary is authorized to issue
such regulations as may be necessary to carry out this section.
(b) AREAS OF NATIONAL NEED.—For purposes of this section,
an individual is employed in an area of national need if the individual meets the requirements of one of the following:
(1) EARLY CHILDHOOD EDUCATORS.—The individual is employed full-time as an early childhood educator.
(2) NURSES.—The individual is employed full-time—
(A) as a nurse in a clinical setting; or
(B) as a member of the nursing faculty at an accredited school of nursing (as those terms are defined in section 801 of the Public Health Service Act (42 U.S.C. 296)).
(3) FOREIGN LANGUAGE SPECIALISTS.—The individual—
(A) has obtained a baccalaureate or advanced degree
in a critical foreign language; and
(B) is employed full-time—
(i) in an elementary school or secondary school as
a teacher of a critical foreign language;
(ii) in an agency of the United States Government
in a position that regularly requires the use of such
critical foreign language; or
(iii) in an institution of higher education as a faculty member or instructor teaching a critical foreign
language.
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Sec. 428K
HIGHER EDUCATION ACT OF 1965
352
(4) LIBRARIANS.—The individual is employed full-time as a
librarian in—
(A) a public library that serves a geographic area within which the public schools have a combined average of 30
percent or more of the schools’ total student enrollments
composed of children meeting a measure of poverty under
section 1113(a)(5) of the Elementary and Secondary Education Act of 1965; or
(B) a school that qualifies under section 465(a)(2)(A)
for loan cancellation for Perkins loan recipients who teach
in such a school.
(5) HIGHLY QUALIFIED TEACHERS SERVING STUDENTS WHO
ARE LIMITED ENGLISH PROFICIENT, LOW-INCOME COMMUNITIES,
AND UNDERREPRESENTED POPULATIONS.—The individual—
(A) is highly qualified, as such term is defined in section 9101 of the Elementary and Secondary Education Act
of 1965; and
(B) is employed full-time—
(i) as a teacher educating students who are limited English proficient;
(ii) as a teacher in a school that qualifies under
section 465(a)(2)(A) for loan cancellation for Perkins
loan recipients who teach in such a school;
(iii) as a teacher and is an individual from an
underrepresented population in the teaching profession, as determined by the Secretary; or
(iv) as a teacher in an educational service agency,
as such term is defined in section 9101 of the Elementary and Secondary Education Act of 1965.
(6) CHILD WELFARE WORKERS.—The individual—
(A) has obtained a degree in social work or a related
field with a focus on serving children and families; and
(B) is employed full-time in public or private child welfare services.
(7) SPEECH-LANGUAGE PATHOLOGISTS AND AUDIOLOGISTS.—
The individual—
(A) is employed full-time as a speech-language pathologist or audiologist in an eligible preschool program or a
school that qualifies under section 465(a)(2)(A) for loan
cancellation for Perkins loan recipients who teach in such
a school; and
(B) has, at a minimum, a graduate degree in speechlanguage pathology, audiology, or communication sciences
and disorders.
(8) SCHOOL COUNSELORS.—The individual is employed fulltime as a school counselor (as such term is defined in section
5421(e) of the Elementary and Secondary Education Act of
1965), in a school that qualifies under section 465(a)(2)(A) for
loan cancellation for Perkins loan recipients who teach in such
a school.
(9) PUBLIC SECTOR EMPLOYEES.—The individual is employed full-time in—
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(A) public safety (including as a first responder, firefighter, police officer, or other law enforcement or public
safety officer);
(B) emergency management (including as an emergency medical technician);
(C) public health (including full-time professionals engaged in health care practitioner occupations and health
care support occupations, as such terms are defined by the
Bureau of Labor Statistics); or
(D) public interest legal services (including prosecution, public defense, or legal advocacy in low-income communities at a nonprofit organization).
(10) NUTRITION PROFESSIONALS.—The individual—
(A) is a licensed, certified, or registered dietician who
has completed a degree in a relevant field; and
(B) is employed full-time as a dietician with an agency
of the special supplemental nutrition program for women,
infants, and children under section 17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786).
(11) MEDICAL SPECIALISTS.—The individual—
(A) has received a degree from a medical school at an
institution of higher education; and
(B) has been accepted to, or currently participates in,
a full-time graduate medical education training program or
fellowship (or both) to provide health care services (as recognized by the Accreditation Council for Graduate Medical
Education) that—
(i) requires more than five years of total graduate
medical training; and
(ii) has fewer United States medical school graduate applicants than the total number of positions
available in such program or fellowship.
(12) MENTAL HEALTH PROFESSIONALS.—The individual—
(A) has not less than a master’s degree in social work,
psychology, or psychiatry; and
(B) is employed full-time providing mental health services to children, adolescents, or veterans.
(13) DENTISTS.—The individual—
(A)(i) has received a degree from an accredited dental
school (as accredited by the Commission on Dental Accreditation);
(ii) has completed residency training in pediatric dentistry, general dentistry, or dental public health; and
(iii) is employed full-time as a dentist; or
(B) is employed full-time as a member of the faculty
at a program or school accredited by the Commission on
Dental Accreditation.
(14) STEM EMPLOYEES.—The individual is employed fulltime in applied sciences, technology, engineering, or mathematics.
(15) PHYSICAL THERAPISTS.—The individual—
(A) is a physical therapist; and
(B) is employed full-time providing physical therapy
services to children, adolescents, or veterans.
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HIGHER EDUCATION ACT OF 1965
354
(16) SUPERINTENDENTS, PRINCIPALS, AND OTHER ADMINISTRATORS.—The individual is employed full-time as a school superintendent, principal, or other administrator in a local educational agency, including in an educational service agency, in
which 30 percent or more of the schools are schools that qualify under section 465(a)(2)(A) for loan cancellation for Perkins
loan recipients who teach in such a school.
(17) OCCUPATIONAL THERAPISTS.—The individual is an occupational therapist and is employed full-time providing occupational therapy services to children, adolescents, or veterans.
(18) ALLIED HEALTH PROFESSIONALS.—The individual is
employed full-time as an allied health professional—
(A) in a Federal, State, local, or tribal public health
agency; or
(B) in a setting where patients might require health
care services, including acute care facilities, ambulatory
care facilities, personal residences and other settings located in health professional shortage areas, medically underserved areas, or medically underserved populations, as
recognized by the Secretary of Health and Human Services.
(c) QUALIFIED LOAN AMOUNT.—
(1) IN GENERAL.—Subject to paragraph (2), for each school,
academic, or calendar year of full-time employment in an area
of national need described in subsection (b) that a borrower
completes on or after the date of enactment of the Higher Education Opportunity Act, the Secretary shall forgive not more
than $2,000 of the student loan obligation of the borrower that
is outstanding after the completion of each such school, academic, or calendar year of employment, respectively.
(2) MAXIMUM AMOUNT.—The Secretary shall not forgive
more than $10,000 in the aggregate for any borrower under
this section, and no borrower shall receive loan forgiveness
under this section for more than five years of service.
(d) PRIORITY.—The Secretary shall grant loan forgiveness
under this section on a first-come, first-served basis, and subject to
the availability of appropriations.
(e) RULE OF CONSTRUCTION.—Nothing in this section shall be
construed to authorize the refunding of any repayment of a loan.
(f) INELIGIBILITY FOR DOUBLE BENEFITS.—No borrower may,
for the same service, receive a reduction of loan obligations under
both this section and section 428J, 428L, 455(m), or 460.
(g) DEFINITIONS.—In this section:
(1) ALLIED HEALTH PROFESSIONAL.—The term ‘‘allied
health professional’’ means an allied health professional as defined in section 799B(5) of the Public Heath Service Act (42
U.S.C. 295p(5)) who—
(A) has graduated and received an allied health professions degree or certificate from an institution of higher
education; and
(B) is employed with a Federal, State, local or tribal
public health agency, or in a setting where patients might
require health care services, including acute care facilities,
ambulatory care facilities, personal residences and other
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HIGHER EDUCATION ACT OF 1965
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settings located in health professional shortage areas,
medically underserved areas, or medically underserved
populations, as recognized by the Secretary of Health and
Human Services.
(2) AUDIOLOGIST.—The term ‘‘audiologist’’ means an individual who—
(A) has received, at a minimum, a graduate degree in
audiology from an institution of higher education accredited by an agency or association recognized by the Secretary pursuant to section 496(a); and
(B)(i) provides audiology services under subsection
(ll)(2) of section 1861 of the Social Security Act (42 U.S.C.
1395x(ll)(2)); or
(ii) meets or exceeds the qualifications for a qualified
audiologist under subsection (ll)(4) of such section (42
U.S.C. 1395x(ll)(4)).
(3) EARLY CHILDHOOD EDUCATOR.—The term ‘‘early childhood educator’’ means an individual who—
(A) works directly with children in an eligible preschool program or eligible early childhood education program in a low-income community;
(B) is involved directly in the care, development, and
education of infants, toddlers, or young children age five
and under; and
(C) has completed a baccalaureate or advanced degree
in early childhood development or early childhood education, or in a field related to early childhood education.
(4) ELIGIBLE PRESCHOOL PROGRAM.—The term ‘‘eligible preschool program’’ means a program that—
(A) provides for the care, development, and education
of infants, toddlers, or young children age five and under;
(B) meets any applicable State or local government licensing, certification, approval, and registration requirements, and
(C) is operated by—
(i) a public or private school that is supported,
sponsored, supervised, or administered by a local educational agency;
(ii) a Head Start agency serving as a grantee designated under the Head Start Act (42 U.S.C. 9831 et
seq.);
(iii) a nonprofit or community based organization;
or
(iv) a child care program, including a home.
(5) ELIGIBLE EARLY CHILDHOOD EDUCATION PROGRAM.—The
term ‘‘eligible early childhood education program’’ means—
(A) a family child care program, center-based child
care program, State prekindergarten program, school program, or other out-of-home early childhood development
care program, that—
(i) is licensed or regulated by the State; and
(ii) serves two or more unrelated children who are
not old enough to attend kindergarten;
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(B) a Head Start Program carried out under the Head
Start Act (42 U.S.C. 9831 et seq.); or
(C) an Early Head Start Program carried out under
section 645A of the Head Start Act (42 U.S.C. 9840a).
(6) LOW-INCOME COMMUNITY.—The term ‘‘low-income community’’ means a school attendance area (as defined in section
1113(a)(2)(A) of the Elementary and Secondary Education Act
of 1965)—
(A) in which 70 percent of households earn less than
85 percent of the State median household income; or
(B) that includes a school that qualifies under section
465(a)(2)(A) for loan cancellation for Perkins loan recipients who teach in such a school.
(7) NURSE.—The term ‘‘nurse’’ means a nurse who meets
all of the following:
(A) The nurse graduated from—
(i) an accredited school of nursing (as those terms
are defined in section 801 of the Public Health Service
Act (42 U.S.C. 296));
(ii) a nursing center; or
(iii) an academic health center that provides nurse
training.
(B) The nurse holds a valid and unrestricted license to
practice nursing in the State in which the nurse practices
in a clinical setting.
(C) The nurse holds one or more of the following:
(i) A graduate degree in nursing, or an equivalent
degree.
(ii) A nursing degree from a collegiate school of
nursing (as defined in section 801 of the Public Health
Service Act (42 U.S.C. 296)).
(iii) A nursing degree from an associate degree
school of nursing (as defined in such section).
(iv) A nursing degree from a diploma school of
nursing (as defined in such section).
(8) OCCUPATIONAL THERAPIST.—The term ‘‘occupational
therapist’’ means an individual who—
(A) has received, at a minimum, a baccalaureate degree in occupational therapy from an institution of higher
education accredited by an agency or association recognized by the Secretary pursuant to section 496(a); and
(B)(i) provides occupational therapy services under
section 1861(g) of the Social Security Act (42 U.S.C.
1395x(g)); or
(ii) meets or exceeds the qualifications for a qualified
occupational therapist, as determined by State law.
(9) PHYSICAL THERAPIST.—The term ‘‘physical therapist’’
means an individual who—
(A) has received, at a minimum, a graduate degree in
physical therapy from an institution of higher education
accredited by an agency or association recognized by the
Secretary pursuant to section 496(a); and
(B)(i) provides physical therapy services under section
1861(p) of the Social Security Act (42 U.S.C. 1395x(p)); or
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HIGHER EDUCATION ACT OF 1965
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(ii) meets or exceeds the qualifications for a qualified
physical therapist, as determined by State law.
(10) SPEECH-LANGUAGE PATHOLOGIST.—The term ‘‘speechlanguage pathologist’’ means a speech-language pathologist
who—
(A) has received, at a minimum, a graduate degree in
speech-language pathology or communication sciences and
disorders from an institution of higher education accredited by an agency or association recognized by the Secretary pursuant to section 496(a); and
(B) provides speech-language pathology services under
section 1861(ll)(1) of the Social Security Act (42 U.S.C.
1395x(ll)(1)), or meets or exceeds the qualifications for a
qualified speech-language pathologist under subsection
(ll)(4) of such section (42 U.S.C. 1395x(ll)(4)).
(h) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years to provide loan forgiveness in accordance with this section.
SEC. 428L. ø20 U.S.C. 1078–12¿ LOAN REPAYMENT FOR CIVIL LEGAL ASSISTANCE ATTORNEYS.
(a) PURPOSE.—The purpose of this section is to encourage
qualified individuals to enter and continue employment as civil
legal assistance attorneys.
(b) DEFINITIONS.—In this section:
(1) CIVIL LEGAL ASSISTANCE ATTORNEY.—The term ‘‘civil
legal assistance attorney’’ means an attorney who—
(A) is a full-time employee of—
(i) a nonprofit organization that provides legal assistance with respect to civil matters to low-income individuals without a fee; or
(ii) a protection and advocacy system or client assistance program that provides legal assistance with
respect to civil matters and receives funding under—
(I) subtitle C of title I of the Developmental
Disabilities Assistance and Bill of Rights Act of
2000 (42 U.S.C. 15041 et seq.);
(II) section 112 or 509 of the Rehabilitation
Act of 1973 (29 U.S.C. 732, 794e);
(III) part A of title I of the Protection and Advocacy for Individuals with Mental Illness Act (42
U.S.C. 10801 et seq.);
(IV) section 5 of the Assistive Technology Act
of 1998 (29 U.S.C. 3004);
(V) section 1150 of the Social Security Act (42
U.S.C. 1320b–21);
(VI) section 1253 of the Public Health Service
Act (42 U.S.C. 300d–53); or
(VII) section 291 of the Help America Vote
Act of 2002 (42 U.S.C. 15461);
(B) as such employee, provides civil legal assistance as
described in subparagraph (A) on a full-time basis; and
(C) is continually licensed to practice law.
(2) STUDENT LOAN.—
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(A) IN GENERAL.—Except as provided in subparagraph
(B), the term ‘‘student loan’’ means—
(i) subject to clause (ii), a loan made, insured, or
guaranteed under this part, part D, or part E; and
(ii) a loan made under section 428C or 455(g), to
the extent that such loan was used to repay—
(I) a Federal Direct Stafford Loan, a Federal
Direct Unsubsidized Stafford Loan, or a Federal
Direct PLUS Loan;
(II) a loan made under section 428, 428B, or
428H; or
(III) a loan made under part E.
(B) EXCLUSION OF PARENT PLUS LOANS.—The term
‘‘student loan’’ does not include any of the following loans:
(i) A loan made to the parents of a dependent student under section 428B.
(ii) A Federal Direct PLUS Loan made to the parents of a dependent student.
(iii) A loan made under section 428C or 455(g), to
the extent that such loan was used to repay—
(I) a loan made to the parents of a dependent
student under section 428B; or
(II) a Federal Direct PLUS Loan made to the
parents of a dependent student.
(c) PROGRAM AUTHORIZED.—From amounts appropriated under
subsection (i) for a fiscal year, the Secretary shall carry out a program of assuming the obligation to repay a student loan, by direct
payments on behalf of a borrower to the holder of such loan, in accordance with subsection (d), for any borrower who—
(1) is employed as a civil legal assistance attorney; and
(2) is not in default on a loan for which the borrower seeks
repayment.
(d) TERMS OF AGREEMENT.—
(1) IN GENERAL.—To be eligible to receive repayment benefits under subsection (c), a borrower shall enter into a written
agreement with the Secretary that specifies that—
(A) the borrower will remain employed as a civil legal
assistance attorney for a required period of service of not
less than three years, unless involuntarily separated from
that employment;
(B) if the borrower is involuntarily separated from employment on account of misconduct, or voluntarily separates from employment, before the end of the period specified in the agreement, the borrower will repay the Secretary the amount of any benefits received by such employee under this agreement;
(C) if the borrower is required to repay an amount to
the Secretary under subparagraph (B) and fails to repay
such amount, a sum equal to that amount shall be recoverable by the Federal Government from the employee by
such methods as are provided by law for the recovery of
amounts owed to the Federal Government;
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(D) the Secretary may waive, in whole or in part, a
right of recovery under this subsection if it is shown that
recovery would be contrary to the public interest; and
(E) the Secretary shall make student loan payments
under this section for the period of the agreement, subject
to the availability of appropriations.
(2) REPAYMENTS.—
(A) IN GENERAL.—Any amount repaid by, or recovered
from, an individual under this subsection shall be credited
to the appropriation account from which the amount involved was originally paid.
(B) MERGER.—Any amount credited under subparagraph (A) shall be merged with other sums in such account
and shall be available for the same purposes and period,
and subject to the same limitations, if any, as the sums
with which the amount was merged.
(3) LIMITATIONS.—
(A) STUDENT LOAN PAYMENT AMOUNT.—Student loan
repayments made by the Secretary under this section shall
be made subject to such terms, limitations, or conditions as
may be mutually agreed upon by the borrower and the
Secretary in an agreement under paragraph (1), except
that the amount paid by the Secretary under this section
shall not exceed—
(i) $6,000 for any borrower in any calendar year;
or
(ii) an aggregate total of $40,000 in the case of
any borrower.
(B) BEGINNING OF PAYMENTS.—Nothing in this section
shall authorize the Secretary to pay any amount to reimburse a borrower for any repayments made by such borrower prior to the date on which the Secretary entered into
an agreement with the borrower under this subsection.
(e) ADDITIONAL AGREEMENTS.—
(1) IN GENERAL.—On completion of the required period of
service under an agreement under subsection (d), the borrower
and the Secretary may, subject to paragraph (2), enter into an
additional agreement in accordance with subsection (d).
(2) TERM.—An agreement entered into under paragraph (1)
may require the borrower to remain employed as a civil legal
assistance attorney for less than three years.
(f) AWARD BASIS; PRIORITY.—
(1) AWARD BASIS.—Subject to paragraph (2), the Secretary
shall provide repayment benefits under this section on a firstcome, first-served basis, and subject to the availability of appropriations.
(2) PRIORITY.—The Secretary shall give priority in providing repayment benefits under this section in any fiscal year
to a borrower who—
(A) has practiced law for five years or less and, for not
less than 90 percent of the time in such practice, has
served as a civil legal assistance attorney;
(B) received repayment benefits under this section
during the preceding fiscal year; and
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HIGHER EDUCATION ACT OF 1965
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(C) has completed less than three years of the first required period of service specified for the borrower in an
agreement entered into under subsection (d).
(g) INELIGIBILITY FOR DOUBLE BENEFITS.—No borrower may,
for the same service, receive a reduction of loan obligations under
both this section and section 428K or 455(m).
(h) REGULATIONS.—The Secretary is authorized to issue such
regulations as may be necessary to carry out this section.
(i) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section $10,000,000 for fiscal
year 2009 and such sums as may be necessary for each of the five
succeeding fiscal years.
SEC. 429. ø20 U.S.C. 1079¿ CERTIFICATE OF FEDERAL LOAN INSURANCE—EFFECTIVE DATE OF INSURANCE.
(a) LOAN-BY-LOAN INSURANCE.—
(1) AUTHORITY TO ISSUE CERTIFICATES ON APPLICATION.—If,
upon application by an eligible lender, made upon such form,
containing such information, and supported by such evidence
as the Secretary may require, and otherwise in conformity with
this section, the Secretary finds that the applicant has made
a loan to an eligible student which is insurable under the provisions of this part, he may issue to the applicant a certificate
of insurance covering the loan and setting forth the amount
and terms of the insurance.
(2) EFFECTIVENESS OF CERTIFICATE.—Insurance evidenced
by a certificate of insurance pursuant to subsection (a)(1) shall
become effective upon the date of issuance of the certificate, except that the Secretary is authorized, in accordance with regulations, to issue commitments with respect to proposed loans,
or with respect to lines (or proposed lines) of credit, submitted
by eligible lenders, and in that event, upon compliance with
subsection (a)(1) by the lender, the certificate of insurance may
be issued effective as of the date when any loan, or any payment by the lender pursuant to a line of credit, to be covered
by such insurance was made. Such insurance shall cease to be
effective upon 60 days’ default by the lender in the payment
of any installment of the premiums payable pursuant to subsection (c).
(3) CONTENTS OF APPLICATIONS.—An application submitted
pursuant to subsection (a)(1) shall contain (A) an agreement by
the applicant to pay, in accordance with regulations, the premiums fixed by the Secretary pursuant to subsection (c), and
(B) an agreement by the applicant that if the loan is covered
by insurance the applicant will submit such supplementary reports and statement during the effective period of the loan
agreement, upon such forms, at such times, and containing
such information as the Secretary may prescribe by or pursuant to regulation.
(b) COMPREHENSIVE INSURANCE COVERAGE CERTIFICATE.—
(1) ESTABLISHMENT OF SYSTEM BY REGULATION.—In lieu of
requiring a separate insurance application and issuing a separate certificate of insurance for each student loan made by an
eligible lender as provided in subsection (a), the Secretary may,
in accordance with regulations consistent with section 424,
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issue to any eligible lender applying therefor a certificate of
comprehensive insurance coverage which shall, without further
action by the Secretary, insure all insurable loans made by
that lender, on or after the date of the certificate and before
a specified cutoff date, within the limits of an aggregate maximum amount stated in the certificate. Such regulations may
provide for conditioning such insurance, with respect to any
loan, upon compliance by the lender with such requirements
(to be stated or incorporated by reference in the certificate) as
in the Secretary’s judgment will best achieve the purpose of
this subsection while protecting the United States from the
risk of unreasonable loss and promoting the objectives of this
part, including (but not limited to) provisions as to the reporting of such loans and information relevant thereto to the Secretary and as to the payment of initial and other premiums
and the effect of default therein, and including provision for
confirmation by the Secretary from time to time (through endorsement of the certificate) of the coverage of specific new
loans by such certificate, which confirmation shall be incontestable by the Secretary in the absence of fraud or misrepresentation of fact or patent error.
(2) UNCOVERED LOANS.—If the holder of a certificate of
comprehensive insurance coverage issued under this subsection
grants to a student a line of credit extending beyond the cutoff
date specified in that certificate, loans or payments thereon
made by the holder after that date pursuant to the line of credit shall not be deemed to be included in the coverage of that
certificate except as may be specifically provided therein; but,
subject to the limitations of section 424, the Secretary may, in
accordance with regulations, make commitments to insure such
future loans or payments, and such commitments may be honored either as provided in subsection (a) or by inclusion of such
insurance on comprehensive coverage under the subsection for
the period or periods in which such future loans or payments
are made.
(c) CHARGES FOR FEDERAL INSURANCE.—The Secretary shall,
pursuant to regulations, charge for insurance on each loan under
this part a premium in an amount not to exceed one-fourth of 1
percent per year of the unpaid principal amount of such loan (excluding interest added to principal), payable in advance, at such
times and in such manner as may be prescribed by the Secretary.
Such regulations may provide that such premium shall not be payable, or if paid shall be refundable, with respect to any period after
default in the payment of principal or interest or after the borrower
has died or becomes totally and permanently disabled, if (1) notice
of such default or other event has been duly given, and (2) requests
for payment of the loss insured against has been made or the Secretary has made such payment on his own motion pursuant to section 430(a).
(d) ASSIGNABILITY OF INSURANCE.—The rights of an eligible
lender arising under insurance evidenced by a certificate of insurance issued to it under this section may be assigned as security by
such lender only to another eligible lender, and subject to regulation by the Secretary.
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HIGHER EDUCATION ACT OF 1965
362
(e) CONSOLIDATION NOT TO AFFECT INSURANCE.—The consolidation of the obligations of two or more federally insured loans obtained by a student borrower in any fiscal year into a single obligation evidenced by a single instrument of indebtedness shall not affect the insurance by the United States. If the loans thus consolidated are covered by separate certificates of insurance issued under
subsection (a), the Secretary may upon surrender of the original
certificates issue a new certificate of insurance in accordance with
that subsection upon the consolidated obligation; if they are covered by a single comprehensive certificate issued under subsection
(b), the Secretary may amend that certificate accordingly.
SEC. 430. ø20 U.S.C. 1080¿ DEFAULT OF STUDENT UNDER FEDERAL
LOAN INSURANCE PROGRAM.
(a) NOTICE TO SECRETARY AND PAYMENT OF LOSS.—Upon de-
fault by the student borrower on any loan covered by Federal loan
insurance pursuant to this part, and prior to the commencement of
suit or other enforcement proceedings upon security for that loan,
the insurance beneficiary shall promptly notify the Secretary, and
the Secretary shall if requested (at that time or after further collection efforts) by the beneficiary, or may on the Secretary’s own motion, if the insurance is still in effect, pay to the beneficiary the
amount of the loss sustained by the insured upon that loan as soon
as that amount has been determined. The ‘‘amount of the loss’’ on
any loan shall, for the purposes of this subsection and subsection
(b), be deemed to be an amount equal to the unpaid balance of the
principal amount and accrued interest, including interest accruing
from the date of submission of a valid default claim (as determined
by the Secretary) to the date on which payment is authorized by
the Secretary, reduced to the extent required by section 425(b).
Such beneficiary shall be required to meet the standards of due
diligence in the collection of the loan and shall be required to 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). The Secretary shall
make the determination required to carry out the provisions of this
section not later than 90 days after the notification by the insurance beneficiary and shall make payment in full on the amount of
the beneficiary’s loss pending completion of the due diligence investigation.
(b) EFFECT OF PAYMENT OF LOSS.—Upon payment of the
amount of the loss pursuant to subsection (a), the United States
shall be subrogated for all of the rights of the holder of the obligation upon the insured loan and shall be entitled to an assignment
of the note or other evidence of the insured loan by the insurance
beneficiary. If the net recovery made by the Secretary on a loan
after deduction of the cost of that recovery (including reasonable
administrative costs and collection costs, to the extent set forth in
regulations issued by the Secretary) exceeds the amount of the loss,
the excess shall be paid over to the insured. The Secretary may,
in attempting to make recovery on such loans, contract with private business concerns, State student loan insurance agencies, or
State guaranty agencies, for payment for services rendered by such
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HIGHER EDUCATION ACT OF 1965
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concerns or agencies in assisting the Secretary in making such recovery. Any contract under this subsection entered into by the Secretary shall provide that attempts to make recovery on such loans
shall be fair and reasonable, and do not involve harassment, intimidation, false or misleading representations, or unnecessary
communications concerning the existence of any such loan to persons other than the student borrower.
(c) FORBEARANCE NOT PRECLUDED.—Nothing in this section or
in this part shall be construed to preclude any forbearance for the
benefit of the student borrower which may be agreed upon by the
parties to the insured loan and approved by the Secretary, or to
preclude forbearance by the Secretary in the enforcement of the insured obligation after payment on that insurance. Any forbearance
which is approved by the Secretary under this subsection with respect to the repayment of a loan, including a forbearance during
default, shall not be considered as indicating that a holder of a federally insured loan has failed to exercise reasonable care and due
diligence in the collection of the loan.
(d) CARE AND DILIGENCE REQUIRED OF HOLDERS.—Nothing in
this section or in this part shall be construed to excuse the holder
of a federally insured loan from exercising reasonable care and diligence in the making and collection of loans under the provisions of
this part. If the Secretary, after a reasonable notice and opportunity for hearing to an eligible lender, finds that it has substantially failed to exercise such care and diligence or to make the reports and statements required under section 428(a)(4) and section
429(a)(3), or to pay the required Federal loan insurance premiums,
the Secretary shall disqualify that lender for further Federal insurance on loans granted pursuant to this part until the Secretary is
satisfied that its failure has ceased and finds that there is reasonable assurance that the lender will in the future exercise necessary
care and diligence or comply with such requirements, as the case
may be.
(e) DEFAULT RATE OF LENDERS, HOLDERS, AND GUARANTY
AGENCIES.—
(1) IN GENERAL.—The Secretary shall annually publish a
list indicating the cohort default rate (determined in accordance with section 435(m)) for each originating lender, subsequent holder, and guaranty agency participating in the program assisted under this part and an average cohort default
rate for all institutions of higher education within each State.
(2) REGULATIONS.—The Secretary shall prescribe regulations designed to prevent an institution from evading the application to that institution of a cohort default rate through the
use of such measures as branching, consolidation, change of
ownership or control, or any similar device.
(3) RATE ESTABLISHMENT AND CORRECTION.—The Secretary
shall establish a cohort default rate for lenders, holders, and
guaranty agencies (determined consistent with section 435(m)),
except that the rate for lenders, holders, and guaranty agencies
shall not reflect any loans issued in accordance with section
428(j).The Secretary shall allow institutions, lenders, holders,
and guaranty agencies the opportunity to correct such cohort
default rate information.
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364
SEC. 430A. ø20 U.S.C. 1080A¿ REPORTS TO CONSUMER REPORTING
AGENCIES AND INSTITUTIONS OF HIGHER EDUCATION.
(a) AGREEMENTS TO EXCHANGE INFORMATION.—For the pur-
pose of promoting responsible repayment of loans covered by Federal loan insurance pursuant to this part or covered by a guaranty
agreement pursuant to section 428, the Secretary and each guaranty agency, eligible lender, and subsequent holder shall enter into
an agreement with each consumer reporting agency to exchange information concerning student borrowers, in accordance with the requirements of this section. For the purpose of assisting such consumer reporting agencies 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) or
by a guaranty agency, eligible lender, or subsequent holder (concerning loans covered by a guaranty agreement), or to requests
from such consumer reporting agencies for responses to objections
raised by borrowers. Subject to the requirements of subsection (c),
such agreements shall require the Secretary or the guaranty agency, eligible lender, or subsequent holder, as appropriate, to disclose
to such consumer reporting agencies, with respect to any loan
under this part that has not been repaid by the borrower—
(1) that the loan is an education loan (as such term is defined in section 151);
(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 for inclusion 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.);
(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
(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.
(b) ADDITIONAL INFORMATION.—Such agreements may also provide for the disclosure by such consumer reporting agencies to the
Secretary or a guaranty agency, whichever insures or guarantees
a loan, upon receipt of a notice under subsection (a)(4) that such
a loan is in default, of information concerning the borrower’s location or other information which may assist the Secretary, the guaranty agency, the eligible lender, or the subsequent holder in collecting the loan.
(c) CONTENTS OF AGREEMENTS.—Agreements entered into pursuant to this section shall contain such provisions as may be necessary to ensure that—
(1) no information is disclosed by the Secretary or the
guaranty agency, eligible lender, or subsequent holder unless
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HIGHER EDUCATION ACT OF 1965
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retary or the guaranty agency has determined that disclosure
would accomplish the purpose of this section;
(2) as to any information so disclosed, such consumer reporting agencies will be promptly notified of, and will promptly
record, any change submitted by the Secretary, the guaranty
agency, eligible lender, or subsequent holder with respect to
such information, or any objections by the borrower with respect to any such information, as required by section 611 of the
Fair Credit Reporting Act (15 U.S.C. 1681i);
(3) no use will be made of any such information which
would result in the use of collection practices with respect to
such a borrower that are not fair and reasonable or that involve harassment, intimidation, false or misleading representations, or unnecessary communication concerning the existence
of such loan or concerning any such information; and
(4) with regard to notices of default under subsection (a)(4)
of this section, except for disclosures made to obtain the borrower’s location, the Secretary, or the guaranty agency, eligible
lender, or subsequent holder whichever is applicable (A) shall
not disclose any such information until the borrower has been
notified that such information will be disclosed to consumer reporting agencies unless the borrower enters into repayment of
his or her loan, but (B) shall, if the borrower has not entered
into repayment within a reasonable period of time, but not less
than 30 days, from the date such notice has been sent to the
borrower, disclose the information required by this subsection.
(d) CONTRACTOR STATUS OF PARTICIPANTS.—A guaranty agency, eligible lender, or subsequent holder or consumer reporting
agency which discloses or receives information under this section
shall not be considered a Government contractor within the meaning of section 552a of title 5, United States Code.
(e) DISCLOSURE TO INSTITUTIONS.—The Secretary and each
guaranty agency, eligible lender, and subsequent holder of a loan
are authorized to disclose information described in subsections (a)
and (b) concerning student borrowers to the eligible institutions
such borrowers attend or previously attended. To further the purpose of this section, an eligible institution may enter into an arrangement with any or all of the holders of delinquent loans made
to borrowers who attend or previously attended such institution for
the purpose of providing current information regarding the borrower’s location or employment or for the purpose of assisting the
holder in contacting and influencing borrowers to avoid default.
(f) DURATION OF AUTHORITY.—Notwithstanding paragraphs (4)
and (5) of subsection (a) of section 605 of the Fair Credit Reporting
Act (15 U.S.C. 1681c (a)(4), (a)(5)), a consumer reporting agency
may make a report containing information received from the Secretary or a guaranty agency, eligible lender, or subsequent holder
regarding the status of a borrower’s defaulted account on a loan
guaranteed under this part until—
(1) 7 years from the date on which the Secretary or the
agency paid a claim to the holder on the guaranty;
(2) 7 years from the date the Secretary, guaranty agency,
eligible lender, or subsequent holder first reported the account
to the consumer reporting agency; or
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(3) in the case of a borrower who reenters repayment after
defaulting on a loan and subsequently goes into default on
such loan, 7 years from the date the loan entered default such
subsequent time.
SEC. 431. ø20 U.S.C. 1081¿ INSURANCE FUND.
(a) ESTABLISHMENT.—There is hereby
established a student
loan insurance fund (hereinafter in this section called the ‘‘fund’’)
which shall be available without fiscal year limitation to the Secretary for making payments in connection with the default of loans
insured by the Secretary under this part, or in connection with
payments under a guaranty agreement under section 428(c). All
amounts received by the Secretary as premium charges for insurance and as receipts, earnings, or proceeds derived from any claim
or other assets acquired by the Secretary in connection with operations under this part, any excess advances under section 422, and
any other moneys, property, or assets derived by the Secretary
from operations in connection with this section, shall be deposited
in the fund. All payments in connection with the default of loans
insured by the Secretary under this part, or in connection with
such guaranty agreements shall be paid from the fund. Moneys in
the fund not needed for current operations under this section may
be invested in bonds or other obligations guaranteed as to principal
and interest by the United States.
(b) BORROWING AUTHORITY.—If at any time the moneys in the
fund are insufficient to make payments in connection with the default of any loan insured by the Secretary under this part, or in
connection with any guaranty agreement made under section
428(c), the Secretary is authorized, to the extent provided in advance by appropriations Acts, to issue to the Secretary of the
Treasury notes or other obligations in such forms and denominations, bearing such maturities, and subject to such terms and conditions as may be prescribed by the Secretary with the approval of
the Secretary of the Treasury. Such notes or other obligations shall
bear interest at a rate determined by the Secretary of the Treasury, taking into consideration the current average market yield on
outstanding marketable obligations of the United States of comparable maturities during the month preceding the issuance of the
notes or other obligations. The Secretary of the Treasury is authorized and directed to purchase any notes and other obligations
issued hereunder and for that purpose is authorized to use as a
public debt transaction the proceeds from the sale of any securities
issued under the Second Liberty Bond Act, as amended, and the
purposes for which securities may be issued under that Act, as
amended, are extended to include any purchase of such notes and
obligations. The Secretary of the Treasury may at any time sell any
of the notes or other obligations acquired under this subsection. All
redemptions, purchases, and sales by the Secretary of the Treasury
of such notes or other obligations shall be treated as public debt
transactions of the United States. Sums borrowed under the subsection shall be deposited in the fund and redemption of such notes
and obligations shall be made by the Secretary from such fund.
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SEC. 432. ø20 U.S.C. 1082¿ LEGAL POWERS AND RESPONSIBILITIES.
(a) GENERAL POWERS.—In the performance of, and with respect
to, the functions, powers, and duties, vested in him by this part,
the Secretary may—
(1) prescribe such regulations as may be necessary to carry
out the purposes of this part, including regulations applicable
to third party servicers (including regulations concerning financial responsibility standards for, and the assessment of liabilities for program violations against, such servicers) to establish minimum standards with respect to sound management
and accountability of programs under this part, except that in
no case shall damages be assessed against the United States
for the actions or inactions of such servicers;
(2) sue and be sued in any court of record of a State having general jurisdiction or in any district court of the United
States, and such district courts shall have jurisdiction of civil
actions arising under this part without regard to the amount
in controversy, and action instituted under this subsection by
or against the Secretary shall survive notwithstanding any
change in the person occupying the office of Secretary or any
vacancy in that office; but no attachment, injunction, garnishment, or other similar process, mesne or final, shall be issued
against the Secretary or property under the Secretary’s control
and nothing herein shall be construed to except litigation arising out of activities under this part from the application of sections 509, 517, 547, and 2679 of title 28 of the United States
Code;
(3) include in any contract for Federal loan insurance such
terms, conditions, and covenants relating to repayment of principal and payment of interest, relating to the Secretary’s obligations and rights to those of eligible lenders, and borrowers
in case of default, and relating to such other matters as the
Secretary determines to be necessary to assure that the purposes of this part will be achieved; and any term, condition,
and covenant made pursuant to this paragraph or pursuant to
any other provision of this part may be modified by the Secretary, after notice and opportunity for a hearing, if the Secretary finds that the modification is necessary to protect the
United States from the risk of unreasonable loss;
(4) subject to the specific limitations in this part, consent
to modification, with respect to rate of interest, time of payment of any installment of principal and interest or any portion thereof, or any other provision of any note or other instrument evidencing a loan which has been insured by the Secretary under this part;
(5) enforce, pay, or compromise, any claim on, or arising
because of, any such insurance or any guaranty agreement
under section 428(c); and
(6) enforce, pay, compromise, waive, or release any right,
title, claim, lien, or demand, however acquired, including any
equity or any right of redemption.
(b) FINANCIAL OPERATIONS RESPONSIBILITIES.—The Secretary
shall, with respect to the financial operations arising by reason of
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vided for wholly owned Government corporations by chapter 91 of
title 31, United States Code. The transactions of the Secretary, including the settlement of insurance claims and of claims for payments pursuant to section 428, and transactions related thereto
and vouchers approved by the Secretary in connection with such
transactions, shall be final and conclusive upon all accounting and
other officers of the Government. The Secretary may not enter into
any settlement of any claim under this title that exceeds
$1,000,000 unless—
(1) the Secretary requests a review of the proposed settlement of such claim by the Attorney General; and
(2) the Attorney General responds to such request, which
may include, at the Attorney General’s discretion, a written
opinion related to such proposed settlement.
(c) DATA COLLECTION.—
(1) COLLECTION BY CATEGORY OF LOAN.—(A) For loans insured after December 31, 1976, or in the case of each insurer
after such earlier date where the data required by this subsection are available, the Secretary and all other insurers
under this part shall collect and accumulate all data relating
to (i) loan volume insured and (ii) defaults reimbursed or default rates according to the categories of loans listed in subparagraph (B) of this paragraph.
(B) The data indicated in subparagraph (A) of this paragraph shall be accumulated according to the category of lender
making the loan and shall be accumulated separately for lenders who are (i) eligible institutions, (ii) State or private, nonprofit direct lenders, (iii) commercial financial institutions who
are banks, savings and loan associations, or credit unions, and
(iv) all other types of institutions or agencies.
(C) The Secretary may designate such additional subcategories within the categories specified in subparagraph (B) of
this paragraph as the Secretary deems appropriate.
(D) The category or designation of a loan shall not be
changed for any reason, including its purchase or acquisition
by a lender of another category.
(2) COLLECTION AND REPORTING REQUIREMENTS.—(A) The
Secretary shall collect data under this subsection from all insurers under this part and shall publish not less often than
once every fiscal year a report showing loan volume guaranteed and default data for each category specified in subparagraph (B) of paragraph (1) of this subsection and for the total
of all lenders.
(B) The reports specified in subparagraph (A) of this paragraph shall include a separate report for each insurer under
this part including the Secretary, and where an insurer insures
loans for lenders in more than one State, such insurer’s report
shall list all data separately for each State.
(3) INSTITUTIONAL, PUBLIC, OR NONPROFIT LENDERS.—For
purposes of clarity in communications, the Secretary shall separately identify loans made by the lenders referred to in clause
(i) and loans made by the lenders referred to in clause (ii) of
paragraph (1)(B) of this subsection.
(d) DELEGATION.—
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(1) REGIONAL OFFICES.—The functions of the Secretary
under this part listed in paragraph (2) of this subsection may
be delegated to employees in the regional office of the Department.
(2) DELEGABLE FUNCTIONS.—The functions which may be
delegated pursuant to this subsection are—
(A) reviewing applications for loan insurance under
section 429 and issuing contracts for Federal loan insurance, certificates of insurance, and certificates of comprehensive insurance coverage to eligible lenders which
are financial or credit institutions subject to examination
and supervision by an agency of the United States or of
any State;
(B) receiving claims for payments under section
430(a), examining those claims, and pursuant to regulations of the Secretary, approving claims for payment, or requiring lenders to take additional collection action as a
condition for payment of claims; and
(C) certifying to the central office when collection of
defaulted loans has been completed, compromising or
agreeing to the modification of any Federal claim against
a borrower (pursuant to regulations of the Secretary issued
under section 432(a)), and recommending litigation with
respect to any such claim.
(e) USE OF INFORMATION ON BORROWERS.—Notwithstanding
any other provision of law, the Secretary may provide to eligible
lenders, and to any guaranty agency having a guaranty agreement
under section 428(c)(1), any information with respect to the names
and addresses of borrowers or other relevant information which is
available to the Secretary, from whatever source such information
may be derived.
(f) AUDIT OF FINANCIAL TRANSACTIONS.—
(1) COMPTROLLER GENERAL AND INSPECTOR GENERAL AUTHORITY.—The Comptroller General and the Inspector General
of the Department of Education shall each have the authority
to conduct an audit of the financial transactions of—
(A) any guaranty agency operating under an agreement with the Secretary pursuant to section 428(b);
(B) any eligible lender as defined in section 435(d)(1);
and
(C) a representative sample of eligible lenders under
this part, upon the request of 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.
(2) ACCESS TO RECORDS.—For the purpose of carrying out
this subsection, the records of any entity described in subparagraph (A), (B), (C), or (D) of paragraph (1) shall be available
to the Comptroller General and the Inspector General of the
Department of Education. For the purpose of section 716(c) of
title 31, United States Code, such records shall be considered
to be records to which the Comptroller General has access by
law, and for the purpose of section 6(a)(4) of the Inspector General Act of 1978, such records shall be considered to be records
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necessary in the performance of functions assigned by that Act
to the Inspector General.
(3) DEFINITION OF RECORDS.—For the purpose of this subsection, the term ‘‘record’’ includes any information, document,
report, answer, account, paper, or other data or documentary
evidence.
(4) AUDIT PROCEDURES.—In conducting audits pursuant to
this subsection, the Comptroller General and the Inspector
General of the Department of Education shall audit the records
to determine the extent to which they, at a minimum, comply
with Federal statutes, and rules and regulations prescribed by
the Secretary, in effect at the time that the record was made,
and in no case shall the Comptroller General or the Inspector
General apply subsequently determined standards, procedures,
or regulations to the records of such agency, lender, or Authority.
(g) CIVIL PENALTIES.—
(1) AUTHORITY TO IMPOSE PENALTIES.—Upon determination, after reasonable notice and opportunity for a hearing,
that a lender or a guaranty agency—
(A) has violated or failed to carry out any provision of
this part or any regulation prescribed under this part, or
(B) has engaged in substantial misrepresentation of
the nature of its financial charges,
the Secretary may impose a civil penalty upon such lender or
agency of not to exceed $25,000 for each violation, failure, or
misrepresentation.
(2) LIMITATIONS.—No civil penalty may be imposed under
paragraph (1) of this subsection unless the Secretary determines that—
(A) the violation, failure, or substantial misrepresentation referred to in that paragraph resulted from a violation, failure, or misrepresentation that is material; and
(B) the lender or guaranty agency knew or should
have known that its actions violated or failed to carry out
the provisions of this part or the regulations thereunder.
(3) CORRECTION OF FAILURE.—A lender or guaranty agency
has no liability under paragraph (1) of this subsection if, prior
to the notification by the Secretary under that paragraph, the
lender or guaranty agency cures or corrects the violation or
failure or notifies the person who received the substantial misrepresentation of the actual nature of the financial charges involved.
(4) CONSIDERATION AS SINGLE VIOLATION.—For the purpose
of paragraph (1) of this subsection, violations, failures, or substantial misrepresentations arising from a specific practice of
a lender or guaranty agency, and occurring prior to notification
by the Secretary under that paragraph, shall be deemed to be
a single violation, failure, or substantial misrepresentation
even if the violation, failure, or substantial misrepresentation
affects more than one loan or more than one borrower, or both.
The Secretary may only impose a single civil penalty for each
such violation, failure, or substantial misrepresentation.
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(5) ASSIGNEES NOT LIABLE FOR VIOLATIONS BY OTHERS.—If
a loan affected by a violation, failure, or substantial misrepresentation is assigned to another holder, the lender or guaranty
agency responsible for the violation, failure, or substantial misrepresentation shall remain liable for any civil money penalty
provided for under paragraph (1) of this subsection, but the assignee shall not be liable for any such civil money penalty.
(6) COMPROMISE.—Until a matter is referred to the Attorney General, any civil penalty under paragraph (1) of this subsection may be compromised by the Secretary. In determining
the amount of such penalty, or the amount agreed upon in
compromise, the Secretary shall consider the appropriateness
of the penalty to the resources of the lender or guaranty agency subject to the determination; the gravity of the violation,
failure, or substantial misrepresentation; the frequency and
persistence of the violation, failure, or substantial misrepresentation; and the amount of any losses resulting from the violation, failure, or substantial misrepresentation. The amount of
such penalty, when finally determined, or the amount agreed
upon in compromise, may be deducted from any sums owing by
the United States to the lender or agency charged, unless the
lender or agency has, in the case of a final agency determination, commenced proceedings for judicial review within 90 days
of the determination, in which case the deduction may not be
made during the pendency of the proceeding.
(h) AUTHORITY OF THE SECRETARY TO IMPOSE AND ENFORCE
LIMITATIONS, SUSPENSIONS, AND TERMINATIONS.—
(1) IMPOSITION OF SANCTIONS.—(A) If the Secretary, after
a reasonable notice and opportunity for hearing to an eligible
lender, finds that the eligible lender—
(i) has substantially failed—
(I) to exercise reasonable care and diligence in the
making and collecting of loans under the provisions of
this part,
(II) to make the reports or statements under section 428(a)(4), or
(III) to pay the required loan insurance premiums
to any guaranty agency, or
(ii) has engaged in—
(I) fraudulent or misleading advertising or in solicitations that have resulted in the making of loans
insured or guaranteed under this part to borrowers
who are ineligible; or
(II) the practice of making loans that violate the
certification for eligibility provided in section 428,
the Secretary shall limit, suspend, or terminate that lender
from participation in the insurance programs operated by guaranty agencies under this part.
(B) The Secretary shall not lift any such limitation, suspension, or termination until the Secretary is satisfied that the
lender’s failure under subparagraph (A)(i) of this paragraph or
practice under subparagraph (A)(ii) of this paragraph has
ceased and finds that there are reasonable assurances that the
lender will—
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(i) exercise the necessary care and diligence,
(ii) comply with the requirements described in subparagraph (A)(i), or
(iii) cease to engage in the practices described in subparagraph (A)(ii),
as the case may be.
(2) REVIEW OF SANCTIONS ON LENDERS.—(A) The Secretary
shall review each limitation, suspension, or termination imposed by any guaranty agency pursuant to section 428(b)(1)(U)
within 60 days after receipt by the Secretary of a notice from
the guaranty agency of the imposition of such limitation, suspension, or termination, unless the right to such review is
waived in writing by the lender. The Secretary shall uphold
the imposition of such limitation, suspension, or termination in
the student loan insurance program of each of the guaranty
agencies under this part, and shall notify such guaranty agencies of such sanction—
(i) if such review is waived; or
(ii) if such review is not waived, unless the Secretary
determines that the limitation, suspension, or termination
was not imposed in accordance with requirements of such
section.
(B) The Secretary’s review under this paragraph of the
limitation, suspension, or termination imposed by a guaranty
agency pursuant to section 428(b)(1)(U) shall be limited to—
(i) a review of the written record of the proceedings in
which the guaranty agency imposed such sanctions; and
(ii) a determination as to whether the guaranty agency
complied with section 428(b)(1)(U) and any notice and
hearing requirements prescribed in regulations of the Secretary under this part.
(C) The Secretary shall not lift any such sanction until the
Secretary is satisfied that the lender has corrected the failures
which led to the limitation, suspension, or termination, and
finds that there are reasonable assurances that the lender will,
in the future, comply with the requirements of this part. The
Secretary shall notify each guaranty agency of the lifting of
any such sanction.
(3) REVIEW OF SANCTIONS ON ELIGIBLE INSTITUTIONS.—(A)
The Secretary shall review each limitation, suspension, or termination imposed by any guaranty agency pursuant to section
428(b)(1)(T) within 60 days after receipt by the Secretary of a
notice from the guaranty of the imposition of such limitation,
suspension, or termination, unless the right to such review is
waived in writing by the institution. The Secretary shall uphold the imposition of such limitation, suspension, or termination in the student loan insurance program of each of the
guaranty agencies under this part, and shall notify such guaranty agencies of such sanctions—
(i) if such review is waived; or
(ii) if such review is not waived, unless the Secretary
determines that the limitation, suspension, or termination
was not imposed in accordance with requirements of such
section.
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(B) The Secretary’s review under this paragraph of the
limitation, suspension, or termination imposed by a guaranty
agency pursuant to section 428(b)(1)(T) shall be limited to—
(i) a review of the written record of the proceedings in
which the guaranty agency imposed such sanctions; and
(ii) a determination as to whether the guaranty agency
complied with section 428(b)(1)(T) and any notice and
hearing requirements prescribed in regulations of the Secretary under this part.
(C) The Secretary shall not lift any such sanction until the
Secretary is satisfied that the institution has corrected the failures which led to the limitation, suspension, or termination,
and finds that there are reasonable assurances that the institution will, in the future, comply with the requirements of this
part. The Secretary shall notify each guaranty agency of the
lifting of any such sanction.
(i) AUTHORITY TO SELL DEFAULTED LOANS.—In the event that
all other collection efforts have failed, the Secretary is authorized
to sell defaulted student loans assigned to the United States under
this part to collection agencies, eligible lenders, guaranty agencies,
or other qualified purchaser on such terms as the Secretary determines are in the best financial interests of the United States. A
loan may not be sold pursuant to this subsection if such loan is in
repayment status.
(j) AUTHORITY OF THE SECRETARY TO TAKE EMERGENCY ACTIONS AGAINST LENDERS.—
(1) IMPOSITION OF SANCTIONS.—If the Secretary—
(A) receives information, determined by the Secretary
to be reliable, that a lender is violating any provision of
this title, any regulation prescribed under this title, or any
applicable special arrangement, agreement, or limitation;
(B) determines that immediate action is necessary to
prevent misuse of Federal funds; and
(C) determines that the likelihood of loss outweighs
the importance of following the limitation, suspension, or
termination procedures authorized in subsection (h);
the Secretary shall, effective on the date on which a notice and
statement of the basis of the action is mailed to the lender (by
registered mail, return receipt requested), take emergency action to stop the issuance of guarantee commitments and the
payment of interest benefits and special allowance to the lender.
(2) LENGTH OF EMERGENCY ACTION.—An emergency action
under this subsection may not exceed 30 days unless a limitation, suspension, or termination proceeding is initiated against
the lender under subsection (h) before the expiration of that
period.
(3) OPPORTUNITY TO SHOW CAUSE.—The Secretary shall
provide the lender, if it so requests, an opportunity to show
cause that the emergency action is unwarranted.
(k) PROGRAM OF ASSISTANCE FOR BORROWERS.—
(1) IN GENERAL.—The Secretary shall undertake a program
to encourage corporations and other private and public employers, including the Federal Government, to assist borrowers in
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repaying loans received under this title, including providing
employers with options for payroll deduction of loan payments
and offering loan repayment matching provisions as part of
employee benefit packages.
(2) PUBLICATION.—The Secretary shall publicize models for
providing the repayment assistance described in paragraph (1)
and each year select entities that deserve recognition, through
means devised by the Secretary, for the development of innovative plans for providing such assistance to employees.
(3) RECOMMENDATION.—The Secretary shall recommend to
the appropriate committees in the Senate and House of Representatives changes to statutes that could be made in order
to further encourage such efforts.
(l) UNIFORM ADMINISTRATIVE AND CLAIMS PROCEDURES.—
(1) IN GENERAL.—The Secretary shall, by regulation developed in consultation with guaranty agencies, lenders, institutions of higher education, secondary markets, students, third
party servicers and other organizations involved in providing
loans under this part, prescribe standardized forms and procedures regarding—
(A) origination of loans;
(B) electronic funds transfer;
(C) guaranty of loans;
(D) deferments;
(E) forbearance;
(F) servicing;
(G) claims filing;
(H) borrower status change and anticipated graduation date; and
(I) cures.
(2) SPECIAL RULES.—(A) The forms and procedures described in paragraph (1) shall include all aspects of the loan
process as such process involves eligible lenders and guaranty
agencies and shall be designed to minimize administrative
costs and burdens (other than the costs and burdens involved
in the transition to new forms and procedures) involved in exchanges of data to and from borrowers, schools, lenders, secondary markets, and the Department.
(B) Nothing in this paragraph shall be construed to limit
the development of electronic forms and procedures.
(3) SIMPLIFICATION REQUIREMENTS.—Such regulations
shall include—
(A) standardization of computer formats, forms design,
and guaranty agency procedures relating to the origination, servicing, and collection of loans made under this
part;
(B) authorization of alternate means of document retention, including the use of microfilm, microfiche, laser
disc, compact disc, and other methods allowing the production of a facsimile of the original documents;
(C) authorization of the use of computer or similar
electronic methods of maintaining records relating to the
performance of servicing, collection, and other regulatory
requirements under this Act; and
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(D) authorization and implementation of electronic
data linkages for the exchange of information to and from
lenders, guarantors, institutions of higher education, third
party servicers, and the Department of Education for student status confirmation reports, claim filing, interest and
special allowance billing, deferment processing, and all
other administrative steps relating to loans made pursuant
to this part where using electronic data linkage is feasible.
(4) ADDITIONAL RECOMMENDATIONS.—The Secretary shall
review regulations prescribed pursuant to paragraph (1) and
seek additional recommendations from guaranty agencies,
lenders, institutions of higher education, students, secondary
markets, third party servicers and other organizations involved
in providing loans under this part, not less frequently than annually, for additional methods of simplifying and standardizing
the administration of the programs authorized by this part.
(m) COMMON FORMS AND FORMATS.—
(1) COMMON GUARANTEED STUDENT LOAN APPLICATION
FORM AND PROMISSORY NOTE.—
(A) IN GENERAL.—The Secretary, in cooperation with
representatives of guaranty agencies, eligible lenders, and
organizations involved in student financial assistance,
shall prescribe common application forms and promissory
notes, or master promissory notes, to be used for applying
for loans under part B of this title.
(B) REQUIREMENTS.—The forms prescribed by the Secretary shall—
(i) use clear, concise, and simple language to facilitate understanding of loan terms and conditions by applicants; and
(ii) be formatted to require the applicant to clearly
indicate a choice of lender.
(C) FREE APPLICATION FORM.—For academic year
1999–2000 and succeeding academic years, the Secretary
shall prescribe the form developed under section 483 as
the application form under this part, other than for loans
under sections 428B and 428C.
(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.
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(ii) CONSULTATION.—In developing the master
promissory note under this subsection, the Secretary
shall consult with representatives of guaranty agencies, eligible lenders, institutions of higher education,
students, and organizations involved in student financial assistance.
(iii) SALE; ASSIGNMENT; ENFORCEABILITY.—Notwithstanding any other provision of law, each loan
made under a master promissory note under this subsection may be sold or assigned independently of any
other loan made under the same promissory note and
each such loan shall be separately enforceable in all
Federal and State courts on the basis of an original or
copy of the master promissory note in accordance with
the terms of the master promissory note.
(E) PERFECTION OF SECURITY INTERESTS IN STUDENT
LOANS.—
(i) IN GENERAL.—Notwithstanding the provisions
of any State law to the contrary, including the Uniform Commercial Code as in effect in any State, a security interest in loans made under this part, on behalf of any eligible lender (as defined in section 435(d))
shall attach, be perfected, and be assigned priority in
the manner provided by the applicable State’s law for
perfection of security interests in accounts, as such
law may be amended from time to time (including applicable transition provisions). If any such State’s law
provides for a statutory lien to be created in such
loans, such statutory lien may be created by the entity
or entities governed by such State law in accordance
with the applicable statutory provisions that created
such a statutory lien.
(ii) COLLATERAL DESCRIPTION.—In addition to any
other method for describing collateral in a legally sufficient manner permitted under the laws of the State,
the description of collateral in any financing statement
filed pursuant to this subparagraph shall be deemed
legally sufficient if it lists such loans, or refers to
records (identifying such loans) retained by the secured party or any designee of the secured party identified in such financing statement, including the debtor or any loan servicer.
(iii) SALES.—Notwithstanding clauses (i) and (ii)
and any provisions of any State law to the contrary,
other than any such State’s law providing for creation
of a statutory lien, an outright sale of loans made
under this part shall be effective and perfected automatically upon attachment as defined in the Uniform
Commercial Code of such State.
(2) COMMON DEFERMENT FORM.—The Secretary, in cooperation with representatives of guaranty agencies, institutions of
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ing form to be used for the processing of deferments of loans
made under this title.
(3) COMMON REPORTING FORMATS.—The Secretary shall
promulgate standards including necessary rules, regulations
(including the definitions of all relevant terms), and procedures
so as to require all lenders and guaranty agencies to report information on all aspects of loans made under this part in uniform formats, so as to permit the direct comparison of data
submitted by individual lenders, servicers, or guaranty agencies.
(4) ELECTRONIC FORMS.—Nothing in this section shall be
construed to limit the development and use of electronic forms
and procedures.
(n) DEFAULT REDUCTION MANAGEMENT.—
(1) AUTHORIZATION.—There are authorized to be appropriated $25,000,000 for fiscal year 1999 and each of the four
succeeding fiscal years, for the Secretary to expend for default
reduction management activities for the purposes of establishing a performance measure that will reduce defaults by 5
percent relative to the prior fiscal year. Such funds shall be in
addition to, and not in lieu of, other appropriations made for
such purposes.
(2) ALLOWABLE ACTIVITIES.—Allowable activities for which
such funds shall be expended by the Secretary shall include
the following: (A) program reviews; (B) audits; (C) debt management programs; (D) training activities; and (E) such other
management improvement activities approved by the Secretary.
(3) PLAN FOR USE REQUIRED.—The Secretary shall submit
a plan, for inclusion in the materials accompanying the President’s budget each fiscal year, detailing the expenditure of
funds authorized by this section to accomplish the 5 percent reduction in defaults. At the conclusion of the fiscal year, the
Secretary shall report the Secretary’s findings and activities
concerning the expenditure of funds and whether the performance measure was met. If the performance measure was not
met, the Secretary shall report the following:
(A) why the goal was not met, including an indication
of any managerial deficiencies or of any legal obstacles;
(B) plans and a schedule for achieving the established
performance goal;
(C) recommended legislative or regulatory changes
necessary to achieve the goal; and
(D) if the performance standard or goal is impractical
or infeasible, why that is the case and what action is recommended, including whether the goal should be changed
or the program altered or eliminated.
This report shall be submitted to the Appropriations Committees of the House of Representatives and the Senate and to the
authorizing committees.
(o) CONSEQUENCES OF GUARANTY AGENCY INSOLVENCY.—In the
event that the Secretary has determined that a guaranty agency is
unable to meet its insurance obligations under this part, the holder
of loans insured by the guaranty agency may submit insurance
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claims directly to the Secretary and the Secretary shall pay to the
holder the full insurance obligation of the guaranty agency, in accordance with insurance requirements no more stringent than
those of the guaranty agency. Such arrangements shall continue
until the Secretary is satisfied that the insurance obligations have
been transferred to another guarantor who can meet those obligations or a successor will assume the outstanding insurance obligations.
(p) REPORTING REQUIREMENT.—All officers and directors, and
those employees and paid consultants of eligible institutions, eligible lenders, guaranty agencies, loan servicing agencies, accrediting
agencies or associations, State licensing agencies or boards, and entities acting as secondary markets (including the Student Loan
Marketing Association), who are engaged in making decisions as to
the administration of any program or funds under this title or as
to the eligibility of any entity or individual to participate under
this title, shall report to the Secretary, in such manner and at such
time as the Secretary shall require, on any financial interest which
such individual may hold in any other entity participating in any
program assisted under this title.
SEC. 433. ø20 U.S.C. 1083¿ STUDENT LOAN INFORMATION BY ELIGIBLE
LENDERS.
(a) REQUIRED DISCLOSURE BEFORE DISBURSEMENT.—Each eligi-
ble lender, at or prior to the time such lender disburses a loan that
is insured or guaranteed under this part (other than a loan made
under section 428C), shall provide thorough and accurate loan information on such loan to the borrower in simple and understandable terms. Any disclosure required by this subsection may be
made by an eligible lender by written or electronic means, including as part of the application material provided to the borrower, as
part of the promissory note evidencing the loan, or on a separate
written form provided to the borrower. Each lender shall provide
to each borrower a telephone number, and may provide an electronic address, through which additional loan information can be
obtained. The disclosure shall include—
(1) a statement prominently and clearly displayed and in
bold print that the borrower is receiving a loan that must be
repaid;
(2) the name of the eligible lender, and the address to
which communications and payments should be sent;
(3) the principal amount of the loan;
(4) the amount of any charges, such as the origination fee
and Federal default fee, and whether those fees will be—
(A) collected by the lender at or prior to the disbursal
of the loan;
(B) deducted from the proceeds of the loan;
(C) paid separately by the borrower; or
(D) paid by the lender;
(5) the stated interest rate on the loan;
(6) for loans made under section 428H or to a student borrower under section 428B, an explanation—
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(A) that the borrower has the option to pay the interest that accrues on the loan while the borrower is a student at an institution of higher education; and
(B) if the borrower does not pay such interest while attending an institution, when and how often interest on the
loan will be capitalized;
(7) for loans made to a parent borrower on behalf of a student under section 428B, an explanation—
(A) that the parent has the option to defer payment on
the loan while the student is enrolled on at least a halftime basis in an institution of higher education;
(B) if the parent does not pay the interest on the loan
while the student is enrolled in an institution, when and
how often interest on the loan will be capitalized; and
(C) that the parent may be eligible for a deferment on
the loan if the parent is enrolled on at least a half-time
basis in an institution of higher education;
(8) the yearly and cumulative maximum amounts that may
be borrowed;
(9) a statement of the total cumulative balance, including
the loan being disbursed, owed by the borrower to that lender,
and an estimate of the projected monthly payment, given such
cumulative balance;
(10) an explanation of when repayment of the loan will be
required and when the borrower will be obligated to pay interest that accrues on the loan;
(11) a description of the types of repayment plans that are
available for the loan;
(12) a statement as to the minimum and maximum repayment terms which the lender may impose, and the minimum
annual payment required by law;
(13) an explanation of any special options the borrower
may have for loan consolidation or other refinancing of the
loan;
(14) a statement that the borrower has the right to prepay
all or part of the loan, at any time, without penalty;
(15) a statement summarizing circumstances in which repayment of the loan or interest that accrues on the loan may
be deferred;
(16) a statement summarizing the circumstances in which
a borrower may obtain forbearance on the loan;
(17) a description of the options available for forgiveness of
the loan, and the requirements to obtain loan forgiveness;
(18) a definition of default and the consequences to the
borrower if the borrower defaults, including a statement that
the default will be reported to a consumer reporting agency;
and
(19) an explanation of any cost the borrower may incur
during repayment or in the collection of the loan, including
fees that the borrower may be charged, such as late payment
fees and collection costs.
(b) REQUIRED DISCLOSURE BEFORE REPAYMENT.—Each eligible
lender shall, at or prior to the start of the repayment period on a
loan made, insured, or guaranteed under section 428, 428B, or
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428H, disclose to the borrower by written or electronic means the
information required under this subsection in simple and understandable terms. Each eligible lender shall provide to each borrower a telephone number, and may provide an electronic address,
through which additional loan information can be obtained. The
disclosure required by this subsection shall be made not less than
30 days nor more than 150 days before the first payment on the
loan is due from the borrower. The disclosure shall include—
(1) the name of the eligible lender or loan servicer, and the
address to which communications and payments should be
sent;
(2) the scheduled date upon which the repayment period is
to begin or the deferment period under section 428B(d)(1) is to
end, as applicable;
(3) the estimated balance owed by the borrower on the
loan or loans covered by the disclosure (including, if applicable,
the estimated amount of interest to be capitalized) as of the
scheduled date on which the repayment period is to begin or
the deferment period under 428B(d)(1) is to end, as applicable;
(4) the stated interest rate on the loan or loans, or the
combined interest rate of loans with different stated interest
rates;
(5) information on loan repayment benefits offered for the
loan or loans, including—
(A) whether the lender offers any benefits that are
contingent on the repayment behavior of the borrower,
such as—
(i) a reduction in interest rate if the borrower repays the loan by automatic payroll or checking account
deduction;
(ii) a reduction in interest rate if the borrower
makes a specified number of on-time payments; and
(iii) other loan repayment benefits for which the
borrower could be eligible that would reduce the
amount of repayment or the length of the repayment
period;
(B) if the lender provides a loan repayment benefit—
(i) any limitations on such benefit;
(ii) explicit information on the reasons a borrower
may lose eligibility for such benefit;
(iii) for a loan repayment benefit that reduces the
borrower’s interest rate—
(I) examples of the impact the interest rate
reduction would have on the length of the borrower’s repayment period and the amount of repayment; and
(II) upon the request of the borrower, the effect the reduction in interest rate would have with
respect to the borrower’s payoff amount and time
for repayment; and
(iv) whether and how the borrower can regain eligibility for a benefit if a borrower loses a benefit;
(6) a description of all the repayment plans that are available to the borrower and a statement that the borrower may
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change from one plan to another during the period of repayment;
(7) the repayment schedule for all loans covered by the disclosure, including—
(A) the date the first installment is due; and
(B) the number, amount, and frequency of required
payments, which shall be based on a standard repayment
plan or, in the case of a borrower who has selected another
repayment plan, on the repayment plan selected by the
borrower;
(8) an explanation of any special options the borrower may
have for loan consolidation or other refinancing of the loan and
of the availability and terms of such other options;
(9) except as provided in subsection (d)—
(A) the projected total of interest charges which the
borrower will pay on the loan or loans, assuming that the
borrower makes payments exactly in accordance with the
repayment schedule; and
(B) if the borrower has already paid interest on the
loan or loans, the amount of interest paid;
(10) the nature of any fees which may accrue or be charged
to the borrower during the repayment period;
(11) a statement that the borrower has the right to prepay
all or part of the loan or loans covered by the disclosure at any
time without penalty;
(12) a description of the options by which the borrower
may avoid or be removed from default, including any relevant
fees associated with such options; and
(13) additional resources, including nonprofit organizations, advocates, and counselors (including the Student Loan
Ombudsman of the Department) of which the lender is aware,
where borrowers may receive advice and assistance on loan repayment.
(c) SEPARATE NOTIFICATION.—Each eligible lender shall, at the
time such lender notifies a borrower of approval of a loan which is
insured or guaranteed under this part, provide the borrower with
a separate notification which summarizes, in simple and understandable terms, the rights and responsibilities of the borrower
with respect to the loan, including a statement of the consequences
of defaulting on the loan and a statement that each borrower who
defaults will be reported to a consumer reporting agency. The requirement of this subsection shall be in addition to the information
required by subsection (a) of this section.
(d) SPECIAL DISCLOSURE RULES ON PLUS LOANS, AND UNSUBSIDIZED LOANS.—Loans made under sections 428B and 428H shall
not be subject to the disclosure of projected monthly payment
amounts required under subsection (b)(7) if the lender, in lieu of
such disclosure, provides the borrower with sample projections of
monthly repayment amounts, assuming different levels of borrowing and interest accruals resulting from capitalization of interest while the borrower, or the student on whose behalf the loan is
made, is in school, in simple and understandable terms. Such sample projections shall disclose the cost to the borrower of—
(1) capitalizing the interest; and
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(2) paying the interest as the interest accrues.
(e) REQUIRED DISCLOSURES DURING REPAYMENT.—
(1) PERTINENT INFORMATION ABOUT A LOAN PROVIDED ON A
PERIODIC BASIS.—Each eligible lender shall provide the borrower of a loan made, insured, or guaranteed under this part
with a bill or statement (as applicable) that corresponds to
each payment installment time period in which a payment is
due and that includes, in simple and understandable terms—
(A) the original principal amount of the borrower’s
loan;
(B) the borrower’s current balance, as of the time of
the bill or statement, as applicable;
(C) the interest rate on such loan;
(D) the total amount the borrower has paid in interest
on the loan;
(E) the aggregate amount the borrower has paid for
the loan, including the amount the borrower has paid in
interest, the amount the borrower has paid in fees, and the
amount the borrower has paid against the balance;
(F) a description of each fee the borrower has been
charged for the most recently preceding installment time
period;
(G) the date by which the borrower needs to make a
payment in order to avoid additional fees and the amount
of such payment and the amount of such fees;
(H) the lender’s or loan servicer’s address and toll-free
phone number for payment and billing error purposes; and
(I) a reminder that the borrower has the option to
change repayment plans, a list of the names of the repayment plans available to the borrower, a link to the appropriate page of the Department’s website to obtain a more
detailed description of the repayment plans, and directions
for the borrower to request a change in repayment plan.
(2) INFORMATION PROVIDED TO A BORROWER HAVING DIFFICULTY MAKING PAYMENTS.—Each eligible lender shall provide
to a borrower who has notified the lender that the borrower is
having difficulty making payments on a loan made, insured, or
guaranteed under this part with the following information in
simple and understandable terms:
(A) A description of the repayment plans available to
the borrower, including how the borrower should request
a change in repayment plan.
(B) A description of the requirements for obtaining forbearance on a loan, including expected costs associated
with forbearance.
(C) A description of the options available to the borrower to avoid defaulting on the loan, and any relevant
fees or costs associated with such options.
(3) REQUIRED DISCLOSURES DURING DELINQUENCY.—Each
eligible lender shall provide to a borrower who is 60 days delinquent in making payments on a loan made, insured, or guaranteed under this part with a notice, in simple and understandable terms, of the following:
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(A) The date on which the loan will default if no payment is made.
(B) The minimum payment the borrower must make
to avoid default.
(C) A description of the options available to the borrower to avoid default, and any relevant fees or costs associated with such options, including a description of
deferment and forbearance and the requirements to obtain
each.
(D) Discharge options to which the borrower may be
entitled.
(E) Additional resources, including nonprofit organizations, advocates, and counselors (including the Student
Loan Ombudsman of the Department), of which the lender
is aware, where the borrower can receive advice and assistance on loan repayment.
(f) COST OF DISCLOSURE AND CONSEQUENCES OF NONDISCLOSURE.—
(1) NO COST TO BORROWERS.—The information required
under this section shall be available without cost to the borrower.
(2) CONSEQUENCES OF NONDISCLOSURE.—The failure of an
eligible lender to provide information as required by this section shall not—
(A) relieve a borrower of the obligation to repay a loan
in accordance with the loan’s terms; or
(B) provide a basis for a claim for civil damages.
(3) RULE OF CONSTRUCTION.—Nothing in this section shall
be construed as subjecting the lender to the Truth in Lending
Act with regard to loans made under this part.
(4) ACTIONS BY THE SECRETARY.—The Secretary may limit,
suspend, or terminate the continued participation of an eligible
lender in making loans under this part for failure by that lender to comply with this section.
SEC. 433A. ø20 U.S.C. 1083a¿ CONSUMER EDUCATION INFORMATION.
(a) IN GENERAL.—Each guaranty agency participating in a pro-
gram under this part, working with the institutions of higher education served by such guaranty agency, shall develop and make
available high-quality educational programs and materials to provide training for students and families in budgeting and financial
management, including debt management and other aspects of financial literacy, such as the cost of using high interest loans to pay
for postsecondary education, particularly as budgeting and financial management relates to student loan programs authorized by
this title. Such programs and materials shall be in formats that are
simple and understandable to students and families, and shall be
provided before, during, and after the students’ enrollment in an
institution of higher education. The activities described in this section shall be considered default reduction activities for the purposes of section 422.
(b) RULE OF CONSTRUCTION.—Nothing in this section shall be
construed to prohibit—
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(1) a guaranty agency from using existing activities, programs, and materials in meeting the requirements of this section;
(2) a guaranty agency from providing programs or materials similar to the programs or materials described in subsection (a) to an institution of higher education that provides
loans exclusively through part D; or
(3) a lender or loan servicer from providing outreach or financial aid literacy information in accordance with subsection
(a).
SEC. 434. ø20 U.S.C. 1084¿ PARTICIPATION BY FEDERAL CREDIT
UNIONS IN FEDERAL, STATE, AND PRIVATE STUDENT
LOAN INSURANCE PROGRAMS.
Notwithstanding any other provision of law, Federal credit
unions shall, pursuant to regulations of the National Credit Union
Administration, have power to make insured loans to student members in accordance with the provisions of this part relating to federally insured loans, or in accordance with the provisions of any
State or nonprofit private student loan insurance program which
meets the requirements of section 428(a)(1)(B).
SEC. 435. ø20 U.S.C. 1085¿ DEFINITIONS FOR STUDENT LOAN INSURANCE PROGRAM.
As used in this part:
(a) ELIGIBLE INSTITUTION.—
(1) IN GENERAL.—Except as provided in paragraph (2), the
term ‘‘eligible institution’’ means an institution of higher education, as defined in section 102, except that, for the purposes
of sections 427(a)(2)(C)(i) and 428(b)(1)(M)(i), an eligible institution includes any institution that is within this definition
without regard to whether such institution is participating in
any program under this title and includes any institution ineligible for participation in any program under this part pursuant
to paragraph (2) of this subsection.
(2) INELIGIBILITY BASED ON HIGH DEFAULT RATES.—(A) An
institution whose cohort default rate is equal to or greater than
the threshold percentage specified in subparagraph (B) for each
of the three most recent fiscal years for which data are available shall not be eligible to participate in a program under this
part for the fiscal year for which the determination is made
and for the two succeeding fiscal years, unless, within 30 days
of receiving notification from the Secretary of the loss of eligibility under this paragraph, the institution appeals the loss of
its eligibility to the Secretary. The Secretary shall issue a decision on any such appeal within 45 days after its submission.
Such decision may permit the institution to continue to participate in a program under this part if—
(i) the institution demonstrates to the satisfaction of
the Secretary that the Secretary’s calculation of its cohort
default rate is not accurate, and that recalculation would
reduce its cohort default rate for any of the three fiscal
years below the threshold percentage specified in subparagraph (B);
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(ii) there are exceptional mitigating circumstances
within the meaning of paragraph (5); or
(iii) there are, in the judgment of the Secretary, other
exceptional mitigating circumstances that would make the
application of this paragraph inequitable.
If an institution continues to participate in a program under
this part, and the institution’s appeal of the loss of eligibility
is unsuccessful, the institution shall be required to pay to the
Secretary an amount equal to the amount of interest, special
allowance, reinsurance, and any related payments made by the
Secretary (or which the Secretary is obligated to make) with
respect to loans made under this part to students attending, or
planning to attend, that institution during the pendency of
such appeal. During such appeal, the Secretary may permit the
institution to continue to participate in a program under this
part.
(B) For purposes of determinations under subparagraph
(A), the threshold percentage is—
(i) 35 percent for fiscal year 1991 and 1992;
(ii) 30 percent for fiscal year 1993;
(iii) 1 25 percent for fiscal year 1994 through fiscal
year 2011; and
(iv) 1 30 percent for fiscal year 2012 and any succeeding fiscal year.
(C) Until July 1, 1999, this paragraph shall not apply to
any institution that is—
(i) a part B institution within the meaning of section
322(2) of this Act;
(ii) a tribally controlled college or university, as defined in section 2(a)(4) of the Tribally Controlled Colleges
and Universities Assistance Act of 1978; or
(iii) a Navajo Community College under the Navajo
Community College Act.
(D) 1 Notwithstanding the first sentence of subparagraph (A),
the Secretary shall restore the eligibility to participate in a program under subpart 1 of part A, part B, or part D of an institution
that did not appeal its loss of eligibility within 30 days of receiving
notification if the Secretary determines, on a case-by-case basis,
that the institution’s failure to appeal was substantially justified
under the circumstances, and that—
(i) the institution made a timely request that the appropriate guaranty agency correct errors in the draft data used to
calculate the institution’s cohort default rate;
(ii) the guaranty agency did not correct the erroneous data
in a timely fashion; and
(iii) the institution would have been eligible if the erroneous data had been corrected by the guaranty agency.
(3) APPEALS FOR REGULATORY RELIEF.—An institution
whose cohort default rate, calculated in accordance with subsection (m), is equal to or greater than the threshold percentage specified in paragraph (2)(B)(iv) for any two consecutive
1 Margin
1 Margin
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fiscal years may, not later than 30 days after the date the institution receives notification from the Secretary, file an appeal
demonstrating exceptional mitigating circumstances, as defined
in paragraph (5). The Secretary shall issue a decision on any
such appeal not later than 45 days after the date of submission
of the appeal. If the Secretary determines that the institution
demonstrates exceptional mitigating circumstances, the Secretary may not subject the institution to provisional certification based solely on the institution’s cohort default rate.
(4) APPEALS BASED UPON ALLEGATIONS OF IMPROPER LOAN
SERVICING.—An institution that—
(A) is subject to loss of eligibility for the Federal Family Education Loan Program pursuant to paragraph (2)(A)
of this subsection;
(B) is subject to loss of eligibility for the Federal Supplemental Loans for Students pursuant to section
428A(a)(2); or
(C) is an institution whose cohort default rate equals
or exceeds 20 percent for the most recent year for which
data are available;
may include in its appeal of such loss or rate a defense based
on improper loan servicing (in addition to other defenses). In
any such appeal, the Secretary shall take whatever steps are
necessary to ensure that such institution has access for a reasonable period of time, not to exceed 30 days, to a representative sample (as determined by the Secretary) of the relevant
loan servicing and collection records used by a guaranty agency
in determining whether to pay a claim on a defaulted loan or
by the Department in determining an institution’s default rate
in the loan program under part D of this title. The Secretary
shall reduce the institution’s cohort default rate to reflect the
percentage of defaulted loans in the representative sample that
are required to be excluded pursuant to subsection (m)(1)(B).
(5) DEFINITION OF MITIGATING CIRCUMSTANCES.—(A) For
purposes of this subsection, an institution of higher education
shall be treated as having exceptional mitigating circumstances that make application of paragraph (2) inequitable,
and that provide for regulatory relief under paragraph (3), if
such institution, in the opinion of an independent auditor,
meets the following criteria:
(i) For a 12-month period that ended during the 6
months immediately preceding the fiscal year for which
the cohort of borrowers used to calculate the institution’s
cohort default rate is determined, at least two-thirds of the
students enrolled on at least a half-time basis at the institution—
(I) are eligible to receive a Federal Pell Grant
award that is at least equal to one-half the Federal
Pell Grant amount, determined under section
401(b)(2)(A), for which a student would be eligible
based on the student’s enrollment status; or
(II) have an adjusted gross income that when
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dent), of less than the poverty level, as determined by
the Department of Health and Human Services.
(ii) In the case of an institution of higher education
that offers an associate, baccalaureate, graduate or professional degree, 70 percent or more of the institution’s regular students who were initially enrolled on a full-time
basis and were scheduled to complete their programs during the same 12-month period described in clause (i)—
(I) completed the educational programs in which
the students were enrolled;
(II) transferred from the institution to a higher
level educational program;
(III) at the end of the 12-month period, remained
enrolled and making satisfactory progress toward completion of the student’s educational programs; or
(IV) entered active duty in the Armed Forces of
the United States.
(iii)(I) In the case of an institution of higher education
that does not award a degree described in clause (ii), had
a placement rate of 44 percent or more with respect to the
institution’s former regular students who—
(aa) remained in the program beyond the point
the students would have received a 100 percent tuition
refund from the institution;
(bb) were initially enrolled on at least a half-time
basis; and
(cc) were originally scheduled, at the time of enrollment, to complete their educational programs during the same 12-month period described in clause (i).
(II) The placement rate shall not include students who
are still enrolled and making satisfactory progress in the
educational programs in which the students were originally enrolled on the date following 12 months after the
date of the student’s last date of attendance at the institution.
(III) The placement rate is calculated by determining
the percentage of all those former regular students who—
(aa) are employed, in an occupation for which the
institution provided training, on the date following 12
months after the date of their last day of attendance
at the institution;
(bb) were employed, in an occupation for which
the institution provided training, for at least 13 weeks
before the date following 12 months after the date of
their last day of attendance at the institution; or
(cc) entered active duty in the Armed Forces of the
United States.
(IV) The placement rate shall not include as placements a student or former student for whom the institution is the employer.
(B) For purposes of determining a rate of completion and
a placement rate under this paragraph, a student is originally
scheduled, at the time of enrollment, to complete the educational program on the date when the student will have been
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enrolled in the program for the amount of time normally required to complete the program. The amount of time normally
required to complete the program for a student who is initially
enrolled full-time is the period of time specified in the institution’s enrollment contract, catalog, or other materials, for completion of the program by a full-time student. For a student
who is initially enrolled less than full-time, the period is the
amount of time it would take the student to complete the program if the student remained enrolled at that level of enrollment throughout the program.
(6) REDUCTION OF DEFAULT RATES AT CERTAIN MINORITY INSTITUTIONS.—
(A) BENEFICIARIES OF EXCEPTION REQUIRED TO ESTABLISH MANAGEMENT PLAN.—After July 1, 1999, any institution that has a cohort default rate that equals or exceeds
25 percent for each of the three most recent fiscal years for
which data are available and that relies on the exception
in subparagraph (B) to continue to be an eligible institution shall—
(i) submit to the Secretary a default management
plan which the Secretary, in the Secretary’s discretion,
after consideration of the institution’s history, resources, dollars in default, and targets for default reduction, determines is acceptable and provides reasonable assurance that the institution will, by July 1,
2004, have a cohort default rate that is less than 25
percent;
(ii) engage an independent third party (which may
be paid with funds received under section 317 or part
B of title III) to provide technical assistance in implementing such default management plan; and
(iii) provide to the Secretary, on an annual basis
or at such other intervals as the Secretary may require, evidence of cohort default rate improvement and
successful implementation of such default management plan.
(B) DISCRETIONARY ELIGIBILITY CONDITIONED ON IMPROVEMENT.—Notwithstanding the expiration of the exception in paragraph (2)(C), the Secretary may, in the Secretary’s discretion, continue to treat an institution described in subparagraph (A) of this paragraph as an eligible institution for each of the 1-year periods beginning on
July 1 of 1999 through 2003, only if the institution submits by the beginning of such period evidence satisfactory
to the Secretary that—
(i) such institution has complied and is continuing
to comply with the requirements of subparagraph (A);
and
(ii) such institution has made substantial improvement, during each of the preceding 1-year periods, in
the institution’s cohort default rate.
(7) DEFAULT PREVENTION AND ASSESSMENT OF ELIGIBILITY
BASED ON HIGH DEFAULT RATES.—
(A) FIRST YEAR.—
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(i) IN GENERAL.—An institution whose cohort default rate is equal to or greater than the threshold
percentage specified in paragraph (2)(B)(iv) in any fiscal year shall establish a default prevention task force
to prepare a plan to—
(I) identify the factors causing the institution’s cohort default rate to exceed such threshold;
(II) establish measurable objectives and the
steps to be taken to improve the institution’s cohort default rate; and
(III) specify actions that the institution can
take to improve student loan repayment, including
appropriate counseling regarding loan repayment
options.
(ii) TECHNICAL ASSISTANCE.—Each institution subject to this subparagraph shall submit the plan under
clause (i) to the Secretary, who shall review the plan
and offer technical assistance to the institution to promote improved student loan repayment.
(B) SECOND CONSECUTIVE YEAR.—
(i) IN GENERAL.—An institution whose cohort default rate is equal to or greater than the threshold
percentage specified in paragraph (2)(B)(iv) for two
consecutive fiscal years, shall require the institution’s
default prevention task force established under subparagraph (A) to review and revise the plan required
under such subparagraph, and shall submit such revised plan to the Secretary.
(ii) REVIEW BY THE SECRETARY.—The Secretary
shall review each revised plan submitted in accordance with this subparagraph, and may direct that
such plan be amended to include actions, with measurable objectives, that the Secretary determines, based
on available data and analyses of student loan defaults, will promote student loan repayment.
(8) PARTICIPATION RATE INDEX.—
(A) IN GENERAL.—An institution that demonstrates to
the Secretary that the institution’s participation rate index
is equal to or less than 0.0375 1 for any of the 3 most recent fiscal years for which data is available shall not be
subject to paragraph (2). The participation rate index shall
be determined by multiplying the institution’s cohort default rate for loans under part B or D, or weighted average
cohort default rate for loans under parts B and D, by the
percentage of the institution’s regular students, enrolled
on at least a half-time basis, who received a loan made
under part B or D for a 12-month period ending during the
6 months immediately preceding the fiscal year for which
the cohort of borrowers used to calculate the institution’s
cohort default rate is determined.
1 Effective October 1, 2011, subparagraph (F) of section 436(a)(1) of Public Law 110–315
amends paragraph (8)(A) by striking ‘‘0.0375’’ and inserting ‘‘0.0625’’.
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(B) DATA.—An institution shall provide the Secretary
with sufficient data to determine the institution’s participation rate index within 30 days after receiving an initial
notification of the institution’s draft cohort default rate.
(C) NOTIFICATION.—Prior to publication of a final cohort default rate for an institution that provides the data
described in subparagraph (B), the Secretary shall notify
the institution of the institution’s compliance or noncompliance with subparagraph (A).
(d) 1 ELIGIBLE LENDER.—
(1) IN GENERAL.—Except as provided in paragraphs (2)
through (6), the term ‘‘eligible lender’’ means—
(A) a National or State chartered bank, a mutual savings bank, a savings and loan association, a stock savings
bank, or a credit union which—
(i) is subject to examination and supervision by an
agency of the United States or of the State in which
its principal place of operation is established, and
(ii) does not have as its primary consumer credit
function the making or holding of loans made to students under this part unless (I) it is a bank which is
wholly owned by a State, or a bank which is subject
to examination and supervision by an agency of the
United States, makes student loans as a trustee pursuant to an express trust, operated as a lender under
this part prior to January 1, 1975, and which meets
the requirements of this provision prior to the enactment of the Higher Education Amendments of 1992,
(II) it is a single wholly owned subsidiary of a bank
holding company which does not have as its primary
consumer credit function the making or holding of
loans made to students under this part, (III) it is a
bank (as defined in section 3(a)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1813(a)(1)) that is a
wholly owned subsidiary of a nonprofit foundation, the
foundation is described in section 501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code, and the bank
makes loans under this part only to undergraduate
students who are age 22 or younger and has a portfolio of such loans that is not more than $5,000,000,
or (IV) it is a National or State chartered bank, or a
credit union, with assets of less than $1,000,000,000;
(B) a pension fund as defined in the Employee Retirement Income Security Act;
(C) an insurance company which is subject to examination and supervision by an agency of the United States
or a State;
(D) in any State, a single agency of the State or a single nonprofit private agency designated by the State;
(E) an eligible institution which meets the requirements of paragraphs (2) through (5) of this subsection;
1 Subsections
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(b) and (c) were repealed by P.L. 102–325, sec. 427(b)(1) and (2), 106 Stat. 549.
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(F) for purposes only of purchasing and holding loans
made by other lenders under this part, the Student Loan
Marketing Association or the Holding Company of the Student Loan Marketing Association, including any subsidiary
of the Holding Company, created pursuant to section 440,
or an agency of any State functioning as a secondary market;
(G) for purposes of making loans under sections
428B(d) and 428C, the Student Loan Marketing Association or the Holding Company of the Student Loan Marketing Association, including any subsidiary of the Holding
Company, created pursuant to section 440;
(H) for purposes of making loans under sections 428(h)
and 428(j), a guaranty agency;
(I) a Rural Rehabilitation Corporation, or its successor
agency, which has received Federal funds under Public
Law 499, Eighty-first Congress (64 Stat. 98 (1950));
(J) for purpose of making loans under section 428C,
any nonprofit private agency functioning in any State as
a secondary market; and
(K) a consumer finance company subsidiary of a national bank which, as of the date of enactment of this subparagraph, through one or more subsidiaries: (i) acts as a
small business lending company, as determined under regulations of the Small Business Administration under section 120.470 of title 13, Code of Federal Regulations (as
such section is in effect on the date of enactment of this
subparagraph); and (ii) participates in the program authorized by this part pursuant to subparagraph (C), provided
the national bank and all of the bank’s direct and indirect
subsidiaries taken together as a whole, do not have, as
their primary consumer credit function, the making or
holding of loans made to students under this part.
(2) REQUIREMENTS FOR ELIGIBLE INSTITUTIONS.—
(A) IN GENERAL.—To be an eligible lender under this
part, an eligible institution—
(i) shall employ at least one person whose fulltime responsibilities are limited to the administration
of programs of financial aid for students attending
such institution;
(ii) shall not be a home study school;
(iii) shall not—
(I) make a loan to any undergraduate student;
(II) make a loan other than a loan under section 428 or 428H to a graduate or professional
student; or
(III) make a loan to a borrower who is not enrolled at that institution;
(iv) shall award any contract for financing, servicing, or administration of loans under this title on a
competitive basis;
(v) shall offer loans that carry an origination fee
or an interest rate, or both, that are less than such fee
or rate authorized under the provisions of this title;
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(vi) shall not have a cohort default rate (as defined in subsection (m)) greater than 10 percent;
(vii) shall, for any year for which the institution
engages in activities as an eligible lender, provide for
a compliance audit conducted in accordance with section 428(b)(1)(U)(iii)(I), and the regulations thereunder, and submit the results of such audit to the Secretary;
(viii) shall use any proceeds from special allowance payments and interest payments from borrowers,
interest subsidies received from the Department of
Education, and any proceeds from the sale or other
disposition of loans, for need-based grant programs;
and
(ix) shall have met the requirements of subparagraphs (A) through (F) of this paragraph as in effect
on the day before the date of enactment of the Higher
Education Reconciliation Act of 2005, and made loans
under this part, on or before April 1, 2006.
(B) ADMINISTRATIVE EXPENSES.—An eligible lender
under subparagraph (A) shall be permitted to use a portion of the proceeds described in subparagraph (A)(viii) for
reasonable and direct administrative expenses.
(C) SUPPLEMENT, NOT SUPPLANT.—An eligible lender
under subparagraph (A) shall ensure that the proceeds described in subparagraph (A)(viii) are used to supplement,
and not to supplant, non-Federal funds that would otherwise be used for need-based grant programs.
(3) DISQUALIFICATION FOR HIGH DEFAULT RATES.—The term
‘‘eligible lender’’ does not include any eligible institution in any
fiscal year immediately after the fiscal year in which the Secretary determines, after notice and opportunity for a hearing,
that for each of 2 consecutive years, 15 percent or more of the
total amount of such loans as are described in section 428(a)(1)
made by the institution with respect to students at that institution and repayable in each such year, are in default, as defined in subsection (m).
(4) WAIVER OF DISQUALIFICATION.—Whenever the Secretary determines that—
(A) there is reasonable possibility that an eligible institution may, within 1 year after a determination is made
under paragraph (3), improve the collection of loans described in section 428(a)(1), so that the application of paragraph (3) would be a hardship to that institution, or
(B) the termination of the lender’s status under paragraph (3) would be a hardship to the present or for prospective students of the eligible institution, after considering the management of that institution, the ability of
that institution to improve the collection of loans, the opportunities that institution offers to economically disadvantaged students, and other related factors,
the Secretary shall waive the provisions of paragraph (3) with
respect to that institution. Any determination required under
this paragraph shall be made by the Secretary prior to the terMay 7, 2013
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mination of an eligible institution as a lender under the exception of paragraph (3). Whenever the Secretary grants a waiver
pursuant to this paragraph, the Secretary shall provide technical assistance to the institution concerned in order to improve the collection rate of such loans.
(5) DISQUALIFICATION FOR USE OF CERTAIN INCENTIVES.—
The term ‘‘eligible lender’’ does not include any lender that the
Secretary determines, after notice and opportunity for a hearing, has—
(A) offered, directly or indirectly, points, premiums,
payments (including payments for referrals and for processing or finder fees), prizes, stock or other securities, travel, entertainment expenses, tuition payment or reimbursement, the provision of information technology equipment
at below-market value, additional financial aid funds, or
other inducements, to any institution of higher education,
any employee of an institution of higher education, or any
individual or entity in order to secure applicants for loans
under this part;
(B) conducted unsolicited mailings, by postal or electronic means, of student loan application forms to students
enrolled in secondary schools or postsecondary institutions,
or to family members of such students, except that applications may be mailed, by postal or electronic means, to students or borrowers who have previously received loans
under this part from such lender;
(C) entered into any type of consulting arrangement,
or other contract to provide services to a lender, with an
employee who is employed in the financial aid office of an
institution of higher education, or who otherwise has responsibilities with respect to student loans or other financial aid of the institution;
(D) compensated an employee who is employed in the
financial aid office of an institution of higher education, or
who otherwise has responsibilities with respect to student
loans or other financial aid of the institution, and who is
serving on an advisory board, commission, or group established by a lender or group of lenders for providing such
service, except that the eligible lender may reimburse such
employee for reasonable expenses incurred in providing
such service;
(E) performed for an institution of higher education
any function that such institution of higher education is
required to perform under this title, except that a lender
shall be permitted to perform functions on behalf of such
institution in accordance with section 485(b) or 485(l);
(F) paid, on behalf of an institution of higher education, another person to perform any function that such
institution of higher education is required to perform
under this title, except that a lender shall be permitted to
perform functions on behalf of such institution in accordance with section 485(b) or 485(l);
(G) provided payments or other benefits to a student
at an institution of higher education to act as the lender’s
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representative to secure applications under this title from
individual prospective borrowers, unless such student—
(i) is also employed by the lender for other purposes; and
(ii) made all appropriate disclosures regarding
such employment;
(H) offered, directly or indirectly, loans under this part
as an inducement to a prospective borrower to purchase a
policy of insurance or other product; or
(I) engaged in fraudulent or misleading advertising.
It shall not be a violation of this paragraph for a lender to provide technical assistance to institutions of higher education
comparable to the kinds of technical assistance provided to institutions of higher education by the Department.
(6) REBATE FEE REQUIREMENT.—To be an eligible lender
under this part, an eligible lender shall pay rebate fees in accordance with section 428C(f).
(7) 1 ELIGIBLE LENDER TRUSTEES.—Notwithstanding any
other provision of this subsection, an eligible lender may not
make or hold a loan under this part as trustee for an institution of higher education, or for an organization affiliated with
an institution of higher education, unless—
(A) the eligible lender is serving as trustee for that institution or organization as of the date of enactment of the
Third Higher Education Extension Act of 2006 under a
contract that was originally entered into before the date of
enactment of such Act and that continues in effect or is renewed after such date; and
(B) the institution or organization, and the eligible
lender, with respect to its duties as trustee, each comply
on and after January 1, 2007, with the requirements of
paragraph (2), except that—
(i) the requirements of clauses (i), (ii), (vi), and
(viii) of paragraph (2)(A) shall, subject to clause (ii) of
this subparagraph, only apply to the institution (including both an institution for which the lender serves
as trustee and an institution affiliated with an organization for which the lender serves as trustee);
(ii) in the case of an organization affiliated with
an institution—
(I) the requirements of clauses (iii) and (v) of
paragraph (2)(A) shall apply to the organization;
and
(II) the requirements of clause (viii) of paragraph (2)(A) shall apply to the institution or the
organization (or both), if the institution or organization receives (directly or indirectly) the proceeds
described in such clause;
1 Effective Date: Section 3(b) of Public Law 109–292 (120 Stat. 1345), states that the amendment made by subsection (a) of such section (which adds paragraph (7)) ‘‘shall not apply with
respect to any loan under part B of title IV of the Higher Education Act of 1965 (20 U.S.C. 1071
et seq.) disbursed before January 1, 2007.’’.
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(iii) the requirements of clauses (iv) and (ix) of
paragraph (2)(A) shall not apply to the eligible lender,
institution, or organization; and
(iv) the eligible lender, institution, and organization shall ensure that the loans made or held by the
eligible lender as trustee for the institution or organization, as the case may be, are included in a compliance audit in accordance with clause (vii) of paragraph
(2)(A).
(8) SCHOOL AS LENDER PROGRAM AUDIT.—Each institution
serving as an eligible lender under paragraph (1)(E), and each
eligible lender serving as a trustee for an institution of higher
education or an organization affiliated with an institution of
higher education, shall annually complete and submit to the
Secretary a compliance audit to determine whether—
(A) the institution or lender is using all proceeds from
special allowance payments and interest payments from
borrowers, interest subsidies received from the Department, and any proceeds from the sale or other disposition
of loans, for need-based grant programs, in accordance
with paragraph (2)(A)(viii);
(B) the institution or lender is using not more than a
reasonable portion of the proceeds described in paragraph
(2)(A)(viii) for direct administrative expenses; and
(C) the institution or lender is ensuring that the proceeds described in paragraph (2)(A)(viii) are being used to
supplement, and not to supplant, Federal and non-Federal
funds that would otherwise be used for need-based grant
programs.
(e) LINE OF CREDIT.—The term ‘‘line of credit’’ means an arrangement or agreement between the lender and the borrower
whereby a loan is paid out by the lender to the borrower in annual
installments, or whereby the lender agrees to make, in addition to
the initial loan, additional loans in subsequent years.
(f) DUE DILIGENCE.—The term ‘‘due diligence’’ requires the utilization by a lender, in the servicing and collection of loans insured
under this part, of servicing and collection practices at least as extensive and forceful as those generally practiced by financial institutions for the collection of consumer loans.
(i) 1 HOLDER.—The term ‘‘holder’’ means an eligible lender who
owns a loan.
(j) GUARANTY AGENCY.—The term ‘‘guaranty agency’’ means
any State or nonprofit private institution or organization with
which the Secretary has an agreement under section 428(b).
(k) INSURANCE BENEFICIARY.—The term ‘‘insurance beneficiary’’ means the insured or its authorized representative assigned in accordance with section 429(d).
(l) DEFAULT.—Except as provided in subsection (m), the term
‘‘default’’ includes only such defaults as have existed for (1) 270
days in the case of a loan which is repayable in monthly install1 Section 427(f) of the Higher Education Amendments of 1992 (P.L. 102–325; 106 Stat. 550)
amended section 435 of the Higher Education Act of 1965 by striking subsections (g), (h), and
(n), but did not to redesignate remaining subsections.
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ments, or (2) 330 days in the case of a loan which is repayable in
less frequent installments. 2
(m) COHORT DEFAULT RATE.—
(1) IN GENERAL.—(A) Except as provided in paragraph (2),
the term ‘‘cohort default rate’’ means, for any fiscal year in
which 30 or more current and former students at the institution enter repayment on loans under section 428, 428A, or
428H, received for attendance at the institution, the percentage of those current and former students who enter repayment
on such loans (or on the portion of a loan made under section
428C that is used to repay any such loans) received for attendance at that institution in that fiscal year who default before
the end of the second fiscal year following the fiscal year in
which the students entered repayment. The Secretary shall require that each guaranty agency that has insured loans for
current or former students of the institution afford such institution a reasonable opportunity (as specified by the Secretary)
to review and correct errors in the information required to be
provided to the Secretary by the guaranty agency for the purposes of calculating a cohort default rate for such institution,
prior to the calculation of such rate.
(B) In determining the number of students who default before the end of such second fiscal year, the Secretary shall include only loans for which the Secretary or a guaranty agency
has paid claims for insurance. In considering appeals with respect to cohort default rates pursuant to subsection (a)(3), the
Secretary shall exclude, from the calculation of the number of
students who entered repayment and from the calculation of
the number of students who default, any loans which, due to
improper servicing or collection, would, as demonstrated by the
evidence submitted in support of the institution’s timely appeal
to the Secretary, result in an inaccurate or incomplete calculation of such cohort default rate.
(C) For any fiscal year in which fewer than 30 of the institution’s current and former students enter repayment, the
term ‘‘cohort default rate’’ means the percentage of such current and former students who entered repayment on such
loans (or on the portion of a loan made under section 428C
that is used to repay any such loans) in any of the three most
recent fiscal years, who default before the end of the second fiscal year following the year in which they entered repayment.
(2) SPECIAL RULES.—(A) In the case of a student who has
attended and borrowed at more than one school, the student
(and such student’s subsequent repayment or default) is attributed to each school for attendance at which the student received a loan that entered repayment in the fiscal year.
(B) A loan on which a payment is made by the school, such
school’s owner, agent, contractor, employee, or any other entity
or individual affiliated with such school, in order to avoid de2 Section 429(c)(2) of the Higher Education Amendments of 1998 (P.L. 105–244; 112 Stat.
1708) amended subsection (l) of the Higher Education Act of 1965 by striking ‘‘180 days’’ and
‘‘240 days’’ and inserting ‘‘270 days’’ and ‘‘330 days’’, respectively, with respect to loans for which
the first day of delinquency occurred on or after the date of enactment of that Act.
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fault by the borrower, is considered as in default for purposes
of this subsection.
(C) Any loan which has been rehabilitated before the end
of the second fiscal year following the year in which the loan
entered repayment is not considered as in default for purposes
of this subsection. The Secretary may require guaranty agencies to collect data with respect to defaulted loans in a manner
that will permit the identification of any defaulted loan for
which (i) the borrower is currently making payments and has
made not less than 6 consecutive on-time payments by the end
of such second fiscal year, and (ii) a guaranty agency has renewed the borrower’s title IV eligibility as provided in section
428F(b).
(D) For the purposes of this subsection, a loan made in accordance with section 428A (or the portion of a loan made
under section 428C that is used to repay a loan made under
section 428A) shall not be considered to enter repayment until
after the borrower has ceased to be enrolled in a course of
study leading to a degree or certificate at an eligible institution
on at least a half-time basis (as determined by the institution)
and ceased to be in a period of forbearance based on such enrollment. Each eligible lender of a loan made under section
428A (or a loan made under section 428C a portion of which
is used to repay a loan made under section 428A) shall provide
the guaranty agency with the information necessary to determine when the loan entered repayment for purposes of this
subsection, and the guaranty agency shall provide such information to the Secretary.
(3) REGULATIONS TO PREVENT EVASIONS.—The Secretary
shall prescribe regulations designed to prevent an institution
from evading the application to that institution of a default
rate determination under this subsection through the use of
such measures as branching, consolidation, change of ownership or control, or any similar device.
(4) COLLECTION AND REPORTING OF COHORT DEFAULT RATES
AND LIFE OF COHORT DEFAULT RATES.—(A) The Secretary shall
publish not less often than once every fiscal year a report
showing cohort default data and life of cohort default rates for
each category of institution, including: (i) four-year public institutions; (ii) four-year private nonprofit institutions; (iii) twoyear public institutions; (iv) two-year private nonprofit institutions; (v) four-year proprietary institutions; (vi) two-year proprietary institutions; and (vii) less than two-year proprietary
institutions. For purposes of this subparagraph, for any fiscal
year in which one or more current and former students at an
institution enter repayment on loans under section 428, 428B,
or 428H, received for attendance at the institution, the Secretary shall publish the percentage of those current and former
students who enter repayment on such loans (or on the portion
of a loan made under section 428C that is used to repay any
such loans) received for attendance at the institution in that
fiscal year who default before the end of each succeeding fiscal
year.
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(B) The Secretary may designate such additional subcategories within the categories specified in subparagraph (A) as
the Secretary deems appropriate.
(C) The Secretary shall publish not less often than once
every fiscal year a report showing default data for each institution for which a cohort default rate is calculated under this
subsection.
(D) The Secretary shall publish the report described in
subparagraph (C) by September 30 of each year.
(o) 1 ECONOMIC HARDSHIP.—
(1) IN GENERAL.—For purposes of this part and part E, a
borrower shall be considered to have an economic hardship if—
(A) such borrower is working full-time and is earning
an amount which does not exceed the greater of—
(i) the minimum wage rate described in section 6
of the Fair Labor Standards Act of 1938; or
(ii) an amount equal to 150 percent of the poverty
line applicable to the borrower’s family size as determined in accordance with section 673(2) of the Community Services Block Grant Act; or
(B) such borrower meets such other criteria as are established by the Secretary by regulation in accordance
with paragraph (2).
(2) CONSIDERATIONS.—In establishing criteria for purposes
of paragraph (1)(B), the Secretary shall consider the borrower’s
income and debt-to-income ratio as primary factors.
(p) ELIGIBLE NOT-FOR-PROFIT HOLDER.—
(1) DEFINITION.—Subject to the limitations in paragraph
(2) and the prohibition in paragraph (3), the term ‘‘eligible notfor-profit holder’’ means an eligible lender under subsection (d)
(except for an eligible lender described in subsection (d)(1)(E))
that requests a special allowance payment under section
438(b)(2)(I)(vi)(II) or a payment under section 781 and that is—
(A) a State, or a political subdivision, authority, agency, or other instrumentality thereof, including such entities
that are eligible to issue bonds described in section 1.103–
1 of title 26, Code of Federal Regulations, or section 144(b)
of the Internal Revenue Code of 1986;
(B) an entity described in section 150(d)(2) of such
Code that has not made the election described in section
150(d)(3) of such Code;
(C) an entity described in section 501(c)(3) of such
Code; or
(D) acting as a trustee on behalf of a State, political
subdivision, authority, agency, instrumentality, or other
entity described in subparagraph (A), (B), or (C), regardless of whether such State, political subdivision, authority,
agency, instrumentality, or other entity is an eligible lender under subsection (d).
(2) LIMITATIONS.—
(A) EXISTING ON DATE OF ENACTMENT.—
1 Subsection
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(n) repealed by sec. 427(f) of P.L. 102–325. See footnote to subsection (i).
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(i) IN GENERAL.—An eligible lender shall not be an
eligible not-for-profit holder under this Act unless such
lender—
(I) was a State, political subdivision, authority, agency, instrumentality, or other entity described in paragraph (1)(A), (B), or (C) that was,
on the date of the enactment of the College Cost
Reduction and Access Act, acting as an eligible
lender under subsection (d) (other than an eligible
lender described in subsection (d)(1)(E)); or
(II) is acting as a trustee on behalf of a State,
political subdivision, authority, agency, instrumentality, or other entity described in subparagraph (A), (B), or (C) of paragraph (1), regardless
of whether such State, political subdivision, authority, agency, instrumentality, or other entity is
an eligible lender under subsection (d), and such
State, political subdivision, authority, agency, instrumentality, or other entity, on the date of enactment of the College Cost Reduction and Access
Act, was the sole beneficial owner of a loan eligible for any special allowance payment under section 438.
(ii) EXCEPTION.—Notwithstanding clause (i), a
State may elect, in accordance with regulations of the
Secretary, to waive the requirements of this subparagraph for a new not-for-profit holder determined by
the State to be necessary to carry out a public purpose
of such State, except that a State may not make such
election with respect the requirements of clause (i)(II).
(B) NO FOR-PROFIT OWNERSHIP OR CONTROL.—
(i) IN GENERAL.—No State, political subdivision,
authority, agency, instrumentality, or other entity described in paragraph (1)(A), (B), or (C) shall be an eligible not-for-profit holder under this Act if such State,
political subdivision, authority, agency, instrumentality, or other entity is owned or controlled, in whole
or in part, by a for-profit entity.
(ii) TRUSTEES.—A trustee described in paragraph
(1)(D) shall not be an eligible not-for-profit holder
under this Act with respect to a State, political subdivision, authority, agency, instrumentality, or other
entity described in subparagraph (A), (B), or (C) of
paragraph (1), regardless of whether such State, political subdivision, authority, agency, instrumentality, or
other entity is an eligible lender under subsection (d),
if such State, political subdivision, authority, agency,
instrumentality, or other entity is owned or controlled,
in whole or in part, by a for-profit entity.
(C) SOLE OWNERSHIP OF LOANS AND INCOME.—No
State, political subdivision, authority, agency, instrumentality, trustee, or other entity described in paragraph
(1)(A), (B), (C), or (D) shall be an eligible not-for-profit
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holder under this Act with respect to any loan, or income
from any loan, unless—
(i) such State, political subdivision, authority,
agency, instrumentality, or other entity is the sole
beneficial owner of such loan and the income from
such loan; or
(ii) such trustee holds the loan on behalf of a
State, political subdivision, authority, agency, instrumentality, or other entity described in subparagraph
(A), (B), or (C) of paragraph (1), regardless of whether
such State, political subdivision, authority, agency, instrumentality, or other entity is an eligible lender
under subsection (d), and such State, political subdivision, authority, agency, instrumentality, or other entity is the sole beneficial owner of such loan and the income from such loan.
(D) TRUSTEE COMPENSATION LIMITATIONS.—A trustee
described in paragraph (1)(D) shall not receive compensation as consideration for acting as an eligible lender on behalf of a State, political subdivision, authority, agency, instrumentality, or other entity described in subparagraph
(A), (B), or (C) of paragraph (1), regardless of whether such
State, political subdivision, authority, agency, instrumentality, or other entity is an eligible lender under subsection
(d), in excess of reasonable and customary fees.
(E) RULE OF CONSTRUCTION.—For purposes of subparagraphs (A), (B), (C), and (D) of this paragraph, a State, political subdivision, authority, agency, instrumentality, or
other entity described in subparagraph (A), (B), or (C) of
paragraph (1), regardless of whether such State, political
subdivision, authority, agency, instrumentality, or other
entity is an eligible lender under subsection (d), shall
not—
(i) be deemed to be owned or controlled, in whole
or in part, by a for-profit entity; or
(ii) lose its status as the sole owner of a beneficial
interest in a loan and the income from a loan,
by such State, political subdivision, authority, agency, instrumentality, or other entity, or by the trustee described
in paragraph (1)(D), granting a security interest in, or otherwise pledging as collateral, such loan, or the income
from such loan, to secure a debt obligation for which such
State, political subdivision, authority, agency, instrumentality, or other entity is the issuer of the debt obligation.
(3) PROHIBITION.—In the case of a loan for which the special allowance payment is calculated under section
438(b)(2)(I)(vi)(II) and that is sold by the eligible not-for-profit
holder holding the loan to an entity that is not an eligible notfor-profit holder under this Act, the special allowance payment
for such loan shall, beginning on the date of the sale, no longer
be calculated under section 438(b)(2)(I)(vi)(II) and shall be calculated under section 438(b)(2)(I)(vi)(I) instead.
(4) REGULATIONS.—Not later than 1 year after the date of
enactment of the College Cost Reduction and Access Act, the
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HIGHER EDUCATION ACT OF 1965
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Secretary shall promulgate regulations in accordance with the
provisions of this subsection.
SEC. 436. ø20 U.S.C. 1086¿ DELEGATION OF FUNCTIONS.
(a) IN GENERAL.—An eligible lender or guaranty
agency that
contracts with another entity to perform any of the lender’s or
agency’s functions under this title, or otherwise delegates the performance of such functions to such other entity—
(1) shall not be relieved of the lender’s or agency’s duty to
comply with the requirements of this title; and
(2) shall monitor the activities of such other entity for compliance with such requirements.
(b) SPECIAL RULE.—A lender that holds a loan made under
part B in the lender’s capacity as a trustee is responsible for complying with all statutory and regulatory requirements imposed on
any other holder of a loan made under this part.
SEC. 437. ø20 U.S.C. 1087¿ 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.
(a) REPAYMENT IN FULL FOR DEATH AND DISABILITY.—
(1) IN GENERAL.—If a student borrower who has received
a loan described in subparagraph (A) or (B) of section 428(a)(1)
dies or becomes permanently and totally disabled (as determined in accordance with regulations of the Secretary), or if a
student borrower who has received such a loan is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be
expected to result in death, has lasted for a continuous period
of not less than 60 months, or can be expected to last for a continuous period of not less than 60 months then the Secretary
shall discharge the borrower’s liability on the loan by repaying
the amount owed on the loan. The Secretary may develop such
safeguards as the Secretary determines necessary to prevent
fraud and abuse in the discharge of liability under this subsection. Notwithstanding any other provision of this subsection, the Secretary may promulgate regulations to reinstate
the obligation of, and resume collection on, loans discharged
under this subsection in any case in which—
(A) a borrower received a discharge of liability under
this subsection and after the discharge the borrower—
(i) receives a loan made, insured, or guaranteed
under this title; or
(ii) has earned income in excess of the poverty
line; or
(B) the Secretary determines the reinstatement and
resumption to be necessary.
(2) DISABILITY DETERMINATIONS.—A borrower who has
been determined by the Secretary of Veterans Affairs to be unemployable due to a service-connected condition and who provides documentation of such determination to the Secretary of
Education, shall be considered permanently and totally disabled for the purpose of discharging such borrower’s loans
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under this subsection, and such borrower shall not be required
to present additional documentation for purposes of this subsection.
(b) PAYMENT OF CLAIMS ON LOANS IN BANKRUPTCY.—The Secretary shall pay to the holder of a loan described in section
428(a)(1) (A) or (B), 428A, 428B, 428C, or 428H, the amount of the
unpaid balance of principal and interest owed on such loan—
(1) when the borrower files for relief under chapter 12 or
13 of title 11, United States Code;
(2) when the borrower who has filed for relief under chapter 7 or 11 of such title commences an action for a determination of dischargeability under section 523(a)(8)(B) of such title;
or
(3) for loans described in section 523(a)(8)(A) of such title,
when the borrower files for relief under chapter 7 or 11 of such
title.
(c) DISCHARGE.—
(1) IN GENERAL.—If a borrower who received, on or after
January 1, 1986, a loan made, insured, or guaranteed under
this part and the student borrower, or the student on whose
behalf a parent borrowed, is unable to complete the program
in which such student is enrolled due to the closure of the institution or if such student’s eligibility 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
authorizing committees annually as to the dollar amount of
loan discharges attributable to failures to make refunds.
(2) ASSIGNMENT.—A borrower whose loan has been discharged pursuant to this subsection shall be deemed to have
assigned to the United States the right to a loan refund up to
the amount discharged against the institution and its affiliates
and principals.
(3) ELIGIBILITY FOR ADDITIONAL ASSISTANCE.—The period
of a student’s attendance at an institution at which the student
was unable to complete a course of study due to the closing of
the institution shall not be considered for purposes of calculating the student’s period of eligibility for additional assistance under this title.
(4) SPECIAL RULE.—A borrower whose loan has been discharged pursuant to this subsection shall not be precluded
from receiving additional grants, loans, or work assistance
under this title for which the borrower would be otherwise eligible (but for the default on such discharged loan). The amount
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discharged under this subsection shall be treated the same as
loans under section 465(a)(5) of this title.
(5) REPORTING.—The Secretary shall report to consumer
reporting agencies with respect to loans which have been discharged pursuant to this subsection.
(d) REPAYMENT OF LOANS TO PARENTS.—If a student on whose
behalf a parent has received a loan described in section 428B dies,
then the Secretary shall discharge the borrower’s liability on the
loan by repaying the amount owed on the loan.
øSection 437A repealed by P.L. 105–244, sec. 432, 112 Stat.
1710.¿
SEC. 438. ø20 U.S.C. 1087–1¿ SPECIAL ALLOWANCES.
(a) FINDINGS.—In order to assure (1) that the
limitation on interest payments or other conditions (or both) on loans made or insured under this part, do not impede or threaten to impede the carrying out of the purposes of this part or do not cause the return
to holders of loans to be less than equitable, (2) that incentive payments on such loans are paid promptly to eligible lenders, and (3)
that appropriate consideration of relative administrative costs and
money market conditions is made in setting the quarterly rate of
such payments, the Congress finds it necessary to establish an improved method for the determination of the quarterly rate of the
special allowances on such loans, and to provide for a thorough, expeditious, and objective examination of alternative methods for the
determination of the quarterly rate of such allowances.
(b) COMPUTATION AND PAYMENT.—
(1) QUARTERLY PAYMENT BASED ON UNPAID BALANCE.—A
special allowance shall be paid for each of the 3-month periods
ending March 31, June 30, September 30, and December 31 of
every year and the amount of such allowance paid to any holder with respect to any 3-month period shall be a percentage of
the average unpaid balance of principal (not including unearned interest added to principal) of all eligible loans held by
such holder during such period.
(2) RATE OF SPECIAL ALLOWANCE.—(A) Subject to subparagraphs (B), (C), (D), (E), (F), (G), (H), and (I) and paragraph
(4), the special allowance paid pursuant to this subsection on
loans shall be computed (i) by determining the average of the
bond equivalent rates of 91-day Treasury bills auctioned for
such 3-month period, (ii) by subtracting the applicable interest
rate on such loans from such average, (iii) by adding 3.10 percent to the resultant percent, and (iv) by dividing the resultant
percent by 4. If such computation produces a number less than
zero, such loans shall be subject to section 427A(i).
(B)(i) The quarterly rate of the special allowance for holders of loans which were made or purchased with funds obtained by the holder from the issuance of obligations, the income from which is exempt from taxation under the Internal
Revenue Code of 1986 shall be one-half the quarterly rate of
the special allowance established under subparagraph (A), except that, in determining the rate for the purpose of this
clause, subparagraph (A)(iii) shall be applied by substituting
‘‘3.5 percent’’ for ‘‘3.10 percent’’ . Such rate shall also apply to
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holders of loans which were made or purchased with funds obtained by the holder from collections or default reimbursements on, or interests 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. This subparagraph shall not apply to loans
which were made or insured prior to October 1, 1980.
(ii) The quarterly rate of the special allowance set under
clause (i) of this subparagraph shall not be less than 9.5 percent minus the applicable interest rate on such loans, divided
by 4.
(iii) No special allowance may be paid under this subparagraph unless the issuer of such obligations complies with subsection (d) of this section.
(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, 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) were made or purchased with funds—
(aa) obtained from the issuance of obligations the
income from which is excluded from gross income
under the Internal Revenue Code of 1986 and which
obligations were originally issued before October 1,
1993; or
(bb) obtained from collections or default reimbursements on, or interest or other income pertaining
to, eligible loans made or purchased with funds described in division (aa), or from income on the investment of such funds; and
(II) are—
(aa) financed by such an obligation that, after
September 30, 2004, has matured or been retired or
defeased;
(bb) refinanced after September 30, 2004, 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.
(vi) Notwithstanding clauses (i), (ii), and (v), but subject to
clause (vii), the quarterly rate of the special allowance shall be
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the rate determined under subparagraph (A), (E), (F), (G), (H),
or (I) of this paragraph, as the case may be, for a holder of
loans—
(I) that were made or purchased on or after the date
of enactment of the Higher Education Reconciliation Act of
2005; or
(II) that were not earning a quarterly rate of special
allowance determined under clauses (i) or (ii) of subparagraph (B) of this paragraph (20 U.S.C. 1087–1(b)(2)(b)) as
of the date of enactment of the Higher Education Reconciliation Act of 2005.
(vii) Clause (vi) shall be applied by substituting ‘‘December
31, 2010’’ for ‘‘the date of enactment of the Higher Education
Reconciliation Act of 2005’’ in the case of a holder of loans
that—
(I) was, as of the date of enactment of the Higher Education Reconciliation Act of 2005, and during the quarter
for which the special allowance is paid, a unit of State or
local government or a nonprofit private entity;
(II) was, as of such date of enactment, and during
such quarter, not owned or controlled by, or under common
ownership or control with, a for-profit entity; and
(III) held, directly or through any subsidiary, affiliate,
or trustee, a total unpaid balance of principal equal to or
less than $100,000,000 on loans for which special allowances were paid under this subparagraph in the most recent quarterly payment prior to September 30, 2005.
(C)(i) In the case of loans made before October 1, 1992,
pursuant to section 428A or 428B for which the interest rate
is determined under section 427A(c)(4), a special allowance
shall not be paid unless the rate determined for any 12-month
period under subparagraph (B) of such section exceeds 12 percent.
(ii) Subject to subparagraphs (G), (H), and (I), in the case
of loans disbursed on or after October 1, 1992, pursuant to section 428A or 428B for which the interest rate is determined
under section 427A(c)(4), a special allowance shall not be paid
unless the rate determined for any 12-month period under section 427A(c)(4)(B) exceeds—
(I) 11 percent in the case of a loan under section 428A;
or
(II) 10 percent in the case of a loan under section
428B.
(D)(i) In the case of loans made or purchased directly from
funds loaned or advanced pursuant to a qualified State obligation, subparagraph (A)(iii) shall be applied by substituting ‘‘3.5
percent’’ for ‘‘3.10 percent’’.
(ii) For the purpose of division (i) of this subparagraph, the
term ‘‘qualified State obligation’’ means—
(I) an obligation of the Maine Educational Loan Marketing Corporation to the Student Loan Marketing Association pursuant to an agreement entered into on January
31, 1984; or
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(II) an obligation of the South Carolina Student Loan
Corporation to the South Carolina National Bank pursuant to an agreement entered into on July 30, 1986.
(E) In the case of any loan for which the applicable rate
of interest is described in section 427A(g)(2), subparagraph
(A)(iii) shall be applied by substituting ‘‘2.5 percent’’ for ‘‘3.10
percent’’.
(F) Subject to paragraph (4), the special allowance paid
pursuant to this subsection on loans for which the applicable
rate of interest is determined under section 427A(h) shall be
computed (i) by determining the applicable bond equivalent
rate of the security with a comparable maturity, as established
by the Secretary, (ii) by subtracting the applicable interest
rates on such loans from such applicable bond equivalent rate,
(iii) by adding 1.0 percent to the resultant percent, and (iv) by
dividing the resultant percent by 4. If such computation produces a number less than zero, such loans shall be subject to
section 427A(i).
(G) LOANS DISBURSED BETWEEN JULY 1, 1998, AND OCTOBER
1, 1998.—
(i) IN GENERAL.—Subject to paragraph (4) and clauses
(ii), (iii), and (iv) of this subparagraph, and except as provided in subparagraph (B), the special allowance paid pursuant to this subsection on loans for which the first disbursement is made on or after July 1, 1998, and before October 1, 1998, shall be computed—
(I) by determining the average of the bond equivalent rates of 91-day T
(II) by subtracting the applicable interest rates on
such loans from such average bond equivalent rate;
(III) by adding 2.8 percent to the resultant percent; and
(IV) by dividing the resultant percent by 4.
(ii) IN SCHOOL AND GRACE PERIOD.—In the case of any
loan for which the first disbursement is made on or after
July 1, 1998, and before October 1, 1998, and for which the
applicable rate of interest is described in section
427A(j)(2), clause (i)(III) of this subparagraph shall be applied by substituting ‘‘2.2 percent’’ for ‘‘2.8 percent’’.
(iii) PLUS LOANS.—In the case of any loan for which
the first disbursement is made on or after July 1, 1998,
and before October 1, 1998, and for which the applicable
rate of interest is described in section 427A(j)(3), clause
(i)(III) of this subparagraph shall be applied by substituting ‘‘3.1 percent’’ for ‘‘2.8 percent’’, subject to clause
(v) of this subparagraph.
(iv) CONSOLIDATION LOANS.—This subparagraph shall
not apply in the case of any consolidation loan.
(v) LIMITATION ON SPECIAL ALLOWANCES FOR PLUS
LOANS.—In the case of PLUS loans made under section
428B and disbursed on or after July 1, 1998, and before
October 1, 1998, for which the interest rate is determined
under 427A(j)(3), a special allowance shall not be paid for
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HIGHER EDUCATION ACT OF 1965
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such loan for such 1 unless the rate determined under subparagraph (A) of such section (without regard to subparagraph (B) of such section) exceeds 9.0 percent.
(H) 2 LOANS DISBURSED ON OR AFTER OCTOBER 1, 1998,
AND BEFORE JANUARY 1, 2000.—
(i) IN GENERAL.—Subject to paragraph (4) and
clauses (ii), (iii), and (iv) of this subparagraph, and except as provided in subparagraph (B), the special allowance paid pursuant to this subsection on loans for
which the first disbursement is made on or after October 1, 1998, and before January 1, 2000, shall be computed—
(I) by determining the average of the bond
equivalent rates of 91-day Treasury bills auctioned for such 3-month period;
(II) by subtracting the applicable interest
rates on such loans from such average bond equivalent rate;
(III) by adding 2.8 percent to the resultant
percent; and
(IV) by dividing the resultant percent by 4.
(ii) IN SCHOOL AND GRACE PERIOD.—In the case of
any loan for which the first disbursement is made on
or after October 1, 1998, and before January 1, 2000,
and for which the applicable rate of interest is described in section 427A(k)(2), clause (i)(III) of this subparagraph shall be applied by substituting ‘‘2.2 percent’’ for ‘‘2.8 percent’’.
(iii) PLUS LOANS.—In the case of any loan for
which the first disbursement is made on or after October 1, 1998, and before January 1, 2000, and for which
the applicable rate of interest is described in section
427A(k)(3), clause (i)(III) of this subparagraph shall be
applied by substituting ‘‘3.1 percent’’ for ‘‘2.8 percent’’,
subject to clause (v) of this subparagraph.
(iv) CONSOLIDATION LOANS.—In the case of any
consolidation loan for which the application is received
by an eligible lender on or after October 1, 1998, and
before January 1, 2000, and for which the applicable
interest rate is determined under section 427A(k)(4),
clause (i)(III) of this subparagraph shall be applied by
substituting ‘‘3.1 percent’’ for ‘‘2.8 percent’’, subject to
clause (vi) of this subparagraph.
(v) LIMITATION ON SPECIAL ALLOWANCES FOR PLUS
LOANS.—In the case of PLUS loans made under section 428B and first disbursed on or after October 1,
1998, and before January 1, 2000, 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
1 So
in original.
so in law.
2 Margin
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HIGHER EDUCATION ACT OF 1965
408
on June 30 unless, on the June 1 preceding such July
1—
(I) the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held prior
to such June 1 (as determined by the Secretary for
purposes of such section); plus
(II) 3.1 percent,
exceeds 9.0 percent.
(vi) LIMITATION ON SPECIAL ALLOWANCES FOR CONSOLIDATION LOANS.—In the case of consolidation loans
made under section 428C and for which the application is received on or after October 1, 1998, and before
January 1, 2000, for which the interest rate is determined under section 427A(k)(4), 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 rate of
91-day Treasury bills auctioned for such 3-month
period; plus
(II) 3.1 percent,
exceeds the rate determined under section 427A(k)(4).
(I) 1 LOANS DISBURSED ON OR AFTER JANUARY 1, 2000,
AND BEFORE JULY 1, 2010.—
(i) IN GENERAL.—Notwithstanding subparagraphs
(G) and (H), but subject to paragraph (4) and the following clauses of this subparagraph, and except as
provided in subparagraph (B), the special allowance
paid pursuant to this subsection on loans for which
the first disbursement is made on or after January 1,
2000, and before July 1, 2010, shall be computed—
(I) by determining the average of the bond
equivalent rates of the quotes of the 3-month commercial paper (financial) rates in effect for each of
the days in such quarter as reported by the Federal Reserve in Publication H–15 (or its successor)
for such 3-month period;
(II) by subtracting the applicable interest
rates on such loans from the rate determined
under subclause (I) (in accordance with clause
(vii));
(III) by adding 2.34 percent to the resultant
percent; and
(IV) by dividing the resultant percent by 4.
(ii) IN SCHOOL AND GRACE PERIOD.—In the case of
any loan—
(I) for which the first disbursement is made
on or after January 1, 2000, and before July 1,
2006, and for which the applicable rate of interest
is described in section 427A(k)(2); or
(II) for which the first disbursement is made
on or after July 1, 2006, and before July 1, 2010,
1 Margin
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HIGHER EDUCATION ACT OF 1965
Sec. 438
and for which the applicable rate of interest is described in section section 427A(l)(1) or (l)(4), but
only with respect to (aa) periods prior to the beginning of the repayment period of the loan; or
(bb) during the periods in which principal need
not be paid (whether or not such principal is in
fact paid) by reason of a provision described in
section 427(a)(2)(C) or 428(b)(1)(M);
clause (i)(III) of this subparagraph shall be applied by
substituting ‘‘1.74 percent’’ for ‘‘2.34 percent’’.
(iii) PLUS LOANS.—In the case of any loan for
which the first disbursement is made on or after January 1, 2000, and before July 1, 2010, and for which the
applicable rate of interest is described in section
427A(k)(3) or (l)(2), clause (i)(III) of this subparagraph
shall be applied by substituting ‘‘2.64 percent’’ for
‘‘2.34 percent’’.
(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
that is disbursed before July 1, 2010, and for which
the applicable interest rate is determined under section 427A(k)(4) or (l)(3), clause (i)(III) of this subparagraph shall be applied by substituting ‘‘2.64 percent’’
for ‘‘2.34 percent’’.
(v) 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, and before July
1, 2010, if the applicable interest rate for any 3month 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
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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), (iv), (vi), and (vii) in determining such
sum.
(vi) REDUCTION FOR LOANS DISBURSED ON OR
AFTER OCTOBER 1, 2007, AND BEFORE JULY 1, 2010.—
With respect to a loan on which the applicable interest
rate is determined under section 427A(l) and for which
the first disbursement of principal is made on or after
October 1, 2007, and before July 1, 2010, the special
allowance payment computed pursuant to this subparagraph shall be computed—
(I) for loans held by an eligible lender not described in subclause (II)—
(aa) by substituting ‘‘1.79 percent’’ for
‘‘2.34 percent’’ each place the term appears in
this subparagraph;
(bb) by substituting ‘‘1.19 percent’’ for
‘‘1.74 percent’’ in clause (ii);
(cc) by substituting ‘‘1.79 percent’’ for
‘‘2.64 percent’’ in clause (iii); and
(dd) by substituting ‘‘2.09 percent’’ for
‘‘2.64 percent’’ in clause (iv); and
(II) for loans held by an eligible not-for-profit
holder—
(aa) by substituting ‘‘1.94 percent’’ for
‘‘2.34 percent’’ each place the term appears in
this subparagraph;
(bb) by substituting ‘‘1.34 percent’’ for
‘‘1.74 percent’’ in clause (ii);
(cc) by substituting ‘‘1.94 percent’’ for
‘‘2.64 percent’’ in clause (iii); and
(dd) by substituting ‘‘2.24 percent’’ for
‘‘2.64 percent’’ in clause (iv).
(vii) REVISED CALCULATION RULE TO REFLECT FINANCIAL MARKET CONDITIONS.—
(I) CALCULATION BASED ON LIBOR.—For the
calendar quarter beginning on April 1, 2012 and
each subsequent calendar quarter, in computing
the special allowance paid pursuant to this subsection with respect to loans described in subclause (II), clause (i)(I) of this subparagraph shall
be applied by substituting ‘‘of the 1-month London
Inter Bank Offered Rate (LIBOR) for United
States dollars in effect for each of the days in such
quarter as compiled and released by the British
Bankers Association’’ for ‘‘of the quotes of the 3month commercial paper (financial) rates in effect
for each of the days in such quarter as reported by
the Federal Reserve in Publication H–15 (or its
successor) for such 3-month period’’.
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(II) LOANS ELIGIBLE FOR LIBOR-BASED CALCULATION.—The special allowance paid pursuant
to this subsection shall be calculated as described
in subclause (I) with respect to special allowance
payments for the 3-month period ending June 30,
2012, and each succeeding 3-month period, on
loans for which the first disbursement is made on
or after January 1, 2000, and before July 1, 2010,
if, not later than April 1, 2012, the holder of the
loan (or, if the holder acts as eligible lender trustee for the beneficial owner of the loan, the beneficial owner of the loan), affirmatively and permanently waives all contractual, statutory, or other
legal rights to a special allowance paid pursuant
to this subsection that is calculated using the formula in effect at the time the loans were first disbursed.
(III) TERMS OF WAIVER.—
(aa) IN GENERAL.—A waiver pursuant to
subclause (II) shall be in a form (printed or
electronic) prescribed by the Secretary, and
shall be applicable to—
(AA) all loans described in such subclause that the lender holds solely in its
own right under any lender identification
number associated with the holder (pursuant to section 487B);
(BB) all loans described in such subclause for which the beneficial owner has
the authority to make an election of a
waiver under such subclause, regardless
of the lender identification number associated with the loan or the lender that
holds the loan as eligible lender trustee
on behalf of such beneficial owner; and
(CC) all future calculations of the
special allowance on loans that, on the
date of such waiver, are loans described
in subitem (AA) or (BB), or that, after
such date, become loans described in
subitem (AA) or (BB).
(bb) EXCEPTIONS.—Any waiver pursuant
to subclause (II) that is elected for loans described in subitem (AA) or (BB) of item (aa)
shall not apply to any loan described in such
subitem for which the lender or beneficial
owner of the loan demonstrates to the satisfaction of the Secretary that—
(AA) in accordance with an agreement entered into before the date of enactment of this section 1 by which such
lender or owner is governed and that ap1 So
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plies to such loans, such lender or owner
is not legally permitted to make an election of such waiver with respect to such
loans without the approval of one or more
third parties with an interest in the
loans, and that the lender or owner followed all available options under such
agreement to obtain such approval, and
was unable to do so; or
(BB) such lender or beneficial owner
presented the proposal of electing such a
waiver applicable to such loans associated
with an obligation rated by a nationally
recognized statistical rating organization
(as defined in section 3(a)(62) of the Securities Exchange Act of 1934), and such
rating organization provided a written
opinion that the agency would downgrade
the rating applicable to such obligation if
the lender or owner elected such a waiver.
(3) CONTRACTUAL RIGHT OF HOLDERS TO SPECIAL ALLOWANCE.—The holder of an eligible loan shall be deemed to have
a contractual right against the United States, during the life
of such loan, to receive the special allowance according to the
provisions of this section. The special allowance determined for
any such 3-month period shall be paid promptly after the close
of such period, and without administrative delay after receipt
of an accurate and complete request for payment, pursuant to
procedures established by regulations promulgated under this
section.
(4) PENALTY FOR LATE PAYMENT.—(A) If payments of the
special allowances payable under this section or of interest
payments under section 428(a) with respect to a loan have not
been made within 30 days after the Secretary has received an
accurate, timely, and complete request for payment thereof, the
special allowance payable to such holder shall be increased by
an amount equal to the daily interest accruing on the special
allowance and interest benefits payments due the holder.
(B) Such daily interest shall be computed at the daily
equivalent rate of the sum of the special allowance rate computed pursuant to paragraph (2) and the interest rate applicable to the loan and shall be paid for the later of (i) the 31st
day after the receipt of such request for payment from the
holder, or (ii) the 31st day after the final day of the period or
periods covered by such request, and shall be paid for each succeeding day until, and including, the date on which the Secretary authorizes payment.
(C) For purposes of reporting to the Congress the amounts
of special allowances paid under this section, amounts of special allowances paid pursuant to this paragraph shall be segregated and reported separately.
(5) DEFINITION OF ELIGIBLE LOAN.—As used in this section,
the term ‘‘eligible loan’’ means a loan—
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(A)(i) on which a portion of the interest is paid on behalf of the student and for the student’s account to the
holder of the loan under section 428(a);
(ii) which is made under section 428A, 428B, 428C,
428H, or 439(o); or
(iii) which was made prior to October 1, 1981; and
(B) which is insured under this part, or made under
a program covered by an agreement under section 428(b)
of this Act.
(6) REGULATION OF TIME AND MANNER OF PAYMENT.—The
Secretary shall pay the holder of an eligible loan, at such time
or times as are specified in regulations, a special allowance
prescribed pursuant to this subsection subject to the condition
that such holder shall submit to the Secretary, at such time or
times and in such a manner as the Secretary may deem proper, such information as may be required by regulation for the
purpose of enabling the Secretary to carry out his functions
under this section and to carry out the purposes of this section.
(7) USE OF AVERAGE QUARTERLY BALANCE.—The Secretary
shall permit lenders to calculate interest benefits and special
allowance through the use of the average quarterly balance
method until July 1, 1988.
(c) ORIGINATION FEES FROM STUDENTS.—
(1) DEDUCTION FROM INTEREST AND SPECIAL ALLOWANCE
SUBSIDIES.—(A) Notwithstanding subsection (b), the Secretary
shall collect the amount the lender is authorized to charge as
an origination fee in accordance with paragraph (2) of this subsection—
(i) by reducing the total amount of interest and special
allowance payable under section 428(a)(3)(A) and subsection (b) of this section, respectively, to any holder; or
(ii) directly from the holder of the loan, if the lender
fails or is not required to bill the Secretary for interest and
special allowance or withdraws from the program with unpaid loan origination fees.
(B) If the Secretary collects the origination fee under this
subsection through the reduction of interest and special allowance, and the total amount of interest and special allowance
payable under section 428(a)(3)(A) and subsection (b) of this
section, respectively, is less than the amount the lender was
authorized to charge borrowers for origination fees in that
quarter, the Secretary shall deduct the excess amount from the
subsequent quarters’ payments until the total amount has
been deducted.
(2) AMOUNT OF ORIGINATION FEES.—
(A) IN GENERAL.—Subject to paragraph (6) of this subsection, with respect to any loan (including loans made
under section 428H, but excluding loans made under sections 428C and 439(o)) for which a completed note or other
written evidence of the loan was sent or delivered to the
borrower for signing on or after 10 days after the date of
enactment of the Postsecondary Student Assistance
Amendments of 1981, each eligible lender under this part
is authorized to charge the borrower an origination fee in
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HIGHER EDUCATION ACT OF 1965
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an amount not to exceed 3.0 percent of the principal
amount of the loan, to be deducted proportionately from
each installment payment of the proceeds of the loan prior
to payment to the borrower. Except as provided in paragraph (8), a lender that charges an origination fee under
this paragraph shall assess the same fee to all student borrowers.
(B) SUBSEQUENT REDUCTIONS.—Subparagraph (A)
shall be applied to loans made under this part (other than
loans made under sections 428C and 439(o))—
(i) by substituting ‘‘2.0 percent’’ for ‘‘3.0 percent’’
with respect to loans for which the first disbursement
of principal is made on or after July 1, 2006, and before July 1, 2007;
(ii) by substituting ‘‘1.5 percent’’ for ‘‘3.0 percent’’
with respect to loans for which the first disbursement
of principal is made on or after July 1, 2007, and before July 1, 2008;
(iii) by substituting ‘‘1.0 percent’’ for ‘‘3.0 percent’’
with respect to loans for which the first disbursement
of principal is made on or after July 1, 2008, and before July 1, 2009; and
(iv) by substituting ‘‘0.5 percent’’ for ‘‘3.0 percent’’
with respect to loans for which the first disbursement
of principal is made on or after July 1, 2009, and before July 1, 2010.
(3) RELATION TO APPLICABLE INTEREST.—Such origination
fee shall not be taken into account for purposes of determining
compliance with section 427A.
(4) DISCLOSURE REQUIRED.—The lender shall disclose to
the borrower the amount and method of calculating the origination fee.
(5) PROHIBITION ON DEPARTMENT COMPELLING ORIGINATION
FEE COLLECTIONS BY LENDERS.—Nothing in this subsection
shall be construed to permit the Secretary to require any lender that is making loans that are insured or guaranteed under
this part, but for which no amount will be payable for interest
under section 428(a)(3)(A) or for special allowances under subsection (b) of this section, to collect any origination fee or to
submit the sums collected as origination fees to the United
States. The Secretary shall, not later than January 1, 1987, return to any such lender any such sums collected before the enactment of this paragraph, together with interest thereon.
(6) SLS AND PLUS LOANS.—With respect to any loans made
under section 428A or 428B on or after October 1, 1992, and
first disbursed before July 1, 2010, each eligible lender under
this part shall charge the borrower an origination fee of 3.0
percent of the principal amount of the loan, to be deducted proportionately from each installment payment of the proceeds of
the loan prior to payments to the borrower.
(7) DISTRIBUTION OF ORIGINATION FEES.—All origination
fees collected pursuant to this section on loans authorized
under section 428A or 428B shall be paid to the Secretary by
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the lender and deposited in the fund authorized under section
431 of this part.
(8) EXCEPTION.—Notwithstanding paragraph (2), a lender
may assess a lesser origination fee for a borrower demonstrating greater financial need as determined by such borrower’s adjusted gross family income.
(d) LOAN FEES FROM LENDERS.—
(1) DEDUCTION FROM INTEREST AND SPECIAL ALLOWANCE
SUBSIDIES.—
(A) IN GENERAL.—Notwithstanding subsection (b), the
Secretary shall collect a loan fee in an amount determined
in accordance with paragraph (2)—
(i) by reducing the total amount of interest and
special allowance payable under section 428(a)(3)(A)
and subsection (b), respectively, to any holder of a
loan; or
(ii) directly from the holder of the loan, if the lender—
(I) fails or is not required to bill the Secretary
for interest and special allowance payments; or
(II) withdraws from the program with unpaid
loan fees.
(B) SPECIAL RULE.—If the Secretary collects loan fees
under this subsection through the reduction of interest and
special allowance payments, and the total amount of interest and special allowance payable under section
428(a)(3)(A) and subsection (b), respectively, is less than
the amount of such loan fees, then the Secretary shall deduct the amount of the loan fee balance from the amount
of interest and special allowance payments that would otherwise be payable, in subsequent quarterly increments
until the balance has been deducted.
(2) AMOUNT OF LOAN FEES.—The amount of the loan fee
which shall be deducted under paragraph (1), but which may
not be collected from the borrower, shall be equal to—
(A) except as provided in subparagraph (B), 0.50 percent of the principal amount of the loan with respect to
any loan under this part for which the first disbursement
was made on or after October 1, 1993; and
(B) 1.0 percent of the principal amount of the loan
with respect to any loan under this part for which the first
disbursement was made on or after October 1, 2007, and
before July 1, 2010.
(3) DISTRIBUTION OF LOAN FEES.—The Secretary shall deposit all fees collected pursuant to paragraph (3) into the insurance fund established in section 431.
(e) NONDISCRIMINATION.—In order for the holders of loans
which were made or purchased with funds obtained by the holder
from an Authority issuing obligations, the income from which is exempt from taxation under the Internal Revenue Code of 1986, to
be eligible to receive a special allowance under subsection (b)(2) on
any such loans, the Authority shall not engage in any pattern or
practice which results in a denial of a borrower’s access to loans
under this part because of the borrower’s race, sex, color, religion,
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national origin, age, disability status, income, attendance at a particular eligible institution within the area served by the Authority,
length of the borrower’s educational program, or the borrower’s
academic year in school.
(f) REGULATIONS TO PREVENT DENIAL OF LOANS TO ELIGIBLE
STUDENTS.—The Secretary shall adopt or amend appropriate regulations pertaining to programs carried out under this part to prevent, where practicable, any practices which the Secretary finds
have denied loans to a substantial number of eligible students.
(g) SPECIAL RULE.—With respect to any loan made under this
part for which the interest rate is determined under the
Servicemembers Civil Relief Act (50 U.S.C. App. 527), the applicable interest rate to be subtracted in calculating the special allowance for such loan under this section shall be the interest rate determined under that Act for such loan.
SEC. 439. ø20 U.S.C. 1087–2¿ 1 STUDENT LOAN MARKETING ASSOCIATION.
(a) PURPOSE.—The Congress hereby declares that it is the pur-
pose of this section (1) to establish a private corporation which will
be financed by private capital and which will serve as a secondary
market and warehousing facility for student loans, including loans
which are insured by the Secretary under this part or by a guaranty agency, and which will provide liquidity for student loan investments; (2) in order to facilitate secured transactions involving
student loans, to provide for perfection of security interests in student loans either through the taking of possession or by notice filing; and (3) to assure nationwide the establishment of adequate
loan insurance programs for students, to provide for an additional
program of loan insurance to be covered by agreements with the
Secretary.
(b) ESTABLISHMENT.—
(1) IN GENERAL.—There is hereby created a body corporate
to be known as the Student Loan Marketing Association (hereinafter referred to as the ‘‘Association’’). The Association shall
have succession until dissolved. It shall maintain its principal
office in the District of Columbia and shall be deemed, for purposes of venue and jurisdiction in civil actions, to be a resident
and citizen thereof. Offices may be established by the Association in such other place or places as it may deem necessary or
appropriate for the conduct of its business.
(2) EXEMPTION FROM STATE AND LOCAL TAXES.—The Association, including its franchise, capital, reserves, surplus, mortgages, or other security holdings, and income shall be exempt
from all taxation now or hereafter imposed by any State, territory, possession, Commonwealth, or dependency of the United
1 Section
602(d) of Public Law 104–208 (110 Stat. 3009–300) provides for the following repeals:
(d) REPEALS.—
(1) IN GENERAL.—Sections 439 of the Higher Education Act of 1965 (20 U.S.C. 1087–2)
and 440 of such Act (as added by subsection (a) of this section) are repealed.
(2) EFFECTIVE DATE.—The repeals made by paragraph (1) shall be effective one year after—
(A) the date on which all of the obligations of the trust established under section
440(d)(1) of the Higher Education Act of 1965 (as added by subsection (a)) have been
extinguished, if a reorganization occurs in accordance with section 440 of such Act; or
(B) the date on which all of the obligations of the trust established under subsection
439(s)(3)(A) of such Act (as added by subsection (c)) have been extinguished, if a reorganization does not occur in accordance with section 440 of such Act.
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States, or by the District of Columbia, or by any county, municipality, or local taxing authority, except that any real property of the Association shall be subject to State, territorial,
county, municipal, or local taxation to the same extent according to its value as other real property is taxed.
(3) APPROPRIATIONS AUTHORIZED FOR ESTABLISHMENT.—
There is hereby authorized to be appropriated to the Secretary
$5,000,000 for making advances for the purpose of helping to
establish the Association. Such advances shall be repaid within
such period as the Secretary may deem to be appropriate in
light of the maturity and solvency of the Association. Such advances shall bear interest at a rate not less than (A) a rate determined by the Secretary of the Treasury taking into consideration the current average market yield on outstanding marketable obligations of the United States with remaining period to
maturity comparable to the maturity of such advances, adjusted to the nearest one-eighth of 1 percent, plus (B) an allowance adequate in the judgment of the Secretary to cover administrative costs and probable losses. Repayments of such advances shall be deposited into miscellaneous receipts of the
Treasury.
(c) BOARD OF DIRECTORS.—
(1) COMPOSITION OF BOARD; CHAIRMAN.—(A) The Association shall have a Board of Directors which shall consist of 21
persons, 7 of whom shall be appointed by the President and
shall be representative of the general public. The remaining 14
directors shall be elected by the common stockholders of the
Association entitled to vote pursuant to subsection (f). Commencing with the annual shareholders meeting to be held in
1993—
(i) 7 of the elected directors shall be affiliated with an
eligible institution; and
(ii) 7 of the elected directors shall be affiliated with an
eligible lender.
(B) The President shall designate 1 of the directors to
serve as Chairman.
(2) TERMS OF APPOINTED AND ELECTED MEMBERS.—The directors appointed by the President shall serve at the pleasure
of the President and until their successors have been appointed
and have qualified. The remaining directors shall each be elected for a term ending on the date of the next annual meeting
of the common stockholders of the Association, and shall serve
until their successors have been elected and have qualified.
Any appointive seat on the Board which becomes vacant shall
be filled by appointment of the President. Any elective seat on
the Board which becomes vacant after the annual election of
the directors shall be filled by the Board, but only for the unexpired portion of the term.
(3) AFFILIATED MEMBERS.—For the purpose of this subsection, the references to a director ‘‘affiliated with the eligible
institution’’ or a director ‘‘affiliated with an eligible lender’’
means an individual who is, or within 5 years of election to the
Board has been, an employee, officer, director, or similar official of—
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(A) an eligible institution or an eligible lender;
(B) an association whose members consist primarily of
eligible institutions or eligible lenders; or
(C) a State agency, authority, instrumentality, commission, or similar institution, the primary purpose of
which relates to educational matters or banking matters.
(4) MEETINGS AND FUNCTIONS OF THE BOARD.—The Board
of Directors shall meet at the call of its Chairman, but at least
semiannually. The Board shall determine the general policies
which shall govern the operations of the Association. The
Chairman of the Board shall, with the approval of the Board,
select, appoint, and compensate qualified persons to fill the offices as may be provided for in the bylaws, with such functions,
powers, and duties as may be prescribed by the bylaws or by
the Board of Directors, and such persons shall be the officers
of the Association and shall discharge all such functions, powers, and duties.
(d) AUTHORITY OF ASSOCIATION.—
(1) IN GENERAL.—The Association is authorized, subject to
the provisions of this section—
(A) pursuant to commitments or otherwise to make advances on the security of, purchase, or repurchase, service,
sell or resell, offer participations, or pooled interests or
otherwise deal in, at prices and on terms and conditions
determined by the Association, student loans which are insured by the Secretary under this part or by a guaranty
agency;
(B) to buy, sell, hold, underwrite, and otherwise deal
in obligations, if such obligations are issued, for the purpose of making or purchasing insured loans, by a guaranty
agency or by an eligible lender in a State described in section 435(d)(1) (D) or (F);
(C) to buy, sell, hold, insure, underwrite, and otherwise deal in obligations issued for the purpose of financing
or refinancing the construction, reconstruction, renovation,
improvement, or purchase at institutions of higher education of any of the following facilities (including the underlying property) and materials (including related equipment, instrumentation, and furnishings) at an eligible institution of higher education:
(i) educational and training facilities;
(ii) housing for students and faculties, dining
halls, student unions, and facilities specifically designed to promote fitness and health for students, faculty, and staff or for physical education courses; and
(iii) library facilities, including the acquisition of
library materials at institutions of higher education;
except that not more than 30 percent of the value of transactions entered into under this subparagraph shall involve
transactions of the types described in clause (ii);
(D) to undertake a program of loan insurance pursuant to agreements with the Secretary under section 428,
and except with respect to loans under subsection (o) of
this section or under section 428C, the Secretary may
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enter into an agreement with the Association for such purpose only if the Secretary determines that (i) eligible borrowers are seeking and unable to obtain loans under this
part, and (ii) no guaranty agency is capable of or willing
to provide a program of loan insurance for such borrowers;
and
(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) in carrying out all such activities the purpose
shall always be to provide secondary market and other
support for lending programs offered by other organizations and not to replace or compete with such other
programs;
(ii) nothing in this subparagraph (E) shall be
deemed to authorize the Association to acquire, own,
operate, or control any bank, savings and loan association, savings bank or credit union; and
(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 in writing of its plans to offer such program and
shall provide information relating to the general terms
and conditions of such program.
The Association is further authorized to undertake any activity
with regard to student loans which are not insured or guaranteed as provided for in this subsection as it may undertake
with regard to insured or guaranteed student loans. Any
warehousing advance made on the security of such loans shall
be subject to the provisions of paragraph (3) of this subsection
to the same extent as a warehousing advance made on the security of insured loans.
(2) WAREHOUSING ADVANCES.—Any warehousing advance
made under paragraph (1)(A) of this subsection shall be made
on the security of (A) insured loans, (B) marketable obligations
and securities issued, guaranteed, or insured by, the United
States, or for which the full faith and credit of the United
States is pledged for the repayment of principal and interest
thereof, or (C) marketable obligations issued, guaranteed, or
insured by any agency, instrumentality, or corporation of the
United States for which the credit of such agency, instrumentality, or corporation is pledged for the repayment of principal
and interest thereof, in an amount equal to the amount of such
advance. The proceeds of any such advance secured by insured
loans shall either be invested in additional insured loans or the
lender shall provide assurances to the Association that during
the period of the borrowing it will maintain a level of insured
loans in its portfolio not less than the aggregate outstanding
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balance of such loans held at the time of the borrowing. The
proceeds from any such advance secured by collateral described
in clauses (B) and (C) shall be invested in additional insured
student loans.
(3) PERFECTION OF SECURITY INTERESTS IN STUDENT
LOANS.—Notwithstanding the provisions of any State law to
the contrary, including the Uniform Commercial Code as in effect in any State, a security interest in insured student loans
created on behalf of the Association or any eligible lender as
defined in section 435(a) may be perfected either through the
taking of possession of such loans or by the filing of notice of
such security interest in such loans in the manner provided by
such State law for perfection of security interests in accounts.
(4) FORM OF SECURITIES.—Securities issued pursuant to
the offering of participations or pooled interests under paragraph (1) of this subsection may be in the form of debt obligations, or trust certificates of beneficial ownership, or both. Student loans set aside pursuant to the offering of participations
or pooled interests shall at all times be adequate to ensure the
timely principal and interest payments on such securities.
(5) RESTRICTIONS ON FACILITIES AND HOUSING ACTIVITIES.—
Not less than 75 percent of the aggregate dollar amount of obligations bought, sold, held, insured, underwritten, and otherwise supported in accordance with the authority contained in
paragraph (1)(C) shall be obligations which are listed by a nationally recognized statistical rating organization at a rating
below the second highest rating of such organization.
(e) ADVANCES TO LENDERS THAT DO NOT DISCRIMINATE.—The
Association, pursuant to such criteria as the Board of Directors
may prescribe, shall make advances on security or purchase student loans pursuant to subsection (d) only after the Association is
assured that the lender (1) does not discriminate by pattern or
practice against any particular class or category of students by requiring that, as a condition to the receipt of a loan, the student or
his family maintain a business relationship with the lender, except
that this clause shall not apply in the case of a loan made by a
credit union, savings and loan association, mutual savings bank,
institution of higher education, or any other lender with less than
$75,000,000 in deposits, and (2) does not discriminate on the basis
of race, sex, color, creed, or national origin.
(f) STOCK OF THE ASSOCIATION.—
(1) VOTING COMMON STOCK.—The Association shall have
voting common stock having such par value as may be fixed by
its Board of Directors from time to time. Each share of voting
common stock shall be entitled to one vote with rights of cumulative voting at all elections of directors.
(2) NUMBER OF SHARES; TRANSFERABILITY.—The maximum
number of shares of voting common stock that the Association
may issue and have outstanding at any one time shall be fixed
by the Board of Directors from time to time. Any voting common stock issued shall be fully transferable, except that, as to
the Association, it shall be transferred only on the books of the
Association.
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(3) DIVIDENDS.—To the extent that net income is earned
and realized, subject to subsection (g)(2), dividends may be declared on voting common stock by the Board of Directors. Such
dividends as may be declared by the Board of Directors shall
be paid to the holders of outstanding shares of voting common
stock, except that no such dividends shall be payable with respect to any share which has been called for redemption past
the effective date of such call.
(4) SINGLE CLASS OF VOTING COMMON STOCK.—As of the effective date of the Higher Education Amendments of 1992, all
of the previously authorized shares of voting common stock and
nonvoting common stock of the Association shall be converted
to shares of a single class of voting common stock on a sharefor-share basis, without any further action on the part of the
Association or any holder. Each outstanding certificate for voting or nonvoting common stock shall evidence ownership of the
same number of shares of voting stock into which it is converted. All preexisting rights and obligations with respect to
any class of common stock of the Association shall be deemed
to be rights and obligations with respect to such converted
shares.
(g) PREFERRED STOCK.—
(1) AUTHORITY OF BOARD.—The Association is authorized
to issue nonvoting preferred stock having such par value as
may be fixed by its Board of Directors from time to time. Any
preferred share issued shall be freely transferable, except that,
as to the Association, it shall be transferred only on the books
of the Association.
(2) RIGHTS OF PREFERRED STOCK.—The holders of the preferred shares shall be entitled to such rate of cumulative dividends and such shares shall be subject to such redemption or
other conversion provisions as may be provided for at the time
of issuance. No dividends shall be payable on any share of common stock at any time when any dividend is due on any share
of preferred stock and has not been paid.
(3) PREFERENCE ON TERMINATION OF BUSINESS.—In the
event of any liquidation, dissolution, or winding up of the Association’s business, the holders of the preferred shares shall be
paid in full at par value thereof, plus all accrued dividends, before the holders of the common shares receive any payment.
(h) DEBT OBLIGATIONS.—
(1) APPROVAL BY SECRETARIES OF EDUCATION AND THE
TREASURY.—The Association is authorized with the approval of
the Secretary of Education and the Secretary of the Treasury
to issue and have outstanding obligations having such maturities and bearing such rate or rates of interest as may be determined by the Association. The authority of the Secretary of
Education to approve the issuance of such obligations is limited to obligations issued by the Association and guaranteed by
the Secretary pursuant to paragraph (2) of this subsection.
Such obligations may be redeemable at the option of the Association before maturity in such manner as may be stipulated
therein. The Secretary of the Treasury may not direct as a condition of his approval that any such issuance of obligations by
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the Association be made or sold to the Federal Financing
Bank. To the extent that the average outstanding amount of
the obligations owned by the Association pursuant to the authority contained in subsection (d)(1) (B) and (C) of this section
and as to which the income is exempt from taxation under the
Internal Revenue Code of 1986 does not exceed the average
stockholders’ equity of the Association, the interest on obligations issued under this paragraph shall not be deemed to be
interest on indebtedness incurred or continued to purchase or
carry obligations for the purpose of section 265 of the Internal
Revenue Code of 1986.
(2) GUARANTEE OF DEBT.—The Secretary is authorized,
prior to October 1, 1984, to guarantee payment when due of
principal and interest on obligations issued by the Association
in an aggregate amount determined by the Secretary in consultation with the Secretary of the Treasury. Nothing in this
section shall be construed so as to authorize the Secretary of
Education or the Secretary of the Treasury to limit, control, or
constrain programs of the Association or support of the Guaranteed Student Loan Program by the Association.
(3) BORROWING AUTHORITY TO MEET GUARANTEE OBLIGATIONS.—To enable the Secretary to discharge his responsibilities under guarantees issued by him, he is authorized to issue
to the Secretary of the Treasury notes or other obligations in
such forms and denominations, bearing such maturities, and
subject to such terms and conditions, as may be prescribed by
the Secretary with the approval of the Secretary of the Treasury. Such notes or other obligations shall bear interest at a
rate determined by the Secretary of the Treasury, taking into
consideration the current average market yield on outstanding
marketable obligations of the United States of comparable maturities during the months preceding the issuance of the notes
or other obligations. The Secretary of the Treasury is authorized and directed to purchase any notes and other obligations
issued hereunder and for that purpose he is authorized to use
as a public debt transaction the proceeds from the sale of any
securities issued under the Second Liberty Bond Act, as
amended, and the purposes for which securities may be issued
under that Act, as amended, are extended to include any purchase of such notes and obligations. The Secretary of the
Treasury may at any time sell any of the notes or other obligations acquired by him under this subsection. All redemptions,
purchases, and sales by the Secretary of the Treasury of such
notes or other obligations shall be treated as public debt transactions of the United States. There is authorized to be appropriated to the Secretary such sums as may be necessary to pay
the principal and interest on the notes or obligations issued by
him to the Secretary of the Treasury.
(4) ACTION ON REQUEST FOR GUARANTEES.—Upon receipt of
a request from the Association under this subsection requiring
approvals by the Secretary of Education or the Secretary of the
Treasury, the Secretary of Education or the Secretary of the
Treasury shall act promptly either to grant approval or to advise the Association of the reasons for withholding approval. In
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no case shall such an approval be withheld for a period longer
than 60 days unless, prior to the end of such period, the Secretary of Education and the Secretary of the Treasury submit
to the Congress a detailed explanation of reasons for doing so.
(5) AUTHORITY OF TREASURY TO PURCHASE DEBT.—The Secretary of the Treasury is authorized to purchase any obligations issued by the Association pursuant to this subsection as
now or hereafter in force, and for such purpose the Secretary
of the Treasury is authorized to use as a public debt transaction the proceeds of the sale of any securities hereafter
issued under the Second Liberty Bond Act, as now or hereafter
in force, and the purposes for which securities may be issued
under the Second Liberty Bond Act, as now or hereafter in
force are extended to include such purchases. The Secretary of
the Treasury shall not at any time purchase any obligations
under this subsection if such purchase would increase the aggregate principal amount of his then outstanding holdings of
such obligations under this subsection to an amount greater
than $1,000,000,000. Each purchase of obligations by the Secretary of the Treasury under this subsection shall be upon
such terms and conditions as to yield a return at a rate determined by the Secretary of the Treasury, taking into consideration the current average rate on outstanding marketable obligations of the United States of comparable maturities as of the
last day of the month preceding the making of such purchase.
The Secretary of the Treasury may, at any time, sell, upon
such terms and conditions and at such price or prices as he
shall determine, any of the obligations acquired by him under
this subsection. All redemptions, purchases, and sales by the
Secretary of the Treasury of such obligations under this subsection shall be treated as public debt transactions of the
United States.
(6) SALE OF DEBT TO FEDERAL FINANCING BANK.—Notwithstanding any other provision of law the Association is authorized to sell or issue obligations on the security of student loans,
the payment of interest or principal of which has at any time
been guaranteed under section 428 or 429 of this part, to the
Federal Financing Bank.
(7) OFFSET FEE.—(A) The Association shall pay to the Secretary, on a monthly basis, an offset fee calculated on an annual basis in an amount equal to 0.30 percent of the principal
amount of each loan made, insured or guaranteed under this
part that the Association holds (except for loans made pursuant to sections 428C, 439(o), or 439(q)) and that was acquired
on or after the date of enactment of this paragraph.
(B) If the Secretary determines that the Association has
substantially failed to comply with subsection (q), subparagraph (A) shall be applied by substituting ‘‘1.0 percent’’ for ‘‘0.3
percent’’.
(C) The Secretary shall deposit all fees collected pursuant
to this paragraph into the insurance fund established in section 431.
(i) GENERAL CORPORATE POWERS.—The Association shall have
power—
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(1) to sue and be sued, complain and defend, in its corporate name and through its own counsel;
(2) to adopt, alter, and use the corporate seal, which shall
be judicially noticed;
(3) to adopt, amend, and repeal by its Board of Directors,
bylaws, rules, and regulations as may be necessary for the conduct of its business;
(4) to conduct its business, carry on its operations, and
have officers and exercise the power granted by this section in
any State without regard to any qualification or similar statute
in any State;
(5) to lease, purchase, or otherwise acquire, own, hold, improve, use, or otherwise deal in and with any property, real,
personal, or mixed, or any interest therein, wherever situated;
(6) to accept gifts or donations of services, or of property,
real, personal, or mixed, tangible or intangible, in aid of any
of the purposes of the Association;
(7) to sell, convey, mortgage, pledge, lease, exchange, and
otherwise dispose of its property and assets;
(8) to appoint such officers, attorneys, employees, and
agents as may be required, to determine their qualifications, to
define their duties, to fix their salaries, require bonds for them,
and fix the penalty thereof; and
(9) to enter into contracts, to execute instruments, to incur
liabilities, and to do all things as are necessary or incidental
to the proper management of its affairs and the proper conduct
of its business.
(j) ACCOUNTING, AUDITING, AND REPORTING.—The accounts of
the Association shall be audited annually. Such audits shall be conducted in accordance with generally accepted auditing standards by
independent certified public accountants or by independent licensed
public accountants, licensed on or before December 31, 1970, who
are certified or licensed by a regulatory authority of a State or
other political subdivision of the United States, except that independent public accountants licensed to practice by such regulatory
authority after December 31, 1970, and persons who, although not
so certified or licensed, meet, in the opinion of the Secretary, standards of education and experience representative of the highest
standards prescribed by the licensing authorities of the several
States which provide for the continuing licensing of public accountants and which are prescribed by the Secretary in appropriate regulations may perform such audits until December 31, 1975. A report of each such audit shall be furnished to the Secretary of the
Treasury. The audit shall be conducted at the place or places where
the accounts are normally kept. The representatives of the Secretary shall have access to all books, accounts, financial records, reports, files, and all other papers, things, or property belonging to
or in use by the Association and necessary to facilitate the audit,
and they shall be afforded full facilities for verifying transactions
with the balances or securities held by depositaries, fiscal agents,
and custodians.
(k) REPORT ON AUDITS BY TREASURY.—A report of each such
audit for a fiscal year shall be made by the Secretary of the Treasury to the President and to the Congress not later than 6 months
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following the close of such fiscal year. The report shall set forth the
scope of the audit and shall include a statement (showing intercorporate relations) of assets and liabilities, capital and surplus or deficit; a statement of surplus or deficit analysis; a statement of income and expense; a statement of sources and application of funds;
and such comments and information as may be deemed necessary
to keep the President and the Congress informed of the operations
and financial condition of the Association, together with such recommendations with respect thereto as the Secretary may deem advisable, including a report of any impairment of capital or lack of
sufficient capital noted in the audit. A copy of each report shall be
furnished to the Secretary, and to the Association.
(l) LAWFUL INVESTMENT INSTRUMENTS; EFFECT OF AND EXEMPTIONS FROM OTHER LAWS.—All obligations issued by the Association including those made under subsection (d)(4) shall be lawful
investments, and may be accepted as security for all fiduciary,
trust, and public funds, the investment or deposit of which shall be
under authority or control of the United States or of any officer or
officers thereof. All stock and obligations issued by the Association
pursuant to this section shall be deemed to be exempt securities
within the meaning of laws administered by the Securities and Exchange Commission, to the same extent as securities which are direct obligations of, or obligations guaranteed as to principal or interest by, the United States. The Association shall, for the purposes
of section 14(b)(2) of the Federal Reserve Act, be deemed to be an
agency of the United States. The obligations of the Association
shall be deemed to be obligations of the United States for the purpose of section 3124 of title 31, United States Code. For the purpose of the distribution of its property pursuant to section 726 of
title 11, United States Code, the Association shall be deemed a person within the meaning of such title. The priority established in
favor of the United States by section 3713 of title 31, United States
Code, shall not establish a priority over the indebtedness of the Association issued or incurred on or before September 30, 1992. The
Federal Reserve Banks are authorized to act as depositaries,
custodians, or fiscal agents, or a combination thereof, for the Association in the general performance of its powers under this section.
(m) PREPARATION OF OBLIGATIONS.—In order to furnish obligations for delivery by the Association, the Secretary of the Treasury
is authorized to prepare such obligations in such form as the Board
of Directors may approve, such obligations when prepared to be
held in the Treasury subject to delivery upon order by the Association. The engraved plates, dies, bed pieces, and so forth, executed
in connection therewith shall remain in the custody of the Secretary of the Treasury. The Association shall reimburse the Secretary of the Treasury for any expenditures made in the preparation, custody, and delivery of such obligations. The Secretary of the
Treasury is authorized to promulgate regulations on behalf of the
Association so that the Association may utilize the book-entry system of the Federal Reserve Banks.
(n) REPORT ON OPERATIONS AND ACTIVITIES.—The Association
shall, as soon as practicable after the end of each fiscal year, transmit to the President and the Congress a report of the Association’s
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operations and activities, including a report with respect to all facilities transactions, during each year.
(o) LOAN CONSOLIDATIONS.—
(1) IN GENERAL.—The Association or its designated agent
may, upon request of a borrower, consolidate loans received
under this title in accordance with section 428C.
(2) USE OF EXISTING AGENCIES AS AGENT.—The Association
in making loans pursuant to this subsection in any State
served by a guaranty agency or an eligible lender in a State
described in section 435(d)(1) (D) or (F) may designate as its
agent such agency or lender to perform such functions as the
Association determines appropriate. Any agreements made
pursuant to this subparagraph shall be on such terms and conditions as agreed upon by the Association and such agency or
lender.
(p) ADVANCES FOR DIRECT LOANS BY GUARANTY AGENCIES.—
(1) IN GENERAL.—The Association shall make advances in
each fiscal year from amounts available to it to each guaranty
agency and eligible lender described in subsection 428(h)(1)
which has an agreement with the Association which sets forth
that advances are necessary to enable such agency or lender to
make student loans in accordance with section 428(h) and that
such advances will be repaid to the Association in accordance
with such terms and conditions as may be set forth in the
agreement and agreed to by the Association and such agency
or lender. Advances made under this subsection shall not be
subject to subsection (d)(2) of this section.
(2) LIMITATION.—No advance may be made under this subsection unless the guaranty agency or lender makes an application to the Association, which shall be accompanied by such information as the Association determines to be reasonably necessary.
(q) LENDER-OF-LAST-RESORT.—
(1) ACTION AT REQUEST OF SECRETARY.—(A) Whenever the
Secretary determines that eligible borrowers are seeking and
are unable to obtain loans under this part, the Association or
its designated agent shall, not later than 90 days after the date
of enactment of the Student Loan Reform Act of 1993, begin
making loans to such eligible borrowers in accordance with this
subsection at the request of the Secretary. The Secretary may
request that the Association make loans to borrowers within a
geographic area or for the benefit of students attending institutions of higher education that certify, in accordance with standards established by the Secretary, that their students are seeking and unable to obtain loans.
(B) Loans made pursuant to this subsection shall be insurable by the Secretary under section 429 with a certificate of
comprehensive insurance coverage provided for under section
429(b)(1) or by a guaranty agency under paragraph (2)(A) of
this subsection.
(2) ISSUANCE AND COVERAGE OF LOANS.—(A) Whenever the
Secretary, after consultation with, and with the agreement of,
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mines that a substantial portion of eligible borrowers in such
State or within an area of such State are seeking and are unable to obtain loans under this part, the Association or its designated agent shall begin making such loans to borrowers in
such State or within an area of such State in accordance with
this subsection at the request of the Secretary.
(B) Loans made pursuant to this subsection shall be insurable by the agency identified in subparagraph (A) having an
agreement pursuant to section 428(b). For loans insured by
such agency, the agency shall provide the Association with a
certificate of comprehensive insurance coverage, if the Association and the agency have mutually agreed upon a means to determine that the agency has not already guaranteed a loan
under this part to a student which would cause a subsequent
loan made by the Association to be in violation of any provision
under this part.
(3) TERMINATION OF LENDING.—The Association or its designated agent shall cease making loans under this subsection
at such time as the Secretary determines that the conditions
which caused the implementation of this subsection have
ceased to exist.
(r) SAFETY AND SOUNDNESS OF ASSOCIATION.—
(1) REPORTS BY THE ASSOCIATION.—The Association shall
promptly furnish to the Secretary of Education and Secretary
of the Treasury copies of all—
(A) periodic financial reports publicly distributed by
the Association;
(B) reports concerning the Association that are received by the Association and prepared by nationally recognized statistical rating organizations; and
(C)(i) financial statements of the Association within 45
days of the end of each fiscal quarter; and
(ii) reports setting forth the calculation of the capital
ratio of the Association within 45 days of the end of each
fiscal quarter.
(2) AUDIT BY SECRETARY OF THE TREASURY.—(A) The Secretary of the Treasury may—
(i) appoint and fix the compensation of such auditors
and examiners as may be necessary 1 to conduct audits of
the Association from time to time to determine the condition of the Association for the purpose of assessing the Association’s financial safety and soundness and to determine
whether the requirements of this section and section 440
are being met; and
(ii) obtain the services of such experts as the Secretary
of the Treasury determines necessary and appropriate, as
authorized by section 3109 of title 5, United States Code,
to assist in determining the condition of the Association for
1 Section 309(1) of the Departments of Labor, Health and Human Services, and Education,
and Related Agencies Appropriations Act, 2001 (114 Stat. 2763A–45), as enacted into law by
section 1(a)(1) of Public Law 106–554, amended this clause by striking ‘‘auditors and examiners’’
and inserting ‘‘and fix the compensation of such auditors and examiners as may be necessary’’.
The amendment probably should have been to strike ‘‘auditors or examiners’’, but was executed
to reflect the probable intent of Congress.
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the purpose of assessing the Association’s financial safety
and soundness, and to determine whether the requirements of this section and section 440 are being met.
(B) Each auditor appointed under this paragraph shall
conduct an audit of the Association to the extent requested by
the Secretary of the Treasury and shall prepare and submit a
report to the Secretary of the Treasury concerning the results
of such audit. A copy of such report shall be furnished to the
Association and the Secretary of Education on the date on
which it is delivered to the Secretary of the Treasury.
(C) The Association shall provide full and prompt access to
the Secretary of the Treasury to its books and records and
other information requested by the Secretary of the Treasury.
(D) ANNUAL ASSESSMENT.—
(i) IN GENERAL.—For each fiscal year beginning on or
after October 1, 1996, the Secretary of the Treasury may
establish and collect from the Association an assessment
(or assessments) in amounts sufficient to provide for reasonable costs and expenses of carrying out the duties of
the Secretary of the Treasury under this section and section 440 during such fiscal year. In no event may the total
amount so assessed exceed, for any fiscal year, $800,000,
adjusted for each fiscal year ending after September 30,
1997, by the ratio of the Consumer Price Index for All
Urban Consumers (issued by the Bureau of Labor Statistics) for the final month of the fiscal year preceding the fiscal year for which the assessment is made to the Consumer Price Index for All Urban Consumers for September
1997.
(ii) DEPOSIT.—Amounts collected from assessments
under this subparagraph shall be deposited in an account
within the Treasury of the United States as designated by
the Secretary of the Treasury for that purpose. The Secretary of the Treasury is authorized and directed to pay
out of any funds available in such account the reasonable
costs and expenses of carrying out the duties of the Secretary of the Treasury under this section and section 440.
None of the funds deposited into such account shall be
available for any purpose other than making payments for
such costs and expenses.
(E) OBLIGATION TO OBTAIN, MAINTAIN, AND REPORT INFORMATION.—
(i) IN GENERAL.—The Association shall obtain such information and make and keep such records as the Secretary of the Treasury may from time to time prescribe
concerning—
(I) the financial risk to the Association resulting
from the activities of any associated person, to the extent such activities are reasonably likely to have a material impact on the financial condition of the Association, including the Association’s capital ratio, the Association’s liquidity, or the Association’s ability to conduct and finance the Association’s operations; and
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(II) the Association’s policies, procedures, and systems for monitoring and controlling any such financial
risk.
(ii) SUMMARY REPORTS.—The Secretary of the Treasury
may require summary reports of such information to be
filed no more frequently than quarterly. If, as a result of
adverse market conditions or based on reports provided
pursuant to this subparagraph or other available information, the Secretary of the Treasury has concerns regarding
the financial or operational condition of the Association,
the Secretary of the Treasury may, notwithstanding the
preceding sentence and clause (i), require the Association
to make reports concerning the activities of any associated
person, whose business activities are reasonably likely to
have a material impact on the financial or operational condition of the Association.
(iii) DEFINITION.—For purposes of this subparagraph,
the term ‘‘associated person’’ means any person, other than
a natural person, directly or indirectly controlling, controlled by, or under common control with the Association.
(F) 1 COMPENSATION OF AUDITORS AND EXAMINERS.—
(i) RATES OF PAY.—Rates of basic pay for all auditors and examiners appointed pursuant to subparagraph (A) may be set and adjusted by the Secretary of
the Treasury without regard to the provisions of chapter 51 or subchapter III of chapter 53 of title 5, United
States Code.
(ii) COMPARABILITY.—
(I) IN GENERAL.—Subject to section 5373 of
title 5, United States Code, the Secretary of the
Treasury may provide additional compensation
and benefits to auditors and examiners appointed
pursuant to subparagraph (A) if the same type of
compensation or benefits are then being provided
by any agency referred to in section 1206 of the
Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833b) or, if not
then being provided, could be provided by such an
agency under applicable provisions of law, rule, or
regulation.
(II) CONSULTATION.—In setting and adjusting
the total amount of compensation and benefits for
auditors and examiners appointed pursuant to
subparagraph (A), the Secretary of the Treasury
shall consult with, and seek to maintain comparability with, the agencies referred to in section
1206 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C.
1833b).
(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
1 Margins
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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, 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.
(4) CAPITAL STANDARD.—If the capital ratio is less than 2
percent and is greater than or equal to 1.75 percent at the end
of the Association’s most recent calendar quarter the Association shall, within 60 days of such occurrence, submit to the
Secretary of the Treasury a capital restoration plan, in reasonable detail, that the Association believes is adequate to cause
the capital ratio to equal or exceed 2 percent within 36 months.
(5) CAPITAL RESTORATION PLAN.—
(A) SUBMISSION, APPROVAL, AND IMPLEMENTATION.—
The Secretary of the Treasury and the Association shall
consult with respect to any capital restoration plan submitted pursuant to paragraph (4) and the Secretary of the
Treasury shall approve such plan (or a modification thereof accepted by the Association) or disapprove such plan
within 30 days after such plan is first submitted to the
Secretary of the Treasury by the Association, unless the
Association and Secretary of the Treasury mutually agree
to a longer consideration period. If the Secretary of the
Treasury approves a capital restoration plan (including a
modification of a plan accepted by the Association), the Association shall forthwith proceed with diligence to implement such plan to the best of its ability.
(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. A copy of such submission simultaneously shall be sent to the Association and the Secretary
of Education by the Secretary of the Treasury.
(C) ASSOCIATION IMPLEMENTATION AND RESPONSE.—
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ment the most recently proposed capital restoration plan of
the Association. The Association, within 30 days after receipt from the Secretary of the Treasury of such submission, shall submit to such Chairmen and ranking minority
members a written response to such submission, setting
out fully the nature and extent of the Association’s agreement or the disagreement with the Secretary of the Treasury with respect to the capital restoration plan submitted
to the Secretary of the Treasury and any findings of the
Secretary of the Treasury.
(6) SUBSTANTIAL CAPITAL RATIO REDUCTION.—
(A) ADDITIONAL PLAN REQUIRED.—If the capital ratio is
less than 1.75 percent and is greater than or equal to 1
percent at the end of the Association’s most recent calendar quarter, the Association shall submit to the Secretary of the Treasury within 60 days after such occurrence a capital restoration plan (or an appropriate modification of any plan previously submitted or approved
under paragraph (4)) to increase promptly its capital ratio
to equal or exceed 1.75 percent. The Secretary of the
Treasury and the Association shall consult with respect to
any plan or modified plan submitted pursuant to this
paragraph. The Secretary of the Treasury shall approve
such plan or modified plan (or a modification thereof accepted by the Association) or disapprove such plan or
modified plan within 30 days after such plan or modified
plan is first submitted to the Secretary of the Treasury by
the Association, unless the Association and Secretary of
the Treasury mutually agree to a longer consideration period. If the Secretary of the Treasury approves a plan or
modified plan (including a modification of a plan accepted
by the Association), the Association shall forthwith proceed
with diligence to implement such plan or modified plan to
the best of the Association’s ability.
(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. 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
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Chairmen and ranking minority members of such Committees, and the Secretary of the Treasury, a written response
to such submission, setting out fully the nature and extent
of the Association’s agreement or disagreement with the
Secretary of the Treasury with respect to the disapproved
plan and the alternative plan of the Secretary of the
Treasury and any findings of the Secretary of the Treasury.
(C) REVIEW BY CONGRESS; ASSOCIATION IMPLEMENTATION.—Congress shall have 60 legislative days after the
date on which Congress receives the alternative plan
under subparagraph (B) from the Secretary of the Treasury to review such plan. If Congress does not take statutory action with respect to any such plan within such 60day period, the Association shall immediately proceed with
diligence to implement the alternative capital restoration
plan of the Secretary of the Treasury under subparagraph
(B). If Congress is out of session when any such alternative plan is received, such 60-day period shall begin on
the first day of the next session of Congress.
(7) ACTIONS BY SECRETARY OF THE TREASURY.—If the capital ratio of the Association does not equal or exceed 1.75 percent at the end of the Association’s most recent calendar quarter, the Secretary of the Treasury may, until the capital ratio
equals or exceeds 1.75 percent, take any one or more of the following actions:
(A) LIMIT INCREASE IN LIABILITIES.—Limit any increase in, or order the reduction of, any liabilities of the
Association, except as necessary to fund student loan purchases and warehousing advances.
(B) RESTRICT GROWTH.—Restrict or eliminate growth
of the Association’s assets, other than student loans purchases and warehousing advances.
(C) RESTRICT DISTRIBUTIONS.—Restrict the Association
from making any capital distribution.
(D) REQUIRE ISSUANCE OF NEW CAPITAL.—Require the
Association to issue new capital in any form and in any
amount sufficient to restore at least a 1.75 percent capital
ratio.
(E) LIMIT EXECUTIVE COMPENSATION.—Prohibit the Association from increasing for any executive officer any compensation including bonuses at a rate exceeding that officer’s average rate of compensation during the previous 12
calendar months and prohibiting the Board from adopting
any new employment severance contracts.
(8) CRITICAL CAPITAL STANDARD.—(A) If the capital ratio is
less than 1 percent at the end of the Association’s most recent
calendar quarter and the Association has already submitted a
capital restoration plan to the Secretary of the Treasury pursuant to paragraph (4) or (6)(A), the Association shall forthwith
proceed with diligence to implement the most recently proposed plan with such modifications as the Secretary of the
Treasury determines are necessary to cause the capital ratio to
equal or exceed 2 percent within 60 months.
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(B) If the capital ratio is less than 1 percent at the end of
the Association’s most recent calendar quarter and the Association has not submitted a capital restoration plan to the Secretary of the Treasury pursuant to paragraph (4) or (6)(A), the
Association shall—
(i) within 14 days of such occurrence submit a capital
restoration plan to the Secretary of the Treasury which the
Association believes is adequate to cause the capital ratio
to equal or exceed 2 percent within 60 months; and
(ii) forthwith proceed with diligence to implement such
plan with such modifications as the Secretary of the Treasury determines are necessary to cause the capital ratio to
equal or exceed 2 percent within 60 months.
(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 the Secretary of Education.
(9) ADDITIONAL REPORTS TO COMMITTEES.—The Association
shall submit a copy of its capital restoration plan, modifications proposed to the Secretary of the Treasury, and proposed
modifications received from the Secretary of the Treasury to
the Congressional Budget Office and General Accounting Office
upon their submission to the Secretary of the Treasury or receipt from the Secretary of the Treasury. Notwithstanding any
other provision of law, the Congressional Budget Office and
General Accounting Office shall maintain the confidentiality of
information received pursuant to the previous sentence. In the
event that the Secretary of the Treasury does not approve a
capital restoration plan as provided in paragraph (5)(A) or
(6)(A), or in the event that a capital restoration plan is modified by the Secretary of the Treasury pursuant to paragraph
(6)(B) or (8), the Congressional Budget Office and General Accounting Office shall each submit a report within 30 days of
the Secretary of the Treasury’s submission to the Chairmen
and ranking minority members as required in paragraphs
(5)(B), (6)(B), and (8)(C) to such Chairmen and ranking members—
(A) analyzing the financial condition of the Association;
(B) analyzing the capital restoration plan and reasons
for disapproval of the plan contained in the Secretary of
the Treasury’s submission made pursuant to paragraph
(5)(B), or the capital restoration plan proposed by the Association and the modifications made by the Secretary of
the Treasury pursuant to paragraph (6)(B) or (8);
(C) analyzing the impact of the capital restoration
plan and reasons for disapproval of the plan contained in
the Secretary of the Treasury’s submission made pursuant
to paragraph (5)(B), or the impact of the capital restoration
plan proposed by the Association and the modifications
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made by the Secretary of the Treasury pursuant to paragraph (6)(B) or (8), and analyzing the impact of the recommendations made pursuant to subparagraph (D) of this
paragraph, on—
(i) the ability of the Association to fulfill its purpose and authorized activities as provided in this section, and
(ii) the operation of the student loan programs;
and
(D) recommending steps which the Association should
take to increase its capital ratio without impairing its ability to perform its purpose and authorized activities as provided in this section.
(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—
(A) describing any administrative or legislative provisions governing the student loan programs which contributed to the decline in the Association’s capital ratio; and
(B) recommending administrative and legislative
changes in the student loan programs to maintain the orderly operation of such programs and to enable the Association to fulfill its purpose and authorized activities consistent with the capital ratio specified in paragraph (4).
(11) SAFE HARBOR.—The Association shall be deemed in
compliance with the capital ratios described in paragraphs (4)
and (6)(A) if the Association is rated in 1 of the 2 highest full
rating categories (such categories to be determined without regard to designations within categories) by 2 nationally recognized statistical rating organizations, determined without regard to the Association’s status as a federally chartered corporation.
(12) TREATMENT OF CONFIDENTIAL INFORMATION.—Notwithstanding any other provision of law, the Secretary of the
Treasury, the Secretary of Education, the Congressional Budget Office, and the General Accounting Office shall not disclose
any information treated as confidential by the Association or
the Association’s associated persons and obtained pursuant to
this subsection. Nothing in this paragraph shall authorize the
Secretary of the Treasury, the Secretary of Education, the Congressional Budget Office, and the General Accounting Office to
withhold information from Congress, or prevent the Secretary
of Education, the Congressional Budget Office, and the General
Accounting Office from complying with a request for information from any other Federal department or agency requesting
the information for purposes within the scope of its jurisdiction, or complying with an order of a court of the United States
in an action brought by the United States. For purposes of section 552 of title 5, United States Code, this paragraph shall be
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HIGHER EDUCATION ACT OF 1965
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considered a statute described in subsection (b)(3) of such section 552.
(13) ENFORCEMENT OF SAFETY AND SOUNDNESS REQUIREMENTS.—The Secretary of Education or the Secretary of the
Treasury, as appropriate, may request that the Attorney General bring an action in the United States District Court for the
District of Columbia for the enforcement of any provision of
this section, or may, under the direction or control of the Attorney General, bring such an action. Such court shall have jurisdiction and power to order and require compliance with this
section.
(14) ACTIONS BY SECRETARY.—
(A) IN GENERAL.—For any fiscal quarter ending after
January 1, 2000, the Association shall have a capital ratio
of at least 2.25 percent. The Secretary of the Treasury
may, whenever such capital ratio is not met, take any one
or more of the actions described in paragraph (7), except
that—
(i) the capital ratio to be restored pursuant to
paragraph (7)(D) shall be 2.25 percent; and
(ii) if the relevant capital ratio is in excess of or
equal to 2 percent for such quarter, the Secretary of
the Treasury shall defer taking any of the actions set
forth in paragraph (7) until the next succeeding quarter and may then proceed with any such action only
if the capital ratio of the Association remains below
2.25 percent.
(B) APPLICABILITY.—The provisions of paragraphs (4),
(5), (6), (8), (9), (10), and (11) shall be of no further application to the Association for any period after January 1,
2000.
(15) DEFINITIONS.—As used in this subsection:
(A) The term ‘‘nationally recognized statistical rating
organization’’ means any nationally recognized statistical
rating organization, as that term is defined in section 3(a)
of the Securities Exchange Act of 1934.
(B) The term ‘‘capital ratio’’ means the ratio of total
stockholders’ equity, as shown on the Association’s most
recent quarterly consolidated balance sheet prepared in
the ordinary course of its business, to the sum of—
(i) the total assets of the Association, as shown on
the balance sheet prepared in the ordinary course of
its business; and
(ii) 50 percent of the credit equivalent amount of
the following off-balance sheet items of the Association
as of the date of such balance sheet—
(I) all financial standby letters of credit and
other irrevocable guarantees of the repayment of
financial obligations of others; and
(II) all interest rate contracts and exchange
rate contracts, including interest exchange agreements, floor, cap, and collar agreements and similar arrangements.
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For purposes of this subparagraph, the calculation of the
credit equivalent amount of the items set forth in clause
(ii) of this subparagraph, the netting of such items and
eliminations for the purpose of avoidance of double-counting of such items shall be made in accordance with the
measures for computing credit conversion factors for offbalance sheet items for capital maintenance purposes established for commercial banks from time to time by the
Federal Reserve Board, but without regard to any risk
weighting provisions in such measures.
(C) The term ‘‘legislative days’’ means only days on
which either House of Congress is in session.
(16) DIVIDENDS.—The Association may pay dividends in
the form of cash or noncash distributions so long as at the time
of the declaration of such dividends, after giving effect to the
payment of such dividends as of the date of such declaration
by the Board of Directors of the Association, the Association’s
capital would be in compliance with the capital standards set
forth in this section.
(17) CERTIFICATION PRIOR TO PAYMENT OF DIVIDEND.—Prior
to the payment of any dividend under paragraph (16), the Association shall certify to the Secretary of the Treasury that the
payment of the dividend will be made in compliance with paragraph (16) and shall provide copies of all calculations needed
to make such certification.
(s) CHARTER SUNSET.—
(1) APPLICATION OF PROVISIONS.—This subsection applies
beginning 18 months and one day after the date of enactment
of this subsection if no reorganization of the Association occurs
in accordance with the provisions of section 440.
(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, 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) ensure that the Association will have adequate
assets to transfer to a trust, as provided in this subsection, to ensure full payment of remaining obligations of the Association in accordance with the terms
of such obligations;
(ii) provide that all assets not used to pay liabilities shall be distributed to shareholders as provided
in this subsection; and
(iii) provide that the operations of the Association
shall remain separate and distinct from that of any
entity to which the assets of the Association are transferred.
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HIGHER EDUCATION ACT OF 1965
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(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. In no case may any amendment extend the
date for full implementation of the plan beyond the dissolution date provided in paragraph (3).
(C) PLAN MONITORING.—The Secretary of the Treasury
shall monitor the Association’s compliance with the plan
and shall continue to review the plan (including any
amendments thereto).
(D) AMENDMENT OF THE PLAN BY THE SECRETARY OF
THE TREASURY.—The Secretary of the Treasury may require the Association to amend the plan (including any
amendments to the plan), if the Secretary of the Treasury
deems such amendments necessary to ensure full payment
of all obligations of the Association.
(E) IMPLEMENTATION BY THE ASSOCIATION.—The Association shall promptly implement the plan (including any
amendments to the plan, whether such amendments are
made by the Association or are required to be made by the
Secretary of the Treasury).
(3) DISSOLUTION OF THE ASSOCIATION.—The Association
shall dissolve and the Association’s separate existence shall
terminate on July 1, 2013, after discharge of all outstanding
debt obligations and liquidation pursuant to this subsection.
The Association may dissolve pursuant to this subsection prior
to such date by notifying the Secretary of Education and the
Secretary of the Treasury of the Association’s intention to dissolve, unless within 60 days of receipt of such notice the Secretary of Education notifies the Association that the Association continues to be needed to serve as a lender of last resort
pursuant to subsection (q) or continues to be needed to purchase loans under an agreement with the Secretary described
in paragraph (4)(A). On the dissolution date, the Association
shall take the following actions:
(A) ESTABLISHMENT OF A TRUST.—The Association
shall, under the terms of an irrevocable trust agreement in
form and substance satisfactory to the Secretary of the
Treasury, the Association, and the appointed trustee, irrevocably transfer all remaining obligations of the Association to a trust and irrevocably deposit or cause to be deposited into such trust, to be held as trust funds solely for the
benefit of holders of the remaining obligations, money or
direct noncallable obligations of the United States or any
agency thereof for which payment the full faith and credit
of the United States is pledged, maturing as to principal
and interest in such amounts and at such times as are determined by the Secretary of the Treasury to be sufficient,
without consideration of any significant reinvestment of
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such interest, to pay the principal of, and interest on, the
remaining obligations in accordance with their terms.
(B) USE OF TRUST ASSETS.—All money, obligations, or
financial assets deposited into the trust pursuant to this
subsection shall be applied by the trustee to the payment
of the remaining obligations assumed by the trust. Upon
the fulfillment of the trustee’s duties under the trust, any
remaining assets of the trust shall be transferred to the
persons who, at the time of the dissolution, were the
shareholders of the Association, or to the legal successors
or assigns of such persons.
(C) OBLIGATIONS NOT TRANSFERRED TO THE TRUST.—
The Association shall make proper provision for all other
obligations of the Association, including the repurchase or
redemption, or the making of proper provision for the repurchase or redemption, of any preferred stock of the Association outstanding.
(D) TRANSFER OF REMAINING ASSETS.—After compliance with subparagraphs (A) and (C), the Association shall
transfer to the shareholders of the Association any remaining assets of the Association.
(4) RESTRICTIONS RELATING TO WINDING UP.—
(A) RESTRICTIONS ON NEW BUSINESS ACTIVITY OR ACQUISITION OF ASSETS BY THE ASSOCIATION.—
(i) IN GENERAL.—Beginning on July 1, 2009, the
Association shall not engage in any new business activities or acquire any additional program assets (including acquiring assets pursuant to contractual commitments) described in subsection (d) other than in
connection with the Association—
(I) serving as a lender of last resort pursuant
to subsection (q); and
(II) purchasing loans insured under this part,
if the Secretary, with the approval of the Secretary of the Treasury, enters into an agreement
with the Association for the continuation or resumption of the Association’s secondary market
purchase program because the Secretary determines there is inadequate liquidity for loans made
under this part.
(ii) AGREEMENT.—The Secretary is authorized to
enter into an agreement described in subclause (II) of
clause (i) with the Association covering such secondary
market activities. Any agreement entered into under
such subclause shall cover a period of 12 months, but
may be renewed if the Secretary determines that liquidity remains inadequate. The fee provided under
subsection (h)(7) shall not apply to loans acquired
under any such agreement with the Secretary.
(B) ISSUANCE OF DEBT OBLIGATIONS DURING THE WIND
UP PERIOD; ATTRIBUTES OF DEBT OBLIGATIONS.—The Association shall not issue debt obligations which mature later
than July 1, 2013, except in connection with serving as a
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HIGHER EDUCATION ACT OF 1965
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chasing loans under an agreement with the Secretary as
described in subparagraph (A). Nothing in this subsection
shall modify the attributes accorded the debt obligations of
the Association by this section, regardless of whether such
debt obligations are transferred to a trust in accordance
with paragraph (3).
(C) USE OF ASSOCIATION NAME.—The Association may
not transfer or permit the use of the name ‘‘Student Loan
Marketing Association’’, ‘‘Sallie Mae’’, or any variation
thereof, to or by any entity other than a subsidiary of the
Association.
SEC. 440. 1 REORGANIZATION OF THE STUDENT LOAN MARKETING ASSOCIATION THROUGH THE FORMATION OF A HOLDING
COMPANY.
(a) ACTIONS BY THE ASSOCIATION’S BOARD OF DIRECTORS.—The
Board of Directors of the Association shall take or cause to be
taken all such action as the Board of Directors deems necessary or
appropriate to effect, upon the shareholder approval described in
subsection (b), a restructuring of the common stock ownership of
the Association, as set forth in a plan of reorganization adopted by
the Board of Directors (the terms of which shall be consistent with
this section) so that all of the outstanding common shares of the
Association shall be directly owned by a Holding Company. Such
actions may include, in the Board of Director’s discretion, a merger
of a wholly owned subsidiary of the Holding Company with and
into the Association, which would have the effect provided in the
plan of reorganization and the law of the jurisdiction in which such
subsidiary is incorporated. As part of the restructuring, the Board
of Directors may cause—
(1) the common shares of the Association to be converted,
on the reorganization effective date, to common shares of the
Holding Company on a one for one basis, consistent with applicable State or District of Columbia law; and
(2) Holding Company common shares to be registered with
the Securities and Exchange Commission.
(b) SHAREHOLDER APPROVAL.—The plan of reorganization
adopted by the Board of Directors pursuant to subsection (a) shall
be submitted to common shareholders of the Association for their
approval. The reorganization shall occur on the reorganization effective date, provided that the plan of reorganization has been approved by the affirmative votes, cast in person or by proxy, of the
holders of a majority of the issued and outstanding shares of the
Association common stock.
(c) TRANSITION.—In the event the shareholders of the Association approve the plan of reorganization under subsection (b), the
following provisions shall apply beginning on the reorganization effective date:
(1) IN GENERAL.—Except as specifically provided in this
section, until the dissolution date the Association shall continue to have all of the rights, privileges and obligations set
forth in, and shall be subject to all of the limitations and restrictions of, section 439, and the Association shall continue to
1 See
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HIGHER EDUCATION ACT OF 1965
440
carry out the purposes of such section. The Holding Company
and any subsidiary of the Holding Company (other than the
Association) shall not be entitled to any of the rights, privileges, and obligations, and shall not be subject to the limitations and restrictions, applicable to the Association under section 439, except as specifically provided in this section. The
Holding Company and any subsidiary of the Holding Company
(other than the Association or a subsidiary of the Association)
shall not purchase loans insured under this Act until such time
as the Association ceases acquiring such loans, except that the
Holding Company may purchase such loans if the Association
is merely continuing to acquire loans as a lender of last resort
pursuant to section 439(q) or under an agreement with the
Secretary described in paragraph (6).
(2) TRANSFER OF CERTAIN PROPERTY.—
(A) IN GENERAL.—Except as provided in this section,
on the reorganization effective date or as soon as practicable thereafter, the Association shall use the Association’s best efforts to transfer to the Holding Company or
any subsidiary of the Holding Company (or both), as directed by the Holding Company, all real and personal
property of the Association (both tangible and intangible)
other than the remaining property. Subject to the preceding sentence, such transferred property shall include all
right, title, and interest in—
(i) direct or indirect subsidiaries of the Association
(excluding special purpose funding companies in existence on the date of enactment of this section and any
interest in any government-sponsored enterprise);
(ii) contracts, leases, and other agreements of the
Association;
(iii) licenses and other intellectual property of the
Association; and
(iv) any other property of the Association.
(B) CONSTRUCTION.—Nothing in this paragraph shall
be construed to prohibit the Association from transferring
remaining property from time to time to the Holding Company or any subsidiary of the Holding Company, subject to
the provisions of paragraph (4).
(3) TRANSFER OF PERSONNEL.—On the reorganization effective date, employees of the Association shall become employees
of the Holding Company (or any subsidiary of the Holding
Company), and the Holding Company (or any subsidiary of the
Holding Company) shall provide all necessary and appropriate
management and operational support (including loan servicing)
to the Association, as requested by the Association. The Association, however, may obtain such management and operational support from persons or entities not associated with the
Holding Company.
(4) DIVIDENDS.—The Association may pay dividends in the
form of cash or noncash distributions so long as at the time of
the declaration of such dividends, after giving effect to the payment of such dividends as of the date of such declaration by
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HIGHER EDUCATION ACT OF 1965
Sec. 440
ital would be in compliance with the capital standards and requirements set forth in section 439(r). If, at any time after the
reorganization effective date, the Association fails to comply
with such capital standards, the Holding Company shall transfer with due diligence to the Association additional capital in
such amounts as are necessary to ensure that the Association
again complies with the capital standards.
(5) CERTIFICATION PRIOR TO DIVIDEND.—Prior to the payment of any dividend under paragraph (4), the Association
shall certify to the Secretary of the Treasury that the payment
of the dividend will be made in compliance with paragraph (4)
and shall provide copies of all calculations needed to make
such certification.
(6) RESTRICTIONS ON NEW BUSINESS ACTIVITY OR ACQUISITION OF ASSETS BY ASSOCIATION.—
(A) IN GENERAL.—After the reorganization effective
date, the Association shall not engage in any new business
activities or acquire any additional program assets described in section 439(d) other than in connection with—
(i) student loan purchases through September 30,
2007;
(ii)
contractual
commitments
for
future
warehousing advances, or pursuant to letters of credit
or standby bond purchase agreements, which are outstanding as of the reorganization effective date;
(iii) the Association serving as a lender-of-last-resort pursuant to section 439(q); and
(iv) the Association’s purchase of loans insured
under this part, if the Secretary, with the approval of
the Secretary of the Treasury, enters into an agreement with the Association for the continuation or resumption of the Association’s secondary market purchase program because the Secretary determines there
is inadequate liquidity for loans made under this part.
(B) AGREEMENT.—The Secretary is authorized to enter
into an agreement described in clause (iv) of subparagraph
(A) with the Association covering such secondary market
activities. Any agreement entered into under such clause
shall cover a period of 12 months, but may be renewed if
the Secretary determines that liquidity remains inadequate. The fee provided under section 439(h)(7) shall not
apply to loans acquired under any such agreement with
the Secretary.
(7) ISSUANCE OF DEBT OBLIGATIONS DURING THE TRANSITION PERIOD; ATTRIBUTES OF DEBT OBLIGATIONS.—After the reorganization effective date, the Association shall not issue debt
obligations which mature later than September 30, 2008, except in connection with serving as a lender-of-last-resort pursuant to section 439(q) or with purchasing loans under an agreement with the Secretary as described in paragraph (6). Nothing in this section shall modify the attributes accorded the debt
obligations of the Association by section 439, regardless of
whether such debt obligations are incurred prior to, or at any
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time following, the reorganization effective date or are transferred to a trust in accordance with subsection (d).
(8) MONITORING OF SAFETY AND SOUNDNESS.—
(A) OBLIGATION TO OBTAIN, MAINTAIN, AND REPORT INFORMATION.—The Association shall obtain such information and make and keep such records as the Secretary of
the Treasury may from time to time prescribe concerning—
(i) the financial risk to the Association resulting
from the activities of any associated person, to the extent such activities are reasonably likely to have a material impact on the financial condition of the Association, including the Association’s capital ratio, the Association’s liquidity, or the Association’s ability to conduct and finance the Association’s operations; and
(ii) the Association’s policies, procedures, and systems for monitoring and controlling any such financial
risk.
(B) SUMMARY REPORTS.—The Secretary of the Treasury may require summary reports of the information described in subparagraph (A) to be filed no more frequently
than quarterly. If, as a result of adverse market conditions
or based on reports provided pursuant to this subparagraph or other available information, the Secretary of the
Treasury has concerns regarding the financial or operational condition of the Association, the Secretary of the
Treasury may, notwithstanding the preceding sentence
and subparagraph (A), require the Association to make reports concerning the activities of any associated person
whose business activities are reasonably likely to have a
material impact on the financial or operational condition of
the Association.
(C) SEPARATE OPERATION OF CORPORATIONS.—
(i) IN GENERAL.—The funds and assets of the Association shall at all times be maintained separately
from the funds and assets of the Holding Company or
any subsidiary of the Holding Company and may be
used by the Association solely to carry out the Association’s purposes and to fulfill the Association’s obligations.
(ii) BOOKS AND RECORDS.—The Association shall
maintain books and records that clearly reflect the assets and liabilities of the Association, separate from
the assets and liabilities of the Holding Company or
any subsidiary of the Holding Company.
(iii) CORPORATE OFFICE.—The Association shall
maintain a corporate office that is physically separate
from any office of the Holding Company or any subsidiary of the Holding Company.
(iv) DIRECTOR.—No director of the Association who
is appointed by the President pursuant to section
439(c)(1)(A) may serve as a director of the Holding
Company.
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HIGHER EDUCATION ACT OF 1965
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(v) ONE OFFICER REQUIREMENT.—At least one officer of the Association shall be an officer solely of the
Association.
(vi) TRANSACTIONS.—Transactions between the Association and the Holding Company or any subsidiary
of the Holding Company, including any loan servicing
arrangements, shall be on terms no less favorable to
the Association than the Association could obtain from
an unrelated third party offering comparable services.
(vii) CREDIT PROHIBITION.—The Association shall
not extend credit to the Holding Company or any subsidiary of the Holding Company nor guarantee or provide any credit enhancement to any debt obligations of
the Holding Company or any subsidiary of the Holding
Company.
(viii) AMOUNTS COLLECTED.—Any amounts collected on behalf of the Association by the Holding
Company or any subsidiary of the Holding Company
with respect to the assets of the Association, pursuant
to a servicing contract or other arrangement between
the Association and the Holding Company or any subsidiary of the Holding Company, shall be collected
solely for the benefit of the Association and shall be
immediately deposited by the Holding Company or
such subsidiary to an account under the sole control of
the Association.
(D) ENCUMBRANCE OF ASSETS.—Notwithstanding any
Federal or State law, rule, or regulation, or legal or equitable principle, doctrine, or theory to the contrary, under
no circumstances shall the assets of the Association be
available or used to pay claims or debts of or incurred by
the Holding Company. Nothing in this subparagraph shall
be construed to limit the right of the Association to pay
dividends not otherwise prohibited under this subparagraph or to limit any liability of the Holding Company explicitly provided for in this section.
(E) HOLDING COMPANY ACTIVITIES.—After the reorganization effective date and prior to the dissolution date, all
business activities of the Holding Company shall be conducted through subsidiaries of the Holding Company.
(F) CONFIDENTIALITY.—Any information provided by
the Association pursuant to this section shall be subject to
the same confidentiality obligations contained in section
439(r)(12).
(G) DEFINITION.—For purposes of this paragraph, the
term associated person’’ means any person, other than a
natural person, who is directly or indirectly controlling,
controlled by, or under common control with, the Association.
(9) ISSUANCE OF STOCK WARRANTS.—
(A) IN GENERAL.—On the reorganization effective date,
the Holding Company shall issue to the District of Columbia Financial Responsibility and Management Assistance
Authority a number of stock warrants that is equal to one
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percent of the outstanding shares of the Association, determined as of the last day of the fiscal quarter preceding the
date of enactment of this section, with each stock warrant
entitling the holder of the stock warrant to purchase from
the Holding Company one share of the registered common
stock of the Holding Company or the Holding Company’s
successors or assigns, at any time on or before September
30, 2008. The exercise price for such warrants shall be an
amount equal to the average closing price of the common
stock of the Association for the 20 business days prior to
the date of enactment of this section on the exchange or
market which is then the primary exchange or market for
the common stock of the Association. The number of
shares of Holding Company common stock subject to each
stock warrant and the exercise price of each stock warrant
shall be adjusted as necessary to reflect—
(i) the conversion of Association common stock
into Holding Company common stock as part of the
plan of reorganization approved by the Association’s
shareholders; and
(ii) any issuance or sale of stock (including
issuance or sale of treasury stock), stock split, recapitalization, reorganization, or other corporate event, if
agreed to by the Secretary of the Treasury and the Association.
(B) AUTHORITY TO SELL OR EXERCISE STOCK WARRANTS;
DEPOSIT OF PROCEEDS.—The District of Columbia Financial
Responsibility and Management Assistance Authority is
authorized to sell or exercise the stock warrants described
in subparagraph (A). The District of Columbia Financial
Responsibility and Management Assistance Authority shall
deposit into the account established under section 3(e) of
the Student Loan Marketing Association Reorganization
Act of 1996 amounts collected from the sale and proceeds
resulting from the exercise of the stock warrants pursuant
to this subparagraph.
(10) RESTRICTIONS ON TRANSFER OF ASSOCIATION SHARES
AND BANKRUPTCY OF ASSOCIATION.—After the reorganization effective date, the Holding Company shall not sell, pledge, or
otherwise transfer the outstanding shares of the Association,
or agree to or cause the liquidation of the Association or cause
the Association to file a petition for bankruptcy under title 11,
United States Code, without prior approval of the Secretary of
the Treasury and the Secretary of Education.
(d) TERMINATION OF THE ASSOCIATION.—In the event the shareholders of the Association approve a plan of reorganization under
subsection (b), the Association shall dissolve, and the Association’s
separate existence shall terminate on September 30, 2008, after
discharge of all outstanding debt obligations and liquidation pursuant to this subsection. The Association may dissolve pursuant to
this subsection prior to such date by notifying the Secretary of
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sociation continues to be needed to serve as a lender of last resort
pursuant to section 439(q) or continues to be needed to purchase
loans under an agreement with the Secretary described in subsection (c)(6). On the dissolution date, the Association shall take
the following actions:
(1) ESTABLISHMENT OF A TRUST.—The Association shall,
under the terms of an irrevocable trust agreement that is in
form and substance satisfactory to the Secretary of the Treasury, the Association and the appointed trustee, irrevocably
transfer all remaining obligations of the Association to the
trust and irrevocably deposit or cause to be deposited into such
trust, to be held as trust funds solely for the benefit of holders
of the remaining obligations, money or direct noncallable obligations of the United States or any agency thereof for which
payment the full faith and credit of the United States is
pledged, maturing as to principal and interest in such amounts
and at such times as are determined by the Secretary of the
Treasury to be sufficient, without consideration of any significant reinvestment of such interest, to pay the principal of, and
interest on, the remaining obligations in accordance with their
terms. To the extent the Association cannot provide money or
qualifying obligations in the amount required, the Holding
Company shall be required to transfer money or qualifying obligations to the trust in the amount necessary to prevent any
deficiency.
(2) USE OF TRUST ASSETS.—All money, obligations, or financial assets deposited into the trust pursuant to this subsection shall be applied by the trustee to the payment of the
remaining obligations assumed by the trust.
(3) OBLIGATIONS NOT TRANSFERRED TO THE TRUST.—The
Association shall make proper provision for all other obligations of the Association not transferred to the trust, including
the repurchase or redemption, or the making of proper provision for the repurchase or redemption, of any preferred stock
of the Association outstanding. Any obligations of the Association which cannot be fully satisfied shall become liabilities of
the Holding Company as of the date of dissolution.
(4) TRANSFER OF REMAINING ASSETS.—After compliance
with paragraphs (1) and (3), any remaining assets of the trust
shall be transferred to the Holding Company or any subsidiary
of the Holding Company, as directed by the Holding Company.
(e) OPERATION OF THE HOLDING COMPANY.—In the event the
shareholders of the Association approve the plan of reorganization
under subsection (b), the following provisions shall apply beginning
on the reorganization effective date:
(1) HOLDING COMPANY BOARD OF DIRECTORS.—The number
of members and composition of the Board of Directors of the
Holding Company shall be determined as set forth in the Holding Company’s charter or like instrument (as amended from
time to time) or bylaws (as amended from time to time) and
as permitted under the laws of the jurisdiction of the Holding
Company’s incorporation.
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(2) HOLDING COMPANY NAME.—The names of the Holding
Company and any subsidiary of the Holding Company (other
than the Association)—
(A) may not contain the name ‘‘Student Loan Marketing Association’’; and
(B) may contain, to the extent permitted by applicable
State or District of Columbia law, ‘‘Sallie Mae’’ or variations thereof, or such other names as the Board of Directors of the Association or the Holding Company deems appropriate.
(3) USE OF SALLIE MAE NAME.—Subject to paragraph (2),
the Association may assign to the Holding Company, or any
subsidiary of the Holding Company, the ‘‘Sallie Mae’’ name as
a trademark or service mark, except that neither the Holding
Company nor any subsidiary of the Holding Company (other
than the Association or any subsidiary of the Association) may
use the ‘‘Sallie Mae’’ name on, or to identify the issuer of, any
debt obligation or other security offered or sold by the Holding
Company or any subsidiary of the Holding Company (other
than a debt obligation or other security issued to and held by
the Holding Company or any subsidiary of the Holding Company). The Association shall remit to the account established
under section 3(e) of the Student Loan Marketing Association
Reorganization Act of 1996, $5,000,000, within 60 days of the
reorganization effective date as compensation for the right to
assign the ‘‘Sallie Mae’’ name as a trademark or service mark.
(4) DISCLOSURE REQUIRED.—Until 3 years after the dissolution date, the Holding Company, and any subsidiary of the
Holding Company (other than the Association), shall prominently display—
(A) in any document offering the Holding Company’s
securities, a statement that the obligations of the Holding
Company and any subsidiary of the Holding Company are
not guaranteed by the full faith and credit of the United
States; and
(B) in any advertisement or promotional materials
which use the ‘‘Sallie Mae’’ name or mark, a statement
that neither the Holding Company nor any subsidiary of
the Holding Company is a government-sponsored enterprise or instrumentality of the United States.
(f) STRICT CONSTRUCTION.—Except as specifically set forth in
this section, nothing in this section shall be construed to limit the
authority of the Association as a federally chartered corporation, or
of the Holding Company as a State or District of Columbia chartered corporation.
(g) RIGHT TO ENFORCE.—The Secretary of Education or the
Secretary of the Treasury, as appropriate, may request that the Attorney General bring an action in the United States District Court
for the District of Columbia for the enforcement of any provision
of this section, or may, under the direction or control of the Attorney General, bring such an action. Such court shall have jurisdiction and power to order and require compliance with this section.
(h) DEADLINE FOR REORGANIZATION EFFECTIVE DATE.—This
section shall be of no further force and effect in the event that the
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reorganization effective date does not occur on or before 18 months
after the date of enactment of this section.
(i) DEFINITIONS.—For purposes of this section:
(1) ASSOCIATION.—The term ‘‘Association’’ means the Student Loan Marketing Association.
(2) DISSOLUTION DATE.—The term ‘‘dissolution date’’ means
September 30, 2008, or such earlier date as the Secretary of
Education permits the transfer of remaining obligations in accordance with subsection (d).
(3) HOLDING COMPANY.—The term ‘‘Holding Company’’
means the new business corporation established pursuant to
this section by the Association under the laws of any State of
the United States or the District of Columbia for the purposes
of the reorganization and restructuring described in subsection
(a).
(4) REMAINING OBLIGATIONS.—The term ‘‘remaining obligations’’ means the debt obligations of the Association outstanding as of the dissolution date.
(5) REMAINING PROPERTY.—The term ‘‘remaining property’’
means the following assets and liabilities of the Association
which are outstanding as of the reorganization effective date:
(A) Debt obligations issued by the Association.
(B) Contracts relating to interest rate, currency, or
commodity positions or protections.
(C) Investment securities owned by the Association.
(D) Any instruments, assets, or agreements described
in section 439(d) (including, without limitation, all student
loans and agreements relating to the purchase and sale of
student loans, forward purchase and lending commitments, warehousing advances, academic facilities obligations, letters of credit, standby bond purchase agreements,
liquidity agreements, and student loan revenue bonds or
other loans).
(E) Except as specifically prohibited by this section or
section 439, any other nonmaterial assets or liabilities of
the Association which the Association’s Board of Directors
determines to be necessary or appropriate to the Association’s operations.
(6) REORGANIZATION.—The term ‘‘reorganization’ means
the restructuring event or events (including any merger event)
giving effect to the Holding Company structure described in
subsection (a).
(7) REORGANIZATION EFFECTIVE DATE.—The term ‘‘reorganization effective date’’ means the effective date of the reorganization as determined by the Board of Directors of the Association, which shall not be earlier than the date that shareholder approval is obtained pursuant to subsection (b) and
shall not be later than the date that is 18 months after the
date of enactment of this section.
(8) SUBSIDIARY.—The term ‘‘subsidiary’’ means one or more
direct or indirect subsidiaries.
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SEC. 440A. DISCRIMINATION IN SECONDARY MARKETS PROHIBITED.
The Student Loan Marketing Association (and, if the Association is privatized under section 440, any successor entity functioning as a secondary market for loans under this part, including
the Holding Company described in such section) shall not engage
directly or indirectly in any pattern or practice that results in a denial of a borrower’s access to loans under this part because of the
borrower’s race, sex, color, religion, national origin, age, disability
status, income, attendance at a particular eligible institution,
length of the borrower’s educational program, or the borrower’s
academic year at an eligible institution.
PART C—FEDERAL WORK-STUDY PROGRAMS
SEC. 441. ø42 U.S.C. 2751¿ PURPOSE; APPROPRIATIONS AUTHORIZED.
(a) PURPOSE.—The purpose of this part is to stimulate and pro-
mote the part-time employment of students who are enrolled as undergraduate, graduate, or professional students and who are in
need of earnings from employment to pursue courses of study at eligible institutions, and to encourage students receiving Federal student financial assistance to participate in community service activities that will benefit the Nation and engender in the students a
sense of social responsibility and commitment to the community.
(b) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this part, such sums as may be necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
(c) COMMUNITY SERVICES.—For purposes of this part, the term
‘‘community services’’ means services which are identified by an institution of higher education, through formal or informal consultation with local nonprofit, governmental, and community-based organizations, as designed to improve the quality of life for community residents, particularly low-income individuals, or to solve particular problems related to their needs, including—
(1) such fields as health care, child care (including child
care services provided on campus that are open and accessible
to the community), literacy training, education (including tutorial services), welfare, social services, transportation, housing
and neighborhood improvement, public safety, emergency preparedness and response, crime prevention and control, recreation, rural development, and community improvement;
(2) work in a project, as defined in section 101(20) of the
National and Community Service Act of 1990 (42 U.S.C.
12511(20));
(3) support services to students with disabilities, including
students with disabilities who are enrolled at the institution;
and
(4) activities in which a student serves as a mentor for
such purposes as—
(A) tutoring;
(B) supporting educational and recreational activities;
and
(C) counseling, including career counseling.
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SEC. 442. ø42 U.S.C. 2752¿ ALLOCATION OF FUNDS.
(a) ALLOCATION BASED ON PREVIOUS ALLOCATION 1.—(1)
From
the amount appropriated pursuant to section 441(b) for each fiscal
year, the Secretary shall first allocate to each eligible institution
for each succeeding fiscal year, an amount equal to 100 percent of
the amount such institution received under subsections (a) and (b)
for fiscal year 1999 (as such subsections were in effect with respect
to allocations for such fiscal year).
(2)(A) From the amount so appropriated, the Secretary shall
next allocate to each eligible institution that began participation in
the program under this part after fiscal year 1999 but is not a first
or second time participant, an amount equal to the greater of—
(i) $5,000; or
(ii) 90 percent of the amount received and used under this
part for the first year it participated in the program.
(B) From the amount so appropriated, the Secretary shall next
allocate to each eligible institution that began participation in the
program under this part after fiscal year 1999 and is a first or second time participant, an amount equal to the greatest of—
(i) $5,000;
(ii) an amount equal to (I) 90 percent of the amount received and used under this part in the second preceding fiscal
year by eligible institutions offering comparable programs of
instruction, divided by (II) the number of students enrolled at
such comparable institutions in such fiscal year, multiplied by
(III) the number of students enrolled at the applicant institution in such fiscal year; or
(iii) 90 percent of the institution’s allocation under this
part for the preceding fiscal year.
(C) Notwithstanding subparagraphs (A) and (B) of this paragraph, the Secretary shall allocate to each eligible institution
which—
(i) was a first-time participant in the program in fiscal
year 2000 or any subsequent fiscal year, and
(ii) received a larger amount under this subsection in the
second year of participation,
an amount equal to 90 percent of the amount it received under this
subsection in its second year of participation.
(3)(A) If the amount appropriated for any fiscal year is less
than the amount required to be allocated to all institutions under
paragraph (1) of this subsection, then the amount of the allocation
to each such institution shall be ratably reduced.
(B) If the amount appropriated for any fiscal year is more than
the amount required to be allocated to all institutions under paragraph (1) but less than the amount required to be allocated to all
institutions under paragraph (2), then—
(i) the Secretary shall allot the amount required to be allocated to all institutions under paragraph (1), and
1 The allocation provisions of section 413D of the Higher Education Act of 1965 were amended
by section 442 of the Higher Education Amendments of 1998 (P.L. 105–244; 112 Stat. 1712).
Subsection (c) of that section 442 contained the following effective date provision:
(c) EFFECTIVE DATE.—The amendments made by this section shall apply with respect to allocations of amounts appropriated pursuant to section 441(b) for fiscal year 2000 or any succeeding fiscal year.
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(ii) the amount of the allocation to each institution under
paragraph (2) shall be ratably reduced.
(C) If additional amounts are appropriated for any such fiscal
year, such reduced amounts shall be increased on the same basis
as they were reduced (until the amount allocated equals the
amount required to be allocated under paragraphs (1) and (2) of
this subsection).
(4)(A) Notwithstanding any other provision of this section, the
Secretary may allocate an amount equal to not more than 10 percent of the amount by which the amount appropriated in any fiscal
year to carry out this part exceeds $700,000,000 among eligible institutions described in subparagraph (B).
(B) In order to receive an allocation pursuant to subparagraph
(A) an institution shall be an eligible institution from which 50 percent or more of the Pell Grant recipients attending such eligible institution graduate or transfer to a 4-year institution of higher education.
(b) ALLOCATION OF EXCESS BASED ON SHARE OF EXCESS ELIGIBLE AMOUNTS.—(1) From the remainder of the amount appropriated pursuant to section 441(b) after making the allocations required by subsection (a), the Secretary shall allocate to each eligible institution which has an excess eligible amount an amount
which bears the same ratio to such remainder as such excess eligible amount bears to the sum of the excess eligible amounts of all
such eligible institutions (having such excess eligible amounts).
(2) For any eligible institution, the excess eligible amount is
the amount, if any, by which—
(A)(i) the amount of that institution’s need (as determined
under subsection (c)), divided by (ii) the sum of the need of all
institutions (as so determined), multiplied by (iii) the amount
appropriated pursuant to section 441(b) for the fiscal year; exceeds
(B) the amount required to be allocated to that institution
under subsection (a).
(c) DETERMINATION OF INSTITUTION’S NEED.—(1) The amount of
an institution’s need is equal to the sum of the self-help need of
the institution’s eligible undergraduate students and the self-help
need of the institution’s eligible graduate and professional students.
(2) To determine the self-help need of an institution’s eligible
undergraduate students, the Secretary shall—
(A) establish various income categories for dependent and
independent undergraduate students;
(B) establish an expected family contribution for each income category of dependent and independent undergraduate
students, determined on the basis of the average expected family contribution (computed in accordance with part F of this
title) of a representative sample within each income category
for the second preceding fiscal year;
(C) compute 25 percent of the average cost of attendance
for all undergraduate students;
(D) multiply the number of eligible dependent students in
each income category by the lesser of—
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(i) 25 percent of the average cost of attendance for all
undergraduate students determined under subparagraph
(C); or
(ii) the average cost of attendance for all undergraduate students minus the expected family contribution
determined under subparagraph (B) for that income category, except that the amount computed by such subtraction shall not be less than zero;
(E) add the amounts determined under subparagraph (D)
for each income category of dependent students; and
(F) multiply the number of eligible independent students
in ach income category by the lesser of—
(i) 25 percent of the average cost of attendance for all
undergraduate students determined under subparagraph
(C); or
(ii) the average cost of attendance for all undergraduate students minus the expected family contribution
determined under subparagraph (B) for that income category, except that the amount computed by such subtraction for any income category shall not be less than zero;
(G) add the amounts determined under subparagraph (F)
for each income category of independent students; and
(H) add the amounts determined under subparagraphs (E)
and (G).
(3) To determine the self-help need of an institution’s eligible
graduate and professional students, the Secretary shall—
(A) establish various income categories of graduate and
professional students;
(B) establish an expected family contribution for each income category of graduate and professional students, determined on the basis of the average expected family contribution
(computed in accordance with part F of this title) of a representative sample within each income category for the second
preceding fiscal year;
(C) determine the average cost of attendance for all graduate and professional students;
(D) subtract from the average cost of attendance for all
graduate and professional students (determined under subparagraph (C)), the expected family contribution (determined
under subparagraph (B)) for each income category, except that
the amount computed by such subtraction for any income category shall not be less than zero;
(E) multiply the amounts determined under subparagraph
(D) by the number of eligible students in each category; and
(F) add the amounts determined under subparagraph (E)
of this paragraph for each income category.
(4)(A) For purposes of paragraphs (2) and (3), the term ‘‘average cost of attendance’’ means the average of the attendance costs
for undergraduate students and for graduate and professional students, which shall include (i) tuition and fees determined in accordance with subparagraph (B), (ii) standard living expenses determined in accordance with subparagraph (C), and (iii) books and
supplies determined in accordance with subparagraph (D).
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(B) The average undergraduate and graduate and professional
tuition and fees described in subparagraph (A)(i) shall be computed
on the basis of information reported by the institution to the Secretary, which shall include (i) total revenue received by the institution from undergraduate and graduate tuition and fees for the second year preceding the year for which it is applying for an allocation, and (ii) the institution’s enrollment for such second preceding
year.
(C) The standard living expense described in subparagraph
(A)(ii) is equal to 150 percent of the difference between the income
protection allowance for a family of five with one in college and the
income protection allowance for a family of six with one in college
for a single independent student.
(D) The allowance for books and supplies described in subparagraph (A)(iii) is equal to $600.
(d) REALLOCATION OF EXCESS ALLOCATIONS.—(1) If institutions
return to the Secretary any portion of the sums allocated to such
institutions under this section for any fiscal year, the Secretary
shall reallot such excess to eligible institutions which used at least
5 percent of the total amount of funds granted to such institution
under this section to compensate students employed in tutoring in
reading and family literacy activities in the preceding fiscal year.
Such excess funds shall be reallotted to institutions which qualify
under this subsection on the same basis as excess eligible amounts
are allocated to institutions pursuant to subsection (b). Funds received by institutions pursuant to this subsection shall be used to
compensate students employed in community service.
(2) If, under paragraph (1) of this subsection, an institution returns more than 10 percent of its allocation, the institution’s allocation for the next fiscal year shall be reduced by the amount returned. The Secretary may waive this paragraph for a specific institution if the Secretary finds that enforcing this paragraph would
be contrary to the interest of the program.
(e) FILING DEADLINES.—The Secretary shall, from time to time,
set dates before which institutions must file applications for allocations under this part.
SEC. 443. ø42 U.S.C. 2753¿ GRANTS FOR FEDERAL WORK-STUDY PROGRAMS.
(a) AGREEMENTS REQUIRED.—The Secretary is authorized to
enter into agreements with institutions of higher education under
which the Secretary will make grants to such institutions to assist
in the operation of work-study programs as provided in this part.
(b) CONTENTS OF AGREEMENTS.—An agreement entered into
pursuant to this section shall—
(1) provide for the operation by the institution of a program for the part-time employment, including internships,
practica, or research assistantships as determined by the Secretary, of its students in work for the institution itself, work
in community service or work in the public interest for a Federal, State, or local public agency or private nonprofit organization under an arrangement between the institution and such
agency or organization, and such work—
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(A) will not result in the displacement of employed
workers or impair existing contracts for services;
(B) will be governed by such conditions of employment
as will be appropriate and reasonable in light of such factors as type of work performed, geographical region, and
proficiency of the employee;
(C) does not involve the construction, operation, or
maintenance of so much of any facility as is used or is to
be used for sectarian instruction or as a place for religious
worship; and
(D) will not pay any wage to students employed under
this subpart that is less than the current Federal minimum wage as mandated by section 6(a) of the Fair Labor
Standards Act of 1938;
(2) provide that funds granted an institution of higher education, pursuant to this section, may be used only to make payments to students participating in work-study programs, except that—
(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
(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;
(3) provide that in the selection of students for employment under such work-study program, only students who demonstrate financial need in accordance with part F and meet the
requirements of section 484 will be assisted, except that if the
institution’s grant under this part is directly or indirectly
based in part on the financial need demonstrated by students
who are (A) attending the institution on less than a full-time
basis, or (B) independent students, a reasonable portion of the
grant shall be made available to such students;
(4) provide that for a student employed in a work-study
program under this part, at the time income derived from any
need-based employment is in excess of the determination of the
amount of such student’s need by more than $300, continued
employment shall not be subsidized with funds appropriated
under this part;
(5) provide that the Federal share of the compensation of
students employed in the work-study program in accordance
with the agreement shall not exceed 75 percent, except that—
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(A) the Federal share may exceed 75 percent, but not
exceed 90 percent, if, consistent with regulations of the
Secretary—
(i) the student is employed at a nonprofit private
organization or a government agency that—
(I) is not a part of, and is not owned, operated, or controlled by, or under common ownership, operation, or control with, the institution;
(II) is selected by the institution on an individual case-by-case basis for such student; and
(III) would otherwise be unable to afford the
costs of such employment; and
(ii) not more than 10 percent of the students compensated through the institution’s grant under this
part during the academic year are employed in positions for which the Federal share exceeds 75 percent;
and
(B) the Federal share may exceed 75 percent if the
Secretary determines, pursuant to regulations promulgated by the Secretary establishing objective criteria for
such determinations, that a Federal share in excess of
such amounts is required in furtherance of the purpose of
this part;
(6) include provisions to make employment under such
work-study program reasonably available (to the extent of
available funds) to all eligible students in the institution in
need thereof;
(7) provide assurances that employment made available
from funds under this part will, to the maximum extent practicable, complement and reinforce the educational program or
vocational goals of each student receiving assistance under this
part;
(8) provide assurances, in the case of each proprietary institution, that students attending the proprietary institution
receiving assistance under this part who are employed by the
institution may be employed in jobs—
(A) that are only on campus and that—
(i) to the maximum extent practicable, complement and reinforce the education programs or vocational goals of such students; and
(ii) furnish student services that are directly related to the student’s education, as determined by the
Secretary pursuant to regulations, except that no student shall be employed in any position that would involve the solicitation of other potential students to enroll in the school; or
(B) in community service in accordance with paragraph (2)(A) of this subsection;
(9) provide assurances that employment made available
from funds under this part may be used to support programs
for supportive services to students with disabilities;
(10) provide assurances that the institution will inform all
eligible students of the opportunity to perform community service, and will consult with local nonprofit, governmental, and
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community-based organizations to identify such opportunities;
and
(11) include such other reasonable provisions as the Secretary shall deem necessary or appropriate to carry out the
purpose of this part.
(c) PRIVATE SECTOR EMPLOYMENT AGREEMENT.—As part of its
agreement described in subsection (b), an institution of higher education may, at its option, enter into an additional agreement with
the Secretary which shall—
(1) provide for the operation by the institution of a program of part-time employment of its students in work for a private for-profit organization under an arrangement between the
institution and such organization that complies with the requirements of subparagraphs (A) through (D) of subsection
(b)(1) and subsection (b)(3);
(2) provide that the institution will use not more than 25
percent of the funds made available to such institution under
this part for any fiscal year for the operation of the program
described in paragraph (1);
(3) provide that, notwithstanding subsection (b)(5), the
Federal share of the compensation of students employed in
such program will not exceed 60 percent for academic years
1987–1988 and 1988–1989, 55 percent for academic year 1989–
1990, and 50 percent for academic year 1990–1991 and succeeding academic years, and that the non-Federal share of
such compensation will be provided by the private for-profit organization in which the student is employed;
(4) provide that jobs under the work study program will be
academically relevant, to the maximum extent practicable; and
(5) provide that the for-profit organization will not use
funds made available under this part to pay any employee who
would otherwise be employed by the organization.
(d) TUTORING AND LITERACY ACTIVITIES.—
(1) USE OF FUNDS.—In any academic year to which subsection (b)(2)(A) applies, an institution shall ensure that funds
granted to such institution under this section are used in accordance with such subsection to compensate (including compensation for time spent in training and travel directly related
to tutoring in reading and family literacy activities) students—
(A) employed as reading tutors for children who are
preschool age or are in elementary school; or
(B) employed in family literacy projects.
(2) PRIORITY FOR SCHOOLS.—To the extent practicable, an
institution shall—
(A) give priority to the employment of students in the
provision of tutoring in reading in schools that are participating in a reading reform project that—
(i) is designed to train teachers how to teach reading on the basis of scientifically-based research on
reading; and
(ii) is funded under the Elementary and Secondary Education Act of 1965; and
(B) ensure that any student compensated with the
funds described in paragraph (1) who is employed in a
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school participating in a reading reform project described
in subparagraph (A) receives training from the employing
school in the instructional practices used by the school.
(3) FEDERAL SHARE.—The Federal share of the compensation of work-study students compensated under this subsection
may exceed 75 percent.
(e) CIVIC EDUCATION AND PARTICIPATION ACTIVITIES.—
(1) USE OF FUNDS.—Funds granted to an institution under
this section may be used to compensate (including compensation for time spent in training and travel directly related to
civic education and participation activities) students employed
in projects that—
(A) teach civics in schools;
(B) raise awareness of government functions or resources; or
(C) increase civic participation.
(2) PRIORITY FOR SCHOOLS.—To the extent practicable, an
institution shall—
(A) give priority to the employment of students participating in projects that educate or train the public about
evacuation, emergency response, and injury prevention
strategies relating to natural disasters, acts of terrorism,
and other emergency situations; and
(B) ensure that any student compensated with the
funds described in paragraph (1) receives appropriate
training to carry out the educational services required.
(3) FEDERAL SHARE.—The Federal share of the compensation of work-study students compensated under this subsection
may exceed 75 percent.
SEC. 444. ø20 U.S.C. 2754¿ SOURCES OF MATCHING FUNDS.
Nothing in this part shall be construed as restricting the
source (other than this part) from which the institution may pay
its share of the compensation of a student employed under a workstudy program covered by an agreement under this part, and such
share may be paid to such student in the form of services and
equipment (including tuition, room, board, and books) furnished by
such institution.
SEC. 445. ø42 U.S.C. 2755¿ FLEXIBLE USE OF FUNDS.
(a) CARRY-OVER AUTHORITY.—(1) Of the sums
granted to an eligible institution under this part for any fiscal year, 10 percent
may, at the discretion of the institution, remain available for expenditure during the succeeding fiscal year to carry out programs
under this part.
(2) Any of the sums so granted to an institution for a fiscal
year which are not needed by that institution to operate workstudy programs during that fiscal year, and which it does not wish
to use during the next fiscal year as authorized in the preceding
sentence, shall remain available to the Secretary for making grants
under section 443 to other institutions in the same State until the
close of the second fiscal year next succeeding the fiscal year for
which such funds were appropriated.
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(b) CARRY-BACK AUTHORITY.—(1) Up to 10 percent of the sums
the Secretary determines an eligible institution may receive from
funds which have been appropriated for a fiscal year may be used
by the Secretary to make grants under this part to such institution
for expenditure during the fiscal year preceding the fiscal year for
which the sums were appropriated.
(2) An eligible institution may make payments to students of
wages earned after the end of the academic year, but prior to the
beginning of the succeeding fiscal year, from such succeeding fiscal
year’s appropriations.
(c) FLEXIBLE USE OF FUNDS.—An eligible institution may, upon
the request of a student, make payments to the student under this
part by crediting the student’s account at the institution or by
making a direct deposit to the student’s account at a depository institution. An eligible institution may only credit the student’s account at the institution for (1) tuition and fees, (2) in the case of
institutionally owned housing, room and board, and (3) other institutionally provided goods and services.
(d) FLEXIBILITY IN THE EVENT OF A MAJOR DISASTER.—
(1) IN GENERAL.—In the event of a major disaster, an eligible institution located in any area affected by such major disaster, as determined by the Secretary, may make payments
under this part to disaster-affected students, for the period of
time (not to exceed one academic year) in which the disasteraffected students were prevented from fulfilling the students’
work-study obligations as described in paragraph (2)(A)(iii), as
follows:
(A) Payments may be made under this part to disaster-affected students in an amount equal to or less than
the amount of wages such students would have been paid
under this part had the students been able to complete the
work obligation necessary to receive work study funds.
(B) Payments shall not be made to any student who
was not eligible for work study or was not completing the
work obligation necessary to receive work study funds
under this part prior to the occurrence of the major disaster.
(C) Any payments made to disaster-affected students
under this subsection shall meet the matching requirements of section 443, unless such matching requirements
are waived by the Secretary.
(2) DEFINITIONS.—In this subsection:
(A) The term ‘‘disaster-affected student’’ means a student enrolled at an eligible institution who—
(i) received a work-study award under this section
for the academic year during which a major disaster
occurred;
(ii) earned Federal work-study wages from such
eligible institution for such academic year;
(iii) was prevented from fulfilling the student’s
work-study obligation for all or part of such academic
year due to such major disaster; and
(iv) was unable to be reassigned to another workstudy job.
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(B) The term ‘‘major disaster’’ has the meaning given
such term in section 102(2) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C.
5122(2)).
SEC. 446. ø42 U.S.C. 2756¿ 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 $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.
(2) Jobs located and developed under this section shall be jobs
that are suitable to the scheduling and other needs of such students and that, to the maximum extent practicable, complement
and reinforce the educational programs or vocational goals of such
students.
(b) CONTENTS OF AGREEMENTS.—Agreements under subsection
(a) shall—
(1) provide that the Federal share of the cost of any program under this section will not exceed 80 percent of such cost;
(2) provide satisfactory assurance that funds available
under this section will not be used to locate or develop jobs at
an eligible institution;
(3) provide satisfactory assurance that funds available
under this section will not be used for the location or development of jobs for students to obtain upon graduation, but rather
for the location and development of jobs available to students
during and between periods of attendance at such institution;
(4) provide satisfactory assurance that the location or development of jobs pursuant to programs assisted under this
section will not result in the displacement of employed workers
or impair existing contracts for services;
(5) provide satisfactory assurance that Federal funds used
for the purpose of this section can realistically be expected to
help generate student wages exceeding, in the aggregate, the
amount of such funds, and that if such funds are used to contract with another organization, appropriate performance
standards are part of such contract; and
(6) provide that the institution will submit to the Secretary
an annual report on the uses made of funds provided under
this section and an evaluation of the effectiveness of such program in benefiting the students of such institution.
SEC. 447. ø42 U.S.C. 2756a¿ ADDITIONAL FUNDS TO CONDUCT COMMUNITY SERVICE WORK-STUDY PROGRAMS.
(a) COMMUNITY SERVICE-LEARNING.—Each institution partici-
pating under this part may use up to 10 percent of the funds made
available under section 489(a) and attributable to the amount of
the institution’s expenditures under this part to conduct that institution’s program of community service-learning, including—
(1) development of mechanisms to assure the academic
quality of the student experience,
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HIGHER EDUCATION ACT OF 1965
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(2) assuring student access to educational resources, expertise, and supervision necessary to achieve community service
objectives, and
(3) collaboration with public and private nonprofit agencies, and programs assisted under the National and Community Service Act of 1990 in the planning, development, and administration of such programs.
(b) OFF-CAMPUS COMMUNITY SERVICE.—
(1) GRANTS AUTHORIZED.—In addition to funds made available under section 443(b)(2)(A), the Secretary is authorized to
award grants to institutions participating under this part to
supplement off-campus community service employment.
(2) USE OF FUNDS.—An institution shall ensure that funds
granted to such institution under this subsection are used in
accordance with section 443(b)(2)(A) to recruit and compensate
students (including compensation for time spent in training
and for travel directly related to such community service).
(3) PRIORITY.—In awarding grants under this subsection,
the Secretary shall give priority to applications that support
postsecondary students assisting with early childhood education activities and activities in preparation for emergencies
and natural disasters.
(4) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to carry out this subsection such sums
as may be necessary for fiscal year 2009 and each of the five
succeeding fiscal years.
SEC. 448. ø42 U.S.C. 2756b¿ WORK COLLEGES.
(a) PURPOSE.—The purpose of this section
is to recognize, encourage, and promote the use of comprehensive work-learning-service programs as a valuable educational approach when it is an integral part of the institution’s educational program and a part of a
financial plan which decreases reliance on grants and loans.
(b) SOURCE AND USE FUNDS.—
(1) SOURCE OF FUNDS.—In addition to the sums appropriated under subsection (f), funds allocated to the institution
under part C and part E of this title may be transferred for
use under this section to provide flexibility in strengthening
the self-help-through-work element in financial aid packaging.
(2) ACTIVITIES AUTHORIZED.—From the sums appropriated
pursuant to subsection (f), and from the funds available under
paragraph (1), eligible institutions may, following approval of
an application under subsection (c) by the Secretary—
(A) support the educational costs of qualified students
through self-help payments or credits provided under the
work-learning-service program of the institution within the
limits of part F of this title;
(B) promote the work-learning-service experience as a
tool of postsecondary education, financial self-help and
community service-learning opportunities;
(C) carry out activities described in section 443 or 446;
(D) be used for the administration, development and
assessment of comprehensive work-learning-service programs, including—
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(i) community-based work-learning-service alternatives that expand opportunities for community service and career-related work; and
(ii) alternatives that develop sound citizenship, encourage student persistence, and make optimum use of
assistance under this part in education and student
development;
(E) coordinate and carry out joint projects and activities to promote work service learning; and
(F) carry out a comprehensive, longitudinal study of
student academic progress and academic and career outcomes, relative to student self-sufficiency in financing their
higher education, repayment of student loans, continued
community service, kind and quality of service performed,
and career choice and community service selected after
graduation.
(c) APPLICATION.—Each eligible institution may submit an application for funds authorized by subsection (f) to use funds under
subsection (b)(1) at such time and in such manner as the Secretary,
by regulation, may reasonably require.
(d) MATCH REQUIRED.—Funds made available to work-colleges
pursuant to this section shall be matched on a dollar-for-dollar
basis from non-Federal sources.
(e) DEFINITIONS.—For the purpose of this section—
(1) the term ‘‘work college’’ means an eligible institution
that—
(A) has been a public or private nonprofit, four-year,
degree-granting institution with a commitment to community service;
(B) has operated a comprehensive work-learning-service program for at least two years;
(C) requires students, including at least one-half of all
students who are enrolled on a full-time basis, to participate in a comprehensive work-learning-service program for
at least five hours each week, or at least 80 hours during
each period of enrollment, except summer school, unless
the student is engaged in an institutionally organized or
approved study abroad or externship program; and
(D) provides students participating in the comprehensive work-learning-service program with the opportunity to
contribute to their education and to the welfare of the community as a whole; and
(2) the term ‘‘comprehensive student work-learning-service
program’’ means a student work-learning-service program
that—
(A) is an integral and stated part of the institution’s
educational philosophy and program;
(B) requires participation of all resident students for
enrollment and graduation;
(C) includes learning objectives, evaluation, and a
record of work performance as part of the student’s college
record;
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(D) provides programmatic leadership by college personnel at levels comparable to traditional academic programs;
(E) recognizes the educational role of work-learningservice supervisors; and
(F) includes consequences for nonperformance or failure in the work-learning-service program similar to the
consequences for failure in the regular academic program.
(f) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
PART D—WILLIAM D. FORD FEDERAL DIRECT
LOAN PROGRAM
SEC. 451. ø20 U.S.C. 1087a¿ PROGRAM AUTHORITY.
(a) IN GENERAL.—There are hereby made
available, in accordance with the provisions of this part, such sums as may be necessary (1) to make loans to all eligible students (and the eligible
parents of such students) in attendance at participating institutions of higher education selected by the Secretary, to enable such
students to pursue their courses of study at such institutions during the period beginning July 1, 1994; and (2) for purchasing loans
under section 459A. Loans made under this part shall be made by
participating institutions, or consortia thereof, that have agreements with the Secretary to originate loans, or by alternative originators designated by the Secretary to make loans for students in
attendance at participating institutions (and their parents).
(b) DESIGNATION.—
(1) PROGRAM.—The program established under this part
shall be referred to as the ‘‘William D. Ford Federal Direct
Loan Program’’.
(2) DIRECT LOANS.—Notwithstanding any other provision
of this part, loans made to borrowers under this part that, except as otherwise specified in this part, have the same terms,
conditions, and benefits as loans made to borrowers under section 428, shall be known as ‘‘Federal Direct Stafford/Ford
Loans’’.
SEC. 452. ø20 U.S.C. 1087b¿ FUNDS FOR ORIGINATION OF DIRECT STUDENT LOANS.
(a) IN GENERAL.—The Secretary shall provide, on the basis of
the need and the eligibility of students at each participating institution, and parents of such students, for such loans, funds for student and parent loans under this part—
(1) directly to an institution of higher education that has
an agreement with the Secretary under section 454(a) to participate in the direct student loan programs under this part
and that also has an agreement with the Secretary under section 454(b) to originate loans under this part; or
(2) through an alternative originator designated by the
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tutions of higher education that have an agreement with the
Secretary under section 454(a) but that do not have an agreement with the Secretary under section 454(b).
(b) NO ENTITLEMENT TO PARTICIPATE OR ORIGINATE.—No institution of higher education shall have a right to participate in the
programs authorized by this part, to originate loans, or to perform
any program function under this part. Nothing in this subsection
shall be construed so as to limit the entitlement of an eligible student attending a participating institution (or the eligible parent of
such student) to borrow under this part.
(c) DELIVERY OF LOAN FUNDS.—Loan funds shall be paid and
delivered to an institution by the Secretary prior to the beginning
of the payment period established by the Secretary in a manner
that is consistent with payment and delivery of Federal Pell Grants
under subpart 1 of part A of this title.
(d) INSTITUTIONS OUTSIDE THE UNITED STATES.—Loan funds
for students (and parents of students) attending institutions outside the United States shall be disbursed through a financial institution located or operating in the United States and designated by
the Secretary to serve as the agent of such institutions with respect
to the receipt of the disbursements of such loan funds and the
transfer of such funds to such institutions. To be eligible to receive
funds under this part, an institution outside the United States
shall make arrangements with the agent designated by the Secretary under this subsection to receive funds under this part.
SEC. 453. ø20 U.S.C. 1087c¿ SELECTION OF INSTITUTIONS FOR PARTICIPATION AND ORIGINATION.
(a) GENERAL AUTHORITY.—The Secretary shall enter into
agreements pursuant to section 454(a) with institutions of higher
education to participate in the direct student loan program under
this part, and agreements pursuant to section 454(b) with institutions of higher education, or consortia thereof, to originate loans in
such program, for academic years beginning on or after July 1,
1994. Alternative origination services, through which an entity
other than the participating institution at which the student is in
attendance originates the loan, shall be provided by the Secretary,
through 1 or more contracts under section 456(b) or such other
means as the Secretary may provide, for students attending participating institutions that do not originate direct student loans under
this part. Such agreements for the academic year 1994–1995 shall,
to the extent feasible, be entered into not later than January 1,
1994.
(b) SELECTION CRITERIA.—
(1) APPLICATION.—Each institution of higher education desiring to participate in the direct student loan program under
this part shall submit an application satisfactory to the Secretary containing such information and assurances as the Secretary may require.
(2) SELECTION PROCEDURE.—The Secretary shall select institutions for participation in the direct student loan program
under this part, and shall enter into agreements with such institutions under section 454(a), from among those institutions
that submit the applications described in paragraph (1), and
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meet such other eligibility requirements as the Secretary shall
prescribe.
(c) SELECTION CRITERIA FOR ORIGINATION.—
(1) IN GENERAL.—The Secretary may enter into a supplemental agreement with an institution (or a consortium of such
institutions) that—
(A) has an agreement under subsection 454(a);
(B) desires to originate loans under this part; and
(C) meets the criteria described in paragraph (2).
(2) SELECTION CRITERIA.—The Secretary may approve an
institution to originate loans only if such institution—
(A) is not on the reimbursement system of payment for
any of the programs under subpart 1 or 3 of part A, part
C, or part E of this title;
(B) is not overdue on program or financial reports or
audits required under this title;
(C) is not subject to an emergency action, or a limitation, suspension, or termination under section 428(b)(1)(T),
432(h), or 487(c);
(D) in the opinion of the Secretary, has not had severe
performance deficiencies for any of the programs under
this title, including such deficiencies demonstrated by audits or program reviews submitted or conducted during the
5 calendar years immediately preceding the date of application;
(E) provides an assurance that such institution has no
delinquent outstanding debts to the Federal Government,
unless such debts are being repaid under or in accordance
with a repayment arrangement satisfactory to the Federal
Government, or the Secretary in the Secretary’s discretion
determines that the existence or amount of such debts has
not been finally determined by the cognizant Federal agency; and
(F) meets such other criteria as the Secretary may establish to protect the financial interest of the United
States and to promote the purposes of this part.
(d) ELIGIBLE INSTITUTIONS.—The Secretary may not select an
institution of higher education for participation under this section
unless such institution is an eligible institution under section
435(a).
(e) CONSORTIA.—Subject to such requirements as the Secretary
may prescribe, eligible institutions of higher education (as determined under subsection (d)) with agreements under section 454(a)
may apply to the Secretary as consortia to originate loans under
this part for students in attendance at such institutions. Each such
institution shall be required to meet the requirements of subsection
(c) with respect to loan origination.
SEC. 454. ø20 U.S.C. 1087d¿ AGREEMENTS WITH INSTITUTIONS.
(a) PARTICIPATION AGREEMENTS.—An agreement with
any institution of higher education for participation in the direct student
loan program under this part shall—
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(1) provide for the establishment and maintenance of a direct student loan program at the institution under which the
institution will—
(A) identify eligible students who seek student financial assistance at such institution in accordance with section 484;
(B) estimate the need of each such student as required
by part F of this title for an academic year, except that,
any loan obtained by a student under this part with the
same terms as loans made under section 428H (except as
otherwise provided in this part), or a loan obtained by a
parent under this part with the same terms as loans made
under section 428B (except as otherwise provided in this
part), or obtained under any State-sponsored or private
loan program, may be used to offset the expected family
contribution of the student for that year;
(C) provide a statement that certifies the eligibility of
any student to receive a loan under this part that is not
in excess of the annual or aggregate limit applicable to
such loan, except that the institution may, in exceptional
circumstances identified by the Secretary, refuse to certify
a statement that permits a student to receive a loan under
this part, or certify a loan amount that is less than the
student’s determination of need (as determined under part
F of this title), if the reason for such action is documented
and provided in written form to such student;
(D) set forth a schedule for disbursement of the proceeds of the loan in installments, consistent with the requirements of section 428G; and
(E) provide timely and accurate information—
(i) concerning the status of student borrowers (and
students on whose behalf parents borrow under this
part) while such students are in attendance at the institution and concerning any new information of which
the institution becomes aware for such students (or
their parents) after such borrowers leave the institution, to the Secretary for the servicing and collecting
of loans made under this part; and
(ii) if the institution does not have an agreement
with the Secretary under subsection (b), concerning
student eligibility and need, as determined under subparagraphs (A) and (B), to the Secretary as needed for
the alternative origination of loans to eligible students
and parents in accordance with this part;
(2) provide assurances that the institution will comply
with requirements established by the Secretary relating to student loan information with respect to loans made under this
part;
(3) provide that the institution accepts responsibility and
financial liability stemming from its failure to perform its functions pursuant to the agreement;
(4) provide for the implementation of a quality assurance
system, as established by the Secretary and developed in consultation with institutions of higher education, to ensure that
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HIGHER EDUCATION ACT OF 1965
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the institution is complying with program requirements and
meeting program objectives;
(5) provide that the institution will not charge any fees of
any kind, however described, to student or parent borrowers
for origination activities or the provision of any information
necessary for a student or parent to receive a loan under this
part, or any benefits associated with such loan; and
(6) include such other provisions as the Secretary determines are necessary to protect the interests of the United
States and to promote the purposes of this part.
(b) ORIGINATION.—An agreement with any institution of higher
education, or consortia thereof, for the origination of loans under
this part shall—
(1) supplement the agreement entered into in accordance
with subsection (a);
(2) include provisions established by the Secretary that are
similar to the participation agreement provisions described in
paragraphs (1)(E)(ii), (2), (3), (4), (5), and (6) of subsection (a),
as modified to relate to the origination of loans by the institution or consortium;
(3) provide that the institution or consortium will originate
loans to eligible students and parents in accordance with this
part; and
(4) provide that the note or evidence of obligation on the
loan shall be the property of the Secretary.
(c) WITHDRAWAL AND TERMINATION PROCEDURES.—The Secretary shall establish procedures by which institutions or consortia
may withdraw or be terminated from the program under this part.
SEC. 455. ø20 U.S.C. 1087e¿ TERMS AND CONDITIONS OF LOANS.
(a) IN GENERAL.—
(1) PARALLEL TERMS, CONDITIONS, BENEFITS,
AMOUNTS.—Unless otherwise specified in this part, loans
AND
made
to borrowers under this part shall have the same terms, conditions, and benefits, and be available in the same amounts, as
loans made to borrowers, and first disbursed on June 30,
2010, 1 under sections 428, 428B, 428C, and 428H of this title.
(2) DESIGNATION OF LOANS.—Loans made to borrowers
under this part that, except as otherwise specified in this part,
have the same terms, conditions, and benefits as loans made
to borrowers under—
(A) section 428 shall be known as ‘‘Federal Direct Stafford Loans’’;
(B) section 428B shall be known as ‘‘Federal Direct
PLUS Loans’’;
(C) section 428C shall be known as ‘Federal Direct
Consolidation Loans’; and
1 The amendment made by section 2211(a)(1) of Public Law 111–152 to insert ‘‘, and first disbursed on June 30, 2010,’’ before ‘‘under sections 428’’ is subject to an effective date. Subsection
(b) of section 2211 of such Public Law provides:
(b) EFFECTIVE DATE.—The amendment made by subsection (a)(1) shall apply with respect to
loans first disbursed under part D of title IV of the Higher Education Act of 1965 (20 U.S.C.
1087a et seq.) on or after July 1, 2010.
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(D) section 428H shall be known as ‘‘Federal Direct
Unsubsidized Stafford Loans’’.
(3) TERMINATION OF AUTHORITY TO MAKE INTEREST SUBSIDIZED LOANS TO GRADUATE AND PROFESSIONAL STUDENTS.—
(A) IN GENERAL.—Subject to subparagraph (B) and
notwithstanding any provision of this part or part B, for
any period of instruction beginning on or after July 1,
2012—
(i) a graduate or professional student shall not be
eligible to receive a Federal Direct Stafford loan under
this part; and
(ii) the maximum annual amount of Federal Direct Unsubsidized Stafford loans such a student may
borrow in any academic year (as defined in section
481(a)(2)) or its equivalent shall be the maximum annual amount for such student determined under section 428H, plus an amount equal to the amount of
Federal Direct Stafford loans the student would have
received in the absence of this subparagraph.
(B) EXCEPTION.—Subparagraph (A) shall not apply to
an individual enrolled in course work specified in paragraph (3)(B) or (4)(B) of section 484(b).
(b) INTEREST RATE.—
(1) RATES FOR FDSL AND FDUSL.—For Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans for
which the first disbursement is made on or after July 1, 1994,
the applicable rate of interest shall, during any 12-month period beginning on July 1 and ending on June 30, be determined
on the preceding June 1 and be equal to—
(A) the bond equivalent rate of 91-day Treasury bills
auctioned at the final auction held prior to such June 1;
plus
(B) 3.1 percent,
except that such rate shall not exceed 8.25 percent.
(2) IN SCHOOL AND GRACE PERIOD RULES.—(A) Notwithstanding the provisions of paragraph (1), but subject to paragraph (3), with respect to any Federal Direct Stafford Loan or
Federal Direct Unsubsidized Stafford Loan for which the first
disbursement is made on or after July 1, 1995, the applicable
rate of interest for interest which accrues—
(i) prior to the beginning of the repayment period of
the loan; or
(ii) during the period in which principal need not be
paid (whether or not such principal is in fact paid) by reason of a provision described in section 428(b)(1)(M) or
427(a)(2)(C),
shall not exceed the rate determined under subparagraph (B).
(B) For the purpose of subparagraph (A), the rate determined under this subparagraph shall, during any 12-month period beginning on July 1 and ending on June 30, be determined
on the preceding June 1 and be equal to—
(i) the bond equivalent rate of 91-day Treasury bills
auctioned at the final auction prior to such June 1; plus
(ii) 2.5 percent,
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except that such rate shall not exceed 8.25 percent.
(3) OUT-YEAR RULE.—Notwithstanding paragraphs (1) and
(2), for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans made on or after July 1, 1998, the
applicable rate of interest shall, during any 12-month period
beginning on July 1 and ending on June 30, be determined on
the preceding June 1 and be equal to—
(A) the bond equivalent rate of the security with a
comparable maturity as established by the Secretary; plus
(B) 1.0 percent,
except that such rate shall not exceed 8.25 percent.
(4) RATES FOR FDPLUS.—
(A)(i) For Federal Direct PLUS Loans for which the
first disbursement is made on or after July 1, 1994, the applicable rate of interest shall, during any 12-month period
beginning on July 1 and ending on or before June 30,
2001, be determined on the preceding June 1 and be equal
to—
(I) the bond equivalent rate of 52-week Treasury
bills auctioned at final auction held prior to such June
1; plus
(II) 3.1 percent,
except that such rate shall not exceed 9 percent.
(ii) For any 12-month period beginning on July 1 of
2001 or any succeeding year, the applicable rate of interest
determined under this subparagraph shall be determined
on the preceding June 26 and be equal to—
(I) the weekly average 1-year constant maturity
Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the last calendar week ending on or before such June 26; plus
(II) 3.1 percent,
except that such rate shall not exceed 9 percent.
(B) For Federal Direct PLUS loans made on or after July
1, 1998, the applicable rate of interest shall, during any 12month period beginning on July 1 and ending on June 30, be
determined on the preceding June 1 and be equal to—
(i) the bond equivalent rate of the security with a comparable maturity as established by the Secretary; plus
(ii) 2.1 percent,
except that such rate shall not exceed 9 percent.
(5) TEMPORARY INTEREST RATE PROVISION.—
(A) RATES FOR FDSL AND FDUSL.—Notwithstanding the
preceding paragraphs of this subsection, for Federal Direct
Stafford Loans and Federal Direct Unsubsidized Stafford
Loans for which the first disbursement is made on or after
July 1, 1998, and before October 1, 1998, the applicable
rate of interest shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on
the preceding June 1 and be equal to—
(i) the bond equivalent rate of 91-day Treasury
bills auctioned at the final auction held prior to such
June 1; plus
(ii) 2.3 percent,
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except that such rate shall not exceed 8.25 percent.
(B) IN SCHOOL AND GRACE PERIOD RULES.—Notwithstanding the preceding paragraphs of this subsection, with
respect to any Federal Direct Stafford Loan or Federal Direct Unsubsidized Stafford Loan for which the first disbursement is made on or after July 1, 1998, and before October 1, 1998, the applicable rate of interest for interest
which accrues—
(i) prior to the beginning of the repayment period
of the loan; or
(ii) during the period in which principal need not
be paid (whether or not such principal is in fact paid)
by reason of a provision described in section
428(b)(1)(M) or 427(a)(2)(C),
shall be determined under subparagraph (A) by substituting ‘‘1.7 percent’’ for ‘‘2.3 percent’’.
(C) PLUS LOANS.—Notwithstanding the preceding
paragraphs of this subsection, with respect to Federal Direct PLUS Loan for which the first disbursement is made
on or after July 1, 1998, and before October 1, 1998, the
applicable rate of interest shall be determined under subparagraph (A)—
(i) by substituting ‘‘3.1 percent’’ for ‘‘2.3 percent’’;
and
(ii) by substituting ‘‘9.0 percent’’ for ‘‘8.25 percent’’.
(6) INTEREST RATE PROVISION FOR NEW LOANS ON OR AFTER
OCTOBER 1, 1998, AND BEFORE JULY 1, 2006.—
(A) RATES FOR FDSL AND FDUSL.—Notwithstanding the
preceding paragraphs of this subsection, for Federal Direct
Stafford Loans and Federal Direct Unsubsidized Stafford
Loans for which the first disbursement is made on or after
October 1, 1998, and before July 1, 2006, the applicable
rate of interest shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on
the preceding June 1 and be equal to—
(i) the bond equivalent rate of 91-day Treasury
bills auctioned at the final auction held prior to such
June 1; plus
(ii) 2.3 percent,
except that such rate shall not exceed 8.25 percent.
(B) IN SCHOOL AND GRACE PERIOD RULES.—Notwithstanding the preceding paragraphs of this subsection, with
respect to any Federal Direct Stafford Loan or Federal Direct Unsubsidized Stafford Loan for which the first disbursement is made on or after October 1, 1998, and before
July 1, 2006, the applicable rate of interest for interest
which accrues—
(i) prior to the beginning of the repayment period
of the loan; or
(ii) during the period in which principal need not
be paid (whether or not such principal is in fact paid)
by reason of a provision described in section
428(b)(1)(M) or 427(a)(2)(C),
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shall be determined under subparagraph (A) by substituting ‘‘1.7 percent’’ for ‘‘2.3 percent’’.
(C) PLUS LOANS.—Notwithstanding the preceding
paragraphs of this subsection, with respect to Federal Direct PLUS Loan for which the first disbursement is made
on or after October 1, 1998, and before July 1, 2006, the
applicable rate of interest shall be determined under subparagraph (A)—
(i) by substituting ‘‘3.1 percent’’ for ‘‘2.3 percent’’;
and
(ii) by substituting ‘‘9.0 percent’’ for ‘‘8.25 percent’’.
(D) CONSOLIDATION LOANS.—Notwithstanding the preceding paragraphs of this subsection, any Federal Direct
Consolidation loan for which the application is received on
or after February 1, 1999, and before July 1, 2006, shall
bear interest at an annual rate on the unpaid principal
balance of the loan that is equal to the lesser of—
(i) the weighted average of the interest rates on
the loans consolidated, rounded to the nearest higher
one-eighth of one percent; or
(ii) 8.25 percent.
(E) TEMPORARY RULES FOR CONSOLIDATION LOANS.—
Notwithstanding the preceding paragraphs of this subsection, any Federal Direct Consolidation loan for which
the application is received on or after October 1, 1998, and
before February 1, 1999, shall bear interest at an annual
rate on the unpaid principal balance of the loan that is
equal to—
(i) the bond equivalent rate of 91-day Treasury
bills auctioned at the final auction held prior to such
June 1; plus
(ii) 2.3 percent,
except that such rate shall not exceed 8.25 percent.
(7) INTEREST RATE PROVISION FOR NEW LOANS ON OR AFTER
JULY 1, 2006.—
(A) RATES FOR FDSL AND FDUSL.—Notwithstanding the
preceding paragraphs of this subsection, for Federal Direct
Stafford Loans and Federal Direct Unsubsidized Stafford
Loans for which the first disbursement is made on or after
July 1, 2006, the applicable rate of interest shall be 6.8
percent on the unpaid principal balance of the loan.
(B) PLUS LOANS.—Notwithstanding the preceding
paragraphs of this subsection, with respect to any Federal
Direct PLUS loan for which the first disbursement is made
on or after July 1, 2006, the applicable rate of interest
shall be 7.9 percent on the unpaid principal balance of the
loan.
(C) CONSOLIDATION LOANS.—Notwithstanding the preceding paragraphs of this subsection, any Federal Direct
Consolidation loan for which the application is received on
or after July 1, 2006, shall bear interest at an annual rate
on the unpaid principal balance of the loan that is equal
to the lesser of—
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(i) the weighted average of the interest rates on
the loans consolidated, rounded to the nearest higher
one-eighth of one percent; or
(ii) 8.25 percent.
(D) REDUCED RATES FOR UNDERGRADUATE FDSL.—Notwithstanding the preceding paragraphs of this subsection
and subparagraph (A) of this paragraph, for Federal Direct
Stafford Loans made to undergraduate students for which
the first disbursement is made on or after July 1, 2006,
and before July 1, 2013, the applicable rate of interest
shall be as follows:
(i) For a loan for which the first disbursement is
made on or after July 1, 2006, and before July 1, 2008,
6.8 percent on the unpaid principal balance of the
loan.
(ii) For a loan for which the first disbursement is
made on or after July 1, 2008, and before July 1, 2009,
6.0 percent on the unpaid principal balance of the
loan.
(iii) For a loan for which the first disbursement is
made on or after July 1, 2009, and before July 1, 2010,
5.6 percent on the unpaid principal balance of the
loan.
(iv) For a loan for which the first disbursement is
made on or after July 1, 2010, and before July 1, 2011,
4.5 percent on the unpaid principal balance of the
loan.
(v) For a loan for which the first disbursement is
made on or after July 1, 2011, and before July 1, 2013,
3.4 percent on the unpaid principal balance of the
loan.
(8) REPAYMENT INCENTIVES.—
(A)(A) 1 INCENTIVES FOR LOANS DISBURSED BEFORE
JULY 1, 2012.—Notwithstanding any other provision of this
part with respect to loans for which the first disbursement
of principal is made before July 1, 2012,, 2 the Secretary is
authorized to prescribe by regulation such reductions in
the interest or origination fee rate paid by a borrower of
a loan made under this part as the Secretary determines
appropriate to encourage on-time repayment of the loan.
Such reductions may be offered only if the Secretary determines the reductions are cost neutral and in the best financial interest of the Federal Government. Any increase
in subsidy costs resulting from such reductions shall be
completely offset by corresponding savings in funds available for the William D. Ford Federal Direct Loan Program
in that fiscal year from section 458 and other administrative accounts.
(B) ACCOUNTABILITY.—Prior to publishing regulations
proposing repayment incentives with respect to loans for
1 So in law. See amendment made by section 503(1)(A) of Public Law 112–25. The amendment
revises the heading in its entirety and probably should not have included the subparagraph designator in the matter to be inserted since that is not part of the heading.
2 Two commas so in law. See amendment made by section 503(1)(B) of Public Law 112–25.
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which the first disbursement of principal is made before
July 1, 2012, 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 authorizing committees not less than 60 days prior to the publication of
regulations proposing such reductions.
(C) NO REPAYMENT INCENTIVES FOR NEW LOANS DISBURSED ON OR AFTER JULY 1, 2012.—Notwithstanding any
other provision of this part, the Secretary is prohibited
from authorizing or providing any repayment incentive not
otherwise authorized under this part to encourage on-time
repayment of a loan under this part for which the first disbursement of principal is made on or after July 1, 2012,
including any reduction in the interest or origination fee
rate paid by a borrower of such a loan, except that the Secretary may provide for an interest rate reduction for a borrower who agrees to have payments on such a loan automatically electronically debited from a bank account.
(9) PUBLICATION.—The Secretary shall determine the applicable rates of interest under this subsection after consultation with the Secretary of the Treasury and shall publish such
rate in the Federal Register as soon as practicable after the
date of determination.
(c) LOAN FEE.—
(1) IN GENERAL.—The Secretary shall charge the borrower
of a loan made under this part an origination fee of 4.0 percent
of the principal amount of loan.
(2) SUBSEQUENT REDUCTION.—Paragraph (1) shall be applied to loans made under this part, other than Federal Direct
Consolidation loans and Federal Direct PLUS loans—
(A) by substituting ‘‘3.0 percent’’ for ‘‘4.0 percent’’ with
respect to loans for which the first disbursement of principal is made on or after the date of enactment of the
Higher Education Reconciliation Act of 2005, and before
July 1, 2007;
(B) by substituting ‘‘2.5 percent’’ for ‘‘4.0 percent’’ with
respect to loans for which the first disbursement of principal is made on or after July 1, 2007, and before July 1,
2008;
(C) by substituting ‘‘2.0 percent’’ for ‘‘4.0 percent’’ with
respect to loans for which the first disbursement of principal is made on or after July 1, 2008, and before July 1,
2009;
(D) by substituting ‘‘1.5 percent’’ for ‘‘4.0 percent’’ with
respect to loans for which the first disbursement of principal is made on or after July 1, 2009, and before July 1,
2010; and
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(E) by substituting ‘‘1.0 percent’’ for ‘‘4.0 percent’’ with
respect to loans for which the first disbursement of principal is made on or after July 1, 2010.
(d) REPAYMENT PLANS.—
(1) DESIGN AND SELECTION.—Consistent with criteria established by the Secretary, the Secretary shall offer a borrower
of a loan made under this part a variety of plans for repayment
of such loan, including principal and interest on the loan. The
borrower shall be entitled to accelerate, without penalty, repayment on the borrower’s loans under this part. The borrower
may choose—
(A) a standard repayment plan, consistent with subsection (a)(1) of this section and with section
428(b)(9)(A)(i);
(B) a graduated repayment plan, consistent with section 428(b)(9)(A)(ii);
(C) an extended repayment plan, consistent with section 428(b)(9)(A)(iv), except that the borrower shall annually repay a minimum amount determined by the Secretary in accordance with section 428(b)(1)(L);
(D) an income contingent repayment plan, with varying annual repayment amounts based on the income of the
borrower, paid over an extended period of time prescribed
by the Secretary, not to exceed 25 years, except that the
plan described in this subparagraph shall not be available
to the borrower of a Federal Direct PLUS loan made on behalf of a dependent student; and
(E) beginning on July 1, 2009, an income-based repayment plan that enables borrowers who have a partial financial hardship to make a lower monthly payment in accordance with section 493C, except that the plan described
in this subparagraph shall not be available to the borrower
of a Federal Direct PLUS Loan made on behalf of a dependent student or a Federal Direct Consolidation Loan, if
the proceeds of such loan were used to discharge the liability on such Federal Direct PLUS Loan or a loan under section 428B made on behalf of a dependent student.
(2) SELECTION BY SECRETARY.—If a borrower of a loan
made under this part does not select a repayment plan described in paragraph (1), the Secretary may provide the borrower with a repayment plan described in subparagraph (A),
(B), or (C) of paragraph (1).
(3) CHANGES IN SELECTIONS.—The borrower of a loan made
under this part may change the borrower’s selection of a repayment plan under paragraph (1), or the Secretary’s selection of
a plan for the borrower under paragraph (2), as the case may
be, under such terms and conditions as may be established by
the Secretary.
(4) ALTERNATIVE REPAYMENT PLANS.—The Secretary may
provide, on a case by case basis, an alternative repayment plan
to a borrower of a loan made under this part who demonstrates
to the satisfaction of the Secretary that the terms and conditions of the repayment plans available under paragraph (1) are
not adequate to accommodate the borrower’s exceptional cirMay 7, 2013
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cumstances. In designing such alternative repayment plans,
the Secretary shall ensure that such plans do not exceed the
cost to the Federal Government, as determined on the basis of
the present value of future payments by such borrowers, of
loans made using the plans available under paragraph (1).
(5) REPAYMENT AFTER DEFAULT.—The Secretary may require any borrower who has defaulted on a loan made under
this part to—
(A) pay all reasonable collection costs associated with
such loan; and
(B) repay the loan pursuant to an income contingent
repayment plan.
(e) INCOME CONTINGENT REPAYMENT.—
(1) INFORMATION AND PROCEDURES.—The Secretary may
obtain such information as is reasonably necessary regarding
the income of a borrower (and the borrower’s spouse, if applicable) of a loan made under this part that is, or may be, repaid
pursuant to income contingent repayment, for the purpose of
determining the annual repayment obligation of the borrower.
Returns and return information (as defined in section 6103 of
the Internal Revenue Code of 1986) may be obtained under the
preceding sentence only to the extent authorized by section
6103(l)(13) of such Code. The Secretary shall establish procedures for determining the borrower’s repayment obligation on
that loan for such year, and such other procedures as are necessary to implement effectively income contingent repayment.
(2) REPAYMENT BASED ON ADJUSTED GROSS INCOME.—A repayment schedule for a loan made under this part and repaid
pursuant to income contingent repayment shall be based on
the adjusted gross income (as defined in section 62 of the Internal Revenue Code of 1986) of the borrower or, if the borrower
is married and files a Federal income tax return jointly with
the borrower’s spouse, on the adjusted gross income of the borrower and the borrower’s spouse.
(3) ADDITIONAL DOCUMENTS.—A borrower who chooses, or
is required, to repay a loan made under this part pursuant to
income contingent repayment, and for whom adjusted gross income is unavailable or does not reasonably reflect the borrower’s current income, shall provide to the Secretary other
documentation of income satisfactory to the Secretary, which
documentation the Secretary may use to determine an appropriate repayment schedule.
(4) REPAYMENT SCHEDULES.—Income contingent repayment
schedules shall be established by regulations promulgated by
the Secretary and shall require payments that vary in relation
to the appropriate portion of the annual income of the borrower
(and the borrower’s spouse, if applicable) as determined by the
Secretary.
(5) CALCULATION OF BALANCE DUE.—The balance due on a
loan made under this part that is repaid pursuant to income
contingent repayment shall equal the unpaid principal amount
of the loan, any accrued interest, and any fees, such as late
charges, assessed on such loan. The Secretary may promulgate
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regulations limiting the amount of interest that may be capitalized on such loan, and the timing of any such capitalization.
(6) NOTIFICATION TO BORROWERS.—The Secretary shall establish procedures under which a borrower of a loan made
under this part who chooses or is required to repay such loan
pursuant to income contingent repayment is notified of the
terms and conditions of such plan, including notification of
such borrower—
(A) that the Internal Revenue Service will disclose to
the Secretary tax return information as authorized under
section 6103(l)(13) of the Internal Revenue Code of 1986;
and
(B) that if a borrower considers that special circumstances, such as a loss of employment by the borrower
or the borrower’s spouse, warrant an adjustment in the
borrower’s loan repayment as determined using the information described in subparagraph (A), or the alternative
documentation described in paragraph (3), the borrower
may contact the Secretary, who shall determine whether
such adjustment is appropriate, in accordance with criteria
established by the Secretary.
(7) MAXIMUM REPAYMENT PERIOD.—In calculating the extended period of time for which an income contingent repayment plan under this subsection may be in effect for a borrower, the Secretary shall include all time periods during
which a borrower of loans under part B, part D, or part E—
(A) is not in default on any loan that is included in the
income contingent repayment plan; and
(B)(i) is in deferment due to an economic hardship described in section 435(o);
(ii) makes monthly payments under paragraph (1) or
(6) of section 493C(b);
(iii) makes monthly payments of not less than the
monthly amount calculated under section 428(b)(9)(A)(i) or
subsection (d)(1)(A), based on a 10-year repayment period,
when the borrower first made the election described in section 493C(b)(1);
(iv) makes payments of not less than the payments required under a standard repayment plan under section
428(b)(9)(A)(i) or subsection (d)(1)(A) with a repayment period of 10 years; or
(v) makes payments under an income contingent repayment plan under subsection (d)(1)(D).
(f) DEFERMENT.—
(1) EFFECT ON PRINCIPAL AND INTEREST.—A borrower of a
loan made under this part who meets the requirements described in paragraph (2) shall be eligible for a deferment, during which periodic installments of principal need not be paid,
and interest—
(A) shall not accrue, in the case of a—
(i) Federal Direct Stafford Loan; or
(ii) a Federal Direct Consolidation Loan that consolidated only Federal Direct Stafford Loans, or a combination of such loans and Federal Stafford Loans for
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which the student borrower received an interest subsidy under section 428; or
(B) shall accrue and be capitalized or paid by the borrower, in the case of a Federal Direct PLUS Loan, a Federal Direct Unsubsidized Stafford Loan, or a Federal Direct Consolidation Loan not described in subparagraph
(A)(ii).
(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—
(i) is carrying at least one-half the normal fulltime work load for the course of study that the borrower is pursuing, as determined by the eligible institution (as such term is defined in section 435(a)) the
borrower is attending; or
(ii) is pursuing a course of study pursuant to a
graduate fellowship program approved by the Secretary, or pursuant to a rehabilitation training program for individuals with disabilities approved by the
Secretary,
except that no borrower shall be eligible for a deferment
under this subparagraph, or a loan made under this part
(other than a Federal Direct PLUS Loan or a Federal Direct Consolidation Loan), while serving in a medical internship or residency program;
(B) not in excess of 3 years during which the borrower
is seeking and unable to find full-time employment;
(C) 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,
and for the 180-day period following the demobilization
date for the service described in clause (i) or (ii); or
(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.
(3) DEFINITION OF BORROWER.—For the purpose of this
subsection, the term ‘‘borrower’’ means an individual who is a
new borrower on the date such individual applies for a loan
under this part for which the first disbursement is made on or
after July 1, 1993.
(4) DEFERMENTS FOR PREVIOUS PART B LOAN BORROWERS.—
A borrower of a loan made under this part, who at the time
such individual applies for such loan, has an outstanding balance of principal or interest owing on any loan made, insured,
or guaranteed under part B of title IV prior to July 1, 1993,
shall be eligible for a deferment under section 427(a)(2)(C) or
section 428(b)(1)(M) as such sections were in effect on July 22,
1992.
(g) FEDERAL DIRECT CONSOLIDATION LOANS.—A borrower of a
loan made under this part may consolidate such loan with the
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loans described in section 428C(a)(4), including any loan made
under part B and first disbursed before July 1, 2010. To be eligible
for a consolidation loan under this part, a borrower shall meet the
eligibility criteria set forth in section 428C(a)(3).
(h) BORROWER DEFENSES.—Notwithstanding any other provision of State or Federal law, the Secretary shall specify in regulations which acts or omissions of an institution of higher education
a borrower may assert as a defense to repayment of a loan made
under this part, except that in no event may a borrower recover
from the Secretary, in any action arising from or relating to a loan
made under this part, an amount in excess of the amount such borrower has repaid on such loan.
(i) LOAN APPLICATION AND PROMISSORY NOTE.—The common financial reporting form required in section 483(a)(1) shall constitute
the application for loans made under this part (other than a Federal Direct PLUS loan). The Secretary shall develop, print, and distribute to participating institutions a standard promissory note and
loan disclosure form.
(j) LOAN DISBURSEMENT.—
(1) IN GENERAL.—Proceeds of loans to students under this
part shall be applied to the student’s account for tuition and
fees, and, in the case of institutionally owned housing, to room
and board. Loan proceeds that remain after the application of
the previous sentence shall be delivered to the borrower by
check or other means that is payable to and requires the endorsement or other certification by such borrower.
(2) PAYMENT PERIODS.—The Secretary shall establish periods for the payments described in paragraph (1) in a manner
consistent with payment of Federal Pell Grants under subpart
1 of part A of this title.
(k) FISCAL CONTROL AND FUND ACCOUNTABILITY.—
(1) IN GENERAL.—(A) An institution shall maintain financial records in a manner consistent with records maintained for
other programs under this title.
(B) Except as otherwise required by regulations of the Secretary 1 an institution may maintain loan funds under this part
in the same account as other Federal student financial assistance.
(2) PAYMENTS AND REFUNDS.—Payments and refunds shall
be reconciled in a manner consistent with the manner set forth
for the submission of a payment summary report required of
institutions participating in the program under subpart 1 of
part A, except that nothing in this paragraph shall prevent
such reconciliations on a monthly basis.
(3) TRANSACTION HISTORIES.—All transaction histories
under this part shall be maintained using the same system
designated by the Secretary for the provision of Federal Pell
Grants under subpart 1 of part A of this title.
(l) ARMED FORCES STUDENT LOAN INTEREST PAYMENT PROGRAM.—
(1) AUTHORITY.—Using funds received by transfer to the
Secretary under section 2174 of title 10, United States Code,
1 So
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HIGHER EDUCATION ACT OF 1965
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for the payment of interest on a loan made under this part to
a member of the Armed Forces, the Secretary shall pay the interest on the loan as due for a period not in excess of 36 consecutive months. The Secretary may not pay interest on such
a loan out of any funds other than funds that have been so
transferred.
(2) FORBEARANCE.—During the period in which the Secretary is making payments on a loan under paragraph (1), the
Secretary shall grant the borrower forbearance, in the form of
a temporary cessation of all payments on the loan other than
the payments of interest on the loan that are made under that
paragraph.
(m) REPAYMENT PLAN FOR PUBLIC SERVICE EMPLOYEES.—
(1) IN GENERAL.—The Secretary shall cancel the balance of
interest and principal due, in accordance with paragraph (2),
on any eligible Federal Direct Loan not in default for a borrower who—
(A) has made 120 monthly payments on the eligible
Federal Direct Loan after October 1, 2007, pursuant to any
one or a combination of the following—
(i) payments under an income-based repayment
plan under section 493C;
(ii) payments under a standard repayment plan
under subsection (d)(1)(A), based on a 10-year repayment period;
(iii) monthly payments under a repayment plan
under subsection (d)(1) or (g) of not less than the
monthly amount calculated under subsection (d)(1)(A),
based on a 10-year repayment period; or
(iv) payments under an income contingent repayment plan under subsection (d)(1)(D); and
(B)(i) is employed in a public service job at the time
of such forgiveness; and
(ii) has been employed in a public service job during
the period in which the borrower makes each of the 120
payments described in subparagraph (A).
(2) LOAN CANCELLATION AMOUNT.—After the conclusion of
the employment period described in paragraph (1), the Secretary shall cancel the obligation to repay the balance of principal and interest due as of the time of such cancellation, on
the eligible Federal Direct Loans made to the borrower under
this part.
(3) DEFINITIONS.—In this subsection:
(A) ELIGIBLE FEDERAL DIRECT LOAN.—The term ‘‘eligible Federal Direct Loan’’ means a Federal Direct Stafford
Loan, Federal Direct PLUS Loan, or Federal Direct Unsubsidized Stafford Loan, or a Federal Direct Consolidation Loan.
(B) PUBLIC SERVICE JOB.—The term ‘‘public service
job’’ means—
(i) a full-time job in emergency management, government (excluding time served as a member of Congress), military service, public safety, law enforcement,
public health (including nurses, nurse practitioners,
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nurses in a clinical setting, and full-time professionals
engaged in health care practitioner occupations and
health care support occupations, as such terms are defined by the Bureau of Labor Statistics), public education, social work in a public child or family service
agency, public interest law services (including prosecution or public defense or legal advocacy on behalf of
low-income communities at a nonprofit organization),
early childhood education (including licensed or regulated childcare, Head Start, and State funded prekindergarten), public service for individuals with disabilities, public service for the elderly, public library
sciences, school-based library sciences and other
school-based services, or at an organization that is described in section 501(c)(3) of the Internal Revenue
Code of 1986 and exempt from taxation under section
501(a) of such Code; or
(ii) teaching as a full-time faculty member at a
Tribal College or University as defined in section
316(b) and other faculty teaching in high-needs subject
areas or areas of shortage (including nurse faculty,
foreign language faculty, and part-time faculty at community colleges), as determined by the Secretary.
(4) INELIGIBILITY FOR DOUBLE BENEFITS.—No borrower
may, for the same service, receive a reduction of loan obligations under both this subsection and section 428J, 428K, 428L,
or 460.
(n) IDENTITY FRAUD PROTECTION.—The Secretary shall take
such steps as may be necessary to ensure that monthly Federal Direct Loan statements and other publications of the Department do
not contain more than four digits of the Social Security number of
any individual.
(o) NO ACCRUAL OF INTEREST FOR ACTIVE DUTY SERVICE MEMBERS.—
(1) IN GENERAL.—Notwithstanding any other provision of
this part and in accordance with paragraphs (2) and (4), interest shall not accrue for an eligible military borrower on a loan
made under this part for which the first disbursement is made
on or after October 1, 2008.
(2) CONSOLIDATION LOANS.—In the case of any consolidation loan made under this part that is disbursed on or after
October 1, 2008, interest shall not accrue pursuant to this subsection only on such portion of such loan as was used to repay
a loan made under this part for which the first disbursement
is made on or after October 1, 2008.
(3) ELIGIBLE MILITARY BORROWER.—In this subsection, the
term ‘‘eligible military borrower’’ means an individual who—
(A)(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; and
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(B) is serving in an area of hostilities in which service
qualifies for special pay under section 310 of title 37,
United States Code.
(4) LIMITATION.—An individual who qualifies as an eligible
military borrower under this subsection may receive the benefit of this subsection for not more than 60 months.
(p) DISCLOSURES.—Each institution of higher education with
which the Secretary has an agreement under section 453, and each
contractor with which the Secretary has a contract under section
456, shall, with respect to loans under this part and in accordance
with such regulations as the Secretary shall prescribe, comply with
each of the requirements under section 433 that apply to a lender
with respect to a loan under part B.
(q) ELIGIBILITY FOR, AND INTEREST CHARGES ON, FEDERAL DIRECT STAFFORD LOANS FOR NEW BORROWERS ON OR AFTER JULY 1,
2013.—
(1) IN GENERAL.—Notwithstanding subsection (a) or any
other provision of this title, any borrower who was a new borrower on or after July 1, 2013, shall not be eligible for a Federal Direct Stafford Loan if the period of time for which the
borrower has received Federal Direct Stafford Loans, in the aggregate, exceeds the period of enrollment described in paragraph (3). Such borrower may still receive any Federal Direct
Unsubsidized Stafford Loan for which such borrower is otherwise eligible.
(2) ACCRUAL OF INTEREST ON FEDERAL DIRECT STAFFORD
LOANS.—Notwithstanding subsection (f)(1)(A) or any other provision of this title and beginning on the date upon which a borrower who is enrolled in a program of education or training (including a course of study or program described in paragraph
(3)(B) or (4)(B) of section 484(b)) for which borrowers are otherwise eligible to receive Federal Direct Stafford Loans, becomes
ineligible for such loan as a result of paragraph (1), interest on
all Federal Direct Stafford Loans that were disbursed to such
borrower on or after July 1, 2013, shall accrue. Such interest
shall be paid or capitalized in the same manner as interest on
a Federal Direct Unsubsidized Stafford Loan is paid or capitalized under section 428H(e)(2).
(3) PERIOD OF ENROLLMENT.—
(A) IN GENERAL.—The aggregate period of enrollment
referred to in paragraph (1) shall not exceed the lesser of—
(i) a period equal to 150 percent of the published
length of the educational program in which the student is enrolled; or
(ii) in the case of a borrower who was previously
enrolled in one or more other educational programs
that began on or after July 1, 2013, and subject to
subparagraph (B), a period of time equal to the difference between—
(I) 150 percent of the published length of the
longest educational program in which the borrower was, or is, enrolled; and
(II) any periods of enrollment in which the
borrower received a Federal Direct Stafford Loan.
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(B) REGULATIONS.—The Secretary shall specify in regulation—
(i) how the aggregate period described in subparagraph (A) shall be calculated with respect to a borrower who was or is enrolled on less than a full-time
basis; and
(ii) how such aggregate period shall be calculated
to include a course of study or program described in
paragraph (3)(B) or (4)(B) of section 484(b), respectively.
SEC. 456. ø20 U.S.C. 1087f¿ CONTRACTS.
(a) CONTRACTS FOR SUPPLIES AND SERVICES.—
(1) IN GENERAL.—The Secretary shall, to
the extent practicable, award contracts for origination, servicing, and collection described in subsection (b). In awarding such contracts,
the Secretary shall ensure that such services and supplies are
provided at competitive prices.
(2) ENTITIES.—The entities with which the Secretary may
enter into contracts shall include only entities which the Secretary determines are qualified to provide such services and
supplies and will comply with the procedures applicable to the
award of such contracts. In the case of awarding contracts for
the origination, servicing, and collection of loans under this
part, the Secretary shall enter into contracts only with entities
that have extensive and relevant experience and demonstrated
effectiveness. The entities with which the Secretary may enter
into such contracts shall include, where practicable, agencies
with agreements with the Secretary under sections 428(b) and
(c), if such agencies meet the qualifications as determined by
the Secretary under this subsection and if those agencies have
such experience and demonstrated effectiveness. In awarding
contracts to such State agencies, the Secretary shall, to the extent practicable and consistent with the purposes of this part,
give special consideration to State agencies with a history of
high quality performance to perform services for institutions of
higher education within their State.
(3) RULE OF CONSTRUCTION.—Nothing in this section shall
be construed as a limitation of the authority of any State agency to enter into an agreement for the purposes of this section
as a member of a consortium of State agencies.
(4) SERVICING BY ELIGIBLE NOT-FOR-PROFIT SERVICERS.—
(A) SERVICING CONTRACTS.—
(i) IN GENERAL.—The Secretary shall contract with
each eligible not-for-profit servicer to service loans
originated under this part, if the servicer—
(I) meets the standards for servicing Federal
assets that apply to contracts awarded pursuant
to paragraph (1); and
(II) has the capacity to service the applicable
loan volume allocation described in subparagraph
(B).
(ii) COMPETITIVE MARKET RATE DETERMINATION
FOR FIRST 100,000 BORROWER ACCOUNTS.—The Sec-
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retary shall establish a separate pricing tier for each
of the first 100,000 borrower loan accounts at a competitive market rate.
(iii) INELIGIBILITY.—An eligible not-for-profit
servicer shall no longer be eligible for a contract under
this paragraph after July 1, 2014, if—
(I) the servicer has not been awarded such a
contract before that date; or
(II) the servicer’s contract was terminated,
and the servicer had not reapplied for, and been
awarded, a contract under this paragraph.
(B) ALLOCATIONS.—
(i) IN GENERAL.—The Secretary shall (except as
provided in clause (ii)) allocate to an eligible not-forprofit servicer, subject to the contract of such servicer
described in subparagraph (A), the servicing rights for
the loan accounts of 100,000 borrowers (including borrowers who borrowed loans in a prior year that were
serviced by the servicer).
(ii) SERVICER ALLOCATION.—The Secretary may reallocate, increase, reduce, or terminate an eligible notfor-profit servicer’s allocation of servicing rights under
clause (i) based on the performance of such servicer,
on the same terms as loan allocations provided by contracts awarded pursuant to paragraph (1).
(b) CONTRACTS FOR ORIGINATION, SERVICING, AND DATA SYSTEMS.—The Secretary may enter into contracts for—
(1) the alternative origination of loans to students attending institutions of higher education with agreements to participate in the program under this part (or their parents), if such
institutions do not have agreements with the Secretary under
section 454(b);
(2) the servicing and collection of loans made or purchased
under this part;
(3) the establishment and operation of 1 or more data systems for the maintenance of records on all loans made or purchased under this part; and
(4) such other aspects of the direct student loan program
as the Secretary determines are necessary to ensure the successful operation of the program.
(c) DEFINITION OF ELIGIBLE NOT-FOR-PROFIT SERVICER.—In this
section:
(1) IN GENERAL.—The term ‘‘eligible not-for-profit servicer’’
means an entity—
(A) that is not owned or controlled in whole or in part
by—
(i) a for-profit entity; or
(ii) a nonprofit entity having its principal place of
business in another State; and
(B) that—
(i) as of July 1, 2009—
(I) meets the definition of an eligible not-forprofit holder under section 435(p), except that
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such term does not include eligible lenders described in paragraph (1)(D) of such section; and
(II) was performing, or had entered into a contract with a third party servicer (as such term is
defined in section 481(c)) who was performing,
student loan servicing functions for loans made
under part B of this title;
(ii) notwithstanding clause (i), as of July 1, 2009—
(I) is the sole beneficial owner of a loan for
which the special allowance rate is calculated
under section 438(b)(2)(I)(vi)(II) because the loan
is held by an eligible lender trustee that is an eligible not-for-profit holder as defined under section
435(p)(1)(D); and
(II) was performing, or had entered into a contract with a third party servicer (as such term is
defined in section 481(c)) who was performing,
student loan servicing functions for loans made
under part B of this title; or
(iii) is an affiliated entity of an eligible not-forprofit servicer described in clause (i) or (ii) that—
(I) directly employs, or will directly employ
(on or before the date the entity begins servicing
loans under a contract awarded by the Secretary
pursuant to subsection (a)(3)(A)), the majority of
individuals who perform borrower-specific student
loan servicing functions; and
(II) as of July 1, 2009, was performing, or had
entered into a contract with a third party servicer
(as such term is defined in section 481(c)) who was
performing, student loan servicing functions for
loans made under part B of this title.
(2) AFFILIATED ENTITY.—For the purposes of paragraph (1),
the term ‘‘affiliated entity’’—
(A) means an entity contracted to perform services for
an eligible not-for-profit servicer that—
(i) is a nonprofit entity or is wholly owned by a
nonprofit entity; and
(ii) is not owned or controlled, in whole or in part,
by—
(I) a for-profit entity; or
(II) an entity having its principal place of
business in another State; and
(B) may include an affiliated entity that is established
by an eligible not-for-profit servicer after the date of enactment of the SAFRA Act, if such affiliated entity is otherwise described in paragraph (1)(B)(iii)(I) and subparagraph
(A) of this paragraph.
øSection 457 repealed by section 404(b)(3) of P.L. 111–39¿
SEC. 458. ø20 U.S.C. 1087h¿ FUNDS FOR ADMINISTRATIVE EXPENSES.
(a) ADMINISTRATIVE EXPENSES.—
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(1) MANDATORY FUNDS FOR FISCAL YEAR 2006.—For fiscal
year 2006, there shall be available to the Secretary, from funds
not otherwise appropriated, funds to be obligated for—
(A) administrative costs under this part and part B,
including the costs of the direct student loan programs
under this part; and
(B) account maintenance fees payable to guaranty
agencies under part B and calculated in accordance with
subsections (b) and (c),
not to exceed (from such funds not otherwise appropriated)
$820,000,000 in fiscal year 2006.
(2) MANDATORY FUNDS FOR ELIGIBLE NOT-FOR-PROFIT
SERVICERS.—For fiscal years 2010 through 2019, there shall be
available to the Secretary, in addition to any other amounts
appropriated to carry out this paragraph and out of any money
in the Treasury not otherwise appropriated, funds to be obligated for administrative costs of servicing contracts with eligible not-for-profit servicers as described in section 456.
(3) AUTHORIZATION FOR ADMINISTRATIVE COSTS BEGINNING
IN FISCAL YEARS 2007 THROUGH 2014.—For each of the fiscal
years 2007 through 2014, there are authorized to be appropriated such sums as may be necessary for administrative
costs under this part and part B, including the costs of the direct student loan programs under this part.
(4) CONTINUING MANDATORY FUNDS FOR ACCOUNT MAINTENANCE FEES.—For each of the fiscal years 2007 through 2014,
there shall be available to the Secretary, from funds not otherwise appropriated, funds to be obligated for account maintenance fees payable to guaranty agencies under part B and calculated in accordance with subsection (b).
(5) ACCOUNT MAINTENANCE FEES.—Account maintenance
fees under paragraph (3) shall be paid quarterly and deposited
in the Agency Operating Fund established under section 422B.
(6) TECHNICAL ASSISTANCE TO INSTITUTIONS OF HIGHER
EDUCATION.—
(A) PROVISION OF ASSISTANCE.—The Secretary shall
provide institutions of higher education participating, or
seeking to participate, in the loan programs under this
part with technical assistance in establishing and administering such programs.
(B) FUNDS.—There are authorized to be appropriated,
and there are appropriated, to carry out this paragraph (in
addition to any other amounts appropriated to carry out
this paragraph and out of any money in the Treasury not
otherwise appropriated), $50,000,000 for fiscal year 2010.
(C) DEFINITION.—In this paragraph, the term ‘‘assistance’’ means the provision of technical support, training,
materials, technical assistance, and financial assistance.
(7) ADDITIONAL PAYMENTS.—
(A) PROVISION OF ASSISTANCE.—The Secretary shall
provide payments to loan servicers for retaining jobs at locations in the United States where such servicers were operating under part B on January 1, 2010.
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HIGHER EDUCATION ACT OF 1965
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(B) FUNDS.—There are authorized to be appropriated,
and there are appropriated, to carry out this paragraph (in
addition to any other amounts appropriated to carry out
this paragraph and out of any money in the Treasury not
otherwise appropriated), $25,000,000 for each of the fiscal
years 2010 and 2011.
(8) CARRYOVER.—The Secretary may carry over funds
made available under this section to a subsequent fiscal year.
(b) CALCULATION BASIS.—Account maintenance fees payable to
guaranty agencies under subsection (a)(4) shall be calculated on
the basis of 0.06 percent of the original principal amount of outstanding loans on which insurance was issued under part B.
(c) BUDGET JUSTIFICATION.—No funds may be expended under
this section unless the Secretary includes in the Department of
Education’s annual budget justification to Congress a detailed description of the specific activities for which the funds made available by this section have been used in the prior and current years
(if applicable), the activities and costs planned for the budget year,
and the projection of activities and costs for each remaining year
for which administrative expenses under this section are made
available.
SEC. 459. ø20 U.S.C. 1087i¿ AUTHORITY TO SELL LOANS.
The Secretary, in consultation with the Secretary of the Treasury, is authorized to sell loans made under this part on such terms
as the Secretary determines are in the best interest of the United
States, except that any such sale shall not result in any cost to the
Federal Government. Notwithstanding any other provision of law,
the proceeds of any such sale may be used by the Secretary to offer
reductions in the interest rate paid by a borrower of a loan made
under this part as the Secretary determines appropriate to encourage on-time repayment in accordance with section 455(b)(7). Such
reductions may be offered only if the Secretary determines the reductions are in the best financial interests of the Federal Government.
SEC. 459A. ø20 U.S.C. 1087i–1¿ TEMPORARY AUTHORITY TO PURCHASE
STUDENT LOANS.
(a) AUTHORITY TO PURCHASE.—
(1) AUTHORITY; DETERMINATION REQUIRED.—Upon a deter-
mination by the Secretary that there is an inadequate availability of loan capital to meet the demand for loans under sections 428, 428B, or 428H, whether as a result of inadequate liquidity for such loans or for other reasons, the Secretary, in
consultation with the Secretary of the Treasury, is authorized
to purchase, or enter into forward commitments to purchase,
from any eligible lender, as defined by section 435(d)(1), loans
first disbursed under sections 428, 428B, or 428H on or after
October 1, 2003, and before July 1, 2010, on such terms as the
Secretary, the Secretary of the Treasury, and the Director of
the Office of Management and Budget jointly determine are in
the best interest of the United States, except that any purchase under this section shall not result in any net cost to the
Federal Government (including the cost of servicing the loans
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HIGHER EDUCATION ACT OF 1965
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retary of the Treasury, and the Director of the Office of Management and Budget.
(2) FEDERAL REGISTER NOTICE.—The Secretary, the Secretary of the Treasury, and the Director of the Office of Management and Budget, shall jointly publish a notice in the Federal Register prior to any purchase of loans under paragraph
(1) that—
(A) establishes the terms and conditions governing the
purchases authorized by paragraph (1);
(B) includes an outline of the methodology and factors
that the Secretary, the Secretary of the Treasury, and the
Director of the Office of Management and Budget, will
jointly consider in evaluating the price at which to purchase loans made under section 428, 428B, or 428H; and
(C) describes how the use of such methodology and
consideration of such factors used to determine purchase
price will ensure that loan purchases do not result in any
net cost to the Federal Government (including the cost of
servicing the loans purchased).
(3) TEMPORARY AUTHORITY TO PURCHASE REHABILITATED
LOANS.—
(A) AUTHORITY.—In addition to the authority described in paragraph (1), the Secretary, in consultation
with the Secretary of the Treasury, is authorized to purchase, or enter into forward commitments to purchase,
from any eligible lender (as defined in section 435(d)(1)),
loans that such lender purchased under section 428F on or
after October 1, 2003, and before July 1, 2010, and that
are not in default, on such terms as the Secretary, the Secretary of the Treasury, and the Director of the Office of
Management and Budget jointly determine are in the best
interest of the United States, except that any purchase
under this paragraph shall not result in any net cost to the
Federal Government (including the cost of servicing the
loans purchased), as determined jointly by the Secretary,
the Secretary of the Treasury, and the Director of the Office of Management and Budget.
(B) FEDERAL REGISTER NOTICE.—The Secretary, the
Secretary of the Treasury, and the Director of the Office
of Management and Budget shall jointly publish a notice
in the Federal Register prior to any purchase of loans
under this paragraph that—
(i) establishes the terms and conditions governing
the purchases authorized by this paragraph;
(ii) includes an outline of the methodology and factors that the Secretary, the Secretary of the Treasury,
and the Director of the Office of Management and
Budget will jointly consider in evaluating the price at
which to purchase loans rehabilitated pursuant to section 428F(a); and
(iii) describes how the use of such methodology
and consideration of such factors used to determine
purchase price will ensure that loan purchases do not
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HIGHER EDUCATION ACT OF 1965
486
result in any net cost to the Federal Government (including the cost of servicing the loans purchased).
(b) PROCEEDS.—The Secretary shall require, as a condition of
any purchase under subsection (a), that the funds paid by the Secretary to any eligible lender under this section be used—
(1) to ensure continued participation of such lender in the
Federal student loan programs authorized under part B of this
title; and
(2)(A) in the case of loans purchased pursuant to subsection (a)(1), to originate new Federal loans to students, as
authorized under part B of this title; or
(B) in the case of loans purchased pursuant to subsection
(a)(3), to originate such new Federal loans to students, or to
purchase loans in accordance with section 428F(a).
(c) MAINTAINING SERVICING ARRANGEMENTS.—The Secretary
may, if agreed upon by an eligible lender selling loans under this
section, contract with such lender for the servicing of the loans purchased, provided that—
(1) the cost of such servicing arrangement does not exceed
the cost the Federal Government would otherwise incur for the
servicing of loans purchased, as determined under subsection
(a); and
(2) such servicing arrangement is in the best interest of
the borrowers whose loans are purchased.
(d) GUARANTY AGENCY RESPONSIBILITIES AND PAYMENTS.—Notwithstanding any other provision of this Act, beginning on the date
on which the Secretary purchases a loan under this section—
(1) the guaranty agency that insured such loan shall cease
to have any obligations, responsibilities, or rights (including
rights to any payment) under this Act for any activity related
to the administration of such loan that is carried out or required to be carried out on or after the date of such purchase;
and
(2) the insurance issued by such agency pursuant to section 428(b) for such loan shall cease to be effective with respect
to any default on such loan that occurs on or after the date of
such purchase.
(e) REPORTS AND COST ESTIMATES.—The Secretary shall prepare, transmit to the authorizing committees, and make available
to the public, the following:
(1) QUARTERLY REPORTS.—
(A) CONTENTS.—Not later than 60 days after the end
of each quarter during the period beginning July 1, 2008,
and ending September 30, 2010, a quarterly report on—
(i) the number of loans the Secretary has agreed
to purchase, or has purchased, using the authority
provided under this section, and the total amount of
outstanding principal and accrued interest of such
loans, during such period; and
(ii) the number of loans in which the Secretary
has purchased a participation interest, and the total
amount of outstanding principal and accrued interest
of such loans, during such period.
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Sec. 459B
(B) DISAGGREGATED INFORMATION.—For each quarterly
report, the information described in clauses (i) and (ii) of
subparagraph (A) shall be disaggregated by lender and, for
each lender, by category of institution (using the categories
described in section 132(d)) and type of loan.
(2) ESTIMATES OF PURCHASE PROGRAM COSTS.—Not later
than February 15, 2011, an estimate of the costs associated
with the program of purchasing loans described in paragraph
(1)(A)(i) during the period beginning July 1, 2008, and ending
September 30, 2010, and an estimate of the costs associated
with the program of purchasing a participation interest in
loans described in paragraph (1)(A)(ii) during such period.
Each such estimate shall—
(A) contain the same level of detail, and be reported
in a similar manner, as the budget estimates provided for
the loan program under part B and the direct student loan
program under this part in the President’s annual budget
submission to Congress, except that current and future administrative costs shall also be reported;
(B) include an estimate of the gross and net outlays
that have been, or will be, incurred by the Federal Government (including subsidy and administrative costs, and any
payments made by the Department to lenders, trusts, or
other entities related to such activities) in purchasing such
loans or purchasing a participation interest in such loans
during such period (as applicable); and
(C) include a comparison of—
(i) the average amount of the gross and net outlays (including costs and payments) described in subparagraph (B) for each $100 of loans purchased or for
which a participation interest was purchased (as applicable) during such period, disaggregated by type of
loan; with
(ii) the average amount of such gross and net outlays (including costs and payments) to the Federal
Government for each $100 of comparable loans made
under this part and part B during such period,
disaggregated by part and by type of loan.
(3) ANNUAL COST ESTIMATES.—Not later than February 15
of the fiscal year following each of the fiscal years 2008, 2009,
2010, and 2011, an annual estimate of the costs associated
with the program of purchasing loans described in paragraph
(1)(A)(i), and an annual estimate of the costs associated with
the program of purchasing a participation interest in loans described in paragraph (1)(A)(ii), that includes the information
described in paragraph (2) for such fiscal year.
(f) EXPIRATION OF AUTHORITY.—The Secretary’s authority to
purchase loans under this section shall expire on July 1, 2010.
SEC. 459B. ø20 U.S.C. 1087i–2¿ TEMPORARY LOAN CONSOLIDATION AUTHORITY.
(a) TEMPORARY LOAN CONSOLIDATION AUTHORITY.—
(1) IN GENERAL.—A borrower who has 1 or more loans in
2 or more of the categories described in paragraph (2), and who
has not yet entered repayment on 1 or more of those loans in
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HIGHER EDUCATION ACT OF 1965
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any of the categories, may consolidate all of the loans of the
borrower that are described in paragraph (2) into a Federal Direct Consolidation Loan during the period described in paragraph (3).
(2) CATEGORIES OF LOANS THAT MAY BE CONSOLIDATED.—
The categories of loans that may be consolidated under paragraph (1) are—
(A) loans made under this part;
(B) loans purchased by the Secretary pursuant to section 459A; and
(C) loans made under part B that are held by an eligible lender, as such term is defined in section 435(d).
(3) TIME PERIOD IN WHICH LOANS MAY BE CONSOLIDATED.—
The Secretary may make a Federal Direct Consolidation Loan
under this section to a borrower whose application for such
Federal Direct Consolidation Loan is received on or after July
1, 2010, and before July 1, 2011.
(b) TERMS OF LOANS.—A Federal Direct Consolidation Loan
made under this section shall have the same terms and conditions
as a Federal Direct Consolidation Loan made under section 455(g),
except that—
(1) in determining the applicable rate of interest on the
Federal Direct Consolidation Loan made under this section
(other than on a Federal Direct Consolidation Loan described
in paragraph (2)), section 427A(l)(3) shall be applied without
rounding the weighted average of the interest rate on the loans
consolidated to the nearest higher one-eighth of 1 percent as
described in subparagraph (A) of section 427A(l)(3); and
(2) if a Federal Direct Consolidation Loan made under this
section that repays a loan which is subject to an interest rate
determined under section 427A(g)(2), (j)(2), or (k)(2), then the
interest rate for such Federal Direct Consolidation Loan shall
be calculated—
(A) by using the applicable rate of interest described
in section 427A(g)(2), (j)(2), or (k)(2), respectively; and
(B) in accordance with section 427A(l)(3).
SEC. 460. ø20 U.S.C. 1087j¿ LOAN CANCELLATION FOR TEACHERS.
(a) STATEMENT OF PURPOSE.—It is the purpose of this section
to encourage individuals to enter and continue in the teaching profession.
(b) PROGRAM AUTHORIZED.—The Secretary shall carry out a
program of canceling the obligation to repay a qualified loan
amount in accordance with subsection (c) for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans made
under this part for any new borrower on or after October 1, 1998,
who—
(1) has been employed as a full-time teacher for 5 consecutive complete school years—
(A) in a school or location that qualifies under section
465(a)(2)(A) for loan cancellation for Perkins loan recipients who teach in such schools or locations; and
(B) if employed as an elementary school or secondary
school teacher, is highly qualified as defined in section
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9101 of the Elementary and Secondary Education Act of
1965, or meets the requirements of subsection (g)(3); and
(2) is not in default on a loan for which the borrower seeks
forgiveness.
(c) QUALIFIED LOAN AMOUNTS.—
(1) IN GENERAL.—The Secretary shall cancel not more than
$5,000 in the aggregate of the loan obligation on a Federal Direct Stafford Loan or a Federal Direct Unsubsidized Stafford
Loan that is outstanding after the completion of the fifth complete school year of teaching described in subsection (b)(1). No
borrower may receive a reduction of loan obligations under
both this section and section 428J.
(2) TREATMENT OF CONSOLIDATION LOANS.—A loan amount
for a Federal Direct Consolidation Loan may be a qualified
loan amount for the purposes of this subsection only to the extent that such loan amount was used to repay a Federal Direct
Stafford Loan, a Federal Direct Unsubsidized Stafford Loan, or
a loan made under section 428 or 428H, for a borrower who
meets the requirements of subsection (b), as determined in accordance with regulations prescribed by the Secretary.
(3) ADDITIONAL AMOUNTS FOR TEACHERS IN MATHEMATICS,
SCIENCE,
OR
SPECIAL
EDUCATION.—Notwithstanding
the
amount specified in paragraph (1), the aggregate amount that
the Secretary shall cancel under this section shall be not more
than $17,500 in the case of—
(A) a secondary school teacher—
(i) who meets the requirements of subsection (b);
and
(ii) whose qualifying employment for purposes of
such subsection is teaching mathematics or science on
a full-time basis; and
(B) an elementary school or secondary school teacher—
(i) who meets the requirements of subsection (b);
(ii) whose qualifying employment for purposes of
such subsection is as a special education teacher
whose primary responsibility is to provide special education to children with disabilities (as those terms are
defined in section 602 of the Individuals with Disabilities Education Act); and
(iii) who, as certified by the chief administrative
officer of the public or non-profit private elementary
school or secondary school in which the borrower is
employed, or, in the case of a teacher who is employed
by an educational service agency, as certified by the
chief administrative officer of such agency, is teaching
children with disabilities that correspond with the borrower’s special education training and has demonstrated knowledge and teaching skills in the content
areas of the elementary school or secondary school curriculum that the borrower is teaching.
(d) REGULATIONS.—The Secretary is authorized to issue such
regulations as may be necessary to carry out the provisions of this
section.
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(e) CONSTRUCTION.—Nothing in this section shall be construed
to authorize any refunding of any canceled loan.
(f ) LIST.—If the list of schools in which a teacher may perform
service pursuant to subsection (b) is not available before May 1 of
any year, the Secretary may use the list for the year preceding the
year for which the determination is made to make such service determination.
(g) ADDITIONAL ELIGIBILITY PROVISIONS.—
(1) CONTINUED ELIGIBILITY.—Any teacher who performs
service in a school that—
(A) meets the requirements of subsection (b)(1)(A) in
any year during such service; and
(B) in a subsequent year fails to meet the requirements of such subsection, may continue to teach in such
school and shall be eligible for loan cancellation pursuant
to subsection (b).
(2) PREVENTION OF DOUBLE BENEFITS.—No borrower may,
for the same voluntary service, receive a benefit under both
this section and—
(A) section 428K;
(B) section 455(m); or
(C) subtitle D of title I of the National and Community
Service Act of 1990 (42 U.S.C. 12601 et seq.).
(3) PRIVATE SCHOOL TEACHERS.—An individual who is employed as a teacher in a private school and is exempt from
State certification requirements (unless otherwise applicable
under State law), may, in lieu of the requirement of subsection
(b)(1)(B), have such employment treated as qualifying employment under this section if such individual is permitted to and
does satisfy rigorous subject knowledge and skills tests by taking competency tests in the applicable grade levels and subject
areas. For such purposes, the competency tests taken by such
a private school teacher shall be recognized by 5 or more
States for the purpose of fulfilling the highly qualified teacher
requirements under section 9101 of the Elementary and Secondary Education Act of 1965, and the score achieved by such
teacher on each test shall equal or exceed the average passing
score of those 5 States.
(h) DEFINITION.—For the purpose of this section, the term
‘‘year’’ where applied to service as a teacher means an academic
year as defined by the Secretary.
PART E—FEDERAL PERKINS LOANS
SEC. 461. ø20 U.S.C. 1087aa¿ APPROPRIATIONS AUTHORIZED.
(a) PROGRAM AUTHORITY.—The Secretary shall carry
out a program of stimulating and assisting in the establishment and maintenance of funds at institutions of higher education for the making
of low-interest loans to students in need thereof to pursue their
courses of study in such institutions or while engaged in programs
of study abroad approved for credit by such institutions. Loans
made under this part shall be known as ‘‘Federal Perkins Loans’’.
(b) AUTHORIZATION OF APPROPRIATIONS.—(1) For the purpose of
enabling the Secretary to make contributions to student loan funds
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established under this part, there are authorized to be appropriated $300,000,000 for fiscal year 2009 and for each of the five
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 2015 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, 2015, to continue or complete
courses of study.
(c) USE OF APPROPRIATIONS.—Any sums appropriated pursuant
to subsection (b) for any fiscal year shall be available for apportionment pursuant to section 462 and for payments of Federal capital
contributions therefrom to institutions of higher education which
have agreements with the Secretary under section 463. Such Federal capital contributions and all contributions from such institutions shall be used for the establishment, expansion, and maintenance of student loan funds.
SEC. 462. ø20 U.S.C. 1087bb¿ ALLOCATION OF FUNDS.
(a) ALLOCATION BASED ON PREVIOUS ALLOCATION.—(1)
From
the amount appropriated pursuant to section 461(b) for each fiscal
year, the Secretary shall first allocate to each eligible institution an
amount equal to—
(A) 100 percent of the amount received under subsections
(a) and (b) of this section for fiscal year 1999 (as such subsections were in effect with respect to allocations for such fiscal
year), multiplied by
(B) the institution’s default penalty, as determined under
subsection (e),
except that if the institution has a cohort default rate in excess of
the applicable maximum cohort default rate under subsection (f),
the institution may not receive an allocation under this paragraph.
(2)(A) From the amount so appropriated, the Secretary shall
next allocate to each eligible institution that began participation in
the program under this part after fiscal year 1999 but is not a first
or second time participant, an amount equal to the greater of—
(i) $5,000; or
(ii) 100 percent of the amount received and expended
under this part for the first year it participated in the program.
(B) From the amount so appropriated, the Secretary shall next
allocate to each eligible institution that began participation in the
program under this part after fiscal year 1999 and is a first or second time participant, an amount equal to the greatest of—
(i) $5,000;
(ii) an amount equal to (I) 90 percent of the amount received and used under this part in the second preceding fiscal
year by eligible institutions offering comparable programs of
instruction, divided by (II) the number of students enrolled at
such comparable institutions in such fiscal year, multiplied by
(III) the number of students enrolled at the applicant institution in such fiscal year; or
(iii) 90 percent of the institution’s allocation under this
part for the preceding fiscal year.
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(C) Notwithstanding subparagraphs (A) and (B) of this paragraph, the Secretary shall allocate to each eligible institution
which—
(i) was a first-time participant in the program in fiscal
year 2000 or any subsequent fiscal year, and
(ii) received a larger amount under this subsection in the
second year of participation,
an amount equal to 90 percent of the amount it received under this
subsection in its second year of participation.
(D) For any fiscal year after a fiscal year in which an institution receives an allocation under subparagraph (A), (B), or (C), the
Secretary shall allocate to such institution an amount equal to the
product of—
(i) the amount determined under subparagraph (A), (B), or
(C), multiplied by
(ii) the institution’s default penalty, as determined under
subsection (e),
except that if the institution has a cohort default rate in excess of
the applicable maximum cohort default rate under subsection (f),
the institution may not receive an allocation under this paragraph.
(3)(A) If the amount appropriated for any fiscal year is less
than the amount required to be allocated to all institutions under
paragraph (1) of this subsection, then the amount of the allocation
to each such institution shall be ratably reduced.
(B) If the amount appropriated for any fiscal year is more than
the amount required to be allocated to all institutions under paragraph (1) but less than the amount required to be allocated to all
institutions under paragraph (2), then—
(i) the Secretary shall allot the amount required to be allocated to all institutions under paragraph (1), and
(ii) the amount of the allocation to each institution under
paragraph (2) shall be ratably reduced.
(C) If additional amounts are appropriated for any such fiscal
year, such reduced amounts shall be increased on the same basis
as they were reduced (until the amount allocated equals the
amount required to be allocated under paragraphs (1) and (2) of
this subsection).
(b) ALLOCATION OF EXCESS BASED ON SHARE OF EXCESS ELIGIBLE AMOUNTS.—(1) From the remainder of the amount appropriated pursuant to section 461(b) after making the allocations required by subsection (a) of this section, the Secretary shall allocate
to each eligible institution which has an excess eligible amount an
amount which bears the same ratio to such remainder as such excess eligible amount bears to the sum of the excess eligible
amounts of all such eligible institutions (having such excess eligible
amounts).
(2) For any eligible institution, the excess eligible amount is
the amount, if any, by which—
(A)(i) that institution’s eligible amount (as determined
under paragraph (3)), divided by (ii) the sum of the eligible
amounts of all institutions (as so determined), multiplied by
(iii) the amount appropriated pursuant to section 461(b) for the
fiscal year; exceeds
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(B) the amount required to be allocated to that institution
under subsection (a),
except that an eligible institution which has a cohort default rate
in excess of the applicable maximum cohort default rate under subsection (f) may not receive an allocation under this paragraph.
(3) For any eligible institution, the eligible amount of that institution is equal to—
(A) the amount of the institution’s self-help need, as determined under subsection (c); minus
(B) the institution’s anticipated collections; multiplied by
(C) the institution’s default penalty, as determined under
subsection (e);
except that, if the institution has a cohort default rate in excess of
the applicable maximum cohort default rate under subsection (f),
the eligible amount of that institution is zero.
(c) DETERMINATION OF INSTITUTION’S SELF-HELP NEED.—(1)
The amount of an institution’s self-help need is equal to the sum
of the self-help need of the institution’s eligible undergraduate students and the self-help need of the institution’s eligible graduate
and professional students.
(2) To determine the self-help need of an institution’s eligible
undergraduate students, the Secretary shall—
(A) establish various income categories for dependent and
independent undergraduate students;
(B) establish an expected family contribution for each income category of dependent and independent undergraduate
students, determined on the basis of the average expected family contribution (computed in accordance with part F of this
title) of a representative sample within each income category
for the second preceding fiscal year;
(C) compute 25 percent of the average cost of attendance
for all undergraduate students;
(D) multiply the number of eligible dependent students in
each income category by the lesser of—
(i) 25 percent of the average cost of attendance for all
undergraduate students determined under subparagraph
(C); or
(ii) the average cost of attendance for all undergraduate students minus the expected family contribution
determined under subparagraph (B) for that income category, except that the amount computed by such subtraction shall not be less than zero;
(E) add the amounts determined under subparagraph (D)
for each income category of dependent students;
(F) multiply the number of eligible independent students
in each income category by the lesser of—
(i) 25 percent of the average cost of attendance for all
undergraduate students determined under subparagraph
(C); or
(ii) the average cost of attendance for all undergraduate students minus the expected family contribution
determined under subparagraph (B) for that income category, except that the amount computed by such subtraction for any income category shall not be less than zero;
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(G) add the amounts determined under subparagraph (F)
for each income category of independent students; and
(H) add the amounts determined under subparagraphs (E)
and (G).
(3) To determine the self-help need of an institution’s eligible
graduate and professional students, the Secretary shall—
(A) establish various income categories for graduate and
professional students;
(B) establish an expected family contribution for each income category of graduate and professional students, determined on the basis of the average expected family contribution
(computed in accordance with part F of this title) of a representative sample within each income category for the second
preceding fiscal year;
(C) determine the average cost of attendance for all graduate and professional students;
(D) subtract from the average cost of attendance for all
graduate and professional students (determined under subparagraph (C)), the expected family contribution (determined
under subparagraph (B)) for each income category, except that
the amount computed by such subtraction for any income category shall not be less than zero;
(E) multiply the amounts determined under subparagraph
(D) by the number of eligible students in each category;
(F) add the amounts determined under subparagraph (E)
for each income category.
(4)(A) For purposes of paragraphs (2) and (3), the term ‘‘average cost of attendance’’ means the average of the attendance costs
for undergraduate students and for graduate and professional students, which shall include (i) tuition and fees determined in accordance with subparagraph (B), (ii) standard living expenses determined in accordance with subparagraph (C), and (iii) books and
supplies determined in accordance with subparagraph (D).
(B) The average undergraduate and graduate and professional
tuition and fees described in subparagraph (A)(i) shall be computed
on the basis of information reported by the institution to the Secretary, which shall include (i) total revenue received by the institution from undergraduate and graduate tuition and fees for the second year preceding the year for which it is applying for an allocation, and (ii) the institution’s enrollment for such second preceding
year.
(C) The standard living expense described in subparagraph
(A)(ii) is equal to 150 percent of the difference between the income
protection allowance for a family of five with one in college and the
income protection allowance for a family of six with one in college
for a single independent student.
(D) The allowance for books and supplies described in subparagraph (A)(iii) is equal to $600.
(d) ANTICIPATED COLLECTIONS.—(1) An institution’s anticipated
collections are equal to the amount which was collected during the
second year preceding the beginning of the award period, multiplied by 1.21.
(2) The Secretary shall establish an appeals process by which
the anticipated collections required in paragraph (1) may be waived
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for institutions with low cohort default rates in the program assisted under this part.
(e) DEFAULT PENALTIES.—
(1) YEARS PRECEDING FISCAL YEAR 2000.—For any fiscal
year preceding fiscal year 2000, any institution with a cohort
default rate that—
(A) equals or exceeds 15 percent, shall establish a default reduction plan pursuant to regulations prescribed by
the Secretary, except that such plan shall not be required
with respect to an institution that has a default rate of
less than 20 percent and that has less than 100 students
who have loans under this part in such academic year;
(B) equals or exceeds 20 percent, but is less than 25
percent, shall have a default penalty of 0.9;
(C) equals or exceeds 25 percent, but is less than 30
percent, shall have a default penalty of 0.7; and
(D) equals or exceeds 30 percent shall have a default
penalty of zero.
(2) YEARS FOLLOWING FISCAL YEAR 2000.—For fiscal year
2000 and any succeeding fiscal year, any institution with a cohort default rate (as defined under subsection (g)) that equals
or exceeds 25 percent shall have a default penalty of zero.
(3) INELIGIBILITY.—
(A) IN GENERAL.—For fiscal year 2000 and any succeeding fiscal year, any institution with a cohort default
rate (as defined in subsection (g)) that equals or exceeds
50 percent for each of the 3 most recent years for which
data are available shall not be eligible to participate in a
program under this part for the fiscal year for which the
determination is made and the 2 succeeding fiscal years,
unless, within 30 days of receiving notification from the
Secretary of the loss of eligibility under this paragraph,
the institution appeals the loss of eligibility to the Secretary. The Secretary shall issue a decision on any such
appeal within 45 days after the submission of the appeal.
Such decision may permit the institution to continue to
participate in a program under this part if—
(i) the institution demonstrates to the satisfaction
of the Secretary that the calculation of the institution’s cohort default rate is not accurate, and that recalculation would reduce the institution’s cohort default rate for any of the 3 fiscal years below 50 percent; or
(ii) there are, in the judgment of the Secretary,
such a small number of borrowers entering repayment
that the application of this subparagraph would be inequitable.
(B) CONTINUED PARTICIPATION.—During an appeal
under subparagraph (A), the Secretary may permit the institution to continue to participate in a program under this
part.
(C) RETURN OF FUNDS.—Within 90 days after the date
of any termination pursuant to subparagraph (A), or the
conclusion of any appeal pursuant to subparagraph (B),
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whichever is later, the balance of the student loan fund established under this part by the institution that is the subject of the termination shall be distributed as follows:
(i) The Secretary shall first be paid an amount
which bears the same ratio to such balance (as of the
date of such distribution) as the total amount of Federal capital contributions to such fund by the Secretary under this part bears to the sum of such Federal capital contributions and the capital contributions
to such fund made by the institution.
(ii) The remainder of such student loan fund shall
be paid to the institution.
(D) USE OF RETURNED FUNDS.—Any funds returned to
the Secretary under this paragraph shall be reallocated to
institutions of higher education pursuant to subsection (i).
(E) DEFINITION.—For the purposes of subparagraph
(A), the term ‘‘loss of eligibility’’ shall be defined as the
mandatory liquidation of an institution’s student loan
fund, and assignment of the institution’s outstanding loan
portfolio to the Secretary.
(f) APPLICABLE MAXIMUM COHORT DEFAULT RATE.—
(1) AWARD YEARS PRIOR TO 2000.—For award years prior to
award year 2000, the applicable maximum cohort default rate
is 30 percent.
(2) AWARD YEAR 2000 AND SUCCEEDING AWARD YEARS.—For
award year 2000 and subsequent years, the applicable maximum cohort default rate is 25 percent.
(g) DEFINITION OF COHORT DEFAULT RATE.—
(1)(A) The term ‘‘cohort default rate’’ means, for any award
year in which 30 or more current and former students at the
institution enter repayment on loans under this part (received
for attendance at the institution), the percentage of those current and former students who enter repayment on such loans
(received for attendance at that institution) in that award year
who default before the end of the following award year.
(B) For any award year in which less than 30 of the institution’s current and former students enter repayment, the
term ‘‘cohort default rate’’ means the percentage of such current and former students who entered repayment on such
loans in any of the three most recent award years and who default before the end of the award year immediately following
the year in which they entered repayment.
(C) A loan on which a payment is made by the institution
of higher education, its owner, agency, contractor, employee, or
any other entity or individual affiliated with such institution,
in order to avoid default by the borrower, is considered as in
default for the purposes of this subsection.
(D) In the case of a student who has attended and borrowed at more than one school, the student (and his or her
subsequent repayment or default) is attributed to the school for
attendance at which the student received the loan that entered
repayment in the award year.
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(E) In determining the number of students who default before the end of such award year, the institution, in calculating
the cohort default rate, shall exclude—
(i) any loan on which the borrower has, after the time
periods specified in paragraph (2)—
(I) voluntarily made 6 consecutive payments;
(II) voluntarily made all payments currently due;
(III) repaid in full the amount due on the
loan; or
(IV) received a deferment or forbearance, based on
a condition that began prior to such time periods;
(ii) any loan which has, after the time periods specified in paragraph (2), been rehabilitated or canceled; and
(iii) any other loan that the Secretary determines
should be excluded from such determination.
(F) The Secretary shall prescribe regulations designed to
prevent an institution from evading the application to that institution of a cohort default rate determination under this subsection through the use of such measures as branching, consolidation, change of ownership or control or other means as
determined by the Secretary.
(2) For purposes of calculating the cohort default rate
under this subsection, a loan shall be considered to be in default—
(A) 240 days (in the case of a loan repayable monthly),
or
(B) 270 days (in the case of a loan repayable quarterly),
after the borrower fails to make an installment payment when
due or to comply with other terms of the promissory note.
(h) FILING DEADLINES.—The Secretary shall, from time to time,
set dates before which institutions must file applications for allocations under this part.
(i) REALLOCATION OF EXCESS ALLOCATIONS.—
(1) IN GENERAL.—(A) If an institution of higher education
returns to the Secretary any portion of the sums allocated to
such institution under this section for any fiscal year, the Secretary shall reallocate 80 percent of such returned portions to
participating institutions in an amount not to exceed such participating institution’s excess eligible amounts as determined
under paragraph (2).
(B) For the purpose of this subsection, the term ‘‘participating institution’’ means an institution of higher education
that—
(i) was a participant in the program assisted under
this part in fiscal year 1999; and
(ii) did not receive an allocation under subsection (a)
in the fiscal year for which the reallocation determination
is made.
(2) EXCESS ELIGIBLE AMOUNT.—For any participating institution, the excess eligible amount is the amount, if any, by
which—
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gible amounts of all participating institutions (as determined under paragraph (3)), multiplied by (iii) the amount
of funds available for reallocation under this subsection;
exceeds
(B) the amount required to be allocated to that institution under subsection (b).
(3) REMAINDER.—The Secretary shall reallocate the remainder of such returned portions in accordance with regulations of the Secretary.
(4) ALLOCATION REDUCTIONS.—If under paragraph (1) of
this subsection an institution returns more than 10 percent of
its allocation, the institution’s allocation for the next fiscal year
shall be reduced by the amount returned. The Secretary may
waive this paragraph for a specific institution if the Secretary
finds that enforcing it is contrary to the interest of the program.
SEC. 463. ø20 U.S.C. 1087cc¿ AGREEMENTS WITH INSTITUTIONS OF
HIGHER EDUCATION.
(a) CONTENTS OF AGREEMENTS.—An agreement with any insti-
tution of higher education for the payment of Federal capital contributions under this part shall—
(1) provide for the establishment and maintenance of a
student loan fund for the purpose of this part;
(2) provide for the deposit in such fund of—
(A) Federal capital contributions from funds appropriated under section 461;
(B) a capital contribution by an institution in an
amount equal to one-third of the Federal capital contributions described in subparagraph (A);
(C) collections of principal and interest on student
loans made from deposited funds;
(D) charges collected pursuant to regulations under
section 464(c)(1)(H); and
(E) any other earnings of the funds;
(3) provide that such student loan fund shall be used only
for—
(A) loans to students, in accordance with the provisions of this part;
(B) administrative expenses, as provided in subsection
(b);
(C) capital distributions, as provided in section 466;
and
(D) costs of litigation, and other collection costs agreed
to by the Secretary in connection with the collection of a
loan from the fund (and interest thereon) or a charge assessed pursuant to regulations under section 464(c)(1)(H);
(4) provide that where a note or written agreement evidencing a loan has been in default despite due diligence on the
part of the institution in attempting collection thereon—
(A) if the institution has knowingly failed to maintain
an acceptable collection record with respect to such loan,
as determined by the Secretary in accordance with criteria
established by regulation, the Secretary may—
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(i) require the institution to assign such note or
agreement to the Secretary, without recompense; and
(ii) apportion any sums collected on such a loan,
less an amount not to exceed 30 percent of any sums
collected to cover the Secretary’s collection costs,
among other institutions in accordance with section
462; or
(B) if the institution is not one described in subparagraph (A), the Secretary may allow such institution to
refer such note or agreement to the Secretary, without recompense, except that, once every six months, any sums collected on such a loan (less an amount not to exceed 30 percent of any such sums collected to cover the Secretary’s
collection costs) shall be repaid to such institution and
treated as an additional capital contribution under section
462;
(5) provide that, if an institution of higher education determines not to service and collect student loans made available
from funds under this part, the institution will assign, at the
beginning of the repayment period, notes or evidence of obligations of student loans made from such funds to the Secretary
and the Secretary shall apportion any sums collected on such
notes or obligations (less an amount not to exceed 30 percent
of any such sums collected to cover that Secretary’s collection
costs) among other institutions in accordance with section 462;
(6) provide that, notwithstanding any other provision of
law, the Secretary will provide to the institution any information with respect to the names and addresses of borrowers or
other relevant information which is available to the Secretary,
from whatever source such information may be derived;
(7) provide assurances that the institution will comply
with the provisions of section 463A;
(8) provide that the institution of higher education will
make loans first to students with exceptional need; and
(9) include such other reasonable provisions as may be necessary to protect the United States from unreasonable risk of
loss and as are agreed to by the Secretary and the institution,
except that nothing in this paragraph shall be construed to
permit the Secretary to require the assignment of loans to the
Secretary other than as is provided for in paragraphs (4) and
(5).
(b) ADMINISTRATIVE EXPENSES.—An institution which has entered into an agreement under subsection (a) shall be entitled, for
each fiscal year during which it makes student loans from a student loan fund established under such agreement, to a payment in
lieu of reimbursement for its expenses in administering its student
loan program under this part during such year. Such payment
shall be made in accordance with section 489.
(c) COOPERATIVE AGREEMENTS WITH CONSUMER REPORTING
AGENCIES.—(1) For the purpose of promoting responsible repayment of loans made pursuant to this part, the Secretary and each
institution of higher education participating in the program under
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cerning student borrowers concerning whom the Secretary has received a referral pursuant to section 467 and regarding loans held
by the Secretary or an institution.
(2) Each cooperative agreement made pursuant to paragraph
(1) shall be made in accordance with the requirements of section
430A except that such agreement shall provide for the disclosure
by the Secretary or an institution, as the case may be, to such consumer reporting agencies, with respect to any loan held by the Secretary or the institution, respectively, of—
(A) the date of disbursement and the amount of such loans
made to any borrower under this part at the time of disbursement of the loan;
(B) information concerning the repayment and collection of
any such loan, including information concerning the status of
such loan; and
(C) the date of cancellation of the note upon completion of
repayment by the borrower of any such loan, or upon cancellation or discharge of the borrower’s obligation on the loan for
any reason.
(3) Notwithstanding paragraphs (4) and (5) of subsection (a) of
section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c (a)(4),
(a)(5)), a consumer reporting agency may make a report containing
information received from the Secretary or an institution regarding
the status of a borrower’s account on a loan made under this part
until the loan is paid in full.
(4)(A) Except as provided in subparagraph (B), an institution
of higher education, after consultation with the Secretary and pursuant to the agreements entered into under paragraph (1), shall
disclose at least annually to any consumer reporting agency with
which the Secretary has such an agreement the information set
forth in paragraph (2), and shall disclose promptly to such consumer reporting agency any changes to the information previously
disclosed.
(B) The Secretary may promulgate regulations establishing criteria under which an institution of higher education may cease reporting the information described in paragraph (2) before a loan is
paid in full.
(5) Each institution of higher education shall notify the appropriate consumer reporting agencies whenever a borrower of a loan
that is made and held by the institution and that is in default
makes 6 consecutive monthly payments on such loan, for the purpose of encouraging such consumer reporting agencies to update
the status of information maintained with respect to that borrower.
(d) LIMITATION ON USE OF INTEREST BEARING ACCOUNTS.—In
carrying out the provisions of subsection (a)(9), the Secretary may
not require that any collection agency, collection attorney, or loan
servicer collecting loans made under this part deposit amounts collected on such loans in interest bearing accounts, unless such agency, attorney, or servicer holds such amounts for more than 45 days.
(e) SPECIAL DUE DILIGENCE RULE.—In carrying out the provisions of subsection (a)(5) relating to due diligence, the Secretary
shall make every effort to ensure that institutions of higher education may use Internal Revenue Service skip-tracing collection
procedures on loans made under this part.
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SEC. 463A. ø20 U.S.C. 1087cc–1¿ STUDENT LOAN INFORMATION BY ELIGIBLE INSTITUTIONS.
(a) DISCLOSURE REQUIRED PRIOR TO DISBURSEMENT.—Each in-
stitution of higher education shall, at or prior to the time such institution makes a loan to a student borrower which is made under
this part, provide thorough and adequate loan information on such
loan to the student borrower. Any disclosure required by this subsection may be made by an institution of higher education as part
of the written application material provided to the borrower, or as
part of the promissory note evidencing the loan, or on a separate
written form provided to the borrower. The disclosures shall include—
(1) the name of the institution of higher education, and the
address to which communications and payments should be
sent;
(2) the principal amount of the loan;
(3) the amount of any charges collected by the institution
at or prior to the disbursal of the loan and whether such
charges are deducted from the proceeds of the loan or paid separately by the borrower;
(4) the stated interest rate on the loan;
(5) the yearly and cumulative maximum amounts that may
be borrowed;
(6) an explanation of when repayment of the loan will be
required and when the borrower will be obligated to pay interest that accrues on the loan;
(7) a statement as to the minimum and maximum repayment term which the institution may impose, and the minimum monthly payment required by law and a description of
any penalty imposed as a consequence of default, such as liability for expenses reasonably incurred in attempts by the
Secretary or institutions to collect on a loan;
(8) a statement of the total cumulative balance, including
the loan applied for, owed by the student to that lender, and
an estimate of the projected monthly payment, given such cumulative balance;
(9) an explanation of any special options the borrower may
have for loan consolidation or other refinancing of the loan;
(10) a statement that the borrower has the right to prepay
all or part of the loan, at any time, without penalty, a statement summarizing circumstances in which repayment of the
loan or interest that accrues on the loan may be deferred, and
a brief notice of the program for repayment of loans, on the
basis of military service, pursuant to the Department of Defense educational loan repayment program (10 U.S.C. 16302);
(11) a definition of default and the consequences to the
borrower if the borrower defaults, together with a statement
that the disbursement of, and the default on, a loan under this
part, shall be reported to a consumer reporting agency;
(12) to the extent practicable, the effect of accepting the
loan on the eligibility of the borrower for other forms of student assistance; and
(13) an explanation of any cost the borrower may incur in
the making or collection of the loan.
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(b) DISCLOSURE REQUIRED PRIOR TO REPAYMENT.—Each institution of higher education shall enter into an agreement with the
Secretary under which the institution will, prior to the start of the
repayment period of the student borrower on loans made under
this part, disclose to the student borrower the information required
under this subsection. Any disclosure required by this subsection
may be made by an institution of higher education either in a
promissory note evidencing the loan or loans or in a written statement provided to the borrower. The disclosures shall include—
(1) the name of the institution of higher education, and the
address to which communications and payments should be
sent;
(2) the scheduled date upon which the repayment period is
to begin;
(3) the estimated balance owed by the borrower on the
loan or loans covered by the disclosure as of the scheduled date
on which the repayment period is to begin (including, if applicable, the estimated amount of interest to be capitalized);
(4) the stated interest rate on the loan or loans, or the
combined interest rate of loans with different stated interest
rates;
(5) the nature of any fees which may accrue or be charged
to the borrower during the repayment period;
(6) the repayment schedule for all loans covered by the disclosure including the date the first installment is due, and the
number, amount, and frequency of required payments;
(7) an explanation of any special options the borrower may
have for loan consolidation or other refinancing of the loan;
(8) the projected total of interest charges which the borrower will pay on the loan or loans, assuming that the borrower makes payments exactly in accordance with the repayment schedule; and
(9) a statement that the borrower has the right to prepay
all or part of the loan or loans covered by the disclosure at any
time without penalty.
(c) COSTS AND EFFECTS OF DISCLOSURES.—Such information
shall be available without cost to the borrower. The failure of an
eligible institution to provide information as required by this section shall not (1) relieve a borrower of the obligation to repay a
loan in accordance with its terms, (2) provide a basis for a claim
for civil damages, or (3) be deemed to abrogate the obligation of the
Secretary to make payments with respect to such loan.
SEC. 464. ø20 U.S.C. 1087dd¿ TERMS OF LOANS.
(a) TERMS AND CONDITIONS.—(1) Loans
from any student loan
fund established pursuant to an agreement under section 463 to
any student by any institution shall, subject to such conditions,
limitations, and requirements as the Secretary shall prescribe by
regulation, be made on such terms and conditions as the institution
may determine.
(2)(A) Except as provided in paragraph (4), the total of loans
made to a student in any academic year or its equivalent by an institution of higher education from a loan fund established pursuant
to an agreement under this part shall not exceed—
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(i) $5,500, in the case of a student who has not successfully
completed a program of undergraduate education; or
(ii) $8,000, in the case of a graduate or professional student (as defined in regulations issued by the Secretary).
(B) Except as provided in paragraph (4), the aggregate unpaid
principal amount for all loans made to a student by institutions of
higher education from loan funds established pursuant to agreements under this part may not exceed—
(i) $60,000, in the case of any graduate or professional student (as defined by regulations issued by the Secretary, and including any loans from such funds made to such person before
such person became a graduate or professional student);
(ii) $27,500, in the case of a student who has successfully
completed 2 years of a program of education leading to a bachelor’s degree but who has not completed the work necessary for
such a degree (determined under regulations issued by the Secretary), and including any loans from such funds made to such
person before such person became such a student; and
(iii) $11,000, in the case of any other student.
(3) Regulations of the Secretary under paragraph (1) shall be
designed to prevent the impairment of the capital student loan
funds to the maximum extent practicable and with a view toward
the objective of enabling the student to complete his course of
study.
(4) In the case of a program of study abroad that is approved
for credit by the home institution at which a student is enrolled
and that has reasonable costs in excess of the home institution’s
budget, the annual and aggregate loan limits for the student may
exceed the amounts described in paragraphs (2)(A) and (2)(B) by 20
percent.
(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 unless such loan
meets one of the conditions for exclusion under section 462(g)(1)(E).
(2) If the institution’s capital contribution under section 462 is
directly or indirectly based in part on the financial need demonstrated by students who are (A) attending the institution less
than full time, or (B) independent students, then a reasonable portion of the loans made from the institution’s student loan fund containing the contribution shall be made available to such students.
(c) CONTENTS OF LOAN AGREEMENT.—(1) Any agreement between an institution and a student for a loan from a student loan
fund assisted under this part—
(A) shall be evidenced by note or other written instrument
which, except as provided in paragraph (2), provides for repayment of the principal amount of the loan, together with interest thereon, in equal installments (or, if the borrower so requests, in graduated periodic installments determined in accordance with such schedules as may be approved by the SecMay 7, 2013
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504
retary) payable quarterly, bimonthly, or monthly, at the option
of the institution, over a period beginning nine months after
the date on which the student ceases to carry, at an institution
of higher education or a comparable institution outside the
United States approved for this purpose by the Secretary, at
least one-half the normal full-time academic workload, and
ending 10 years and 9 months after such date except that such
period may begin earlier than 9 months after such date upon
the request of the borrower;
(B) shall include provision for acceleration of repayment of
the whole, or any part, of such loan, at the option of the borrower;
(C)(i) may provide, at the option of the institution, in accordance with regulations of the Secretary, that during the repayment period of the loan, payments of principal and interest
by the borrower with respect to all outstanding loans made to
the student from a student loan fund assisted under this part
shall be at a rate equal to not less than $40 per month, except
that the institution may, subject to such regulations, permit a
borrower to pay less than $40 per month for a period of not
more than one year where necessary to avoid hardship to the
borrower, but without extending the 10-year maximum repayment period provided for in subparagraph (A) of this paragraph; and
(ii) may provide that the total payments by a borrower for
a monthly or similar payment period with respect to the aggregate of all loans held by the institution may, when the amount
of a monthly or other similar payment is not a multiple of $5,
be rounded to the next highest whole dollar amount that is a
multiple of $5;
(D) shall provide that the loan shall bear interest, on the
unpaid balance of the loan, at the rate of 5 percent per year
in the case of any loan made on or after October 1, 1981, except that no interest shall accrue (i) prior to the beginning date
of repayment determined under paragraph (2)(A)(i), or (ii) during any period in which repayment is suspended by reason of
paragraph (2);
(E) shall provide that the loan shall be made without security and without endorsement;
(F) shall provide that the liability to repay the loan shall
be cancelled—
(i) 1 upon the death of the borrower;
(ii) 1 if the borrower becomes permanently and totally disabled as determined in accordance with regulations of the Secretary;
(iii) 1 if the borrower is unable to engage in any
substantial gainful activity by reason of any medically
determinable physical or mental impairment that can
be expected to result in death, has lasted for a continuous period of not less than 60 months, or can be expected to last for a continuous period of not less than
60 months; or
1 Margin
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(iv) 1 if the borrower is determined by the Secretary of Veterans Affairs to be unemployable due to
a service-connected disability;
(G) shall provide that no note or evidence of obligation
may be assigned by the lender, except upon the transfer of the
borrower to another institution participating under this part
(or, if not so participating, is eligible to do so and is approved
by the Secretary for such purpose), to such institution, and except as necessary to carry out section 463(a)(6);
(H) pursuant to regulations of the Secretary, shall provide
for an assessment of a charge with respect to the loan for failure of the borrower to pay all or part of an installment when
due, which shall include the expenses reasonably incurred in
attempting collection of the loan, to the extent permitted by
the Secretary, except that no charge imposed under this subparagraph shall exceed 20 percent of the amount of the monthly payment of the borrower; and
(I) shall contain a notice of the system of disclosure of information concerning default on such loan to consumer reporting agencies under section 463(c).
(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—
(I) is pursuing at least a half-time course of study as
determined by an eligible institution; or
(II) is pursuing a course of study pursuant to a graduate fellowship program approved by the Secretary, or
pursuant to a rehabilitation training program for disabled
individuals approved by the Secretary,
except that no borrower shall be eligible for a deferment under
this clause, or loan made under this part while serving in a
medical internship or residency program;
(ii) not in excess of 3 years during which the borrower is
seeking and unable to find full-time employment;
(iii) 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,
and for the 180-day period following the demobilization date
for the service described in subclause (I) or (II);
(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
(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).
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(B) No repayment of principal of, or interest on, any loan for
any period described in subparagraph (A) shall begin until 6
months after the completion of such period.
(C) An individual with an outstanding loan balance who meets
the eligibility criteria for a deferment described in subparagraph
(A) as in effect on the date of enactment of this subparagraph shall
be eligible for deferment under this paragraph notwithstanding any
contrary provision of the promissory note under which the loan or
loans were made, and notwithstanding any amendment (or effective date provision relating to any amendment) to this section
made prior to the date of such deferment.
(3)(A) The Secretary is authorized, when good cause is shown,
to extend, in accordance with regulations, the 10-year maximum repayment period provided for in subparagraph (A) of paragraph (1)
with respect to individual loans.
(B) Pursuant to uniform criteria established by the Secretary,
the repayment period for any student borrower who during the repayment period is a low-income individual may be extended for a
period not to exceed 10 years and the repayment schedule may be
adjusted to reflect the income of that individual.
(4) The repayment period for a loan made under this part shall
begin on the day immediately following the expiration of the period, specified in paragraph (1)(A), after the student ceases to carry
the required academic workload, unless the borrower requests and
is granted a repayment schedule that provides for repayment to
commence at an earlier point in time, and shall exclude any period
of authorized deferment, forbearance, or cancellation.
(5) The institution may elect—
(A) to add the amount of any charge imposed under paragraph (1)(H) to the principal amount of the loan as of the first
day after the day on which the installment was due and to notify the borrower of the assessment of the charge; or
(B) to make the amount of the charge payable to the institution not later than the due date of the next installment.
(6) Requests for deferment of repayment of loans under this
part by students engaged in graduate or post-graduate fellowshipsupported study (such as pursuant to a Fulbright grant) outside
the United States shall be approved until completion of the period
of the fellowship.
(7) There shall be excluded from the 9-month period that begins on the date on which a student ceases to carry at least onehalf the normal full-time academic workload (as described in paragraph (1)(A)) any period not to exceed 3 years during which a borrower who is a member of a reserve component of the Armed
Forces named in section 10101 of title 10, United States Code, is
called or ordered to active duty for a period of more than 30 days
(as defined in section 101(d)(2) of such title). Such period of exclusion shall include the period necessary to resume enrollment at the
borrower’s next available regular enrollment period.
(d) AVAILABILITY OF LOAN FUND TO ALL ELIGIBLE STUDENTS.—
An agreement under this part for payment of Federal capital contributions shall include provisions designed to make loans from the
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ably available (to the extent of the available funds in such fund)
to all eligible students in such institutions in need thereof.
(e) FORBEARANCE.—(1) The Secretary shall ensure that, as documented in accordance with paragraph (2), 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—
(A) the borrower’s debt burden equals or exceeds 20 percent of such borrower’s gross income;
(B) the institution determines that the borrower should
qualify for forbearance for other reasons; or
(C) the borrower is eligible for interest payments to be
made on such loan for service in the Armed Forces under section 2174 of title 10, United States Code, and, pursuant to that
eligibility, the interest on such loan is being paid under subsection (j), except that the form of a forbearance under this
paragraph shall be a temporary cessation of all payments on
the loan other than payments of interest on the loan that are
made under subsection (j).
(2) For the purpose of paragraph (1), the terms of forbearance
agreed to by the parties shall be documented by—
(A) confirming the agreement of the borrower by notice to
the borrower from the institution of higher education; and
(B) recording the terms in the borrower’s file.
(f) SPECIAL REPAYMENT RULE AUTHORITY.—(1) Subject to such
restrictions as the Secretary may prescribe to protect the interest
of the United States, in order to encourage repayment of loans
made under this part which are in default, the Secretary may, in
the agreement entered into under this part, authorize an institution of higher education to compromise on the repayment of such
defaulted loans in accordance with paragraph (2). The Federal
share of the compromise repayment shall bear the same relation to
the institution’s share of such compromise repayment as the Federal capital contribution to the institution’s loan fund under this
part bears to the institution’s capital contribution to such fund.
(2) No compromise repayment of a defaulted loan as authorized
by paragraph (1) may be made unless the student borrower pays—
(A) 90 percent of the loan under this part;
(B) the interest due on such loan; and
(C) any collection fees due on such loan;
in a lump sum payment.
(g) DISCHARGE.—
(1) IN GENERAL.—If a student borrower who received a
loan made under this part on or after January 1, 1986, is unable to complete the program in which such student is enrolled
due to the closure of the institution, then the Secretary shall
discharge the borrower’s liability on the loan (including the interest and collection fees) and shall subsequently pursue any
claim available to such borrower against the institution and
the institution’s affiliates and principals, or settle the loan obligation pursuant to the financial responsibility standards described in section 498(c).
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(2) ASSIGNMENT.—A borrower whose loan has been discharged pursuant to this subsection shall be deemed to have
assigned to the United States the right to a loan refund in an
amount that does not exceed the amount discharged against
the institution and the institution’s affiliates and principals.
(3) ELIGIBILITY FOR ADDITIONAL ASSISTANCE.—The period
during which a student was unable to complete a course of
study due to the closing of the institution shall not be considered for purposes of calculating the student’s period of eligibility for additional assistance under this title.
(4) SPECIAL RULE.—A borrower whose loan has been discharged pursuant to this subsection shall not be precluded, because of that discharge, from receiving additional grant, loan,
or work assistance under this title for which the borrower
would be otherwise eligible (but for the default on the discharged loan). The amount discharged under this subsection
shall be treated as an amount canceled under section 465(a).
(5) REPORTING.—The Secretary or institution, as the case
may be, shall report to consumer reporting agencies with respect to loans that have been discharged pursuant to this subsection.
(h) REHABILITATION OF LOANS.—
(1) REHABILITATION.—
(A) IN GENERAL.—If the borrower of a loan made
under this part who has defaulted on the loan makes 9 ontime, consecutive, monthly payments of amounts owed on
the loan, as determined by the institution, or by the Secretary in the case of a loan held by the Secretary, the loan
shall be considered rehabilitated, and the institution that
made that loan (or the Secretary, in the case of a loan held
by the Secretary) shall request that any consumer reporting agency to which the default was reported remove the
default from the borrower’s credit history.
(B) COMPARABLE CONDITIONS.—As long as the borrower continues to make scheduled repayments on a loan
rehabilitated under this paragraph, the rehabilitated loan
shall be subject to the same terms and conditions, and
qualify for the same benefits and privileges, as other loans
made under this part.
(C) ADDITIONAL ASSISTANCE.—The borrower of a rehabilitated loan shall not be precluded by section 484 from
receiving additional grant, loan, or work assistance under
this title (for which the borrower is otherwise eligible) on
the basis of defaulting on the loan prior to such rehabilitation.
(D) LIMITATIONS.—A borrower only once may obtain
the benefit of this paragraph with respect to rehabilitating
a loan under this part.
(2) RESTORATION OF ELIGIBILITY.—If the borrower of a loan
made under this part who has defaulted on that loan makes
6 ontime, consecutive, monthly payments of amounts owed on
such loan, the borrower’s eligibility for grant, loan, or work assistance under this title shall be restored to the extent that the
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tain the benefit of this paragraph with respect to restored eligibility.
(i) INCENTIVE REPAYMENT PROGRAM.—
(1) IN GENERAL.—Each institution of higher education may
establish, with the approval of the Secretary, an incentive repayment program designed to reduce default and to replenish
student loan funds established under this part. Each such incentive repayment program may—
(A) offer a reduction of the interest rate on a loan on
which the borrower has made 48 consecutive, monthly repayments, but in no event may the rate be reduced by
more than 1 percent;
(B) provide for a discount on the balance owed on a
loan on which the borrower pays the principal and interest
in full prior to the end of the applicable repayment period,
but in no event may the discount exceed 5 percent of the
unpaid principal balance due on the loan at the time the
early repayment is made; and
(C) include such other incentive repayment options as
the institution determines will carry out the objectives of
this subsection.
(2) LIMITATION.—No incentive repayment option under an
incentive repayment program authorized by this subsection
may be paid for with Federal funds, including any Federal
funds from the student loan fund, or with institutional funds
from the student loan fund.
(j) ARMED FORCES STUDENT LOAN INTEREST PAYMENT PROGRAM.—
(1) AUTHORITY.—Using funds received by transfer to the
Secretary under section 2174 of title 10, United States Code,
for the payment of interest on a loan made under this part to
a member of the Armed Forces, the Secretary shall pay the interest on the loan as due for a period not in excess of 36 consecutive months. The Secretary may not pay interest on such
a loan out of any funds other than funds that have been so
transferred.
(2) FORBEARANCE.—During the period in which the Secretary is making payments on a loan under paragraph (1), the
institution of higher education shall grant the borrower forbearance in accordance with subsection (e)(1)(C).
(k) The Secretary may develop such additional safeguards as
the Secretary determines necessary to prevent fraud and abuse in
the cancellation of liability under subsection (c)(1)(F). Notwithstanding subsection (c)(1)(F), the Secretary may promulgate regulations to resume collection on loans cancelled under subsection
(c)(1)(F) in any case in which—
(1) a borrower received a cancellation of liability under
subsection (c)(1)(F) and after the cancellation the borrower—
(A) receives a loan made, insured, or guaranteed
under this title; or
(B) has earned income in excess of the poverty line; or
(2) the Secretary determines necessary.
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510
SEC. 465. ø20 U.S.C. 1087ee¿ CANCELLATION OF LOANS FOR CERTAIN
PUBLIC SERVICE.
(a) CANCELLATION OF PERCENTAGE OF DEBT BASED ON YEARS
OF QUALIFYING SERVICE.—(1) The percent specified in paragraph
(3) of this subsection of the total amount of any loan made after
June 30, 1972, from a student loan fund assisted under this part
shall be canceled for each complete year of service after such date
by the borrower under circumstances described in paragraph (2).
(2) Loans shall be canceled under paragraph (1) for service—
(A) as a full-time teacher for service in an academic year
(including such a teacher employed by an educational service
agency)—
(i) in a public or other nonprofit private elementary
school or secondary school, which, for the purpose of this
paragraph and for that year—
(I) has been determined by the Secretary (pursuant to regulations of the Secretary and after consultation with the State educational agency of the State in
which the school is located) to be a school in which the
number of children meeting a measure of poverty
under section 1113(a)(5) of the Elementary and Secondary Education Act of 1965, exceeds 30 percent of
the total number of children enrolled in such school;
and
(II) is in the school district of a local educational
agency which is eligible in such year for assistance
pursuant to part A of title I of the Elementary and
Secondary Education Act of 1965; or
(ii) in one or more public, or nonprofit private, elementary schools or secondary schools or locations operated by
an educational service agency that have been determined
by the Secretary (pursuant to regulations of the Secretary
and after consultation with the State educational agency of
the State in which the educational service agency operates) to be a school or location at which the number of children taught who meet a measure of poverty under section
1113(a)(5) of the Elementary and Secondary Education Act
of 1965, exceeds 30 percent of the total number of children
taught at such school or location;
(B) as a full-time staff member in a preschool program carried on under the 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;
(C) as a full-time special education teacher, including
teachers of infants, toddlers, children, or youth with disabilities in a public or other nonprofit elementary or secondary
school system, including a system administered by an educational service agency, or as a full-time qualified professional
provider of early intervention services in a public or other nonprofit program under public supervision by the lead agency as
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authorized in section 635(a)(10) of the Individuals with Disabilities Education Act;
(D) as a member of the Armed Forces of the United States,
for service that qualifies for special pay under section 310 of
title 37, United States Code, as an area of hostilities;
(E) as a volunteer under the Peace Corps Act or a volunteer under the Domestic Volunteer Service Act of 1973;
(F) as a full-time law enforcement officer or corrections officer for service to local, State, or Federal law enforcement or
corrections agencies, or as a full-time attorney employed in a
defender organization established in accordance withsection
3006A(g)(2)of title 18, United States Code;
(G) as a full-time teacher of mathematics, science, foreign
languages, bilingual education, or any other field of expertise
where the State educational agency determines there is a
shortage of qualified teachers;
(H) as a full-time nurse or medical technician providing
health care services;
(I) as a full-time employee of a public or private nonprofit
child or family service agency who is providing, or supervising
the provision of, services to high-risk children who are from
low-income communities and the families of such children;
(J) as a full-time fire fighter for service to a local, State,
or Federal fire department or fire district;
(K) as a full-time faculty member at a Tribal College or
University, as that term is defined in section 316;
(L) 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 part A of title I of the Elementary and Secondary Education Act of 1965; or
(ii) a public library that serves a geographic area that
contains one or more schools eligible for assistance under
part A of title I of the Elementary and Secondary Education Act of 1965; or
(M) as a full-time speech language pathologist, if the pathologist has a masters degree and is working exclusively with
schools that are eligible for assistance under title I of the Elementary and Secondary Education Act of 1965.
For the purpose of this paragraph, the term ‘‘children with disabilities’’ has the meaning set forth in section 602 of the Individuals
with Disabilities Education Act.
(3)(A) The percent of a loan which shall be canceled under
paragraph (1) of this subsection is—
(i) in the case of service described in subparagraph (A),
(C), (D), (F), (G), (H), (I), (J), (K), (L), or (M) of paragraph (2),
at the rate of 15 percent for the first or second year of such
service, 20 percent for the third or fourth year of such service,
and 30 percent for the fifth year of such service;
(ii) in the case of service described in subparagraph (B) of
paragraph (2), at the rate of 15 percent for each year of such
service; or
(iii) in the case of service described in subparagraph (E) of
paragraph (2) at the rate of 15 percent for the first or second
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year of such service and 20 percent for the third or fourth year
of such service.
(B) If a portion of a loan is canceled under this subsection for
any year, the entire amount of interest on such loan which accrues
for such year shall be canceled.
(C) Nothing in this subsection shall be construed to authorize
refunding of any repayment of a loan.
(4) For the purpose of this subsection, the term ‘‘year’’ where
applied to service as a teacher means academic year as defined by
the Secretary.
(5) The amount of a loan, and interest on a loan, which is canceled under this section shall not be considered income for purposes
of the Internal Revenue Code of 1986.
(6) No borrower may, for the same volunteer service, receive a
benefit under both this section and subtitle D of title I of the National and Community Service Act of 1990 (42 U.S.C. 12601 et
seq.).
(7) An individual with an outstanding loan obligation under
this part who performs service of any type that is described in
paragraph (2) as in effect on the date of enactment of this paragraph shall be eligible for cancellation under this section for such
service notwithstanding any contrary provision of the promissory
note under which the loan or loans were made, and notwithstanding any amendment (or effective date provision relating to
any amendment) to this section made prior to the date of such
service.
(b) REIMBURSEMENT FOR CANCELLATION.—The Secretary shall
pay to each institution for each fiscal year an amount equal to the
aggregate of the amounts of loans from its student loan fund which
are canceled pursuant to this section for such year, minus an
amount equal to the aggregate of the amounts of any such loans
so canceled which were made from Federal capital contributions to
its student loan fund provided by the Secretary under section 468.
None of the funds appropriated pursuant to section 461(b) shall be
available for payments pursuant to this subsection. To the extent
feasible, the Secretary shall pay the amounts for which any institution qualifies under this subsection not later than 3 months after
the institution files an institutional application for campus-based
funds.
(c) SPECIAL RULES.—
(1) LIST.—If the list of schools in which a teacher may perform service pursuant to subsection (a)(2)(A) is not available
before May 1 of any year, the Secretary may use the list for
the year preceding the year for which the determination is
made to make such service determination.
(2) CONTINUING ELIGIBILITY.—Any teacher who performs
service in a school which—
(A) meets the requirements of subsection (a)(2)(A) in
any year; and
(B) in a subsequent year fails to meet the requirements of such subsection,
may continue to teach in such school and shall be eligible for
loan cancellation pursuant to subsection (a)(1) such subsequent
years.
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HIGHER EDUCATION ACT OF 1965
Sec. 466
SEC. 466. ø20 U.S.C. 1087ff¿ DISTRIBUTION OF ASSETS FROM STUDENT
LOAN FUNDS.
(a) IN GENERAL.—After September 30, 2003, and not later than
March 31, 2004, there shall be a capital distribution of the balance
of the student loan fund established under this part by each institution of higher education as follows:
(1) The Secretary shall first be paid an amount which
bears the same ratio to the balance in such fund at the close
of September 30, 2003, as the total amount of the Federal capital contributions to such fund by the Secretary under this part
bears to the sum of such Federal contributions and the institution’s capital contributions to such fund.
(2) The remainder of such balance shall be paid to the institution.
(b) DISTRIBUTION OF LATE COLLECTIONS.—After October 1,
2012, each institution with which the Secretary has made an agreement under this part, shall pay to the Secretary the same proportionate share of amounts received by this institution after September 30, 2003, in payment of principal and interest on student
loans made from the student loan fund established pursuant to
such agreement (which amount shall be determined after deduction
of any costs of litigation incurred in collection of the principal or
interest on loans from the fund and not already reimbursed from
the fund or from such payments of principal or interest), as was determined for the Secretary under subsection (a).
(c) DISTRIBUTION OF EXCESS CAPITAL.—(1) Upon a finding by
the institution or the Secretary prior to October 1, 2004, that the
liquid assets of a student loan fund established pursuant to an
agreement under this part exceed the amount required for loans or
otherwise in the foreseeable future, and upon notice to such institution or to the Secretary, as the case may be, there shall be, subject
to such limitations as may be included in regulations of the Secretary or in such agreement, a capital distribution from such fund.
Such capital distribution shall be made as follows:
(A) The Secretary shall first be paid an amount which
bears the same ratio to the total to be distributed as the Federal capital contributions by the Secretary to the student loan
fund prior to such distribution bear to the sum of such Federal
capital contributions and the capital contributions to the fund
made by the institution.
(B) The remainder of the capital distribution shall be paid
to the institution.
(2) No finding that the liquid assets of a student loan fund established under this part exceed the amount required under paragraph (1) may be made prior to a date which is 2 years after the
date on which the institution of higher education received the
funds from such institution’s allocation under section 462.
SEC. 467. ø20 U.S.C. 1087gg¿ COLLECTION OF DEFAULTED LOANS: PERKINS LOAN REVOLVING FUND.
(a) AUTHORITY OF SECRETARY TO COLLECT REFERRED, TRANSFERRED, OR ASSIGNED LOANS.—With respect to any loan—
(1) which was made under this part, and
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HIGHER EDUCATION ACT OF 1965
514
(2) which is referred, transferred, or assigned to the Secretary by an institution with an agreement under section
463(a),
the Secretary is authorized to attempt to collect such loan by any
means authorized by law for collecting claims of the United States
(including referral to the Attorney General for litigation) and under
such terms and conditions as the Secretary may prescribe, including reimbursement for expenses reasonably incurred in attempting
such collection.
(b) COLLECTION OF REFERRED, TRANSFERRED, OR ASSIGNED
LOANS.—The Secretary shall continue to attempt to collect any loan
referred, transferred, or assigned under paragraph (4) or (5) of section 463(a) until all appropriate collection efforts, as determined by
the Secretary, have been expended.
SEC. 468. ø20 U.S.C. 1087hh¿ GENERAL AUTHORITY OF SECRETARY.
In carrying out the provisions of this part, the Secretary is authorized—
(1) to consent to modification, with respect to rate of interest, time of payment of any installment of principal and interest or any portion thereof, or any other provision of any note
evidencing a loan which has been made under this part;
(2) to enforce, pay, compromise, waive, or release any
right, title, claim, lien, or demand, however acquired, including
any equity or any right of redemption;
(3) to conduct litigation in accordance with the provisions
of section 432(a)(2); and
(4) to enter into a contract or other arrangement with
State or nonprofit agencies and, on a competitive basis, with
collection agencies for servicing and collection of loans under
this part.
SEC. 469. ø20 U.S.C. 1087ii¿ DEFINITIONS.
(a) LOW-INCOME COMMUNITIES.—For
the purpose of this part,
the term ‘‘low-income communities’’ means communities in which
there is a high concentration of children eligible to be counted
under title I of the Elementary and Secondary Education Act of
1965.
(b) HIGH-RISK CHILDREN.—For the purposes of this part, the
term ‘‘high-risk children’’ means individuals under the age of 21
who are low-income or at risk of abuse or neglect, have been
abused or neglected, have serious emotional, mental, or behavioral
disturbances, reside in placements outside their homes, or are involved in the juvenile justice system.
(c) INFANTS, TODDLERS, CHILDREN, AND YOUTH WITH DISABILITIES.—For purposes of this part, the term ‘‘infants, toddlers, children, and youth with disabilities’’ means children with disabilities
and infants and toddlers with disabilities as defined in sections 602
and 632, respectively, of the Individuals with Disabilities Education Act, and the term ‘‘early intervention services’’ has the
meaning given the term in section 632 of such Act.
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HIGHER EDUCATION ACT OF 1965
Sec. 472
PART F—NEED ANALYSIS
SEC. 471. ø20 U.S.C. 1087kk¿ AMOUNT OF NEED.
Except as otherwise provided therein, the amount of need of
any student for financial assistance under this title (except subparts 1 or 2 of part A) is equal to—
(1) the cost of attendance of such student, minus
(2) the expected family contribution for such student,
minus
(3) estimated financial assistance not received under this
title (as defined in section 480(j)).
SEC. 472. ø20 U.S.C. 1087ll¿ COST OF ATTENDANCE.
For the purpose of this title, the term ‘‘cost of attendance’’
means—
(1) tuition and fees normally assessed a student carrying
the same academic workload as determined by the institution,
and including costs for rental or purchase of any equipment,
materials, or supplies required of all students in the same
course of study;
(2) an allowance for books, supplies, transportation, and
miscellaneous personal expenses, including a reasonable allowance for the documented rental or purchase of a personal computer, for a student attending the institution on at least a halftime basis, as determined by the institution;
(3) an allowance (as determined by the institution) for
room and board costs incurred by the student which—
(A) shall be an allowance determined by the institution for a student without dependents residing at home
with parents;
(B) for students without dependents residing in institutionally owned or operated housing, shall be a standard
allowance determined by the institution based on the
amount normally assessed most of its residents for room
and board;
(C) for students who live in housing located on a military base or for which a basic allowance is provided under
section 403(b) of title 37, United States Code, shall be an
allowance based on the expenses reasonably incurred by
such students for board but not for room; and
(D) for all other students shall be an allowance based
on the expenses reasonably incurred by such students for
room and board;
(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
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516
more than 2 semesters or the equivalent may be consecutive;
(5) for a student engaged in a program of study by correspondence, only tuition and fees and, if required, books and
supplies, travel, and room and board costs incurred specifically
in fulfilling a required period of residential training;
(6) for incarcerated students only tuition and fees and, if
required, books and supplies;
(7) for a student enrolled in an academic program in a program of study abroad approved for credit by the student’s
home institution, reasonable costs associated with such study
(as determined by the institution at which such student is enrolled);
(8) for a student with one or more dependents, an allowance based on the estimated actual expenses incurred for such
dependent care, based on the number and age of such dependents, except that—
(A) such allowance shall not exceed the reasonable
cost in the community in which such student resides for
the kind of care provided; and
(B) the period for which dependent care is required includes, but is not limited to, class-time, study-time, field
work, internships, and commuting time;
(9) for a student with a disability, an allowance (as determined by the institution) for those expenses related to the student’s disability, including special services, personal assistance,
transportation, equipment, and supplies that are reasonably
incurred and not provided for by other assisting agencies;
(10) for a student receiving all or part of the student’s instruction by means of telecommunications technology, no distinction shall be made with respect to the mode of instruction
in determining costs;
(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);
(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 of 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 onetime cost of obtaining the first professional credentials (as determined by the institution).
SEC. 473. ø20 U.S.C. 1087mm¿ FAMILY CONTRIBUTION.
(a) IN GENERAL.—For the purpose of this title,
other than subpart 2 of part A, and except as provided in subsection (b), the term
‘‘family contribution’’ with respect to any student means the
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HIGHER EDUCATION ACT OF 1965
Sec. 474
amount which the student and the student’s family may be reasonably expected to contribute toward the student’s postsecondary education for the academic year for which the determination is made,
as determined in accordance with this part.
(b) SPECIAL RULE.—
(1) IN GENERAL.—Notwithstanding any other provision of
this title, the family contribution of each student described in
paragraph (2) shall be deemed to be zero for the academic year
for which the determination is made.
(2) APPLICABILITY.—Paragraph (1) shall apply to any dependent or independent student with respect to determinations
of need for academic year 2009–2010 and succeeding academic
years—
(A) who is eligible to receive a Federal Pell Grant for
the academic year for which the determination is made;
(B) whose parent or guardian was a member of the
Armed Forces of the United States and died as a result of
performing military service in Iraq or Afghanistan after
September 11, 2001; and
(C) who, at the time of the parent or guardian’s death,
was—
(i) less than 24 years of age; or
(ii) enrolled at an institution of higher education
on a part-time or full-time basis.
(3) INFORMATION.—Notwithstanding any other provision of
law, the Secretary of Veterans Affairs and the Secretary of Defense, as appropriate, shall provide the Secretary of Education
with information necessary to determine which students meet
the requirements of paragraph (2).
SEC. 474. ø20 U.S.C. 1087nn¿ DETERMINATION OF EXPECTED FAMILY
CONTRIBUTION; DATA ELEMENTS.
(a) GENERAL RULE FOR DETERMINATION OF EXPECTED FAMILY
CONTRIBUTION.—The expected family contribution—
(1) for a dependent student shall be determined in accordance with section 475;
(2) for a single independent student or a married independent student without dependents (other than a spouse)
shall be determined in accordance with section 476; and
(3) for an independent student with dependents other than
a spouse shall be determined in accordance with section 477.
(b) DATA ELEMENTS.—The following data elements are considered in determining the expected family contribution:
(1) the available income of (A) the student and the student’s spouse, or (B) the student and the student’s parents, in
the case of a dependent student;
(2) the number of dependents in the family of the student;
(3) the number of dependents in the family of the student,
excluding the student’s parents, who are enrolled or accepted
for enrollment, on at least a half-time basis, in a degree, certificate, or other program leading to a recognized educational
credential at an institution of higher education that is an eligible institution in accordance with the provisions of section 487
and for whom the family may reasonably be expected to contribute to their postsecondary education;
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Sec. 475
HIGHER EDUCATION ACT OF 1965
518
(4) the net assets of (A) the student and the student’s
spouse, and (B) the student and the student’s parents, in the
case of a dependent student;
(5) the marital status of the student;
(6) the age of the older parent, in the case of a dependent
student, and the student; and
(7) the additional expenses incurred (A) in the case of a dependent student, when both parents of the student are employed or when the family is headed by a single parent who is
employed, or (B) in the case of an independent student, when
the student is married and the student’s spouse is employed,
or when the employed student qualifies as a surviving spouse
or as a head of a household under section 2 of the Internal
Revenue Code of 1986.
SEC. 475. ø20 U.S.C. 1087oo¿ FAMILY CONTRIBUTION FOR DEPENDENT
STUDENTS.
(a) COMPUTATION OF EXPECTED FAMILY CONTRIBUTION.—For
each dependent student, the expected family contribution is equal
to the sum of—
(1) the parents’ contribution from adjusted available income (determined in accordance with subsection (b));
(2) the student contribution from available income (determined in accordance with subsection (g)); and
(3) the student contribution from assets (determined in accordance with subsection (h)).
(b) PARENTS’ CONTRIBUTION FROM ADJUSTED AVAILABLE INCOME.—The parents’ contribution from adjusted available income is
equal to the amount determined by—
(1) computing adjusted available income by adding—
(A) the parents’ available income (determined in accordance with subsection (c)); and
(B) the parents’ contribution from assets (determined
in accordance with subsection (d));
(2) assessing such adjusted available income in accordance
with the assessment schedule set forth in subsection (e); and
(3) dividing the assessment resulting under paragraph (2)
by the number of the family members, excluding the student’s
parents, who are enrolled or accepted for enrollment, on at
least a half-time basis, in a degree, certificate, or other program leading to a recognized educational credential at an institution of higher education that is an eligible institution in accordance with the provisions of section 487 during the award
period for which assistance under this title is requested;
except that the amount determined under this subsection shall not
be less than zero.
(c) PARENTS’ AVAILABLE INCOME.—
(1) IN GENERAL.—The parents’ available income is determined by deducting from total income (as defined in section
480)—
(A) Federal income taxes;
(B) an allowance for State and other taxes, determined
in accordance with paragraph (2);
(C) an allowance for social security taxes, determined
in accordance with paragraph (3);
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519
HIGHER EDUCATION ACT OF 1965
Sec. 475
(D) an income protection allowance, determined in accordance with paragraph (4);
(E) an employment expense allowance, determined in
accordance with paragraph (5); and
(F) the amount of any tax credit taken by the parents
under section 25A of the Internal Revenue Code of 1986.
(2) ALLOWANCE FOR STATE AND OTHER TAXES.—The allowance for State and other taxes is equal to an amount determined by multiplying total income (as defined in section 480)
by a percentage determined according to the following table (or
a successor table prescribed by the Secretary under section
478):
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Sec. 475
HIGHER EDUCATION ACT OF 1965
520
Percentages for Computation of State and Other Tax Allowance
And parents’ total
income is—
If parents’ State or territory of residence is—
less than
$15,000
or
$15,000
or more
then the percentage
is—
Alaska, Puerto Rico, Wyoming ..................................................
American Samoa, Guam, Louisiana, Nevada, Texas, Trust
Territory, Virgin Islands ........................................................
Florida, South Dakota, Tennessee, New Mexico ......................
North Dakota, Washington ........................................................
Alabama, Arizona, Arkansas, Indiana, Mississippi, Missouri,
Montana, New Hampshire, Oklahoma, West Virginia ........
Colorado, Connecticut, Georgia, Illinois, Kansas, Kentucky ...
California, Delaware, Idaho, Iowa, Nebraska, North Carolina, Ohio, Pennsylvania, South Carolina, Utah, Vermont,
Virginia, Canada, Mexico .......................................................
Maine, New Jersey .....................................................................
District of Columbia, Hawaii, Maryland, Massachusetts, Oregon, Rhode Island ..................................................................
Michigan, Minnesota ..................................................................
Wisconsin ....................................................................................
New York .....................................................................................
Other ............................................................................................
3
2
4
5
6
3
4
5
7
8
6
7
9
10
8
9
11
12
13
14
9
10
11
12
13
8
(3) ALLOWANCE FOR SOCIAL SECURITY TAXES.—The allowance for social security taxes is equal to the amount earned by
each parent multiplied by the social security withholding rate
appropriate to the tax year of the earnings, up to the maximum statutory social security tax withholding amount for that
same tax year.
(4) INCOME PROTECTION ALLOWANCE.—The income protection allowance is determined by the following table (or a successor table prescribed by the Secretary under section 478):
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521
HIGHER EDUCATION ACT OF 1965
Sec. 475
Income Protection Allowance
Family Size
Number in College
(including student)
1
2
3
2
3
4
5
6
$10,520
13,100
16,180
19,090
22,330
$8,720
11,310
14,380
17,290
20,530
$9,510
12,590
15,500
18,740
$10,790
13,700
16,940
$11,910
15,150
2,520
2,520
2,520
2,520
2,520
For each
additional
add:
4
5
For
each
additional
subtract:
$1,790
(5) EMPLOYMENT EXPENSE ALLOWANCE.—The employment
expense allowance is determined as follows (or using a successor provision prescribed by the Secretary under section
478):
(A) If both parents were employed in the year for
which their income is reported and both have their incomes reported in determining the expected family contribution, such allowance is equal to the lesser of $2,500
or 35 percent of the earned income of the parent with the
lesser earned income.
(B) If a parent qualifies as a surviving spouse or as a
head of household as defined in section 2 of the Internal
Revenue Code of 1986, such allowance is equal to the lesser of $2,500 or 35 percent of such parent’s earned income.
(d) PARENTS’ CONTRIBUTION FROM ASSETS.—
(1) IN GENERAL.—The parents’ contribution from assets is
equal to—
(A) the parental net worth (determined in accordance
with paragraph (2)); minus
(B) the education savings and asset protection allowance (determined in accordance with paragraph (3)); multiplied by
(C) the asset conversion rate (determined in accordance with paragraph (4)), except that the result shall not
be less than zero.
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Sec. 475
HIGHER EDUCATION ACT OF 1965
522
(2) PARENTAL NET WORTH.—The parental net worth is calculated by adding—
(A) the current balance of checking and savings accounts and cash on hand;
(B) the net value of investments and real estate, excluding the net value of the principal place of residence;
and
(C) the adjusted net worth of a business or farm, computed on the basis of the net worth of such business or
farm (hereafter in this subsection referred to as ‘‘NW’’), determined in accordance with the following table (or a successor table prescribed by the Secretary under section
478), except as provided under section 480(f):
Adjusted Net Worth of a Business or Farm
If the net worth of a business or farm
is—
Then the adjusted net worth is:
Less than $1 ..............................................
$1–$75,000 .................................................
$75,001–$225,000 ......................................
$0
40 percent of NW
$30,000 plus 50 percent of NW over
$75,000
$105,000 plus 60 percent of NW over
$225,000
$195,000 plus 100 percent of NW over
$375,000
$225,001–$375,000 ....................................
$375,001 or more .......................................
(3) EDUCATION SAVINGS AND ASSET PROTECTION ALLOWANCE.—The education savings and asset protection allowance
is calculated according to the following table (or a successor
table prescribed by the Secretary under section 478):
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523
HIGHER EDUCATION ACT OF 1965
Sec. 475
Education Savings and Asset Protection Allowances for Families and Students
And there are
If the age of the oldest parent is—
two parents
one parent
then the allowance is—
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
or less ....................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
................................................................................
or more ..................................................................
$ 0
2,200
4,300
6,500
8,600
10,800
13,000
15,100
17,300
19,400
21,600
23,800
25,900
28,100
30,200
32,400
33,300
34,100
35,000
35,700
36,600
37,600
38,800
39,800
40,800
41,800
43,200
44,300
45,700
47,100
48,300
49,800
51,300
52,900
54,800
56,500
58,500
60,300
62,400
64,600
66,800
$0
1,600
3,200
4,700
6,300
7,900
9,500
11,100
12,600
14,200
15,800
17,400
19,000
20,500
22,100
23,700
24,100
24,700
25,200
25,800
26,300
26,900
27,600
28,200
28,800
29,500
30,200
31,100
31,800
32,600
33,400
34,400
35,200
36,200
37,200
38,100
39,200
40,300
41,500
42,800
44,000
(4) ASSET CONVERSION RATE.—The asset conversion rate is
12 percent.
(e) ASSESSMENT SCHEDULE.—The adjusted available income (as
determined under subsection (b)(1) and hereafter in this subsection
referred to as ‘‘AAI’’) is assessed according to the following table (or
a successor table prescribed by the Secretary under section 478):
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Sec. 475
HIGHER EDUCATION ACT OF 1965
524
Parents’ Assessment From Adjusted Available Income (AAI)
If AAI is—
Less than ¥$3,409 ....................................
¥$3,409 to $9,400 .....................................
$9,401 to $11,800 ......................................
$11,801 to $14,200 ....................................
$14,201 to $16,600 ....................................
$16,601 to $19,000 ....................................
$19,001 or more .........................................
Then the assessment is—
¥$750
22% of AAI
$2,068 + 25%
$2,668 + 29%
$3,364 + 34%
$4,180 + 40%
$5,140 + 47%
of
of
of
of
of
AAI
AAI
AAI
AAI
AAI
over
over
over
over
over
$9,400
$11,800
$14,200
$16,600
$19,000
(f) COMPUTATIONS IN CASE OF SEPARATION, DIVORCE,
RIAGE, OR DEATH.—
(1) DIVORCED OR SEPARATED PARENTS.—Parental
REMAR-
income
and assets for a student whose parents are divorced or separated is determined under the following procedures:
(A) Include only the income and assets of the parent
with whom the student resided for the greater portion of
the 12-month period preceding the date of the application.
(B) If the preceding criterion does not apply, include
only the income and assets of the parent who provided the
greater portion of the student’s support for the 12-month
period preceding the date of application.
(C) If neither of the preceding criteria apply, include
only the income and assets of the parent who provided the
greater support during the most recent calendar year for
which parental support was provided.
(2) DEATH OF A PARENT.—Parental income and assets in
the case of the death of any parent is determined as follows:
(A) If either of the parents has died, the student shall
include only the income and assets of the surviving parent.
(B) If both parents have died, the student shall not report any parental income or assets.
(3) REMARRIED PARENTS.—If a parent whose income and
assets are taken into account under paragraph (1) of this subsection, or if a parent who is a widow or widower and whose
income is taken into account under paragraph (2) of this subsection, has remarried, the income of that parent’s spouse shall
be included in determining the parent’s adjusted available income only if—
(A) the student’s parent and the stepparent are married as of the date of application for the award year concerned; and
(B) the student is not an independent student.
(g) STUDENT CONTRIBUTION FROM AVAILABLE INCOME.—
(1) IN GENERAL.—The student contribution from available
income is equal to—
(A) the student’s total income (determined in accordance with section 480); minus
(B) the adjustment to student income (determined in
accordance with paragraph (2)); multiplied by
May 7, 2013
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HIGHER EDUCATION ACT OF 1965
Sec. 475
(C) the assessment rate as determined in paragraph
(5);
except that the amount determined under this subsection shall
not be less than zero.
(2) ADJUSTMENT TO STUDENT INCOME.—The adjustment to
student income is equal to the sum of—
(A) Federal income taxes of the student;
(B) an allowance for State and other income taxes (determined in accordance with paragraph (3));
(C) an allowance for social security taxes determined
in accordance with paragraph (4);
(D) an income protection allowance of the following
amount (or a successor amount prescribed by the Secretary
under section 478)—
(i) for academic year 2009–2010, $3,750;
(ii) for academic year 2010–2011, $4,500;
(iii) for academic year 2011–2012, $5,250; and
(iv) for academic year 2012–2013, $6,000;
(E) the amount of any tax credit taken by the student
under section 25A of the Internal Revenue Code of 1986;
and
(F) an allowance for parents’ negative available income, determined in accordance with paragraph (6).
(3) ALLOWANCE FOR STATE AND OTHER INCOME TAXES.—The
allowance for State and other income taxes is equal to an
amount determined by multiplying total income (as defined in
section 480) by a percentage determined according to the following table (or a successor table prescribed by the Secretary
under section 478):
Percentages for Computation of State and Other Tax Allowance
If the students’ State or territory of residence is—
Alaska, American Samoa, Florida, Guam, Nevada, South Dakota, Tennessee, Texas, Trust Territory, Virgin Islands, Washington, Wyoming
Connecticut, Louisiana, Puerto Rico .............................................................
Arizona, New Hampshire, New Mexico, North Dakota ...............................
Alabama, Colorado, Illinois, Indiana, Kansas, Mississippi, Missouri,
Montana, Nebraska, New Jersey, Oklahoma ...........................................
Arkansas, Georgia, Iowa, Kentucky, Maine, Pennsylvania, Utah,
Vermont, Virginia, West Virginia, Canada, Mexico .................................
California, Idaho, Massachusetts, North Carolina, Ohio, Rhode Island,
South Carolina ............................................................................................
Hawaii, Maryland, Michigan, Wisconsin ......................................................
Delaware, District of Columbia, Minnesota, Oregon ...................................
New York ........................................................................................................
Other ...............................................................................................................
The percentage
is—
0
1
2
3
4
5
6
7
8
4
(4) ALLOWANCE FOR SOCIAL SECURITY TAXES.—The allowance for social security taxes is equal to the amount earned by
the student multiplied by the social security withholding rate
appropriate to the tax year of the earnings, up to the maxMay 7, 2013
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Sec. 475
HIGHER EDUCATION ACT OF 1965
526
imum statutory social security tax withholding amount for that
same tax year.
(5) The student’s available income (determined in accordance with paragraph (1) of this subsection) is assessed at 50
percent.
(6) ALLOWANCE FOR PARENTS’ NEGATIVE AVAILABLE INCOME.—The allowance for parents’ negative available income is
the amount, if any, by which the sum of the amounts deducted
under subparagraphs (A) through (F) of subsection (c)(1) exceeds the sum of the parents’ total income (as defined in section 480) and the parents’ contribution from assets (as determined in accordance with subsection (d)).
(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 20 percent, except
that the result shall not be less than zero.
(i) ADJUSTMENTS TO PARENTS’ CONTRIBUTION FOR ENROLLMENT
PERIODS OTHER THAN 9 MONTHS FOR PURPOSES OTHER THAN SUBPART 2 OF PART A OF THIS TITLE.—For periods of enrollment other
than 9 months, the parents’ contribution from adjusted available
income (as determined under subsection (b)) is determined as follows for purposes other than subpart 2 of part A of this title:
(1) For periods of enrollment less than 9 months, the parents’ contribution from adjusted available income is divided by
9 and the result multiplied by the number of months enrolled.
(2) For periods of enrollment greater than 9 months—
(A) the parents’ adjusted available income (determined
in accordance with subsection (b)(1)) is increased by the
difference between the income protection allowance (determined in accordance with subsection (c)(4)) for a family of
four and a family of five, each with one child in college;
(B) the resulting revised parents’ adjusted available
income is assessed according to subsection (e) and adjusted
according to subsection (b)(3) to determine a revised parents’ contribution from adjusted available income;
(C) the original parents’ contribution from adjusted
available income is subtracted from the revised parents’
contribution from adjusted available income, and the result is divided by 12 to determine the monthly adjustment
amount; and
(D) the original parents’ contribution from adjusted
available income is increased by the product of the monthly adjustment amount multiplied by the number of months
greater than 9 for which the student will be enrolled.
( j) ADJUSTMENTS TO STUDENT’S CONTRIBUTION FOR ENROLLMENT PERIODS OF LESS THAN NINE MONTHS.—For periods of enrollment of less than 9 months, the student’s contribution from adjusted available income (as determined under subsection (g)) is determined, for purposes other than subpart 2 of part A, by dividing
the amount determined under such subsection by 9, and multiplying the result by the number of months in the period of enrollment.
May 7, 2013
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HIGHER EDUCATION ACT OF 1965
Sec. 476
SEC. 476. ø20 U.S.C. 1087pp¿ FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS WITHOUT DEPENDENTS OTHER
THAN A SPOUSE.
(a) COMPUTATION OF EXPECTED FAMILY CONTRIBUTION.—For
each independent student without dependents other than a spouse,
the expected family contribution is determined by—
(1) adding—
(A) the family’s contribution from available income
(determined in accordance with subsection (b)); and
(B) the family’s contribution from assets (determined
in accordance with subsection (c));
(2) dividing the sum resulting under paragraph (1) by the
number of students who are enrolled or accepted for enrollment, on at least a half-time basis, in a degree, certificate, or
other program leading to a recognized educational credential at
an institution of higher education that is an eligible institution
in accordance with the provisions of section 487 during the
award period for which assistance under this title is requested;
and
(3) for periods of enrollment of less than 9 months, for purposes other than subpart 2 of part A—
(A) dividing the quotient resulting under paragraph
(2) by 9; and
(B) multiplying the result by the number of months in
the period of enrollment;
except that the amount determined under this subsection shall not
be less than zero.
(b) FAMILY’S CONTRIBUTION FROM AVAILABLE INCOME.—
(1) IN GENERAL.—The family’s contribution from income is
determined by—
(A) deducting from total income (as defined in section
480)—
(i) Federal income taxes;
(ii) an allowance for State and other taxes, determined in accordance with paragraph (2);
(iii) an allowance for social security taxes, determined in accordance with paragraph (3);
(iv) an income protection allowance of the following amount (or a successor amount prescribed by
the Secretary under section 478)—
(I) for single or separated students, or married students where both are enrolled pursuant to
subsection (a)(2)—
(aa) for academic year 2009–2010, $7,000;
(bb) for academic year 2010–2011, $7,780;
(cc) for academic year 2011–2012, $8,550;
and
(dd) for academic year 2012–2013, $9,330;
and
(II) for married students where 1 is enrolled
pursuant to subsection (a)(2)—
(aa) for academic year 2009–2010,
$11,220;
May 7, 2013
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HIGHER EDUCATION ACT OF 1965
528
(bb) for academic year 2010–2011,
$12,460;
(cc) for academic year 2011–2012,
$13,710; and
(dd) for academic year 2012–2013,
$14,960;
(v) in the case where a spouse is present, an employment expense allowance, as determined in accordance with paragraph (4); and
(vi) the amount of any tax credit taken under section 25A of the Internal Revenue Code of 1986; and
(B) assessing such available income in accordance with
paragraph (5).
(2) ALLOWANCE FOR STATE AND OTHER TAXES.—The allowance for State and other taxes is equal to an amount determined by multiplying total income (as defined in section 480)
by a percentage determined according to the following table (or
a successor table prescribed by the Secretary under section
478):
Percentages for Computation of State and Other Tax Allowance
If the students’ State or territory of residence is—
Alaska, American Samoa, Florida, Guam, Nevada, South Dakota, Tennessee, Texas, Trust Territory, Virgin Islands, Washington, Wyoming
Connecticut, Louisiana, Puerto Rico .............................................................
Arizona, New Hampshire, New Mexico, North Dakota ...............................
Alabama, Colorado, Illinois, Indiana, Kansas, Mississippi, Missouri,
Montana, Nebraska, New Jersey, Oklahoma ...........................................
Arkansas, Georgia, Iowa, Kentucky, Maine, Pennsylvania, Utah,
Vermont, Virginia, West Virginia, Canada, Mexico .................................
California, Idaho, Massachusetts, North Carolina, Ohio, Rhode Island,
South Carolina ............................................................................................
Hawaii, Maryland, Michigan, Wisconsin ......................................................
Delaware, District of Columbia, Minnesota, Oregon ...................................
New York ........................................................................................................
Other ...............................................................................................................
The percentage
is—
0
1
2
3
4
5
6
7
8
4
(3) ALLOWANCE FOR SOCIAL SECURITY TAXES.—The allowance for social security taxes is equal to the amount earned by
the student (and spouse, if appropriate), multiplied by the social security withholding rate appropriate to the tax year preceding the award year, up to the maximum statutory social security tax withholding amount for that same tax year.
(4) EMPLOYMENT EXPENSES ALLOWANCE.—The employment
expense allowance is determined as follows (or using a successor provision prescribed by the Secretary under section
478):
(A) If the student is married and the student’s spouse
is employed in the year for which income is reported, such
allowance is equal to the lesser of $2,500 or 35 percent of
the earned income of the student or spouse with the lesser
earned income.
May 7, 2013
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HIGHER EDUCATION ACT OF 1965
Sec. 476
(B) If a student is not married, the employment expense allowance is zero.
(5) ASSESSMENT OF AVAILABLE INCOME.—The family’s
available income (determined in accordance with paragraph
(1)(A) of this subsection) is assessed at 50 percent.
(c) FAMILY CONTRIBUTION FROM ASSETS.—
(1) IN GENERAL.—The family’s contribution from assets is
equal to—
(A) the family’s net worth (determined in accordance
with paragraph (2)); minus
(B) the asset protection allowance (determined in accordance with paragraph (3)); multiplied by
(C) the asset conversion rate (determined in accordance with paragraph (4));
except that the family’s contribution from assets shall not be
less than zero.
(2) FAMILY’S NET WORTH.—The family’s net worth is calculated by adding—
(A) the current balance of checking and savings accounts and cash on hand;
(B) the net value of investments and real estate, excluding the net value in the principal place of residence;
and
(C) the adjusted net worth of a business or farm, computed on the basis of the net worth of such business or
farm (hereafter referred to as ‘‘NW’’), determined in accordance with the following table (or a successor table prescribed by the Secretary under section 478), except as provided under section 480(f):
Adjusted Net Worth of a Business or Farm
If the net worth of a business or farm
is—
Then the adjusted net worth is—
Less than $1 ..............................................
$1–$75,000 .................................................
$75,001–$225,000 ......................................
$0
40 percent of NW
$30,000 plus 50 percent of NW over
$75,000
$105,000 plus 60 percent of NW over
$225,000
$195,000 plus 100 percent of NW over
$375,000
$225,001–$375,000 ....................................
$375,001 or more .......................................
(3) ASSET PROTECTION ALLOWANCE.—The asset protection
allowance is calculated according to the following table (or a
successor table prescribed by the Secretary under section 478):
May 7, 2013
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Sec. 476
HIGHER EDUCATION ACT OF 1965
530
Asset Protection Allowances for Families and Students
And the student is
If the age of the student is—
married
single
then the allowance
is—
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
or less .....................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
or more ...................................................................................
$ 0
2,200
4,300
6,500
8,600
10,800
13,000
15,100
17,300
19,400
21,600
23,800
25,900
28,100
30,200
32,400
33,300
34,100
35,000
35,700
36,600
37,600
38,800
39,800
40,800
41,800
43,200
44,300
45,700
47,100
48,300
49,800
51,300
52,900
54,800
56,500
58,500
60,300
62,400
64,600
66,800
$0
1,600
3,200
4,700
6,300
7,900
9,500
11,100
12,600
14,200
15,800
17,400
19,000
20,500
22,100
23,700
24,100
24,700
25,200
25,800
26,300
26,900
27,600
28,200
28,800
29,500
30,200
31,100
31,800
32,600
33,400
34,400
35,200
36,200
37,200
38,100
39,200
40,300
41,500
42,800
44,000
(4) ASSET CONVERSION RATE.—The asset conversion rate is
20 percent.
(d) COMPUTATIONS IN CASE OF SEPARATION, DIVORCE, OR
DEATH.—In the case of a student who is divorced or separated, or
whose spouse has died, the spouse’s income and assets shall not be
May 7, 2013
\\143.231.149.13\DATA\COMP\EDIII\HEA65.003
531
HIGHER EDUCATION ACT OF 1965
Sec. 477
considered in determining the family’s contribution from income or
assets.
SEC. 477. ø20 U.S.C. 1087qq¿ FAMILY CONTRIBUTION FOR INDEPENDENT STUDENTS WITH DEPENDENTS OTHER THAN A
SPOUSE.
(a) COMPUTATION OF EXPECTED FAMILY CONTRIBUTION.—For
each independent student with dependents other than a spouse,
the expected family contribution is equal to the amount determined
by—
(1) computing adjusted available income by adding—
(A) the family’s available income (determined in accordance with subsection (b)); and
(B) the family’s contribution from assets (determined
in accordance with subsection (c));
(2) assessing such adjusted available income in accordance
with an assessment schedule set forth in subsection (d);
(3) dividing the assessment resulting under paragraph (2)
by the number of family members who are enrolled or accepted
for enrollment, on at least a half-time basis, in a degree, certificate, or other program leading to a recognized educational
credential at an institution of higher education that is an eligible institution in accordance with the provisions of section 487
during the award period for which assistance under this title
is requested; and
(4) for periods of enrollment of less than 9 months, for purposes other than subpart 2 of part A—
(A) dividing the quotient resulting under paragraph
(3) by 9; and
(B) multiplying the result by the number of months in
the period of enrollment;
except that the amount determined under this subsection shall not
be less than zero.
(b) FAMILY’S AVAILABLE INCOME.—
(1) IN GENERAL.—The family’s available income is determined by deducting from total income (as defined in section
480)—
(A) Federal income taxes;
(B) an allowance for State and other taxes, determined
in accordance with paragraph (2);
(C) an allowance for social security taxes, determined
in accordance with paragraph (3);
(D) an income protection allowance, determined in accordance with paragraph (4);
(E) an employment expense allowance, determined in
accordance with paragraph (5); and
(F) the amount of any tax credit taken under section
25A of the Internal Revenue Code of 1986.
(2) ALLOWANCE FOR STATE AND OTHER TAXES.—The allowance for State and other taxes is equal to an amount determined by multiplying total income (as defined in section 480)
by a percentage determined according to the following table (or
a successor table prescribed by the Secretary under section
478):
May 7, 2013
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Sec. 477
HIGHER EDUCATION ACT OF 1965
532
Percentages for Computation of State and Other Tax Allowance
And family’s total
income is—
If student’s State or territory of residence is—
less than
$15,000
$15,000
or more
then the percentage
is—
Alaska, Puerto Rico, Wyoming ..................................................
American Samoa, Guam, Louisiana, Nevada, Texas, Trust
Territory, Virgin Islands ........................................................
Florida, South Dakota, Tennessee, New Mexico ......................
North Dakota, Washington ........................................................
Alabama, Arizona, Arkansas, Indiana, Mississippi, Missouri,
Montana, New Hampshire, Oklahoma, West Virginia ........
Colorado, Connecticut, Georgia, Illinois, Kansas, Kentucky ...
California, Delaware, Idaho, Iowa, Nebraska, North Carolina, Ohio, Pennsylvania, South Carolina, Utah, Vermont,
Virginia, Canada, Mexico .......................................................
Maine, New Jersey .....................................................................
District of Columbia, Hawaii, Maryland, Massachusetts, Oregon, Rhode Island ..................................................................
Michigan, Minnesota ..................................................................
Wisconsin ....................................................................................
New York .....................................................................................
Other ............................................................................................
3
2
4
5
6
3
4
5
7
8
6
7
9
10
8
9
11
12
13
14
9
10
11
12
13
8
(3) ALLOWANCE FOR SOCIAL SECURITY TAXES.—The allowance for social security taxes is equal to the amount estimated
to be earned by the student (and spouse, if appropriate) multiplied by the social security withholding rate appropriate to the
tax year preceding the award year, up to the maximum statutory social security tax withholding amount for that same tax
year.
(4) INCOME PROTECTION ALLOWANCE.—The income protection allowance is determined by the tables described in subparagraphs (A) through (D) (or a successor table prescribed by
the Secretary under section 478).
(A) ACADEMIC YEAR 2009–2010.—For academic year
2009–2010, the income protection allowance is determined
by the following table:
Income Protection Allowance
Family
Size
(including
student)
2
3
4
5
May 7, 2013
Number in College
1
$17,720
22,060
27,250
32,150
2
$14,690
19,050
24,220
29,120
3
$16,020
21,210
26,100
4
$18,170
23,070
5
$20,060
For each
additional
subtract:
\\143.231.149.13\DATA\COMP\EDIII\HEA65.003
533
HIGHER EDUCATION ACT OF 1965
Sec. 477
Income Protection Allowance—Continued
Family
Size
Number in College
(including
student)
1
2
3
6
For each
additional
add:
37,600
34,570
4,240
4,240
4
5
31,570
28,520
25,520
4,240
4,240
4,240
For each
additional
subtract:
$3,020
(B) ACADEMIC YEAR 2010–2011.—For academic year
2010–2011, the income protection allowance is determined
by the following table:
Income Protection Allowance
Family
Size
(including
student)
2
3
4
5
6
For each
additional
add:
Number in College
1
2
3
4
5
$19,690
24,510
30,280
35,730
41,780
$16,330
21,160
26,910
32,350
38,410
$17,800
23,560
29,000
35,080
$20,190
25,640
31,690
$22,290
28,350
4,710
4,710
4,710
4,710
4,710
For each
additional
subtract:
$3,350
(C) ACADEMIC YEAR 2011–2012.—For academic year
2011–2012, the income protection allowance is determined
by the following table:
Income Protection Allowance
Family
Size
(including
student)
2
3
4
5
6
For each
additional
add:
Number in College
1
2
3
4
5
$21,660
26,960
33,300
39,300
45,950
$17,960
23,280
29,600
35,590
42,250
$19,580
25,920
31,900
38,580
$22,210
28,200
34,860
$24,520
31,190
5,180
5,180
5,180
5,180
5,180
For each
additional
subtract:
$3,690
(D) ACADEMIC YEAR 2012–2013.—For academic year
2012–2013, the income protection allowance is determined
by the following table:
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\\143.231.149.13\DATA\COMP\EDIII\HEA65.003
Sec. 477
HIGHER EDUCATION ACT OF 1965
534
Income Protection Allowance
Family
Size
(including
student)
2
3
4
5
6
For each
additional
add:
Number in College
1
2
3
4
5
$23,630
29,420
36,330
42,870
50,130
$19,590
25,400
32,300
38,820
46,100
$21,360
28,280
34,800
42,090
$24,230
30,770
38,030
$26,750
34,020
5,660
5,660
5,660
5,660
5,660
For each
additional
subtract:
$4,020
(5) EMPLOYMENT EXPENSE ALLOWANCE.—The employment
expense allowance is determined as follows (or a successor
table prescribed by the Secretary under section 478):
(A) If the student is married and the student’s spouse
is employed in the year for which their income is reported,
such allowance is equal to the lesser of $2,500 or 35 percent of the earned income of the student or spouse with
the lesser earned income.
(B) If a student qualifies as a surviving spouse or as
a head of household as defined in section 2 of the Internal
Revenue Code of 1986, such allowance is equal to the lesser of $2,500 or 35 percent of the student’s earned income.
(c) FAMILY’S CONTRIBUTION FROM ASSETS.—
(1) IN GENERAL.—The family’s contribution from assets is
equal to—
(A) the family net worth (determined in accordance
with paragraph (2)); minus
(B) the asset protection allowance (determined in accordance with paragraph (3)); multiplied by
(C) the asset conversion rate (determined in accordance with paragraph (4)), except that the result shall not
be less than zero.
May 7, 2013
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535
HIGHER EDUCATION ACT OF 1965
Sec. 477
(2) FAMILY NET WORTH.—The family net worth is calculated by adding—
(A) the current balance of checking and savings accounts and cash on hand;
(B) the net value of investments and real estate, excluding the net value in the principal place of residence;
and
(C) the adjusted net worth of a business or farm, computed on the basis of the net worth of such business or
farm (hereafter referred to as ‘‘NW’’), determined in accordance with the following table (or a successor table prescribed by the Secretary under section 478), except as provided under section 480(f):
Adjusted Net Worth of a Business or Farm
If the net worth of a business or farm
is—
Then the adjusted net worth is—
Less than $1 ..............................................
$1–$75,000 .................................................
$75,001–$225,000 ......................................
$0
40 percent of NW
$30,000 plus 50 percent of NW over
$75,000
$105,000 plus 60 percent of NW over
$225,000
$195,000 plus 100 percent of NW over
$375,000
$225,001–$375,000 ....................................
$375,001 or more .......................................
(3) ASSET PROTECTION ALLOWANCE.—The asset protection
allowance is calculated according to the following table (or a
successor table prescribed by the Secretary under section 478):
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Sec. 477
HIGHER EDUCATION ACT OF 1965
536
Asset Protection Allowances for Families and Students
And the student is
If the age of the student is—
married
single
then the allowance
is—
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
or less .....................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
.................................................................................................
or more ...................................................................................
$ 0
2,200
4,300
6,500
8,600
10,800
13,000
15,100
17,300
19,400
21,600
23,800
25,900
28,100
30,200
32,400
33,300
34,100
35,000
35,700
36,600
37,600
38,800
39,800
40,800
41,800
43,200
44,300
45,700
47,100
48,300
49,800
51,300
52,900
54,800
56,500
58,500
60,300
62,400
64,600
66,800
$0
1,600
3,200
4,700
6,300
7,900
9,500
11,100
12,600
14,200
15,800
17,400
19,000
20,500
22,100
23,700
24,100
24,700
25,200
25,800
26,300
26,900
27,600
28,200
28,800
29,500
30,200
31,100
31,800
32,600
33,400
34,400
35,200
36,200
37,200
38,100
39,200
40,300
41,500
42,800
44,000
(4) ASSET CONVERSION RATE.—The asset conversion rate is
7 percent.
(d) ASSESSMENT SCHEDULE.—The adjusted available income (as
determined under subsection (a)(1) and hereafter referred to as
‘‘AAI’’) is assessed according to the following table (or a successor
table prescribed by the Secretary under section 478):
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HIGHER EDUCATION ACT OF 1965
Sec. 478
Assessment From Adjusted Available Income (AAI)
If AAI is—
Less than ¥$3,409 ....................................
¥$3,409 to $9,400 .....................................
$9,401 to $11,800 ......................................
$11,801 to $14,200 ....................................
$14,201 to $16,600 ....................................
$16,601 to $19,000 ....................................
$19,001 or more .........................................
Then the assessment is—
¥$750
22% of AAI
$2,068 + 25%
$2,668 + 29%
$3,364 + 34%
$4,180 + 40%
$5,140 + 47%
of
of
of
of
of
AAI
AAI
AAI
AAI
AAI
over
over
over
over
over
$9,400
$11,800
$14,200
$16,600
$19,000
(e) COMPUTATIONS IN CASE OF SEPARATION, DIVORCE, OR
DEATH.—In the case of a student who is divorced or separated, or
whose spouse has died, the spouse’s income and assets shall not be
considered in determining the family’s available income or assets.
SEC. 478. ø20 U.S.C. 1087rr¿ REGULATIONS; UPDATED TABLES.
(a) AUTHORITY TO PRESCRIBE REGULATIONS RESTRICTED.—(1)
Notwithstanding any other provision of law, the Secretary shall not
have the authority to prescribe regulations to carry out this part
except—
(A) to prescribe updated tables in accordance with subsections (b) through (h) of this section; or
(B) to propose modifications in the need analysis methodology required by this part.
(2) Any regulation proposed by the Secretary that (A) updates
tables in a manner that does not comply with subsections (b)
through (h) of this section, or (B) that proposes modifications under
paragraph (1)(B) of this subsection, shall not be effective unless approved by joint resolution of the Congress by May 1 following the
date such regulations are published in the Federal Register in accordance with section 482. If the Congress fails to approve such
regulations by such May 1, the Secretary shall publish in the Federal Register in accordance with section 482 updated tables for the
applicable award year that are prescribed in accordance with subsections (b) through (h) of this section.
(b) INCOME PROTECTION ALLOWANCE.—
(1) REVISED TABLES.—
(A) IN GENERAL.—For each academic year after academic year 2008–2009, 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), subject to subparagraphs (B) and (C).
(B) TABLE FOR INDEPENDENT STUDENTS.—
(i) ACADEMIC YEARS 2009–2010 THROUGH 2012–
2013.—For each of the academic years 2009–2010
through 2012–2013, the Secretary shall not develop a
revised table of income protection allowances under
section 477(b)(4) and the table specified for such academic year under subparagraphs (A) through (D) of
such section shall apply.
(ii) OTHER ACADEMIC YEARS.—For each academic
year after academic year 2012–2013, the Secretary
shall develop the revised table of income protection allowances by increasing each of the dollar amounts conMay 7, 2013
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Sec. 478
HIGHER EDUCATION ACT OF 1965
538
tained in the table of income protection allowances
under section 477(b)(4)(D) by a percentage equal to the
estimated percentage increase in the Consumer Price
Index (as determined by the Secretary) between December 2011 and the December next preceding the beginning of such academic year, and rounding the result to the nearest $10.
(C) TABLE FOR PARENTS.—For each academic year
after academic year 2008–2009, the Secretary shall develop the revised table of income protection allowances
under section 475(c)(4) by increasing each of the dollar
amounts contained in the table by a percentage equal to
the estimated percentage increase in the Consumer Price
Index (as determined by the Secretary) between December
1992 and the December next preceding the beginning of
such academic year, and rounding the result to the nearest
$10.
(2) REVISED AMOUNTS.—For each academic year after academic year 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 for each academic year after academic year 2012–2013, by increasing each of the dollar
amounts contained in such section for academic year 2012–
2013 by a percentage equal to the estimated percentage increase in the Consumer Price Index (as determined by the Secretary) between December 2011 and the December next preceding the beginning of such academic year, and rounding the
result to the nearest $10.
(c) ADJUSTED NET WORTH OF A FARM OR BUSINESS.—For each
award year after award year 1993–1994, the Secretary shall publish in the Federal Register a revised table of adjusted net worth
of a farm or business for purposes of sections 475(d)(2)(C),
476(c)(2)(C), and 477(c)(2)(C). Such revised table shall be developed—
(1) by increasing each dollar amount that refers to net
worth of a farm or business 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 award year,
and rounding the result to the nearest $5,000; and
(2) by adjusting the dollar amounts ‘‘$30,000’’, ‘‘$105,000’’,
and ‘‘$195,000’’ to reflect the changes made pursuant to paragraph (1).
(d) EDUCATION SAVINGS AND ASSET PROTECTION ALLOWANCE.—
For each award year after award year 1993–1994, the Secretary
shall publish in the Federal Register a revised table of allowances
for the purpose of sections 475(d)(3), 476(c)(3), and 477(c)(3). Such
revised table shall be developed by determining the present value
cost, rounded to the nearest $100, of an annuity that would provide, for each age cohort of 40 and above, a supplemental income
at age 65 (adjusted for inflation) equal to the difference between
the moderate family income (as most recently determined by the
Bureau of Labor Statistics), and the current average social security
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539
HIGHER EDUCATION ACT OF 1965
Sec. 478
retirement benefits. For each age cohort below 40, the allowance
shall be computed by decreasing the allowance for age 40, as updated, by one-fifteenth for each year of age below age 40 and
rounding the result to the nearest $100. In making such determinations—
(1) inflation shall be presumed to be 6 percent per year;
(2) the rate of return of an annuity shall be presumed to
be 8 percent; and
(3) the sales commission on an annuity shall be presumed
to be 6 percent.
(e) ASSESSMENT SCHEDULES AND RATES.—For each award year
after award year 1993–1994, the Secretary shall publish in the
Federal Register a revised table of assessments from adjusted
available income for the purpose of sections 475(e) and 477(d). Such
revised table shall be developed—
(1) by increasing each dollar amount that refers to adjusted available income 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,
rounded to the nearest $100; and
(2) by adjusting the other dollar amounts to reflect the
changes made pursuant to paragraph (1).
(f) DEFINITION OF CONSUMER PRICE INDEX.—As used in this
section, the term ‘‘Consumer Price Index’’ means the Consumer
Price Index for All Urban Consumers published by the Department
of Labor. Each annual update of tables to reflect changes in the
Consumer Price Index shall be corrected for misestimation of actual changes in such Index in previous years.
(g) STATE AND OTHER TAX ALLOWANCE.—For each award year
after award year 1993–1994, the Secretary shall publish in the
Federal Register a revised table of State and other tax allowances
for the purpose of sections 475(c)(2), 475(g)(3), 476(b)(2), and
477(b)(2). The Secretary shall develop such revised table after review of the Department of the Treasury’s Statistics of Income file
and determination of the percentage of income that each State’s
taxes represent.
(h) EMPLOYMENT EXPENSE ALLOWANCE.—For each award year
after award year 1993–1994, the Secretary shall publish in the
Federal Register a revised table of employment expense allowances
for the purpose of sections 475(c)(5), 476(b)(4), and 477(b)(5). Such
revised table shall be developed by increasing the dollar amount
specified in sections 475(c)(5)(A), 475(c)(5)(B), 476(b)(4)(A),
477(b)(5)(A), and 477(b)(5)(B) to reflect increases in the amount
and percent of the Bureau of Labor Statistics budget of the marginal costs for food away from home, apparel, transportation, and
household furnishings and operations for a two-worker versus oneworker family.
SEC. 479. ø20 U.S.C. 1087ss¿ SIMPLIFIED NEEDS TESTS.
(a) SIMPLIFIED APPLICATION SECTION.—
(1) IN GENERAL.—The Secretary shall develop
and use an
easily identifiable simplified application section as part of the
common financial reporting form prescribed under section
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Sec. 478
HIGHER EDUCATION ACT OF 1965
540
483(a) for families described in subsections (b) and (c) of this
section.
(2) REDUCED DATA REQUIREMENTS.—The simplified application form shall—
(A) in the case of a family meeting the requirements
of subsection (b)(1), permit such family to submit only the
data elements required under subsection (b)(2) for the purposes of establishing eligibility for student financial aid
under this part; and
(B) in the case of a family meeting the requirements
of subsection (c), permit such family to be treated as having an expected family contribution equal to zero for purposes of establishing such eligibility and to submit only the
data elements required to make a determination under
subsection (c).
(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—
(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;
(III) include at least one parent who is a dislocated worker; or
(IV) received, or the student received, benefits
at some time during the previous 24-month period
under a means-tested Federal benefit program as
defined under subsection (d); and
(ii) the total adjusted gross income of the parents
(excluding any income of the dependent student) is
less than $50,000; or
(B) in the case of an applicant who is an independent
student—
(i) the student (and the student’s spouse, if any)—
(I) files, or is eligible to 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;
(III) is a dislocated worker or has a spouse
who is a dislocated worker; or
(IV) received benefits at some time during the
previous 24-month period under a means-tested
Federal benefit program as defined under subsection (d); and
(ii) the adjusted gross income of the student (and
the student’s spouse, if any) is less than $50,000.
(2) SIMPLIFIED TEST ELEMENTS.—The six elements to be
used for the simplified needs analysis are—
(A) adjusted gross income,
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541
HIGHER EDUCATION ACT OF 1965
Sec. 478
(B) Federal taxes paid,
(C) untaxed income and benefits,
(D) the number of family members,
(E) the number of family members in postsecondary
education, and
(F) an allowance (A) for State and other taxes, as defined in section 475(c)(2) for dependent students and in
section 477(b)(2) for independent students with dependents
other than a spouse, or (B) for State and other income
taxes, as defined in section 476(b)(2) for independent students without dependents other than a spouse.
(3) QUALIFYING FORMS.—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—
(A) a form 1040A or 1040EZ (including any prepared
or electronic version of such form) required pursuant to the
Internal Revenue Code of 1986;
(B) a form 1040 (including any prepared or electronic
version of such form) required pursuant to the Internal
Revenue Code of 1986, except that such form shall be considered a qualifying form only if the student or family files
such form in order to take a tax credit under section 25A
of the Internal Revenue Code of 1986, and would otherwise
be eligible to file a form described in subparagraph (A); or
(C) an income tax return (including any prepared or
electronic version of such return) required pursuant to the
tax code of the Commonwealth of Puerto Rico, Guam,
American Samoa, the Virgin Islands, the Republic of the
Marshall Islands, the Federated States of Micronesia, or
Palau.
(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—
(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;
(iii) include at least one parent who is a dislocated
worker; or
(iv) received, or the student received, benefits at
some time during the previous 24-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 $23,000; 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)—
(i) files, or is eligible to file, a form described in
subsection (b)(3);
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Sec. 479A
HIGHER EDUCATION ACT OF 1965
542
(ii) certifies that the student (and the student’s
spouse, if any) is not required to file a Federal income
tax return;
(iii) is a dislocated worker or has a spouse who is
a dislocated worker; or
(iv) received benefits at some time during the previous 24-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
$23,000.
An individual is not required to qualify or file for the earned income credit in order to be eligible under this subsection. The Secretary shall annually adjust the income level necessary to qualify
an applicant for the zero expected family contribution. The income
level shall be adjusted according to increases in the Consumer
Price Index, as defined in section 478(f).
(d) DEFINITIONS.—In this section:
(1) DISLOCATED WORKER.—The term ‘‘dislocated worker’’
has the meaning given the term in section 101 of the Workforce Investment Act of 1998 (29 U.S.C. 2801).
(2) MEANS-TESTED FEDERAL BENEFIT PROGRAM.—The term 1
‘‘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 supplemental nutrition assistance program
under the Food and Nutrition Act of 2008 (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. ø20 U.S.C. 1087tt¿ 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 caseby-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
May 7, 2013
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543
HIGHER EDUCATION ACT OF 1965
Sec. 479A
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, dental, or nursing home expenses not
covered by insurance, unusually high child care or dependent care
costs, recent unemployment of a family member or an independent
student, a student or family member who is a dislocated worker (as
defined in section 101 of the Workforce Investment Act of 1998),
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 an
individual being homeless (as defined in section 103 of the McKinney-Vento Homeless Assistance Act), or other changes in a family’s
income, a family’s assets, or a student’s status. Special circumstances shall be conditions that differentiate an individual student from a class of students rather than conditions that exist
across a class of students. 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 (1) 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, or (2) to offer a dependent student financial assistance under section 428H or a Federal Direct Unsubsidized Stafford
Loan without requiring the parents of such student to file the financial aid form prescribed under section 483 if the student financial aid administrator verifies that the parent or parents of such
student have ended financial support of such student and refuse to
file such form. No student or parent shall be charged a fee for collecting, processing, or delivering such supplementary information.
(b) ADJUSTMENTS TO ASSETS TAKEN INTO ACCOUNT.—A student
financial aid administrator shall be considered to be making a necessary adjustment in accordance with subsection (a) if—
(1) the administrator makes adjustments excluding from
family income any proceeds of a sale of farm or business assets
of a family if such sale results from a voluntary or involuntary
foreclosure, forfeiture, or bankruptcy or an involuntary liquidation; or
(2) the administrator makes adjustments in the award
level of a student with a disability so as to take into consideration the additional costs such student incurs as a result of
such student’s disability.
(c) REFUSAL OR ADJUSTMENT OF LOAN CERTIFICATIONS.—On a
case-by-case basis, an eligible institution may refuse to certify a
statement that permits a student to receive a loan under part B
or D, or may certify a loan amount or make a loan that is less than
the student’s determination of need (as determined under this
part), if the reason for the action is documented and provided in
written form to the student. No eligible institution shall discriminate against any borrower or applicant in obtaining a loan on the
basis of race, national origin, religion, sex, marital status, age, or
disability status.
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Sec. 479B
HIGHER EDUCATION ACT OF 1965
544
SEC. 479B. ø20 U.S.C. 1087uu¿ DISREGARD OF STUDENT AID IN OTHER
FEDERAL PROGRAMS.
Notwithstanding any other provision of law, student financial
assistance received under this title, or under Bureau of Indian Affairs student assistance programs, shall not be taken into account
in determining the need or eligibility of any person for benefits or
assistance, or the amount of such benefits or assistance, under any
Federal, State, or local program financed in whole or in part with
Federal funds.
SEC. 479C. ø20 U.S.C. 1087uu–1¿ NATIVE AMERICAN STUDENTS
In determining family contributions for Native American students, computations performed pursuant to this part shall exclude—
(1) any income and assets of $2,000 or less per individual
payment received by the student (and spouse) and student’s
parents under Public Law 98–64 (25 U.S.C. 117a et seq.; 97
Stat. 365) (commonly known as the ‘‘Per Capita Act’’) or the Indian Tribal Judgment Funds Use or Distribution Act (25
U.S.C. 1401 et seq.); and
(2) any income received by the student (and spouse) and
student’s parents under the Alaska Native Claims Settlement
Act (43 U.S.C. 1601 et seq.) or the Maine Indian Claims Settlement Act of 1980 (25 U.S.C. 1721 et seq.).
SEC. 480. ø20 U.S.C. 1087vv¿ DEFINITIONS.
As used in this part:
(a) TOTAL INCOME.—(1)(A) Except as provided in subparagraph
(B) and paragraph (2), the term ‘‘total income’’ is equal to adjusted
gross income plus untaxed income and benefits for the preceding
tax year minus excludable income (as defined in subsection (e)).
(B) Notwithstanding section 478(a), the Secretary may provide
for the use of data from the second preceding tax year when and
to the extent necessary to carry out the simplification of applications (including simplification for a subset of applications) used for
the estimation and determination of financial aid eligibility. Such
simplification may include the sharing of data between the Internal
Revenue Service and the Department, pursuant to the consent of
the taxpayer.
(2) No portion of any student financial assistance received from
any program by an individual, no portion of veterans’ education
benefits received by an individual, no portion of a national service
educational award or post-service benefit received by an individual
under title I of the National and Community Service Act of 1990
(42 U.S.C. 12511 et seq.), no portion of any tax credit taken under
section 25A of the Internal Revenue Code of 1986, and no distribution from any qualified education benefit described in subsection
(f)(3) that is not subject to Federal income tax, shall be included
as income or assets in the computation of expected family contribution for any program funded in whole or in part under this Act.
(b) UNTAXED INCOME AND BENEFITS.—
(1) The term ‘‘untaxed income and benefits’’ means—
(A) child support received;
(B) workman’s compensation;
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545
HIGHER EDUCATION ACT OF 1965
Sec. 479C
(C) veteran’s benefits such as death pension, dependency, and indemnity compensation, but excluding veterans’
education benefits as defined in subsection (c);
(D) interest on tax-free bonds;
(E) housing, food, and other allowances (excluding rent
subsidies for low-income housing) for military, clergy, and
others (including cash payments and cash value of benefits), except that the value of on-base military housing or
the value of basic allowance for housing determined under
section 403(b) of title 37, United States Code, received by
the parents, in the case of a dependent student, or the student or student’s spouse, in the case of an independent
student, shall be excluded;
(F) cash support or any money paid on the student‘s
behalf, except, for dependent students, funds provided by
the student’s parents;
(G) untaxed portion of pensions;
(H) payments to individual retirement accounts and
Keogh accounts excluded from income for Federal income
tax purposes; and
(I) any other untaxed income and benefits, such as
Black Lung Benefits, Refugee Assistance, or railroad retirement benefits, or benefits received through participation in employment and training activities under title I of
the Workforce Investment Act of 1998 (29 U.S.C. 2801 et
seq.).
(2) The term ‘‘untaxed income and benefits’’ shall not include—
(A) the amount of additional child tax credit claimed
for Federal income tax purposes;
(B) welfare benefits, including assistance under a
State program funded under part A of title IV of the Social
Security Act and aid to dependent children;
(C) the amount of earned income credit claimed for
Federal income tax purposes;
(D) the amount of credit for Federal tax on special
fuels claimed for Federal income tax purposes;
(E) the amount of foreign income excluded for purposes of Federal income taxes; or
(F) untaxed social security benefits.
(c) VETERAN AND VETERANS’ EDUCATION BENEFITS.—(1) The
term ‘‘veteran’’ means any individual who—
(A) has engaged in the active duty in the United States
Army, Navy, Air Force, Marines, or Coast Guard; and
(B) was released under a condition other than dishonorable.
(2) The term ‘‘veterans’ education benefits’’ means veterans’
benefits the student will receive during the award year, including
but not limited to benefits under the following provisions of law:
(A) Chapter 103 of title 10, United States Code (Senior Reserve Officers’ Training Corps).
(B) Chapter 106A of title 10, United States Code (Educational Assistance for Persons Enlisting for Active Duty).
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Sec. 479C
HIGHER EDUCATION ACT OF 1965
546
(C) Chapter 1606 of title 10, United States Code (Selected
Reserve Educational Assistance Program).
(D) Chapter 1607 of title 10, United States Code (Educational Assistance Program for Reserve Component Members
Supporting Contingency Operations and Certain Other Operations).
(E) Chapter 30 of title 38, United States Code (All-Volunteer Force Educational Assistance Program, also known as the
‘‘Montgomery GI Bill—active duty’’).
(F) Chapter 31 of title 38, United States Code (Training
and Rehabilitation for Veterans with Service-Connected Disabilities).
(G) Chapter 32 of title 38, United States Code (Post-Vietnam Era Veterans’ Educational Assistance Program).
(H) Chapter 33 of title 38, United States Code (Post-9/11
Educational Assistance).
(I) Chapter 35 of title 38, United States Code (Survivors’
and Dependents’ Educational Assistance Program).
(J) Section 903 of the Department of Defense Authorization Act, 1981 (10 U.S.C. 2141 note) (Educational Assistance
Pilot Program).
(K) Section 156(b) of the ‘‘Joint Resolution making further
continuing appropriations and providing for productive employment for the fiscal year 1983, and for other purposes’’ (42
U.S.C. 402 note) (Restored Entitlement Program for Survivors,
also known as ‘‘Quayle benefits’’).
(L) The provisions of chapter 3 of title 37, United States
Code, related to subsistence allowances for members of the Reserve Officers Training Corps.
(d) INDEPENDENT STUDENT.—
(1) DEFINITION.—The term ‘‘independent’’, when used with
respect to a student, means any individual who—
(A) is 24 years of age or older by December 31 of the
award year;
(B) is an orphan, in foster care, or a ward of the court,
or was an orphan, in foster care, or a ward of the court at
any time when the individual was 13 years of age or older;
(C) is, or was immediately prior to attaining the age
of majority, an emancipated minor or in legal guardianship
as determined by a court of competent jurisdiction in the
individual’s State of legal residence;
(D) is a veteran of the Armed Forces of the United
States (as defined in subsection (c)(1)) or is currently serving on active duty in the Armed Forces for other than
training purposes;
(E) is a graduate or professional student;
(F) is a married individual;
(G) has legal dependents other than a spouse;
(H) has been verified during the school year in which
the application is submitted as either an unaccompanied
youth who is a homeless child or youth (as such terms are
defined in section 725 of the McKinney-Vento Homeless
Assistance Act), or as unaccompanied, at risk of homelessness, and self-supporting, by—
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(i) a local educational agency homeless liaison,
designated pursuant to section 722(g)(1)(J)(ii) of the
McKinney-Vento Homeless Assistance Act;
(ii) the director of a program funded under the
Runaway and Homeless Youth Act or a designee of the
director;
(iii) the director of a program funded under subtitle B of title IV of the McKinney-Vento Homeless Assistance Act (relating to emergency shelter grants) or
a designee of the director; or
(iv) a financial aid administrator; or
(I) is a student for whom a financial aid administrator
makes a documented determination of independence by
reason of other unusual circumstances.
(2) SIMPLIFYING THE DEPENDENCY OVERRIDE PROCESS.—A
financial aid administrator may make a determination of independence under paragraph (1)(I) based upon a documented determination of independence that was previously made by another financial aid administrator under such paragraph in the
same award year.
(e) EXCLUDABLE INCOME.—The term ‘‘excludable income’’
means—
(1) any student financial assistance awarded based on
need as determined in accordance with the provisions of this
part, including any income earned from work under part C of
this title;
(2) any income earned from work under a cooperative education program offered by an institution of higher education;
(3) any living allowance received by a participant in a program established under the National and Community Service
Act of 1990;
(4) child support payments made by the student or parent;
(5) payments made and services provided under part E of
title IV of the Social Security Act; and
(6) special combat pay.
(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.
(2) With respect to determinations of need under this title,
other than for subpart 4 of part A, the term ‘‘assets’’ shall not include the net value of—
(A) the family’s principal place of residence;
(B) a family farm on which the family resides; or
(C) a small business with not more than 100 full-time or
full-time equivalent employees (or any part of such a small
business) that is owned and controlled by the family.
(3) A qualified education benefit shall be considered an
asset of—
(A) the student if the student is an independent student; or
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HIGHER EDUCATION ACT OF 1965
548
(B) the parent if the student is a dependent student,
regardless of whether the owner of the account is the student or the parent.
(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) 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) The term ‘‘qualified higher education expenses’’ has the
meaning given the term in section 529(e) of the Internal Revenue Code of 1986.
(g) NET ASSETS.—The term ‘‘net assets’’ means the current
market value at the time of application of the assets (as defined in
subsection (f)), minus the outstanding liabilities or indebtedness
against the assets.
(h) TREATMENT OF INCOME TAXES PAID TO OTHER JURISDICTIONS.—(1) The tax on income paid to the Governments of the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands, or the Commonwealth of the Northern Mariana Islands, the
Republic of the Marshall Islands, the Federated States of Micronesia, or Palau under the laws applicable to those jurisdictions, or
the comparable tax paid to the central government of a foreign
country, shall be treated as Federal income taxes.
(2) References in this part to the Internal Revenue Code of
1986, Federal income tax forms, and the Internal Revenue Service
shall, for purposes of the tax described in paragraph (1), be treated
as references to the corresponding laws, tax forms, and tax collection agencies of those jurisdictions, respectively, subject to such adjustments as the Secretary may provide by regulation.
(i) CURRENT BALANCE.—The term ‘‘current balance of checking
and savings accounts’’ does not include any funds over which an individual is barred from exercising discretion and control because of
the actions of any State in declaring a bank emergency due to the
insolvency of a private deposit insurance fund.
(j) OTHER FINANCIAL ASSISTANCE.—(1) For purposes of determining a student’s eligibility for funds under this title, estimated
financial assistance not received under this title shall include all
scholarships, grants, loans, or other assistance known to the institution at the time the determination of the student’s need is made,
including national service educational awards or post-service benefits under title I of the National and Community Service Act of
1990 (42 U.S.C. 12511 et seq.), but excluding veterans’ education
benefits as defined in subsection (c).
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(2) Notwithstanding paragraph (1), a tax credit taken under
section 25A of the Internal Revenue Code of 1986, or a distribution
that is not includable in gross income under section 529 of such
Code, under another prepaid tuition plan offered by a State, or
under a Coverdell education savings account under section 530 of
such Code, shall not be treated as estimated financial assistance
for purposes of section 471(3).
(3) Notwithstanding paragraph (1) and section 472, assistance
not received under this title may be excluded from both estimated
financial assistance and cost of attendance, if that assistance is
provided by a State and is designated by such State to offset a specific component of the cost of attendance. If that assistance is excluded from either estimated financial assistance or cost of attendance, it shall be excluded from both.
(4) Notwithstanding paragraph (1), special combat pay
shall not be treated as estimated financial assistance for purposes of section 471(3).
(k) DEPENDENTS.—(1) Except as otherwise provided, the term
‘‘dependent of the parent’’ means the student, dependent children
of the student’s parents, including those children who are deemed
to be dependent students when applying for aid under this title,
and other persons who live with and receive more than one-half of
their support from the parent and will continue to receive more
than half of their support from the parent during the award year.
(2) Except as otherwise provided, the term ‘‘dependent of the
student’’ means the student’s dependent children and other persons
(except the student’s spouse) who live with and receive more than
one-half of their support from the student and will continue to receive more than half of their support from the student during the
award year.
(l) FAMILY SIZE.—(1) In determining family size in the case of
a dependent student—
(A) if the parents are not divorced or separated, family
members include the student’s parents, and the dependents of
the student’s parents including the student;
(B) if the parents are divorced or separated, family members include the parent whose income is included in computing
available income and that parent’s dependents, including the
student; and
(C) if the parents are divorced and the parent whose income is so included is remarried, or if the parent was a widow
or widower who has remarried, family members also include,
in addition to those individuals referred to in subparagraph
(B), the new spouse and any dependents of the new spouse if
that spouse’s income is included in determining the parents’
adjusted available income.
(2) In determining family size in the case of an independent
student—
(A) family members include the student, the student’s
spouse, and the dependents of the student; and
(B) if the student is divorced or separated, family members
do not include the spouse (or ex-spouse), but do include the
student and the student’s dependents.
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(m) BUSINESS ASSETS.—The term ‘‘business assets’’ means
property that is used in the operation of a trade or business, including real estate, inventories, buildings, machinery, and other
equipment, patents, franchise rights, and copyrights.
(n) SPECIAL COMBAT PAY.—The term ‘‘special combat pay’’
means pay received by a member of the Armed Forces because of
exposure to a hazardous situation.
PART G—GENERAL PROVISIONS RELATING
PROGRAMS
TO
SEC. 481. ø20 U.S.C. 1088¿ DEFINITIONS.
(a) ACADEMIC AND AWARD YEAR.—(1)
STUDENT ASSISTANCE
For the purpose of any
program under this title, the term ‘‘award year’’ shall be defined as
the period beginning July 1 and ending June 30 of the following
year.
(2)(A) For the purpose of any program under this title, the
term ‘‘academic year’’ shall—
(i) require a minimum of 30 weeks of instructional time for
a course of study that measures its program length in credit
hours; or
(ii) require a minimum of 26 weeks of instructional time
for a course of study that measures its program length in clock
hours; and
(iii) require an undergraduate course of study to contain
an amount of instructional time whereby a full-time student is
expected to complete at least—
(I) 24 semester or trimester hours or 36 quarter credit
hours in a course of study that measures its program
length in credit hours; or
(II) 900 clock hours in a course of study that measures
its program length in clock hours.
(B) The Secretary may reduce such minimum of 30 weeks to
not less than 26 weeks for good cause, as determined by the Secretary on a case-by-case basis, in the case of an institution of higher education that provides a 2-year or 4-year program of instruction for which the institution awards an associate or baccalaureate
degree and that measures program length in credit hours or clock
hours.
(b) ELIGIBLE PROGRAM.—(1) For purposes of this title, the term
‘‘eligible program’’ means a program of at least—
(A) 600 clock hours of instruction, 16 semester hours, or 24
quarter hours, offered during a minimum of 15 weeks, in the
case of a program that—
(i) provides a program of training to prepare students
for gainful employment in a recognized profession; and
(ii) admits students who have not completed the equivalent of an associate degree; or
(B) 300 clock hours of instruction, 8 semester hours, or 12
hours, offered during a minimum of 10 weeks, in the case of—
(i) an undergraduate program that requires the equivalent of an associate degree for admissions; or
(ii) a graduate or professional program.
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(2)(A) A program is an eligible program for purposes of part B
of this title if it is a program of at least 300 clock hours of instruction, but less than 600 clock hours of instruction, offered during a
minimum of 10 weeks, that—
(i) has a verified completion rate of at least 70 percent, as
determined in accordance with the regulations of the Secretary;
(ii) has a verified placement rate of at least 70 percent, as
determined in accordance with the regulations of the Secretary; and
(iii) satisfies such further criteria as the Secretary may
prescribe by regulation.
(B) 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 have satisfied the requirements of this paragraph.
(3) An otherwise eligible program that is offered in whole or in
part through telecommunications is eligible for the purposes of this
title if the program is offered by an institution, other than a foreign
institution, that has been evaluated and determined (before or
after the date of enactment of the Higher Education Reconciliation
Act of 2005) to have the capability to effectively deliver distance
education programs by an accrediting agency or association that—
(A) is recognized by the Secretary under subpart 2 of part
H; and
(B) has evaluation of distance education programs within
the scope of its recognition, as described in section 496(n)(3).
(4) For purposes of this title, the term ‘‘eligible program’’ includes an instructional program that, in lieu of credit hours or
clock hours as the measure of student learning, 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 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.—For purposes of this title, the
term ‘‘third party servicer’’ means any individual, any State, or any
private, for-profit or nonprofit organization, which enters into a
contract with—
(1) any eligible institution of higher education to administer, through either manual or automated processing, any aspect of such institution’s student assistance programs under
this title; or
(2) any guaranty agency, or any eligible lender, to administer, through either manual or automated processing, any aspect of such guaranty agency’s or lender’s student loan programs under part B of this title, including originating, guaranteeing, monitoring, processing, servicing, or collecting loans.
(d) DEFINITIONS FOR MILITARY DEFERMENTS.—For purposes of
parts B, D, and E of this title:
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(1) ACTIVE DUTY.—The term ‘‘active duty’’ has the meaning
given such term in section 101(d)(1) of title 10, United States
Code, except that such term does not include active duty for
training or attendance at a service school.
(2) MILITARY OPERATION.—The term ‘‘military operation’’
means a contingency operation as such term is defined in section 101(a)(13) of title 10, United States Code.
(3) NATIONAL EMERGENCY.—The term ‘‘national emergency’’ means the national emergency by reason of certain terrorist attacks declared by the President on September 14,
2001, or subsequent national emergencies declared by the
President by reason of terrorist attacks.
(4) SERVING ON ACTIVE DUTY.—The term ‘‘serving on active
duty during a war or other military operation or national
emergency’’ means service by an individual who is—
(A) a Reserve of an Armed Force ordered to active
duty under section 12301(a), 12301(g), 12302, 12304, or
12306 of title 10, United States Code, or any retired member of an Armed Force ordered to active duty under section
688 of such title, for service in connection with a war or
other military operation or national emergency, regardless
of the location at which such active duty service is performed; and
(B) any other member of an Armed Force on active
duty in connection with such emergency or subsequent actions or conditions who has been assigned to a duty station
at a location other than the location at which such member
is normally assigned.
(5) QUALIFYING NATIONAL GUARD DUTY.—The term ‘‘qualifying National Guard duty during a war or other military operation or national emergency’’ means service as a member of the
National Guard on full-time National Guard duty (as defined
in section 101(d)(5) of title 10, United States Code) under a call
to active service authorized by the President or the Secretary
of Defense for a period of more than 30 consecutive days under
section 502(f) of title 32, United States Code, in connection
with a war, other military operation, or a national emergency
declared by the President and supported by Federal funds.
(e) CONSUMER REPORTING AGENCY.—For purposes of this title,
the term ‘‘consumer reporting agency’’ has the meaning given the
term ‘‘consumer reporting agency that compiles and maintains files
on consumers on a nationwide basis’’ in Section 603(p) of the Fair
Credit Reporting Act (15 U.S.C. 1681a(p)).
(f) DEFINITION OF EDUCATIONAL SERVICE AGENCY.—For purposes of parts B, D, and E, the term ‘‘educational service agency’’
has the meaning given the term in section 9101 of the Elementary
and Secondary Education Act of 1965.
SEC. 481A. ø20 U.S.C. 1088a¿ CLOCK AND CREDIT HOUR TREATMENT
OF DIPLOMA NURSING SCHOOLS.
Notwithstanding any other provision of this Act, any regulations promulgated by the Secretary concerning the relationship between clock hours and semester, trimester, or quarter hours in calculating student grant, loan, or work assistance under this title,
shall not apply to a public or private nonprofit hospital-based
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HIGHER EDUCATION ACT OF 1965
Sec. 482
school of nursing that awards a diploma at the completion of the
school’s program of education.
SEC. 482. ø20 U.S.C. 1089¿ MASTER CALENDAR.
(a) SECRETARY REQUIRED TO COMPLY WITH
SCHEDULE.—To assure adequate notification and timely delivery of student aid funds
under this title, the Secretary shall adhere to the following calendar dates in the year preceding the award year:
(1) Development and distribution of Federal and multiple
data entry forms—
(A) by February 1: first meeting of the technical committee on forms design of the Department;
(B) by March 1: proposed modifications, updates, and
notices pursuant to sections 478 and 483(a)(5) published in
the Federal Register;
(C) by June 1: final modifications, updates, and notices
pursuant to sections 478 and 483(a)(5) published in the
Federal Register;
(D) by August 15: application for Federal student assistance and multiple data entry data elements and instructions approved;
(E) by August 30: final approved forms delivered to
servicers and printers;
(F) by October 1: Federal and multiple data entry
forms and instructions printed; and
(G) by November 1: Federal and multiple data entry
forms, instructions, and training materials distributed.
(2) Allocations of campus-based and Pell Grant funds—
(A) by August 1: distribution of institutional application for campus-based funds (FISAP) to institutions;
(B) by October 1: final date for submission of FISAP
by institutions to the Department;
(C) by November 15: edited FISAP and computer
printout received by institutions;
(D) by December 1: appeals procedures received by institutions;
(E) by December 15: edits returned by institutions to
the Department;
(F) by February 1: tentative award levels received by
institutions and final Pell Grant payment schedule;
(G) by February 15: closing date for receipt of institutional appeals by the Department;
(H) by March 1: appeals process completed;
(I) by April 1: final award notifications sent to institutions; and
(J) by June 1: Pell Grant authorization levels sent to
institutions.
(3) The Secretary shall, to the extent practicable, notify eligible institutions, guaranty agencies, lenders, interested software providers, and, upon request, other interested parties, by
December 1 prior to the start of an award year of minimal
hardware and software requirements necessary to administer
programs under this title.
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(4) The Secretary shall attempt to conduct training activities for financial aid administrators and others in an expeditious and timely manner prior to the start of an award year
in order to ensure that all participants are informed of all administrative requirements.
(b) TIMING FOR REALLOCATIONS.—With respect to any funds reallocated under section 413D(d), 442(d), or 462(i), the Secretary
shall reallocate such funds at any time during the course of the
year that will best meet the purpose of the programs under subpart
3 of part A, part C, and part E, respectively. However, such reallocation shall occur at least once each year, not later than September 30 of that year.
(c) DELAY OF EFFECTIVE DATE OF LATE PUBLICATIONS.—(1) Except as provided in paragraph (2), any regulatory changes initiated
by the Secretary affecting the programs under this title that have
not been published in final form by November 1 prior to the start
of the award year shall not become effective until the beginning of
the second award year after such November 1 date.
(2)(A) The Secretary may designate any regulatory provision
that affects the programs under this title and is published in final
form after November 1 as one that an entity subject to the provision may, in the entity’s discretion, choose to implement prior to
the effective date described in paragraph (1). The Secretary may
specify in the designation when, and under what conditions, an entity may implement the provision prior to that effective date. The
Secretary shall publish any designation under this subparagraph in
the Federal Register.
(B) If an entity chooses to implement a regulatory provision
prior to the effective date described in paragraph (1), as permitted
by subparagraph (A), the provision shall be effective with respect
to that entity in accordance with the terms of the Secretary’s designation.
(d) NOTICE TO CONGRESS.—The Secretary shall notify the 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;
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HIGHER EDUCATION ACT OF 1965
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(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. ø20 U.S.C. 1090¿ FORMS AND REGULATIONS.
(a) COMMON FINANCIAL AID FORM DEVELOPMENT AND PROCESSING.—
(1) IN GENERAL.—The Secretary, in cooperation with rep-
resentatives of agencies and organizations involved in student
financial assistance, shall produce, distribute, and process free
of charge common financial reporting forms as described in
this subsection to be used for application and reapplication to
determine the need and eligibility of a student for financial assistance under parts A through E (other than subpart 4 of part
A). The forms shall be made available to applicants in both
paper and electronic formats and shall be referred to as the
‘‘Free Application for Federal Student Aid’’ or the ‘‘FAFSA’’.
The Secretary shall work to make the FAFSA consumer-friendly and to make questions on the FAFSA easy for students and
families to read and understand, and shall ensure that the
FAFSA is available in formats accessible to individuals with
disabilities.
(2) PAPER FORMAT.—
(A) IN GENERAL.—The Secretary shall develop, make
available, and process—
(i) a paper version of EZ FAFSA, as described in
subparagraph (B); and
(ii) a paper version of the other forms described in
this subsection, in accordance with subparagraph (C),
for any applicant who does not meet the requirements
of or does not wish to use the process described in subparagraph (B).
(B) EZ FAFSA.—
(i) IN GENERAL.—The Secretary shall develop and
use, after appropriate field testing, a simplified paper
form, to be known as the EZ FAFSA, to be used for
applicants meeting the requirements of subsection (b)
or (c) of section 479.
(ii) REDUCED DATA REQUIREMENTS.—The EZ
FAFSA shall permit an applicant to submit, for financial assistance purposes, only the data elements required to make a determination of whether the applicant meets the requirements under subsection (b) or
(c) of section 479.
(iii) STATE DATA.—The Secretary shall include on
the EZ FAFSA such data items as may be necessary
to award State financial assistance, as provided under
paragraph (5), except that the Secretary shall not include a State’s data if that State does not permit the
State’s resident applicants to use the EZ FAFSA for
State assistance.
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556
(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 (10).
(C) PROMOTING THE USE OF ELECTRONIC FAFSA.—
(i) IN GENERAL.—The Secretary shall make all efforts to encourage all applicants to utilize the electronic version of the forms described in paragraph (3).
(ii) MAINTENANCE OF THE FAFSA IN A PRINTABLE
ELECTRONIC FILE.—The Secretary shall maintain a
version of the paper forms described in subparagraphs
(A) and (B) in a printable electronic file that is easily
portable, accessible, and downloadable to students on
the same website used to provide students with the
electronic version of the forms described in paragraph
(3).
(iii) REQUESTS FOR PRINTED COPY.—The Secretary
shall provide a printed copy of the full paper version
of FAFSA upon request.
(iv) REPORTING REQUIREMENT.—The Secretary
shall maintain data, and periodically report to Congress, on the impact of the digital divide on students
completing applications for aid under this title. The
Secretary shall report on the steps taken to eliminate
the digital divide and reduce production of the paper
form described in subparagraph (A). The Secretary’s
report shall specifically address the impact of the digital divide on the following student populations:
(I) Independent students.
(II) Traditionally underrepresented students.
(III) Dependent students.
(3) ELECTRONIC FORMAT.—
(A) IN GENERAL.—The Secretary shall produce, distribute, and process forms in electronic format to meet the
requirements of paragraph (1). The Secretary shall develop
an electronic version of the forms for applicants who do not
meet the requirements of subsection (b) or (c) of section
479.
(B) SIMPLIFIED APPLICATIONS: FAFSA ON THE WEB.—
(i) IN GENERAL.—The Secretary shall develop and
use a simplified electronic version of the form to be
used by applicants meeting the requirements under
subsection (b) or (c) of section 479.
(ii) REDUCED DATA REQUIREMENTS.—The simplified electronic version of the forms shall permit an
applicant to submit, for financial assistance purposes,
only the data elements required to make a determination of whether the applicant meets the requirements
under subsection (b) or (c) of section 479.
(iii) 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
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HIGHER EDUCATION ACT OF 1965
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by an eligible institution, eligible lender, guaranty
agency, State grant agency, private computer software
provider, a consortium thereof, or such other entities
as the Secretary may designate.
(C) STATE DATA.—The Secretary shall include on the
electronic version of the forms such items as may be necessary to determine eligibility for State financial assistance, as provided under paragraph (5), except that the Secretary shall not require an applicant to enter data pursuant to this subparagraph that are required by any State
other than the applicant’s State of residence.
(D) AVAILABILITY AND PROCESSING.—The data collected
by means of the simplified electronic version of the forms
shall be available to institutions of higher education, guaranty agencies, and States in accordance with paragraph
(10).
(E) PRIVACY.—The Secretary shall ensure that data
collection under this paragraph complies with section 552a
of title 5, United States Code, and that any entity using
the electronic version of the forms developed by the Secretary pursuant to this paragraph shall maintain reasonable and appropriate administrative, technical, and physical safeguards to ensure the integrity and confidentiality
of the information, and to protect against security threats,
or unauthorized uses or disclosures of the information provided on the electronic version of the forms. Data collected
by such electronic version of the forms shall be used only
for the application, award, and administration of aid
awarded under this title, State aid, or aid awarded by eligible institutions or such entities as the Secretary may
designate. No data collected by such electronic version of
the forms shall be used for making final aid awards under
this title until such data have been processed by the Secretary or a contractor or designee of the Secretary, except
as may be permitted under this title.
(F) SIGNATURE.—Notwithstanding any other provision
of this Act, the Secretary may continue to permit an electronic version of the 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 (G).
(G) PERSONAL IDENTIFICATION NUMBERS AUTHORIZED.—The Secretary may continue to assign to an applicant a personal identification number—
(i) to enable the applicant to use such number as
a signature for purposes of completing an electronic
version of a form developed under this paragraph; and
(ii) for any purpose determined by the Secretary
to enable the Secretary to carry out this title.
(H) PERSONAL IDENTIFICATION NUMBER IMPROVEMENT.—The Secretary shall continue to work with the
Commissioner of Social Security to minimize the time required for an applicant to obtain a personal identification
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number when applying for aid under this title through an
electronic version of a form developed under this paragraph.
(4) STREAMLINING.—
(A) STREAMLINED REAPPLICATION PROCESS.—
(i) IN GENERAL.—The Secretary shall continue to
streamline reapplication forms and processes for an
applicant who applies for financial assistance under
this title in the next succeeding academic year subsequent to an academic year for which such applicant
applied for financial assistance under this title.
(ii) UPDATING OF DATA ELEMENTS.—The Secretary
shall determine, in cooperation with States, institutions of higher education, agencies, and organizations
involved in student financial assistance, the data elements that may be transferred from the previous academic year’s application and those data elements that
shall be updated.
(iii) 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.
(iv) ZERO FAMILY CONTRIBUTION.—Applicants determined to have a zero family contribution pursuant
to section 479(c) shall not be required to provide any
financial data in a reapplication form, except data that
are necessary to determine eligibility under such section.
(B) REDUCTION OF DATA ELEMENTS.—
(i) REDUCTION ENCOURAGED.—Of the number of
data elements on the FAFSA used for the 2009–2010
award year, the Secretary, in cooperation with representatives of agencies and organizations involved in
student financial assistance and consistent with efforts under subsection (c), shall continue to reduce the
number of such data elements required to be entered
by all applicants, with the goal of reducing such number by 50 percent.
(ii) REPORT.—The Secretary shall submit a report
on the process of this reduction to each of the authorizing committees by June 30, 2011.
(5) STATE REQUIREMENTS.—
(A) IN GENERAL.—Except as provided in paragraphs
(2)(B)(iii), (3)(B), and (4)(A)(ii), the Secretary shall include
on the forms developed under this subsection, such Statespecific 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. The number of such data items shall not be less
than the number included on the form for the 2008–2009
award year unless a State notifies the Secretary that the
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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 to determine—
(i) which data items each State requires to award
need-based State aid; and
(ii) if the State will permit an applicant to file a
form described in paragraph (2)(B) or (3)(B).
(C) FEDERAL REGISTER NOTICE.—Beginning with the
forms developed under paragraphs (2)(B) and (3)(B) for the
award year 2010–2011, the Secretary shall publish on an
annual basis a notice in the Federal Register requiring
State agencies to inform the Secretary—
(i) if the State agency is unable to permit applicants to utilize the simplified forms described in paragraphs (2)(B) and (3)(B); and
(ii) of the State-specific nonfinancial data that the
State agency requires for delivery of State need-based
financial aid.
(D) USE OF SIMPLIFIED FORMS ENCOURAGED.—The Secretary shall encourage States to take such steps as are
necessary to encourage the use of simplified forms under
this subsection, including those forms described in paragraphs (2)(B) and (3)(B), for applicants who meet the requirements of subsection (b) or (c) of section 479.
(E) CONSEQUENCES IF STATE DOES NOT ACCEPT SIMPLIFIED 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, the Secretary may determine that State-specific
questions for such State will not be included on a form described in paragraph (2)(B) or (3)(B). If the Secretary
makes such determination, the Secretary shall advise the
State of the Secretary’s determination.
(F) LACK OF STATE RESPONSE TO REQUEST FOR INFORMATION.—If a State does not respond to the Secretary’s request for information under subparagraph (B), the Secretary shall—
(i) permit residents of that State to complete simplified forms under paragraphs (2)(B) and (3)(B); and
(ii) not require any resident of such State to complete any data items previously required by that State
under this section.
(G) RESTRICTION.—The Secretary shall, to the extent
practicable, not require applicants to complete any financial or nonfinancial data items that are not required—
(i) by the applicant’s State; or
(ii) by the Secretary.
(6) CHARGES TO STUDENTS AND PARENTS FOR USE OF FORMS
PROHIBITED.—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 under this subsection. Such forms shall be
produced, distributed, and processed by the Secretary, and no
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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. No data collected on a form for which a fee is charged
shall be used to complete the form prescribed under this section, except that a Federal or State income tax form prepared
by a paid income tax preparer or preparer service for the primary purpose of filing a Federal or State income tax return
may be used to complete the form prescribed under this section.
(7) RESTRICTIONS ON USE OF PIN.—No person, commercial
entity, or other entity may request, obtain, or utilize an applicant’s personal identification number assigned under paragraph (3)(G) for purposes of submitting a form developed under
this subsection on an applicant’s behalf.
(8) APPLICATION PROCESSING CYCLE.—The Secretary shall
enable students to submit forms developed 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.
(9) EARLY ESTIMATES.—The Secretary shall continue to—
(A) permit applicants to enter data in such forms as
described in this subsection in the years prior to enrollment in order to obtain a non-binding estimate of the applicant’s family contribution (as defined in section 473);
(B) permit applicants to update information submitted
on forms described in this subsection, without needing to
re-enter previously submitted information;
(C) develop a means to inform applicants, in the years
prior to enrollment, of student aid options for individuals
in similar financial situations;
(D) develop a means to provide a clear and conspicuous notice that the applicant’s expected family contribution is subject to change and may not reflect the final
expected family contribution used to determine Federal
student financial aid award amounts under this title; and
(E) consult with representatives of States, institutions
of higher education, and other individuals with experience
or expertise in student financial assistance application
processes in making updates to forms used to provide early
estimates under this paragraph.
(10) DISTRIBUTION OF DATA.—Institutions of higher education, guaranty agencies, and States shall receive, without
charge, the data collected by the Secretary using a form developed under 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.
(11) THIRD PARTY SERVICERS AND PRIVATE SOFTWARE PROVIDERS.—To the extent practicable and in a timely manner, the
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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) to be 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 multiple 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.
(12) PARENT’S SOCIAL SECURITY NUMBER AND BIRTH DATE.—
The Secretary is authorized to include space on the forms developed under this subsection for the social security number
and birth date of parents of dependent students seeking financial assistance under this title.
(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 authorizing committees at least 45 days prior to their effective date.
(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 or other appropriate provider
of technical assistance and information on postsecondary educational services for individuals with disabilities, including the National Technical Assistance Center under section 777. The Secretary shall continue to implement, to the extent practicable, a tollfree telephone based system to permit applicants who meet the requirements of subsection (b) or (c) of section 479 to submit an application over such system.
(d) 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 a form developed under subsection (a) if the preparer satisfies the requirements of this subsection.
(2) PREPARER IDENTIFICATION REQUIRED.—If an applicant
uses a preparer for consultative or preparation services for the
completion of a form developed under subsection (a), and for
which a fee is charged, the preparer shall—
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(A) include, at the time the form is submitted to the
Department, the name, address or employer’s address, social security number or employer identification number,
and organizational affiliation of the preparer on the applicant’s form; and
(B) be subject to the same penalties as an applicant
for purposely giving false or misleading information in the
application.
(3) ADDITIONAL REQUIREMENTS.—A preparer that provides
consultative or preparation services pursuant to this subsection
shall—
(A) clearly inform each individual upon initial contact,
including contact through the Internet or by telephone,
that the FAFSA and EZ FAFSA are free forms that may
be completed without professional assistance via paper or
electronic version of the forms that are provided by the
Secretary;
(B) include in any advertising clear and conspicuous
information that the FAFSA and EZ FAFSA are free forms
that may be completed without professional assistance via
paper or electronic version of the forms that are provided
by the Secretary;
(C) if advertising or providing any information on a
website, or if providing services through a website, include
on the website a link to the website that provides the electronic version of the forms developed under subsection (a);
and
(D) not produce, use, or disseminate any other form for
the purpose of applying for Federal student financial aid
other than the form developed by the Secretary under subsection (a).
(4) SPECIAL RULE.—Nothing in this Act shall be construed
to limit preparers of the forms required under this title that
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.
(e) EARLY APPLICATION AND ESTIMATED AWARD DEMONSTRATION PROGRAM.—
(1) PURPOSE AND OBJECTIVES.—The purpose of the demonstration program under this subsection is to measure the
benefits, in terms of student aspirations and plans to attend an
institution of higher education, and any adverse effects, in
terms of program costs, integrity, distribution, and delivery of
aid under this title, of implementing an early application system for all dependent students that allows dependent students
to apply for financial aid using information from two years
prior to the year of enrollment. Additional objectives associated
with implementation of the demonstration program are the following:
(A) To measure the feasibility of enabling dependent
students to apply for Federal, State, and institutional financial aid in their junior year of secondary school, using
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information from two years prior to the year of enrollment,
by completing any of the forms under this subsection.
(B) To identify whether receiving final financial aid
award estimates not later than the fall of the senior year
of secondary school provides students with additional time
to compete for the limited resources available for State and
institutional financial aid and positively impacts the college aspirations and plans of these students.
(C) To measure the impact of using income information from the years prior to enrollment on—
(i) eligibility for financial aid under this title and
for other State and institutional aid; and
(ii) the cost of financial aid programs under this
title.
(D) To effectively evaluate the benefits and adverse effects of the demonstration program on program costs, integrity, distribution, and delivery of financial aid.
(2) PROGRAM AUTHORIZED.—Not later than two years after
the date of enactment of the Higher Education Opportunity
Act, the Secretary shall implement an early application demonstration program enabling dependent students who wish to
participate in the program—
(A) to complete an application under this subsection
during the academic year that is two years prior to the
year such students plan to enroll in an institution of higher education; and
(B) based on the application described in subparagraph (A), to obtain, not later than one year prior to the
year of the students’ planned enrollment, information on
eligibility for Federal Pell Grants, Federal student loans
under this title, and State and institutional financial aid
for the student’s first year of enrollment in the institution
of higher education.
(3) EARLY APPLICATION AND ESTIMATED AWARD.—For all dependent students selected for participation in the demonstration program who submit a completed FAFSA, or, as appropriate, an EZ FAFSA, two years prior to the year such students plan to enroll in an institution of higher education, the
Secretary shall, not later than one year prior to the year of
such planned enrollment—
(A) provide each student who completes an early application with an estimated determination of such student’s—
(i) expected family contribution for the first year
of the student’s enrollment in an institution of higher
education; and
(ii) Federal Pell Grant award for the first such
year, based on the Federal Pell Grant amount, determined under section 401(b)(2)(A), for which a student
is eligible at the time of application; and
(B) remind the students of the need to update the students’ information during the calendar year of enrollment
using the expedited reapplication process provided for in
subsection (a)(4)(A).
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(4) PARTICIPANTS.—The Secretary shall include as participants in the demonstration program—
(A) States selected through the application process described in paragraph (5);
(B) institutions of higher education within the selected
States that are interested in participating in the demonstration program, and that can make estimates or commitments of institutional student financial aid, as appropriate, to students the year before the students’ planned
enrollment date; and
(C) secondary schools within the selected States that
are interested in participating in the demonstration program, and that can commit resources to—
(i) advertising the availability of the program;
(ii) identifying students who might be interested
in participating in the program;
(iii) encouraging such students to apply; and
(iv) participating in the evaluation of the program.
(5) APPLICATIONS.—Each State that is interested in participating in the demonstration program shall submit an application to the Secretary at such time, in such form, and containing such information as the Secretary shall require. The
application shall include—
(A) information on the amount of the State’s needbased student financial assistance available, and the eligibility criteria for receiving such assistance;
(B) a commitment to make, not later than the year before the dependent students participating in the demonstration program plan to enroll in an institution of higher education, an estimate of the award of State financial
aid to such dependent students;
(C) a plan for recruiting institutions of higher education and secondary schools with different demographic
characteristics to participate in the program;
(D) a plan for selecting institutions of higher education
and secondary schools to participate in the program that—
(i) demonstrate a commitment to encouraging students to submit a FAFSA, or, as appropriate, an EZ
FAFSA, two years before the students’ planned date of
enrollment in an institution of higher education;
(ii) serve different populations of students;
(iii) in the case of institutions of higher education—
(I) to the extent possible, are of varying types
and sectors; and
(II) commit to making, not later than the year
prior to the year that dependent students participating in the demonstration program plan to enroll in the institution—
(aa) estimated institutional awards to
participating dependent students; and
(bb) estimated grants or other financial
aid available under this title (including supplemental grants under subpart 3 of part A),
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for all participating dependent students, along
with information on State awards, as provided
to the institution by the State;
(E) a commitment to participate in the evaluation conducted by the Secretary; and
(F) such other information as the Secretary may require.
(6) SPECIAL PROVISIONS.—
(A) DISCRETION OF STUDENT FINANCIAL AID ADMINISTRATORS.—A financial aid administrator at an institution
of higher education participating in a demonstration program under this subsection may use the discretion provided under section 479A as necessary for students participating in the demonstration program.
(B) WAIVERS.—The Secretary is authorized to waive,
for an institution of higher education participating in the
demonstration program, any requirements under this title,
or regulations prescribed under this title, that will make
the demonstration program unworkable, except that the
Secretary shall not waive any provisions with respect to
the maximum award amounts for grants and loans under
this title.
(7) OUTREACH.—The Secretary shall make appropriate efforts to notify States of the demonstration program under this
subsection. Upon determination of participating States, the
Secretary shall continue to make efforts to notify institutions
of higher education and dependent students within participating States of the opportunity to participate in the demonstration program and of the participation requirements.
(8) EVALUATION.—The Secretary shall conduct a rigorous
evaluation of the demonstration program to measure the program’s benefits and adverse effects, as the benefits and effects
relate to the purpose and objectives of the program described
in paragraph (1). In conducting the evaluation, the Secretary
shall—
(A) determine whether receiving financial aid estimates one year prior to the year in which the student
plans to enroll in an institution of higher education, has a
positive impact on the higher education aspirations and
plans of such student;
(B) measure the extent to which using a student’s income information from the year that is two years prior to
the student’s planned enrollment date had an impact on
the ability of States and institutions of higher education to
make financial aid awards and commitments;
(C) determine what operational changes are required
to implement the program on a larger scale;
(D) identify any changes to Federal law that are necessary to implement the program on a permanent basis;
(E) identify the benefits and adverse effects of providing early estimates on program costs, program operations, program integrity, award amounts, distribution,
and delivery of aid; and
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(F) examine the extent to which estimated awards differ from actual awards made to students participating in
the program.
(9) CONSULTATION.—The Secretary shall consult, as appropriate, with the Advisory Committee on Student Financial Assistance established under section 491 on the design, implementation, and evaluation of the demonstration program.
(f) REDUCTION OF INCOME AND ASSET INFORMATION TO DETERMINE ELIGIBILITY FOR STUDENT FINANCIAL AID.—
(1) CONTINUATION OF CURRENT FAFSA SIMPLIFICATION EFFORTS.—The Secretary shall continue to examine—
(A) how the Internal Revenue Service can provide to
the Secretary income and other data needed to compute an
expected family contribution for taxpayers and dependents
of taxpayers, and when in the application cycle the data
can be made available;
(B) whether data provided by the Internal Revenue
Service can be used to—
(i) prepopulate the electronic version of the
FAFSA with student and parent taxpayer data; or
(ii) generate an expected family contribution without additional action on the part of the student and
taxpayer; and
(C) whether the data elements collected on the FAFSA
that are needed to determine eligibility for student aid, or
to administer the Federal student financial aid programs
under this title, but are not needed to compute an expected
family contribution, such as information regarding the student’s citizenship or permanent residency status, registration for selective service, or driver’s license number, can be
reduced without adverse effects.
(2) REPORT ON FAFSA SIMPLIFICATION EFFORTS TO DATE.—
Not later than 90 days after the date of enactment of the Higher Education Opportunity Act, the Secretary shall provide a
written report to the authorizing committees on the work the
Department has done with the Secretary of the Treasury regarding—
(A) how the expected family contribution of a student
can be calculated using substantially less income and asset
information than was used on March 31, 2008;
(B) the extent to which the reduced income and asset
information will result in a redistribution of Federal
grants and subsidized loans under this title, State aid, or
institutional aid, or in a change in the composition of the
group of recipients of such aid, and the amount of such redistribution;
(C) how the alternative approaches for calculating the
expected family contribution will—
(i) rely mainly, in the case of students and parents
who file income tax returns, on information available
on the 1040, 1040EZ, and 1040A; and
(ii) include formulas for adjusting income or asset
information to produce similar results to the existing
approach with less data;
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(D) how the Internal Revenue Service can provide to
the Secretary of Education income and other data needed
to compute an expected family contribution for taxpayers
and dependents of taxpayers, and when in the application
cycle the data can be made available;
(E) whether data provided by the Internal Revenue
Service can be used to—
(i) prepopulate the electronic version of the
FAFSA with student and parent taxpayer data; or
(ii) generate an expected family contribution without additional action on the part of the student and
taxpayer;
(F) the extent to which the use of income data from
two years prior to a student’s planned enrollment date will
change the expected family contribution computed in accordance with part F, and potential adjustments to the
need analysis formula that will minimize the change; and
(G) the extent to which the data elements collected on
the FAFSA on March 31, 2008, that are needed to determine eligibility for student aid or to administer the Federal student financial aid programs, but are not needed to
compute an expected family contribution, such as information regarding the student’s citizenship or permanent residency status, registration for selective service, or driver’s
license number, can be reduced without adverse effects.
(3) STUDY.—
(A) FORMATION OF STUDY GROUP.—Not later than 90
days after the date of enactment of the Higher Education
Opportunity Act, the Comptroller General shall convene a
study group the membership of which shall include the
Secretary of Education, the Secretary of the Treasury, the
Director of the Office of Management and Budget, the Director of the Congressional Budget Office, representatives
of institutions of higher education with expertise in Federal and State financial aid assistance, State chief executive officers of higher education with a demonstrated commitment to simplifying the FAFSA, and such other individuals as the Comptroller General and the Secretary of Education may designate.
(B) STUDY REQUIRED.—The Comptroller General, in
consultation with the study group convened under subparagraph (A) shall—
(i) review and build on the work of the Secretary
of Education and the Secretary of the Treasury, and
individuals with expertise in analysis of financial
need, to assess alternative approaches for calculating
the expected family contribution under the statutory
need analysis formula in effect on the day before the
date of enactment of the Higher Education Opportunity Act and under a new calculation that will use
substantially less income and asset information than
was used for the 2008–2009 FAFSA;
(ii) conduct an additional analysis if necessary;
and
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(iii) make recommendations to the authorizing
committees.
(C) OBJECTIVES OF STUDY.—The objectives of the study
required under subparagraph (B) are—
(i) to determine methods to shorten the FAFSA
and make the FAFSA easier and less time-consuming
to complete, thereby increasing higher education access for low-income students;
(ii) to identify changes to the statutory need analysis formula that will be necessary to reduce the
amount of financial information students and families
need to provide to receive a determination of eligibility
for student financial aid without causing significant
redistribution of Federal grants and subsidized loans
under this title; and
(iii) to review State and institutional needs and
uses for data collected on the FAFSA, and to determine the best means of addressing such needs in the
case of modification of the FAFSA as described in
clause (i), or modification of the need analysis formula
as described in clause (ii).
(D) REQUIRED SUBJECTS OF STUDY.—The study required under subparagraph (B) shall examine—
(i) with respect to simplification of the financial
aid application process using the statutory requirements for need analysis—
(I) additional steps that can be taken to simplify the financial aid application process for students who (or, in the case of dependent students,
whose parents) are not required to file a Federal
income tax return for the prior taxable year;
(II) information on State use of information
provided on the FAFSA, including—
(aa) whether a State uses, as of the time
of the study, or can use, a student’s expected
family contribution based on data from two
years prior to the student’s planned enrollment date;
(bb) the extent to which States and institutions will accept the data provided by the
Internal Revenue Service to prepopulate the
electronic version of the FAFSA to determine
the distribution of State and institutional student financial aid funds;
(cc) what data are used by States, as of
the time of the study, to determine eligibility
for State student financial aid, and whether
the data are used for merit- or need-based
aid;
(dd) whether State data are required by
State law, State regulations, or policy directives; and
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pletion of a State application linked to the
electronic version of the FAFSA; and
(III) information on institutional needs, including the extent to which institutions of higher
education are already using supplemental forms
to collect additional data from students and their
families to determine eligibility for institutional
funds; and
(ii) ways to reduce the amount of financial information students and families need to provide to receive a determination of eligibility for student financial aid, taking into account—
(I) the amount of redistribution of Federal
grants and subsidized loans under this title
caused by such a reduction, and the benefits to be
gained by having an application process that will
be easier for students and their families;
(II) students and families who do not file income tax returns;
(III) the extent to which the full array of income and asset information collected on the
FAFSA, as of the time of the study, plays an important role in the awarding of need-based State
financial aid, and whether the State can use an
expected family contribution generated by the
FAFSA, instead of income and asset information
or a calculation with reduced data elements, to
support determinations of eligibility for such State
aid programs and, if not, what additional information will be needed or what changes to the FAFSA
will be required; and
(IV) information on institutional needs, including the extent to which institutions of higher
education are already using supplemental forms
to collect additional data from students and their
families to determine eligibility for institutional
funds; and
(V) changes to this Act or other laws that will
be required to implement a modified need analysis
system.
(4) CONSULTATION.—The Secretary shall consult with the
Advisory Committee on Student Financial Assistance established under section 491 as appropriate in carrying out this
subsection.
(5) REPORTS.—
(A) REPORTS ON STUDY.—The Secretary shall prepare
and submit to the authorizing committees—
(i) not later than one year after the date of enactment of the Higher Education Opportunity Act, an interim report on the progress of the study required
under paragraph (3) that includes any preliminary
recommendations by the study group established
under such paragraph; and
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(ii) not later than two years after the date of enactment of the Higher Education Opportunity Act, a
final report on the results of the study required under
paragraph (3) that includes recommendations by the
study group established under such paragraph.
(B) REPORTS ON FAFSA SIMPLIFICATION EFFORTS.—The
Secretary shall report to the authorizing committees, from
time to time, on the progress of the simplification efforts
under this subsection.
(g) ADDRESSING THE DIGITAL DIVIDE.—The Secretary shall utilize savings accrued by moving more applicants to the electronic
version of the forms described in subsection (a)(3) to improve access
to the electronic version of the forms described in such subsection
for applicants meeting the requirements of subsection (b) or (c) of
section 479.
(h) ADJUSTMENTS.—The Secretary shall disclose, on the form
notifying a student of the student’s expected family contribution,
that the student may, on a case-by-case basis, qualify for an adjustment under section 479A to the cost of attendance or the values of
the data items required to calculate the expected contribution for
the student or parent. Such disclosure shall specify—
(1) the special circumstances under which a student or
family member may qualify for such adjustment; and
(2) additional information regarding the steps a student or
family member may take in order to seek an adjustment under
section 479A.
SEC. 484. ø20 U.S.C. 1091¿ STUDENT ELIGIBILITY.
(a) IN GENERAL.—In order to receive any
grant, loan, or work
assistance under this title, a student must—
(1) be enrolled or accepted for enrollment in a degree, certificate, or other program (including a program of study abroad
approved for credit by the eligible institution at which such
student is enrolled) leading to a recognized educational credential at an institution of higher education that is an eligible institution in accordance with the provisions of section 487, except as provided in subsections (b)(3) and (b)(4), and not be enrolled in an elementary or secondary school;
(2) if the student is presently enrolled at an institution, be
maintaining satisfactory progress in the course of study the
student is pursuing in accordance with the provisions of subsection (c);
(3) not owe a refund on grants previously received at any
institution under this title, or be in default on any loan from
a student loan fund at any institution provided for in part E,
or a loan made, insured, or guaranteed by the Secretary under
this title for attendance at any institution;
(4) file with the Secretary, as part of the original financial
aid application process, a certification, which need not be notarized, but which shall include—
(A) a statement of educational purpose stating that
the money attributable to such grant, loan, or loan guarantee will be used solely for expenses related to attendance or continued attendance at such institution; and
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(B) such student’s social security number;
(5) be a citizen or national of the United States, a permanent resident of the United States, or able to provide evidence
from the Immigration and Naturalization Service that he or
she is in the United States for other than a temporary purpose
with the intention of becoming a citizen or permanent resident;
and
(6) if the student has been convicted of, or has pled nolo
contendere or guilty to, a crime involving fraud in obtaining
funds under this title, have completed the repayment of such
funds to the Secretary, or to the holder in the case of a loan
under this title obtained by fraud.
(b) ELIGIBILITY FOR STUDENT LOANS.—(1) In order to be eligible to receive any loan under this title (other than a loan under
section 428B or 428C, or under section 428H pursuant to an exercise of discretion under section 479A) for any period of enrollment,
a student who is not a graduate or professional student (as defined
in regulations of the Secretary), and who is enrolled in a program
at an institution which has a participation agreement with the Secretary to make awards under subpart 1 of part A of this title,
shall—
(A)(i) have received a determination of eligibility or ineligibility for a Pell Grant under such subpart 1 for such period of
enrollment; and (ii) if determined to be eligible, have filed an
application for a Pell Grant for such enrollment period; or
(B) have (A) filed an application with the Pell Grant processor for such institution for such enrollment period, and (B)
received from the financial aid administrator of the institution
a preliminary determination of the student’s eligibility or ineligibility for a grant under such subpart 1.
(2) In order to be eligible to receive any loan under section
428A for any period of enrollment, a student shall—
(A) have received a determination of need for a loan under
section 428(a)(2)(B) of this title;
(B) if determined to have need for a loan under section
428, have applied for such a loan; and
(C) has applied for a loan under section 428H, if such student is eligible to apply for such a loan.
(3) A student who—
(A) is carrying at least one-half the normal full-time work
load for the course of study that the student is pursuing, as determined by an eligible institution, and
(B) is enrolled in a course of study necessary for enrollment in a program leading to a degree or certificate,
shall be, notwithstanding paragraph (1) of subsection (a), eligible
to apply for loans under part B or D of this title. The eligibility described in this paragraph shall be restricted to one 12-month period.
(4) A student who—
(A) is carrying at least one-half the normal full-time work
load for the course of study the student is pursuing, as determined by the institution, and
(B) is enrolled or accepted for enrollment in a program at
an eligible institution necessary for a professional credential or
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certification from a State that is required for employment as
a teacher in an elementary or secondary school in that State,
shall be, notwithstanding paragraph (1) of subsection (a), eligible
to apply for loans under part B, D, or E or work-study assistance
under part C of this title.
(5) Notwithstanding any other provision of this subsection, no
incarcerated student is eligible to receive a loan under this title.
(c) SATISFACTORY PROGRESS.—(1) For the purpose of subsection
(a)(2), a student is maintaining satisfactory progress if—
(A) the institution at which the student is in attendance,
reviews the progress of the student at the end of each academic year, or its equivalent, as determined by the institution,
and
(B) the student has a cumulative C average, or its equivalent or academic standing consistent with the requirements for
graduation, as determined by the institution, at the end of the
second such academic year.
(2) Whenever a student fails to meet the eligibility requirements of subsection (a)(2) as a result of the application of this subsection and subsequent to that failure the student has academic
standing consistent with the requirements for graduation, as determined by the institution, for any grading period, the student may,
subject to this subsection, again be eligible under subsection (a)(2)
for a grant, loan, or work assistance under this title.
(3) Any institution of higher education at which the student is
in attendance may waive the provisions of paragraph (1) or paragraph (2) of this subsection for undue hardship based on—
(A) the death of a relative of the student,
(B) the personal injury or illness of the student, or
(C) special circumstances as determined by the institution.
(d) 1 STUDENTS WHO ARE NOT HIGH SCHOOL GRADUATES.—In
order for a student who does not have a certificate of graduation
from a school providing secondary education, or the recognized
1 This subsection was amended by section 309(c) of division F of Public Law 112–74, and applied to ‘‘students who first enroll in a program of study on or after July 1, 2012’’. The subsection that is applicable to students who first enrolled prior to July 1, 2012, reads as follows:
(d) STUDENTS WHO ARE NOT HIGH SCHOOL GRADUATES.—In order for a student who does not
have a certificate of graduation from a school providing secondary education, or the recognized
equivalent of such certificate, to be eligible for any assistance under subparts 1, 3, and 4 of part
A and parts B, C, D, and E of this title, the student shall meet one of the following standards:
(1) The student shall take an independently administered examination and shall achieve
a score, specified by the Secretary, demonstrating that such student can benefit from the
education or training being offered. Such examination shall be approved by the Secretary
on the basis of compliance with such standards for development, administration, and scoring
as the Secretary may prescribe in regulations.
(2) The student shall be determined as having the ability to benefit from the education
or training in accordance with such process as the State shall prescribe. Any such process
described or approved by a State for the purposes of this section shall be effective 6 months
after the date of submission to the Secretary unless the Secretary disapproves such process.
In determining whether to approve or disapprove such process, the Secretary shall take into
account the effectiveness of such process in enabling students without high school diplomas
or the equivalent thereof to benefit from the instruction offered by institutions utilizing such
process, and shall also take into account the cultural diversity, economic circumstances, and
educational preparation of the populations served by the institutions.
(3) The student has completed a secondary school education in a home school setting that
is treated as a home school or private school under State law.
(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 six credit hours or the equivalent coursework that
are applicable toward a degree or certificate offered by the institution of higher education.
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equivalent of such certificate, to be eligible for any assistance
under subparts 1, 3, and 4 of part A and parts B, C, D, and E of
this title, the student shall have completed a secondary school education in a home school setting that is treated as a home school or
private school under State law.
(e) CERTIFICATION FOR GSL ELIGIBILITY.—Each eligible institution may certify student eligibility for a loan by an eligible lender
under part B of this title prior to completing the review for accuracy of the information submitted by the applicant required by regulations issued under this title, if—
(1) checks for the loans are mailed to the eligible institution prior to disbursements;
(2) the disbursement is not made until the review is complete; and
(3) the eligible institution has no evidence or documentation on which the institution may base a determination that
the information submitted by the applicant is incorrect.
(f) LOSS OF ELIGIBILITY FOR VIOLATION OF LOAN LIMITS.—(1)
No student shall be eligible to receive any grant, loan, or work assistance under this title if the eligible institution determines that
the student fraudulently borrowed in violation of the annual loan
limits under part B, part D, or part E of this title in the same academic year, or if the student fraudulently borrowed in excess of the
aggregate maximum loan limits under such part B, part D, or part
E.
(2) If the institution determines that the student inadvertently
borrowed amounts in excess of such annual or aggregate maximum
loan limits, such institution shall allow the student to repay any
amount borrowed in excess of such limits prior to certifying the
student’s eligibility for further assistance under this title.
(g) VERIFICATION OF IMMIGRATION STATUS.—
(1) IN GENERAL.—The Secretary shall implement a system
under which the statements and supporting documentation, if
required, of an individual declaring that such individual is in
compliance with the requirements of subsection (a)(5) shall be
verified prior to the individual’s receipt of a grant, loan, or
work assistance under this title.
(2) SPECIAL RULE.—The documents collected and maintained by an eligible institution in the admission of a student
to the institution may be used by the student in lieu of the documents used to establish both employment authorization and
identity under section 274A(b)(1)(B) of the Immigration and
Nationality Act (8 U.S.C. 1324a) to verify eligibility to participate in work-study programs under part C of this title.
(3) VERIFICATION MECHANISMS.—The Secretary is authorized to verify such statements and supporting documentation
through a data match, using an automated or other system,
with other Federal agencies that may be in possession of information relevant to such statements and supporting documentation.
(4) REVIEW.—In the case of such an individual who is not
a citizen or national of the United States, if the statement described in paragraph (1) is submitted but the documentation
required under paragraph (2) is not presented or if the docuMay 7, 2013
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mentation required under paragraph (2)(A) is presented but
such documentation is not verified under paragraph (3)—
(A) the institution—
(i) shall provide a reasonable opportunity to submit to the institution evidence indicating a satisfactory
immigration status, and
(ii) may not delay, deny, reduce, or terminate the
individual’s eligibility for the grant, loan, or work assistance on the basis of the individual’s immigration
status until such a reasonable opportunity has been
provided; and
(B) if there are submitted documents which the institution determines constitute reasonable evidence indicating such status—
(i) the institution shall transmit to the Immigration and Naturalization Service either photostatic or
other similar copies of such documents, or information
from such documents, as specified by the Immigration
and Naturalization Service, for official verification,
(ii) pending such verification, the institution may
not delay, deny, reduce, or terminate the individual’s
eligibility for the grant, loan, or work assistance on
the basis of the individual’s immigration status, and
(iii) the institution shall not be liable for the consequences of any action, delay, or failure of the Service
to conduct such verification.
(h) LIMITATIONS OF ENFORCEMENT ACTIONS AGAINST INSTITUTIONS.—The Secretary shall not take any compliance, disallowance,
penalty, or other regulatory action against an institution of higher
education with respect to any error in the institution’s determination to make a student eligible for a grant, loan, or work assistance
based on citizenship or immigration status—
(1) if the institution has provided such eligibility based on
a verification of satisfactory immigration status by the Immigration and Naturalization Service,
(2) because the institution, under subsection (g)(4)(A)(i),
was required to provide a reasonable opportunity to submit
documentation, or
(3) because the institution, under subsection (g)(4)(B)(i),
was required to wait for the response of the Immigration and
Naturalization Service to the institution’s request for official
verification of the immigration status of the student.
(i) VALIDITY OF LOAN GUARANTEES FOR LOAN PAYMENTS MADE
BEFORE IMMIGRATION STATUS VERIFICATION COMPLETED.—Notwithstanding subsection (h), if—
(1) a guaranty is made under this title for a loan made
with respect to an individual,
(2) at the time the guaranty is entered into, the provisions
of subsection (h) had been complied with,
(3) amounts are paid under the loan subject to such guaranty, and
(4) there is a subsequent determination that, because of an
unsatisfactory immigration status, the individual is not eligible
for the loan,
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HIGHER EDUCATION ACT OF 1965
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the official of the institution making the determination shall notify
and instruct the entity making the loan to cease further payments
under the loan, but such guaranty shall not be voided or otherwise
nullified with respect to such payments made before the date the
entity receives the notice.
(k) 1 SPECIAL RULE FOR CORRESPONDENCE COURSES.—A student shall not be eligible to receive grant, loan, or work assistance
under this title for a correspondence course unless such course is
part of a program leading to an associate, bachelor or graduate degree.
(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 recognized associate, recognized
baccalaureate, or recognized 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 Career and Technical Education Act of 2006.
(2) 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 beginning prior to
July 1, 2008, the Secretary shall not take any compliance, disallowance, penalty, or other action based on a violation of this
subsection 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.
(m) STUDENTS WITH A FIRST BACCALAUREATE OR PROFESSIONAL DEGREE.—A student shall not be ineligible for assistance
under parts B, C, D, and E of this title because such student has
previously received a baccalaureate or professional degree.
(n) DATA BASE MATCHING.—To enforce the Selective Service
registration provisions of section 12(f) of the Military Selective
Service Act (50 U.S.C. App. 462(f)), the Secretary shall conduct
data base matches with the Selective Service, using common demographic data elements. Appropriate confirmation, through an application output document or through other means, of any person’s
registration shall fulfill the requirement to file a separate statement of compliance. In the absence of a confirmation from such
data matches, an institution may also use data or documents that
support either the student’s registration, or the absence of a reg1 So
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576
istration requirement for the student, to fulfill the requirement to
file a separate statement of compliance. The mechanism for reporting the resolution of nonconfirmed matches shall be prescribed by
the Secretary in regulations.
(o) STUDY ABROAD.—Nothing in this Act shall be construed to
limit or otherwise prohibit access to study abroad programs approved by the home institution at which a student is enrolled. An
otherwise eligible student who is engaged in a program of study
abroad approved for academic credit by the home institution at
which the student is enrolled shall be eligible to receive grant,
loan, or work assistance under this title, without regard to whether
such study abroad program is required as part of the student’s degree program.
(p) VERIFICATION OF SOCIAL SECURITY NUMBER.—The Secretary of Education, in cooperation with the Commissioner of the
Social Security Administration, shall verify any social security
number provided by a student to an eligible institution under subsection (a)(4) and shall enforce the following conditions:
(1) Except as provided in paragraphs (2) and (3), an institution shall not deny, reduce, delay, or terminate a student’s
eligibility for assistance under this part because social security
number verification is pending.
(2) If there is a determination by the Secretary that the social security number provided to an eligible institution by a
student is incorrect, the institution shall deny or terminate the
student’s eligibility for any grant, loan, or work assistance
under this title until such time as the student provides documented evidence of a social security number that is determined
by the institution to be correct.
(3) If there is a determination by the Secretary that the social security number provided to an eligible institution by a
student is incorrect, and a correct social security number cannot be provided by such student, and a loan has been guaranteed for such student under part B of this title, the institution
shall notify and instruct the lender and guaranty agency making and guaranteeing the loan, respectively, to cease further
disbursements of the loan, but such guaranty shall not be voided or otherwise nullified with respect to such disbursements
made before the date that the lender and the guaranty agency
receives such notice.
(4) Nothing in this subsection shall permit the Secretary
to take any compliance, disallowance, penalty, or other regulatory action against—
(A) any institution of higher education with respect to
any error in a social security number, unless such error
was a result of fraud on the part of the institution; or
(B) any student with respect to any error in a social
security number, unless such error was a result of fraud
on the part of the student.
(q) USE OF INCOME DATA.—
(1) MATCHING WITH IRS.—The Secretary, in cooperation
with the Secretary of the Treasury, is authorized to obtain
from the Internal Revenue Service such information reported
on Federal income tax returns by applicants, or by any other
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person whose financial information is required to be provided
on the Federal student financial aid application, as the Secretary determines is necessary for the purpose of—
(A) prepopulating the Federal student financial aid application described in section 483; or
(B) verifying the information reported on such student
financial aid applications.
(2) CONSENT.—The Secretary may require that applicants
for financial assistance under this title provide a consent to the
disclosure of the data described in paragraph (1) as a condition
of the student receiving assistance under this title. The parents of an applicant, in the case of a dependent student, or the
spouse of an applicant, in the case of an applicant who is married but files separately, may also be required to provide consent as a condition of the student receiving assistance under
this title.
(r) SUSPENSION OF ELIGIBILITY FOR DRUG-RELATED OFFENSES.—
(1) IN GENERAL.—A student who is convicted of any offense
under any Federal or State law involving the possession or sale
of a controlled substance for conduct that occurred during a period of enrollment for which the student was receiving any
grant, loan, or work assistance under this title shall not be eligible to receive any grant, loan, or work assistance under this
title from the date of that conviction for the period of time
specified in the following table:
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If convicted of an offense involving:
The possession of a controlled substance:
First offense ...................................
Second offense ...............................
Third offense ..................................
Ineligibility period is:
1 year
2 years
Indefinite.
The sale of a controlled
substance:
First offense ...................................
Second offense ...............................
Ineligibility period is:
2 years
Indefinite.
(2) REHABILITATION.—A student whose eligibility has been
suspended under paragraph (1) may resume eligibility before
the end of the ineligibility period determined under such paragraph if—
(A) the student satisfactorily completes a drug rehabilitation program that—
(i) complies with such criteria as the Secretary
shall prescribe in regulations for purposes of this paragraph; and
(ii) includes two unannounced drug tests;
(B) the student successfully passes two unannounced
drug tests conducted by a drug rehabilitation program that
complies with such criteria as the Secretary shall prescribe
in regulations for purposes of subparagraph (A)(i); or
(C) the conviction is reversed, set aside, or otherwise
rendered nugatory.
(3) DEFINITIONS.—In this subsection, the term ‘‘controlled
substance’’ has the meaning given the term in section 102(6)
of the Controlled Substances Act (21 U.S.C. 802(6)).
(s) STUDENTS WITH INTELLECTUAL DISABILITIES.—
(1) DEFINITIONS.—In this subsection the terms ‘‘comprehensive transition and postsecondary program for students
with intellectual disabilities’’ and ‘‘student with an intellectual
disability’’ have the meanings given the terms in section 760.
(2) REQUIREMENTS.—Notwithstanding subsections (a), (c),
and (d), in order to receive any grant or work assistance under
section 401, subpart 3 of part A, or part C, a student with an
intellectual disability shall—
(A) be enrolled or accepted for enrollment in a comprehensive transition and postsecondary program for students with intellectual disabilities at an institution of
higher education;
(B) be maintaining satisfactory progress in the program as determined by the institution, in accordance with
standards established by the institution; and
(C) meet the requirements of paragraphs (3), (4), (5),
and (6) of subsection (a).
(3) AUTHORITY.—Notwithstanding any other provision of
law unless such provision is enacted with specific reference to
this section, the Secretary is authorized to waive any statutory
provision applicable to the student financial assistance programs under section 401, subpart 3 of part A, or part C (other
than a provision of part F related to such a program), or any
institutional eligibility provisions of this title, as the Secretary
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determines necessary to ensure that programs enrolling students with intellectual disabilities otherwise determined to be
eligible under this subsection may receive such financial assistance.
(4) REGULATIONS.—Notwithstanding regulations applicable
to grant or work assistance awards made under section 401,
subpart 3 of part A, and part C (other than a regulation under
part F related to such an award), including with respect to eligible programs, instructional time, credit status, and enrollment status as described in section 481, the Secretary shall
promulgate regulations allowing programs enrolling students
with intellectual disabilities otherwise determined to be eligible under this subsection to receive such awards.
(t) DATA ANALYSIS ON ACCESS TO FEDERAL STUDENT AID FOR
CERTAIN POPULATIONS.—
(1) DEVELOPMENT OF THE SYSTEM.—Within one year of enactment of the Higher Education Opportunity Act, the Secretary shall analyze data from the FAFSA containing information regarding the number, characteristics, and circumstances
of students denied Federal student aid based on a drug conviction while receiving Federal aid.
(2) RESULTS FROM ANALYSIS.—The results from the analysis of such information shall be made available on a continuous basis via the Department website and the Digest of Education Statistics.
(3) DATA UPDATING.—The data analyzed under this subsection shall be updated at the beginning of each award year
and at least one additional time during such award year.
(4) REPORT TO CONGRESS.—The Secretary shall prepare
and submit to the authorizing committees, in each fiscal year,
a report describing the results obtained by the establishment
and operation of the data system authorized by this subsection.
SEC. 484A. ø20 U.S.C. 1091a¿ STATUTE OF LIMITATIONS, AND STATE
COURT JUDGMENTS.
(a) IN GENERAL.—(1) It is the purpose of this subsection to en-
sure that obligations to repay loans and grant overpayments are
enforced without regard to any Federal or State statutory, regulatory, or administrative limitation on the period within which
debts may be enforced.
(2) Notwithstanding any other provision of statute, regulation,
or administrative limitation, no limitation shall terminate the period within which suit may be filed, a judgment may be enforced,
or an offset, garnishment, or other action initiated or taken by—
(A) an institution that receives funds under this title that
is seeking to collect a refund due from a student on a grant
made, or work assistance awarded, under this title;
(B) a guaranty agency that has an agreement with the
Secretary under section 428(c) that is seeking the repayment
of the amount due from a borrower on a loan made under part
B of this title after such guaranty agency reimburses the previous holder of the loan for its loss on account of the default
of the borrower;
(C) an institution that has an agreement with the Secretary pursuant to section 453 or 463(a) that is seeking the reMay 7, 2013
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580
payment of the amount due from a borrower on a loan made
under part D or E of this title after the default of the borrower
on such loan; or
(D) the Secretary, the Attorney General, or the administrative head of another Federal agency, as the case may be, for
payment of a refund due from a student on a grant made
under this title, or for the repayment of the amount due from
a borrower on a loan made under this title that has been assigned to the Secretary under this title.
(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 collection costs;
(2) in collecting 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, 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) STATE COURT JUDGMENTS.—A judgment of a State court for
the recovery of money provided as grant, loan, or work assistance
under this title that has been assigned or transferred to the Secretary under this title may be registered in any district court of the
United States by filing a certified copy of the judgment and a copy
of the assignment or transfer. A judgment so registered shall have
the same force and effect, and may be enforced in the same manner, as a judgment of the district court of the district in which the
judgment is registered.
(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. ø20 U.S.C. 1091b¿ INSTITUTIONAL REFUNDS.
(a) RETURN OF TITLE IV FUNDS.—
(1) IN GENERAL.—If a recipient of assistance
under this
title withdraws from an institution during a payment period or
period of enrollment in which the recipient began attendance,
the amount of grant or loan assistance (other than assistance
received under part C) to be returned to the title IV programs
is calculated according to paragraph (3) and returned in accordance with subsection (b).
(2) LEAVE OF ABSENCE.—
(A) LEAVE NOT TREATED AS WITHDRAWAL.—In the case
of a student who takes 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
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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) the institution has a formal policy regarding
leaves of absence;
(ii) the student followed the institution’s policy in
requesting a leave of absence; and
(iii) the institution approved the student’s request
in accordance with the institution’s policy.
(B) CONSEQUENCES OF FAILURE TO RETURN.—If a student does not return to the institution at the expiration of
an approved leave of absence that meets the requirements
of subparagraph (A), the institution shall calculate the
amount of grant and loan assistance provided under this
title that is to be returned in accordance with this section
based on the day the student withdrew (as determined
under subsection (c)).
(3) CALCULATION OF AMOUNT OF TITLE IV ASSISTANCE
EARNED.—
(A) IN GENERAL.—The amount of grant or loan assistance under this title that is earned by the recipient for
purposes of this section is calculated by—
(i) determining the percentage of grant and loan
assistance under this title that has been earned by the
student, as described in subparagraph (B); and
(ii) applying such percentage to the total amount
of such grant and loan assistance that was disbursed
(and that could have been disbursed) to the student,
or on the student’s behalf, for the payment period or
period of enrollment for which the assistance was
awarded, as of the day the student withdrew.
(B) PERCENTAGE EARNED.—For purposes of subparagraph (A)(i), the percentage of grant or loan assistance
under this title that has been earned by the student is—
(i) equal to the percentage of the payment period
or period of enrollment for which assistance was
awarded that was completed (as determined in accordance with subsection (d)) as of the day the student
withdrew, provided that such date occurs on or before
the completion of 60 percent of the payment period or
period of enrollment; or
(ii) 100 percent, if the day the student withdrew
occurs after the student has completed (as determined
in accordance with subsection (d)) 60 percent of the
payment period or period of enrollment.
(C) PERCENTAGE AND AMOUNT NOT EARNED.—For purposes of subsection (b), the amount of grant and loan assistance awarded under this title that has not been earned
by the student shall be calculated by—
(i) determining the complement of the percentage
of grant assistance under subparts 1 and 3 of part A,
or loan assistance under parts B, D, and E, that has
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been earned by the student described in subparagraph
(B); and
(ii) applying the percentage determined under
clause (i) to the total amount of such grant and loan
assistance that was disbursed (and that could have
been disbursed) to the student, or on the student’s behalf, for the payment period or period of enrollment,
as of the day the student withdrew.
(4) DIFFERENCES BETWEEN AMOUNTS EARNED AND AMOUNTS
RECEIVED.—
(A) IN GENERAL.—After determining the eligibility of
the student for a late disbursement or post-withdrawal disbursement (as required in regulations prescribed by the
Secretary), the institution of higher education shall contact
the borrower and obtain confirmation that the loan funds
are still required by the borrower. In making such contact,
the institution shall explain to the borrower the borrower’s
obligation to repay the funds following any such disbursement. The institution shall document in the borrower’s file
the result of such contact and the final determination
made concerning such disbursement.
(B) RETURN.—If the student has received more grant
or loan assistance than the amount earned as calculated
under paragraph (3)(A), the unearned funds shall be returned by the institution or the student, or both, as may
be required under paragraphs (1) and (2) of subsection (b),
to the programs under this title in the order specified in
subsection (b)(3).
(b) RETURN OF TITLE IV PROGRAM FUNDS.—
(1) RESPONSIBILITY OF THE INSTITUTION.—The institution
shall return not later than 45 days from the determination of
withdrawal, in the order specified in paragraph (3), the lesser
of—
(A) the amount of grant and loan assistance awarded
under this title that has not been earned by the student,
as calculated under subsection (a)(3)(C); or
(B) an amount equal to—
(i) the total institutional charges incurred by the
student for the payment period or period of enrollment
for which such assistance was awarded; multiplied by
(ii) the percentage of grant and loan assistance
awarded under this title that has not been earned by
the student, as described in subsection (a)(3)(C)(i).
(2) RESPONSIBILITY OF THE STUDENT.—
(A) IN GENERAL.—The student shall return assistance
that has not been earned by the student as described in
subsection (a)(3)(C)(ii) in the order specified in paragraph
(3) minus the amount the institution is required to return
under paragraph (1).
(B) SPECIAL RULE.—The student (or parent in the case
of funds due to a loan borrowed by a parent under part B
or D) shall return or repay, as appropriate, the amount determined under subparagraph (A) to—
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(i) a loan program under this title in accordance
with the terms of the loan; and
(ii) a grant program under this title, as an overpayment of such grant and shall be subject to—
(I) repayment arrangements satisfactory to
the institution; or
(II) overpayment collection procedures prescribed by the Secretary.
(C) GRANT OVERPAYMENT REQUIREMENTS.—
(i) IN GENERAL.—Notwithstanding subparagraphs
(A) and (B), a student shall only be required to return
grant assistance in the amount (if any) by which—
(I) the amount to be returned by the student
(as determined under subparagraphs (A) and (B)),
exceeds
(II) 50 percent of the total grant assistance received by the student under this title for the payment period or period of enrollment.
(ii) MINIMUM.—A student shall not be required to
return amounts of $50 or less.
(D) WAIVERS OF FEDERAL PELL GRANT REPAYMENT BY
STUDENTS AFFECTED BY DISASTERS.—The Secretary may
waive the amounts that students are required to return
under this section with respect to Federal Pell Grants if
the withdrawals on which the returns are based are withdrawals by students—
(i) who were residing in, employed in, or attending
an institution of higher education that is located in an
area in which the President has declared that a major
disaster exists, in accordance with section 401 of the
Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170);
(ii) whose attendance was interrupted because of
the impact of the disaster on the student or the institution; and
(iii) whose withdrawal ended within the academic
year during which the designation occurred or during
the next succeeding academic year.
(E) WAIVERS OF GRANT ASSISTANCE REPAYMENT BY STUDENTS AFFECTED BY DISASTERS.—In addition to the waivers
authorized by subparagraph (D), the Secretary may waive
the amounts that students are required to return under
this section with respect to any other grant assistance
under this title if the withdrawals on which the returns
are based are withdrawals by students—
(i) who were residing in, employed in, or attending
an institution of higher education that is located in an
area in which the President has declared that a major
disaster exists, in accordance with section 401 of the
Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170);
(ii) whose attendance was interrupted because of
the impact of the disaster on the student or the institution; and
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(iii) whose withdrawal ended within the academic
year during which the designation occurred or during
the next succeeding academic year.
(3) ORDER OF RETURN OF TITLE IV FUNDS.—
(A) IN GENERAL.—Excess funds returned by the institution or the student, as appropriate, in accordance with
paragraph (1) or (2), respectively, shall be credited to outstanding balances on loans made under this title to the
student or on behalf of the student for the payment period
or period of enrollment for which a return of funds is required. Such excess funds shall be credited in the following
order:
(i) To outstanding balances on loans made under
section 428H for the payment period or period of enrollment for which a return of funds is required.
(ii) To outstanding balances on loans made under
section 428 for the payment period or period of enrollment for which a return of funds is required.
(iii) To outstanding balances on unsubsidized
loans (other than parent loans) made under part D for
the payment period or period of enrollment for which
a return of funds is required.
(iv) To outstanding balances on subsidized loans
made under part D for the payment period or period
of enrollment for which a return of funds is required.
(v) To outstanding balances on loans made under
part E for the payment period or period of enrollment
for which a return of funds is required.
(vi) To outstanding balances on loans made under
section 428B for the payment period or period of enrollment for which a return of funds is required.
(vii) To outstanding balances on parent loans
made under part D for the payment period or period
of enrollment for which a return of funds is required.
(B) REMAINING EXCESSES.—If excess funds remain
after repaying all outstanding loan amounts, the remaining excess shall be credited in the following order:
(i) To awards under subpart 1 of part A for the
payment period or period of enrollment for which a return of funds is required.
(ii) To awards under subpart 3 of part A for the
payment period or period of enrollment for which a return of funds is required.
(iii) To other assistance awarded under this title
for which a return of funds is required.
(c) WITHDRAWAL DATE.—
(1) IN GENERAL.—In this section, the term ‘‘day the student
withdrew’’—
(A) is the date that the institution determines—
(i) the student began the withdrawal process prescribed by the institution;
(ii) the student otherwise provided official notification to the institution of the intent to withdraw; or
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HIGHER EDUCATION ACT OF 1965
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(iii) in the case of a student who does not begin
the withdrawal process or otherwise notify the institution of the intent to withdraw, the date that is the
mid-point of the payment period for which assistance
under this title was disbursed or a later date documented by the institution; or
(B) for institutions required to take attendance, is determined by the institution from such attendance records.
(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, grievous personal loss, or
other such circumstances beyond the student’s control, the institution may determine the appropriate withdrawal date.
(d) PERCENTAGE OF THE PAYMENT PERIOD OR PERIOD OF ENROLLMENT COMPLETED.—For purposes of subsection (a)(3)(B), the
percentage of the payment period or period of enrollment for which
assistance was awarded that was completed, is determined—
(1) in the case of a program that is measured in credit
hours, by dividing the total number of calendar days comprising the payment period or period of enrollment for which
assistance is awarded into the number of calendar days completed in that period as of the day the student withdrew; and
(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 scheduled to
be completed by the student in that period as of the day the
student withdrew.
(e) EFFECTIVE DATE.—The provisions of this section shall take
effect 2 years after the date of enactment of the Higher Education
Amendments of 1998. An institution of higher education may
choose to implement such provisions prior to that date.
SEC. 484C. ø20 U.S.C. 1091c¿ READMISSION REQUIREMENTS FOR
SERVICEMEMBERS.
(a) DEFINITION OF SERVICE IN THE UNIFORMED SERVICES.—In
this section, the term ‘‘service in the uniformed services’’ means
service (whether voluntary or involuntary) on active duty in the
Armed Forces, including such service by a member of the National
Guard or Reserve, for a period of more than 30 days under a call
or order to active duty of more than 30 days.
(b) DISCRIMINATION AGAINST STUDENTS WHO SERVE IN THE
UNIFORMED SERVICES PROHIBITED.—A person who is a member of,
applies to be a member of, performs, has performed, applies to perform, or has an obligation to perform, service in the uniformed
services shall not be denied readmission to an institution of higher
education on the basis of that membership, application for membership, performance of service, application for service, or obligation.
(c) READMISSION PROCEDURES.—
(1) IN GENERAL.—Any student whose absence from an institution of higher education is necessitated by reason of service in the uniformed services shall be entitled to readmission
to the institution of higher education if—
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(A) the student (or an appropriate officer of the Armed
Forces or official of the Department of Defense) gives advance written or verbal notice of such service to the appropriate official at the institution of higher education;
(B) the cumulative length of the absence and of all
previous absences from that institution of higher education
by reason of service in the uniformed services does not exceed five years; and
(C) except as otherwise provided in this section, the
student submits a notification of intent to reenroll in the
institution of higher education in accordance with the provisions of paragraph (4).
(2) EXCEPTIONS.—
(A) MILITARY NECESSITY.—No notice is required under
paragraph (1)(A) if the giving of such notice is precluded
by military necessity, such as—
(i) a mission, operation, exercise, or requirement
that is classified; or
(ii) a pending or ongoing mission, operation, exercise, or requirement that may be compromised or otherwise adversely affected by public knowledge.
(B) FAILURE TO GIVE ADVANCE NOTICE.—Any student
(or an appropriate officer of the Armed Forces or official of
the Department of Defense) who did not give advance written or verbal notice of service to the appropriate official at
the institution of higher education in accordance with
paragraph (1)(A) may meet the notice requirement by submitting, at the time the student seeks readmission, an attestation to the student’s institution of higher education
that the student performed service in the uniformed services that necessitated the student’s absence from the institution of higher education.
(3) APPLICABILITY.—This section shall apply to a student
who is absent from an institution of higher education by reason
of service in the uniformed services if such student’s cumulative period of service in the Armed Forces (including the National Guard or Reserve), with respect to the institution of
higher education for which a student seeks readmission, does
not exceed five years, except that any such period of service
shall not include any service—
(A) that is required, beyond five years, to complete an
initial period of obligated service;
(B) during which such student was unable to obtain
orders releasing such student from a period of service in
the uniformed services before the expiration of such fiveyear period and such inability was through no fault of such
student; or
(C) performed by a member of the Armed Forces (including the National Guard and Reserves) who is—
(i) ordered to or retained on active duty under section 688, 12301(a), 12301(g), 12302, 12304, or 12305 of
title 10, United States Code, or under section 331, 332,
359, 360, 367, or 712 of title 14, United States Code;
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HIGHER EDUCATION ACT OF 1965
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(ii) ordered to or retained on active duty (other
than for training) under any provision of law because
of a war or national emergency declared by the President or the Congress, as determined by the Secretary
concerned;
(iii) ordered to active duty (other than for training) in support, as determined by the Secretary concerned, of an operational mission for which personnel
have been ordered to active duty under section 12304
of title 10, United States Code;
(iv) ordered to active duty in support, as determined by the Secretary concerned, of a critical mission
or requirement of the Armed Forces (including the National Guard or Reserve); or
(v) called into Federal service as a member of the
National Guard under chapter 15 of title 10, United
States Code, or section 12406 of title 10, United States
Code.
(4) NOTIFICATION OF INTENT TO RETURN.—
(A) IN GENERAL.—Except as provided in subparagraph
(B), a student referred to in subsection (a) shall, upon the
completion of a period of service in the uniformed services,
notify the institution of higher education of the student’s
intent to return to the institution not later than three
years after the completion of the period of service.
(B) HOSPITALIZATION OR CONVALESCENCE.—A student
who is hospitalized for or convalescing from an illness or
injury incurred in or aggravated during the performance of
service in the uniformed services shall notify the institution of higher education of the student’s intent to return
to the institution not later than two years after the end of
the period that is necessary for recovery from such illness
or injury.
(C) SPECIAL RULE.—A student who fails to apply for
readmission within the period described in this section
shall not automatically forfeit such eligibility for readmission to the institution of higher education, but shall be
subject to the institution of higher education’s established
leave of absence policy and general practices.
(5) DOCUMENTATION.—
(A) IN GENERAL.—A student who submits an application for readmission to an institution of higher education
under this section shall provide to the institution of higher
education documentation to establish that—
(i) the student has not exceeded the service limitations established under this section; and
(ii) the student’s eligibility for readmission has not
been terminated due to an exception in subsection (d).
(B) PROHIBITED DOCUMENTATION DEMANDS.—An institution of higher education may not delay or attempt to
avoid a readmission of a student under this section by demanding documentation that does not exist, or is not readily available, at the time of readmission.
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(6) NO CHANGE IN ACADEMIC STATUS.—A student who is readmitted to an institution of higher education under this section shall be readmitted with the same academic status as
such student had when such student last attended the institution of higher education.
(d) EXCEPTION FROM READMISSION ELIGIBILITY.—A student’s
eligibility for readmission to an institution of higher education
under this section by reason of such student’s service in the uniformed services terminates upon the occurrence of any of the following events:
(1) A separation of such person from the Armed Forces (including the National Guard and Reserves) with a dishonorable
or bad conduct discharge.
(2) A dismissal of such person permitted under section
1161(a) of title 10, United States Code.
(3) A dropping of such person from the rolls pursuant to
section 1161(b) of title 10, United States Code.
SEC. 485. ø20 U.S.C. 1092¿ INSTITUTIONAL AND FINANCIAL ASSISTANCE
INFORMATION FOR STUDENTS.
(a) INFORMATION DISSEMINATION ACTIVITIES.—(1) Each eligible
institution participating in any program under this title shall carry
out information dissemination activities for prospective and enrolled students (including those attending or planning to attend
less than full time) regarding the institution and all financial assistance under this title. The information required by this section
shall be produced and be made readily available upon request,
through appropriate publications, mailings, and electronic media,
to an enrolled student and to any prospective student. Each eligible
institution shall, on an annual basis, provide to all enrolled students a list of the information that is required to be provided by
institutions to students by this section and section 444 of the General Education Provisions Act (commonly known as the ‘‘Family
Educational Rights and Privacy Act of 1974’’), together with a
statement of the procedures required to obtain such information.
The information required by this section shall accurately describe—
(A) the student financial assistance programs available to
students who enroll at such institution;
(B) the methods by which such assistance is distributed
among student recipients who enroll at such institution;
(C) any means, including forms, by which application for
student financial assistance is made and requirements for accurately preparing such application;
(D) the rights and responsibilities of students receiving financial assistance under this title;
(E) the cost of attending the institution, including (i) tuition and fees, (ii) books and supplies, (iii) estimates of typical
student room and board costs or typical commuting costs, and
(iv) any additional cost of the program in which the student is
enrolled or expresses a specific interest;
(F) a statement of—
(i) the requirements of any refund policy with which
the institution is required to comply;
(ii) the requirements under section 484B for the return
of grant or loan assistance provided under this title; and
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(iii) the requirements for officially withdrawing from
the institution;
(G) the academic program of the institution, including (i)
the current degree programs and other educational and training programs, (ii) the instructional, laboratory, and other physical plant facilities which relate to the academic program, (iii)
the faculty and other instructional personnel, and (iv) any
plans by the institution for improving the academic program of
the institution;
(H) each person designated under subsection (c) of this section, and the methods by which and locations in which any
person so designated may be contacted by students and prospective students who are seeking information required by this
subsection;
(I) special facilities and services available to students with
disabilities;
(J) the names of associations, agencies, or governmental
bodies which accredit, approve, or license the institution and
its programs, and the procedures under which any current or
prospective student may obtain or review upon request a copy
of the documents describing the institution’s accreditation, approval, or licensing;
(K) the standards which the student must maintain in
order to be considered to be making satisfactory progress, pursuant to section 484(a)(2);
(L) the completion or graduation rate of certificate- or degree-seeking, full-time, undergraduate 1 students entering such
institutions;
(M) 2 the terms and conditions of the loans that students receive under parts B, D, and E;
(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;
(O) the campus crime report prepared by the institution
pursuant to subsection (f ), including all required reporting categories;
(P) 3 institutional policies and sanctions related to
copyright infringement, including—
(i) an annual disclosure that explicitly informs
students that unauthorized distribution of copyrighted
material, including unauthorized peer-to-peer file
sharing, may subject the students to civil and criminal
liabilities;
(ii) a summary of the penalties for violation of
Federal copyright laws; and
(iii) a description of the institution’s policies with
respect to unauthorized peer-to-peer file sharing, including disciplinary actions that are taken against stu1 Amendment made by sec. 10(a) of P.L. 102–26, 105 Stat. 128, inserted ‘‘undergraduate’’ after
‘‘full–time’’ without specifying which location. This compilation inserts it in only the first location.
2 Margin so in law.
3 Margins so in law.
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dents who engage in unauthorized distribution of
copyrighted materials using the institution’s information technology system;
(Q) 3 student body diversity at the institution, including information on the percentage of enrolled, full-time
students who—
(i) are male;
(ii) are female;
(iii) receive a Federal Pell Grant; and
(iv) are a self-identified member of a major racial
or ethnic group;
(R) 3 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;
(S) 3 the types of graduate and professional education
in which graduates of the institution’s four-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;
(T) 3 the fire safety report prepared by the institution
pursuant to subsection (i);
(U) 3 the retention rate of certificate- or degree-seeking, first-time, full-time, undergraduate students entering
such institution; and
(V) 3 institutional policies regarding vaccinations.
(2) For the purpose of this section, the term ‘‘prospective student’’ means any individual who has contacted an eligible institution requesting information concerning admission to that institution.
(3) In calculating the completion or graduation rate under subparagraph (L) of paragraph (1) of this subsection or under subsection (e), a student shall be counted as a completion or graduation if, within 150 percent of the normal time for completion of or
graduation from the program, the student has completed or graduated from the program, or enrolled in any program of an eligible
institution for which the prior program provides substantial preparation. The information required to be disclosed under such subparagraph—
(A) shall be made available by July 1 each year to enrolled
students and prospective students prior to the students enrolling or entering into any financial obligation; and
(B) shall cover the one-year period ending on August 31 of
the preceding year.
(4) 1 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
1 Margin
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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 certificateor degree-seeking, full-time, undergraduate students at the
institution, recalculate the completion or graduation rates
of such students by excluding from the calculation described in paragraph (3) the time period during which 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.
(5) The Secretary shall permit any institution of higher education that is a member of an athletic association or athletic conference that has voluntarily published completion or graduation
rate data or has agreed to publish data that, in the opinion of the
Secretary, is substantially comparable to the information required
under this subsection, to use such data to satisfy the requirements
of this subsection; and
(6) Each institution may provide supplemental information to
enrolled and prospective students showing the completion or graduation rate for students described in paragraph (4) or for students
transferring into the institution or information showing the rate at
which students transfer out of the institution.
(7)(A)(i) 1 Subject to clause (ii), the information disseminated under paragraph (1)(L), or reported under subsection (e),
shall be disaggregated by gender, by each major racial and ethnic subgroup, by recipients of a Federal Pell Grant, by recipients of a loan made under part B or D (other than a loan made
under section 428H or a Federal Direct Unsubsidized Stafford
Loan) who did not receive a Federal Pell Grant, and by recipients of neither a Federal Pell Grant nor a loan made under
part B or D (other than a loan made under section 428H or a
Federal Direct Unsubsidized Stafford Loan), if the number of
students in such subgroup or with such status is sufficient to
yield statistically reliable information and reporting will 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.
(ii) The requirements of clause (i) shall not apply to twoyear, degree-granting institutions of higher education until
academic year 2011-2012.
(B)(i) In order to assist two-year degree-granting institutions of higher education in meeting the requirements of paragraph (1)(L) and subsection (e), the Secretary, in consultation
with the Commissioner for Education Statistics, shall, not later
than 90 days after the date of enactment of the Higher Education Opportunity Act, convene a group of representatives
from diverse institutions of higher education, experts in the
field of higher education policy, state higher education officials,
students, and other stakeholders in the higher education community, to develop recommendations regarding the accurate
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calculation and reporting of the information required to be disseminated or reported under paragraph (1)(L) and subsection
(e) by two-year, degree-granting institutions of higher education. In developing such recommendations, the group of representatives shall consider the mission and role of two-year degree-granting institutions of higher education, and may recommend additional or alternative measures of student success
for such institutions in light of the mission and role of such institutions.
(ii) The Secretary shall widely disseminate the recommendations required under this subparagraph to two-year,
degree-granting institutions of higher education, the public,
and the authorizing committees not later than 18 months after
the first meeting of the group of representatives convened
under clause (i).
(iii) The Secretary shall use the recommendations from the
group of representatives convened under clause (i) to provide
technical assistance to two-year, degree-granting institutions of
higher education in meeting the requirements of paragraph
(1)(L) and subsection (e).
(iv) The Secretary may modify the information required to
be disseminated or reported under paragraph (1)(L) or subsection (e) by a two-year, degree-granting institution of higher
education—
(I) based on the recommendations received under this
subparagraph from the group of representatives convened
under clause (i);
(II) to include additional or alternative measures of
student success if the goals of the provisions of paragraph
(1)(L) and subsection (e) can be met through additional
means or comparable alternatives; and
(III) during the period beginning on the date of enactment of the Higher Education Opportunity Act, and ending
on June 30, 2011.
(b) EXIT COUNSELING FOR BORROWERS.—(1)(A) Each eligible institution shall, through financial aid offices or otherwise, provide
counseling to borrowers of loans that are made, insured, or guaranteed under part B (other than loans made pursuant to section 428C
or loans under section 428B made on behalf of a student) or made
under part D (other than Federal Direct Consolidation Loans or
Federal Direct PLUS Loans made on behalf of a student) or made
under part E of this title prior to the completion of the course of
study for which the borrower enrolled at the institution or at the
time of departure from such institution. The counseling required by
this subsection shall include—
(i) information on the repayment plans available, including
a description of the different features of each plan and sample
information showing the average anticipated monthly payments, and the difference in interest paid and total payments,
under each plan;
(ii) debt management strategies that are designed to facilitate the repayment of such indebtedness;
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(iii) an explanation that the borrower has the options to
prepay each loan, pay each loan on a shorter schedule, and
change repayment plans;
(iv) for any loan forgiveness or cancellation provision of
this title, a general description of the terms and conditions
under which the borrower may obtain full or partial forgiveness or cancellation of the principal and interest, and a copy
of the information provided by the Secretary under section
485(d);
(v) for any forbearance provision of this title, a general description of the terms and conditions under which the borrower
may defer repayment of principal or interest or be granted forbearance, and a copy of the information provided by the Secretary under section 485(d);
(vi) the consequences of defaulting on a loan, including adverse credit reports, delinquent debt collection procedures
under Federal law, and litigation;
(vii) information on the effects of using a consolidation
loan under section 428C or a Federal Direct Consolidation
Loan to discharge the borrower’s loans under parts B, D, and
E, including at a minimum—
(I) the effects of consolidation on total interest to be
paid, fees to be paid, and length of repayment;
(II) the effects of consolidation on a borrower’s underlying loan benefits, including grace periods, loan forgiveness, cancellation, and deferment opportunities;
(III) the option of the borrower to prepay the loan or
to change repayment plans; and
(IV) that borrower benefit programs may vary among
different lenders;
(viii) a general description of the types of tax benefits that
may be available to borrowers; and
(ix) a notice to borrowers about the availability of the National Student Loan Data System and how the system can be
used by a borrower to obtain information on the status of the
borrower’s loans; and
(B) In the case of borrower who leaves an institution without
the prior knowledge of the institution, the institution shall attempt
to provide the information described in subparagraph (A) to the
student in writing.
(2)(A) Each eligible institution shall require that the borrower
of a loan made under part B, D, or E submit to the institution, during the exit interview required by this subsection—
(i) the borrower’s expected permanent address after leaving the institution (regardless of the reason for leaving);
(ii) the name and address of the borrower’s expected employer after leaving the institution;
(iii) the address of the borrower’s next of kin; and
(iv) any corrections in the institution’s records relating the
borrower’s name, address, social security number, references,
and driver’s license number.
(B) The institution shall, within 60 days after the interview,
forward any corrected or completed information received from the
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borrower to the guaranty agency indicated on the borrower’s student aid records.
(C) Nothing in this subsection shall be construed to prohibit an
institution of higher education from utilizing electronic means to
provide personalized exit counseling.
(c) FINANCIAL ASSISTANCE INFORMATION PERSONNEL.—Each eligible institution shall designate an employee or group of employees who shall be available on a full-time basis to assist students
or potential students in obtaining information as specified in subsection (a). The Secretary may, by regulation, waive the requirement that an employee or employees be available on a full-time
basis for carrying out responsibilities required under this section
whenever an institution in which the total enrollment, or the portion of the enrollment participating in programs under this title at
that institution, is too small to necessitate such employee or employees being available on a full-time basis. No such waiver may
include permission to exempt any such institution from designating
a specific individual or a group of individuals to carry out the provisions of this section.
(d) DEPARTMENTAL PUBLICATION OF DESCRIPTIONS OF ASSISTANCE PROGRAMS.—(1) The Secretary shall make available to eligible institutions, eligible lenders, and secondary schools descriptions
of Federal student assistance programs including the rights and responsibilities of student and institutional participants, in order to
(A) assist students in gaining information through institutional
sources, and (B) assist institutions in carrying out the provisions
of this section, so that individual and institutional participants will
be fully aware of their rights and responsibilities under such programs. In particular, such information shall include information to
enable students and prospective students to assess the debt burden
and monthly and total repayment obligations that will be incurred
as a result of receiving loans of varying amounts under this title.
Such information shall also include information on the various payment options available for student loans, including income-sensitive and income-based repayment plans for loans made, insured,
or guaranteed under part B and income-contingent and incomebased repayment plans for loans made under part D. In addition,
such information shall include information to enable borrowers to
assess the practical consequences of loan consolidation, including
differences in deferment eligibility, interest rates, monthly payments, and finance charges, and samples of loan consolidation profiles to illustrate such consequences. The Secretary shall provide
information concerning the specific terms and conditions under
which students may obtain partial or total cancellation or defer repayment of loans for service, shall indicate (in terms of the Federal
minimum wage) the maximum level of compensation and allowances that a student borrower may receive from a tax-exempt organization to qualify for a deferment, and shall explicitly state that
students may qualify for such partial cancellations or deferments
when they serve as a paid employee of a tax-exempt organization.
The Secretary shall also provide information on loan forbearance,
including the increase in debt that results from capitalization of interest. Such information shall be provided by eligible institutions
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and eligible lenders at any time that information regarding loan
availability is provided to any student.
(2) The Secretary, to the extent the information is available,
shall compile information describing State and other prepaid tuition programs and savings programs and disseminate such information to States, eligible institutions, students, and parents in departmental publications.
(3) The Secretary, to the extent practicable, shall update the
Department’s Internet site to include direct links to databases that
contain information on public and private financial assistance programs. The Secretary shall only provide direct links to databases
that can be accessed without charge and shall make reasonable efforts to verify that the databases included in a direct link are not
providing fraudulent information. The Secretary shall prominently
display adjacent to any such direct link a disclaimer indicating that
a direct link to a database does not constitute an endorsement or
recommendation of the database, the provider of the database, or
any services or products of such provider. The Secretary shall provide additional direct links to information resources from which
students may obtain information about fraudulent and deceptive
practices in the provision of services related to student financial
aid.
(4) The Secretary shall widely publicize the location of the information described in paragraph (1) among the public, eligible institutions, and eligible lenders, and promote the use of such information by prospective students, enrolled students, families of prospective and enrolled students, and borrowers.
(e) DISCLOSURES REQUIRED WITH RESPECT TO ATHLETICALLY
RELATED STUDENT AID.—(1) Each institution of higher education
which participates in any program under this title and is attended
by students receiving athletically related student aid shall annually submit a report to the Secretary which contains—
(A) the number of students at the institution of higher
education who received athletically related student aid broken
down by race and sex in the following sports: basketball, football, baseball, cross country/track, and all other sports combined;
(B) the number of students at the institution of higher
education, broken down by race and sex;
(C) the completion or graduation rate for students at the
institution of higher education who received athletically related
student aid broken down by race and sex in the following
sports: basketball, football, baseball, cross country/track and
all other sports combined;
(D) the completion or graduation rate for students at the
institution of higher education, broken down by race and sex;
(E) the average completion or graduation rate for the 4
most recent completing or graduating classes of students at the
institution of higher education who received athletically related
student aid broken down by race and sex in the following categories: basketball, football, baseball, cross country/track, and
all other sports combined; and
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(F) the average completion or graduation rate for the 4
most recent completing or graduating classes of students at the
institution of higher education broken down by race and sex.
(2) When an institution described in paragraph (1) of this subsection offers a potential student athlete athletically related student aid, such institution shall provide to the student and the student’s parents, guidance counselor, and coach the information contained in the report submitted by such institution pursuant to
paragraph (1). If the institution is a member of a national collegiate athletic association that compiles graduation rate data on behalf of the association’s member institutions that the Secretary determines is substantially comparable to the information described
in paragraph (1), the distribution of the compilation of such data
to all secondary schools in the United States shall fulfill the responsibility of the institution to provide information to a prospective student athlete’s guidance counselor and coach.
(3) 1 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 certificateor degree-seeking, full-time, undergraduate students at the
institution, calculate the completion or graduation rates of
such students by excluding from the calculations described
in paragraph (1) the time period during which 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.
(4) Each institution of higher education described in paragraph
(1) may provide supplemental information to students and the Secretary showing the completion or graduation rate when such completion or graduation rate includes students transferring into and
out of such institution.
(5) The Secretary, using the reports submitted under this subsection, shall compile and publish a report containing the information required under paragraph (1) broken down by—
(A) individual institutions of higher education; and
(B) athletic conferences recognized by the National Collegiate Athletic Association and the National Association of
Intercollegiate Athletics.
(6) The Secretary shall waive the requirements of this subsection for any institution of higher education that is a member of
an athletic association or athletic conference that has voluntarily
published completion or graduation rate data or has agreed to publish data that, in the opinion of the Secretary, is substantially comparable to the information required under this subsection.
(7) The Secretary, in conjunction with the National Junior College Athletic Association, shall develop and obtain data on comple1 Margin
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tion or graduation rates from two-year colleges that award athletically related student aid. Such data shall, to the extent practicable, be consistent with the reporting requirements set forth in
this section.
(8) For purposes of this subsection, the term ‘‘athletically related student aid’’ means any scholarship, grant, or other form of
financial assistance the terms of which require the recipient to participate in a program of intercollegiate athletics at an institution
of higher education in order to be eligible to receive such assistance.
(9) The reports required by this subsection shall be due each
July 1 and shall cover the 1-year period ending August 31 of the
preceding year.
(f) 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) A statement of current campus policies regarding procedures and facilities for students and others to report criminal
actions or other emergencies occurring on campus and policies
concerning the institution’s response to such reports.
(B) A statement of current policies concerning security and
access to campus facilities, including campus residences, and
security considerations used in the maintenance of campus facilities.
(C) A statement of current policies concerning campus law
enforcement, including—
(i) 1 the law enforcement authority of campus security personnel;
(ii) 1 the working relationship of campus security
personnel with State and local law enforcement agencies, including whether the institution has agreements
with such agencies, such as written memoranda of understanding, for the investigation of alleged criminal
offenses; and
(iii) 1 policies which encourage accurate and
prompt reporting of all crimes to the campus police
and the appropriate law enforcement agencies.
(D) A description of the type and frequency of programs
designed to inform students and employees about campus security procedures and practices and to encourage students and
employees to be responsible for their own security and the security of others.
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(E) A description of programs designed to inform students
and employees about the prevention of crimes.
(F) Statistics concerning the occurrence on campus, in or
on noncampus buildings or property, and on public property
during the most recent calendar year, and during the 2 preceding calendar years for which data are available—
(i) of the following criminal offenses reported to campus security authorities or local police agencies:
(I) murder;
(II) sex offenses, forcible or nonforcible;
(III) robbery;
(IV) aggravated assault;
(V) burglary;
(VI) motor vehicle theft;
(VII) manslaughter;
(VIII) arson; and
(IX) arrests or persons referred for campus disciplinary action for liquor law violations, drug-related
violations, and weapons possession; and
(ii) of the crimes described in subclauses (I) through
(VIII) of clause (i), of larceny-theft, simple assault, intimidation, and destruction, damage, or vandalism of property,
and of other crimes involving bodily injury to any person,
in which the victim is intentionally selected because of the
actual or perceived race, gender, religion, sexual orientation, ethnicity, or disability of the victim that are reported
to campus security authorities or local police agencies,
which data shall be collected and reported according to category of prejudice; and
(G) A statement of policy concerning the monitoring and
recording through local police agencies of criminal activity at
off-campus student organizations which are recognized by the
institution and that are engaged in by students attending the
institution, including those student organizations with off-campus housing facilities.
(H) A statement of policy regarding the possession, use,
and sale of alcoholic beverages and enforcement of State underage drinking laws and a statement of policy regarding the possession, use, and sale of illegal drugs and enforcement of Federal and State drug laws and a description of any drug or alcohol abuse education programs as required under section 120 of
this Act.
(I) 1 A statement advising the campus community where
law enforcement agency information provided by a State under
section 170101( j) of the Violent Crime Control and Law Enforcement Act of 1994 (42 U.S.C. 14071( j)), concerning registered sex offenders may be obtained, such as the law enforcement office of the institution, a local law enforcement agency
1 This subparagraph was added by section 1601(c)(1) of P.L. 106–386 (114 Stat. 1538). Section
1601(c)(2) provides an effective date as follows:
‘‘(2) EFFECTIVE DATE.—The amendment made by this subsection shall take effect 2 years after
the date of the enactment of this Act.’’
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with jurisdiction for the campus, or a computer network address.
(J) 2 A statement of current campus policies regarding
immediate emergency response and evacuation procedures,
including the use of electronic and cellular communication
(if appropriate), which policies shall include procedures
to—
(i) immediately notify the campus community
upon the confirmation of a significant emergency or
dangerous situation involving an immediate threat to
the health or safety of students or staff occurring on
the campus, as defined in paragraph (6), unless
issuing a notification will compromise efforts to contain the emergency;
(ii) publicize emergency response and evacuation
procedures on an annual basis in a manner designed
to reach students and staff; and
(iii) test emergency response and evacuation procedures on an annual basis.
(2) Nothing in this subsection shall be construed to authorize
the Secretary to require particular policies, procedures, or practices
by institutions of higher education with respect to campus crimes
or campus security.
(3) Each institution participating in any program under this
title, other than a foreign institution of higher education, shall
make timely reports to the campus community on crimes considered to be a threat to other students and employees described in
paragraph (1)(F) that are reported to campus security or local law
police agencies. Such reports shall be provided to students and employees in a manner that is timely and that will aid in the prevention of similar occurrences.
(4)(A) Each institution participating in any program under this
title, other than a foreign institution of higher education, that
maintains a police or security department of any kind shall make,
keep, and maintain a daily log, written in a form that can be easily
understood, recording all crimes reported to such police or security
department, including—
(i) the nature, date, time, and general location of each
crime; and
(ii) the disposition of the complaint, if known.
(B)(i) All entries that are required pursuant to this paragraph
shall, except where disclosure of such information is prohibited by
law or such disclosure would jeopardize the confidentiality of the
victim, be open to public inspection within two business days of the
initial report being made to the department or a campus security
authority.
(ii) If new information about an entry into a log becomes available to a police or security department, then the new information
shall be recorded in the log not later than two business days after
the information becomes available to the police or security department.
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(iii) If there is clear and convincing evidence that the release
of such information would jeopardize an ongoing criminal investigation or the safety of an individual, cause a suspect to flee or evade
detection, or result in the destruction of evidence, such information
may be withheld until that damage is no longer likely to occur from
the release of such information.
(5) On an annual basis, each institution participating in any
program under this title, other than a foreign institution of higher
education, 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 authorizing
committees on campus crime statistics by September 1, 2000;
(B) make copies of the statistics submitted to the Secretary
available to the public; and
(C) in coordination with representatives of institutions of
higher education, identify exemplary campus security policies,
procedures, and practices and disseminate information concerning those policies, procedures, and practices that have
proven effective in the reduction of campus crime.
(6)(A) In this subsection:
(i) The term ‘‘campus’’ means—
(I) any building or property owned or controlled by an
institution of higher education within the same reasonably
contiguous geographic area of the institution and used by
the institution in direct support of, or in a manner related
to, the institution’s educational purposes, including residence halls; and
(II) property within the same reasonably contiguous
geographic area of the institution that is owned by the institution but controlled by another person, is used by students, and supports institutional purposes (such as a food
or other retail vendor).
(ii) The term ‘‘noncampus building or property’’ means—
(I) any building or property owned or controlled by a
student organization recognized by the institution; and
(II) any building or property (other than a branch
campus) owned or controlled by an institution of higher
education that is used in direct support of, or in relation
to, the institution’s educational purposes, is used by students, and is not within the same reasonably contiguous
geographic area of the institution.
(iii) The term ‘‘public property’’ means all public property
that is within the same reasonably contiguous geographic area
of the institution, such as a sidewalk, a street, other thoroughfare, or parking facility, and is adjacent to a facility owned or
controlled by the institution if the facility is used by the institution in direct support of, or in a manner related to the institution’s educational purposes.
(B) In cases where branch campuses of an institution of higher
education, schools within an institution of higher education, or administrative divisions within an institution are not within a reasonably contiguous geographic area, such entities shall be considMay 7, 2013
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ered separate campuses for purposes of the reporting requirements
of this section.
(7) The statistics described in paragraph (1)(F) shall be compiled in accordance with the definitions used in the uniform crime
reporting system of the Department of Justice, Federal Bureau of
Investigation, and the modifications in such definitions as implemented pursuant to the Hate Crime Statistics Act. Such statistics
shall not identify victims of crimes or persons accused of crimes.
(8)(A) Each institution of higher education participating in any
program under this title, other than a foreign institution of higher
education, shall develop and distribute as part of the report described in paragraph (1) a statement of policy regarding—
(i) such institution’s campus sexual assault programs,
which shall be aimed at prevention of sex offenses; and
(i) such institution’s campus sexual assault programs,
which shall be aimed at prevention of sex offenses; and
(ii) the procedures followed once a sex offense has occurred.
(B) The policy described in subparagraph (A) shall address the
following areas:
(i) Education programs to promote the awareness of rape,
acquaintance rape, and other sex offenses.
(ii) Possible sanctions to be imposed following the final determination of an on-campus disciplinary procedure regarding
rape, acquaintance rape, or other sex offenses, forcible or nonforcible.
(iii) Procedures students should follow if a sex offense occurs, including who should be contacted, the importance of preserving evidence as may be necessary to the proof of criminal
sexual assault, and to whom the alleged offense should be reported.
(iv) Procedures students should follow if a sex offense occurs, including who should be contacted, the importance of preserving evidence as may be necessary to the proof of criminal
sexual assault, and to whom the alleged offense should be reported—
(I) the accuser and the accused are entitled to the
same opportunities to have others present during a campus disciplinary proceeding; and
(II) both the accuser and the accused shall be informed
of the outcome of any campus disciplinary proceeding
brought alleging a sexual assault.
(v) Informing students of their options to notify proper law
enforcement authorities, including on-campus and local police,
and the option to be assisted by campus authorities in notifying such authorities, if the student so chooses.
(vi) Notification of students of existing counseling, mental
health or student services for victims of sexual assault, both on
campus and in the community.
(vii) Notification of students of options for, and available
assistance in, changing academic and living situations after an
alleged sexual assault incident, if so requested by the victim
and if such changes are reasonably available.
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(C) Nothing in this paragraph shall be construed to confer a
private right of action upon any person to enforce the provisions of
this paragraph.
(9) The Secretary shall provide technical assistance in complying with the provisions of this section to an institution of higher
education who requests such assistance.
(10) Nothing in this section shall be construed to require the
reporting or disclosure of privileged information.
(11) The Secretary shall report to the appropriate committees
of Congress each institution of higher education that the Secretary
determines is not in compliance with the reporting requirements of
this subsection.
(12) For purposes of reporting the statistics with respect to
crimes described in paragraph (1)(F), an institution of higher education shall distinguish, by means of separate categories, any
criminal offenses that occur—
(A) on campus;
(B) in or on a noncampus building or property;
(C) on public property; and
(D) in dormitories or other residential facilities for students on campus.
(13) Upon a determination pursuant to section 487(c)(3)(B) that
an institution of higher education has substantially misrepresented
the number, location, or nature of the crimes required to be reported under this subsection, the Secretary shall impose a civil
penalty upon the institution in the same amount and pursuant to
the same procedures as a civil penalty is imposed under section
487(c)(3)(B).
(14)(A) Nothing in this subsection may be construed to—
(i) create a cause of action against any institution of higher
education or any employee of such an institution for any civil
liability; or
(ii) establish any standard of care.
(B) Notwithstanding any other provision of law, evidence regarding compliance or noncompliance with this subsection shall not
be admissible as evidence in any proceeding of any court, agency,
board, or other entity, except with respect to an action to enforce
this subsection.
(15) 1 The Secretary shall annually report to the authorizing committees regarding compliance with this subsection by
institutions of higher education, including an up-to-date report
on the Secretary’s monitoring of such compliance.
(16) 1 The Secretary may seek the advice and counsel of the Attorney General concerning the development, and dissemination to
institutions of higher education, of best practices information about
campus safety and emergencies.
(17) 1 Nothing in this subsection shall be construed to permit
an institution, or an officer, employee, or agent of an institution,
participating in any program under this title to retaliate, intimidate, threaten, coerce, or otherwise discriminate against any individual with respect to the implementation of any provision of this
subsection.
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(18) This subsection may be cited as the ‘‘Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act’’.
[Note: The amendments made by section 304(a) of Public Law
113–4 shall take effect with respect to the annual security report
under section 485(f)(1) of the Higher Education Act of 1965 (20
U.S.C. 1092(f)(1)) prepared by an institution of higher education 1
calendar year after the date of enactment of this Act, and each subsequent calendar year. Section 485(f), as amended by section 304(a)
of such Public Law, reads as follows:]
(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) A statement of current campus policies regarding procedures and facilities for students and others to report criminal
actions or other emergencies occurring on campus and policies
concerning the institution’s response to such reports.
(B) A statement of current policies concerning security and
access to campus facilities, including campus residences, and
security considerations used in the maintenance of campus facilities.
(C) A statement of current policies concerning campus law
enforcement, including—
(i) 1 the law enforcement authority of campus security personnel;
(ii) 1 the working relationship of campus security
personnel with State and local law enforcement agencies, including whether the institution has agreements
with such agencies, such as written memoranda of understanding, for the investigation of alleged criminal
offenses; and
(iii) 1 policies which encourage accurate and
prompt reporting of all crimes to the campus police
and the appropriate law enforcement agencies, when
the victim of such crime elects or is unable to make
such a report.
(D) A description of the type and frequency of programs designed to inform students and employees about campus security
procedures and practices and to encourage students and em1 Margin
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ployees to be responsible for their own security and the security
of others.
(E) A description of programs designed to inform students
and employees about the prevention of crimes.
(F) Statistics concerning the occurrence on campus, in or on
noncampus buildings or property, and on public property during the most recent calendar year, and during the 2 preceding
calendar years for which data are available—
(i) of the following criminal offenses reported to campus security authorities or local police agencies:
(I) murder;
(II) sex offenses, forcible or nonforcible;
(III) robbery;
(IV) aggravated assault;
(V) burglary;
(VI) motor vehicle theft;
(VII) manslaughter;
(VIII) arson;
(IX) arrests or persons referred for campus disciplinary action for liquor law violations, drug-related violations, and weapons possession; and
(ii) of the crimes described in subclauses (I) through
(VIII) of clause (i), of larceny-theft, simple assault, intimidation, and destruction, damage, or vandalism of property,
and of other crimes involving bodily injury to any person,
in which the victim is intentionally selected because of the
actual or perceived race, gender, religion, national origin,
sexual orientation, gender identity,, 1 ethnicity, or disability
of the victim that are reported to campus security authorities or local police agencies, which data shall be collected
and reported according to category of prejudice; and
(iii) 2 of domestic violence, dating violence, and
stalking incidents that were reported to campus security authorities or local police agencies.
(G) A statement of policy concerning the monitoring and recording through local police agencies of criminal activity at offcampus student organizations which are recognized by the institution and that are engaged in by students attending the institution, including those student organizations with off-campus
housing facilities.
(H) A statement of policy regarding the possession, use, and
sale of alcoholic beverages and enforcement of State underage
drinking laws and a statement of policy regarding the possession, use, and sale of illegal drugs and enforcement of Federal
and State drug laws and a description of any drug or alcohol
abuse education programs as required under section 120 of this
Act.
(I) A statement advising the campus community where law
enforcement agency information provided by a State under section 170101( j) of the Violent Crime Control and Law Enforcement Act of 1994 (42 U.S.C. 14071( j)), concerning registered sex
1 So in law. See section 304(a)(1)(B)(ii)(I) of Public Law 113–4 [enacted March 7, 2013, 127
Stat. 54].
2 Margin so in law.
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offenders may be obtained, such as the law enforcement office
of the institution, a local law enforcement agency with jurisdiction for the campus, or a computer network address.
(J) 2 A statement of current campus policies regarding
immediate emergency response and evacuation procedures,
including the use of electronic and cellular communication
(if appropriate), which policies shall include procedures
to—
(i) immediately notify the campus community upon
the confirmation of a significant emergency or dangerous situation involving an immediate threat to the
health or safety of students or staff occurring on the
campus, as defined in paragraph (6), unless issuing a
notification will compromise efforts to contain the
emergency;
(ii) publicize emergency response and evacuation
procedures on an annual basis in a manner designed
to reach students and staff; and
(iii) test emergency response and evacuation procedures on an annual basis.
(2) Nothing in this subsection shall be construed to authorize
the Secretary to require particular policies, procedures, or practices
by institutions of higher education with respect to campus crimes or
campus security.
(3) Each institution participating in any program under this
title, other than a foreign institution of higher education, shall
make timely reports to the campus community on crimes considered
to be a threat to other students and employees described in paragraph (1)(F) that are reported to campus security or local law police
agencies. Such reports shall be provided to students and employees
in a manner that is timely, that withholds the names of victims as
confidential, and that will aid in the prevention of similar occurrences.
(4)(A) Each institution participating in any program under this
title, other than a foreign institution of higher education, that maintains a police or security department of any kind shall make, keep,
and maintain a daily log, written in a form that can be easily understood, recording all crimes reported to such police or security department, including—
(i) the nature, date, time, and general location of each
crime; and
(ii) the disposition of the complaint, if known.
(B)(i) All entries that are required pursuant to this paragraph
shall, except where disclosure of such information is prohibited by
law or such disclosure would jeopardize the confidentiality of the
victim, be open to public inspection within two business days of the
initial report being made to the department or a campus security
authority.
(ii) If new information about an entry into a log becomes available to a police or security department, then the new information
shall be recorded in the log not later than two business days after
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the information becomes available to the police or security department.
(iii) If there is clear and convincing evidence that the release of
such information would jeopardize an ongoing criminal investigation or the safety of an individual, cause a suspect to flee or evade
detection, or result in the destruction of evidence, such information
may be withheld until that damage is no longer likely to occur from
the release of such information.
(5) On an annual basis, each institution participating in any
program under this title, other than a foreign institution of higher
education, 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 authorizing
committees on campus crime statistics by September 1, 2000;
(B) make copies of the statistics submitted to the Secretary
available to the public; and
(C) in coordination with representatives of institutions of
higher education, identify exemplary campus security policies,
procedures, and practices and disseminate information concerning those policies, procedures, and practices that have proven effective in the reduction of campus crime.
(6)(A) In this subsection:
(i) The terms ‘‘dating violence’’, ‘‘domestic violence’’, and
‘‘stalking’’ have the meaning given such terms in section
40002(a) of the Violence Against Women Act of 1994 (42 U.S.C.
13925(a)).
(ii) The term ‘‘campus’’ means—
(I) any building or property owned or controlled by an
institution of higher education within the same reasonably
contiguous geographic area of the institution and used by
the institution in direct support of, or in a manner related
to, the institution’s educational purposes, including residence halls; and
(II) property within the same reasonably contiguous geographic area of the institution that is owned by the institution but controlled by another person, is used by students,
and supports institutional purposes (such as a food or other
retail vendor).
(iii) The term ‘‘noncampus building or property’’ means—
(I) any building or property owned or controlled by a
student organization recognized by the institution; and
(II) any building or property (other than a branch campus) owned or controlled by an institution of higher education that is used in direct support of, or in relation to,
the institution’s educational purposes, is used by students,
and is not within the same reasonably contiguous geographic area of the institution.
(iv) The term ‘‘public property’’ means all public property
that is within the same reasonably contiguous geographic area
of the institution, such as a sidewalk, a street, other thoroughfare, or parking facility, and is adjacent to a facility owned or
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tion in direct support of, or in a manner related to the institution’s educational purposes.
(v) The term ‘‘sexual assault’’ means an offense classified as
a forcible or nonforcible sex offense under the uniform crime reporting system of the Federal Bureau of Investigation.
(B) In cases where branch campuses of an institution of higher
education, schools within an institution of higher education, or administrative divisions within an institution are not within a reasonably contiguous geographic area, such entities shall be considered
separate campuses for purposes of the reporting requirements of this
section.
(7) The statistics described in clauses (i) and (ii) of paragraph
(1)(F) shall be compiled in accordance with the definitions used in
the uniform crime reporting system of the Department of Justice,
Federal Bureau of Investigation, and the modifications in such definitions as implemented pursuant to the Hate Crime Statistics Act.
For the offenses of domestic violence, dating violence, and stalking,
such statistics shall be compiled in accordance with the definitions
used in section 40002(a) of the Violence Against Women Act of 1994
(42 U.S.C. 13925(a)). Such statistics shall not identify victims of
crimes or persons accused of crimes.
(8)(A) Each institution of higher education participating in any
program under this title and title IV of the Economic Opportunity
Act of 1964, other than a foreign institution of higher education,
shall develop and distribute as part of the report described in paragraph (1) a statement of policy regarding—
(i) such institution’s programs to prevent domestic violence,
dating violence, sexual assault, and stalking; and
(ii) the procedures that such institution will follow once an
incident of domestic violence, dating violence, sexual assault, or
stalking has been reported, including a statement of the standard of evidence that will be used during any institutional conduct proceeding arising from such a report.
(B) The policy described in subparagraph (A) shall address the
following areas:
(i) Education programs to promote the awareness of rape,
acquaintance rape, domestic violence, dating violence, sexual
assault, and stalking, which shall include—
(I) primary prevention and awareness programs for all
incoming students and new employees, which shall include—
(aa) a statement that the institution of higher education prohibits the offenses of domestic violence, dating violence, sexual assault, and stalking;
(bb) the definition of domestic violence, dating violence, sexual assault, and stalking in the applicable jurisdiction;
(cc) the definition of consent, in reference to sexual
activity, in the applicable jurisdiction;
(dd) safe and positive options for bystander intervention that may be carried out by an individual to
prevent harm or intervene when there is a risk of domestic violence, dating violence, sexual assault, or
stalking against a person other than such individual;
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(ee) information on risk reduction to recognize
warning signs of abusive behavior and how to avoid
potential attacks; and
(ff) the information described in clauses (ii)
through (vii); and
(II) ongoing prevention and awareness campaigns for
students and faculty, including information described in
items (aa) through (ff) of subclause (I).
(ii) Possible sanctions or protective measures that such institution may impose following a final determination of an institutional disciplinary procedure regarding rape, acquaintance
rape, domestic violence, dating violence, sexual assault, or
stalking.
(iii) Procedures victims should follow if a sex offense, domestic violence, dating violence, sexual assault, or stalking has
occurred, including information in writing about—
(I) the importance of preserving evidence as may be
necessary to the proof of criminal domestic violence, dating
violence, sexual assault, or stalking, or in obtaining a protection order;
(II) to whom the alleged offense should be reported;
(III) options regarding law enforcement and campus
authorities, including notification of the victim’s option to—
(aa) notify proper law enforcement authorities, including on-campus and local police;
(bb) be assisted by campus authorities in notifying
law enforcement authorities if the victim so chooses;
and
(cc) decline to notify such authorities; and
(IV) where applicable, the rights of victims and the institution’s responsibilities regarding orders of protection, no
contact orders, restraining orders, or similar lawful orders
issued by a criminal, civil, or tribal court.
(iv) Procedures for institutional disciplinary action in cases
of alleged domestic violence, dating violence, sexual assault, or
stalking, which shall include a clear statement that—
(I) such proceedings shall—
(aa) provide a prompt, fair, and impartial investigation and resolution; and
(bb) be conducted by officials who receive annual
training on the issues related to domestic violence, dating violence, sexual assault, and stalking and how to
conduct an investigation and hearing process that protects the safety of victims and promotes accountability;
(II) the accuser and the accused are entitled to the
same opportunities to have others present during an institutional disciplinary proceeding, including the opportunity
to be accompanied to any related meeting or proceeding by
an advisor of their choice; and
(III) both the accuser and the accused shall be simultaneously informed, in writing, of—
(aa) the outcome of any institutional disciplinary
proceeding that arises from an allegation of domestic
violence, dating violence, sexual assault, or stalking;
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(bb) the institution’s procedures for the accused
and the victim to appeal the results of the institutional
disciplinary proceeding;
(cc) of any change to the results that occurs prior
to the time that such results become final; and
(dd) when such results become final.
(v) Information about how the institution will protect the
confidentiality of victims, including how publicly-available recordkeeping will be accomplished without the inclusion of identifying information about the victim, to the extent permissible by
law.
(vi) Written notification of students and employees about
existing counseling, health, mental health, victim advocacy,
legal assistance, and other services available for victims both
on-campus and in the community.
(vii) Written notification of victims about options for, and
available assistance in, changing academic, living, transportation, and working situations, if so requested by the victim and
if such accommodations are reasonably available, regardless of
whether the victim chooses to report the crime to campus police
or local law enforcement.
(C) A student or employee who reports to an institution of higher education that the student or employee has been a victim of domestic violence, dating violence, sexual assault, or stalking, whether
the offense occurred on or off campus, shall be provided with a written explanation of the student or employee’s rights and options, as
described in clauses (ii) through (vii) of subparagraph (B).
(9) The Secretary, in consultation with the Attorney General of
the United States, shall provide technical assistance in complying
with the provisions of this section to an institution of higher education who requests such assistance.
(10) Nothing in this section shall be construed to require the reporting or disclosure of privileged information.
(11) The Secretary shall report to the appropriate committees of
Congress each institution of higher education that the Secretary determines is not in compliance with the reporting requirements of
this subsection.
(12) For purposes of reporting the statistics with respect to
crimes described in paragraph (1)(F), an institution of higher education shall distinguish, by means of separate categories, any criminal offenses that occur—
(A) on campus;
(B) in or on a noncampus building or property;
(C) on public property; and
(D) in dormitories or other residential facilities for students
on campus.
(13) Upon a determination pursuant to section 487(c)(3)(B) that
an institution of higher education has substantially misrepresented
the number, location, or nature of the crimes required to be reported
under this subsection, the Secretary shall impose a civil penalty
upon the institution in the same amount and pursuant to the same
procedures as a civil penalty is imposed under section 487(c)(3)(B).
(14)(A) Nothing in this subsection may be construed to—
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(i) create a cause of action against any institution of higher
education or any employee of such an institution for any civil
liability; or
(ii) establish any standard of care.
(B) Notwithstanding any other provision of law, evidence regarding compliance or noncompliance with this subsection shall not
be admissible as evidence in any proceeding of any court, agency,
board, or other entity, except with respect to an action to enforce this
subsection.
(15) 1 The Secretary shall annually report to the authorizing committees regarding compliance with this subsection by
institutions of higher education, including an up-to-date report
on the Secretary’s monitoring of such compliance.
(16)(A) The Secretary shall seek the advice and counsel of the
Attorney General of the United States concerning the development,
and dissemination to institutions of higher education, of best practices information about campus safety and emergencies.
(B) The Secretary shall seek the advice and counsel of the Attorney General of the United States and the Secretary of Health and
Human Services concerning the development, and dissemination to
institutions of higher education, of best practices information about
preventing and responding to incidents of domestic violence, dating
violence, sexual assault, and stalking, including elements of institutional policies that have proven successful based on evidence-based
outcome measurements.
(17) No officer, employee, or agent of an institution participating in any program under this title shall retaliate, intimidate,
threaten, coerce, or otherwise discriminate against any individual
for exercising their rights or responsibilities under any provision of
this subsection.
(18) This subsection may be cited as the ‘‘Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act’’.
(g) DATA REQUIRED.—
(1) IN GENERAL.—Each coeducational institution of higher
education that participates in any program under this title,
and has an intercollegiate athletic program, shall annually, for
the immediately preceding academic year, prepare a report
that contains the following information regarding intercollegiate athletics:
(A) The number of male and female full-time undergraduates that attended the institution.
(B) A listing of the varsity teams that competed in
intercollegiate athletic competition and for each such team
the following data:
(i) The total number of participants, by team, as
of the day of the first scheduled contest for the team.
(ii) Total operating expenses attributable to such
teams, except that an institution may also report such
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expenses on a per capita basis for each team and expenditures attributable to closely related teams such
as track and field or swimming and diving, may be reported together, although such combinations shall be
reported separately for men’s and women’s teams.
(iii) Whether the head coach is male or female and
whether the head coach is assigned to that team on a
full-time or part-time basis. Graduate assistants and
volunteers who serve as head coaches shall be considered to be head coaches for the purposes of this clause.
(iv) The number of assistant coaches who are male
and the number of assistant coaches who are female
for each team and whether a particular coach is assigned to that team on a full-time or part-time basis.
Graduate assistants and volunteers who serve as assistant coaches shall be considered to be assistant
coaches for the purposes of this clause.
(C) The total amount of money spent on athletically
related student aid, including the value of waivers of educational expenses, separately for men’s and women’s teams
overall.
(D) The ratio of athletically related student aid awarded male athletes to athletically related student aid awarded female athletes.
(E) The total amount of expenditures on recruiting,
separately for men’s and women’s teams overall.
(F) The total annual revenues generated across all
men’s teams and across all women’s teams, except that an
institution may also report such revenues by individual
team.
(G) The average annual institutional salary of the
head coaches of men’s teams, across all offered sports, and
the average annual institutional salary of the head coaches
of women’s teams, across all offered sports.
(H) The average annual institutional salary of the assistant coaches of men’s teams, across all offered sports,
and the average annual institutional salary of the assistant coaches of women’s teams, across all offered sports.
(I)(i) The total revenues, and the revenues from football, men’s basketball, women’s basketball, all other men’s
sports combined and all other women’s sports combined,
derived by the institution from the institution’s intercollegiate athletics activities.
(ii) For the purpose of clause (i), revenues from intercollegiate athletics activities allocable to a sport shall include (without limitation) gate receipts, broadcast revenues, appearance guarantees and options, concessions, and
advertising, but revenues such as student activities fees or
alumni contributions not so allocable shall be included in
the calculation of total revenues only.
(J)(i) The total expenses, and the expenses attributable to football, men’s basketball, women’s basketball,
all other men’s sports combined, and all other women’s
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sports combined, made by the institution for the institution’s intercollegiate athletics activities.
(ii) For the purpose of clause (i), expenses for intercollegiate athletics activities allocable to a sport shall include (without limitation) grants-in-aid, salaries, travel,
equipment, and supplies, but expenses such as general and
administrative overhead not so allocable shall be included
in the calculation of total expenses only.
(2) SPECIAL RULE.—For the purposes of paragraph (1)(G),
if a coach has responsibilities for more than one team and the
institution does not allocate such coach’s salary by team, the
institution should divide the salary by the number of teams for
which the coach has responsibility and allocate the salary
among the teams on a basis consistent with the coach’s responsibilities for the different teams.
(3) DISCLOSURE OF INFORMATION TO STUDENTS AND PUBLIC.—An institution of higher education described in paragraph
(1) shall make available to students and potential students,
upon request, and to the public, the information contained in
the report described in paragraph (1), except that all students
shall be informed of their right to request such information.
(4) SUBMISSION; REPORT; INFORMATION AVAILABILITY.—(A)
On an annual basis, each institution of higher education described in paragraph (1) shall provide to the Secretary, within
15 days of the date that the institution makes available the report under paragraph (1), the information contained in the report.
(B) The Secretary shall ensure that the reports described
in subparagraph (A) are made available to the public within a
reasonable period of time.
(C) Not later than 180 days after the date of enactment of
the Higher Education Amendments of 1998, the Secretary shall
notify all secondary schools in all States regarding the availability of the information made available under paragraph (1),
and how such information may be accessed.
(5) DEFINITION.—For the purposes of this subsection, the
term ‘‘operating expenses’’ means expenditures on lodging and
meals, transportation, officials, uniforms and equipment.
(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 transfer
of credit policies established by the institution which shall include a statement of the institution’s current transfer of credit
policies that includes, at a minimum—
(A) any established criteria the institution uses regarding the transfer of credit earned at another institution
of higher education; and
(B) a list of institutions of higher education with which
the institution has established an articulation agreement.
(2) RULE OF CONSTRUCTION.—Nothing in this subsection
shall be construed to—
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quire particular policies, procedures, or practices by institutions of higher education with respect to transfer of credit;
(B) 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;
(C) limit the application of the General Education Provisions Act; or
(D) 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.
(i) DISCLOSURE OF FIRE SAFETY STANDARDS AND MEASURES.—
(1) ANNUAL FIRE SAFETY REPORTS ON STUDENT HOUSING REQUIRED.—Each eligible institution participating in any program under this title that maintains on-campus student housing facilities shall, on an annual basis, publish a fire safety report, which shall contain information with respect to the campus fire safety practices and standards of that institution, including—
(A) statistics concerning the following in each on-campus student housing facility during the most recent calendar years for which data are available:
(i) the number of fires and the cause of each fire;
(ii) the number of injuries related to a fire that result in treatment at a medical facility;
(iii) the number of deaths related to a fire; and
(iv) the value of property damage caused by a fire;
(B) a description of each on-campus student housing
facility fire safety system, including the fire sprinkler system;
(C) the number of regular mandatory supervised fire
drills;
(D) policies or rules on portable electrical appliances,
smoking, and open flames (such as candles), procedures for
evacuation, and policies regarding fire safety education
and training programs provided to students, faculty, and
staff; and
(E) plans for future improvements in fire safety, if determined necessary by such institution.
(2) REPORT TO THE SECRETARY.—Each institution described
in paragraph (1) shall, on an annual basis, submit to the Secretary a copy of the statistics required to be made available
under paragraph (1)(A).
(3) CURRENT INFORMATION TO CAMPUS COMMUNITY.—Each
institution described in paragraph (1) shall—
(A) make, keep, and maintain a log, recording all fires
in on-campus student housing facilities, including the nature, date, time, and general location of each fire; and
(B) make annual reports to the campus community on
such fires.
(4) RESPONSIBILITIES OF THE SECRETARY.—The Secretary
shall—
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(A) make the statistics submitted under paragraph
(1)(A) to the Secretary available to the public; and
(B) in coordination with nationally recognized fire organizations and representatives of institutions of higher
education, representatives of associations of institutions of
higher education, and other organizations that represent
and house a significant number of students—
(i) identify exemplary fire safety policies, procedures, programs, and practices, including the installation, to the technical standards of the National Fire
Protection Association, of fire detection, prevention,
and protection technologies in student housing, dormitories, and other buildings;
(ii) disseminate the exemplary policies, procedures, programs and practices described in clause (i)
to the Administrator of the United States Fire Administration;
(iii) make available to the public information concerning those policies, procedures, programs, and practices that have proven effective in the reduction of
fires; and
(iv) develop a protocol for institutions to review
the status of their fire safety systems.
(5) RULES OF CONSTRUCTION.—Nothing in this subsection
shall be construed to—
(A) authorize the Secretary to require particular policies, procedures, programs, or practices by institutions of
higher education with respect to fire safety, other than
with respect to the collection, reporting, and dissemination
of information required by this subsection;
(B) affect section 444 of the General Education Provisions Act (commonly known as the ‘‘Family Educational
Rights and Privacy Act of 1974’’) or the regulations issued
under section 264 of the Health Insurance Portability and
Accountability Act of 1996 (42 U.S.C. 1320d–2 note);
(C) create a cause of action against any institution of
higher education or any employee of such an institution for
any civil liability; or
(D) establish any standard of care.
(6) COMPLIANCE REPORT.—The Secretary shall annually report to the authorizing committees regarding compliance with
this subsection by institutions of higher education, including
an up-to-date report on the Secretary’s monitoring of such compliance.
(7) EVIDENCE.—Notwithstanding any other provision of
law, evidence regarding compliance or noncompliance with this
subsection shall not be admissible as evidence in any proceeding of any court, agency, board, or other entity, except with
respect to an action to enforce this subsection.
(j) MISSING PERSON PROCEDURES.—
(1) OPTION AND PROCEDURES.—Each institution of higher
education that provides on-campus housing and participates in
any program under this title shall—
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(A) establish a missing student notification policy for
students who reside in on-campus housing that—
(i) informs each such student that such student
has the option to identify an individual to be contacted
by the institution not later than 24 hours after the
time that the student is determined missing in accordance with official notification procedures established
by the institution under subparagraph (B);
(ii) provides each such student a means to register
confidential contact information in the event that the
student is determined to be missing for a period of
more than 24 hours;
(iii) advises each such student who is under 18
years of age, and not an emancipated individual, that
the institution is required to notify a custodial parent
or guardian not later 24 hours after the time that the
student is determined to be missing in accordance
with such procedures;
(iv) informs each such residing student that the
institution will notify the appropriate law enforcement
agency not later than 24 hours after the time that the
student is determined missing in accordance with such
procedures; and
(v) requires, if the campus security or law enforcement personnel has been notified and makes a determination that a student who is the subject of a missing person report has been missing for more than 24
hours and has not returned to the campus, the institution to initiate the emergency contact procedures in
accordance with the student’s designation; and
(B) establish official notification procedures for a missing student who resides in on-campus housing that—
(i) includes procedures for official notification of
appropriate individuals at the institution that such
student has been missing for more than 24 hours;
(ii) requires any official missing person report relating to such student be referred immediately to the
institution’s police or campus security department;
and
(iii) if, on investigation of the official report, such
department determines that the missing student has
been missing for more than 24 hours, requires—
(I) such department to contact the individual
identified by such student under subparagraph
(A)(i);
(II) if such student is under 18 years of age,
and not an emancipated individual, the institution
to immediately contact the custodial parent or
legal guardian of such student; and
(III) if subclauses (I) or (II) do not apply to a
student determined to be a missing person, inform
the appropriate law enforcement agency.
(2) RULE OF CONSTRUCTION.—Nothing in this subsection
shall be construed—
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(A) to provide a private right of action to any person
to enforce any provision of this subsection; or
(B) to create a cause of action against any institution
of higher education or any employee of the institution for
any civil liability.
(k) NOTICE TO STUDENTS CONCERNING PENALTIES FOR DRUG
VIOLATIONS.—
(1) NOTICE UPON ENROLLMENT.—Each institution of higher
education shall provide to each student, upon enrollment, a
separate, clear, and conspicuous written notice that advises the
student of the penalties under section 484(r).
(2) NOTICE AFTER LOSS OF ELIGIBILITY.—An institution of
higher education shall provide in a timely manner to each student who has lost eligibility for any grant, loan, or work-study
assistance under this title as a result of the penalties listed
under section 484(r)(1) a separate, clear, and conspicuous written notice that notifies the student of the loss of eligibility and
advises the student of the ways in which the student can regain eligibility under section 484(r)(2).
(l) ENTRANCE COUNSELING FOR BORROWERS.—
(1) DISCLOSURE REQUIRED PRIOR TO DISBURSEMENT.—
(A) IN GENERAL.—Each eligible institution shall, at or
prior to the time of a disbursement to a first-time borrower
of a loan made, insured, or guaranteed under part B (other
than a loan made pursuant to section 428C or a loan made
on behalf of a student pursuant to section 428B) or made
under part D (other than a Federal Direct Consolidation
Loan or a Federal Direct PLUS loan made on behalf of a
student), ensure that the borrower receives comprehensive
information on the terms and conditions of the loan and of
the responsibilities the borrower has with respect to such
loan in accordance with paragraph (2). Such information—
(i) shall be provided in a simple and understandable manner; and
(ii) may be provided—
(I) during an entrance counseling session conduction in person;
(II) on a separate written form provided to the
borrower that the borrower signs and returns to
the institution; or
(III) online, with the borrower acknowledging
receipt of the information.
(B) USE OF INTERACTIVE PROGRAMS.—The Secretary
shall encourage institutions to carry out the requirements
of subparagraph (A) through the use of interactive programs that test the borrower’s understanding of the terms
and conditions of the borrower’s loans under part B or D,
using simple and understandable language and clear formatting.
(2) INFORMATION TO BE PROVIDED.—The information to be
provided to the borrower under paragraph (1)(A) shall include
the following:
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(A) To the extent practicable, the effect of accepting
the loan to be disbursed on the eligibility of the borrower
for other forms of student financial assistance.
(B) An explanation of the use of the master promissory
note.
(C) Information on how interest accrues and is capitalized during periods when the interest is not paid by either
the borrower or the Secretary.
(D) In the case of a loan made under section 428B or
428H, a Federal Direct PLUS Loan, or a Federal Direct
Unsubsidized Stafford Loan, the option of the borrower to
pay the interest while the borrower is in school.
(E) The definition of half-time enrollment at the institution, during regular terms and summer school, if applicable, and the consequences of not maintaining half-time
enrollment.
(F) An explanation of the importance of contacting the
appropriate offices at the institution of higher education if
the borrower withdraws prior to completing the borrower’s
program of study so that the institution can provide exit
counseling, including information regarding the borrower’s
repayment options and loan consolidation.
(G) Sample monthly repayment amounts based on—
(i) a range of levels of indebtedness of—
(I) borrowers of loans under section 428 or
428H; and
(II) as appropriate, graduate borrowers of
loans under section 428, 428B, or 428H; or
(ii) the average cumulative indebtedness of other
borrowers in the same program as the borrower at the
same institution.
(H) The obligation of the borrower to repay the full
amount of the loan, regardless of whether the borrower
completes or does not complete the program in which the
borrower is enrolled within the regular time for program
completion.
(I) The likely consequences of default on the loan, including adverse credit reports, delinquent debt collection
procedures under Federal law, and litigation.
(J) Information on the National Student Loan Data
System and how the borrower can access the borrower’s
records.
(K) The name of and contact information for the individual the borrower may contact if the borrower has any
questions about the borrower’s rights and responsibilities
or the terms and conditions of the loan.
(m) DISCLOSURES OF REIMBURSEMENTS FOR SERVICE ON ADVISORY BOARDS.—
(1) DISCLOSURE.—Each institution of higher education participating in any program under this title shall report, on an
annual basis, to the Secretary, any reasonable expenses paid
or provided under section 140(d) of the Truth in Lending Act
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spect to education loans or other financial aid of the institution. Such reports shall include—
(A) the amount for each specific instance of reasonable
expenses paid or provided;
(B) the name of the financial aid official, other employee, or agent to whom the expenses were paid or provided;
(C) the dates of the activity for which the expenses
were paid or provided; and
(D) a brief description of the activity for which the expenses were paid or provided.
(2) REPORT TO CONGRESS.—The Secretary shall summarize
the information received from institutions of higher education
under paragraph (1) in a report and transmit such report annually to the authorizing committees.
SEC. 485A. ø20 U.S.C. 1092a¿ COMBINED PAYMENT PLAN.
(a) ELIGIBILITY FOR PLAN.—Upon the request of
the borrower,
a lender described in subparagraph (A), (B), or (C) of section
428C(a)(1) of this Act, or an eligible lender as defined in section
719 of the Public Health Service Act (42 U.S.C. 292o) may, with respect to a consolidation loan made under section 428C of this Act
(and section 439(o) of this Act as in effect prior to the enactment
of section 428C) and loans guaranteed under under part A of title
VII of the Public Health Service Act (42 U.S.C. 292 et seq.), offer
a combined payment plan under which the lender shall submit one
bill to the borrower for the repayment of all such loans for the
monthly or other similar period of repayment.
(b) APPLICABILITY OF OTHER REQUIREMENTS.—A lender offering
a combined payment plan shall comply with all provisions of section 428C applicable to loans consolidated or to be consolidated and
shall comply with all provisions of part A of title VII of the Public
Health Service Act (42 U.S.C. 292 et seq.) applicable to loans under
that subpart which are made part of the combined payment plan,
except that a lender offering a combined payment plan under this
section may offer consolidation loans pursuant to section
428C(b)(1)(A) if such lender holds any outstanding loan of a borrower which is selected for inclusion in a combined payment plan.
(c) LENDER ELIGIBILITY.—Such lender may offer a combined
payment plan only if—
(1) the lender holds an outstanding loan of that borrower
which is selected by the borrower for incorporation into a combined payment plan pursuant to this section (including loans
which are selected by the borrower for consolidation under this
section); or
(2) the borrower certifies that the borrower has sought and
has been unable to obtain a combined payment plan from the
holders of the outstanding loans of that borrower.
(d) BORROWER SELECTION OF COMPETING OFFERS.—In the case
of multiple offers by lenders to administer a combined payment
plan for a borrower, the borrower shall select from among them the
lender to administer the combined payment plan including its loan
consolidation component.
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(e) EFFECT OF PLAN.—Upon selection of a lender to administer
the combined payment plan, the lender may reissue any loan under
part A of title VII of the Public Health Service Act (42 U.S.C. 292
et seq.) selected by the borrower for incorporation in the combined
payment plan which is not held by such lender and the proceeds
of such reissued loan shall be paid by the lender to the holder or
holders of the loans so selected to discharge the liability on such
loans, if—
(1) the lender selected to administer the combined payment plan has determined to its satisfaction, in accordance
with reasonable and prudent business practices, for each loan
being reissued (A) that the loan is a legal, valid, and binding
obligation of the borrower; (B) that each such loan was made
and serviced in compliance with applicable laws and regulations; and (C) the insurance on such loan is in full force and
effect; and
(2) the loan being reissued was not in default (as defined
in section 707(e)(3) of the Public Health Service Act) at the
time the request for a combined payment plan is made.
(f) NOTES AND INSURANCE CERTIFICATES.—(1) Each loan reissued under subsection (e) shall be evidenced by a note executed
by the borrower. The Secretary of Health and Human Services
shall insure such loan under a certificate of comprehensive insurance with no insurance limit, but any such certificate shall only be
issued to an authorized holder of loans insured under part A of
title VII of the Public Health Service Act (42 U.S.C. 292 et seq.)
(including the Student Loan Marketing Association). Such certificates shall provide that all loans reissued under this section shall
be fully insured against loss of principal and interest. Any insurance issued with respect to loans reissued under this section shall
be excluded from the limitation on maximum insurance authority
set forth in section 710 of the Public Health Service Act. Notwithstanding the provisions of section 729(a) of the Public Health Service Act, the reissued loan shall be made in an amount, including
outstanding principal, capitalized interest, accrued unpaid interest
not yet capitalized, and authorized late charges. The proceeds of
each such loan will be paid by the lender to the holder of the original loan being reissued and the borrower’s obligation to that holder
on that loan shall be discharged.
(2) Except as otherwise specifically provided for under the provisions of this section, the terms of any reissued loan shall be the
same as the terms of the original loan. The maximum repayment
period for a loan reissued under this section shall not exceed the
remainder of the period which would have been permitted on the
original loan. If the lender holds more than one loan insured under
part A of title VII of the Public Health Service Act (42 U.S.C. 292
et seq.), the maximum repayment period for all such loans may extend to the latest date permitted for any individual loan. Any reissued loan may be consolidated with any other Health Education
Assistance Loan as provided in the Public Health Service Act, and,
with the concurrence of the borrower, repayment of any such loans
during any period may be made in amounts that are less than the
interest that accrues on such loans during that period.
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(g) TERMINATION OF BORROWER ELIGIBILITY.—The status of an
individual as an eligible combined payment plan borrower terminates upon receipt of a combined payment plan.
(h) FEES AND PREMIUMS.—No origination fee or insurance premium shall be charged to the borrower on any combined payment
plan, and no origination fee or insurance premium shall be payable
by the lender to the Secretary of Health and Human Services.
(i) COMMENCEMENT OF REPAYMENT.—Repayment of a combined
payment plan shall commence within 60 days after the later of the
date of acceptance of the lender’s offer to administer a combined
payment plan, the making of the consolidation loan or the
reissuance of any Health Education Assistance Loans pursuant to
subsection (e).
SEC. 485B. ø20 U.S.C. 1092b¿ NATIONAL STUDENT LOAN DATA SYSTEM.
(a) DEVELOPMENT OF THE SYSTEM.—The Secretary shall con-
sult with a representative group of guaranty agencies, eligible lenders, and eligible institutions to develop a mutually agreeable proposal for the establishment of a National Student Loan Data System containing information regarding loans made, insured, or guaranteed under part B and loans made under parts D and E, and for
allowing the electronic exchange of data between program participants and the system. In establishing such data system, the Secretary shall place a priority on providing for the monitoring of enrollment, student status, information about current loan holders
and servicers, and internship and residency information. Such data
system shall also permit borrowers to use the system to identify
the current loan holders and servicers of such borrower’s loan not
later than one year after the date of enactment of the Higher Education Amendments of 1998. The information in the data system
shall include (but is not limited to)—
(1) the amount and type of each such loan made;
(2) the names and social security numbers of the borrowers;
(3) the guaranty agency responsible for the guarantee of
the loan;
(4) the institution of higher education or organization responsible for loans made under parts D and E;
(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;
(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;
(7) the total amount of loans made to any borrower and
the remaining balance of the loans;
(8) the lender, holder, and servicer of such loans;
(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
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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;
(10) information regarding any deferments or forbearance
granted on such loans; and
(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.
(b) ADDITIONAL INFORMATION.—For the purposes of research
and policy analysis, the proposal shall also contain provisions for
obtaining additional data concerning the characteristics of borrowers and the extent of student loan indebtedness on a statistically valid sample of borrowers under part B. Such data shall include—
(1) information concerning the income level of the borrower
and his family and the extent of the borrower’s need for student financial assistance, including loans;
(2) information concerning the type of institution attended
by the borrower and the year of the program of education for
which the loan was obtained;
(3) information concerning other student financial assistance received by the borrower; and
(4) information concerning Federal costs associated with
the student loan program under part B of this title, including
the costs of interest subsidies, special allowance payments, and
other subsidies.
(c) VERIFICATION.—The Secretary may require lenders, guaranty agencies, or institutions of higher education to verify information or obtain eligibility or other information through the National
Student Loan Data System prior to making, guaranteeing, or certifying a loan made under part B, D, or E.
(d) PRINCIPLES FOR ADMINISTERING THE DATA SYSTEM.—In
managing the National Student Loan Data System, the Secretary
shall take actions necessary to maintain confidence in the data system, including, at a minimum—
(1) ensuring that the primary purpose of access to the data
system by guaranty agencies, eligible lenders, and eligible institutions of higher education is for legitimate program operations, such as the need to verify the eligibility of a student,
potential student, or parent for loans under part B, D, or E;
(2) prohibiting nongovernmental researchers and policy analysts from accessing personally identifiable information;
(3) creating a disclosure form for students and potential
students that is distributed when such students complete the
common financial reporting form under section 483, and as a
part of the exit counseling process under section 485(b), that—
(A) informs the students that any title IV grant or
loan the students receive will be included in the National
Student Loan Data System, and instructs the students on
how to access that information;
(B) describes the categories of individuals or entities
that may access the data relating to such grant or loan
through the data system, and for what purposes access is
allowed;
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(C) defines and explains the categories of information
included in the data system;
(D) provides a summary of the provisions of section
444 of the General Education Provisions Act (commonly
known as the ‘‘Family Educational Rights and Privacy Act
of 1974’’) and other applicable Federal privacy statutes,
and a statement of the students’ rights and responsibilities
with respect to such statutes;
(E) explains the measures taken by the Department to
safeguard the students’ data; and
(F) includes other information as determined appropriate by the Secretary;
(4) requiring guaranty agencies, eligible lenders, and eligible institutions of higher education that enter into an agreement with a potential student, student, or parent of such student regarding a loan under part B, D, or E, to inform the student or parent that such loan shall be—
(A) submitted to the data system; and
(B) accessible to guaranty agencies, eligible lenders,
and eligible institutions of higher education determined by
the Secretary to be authorized users of the data system;
(5) regularly reviewing the data system to—
(A) delete inactive users from the data system;
(B) ensure that the data in the data system are not
being used for marketing purposes; and
(C) monitor the use of the data system by guaranty
agencies and eligible lenders to determine whether an
agency or lender is accessing the records of students in
which the agency or lender has no existing financial interest; and
(6) developing standardized protocols for limiting access to
the data system that include—
(A) collecting data on the usage of the data system to
monitor whether access has been or is being used contrary
to the purposes of the data system;
(B) defining the steps necessary for determining
whether, and how, to deny or restrict access to the data
system; and
(C) determining the steps necessary to reopen access
to the data system following a denial or restriction of access.
(e) REPORTS TO CONGRESS.—
(1) ANNUAL REPORT.—Not later than September 30 of each
fiscal year, the Secretary shall prepare and submit to the authorizing committees a report describing—
(A) the effectiveness of existing privacy safeguards in
protecting student and parent information in the data system;
(B) the success of any new authorization protocols in
more effectively preventing abuse of the data system;
(C) the ability of the Secretary to monitor how the system is being used, relative to the intended purposes of the
data system; and
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(D) any protocols developed under subsection (d)(6)
during the preceding fiscal year.
(2) STUDY.—
(A) IN GENERAL.—The Secretary shall conduct a study
regarding—
(i) available mechanisms for providing students
and parents with the ability to opt in or opt out of allowing eligible lenders to access their records in the
National Student Loan Data System; and
(ii) appropriate protocols for limiting access to the
data system, based on the risk assessment required
under subchapter III of chapter 35 of title 44, United
States Code.
(B) SUBMISSION OF STUDY.—Not later than three years
after the date of enactment of the Higher Education Opportunity Act, the Secretary shall prepare and submit a report on the findings of the study under subparagraph (A)
to the authorizing committees.
(f) STANDARDIZATION OF DATA REPORTING.—
(1) IN GENERAL.—The Secretary shall by regulation prescribe standards and procedures (including relevant definitions) that require all lenders and guaranty agencies to report
information on all aspects of loans made under this title in uniform formats in order to permit the direct comparison of data
submitted by individual lenders, servicers or guaranty agencies.
(2) ACTIVITIES.—For the purpose of establishing standards
under this section, the Secretary shall—
(A) consult with guaranty agencies, lenders, institutions of higher education, and organizations representing
the groups described in paragraph (1);
(B) develop standards designed to be implemented by
all guaranty agencies and lenders with minimum modifications to existing data processing hardware and software;
and
(C) publish the specifications selected to be used to encourage the automation of exchanges of information between all parties involved in loans under this title.
(g) COMMON IDENTIFIERS.—The Secretary shall, not later than
July 1, 1993—
(1) revise the codes used to identify institutions and students in the student loan data system authorized by this section to make such codes consistent with the codes used in each
database used by the Department of Education that contains
information of participation in programs under this title; and
(2) modify the design or operation of the system authorized
by this section to ensure that data relating to any institution
is readily accessible and can be used in a form compatible with
the integrated postsecondary education data system (IPEDS).
(h) INTEGRATION OF DATABASES.—The Secretary shall integrate
the National Student Loan Data System with the Pell Grant applicant and recipient databases as of January 1, 1994, and any other
databases containing information on participation in programs
under this title.
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SEC. 485C. ø20 U.S.C. 1092c¿ SIMPLIFICATION OF THE LENDING PROCESS FOR BORROWERS.
(a) ALL LIKE LOANS TREATED AS ONE.—To the extent prac-
ticable, and with the cooperation of the borrower, eligible lenders
shall treat all loans made to a borrower under the same section of
part B as one loan and shall submit one bill to the borrower for
the repayment of all such loans for the monthly or other similar
period of repayment. Any deferments on one such loan will be considered a deferment on the total amount of all such loans.
(b) ONE LENDER, ONE GUARANTY AGENCY.—To the extent practicable, and with the cooperation of the borrower, the guaranty
agency shall ensure that a borrower only have one lender, one
holder, one guaranty agency, and one servicer with which to maintain contact.
SEC. 485D. ø20 U.S.C. 1092e¿ 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 as prescribed by the Secretary.
(2) ACTIVITIES.—Each guaranty agency shall undertake
such activities as are necessary to promote access to postsecondary education for students through providing information
on college planning, career preparation, and paying for college.
The guaranty agency shall publicize such information and coordinate such activities with other entities that either provide
or distribute such information in the States for which such
guaranty agency serves as the designated guarantor.
(3) FUNDING.—The activities required by this section may
be funded from the guaranty agency’s Operating 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 be construed to require a guaranty agency to duplicate
any efforts under way on the date of enactment of the Higher
Education Reconciliation Act of 2005 that meet the requirements of this section.
(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, parMay 7, 2013
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HIGHER EDUCATION ACT OF 1965
Sec. 485E
ents, and other interested individuals, through Internet 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 Reconciliation 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. 485E. ø20 U.S.C. 1092f¿ EARLY AWARENESS OF FINANCIAL AID ELIGIBILITY.
(a) IN GENERAL.—The Secretary shall implement, in coopera-
tion with States, institutions of higher education, secondary
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 subsection (b).
(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 a Federal meanstested benefit program (including the supplemental nutrition assistance program under the Food and Nutrition Act
of 2008 (7 U.S.C. 2011 et seq.)), or another such benefit
program as determined by the Secretary, of such students’
potential eligibility for the Federal Pell Grant amount, determined under section 401(b)(2)(A), for which the student
would be eligible; and
(B) disseminate such informational materials, that are
part of the system described in subsection (a), as the Secretary determines necessary.
(2) 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 families, 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 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
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an age-appropriate format using dissemination mechanisms
suitable for students in secondary school.
(3) 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 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.
(4) PUBLIC AWARENESS CAMPAIGN.—Not later than two
years after the date of enactment of the Higher Education Opportunity Act, the Secretary, in coordination with States, institutions of higher education, early intervention and outreach
programs under this title, other agencies and organizations involved in college access and student financial aid, secondary
schools, organizations that provide services to individuals that
are or were homeless, to individuals in foster care, or to other
disconnected individuals, 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 (3).
SEC. 486. ø20 U.S.C. 1093¿ DISTANCE EDUCATION DEMONSTRATION
PROGRAMS.
(a) PURPOSE.—It is the purpose of this section—
(1) to allow demonstration programs that are strictly monitored by the Department of Education to test the quality and
viability of expanded distance education programs currently restricted under this Act;
(2) to provide for increased student access to higher education through distance education programs; and
(3) to help determine—
(A) the most effective means of delivering quality education via distance education course offerings;
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HIGHER EDUCATION ACT OF 1965
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(B) the specific statutory and regulatory requirements
which should be altered to provide greater access to high
quality distanceeducation programs; and
(C) the appropriate level of Federal assistance for students enrolled in distance education programs.
(b) DEMONSTRATION PROGRAMS AUTHORIZED.—
(1) IN GENERAL.—In accordance with the provisions of subsection (d), the Secretary is authorized to select institutions of
higher education, systems of such institutions, or consortia of
such institutions for voluntary participation in a Distance Education Demonstration Program that provides participating institutions with the ability to offer distance education programs
that do not meet all or a portion of the sections or regulations
described in paragraph (2).
(2) WAIVERS.—The Secretary is authorized to waive for any
institution of higher education, system of institutions of higher
education, or consortium participating in a Distance Education
Demonstration Program, the requirements of section 472(5) as
the section relates to computer costs, sections 481(a) and
481(b) as such sections relate to requirements for a minimum
number of weeks of instruction, sections 102(a)(3)(A),
102(a)(3)(B), and 484(l)(1), or one or more of the regulations
prescribed under this part or part F which inhibit the operation of quality distance education programs.
(3) ELIGIBLE APPLICANTS.—
(A) ELIGIBLE INSTITUTIONS.—Except as provided in
subparagraphs (B), (C), and (D), only an institution of
higher education that is eligible to participate in programs
under this title shall be eligible to participate in the demonstration program authorized under this section.
(B) PROHIBITION.—An institution of higher education
described in section 102(a)(1)(C) shall not be eligible to
participate in the demonstration program authorized
under this section.
(C) SPECIAL RULE.—Subject to subparagraph (B), an
institution of higher education that meets the requirements of subsection (a) of section 102, other than the requirement of paragraph (3)(A) or (3)(B) of such subsection,
and that provides a 2-year or 4-year program of instruction
for which the institution awards an associate or baccalaureate degree, shall be eligible to participate in the demonstration program authorized under this section.
(D) REQUIREMENT.—Notwithstanding any other provision of this paragraph, Western Governors University shall
be considered eligible to participate in the demonstration
program authorized under this section. In addition to the
waivers described in paragraph (2), the Secretary may
waive the provisions of title I and parts G and H of this
title for such university that the Secretary determines to
be appropriate because of the unique characteristics of
such university. In carrying out the preceding sentence,
the Secretary shall ensure that adequate program integrity and accountability measures apply to such university’s
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participation in the demonstration program authorized
under this section.
(c) APPLICATION.—
(1) IN GENERAL.—Each institution, system, or consortium
of institutions desiring to participate in a demonstration program under this section shall submit an application to the Secretary at such time and in such manner as the Secretary may
require.
(2) CONTENTS.—Each application shall include—
(A) a description of the institution, system, or consortium’s consultation with a recognized accrediting agency or
association with respect to quality assurances for the distance education programs to be offered;
(B) a description of the statutory and regulatory requirements described in subsection (b)(2) or, if applicable,
subsection (b)(3)(D) for which a waiver is sought and the
reasons for which the waiver is sought;
(C) a description of the distance education programs to
be offered;
(D) a description of the students to whom distance
education programs will be offered;
(E) an assurance that the institution, system, or consortium will offer full cooperation with the ongoing evaluations of the demonstration program provided for in this
section; and
(F) such other information as the Secretary may require.
(d) SELECTION.—
(1) IN GENERAL.—For the first year of the demonstration
program authorized under this section, the Secretary is authorized to select for participation in the program not more than
15 institutions, systems of institutions, or consortia of institutions. For the third year of the demonstration program authorized under this section, the Secretary may select not more than
35 institutions, systems, or consortia, in addition to the institutions, systems, or consortia selected pursuant to the preceding
sentence, to participate in the demonstration program if the
Secretary determines that such expansion is warranted based
on the evaluations conducted in accordance with subsections
(f ) and (g).
(2) CONSIDERATIONS.—In selecting institutions to participate in the demonstration program in the first or succeeding
years of the program, the Secretary shall take into account—
(A) the number and quality of applications received;
(B) the Department’s capacity to oversee and monitor
each institution’s participation;
(C) an institution’s—
(i) financial responsibility;
(ii) administrative capability; and
(iii) program or programs being offered via distance education; and
(D) ensuring the participation of a diverse group of institutions with respect to size, mission, and geographic distribution.
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(e) NOTIFICATION.—The Secretary shall make available to the
public and to the 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.—The Secretary shall evaluate the demonstration programs authorized under this section on an annual basis. Such evaluations specifically shall review—
(A) the extent to which the institution, system or consortium has met the goals set forth in its application to the
Secretary, including the measures of program quality assurance;
(B) the number and types of students participating in
the programs offered, including the progress of participating students toward recognized certificates or degrees
and the extent to which participation in such programs increased;
(C) issues related to student financial assistance for
distance education;
(D) effective technologies for delivering distance education course offerings; and
(E) the extent to which statutory or regulatory requirements not waived under the demonstration program
present difficulties for students or institutions.
(2) POLICY ANALYSIS.—The Secretary shall review current
policies and identify those policies that present impediments to
the development and use of distance education and other nontraditional methods of expanding access to education.
(3) ANNUAL REPORTS.—The Secretary shall provide reports
to the authorizing committees on an annual basis regarding—
(A) the demonstration programs authorized under this
section; and
(B) the number and types of students receiving assistance under this title for instruction leading to a recognized
certificate, as provided for in section 484(l)(1), including
the progress of such students toward recognized certificates and the degree to which participation in such programs leading to such certificates increased.
(g) OVERSIGHT.—In conducting the demonstration program authorized under this section, the Secretary shall, on a continuing
basis—
(1) assure compliance of institutions, systems or consortia
with the requirements of this title (other than the sections and
regulations that are waived under subsections (b)(2) and
(b)(3)(D));
(2) provide technical assistance;
(3) monitor fluctuations in the student population enrolled
in the participating institutions, systems or consortia; and
(4) consult with appropriate accrediting agencies or associations and appropriate State regulatory authorities.
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(h) DEFINITION.—For the purpose of this section, the term ‘‘distance education’’ means an educational process that is characterized by the separation, in time or place, between instructor and
student. Such term may include courses offered principally through
the use of—
(1) television, audio, or computer transmission, such as
open broadcast, closed circuit, cable, microwave, or satellite
transmission;
(2) audio or computer conferencing;
(3) video cassettes or discs; or
(4) correspondence.
SEC. 486A. ø20 U.S.C. 1093a¿ ARTICULATION AGREEMENTS.
(a) DEFINITION.—In this section, the term ‘‘articulation
agreement’’ means an agreement between or among institutions of higher education that specifies the acceptability of courses in transfer
toward meeting specific degree or program requirements.
(b) PROGRAM TO ENCOURAGE ARTICULATION AGREEMENTS.—
(1) PROGRAM ESTABLISHED.—The Secretary shall carry out
a program for States, in cooperation with public institutions of
higher education, to develop, enhance, and implement comprehensive articulation agreements between or among such institutions in a State, and (to the extent practicable) across
State lines, by 2010. Such articulation agreements shall be
made widely and publicly available on the websites of States
and such institutions. In developing, enhancing, and implementing articulation agreements, States and public institutions
of higher education may employ strategies, where applicable,
including—
(A) common course numbering;
(B) a general education core curriculum;
(C) management systems regarding course equivalency, transfer of credit, and articulation; and
(D) other strategies identified by the Secretary.
(2) TECHNICAL ASSISTANCE PROVIDED.—The Secretary shall
provide technical assistance to States and public institutions of
higher education for the purposes of developing and implementing articulation agreements in accordance with this subsection.
(3) RULE OF CONSTRUCTION.—Nothing in this subsection
shall be construed to authorize the Secretary to require particular policies, procedures, or practices by institutions of higher education with respect to articulation agreements.
SEC. 487. ø20 U.S.C. 1094¿ PROGRAM PARTICIPATION AGREEMENTS.
(a) REQUIRED FOR PROGRAMS OF ASSISTANCE; CONTENTS.—In
order to be an eligible institution for the purposes of any program
authorized under this title, an institution must be an institution of
higher education or an eligible institution (as that term is defined
for the purpose of that program) and shall, except with respect to
a program under subpart 4 of part A, enter into a program participation agreement with the Secretary. The agreement shall condition the initial and continuing eligibility of an institution to participate in a program upon compliance with the following requirements:
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(1) The institution will use funds received by it for any
program under this title and any interest or other earnings
thereon solely for the purpose specified in and in accordance
with the provision of that program.
(2) The institution shall not charge any student a fee for
processing or handling any application, form, or data required
to determine the student’s eligibility for assistance under this
title or the amount of such assistance.
(3) The institution will establish and maintain such administrative and fiscal procedures and records as may be necessary to ensure proper and efficient administration of funds
received from the Secretary or from students under this title,
together with assurances that the institution will provide,
upon request and in a timely fashion, information relating to
the administrative capability and financial responsibility of the
institution to—
(A) the Secretary;
(B) the appropriate guaranty agency; and
(C) the appropriate accrediting agency or association.
(4) The institution will comply with the provisions of subsection (c) of this section and the regulations prescribed under
that subsection, relating to fiscal eligibility.
(5) The institution will submit reports to the Secretary
and, in the case of an institution participating in a program
under part B or part E, to holders of loans made to the institution’s students under such parts at such times and containing
such information as the Secretary may reasonably require to
carry out the purpose of this title.
(6) The institution will not provide any student with any
statement or certification to any lender under part B that
qualifies the student for a loan or loans in excess of the
amount that student is eligible to borrow in accordance with
sections 425(a), 428(a)(2), and 428(b)(1) (A) and (B).
(7) The institution will comply with the requirements of
section 485.
(8) In the case of an institution that advertises job placement rates as a means of attracting students to enroll in the
institution, the institution will make available to prospective
students, at or before the time of application (A) the most recent available data concerning employment statistics, graduation statistics, and any other information necessary to substantiate the truthfulness of the advertisements, and (B) relevant
State licensing requirements of the State in which such institution is located for any job for which the course of instruction
is designed to prepare such prospective students.
(9) In the case of an institution participating in a program
under part B or D, the institution will inform all eligible borrowers enrolled in the institution about the availability and eligibility of such borrowers for State grant assistance from the
State in which the institution is located, and will inform such
borrowers from another State of the source for further information concerning such assistance from that State.
(10) The institution certifies that it has in operation a drug
abuse prevention program that is determined by the institution
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to be accessible to any officer, employee, or student at the institution.
(11) In the case of any institution whose students receive
financial assistance pursuant to section 484(d), the institution
will make available to such students a program proven successful in assisting students in obtaining a certificate of high
school equivalency.
(12) The institution certifies that—
(A) the institution has established a campus security
policy; and
(B) the institution has complied with the disclosure requirements of section 485(f).
(13) The institution will not deny any form of Federal financial aid to any student who meets the eligibility requirements of this title on the grounds that the student is participating in a program of study abroad approved for credit by the
institution.
(14)(A) The institution, in order to participate as an eligible institution under part B or D, will develop a Default Management Plan for approval by the Secretary as part of its initial application for certification as an eligible institution and
will implement such Plan for two years thereafter.
(B) Any institution of higher education which changes
ownership and any eligible institution which changes its status
as a parent or subordinate institution shall, in order to participate as an eligible institution under part B or D, develop a Default Management Plan for approval by the Secretary and implement such Plan for two years after its change of ownership
or status.
(C) This paragraph shall not apply in the case of an institution in which (i) neither the parent nor the subordinate institution has a cohort default rate in excess of 10 percent, and (ii)
the new owner of such parent or subordinate institution does
not, and has not, owned any other institution with a cohort default rate in excess of 10 percent.
(15) The institution acknowledges the authority of the Secretary, guaranty agencies, lenders, accrediting agencies, the
Secretary of Veterans Affairs, and the State agencies under
subpart 1 of part H to share with each other any information
pertaining to the institution’s eligibility to participate in programs under this title or any information on fraud and abuse.
(16)(A) The institution will not knowingly employ an individual in a capacity that involves the administration of programs under this title, or the receipt of program funds under
this title, who has been convicted of, or has pled nolo
contendere or guilty to, a crime involving the acquisition, use,
or expenditure of funds under this title, or has been judicially
determined to have committed fraud involving funds under
this title or contract with an institution or third party servicer
that has been terminated under section 432 involving the acquisition, use, or expenditure of funds under this title, or who
has been judicially determined to have committed fraud involving funds under this title.
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(B) The institution will not knowingly contract with or employ any individual, agency, or organization that has been, or
whose officers or employees have been—
(i) convicted of, or pled nolo contendere or guilty to, a
crime involving the acquisition, use, or expenditure of
funds under this title; or
(ii) judicially determined to have committed fraud involving funds under this title.
(17) The institution will complete surveys conducted as a
part of the Integrated Postsecondary Education Data System
(IPEDS) or any other Federal postsecondary institution data
collection effort, as designated by the Secretary, in a timely
manner and to the satisfaction of the Secretary.
(18) The institution will meet the requirements established
pursuant to section 485(g).
(19) The institution will not impose any penalty, including
the assessment of late fees, the denial of access to classes, libraries, or other institutional facilities, or the requirement that
the student borrow additional funds, on any student because of
the student’s inability to meet his or her financial obligations
to the institution as a result of the delayed disbursement of the
proceeds of a loan made under this title due to compliance with
the provisions of this title, or delays attributable to the institution.
(20) The institution will not provide any commission,
bonus, or other incentive payment based directly or indirectly
on success in securing enrollments or financial aid to any persons or entities engaged in any student recruiting or admission
activities or in making decisions regarding the award of student financial assistance, except that this paragraph shall not
apply to the recruitment of foreign students residing in foreign
countries who are not eligible to receive Federal student assistance.
(21) The institution will meet the requirements established
by the Secretary and accrediting agencies or associations, and
will provide evidence to the Secretary that the institution has
the authority to operate within a State.
(22) The institution will comply with the refund policy established pursuant to section 484B.
(23)(A) The institution, if located in a State to which section 4(b) of the National Voter Registration Act of 1993 (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
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.
(B) The institution shall request the forms from the State
120 days prior to the deadline for registering to vote within the
State. If an institution has not received a sufficient quantity of
forms to fulfill this section from the State within 60 days prior
to the deadline for registering to vote in the State, the institution shall not be held liable for not meeting the requirements
of this section during that election year.
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(C) This paragraph shall apply to general and special elections for Federal office, as defined in section 301(3) of the Federal Election Campaign Act of 1971 (2 U.S.C. 431(3)), and to
the elections for Governor or other chief executive within such
State).
(D) 1 The institution shall be considered in compliance
with the requirements of subparagraph (A) for each 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 exclusively to voter registration.
(24) In the case of a proprietary institution of higher education (as defined in section 102(b)), such institution will derive not less than ten percent of such institution’s revenues
from sources other than funds provided under this title, as calculated in accordance with subsection (d)(1), or will be subject
to the sanctions described in subsection (d)(2).
(25) In the case of an institution that participates in a loan
program under this title, the institution will—
(A) develop a code of conduct with respect to such
loans with which the institution’s officers, employees, and
agents shall comply, that—
(i) prohibits a conflict of interest with the responsibilities of an officer, employee, or agent of an institution with respect to such loans; and
(ii) at a minimum, includes the provisions described in subsection (e);
(B) publish such code of conduct prominently on the
institution’s website; and
(C) administer and enforce such code by, at a minimum, requiring that all of the institution’s officers, employees, and agents with responsibilities with respect to
such loans be annually informed of the provisions of the
code of conduct.
(26) The institution will, upon written request, disclose to
the alleged victim of any crime of violence (as that term is defined in section 16 of title 18, United States Code), or a nonforcible sex offense, the report on the results of any disciplinary proceeding conducted by such institution against a student who is the alleged perpetrator of such crime or offense
with respect to such crime or offense. If the alleged victim of
such crime or offense is deceased as a result of such crime or
offense, the next of kin of such victim shall be treated as the
alleged victim for purposes of this paragraph.
(27) In the case of an institution that has entered into a
preferred lender arrangement, the institution will at least annually compile, maintain, and make available for students attending the institution, and the families of such students, a
list, in print or other medium, of the specific lenders for loans
made, insured, or guaranteed under this title or private edu1 Margin
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cation loans that the institution recommends, promotes, or endorses in accordance with such preferred lender arrangement.
In making such list, the institution shall comply with the requirements of subsection (h).
(28)(A) The institution will, upon the request of an applicant for a private education loan, provide to the applicant the
form required under section 128(e)(3) of the Truth in Lending
Act (15 U.S.C. 1638(e)(3)), and the information required to
complete such form, to the extent the institution possesses
such information.
(B) For purposes of this paragraph, the term ‘‘private education loan’’ has the meaning given such term in section 140
of the Truth in Lending Act.
(29) The institution certifies that the institution—
(A) has developed plans to effectively combat the unauthorized distribution of copyrighted material, including
through the use of a variety of technology-based deterrents; and
(B) will, to the extent practicable, offer alternatives to
illegal downloading or peer-to-peer distribution of intellectual property, as determined by the institution in consultation with the chief technology officer or other designated
officer of the institution.
(b) HEARINGS.—(1) An institution that has received written notice of a final audit or program review determination and that desires to have such determination reviewed by the Secretary shall
submit to the Secretary a written request for review not later than
45 days after receipt of notification of the final audit or program
review determination.
(2) The Secretary shall, upon receipt of written notice under
paragraph (1), arrange for a hearing and notify the institution
within 30 days of receipt of such notice the date, time, and place
of such hearing. Such hearing shall take place not later than 120
days from the date upon which the Secretary notifies the institution.
(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
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H, except that the Secretary may modify the requirements of
this clause with respect to institutions of higher education that
are foreign institutions, and may waive such requirements
with respect to a foreign institution whose students receive less
than $500,000 in loans under this title during the award year
preceding the audit period;
(ii) with regard to an eligible institution which is audited
under chapter 75 of title 31, United States Code, deeming such
audit to satisfy the requirements of clause (i) for the period
covered by such audit; or
(iii) at the discretion of the Secretary, with regard to an
eligible institution (other than an eligible institution described
in section 102(a)(1)(C)) that has obtained less than $200,000 in
funds under this title during each of the 2 award years that
precede the audit period and submits a letter of credit payable
to the Secretary equal to not less than 1⁄2 of the annual potential liabilities of such institution as determined by the Secretary, deeming an audit conducted every 3 years to satisfy the
requirements of clause (i), except for the award year immediately preceding renewal of the institution’s eligibility under
section 498(g);
(B) in matters not governed by specific program provisions,
the establishment of reasonable standards of financial responsibility and appropriate institutional capability for the administration by an eligible institution of a program of student financial aid under this title, including any matter the Secretary
deems necessary to the sound administration of the financial
aid programs, such as the pertinent actions of any owner,
shareholder, or person exercising control over an eligible institution;
(C)(i) except as provided in clause (ii), a compliance audit
of a third party servicer (other than with respect to the
servicer’s functions as a lender if such functions are otherwise
audited under this part and such audits meet the requirements
of this clause), with regard to any contract with an eligible institution, guaranty agency, or lender for administering or servicing any aspect of the student assistance programs under this
title, at least once every year and covering the period since the
most recent audit, conducted by a qualified, independent organization or person in accordance with standards established by
the Comptroller General for the audit of governmental organizations, programs, and functions, and as prescribed in regulations of the Secretary, the results of which shall be submitted
to the Secretary; or
(ii) with regard to a third party servicer that is audited
under chapter 75 of title 31, United States Code, such audit
shall be deemed to satisfy the requirements of clause (i) for the
period covered by such audit;
(D)(i) a compliance audit of a secondary market with regard to its transactions involving, and its servicing and collection of, loans made under this title, at least once a year and
covering the period since the most recent audit, conducted by
a qualified, independent organization or person in accordance
with standards established by the Comptroller General for the
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audit of governmental organizations, programs, and functions,
and as prescribed in regulations of the Secretary, the results
of which shall be submitted to the Secretary; or
(ii) with regard to a secondary market that is audited
under chapter 75 of title 31, United States Code, such audit
shall be deemed to satisfy the requirements of clause (i) for the
period covered by the audit;
(E) the establishment, by each eligible institution under
part B responsible for furnishing to the lender the statement
required by section 428(a)(2)(A)(i), of policies and procedures by
which the latest known address and enrollment status of any
student who has had a loan insured under this part and who
has either formally terminated his enrollment, or failed to reenroll on at least a half-time basis, at such institution, shall
be furnished either to the holder (or if unknown, the insurer)
of the note, not later than 60 days after such termination or
failure to re-enroll;
(F) the limitation, suspension, or termination of the participation in any program under this title of an eligible institution, or the imposition of a civil penalty under paragraph (3)(B)
whenever the Secretary has determined, after reasonable notice and opportunity for hearing, that such institution has violated or failed to carry out any provision of this title, any regulation prescribed under this title, or any applicable special arrangement, agreement, or limitation, except that no period of
suspension under this section shall exceed 60 days unless the
institution and the Secretary agree to an extension or unless
limitation or termination proceedings are initiated by the Secretary within that period of time;
(G) an emergency action against an institution, under
which the Secretary shall, effective on the date on which a notice and statement of the basis of the action is mailed to the
institution (by registered mail, return receipt requested), withhold funds from the institution or its students and withdraw
the institution’s authority to obligate funds under any program
under this title, if the Secretary—
(i) receives information, determined by the Secretary
to be reliable, that the institution is violating any provision of this title, any regulation prescribed under this title,
or any applicable special arrangement, agreement, or limitation,
(ii) determines that immediate action is necessary to
prevent misuse of Federal funds, and
(iii) determines that the likelihood of loss outweighs
the importance of the procedures prescribed under subparagraph (D) for limitation, suspension, or termination,
except that an emergency action shall not exceed 30 days unless limitation, suspension, or termination proceedings are initiated by the Secretary against the institution within that period of time, and except that the Secretary shall provide the institution an opportunity to show cause, if it so requests, that
the emergency action is unwarranted;
(H) the limitation, suspension, or termination of the eligibility of a third party servicer to contract with any institution
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to administer any aspect of an institution’s student assistance
program under this title, or the imposition of a civil penalty
under paragraph (3)(B), whenever the Secretary has determined, after reasonable notice and opportunity for a hearing,
that such organization, acting on behalf of an institution, has
violated or failed to carry out any provision of this title, any
regulation prescribed under this title, or any applicable special
arrangement, agreement, or limitation, except that no period of
suspension under this subparagraph shall exceed 60 days unless the organization and the Secretary agree to an extension,
or unless limitation or termination proceedings are initiated by
the Secretary against the individual or organization within
that period of time; and
(I) an emergency action against a third party servicer that
has contracted with an institution to administer any aspect of
the institution’s student assistance program under this title,
under which the Secretary shall, effective on the date on which
a notice and statement of the basis of the action is mailed to
such individual or organization (by registered mail, return receipt requested), withhold funds from the individual or organization and withdraw the individual or organization’s authority
to act on behalf of an institution under any program under this
title, if the Secretary—
(i) receives information, determined by the Secretary
to be reliable, that the individual or organization, acting
on behalf of an institution, is violating any provision of
this title, any regulation prescribed under this title, or any
applicable special arrangement, agreement, or limitation,
(ii) determines that immediate action is necessary to
prevent misuse of Federal funds, and
(iii) determines that the likelihood of loss outweighs
the importance of the procedures prescribed under subparagraph (F), for limitation, suspension, or termination,
except that an emergency action shall not exceed 30 days unless the limitation, suspension, or termination proceedings are
initiated by the Secretary against the individual or organization within that period of time, and except that the Secretary
shall provide the individual or organization an opportunity to
show cause, if it so requests, that the emergency action is unwarranted.
(2) If an individual who, or entity that, exercises substantial
control, as determined by the Secretary in accordance with the definition of substantial control in subpart 3 of part H, over one or
more institutions participating in any program under this title, or,
for purposes of paragraphs (1) (H) and (I), over one or more organizations that contract with an institution to administer any aspect
of the institution’s student assistance program under this title, is
determined to have committed one or more violations of the requirements of any program under this title, or has been suspended
or debarred in accordance with the regulations of the Secretary, the
Secretary may use such determination, suspension, or debarment
as the basis for imposing an emergency action on, or limiting, suspending, or terminating, in a single proceeding, the participation of
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any or all institutions under the substantial control of that individual or entity.
(3)(A) Upon determination, after reasonable notice and opportunity for a hearing, that an eligible institution has engaged in
substantial misrepresentation of the nature of its educational program, its financial charges, or the employability of its graduates,
the Secretary may suspend or terminate the eligibility status for
any or all programs under this title of any otherwise eligible institution, in accordance with procedures specified in paragraph (1)(D)
of this subsection, until the Secretary finds that such practices
have been corrected.
(B)(i) Upon determination, after reasonable notice and opportunity for a hearing, that an eligible institution—
(I) has violated or failed to carry out any provision of this
title or any regulation prescribed under this title; or
(II) has engaged in substantial misrepresentation of the
nature of its educational program, its financial charges, and
the employability of its graduates,
the Secretary may impose a civil penalty upon such institution of
not to exceed $25,000 for each violation or misrepresentation.
(ii) Any civil penalty may be compromised by the Secretary. In
determining the amount of such penalty, or the amount agreed
upon in compromise, the appropriateness of the penalty to the size
of the institution of higher education subject to the determination,
and the gravity of the violation, failure, or misrepresentation shall
be considered. The amount of such penalty, when finally determined, or the amount agreed upon in compromise, may be deducted
from any sums owing by the United States to the institution
charged.
(4) The Secretary shall publish a list of State agencies which
the Secretary determines to be reliable authority as to the quality
of public postsecondary vocational education in their respective
States for the purpose of determining eligibility for all Federal student assistance programs.
(5) The Secretary shall make readily available to appropriate
guaranty agencies, eligible lenders, State agencies notifying the
Secretary under subpart 1 of part H, and accrediting agencies or
associations the results of the audits of eligible institutions conducted pursuant to paragraph (1)(A).
(6) The Secretary is authorized to provide any information collected as a result of audits conducted under this section, together
with audit information collected by guaranty agencies, to any Federal or State agency having responsibilities with respect to student
financial assistance, including those referred to in subsection
(a)(15) of this section.
(7) Effective with respect to any audit conducted under this
subsection after December 31, 1988, if, in the course of conducting
any such audit, the personnel of the Department of Education discover, or are informed of, grants or other assistance provided by an
institution in accordance with this title for which the institution
has not received funds appropriated under this title (in the amount
necessary to provide such assistance), including funds for which reimbursement was not requested prior to such discovery or information, such institution shall be permitted to offset that amount
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against any sums determined to be owed by the institution pursuant to such audit, or to receive reimbursement for that amount (if
the institution does not owe any such sums).
(d) IMPLEMENTATION OF NON-TITLE IV REVENUE REQUIREMENT.—
(1) CALCULATION.—In making calculations under subsection (a)(24), a proprietary institution of higher education
shall—
(A) use the cash basis of accounting, except in the case
of loans described in subparagraph (D)(i) that are made by
the proprietary institution of higher education;
(B) consider as revenue only those funds generated by
the institution from—
(i) tuition, fees, and other institutional charges for
students enrolled in programs eligible for assistance
under this title;
(ii) activities conducted by the institution 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; and
(iii) funds paid by a student, or on behalf of a student by a party other than the institution, for an education or training program that is not eligible for
funds under this title, if the program—
(I) is approved or licensed by the appropriate
State agency;
(II) is accredited by an accrediting agency recognized by the Secretary; or
(III) provides an industry-recognized credential or certification;
(C) presume that any funds for a program under this
title that are disbursed or delivered to or on behalf of a
student will be used to pay the student’s tuition, fees, or
other institutional charges, regardless of whether the institution credits those funds to the student’s account or pays
those funds directly to the student, except to the extent
that the student’s tuition, fees, or other institutional
charges are satisfied by—
(i) grant funds provided by non-Federal public
agencies or private sources independent of the institution;
(ii) funds provided under a contractual arrangement with a Federal, State, or local government agency for the purpose of providing job training to low-income individuals who are in need of that training;
(iii) funds used by a student from savings plans
for educational expenses established by or on behalf of
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the student and which qualify for special tax treatment under the Internal Revenue Code of 1986; or
(iv) institutional scholarships described in subparagraph (D)(iii);
(D) include institutional aid as revenue to the school
only as follows:
(i) in the case of loans made by a proprietary institution of higher education on or after July 1, 2008
and prior to July 1, 2012, the net present value of
such loans made by the institution during the applicable institutional fiscal year accounted for on an accrual
basis and estimated in accordance with generally accepted accounting principles and related standards
and guidance, if the loans—
(I) are bona fide as evidenced by enforceable
promissory notes;
(II) are issued at intervals related to the institution’s enrollment periods; and
(III) are subject to regular loan repayments
and collections;
(ii) in the case of loans made by a proprietary institution of higher education on or after July 1, 2012,
only the amount of loan repayments received during
the applicable institutional fiscal year, excluding repayments on loans made and accounted for as specified in clause (i); and
(iii) in the case of scholarships provided by a proprietary institution of higher education, only those
scholarships provided by the institution in the form of
monetary aid or tuition discounts based upon the academic achievements or financial need of students, disbursed during each fiscal year from an established restricted account, and only to the extent that funds in
that account represent designated funds from an outside source or from income earned on those funds;
(E) in the case of each student who receives a loan on
or after July 1, 2008, and prior to July 1, 2011, that is authorized under section 428H or that is a Federal Direct
Unsubsidized Stafford Loan, treat as revenue received by
the institution from sources other than funds received
under this title, the amount by which the disbursement of
such loan received by the institution exceeds the limit on
such loan in effect on the day before the date of enactment
of the Ensuring Continued Access to Student Loans Act of
2008; and
(F) exclude from revenues—
(i) the amount of funds the institution received
under part C, unless the institution used those funds
to pay a student’s institutional charges;
(ii) the amount of funds the institution received
under subpart 4 of part A;
(iii) the amount of funds provided by the institution as matching funds for a program under this title;
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(iv) the amount of funds provided by the institution for a program under this title that are required
to be refunded or returned; and
(v) the amount charged for books, supplies, and
equipment, unless the institution includes that
amount as tuition, fees, or other institutional charges.
(2) SANCTIONS.—
(A) INELIGIBILITY.—A proprietary institution of higher
education that fails to meet a requirement of subsection
(a)(24) for two consecutive institutional fiscal years shall
be ineligible to participate in the programs authorized by
this title for a period of not less than two institutional fiscal years. To regain eligibility to participate in the programs authorized by this title, a proprietary institution of
higher education shall demonstrate compliance with all eligibility and certification requirements under section 498
for a minimum of two institutional fiscal years after the
institutional fiscal year in which the institution became ineligible.
(B) ADDITIONAL ENFORCEMENT.—In addition to such
other means of enforcing the requirements of this title as
may be available to the Secretary, if a proprietary institution of higher education fails to meet a requirement of subsection (a)(24) for any institutional fiscal year, then the institution’s eligibility to participate in the programs authorized by this title becomes provisional for the two institutional fiscal years after the institutional fiscal year in
which the institution failed to meet the requirement of
subsection (a)(24), except that such provisional eligibility
shall terminate—
(i) on the expiration date of the institution’s program participation agreement under this subsection
that is in effect on the date the Secretary determines
that the institution failed to meet the requirement of
subsection (a)(24); or
(ii) in the case that the Secretary determines that
the institution failed to meet a requirement of subsection (a)(24) for two consecutive institutional fiscal
years, on the date the institution is determined ineligible in accordance with subparagraph (A).
(3) PUBLICATION ON COLLEGE NAVIGATOR WEBSITE.—The
Secretary shall publicly disclose on the College Navigator
website—
(A) the identity of any proprietary institution of higher
education that fails to meet a requirement of subsection
(a)(24); and
(B) the extent to which the institution failed to meet
such requirement.
(4) REPORT TO CONGRESS.—Not later than July 1, 2009,
and July 1 of each succeeding year, the Secretary shall submit
to the authorizing committees a report that contains, for each
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ments submitted to the Secretary by each institution pursuant
to the requirements of subsection (a)(24)—
(A) the amount and percentage of such institution’s
revenues received from sources under this title; and
(B) the amount and percentage of such institution’s
revenues received from other sources.
(e) CODE OF CONDUCT REQUIREMENTS.—An institution of higher education’s code of conduct, as required under subsection (a)(25),
shall include the following requirements:
(1) BAN ON REVENUE-SHARING ARRANGEMENTS.—
(A) PROHIBITION.—The institution shall not enter into
any revenue-sharing arrangement with any lender.
(B) DEFINITION.—For purposes of this paragraph, the
term ‘‘revenue-sharing arrangement’’ means an arrangement between an institution and a lender under which—
(i) a lender provides or issues a loan that is made,
insured, or guaranteed under this title to students attending the institution or to the families of such students; and
(ii) the institution recommends the lender or the
loan products of the lender and in exchange, the lender pays a fee or provides other material benefits, including revenue or profit sharing, to the institution, an
officer or employee of the institution, or an agent.
(2) GIFT BAN.—
(A) PROHIBITION.—No officer or employee of the institution who is employed in the financial aid office of the institution or who otherwise has responsibilities with respect
to education loans, or agent who has responsibilities with
respect to education loans, shall solicit or accept any gift
from a lender, guarantor, or servicer of education loans.
(B) DEFINITION OF GIFT.—
(i) IN GENERAL.—In this paragraph, the term ‘‘gift’’
means any gratuity, favor, discount, entertainment,
hospitality, loan, or other item having a monetary
value of more than a de minimus amount. The term
includes a gift of services, transportation, lodging, or
meals, whether provided in kind, by purchase of a
ticket, payment in advance, or reimbursement after
the expense has been incurred.
(ii) EXCEPTIONS.—The term ‘‘gift’’ shall not include
any of the following:
(I) Standard material, activities, or programs
on issues related to a loan, default aversion, default prevention, or financial literacy, such as a
brochure, a workshop, or training.
(II) Food, refreshments, training, or informational material furnished to an officer or employee
of an institution, or to an agent, as an integral
part of a training session that is designed to improve the service of a lender, guarantor, or
servicer of education loans to the institution, if
such training contributes to the professional development of the officer, employee, or agent.
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(III) Favorable terms, conditions, and borrower benefits on an education loan provided to a
student employed by the institution if such terms,
conditions, or benefits are comparable to those
provided to all students of the institution.
(IV) Entrance and exit counseling services
provided to borrowers to meet the institution’s responsibilities for entrance and exit counseling as
required by subsections (b) and (l) of section 485,
as long as—
(aa) the institution’s staff are in control of
the counseling, (whether in person or via electronic capabilities); and
(bb) such counseling does not promote the
products or services of any specific lender.
(V) Philanthropic contributions to an institution from a lender, servicer, or guarantor of education loans that are unrelated to education loans
or any contribution from any lender, guarantor, or
servicer that is not made in exchange for any advantage related to education loans.
(VI) State education grants, scholarships, or
financial aid funds administered by or on behalf of
a State.
(iii) RULE FOR GIFTS TO FAMILY MEMBERS.—For
purposes of this paragraph, a gift to a family member
of an officer or employee of an institution, to a family
member of an agent, or to any other individual based
on that individual’s relationship with the officer, employee, or agent, shall be considered a gift to the officer, employee, or agent if—
(I) the gift is given with the knowledge and
acquiescence of the officer, employee, or agent;
and
(II) the officer, employee, or agent has reason
to believe the gift was given because of the official
position of the officer, employee, or agent.
(3) CONTRACTING ARRANGEMENTS PROHIBITED.—
(A) PROHIBITION.—An officer or employee who is employed in the financial aid office of the institution or who
otherwise has responsibilities with respect to education
loans, or an agent who has responsibilities with respect to
education loans, shall not accept from any lender or affiliate of any lender any fee, payment, or other financial benefit (including the opportunity to purchase stock) as compensation for any type of consulting arrangement or other
contract to provide services to a lender or on behalf of a
lender relating to education loans.
(B) EXCEPTIONS.—Nothing in this subsection shall be
construed as prohibiting—
(i) an officer or employee of an institution who is
not employed in the institution’s financial aid office
and who does not otherwise have responsibilities with
respect to education loans, or an agent who does not
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have responsibilities with respect to education loans,
from performing paid or unpaid service on a board of
directors of a lender, guarantor, or servicer of education loans;
(ii) an officer or employee of the institution who is
not employed in the institution’s financial aid office
but who has responsibility with respect to education
loans as a result of a position held at the institution,
or an agent who has responsibility with respect to education loans, from performing paid or unpaid service
on a board of directors of a lender, guarantor, or
servicer of education loans, if the institution has a
written conflict of interest policy that clearly sets forth
that officers, employees, or agents must recuse themselves from participating in any decision of the board
regarding education loans at the institution; or
(iii) an officer, employee, or contractor of a lender,
guarantor, or servicer of education loans from serving
on a board of directors, or serving as a trustee, of an
institution, if the institution has a written conflict of
interest policy that the board member or trustee must
recuse themselves from any decision regarding education loans at the institution.
(4) INTERACTION WITH BORROWERS.—The institution shall
not—
(A) for any first-time borrower, assign, through award
packaging or other methods, the borrower’s loan to a particular lender; or
(B) refuse to certify, or delay certification of, any loan
based on the borrower’s selection of a particular lender or
guaranty agency.
(5) PROHIBITION ON OFFERS OF FUNDS FOR PRIVATE
LOANS.—
(A) PROHIBITION.—The institution shall not request or
accept from any lender any offer of funds to be used for
private education loans (as defined in section 140 of the
Truth in Lending Act), including funds for an opportunity
pool loan, to students in exchange for the institution providing concessions or promises regarding providing the
lender with—
(i) a specified number of loans made, insured, or
guaranteed under this title;
(ii) a specified loan volume of such loans; or
(iii) a preferred lender arrangement for such
loans.
(B) DEFINITION OF OPPORTUNITY POOL LOAN.—In this
paragraph, the term ‘‘opportunity pool loan’’ means a private education loan made by a lender to a student attending the institution or the family member of such a student
that involves a payment, directly or indirectly, by such institution of points, premiums, additional interest, or financial support to such lender for the purpose of such lender
extending credit to the student or the family.
(6) BAN ON STAFFING ASSISTANCE.—
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(A) PROHIBITION.—The institution shall not request or
accept from any lender any assistance with call center
staffing or financial aid office staffing.
(B) CERTAIN ASSISTANCE PERMITTED.—Nothing in
paragraph (1) shall be construed to prohibit the institution
from requesting or accepting assistance from a lender related to—
(i) professional development training for financial
aid administrators;
(ii) providing educational counseling materials, financial literacy materials, or debt management materials to borrowers, provided that such materials disclose to borrowers the identification of any lender that
assisted in preparing or providing such materials; or
(iii) staffing services on a short-term, nonrecurring
basis to assist the institution with financial aid-related functions during emergencies, including Statedeclared or federally declared natural disasters, federally declared national disasters, and other localized
disasters and emergencies identified by the Secretary.
(7) ADVISORY BOARD COMPENSATION.—Any employee who is
employed in the financial aid office of the institution, or who
otherwise has responsibilities with respect to education loans
or other student financial aid of the institution, and who serves
on an advisory board, commission, or group established by a
lender, guarantor, or group of lenders or guarantors, shall be
prohibited from receiving anything of value from the lender,
guarantor, or group of lenders or guarantors, except that the
employee may be reimbursed for reasonable expenses incurred
in serving on such advisory board, commission, or group.
(f) 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 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)(3), 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.
(g) INSPECTOR GENERAL REPORT ON GIFT BAN VIOLATIONS.—
The Inspector General of the Department shall—
(1) submit an annual report to the authorizing committees
identifying all violations of an institution’s code of conduct that
the Inspector General has substantiated during the preceding
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year relating to the gift ban provisions described in subsection
(e)(2); and
(2) make the report available to the public through the Department’s website.
(h) PREFERRED LENDER LIST REQUIREMENTS.—
(1) IN GENERAL.—In compiling, maintaining, and making
available a preferred lender list as required under subsection
(a)(27), the institution will—
(A) clearly and fully disclose on such preferred lender
list—
(i) not less than the information required to be
disclosed under section 153(a)(2)(A);
(ii) why the institution has entered into a preferred lender arrangement with each lender on the
preferred lender list, particularly with respect to
terms and conditions or provisions favorable to the
borrower; and
(iii) that the students attending the institution, or
the families of such students, do not have to borrow
from a lender on the preferred lender list;
(B) ensure, through the use of the list of lender affiliates provided by the Secretary under paragraph (2), that—
(i) there are not less than three lenders of loans
made under part B that are not affiliates of each other
included on the preferred lender list and, if the institution recommends, promotes, or endorses private education loans, there are not less than two lenders of private education loans that are not affiliates of each
other included on the preferred lender list; and
(ii) the preferred lender list under this paragraph—
(I) specifically indicates, for each listed lender,
whether the lender is or is not an affiliate of each
other lender on the preferred lender list; and
(II) if a lender is an affiliate of another lender
on the preferred lender list, describes the details
of such affiliation;
(C) prominently disclose the method and criteria used
by the institution in selecting lenders with which to enter
into preferred lender arrangements to ensure that such
lenders are selected on the basis of the best interests of
the borrowers, including—
(i) payment of origination or other fees on behalf
of the borrower;
(ii) highly competitive interest rates, or other
terms and conditions or provisions of loans under this
title or private education loans;
(iii) high-quality servicing for such loans; or
(iv) additional benefits beyond the standard terms
and conditions or provisions for such loans;
(D) exercise a duty of care and a duty of loyalty to
compile the preferred lender list under this paragraph
without prejudice and for the sole benefit of the students
attending the institution, or the families of such students;
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(E) not deny or otherwise impede the borrower’s choice
of a lender or cause unnecessary delay in loan certification
under this title for those borrowers who choose a lender
that is not included on the preferred lender list; and
(F) comply with such other requirements as the Secretary may prescribe by regulation.
(2) LENDER AFFILIATES LIST.—
(A) IN GENERAL.—The Secretary shall maintain and
regularly update a list of lender affiliates of all eligible
lenders, and shall provide such list to institutions for use
in carrying out paragraph (1)(B).
(B) USE OF MOST RECENT LIST.—An institution shall
use the most recent list of lender affiliates provided by the
Secretary under subparagraph (A) in carrying out paragraph (1)(B).
(i) DEFINITIONS.—For the purpose of this section:
(1) AGENT.—The term ‘‘agent’’ has the meaning given the
term in section 151.
(2) AFFILIATE.—The term ‘‘affiliate’’ means a person that
controls, is controlled by, or is under common control with another person. A person controls, is controlled by, or is under
common control with another person if—
(A) the person directly or indirectly, or acting through
one or more others, owns, controls, or has the power to
vote five percent or more of any class of voting securities
of such other person;
(B) the person controls, in any manner, the election of
a majority of the directors or trustees of such other person;
or
(C) the Secretary determines (after notice and opportunity for a hearing) that the person directly or indirectly
exercises a controlling interest over the management or
policies of such other person’s education loans.
(3) EDUCATION LOAN.—The term ‘‘education loan’’ has the
meaning given the term in section 151.
(4) ELIGIBLE INSTITUTION.—The term ‘‘eligible institution’’
means any such institution described in section 102 of this Act.
(5) OFFICER.—The term ‘‘officer’’ has the meaning given
the term in section 151.
(6) PREFERRED LENDER ARRANGEMENT.—The term ‘‘preferred lender arrangement’’ has the meaning given the term in
section 151.
(j) CONSTRUCTION.—Nothing in the amendments made by the
Higher Education Amendments of 1992 shall be construed to prohibit an institution from recording, at the cost of the institution, a
hearing referred to in subsection (b)(2), subsection (c)(1)(D), or subparagraph (A) or (B)(i) of subsection (c)(2), of this section to create
a record of the hearing, except the unavailability of a recording
shall not serve to delay the completion of the proceeding. The Secretary shall allow the institution to use any reasonable means, including stenographers, of recording the hearing.
SEC. 487A. ø20 U.S.C. 1094a¿ REGULATORY RELIEF AND IMPROVEMENT.
(a) QUALITY ASSURANCE PROGRAM.—
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(1) IN GENERAL.—The Secretary is authorized to select institutions for voluntary participation in a Quality Assurance
Program that provides participating institutions with an alternative management approach through which individual schools
develop and implement their own comprehensive systems, related to processing and disbursement of student financial aid,
verification of student financial aid application data, and entrance and exit interviews, thereby enhancing program integrity within the student aid delivery system.
(2) CRITERIA AND CONSIDERATION.—The Quality Assurance
Program authorized by this section shall be based on criteria
that include demonstrated institutional performance, as determined by the Secretary, and shall take into consideration current quality assurance goals, as determined by the Secretary.
The selection criteria shall ensure the participation of a diverse
group of institutions of higher education with respect to size,
mission, and geographical distribution.
(3) WAIVER.—The Secretary is authorized to waive for any
institution participating in the Quality Assurance Program any
regulations dealing with reporting or verification requirements
in this title that are addressed by the institution’s alternative
management system, and may substitute such quality assurance reporting as the Secretary determines necessary to ensure
accountability and compliance with the purposes of the programs under this title. The Secretary shall not modify or waive
any statutory requirements pursuant to this paragraph.
(4) DETERMINATION.—The Secretary is authorized to determine—
(A) when an institution that is unable to administer
the Quality Assurance Program shall be removed from
such program; and
(B) when institutions desiring to cease participation in
such program will be required to complete the current
award year under the requirements of the Quality Assurance Program.
(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 authorizing committees.
(b) REGULATORY IMPROVEMENT AND STREAMLINING EXPERIMENTS.—
(1) IN GENERAL.—The Secretary shall continue the voluntary participation of any experimental sites in existence as
of July 1, 2007, unless the Secretary determines that such
site’s participation has not been successful in carrying out the
purposes of this section. Any experimental sites approved by
the Secretary prior to such date that have not been successful
in carrying out the purposes of this section shall be discontinued not later than June 30, 2010.
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(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—
(A) a list of participating institutions and the specific
statutory or regulatory waivers granted to each institution;
(B) the findings and conclusions reached regarding
each of the experiments conducted; and
(C) recommendations for amendments to improve and
streamline this Act, based on the results of the experiment.
(3) SELECTION.—
(A) IN GENERAL.—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) 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.
(4) DETERMINATION OF SUCCESS.—For the purposes of
paragraph (1), the Secretary shall make a determination of
success regarding an institution’s participation as an experimental site based on—
(A) the ability of the experimental site to reduce administrative burdens to the institution, as documented in
the Secretary’s biennial report under paragraph (2), without creating costs for the taxpayer; and
(B) whether the experimental site has improved the
delivery of services to, or otherwise benefitted, students.
(c) DEFINITIONS.—For purposes of this section, the term ‘‘current award year’’ means the award year during which the participating institution indicates the institution’s intention to cease participation.
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SEC. 487B. ø20 U.S.C. 1094b¿ ASSIGNMENT OF IDENTIFICATION NUMBERS.
The Secretary shall assign to each participant in title IV programs, including institutions, lenders, and guaranty agencies, a
single Department of Education identification number to be used to
identify its participation in each of the title IV programs.
SEC. 488. ø20 U.S.C. 1095¿ 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); (2) transfer 25 percent of the institution’s allotment under section 442 to the institution’s allotment under section 413D or 462 (or both); and (3) transfer 25 percent of the institution’s allotment under section 413D to
the institution’s allotment under section 442. 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.
SEC. 488A. ø20 U.S.C. 1095a¿ WAGE GARNISHMENT REQUIREMENT.
(a) GARNISHMENT REQUIREMENTS.—Notwithstanding any provi-
sion of State law, a guaranty agency, or the Secretary in the case
of loans made, insured or guaranteed under this title that are held
by the Secretary, may garnish the disposable pay of an individual
to collect the amount owed by the individual, if he or she is not currently making required repayment under a repayment agreement
with the Secretary, or, in the case of a loan guaranteed under part
B on which the guaranty agency received reimbursement from the
Secretary under section 428(c), with the guaranty agency holding
the loan, as appropriate, provided that—
(1) the amount deducted for any pay period may not exceed 15 percent of disposable pay, except that a greater percentage may be deducted with the written consent of the individual involved;
(2) the individual shall be provided written notice, sent by
mail to the individual’s last known address, a minimum of 30
days prior to the initiation of proceedings, from the guaranty
agency or the Secretary, as appropriate, informing such individual of the nature and amount of the loan obligation to be
collected, the intention of the guaranty agency or the Secretary, as appropriate, to initiate proceedings to collect the
debt through deductions from pay, and an explanation of the
rights of the individual under this section;
(3) the individual shall be provided an opportunity to inspect and copy records relating to the debt;
(4) the individual shall be provided an opportunity to enter
into a written agreement with the guaranty agency or the Secretary, under terms agreeable to the Secretary, or the head of
the guaranty agency or his designee, as appropriate, to establish a schedule for the repayment of the debt;
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(5) the individual shall be provided an opportunity for a
hearing in accordance with subsection (b) on the determination
of the Secretary or the guaranty agency, as appropriate, concerning the existence or the amount of the debt, and, in the
case of an individual whose repayment schedule is established
other than by a written agreement pursuant to paragraph (4),
concerning the terms of the repayment schedule;
(6) the employer shall pay to the Secretary or the guaranty
agency as directed in the withholding order issued in this action, and shall be liable for, and the Secretary or the guaranty
agency, as appropriate, may sue the employer in a State or
Federal court of competent jurisdiction to recover, any amount
that such employer fails to withhold from wages due an employee following receipt of such employer of notice of the withholding order, plus attorneys’ fees, costs, and, in the court’s
discretion, punitive damages, but such employer shall not be
required to vary the normal pay and disbursement cycles in
order to comply with this paragraph;
(7) if an individual has been reemployed within 12 months
after having been involuntarily separated from employment, no
amount may be deducted from the disposable pay of such individual until such individual has been reemployed continuously
for at least 12 months; and
(8) an employer may not discharge from employment,
refuse to employ, or take disciplinary action against an individual subject to wage withholding in accordance with this section by reason of the fact that the individual’s wages have been
subject to garnishment under this section, and such individual
may sue in a State or Federal court of competent jurisdiction
any employer who takes such action. The court shall award attorneys’ fees to a prevailing employee and, in its discretion,
may order reinstatement of the individual, award punitive
damages and back pay to the employee, or order such other
remedy as may be reasonably necessary.
(b) HEARING REQUIREMENTS.—A hearing described in subsection (a)(5) shall be provided prior to issuance of a garnishment
order if the individual, on or before the 15th day following the
mailing of the notice described in subsection (a)(2), and in accordance with such procedures as the Secretary or the head of the
guaranty agency, as appropriate, may prescribe, files a petition requesting such a hearing. If the individual does not file a petition
requesting a hearing prior to such date, the Secretary or the guaranty agency, as appropriate, shall provide the individual a hearing
under subsection (a)(5) upon request, but such hearing need not be
provided prior to issuance of a garnishment order. A hearing under
subsection (a)(5) may not be conducted by an individual under the
supervision or control of the head of the guaranty agency, except
that nothing in this sentence shall be construed to prohibit the appointment of an administrative law judge. The hearing official shall
issue a final decision at the earliest practicable date, but not later
than 60 days after the filing of the petition requesting the hearing.
(c) NOTICE REQUIREMENTS.—The notice to the employer of the
withholding order shall contain only such information as may be
necessary for the employer to comply with the withholding order.
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(d) NO ATTACHMENT OF STUDENT ASSISTANCE.—Except as authorized in this section, notwithstanding any other provision of
Federal or State law, no grant, loan, or work assistance awarded
under this title, or property traceable to such assistance, shall be
subject to garnishment or attachment in order to satisfy any debt
owed by the student awarded such assistance, other than a debt
owed to the Secretary and arising under this title.
(e) DEFINITION.—For the purpose of this section, the term ‘‘disposable pay’’ means that part of the compensation of any individual
from an employer remaining after the deduction of any amounts required by law to be withheld.
SEC. 489. ø20 U.S.C. 1096¿ ADMINISTRATIVE EXPENSES.
(a) AMOUNT OF PAYMENTS.—From the sums appropriated
for
any fiscal year for the purpose of the program authorized under
subpart 1 of part A, the Secretary shall reserve such sums as may
be necessary to pay to each institution with which he has an agreement under section 487, an amount equal to $5 for each student
at that institution who receives assistance under subpart 1 of part
A. In addition, an institution which has entered into an agreement
with the Secretary under subpart 3 of part A or part C, of this title
or under part E of this title shall be entitled for each fiscal year
which such institution disburses funds to eligible students under
any such part to a payment for the purpose set forth in subsection
(b). The payment for a fiscal year shall be payable from each such
allotment by payment in accordance with regulations of the Secretary and shall be equal to 5 percent of the institution’s first
$2,750,000 of expenditures plus 4 percent of the institution’s expenditures greater than $2,750,000 and less than $5,500,000, plus
3 percent of the institution’s expenditures in excess of $5,500,000
during the fiscal year from the sum of its grants to students under
subpart 3 of part A, its expenditures during such fiscal year under
part C for compensation of students, and the principal amount of
loans made during such fiscal year from its student loan fund established under part E, excluding the principal amount of any such
loans which the institution has referred under section 463(a)(4)(B).
In addition, the Secretary shall provide for payment to each institution of higher education an amount equal to 100 percent of the
costs incurred by the institution in implementing and operating the
immigration status verification system under section 484(g).
(b) PURPOSE OF PAYMENTS.—(1) The sums paid to institutions
under this part are for the sole purpose of administering the programs described in subsection (a).
(2) If the institution enrolls a significant number of students
who are (A) attending the institution less than full time, or (B)
independent students, the institution shall use a reasonable proportion of the funds available under this section for financial aid
services during times and in places that will most effectively accommodate the needs of such students.
SEC. 490. ø20 U.S.C. 1097¿ CRIMINAL PENALTIES.
(a) IN GENERAL.—Any person who knowingly
and willfully embezzles, misapplies, steals, obtains by fraud, false statement, or forgery, or fails to refund any funds, assets, or property provided or
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insured under this title or attempts to so embezzle, misapply, steal,
obtain by fraud, false statement or forgery, or fail to refund any
funds, assets, or property, shall be fined not more than $20,000 or
imprisoned for not more than 5 years, or both, except if the amount
so embezzled, misapplied, stolen, obtained by fraud, false statement, or forgery, or failed to be refunded does not exceed $200,
then the fine shall not be more than $5,000 and imprisonment
shall not exceed one year, or both.
(b) ASSIGNMENT OF LOANS.—Any person who knowingly and
willfully makes any false statement, furnishes any false information, or conceals any material information in connection with the
assignment of a loan which is made or insured under this title or
attempts to so make any false statement, furnish any false information, or conceal any material information in connection with
such assignment shall, upon conviction thereof, be fined not more
than $10,000 or imprisoned for not more than one year, or both.
(c) INDUCEMENTS TO LEND OR ASSIGN.—Any person who knowingly and willfully makes an unlawful payment to an eligible lender under part B or attempts to make such unlawful payment as an
inducement to make, or to acquire by assignment, a loan insured
under such part shall, upon conviction thereof, be fined not more
than $10,000 or imprisoned for not more than one year, or both.
(d) OBSTRUCTION OF JUSTICE.—Any person who knowingly and
willfully destroys or conceals any record relating to the provision
of assistance under this title or attempts to so destroy or conceal
with intent to defraud the United States or to prevent the United
States from enforcing any right obtained by subrogation under this
part, shall upon conviction thereof, be fined not more than $20,000
or imprisoned not more than 5 years, or both.
SEC. 490A. ø20 U.S.C. 1097a¿ ADMINISTRATIVE SUBPOENAS.
(a) AUTHORITY.—To assist the Secretary in the conduct
of investigations of possible violations of the provisions of this title, the
Secretary is authorized to require by subpoena the production of information, documents, reports, answers, records, accounts, papers,
and other documentary evidence pertaining to participation in any
program under this title. The production of any such records may
be required from any place in a State.
(b) ENFORCEMENT.—In case of contumacy by, or refusal to obey
a subpoena issued to, any person, the Secretary may request the
Attorney General to invoke the aid of any court of the United
States where such person resides or transacts business for a court
order for the enforcement of this section.
SEC. 491. ø20 U.S.C. 1098¿ ADVISORY COMMITTEE ON STUDENT FINANCIAL ASSISTANCE.
(a) ESTABLISHMENT AND PURPOSE.—(1) There is established in
the Department an independent Advisory Committee on Student
Financial Assistance (hereafter in this section referred to as the
‘‘Advisory Committee’’) which shall provide advice and counsel to
the authorizing committees and to the Secretary on student financial aid matters.
(2) The purpose of the Advisory Committee is—
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(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;
(C) to make recommendations that will result in the maintenance of access to postsecondary education for low- and middle-income students;
(D) 1 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;
(E) 1 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; and
(F) 1 to collect information on Federal regulations, and
on the impact of Federal regulations on student financial
assistance and on the cost of receiving a postsecondary
education, and to make recommendations to help streamline the regulations for institutions of higher education
from all sectors.
(b) INDEPENDENCE OF ADVISORY COMMITTEE.—In the exercise
of its functions, powers, and duties, the Advisory Committee shall
be independent of the Secretary and the other offices and officers
of the Department. Notwithstanding Department of Education policies and regulations, the Advisory Committee shall exert independent control of its budget allocations, expenditures and staffing
levels, personnel decisions and processes, procurements, and other
administrative and management functions. The Advisory Committee’s administration and management shall be subject to the usual
and customary Federal audit procedures. Reports, publications, and
other documents of the Advisory Committee, including such reports, publications, and documents in electronic form, shall not be
subject to review by the Secretary. Notwithstanding Department of
Education policies and regulations, the Advisory Committee shall
exert independent control of its budget allocations and expenditures, personnel decisions and processes, procurements, and other
administrative and management functions. The Advisory Committee’s administration and management shall be subject to the usual
and customary Federal audit procedures. The recommendations of
the Committee shall not be subject to review or approval by any
officer in the executive branch, but may be submitted to the Secretary for comment prior to submission to the authorizing committees in accordance with subsection (f). The Secretary’s authority to
1 Margin
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terminate advisory committees of the Department pursuant to section 448(b) of the General Education Provisions Act ceased to be effective on June 23, 1983.
(c) MEMBERSHIP.—(1) The Advisory Committee shall consist of
11 members appointed as follows:
(A) Four members shall be appointed by the President pro
tempore of the Senate, of whom two members shall be appointed from recommendations by the Majority Leader of the
Senate, and two members shall be appointed from recommendations by the Minority Leader of the Senate.
(B) Four members shall be appointed by the Speaker of the
House of Representatives, of whom two members shall be appointed from recommendations by the Majority Leader of the
House of Representatives, and two members shall be appointed
from recommendations by the Minority Leader of the House of
Representatives.
(C) Three members shall be appointed by the Secretary, of
whom at least one member shall be a student.
(2) Each member of the Advisory Committee, with the exception of a student member, shall be appointed on the basis of technical qualifications, professional experience, and demonstrated
knowledge in the fields of higher education, student financial aid,
financing post-secondary education, and the operations and financing of student loan guarantee agencies.
(3) The appointment of a member under subparagraph (A) or
(B) of paragraph (1) shall be effective upon publication of such appointment in the Congressional Record.
(d) FUNCTIONS OF THE COMMITTEE.—The Advisory Committee
shall—
(1) develop, review, and comment annually upon the system of needs analysis established under part F of this title;
(2) monitor, apprise, and evaluate the effectiveness of student aid delivery and recommend improvements;
(3) recommend data collection needs and student information requirements which would improve access and choice for
eligible students under this title and assist the Department of
Education in improving the delivery of student aid;
(4) assess the impact of legislative and administrative policy proposals;
(5) review and comment upon, prior to promulgation, all
regulations affecting programs under this title, including proposed regulations;
(6) recommend to the authorizing committees 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;
(7) review and comment upon standards by which financial
need is measured in determining eligibility for Federal student
assistance programs;
(8) appraise the adequacies and deficiencies of current student financial aid information resources and services and
evaluate the effectiveness of current student aid information
programs;
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(9) provide an annual report to the authorizing committees
that provides analyses and policy recommendations regarding—
(A) the adequacy of need-based grant aid for low- and
moderate-income students; and
(B) the postsecondary enrollment and graduation rates
of low- and moderate-income students;
(10) develop and maintain an information clearinghouse to
help institutions of higher education understand the regulatory
impact of the Federal Government on institutions of higher
education from all sectors, in order to raise awareness of institutional legal obligations and provide information to improve
compliance with, and to reduce the duplication and inefficiency
of, Federal regulations; and
(11) make special efforts to advise Members of Congress
and such Members’ staff of the findings and recommendations
made pursuant to this paragraph.
(e) OPERATIONS OF THE COMMITTEE.—(1) Each member of the
Advisory Committee shall be appointed for a term of 4 years, except that, of the members first appointed—
(A) 4 shall be appointed for a term of 1 year;
(B) 4 shall be appointed for a term of 2 years; and
(C) 3 shall be appointed for a term of 3 years,
as designated at the time of appointment by the Secretary.
(2) Any member appointed to fill a vacancy occurring prior to
the expiration of the term of a predecessor shall be appointed only
for the remainder of such term. A member of the Advisory Committee serving on the date of enactment of the Higher Education
Opportunity Act shall be permitted to serve the duration of the
member’s term, regardless of whether the member was previously
appointed to more than one term.
(3) No officers or full-time employees of the Federal Government shall serve as members of the Advisory Committee.
(4) The Advisory Committee shall elect a Chairman and a Vice
Chairman from among its members.
(5) Six members of the Advisory Committee shall constitute a
quorum.
(6) The Advisory Committee shall meet at the call of the Chairman or a majority of its members.
(f) SUBMISSION TO DEPARTMENT FOR COMMENT.—The Advisory
Committee may submit its proposed recommendations to the Department of Education for comment for a period not to exceed 30
days in each instance.
(g) COMPENSATION AND EXPENSES.—Members of the Advisory
Committee may each receive reimbursement for travel expenses incident to attending Advisory Committee meetings, including per
diem in lieu of subsistence, as authorized by section 5703 of title
5, United States Code, for persons in the Government service employed intermittently.
(h) PERSONNEL AND RESOURCES.—(1) The Advisory Committee
may appoint such personnel as may be determined necessary by
the Chairman without regard to the provisions of title 5, United
States Code, governing appointments in the competitive service,
and may be paid without regard to the provisions of chapter 51 and
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HIGHER EDUCATION ACT OF 1965
658
subchapter III of chapter 53 of such title relating to classification
and General Schedule pay rates, but no individual so appointed
shall be paid in excess of the rate authorized for GS–18 of the General Schedule. The Advisory Committee may appoint not more than
1 full-time equivalent, nonpermanent, consultant without regard to
the provisions of title 5, United States Code. The Advisory Committee shall not be required by the Secretary to reduce personnel
to meet agency personnel reduction goals.
(2) In carrying out its duties under the Act, the Advisory Committee shall consult with other Federal agencies, representatives of
State and local governments, and private organizations to the extent feasible.
(3)(A) The Advisory Committee is authorized to secure directly
from any executive department, bureau, agency, board, commission, office, independent establishment, or instrumentality information, suggestions, estimates, and statistics for the purpose of this
section and each such department, bureau, agency, board, commission, office, independent establishment, or instrumentality is authorized and directed, to the extent permitted by law, to furnish
such information, suggestions, estimates, and statistics directly to
the Advisory Committee, upon request made by the Chairman.
(B) The Advisory Committee may enter into contracts for the
acquisition of information, suggestions, estimates, and statistics for
the purpose of this section.
(4) The Advisory Committee is authorized to obtain the services of experts and consultants without regard to section 3109 of
title 5, United States Code and to set pay in accordance with such
section.
(5) The head of each Federal agency shall, to the extent not
prohibited by law, cooperate with the Advisory Committee in carrying out this section.
(6) The Advisory Committee is authorized to utilize, with their
consent, the services, personnel, information, and facilities of other
Federal, State, local, and private agencies with or without reimbursement.
(i) AVAILABILITY OF FUNDS.—In each fiscal year not less than
$800,000, shall be available from the amount appropriated for each
such fiscal year from salaries and expenses of the Department for
the costs of carrying out the provisions of this section.
( j) SPECIAL ANALYSES AND ACTIVITIES.—The Advisory
Committee shall—
(1) monitor and evaluate the modernization of student financial aid systems and delivery processes and simplifications,
including recommendations for improvement;
(2) assess the adequacy of current methods for disseminating information about programs under this title and recommend improvements, as appropriate, regarding early needs
assessment and information for first-year secondary school students;
(3) assess and make recommendations concerning the feasibility and degree of use of appropriate technology in the application for, and delivery and management of, financial assistance under this title, as well as policies that promote use of
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HIGHER EDUCATION ACT OF 1965
Sec. 491
gram integrity, including electronic application and reapplication, just-in-time delivery of funds, reporting of disbursements
and reconciliation;
(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
and charter provisions of the Federal Advisory Committee Act (5
U.S.C. App. I) or any other statute or regulation, the Advisory
Committee shall be authorized until October 1, 2014.
(l) REVIEW AND ANALYSIS OF REGULATIONS.—
(1) RECOMMENDATIONS.—The Advisory Committee shall
make recommendations to the Secretary and the authorizing
committees for consideration of future legislative action regarding redundant or outdated regulations consistent with the Secretary’s requirements under section 498B.
(2) REVIEW AND ANALYSIS OF REGULATIONS.—
(A) REVIEW OF CURRENT REGULATIONS.—To meet the
requirements of subsection (d)(10), the Advisory Committee shall conduct a review and analysis of the regulations issued by Federal agencies that are in effect at the
time of the review and that apply to the operations or activities of institutions of higher education from all sectors.
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
two most recent award years prior to the date of enactment of the Higher Education Opportunity Act less than
$200,000 in funds through this title, may be improved,
streamlined, or eliminated.
(B) REVIEW AND COLLECTION OF FUTURE REGULATIONS.—The Advisory Committee shall—
(i) monitor all Federal regulations, including notices of proposed rulemaking, for their impact or potential impact on higher education; and
(ii) provide a succinct description of each regulation or proposed regulation that is generally relevant
to institutions of higher education from all sectors.
(C) MAINTENANCE OF PUBLIC WEBSITE.—The Advisory
Committee shall develop and maintain an easy to use,
searchable, and regularly updated website that—
(i) provides information collected in subparagraph
(B);
(ii) provides an area for the experts and members
of the public to provide recommendations for ways in
which the regulations may be streamlined; and
(iii) publishes the study conducted by the National
Research Council of the National Academy of Sciences
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under section 1106 of the Higher Education Opportunity Act.
(3) CONSULTATION.—
(A) IN GENERAL.—In carrying out the review, analysis,
and development of the website required under paragraph
(2), the Advisory Committee shall consult with the Secretary, other Federal agencies, relevant representatives of
institutions of higher education, individuals who have expertise and experience with Federal regulations, and the
review panels described in subparagraph (B).
(B) REVIEW PANELS.—The Advisory Committee shall
convene not less than two review panels of representatives
of the groups involved in higher education, including individuals involved in student financial assistance programs
under this title, who have experience and expertise in the
regulations issued by the Federal Government that affect
all sectors of higher education, in order to review the regulations 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) PERIODIC UPDATES TO THE AUTHORIZING COMMITTEES.—
The Advisory Committee shall—
(A) submit, not later than two 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 Opportunity Act, a report
to the authorizing committees and the Secretary detailing
the review panels’ findings and recommendations with respect to the review of regulations; and
(B) provide periodic updates to the authorizing committees regarding—
(i) the impact of all Federal regulations on all sectors of higher education; and
(ii) suggestions provided through the website for
streamlining or eliminating duplicative regulations.
(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
and analysis 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.
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HIGHER EDUCATION ACT OF 1965
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(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 two-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 or
concurrent enrollment programs, and appropriate Department officials.
(B) CONSULTATION WITH THE AUTHORIZING COMMITTEES.—The Advisory Committee shall consult on a regular
basis with the authorizing committees in carrying out the
study required by this subsection.
(5) REPORTS TO AUTHORIZING COMMITTEES.—
(A) INTERIM REPORT.—The Advisory Committee shall
prepare and submit to the authorizing committees and the
Secretary an interim report, not later than one year after
the date of enactment of the Higher Education Opportunity Act, describing the progress 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 three years after the date of enactment of
the Higher Education Opportunity Act, 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).
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662
SEC. 492. ø20 U.S.C. 1098a¿ REGIONAL MEETINGS AND NEGOTIATED
RULEMAKING.
(a) MEETINGS.—
(1) IN GENERAL.—The Secretary shall obtain public in-
volvement 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 servicers, guaranty agency servicers, and collection agencies.
(2) ISSUES.—The Secretary shall provide for a comprehensive discussion and exchange of information concerning the implementation of this title through such mechanisms as regional
meetings and electronic exchanges of information. The Secretary shall take into account the information received through
such mechanisms in the development of proposed regulations
and shall publish a summary of such information in the Federal Register together with such proposed regulations.
(b) DRAFT REGULATIONS.—
(1) IN GENERAL.—After obtaining the advice and recommendations described in subsection (a)(1) and before publishing proposed regulations in the Federal Register, the Secretary shall prepare draft regulations implementing this title
and shall submit such regulations to a negotiated rulemaking
process. Participants in the negotiations process shall be chosen by the Secretary from individuals nominated by groups described in subsection (a)(1), and shall include both representatives of such groups from Washington, D.C., and industry participants. The Secretary shall select individuals with demonstrated expertise or experience in the relevant subjects
under negotiation, reflecting the diversity in the industry, representing both large and small participants, as well as individuals serving local areas and national markets. The negotiation
process shall be conducted in a timely manner in order that
the final regulations may be issued by the Secretary within the
360-day period described in section 437(e) of the General Education Provisions Act.
(2) EXPANSION OF NEGOTIATED RULEMAKING.—All regulations pertaining to this title that are promulgated after the
date of enactment of this paragraph shall be subject to a negotiated rulemaking (including the selection of the issues to be
negotiated), unless the Secretary determines that applying
such a requirement with respect to given regulations is impracticable, unnecessary, or contrary to the public interest (within
the meaning of section 553(b)(3)(B) of title 5, United States
Code), and publishes the basis for such determination in the
Federal Register at the same time as the proposed regulations
in question are first published. All published proposed regulations shall conform to agreements resulting from such negotiated rulemaking unless the Secretary reopens the negotiated
rulemaking process or provides a written explanation to the
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HIGHER EDUCATION ACT OF 1965
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participants in that process why the Secretary has decided to
depart from such agreements. Such negotiated rulemaking
shall be conducted in accordance with the provisions of paragraph (1), and the Secretary shall ensure that a clear and reliable record of agreements reached during the negotiations
process is maintained.
(c) APPLICABILITY OF FEDERAL ADVISORY COMMITTEE ACT.—
The Federal Advisory Committee Act shall not apply to activities
carried out under this section.
(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated in any fiscal year or made available from funds
appropriated to carry out this part in any fiscal year such sums as
may be necessary to carry out the provisions of this section, except
that if no funds are appropriated pursuant to this subsection, the
Secretary shall make funds available to carry out this section from
amounts appropriated for the operations and expenses of the Department of Education.
SEC. 493. ø20 U.S.C. 1098b¿ AUTHORIZATION OF APPROPRIATIONS FOR
ADMINISTRATIVE EXPENSES.
There are authorized to be appropriated such sums as may be
necessary for fiscal year 1993 and for each succeeding fiscal year
thereafter for administrative expenses necessary for carrying out
this title, including expenses for staff personnel, program reviews,
and compliance activities.
øSection 493A repealed by section 494E of P.L. 110–315¿
SEC. 493B. ø20 U.S.C. 1098d¿ PROCEDURES FOR CANCELLATIONS AND
DEFERMENTS FOR ELIGIBLE DISABLED VETERANS.
The Secretary, in consultation with the Secretary of Veterans
Affairs, shall develop and implement a procedure to permit Department of Veterans Affairs physicians to provide the certifications
and affidavits needed to enable disabled veterans enrolled in the
Department of Veterans Affairs health care system to document
such veterans’ eligibility for deferments or cancellations of student
loans made, insured, or guaranteed under this title. Not later than
6 months after the date of enactment of the Higher Education
Amendments of 1998, the Secretary and the Secretary of Veterans
Affairs jointly shall report to Congress on the progress made in developing and implementing the procedure.
SEC. 493C. ø20 U.S.C. 1098e¿ INCOME-BASED REPAYMENT.
(a) DEFINITIONS.—In this section:
(1) EXCEPTED PLUS LOAN.—The term ‘‘excepted
PLUS loan’’
means a loan under section 428B, or a Federal Direct PLUS
Loan, that is made, insured, or guaranteed on behalf of a dependent student.
(2) EXCEPTED CONSOLIDATION LOAN.—The term ‘‘excepted
consolidation loan’’ means a consolidation loan under section
428C, or a Federal Direct Consolidation Loan, if the proceeds
of such loan were used to the discharge the liability on an excepted PLUS loan.
(3) PARTIAL FINANCIAL HARDSHIP.—The term ‘‘partial financial hardship’’, when used with respect to a borrower,
means that for such borrower—
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(A) the annual amount due on the total amount of
loans made, insured, or guaranteed under part B or D
(other than an excepted PLUS loan or excepted consolidation loan) to a borrower as calculated under the standard
repayment plan under section 428(b)(9)(A)(i) or
455(d)(1)(A), based on a 10-year repayment period; exceeds
(B) 15 percent of the result obtained by calculating, on
at least an annual basis, the amount by which—
(i) the borrower’s, and the borrower’s spouse’s (if
applicable), adjusted gross income; exceeds
(ii) 150 percent of the poverty line applicable to
the borrower’s family size as determined under section
673(2) of the Community Services Block Grant Act (42
U.S.C. 9902(2)).
(b) INCOME-BASED REPAYMENT PROGRAM AUTHORIZED.—Notwithstanding any other provision of this Act, the Secretary shall
carry out a program under which—
(1) a borrower of any loan made, insured, or guaranteed
under part B or D (other than an excepted PLUS loan or excepted consolidation loan) who has a partial financial hardship
(whether or not the borrower’s loan has been submitted to a
guaranty agency for default aversion or had been in default)
may elect, during any period the borrower has the partial financial hardship, to have the borrower’s aggregate monthly
payment for all such loans not exceed the result described in
subsection (a)(3)(B) divided by 12;
(2) the holder of such a loan shall apply the borrower’s
monthly payment under this subsection first toward interest
due on the loan, next toward any fees due on the loan, and
then toward the principal of the loan;
(3) any interest due and not paid under paragraph (2)—
(A) shall, on subsidized loans, be paid by the Secretary
for a period of not more than 3 years after the date of the
borrower’s election under paragraph (1), except that such
period shall not include any period during which the borrower is in deferment due to an economic hardship described in section 435(o); and
(B) be capitalized—
(i) in the case of a subsidized loan, subject to subparagraph (A), at the time the borrower—
(I) ends the election to make income-based repayment under this subsection; or
(II) begins making payments of not less than
the amount specified in paragraph (6)(A); or
(ii) in the case of an unsubsidized loan, at the
time the borrower—
(I) ends the election to make income-based repayment under this subsection; or
(II) begins making payments of not less than
the amount specified in paragraph (6)(A);
(4) any principal due and not paid under paragraph (2)
shall be deferred;
(5) the amount of time the borrower makes monthly payments under paragraph (1) may exceed 10 years;
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(6) if the borrower no longer has a partial financial hardship or no longer wishes to continue the election under this
subsection, then—
(A) the maximum monthly payment required to be
paid for all loans made to the borrower under part B or D
(other than an excepted PLUS loan or excepted consolidation loan) shall not exceed the monthly amount calculated
under section 428(b)(9)(A)(i) or 455(d)(1)(A), based on a 10year repayment period, when the borrower first made the
election described in this subsection; and
(B) the amount of time the borrower is permitted to
repay such loans may exceed 10 years;
(7) the Secretary shall repay or cancel any outstanding
balance of principal and interest due on all loans made under
part B or D (other than a loan under section 428B or a Federal
Direct PLUS Loan) to a borrower who—
(A) at any time, elected to participate in income-based
repayment under paragraph (1); and
(B) for a period of time prescribed by the Secretary,
not to exceed 25 years, meets 1 or more of the following
requirements—
(i) has made reduced monthly payments under
paragraph (1) or paragraph (6);
(ii) has made monthly payments of not less than
the monthly amount calculated under section
428(b)(9)(A)(i) or 455(d)(1)(A), based on a 10-year repayment period, when the borrower first made the
election described in this subsection;
(iii) has made payments of not less than the payments required under a standard repayment plan
under section 428(b)(9)(A)(i) or 455(d)(1)(A) with a repayment period of 10 years;
(iv) has made payments under an income-contingent repayment plan under section 455(d)(1)(D); or
(v) has been in deferment due to an economic
hardship described in section 435(o);
(8) a borrower who is repaying a loan made under part B
or D pursuant to income-based repayment may elect, at any
time, to terminate repayment pursuant to income-based repayment and repay such loan under the standard repayment plan;
and
(9) the special allowance payment to a lender calculated
under section 438(b)(2)(I), when calculated for a loan in repayment under this section, shall be calculated on the principal
balance of the loan and on any accrued interest unpaid by the
borrower in accordance with this section.
(c) ELIGIBILITY DETERMINATIONS.—The Secretary shall establish procedures for annually determining the borrower’s eligibility
for income-based repayment, including verification of a borrower’s
annual income and the annual amount due on the total amount of
loans made, insured, or guaranteed under part B or D (other than
an excepted PLUS loan or excepted consolidation loan), and such
other procedures as are necessary to effectively implement incomebased repayment under this section. The Secretary shall consider,
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but is not limited to, the procedures established in accordance with
section 455(e)(1) or in connection with income sensitive repayment
schedules under section 428(b)(9)(A)(iii) or 428C(b)(1)(E).
(d) SPECIAL RULE FOR MARRIED BORROWERS FILING SEPARATELY.—In the case of a married borrower who files a separate
Federal income tax return, the Secretary shall calculate the
amount of the borrower’s income-based repayment under this section solely on the basis of the borrower’s student loan debt and adjusted gross income.
(e) SPECIAL TERMS FOR NEW BORROWERS ON AND AFTER JULY
1, 2014.—With respect to any loan made to a new borrower on or
after July 1, 2014—
(1) subsection (a)(3)(B) shall be applied by substituting ‘‘10
percent’’ for ‘‘15 percent’’; and
(2) subsection (b)(7)(B) shall be applied by substituting ‘‘20
years’’ for ‘‘25 years’’.
SEC. 493D. ø20 U.S.C. 1098f¿ DEFERRAL OF LOAN REPAYMENT FOLLOWING ACTIVE DUTY.
(a) DEFERRAL OF LOAN REPAYMENT FOLLOWING ACTIVE
DUTY.—In addition to any deferral of repayment of a loan made
under this title pursuant to section 428(b)(1)(M)(iii), 455(f)(2)(C), or
464(c)(2)(A)(iii), a borrower of a loan under this title who is a member of the National Guard or other reserve component of the Armed
Forces of the United States, or a member of such Armed Forces in
a retired status, is called or ordered to active duty, and is enrolled,
or was enrolled within six months prior to the activation, in a program of instruction at an eligible institution, shall be eligible for
a deferment during the 13 months following the conclusion of such
service, except that a deferment under this subsection shall expire
upon the borrower’s return to enrolled student status.
(b) ACTIVE DUTY.—Notwithstanding section 481(d), in this section, 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—
(1) does not include active duty for training or attendance
at a service school; but
(2) includes, in the case of members of the National Guard,
active State duty.
PART H—PROGRAM INTEGRITY
Subpart 1—State Role
SEC. 495. ø20 U.S.C. 1099a¿ STATE RESPONSIBILITIES.
(a) STATE RESPONSIBILITIES.—As part of the integrity
program
authorized by this part, each State, through one State agency or
several State agencies selected by the State, shall—
(1) furnish the Secretary, upon request, information with
respect to the process for licensing or other authorization for
institutions of higher education to operate within the State;
(2) notify the Secretary promptly whenever the State revokes a license or other authority to operate an institution of
higher education; and
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(3) notify the Secretary promptly whenever the State has
credible evidence that an institution of higher education within
the State—
(A) has committed fraud in the administration of the
student assistance programs authorized by this title; or
(B) has substantially violated a provision of this title.
(b) INSTITUTIONAL RESPONSIBILITY.—Each institution of higher
education shall provide evidence to the Secretary that the institution has authority to operate within a State at the time the institution is certified under subpart 3.
Subpart 2—Accrediting Agency Recognition
SEC. 496. ø20 U.S.C. 1099b¿ RECOGNITION OF ACCREDITING AGENCY
OR ASSOCIATION.
(a) CRITERIA REQUIRED.—No accrediting agency or association
may be determined by the Secretary to be a reliable authority as
to the quality of education or training offered for the purposes of
this Act or for other Federal purposes, unless the agency or association meets criteria established by the Secretary pursuant to this
section. The Secretary shall, after notice and opportunity for a
hearing, establish criteria for such determinations. Such criteria
shall include an appropriate measure or measures of student
achievement. Such criteria shall require that—
(1) the accrediting agency or association shall be a State,
regional, or national agency or association and shall demonstrate the ability and the experience to operate as an accrediting agency or association within the State, region, or nationally, as appropriate;
(2) such agency or association—
(A)(i) for the purpose of participation in programs
under this Act, has a voluntary membership of institutions
of higher education and has as a principal purpose the accrediting of institutions of higher education; or
(ii) for the purpose of participation in other programs
administered by the Department of Education or other
Federal agencies, has a voluntary membership and has as
its principal purpose the accrediting of institutions of higher education or programs;
(B) is a State agency approved by the Secretary for the
purpose described in subparagraph (A); or
(C) is an agency or association that, for the purpose of
determining eligibility for student assistance under this
title, conducts accreditation through (i) a voluntary membership organization of individuals participating in a profession, or (ii) an agency or association which has as its
principal purpose the accreditation of programs within institutions, which institutions are accredited by another
agency or association recognized by the Secretary;
(3) if such agency or association is an agency or association
described in—
(A) subparagraph (A)(i) of paragraph (2), then such
agency or association is separate and independent, both
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administratively and financially of any related, associated,
or affiliated trade association or membership organization;
(B) subparagraph (B) of paragraph (2), then such
agency or association has been recognized by the Secretary
on or before October 1, 1991; or
(C) subparagraph (C) of paragraph (2) and such agency or association has been recognized by the Secretary on
or before October 1, 1991, then the Secretary may waive
the requirement that such agency or association is separate and independent, both administratively and financially of any related, associated, or affiliated trade association or membership organization upon a demonstration
that the existing relationship has not served to compromise the independence of its accreditation process;
(4)(A) such agency or association consistently applies and
enforces standards that 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 or correspondence 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 or correspondence 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 or
correspondence education in the areas identified in paragraph (5), except that—
(I) the agency or association shall not be required
to have separate standards, procedures, or policies for
the evaluation of distance education or correspondence
education institutions or programs in order to meet
the requirements of this subparagraph; and
(II) in the case that the agency or association is
recognized by the Secretary, the agency or association
shall not be required to obtain the approval of the Secretary to expand its scope of accreditation to include
distance education or correspondence education, provided that the agency or association notifies the Secretary in writing of the change in scope; and
(ii) the agency or association requires an institution
that offers distance education or correspondence education
to have processes through which the institution establishes
that the student who registers in a distance education or
correspondence education course or program is the same
student who participates in and completes the program
and receives the academic credit;
(5) the standards for accreditation of the agency or association assess the institution’s—
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(A) success with respect to student achievement in relation to the institution’s mission, which may include different standards for different institutions or programs, as
established by the institution, including, as appropriate,
consideration of State licensing examinations, consideration of course completion, and job placement rates;
(B) curricula;
(C) faculty;
(D) facilities, equipment, and supplies;
(E) fiscal and administrative capacity as appropriate
to the specified scale of operations;
(F) student support services;
(G) recruiting and admissions practices, academic calendars, catalogs, publications, grading and advertising;
(H) measures of program length and the objectives of
the degrees or credentials offered;
(I) record of student complaints received by, or available to, the agency or association; and
(J) record of compliance with its program responsibilities under title IV of this Act based on the most recent
student loan default rate data provided by the Secretary,
the results of financial or compliance audits, program reviews, and any such other information as the Secretary
may provide to the agency or association;
except that subparagraphs (A), (H), and (J) shall not apply to
agencies or associations described in paragraph (2)(A)(ii) of this
subsection;
(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—
(A) for adequate written specification of—
(i) requirements, including clear standards for an
institution of higher education or program to be accredited; and
(ii) identified deficiencies at the institution or program examined;
(B) for sufficient opportunity for a written response, by
an institution or program, regarding any deficiencies identified by the agency or association to be considered by the
agency or association—
(i) within a timeframe determined by the agency
or association; and
(ii) prior to final action in the evaluation and
withdrawal proceedings;
(C) upon the written request of an institution or program, for an opportunity for the institution or program to
appeal any adverse action under this section, including denial, withdrawal, suspension, or termination of accreditation, taken against the institution or program, prior to
such action becoming final at a hearing before an appeals
panel that—
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(i) shall not include current members of the agency’s or association’s underlying decisionmaking body
that made the adverse decision; and
(ii) is subject to a conflict of interest policy;
(D) for the right to representation and participation by
counsel for an institution or program during an appeal of
the adverse action;
(E) for a process, in accordance with written procedures developed by the agency or association, through
which an institution or program, before a final adverse action based solely upon a failure to meet a standard or criterion pertaining to finances, may on one occasion seek review of significant financial information that was unavailable to the institution or program prior to the determination of the adverse action, and that bears materially on the
financial deficiencies identified by the agency or association;
(F) in the case that the agency or association determines that the new financial information submitted by the
institution or program under subparagraph (E) meets the
criteria of significance and materiality described in such
subparagraph, for consideration by the agency or association of the new financial information prior to the adverse
action described in such subparagraph becoming final; and
(G) that any determination by the agency or association made with respect to the new financial information
described in subparagraph (E) shall not be separately appealable by the institution or program;
(7) such agency or association shall notify the Secretary
and the appropriate State licensing or authorizing agency
within 30 days of the accreditation of an institution or any
final denial, withdrawal, suspension, or termination of accreditation or placement on probation of an institution, together
with any other adverse action taken with respect to an institution; and
(8) such agency or association shall make available to the
public, upon request, and to the Secretary, and the State 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.
(b) SEPARATE AND INDEPENDENT DEFINED.—For the purpose of
subsection (a)(3), the term ‘‘separate and independent’’ means
that—
(1) the members of the postsecondary education governing
body of the accrediting agency or association are not elected or
selected by the board or chief executive officer of any related,
associated, or affiliated trade association or membership organization;
(2) among the membership of the board of the accrediting
agency or association there shall be one public member (who
is not a member of any related trade or membership organization) for each six members of the board, with a minimum of
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one such public member, and guidelines are established for
such members to avoid conflicts of interest;
(3) dues to the accrediting agency or association are paid
separately from any dues paid to any related, associated, or affiliated trade association or membership organization; and
(4) the budget of the accrediting agency or association is
developed and determined by the accrediting agency or association without review or resort to consultation with any other entity or organization.
(c) OPERATING PROCEDURES REQUIRED.—No accrediting agency
or association may be recognized by the Secretary as a reliable authority as to the quality of education or training offered by an institution seeking to participate in the programs authorized under this
title, unless the agency or association—
(1) performs, at regularly established intervals, on-site inspections and reviews of institutions of higher education
(which may include unannounced site visits) with particular
focus on educational quality and program effectiveness, and ensures that accreditation team members are well-trained and
knowledgeable with respect to their responsibilities, including
those regarding distance education;
(2) monitors the growth of programs at institutions that
are experiencing significant enrollment growth;
(3) requires an institution to submit for approval to the accrediting agency a teach-out plan 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(f);
(B) the accrediting agency acts to withdraw, terminate, or suspend the accreditation of the institution; or
(C) the institution notifies the accrediting agency that
the institution intends to cease operations;
(4) 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;
(5) 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;
(6) 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;
(7) makes available to the public and the State licensing
or authorizing agency, and submits 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 of an institution, and any findings
made in connection with the action taken, together with
the official comments of the affected institution; and
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(C) any other adverse action taken with respect to an
institution or placement on probation of an institution;
(8) discloses publicly whenever an institution of higher
education subject to its jurisdiction is being considered for accreditation or reaccreditation; and
(9) confirms, as a part of the agency’s or association’s review for accreditation or reaccreditation, that the institution
has transfer of credit policies—
(A) that are publicly disclosed; and
(B) that include a statement of the criteria established
by the institution regarding the transfer of credit earned
at another institution of higher education.
(d) LENGTH OF RECOGNITION.—No accrediting agency or association may be recognized by the Secretary for the purpose of this
Act for a period of more than 5 years.
(e) INITIAL ARBITRATION RULE.—The Secretary may not recognize the accreditation of any institution of higher education unless
the institution of higher education agrees to submit any dispute involving the final denial, withdrawal, or termination of accreditation
to initial arbitration prior to any other legal action.
(f) JURISDICTION.—Notwithstanding any other provision of law,
any civil action brought by an institution of higher education seeking accreditation from, or accredited by, an accrediting agency or
association recognized by the Secretary for the purpose of this title
and involving the denial, withdrawal, or termination of accreditation of the institution of higher education, shall be brought in the
appropriate United States district court.
(g) LIMITATION ON SCOPE OF CRITERIA.—Nothing in this Act
shall be construed to permit the Secretary to establish criteria for
accrediting agencies or associations that are not required by this
section. Nothing in this Act shall be construed to prohibit or limit
any accrediting agency or association from adopting additional
standards not provided for in this section. Nothing in this section
shall be construed to permit the Secretary to establish any criteria
that specifies, defines, or prescribes the standards that accrediting
agencies or associations shall use to assess any institution’s success
with respect to student achievement.
(h) CHANGE OF ACCREDITING AGENCY.—The Secretary shall not
recognize the accreditation of any otherwise eligible institution of
higher education if the institution of higher education is in the
process of changing its accrediting agency or association, unless the
eligible institution submits to the Secretary all materials relating
to the prior accreditation, including materials demonstrating reasonable cause for changing the accrediting agency or association.
(i) DUAL ACCREDITATION RULE.—The Secretary shall not recognize the accreditation of any otherwise eligible institution of higher
education if the institution of higher education is accredited, as an
institution, by more than one accrediting agency or association, unless the institution submits to each such agency and association
and to the Secretary the reasons for accreditation by more than one
such agency or association and demonstrates to the Secretary reasonable cause for its accreditation by more than one agency or association. If the institution is accredited, as an institution, by more
than one accrediting agency or association, the institution shall
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designate which agency’s accreditation shall be utilized in determining the institution’s eligibility for programs under this Act.
(j) IMPACT OF LOSS OF ACCREDITATION.—An institution may
not be certified or recertified as an institution of higher education
under section 102 and subpart 3 of this part or participate in any
of the other programs authorized by this Act if such institution—
(1) is not currently accredited by any agency or association
recognized by the Secretary;
(2) has had its accreditation withdrawn, revoked, or otherwise terminated for cause during the preceding 24 months, unless such withdrawal, revocation, or termination has been rescinded by the same accrediting agency; or
(3) has withdrawn from accreditation voluntarily under a
show cause or suspension order during the preceding 24
months, unless such order has been rescinded by the same accrediting agency.
(k) RELIGIOUS INSTITUTION RULE.—Notwithstanding subsection
(j), the Secretary shall allow an institution that has had its accreditation withdrawn, revoked, or otherwise terminated, or has voluntarily withdrawn from an accreditation agency, to remain certified
as an institution of higher education under section 102 and subpart
3 of this part for a period sufficient to allow such institution to obtain alternative accreditation, if the Secretary determines that the
reason for the withdrawal, revocation, or termination—
(1) is related to the religious mission or affiliation of the
institution; and
(2) is not related to the accreditation criteria provided for
in this section.
(l) LIMITATION, SUSPENSION, OR TERMINATION OF RECOGNITION.—(1) If the Secretary determines that an accrediting agency
or association has failed to apply effectively the criteria in this section, or is otherwise not in compliance with the requirements of
this section, the Secretary shall—
(A) after notice and opportunity for a hearing, limit, suspend, or terminate the recognition of the agency or association;
or
(B) require the agency or association to take appropriate
action to bring the agency or association into compliance with
such requirements within a timeframe specified by the Secretary, except that—
(i) such timeframe shall not exceed 12 months unless
the Secretary extends such period for good cause; and
(ii) if the agency or association fails to bring the agency or association into compliance within such timeframe,
the Secretary shall, after notice and opportunity for a
hearing, limit, suspend, or terminate the recognition of the
agency or association.
(2) The Secretary may determine that an accrediting agency or
association has failed to apply effectively the standards provided in
this section if an institution of higher education seeks and receives
accreditation from the accrediting agency or association during any
period in which the institution is the subject of any interim action
by another accrediting agency or association, described in paragraph (2)(A)(i), (2)(B), or (2)(C) of subsection (a) of this section,
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leading to the suspension, revocation, or termination of accreditation or the institution has been notified of the threatened loss of
accreditation, and the due process procedures required by such suspension, revocation, termination, or threatened loss have not been
completed.
(m) LIMITATION ON THE SECRETARY’S AUTHORITY.—The Secretary may only recognize accrediting agencies or associations
which accredit institutions of higher education for the purpose of
enabling such institutions to establish eligibility to participate in
the programs under this Act or which accredit institutions of higher education or higher education programs for the purpose of enabling them to establish eligibility to participate in other programs
administered by the Department of Education or other Federal
agencies.
(n) INDEPENDENT EVALUATION.—(1) The Secretary shall conduct a comprehensive review and evaluation of the performance of
all accrediting agencies or associations which seek recognition by
the Secretary in order to determine whether such accrediting agencies or associations meet the criteria established by this section.
The Secretary shall conduct an independent evaluation of the information provided by such agency or association. Such evaluation
shall include—
(A) the solicitation of third-party information concerning
the performance of the accrediting agency or association; and
(B) site visits, including unannounced site visits as appropriate, at accrediting agencies and associations, and, at the
Secretary’s discretion, at representative member institutions.
(2) The Secretary shall place a priority for review of accrediting
agencies or associations on those agencies or associations that accredit institutions of higher education that participate most extensively in the programs authorized by this title and on those agencies or associations which have been the subject of the most complaints or legal actions.
(3) The Secretary shall consider all available relevant information concerning the compliance of the accrediting agency or association with the criteria provided for in this section, including any
complaints or legal actions against such agency or association. In
cases where deficiencies in the performance of an accreditation
agency or association with respect to the requirements of this section are noted, the Secretary shall take these deficiencies into account in the recognition process. The Secretary shall not, under
any circumstances, base decisions on the recognition or denial of
recognition of accreditation agencies or associations on criteria
other than those contained in this section. When the Secretary decides to recognize an accrediting agency or association, the Secretary shall determine the agency or association’s scope of recognition. If the agency or association reviews institutions offering distance education courses or programs and the Secretary determines
that the agency or association meets the requirements of this section, then the agency shall be recognized and the scope of recognition shall include accreditation of institutions offering distance education courses or programs.
(4) The Secretary shall maintain sufficient documentation to
support the conclusions reached in the recognition process, and, if
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the Secretary does not recognize any accreditation agency or association, shall make publicly available the reason for denying recognition, including reference to the specific criteria under this section which have not been fulfilled.
(o) REGULATIONS.—The Secretary shall by regulation provide
procedures for the recognition of accrediting agencies or associations and for the appeal of the Secretary’s decisions. Notwithstanding any other provision of law, the Secretary shall not promulgate any regulation with respect to the standards of an accreditation agency or association described in subsection (a)(5).
(p) RULE OF CONSTRUCTION.—Nothing in subsection (a)(5) shall
be construed to restrict the ability of—
(1) an accrediting agency or association to set, with the involvement of its members, and to apply, accreditation standards for or to institutions or programs that seek review by the
agency or association; or
(2) an institution to develop and use institutional standards to show its success with respect to student achievement,
which achievement may be considered as part of any accreditation review.
(q) REVIEW OF SCOPE CHANGES.—The Secretary shall require a
review, at the next available meeting of the National Advisory
Committee on Institutional Quality and Integrity, of any change in
scope undertaken by an agency or association under subsection
(a)(4)(B)(i)(II) if the enrollment of an institution that offers distance
education or correspondence education that is accredited by such
agency or association increases by 50 percent or more within any
one institutional fiscal year.
Subpart 3—Eligibility and Certification
Procedures
SEC. 498. ø20 U.S.C. 1099c¿ ELIGIBILITY AND CERTIFICATION PROCEDURES.
(a) GENERAL REQUIREMENT.—For purposes of qualifying insti-
tutions of higher education for participation in programs under this
title, the Secretary shall determine the legal authority to operate
within a State, the accreditation status, and the administrative capability and financial responsibility of an institution of higher education in accordance with the requirements of this section.
(b) SINGLE APPLICATION FORM.—The Secretary shall prepare
and prescribe a single application form which—
(1) requires sufficient information and documentation to
determine that the requirements of eligibility, accreditation, financial responsibility, and administrative capability of the institution of higher education are met;
(2) requires a specific description of the relationship between a main campus of an institution of higher education and
all of its branches, including a description of the student aid
processing that is performed by the main campus and that
which is performed at its branches;
(3) requires—
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(A) a description of the third party servicers of an institution of higher education; and
(B) the institution to maintain a copy of any contract
with a financial aid service provider or loan servicer, and
provide a copy of any such contract to the Secretary upon
request;
(4) requires such other information as the Secretary determines will ensure compliance with the requirements of this
title with respect to eligibility, accreditation, administrative capability and financial responsibility; and
(5) provides, at the option of the institution, for participation in one or more of the programs under part B or D.
(c) FINANCIAL RESPONSIBILITY STANDARDS.—(1) The Secretary
shall determine whether an institution has the financial responsibility required by this title on the basis of whether the institution
is able—
(A) to provide the services described in its official publications and statements;
(B) to provide the administrative resources necessary to
comply with the requirements of this title; and
(C) to meet all of its financial obligations, including (but
not limited to) refunds of institutional charges and repayments
to the Secretary for liabilities and debts incurred in programs
administered by the Secretary.
(2) Notwithstanding paragraph (1), if an institution fails to
meet criteria prescribed by the Secretary regarding ratios that
demonstrate financial responsibility, then the institution shall provide the Secretary with satisfactory evidence of its financial responsibility in accordance with paragraph (3). Such criteria shall take
into account any differences in generally accepted accounting principles, and the financial statements required thereunder, that are
applicable to for-profit, public, and nonprofit institutions. The Secretary shall take into account an institution’s total financial circumstances in making a determination of its ability to meet the
standards herein required.
(3) The Secretary shall determine an institution to be financially responsible, notwithstanding the institution’s failure to meet
the criteria under paragraphs (1) and (2), if—
(A) such institution submits to the Secretary third-party financial guarantees that the Secretary determines are reasonable, such as performance bonds or letters of credit payable to
the Secretary, which third-party financial guarantees shall
equal not less than one-half of the annual potential liabilities
of such institution to the Secretary for funds under this title,
including loan obligations discharged pursuant to section 437,
and to students for refunds of institutional charges, including
funds under this title;
(B) such institution has its liabilities backed by the full
faith and credit of a State, or its equivalent;
(C) such institution establishes to the satisfaction of the
Secretary, with the support of a financial statement audited by
an independent certified public accountant in accordance with
generally accepted auditing standards, that the institution has
sufficient resources to ensure against the precipitous closure of
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the institution, including the ability to meet all of its financial
obligations (including refunds of institutional charges and repayments to the Secretary for liabilities and debts incurred in
programs administered by the Secretary); or
(D) such institution has met standards of financial responsibility, prescribed by the Secretary by regulation, that indicate
a level of financial strength not less than those required in
paragraph (2).
(4) If an institution of higher education that provides a 2-year
or 4-year program of instruction for which the institution awards
an associate or baccalaureate degree fails to meet the criteria imposed by the Secretary pursuant to paragraph (2), the Secretary
shall waive that particular requirement for that institution if the
institution demonstrates to the satisfaction of the Secretary that—
(A) there is no reasonable doubt as to its continued solvency and ability to deliver quality educational services;
(B) it is current in its payment of all current liabilities, including student refunds, repayments to the Secretary, payroll,
and payment of trade creditors and withholding taxes; and
(C) it has substantial equity in school-occupied facilities,
the acquisition of which was the direct cause of its failure to
meet the criteria.
(5) The determination as to whether an institution has met the
standards of financial responsibility provided for in paragraphs (2)
and (3)(C) shall be based on an audited and certified financial
statement of the institution. Such audit shall be conducted by a
qualified independent organization or person in accordance with
standards established by the American Institute of Certified Public
Accountants. Such statement shall be submitted to the Secretary at
the time such institution is considered for certification or recertification under this section. If the institution is permitted to be certified (provisionally or otherwise) and such audit does not establish
compliance with paragraph (2), the Secretary may require that additional audits be submitted.
(6)(A) The Secretary shall establish requirements for the maintenance by an institution of higher education of sufficient cash reserves to ensure repayment of any required refunds.
(B) The Secretary shall provide for a process under which the
Secretary shall exempt an institution of higher education from the
requirements described in subparagraph (A) if the Secretary determines that the institution—
(i) is located in a State that has a tuition recovery fund
that ensures that the institution meets the requirements of
subparagraph (A);
(ii) contributes to the fund; and
(iii) otherwise has legal authority to operate within the
State.
(d) ADMINISTRATIVE CAPACITY STANDARD.—The Secretary is
authorized—
(1) to establish procedures and requirements relating to
the administrative capacities of institutions of higher education, including—
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(A) consideration of past performance of institutions or
persons in control of such institutions with respect to student aid programs; and
(B) maintenance of records; and
(2) to establish such other reasonable procedures as the
Secretary determines will contribute to ensuring that the institution of higher education will comply with administrative capability required by this title.
(e) FINANCIAL GUARANTEES FROM OWNERS.—(1) Notwithstanding any other provision of law, the Secretary may, to the extent necessary to protect the financial interest of the United States,
require—
(A) financial guarantees from an institution participating,
or seeking to participate, in a program under this title, or from
one or more individuals who the Secretary determines, in accordance with paragraph (2), exercise substantial control over
such institution, or both, in an amount determined by the Secretary to be sufficient to satisfy the institution’s potential liability to the Federal Government, student assistance recipients, and other program participants for funds under this title;
and
(B) the assumption of personal liability, by one or more individuals who exercise substantial control over such institution, as determined by the Secretary in accordance with paragraph (2), for financial losses to the Federal Government, student assistance recipients, and other program participants for
funds under this title, and civil and criminal monetary penalties authorized under this title.
(2)(A) The Secretary may determine that an individual exercises substantial control over one or more institutions participating
in a program under this title if the Secretary determines that—
(i) the individual directly or indirectly controls a substantial ownership interest in the institution;
(ii) the individual, either alone or together with other individuals, represents, under a voting trust, power of attorney,
proxy, or similar agreement, one or more persons who have, individually or in combination with the other persons represented or the individual representing them, a substantial
ownership interest in the institution; or
(iii) the individual is a member of the board of directors,
the chief executive officer, or other executive officer of the institution or of an entity that holds a substantial ownership interest in the institution.
(B) The Secretary may determine that an entity exercises substantial control over one or more institutions participating in a program under this title if the Secretary determines that the entity directly or indirectly holds a substantial ownership interest in the institution.
(3) For purposes of this subsection, an ownership interest is defined as a share of the legal or beneficial ownership or control of,
or a right to share in the proceeds of the operation of, an institution or institution’s parent corporation. An ownership interest may
include, but is not limited to—
(A) a sole proprietorship;
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(B) an interest as a tenant-in-common, joint tenant, or tenant by the entireties;
(C) a partnership; or
(D) an interest in a trust.
(4) The Secretary shall not impose the requirements described
in subparagraphs (A) and (B) of paragraph (1) on an institution
that—
(A) has not been subjected to a limitation, suspension, or
termination action by the Secretary or a guaranty agency within the preceding 5 years;
(B) has not had, during its 2 most recent audits of the institutions conduct of programs under this title, an audit finding that resulted in the institution being required to repay an
amount greater than 5 percent of the funds the institution received from programs under this title for any year;
(C) meets and has met, for the preceding 5 years, the financial responsibility standards under subsection (c); and
(D) has not been cited during the preceding 5 years for
failure to submit audits required under this title in a timely
fashion.
(5) For purposes of section 487(c)(1)(G), this section shall also
apply to individuals or organizations that contract with an institution to administer any aspect of an institution’s student assistance
program under this title.
(6) Notwithstanding any other provision of law, any individual
who—
(A) the Secretary determines, in accordance with paragraph (2), exercises substantial control over an institution participating in, or seeking to participate in, a program under this
title;
(B) is required to pay, on behalf of a student or borrower,
a refund of unearned institutional charges to a lender, or to
the Secretary; and
(C) willfully fails to pay such refund or willfully attempts
in any manner to evade payment of such refund,
shall, in addition to other penalties provided by law, be liable to
the Secretary for the amount of the refund not paid, to the same
extent with respect to such refund that such an individual would
be liable as a responsible person for a penalty under section
6672(a) of Internal Revenue Code of 1986 with respect to the nonpayment of taxes. 1
(f) ACTIONS ON APPLICATIONS AND SITE VISITS.—The Secretary
shall ensure that prompt action is taken by the Department on any
application required under subsection (b). The personnel of the Department of Education may conduct a site visit at each institution
before certifying or recertifying its eligibility for purposes of any
program under this title. The Secretary shall establish priorities by
which institutions are to receive site visits, and shall, to the extent
practicable, coordinate such visits with site visits by States, guar1 Section 493(c)(2) of the Higher Education Amendments of 1998 provided that the amendment
adding paragraph (6) was effective with respect to any unpaid refunds that were first required
to be paid to a lender or to the Secretary on or after 90 days after the date of enactment of
that Act.
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anty agencies, and accrediting bodies in order to eliminate duplication, and reduce administrative burden.
(g) TIME LIMITATIONS ON, AND RENEWAL OF, ELIGIBILITY.—
(1) GENERAL RULE.—After the expiration of the certification of any institution under the schedule prescribed under
this section (as this section was in effect prior to the enactment
of the Higher Education Act Amendments of 1998), or upon request for initial certification from an institution not previously
certified, the Secretary may certify the eligibility for the purposes of any program authorized under this title of each such
institution for a period not to exceed 6 years.
(2) NOTIFICATION.—The Secretary shall notify each institution of higher education not later than 6 months prior to the
date of the expiration of the institution’s certification.
(3) INSTITUTIONS OUTSIDE THE UNITED STATES.—The
Secretary shall promulgate regulations regarding the recertification requirements applicable to an institution of higher education outside of the United States that meets the requirements of section 102(a)(1)(C) and received less than $500,000
in funds under part B for the most recent year for which data
are available.
(h) PROVISIONAL CERTIFICATION OF INSTITUTIONAL ELIGIBILITY.—(1) Notwithstanding subsections (d) and (g), the Secretary
may provisionally certify an institution’s eligibility to participate in
programs under this title—
(A) for not more than one complete award year in the case
of an institution of higher education seeking an initial certification; and
(B) for not more than 3 complete award years if—
(i) the institution’s administrative capability and financial responsibility is being determined for the first
time;
(ii) there is a complete or partial change of ownership,
as defined under subsection (i), of an eligible institution; or
(iii) the Secretary determines that an institution that
seeks to renew its certification is, in the judgment of the
Secretary, in an administrative or financial condition that
may jeopardize its ability to perform its financial responsibilities under a program participation agreement.
(2) Whenever the Secretary withdraws the recognition of any
accrediting agency, an institution of higher education which meets
the requirements of accreditation, eligibility, and certification on
the day prior to such withdrawal, the Secretary may, notwithstanding the withdrawal, continue the eligibility of the institution
of higher education to participate in the programs authorized by
this title for a period not to exceed 18 months from the date of the
withdrawal of recognition.
(3) If, prior to the end of a period of provisional certification
under this subsection, the Secretary determines that the institution
is unable to meet its responsibilities under its program participation agreement, the Secretary may terminate the institution’s participation in programs under this title.
(i) TREATMENT OF CHANGES OF OWNERSHIP.—(1) An eligible institution of higher education that has had a change in ownership
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resulting in a change of control shall not qualify to participate in
programs under this title after the change in control (except as provided in paragraph (3)) unless it establishes that it meets the requirements of section 102 (other than the requirements in subsections (b)(5) and (c)(3)) and this section after such change in control.
(2) An action resulting in a change in control may include (but
is not limited to)—
(A) the sale of the institution or the majority of its assets;
(B) the transfer of the controlling interest of stock of the
institution or its parent corporation;
(C) the merger of two or more eligible institutions;
(D) the division of one or more institutions into two or
more institutions;
(E) the transfer of the controlling interest of stock of the
institutions to its parent corporation; or
(F) the transfer of the liabilities of the institution to its
parent corporation.
(3) An action that may be treated as not resulting in a change
in control includes (but is not limited to)—
(A) the sale or transfer, upon the death of an owner of an
institution, of the ownership interest of the deceased in that institution to a family member or to a person holding an ownership interest in that institution; or
(B) another action determined by the Secretary to be a
routine business practice.
(4)(A) The Secretary may provisionally certify an institution
seeking approval of a change in ownership based on the preliminary review by the Secretary of a materially complete application
that is received by the Secretary within 10 business days of the
transaction for which the approval is sought.
(B) A provisional certification under this paragraph shall expire not later than the end of the month following the month in
which the transaction occurred, except that if the Secretary has not
issued a decision on the application for the change of ownership
within that period, the Secretary may continue such provisional
certification on a month-to-month basis until such decision has
been issued.
(j) TREATMENT OF BRANCHES.—(1) A branch of an eligible institution of higher education, as defined pursuant to regulations of
the Secretary, shall be certified under this subpart before it may
participate as part of such institution in a program under this title,
except that such branch shall not be required to meet the requirements of sections 102(b)(1)(E) and 102(c)(1)(C) prior to seeking such
certification. Such branch is required to be in existence at least 2
years after the branch is certified by the Secretary as a branch
campus participating in a program under this title, prior to seeking
certification as a main campus or free-standing institution.
(2) The Secretary may waive the requirement of section
101(a)(2) for a branch that (A) is not located in a State, (B) is affiliated with an eligible institution, and (C) was participating in one
or more programs under this title on or before January 1, 1992.
(k) TREATMENT OF TEACH-OUTS AT ADDITIONAL LOCATIONS.—
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(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 described in section 487(f), 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. ø20 U.S.C. 1099c–1¿ PROGRAM REVIEW AND DATA.
(a) GENERAL AUTHORITY.—In order to strengthen the
administrative capability and financial responsibility provisions of this
title, the Secretary—
(1) shall provide for the conduct of program reviews on a
systematic basis designed to include all institutions of higher
education participating in programs authorized by this title;
(2) shall give priority for program review to institutions of
higher education that are—
(A) institutions with a cohort default rate for loans
under part B of this title in excess of 25 percent or which
places such institutions in the highest 25 percent of such
institutions;
(B) institutions with a default rate in dollar volume for
loans under part B of this title which places the institutions in the highest 25 percent of such institutions;
(C) institutions with a significant fluctuation in Federal Stafford Loan volume, Federal Direct Stafford/Ford
Loan volume, or Federal Pell Grant award volume, or any
combination thereof, in the year for which the determination is made, compared to the year prior to such year, that
are not accounted for by changes in the Federal Stafford
Loan program, the Federal Direct Stafford/Ford Loan program, or the Pell Grant program, or any combination
thereof;
(D) institutions reported to have deficiencies or financial aid problems by the State licensing or authorizing
agency, or by the appropriate accrediting agency or association;
(E) institutions with high annual dropout rates; and
(F) such other institutions that the Secretary determines may pose a significant risk of failure to comply with
the administrative capability or financial responsibility
provisions of this title; and
(3) shall establish and operate a central data base of information on institutional accreditation, eligibility, and certification that includes—
(A) all relevant information available to the Department;
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(B) all relevant information made available by the Secretary of Veterans Affairs;
(C) all relevant information from accrediting agencies
or associations;
(D) all relevant information available from a guaranty
agency; and
(E) all relevant information available from States
under subpart 1.
(b) SPECIAL ADMINISTRATIVE RULES.—In carrying out paragraphs (1) and (2) of subsection (a) and any other relevant provisions of this title, the Secretary shall—
(1) establish guidelines designed to ensure uniformity of
practice in the conduct of program reviews of institutions of
higher education;
(2) make available to each institution participating in programs authorized under this title complete copies of all review
guidelines and procedures used in program reviews;
(3) permit the institution to correct or cure an administrative, accounting, or recordkeeping error if the error is not part
of a pattern of error and there is no evidence of fraud or misconduct related to the error;
(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;
(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 report is issued;
(7) review and take into consideration an institution of
higher education’s response in any final program review report
or audit determination, and include in the report or determination—
(A) a written statement addressing the institution of
higher education’s response;
(B) a written statement of the basis for such report or
determination; and
(C) a copy of the institution’s response; 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.
(c) DATA COLLECTION RULES.—The Secretary shall develop and
carry out a plan for the data collection responsibilities described in
paragraph (3) of subsection (a). The Secretary shall make the information obtained under such paragraph (3) readily available to all
institutions of higher education, guaranty agencies, States, and
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other organizations participating in the programs authorized by
this title.
(d) TRAINING.—The Secretary shall provide training to personnel of the Department, including criminal investigative training,
designed to improve the quality of financial and compliance audits
and program reviews conducted under this title.
(e) SPECIAL RULE.—The provisions of section 103(b) of the Department of Education Organization Act shall not apply to Secretarial determinations made regarding the appropriate length of instruction for programs measured in clock hours.
SEC. 498B. ø20 U.S.C. 1099c–2¿ REVIEW OF REGULATIONS.
(a) REVIEW REQUIRED.—The Secretary shall review
each regulation issued under this title that is in effect at the time of the review and applies to the operations or activities of any participant
in the programs assisted under this title. The review shall include
a determination of whether the regulation is duplicative, or is no
longer necessary. The review may involve one or more of the following:
(1) An assurance of the uniformity of interpretation and
application of such regulations.
(2) The establishment of a process for ensuring that eligibility and compliance issues, such as institutional audit, program review, and recertification, are considered simultaneously.
(3) A determination of the extent to which unnecessary
costs are imposed on institutions of higher education as a consequence of the applicability to the facilities and equipment of
such institutions of regulations prescribed for purposes of regulating industrial and commercial enterprises.
(b) REGULATORY AND STATUTORY RELIEF FOR SMALL VOLUME
INSTITUTIONS.—The Secretary shall review and evaluate ways in
which regulations under and provisions of this Act affecting institution of higher education (other than institutions described in section 102(a)(1)(C)), that have received in each of the two most recent
award years prior to the date of the enactment of the Higher Education Amendments of 1998 less than $200,000 in funds through
this title, may be improved, streamlined, or eliminated.
(c) CONSULTATION.—In carrying out subsections (a) and (b), the
Secretary shall consult with relevant representatives of institutions
participating in the programs authorized by this title.
PART I—COMPETITIVE LOAN AUCTION PILOT
PROGRAM
SEC. 499. ø20 U.S.C. 1099d¿ COMPETITIVE LOAN AUCTION PILOT PROGRAM.
(a) DEFINITIONS.—In this section:
(1) ELIGIBLE FEDERAL PLUS LOAN.—The term ‘‘eligible Fed-
eral PLUS Loan’’ means a loan described in section 428B made
to a parent of a dependent student who is a new borrower on
or after July 1, 2009.
(2) ELIGIBLE LENDER.—The term ‘‘eligible lender’’ has the
meaning given the term in section 435.
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(b) PILOT PROGRAM.—The Secretary shall carry out a pilot program under which the Secretary establishes a mechanism for an
auction of eligible Federal PLUS Loans in accordance with this
subsection. The pilot program shall meet the following requirements:
(1) PLANNING AND IMPLEMENTATION.—During the period
beginning on the date of enactment of this section and ending
on June 30, 2009, the Secretary shall plan and implement the
pilot program under this subsection. During the planning and
implementation, the Secretary shall consult with other Federal
agencies with knowledge of, and experience with, auction programs, including the Federal Communication Commission and
the Department of the Treasury.
(2) ORIGINATION AND DISBURSEMENT; APPLICABILITY OF
SECTION 428B.—Beginning on July 1, 2009, the Secretary shall
arrange for the origination and disbursement of all eligible
Federal PLUS Loans in accordance with the provisions of this
subsection and the provisions of section 428B that are not inconsistent with this subsection.
(3) LOAN ORIGINATION MECHANISM.—The Secretary shall
establish a loan origination auction mechanism that meets the
following requirements:
(A) AUCTION FOR EACH STATE.—The Secretary administers an auction under this paragraph for each State,
under which eligible lenders compete to originate eligible
Federal PLUS Loans under this paragraph at all institutions of higher education within such State.
(B) PREQUALIFICATION PROCESS.—The Secretary establishes a prequalification process for eligible lenders desiring to participate in an auction under this paragraph that
contains, at a minimum—
(i) a set of borrower benefits and servicing requirements each eligible lender shall meet in order to participate in such an auction;
(ii) an assessment of each such eligible lender’s capacity, including capital capacity, to participate effectively; and
(iii) a commitment from such eligible lender that,
if the lender has a winning bid under subparagraph
(F), the lender will enter into the agreement required
under subparagraph (G).
(C) TIMING AND ORIGINATION.—Each State auction
takes place every 2 years, and the eligible lenders with the
winning bids for the State are the only eligible lenders permitted to originate eligible Federal PLUS Loans made
under this paragraph for the cohort of students at the institutions of higher education within the State until the
students graduate from or leave the institutions of higher
education.
(D) BIDS.—Each eligible lender’s bid consists of the
amount of the special allowance payment (after the application of section 438(b)(2)(I)(v)) the eligible lender proposes
to accept from the Secretary with respect to the eligible
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Federal PLUS Loans made under this paragraph in lieu of
the amount determined under section 438(b)(2)(I).
(E) MAXIMUM BID.—The maximum bid allowable under
this paragraph shall not exceed the amount of the special
allowance payable on eligible Federal PLUS Loans made
under this paragraph computed under section 438(b)(2)(I)
(other than clauses (ii), (iii), (iv), and (vi) of such section),
except that for purposes of the computation under this
subparagraph, section 438(b)(2)(I)(i)(III) shall be applied
by substituting ‘‘1.79 percent’’ for ‘‘2.34 percent’’.
(F) WINNING BIDS.—The winning bids for each State
auction shall be the 2 bids containing the lowest and the
second lowest proposed special allowance payments, subject to subparagraph (E).
(G) AGREEMENT WITH SECRETARY; COMPLIANCE.—
(i) AGREEMENT.—Each eligible lender having a
winning bid under subparagraph (F) shall enter into
an agreement with the Secretary under which the eligible lender—
(I) agrees to originate eligible Federal PLUS
Loans under this paragraph to each borrower
who—
(aa) seeks an eligible Federal PLUS Loan
under this paragraph to enable a dependent
student to attend an institution of higher education within the State;
(bb) is eligible for an eligible Federal
PLUS Loan; and
(cc) elects to borrow from the eligible
lender; and
(II) agrees to accept a special allowance payment
(after
the
application
of
section
438(b)(2)(I)(v)) from the Secretary with respect to
the eligible Federal PLUS Loans originated under
subclause (I) in the amount proposed in the second lowest winning bid described in subparagraph
(F) for the applicable State auction.
(ii) COMPLIANCE.—If an eligible lender with a winning bid under subparagraph (F) fails to enter into the
agreement required under clause (i), or fails to comply
with the terms of such agreement, the Secretary may
sanction such eligible lender through one or more of
the following:
(I) The assessment of a penalty on such eligible lender for any eligible Federal PLUS Loans
that such eligible lender fails to originate under
this paragraph in accordance with the agreement
required under clause (i), in the amount of the additional costs (including the amounts of any increase in special allowance payments) incurred by
the Secretary in obtaining another eligible lender
to originate such eligible Federal PLUS Loans.
The Secretary shall collect such penalty by—
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(aa) reducing the amount of any payments otherwise due to such eligible lender
from the Secretary by the amount of the penalty; or
(bb) requesting any other Federal agency
to reduce the amount of any payments due to
such eligible lender from such agency by the
amount of the penalty, in accordance with section 3716 of title 31, United States Code.
(II) A prohibition of bidding by such lender in
other auctions under this section.
(III) The limitation, suspension, or termination of such eligible lender’s participation in the
loan program under part B.
(IV) Any other enforcement action the Secretary is authorized to take under part B.
(H) SEALED BIDS; CONFIDENTIALITY.—All bids are
sealed and the Secretary keeps the bids confidential, including following the announcement of the winning bids.
(I) ELIGIBLE LENDER OF LAST RESORT.—
(i) IN GENERAL.—In the event that there is no winning bid under subparagraph (F), the students at the
institutions of higher education within the State that
was the subject of the auction shall be served by an
eligible lender of last resort, as determined by the Secretary.
(ii) DETERMINATION OF ELIGIBLE LENDER OF LAST
RESORT.—Prior to the start of any auction under this
paragraph, eligible lenders that desire to serve as an
eligible lender of last resort shall submit an application to the Secretary at such time and in such manner
as the Secretary may determine. Such application
shall include an assurance that the eligible lender will
meet the prequalification requirements described in
subparagraph (B).
(iii) GEOGRAPHIC LOCATION.—The Secretary shall
identify an eligible lender of last resort for each State.
(iv) NOTIFICATION TIMING.—The Secretary shall
not identify any eligible lender of last resort until after
the announcement of all the winning bids for a State
auction for any year.
(v) MAXIMUM SPECIAL ALLOWANCE.—The Secretary
is authorized to set a special allowance payment that
shall be payable to a lender of last resort for a State
under this subparagraph, which special allowance payment shall be kept confidential, including following
the announcement of winning bids. The Secretary
shall set such special allowance payment so that it incurs the lowest possible cost to the Federal Government, taking into consideration the lowest bid that
was submitted in an auction for such State and the
lowest bid submitted in a similar State, as determined
by the Secretary.
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(J) GUARANTEE AGAINST LOSSES.—Each eligible Federal PLUS Loan originated under this paragraph shall be
insured by a guaranty agency in accordance with part B,
except that, notwithstanding section 428(b)(1)(G), such insurance shall be in an amount equal to 99 percent of the
unpaid principal and interest due on the loan.
(K) LOAN FEES.—The Secretary shall not collect a loan
fee under section 438(d) with respect to an eligible Federal
Plus Loan originated under this paragraph.
(L) CONSOLIDATION.—
(i) IN GENERAL.—An eligible lender who is permitted to originate eligible Federal PLUS Loans for a
borrower under this paragraph shall have the option
to consolidate such loans into 1 loan.
(ii) NOTIFICATION.—In the event a borrower with
eligible Federal PLUS Loans made under this paragraph wishes to consolidate the loans, the borrower
shall notify the eligible lender who originated the
loans under this paragraph.
(iii) LIMITATION ON ELIGIBLE LENDER OPTION TO
CONSOLIDATE.—The option described in clause (i) shall
not apply if—
(I) the borrower includes in the notification in
clause (ii) verification of consolidation terms and
conditions offered by an eligible lender other than
the eligible lender described in clause (i); and
(II) not later than 10 days after receiving such
notification from the borrower, the eligible lender
described in clause (i) does not agree to match
such terms and conditions, or provide more favorable terms and conditions to such borrower than
the offered terms and conditions described in subclause (I).
(iv) CONSOLIDATION OF ADDITIONAL LOANS.—If a
borrower has a Federal Direct PLUS Loan or a loan
made on behalf of a dependent student under section
428B and seeks to consolidate such loan with an eligible Federal PLUS Loan made under this paragraph,
then the eligible lender that originated the borrower’s
loan under this paragraph may include in the consolidation under this subparagraph a Federal Direct
PLUS Loan or a loan made on behalf of a dependent
student under section 428B, but only if—
(I) in the case of a Federal Direct PLUS Loan,
the eligible lender agrees, not later than 10 days
after the borrower requests such consolidation
from the lender, to match the consolidation terms
and conditions that would otherwise be available
to the borrower if the borrower consolidated such
loans in the loan program under part D; or
(II) in the case of a loan made on behalf of a
dependent student under section 428B, the eligible lender agrees, not later than 10 days after the
borrower requests such consolidation from the
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lender, to match the consolidation terms and conditions offered by an eligible lender other than the
eligible lender that originated the borrower’s loans
under this paragraph.
(v) SPECIAL ALLOWANCE ON CONSOLIDATION LOANS
THAT INCLUDE LOANS MADE UNDER THIS PARAGRAPH.—
The applicable special allowance payment for loans
consolidated under this paragraph shall be equal to
the lesser of—
(I) the weighted average of the special allowance payment on such loans, except that in calculating such weighted average the Secretary shall
exclude any Federal Direct PLUS Loan included
in the consolidation; or
(II) the result of—
(aa) the average of the bond equivalent
rates of the quotes of the 3-month commercial
paper (financial) rates in effect for each of the
days in such quarter as reported by the Federal Reserve in Publication H–15 (or its successor) for such 3-month period; plus
(bb) 1.59 percent.
(vi) INTEREST PAYMENT REBATE FEE.—Any loan
under section 428C consolidated under this paragraph
shall not be subject to the interest payment rebate fee
under section 428C(f).
(c) REQUIRED INITIAL EVALUATION.—The Secretary and Secretary of the Treasury shall jointly conduct an evaluation, in consultation with the Office of Management and Budget, the Congressional Budget Office, and the Comptroller General, of the pilot program carried out by the Secretary under this section. The evaluation shall determine—
(1) the extent of the savings to the Federal Government
that are generated through the pilot program, compared to the
cost the Federal Government would have incurred in operating
the PLUS loan program under section 428B in the absence of
the pilot program;
(2) the number of lenders that participated in the pilot
program, and the extent to which the pilot program generated
competition among lenders to participate in the auctions under
the pilot program;
(3) the number and volume of loans made under the pilot
program in each State;
(4) the effect of the transition to and operation of the pilot
program on the ability of—
(A) lenders participating in the pilot program to originate loans made through the pilot program smoothly and
efficiently;
(B) institutions of higher education participating in
the pilot program to disburse loans made through the pilot
program smoothly and efficiently; and
(C) parents to obtain loans made through the pilot
program in a timely and efficient manner;
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(5) the differential impact, if any, of the auction among the
States, including between rural and non-rural States; and
(6) the feasibility of using the mechanism piloted to operate the other loan programs under part B of this title.
(d) REPORTS.—
(1) IN GENERAL.—The Secretary and the Secretary of the
Treasury shall submit to the authorizing committees—
(A) not later than September 1, 2010, a preliminary
report regarding the findings of the evaluation described in
subsection (c);
(B) not later than September 1, 2012, an interim report regarding such findings; and
(C) not later than September 1, 2013, a final report regarding such findings.
(2) CONTENTS.—The Secretary shall include, in each report
required under subparagraphs (A), (B), and (C) of paragraph
(1), any recommendations, that are based on the findings of the
evaluation under subsection (c), for—
(A) improving the operation and administration of the
auction; and
(B) improving the operation and administration of
other loan programs under part B.
TITLE V—DEVELOPING INSTITUTIONS
PART A—HISPANIC-SERVING INSTITUTIONS
SEC. 501. ø20 U.S.C. 1101¿ FINDINGS; PURPOSE; AND PROGRAM AUTHORITY.
(a) FINDINGS.—Congress makes the following findings:
(1) Hispanic Americans are at high risk of not enrolling or
graduating from institutions of higher education.
(2) Disparities between the enrollment of non-Hispanic
white students and Hispanic students in postsecondary education are increasing. Between 1973 and 1994, enrollment of
white secondary school graduates in 4-year institutions of higher education increased at a rate two times higher than that of
Hispanic secondary school graduates.
(3) Despite significant limitations in resources, Hispanicserving institutions provide a significant proportion of postsecondary opportunities for Hispanic students.
(4) Relative to other institutions of higher education, Hispanic-serving institutions are underfunded. Such institutions
receive significantly less in State and local funding, per fulltime equivalent student, than other institutions of higher education.
(5) Hispanic-serving institutions are succeeding in educating Hispanic students despite significant resource problems
that—
(A) limit the ability of such institutions to expand and
improve the academic programs of such institutions; and
(B) could imperil the financial and administrative stability of such institutions.
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(6) There is a national interest in remedying the disparities described in paragraphs (2) and (4) and ensuring that Hispanic students have an equal opportunity to pursue postsecondary opportunities.
(b) PURPOSE.—The purpose of this title is to—
(1) expand educational opportunities for, and improve the
academic attainment of, Hispanic students; and
(2) expand and enhance the academic offerings, program
quality, and institutional stability of colleges and universities
that are educating the majority of Hispanic college students
and helping large numbers of Hispanic students and other lowincome individuals complete postsecondary degrees.
(c) PROGRAM AUTHORITY.—The Secretary shall provide grants
and related assistance to Hispanic-serving institutions to enable
such institutions to improve and expand their capacity to serve
Hispanic students and other low-income individuals.
SEC. 502. ø20 U.S.C. 1101a¿ DEFINITIONS; ELIGIBILITY.
(a) DEFINITIONS.—For the purpose of this title:
(1) EDUCATIONAL AND GENERAL EXPENDITURES.—The
term
‘‘educational and general expenditures’’ means the total
amount expended by an institution for instruction, research,
public service, academic support (including library expenditures), student services, institutional support, scholarships and
fellowships, operation and maintenance expenditures for the
physical plant, and any mandatory transfers that the institution is required to pay by law.
(2) ELIGIBLE INSTITUTION.—The term ‘‘eligible institution’’
means—
(A) an institution of higher education—
(i) that has an enrollment of needy students as required by subsection (b);
(ii) except as provided in section 522(b), the average educational and general expenditures of which are
low, per full-time equivalent undergraduate student,
in comparison with the average educational and general expenditures per full-time equivalent undergraduate student of institutions that offer similar instruction;
(iii) that is—
(I) legally authorized to provide, and provides
within the State, an educational program for
which the institution awards a bachelor’s degree;
or
(II) a junior or community college;
(iv) that is accredited by a nationally recognized
accrediting agency or association determined by the
Secretary to be reliable authority as to the quality of
training offered or that is, according to such an agency
or association, making reasonable progress toward accreditation;
(v) that meets such other requirements as the Secretary may prescribe; and
(vi) that is located in a State; and
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(B) any branch of any institution of higher education
described under subparagraph (A) that by itself satisfies
the requirements contained in clauses (i) and (ii) of such
subparagraph.
For purposes of the determination of whether an institution is
an eligible institution under this paragraph, the factor described under subparagraph (A)(i) shall be given twice the
weight of the factor described under subparagraph (A)(ii).
(3) ENDOWMENT FUND.—The term ‘‘endowment fund’’
means a fund that—
(A) is established by State law, by a Hispanic-serving
institution, or by a foundation that is exempt from Federal
income taxation;
(B) is maintained for the purpose of generating income
for the support of the institution; and
(C) does not include real estate.
(4) FULL-TIME EQUIVALENT STUDENTS.—The term ‘‘full-time
equivalent students’’ means the sum of the number of students
enrolled full time at an institution, plus the full-time equivalent of the number of students enrolled part time (determined
on the basis of the quotient of the sum of the credit hours of
all part-time students divided by 12) at such institution.
(5) HISPANIC-SERVING INSTITUTION.—The term ‘‘Hispanicserving institution’’ means an institution of higher education
that—
(A) is an eligible institution; and
(B) has an enrollment of undergraduate full-time
equivalent students that is at least 25 percent Hispanic
students at the end of the award year immediately preceding the date of application.
(6) JUNIOR OR COMMUNITY COLLEGE.—The term ‘‘junior or
community college’’ means an institution of higher education—
(A) that admits as regular students persons who are
beyond the age of compulsory school attendance in the
State in which the institution is located and who have the
ability to benefit from the training offered by the institution;
(B) that does not provide an educational program for
which the institution awards a bachelor’s degree (or an
equivalent degree); and
(C) that—
(i) provides an educational program of not less
than 2 years in duration that is acceptable for full
credit toward such a degree; or
(ii) offers a 2-year program in engineering, mathematics, or the physical or biological sciences, designed
to prepare a student to work as a technician or at the
semiprofessional level in engineering, scientific, or
other technological fields requiring the understanding
and application of basic engineering, scientific, or
mathematical principles of knowledge.
(b) ENROLLMENT OF NEEDY STUDENTS.—For the purpose of this
title, the term ‘‘enrollment of needy students’’ means an enrollment
at an institution with respect to which—
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(1) at least 50 percent of the degree students so enrolled
are receiving need-based assistance under title IV in the second fiscal year preceding the fiscal year for which the determination is made (other than loans for which an interest subsidy is paid pursuant to section 428); or
(2) a substantial percentage of the students so enrolled are
receiving Federal Pell Grants in the second fiscal year preceding the fiscal year for which the determination is made,
compared to the percentage of students receiving Federal 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 paragraph is waived under section
522(a).
SEC. 503. ø20 U.S.C. 1101b¿ AUTHORIZED ACTIVITIES.
(a) TYPES OF ACTIVITIES AUTHORIZED.—Grants
awarded under
this title shall be used by Hispanic-serving institutions of higher
education to assist the institutions to plan, develop, undertake, and
carry out programs to improve and expand the institutions’ capacity to serve Hispanic students and other low-income students.
(b) AUTHORIZED ACTIVITIES.—Grants awarded under this section shall be used for one or more of the following activities:
(1) Purchase, rental, or lease of scientific or laboratory
equipment for educational purposes, including instructional
and research purposes.
(2) Construction, maintenance, renovation, and improvement in classrooms, libraries, laboratories, and other instructional facilities.
(3) Support of faculty exchanges, faculty development, curriculum development, academic instruction, and faculty fellowships to assist in attaining advanced degrees in the fellow’s
field of instruction.
(4) Purchase of library books, periodicals, and other educational materials, including telecommunications program material.
(5) Tutoring, counseling, and student service programs designed to improve academic success, including innovative and
customized instruction courses (which may include remedial
education and English language instruction) designed to help
retain students and move the students rapidly into core
courses and through program completion.
(6) Articulation agreements and student support programs
designed to facilitate the transfer from two-year to four-year
institutions.
(7) Funds management, administrative management, and
acquisition of equipment for use in strengthening funds management.
(8) Joint use of facilities, such as laboratories and libraries.
(9) Establishing or improving a development office to
strengthen or improve contributions from alumni and the private sector.
(10) Establishing or improving an endowment fund.
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(11) Creating or improving facilities for Internet or other
distance education technologies, including purchase or rental of
telecommunications technology equipment or services.
(12) Establishing or enhancing a program of teacher education designed to qualify students to teach in public elementary schools and secondary schools.
(13) 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.
(14) Expanding the number of Hispanic and other underrepresented graduate and professional students that can be
served by the institution by expanding courses and institutional resources.
(15) Providing education, counseling services, or financial
information designed to improve the financial literacy and economic literacy of students or the students’ families, especially
with regard to student indebtedness and student assistance
programs under title IV.
(16) Other activities proposed in the application submitted
pursuant to section 504 that—
(A) contribute to carrying out the purposes of this
title; and
(B) are approved by the Secretary as part of the review and acceptance of such application.
(c) ENDOWMENT FUND LIMITATIONS.—
(1) PORTION OF GRANT.—A Hispanic-serving institution
may not use more than 20 percent of the grant funds provided
under this title for any fiscal year for establishing or improving
an endowment fund.
(2) MATCHING REQUIRED.—A Hispanic-serving institution
that uses any portion of the grant funds provided under this
title for any fiscal year for establishing or improving an endowment fund shall provide from non-Federal funds an amount
equal to or greater than the portion.
(3) COMPARABILITY.—The provisions of part C of title III
regarding the establishment or increase of an endowment fund,
that the Secretary determines are not inconsistent with this
subsection, shall apply to funds used under paragraph (1).
SEC. 504. ø20 U.S.C. 1101c¿ DURATION OF GRANT.
(a) AWARD PERIOD.—The Secretary may
award a grant to a
Hispanic-serving institution under this title for 5 years.
(b) PLANNING GRANTS.—Notwithstanding subsection (a), the
Secretary may award a grant to a Hispanic-serving institution
under this title for a period of 1 year for the purpose of preparation
of plans and applications for a grant under this title.
SEC. 505. ø20 U.S.C. 1101d¿ SPECIAL RULE.
No Hispanic-serving institution that is eligible for and receives
funds under this title may receive funds under part A or B of title
III during the period for which funds under this title are awarded.
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PART B—PROMOTING POSTBACCALAUREATE
OPPORTUNITIES FOR HISPANIC AMERICANS
SEC. 511. ø20 U.S.C. 1102¿ PURPOSES.
The purposes of this part are—
(1) to expand postbaccalaureate educational opportunities
for, and improve the academic attainment of, Hispanic students; and
(2) to expand the postbaccalaureate academic offerings and
enhance the program quality in the institutions of higher education that are educating the majority of Hispanic college students and helping large numbers of Hispanic and low-income
students complete postsecondary degrees.
SEC. 512. ø20 U.S.C. 1102a¿ 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 513.
(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
postbaccalaureate degree granting program.
SEC. 513. ø20 U.S.C. 1102b¿ AUTHORIZED ACTIVITIES.
Grants awarded under this part shall be used for one or more
of the following activities:
(1) Purchase, rental, or lease of scientific or laboratory
equipment for educational purposes, including instructional
and research purposes.
(2) Construction, maintenance, renovation, and improvement of classrooms, libraries, laboratories, and other instructional facilities, including purchase or rental of telecommunications technology equipment or services.
(3) Purchase of library books, periodicals, technical and
other scientific journals, microfilm, microfiche, and other educational materials, including telecommunications program materials.
(4) Support for low-income 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 postbaccalaureate 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 education technologies, including purchase or rental of
telecommunications technology equipment or services.
(7) Collaboration with other institutions of higher education
to
expand
postbaccalaureate
certificate
and
postbaccalaureate degree offerings.
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(8) Other activities proposed in the application submitted
pursuant to section 514 that—
(A) contribute to carrying out the purposes of this
part; and
(B) are approved by the Secretary as part of the review and acceptance of such application.
SEC. 514. ø20 U.S.C. 1102c¿ 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.
(b) DURATION.—Grants under this part shall be awarded for a
period not to exceed five years.
(c) LIMITATION.—The Secretary may not award more than one
grant under this part in any fiscal year to any Hispanic-serving institution.
PART C—GENERAL PROVISIONS
SEC. 521. ø20 U.S.C. 1103¿ ELIGIBILITY; APPLICATIONS.
(a) INSTITUTIONAL ELIGIBILITY.—Each Hispanic-serving
institution desiring to receive assistance under this title shall submit to
the Secretary such enrollment data as may be necessary to demonstrate that the institution is a Hispanic-serving institution as defined in section 502, along with such other data and information
as the Secretary may by regulation require.
(b) APPLICATIONS.—
(1) APPLICATIONS REQUIRED.—Any institution which is eligible for assistance under this title shall submit to the Secretary an application for assistance at such time, in such form,
and containing such information, as may be necessary to enable the Secretary to evaluate the institution’s need for assistance. Subject to the availability of appropriations to carry out
this title, the Secretary may approve an application for a grant
under this title only if the Secretary determines that—
(A) the application meets the requirements of subsection (c); and
(B) the institution is eligible for assistance in accordance with the provisions of this title under which the assistance is sought.
(2) PRELIMINARY APPLICATIONS.—In carrying out paragraph (1), the Secretary may develop a preliminary application
for use by Hispanic-serving institutions applying under this
title prior to the submission of the principal application.
(c) CONTENTS.—A Hispanic-serving institution, in the institution’s application for a grant, shall—
(1) set forth, or describe how the institution will develop,
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retary to use in monitoring the effectiveness of activities under
this title);
(2) include a 5-year plan for improving the assistance provided by the Hispanic-serving institution to Hispanic students
and other low-income individuals;
(3) set forth policies and procedures to ensure that Federal
funds made available under this title for any fiscal year will
be used to supplement and, to the extent practical, increase the
funds that would otherwise be made available for the purposes
of section 501(b), and in no case supplant those funds;
(4) set forth policies and procedures for evaluating the effectiveness in accomplishing the purpose of the activities for
which a grant is sought under this title;
(5) provide for such fiscal control and fund accounting procedures as may be necessary to ensure proper disbursement of
and accounting for funds made available to the institution
under this title;
(6) provide that the institution will comply with the limitations set forth in section 526;
(7) describe in a comprehensive manner any proposed
project for which funds are sought under the application and
include—
(A) a description of the various components of the proposed project, including the estimated time required to
complete each such component;
(B) in the case of any development project that consists of several components (as described by the institution
pursuant to subparagraph (A)), a statement identifying
those components which, if separately funded, would be
sound investments of Federal funds and those components
which would be sound investments of Federal funds only
if funded under this title in conjunction with other parts
of the development project (as specified by the institution);
(C) an evaluation by the institution of the priority
given any proposed project for which funds are sought in
relation to any other projects for which funds are sought
by the institution under this title, and a similar evaluation
regarding priorities among the components of any single
proposed project (as described by the institution pursuant
to subparagraph (A));
(D) a detailed budget showing the manner in which
funds for any proposed project would be spent by the institution; and
(E) a detailed description of any activity which involves the expenditure of more than $25,000, as identified
in the budget referred to in subparagraph (D);
(8) provide for making reports, in such form and containing such information, as the Secretary may require to carry
out the Secretary’s functions under this title, including not less
than one report annually setting forth the institution’s
progress toward achieving the objectives for which the funds
were awarded and for keeping such records and affording such
access to such records, as the Secretary may find necessary to
assure the correctness and verification of such reports; and
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(9) include such other information as the Secretary may
prescribe.
(d) PRIORITY.—With respect to applications for assistance
under this section, the Secretary shall give priority to an application that contains satisfactory evidence that the Hispanic-serving
institution has entered into or will enter into a collaborative arrangement with at least one local educational agency or community-based organization to provide such agency or organization with
assistance (from funds other than funds provided under this title)
in reducing dropout rates for Hispanic students, improving rates of
academic achievement for Hispanic students, and increasing the
rates at which Hispanic secondary school graduates enroll in higher education.
(e) ELIGIBILITY DATA.—The Secretary shall use the most recent
and relevant data concerning the number and percentage of students receiving need-based assistance under title IV in making eligibility determinations and shall advance the base-year for the determinations forward following each annual grant cycle.
SEC. 522. ø20 U.S.C. 1103a¿ WAIVER AUTHORITY AND REPORTING REQUIREMENT.
(a) WAIVER REQUIREMENTS; NEED-BASED ASSISTANCE STUDENTS.—The Secretary may waive the requirements set forth in
section 502(a)(2)(A)(i) in the case of an institution—
(1) that is extensively subsidized by the State in which the
institution is located and charges low or no tuition;
(2) that serves a substantial number of low-income students as a percentage of the institution’s total student population;
(3) that is contributing substantially to increasing higher
education opportunities for educationally disadvantaged,
underrepresented, or minority students, who are low-income
individuals;
(4) which is substantially increasing higher educational opportunities for individuals in rural or other isolated areas
which are unserved by postsecondary institutions; or
(5) wherever located, if the Secretary determines that the
waiver will substantially increase higher education opportunities appropriate to the needs of Hispanic Americans.
(b) WAIVER DETERMINATIONS; EXPENDITURES.—
(1) WAIVER DETERMINATIONS.—The Secretary may waive
the requirements set forth in section 502(a)(2)(A)(ii) if the Secretary determines, based on persuasive evidence submitted by
the institution, that the institution’s failure to meet the requirements is due to factors which, when used in the determination of compliance with the requirements, distort such determination, and that the institution’s designation as an eligible institution under part A is otherwise consistent with the
purposes of this title.
(2) EXPENDITURES.—The Secretary shall submit to Congress every other year a report concerning the institutions
that, although not satisfying the requirements of section
502(a)(2)(A)(ii), have been determined to be eligible institutions
under part A. Such report shall—
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(A) identify the factors referred to in paragraph (1)
that were considered by the Secretary as factors that distorted the determination of compliance with clauses (i) and
(ii) of section 502(a)(2)(A); and
(B) contain a list of each institution determined to be
an eligible institution under part A including a statement
of the reasons for each such determination.
SEC. 523. ø20 U.S.C. 1103b¿ APPLICATION REVIEW PROCESS.
(a) REVIEW PANEL.—All applications submitted under
this title
by Hispanic-serving institutions shall be read by a panel of readers
composed of individuals who are selected by the Secretary and who
include individuals representing Hispanic-serving institutions. The
Secretary shall ensure that no individual assigned under this section to review any application has any conflict of interest with regard to the application that might impair the impartiality with
which the individual conducts the review under this section.
(b) INSTRUCTION.—All readers selected by the Secretary shall
receive thorough instruction from the Secretary regarding the evaluation process for applications submitted under this title that are
consistent with the provisions of this title, including—
(1) an enumeration of the factors to be used to determine
the quality of applications submitted under this title; and
(2) an enumeration of the factors to be used to determine
whether a grant should be awarded for a project under this
title, the amount of any such grant, and the duration of any
such grant.
(c) RECOMMENDATIONS OF PANEL.—In awarding grants under
this title, the Secretary shall take into consideration the recommendations of the panel made under subsection (a).
(d) NOTIFICATION.—Not later than June 30 of each year, the
Secretary shall notify each Hispanic-serving institution making an
application under this title of—
(1) the scores given the institution by the panel pursuant
to this section;
(2) the recommendations of the panel with respect to such
application; and
(3) the reasons for the decision of the Secretary in awarding or refusing to award a grant under this title, and any
modifications, if any, in the recommendations of the panel
made by the Secretary.
SEC. 524. ø20 U.S.C. 1103c¿ 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 sections 503 and 513 so that the resources of the cooperating institutions might be combined and shared in order to
achieve the purposes of this title, to avoid costly duplicative efforts,
and to enhance the development of Hispanic-serving institutions.
(b) PRIORITY.—The Secretary shall give priority to grants for
the purposes described under subsection (a) whenever the Secretary determines that the cooperative arrangement is geographi-
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cally and economically sound or will benefit the applicant Hispanicserving institution.
(c) DURATION.—Grants to Hispanic-serving institutions having
a cooperative arrangement may be made under this section for a
period determined under section 505.
SEC. 525. ø20 U.S.C. 1103d¿ ASSISTANCE TO INSTITUTIONS UNDER
OTHER PROGRAMS.
(a) ASSISTANCE ELIGIBILITY.—Each Hispanic-serving institution
that the Secretary determines to be an institution eligible under
this title may be eligible for waivers in accordance with subsection
(b).
(b) WAIVER APPLICABILITY.—
(1) IN GENERAL.—Subject to, and in accordance with, regulations promulgated for the purpose of this section, in the case
of any application by a Hispanic-serving institution referred to
in subsection (a) for assistance under any programs specified
in paragraph (2), the Secretary is authorized, if such application is otherwise approvable, to waive any requirement for a
non-Federal share of the cost of the program or project, or, to
the extent not inconsistent with other law, to give, or require
to be given, priority consideration of the application in relation
to applications from other institutions.
(2) PROGRAMS.—The provisions of this section shall apply
to any program authorized by title IV or section 604.
(c) LIMITATION.—The Secretary shall not waive, under subsection (b), the non-Federal share requirement for any program for
applications which, if approved, would require the expenditure of
more than 10 percent of the appropriations for the program for any
fiscal year.
SEC. 526. ø20 U.S.C. 1103e¿ LIMITATIONS.
The funds appropriated under section 528 may not be used—
(1) for a school or department of divinity or any religious
worship or sectarian activity;
(2) for an activity that is inconsistent with a State plan for
desegregation of higher education applicable to a Hispanicserving institution;
(3) for an activity that is inconsistent with a State plan of
higher education applicable to a Hispanic-serving institution;
or
(4) for purposes other than the purposes set forth in the
approved application under which the funds were made available to a Hispanic-serving institution.
SEC. 527. ø20 U.S.C. 1103f¿ PENALTIES.
Whoever, being an officer, director, agent, or employee of, or
connected in any capacity with, any recipient of Federal financial
assistance or grant pursuant to this title embezzles, willfully
misapplies, steals, or obtains by fraud any of the funds that are the
subject of such grant or assistance, shall be fined not more than
$10,000 or imprisoned for not more than 2 years, or both.
SEC. 528. ø20 U.S.C. 1103g¿ AUTHORIZATIONS OF APPROPRIATIONS.
(a) AUTHORIZATIONS.—
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(1) PARTS A AND C.—There are authorized to be appropriated to carry out parts A and C $175,000,000 for fiscal year
2009 and such sums as may be necessary for each of the five
succeeding fiscal years.
(2) PART B.—There are authorized to be appropriated to
carry out part B $100,000,000 for fiscal year 2009 and such
sums as may be necessary for each of the five succeeding fiscal
years.
(b) USE OF MULTIPLE YEAR AWARDS.—In the event of a multiple year award to any Hispanic-serving 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 institution.
TITLE VI—INTERNATIONAL EDUCATION
PROGRAMS
PART A—INTERNATIONAL AND FOREIGN
LANGUAGE STUDIES
SEC. 601. ø20 U.S.C. 1121¿ FINDINGS; PURPOSES; CONSULTATION; SURVEY.
(a) FINDINGS.—Congress finds as follows:
(1) The security, stability, and economic vitality of the
United States in a complex global era depend upon American
experts in and citizens knowledgeable about world regions, foreign languages, and international affairs, as well as upon a
strong research base in these areas.
(2) Advances in communications technology and the
growth of regional and global problems make knowledge of
other countries and the ability to communicate in other languages more essential to the promotion of mutual understanding and cooperation among nations and their peoples.
(3) Dramatic changes in the world’s geopolitical and economic landscapes are creating needs for American expertise
and knowledge about a greater diversity of less commonly
taught foreign languages and nations of the world.
(4) Systematic efforts are necessary to enhance the capacity of institutions of higher education in the United States
for—
(A) producing graduates with international and foreign
language expertise and knowledge; and
(B) research regarding such expertise and knowledge.
(5) Cooperative efforts among the Federal Government, institutions of higher education, and the private sector are necessary to promote the generation and dissemination of information about world regions, foreign languages, and international
affairs throughout education, government, business, civic, and
nonprofit sectors in the United States.
(b) PURPOSES.—The purposes of this part are—
(1)(A) to support centers, programs, and fellowships in institutions of higher education in the United States for producing increased numbers of trained personnel and research in
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foreign languages, area studies, and other international studies;
(B) to develop a pool of international experts to meet national needs;
(C) to develop and validate specialized materials and techniques for foreign language acquisition and fluency, emphasizing (but not limited to) the less commonly taught languages;
(D) to promote access to research and training overseas,
including through linkages with overseas institutions; and
(E) to advance the internationalization of a variety of disciplines throughout undergraduate and graduate education;
(2) to support cooperative efforts promoting access to and
the dissemination of international and foreign language knowledge, teaching materials, and research, throughout education,
government, business, civic, and nonprofit sectors in the
United States, through the use of advanced technologies; and
(3) to coordinate the programs of the Federal Government
in the areas of foreign language, area studies, and other international studies, including professional international affairs
education and research.
(c) CONSULTATION.—
(1) IN GENERAL.—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 officials of a wide range of Federal agencies.
(2) CONSIDERING RECOMMENDATIONS; PROVIDING INFORMATION.—The Secretary—
(A) may take into account the recommendations described in paragraph (1); and
(B) shall—
(i) provide information collected under paragraph
(1) when requesting applications for funding under
this title; and
(ii) 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 completed programs
under this title to determine postgraduate employment, education,
or training. All grantees, where applicable, shall administer such
survey once every two years and report survey results to the Secretary.
SEC. 602. ø20 U.S.C. 1122¿ 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 to make
grants to institutions of higher education or consortia of
such institutions for the purpose of establishing, strengthening, and operating—
(i) comprehensive foreign language and area or
international studies centers and programs; and
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(ii) a diverse network of undergraduate foreign
language and area or international studies centers and
programs.
(B) NATIONAL RESOURCES.—The centers and programs
referred to in paragraph (1) shall be national resources
for—
(i) teaching of any modern foreign language;
(ii) instruction in fields needed to provide full understanding of areas, regions, or countries in which
such language is commonly used;
(iii) research and training in international studies,
and the international and foreign language aspects of
professional and other fields of study; and
(iv) instruction and research on issues in world affairs that concern one or more countries.
(2) AUTHORIZED ACTIVITIES.—Any such grant may be used
to pay all or part of the cost of establishing or operating a center or program, including the cost of—
(A) teaching and research materials;
(B) curriculum planning and development;
(C) establishing and maintaining linkages with overseas institutions of higher education and other organizations that may contribute to the teaching and research of
the center or program;
(D) bringing visiting scholars and faculty to the center
to teach or to conduct research;
(E) professional development of the center’s faculty
and staff;
(F) projects conducted in cooperation with other centers addressing themes of world regional, cross-regional,
international, or global importance;
(G) summer institutes in the United States or abroad
designed to provide language and area training in the center’s field or topic;
(H) support for faculty, staff, and student travel in foreign areas, regions, or countries, and for the development
and support of educational programs abroad for students;
(I) supporting instructors of the less commonly taught
languages; and
(J) projects that support students in the science, technology, engineering, and mathematics fields to achieve foreign language proficiency.
(3) GRANTS TO MAINTAIN LIBRARY COLLECTIONS.—The Secretary may make grants to centers described in paragraph (1)
having important library collections, as determined by the Secretary, for the maintenance of such collections.
(4) OUTREACH GRANTS AND SUMMER INSTITUTES.—The
Secretary may make additional grants to centers described in
paragraph (1) for any one or more of the following purposes:
(A) Programs of linkage or outreach between foreign
language, area studies, or other international fields, and
professional schools and colleges.
(B) Programs of linkage or outreach with 2- and 4-year
colleges and universities.
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(C) Programs of linkage or outreach between or
among—
(i) postsecondary programs or departments in foreign language, area studies, or other international
fields; and
(ii) State educational agencies or local educational
agencies.
(D) Partnerships or programs of linkage and outreach
with departments or agencies of Federal and State governments, including Federal or State scholarship programs for
students in related areas.
(E) Programs of linkage or outreach with the news
media, business, professional, or trade associations.
(F) Summer institutes in area studies, foreign language, and other international fields designed to carry out
the programs described in subparagraphs (A), (B), (D), and
(E).
(b) FELLOWSHIPS FOR FOREIGN LANGUAGE AND AREA OR INTERNATIONAL STUDIES.—
(1) IN GENERAL.—The Secretary is authorized to make
grants to institutions of higher education or combinations of
such institutions for the purpose of paying stipends to individuals undergoing advanced training in any center or program
approved by the Secretary.
(2) 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.
(c) SPECIAL RULE WITH RESPECT TO TRAVEL.—No funds may be
expended under this part for undergraduate travel except in accordance with rules prescribed by the Secretary setting forth policies and procedures to assure that Federal funds made available
for such travel are expended as part of a formal program of supervised study.
(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.
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ance 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 of higher education or consortium of such 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 such application shall include—
(1) 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; and
(2) a description of how the applicant will encourage government service in areas of national need, as identified by the
Secretary, as well as in areas of need in the education, business, and nonprofit sectors.
SEC. 603. ø20 U.S.C. 1123¿ LANGUAGE RESOURCE CENTERS.
(a) LANGUAGE RESOURCE CENTERS AUTHORIZED.—The
Secretary is authorized to make grants to and enter into contracts
with institutions of higher education, or consortia of such institutions, for the purpose of establishing, strengthening, and operating
a small number of national language resource and training centers,
which shall serve as resources to improve the capacity to teach and
learn foreign languages effectively.
(b) AUTHORIZED ACTIVITIES.—The activities carried out by the
centers described in subsection (a)—
(1) shall include effective dissemination efforts, whenever
appropriate; and
(2) may include—
(A) the conduct and dissemination of research on new
and improved teaching methods, including the use of advanced educational technology;
(B) the development and dissemination of new teaching materials reflecting the use of such research in effective teaching strategies;
(C) the development, application, and dissemination of
performance testing appropriate to an educational setting
for use as a standard and comparable measurement of
skill levels in all languages;
(D) the training of teachers in the administration and
interpretation of performance tests, the use of effective
teaching strategies, and the use of new technologies;
(E) a significant focus on the teaching and learning
needs of the less commonly taught languages, including an
assessment of the strategic needs of the United States, the
determination of ways to meet those needs nationally, and
the publication and dissemination of instructional materials in the less commonly taught languages;
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(F) the development and dissemination of materials
designed to serve as a resource for foreign language teachers at the elementary and secondary school levels; and
(G) the operation of intensive summer language institutes to train advanced foreign language students, to provide professional development, and to improve language
instruction through preservice and inservice language
training for teachers.
(c) CONDITIONS FOR GRANTS.—Grants under this section shall
reflect the purposes of this part and be made on such conditions
as the Secretary determines to be necessary to carry out the provisions of this section.
SEC. 604. ø20 U.S.C. 1124¿ UNDERGRADUATE INTERNATIONAL STUDIES
AND FOREIGN LANGUAGE PROGRAMS.
(a) INCENTIVES FOR THE CREATION OF NEW PROGRAMS AND THE
STRENGTHENING OF EXISTING PROGRAMS IN UNDERGRADUATE
INTERNATIONAL STUDIES AND FOREIGN LANGUAGE PROGRAMS.—
(1) AUTHORITY.—The Secretary is authorized to make
grants to institutions of higher education, consortia of such institutions, or partnerships between nonprofit educational organizations and institutions of higher education, to assist such
institutions, consortia or partnerships in planning, developing,
and carrying out programs to improve undergraduate instruction in international studies and foreign languages. Such
grants shall be awarded to institutions, consortia or partnerships seeking to create new programs or to strengthen existing
programs in foreign languages, area studies, and other international fields.
(2) USE OF FUNDS.—Grants made under this section may
be used for the Federal share of the cost of projects and activities which are an integral part of such a program, such as—
(A) planning for the development and expansion of undergraduate programs in international studies and
foreign languages;
(B) teaching, research, curriculum development,
faculty training in the United States or abroad, and other
related activities, including—
(i) the expansion of library and teaching resources; and
(ii) pre-service teacher training and in-service
teacher professional development;
(C) expansion of opportunities for learning foreign languages, including less commonly taught languages;
(D) programs under which foreign teachers and scholars may visit institutions as visiting faculty;
(E) programs designed to develop or enhance linkages
between 2- and 4-year institutions of higher education, or
baccalaureate and post-baccalaureate programs or institutions;
(F) the development of undergraduate educational programs—
(i) in locations abroad where such opportunities
are not otherwise available or that serve students for
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whom such opportunities are not otherwise available;
and
(ii) that provide courses that are closely related to
on-campus foreign language and international curricula;
(G) the integration of new and continuing education
abroad opportunities for undergraduate students into curricula of specific degree programs;
(H) the development of model programs to enrich or
enhance the effectiveness of educational programs abroad,
including predeparture and postreturn programs, and the
integration of educational programs abroad into the curriculum of the home institution;
(I) the provision of grants for educational programs
abroad that—
(i) are closely linked to the program’s overall
goals; and
(ii) have the purpose of promoting foreign language fluency and knowledge of world regions;
(J) the development of programs designed to integrate
professional and technical education with foreign languages, area studies, and other international fields;
(K) the establishment of linkages overseas with institutions of higher education and organizations that contribute to the educational programs assisted under this
subsection;
(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;
(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
(N) the use of innovative technology to increase access
to international education programs.
(3) NON-FEDERAL SHARE.—The non-Federal share of the
cost of the programs assisted under this subsection—
(A) may be provided in cash from the private sector
corporations or foundations in an amount equal to onethird of the total cost of the programs assisted under this
section; or
(B) may be provided as an in-cash or in-kind contribution from institutional and noninstitutional funds, including State and private sector corporation or foundation contributions, equal to one-half of the total cost of the programs assisted under this section.
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(4) SPECIAL RULE.—The Secretary may waive or reduce the
required non-Federal share for institutions that—
(A) are eligible to receive assistance under part A or
B of title III or under title V; and
(B) have submitted a grant application under this section that demonstrates a need for a waiver or reduction.
(5) PRIORITY.—In awarding grants under this section, the
Secretary shall give priority to applications from institutions of
higher education, consortia or partnerships that require entering students to have successfully completed at least 2 years of
secondary school foreign language instruction or that require
each graduating student to earn 2 years of postsecondary credit in a foreign language (or have demonstrated equivalent competence in the foreign language) or, in the case of a 2-year degree granting institution, offer 2 years of postsecondary credit
in a foreign language.
(6) GRANT CONDITIONS.—Grants under this subsection
shall reflect the purposes of this part and be made on such conditions as the Secretary determines to be necessary to carry
out this subsection.
(7) APPLICATION.—Each application for assistance under
this subsection shall include—
(A) evidence that the applicant has conducted extensive planning prior to submitting the application;
(B) an assurance that the faculty and administrators
of all relevant departments and programs served by the
applicant are involved in ongoing collaboration with regard
to achieving the stated objectives of the application;
(C) an assurance that students at the applicant institutions, as appropriate, will have equal access to, and derive benefits from, the program assisted under this subsection;
(D) an assurance that each applicant, consortium, 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 languages;
(E) a description of how the applicant will provide information to students regarding federally funded scholarship programs in related areas;
(F) 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; and
(G) a description of how the applicant will encourage
service in areas of national need, as identified by the Secretary.
(8) EVALUATION.—The Secretary may establish requirements for program evaluations and require grant recipients to
submit annual reports that evaluate the progress and performance of students participating in programs assisted under this
subsection.
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(b) PROGRAMS OF NATIONAL SIGNIFICANCE.—The Secretary may
also award grants to public and private nonprofit agencies and organizations, including professional and scholarly associations,
whenever the Secretary determines such grants will make an especially significant contribution to improving undergraduate international studies and foreign language programs.
(c) FUNDING SUPPORT.—
(1) IN GENERAL.—The Secretary may use not more than 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 ten percent of such funds for the activity described
in subsection (a)(2)(I).
SEC. 605. ø20 U.S.C. 1125¿ RESEARCH; STUDIES; ANNUAL REPORT.
(a) AUTHORIZED ACTIVITIES.—The Secretary may, directly
or
through grants or contracts, conduct research and studies that contribute to achieving the purposes of this part. Such research and
studies may include—
(1) studies and surveys to determine needs for increased or
improved instruction in foreign language, area studies, or other
international fields, including the demand for foreign language,
area, and other international specialists in government, education, and the private sector;
(2) studies and surveys to assess the utilization of graduates of programs supported under this title by governmental,
educational, and private sector organizations and other studies
assessing the outcomes and effectiveness of programs so supported;
(3) evaluation of the extent to which programs assisted
under this title that address national needs would not otherwise be offered;
(4) comparative studies of the effectiveness of strategies to
provide international capabilities at institutions of higher education;
(5) research on more effective methods of providing instruction and achieving competency in foreign languages, area
studies, or other international fields;
(6) the development and publication of specialized materials for use in foreign language, area studies, and other international fields, or for training foreign language, area, and
other international specialists;
(7) studies and surveys of the uses of technology in foreign
language, area studies, and international studies programs;
(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;
(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
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of views and generate debate on world regions and international affairs, as described in the grantee’s application;
(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.
(b) ANNUAL REPORT.—The Secretary shall prepare, publish,
and announce an annual report listing the books and research materials produced with assistance under this section.
SEC. 606. ø20 U.S.C. 1126¿ TECHNOLOGICAL INNOVATION AND COOPERATION FOR FOREIGN INFORMATION ACCESS.
(a) AUTHORITY.—
(1) IN GENERAL.—The Secretary is authorized to make
grants to institutions of higher education, public or nonprofit
private libraries, or partnerships between such institutions and
other such institutions, libraries, or nonprofit educational organizations, to develop innovative techniques or programs using
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.
(2) GRANT RECIPIENTS.—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 partnership of an institution of higher education
and one or more of the following:
(i) Another institution of higher education.
(ii) A library.
(iii) A nonprofit educational organization.
(b) AUTHORIZED ACTIVITIES.—Grants under this section may be
used—
(1) to acquire, facilitate access to, or preserve foreign information resources in print or electronic forms;
(2) to develop new means of immediate, full-text document
delivery for information and scholarship from abroad;
(3) to develop new means of or standards for shared electronic access to international data;
(4) to support collaborative projects of indexing, cataloging,
and other means of bibliographic access for scholars to important research materials published or distributed outside the
United States;
(5) to develop methods for the wide dissemination of resources written in non-Roman language alphabets;
(6) to assist teachers of less commonly taught languages in
acquiring, via electronic and other means, materials suitable
for classroom use;
(7) to promote collaborative technology based projects in
foreign languages, area studies, and international studies
among grant recipients under this title;
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(8) to establish linkages to facilitate carrying out the activities described in this subsection between—
(A) the institutions of higher education, libraries, and
partnerships receiving grants under this section; and
(B) institutions of higher education, nonprofit educational organizations, and libraries overseas; and
(9) to carry out other activities that the Secretary determines are consistent with the purpose of the grants awarded
under this section.
(c) APPLICATION.—Each institution of higher education, library,
or 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 and assurances as the Secretary
may reasonably require.
(d) MATCH REQUIRED.—The Federal share of the total cost of
carrying out a program supported by a grant under this section
shall not be more than 662⁄3 percent. The non-Federal share of such
cost may be provided either in-kind or in cash, and may include
contributions from private sector corporations or foundations.
SEC. 607. ø20 U.S.C. 1127¿ SELECTION OF CERTAIN GRANT RECIPIENTS.
(a) COMPETITIVE GRANTS.—The Secretary shall award grants
under section 602 competitively on the basis of criteria that
separately, but not less rigorously, evaluates—
(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 objectives of graduate
and undergraduate institutions. In keeping with the purposes of
this part, the Secretary shall take into account the degree to which
activities of centers, programs, and fellowships at institutions of
higher education address national needs, and generate information
for and disseminate information to the public. The Secretary shall
also consider an applicant’s record of placing students into postgraduate employment, education, or training in areas of national
need and an applicant’s stated efforts to increase the number of
such students that go into such placements.
(c) EQUITABLE DISTRIBUTION OF GRANTS.—The Secretary shall,
to the extent practicable, award grants under this part (other than
section 602) in such manner as to achieve an equitable distribution
of the grant funds throughout the United States, based on the
merit of a proposal as determined pursuant to a peer review process involving broadly representative professionals.
SEC. 608. ø20 U.S.C. 1128¿ EQUITABLE DISTRIBUTION OF CERTAIN
FUNDS.
(a) SELECTION CRITERIA.—The Secretary shall make excellence
the criterion for selection of grants awarded under section 602.
(b) EQUITABLE DISTRIBUTION.—To the extent practicable and
consistent with the criterion of excellence, the Secretary shall
award grants under this part (other than section 602) in such a
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manner as will achieve an equitable distribution of funds throughout the United States.
(c) SUPPORT FOR UNDERGRADUATE EDUCATION.—The Secretary
shall also award grants under this part in such manner as to ensure that an appropriate portion of the funds appropriated for this
part (as determined by the Secretary) are used to support undergraduate education.
SEC. 609. ø20 U.S.C. 1128a¿ AMERICAN OVERSEAS RESEARCH CENTERS.
(a) CENTERS AUTHORIZED.—The Secretary is authorized to
make grants to and enter into contracts with any American overseas research center that is a consortium of institutions of higher
education (hereafter in this section referred to as a ‘‘center’’) to enable such center to promote postgraduate research, exchanges and
area studies.
(b) USE OF GRANTS.—Grants made and contracts entered into
pursuant to this section may be used to pay all or a portion of the
cost of establishing or operating a center or program,
including—
(1) the cost of faculty and staff stipends and salaries;
(2) the cost of faculty, staff, and student travel;
(3) the cost of the operation and maintenance of overseas
facilities;
(4) the cost of teaching and research materials;
(5) the cost of acquisition, maintenance, and preservation
of library collections;
(6) the cost of bringing visiting scholars and faculty to a
center to teach or to conduct research;
(7) the cost of organizing and managing conferences; and
(8) the cost of publication and dissemination of material
for the scholarly and general public.
(c) LIMITATION.—The Secretary shall only award grants to and
enter into contracts with centers under this section that—
(1) receive more than 50 percent of their funding from public or private United States sources;
(2) have a permanent presence in the country in which the
center is located; and
(3) are organizations described in section 501(c)(3) of the
Internal Revenue Code of 1986 which are exempt from taxation
under section 501(a) of such Code.
(d) DEVELOPMENT GRANTS.—The Secretary is authorized to
make grants for the establishment of new centers. The grants may
be used to fund activities that, within 1 year, will result in the creation of a center described in subsection (c).
(e) APPLICATION.—Each center desiring to receive a grant or
contract 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.
SEC. 610. ø20 U.S.C. 1128b¿ AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this part
such sums as may be necessary for fiscal year 2009, and such sums
as may be necessary for each of the five succeeding fiscal years.
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HIGHER EDUCATION ACT OF 1965
Sec. 612
PART B—BUSINESS AND INTERNATIONAL
EDUCATION PROGRAMS
SEC. 611. ø20 U.S.C. 1130¿ FINDINGS AND PURPOSES.
(a) FINDINGS.—The Congress finds that—
(1) the future economic welfare of the United States will
depend substantially on increasing international skills in the
business and educational community and creating an awareness among the American public of the internationalization of
our economy;
(2) concerted efforts are necessary to engage business
schools, language and area study programs, professional international affairs education programs, public and private sector
organizations, and United States business in a mutually productive relationship which benefits the Nation’s future economic interests;
(3) few linkages presently exist between the manpower
and information needs of United States business and the international education, language training and research capacities
of institutions of higher education in the United States, and
public and private organizations; and
(4) organizations such as world trade councils, world trade
clubs, chambers of commerce and State departments of commerce are not adequately used to link universities and business for joint venture exploration and program development.
(b) PURPOSES.—It is the purpose of this part—
(1) to enhance the broad objective of this Act by increasing
and promoting the Nation’s capacity for international understanding and economic enterprise through the provision of suitable international education and training for business personnel in various stages of professional development; and
(2) to promote institutional and noninstitutional educational and training activities that will contribute to the ability of United States business to prosper in an international
economy.
SEC. 612. ø20 U.S.C. 1130–1¿ CENTERS FOR INTERNATIONAL BUSINESS
EDUCATION.
(a) PROGRAM AUTHORIZED.—
(1) PURPOSE.—The purpose of this section is to coordinate
the programs of the Federal Government in the areas of research, education, and training in international business and
trade competitiveness.
(2) IN GENERAL.—The Secretary is authorized to make
grants to institutions of higher education, or consortia of such
institutions, to pay the Federal share of the cost of planning,
establishing and operating centers for international business
education which—
(A) will be national resources for the teaching of improved business techniques, strategies, and methodologies
which emphasize the international context in which business is transacted;
(B) will provide instruction in critical foreign languages and international fields needed to provide underMay 7, 2013
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HIGHER EDUCATION ACT OF 1965
714
standing of the cultures and customs of United States
trading partners; and
(C) will provide research and training in the international aspects of trade, commerce, and other fields of
study.
(3) SPECIAL RULE.—In addition to providing training to
students enrolled in the institution of higher education in
which a center is located, such centers shall serve as regional
resources to businesses proximately located by offering programs and providing research designed to meet the international training needs of such businesses. Such centers shall
also serve other faculty, students, and institutions of higher
education located within their region.
(b) AUTHORIZED EXPENDITURES.—Each grant made under this
section may be used to pay the Federal share of the cost of planning, establishing or operating a center, including the cost of—
(1) faculty and staff travel in foreign areas, regions, or
countries;
(2) teaching and research materials;
(3) curriculum planning and development;
(4) bringing visiting scholars and faculty to the center to
teach or to conduct research; and
(5) training and improvement of the staff, for the purpose
of, and subject to such conditions as the Secretary finds necessary for, carrying out the objectives of this section.
(c) AUTHORIZED ACTIVITIES.—
(1) MANDATORY ACTIVITIES.—Programs and activities to be
conducted by centers assisted under this section shall include—
(A) interdisciplinary programs which incorporate foreign language and international studies training into business, finance, management, communications systems, and
other professional curricula;
(B) interdisciplinary programs which provide business,
finance, management, communications systems, and other
professional training for foreign language and international studies faculty and degree candidates;
(C) programs, such as intensive language programs,
available to members of the business community and other
professionals which are designed to develop or enhance
their international skills, awareness, and expertise;
(D) collaborative programs, activities, or research involving other institutions of higher education, local educational agencies, professional associations, businesses,
firms, or consortia thereof, to promote the development of
international skills, awareness, and expertise among current and prospective members of the business community
and other professionals;
(E) research designed to strengthen and improve the
international aspects of business and professional education and to promote integrated curricula; and
(F) research designed to promote the international
competitiveness of American businesses and firms, including those not currently active in international trade.
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HIGHER EDUCATION ACT OF 1965
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(2) PERMISSIBLE ACTIVITIES.—Programs and activities to be
conducted by centers assisted under this section may include—
(A) the establishment of overseas internship programs
for students and faculty designed to provide training and
experience in international business activities, except that
no Federal funds provided under this section may be used
to pay wages or stipends to any participant who is engaged
in compensated employment as part of an internship program;
(B) the establishment of linkages overseas with institutions of higher education and other organizations that
contribute to the educational objectives of this section;
(C) summer institutes in international business, foreign area studies, foreign language studies, and other
international studies designed to carry out the purposes of
subparagraph (A) of this paragraph;
(D) the development of opportunities for business students to study abroad in locations which are important to
the existing and future economic well-being of the United
States;
(E) outreach activities or consortia with business programs located at other institutions of higher education (including those that are eligible to receive assistance under
part A or B of title III or under title V) for the purpose
of providing expertise regarding the internationalization of
such programs, such as assistance in research, curriculum
development, faculty development, or educational exchange
programs;
(F) programs encouraging the advancement and understanding of technology-related disciplines, including
manufacturing software systems and technology management; and
(G) other eligible activities prescribed by the Secretary.
(d) ADVISORY COUNCIL.—
(1) ESTABLISHMENT.—In order to be eligible for assistance
under this section, an institution of higher education, or consortium of such institutions, shall establish a center advisory
council which will conduct extensive planning prior to the establishment of a center concerning the scope of the center’s activities and the design of its programs.
(2) MEMBERSHIP ON ADVISORY COUNCIL.—The center advisory council shall include—
(A) one representative of an administrative department or office of the institution of higher education;
(B) one faculty representative of the business or management school or department of such institution;
(C) one faculty representative of the international
studies or foreign language school or department of such
institution;
(D) one faculty representative of another professional
school or department of such institution, as appropriate;
(E) one or more representatives of local or regional
businesses or firms;
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(F) one representative appointed by the Governor of
the State in which the institution of higher education is located whose normal responsibilities include official oversight or involvement in State-sponsored trade-related activities or programs; and
(G) such other individuals as the institution of higher
education deems appropriate, such as a representative of
a community college in the region served by the center.
(3) MEETINGS.—In addition to the initial planning activities required under subsection (d)(1), the center advisory council shall meet not less than once each year after the establishment of the center to assess and advise on the programs and
activities conducted by the center.
(e) GRANT DURATION; FEDERAL SHARE.—
(1) DURATION OF GRANTS.—The Secretary shall make
grants under this section for a minimum of 3 years unless the
Secretary determines that the provision of grants of shorter
duration is necessary to carry out the objectives of this section.
(2) FEDERAL SHARE.—The Federal share of the cost of planning, establishing and operating centers under this section
shall be—
(A) not more than 90 percent for the first year in
which Federal funds are received;
(B) not more than 70 percent for the second such year;
and
(C) not more than 50 percent for the third such year
and for each such year thereafter.
(3) NON-FEDERAL SHARE.—The non-Federal share of the
cost of planning, establishing, and operating centers under this
section may be provided either in cash or in-kind.
(4) WAIVER OF NON-FEDERAL SHARE.—In the case of an institution of higher education receiving a grant under this part
and conducting outreach or consortia activities with another
institution of higher education in accordance with section
612(c)(2)(E), the Secretary may waive a portion of the requirements for the non-Federal share required in paragraph (2)
equal to the amount provided by the institution of higher education receiving such grant to such other institution of higher
education for carrying out such outreach or consortia activities.
Any such waiver shall be subject to such terms and conditions
as the Secretary deems necessary for carrying out the purposes
of this section.
(f) GRANT CONDITIONS.—Grants under this section shall be
made on such conditions as the Secretary determines to be necessary to carry out the objectives of this section. Such conditions
shall include—
(1) evidence that the institution of higher education, or
consortium of such institutions, will conduct extensive planning prior to the establishment of a center concerning the
scope of the center’s activities and the design of its programs
in accordance with subsection (d)(1);
(2) assurance of ongoing collaboration in the establishment
and operation of the center by faculty of the business, management, foreign language, international studies, professional
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HIGHER EDUCATION ACT OF 1965
Sec. 613
international affairs, and other professional schools or departments, as appropriate;
(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 that diverse perspectives will be made available to students in programs under
this section; and
(4) assurance that the institution of higher education, or
consortium of such institutions, will use the assistance provided under this section to supplement and not to supplant activities conducted by institutions of higher education described
in subsection (c)(1).
SEC. 613. ø20 U.S.C. 1130a¿ EDUCATION AND TRAINING PROGRAMS.
(a) PROGRAM AUTHORIZED.—The Secretary shall make grants
to, and enter into contracts with, institutions of higher education
to pay the Federal share of the cost of programs designed to promote linkages between such institutions and the American business community engaged in international economic activity. Each
program assisted under this section shall both enhance the international academic programs of institutions of higher education and
provide appropriate services to the business community which will
expand its capacity to engage in commerce abroad.
(b) AUTHORIZED ACTIVITIES.—Eligible activities to be conducted
by institutions of higher education pursuant to grants or contracts
awarded under this section shall include—
(1) innovation and improvement in international education
curricula to serve the needs of the business community, including development of new programs for nontraditional, mid-career, or part-time students;
(2) development of programs to inform the public of increasing international economic interdependence and the role
of American business within the international economic system;
(3) internationalization of curricula at the junior and community college level, and at undergraduate and graduate
schools of business;
(4) development of area studies programs, and interdisciplinary international programs;
(5) establishment of export education programs through cooperative arrangements with regional and world trade centers
and councils, and with bilateral and multilateral trade associations;
(6) research for and development of specialized teaching
materials, including language materials, and facilities appropriate to business-oriented students;
(7) establishment of student and faculty fellowships and
internships for training and education in international business activities;
(8) development of opportunities for junior business and
other professional school faculty to acquire or strengthen international skills and perspectives;
(9) development of research programs on issues of common
interest to institutions of higher education and private sector
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718
organizations and associations engaged in or promoting international economic activity;
(10) the establishment of internships overseas to enable
foreign language students to develop their foreign language
skills and knowledge of foreign cultures and societies;
(11) the establishment of linkages overseas with institutions of higher education and organizations that contribute to
the educational objectives of this section; and
(12) summer institutes in international business, foreign
area and other international studies designed to carry out the
purposes of this section.
(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.
(d) FEDERAL SHARE.—The Federal share under this part for
each fiscal year shall not exceed 50 percent of the cost of such program.
SEC. 614. ø20 U.S.C. 1130b¿ AUTHORIZATION OF APPROPRIATIONS.
(a) CENTERS FOR INTERNATIONAL BUSINESS EDUCATION.—There
are authorized to be appropriated such sums as may be necessary
for the fiscal year 2009 and such sums as may be necessary for
each of the five succeeding fiscal years to carry out the provisions
of section 612.
(b) EDUCATION AND TRAINING PROGRAMS.—There are authorized to be appropriated such sums as may be necessary for fiscal
year 2009, and such sums as may be necessary for the five succeeding fiscal years, to carry out the provisions of section 613.
PART C—INSTITUTE FOR INTERNATIONAL
PUBLIC POLICY
SEC. 621. ø20 U.S.C. 1131¿ MINORITY FOREIGN SERVICE PROFESSIONAL
DEVELOPMENT PROGRAM.
(a) ESTABLISHMENT.—The Secretary is authorized to award a
grant, on a competitive basis, to an eligible recipient to enable such
recipient to establish an Institute for International Public Policy
(hereafter in this part referred to as the ‘‘Institute’’). The Institute
shall conduct a program to enhance the international competitiveMay 7, 2013
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719
HIGHER EDUCATION ACT OF 1965
Sec. 622
ness of the United States by increasing the participation of underrepresented populations in the international service, including private international voluntary organizations and the foreign service
of the United States. Such program shall include a program for
such students to study abroad in their junior year, fellowships for
graduate study, internships, intensive academic programs such as
summer institutes, or intensive language training.
(b) DEFINITION OF ELIGIBLE RECIPIENT.—
(1) IN GENERAL.—For the purpose of this part, the term
‘‘eligible recipient’’ means a consortium consisting of 1 or more
of the following entities:
(A) An institution eligible for assistance under part B
of title III of this Act.
(B) A tribally controlled college or university or Alaska
Native or Native Hawaiian-serving institution eligible for
assistance under part A or B of title III, or an institution
eligible for assistance under title V.
(C) An institution of higher education that serves substantial numbers of underrepresented minority students.
(D) An institution of higher education with programs
in training foreign service professionals.
(2) HOST INSTITUTION.—Each eligible recipient receiving a
grant under this section shall designate an institution of higher education as the host institution for the Institute.
(c) APPLICATION.—
(1)IN GENERAL.—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.
(2) CONTENT OF APPLICATION.—Each application submitted
under paragraph (1) shall include a description 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.
(d) DURATION.—Grants made pursuant to this section shall be
awarded for a period not to exceed 5 years.
(e) MATCH REQUIRED.—The eligible recipient of a grant under
this section shall contribute to the conduct of the program supported by the grant an amount from non-Federal sources equal to
at least one-half the amount of the grant, which contribution may
be in cash or in kind.
SEC. 622. ø20 U.S.C. 1131–1¿ INSTITUTIONAL DEVELOPMENT.
(a) IN GENERAL.—The Institute shall award grants,
from
amounts available to the Institute for each fiscal year, to historically Black colleges and universities, Hispanic-serving institutions,
tribally controlled colleges or universities, and minority institutions, to enable such colleges, universities, and institutions to
strengthen international affairs, international business, and foreign
language study programs, including the teaching of foreign languages, at such colleges, universities, and institutions, respectively,
which may include collaboration with institutions of higher education that receive funding under this title.
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(b) APPLICATION.—No grant may be made by the Institute unless an application is made by the college, university, or institution
at such time, in such manner, and accompanied by such information as the Institute may require.
(c) DEFINITIONS.—In this section—
(1) the term ‘‘Hispanic-serving institution’’ has the meaning given the term in section 502; and
(2) the term ‘‘minority institution’’ has the meaning given
the term in section 365.
SEC. 623. ø20 U.S.C. 1131a¿ 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, tribally controlled colleges or universities, Alaska Nativeserving, Native Hawaiian-serving, and Hispanic-serving institutions, and other institutions of higher education with significant
minority student populations. Eligible student expenses shall be
shared by the Institute and the institution at which the student is
in attendance. Each student may spend not more than 9 months
abroad in a program of academic study, as well as social, familial
and political interactions designed to foster an understanding of
and familiarity with the language, culture, economics and governance of the host country.
(b) DEFINITION OF ELIGIBLE STUDENT.—For the purpose of this
section, the term ‘‘eligible student’’ means a student that is—
(1) enrolled full-time in a baccalaureate degree program at
an institution of higher education; and
(2) entering the third year of study, or completing the
third year of study in the case of a summer abroad program,
at an institution of higher education which nominates such
student for participation in the study abroad program.
(c) SPECIAL RULE.—An institution of higher education desiring
to send a student on the study abroad program shall enter into a
Memorandum of Understanding with the Institute under which
such institution of higher education agrees to—
(1) provide the requisite academic preparation for students
participating in the study abroad or internship programs;
(2) pay one-third the cost of each student it nominates for
participation in the study abroad program; and
(3) meet such other requirements as the Secretary may
from time to time, by regulation, reasonably require.
SEC. 624. ø20 U.S.C. 1131b¿ 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 an advanced degree in international relations,
international affairs, international economics, or other academic
areas related to the Institute fellow’s career objectives. The advanced degree study program shall be designed by the consortia,
consistent with the fellow’s career objectives, and shall be reviewed
and approved by the Secretary. The Institute may grant fellowships in an amount not to exceed the level of support comparable
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HIGHER EDUCATION ACT OF 1965
Sec. 625
to that provided by the National Science Foundation graduate fellowships, except such amount shall be adjusted as necessary so as
not to exceed the fellow’s demonstrated level of need according to
measurement of need approved by the Secretary. A fellowship recipient shall agree to undertake full-time study and to enter the
international service (including work with private international
voluntary organizations) or foreign service of the United States.
SEC. 625. ø20 U.S.C. 1131c¿ INTERNSHIPS.
(a) IN GENERAL.—The Institute shall
enter into agreements
with historically Black colleges and universities, tribally controlled
colleges or universities, Alaska Native-serving, Native Hawaiianserving, and Hispanic-serving institutions, other institutions of
higher education with significant numbers of minority students,
and institutions of higher education with programs in training foreign service professionals, to provide academic year internships
during the junior and senior year and summer internships following the sophomore and junior academic years, by work placements with international, voluntary or government organizations
or agencies, including the Agency for International Development, 1
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.
(b) POSTBACCALAUREATE INTERNSHIPS.—The Institute shall
enter into agreements with institutions of higher education described in the first sentence of subsection (a) to conduct internships
for students who have completed study for a baccalaureate degree.
The internship program authorized by this subsection shall—
(1) assist the students to prepare for a master’s degree program;
(2) be carried out with the assistance of the Woodrow Wilson International Center for Scholars; and
(3) contain work experience for the students designed to
contribute to the students’ preparation for a master’s degree
program.
(c) INTERAGENCY COMMITTEE ON MINORITY CAREERS IN INTERNATIONAL AFFAIRS.—
(1) ESTABLISHMENT.—There is established in the executive
branch of the Federal Government an Interagency Committee
on Minority Careers in International Affairs composed of not
less than 7 members, including—
(A) the Under Secretary for Farm and Foreign Agricultural Services of the Department of Agriculture, or the
Under Secretary’s designee;
(B) the Assistant Secretary and Director General, of
the United States and Foreign Commercial Service of the
Department of Commerce, or the Assistant Secretary and
Director General’s designee;
1 The apparent
110–315) was to
State’’. However,
by section 1335(j)
May 7, 2013
intention of section 616(1)(D) of the Higher Education Opportunity Act (P.L.
replace ‘‘the United States Information Agency’’ with ‘‘the Department of
the reference to ‘‘United States Information Agency’’ was apparently deleted
of division G of Public Law 105–277.
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HIGHER EDUCATION ACT OF 1965
722
(C) the Under Secretary of Defense for Personnel and
Readiness of the Department of Defense, or the Under Secretary’s designee;
(D) the Assistant Secretary for Postsecondary Education in the Department of Education, or the Assistant
Secretary’s designee;
(E) the Director General of the Foreign Service of the
Department of State, or the Director General’s designee;
and
(F) the General Counsel of the Agency for International Development, or the General Counsel’s designee.
(2) FUNCTIONS.—The Interagency Committee established
by this section shall—
(A) on an annual basis inform the Secretary and the
Institute regarding ways to advise students participating
in the internship program assisted under this section with
respect to goals for careers in international affairs;
(B) locate for students potential internship opportunities in the Federal Government related to international affairs; and
(C) promote policies in each department and agency
participating in the Committee that are designed to carry
out the objectives of this part.
SEC. 626. ø20 U.S.C. 1131c–1¿ 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 low-income 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.
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HIGHER EDUCATION ACT OF 1965
Sec. 631
SEC. 627. ø20 U.S.C. 1131d¿ REPORT.
The Institute shall prepare a report once every two years on
the activities of the Institute and shall submit such report to the
Secretary of Education and the Secretary of State.
SEC. 628. ø20 U.S.C. 1131e¿ GIFTS AND DONATIONS.
The Institute is authorized to receive money and other property donated, bequeathed, or devised to the Institute with or without a condition of restriction, for the purpose of providing financial
support for the fellowships or underwriting the cost of the Junior
Year Abroad Program. All funds or property given, devised, or bequeathed shall be retained in a separate account, and an accounting of those funds and property shall be included in the report described in section 627.
SEC. 629. ø20 U.S.C. 1131f¿ AUTHORIZATION.
There is authorized to be appropriated such sums as may be
necessary for fiscal year 2009 and such sums as may be necessary
for each of the five succeeding fiscal years to carry out this part.
PART D—GENERAL PROVISIONS
SEC. 631. ø20 U.S.C. 1132¿ DEFINITIONS.
(a) DEFINITIONS.—As used in this
title—
(1) the term ‘‘area studies’’ means a program of comprehensive study of the aspects of a society or societies, including study of its history, culture, economy, politics, international
relations and languages;
(2) the term ‘‘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 1
(3) 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;
(4) 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;
(5) the term ‘‘historically Black college and university’’ has
the meaning given the term ‘‘part B institution’’ in section 322;
(6) 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
1 So
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HIGHER EDUCATION ACT OF 1965
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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;
(7) 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;
(8) 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;
(9) the term ‘‘tribally controlled college or university’’ has
the meaning given the term in section 2 of the Tribally Controlled Colleges and Universities Assistance Act of 1978 (25
U.S.C. 1801); and
(10) the term ‘‘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.
(b) SPECIAL CONDITIONS.—All references to individuals or organizations, unless the context otherwise requires, mean individuals
who are citizens or permanent residents of the United States or organizations which are organized or incorporated in the United
States.
SEC. 632. ø20 U.S.C. 1132–1¿ SPECIAL RULE.
The Secretary may waive or reduce the non-Federal share required under this title for institutions that—
(1) are eligible to receive assistance under part A or B of
title III or under title V; and
(2) have submitted a grant application under this section
that demonstrates a need for a waiver or reduction, as determined by the Secretary.
SEC. 633. ø20 U.S.C. 1132–2¿ 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.
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SEC. 634. ø20 U.S.C. 1132–3¿ ASSESSMENT.
The Secretary is authorized to assess and ensure compliance
with all the conditions and terms of grants provided under this
title.
SEC. 635. ø20 U.S.C. 1132–4¿ EVALUATION, OUTREACH, AND INFORMATION.
The Secretary may use not more than one 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.
SEC. 636. ø20 U.S.C. 1132–5¿ REPORT.
The Secretary shall, in consultation and collaboration with the
Secretary of State, the Secretary of Defense, and the heads of other
relevant Federal agencies, submit a report once every two years
that identifies areas of national need in foreign language, area, and
international studies as such studies relate to government, education, business, and nonprofit needs, and a plan to address those
needs. The report shall be provided to the authorizing committees
and made available to the public.
SEC. 637. ø20 U.S.C. 1132–6¿ SCIENCE AND TECHNOLOGY ADVANCED
FOREIGN LANGUAGE EDUCATION GRANT PROGRAM.
(a) PURPOSE.—It is the purpose of this section to support pro-
grams in institutions of higher education that—
(1) encourage students to develop—
(A) an understanding of science and technology; and
(B) foreign language proficiency;
(2) foster future international scientific collaboration;
(3) provide for professional development opportunities for
elementary school and secondary school teachers of critical foreign languages to increase the number of highly qualified
teachers in critical foreign languages; and
(4) increase the number of United States students who
achieve the highest level of proficiency in foreign languages
critical to the security and competitiveness of the Nation.
(b) DEVELOPMENT.—The Secretary shall develop a program for
the awarding of grants to institutions of higher education that develop innovative programs for the teaching of foreign languages,
which may include the preparation of teachers to teach foreign languages.
(c) REGULATIONS AND REQUIREMENTS.—The Secretary shall
promulgate regulations for the awarding of grants under subsection
(b). Such regulations may require institutions of higher education
to use grant funds for, among other things—
(1) the development of an on-campus cultural awareness
program by which students attend classes taught in a foreign
language and study the science and technology developments
and practices in a non-English speaking country;
(2) immersion programs where students take science or
technology related course work in a non-English speaking
country;
(3) other programs, such as summer workshops, that emphasize the intense study of a foreign language and science
technology;
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(4) if applicable, recruiting highly qualified teachers in
critical foreign languages, and providing professional development activities for such teachers at the elementary school and
secondary school levels; and
(5) providing innovative opportunities for students that
will allow for critical language learning, such as immersion environments, intensive study opportunities, internships, and distance learning.
(d) GRANT DISTRIBUTION.—In distributing grants to institutions of higher education under this section, the Secretary shall
give priority to—
(1) institutions that have programs focusing on curricula
that combine the study of foreign languages and the study of
science and technology and produce graduates who have both
skills; and
(2) institutions teaching critical foreign languages.
(e) REPORT ON BEST PRACTICES.—Not later than one year after
the date of enactment of this section, the Secretary shall—
(1) conduct a study to identify the best practices to
strengthen the role of institutions of higher education that receive funding under title III or title V in increasing the critical
foreign language education efforts in the United States; and
(2) submit a report on the results of such study to the authorizing committees.
(f) APPROPRIATIONS AUTHORIZED.—There are authorized to be
appropriated to carry out this section, such sums as may be necessary for fiscal year 2009 and for each subsequent fiscal year.
SEC. 638. ø20 U.S.C. 1132–7¿ REPORTING BY INSTITUTIONS.
(a) APPLICABILITY.—The data requirement in subsection
(b)
shall apply to an institution of higher education that receives funds
for a center or program under this title if—
(1) the amount of the contribution (including cash and the
fair market value of any property) received from any foreign
government or from a foreign private sector corporation or
foundation during any fiscal year exceeds $250,000 in the aggregate; and
(2) the aggregate contribution, or a significant part of the
aggregate contribution, is to be used by a center or program receiving funds under this title.
(b) DATA REQUIRED.—The Secretary shall require an institution of higher education referred to in subsection (a) to report information listed in subsection (a) to the Secretary consistent with the
requirements of section 117.
TITLE VII—GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS
SEC. 700. ø20 U.S.C. 1133¿ 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 fiMay 7, 2013
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HIGHER EDUCATION ACT OF 1965
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nancial 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 science, technology, engineering, and mathematics; and
(ii) encourage talented students to pursue scholarly careers in the humanities, social sciences, and the
arts; and
(2) to promote postsecondary programs.
PART A—GRADUATE EDUCATION PROGRAMS
Subpart 1—Jacob K. Javits Fellowship Program
SEC. 701. ø20 U.S.C. 1134¿ AWARD OF JACOB K. JAVITS FELLOWSHIPS.
(a) AUTHORITY AND TIMING OF AWARDS.—The Secretary is au-
thorized to award fellowships in accordance with the provisions of
this subpart for graduate study in the arts, humanities, and social
sciences by students of superior ability selected on the basis of
demonstrated achievement, financial need, and exceptional promise. The fellowships shall be awarded to students who are eligible
to receive any grant, loan, or work assistance pursuant to section
484 and intend to pursue a doctoral degree, except that fellowships
may be granted to students pursuing a master’s degree in those
fields in which the master’s degree is the terminal highest degree
awarded in the area of study. All funds appropriated in a fiscal
year shall be obligated and expended to the students for fellowships for use in the academic year beginning after July 1 of the fiscal year following the fiscal year for which the funds were appropriated. The fellowships shall be awarded for only 1 academic year
of study and shall be renewable for a period not to exceed 4 years
of study.
(b) DESIGNATION OF FELLOWS.—Students receiving awards
under this subpart shall be known as ‘‘Jacob K. Javits Fellows’’.
(c) INTERRUPTIONS OF STUDY.—The institution of higher education may allow a fellowship recipient to interrupt periods of
study for a period not to exceed 12 months for the purpose of work,
travel, or independent study away from the campus, if such independent study is supportive of the fellowship recipient’s academic
program and shall continue payments for those 12-month periods
during which the student is pursuing travel or independent study
supportive of the recipient’s academic program. In the case of other
exceptional circumstances, such as active duty military service or
personal or family member illness, the institution of higher education may also permit the fellowship recipient to interrupt periods
of study for the duration of the tour of duty (in the case of military
service) or for not more than 12 months (in any other case), but
without payment of the stipend.
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728
(d) PROCESS AND TIMING OF COMPETITION.—The Secretary
shall make applications for fellowships under this part available
not later than October 1 of the academic year preceding the academic year for which fellowships will be awarded, and shall announce the recipients of fellowships under this section not later
than March 1 of the academic year preceding the academic year for
which the fellowships are awarded.
(e) AUTHORITY TO CONTRACT.—The Secretary is authorized to
enter into a contract with a nongovernmental agency to administer
the program assisted under this part if the Secretary determines
that entering into the contract is an efficient means of carrying out
the program.
SEC. 702. ø20 U.S.C. 1134a¿ ALLOCATION OF FELLOWSHIPS.
(a) FELLOWSHIP BOARD.—
(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) appoint members who represent the various
geographic regions of the United States;
(iii) ensure that individuals appointed to the
Board are broadly representative of a range of disciplines in graduate education in arts, humanities, and
social sciences; and
(iv) ensure that such individuals include representatives from institutions that are eligible for one
or more of the grants under title III or V.
(2) DUTIES.—The Board shall—
(A) establish general policies for the program established by this subpart and oversee the program’s operation;
(B) establish general criteria for the award of fellowships in academic fields identified by the Board, or, in the
event that the Secretary enters into a contract with a nongovernmental entity to administer the program assisted
under this subpart, by such nongovernmental entity;
(C) appoint panels of academic scholars with distinguished backgrounds in the arts, humanities, and social
sciences for the purpose of selecting fellows, except that, in
the event that the Secretary enters into a contract with a
nongovernmental entity to administer the program, such
panels may be appointed by such nongovernmental entity;
and
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HIGHER EDUCATION ACT OF 1965
Sec. 702
(D) prepare and submit to the Congress at least once
in every 3-year period a report on any modifications in the
program that the Board determines are appropriate.
(3) CONSULTATIONS.—In carrying out its responsibilities,
the Board shall consult on a regular basis with representatives
of the National Science Foundation, the National Endowment
for the Humanities, the National Endowment for the Arts, and
representatives of institutions of higher education and associations of such institutions, learned societies, and professional organizations.
(4) TERM.—The term of office of each member of the Board
shall be 4 years, except that any member appointed to fill a vacancy shall serve for the remainder of the term for which the
predecessor of the member was appointed. No member may
serve for a period in excess of 6 years.
(5) INITIAL MEETING; VACANCY.—The Secretary shall call
the first meeting of the Board, at which the first order of business shall be the election of a Chairperson and a Vice Chairperson, who shall serve until 1 year after the date of the appointment of the Chairperson and Vice Chairperson. Thereafter each officer shall be elected for a term of 2 years. In case
a vacancy occurs in either office, the Board shall elect an individual from among the members of the Board to fill such vacancy.
(6) QUORUM; ADDITIONAL MEETINGS.—(A) A majority of the
members of the Board shall constitute a quorum.
(B) The Board shall meet at least once a year or more frequently, as may be necessary, to carry out the Board’s responsibilities.
(7) COMPENSATION.—Members of the Board, while serving
on the business of the Board, shall be entitled to receive compensation at rates fixed by the Secretary, but not exceeding the
rate of basic pay payable for level IV of the Executive Schedule, including travel time, and while so serving away from
their homes or regular places of business, the members may be
allowed travel expenses, including per diem in lieu of subsistence, as authorized by section 5703 of title 5, United States
Code, for persons in Government service employed intermittently.
(b) USE OF SELECTION PANELS.—The recipients of fellowships
shall be selected in each designated field from among all applicants
nationwide in each field by distinguished panels appointed by the
Board to make such selections under criteria established by the
Board, except that, in the event that the Secretary enters into a
contract with a nongovernmental entity to administer the program,
such panels may be appointed by such nongovernmental entity.
The number of recipients in each field in each year shall not exceed
the number of fellows allocated to that field for that year by the
Board.
(c) FELLOWSHIP PORTABILITY.—Each recipient shall be entitled
to use the fellowship in a graduate program at any accredited institution of higher education in which the recipient may decide to enroll.
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730
SEC. 703. ø20 U.S.C. 1134b¿ 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
2009–2010 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 Research Fellowship Program for
such academic year, except such amount shall be adjusted as necessary so as not to exceed the fellow’s demonstrated level of need
determined in accordance with part F of title IV.
(b) INSTITUTIONAL PAYMENTS.—
(1) IN GENERAL.—(A) The Secretary shall (in addition to
stipends paid to individuals under this subpart) pay to the institution of higher education, for each individual awarded a fellowship under this subpart at such institution, an institutional
allowance. Except as provided in subparagraph (B), such allowance shall be, for academic year 2009–2010 and succeeding
academic years, the same amount as the institutional payment
made for academic year 2008–2009, adjusted for academic year
2009–2010 and annually thereafter in accordance with inflation as determined by the Department of Labor’s Consumer
Price Index for the previous calendar year.
(B) The institutional allowance paid under subparagraph
(A) shall be reduced by the amount the institution charges and
collects from a fellowship recipient for tuition and other expenses as part of the recipient’s instructional program.
(2) SPECIAL RULES.—(A) Beginning March 1, 1992, any applicant for a fellowship under this subpart who has been notified in writing by the Secretary that such applicant has been
selected to receive such a fellowship and is subsequently notified that the fellowship award has been withdrawn, shall receive such fellowship unless the Secretary subsequently makes
a determination that such applicant submitted fraudulent information on the application.
(B) Subject to the availability of appropriations, amounts
payable to an institution by the Secretary pursuant to this subsection shall not be reduced for any purpose other than the
purposes specified under paragraph (1).
SEC. 704. ø20 U.S.C. 1134c¿ FELLOWSHIP CONDITIONS.
(a) REQUIREMENTS FOR RECEIPT.—An individual
awarded a fellowship under the provisions of this subpart shall continue to receive payments provided in section 703 only during such periods as
the Secretary finds that such individual is maintaining satisfactory
proficiency in, and devoting essentially full time to, study or research in the field in which such fellowship was awarded, in an institution of higher education, and is not engaging in gainful employment other than part-time employment by such institution in
teaching, research, or similar activities, approved by the Secretary.
(b) REPORTS FROM RECIPIENTS.—The Secretary is authorized to
require reports containing such information in such form and filed
at such times as the Secretary determines necessary from any perMay 7, 2013
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HIGHER EDUCATION ACT OF 1965
Sec. 711
son awarded a fellowship under the provisions of this subpart. The
reports shall be accompanied by a certificate from an appropriate
official at the institution of higher education, library, archive, or
other research center approved by the Secretary, stating that such
individual is making satisfactory progress in, and is devoting essentially full time to the program for which the fellowship was
awarded.
SEC. 705. ø20 U.S.C. 1134d¿ AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated $30,000,000 for fiscal
year 2009 and each of the five succeeding fiscal years to carry out
this subpart.
Subpart 2—Graduate Assistance in Areas of
National Need
SEC. 711. ø20 U.S.C. 1135¿ GRANTS TO ACADEMIC DEPARTMENTS AND
PROGRAMS OF INSTITUTIONS.
(a) GRANT AUTHORITY.—
(1) IN GENERAL.—The Secretary shall make grants to aca-
demic departments, programs and other academic units of institutions of higher education that provide courses of study
leading to a graduate degree, including a master’s or doctoral
degree, in order to enable such institutions to provide assistance to graduate students in accordance with this subpart.
(2) ADDITIONAL GRANTS.—The Secretary may also make
grants to such departments, programs and other academic
units of institutions of higher education granting graduate degrees which submit joint proposals involving nondegree granting institutions which have formal arrangements for the support of doctoral dissertation research with degree-granting institutions. Nondegree granting institutions eligible for awards
as part of such joint proposals include any organization
which—
(A) is described in section 501(c)(3) of the Internal
Revenue Code of 1986, and is exempt from tax under section 501(a) of such Code;
(B) is organized and operated substantially to conduct
scientific and cultural research and graduate training programs;
(C) is not a private foundation;
(D) has academic personnel for instruction and counseling who meet the standards of the institution of higher
education in which the students are enrolled; and
(E) has necessary research resources not otherwise
readily available in such institutions to such students.
(b) AWARD AND DURATION OF GRANTS.—
(1) AWARDS.—The principal criterion for the award of
grants shall be the relative quality of the graduate programs
presented in competing applications. Consistent with an allocation of awards based on quality of competing applications, the
Secretary shall, in awarding such grants, promote an equitable
geographic distribution among eligible public and private institutions of higher education.
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(2)DURATION AND AMOUNT.—
(A) DURATION.—The Secretary shall award a grant
under this subpart for a period of 3 years.
(B) AMOUNT.—The Secretary shall award a grant to an
academic department, program or unit of an institution of
higher education under this subpart for a fiscal year in an
amount that is not less than $100,000 and not greater
than $750,000.
(3) REALLOTMENT.—Whenever the Secretary determines
that an academic department, program or unit of an institution
of higher education is unable to use all of the amounts available to the department, program or unit under this subpart,
the Secretary shall, on such dates during each fiscal year as
the Secretary may fix, reallot the amounts not needed to academic departments, programs and units of institutions which
can use the grants authorized by this subpart.
(c) PREFERENCE TO CONTINUING GRANT RECIPIENTS.—
(1) IN GENERAL.—The Secretary shall make new grant
awards under this subpart only to the extent that each previous grant recipient under this subpart has received continued funding in accordance with subsection (b)(2)(A).
(2) RATABLE REDUCTION.—To the extent that appropriations under this subpart are insufficient to comply with paragraph (1), available funds shall be distributed by ratably reducing the amounts required to be awarded under subsection
(b)(2)(A).
SEC. 712. ø20 U.S.C. 1135a¿ INSTITUTIONAL ELIGIBILITY.
(a) ELIGIBILITY CRITERIA.—Any academic department,
program
or unit of an institution of higher education that offers a program
of postbaccalaureate study leading to a graduate degree, including
a master’s or doctoral degree, in an area of national need (as designated under subsection (b)) may apply for a grant under this subpart. No department, program or unit shall be eligible for a grant
unless the program of postbaccalaureate study has been in existence for at least 4 years at the time of application for assistance
under this subpart.
(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 (as of the time of the designation) and future professional workforce needs of the United
States.
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HIGHER EDUCATION ACT OF 1965
SEC. 713. ø20 U.S.C. 1135b¿ CRITERIA FOR APPLICATIONS.
(a) SELECTION OF APPLICATIONS.—The Secretary
Sec. 713
shall make
grants to academic departments, programs and units of institutions
of higher education on the basis of applications submitted in accordance with subsection (b). Applications shall be ranked on program quality by review panels of nationally recognized scholars
and evaluated on the quality and effectiveness of the academic program and the achievement and promise of the students to be
served. To the extent possible (consistent with other provisions of
this section), the Secretary shall make awards that are consistent
with recommendations of the review panels.
(b) CONTENTS OF APPLICATIONS.—An academic department,
program or unit of an institution of higher education, in the department, program or unit’s application for a grant, shall—
(1) describe the current academic program of the applicant
for which the grant is sought;
(2) provide assurances that the applicant will provide,
from other non-Federal sources, for the purposes of the fellowship program under this subpart an amount equal to at least
25 percent of the amount of the grant received under this subpart, which contribution may be in cash or in kind, fairly valued;
(3) set forth policies and procedures to assure that, in
making fellowship awards under this subpart, the institution
will seek talented students from traditionally underrepresented backgrounds, as determined by the Secretary;
(4) describe the number, types, and amounts of the fellowships that the applicant intends to offer with grant funds provided under this part;
(5) set forth policies and procedures to assure that, in
making fellowship awards under this subpart, the institution
will make awards to individuals who—
(A) have financial need, as determined under part F of
title IV;
(B) have excellent academic records in their previous
programs of study; and
(C) plan to pursue the highest possible degree available in their course of study at the institution;
(6) set forth policies and procedures to ensure that Federal
funds made available under this subpart for any fiscal year
will be used to supplement and, to the extent practical, increase the funds that would otherwise be made available for
the purpose of this subpart and in no case to supplant those
funds;
(7) provide assurances that, in the event that funds made
available to the academic department, program or unit under
this subpart are insufficient to provide the assistance due a
student under the commitment entered into between the academic department, program or unit and the student, the academic department, program or unit will, from any funds available to the department, program or unit, fulfill the commitment to the student;
(8) provide that the applicant will comply with the limitations set forth in section 715;
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(9) provide assurances that the academic department will
provide at least 1 year of supervised training in instruction for
students; and
(10) include such other information as the Secretary may
prescribe.
SEC. 714. ø20 U.S.C. 1135c¿ AWARDS TO GRADUATE STUDENTS.
(a) COMMITMENTS TO GRADUATE STUDENTS.—
(1) IN GENERAL.—An academic department, program
or
unit of an institution of higher education shall make commitments to graduate students who are eligible students under
section 484 (including students pursuing a doctoral degree
after having completed a master’s degree program at an institution of higher education) at any point in their graduate study
to provide stipends for the length of time necessary for a student to complete the course of graduate study, but in no case
longer than 5 years.
(2) SPECIAL RULE.—No such commitments shall be made to
students under this subpart unless the academic department,
program or unit has determined adequate funds are available
to fulfill the commitment from funds received or anticipated
under this subpart, or from institutional funds.
(b) AMOUNT OF STIPENDS.—The Secretary shall make payments to institutions of higher education for the purpose of paying
stipends to individuals who are awarded fellowships under this
subpart. The stipends the Secretary establishes shall reflect the
purpose of the program under this subpart to encourage highly talented students to undertake graduate study as described in this
subpart. In the case of an individual who receives such individual’s
first stipend under this subpart in academic year 2009–2010 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 Research Fellowship Program for such academic year, except such amount shall be adjusted as necessary so as not to exceed
the fellow’s demonstrated level of need as determined under part
F of title IV.
(c) TREATMENT OF INSTITUTIONAL PAYMENTS.—An institution of
higher education that makes institutional payments for tuition and
fees on behalf of individuals supported by fellowships under this
subpart in amounts that exceed the institutional payments made
by the Secretary pursuant to section 715(a) may count such excess
toward the amounts the institution is required to provide pursuant
to section 713(b)(2).
(d) ACADEMIC PROGRESS REQUIRED.—Notwithstanding the provisions of subsection (a), no student shall receive an award—
(1) except during periods in which such student is maintaining satisfactory progress in, and devoting essentially full
time to, study or research in the field in which such fellowship
was awarded; or
(2) if the student is engaging in gainful employment other
than part-time employment involved in teaching, research, or
similar activities determined by the institution to be in support
of the student’s progress towards a degree.
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SEC. 715. ø20 U.S.C. 1135d¿ ADDITIONAL ASSISTANCE FOR COST OF
EDUCATION.
(a) INSTITUTIONAL PAYMENTS.—
(1) IN GENERAL.—The Secretary shall (in addition to sti-
pends 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 2009–2010 and succeeding academic years, the
same amount as the institutional payment made for 2008–2009
adjusted annually thereafter in accordance with inflation as
determined by the Department of Labor’s Consumer Price
Index for the previous calendar year.
(2) REDUCTION.—The institutional allowance paid under
paragraph (1) shall be reduced by the amount the institution
charges and collects from a fellowship recipient for tuition and
other expenses as part of the recipient’s instructional program.
(b) USE FOR OVERHEAD PROHIBITED.—Funds made available
pursuant to this subpart may not be used for the general operational overhead of the academic department or program.
SEC. 716. ø20 U.S.C. 1135e¿ AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated $35,000,000 for fiscal
year 2009 and each of the five succeeding fiscal years to carry out
this subpart.
Subpart 3—Thurgood Marshall Legal Educational
Opportunity Program
SEC. 721. ø20 U.S.C. 1136¿ LEGAL EDUCATIONAL OPPORTUNITY PROGRAM.
(a) PROGRAM AUTHORITY.—The Secretary shall carry out a pro-
gram to be known as the ‘‘Thurgood Marshall Legal Educational
Opportunity Program’’ designed to provide low-income, minority, or
disadvantaged secondary school and college students with the information, preparation, and financial assistance to gain access to
and complete law school study and admission to law practice.
(b) ELIGIBILITY.—A secondary school student or college student
is eligible for assistance under this section if the student is—
(1) from a low-income family;
(2) a minority; or
(3) from an economically or otherwise disadvantaged background.
(c) CONTRACT OR GRANT AUTHORIZED.—The Secretary is authorized to enter into a contract with, or make a grant to, the
Council on Legal Education Opportunity, for a period of not less
than 5 years—
(1) to identify secondary school and college students who
are from low-income families, are minorities, or are from disadvantaged backgrounds described in subsection (b)(3);
(2) to prepare such students for successful completion of a
baccalaureate degree and for study at accredited law schools,
and to assist them with the development of analytical skills,
writing skills, and study methods to enhance the students’ sucMay 7, 2013
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cess in, and promote the students’ admission to and completion
of, law school;
(3) to assist such students to select the appropriate law
school, make application for entry into law school, and receive
financial assistance for such study;
(4) to provide support services to such students who are
first-year law students to improve retention and success in law
school studies;
(5) to motivate and prepare such students—
(A) with respect to law school studies and practice in
low-income communities; and
(B) to provide legal services to low-income individuals
and families; and
(6) to award Thurgood Marshall Fellowships to eligible law
school students—
(A) who participated in summer institutes under subsection (d)(6) and who are enrolled in an accredited law
school; or
(B) who have successfully completed a comparable
summer institute program that is certified by the Council
on Legal Education Opportunity.
(d) SERVICES PROVIDED.—In carrying out the purposes described in subsection (c), the contract or grant shall provide for the
delivery of services through pre-college programs, undergraduate
prelaw information resource centers, summer institutes, midyear
seminars, and other educational activities, conducted under this
section. Such services may include—
(1) information and counseling regarding—
(A) accredited law school academic programs, especially tuition, fees, and admission requirements;
(B) course work offered and required for law school
graduation;
(C) faculty specialties and areas of legal emphasis; and
(D) pre-college and undergraduate preparatory courses
in analytical and writing skills, study methods, and course
selection;
(2) summer academic programs for secondary school students who have expressed interest in a career in the law;
(3) tutoring and academic counseling, including assistance
in preparing for bar examinations;
(4) prelaw mentoring programs, involving law school
faculty, members of State and local bar associations, and retired and sitting judges, justices, and magistrates;
(5) assistance in identifying preparatory courses and
material for the law school aptitude or admissions tests;
(6) summer institutes for Thurgood Marshall Fellows that
expose the Fellows to a rigorous curriculum that emphasizes
abstract thinking, legal analysis, research, writing, and examination techniques; and
(7) midyear seminars and other educational activities that
are designed to reinforce reading, writing, and studying skills
of Thurgood Marshall Fellows and Associates.
(e) DURATION OF THE PROVISION OF SERVICES.—The services
described in subsection (d) may be provided—
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(1) prior to the period of law school study, including before
and during undergraduate study;
(2) during the period of law school study; and
(3) during the period following law school study and prior
to taking a bar examination.
(f ) SUBCONTRACTS AND SUBGRANTS.—For the purposes of planning, developing, or delivering one or more of the services described
in subsection (d), the Council on Legal Education Opportunity shall
enter into subcontracts with, and make subgrants to, institutions
of higher education, law schools, public and private agencies and
organizations, national and State bar associations, and combinations of such institutions, schools, agencies, organizations, and associations.
(g) FELLOWSHIPS AND STIPENDS.—The Secretary shall annually
establish the maximum fellowship to be awarded, and the maximum stipend to be paid (including allowances for participant travel and for the travel of the dependents of the participant), to
Thurgood Marshall Fellows or Associates for the period of participation in summer institutes, midyear seminars, and bar preparation seminars. A Thurgood Marshall Fellow or Associate may be eligible for such a fellowship or stipend only if the Fellow or Associate maintains satisfactory academic progress toward the Juris
Doctor or Bachelor of Laws degree, as determined by the respective
institutions (except with respect to a law school graduate enrolled
in a bar preparation course).
(h) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section $5,000,000 for fiscal
year 2009 and each of the five succeeding fiscal years.
Subpart 4—Masters Degree Programs at Historically Black Colleges and Universities and Predominantly Black Institutions
SEC. 723. ø20 U.S.C. 1136a¿ MASTERS DEGREE PROGRAMS AT HISTORICALLY BLACK COLLEGES AND UNIVERSITIES.
(a) GRANT PROGRAM AUTHORIZED.—
(1) IN GENERAL.—Subject to the availability of funds appro-
priated to carry out this section, the Secretary shall award program grants to each of the institutions listed in subsection
(b)(1) that is determined by the Secretary to be making a substantial contribution to graduate education opportunities at the
masters level in mathematics, engineering, the physical or natural sciences, computer science, information technology, nursing, allied health, or other scientific disciplines for Black Americans.
(2) ASSURANCE OF NON-FEDERAL MATCHING FUNDS.—No
grant in excess of $1,000,000 may be made under this section
unless the institution provides assurances that 50 percent of
the cost of the purposes for which the grant is made will be
paid from non-Federal sources, except that no institution shall
be required to match any portion of the first $1,000,000 of the
institution’s award from the Secretary. After funds are made
available to each eligible institution under the funding rules
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described in subsection (f), the Secretary shall distribute, on a
pro rata basis, any amounts which were not so made available
(by reason of the failure of an institution to comply with the
matching requirements of this paragraph) among the institutions that have complied with such matching requirement.
(3) MINIMUM AWARD.—Subject to subsections (f) and (g),
the amount awarded to each eligible institution listed in subsection (b)(1) for a fiscal year shall be not less than $500,000.
(4) DURATION OF GRANTS.—A grant awarded under this
section shall be for a period of not more than six years, but
may be periodically renewed for a period to be determined by
the Secretary.
(b) INSTITUTIONAL ELIGIBILITY.—
(1) IN GENERAL.—Institutions eligible for grants under subsection (a) are the following:
(A) Albany State University.
(B) Alcorn State University.
(C) Claflin University.
(D) Coppin State University.
(E) Elizabeth City State University.
(F) Fayetteville State University.
(G) Fisk University.
(H) Fort Valley State University.
(I) Grambling State University.
(J) Kentucky State University.
(K) Mississippi Valley State University.
(L) Savannah State University.
(M) South Carolina State University.
(N) University of Arkansas, Pine Bluff.
(O) Virginia State University.
(P) West Virginia State University.
(Q) Wilberforce University.
(R) Winston-Salem State University.
(2) QUALIFIED MASTERS DEGREE PROGRAM.—
(A) IN GENERAL.—For the purposes of this section, the
term ‘‘qualified masters degree program’’ means a masters
degree program that provides a program of instruction in
mathematics, engineering, the physical or natural sciences,
computer science, information technology, nursing, allied
health, or other scientific disciplines in which African
Americans are underrepresented and has students enrolled
in such program of instruction at the time of application
for a grant under this section.
(B) ENROLLMENT EXCEPTION.—Notwithstanding the
enrollment requirement contained in subparagraph (A), an
institution may use an amount equal to not more than 10
percent of the institution’s grant under this section for the
development of a new qualified masters degree program.
(3) INSTITUTIONAL CHOICE.—The president or chancellor of
the institution may decide which graduate school or qualified
masters degree program will receive funds under the grant in
any one fiscal year, if the allocation of funds among the schools
or programs is delineated in the application for funds submitted to the Secretary under this section.
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(4) ONE GRANT PER INSTITUTION.—The Secretary shall not
award more than one grant under this section in any fiscal
year to any institution of higher education.
(c) APPLICATION.—An eligible institution listed in subsection
(b)(1) desiring a grant under this section shall submit an application at such time, in such manner, and containing such information
as the Secretary may require. The application shall—
(1) demonstrate how the grant funds under this section
will be used to improve graduate educational opportunities for
Black and low-income students, and lead to greater financial
independence; and
(2) provide, in the case of applications for grants in excess
of $1,000,000, the assurances required under subsection (a)(2)
and specify the manner in which the eligible institution is
going to pay the non-Federal share of the cost of the application.
(d) USES OF FUNDS.—A grant under this section may be used
for—
(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) scholarships, fellowships, and other financial assistance
for needy graduate students to permit the enrollment of the
students in, and completion of, a masters degree in mathematics, engineering, the physical or natural sciences, computer
science, information technology, nursing, allied health, or other
scientific disciplines in which African Americans are underrepresented;
(5) establishing or improving a development office to
strengthen and increase contributions from alumni and the private sector;
(6) assisting in the establishment or maintenance of an institutional endowment to facilitate financial independence pursuant to section 331;
(7) funds and administrative management, and the acquisition of equipment, including software, for use in strengthening funds management and management information systems;
(8) acquisition of real property that is adjacent to the campus in connection with the construction, renovation, or improvement of, or an addition to, campus facilities;
(9) education or financial information designed to improve
the financial literacy and economic literacy of students or the
students’ families, especially with regard to student indebtedness and student assistance programs under title IV;
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(10) tutoring, counseling, and student service programs designed to improve academic success;
(11) faculty professional development, faculty exchanges,
and faculty participation in professional conferences and meetings; and
(12) other activities proposed in the application submitted
under subsection (c) that—
(A) contribute to carrying out the purposes of this section; and
(B) are approved by the Secretary as part of the review and acceptance of such application.
(e) INTERACTION WITH OTHER GRANT PROGRAMS.—No institution that is eligible for and receives an award under section 326,
512, or 724 for a fiscal year shall be eligible to apply for a grant,
or receive grant funds, under this section for the same fiscal year.
(f) FUNDING RULE.—Subject to subsection (g), of the amount
appropriated to carry out this section for any fiscal year—
(1) the first $9,000,000 (or any lesser amount appropriated) shall be available only for the purposes of making
minimum grants under subsection (a)(3) to eligible institutions
listed in subparagraphs (A) through (R) of subsection (b)(1), except that if the amount appropriated is not sufficient to pay
the minimum grant awards to all such eligible institutions, the
amount of the minimum award to each such eligible institution
shall be ratably reduced;
(2) after the application of paragraph (1), an amount shall
be available for the purpose of making minimum grants under
subsection (a)(3) to eligible institutions listed in subsection
(b)(1) that do not receive a grant under paragraph (1), if any,
except that if the amount appropriated is not sufficient to pay
the minimum grant awards to all such eligible institutions, the
amount of the minimum award to each such eligible institution
shall be ratably reduced; and
(3) any amount in excess of $9,000,000 shall be made
available to each of the eligible institutions identified in subparagraphs (A) through (R) of subsection (b)(1), 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 qualified
masters degree program at the eligible institution in the
previous academic year.
(C) The average cost of attendance per student, for all
full-time students enrolled in the qualified masters degree
program at such institution.
(D) The number of students in the previous year who
received a degree in the qualified masters degree program
at such institution.
(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 masters degrees in the disciplines related to
the programs for the previous year.
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(g) HOLD HARMLESS RULE.—Notwithstanding paragraphs (2)
and (3) of subsection (f), no eligible institution identified in subsection (b)(1) that receives a grant under this section for fiscal year
2009 and that is eligible to receive a grant for a subsequent fiscal
year shall receive a grant amount for any such subsequent fiscal
year that is less than the grant amount received for fiscal year
2009, unless—
(1) the amount appropriated is not sufficient to provide
such grant amounts to all such institutions and programs that
received grants under this section for such fiscal year and that
are eligible to receive a grant in such subsequent fiscal year;
or
(2) the institution cannot provide sufficient matching funds
to meet the requirements of this section.
SEC. 724. ø20 U.S.C. 1136b¿ MASTERS DEGREE PROGRAMS AT PREDOMINANTLY BLACK INSTITUTIONS.
(a) GRANT PROGRAM AUTHORIZED.—
(1) IN GENERAL.—Subject to the availability of funds appro-
priated to carry out this section, the Secretary shall award program grants to each of the institutions listed in subsection
(b)(1) that is determined by the Secretary to be making a substantial contribution to graduate education opportunities at the
masters level in mathematics, engineering, the physical or natural sciences, computer science, information technology, nursing, allied health, or other scientific disciplines for Black Americans.
(2) ASSURANCE OF NON-FEDERAL MATCHING FUNDS.—No
grant in excess of $1,000,000 may be made under this section
unless the institution provides assurances that 50 percent of
the cost of the purposes for which the grant is made will be
paid from non-Federal sources, except that no institution shall
be required to match any portion of the first $1,000,000 of the
institution’s award from the Secretary. After funds are made
available to each eligible institution under the funding rules
described in subsection (f), the Secretary shall distribute, on a
pro rata basis, any amounts which were not so made available
(by reason of the failure of an institution to comply with the
matching requirements of this paragraph) among the institutions that have complied with such matching requirement.
(3) MINIMUM AWARD.—Subject to subsections (f) and (g),
the amount awarded to each eligible institution listed in subsection (b)(1) for a fiscal year shall be not less than $500,000.
(4) DURATION OF GRANTS.—A grant awarded under this
section shall be for a period of not more than six years, but
may be periodically renewed for a period to be determined by
the Secretary.
(b) INSTITUTIONAL ELIGIBILITY.—
(1) IN GENERAL.—Institutions eligible for grants under subsection (a) are the following:
(A) Chicago State University.
(B) Columbia Union College.
(C) Long Island University, Brooklyn campus.
(D) Robert Morris College.
(E) York College, The City University of New York.
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(2) QUALIFIED MASTERS DEGREE PROGRAM.—
(A) IN GENERAL.—For the purposes of this section, the
term ‘‘qualified masters degree program’’ means a masters
degree program that provides a program of instruction in
mathematics, engineering, the physical or natural sciences,
computer science, information technology, nursing, allied
health, or other scientific disciplines in which African
Americans are underrepresented and has students enrolled
in such program of instruction at the time of application
for a grant under this section.
(B) ENROLLMENT EXCEPTION.—Notwithstanding the
enrollment requirement contained in subparagraph (A), an
institution may use an amount equal to not more than 10
percent of the institution’s grant under this section for the
development of a new qualified masters degree program.
(3) INSTITUTIONAL CHOICE.—The president or chancellor of
the institution may decide which graduate school or qualified
masters degree program will receive funds under the grant in
any one fiscal year, if the allocation of funds among the schools
or programs is delineated in the application for funds submitted to the Secretary under this section.
(4) ONE GRANT PER INSTITUTION.—The Secretary shall not
award more than one grant under this section in any fiscal
year to any institution of higher education.
(c) APPLICATION.—An eligible institution listed in subsection
(b)(1) desiring a grant under this section shall submit an application at such time, in such manner, and containing such information
as the Secretary may require. The application shall—
(1) demonstrate how the grant funds under this section
will be used to improve graduate educational opportunities for
Black and low-income students and lead to greater financial
independence; and
(2) provide, in the case of applications for grants in excess
of $1,000,000, the assurances required under subsection (a)(2)
and specify the manner in which the eligible institution is
going to pay the non-Federal share of the cost of the application.
(d) USES OF FUNDS.—A grant under this section may be used
for—
(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) scholarships, fellowships, and other financial assistance
for needy graduate students to permit the enrollment of the
students in, and completion of, a masters degree in mathematics, engineering, the physical or natural sciences, computer
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science, information technology, nursing, allied health, or other
scientific disciplines in which African Americans are underrepresented;
(5) establishing or improving a development office to
strengthen and increase contributions from alumni and the private sector;
(6) assisting in the establishment or maintenance of an institutional endowment to facilitate financial independence pursuant to section 331;
(7) funds and administrative management, and the acquisition of equipment, including software, for use in strengthening funds management and management information systems;
(8) acquisition of real property that is adjacent to the campus in connection with the construction, renovation, or improvement of, or an addition to, campus facilities;
(9) education or financial information designed to improve
the financial literacy and economic literacy of students or the
students’ families, especially with regard to student indebtedness and student assistance programs under title IV;
(10) tutoring, counseling, and student service programs designed to improve academic success;
(11) faculty professional development, faculty exchanges,
and faculty participation in professional conferences and meetings; and
(12) other activities proposed in the application submitted
under subsection (c) that—
(A) contribute to carrying out the purposes of this section; and
(B) are approved by the Secretary as part of the review and acceptance of such application.
(e) INTERACTION WITH OTHER GRANT PROGRAMS.—No institution that is eligible for and receives an award under section 326,
512, or 723 for a fiscal year shall be eligible to apply for a grant,
or receive grant funds, under this section for the same fiscal year.
(f) FUNDING RULE.—Subject to subsection (g), of the amount
appropriated to carry out this section for any fiscal year—
(1) the first $2,500,000 (or any lesser amount appropriated) shall be available only for the purposes of making
minimum grants under subsection (a)(3) to eligible institutions
listed in subparagraphs (A) through (E) of subsection (b)(1), except that if the amount appropriated is not sufficient to pay
the minimum grant awards to all such eligible institutions, the
amount of the minimum award to each such eligible institution
shall be ratably reduced;
(2) after the application of paragraph (1), an amount shall
be available for the purpose of making minimum grants under
subsection (a)(3) to eligible institutions described in subsection
(b)(1) that do not receive a grant under paragraph (1), if any,
except that if the amount appropriated is not sufficient to pay
the minimum grant awards to all such eligible institutions, the
amount of the minimum award to each such eligible institution
shall be ratably reduced; and
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(3) any amount in excess of $2,500,000 shall be made
available to each of the eligible institutions identified in subparagraphs (A) through (E) of subsection (b)(1), 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 qualified
masters degree program at the eligible institution in the
previous academic year.
(C) The average cost of attendance per student, for all
full-time students enrolled in the qualified masters degree
program at such institution.
(D) The number of students in the previous year who
received a degree in the qualified masters degree program
at such institution.
(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 masters degrees in the disciplines related to
the programs for the previous year.
(g) HOLD HARMLESS RULE.—Notwithstanding paragraphs (2)
and (3) of subsection (f), no eligible institution identified in subsection (b)(1) that receives a grant under this section for fiscal year
2009 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
2009, unless—
(1) the amount appropriated is not sufficient to provide
such grant amounts to all such institutions and programs that
received grants under this section for such fiscal year and that
are eligible to receive a grant in such subsequent fiscal year;
or
(2) the institution cannot provide sufficient matching funds
to meet the requirements of this section.
SEC. 725. ø20 U.S.C. 1136c¿ AUTHORIZATION OF APPROPRIATIONS.
(a) MASTERS DEGREE PROGRAMS AT HISTORICALLY BLACK COLLEGES AND UNIVERSITIES.—There are authorized to be appropriated
to carry out section 723 such sums as may be necessary for fiscal
year 2009 and each of the five succeeding fiscal years.
(b) MASTERS DEGREE PROGRAMS AT PREDOMINANTLY BLACK INSTITUTIONS.—There are authorized to be appropriated to carry out
section 724 such sums as may be necessary for fiscal year 2009 and
each of the five succeeding fiscal years.
Subpart 5—General Provisions
SEC. 731. ø20 U.S.C. 1137¿ ADMINISTRATIVE PROVISIONS FOR SUBPARTS 1 THROUGH 4.
(a) COORDINATED ADMINISTRATION.—In carrying out the pur-
pose described in section 700(1), the Secretary shall provide for coordinated administration and regulation of graduate programs assisted under subparts 1 through 4 with other Federal programs
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providing assistance for graduate education in order to minimize
duplication and improve efficiency to ensure that the programs are
carried out in a manner most compatible with academic practices
and with the standard timetables for applications for, and notifications of acceptance to, graduate programs.
(b) HIRING AUTHORITY.—For purposes of carrying out subparts
1 through 4, the Secretary shall appoint, without regard to the provisions of title 5, United States Code, that govern appointments in
the competitive service, such administrative and technical employees, with the appropriate educational background, as shall be needed to assist in the administration of such parts. The employees
shall be paid without regard to the provisions of chapter 51 and
subchapter III of chapter 53 of such title relating to classification
and General Schedule pay rates.
(c) USE FOR RELIGIOUS PURPOSES PROHIBITED.—No institutional payment or allowance under section 703(b) or 715(a) shall be
paid to a school or department of divinity as a result of the award
of a fellowship under subpart 1 or 2, respectively, to an individual
who is studying for a religious vocation.
(d) EVALUATION.—The Secretary shall evaluate the success of
assistance provided to individuals under subpart 1, 2, 3, or 4 with
respect to graduating from their degree programs, and placement
in faculty and professional positions.
PART B—FUND FOR THE IMPROVEMENT OF
POSTSECONDARY EDUCATION
SEC. 741. ø20 U.S.C. 1138¿ FUND FOR THE IMPROVEMENT OF POSTSECONDARY
EDUCATION.
(a) AUTHORITY.—The Secretary is authorized to make grants
to, or enter into contracts with, institutions of higher education,
combinations of such institutions, and other public and private
nonprofit institutions and agencies, to enable such institutions,
combinations, and agencies to improve postsecondary education opportunities by—
(1) the encouragement of reform and improvement of, and
innovation in, postsecondary education and the provision of
educational opportunity for all students, including nontraditional students;
(2) the creation of institutions, programs, and joint efforts
involving paths to career and professional training, including—
(A) efforts that provide academic credit for programs;
and
(B) combinations of academic and experiential learning;
(3) the establishment and continuation of institutions, programs, consortia, collaborations, and other joint efforts based
on communications technology, including those efforts that utilize distance education and technological advancements to educate and train postsecondary students (including health professionals serving medically underserved populations);
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(4) the carrying out, in postsecondary educational institutions, of changes in internal structure and operations designed
to clarify institutional priorities and purposes;
(5) the design and introduction of cost-effective methods of
instruction and operation;
(6) the introduction of institutional reforms designed to expand individual opportunities for entering and reentering postsecondary institutions and pursuing programs of postsecondary
study tailored to individual needs;
(7) the introduction of reforms in graduate education, in
the structure of academic professions, and in the recruitment
and retention of faculties;
(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 postsecondary program completion;
(10) the provision of support and assistance to partnerships between institutions of higher education and secondary
schools with a significant population of students identified as
late-entering limited English proficient students, to establish
programs that—
(A) result in increased secondary school graduation
rates of limited English proficient students; and
(B) increase the number of participating late-entering
limited English proficient students who pursue postsecondary education;
(11) the creation of consortia that join diverse institutions
of higher education to design and offer curricular and cocurricular interdisciplinary programs at the undergraduate and
graduate levels, sustained for not less than a 5 year period,
that—
(A) focus on poverty and human capability; and
(B) include—
(i) a service-learning component; and
(ii) the delivery of educational services through informational resource centers, summer institutes, midyear seminars, and other educational activities that
stress the effects of poverty and how poverty can be alleviated through different career paths;
(12) the provision of support and assistance for demonstration projects to provide comprehensive support services to ensure that homeless students, or students who were in foster
care or were a ward of the court at any time before the age
of 13, enroll and succeed in postsecondary education, including
providing housing to such students during periods when housing at the institution of higher education is closed or generally
unavailable to other students; and
(13) the support of efforts to work with institutions of
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mote cultural diversity in the entertainment media industry,
including through the training of students in production, marketing, and distribution of culturally relevant content.
(b) PLANNING GRANTS.—The Secretary is authorized to make
planning grants to institutions of higher education for the development and testing of innovative techniques in postsecondary education. Such grants shall not exceed $20,000.
(c) CENTER FOR BEST PRACTICES TO SUPPORT SINGLE PARENT
STUDENTS.—
(1) PROGRAM AUTHORIZED.—The Secretary is authorized to
award one grant or contract to an institution of higher education to enable such institution to establish and maintain a
center to study and develop best practices for institutions of
higher education to support single parents who are also students attending such institutions.
(2) INSTITUTION REQUIREMENTS.—The Secretary shall
award the grant or contract under this subsection to a fouryear institution of higher education that has demonstrated expertise in the development of programs to assist single parents
who are students at institutions of higher education, as shown
by the institution’s development of a variety of targeted services to such students, including on-campus housing, child care,
counseling, advising, internship opportunities, financial aid,
and financial aid counseling and assistance.
(3) CENTER ACTIVITIES.—The center funded under this section shall—
(A) assist institutions implementing innovative programs that support single parents pursuing higher education;
(B) study and develop an evaluation protocol for such
programs that includes quantitative and qualitative methodologies;
(C) provide appropriate technical assistance regarding
the replication, evaluation, and continuous improvement of
such programs; and
(D) develop and disseminate best practices for such
programs.
(d) PROHIBITION.—
(1) IN GENERAL.—No funds made available under this part
shall be used to provide direct financial assistance in the form
of grants or scholarships to students who do not meet the requirements of section 484(a).
(2) RULE OF CONSTRUCTION.—Nothing in this subsection
shall be construed to prevent a student who does not meet the
requirements of section 484(a) from participating in programs
funded under this part.
(e) PRIORITY.—In making grants under this part to any institution of higher education after the date of enactment of theHigher
Education Opportunity Act, the Secretary may give priority to institutions that meet or exceed the most current version of
ASHRAE/IES Standard 90.1 (as such term is used in section
342(a)(6) of the Energy Policy and Conservation Act (42 U.S.C.
6313(a)(6)) for any new facilities construction or major renovation
of the institution after such date, except that this subsection shall
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not apply with respect to barns or greenhouses or similar structures owned by the institution.
(f) SCHOLARSHIP PROGRAM FOR FAMILY MEMBERS OF VETERANS
OR MEMBERS OF THE MILITARY.—
(1) AUTHORIZATION.—The Secretary shall enter into a contract with a nonprofit organization with demonstrated success
in carrying out the activities described in this subsection to
carry out a program to provide postsecondary education scholarships for eligible students.
(2) DEFINITION OF ELIGIBLE STUDENT.—In this subsection,
the term ‘‘eligible student’’ means an individual who is enrolled
as a full-time or part-time student at an institution of higher
education (as defined in section 102) and is—
(A) a dependent student who is a child of—
(i) an individual who is—
(I) serving on active duty during a war or
other military operation or national emergency (as
defined in section 481); or
(II) performing qualifying National Guard
duty during a war or other military operation or
national emergency (as defined in section 481); or
(ii) a veteran who—
(I) served or performed, as described in clause
(i), since September 11, 2001; and
(II) died, or has been disabled, as a result of
such service or performance; or
(B) an independent student who—
(i) is a spouse of an individual who is—
(I) serving on active duty during a war or
other military operation or national emergency (as
defined in section 481); or
(II) performing qualifying National Guard
duty during a war or other military operation or
national emergency (as defined in section 481);
(ii) was (at the time of death of the veteran) a
spouse of a veteran who—
(I) served or performed, as described in clause
(i), since September 11, 2001; and
(II) died as a result of such service or performance; or
(iii) is a spouse of a veteran who—
(I) served or performed, as described in clause
(i), since September 11, 2001; and
(II) has been disabled as a result of such service or performance.
(3) AWARDING OF SCHOLARSHIPS.—Scholarships awarded
under this subsection shall be awarded based on need with priority given to eligible students who are eligible to receive Federal Pell Grants under subpart 1 of part A of title IV.
(4) MAXIMUM SCHOLARSHIP AMOUNT.—The maximum scholarship amount awarded to an eligible student under this subsection for an award year shall be the lesser of $5,000, or the
student’s cost of attendance (as defined in section 472).
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(5) AMOUNTS FOR SCHOLARSHIPS.—All of the amounts appropriated to carry out this subsection for a fiscal year shall
be used for scholarships awarded under this subsection, except
that the nonprofit organization receiving a contract under this
subsection may use not more than one percent of such amounts
for the administrative costs of the contract.
SEC. 742. ø20 U.S.C. 1138a¿ BOARD OF THE FUND FOR THE IMPROVEMENT OF POSTSECONDARY EDUCATION.
(a) ESTABLISHMENT.—There is established a National Board of
the Fund for the Improvement of Postsecondary Education (in this
part referred to as the ‘‘Board’’). The Board shall consist of 15
members appointed by the Secretary for overlapping 3-year terms.
A majority of the Board shall constitute a quorum. Any member of
the Board who has served for 6 consecutive years shall thereafter
be ineligible for appointment to the Board during a 2-year period
following the expiration of such sixth year.
(b) MEMBERSHIP.—The Secretary shall designate one of the
members of the Board as Chairperson of the Board. A majority of
the members of the Board shall be public interest representatives,
including students, and a minority shall be educational representatives. All members selected shall be individuals able to contribute
an important perspective on priorities for improvement in postsecondary education and strategies of educational and institutional
change.
(c) DUTIES.—The Board shall—
(1) advise the Secretary on priorities for the improvement
of postsecondary education and make such recommendations
as the Board may deem appropriate for the improvement of
postsecondary education and for the evaluation, dissemination,
and adaptation of demonstrated improvements in postsecondary educational practice;
(2) advise the Secretary on the operation of the Fund for
the Improvement of Postsecondary Education, including advice
on planning documents, guidelines, and procedures for grant
competitions prepared by the Fund; and
(3) meet at the call of the Chairperson, except that the
Board shall meet whenever one-third or more of the members
request in writing that a meeting be held.
(d) INFORMATION AND ASSISTANCE.—The Secretary shall make
available to the Board such information and assistance as may be
necessary to enable the Board to carry out its functions.
SEC. 743. ø20 U.S.C. 1138b¿ ADMINISTRATIVE PROVISIONS.
The Secretary may appoint, for terms not to exceed 3 years,
without regard to the provisions of title 5, United States Code, governing appointments in the competitive service, not more than 7
technical employees to administer this part who may be paid without regard to the provisions of chapter 51 and subchapter III of
chapter 53 of such title relating to classification and General
Schedule pay rates.
SEC. 744. ø20 U.S.C. 1138c¿ SPECIAL PROJECTS.
(a) GRANT AUTHORITY.—The Secretary
is authorized to make
grants to institutions of higher education, or consortia thereof, and
such other public agencies and nonprofit organizations as the Sec-
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retary deems necessary for innovative projects concerning one or
more areas of particular national need identified by the Secretary.
(b) APPLICATION.—No grant shall be made under this part unless an application is made at such time, in such manner, and contains or is accompanied by such information as the Secretary may
require.
(c) AREAS OF NATIONAL NEED.—Areas of national need shall include, at a minimum, the following:
(1) Institutional restructuring to improve learning and promote productivity, efficiency, quality improvement, and cost reduction.
(2) Improvements in academic instruction and student
learning, including efforts designed to assess the learning
gains made by postsecondary students.
(3) Articulation between two- and four-year institutions of
higher education, including developing innovative methods for
ensuring the successful transfer of students from two- to fouryear institutions of higher education.
(4) Development, evaluation, and dissemination of model
courses, including model courses 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 study of a foreign language that leads to
reading and writing competency in the foreign language.
(5) International cooperation and student exchanges
among postsecondary educational institutions.
(6) Support of centers to incorporate education in quality
and safety into the preparation of medical and nursing students, through grants to medical schools, nursing schools, and
osteopathic schools. Such grants shall be used to assist in providing courses of instruction that specifically equip students
to—
(A) understand the causes of, and remedies for, medical error, medically induced patient injuries and complications, and other defects in medical care;
(B) engage effectively in personal and systemic efforts
to continually reduce medical harm; and
(C) improve patient care and outcomes, as recommended by the Institute of Medicine of the National
Academies.
SEC. 745. ø20 U.S.C. 1138d¿ AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this part
such sums as may be necessary for fiscal year 2009 and each of the
five succeeding fiscal years.
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PART D—PROGRAMS TO PROVIDE STUDENTS
WITH DISABILITIES WITH A QUALITY HIGHER EDUCATION 1
SEC. 760. ø20 U.S.C. 1140¿ DEFINITIONS.
In this part:
(1) COMPREHENSIVE
TRANSITION AND POSTSECONDARY PROGRAM FOR STUDENTS WITH INTELLECTUAL DISABILITIES.—The
term ‘‘comprehensive transition and postsecondary program for
students with intellectual disabilities’’ means a degree, certificate, or nondegree program that meets each of the following:
(A) Is offered by an institution of higher education.
(B) Is designed to support students with intellectual
disabilities who are seeking to continue academic, career
and technical, and independent living instruction at an institution of higher education in order to prepare for gainful
employment.
(C) Includes an advising and curriculum structure.
(D) Requires students with intellectual disabilities to
participate on not less than a half-time basis as determined by the institution, with such participation focusing
on academic components, and occurring through 1 or more
of the following activities:
(i) Regular enrollment in credit-bearing courses
with nondisabled students offered by the institution.
(ii) Auditing or participating in courses with nondisabled students offered by the institution for which
the student does not receive regular academic credit.
(iii) Enrollment in noncredit-bearing, nondegree
courses with nondisabled students.
(iv) Participation in internships or work-based
training in settings with nondisabled individuals.
(E) Requires students with intellectual disabilities to
be socially and academically integrated with non-disabled
students to the maximum extent possible.
(2) STUDENT WITH AN INTELLECTUAL DISABILITY.—The term
‘‘student with an intellectual disability’’ means a student—
(A) with a cognitive impairment, characterized by significant limitations in—
(i) intellectual and cognitive functioning; and
(ii) adaptive behavior as expressed in conceptual,
social, and practical adaptive skills; and
(B) who is currently, or was formerly, eligible for a
free appropriate public education under the Individuals
with Disabilities Education Act.
1 Title
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Subpart 1—Demonstration Projects to Support
Postsecondary Faculty, Staff, and Administrators in Educating Students with Disabilities
SEC. 761. ø20 U.S.C. 1140a¿ PURPOSE.
It is the purpose of this subpart to support model demonstration projects to provide technical assistance or professional development for postsecondary faculty, staff, and administrators in institutions of higher education to enable such faculty, staff, and administrators to provide students with disabilities with a quality postsecondary education.
SEC. 762. ø20 U.S.C. 1140b¿ GRANTS, CONTRACTS, AND COOPERATIVE
AGREEMENTS AUTHORIZED.
(a) COMPETITIVE GRANTS, CONTRACTS, AND COOPERATIVE
AGREEMENTS AUTHORIZED.—
(1) IN GENERAL.—From amounts appropriated under sec-
tion 765, the Secretary may award grants, contracts, and cooperative agreements, on a competitive basis, to institutions of
higher education to enable the institutions to carry out the activities under subsection (b).
(2) AWARDS FOR PROFESSIONAL DEVELOPMENT AND TECHNICAL ASSISTANCE.—Not less than two grants, contracts, cooperative agreements, or a combination of such awards shall be
awarded to institutions of higher education that provide professional development and technical assistance in order for students with learning disabilities to receive a quality postsecondary education.
(b) DURATION; ACTIVITIES.—
(1) DURATION.—A grant, contract, or cooperative agreement under this subpart shall be awarded for a period of three
years.
(2) AUTHORIZED ACTIVITIES.—A grant, contract, or cooperative agreement awarded under this subpart 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, consistent with the principles of
universal design for learning, to provide postsecondary faculty, staff, and administrators with the skills and supports
necessary to teach and meet the academic and programmatic needs of students with disabilities, in order to
improve the retention of such students in, and the completion by such students of, postsecondary education. Such
methods and strategies may include in-service training,
professional development, customized and general technical assistance, workshops, summer institutes, distance
learning, and training in the use of assistive and educational technology.
(B) EFFECTIVE TRANSITION PRACTICES.—The development of innovative and effective teaching methods and
strategies to provide postsecondary faculty, staff, and administrators with the skill and supports necessary to ensure the successful and smooth transition of students with
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disabilities from secondary school to postsecondary education.
(C) SYNTHESIZING RESEARCH AND INFORMATION.—The
synthesis of research and other information related to the
provision of postsecondary educational services to students
with disabilities, including data on the impact of a postsecondary education 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 postsecondary faculty, staff, and administrators with
the ability to provide accessible distance education programs or classes that would enhance the access of students
with disabilities to postsecondary education, including the
use of accessible curricula and electronic communication
for instruction and advising.
(E) DISABILITY CAREER PATHWAYS.—
(i) IN GENERAL.—The provision of information,
training, and technical assistance to secondary and
postsecondary faculty, staff, and administrators with
respect to disability-related fields that would enable
such faculty, staff, and administrators to—
(I) encourage interest and participation in
such fields, among students with disabilities and
other students;
(II) enhance awareness and understanding of
such fields among students with disabilities and
other students;
(III) provide educational opportunities in such
fields for students with disabilities and other students;
(IV) teach practical skills related to such
fields to students with disabilities and other students; and
(V) offer work-based opportunities in such
fields to students with disabilities and other students.
(ii) DEVELOPMENT.—The training and support described in subclauses (I) through (V) of clause (i) may
include offering students—
(I)
credit-bearing
postsecondary-level
coursework; and
(II) career and educational counseling.
(F) PROFESSIONAL DEVELOPMENT AND TRAINING SESSIONS.—The conduct of professional development and
training sessions for postsecondary faculty, staff, and administrators from other institutions of higher education to
enable such individuals to meet the educational needs of
students with disabilities.
(G) ACCESSIBILITY OF EDUCATION.—Making postsecondary education more accessible to students with disabilities through curriculum development, consistent with the
principles of universal design for learning.
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(3) MANDATORY EVALUATION AND DISSEMINATION.—An institution of higher education awarded a grant, contract, or cooperative agreement under this subpart shall evaluate and disseminate to other institutions of higher education, the information obtained through the activities described in subparagraphs
(A) through (G) of paragraph (2).
(c) CONSIDERATIONS IN MAKING AWARDS.—In awarding grants,
contracts, or cooperative agreements under this subpart, the Secretary shall consider the following:
(1) GEOGRAPHIC DISTRIBUTION.—Providing an equitable geographic distribution of such awards.
(2) RURAL AND URBAN AREAS.—Distributing such awards to
urban and rural areas.
(3) RANGE AND TYPE OF INSTITUTION.—Ensuring that the
activities to be assisted are developed for a range of types and
sizes of institutions of higher education.
(4) PRIOR EXPERIENCE OR EXCEPTIONAL PROGRAMS.—Distributing the awards to institutions of higher education with
demonstrated prior experience in, or exceptional programs for,
meeting the postsecondary educational needs of students with
disabilities.
(d) REPORTS.—
(1) INITIAL REPORT.—Not later than one year after the date
of enactment of the Higher Education Opportunity Act, the
Secretary shall prepare and submit to the authorizing committees, and make available to the public, a report on all demonstration projects awarded grants under this part for any of
fiscal years 1999 through 2008, including a review of the activities and program performance of such demonstration
projects based on existing information as of the date of the report.
(2) SUBSEQUENT REPORT.—Not later than three years after
the date of the first award of a grant under this subpart after
the date of enactment of the Higher Education Opportunity
Act, the Secretary shall prepare and submit to the authorizing
committees, and make available to the public, a report that—
(A) reviews the activities and program performance of
the demonstration projects authorized under this subpart;
and
(B) provides guidance and recommendations on how
effective projects can be replicated.
SEC. 763. ø20 U.S.C. 1140c¿ APPLICATIONS.
Each institution of higher education desiring to receive a
grant, contract, or cooperative agreement under this subpart shall
submit an application to the Secretary at such time, in such manner, and accompanied by such information as the Secretary may require. Each application shall include—
(1) a description of the activities authorized under this
subpart that the institution proposes to carry out, and how
such institution plans to conduct such activities in order to further the purpose of this subpart;
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(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;
(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 effectiveness in
serving students with disabilities.
SEC. 764. ø20 U.S.C. 1140d¿ RULE OF CONSTRUCTION.
Nothing in this subpart shall be construed to impose any additional duty, obligation, or responsibility on an institution of higher
education or on the institution’s faculty, administrators, or staff
than is required under section 504 of the Rehabilitation Act of 1973
(29 U.S.C. 794) and the Americans with Disabilities Act of 1990 (42
U.S.C. 12101 et seq.).
SEC. 765. ø20 U.S.C. 1140e¿ AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this subpart such sums as may be necessary for fiscal year 2009 and each
of the five succeeding fiscal years.
Subpart 2—Transition Programs for Students
with Intellectual Disabilities Into Higher Education
SEC. 766. ø20 U.S.C. 1140f¿ PURPOSE.
It is the purpose of this subpart to support model demonstration programs that promote the successful transition of students
with intellectual disabilities into higher education.
SEC. 767. ø20 U.S.C. 1140g¿ MODEL COMPREHENSIVE TRANSITION AND
POSTSECONDARY PROGRAMS FOR STUDENTS WITH INTELLECTUAL DISABILITIES.
(a) GRANTS AUTHORIZED.—
(1) IN GENERAL.—From amounts appropriated under sec-
tion 769(a), the Secretary shall annually award grants, on a
competitive basis, to institutions of higher education (or consortia of institutions of higher education), to enable the institutions or consortia to create or expand high quality, inclusive
model comprehensive transition and postsecondary programs
for students with intellectual disabilities.
(2) ADMINISTRATION.—The program under this section
shall be administered by the office in the Department that administers other postsecondary education programs.
(3) DURATION OF GRANTS.—A grant under this section shall
be awarded for a period of 5 years.
(b) APPLICATION.—An institution of higher education (or a consortium) desiring 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.
(c) AWARD BASIS.—In awarding grants under this section, the
Secretary shall—
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(1) provide for an equitable geographic distribution of such
grants;
(2) provide grant funds for model comprehensive transition
and postsecondary programs for students with intellectual disabilities that will serve areas that are underserved by programs of this type; and
(3) give preference to applications submitted under subsection (b) that agree to incorporate into the model comprehensive transition and postsecondary program for students with
intellectual disabilities carried out under the grant one or more
of the following elements:
(A) The formation of a partnership with any relevant
agency serving students with intellectual disabilities, such
as a vocational rehabilitation agency.
(B) In the case of an institution of higher education
that provides institutionally owned or operated housing for
students attending the institution, the integration of students with intellectual disabilities into the housing offered
to nondisabled students.
(C) The involvement of students attending the institution of higher education who are studying special education, general education, vocational rehabilitation, assistive technology, or related fields in the model program.
(d) USE OF FUNDS.—An institution of higher education (or consortium) receiving a grant under this section shall use the grant
funds to establish a model comprehensive transition and postsecondary program for students with intellectual disabilities that—
(1) serves students with intellectual disabilities;
(2) provides individual supports and services for the academic and social inclusion of students with intellectual disabilities in academic courses, extracurricular activities, and other
aspects of the institution of higher education’s regular postsecondary program;
(3) with respect to the students with intellectual disabilities participating in the model program, provides a focus on—
(A) academic enrichment;
(B) socialization;
(C) independent living skills, including self-advocacy
skills; and
(D) integrated work experiences and career skills that
lead to gainful employment;
(4) integrates person-centered planning in the development
of the course of study for each student with an intellectual disability participating in the model program;
(5) participates with the coordinating center established
under section 777(b) in the evaluation of the model program;
(6) partners with one or more local educational agencies to
support students with intellectual disabilities participating in
the model program who are still eligible for special education
and related services under the Individuals with Disabilities
Education Act, including the use of funds available under part
B of such Act to support the participation of such students in
the model program;
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(7) plans for the sustainability of the model program after
the end of the grant period; and
(8) creates and offers a meaningful credential for students
with intellectual disabilities upon the completion of the model
program.
(e) MATCHING REQUIREMENT.—An institution of higher education (or consortium) that receives a grant under this section shall
provide matching funds toward the cost of the model comprehensive transition and postsecondary program for students with intellectual disabilities carried out under the grant. Such matching
funds may be provided in cash or in-kind, and shall be in an
amount of not less than 25 percent of the amount of such costs.
(f) REPORT.—Not later than five years after the date of the first
grant awarded under this section, the Secretary shall prepare and
disseminate a report to the authorizing committees and to the public that—
(1) reviews the activities of the model comprehensive transition and postsecondary programs for students with intellectual disabilities funded under this section; and
(2) provides guidance and recommendations on how effective model programs can be replicated.
SEC. 768. ø20 U.S.C. 1140h¿ RULE OF CONSTRUCTION.
Nothing in this subpart shall be construed to reduce or expand—
(1) the obligation of a State or local educational agency to
provide a free appropriate public education, as defined in section 602 of the Individuals with Disabilities Education Act; or
(2) eligibility requirements under any Federal, State, or
local disability law, including the Americans with Disabilities
Act of 1990 (42 U.S.C. 12101 et seq.), the Rehabilitation Act of
1973 (29 U.S.C. 701 et seq.), or the Developmental Disabilities
Assistance and Bill of Rights Act of 2000 (42 U.S.C. 15001 et
seq.).
SEC. 769. ø20 U.S.C. 1140i¿ AUTHORIZATION OF APPROPRIATIONS AND
RESERVATION.
(a) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this subpart such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
(b) RESERVATION OF FUNDS.—For any fiscal year for which appropriations are made for this subpart, the Secretary shall reserve
funds to enter into a cooperative agreement to establish the coordinating center under section 777(b), in an amount that is—
(1) not less than $240,000 for any year in which the
amount appropriated to carry out this subpart is $8,000,000 or
less; or
(2) equal to 3 percent of the amount appropriated to carry
out this subpart for any year in which such amount appropriated is greater than $8,000,000.
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758
Subpart 3—Commission on Accessible Materials;
Programs to Support Improved Access to Materials
SEC. 771. ø20 U.S.C. 1140k¿ DEFINITION OF STUDENT WITH A PRINT
DISABILITY.
In this subpart, the term ‘‘student with a print disability’’
means a student with a disability who experiences barriers to accessing instructional material in nonspecialized formats, including
an individual described insection 121(d)(2)of title 17, United States
Code.
SEC. 772. ø20 U.S.C. 1140l¿ ESTABLISHMENT OF ADVISORY COMMISSION
ON ACCESSIBLE INSTRUCTIONAL MATERIALS IN POSTSECONDARY EDUCATION FOR STUDENTS WITH DISABILITIES.
(a) ESTABLISHMENT.—
(1) IN GENERAL.—The Secretary shall establish a commis-
sion to be known as the Advisory Commission on Accessible Instructional Materials in Postsecondary Education for Students
with Disabilities (in this section referred to as the ‘‘Commission’’).
(2) MEMBERSHIP.—
(A) TOTAL NUMBER OF MEMBERS.—The Commission
shall include not more than 19 members, who shall be appointed by the Secretary in accordance with subparagraphs (B) and (C).
(B) MEMBERS OF THE COMMISSION.—The Commission
members shall include one representative from each of the
following categories:
(i) The Office of Postsecondary Education of the
Department.
(ii) The Office of Special Education and Rehabilitative Services of the Department.
(iii) The Office for Civil Rights of the Department.
(iv) The Library of Congress National Digital Information and Infrastructure Preservation Program
Copyright Working Group.
(v) The Association on Higher Education and Disability.
(vi) The Association of American Publishers.
(vii) The Association of American University
Presses.
(viii) The National Council on Disability.
(ix) Recording for the Blind and Dyslexic.
(x) National organizations representing individuals with visual impairments.
(xi) National organizations representing individuals with learning disabilities.
(C) ADDITIONAL MEMBERS OF THE COMMISSION.—The
Commission members shall include two representatives
from each of the following categories:
(i) Staff from institutions of higher education with
demonstrated experience teaching or supporting students with print disabilities, including representatives
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from both two-year and four-year institutions of higher
education of different sizes.
(ii) Producers of accessible materials, publishing
software, and supporting technologies in specialized
formats, such as Braille, audio or synthesized speech,
and digital media.
(iii) Individuals with visual impairments, including not less than one currently enrolled postsecondary
student.
(iv) Individuals with dyslexia or other learning
disabilities related to reading, including not less than
one currently enrolled postsecondary student.
(D) TIMING.—The Secretary shall appoint the members
of the Commission not later than 60 days after the Commission is established under paragraph (1).
(3) CHAIRPERSON AND VICE CHAIRPERSON.—The Commission shall select a chairperson and vice chairperson from
among the members of the Commission.
(4) MEETINGS.—
(A) IN GENERAL.—The Commission shall meet at the
call of the Chairperson.
(B) FIRST MEETING.—Not later than 60 days after the
appointment of the members of the Commission under
paragraph (2)(D), the Commission shall hold the Commission’s first meeting.
(5) QUORUM.—A majority of the members of the Commission shall constitute a quorum, but a lesser number of members may hold hearings.
(b) DUTIES OF THE COMMISSION.—
(1) STUDY.—
(A) IN GENERAL.—The Commission shall conduct a
comprehensive study to—
(i) assess the barriers and systemic issues that
may affect, and technical solutions available that may
improve, the timely delivery and quality of accessible
instructional materials for postsecondary students
with print disabilities, as well as the effective use of
such materials by faculty and staff; and
(ii) make recommendations related to the development of a comprehensive approach to improve the opportunities for postsecondary students with print disabilities to access instructional materials in specialized formats in a timeframe comparable to the availability of instructional materials for postsecondary
nondisabled students.
(B) EXISTING INFORMATION.—To the extent practicable,
in carrying out the study under this paragraph, the Commission shall identify and use existing research, recommendations, and information.
(C) RECOMMENDATIONS.—
(i) IN GENERAL.—The Commission shall develop
recommendations—
(I) to inform Federal regulations and legislation;
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(II) to support the model demonstration programs authorized under section 773;
(III) to identify best practices in systems for
collecting, maintaining, processing, and disseminating materials in specialized formats to students with print disabilities at costs comparable to
instructional materials for postsecondary nondisabled students;
(IV) to improve the effective use of such materials by faculty and staff, while complying with
applicable copyright law; and
(V) to modify the definitions of instructional
materials, authorized entities, and eligible students, as such terms are used in applicable Federal law, for the purpose of improving services to
students with disabilities.
(ii) CONSIDERATIONS.—In developing the recommendations under clause (i), the Commission shall
consider—
(I) how students with print disabilities may
obtain instructional materials in accessible formats—
(aa) within a timeframe comparable to
the availability of instructional materials for
nondisabled students; and
(bb) to the maximum extent practicable,
at costs comparable to the costs of such materials for nondisabled students;
(II) the feasibility and technical parameters of
establishing standardized electronic file formats,
such as the National Instructional Materials Accessibility Standard as defined in section 674(e)(3)
of the Individuals with Disabilities Education Act,
to be provided by publishers of instructional materials to producers of materials in specialized formats, institutions of higher education, and eligible
students;
(III) the feasibility of establishing a national
clearinghouse, repository, or file-sharing network
for electronic files in specialized formats and files
used in producing instructional materials in specialized formats, and a list of possible entities
qualified to administer such clearinghouse, repository, or network;
(IV) the feasibility of establishing marketbased solutions involving collaborations among
publishers of instructional materials, producers of
materials in specialized formats, and institutions
of higher education;
(V) solutions utilizing universal design; and
(VI) solutions for low-incidence, high-cost requests for instructional materials in specialized
formats.
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(2) REPORT.—Not later than one year after the Commission’s first meeting, the Commission shall submit a report to
the Secretary and the authorizing committees detailing the
findings and recommendations of the study conducted under
paragraph (1).
(3) DISSEMINATION OF INFORMATION.—In carrying out the
study under paragraph (1), the Commission shall disseminate
information concerning the issues that are the subject of the
study through—
(A) the National Technical Assistance Center established under subpart 4; and
(B) other means, as determined by the Commission.
(c) TERMINATION OF THE COMMISSION.—The Commission shall
terminate on the date that is 90 days after the date on which the
Commission submits the report under subsection (b)(2) to the Secretary and the authorizing committees.
SEC. 773. ø20 U.S.C. 1140m¿ MODEL DEMONSTRATION PROGRAMS TO
SUPPORT IMPROVED ACCESS TO POSTSECONDARY INSTRUCTIONAL MATERIALS FOR STUDENTS WITH PRINT
DISABILITIES.
(a) PURPOSE.—It is the purpose of this section to support model
demonstration programs for the purpose of encouraging the development of systems to improve the quality of postsecondary instructional materials in specialized formats and such materials’ timely
delivery to postsecondary students with print disabilities, including
systems to improve efficiency and reduce duplicative efforts across
multiple institutions of higher education.
(b) DEFINITION OF ELIGIBLE PARTNERSHIP.—In this section, the
term ‘‘eligible partnership’’ means a partnership that—
(1) shall include—
(A) an institution of higher education with demonstrated expertise in meeting the needs of students with
print disabilities, including the retention of such students
in, and such students’ completion of, postsecondary education; and
(B) a public or private entity, other than an institution
of higher education, with—
(i) demonstrated expertise in developing accessible
instructional materials in specialized formats for postsecondary students with print disabilities; and
(ii) the technical development expertise necessary
for the efficient dissemination of such materials, including procedures to protect against copyright infringement with respect to the creation, use, and distribution of instructional materials in specialized formats; and
(2) may include representatives of the publishing industry.
(c) PROGRAM AUTHORIZED.—From amounts appropriated under
section 775, the Secretary shall award grants or contracts, on a
competitive basis, to not less than one eligible partnership to enable the eligible partnership to support the activities described in
subsection (f) and, as applicable, subsection (g).
(d) APPLICATION.—An eligible partnership that desires a grant
or contract under this section shall submit an application at such
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time, in such manner, and in such format as the Secretary may
prescribe. The application shall include information on how the eligible partnership will implement activities under subsection (f)
and, as applicable, subsection (g).
(e) PRIORITY.—In awarding grants or contracts under this section, the Secretary shall give priority to any applications that include the development and implementation of the procedures and
approaches described in paragraphs (2) and (3) of subsection (g).
(f) REQUIRED ACTIVITIES.—An eligible partnership that receives
a grant or contract under this section shall use the grant or contract funds to carry out the following:
(1) Supporting the development and implementation of the
following:
(A) Processes and systems to help identify, and verify
eligibility of, postsecondary students with print disabilities
in need of instructional materials in specialized formats.
(B) Procedures and systems to facilitate and simplify
request methods for accessible instructional materials in
specialized formats from eligible students described in subparagraph (A), which may include a single point-of-entry
system.
(C) Procedures and systems to coordinate among institutions of higher education, publishers of instructional materials, and entities that produce materials in specialized
formats, to efficiently facilitate—
(i) requests for such materials;
(ii) the responses to such requests; and
(iii) the delivery of such materials.
(D) Delivery systems that will ensure the timely provision of instructional materials in specialized formats to eligible students, which may include electronic file distribution.
(E) Systems to reduce duplicative conversions and improve sharing of the same instructional materials in specialized formats for multiple eligible students at multiple
institutions of higher education.
(F) Procedures to protect against copyright infringement with respect to the development, use, and distribution of instructional materials in specialized formats while
maintaining accessibility for eligible students, which may
include digital technologies such as watermarking,
fingerprinting, and other emerging approaches.
(G) Awareness, outreach, and training activities for
faculty, staff, and students related to the acquisition and
dissemination of instructional materials in specialized formats and instructional materials utilizing universal design.
(2) Providing recommendations on how effective procedures
and systems described in paragraph (1) may be disseminated
and implemented on a national basis.
(g) AUTHORIZED APPROACHES.—An eligible partnership that receives a grant or contract under this section may use the grant or
contract funds to support the development and implementation of
the following:
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(1) Approaches for the provision of instructional materials
in specialized formats limited to instructional materials used
in smaller categories of postsecondary courses, such as introductory, first-, and second-year courses.
(2) Approaches supporting a unified search for instructional materials in specialized formats across multiple databases or lists of available materials.
(3) Market-based approaches for making instructional materials in specialized formats directly available to eligible students at prices comparable to standard instructional materials.
(h) REPORT.—Not later than three years after the date of the
first grant or contract awarded under this section, the Secretary
shall submit to the authorizing committees a report that includes—
(1) the number of grants and contracts and the amount of
funds distributed under this section;
(2) a summary of the purposes for which the grants and
contracts were provided and an evaluation of the progress
made under such grants and contracts;
(3) a summary of the activities implemented under subsection (f) and, as applicable, subsection (g), including data on
the number of postsecondary students with print disabilities
served and the number of instructional material requests executed and delivered in specialized formats; and
(4) an evaluation of the effectiveness of programs funded
under this section.
(i) MODEL EXPANSION.—The Secretary may, on the basis of the
reports under subsection (h) and section 772(b)(2) and any evaluations of the projects funded under this section, expand the program
under this section to additional grant or contract recipients that
use other programmatic approaches and serve different geographic
regions, if the Secretary finds that the models used under this section—
(1) are effective in improving the timely delivery and quality of materials in specialized formats; and
(2) provide adequate protections against copyright infringement.
SEC. 774. ø20 U.S.C. 1140n¿ RULE OF CONSTRUCTION.
Nothing in this subpart shall be construed to limit or preempt
any State law requiring the production or distribution of postsecondary instructional materials in accessible formats to students
with disabilities.
SEC. 775. ø20 U.S.C. 1140o¿ AUTHORIZATION OF APPROPRIATIONS.
(a) IN GENERAL.—There are authorized to be appropriated
to
carry out this subpart such sums as may be necessary for fiscal
year 2009 and each of the five succeeding fiscal years.
(b) PRIORITY.—For the first fiscal year for which funds are
made available under this section, the Secretary shall give priority
to allocating funding for the purposes of section 772.
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Subpart 4—National Technical Assistance Center;
Coordinating Center
SEC. 776. ø20 U.S.C. 1140p¿ PURPOSE.
It is the purpose of this subpart to provide technical assistance
and information on best and promising practices to students with
disabilities, the families of students with disabilities, and entities
awarded grants, contracts, or cooperative agreements under subpart 1, 2, or 3 to improve the postsecondary recruitment, transition, retention, and completion rates of students with disabilities.
SEC. 777. ø20 U.S.C. 1140q¿ NATIONAL TECHNICAL ASSISTANCE CENTER; COORDINATING CENTER.
(a) NATIONAL CENTER.—
(1) IN GENERAL.—From amounts appropriated under sec-
tion 778, the Secretary shall award a grant to, or enter into a
contract or cooperative agreement with, an eligible entity to
provide for the establishment and support of a National Center
for Information and Technical Support for Postsecondary Students with Disabilities (in this subsection referred to as the
‘‘National Center’’). The National Center shall carry out the
duties set forth in paragraph (4).
(2) ADMINISTRATION.—The program under this section
shall be administered by the office in the Department that administers other postsecondary education programs.
(3) ELIGIBLE ENTITY.—In this subpart, the term ‘‘eligible
entity’’ means an institution of higher education, a nonprofit
organization, or partnership of two or more such institutions or
organizations, with demonstrated expertise in—
(A) supporting students with disabilities in postsecondary education;
(B) technical knowledge necessary for the dissemination of information in accessible formats;
(C) working with diverse types of institutions of higher
education, including community colleges; and
(D) the subjects supported by the grants, contracts, or
cooperative agreements authorized in subparts 1, 2, and 3.
(4) DUTIES.—The duties of the National Center shall include the following:
(A) ASSISTANCE TO STUDENTS AND FAMILIES.—The National Center shall provide information and technical assistance to students with disabilities and the families of
students with disabilities to support students across the
broad spectrum of disabilities, including—
(i) information to assist individuals with disabilities who are prospective students of an institution of
higher education in planning for postsecondary education while the students are in secondary school;
(ii) information and technical assistance provided
to individualized education program teams (as defined
in section 614(d)(1) of the Individuals with Disabilities
Education Act) for secondary school students with disabilities, and to early outreach and student services
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parts 2, 4, and 5 of part A of title IV, to support students across a broad spectrum of disabilities with the
successful transition to postsecondary education;
(iii) research-based supports, services, and accommodations which are available in postsecondary settings, including services provided by other agencies
such as vocational rehabilitation;
(iv) information on student mentoring and networking opportunities for students with disabilities;
and
(v) effective recruitment and transition programs
at postsecondary educational institutions.
(B) ASSISTANCE TO INSTITUTIONS OF HIGHER EDUCATION.—The National Center shall provide information
and technical assistance to faculty, staff, and administrators of institutions of higher education to improve the services provided to, the accommodations for, the retention
rates of, and the completion rates of, students with disabilities in higher education settings, which may include—
(i) collection and dissemination of best and promising practices and materials for accommodating and
supporting students with disabilities, including practices and materials supported by the grants, contracts,
or cooperative agreements authorized under subparts
1, 2, and 3;
(ii) development and provision of training modules
for higher education faculty on exemplary practices for
accommodating and supporting postsecondary students with disabilities across a range of academic
fields, which may include universal design for learning
and practices supported by the grants, contracts, or cooperative agreements authorized under subparts 1, 2,
and 3; and
(iii) development of technology-based tutorials for
higher education faculty and staff, including new faculty and graduate students, on best and promising
practices related to support and retention of students
with disabilities in postsecondary education.
(C) INFORMATION COLLECTION AND DISSEMINATION.—
The National Center shall be responsible for building,
maintaining, and updating a database of disability support
services information with respect to institutions of higher
education, or for expanding and updating an existing database of disabilities support services information with respect to institutions of higher education. Such database
shall be available to the general public through a website
built to high technical standards of accessibility practicable for the broad spectrum of individuals with disabilities. Such database and website shall include available information on—
(i) disability documentation requirements;
(ii) support services available;
(iii) links to financial aid;
(iv) accommodations policies;
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(v) accessible instructional materials;
(vi) other topics relevant to students with disabilities; and
(vii) the information in the report described in
subparagraph (E).
(D) DISABILITY SUPPORT SERVICES.—The National Center shall work with organizations and individuals with
proven expertise related to disability support services for
postsecondary students with disabilities to evaluate, improve, and disseminate information related to the delivery
of high quality disability support services at institutions of
higher education.
(E) REVIEW AND REPORT.—Not later than three years
after the establishment of the National Center, and every
two years thereafter, the National Center shall prepare
and disseminate a report to the Secretary and the authorizing committees analyzing the condition of postsecondary
success for students with disabilities. Such report shall include—
(i) a review of the activities and the effectiveness
of the programs authorized under this part;
(ii) annual enrollment and graduation rates of students with disabilities in institutions of higher education from publicly reported data;
(iii) recommendations for effective postsecondary
supports and services for students with disabilities,
and how such supports and services may be widely implemented at institutions of higher education;
(iv) recommendations on reducing barriers to full
participation for students with disabilities in higher
education; and
(v) a description of strategies with a demonstrated
record of effectiveness in improving the success of such
students in postsecondary education.
(F) STAFFING OF THE CENTER.—In hiring employees of
the National Center, the National Center shall consider
the expertise and experience of prospective employees in
providing training and technical assistance to practitioners.
(b) COORDINATING CENTER.—
(1) DEFINITION OF ELIGIBLE ENTITY.—In this subsection,
the term ‘‘eligible entity’’ means an entity, or a partnership of
entities, that has demonstrated expertise in the fields of—
(A) higher education;
(B) the education of students with intellectual disabilities;
(C) the development of comprehensive transition and
postsecondary programs for students with intellectual disabilities; and
(D) evaluation and technical assistance.
(2) IN GENERAL.—From amounts appropriated under section 778, the Secretary shall enter into a cooperative agreement, on a competitive basis, with an eligible entity for the
purpose of establishing a coordinating center for institutions of
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higher education that offer inclusive comprehensive transition
and postsecondary programs for students with intellectual disabilities, including institutions participating in grants authorized under subpart 2, to provide—
(A) recommendations related to the development of
standards for such programs;
(B) technical assistance for such programs; and
(C) evaluations for such programs.
(3) ADMINISTRATION.—The program under this subsection
shall be administered by the office in the Department that administers other postsecondary education programs.
(4) DURATION.—The Secretary shall enter into a cooperative agreement under this subsection for a period of five years.
(5) REQUIREMENTS OF COOPERATIVE AGREEMENT.—The eligible entity entering into a cooperative agreement under this
subsection shall establish and maintain a coordinating center
that shall—
(A) serve as the technical assistance entity for all comprehensive transition and postsecondary programs for students with intellectual disabilities;
(B) provide technical assistance regarding the development, evaluation, and continuous improvement of such
programs;
(C) develop an evaluation protocol for such programs
that includes qualitative and quantitative methodologies
for measuring student outcomes and program strengths in
the areas of academic enrichment, socialization, independent living, and competitive or supported employment;
(D) assist recipients of grants under subpart 2 in efforts to award a meaningful credential to students with intellectual disabilities upon the completion of such programs, which credential shall take into consideration
unique State factors;
(E) develop recommendations for the necessary components of such programs, such as—
(i) academic, vocational, social, and independent
living skills;
(ii) evaluation of student progress;
(iii) program administration and evaluation;
(iv) student eligibility; and
(v) issues regarding the equivalency of a student’s
participation in such programs to semester, trimester,
quarter, credit, or clock hours at an institution of
higher education, as the case may be;
(F) analyze possible funding streams for such programs and provide recommendations regarding the funding streams;
(G) develop model memoranda of agreement for use
between or among institutions of higher education and
State and local agencies providing funding for such programs;
(H) develop mechanisms for regular communication,
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dents with intellectual disabilities under subpart 2 between or among such programs and to families and prospective students;
(I) host a meeting of all recipients of grants under subpart 2 not less often than once each year; and
(J) convene a workgroup to develop and recommend
model criteria, standards, and components of such programs as described in subparagraph (E), that are appropriate for the development of accreditation standards,
which workgroup shall include—
(i) an expert in higher education;
(ii) an expert in special education;
(iii) a disability organization that represents students with intellectual disabilities;
(iv) a representative from the National Advisory
Committee on Institutional Quality and Integrity; and
(v) a representative of a regional or national accreditation agency or association.
(6) REPORT.—Not later than five years after the date of the
establishment of the coordinating center under this subsection,
the coordinating center shall report to the Secretary, the authorizing committees, and the National Advisory Committee on
Institutional Quality and Integrity on the recommendations of
the workgroup described in paragraph (5)(J).
SEC. 778. ø20 U.S.C. 1140r¿ AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this subpart such sums as may be necessary for fiscal year 2009 and each
of the five succeeding fiscal years.
PART E—COLLEGE ACCESS CHALLENGE
GRANT PROGRAM
SEC. 781. ø20 U.S.C. 1141¿ COLLEGE ACCESS CHALLENGE GRANT PROGRAM.
(a) AUTHORIZATION AND APPROPRIATION.—There are authorized
to be appropriated, and there are appropriated, to carry out this
section $150,000,000 for each of the fiscal years 2010 through 2014.
The authority to award grants under this section shall expire at
the end of fiscal year 2014. In addition to the amount authorized
and appropriated under the preceding sentence, there are authorized to be appropriated to carry out this section such sums as may
be necessary for fiscal year 2009 and each of the five succeeding
fiscal years.
(b) PROGRAM AUTHORIZED.—
(1) GRANTS AUTHORIZED.—From amounts appropriated
under subsection (a), the Secretary shall, subject to the availability of appropriations, award grants, from allotments under
subsection (c), to States (and to philanthropic organization, as
appropriate under paragraph (3)) having applications approved
under subsection (d), to enable the State (or philanthropic organization) to pay the Federal share of the costs of carrying
out the activities and services described in subsection (f).
(2) FEDERAL SHARE; NON-FEDERAL SHARE.—
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(A) FEDERAL SHARE.—The amount of the Federal
share under this section for a fiscal year shall be equal to
2⁄3 of the costs of the activities and services described in
subsection (f) that are carried out under the grant.
(B) NON-FEDERAL SHARE.—The amount of the non-Federal share under this section shall be equal to 1⁄3 of the
costs of the activities and services described in subsection
(f). The non-Federal share may be in cash or in-kind, and
may be provided from State resources, contributions from
private organizations, or both.
(3) REDUCTION FOR FAILURE TO PAY NON-FEDERAL SHARE.—
If a State fails to provide the full non-Federal share required
under this subsection, the Secretary shall reduce the amount
of the grant payment under this section proportionately, and
may award the proportionate reduction amount of the grant directly to a philanthropic organization, as defined in subsection
(i), to carry out this section.
(4) TEMPORARY INELIGIBILITY FOR SUBSEQUENT PAYMENTS.—
(A) IN GENERAL.—The Secretary shall determine a
grantee to be temporarily ineligible to receive a grant payment under this section for a fiscal year if—
(i) the grantee fails to submit an annual report
pursuant to subsection (h) for the preceding fiscal
year; or
(ii) the Secretary determines, based on information in such annual report, that the grantee is not effectively meeting the conditions described under subsection (g) and the goals of the application under subsection (d).
(B) REINSTATEMENT.—If the Secretary determines that
a grantee is ineligible under subparagraph (A), the Secretary may enter into an agreement with the grantee setting forth the terms and conditions under which the grantee may regain eligibility to receive payments under this
section.
(c) DETERMINATION OF ALLOTMENT.—
(1) AMOUNT OF ALLOTMENT.—Subject to paragraph (2), in
making grant payments to grantees under this section, the allotment to each grantee for a fiscal year shall be equal to the
sum of—
(A) the amount that bears the same relation to 50 percent of the amount appropriated under subsection (a) for
such fiscal year as the number of residents in the State
aged 5 through 17 who are living below the poverty line
applicable to the resident’s family size (as determined
under section 673(2) of the Community Services Block
Grant Act) bears to the total number of such residents in
all States; and
(B) the amount that bears the same relation to 50 percent of the amount appropriated under subsection (a) for
such fiscal year as the number of residents in the State
aged 15 through 44 who are living below the poverty line
applicable to the individual’s family size (as determined
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under section 673(2) of the Community Services Block
Grant Act) bears to the total number of such residents in
all States.
(2) MINIMUM AMOUNT.—The allotment for each State
under this section for a fiscal year shall not be an amount that
is less than 1.0 percent of the total amount appropriated under
subsection (a) for such fiscal year.
(d) SUBMISSION AND CONTENTS OF APPLICATION.—
(1) IN GENERAL.—For each fiscal year for which a grantee
desires a grant payment under subsection (b), the State agency
with jurisdiction over higher education, or another agency designated by the Governor or chief executive of the State to administer the program under this section, or a philanthropic organization, in accordance with subsection (b)(3), shall submit
an application to the Secretary at such time, in such manner,
and containing the information described in paragraph (2).
(2) APPLICATION.—An application submitted under paragraph (1) shall include the following:
(A) A description of the grantee’s capacity to administer the grant under this section and report annually to
the Secretary on the activities and services described in
subsection (f).
(B) A description of the grantee’s plan for using the
grant funds to meet the requirements of subsections (f)
and (g), including plans for how the grantee will make special efforts to—
(i) provide such benefits to students in the State
that are underrepresented in postsecondary education;
or
(ii) in the case of a philanthropic organization that
operates in more than one State, provide benefits to
such students in each such State for which the philanthropic organization is receiving grant funds under
this section.
(C) A description of how the grantee will provide or coordinate the provision of the non-Federal share from State
resources or private contributions.
(D) A description of—
(i) the structure that the grantee has in place to
administer the activities and services described in subsection (f); or
(ii) the plan to develop such administrative capacity.
(e) SUBGRANTS TO NONPROFIT ORGANIZATIONS.—A State receiving a payment under this section may elect to make a subgrant to
one or more nonprofit organizations in the State, including an eligible not-for-profit holder (as described in section 435(p)), or those
nonprofit organizations that have agreements with the Secretary
under section 428(b), or a partnership of such organizations, to
carry out activities or services described in subsection (f), if the
nonprofit organization or partnership—
(1) was in existence on the day before the date of the enactment of this Act; and
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HIGHER EDUCATION ACT OF 1965
Sec. 781
(2) as of such day, was participating in activities and services related to increasing access to higher education, such as
those activities and services described in subsection (f).
(f) ALLOWABLE USES.—
(1) IN GENERAL.—Subject to paragraph (3), a grantee may
use a grant payment under this section only for the following
activities and services, pursuant to the conditions under subsection (g):
(A) Information for students and families regarding—
(i) the benefits of a postsecondary education;
(ii) postsecondary education opportunities;
(iii) planning for postsecondary education; and
(iv) career preparation.
(B) Information on financing options for postsecondary
education and activities that promote financial literacy
and debt management among students and families.
(C) Outreach activities for students who may be at
risk of not enrolling in or completing postsecondary education.
(D) Assistance in completion of the Free Application
for Federal Student Aid or other common financial reporting form under section 483(a) of the Higher Education Act
of 1965.
(E) Need-based grant aid for students.
(F) Professional development for guidance counselors
at middle schools and secondary schools, and financial aid
administrators and college admissions counselors at institutions of higher education, to improve such individuals’
capacity to assist students and parents with—
(i) understanding—
(I) entrance requirements for admission to institutions of higher education; and
(II) State eligibility requirements for Academic Competitiveness Grants or National
SMART Grants under section 401A, and other financial assistance that is dependent upon a student’s coursework;
(ii) applying to institutions of higher education;
(iii) applying for Federal student financial assistance and other State, local, and private student financial assistance and scholarships;
(iv) activities that increase students’ ability to successfully complete the coursework required for a postsecondary degree, including activities such as tutoring
or mentoring; and
(v) activities to improve secondary school students’
preparedness for postsecondary entrance examinations.
(G) Student loan cancellation or repayment (as applicable), or interest rate reductions, for borrowers who are
employed in a high-need geographical area or a high-need
profession in the State, as determined by the State.
(2) PROHIBITED USES.—Funds made available under this
section shall not be used to promote any lender’s loans.
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(3) USE OF FUNDS FOR ADMINISTRATIVE PURPOSES.—A
grantee may use not more than 6 percent of the total amount
of the sum of the Federal share provided under this section
and the non-Federal share required under this section for administrative purposes relating to the grant under this section.
(g) SPECIAL CONDITIONS.—
(1) AVAILABILITY TO STUDENTS AND FAMILIES.—A grantee
receiving a grant payment under this section shall—
(A) make the activities and services described in subparagraphs (A) through (F) of subsection (f)(1) that are
funded under the payment available to all qualifying students and families in the State;
(B) allow students and families to participate in the
activities and services without regard to—
(i) the postsecondary institution in which the student enrolls;
(ii) the type of student loan the student receives;
(iii) the servicer of such loan; or
(iv) the student’s academic performance;
(C) not charge any student or parent a fee or additional charge to participate in the activities or services;
and
(D) in the case of an activity providing grant aid, not
require a student to meet any condition other than eligibility for Federal financial assistance under title IV of the
Higher Education Act of 1965, except as provided for in
the loan cancellation or repayment or interest rate reductions described in subsection (f)(1)(G).
(2) PRIORITY.—A grantee receiving a grant payment under
this section shall, in carrying out any activity or service described in subsection (f)(1) with the grant funds, prioritize students and families who are living below the poverty line applicable to the individual’s family size (as determined under section 673(2) of the Community Services Block Grant Act).
(3) DISCLOSURES.—
(A) ORGANIZATIONAL DISCLOSURES.—In the case of a
State that has chosen to make a payment to an eligible
not-for-profit holder in the State in accordance with subsection (e), the holder shall clearly and prominently indicate the name of the holder and the nature of the holder’s
work in connection with any of the activities carried out,
or any information or services provided, with such funds.
(B) INFORMATIONAL DISCLOSURES.—Any information
about financing options for higher education provided
through an activity or service funded under this section
shall—
(i) include information to students and the students’ parents of the availability of Federal, State,
local, institutional, and other grants and loans for
postsecondary education; and
(ii) present information on financial assistance for
postsecondary education that is not provided under
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ner that is clearly distinct from information on student
financial assistance under such title.
(4) COORDINATION.—A grantee receiving a grant payment
under this section shall attempt to coordinate the activities
carried out with the grant payment with any existing activities
that are similar to such activities, and with any other entities
that support the existing activities in the State.
(h) REPORT.—A grantee receiving a payment under this section
shall prepare and submit an annual report to the Secretary on the
activities and services carried out under this section, and on the
implementation of such activities and services. The report shall include—
(1) each activity or service that was provided to students
and families over the course of the year;
(2) the cost of providing each activity or service;
(3) the number, and percentage, if feasible and applicable,
of students who received each activity or service; and
(4) the total contributions from private organizations included in the grantee’s non-Federal share for the fiscal year.
(i) DEFINITIONS.—In this section:
(1) PHILANTHROPIC ORGANIZATION.—The term ‘‘philanthropic organization’’ means a non-profit organization—
(A) that does not receive funds under title IV of the
Higher Education Act of 1965 or under the Elementary
and Secondary Education Act of 1965;
(B) that is not a local educational agency or an institution of higher education;
(C) that has a demonstrated record of dispersing grant
aid to underserved populations to ensure access to, and
participation in, higher education;
(D) that is affiliated with an eligible consortium (as
defined in paragraph (2)) to carry out this section; and
(E) the primary purpose of which is to provide financial aid and support services to students from underrepresented populations to increase the number of such students who enter and remain in college.
(2) ELIGIBLE CONSORTIUM.—The term ‘‘eligible consortium’’
means a partnership of 2 or more entities that have agreed to
work together to carry out this section that—
(A) includes—
(i) a philanthropic organization, which serves as
the manager of the consortium;
(ii) a State that demonstrates a commitment to
ensuring the creation of a Statewide system to address
the issues of early intervention and financial support
for eligible students to enter and remain in college;
and
(iii) at the discretion of the philanthropic organization described in clause (i), additional partners, including other non-profit organizations, government entities (including local municipalities, school districts,
cities, and counties), institutions of higher education,
and other public or private programs that provide
mentoring or outreach programs; and
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(B) conducts activities to assist students with entering
and remaining in college, which may include—
(i) providing need-based grants to students;
(ii) providing early notification to low-income students of their potential eligibility for Federal financial
aid (which may include assisting students and families
with filling out FAFSA forms), as well as other financial aid and other support available from the eligible
consortium;
(iii) encouraging increased student participation in
higher education through mentoring or outreach programs; and
(iv) conducting marketing and outreach efforts
that are designed to—
(I) encourage full participation of students in
the activities of the consortium that carry out this
section; and
(II) provide the communities impacted by the
activities of the consortium with a general knowledge about the efforts of the consortium.
(3) GRANTEE.—The term ‘‘grantee’’ means—
(A) a State awarded a grant under this section; or
(B) with respect to such a State that has failed to meet
the non-Federal share requirement of subsection (b), a
philanthropic organization awarded the proportionate reduction amount of such a grant under subsection (b)(3).
TITLE VIII—ADDITIONAL PROGRAMS
PART A—PROJECT GRAD
SEC. 801. ø20 U.S.C. 1161a¿ PROJECT GRAD.
(a) PURPOSES.—The purposes of this
section are—
(1) to provide support and assistance to programs implementing integrated education reform services in order to improve secondary school graduation, postsecondary program attendance, and postsecondary completion rates for low-income
students; and
(2) to promote the establishment of new programs to implement such integrated education reform services.
(b) DEFINITIONS.—In this section:
(1) LOW-INCOME STUDENT.—The term ‘‘low-income student’’
means a student who is determined by a local educational
agency to be from a low-income family using the measures described in section 1113(a)(5) of the Elementary and Secondary
Education Act of 1965.
(2) FEEDER PATTERN.—The term ‘‘feeder pattern’’ means a
secondary school and the elementary schools and middle
schools that channel students into that secondary school.
(c) CONTRACT AUTHORIZED.—From the amount appropriated to
carry out this section, the Secretary is authorized to award a fiveyear contract to Project GRAD USA (referred to in this section as
the ‘‘contractor’’), a nonprofit education organization that has as its
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primary purpose the improvement of secondary school graduation
and postsecondary attendance and completion rates for low-income
students. Such contract shall be used to carry out the requirements
of subsection (d) and to implement and sustain integrated education reform services through subcontractor activities described in
subsection (e)(3) at existing Project GRAD program sites and to
promote the expansion to new sites.
(d) REQUIREMENTS OF CONTRACT.—The Secretary shall enter
into an agreement with the contractor that requires that the contractor shall—
(1) enter into subcontracts with nonprofit educational organizations that serve a substantial number or percentage of lowincome students (referred to in this subsection as ‘‘subcontractors’’), under which the subcontractors agree to implement the
Project GRAD programs described in subsection (e) and provide
matching funds for such programs;
(2) directly carry out—
(A) activities to implement and sustain the literacy,
mathematics, classroom management, social service, and
postsecondary access programs further described in subsection (e)(3);
(B) activities to build the organizational and management capacity of the subcontractors to effectively implement and sustain the programs;
(C) activities for the purpose of improving and expanding the programs, including activities—
(i) to further articulate a program for one or more
grade levels and across grade levels;
(ii) to tailor a program for a particular target audience; and
(iii) to provide tighter integration across programs;
(D) activities for the purpose of implementing new
Project GRAD program sites;
(E) activities for the purpose of promoting greater public awareness of integrated education reform services to
improve secondary school graduation and postsecondary
attendance rates for low-income students; and
(F) other activities directly related to improving secondary school graduation and postsecondary attendance
and completion rates for low-income students; and
(3) use contract funds available under this section to pay—
(A) the amount determined under subsection (f); and
(B) costs associated with carrying out the activities
and providing the services, as provided in paragraph (2) of
this subsection.
(e) SUPPORTED PROGRAMS.—
(1) DESIGNATION.—The subcontractor programs referred to
in this subsection shall be known as Project GRAD programs.
(2) FEEDER PATTERNS.—Each subcontractor shall implement a Project GRAD program and shall, with the agreement
of the contractor—
(A) identify or establish not less than one feeder pattern of public schools; and
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(B) provide the integrated educational reform services
described in paragraph (3) at each identified feeder pattern.
(3) INTEGRATED EDUCATION REFORM SERVICES.—The services provided through a Project GRAD program may include—
(A) research-based programs in reading, mathematics,
and classroom management;
(B) campus-based social services programs, including a
systematic approach to increase family and community involvement in the schools served by the Project GRAD program;
(C) a postsecondary access program that includes—
(i) providing postsecondary scholarships for students who meet established criteria;
(ii) proven approaches for increasing student and
family postsecondary awareness; and
(iii) assistance for students in applying for higher
education financial aid; and
(D) such other services identified by the contractor as
necessary to increase secondary school graduation and
postsecondary attendance and completion rates.
(f) USE OF FUNDS.—Of the funds made available to carry out
this section, not more than five percent of such funds, or
$4,000,000, whichever is less, shall be used by the contractor to pay
for administration of the contract.
(g) CONTRIBUTION AND MATCHING REQUIREMENT.—
(1) IN GENERAL.—The contractor shall provide to each subcontractor an average of $200 for each student served by the
subcontractor in the Project GRAD program, adjusted to take
into consideration—
(A) the resources or funds available in the area where
the subcontractor will implement the Project GRAD program; and
(B) the need for the Project GRAD program in such
area to improve student outcomes, including reading and
mathematics achievement, secondary school graduation,
and postsecondary attendance and completion rates.
(2) MATCHING REQUIREMENT.—Each subcontractor shall
provide funds for the Project GRAD program in an amount
that is equal to the amount received by the subcontractor from
the contractor. Such matching funds may be provided in cash
or in kind, fairly evaluated.
(3) WAIVER AUTHORITY.—The contractor may waive, in
whole or in part, the requirement of paragraph (2) for a subcontractor, if the subcontractor—
(A) demonstrates that the subcontractor would not
otherwise be able to participate in the program; and
(B) enters into an agreement with the contractor with
respect to the amount to which the waiver will apply.
(h) EVALUATION.—
(1) EVALUATION BY THE SECRETARY.—The Secretary shall
select an independent entity to evaluate, every three years, the
performance of students who participate in a Project GRAD
program under this section. The evaluation shall—
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(A) be conducted using a rigorous research design for
determining the effectiveness of the Project GRAD programs funded under this section; and
(B) compare reading and mathematics achievement,
secondary school graduation, and postsecondary attendance and completion rates of students who participate in
a Project GRAD program funded under this section with
those indicators for students of similar backgrounds who
do not participate in such program.
(2) EVALUATION BY CONTRACTOR AND SUBCONTRACTORS.—
The contractor shall require each subcontractor to prepare an
in-depth report of the results and the use of funds of each
Project GRAD program funded under this section that includes—
(A) data on the reading and mathematics achievement
of students involved in the Project GRAD program;
(B) data on secondary school graduation and postsecondary attendance and completion rates; and
(C) such financial reporting as required by the Secretary to review the effectiveness and efficiency of the program.
(3) AVAILABILITY OF EVALUATIONS.—Copies of any evaluation or report prepared under this subsection shall be made
available to—
(A) the Secretary; and
(B) the authorizing committees.
(i) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
PART B—MATHEMATICS AND SCIENCE
SCHOLARS PROGRAM
SEC. 802. ø20 U.S.C. 1161b¿ MATHEMATICS AND SCIENCE SCHOLARS
PROGRAM.
(a) PROGRAM AUTHORIZED.—From the amounts appropriated
under subsection (f), the Secretary is authorized to award grants
to States, on a competitive basis, to enable the States to encourage
students to pursue a rigorous course of study, beginning in secondary school and continuing through the students’ postsecondary
education, in science, technology, engineering, mathematics, or a
health-related field.
(b) APPLICATIONS.—
(1) IN GENERAL.—A State 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. A State may submit an application to
receive a grant under subsection (c) or (d), or both.
(2) CONTENTS OF APPLICATION.—Each application shall include a description of—
(A) the program or programs for which the State is applying;
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(B) if applicable, the priority set by the Governor pursuant to subsection (c)(4) or (d)(3); and
(C) how the State will meet the requirements of subsection (e).
(c) MATHEMATICS AND SCIENCE SCHOLARS PROGRAM.—
(1) GRANT FOR SCHOLARSHIPS.—The Secretary shall award
grants under this subsection to provide scholarship support to
eligible students.
(2) ELIGIBLE STUDENTS.—A student is eligible for a scholarship under this subsection if the student—
(A) meets the requirements of section 484(a);
(B) is a full-time student in the student’s first year of
undergraduate study; and
(C) has completed a rigorous secondary school curriculum in mathematics and science.
(3) RIGOROUS CURRICULUM.—Each participating State shall
determine the requirements for a rigorous secondary school
curriculum in mathematics and science described in paragraph
(2)(C).
(4) PRIORITY FOR SCHOLARSHIPS.—The Governor of a State
may set a priority for awarding scholarships under this subsection for particular eligible students, such as students attending schools in high-need local educational agencies (as defined in section 200), 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 other
high-need students.
(5) AMOUNT AND DURATION OF SCHOLARSHIP.—The Secretary shall award a grant under this subsection to provide
scholarships—
(A) in an amount that does not exceed $5,000 per student; and
(B) for not more than one year of undergraduate
study.
(d) STEM OR HEALTH-RELATED SCHOLARS PROGRAM.—
(1) GRANT FOR SCHOLARSHIPS.—The Secretary shall award
grants under this subsection to provide scholarship support to
eligible students.
(2) ELIGIBLE STUDENTS.—A student is eligible for scholarship under this subsection if the student—
(A) meets the requirements of section 484(a);
(B) is a full-time student who has completed at least
the first year of undergraduate study;
(C) is enrolled in a program of undergraduate instruction leading to a bachelor’s degree with a major in science,
technology, engineering, mathematics, or a health-related
field; and
(D) has obtained a cumulative grade point average of
at least a 3.0 (or the equivalent as determined under regulations prescribed by the Secretary) at the end of the most
recently completed term.
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section for students agreeing to work in areas of science, technology, engineering, mathematics, or health-related fields.
(4) AMOUNT AND DURATION OF SCHOLARSHIP.—The Secretary shall award a grant under this subsection to provide
scholarships—
(A) in an amount that does not exceed $5,000 per student for an academic year; and
(B) in an aggregate amount that does not exceed
$20,000 per student.
(e) 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.
(f) AUTHORIZATION.—There are authorized to be appropriated
to carry out this section such sums as may be necessary for fiscal
year 2009 and each of the five succeeding fiscal years.
(g) DEFINITION.—The term ‘‘Governor’’ means the chief executive officer of a State.
PART C—BUSINESS WORKFORCE PARTNERSHIPS FOR JOB SKILL TRAINING IN HIGHGROWTH OCCUPATIONS OR INDUSTRIES
SEC. 803. ø20 U.S.C. 1161c¿ BUSINESS WORKFORCE PARTNERSHIPS FOR
JOB SKILL TRAINING IN HIGH-GROWTH OCCUPATIONS OR
INDUSTRIES.
(a) PURPOSE.—The purpose of this section is to provide grants
to institutions of higher education partnering with employers to—
(1) provide relevant job skill training in high-growth and
high-wage industries or occupations to nontraditional students;
and
(2) strengthen ties between degree credit offerings at institutions of higher education and business and industry workforce needs.
(b) AUTHORIZATION.—
(1) IN GENERAL.—From the amounts appropriated under
subsection (k), the Secretary shall award grants, on a competitive basis, to eligible partnerships for the purpose provided in
subsection (a).
(2) DURATION.—The Secretary shall award grants under
this section for a period of not less than 36 months and not
more than 60 months.
(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 (c).
(c) USE OF FUNDS.—In consultation with all of the members of
an eligible partnership, grant funds provided under this section
may be used to—
(1) expand or create for-credit academic programs or programs of training that provide relevant job skill training for
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ing offerings connected to registered apprenticeship programs
and entrepreneurial training opportunities;
(2) in consultation with faculty in the appropriate departments of an institution of higher education, adapt college offerings to the schedules and needs of working students, such as
the creation of evening, weekend, modular, compressed, or distance learning formats;
(3) purchase equipment that will facilitate the development of academic programs or programs of training that provide training for high-growth and high-wage occupations or industries;
(4) strengthen outreach efforts that enable students, including students with limited English proficiency, to attend institutions of higher education with academic programs or programs of training focused on high-growth and high-wage occupations or industries;
(5) expand worksite learning and training opportunities,
including registered apprenticeships as appropriate; and
(6) support other activities the Secretary determines to be
consistent with the purpose of this section.
(d) 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 and high-wage
occupations or industries; and
(B) how the eligible partnership has consulted with
employers and, where applicable, labor organizations to
identify local high-growth and high-wage occupations or
industries.
(e) AWARD BASIS.—In awarding grants under this section, the
Secretary shall—
(1) give priority to applications focused on serving nontraditional students;
(2) ensure an equitable distribution of grant funds under
this section among urban and rural areas of the United States;
and
(3) take into consideration the capability of an institution
of higher education that is participating in an eligible partnership to—
(A) offer one- or two-year high-quality programs of instruction and job skill training for students entering a
high-growth and high-wage occupation or industry;
(B) involve the local business community, and to place
graduates in employment in high-growth and high-wage
occupations or industries in the community; and
(C) serve adult workers or displaced workers.
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(f) ADMINISTRATIVE COSTS.—A grantee under this section may
use not more than five percent of the grant amount to pay administrative costs associated with activities funded by the grant.
(g) TECHNICAL ASSISTANCE.—The Secretary shall provide technical assistance to grantees under this section throughout the
grant period.
(h) EVALUATION.—The Secretary shall conduct an evaluation of
the effectiveness of the program under this section based on performance standards developed in consultation with the Department
of Labor, and shall disseminate to the public the findings of such
evaluation and information related to promising practices developed under this section.
(i) REPORT TO CONGRESS.—Not later than 36 months after the
first grant is awarded under this section, the Comptroller General
shall report to the authorizing committees recommendations—
(1) for changes to this Act and related Acts, such as the
Carl D. Perkins Career and Technical Education Act of 2006
and the Workforce Investment Act of 1998 (including titles I
and II), to help create and sustain business and industry workforce partnerships at institutions of higher education; and
(2) for other changes to this Act and related Acts to otherwise strengthen the links between business and industry workforce needs, workforce development programs, and other degree credit offerings at institutions of higher education.
(j) DEFINITIONS.—In this section:
(1) ELIGIBLE PARTNERSHIP.—
(A) IN GENERAL.—The term ‘‘eligible partnership’’
means a partnership that includes—
(i) one or more institutions of higher education,
one of which serves as the fiscal agent and grant recipient for the eligible partnership;
(ii) except as provided in subparagraph (B), an
employer, group of employers, local board (as such
term is defined in section 101 of the Workforce Investment Act of 1998 (29 U.S.C. 2801)), or workforce intermediary, or any combination thereof; and
(iii) where applicable, one or more labor organizations that represent workers locally in the businesses
or industries that are the focus of the partnership, including as a result of such an organization’s representation of employees at a worksite at which the partnership proposes to conduct activities under this section.
(B) STATE AND LOCAL BOARDS.—Notwithstanding subparagraph (A), if an institution of higher education that is
participating in an eligible partnership under this section
is located in a State that does not operate local boards, an
eligible partnership may include a State board (as such
term is defined in section 101 of the Workforce Investment
Act of 1998 (29 U.S.C. 2801)).
(C) RULE OF CONSTRUCTION.—Nothing in this subsection shall be construed to prohibit an eligible partnership that is in existence on the date of enactment of
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theHigher Education Opportunity Actfrom applying for a
grant under this section.
(2) NONTRADITIONAL STUDENT.—The term ‘‘nontraditional
student’’ means a student—
(A) who is an independent student, as defined in section 480(d);
(B) who 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 education methods; and
(C) who—
(i) enrolled for the first time in an institution of
higher education three or more years after completing
high school; or
(ii) works full-time.
(k) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
PART D—CAPACITY FOR NURSING STUDENTS
AND FACULTY
SEC. 804. ø20 U.S.C. 1161d¿ CAPACITY FOR NURSING STUDENTS AND
FACULTY.
(a) AUTHORIZATION.—From the amounts appropriated under
subsection (f), the Secretary shall award grants to institutions of
higher education that offer—
(1) an accredited registered nursing program at the baccalaureate or associate degree level to enable such program to expand the faculty and facilities of such program to accommodate
additional students in such program; or
(2) an accredited graduate-level nursing program to accommodate advanced practice degrees for registered nurses or to
accommodate students enrolled in such program to become
teachers of nursing students.
(b) DETERMINATION OF NUMBER OF STUDENTS AND APPLICATION.—Each institution of higher education that offers a program
described in subsection (a) that desires to receive a grant under
this section shall—
(1) determine, for the four academic years preceding the
academic year for which the determination is made, the average number of matriculated nursing program students, in each
of the institution’s accredited associate, baccalaureate, or advanced nursing degree programs at such institution for such
academic years;
(2) submit an application to the Secretary at such time, in
such manner, and accompanied by such information as the Secretary may require, including the average number in each of
the institution’s accredited nursing programs determined
under paragraph (1); and
(3) with respect to the partnerships described in subsection
(c)(2)(B), provide assurances that—
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(A) the individuals enrolled in the program will—
(i) be registered nurses in pursuit of a master’s or
doctoral degree in nursing; and
(ii) have a contractual obligation with the hospital
or health facility that is in partnership with the institution of higher education;
(B) the hospital or health facility of employment will
be the clinical site for the accredited school of nursing program, if the program requires a clinical site;
(C) individuals enrolled in the program will—
(i) maintain their employment on at least a parttime basis with the hospital or health facility that allowed them to participate in the program; and
(ii) receive an income from the hospital or health
facility, as at least a part-time employee, and release
times or flexible schedules, to accommodate their program requirements, as necessary; and
(D) upon completion of the program, recipients of
scholarships described in subsection (c)(2)(B)(ii)(III) will be
required to teach for two years in an accredited school of
nursing for each year of support the individual received
under this section.
(c) GRANT AMOUNT; AWARD BASIS.—
(1) GRANT AMOUNT.—For each academic year after academic year 2009–2010, the Secretary is authorized to provide
to each institution of higher education awarded a grant under
this section an amount that is equal to $3,000 multiplied by
the number by which—
(A) the number of matriculated nursing program students at such institution for such academic year, exceeds
(B) the average number determined with respect to
such institution under subsection (b)(1).
(2) DISTRIBUTION OF GRANTS AMONG DIFFERENT DEGREE
PROGRAMS.—
(A) IN GENERAL.—Subject to subparagraph (D), from
the funds available to award grants under this section for
each fiscal year, the Secretary shall—
(i) use 20 percent of such funds to award grants
under this section to institutions of higher education
for the purpose of accommodating advanced practice
degrees or students in accredited graduate-level nursing programs;
(ii) use 40 percent of such funds to award grants
under this section to institutions of higher education
for the purpose of expanding accredited registered
nurse programs at the baccalaureate degree level; and
(iii) use 40 percent of such funds to award grants
under this section to institutions of higher education
for the purpose of expanding accredited registered
nurse programs at the associate degree level.
(B) OPTIONAL USES OF FUNDS.—Grants awarded under
this section may be used to support partnerships with hospitals or health facilities to—
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(i) improve the alignment between nursing education and the emerging challenges of health care delivery by—
(I) the purchase of distance learning technologies and expanding methods of delivery of instruction to include alternatives to onsite learning; and
(II) the collection, analysis, and dissemination
of data on educational outcomes and best practices
identified through the activities described in this
section; and
(ii) ensure that students can earn a salary while
obtaining an advanced degree in nursing with the goal
of becoming nurse faculty by—
(I) funding release time for qualified nurses
enrolled in the graduate nursing program;
(II) providing for faculty salaries; or
(III) providing scholarships to qualified nurses
in pursuit of an advanced degree with the goal of
becoming faculty members in an accredited nursing program.
(C) CONSIDERATIONS IN MAKING AWARDS.—In awarding
grants under this section, the Secretary shall consider the
following:
(i) GEOGRAPHIC DISTRIBUTION.—Providing an equitable geographic distribution of such grants.
(ii) URBAN AND RURAL AREAS.—Distributing such
grants to urban and rural areas.
(iii) RANGE AND TYPE OF INSTITUTION.—Ensuring
that the activities to be assisted are developed for a
range of types and sizes of institutions of higher education, including institutions providing alternative
methods of delivery of instruction in addition to onsite learning.
(D) DISTRIBUTION OF EXCESS FUNDS.—If, for a fiscal
year, funds described in clause (i), (ii), or (iii) of subparagraph (A) remain available after the Secretary awards
grants under this section to all applicants for the particular category of accredited nursing programs described
in such clause, the Secretary shall use equal amounts of
the remaining funds to award grants under this section to
applicants that applied under the other categories of nursing programs.
(E) LIMITATION.—Of the amount appropriated to carry
out this section, the Secretary may award not more than
ten percent of such amount for the optional purposes
under subparagraph (B).
(d) DEFINITIONS.—For purposes of this section:
(1) HEALTH FACILITY.—The term ‘‘health facility’’ means an
Indian health service center, a Native Hawaiian health center,
a hospital, a federally qualified health center, a rural health
clinic, a nursing home, a home health agency, a hospice program, a public health clinic, a State or local department of
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public health, a skilled nursing facility, or an ambulatory surgical center.
(2) PUBLIC HEALTH SERVICE ACT.—The terms ‘‘accredited’’
and ‘‘school of nursing’’ have the meanings given those terms
in section 801 of the Public Health Service Act (42 U.S.C. 296).
(e) PROHIBITION.—
(1) IN GENERAL.—Funds provided under this section may
not be used for the construction of new facilities.
(2) RULE OF CONSTRUCTION.—Nothing in paragraph (1)
shall be construed to prohibit funds provided under this section
from being used for the repair or renovation of facilities.
(f) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
PART E—AMERICAN HISTORY FOR FREEDOM
SEC. 805. ø20 U.S.C. 1161e¿ AMERICAN HISTORY FOR FREEDOM.
(a) GRANTS AUTHORIZED.—From the amounts appropriated
under subsection (f), the Secretary is authorized to award threeyear 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 section shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may reasonably require.
(2) CONTENTS.—Each application submitted under paragraph (1) shall include a description of—
(A) how funds made available under this section will
be used for the activities set forth under subsection (e), inMay 7, 2013
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cluding 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 section 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 section 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 section.
(d) AWARD BASIS.—In awarding grants under this section, 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 section after
the grant has expired.
(e) USE OF FUNDS.—
(1) REQUIRED USE OF FUNDS.—Funds provided under this
section 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 traditional American history,
free institutions, or Western civilization; and
(B) conduct outreach activities to ensure that information about the activities funded under this section 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.
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(2) ALLOWABLE USES OF FUNDS.—Funds provided under
this section may be used to support—
(A) collaboration with entities such as—
(i) local educational agencies, for the purpose of
providing elementary 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 section, 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 section.
(f) AUTHORIZATION OF APPROPRIATIONS.—For the purpose of
carrying out this section, there are authorized to be appropriated
such sums as may be necessary for fiscal year 2009 and each of the
five succeeding fiscal years.
PART F—TEACH FOR AMERICA
SEC. 806. ø20 U.S.C. 1161f¿ TEACH FOR AMERICA.
(a) DEFINITIONS.—For purposes of this section:
(1) GRANTEE.—The term ‘‘grantee’’ means Teach
For America, Inc.
(2) HIGHLY QUALIFIED.—The term ‘‘highly qualified’’ has
the meaning given the term in section 9101 of the Elementary
and Secondary Education Act of 1965 or section 602 of the Individuals with Disabilities Education Act.
(3) HIGH-NEED LOCAL EDUCATIONAL AGENCY.—The term
‘‘high-need local educational agency’’ has the meaning given
such term in section 200.
(b) GRANTS AUTHORIZED.—From the amounts appropriated
under subsection (f), the Secretary is authorized to award a fiveyear grant to Teach For America, Inc., the national teacher corps
of outstanding recent college graduates who commit to teach for
two 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 to—
(1) provide highly qualified teachers to high-need local
educational agencies in urban and rural communities;
(2) pay the costs of recruiting, selecting, training, and supporting new teachers; and
(3) 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:
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(A) Recruiting and selecting teachers through a highly
selective national process.
(B) Providing preservice training to such teachers
through a rigorous summer institute that includes handson teaching experience and significant exposure to education coursework and theory.
(C) Placing such teachers in schools and positions designated by high-need local educational agencies as highneed placements serving underserved students.
(D) Providing ongoing professional development activities for such teachers’ first two 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 (b), except that funds may be used
for non-programmatic costs in accordance with subsection
(f)(2).
(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 such teachers received, the
placement sites of such teachers, the professional development of such teachers, and the retention of such 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) STUDENT 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.
(C) REQUIREMENTS.—The Secretary shall provide for
such a study not less than once every three years, and
each such study shall include multiple placement sites and
multiple schools within placement sites.
(D) PEER REVIEW STANDARDS.—Each such study shall
meet the peer review standards of the education research
community. Further, the peer review standards shall ensure that reviewers are practicing researchers and have
expertise in assessment systems, accountability, psychometric measurement and statistics, and instruction.
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(3) ACCOUNTING, FINANCIAL REPORTING, AND INTERNAL
CONTROL SYSTEMS.—
(A) IN GENERAL.—The grantee shall contract with an
independent auditor to conduct a comprehensive review of
the grantee’s accounting, financial reporting, and internal
control systems. Such review shall assess whether that
grantee’s accounting, financial reporting, and internal control systems are designed to—
(i) provide information that is complete, accurate,
and reliable;
(ii) reasonably detect and prevent material
misstatements, as well as fraud, waste, and abuse;
and
(iii) provide information to demonstrate the grantee’s compliance with related Federal programs, as applicable.
(B) REVIEW REQUIREMENTS.—Not later than 90 days
after the grantee receives funds to carry out this section
for the first fiscal year in which funds become available to
carry out this section after the date of enactment of
theHigher Education Opportunity Act, the independent
auditor shall complete the review required by this paragraph.
(C) REPORT.—Not later than 120 days after the grantee receives funds to carry out this section for the first fiscal year in which funds become available to carry out this
section after the date of enactment of theHigher Education
Opportunity Act, the independent auditor shall submit a
report to the authorizing committees and the Secretary of
the findings of the review required under this paragraph,
including any recommendations of the independent auditor, as appropriate, with respect to the grantee’s accounting, financial reporting, and internal control systems.
(f) AUTHORIZATION OF APPROPRIATIONS.—
(1) IN GENERAL.—The amount authorized to be appropriated to carry out this section shall not exceed—
(A) $20,000,000 for fiscal year 2009;
(B) $25,000,000 for fiscal year 2010; and
(C) such sums as may be necessary for each of the four
succeeding fiscal years.
(2) LIMITATION.—The grantee shall not use more than 5
percent of Federal funds made available under this section for
non-programmatic costs to carry out this section.
PART G—PATSY T. MINK FELLOWSHIP
PROGRAM
SEC. 807. ø20 U.S.C. 1161g¿ PATSY T. MINK FELLOWSHIP PROGRAM.
(a) PURPOSE; DESIGNATION.—
(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,
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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) ELIGIBLE INSTITUTION.—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.—From the amounts appropriated
under subsection (f), 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.—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 school 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.
(C) PARTNERSHIP.—In developing a grant application
and carrying out the grant activities authorized under this
section, an eligible institution may partner with a nonprofit organization with a demonstrated record of helping
minorities and women earn postbaccalaureate degrees.
(3) SELECTION OF APPLICATIONS.—In awarding grants
under paragraph (1), the Secretary shall—
(A) take into account—
(i) the number and distribution of minority and female faculty nationally;
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(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 faculty.
(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 private 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 are eligible for
assistance under title III or title V, or to consortia of eligible institutions that include at least one eligible institution
that is eligible for assistance under title III or title V.
(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 ten fellowship awards.
(E) INSUFFICIENT FUNDS.—If the amount appropriated
is not sufficient to permit all grantees under this section
to provide the minimum number of fellowships required by
subparagraph (D), the Secretary may, after awarding as
many grants to support the minimum number of fellowships as such amount appropriated permits, award grants
that do not require the grantee to award the minimum
number of fellowships required by such subparagraph.
(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 subparagraph
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demic years, an institutional allowance under this
paragraph shall be in an amount equal to 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 at the discretion of the eligible institution and
may be used to provide, except as prohibited under subparagraph (D), academic support and career transition
services for individuals awarded fellowships by such institution.
(C) REDUCTION.—The institutional allowance paid
under subparagraph (A) 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 program, or program for
the highest possible degree available, 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)); and
(iii) 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 subparagraph (A) not later than three years after
receiving the doctoral degree or highest possible degree available, which three-year period may be extended by the Secretary for extraordinary circumstances; and
(ii) to be employed by such institution for one year
for each year of fellowship assistance received under
this section.
(2) REPAYMENT FOR FAILURE TO COMPLY.—In the event
that any recipient of a fellowship under this section fails or refuses to comply with the agreement signed pursuant to paragraph (1)(B), the sum of the amounts of any fellowship received
by such recipient shall, upon a determination of such a failure
or refusal to comply, be treated as a Federal Direct Unsubsidized Stafford Loan under part D of title IV, and shall be
subject to repayment, together with interest thereon accruing
from the date of the grant award, in accordance with terms
and conditions specified by the Secretary in regulations under
this section.
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(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 paragraph
(1)(B).
(B) CONTENT.—The criteria under subparagraph (A)
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 fellows under the National Science Foundation Graduate Research Fellowship Program, 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 to 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 are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
PART H—IMPROVING COLLEGE ENROLLMENT
BY SECONDARY SCHOOLS
SEC. 808. ø20 U.S.C. 1161h¿ IMPROVING COLLEGE ENROLLMENT BY
SECONDARY SCHOOLS.
(a) IN GENERAL.—From the amounts appropriated under sub-
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nization described in subsection (b) to enable the nonprofit organization—
(1) to make publicly available the year-to-year postsecondary education enrollment rate trends of secondary school
students, disaggregated by secondary school, in compliance
with section 444 of the General Education Provisions Act (commonly known as the ‘‘Family Educational Rights and Privacy
Act of 1974’’);
(2) to identify not less than 50 urban local educational
agencies and five States with significant rural populations,
each serving a significant population of low-income students,
and to carry out a comprehensive assessment in the agencies
and States of the factors known to contribute to improved postsecondary education enrollment rates, which factors shall include—
(A) the local educational agency’s and State’s leadership strategies and capacities;
(B) the secondary school curriculum and class offerings of the local educational agency and State;
(C) the professional development used by the local
educational agency and the State to assist teachers, guidance counselors, and administrators in supporting the
transition of secondary students to postsecondary education;
(D) secondary school student attendance and other factors demonstrated to be associated with enrollment into
postsecondary education;
(E) the use of data systems by the local educational
agency and the State to measure postsecondary education
enrollment rates and the incentives in place to motivate
the efforts of faculty and students to improve student and
schoolwide outcomes; and
(F) strategies to mobilize student leaders to build a
college-bound culture; and
(3) to provide comprehensive services to improve the
schoolwide postsecondary education enrollment rates of each of
not less than ten local educational agencies and States, with
the federally funded portion of each project declining by not
less than 20 percent each year beginning in the second year of
the comprehensive services, that—
(A) participated in the needs assessment described in
paragraph (2); and
(B) demonstrated a willingness and commitment to
improving the postsecondary education enrollment rates of
the local educational agency or State, respectively.
(b) GRANT RECIPIENT CRITERIA.—The recipient of the grant
awarded under subsection (a) shall be a nonprofit organization
with demonstrated expertise—
(1) in increasing schoolwide postsecondary enrollment
rates in low-income communities nationwide by providing curriculum, training, and technical assistance to secondary school
staff and student peer influencers; and
(2) in a postsecondary education transition data management system.
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(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
PART I—EARLY CHILDHOOD EDUCATION PROFESSIONAL DEVELOPMENT AND CAREER
TASK FORCE
SEC. 811. ø20 U.S.C. 1161i¿ PURPOSE.
The purposes of this part are—
(1) to improve the quality of the early childhood education
workforce by creating a statewide early childhood education
professional development and career task force for early childhood education program staff, directors, administrators, and
faculty; and
(2) to create—
(A) a coherent system of core competencies, pathways
to qualifications, credentials, degrees, quality assurances,
access, and outreach, for early childhood education program staff, directors, administrators, and faculty that is
linked to compensation commensurate with experience and
qualifications;
(B) articulation agreements that enable early childhood education professionals to transition easily among degrees; and
(C) compensation initiatives for individuals working in
an early childhood education program that reflect the individuals’ credentials, degrees, and experience.
SEC. 812. ø20 U.S.C. 1161i–1¿ DEFINITION OF EARLY CHILDHOOD EDUCATION PROGRAM.
In this part, the term ‘‘early childhood education program’’
means—
(1) a Head Start program or an Early Head Start program
carried out under the Head Start Act (42 U.S.C. 9831 et seq.),
including a migrant or seasonal Head Start program or an Indian Head Start program;
(2) a State licensed or regulated child care program; or
(3) a State prekindergarten program or a program authorized under section 619 or part C of the Individuals with Disabilities Education Act, that serves children from birth through
age six and that addresses the children’s cognitive (including
language, early literacy, and pre-numeracy), social, emotional,
and physical development.
SEC. 813. ø20 U.S.C. 1161i–2¿ GRANTS AUTHORIZED.
(a) IN GENERAL.—From the amounts appropriated
under section 818, the Secretary is authorized to award grants to States in
accordance with the provisions of this part to enable such States—
(1) to establish a State Task Force described in section
814; and
(2) to support activities of the State Task Force described
in section 815.
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(b) COMPETITIVE BASIS.—Grants under this part shall be
awarded on a competitive basis.
(c) EQUITABLE GEOGRAPHIC DISTRIBUTION.—In awarding
grants under this part, the Secretary shall take into consideration
providing an equitable geographic distribution of such grants.
(d) DURATION.—Grants under this part shall be awarded for a
period of five years.
SEC. 814. ø20 U.S.C. 1161i–3¿ STATE TASK FORCE ESTABLISHMENT.
(a) STATE TASK FORCE ESTABLISHED.—The Governor of a State
receiving a grant under this part shall establish, or designate an
existing entity to serve as, the State Early Childhood Education
Professional Development and Career Task Force (hereafter in this
part referred to as the ‘‘State Task Force’’).
(b) MEMBERSHIP.—The State Task Force shall include a representative of a State agency, an institution of higher education
(including an associate or a baccalaureate degree granting institution of higher education), an early childhood education program, a
nonprofit early childhood organization, a statewide early childhood
workforce scholarship or supplemental initiative, the State Head
Start collaboration director, and any other entity or individual the
Governor determines appropriate.
SEC. 815. ø20 U.S.C. 1161i–4¿ STATE TASK FORCE ACTIVITIES.
(a) ACTIVITIES.—The State Task Force shall—
(1) coordinate and communicate regularly with the State
Advisory Council on Early Care and Education (hereafter in
this part referred to as ‘‘State Advisory Council’’) or a similar
State entity charged with creating a comprehensive system of
early care and education in the State, for the purposes of—
(A) integrating recommendations for early childhood
professional development and career activities into the
plans of the State Advisory Council; and
(B) assisting in the implementation of professional development and career activities that are consistent with
the plans described in subparagraph (A);
(2) conduct a review of opportunities for and barriers to
high-quality professional development, training, and higher
education degree programs, in early childhood development
and learning, including a periodic statewide survey concerning
the demographics of individuals working in early childhood
education programs in the State, which survey shall include information disaggregated by—
(A) race, gender, and ethnicity;
(B) compensation levels;
(C) type of early childhood education program setting;
(D) specialized knowledge of child development;
(E) years of experience in an early childhood education
program;
(F) attainment of—
(i) academic credit for coursework;
(ii) an academic degree;
(iii) a credential;
(iv) licensure; or
(v) certification in early childhood education; and
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(G) specialized knowledge in the education of children
with limited English proficiency and students with disabilities; and
(3) develop a plan for a comprehensive statewide professional development and career system for individuals working
in early childhood education programs or for early childhood
education providers, which plan may include—
(A) methods of providing outreach to early childhood
education program staff, directors, and administrators, including methods for how outreach is provided to nonEnglish speaking providers, in order to enable the providers to be aware of opportunities and resources under
the statewide plan;
(B) developing a unified data collection and dissemination system for early childhood education training, professional development, and higher education programs;
(C) increasing the participation of early childhood educators in high-quality training and professional development by assisting in paying the costs of enrollment in and
completion of such training and professional development
courses;
(D) increasing the participation of early childhood educators in undergraduate and graduate education programs
leading to degrees in early childhood education by providing assistance to pay the costs of enrollment in and
completion of such programs, which assistance—
(i) shall only be provided to an individual who—
(I) in the case of an individual pursuing an
undergraduate or graduate degree, enters into an
agreement under which the individual agrees to
work, for a reasonable number of years after receiving such a degree, in an early childhood education program that is located in a low-income
area; and
(II) has a family income equal to or less than
the annually adjusted national median family income as determined by the Bureau of the Census;
and
(ii) shall be provided in an amount that does not
exceed $17,500;
(E) supporting professional development activities and
a career lattice for a variety of early childhood professional
roles with varying professional qualifications and responsibilities for early childhood education personnel, including
strategies to enhance the compensation of such personnel;
(F) supporting articulation agreements between twoand four-year public and private institutions of higher education and mechanisms to transform other training, professional development, and experience into academic credit;
(G) developing mentoring and coaching programs to
support new educators in and directors of early childhood
education programs;
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(H) providing career development advising with respect to the field of early childhood education, including informing an individual regarding—
(i) entry into and continuing education requirements for professional roles in the field;
(ii) available financial assistance for postsecondary
education; and
(iii) professional development and career advancement in the field;
(I) enhancing the capacity and quality of faculty and
coursework in postsecondary programs that lead to an associate, baccalaureate, or graduate degree in early childhood education;
(J) consideration of the availability of on-line graduate
level professional development offered by institutions of
higher education with experience and demonstrated expertise in establishing programs in child development, in
order to improve the skills and expertise of individuals
working in early childhood education programs; and
(K) developing or enhancing a system of quality assurance with respect to the early childhood education professional development and career system, including standards
or qualifications for individuals and entities who offer
training and professional development in early childhood
education.
(b) PUBLIC HEARINGS.—The State Task Force shall hold public
hearings and provide an opportunity for public comment on the activities described in the statewide plan described in subsection
(a)(3).
(c) PERIODIC REVIEW.—The State Task Force shall meet periodically to review implementation of the statewide plan and to recommend any changes to the statewide plan the State Task Force
determines necessary.
SEC. 816. ø20 U.S.C. 1161i–5¿ STATE APPLICATION AND REPORT.
(a) IN GENERAL.—Each State desiring a grant under this
part
shall submit an application to the Secretary at such time, in such
manner, and accompanied by such information as the Secretary
may reasonably require. Each such application shall include a description of—
(1) the membership of the State Task Force;
(2) the activities for which the grant assistance will be
used;
(3) other Federal, State, local, and private resources that
will be available to support the activities of the State Task
Force described in section 815;
(4) the availability within the State of training, early childhood educator preparation, professional development, compensation initiatives, and career systems, related to early
childhood education; and
(5) the resources available within the State for such training, educator preparation, professional development, compensation initiatives, and career systems.
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(b) REPORT TO THE SECRETARY.—Not later than two years after
receiving a grant under this part, a State shall submit a report to
the Secretary that shall describe—
(1) other Federal, State, local, and private resources that
will be used in combination with a grant under this section to
develop or expand the State’s early childhood education professional development and career activities;
(2) the ways in which the State Advisory Council (or similar State entity) will coordinate the various State and local activities that support the early childhood education professional
development and career system; and
(3) the ways in which the State Task Force will use funds
provided under this part and carry out the activities described
in section 815.
SEC. 817. ø20 U.S.C. 1161i–6¿ EVALUATIONS.
(a) STATE EVALUATION.—Each State
receiving a grant under
this part shall—
(1) evaluate the activities that are assisted under this part
in order to determine—
(A) the effectiveness of the activities in achieving State
goals;
(B) the impact of a career lattice for individuals working in early childhood education programs;
(C) the impact of the activities on licensing or regulating requirements for individuals in the field of early
childhood development;
(D) the impact of the activities, and the impact of the
statewide plan described in section 815(a)(3), on the quality of education, professional development, and training related to early childhood education programs that are offered in the State;
(E) the change in compensation and retention of individuals working in early childhood education programs
within the State resulting from the activities; and
(F) the impact of the activities on the demographic
characteristics of individuals working in early childhood
education programs; and
(2) submit a report at the end of the grant period to the
Secretary regarding the evaluation described in paragraph (1).
(b) SECRETARY’S EVALUATION.—Not later than September 30,
2013, the Secretary, in consultation with the Secretary of Health
and Human Services, shall prepare and submit to the authorizing
committees an evaluation of the State reports submitted under
subsection (a)(2).
SEC. 818. ø20 U.S.C. 1161i–7¿ AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this part
such sums as may be necessary for fiscal year 2009 and each of the
five succeeding fiscal years.
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PART J—IMPROVING SCIENCE, TECHNOLOGY,
ENGINEERING, AND MATHEMATICS EDUCATION WITH A FOCUS ON ALASKA NATIVE
AND NATIVE HAWAIIAN STUDENTS
SEC. 819. ø20 U.S.C. 1161j¿ IMPROVING SCIENCE, TECHNOLOGY, ENGINEERING, AND MATHEMATICS EDUCATION WITH A FOCUS
ON ALASKA NATIVE AND NATIVE HAWAIIAN STUDENTS.
(a) PURPOSE.—The purposes of this section are—
(1) to develop or expand programs for the development of
professionals in the fields of science, technology, engineering,
and mathematics; and
(2) to focus resources on meeting the educational and cultural needs of Alaska Natives and Native Hawaiians.
(b) DEFINITIONS.—In this section:
(1) ALASKA NATIVE.—The term ‘‘Alaska Native’’ has the
meaning given such term in section 7306 of the Elementary
and Secondary Education Act of 1965.
(2) ELIGIBLE PARTNERSHIP.—The term ‘‘eligible partnership’’ means a partnership that includes—
(A) one or more colleges, schools, or departments of engineering;
(B) one or more colleges of science or mathematics;
(C) one or more institutions of higher education that
offer two-year degrees; and
(D) one or more private entities that—
(i) conduct career awareness activities showcasing
local technology professionals;
(ii) encourage students to pursue education in
science, technology, engineering, and mathematics
from elementary school through postsecondary education, and careers in those fields, with the assistance
of local technology professionals;
(iii) develop internships, apprenticeships, and
mentoring programs in partnership with relevant industries; and
(iv) assist with placement of interns and apprentices.
(3) INSTITUTION OF HIGHER EDUCATION.—The term ‘‘institution of higher education’’ has the meaning given such term in
section 101(a).
(4) NATIVE HAWAIIAN.—The term ‘‘Native Hawaiian’’ has
the meaning given the term in section 7207 of the Elementary
and Secondary Education Act of 1965.
(c) GRANT AUTHORIZED.—From the amounts appropriated to
carry out this section under subsection (i), the Secretary is authorized to award a grant to an eligible partnership to enable the eligible partnership to expand programs for the development of science,
technology, engineering, or mathematics professionals, from elementary school through postsecondary education, including existing
programs for Alaska Native and Native Hawaiian students.
(d) USES OF FUNDS.—Grant funds under this section shall be
used for one or more of the following:
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(1) Development or implementation of cultural, social, or
educational transition programs to assist students to transition
into college life and academics in order to increase such students’ retention rates in the fields of science, technology, engineering, or mathematics, with a focus on Alaska Native or Native Hawaiian students.
(2) Development or implementation of academic support or
supplemental educational programs to increase the graduation
rates of students in the fields of science, technology, engineering, or mathematics, with a focus on Alaska Native and Native
Hawaiian students.
(3) Development or implementation of internship programs, carried out in coordination with educational institutions
and private entities, to prepare students for careers in the
fields of science, technology, engineering, or mathematics, with
a focus on programs that serve Alaska Native or Native Hawaiian students.
(4) Such other activities as are consistent with the purpose
of this section.
(e) APPLICATION.—Each eligible partnership 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.
(f) PRIORITY.—In awarding grants under this section, the Secretary shall give priority to an eligible partnership that, on the day
before the date of enactment of theHigher Education Opportunity
Act, provides one or more programs in which 30 percent or more
of the program participants are Alaska Native or Native Hawaiian.
(g) PERIOD OF GRANT.—A grant under this section shall be
awarded for a period of five years.
(h) EVALUATION AND REPORT.—Each eligible partnership that
receives a grant under this section shall conduct an evaluation to
determine the effectiveness of the programs funded under the grant
and shall provide a report regarding the evaluation to the Secretary not later than six months after the end of the grant period.
(i) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
PART K—PILOT PROGRAMS TO INCREASE
COLLEGE PERSISTENCE AND SUCCESS
SEC. 820. ø20 U.S.C. 1161k¿ PILOT PROGRAMS TO INCREASE COLLEGE
PERSISTENCE AND SUCCESS.
(a) GRANTS AUTHORIZED.—From the amounts appropriated
under subsection (i), the Secretary is authorized to award grants in
accordance with this section, on a competitive basis, to eligible institutions to enable the institutions to develop programs to increase
the persistence and success of low-income college students.
(b) APPLICATIONS.—
(1) IN GENERAL.—An eligible institution seeking a grant
under this section shall submit an application to the Secretary
at such time, in such manner, and containing such information
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as the Secretary may require. An eligible institution may submit an application to receive a grant under subsection (c) or (d)
or both.
(2) EVALUATION CONDITION.—Each eligible institution
seeking a grant under this section shall agree to participate in
the evaluation described in subsection (f).
(3) PRIORITY FOR REPLICATION OF EVIDENCE-BASED POLICIES AND PRACTICES.—In awarding grants for the program
under subsection (d), the Secretary shall give priority to applications submitted by eligible institutions that propose to replicate policies and practices that have proven effective in increasing persistence and degree completion by low-income students or students in need of developmental education.
(c) PILOT PROGRAM TO INCREASE PERSISTENCE AND SUCCESS IN
COMMUNITY COLLEGES.—
(1) DEFINITIONS.—In this subsection:
(A) ELIGIBLE INSTITUTION.—The term ‘‘eligible institution’’ means an institution of higher education, as defined
in section 101, that provides a one- or two-year program
of study leading to a degree or certificate.
(B) ELIGIBLE STUDENT.—The term ‘‘eligible student’’
means a student who—
(i) is eligible to receive assistance under section
401;
(ii) is enrolled at least half-time;
(iii) is not younger than age 19;
(iv) is the parent of at least one dependent child,
which dependent child is age 18 or younger;
(v) has a secondary school diploma or its recognized equivalent; and
(vi) does not have a degree or certificate from an
institution of higher education.
(2) USES OF FUNDS.—
(A) SUPPORT.—The Secretary shall award grants
under this subsection to eligible institutions to enable such
institutions to provide additional monetary and nonmonetary support to eligible students to enable the eligible students to maintain enrollment and complete degree or certificate programs.
(B) REQUIRED USES.—Each eligible institution receiving a grant under this subsection shall use the grant
funds—
(i) to provide scholarships in accordance with
paragraph (3); and
(ii) to provide counseling services in accordance
with paragraph (4) .
(C) ALLOWABLE USES OF FUNDS.—Grant funds provided under this subsection may be used—
(i) to conduct outreach to make students aware of
the scholarships and counseling services available
under this subsection and to encourage the students to
participate in the program assisted under this subsection; and
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(ii) to provide incentives of $20 or less to applicants who complete the process of applying for assistance under this subsection, as compensation for the
student’s time.
(3) SCHOLARSHIP REQUIREMENTS.—
(A) IN GENERAL.—Each scholarship awarded under
this subsection shall—
(i) be awarded for one academic year consisting of
two semesters or the equivalent;
(ii) require the student to maintain, during the
scholarship period, at least half-time enrollment and
at least a 2.0 grade point average or the equivalent;
(iii) be awarded in the amount of $1,000 for each
of two semesters (prorated for quarters or other
equivalents), or $2,000 for an academic year;
(iv) not exceed the student’s cost of attendance, as
defined in section 472; and
(v) be paid, for each of the two semesters, in increments of—
(I) $250 upon enrollment (prorated for quarters or other equivalents);
(II) $250 upon passing midterm examinations
or comparable assessments (prorated for quarters
or other equivalents); and
(III) $500 upon passing courses (prorated for
quarters or other equivalents).
(B) NUMBER.—An eligible institution may award an eligible student not more than two scholarships under this
subsection.
(4) COUNSELING SERVICES.—
(A) IN GENERAL.—Each eligible institution receiving a
grant under this subsection shall use the grant funds to
provide students at the institution with a counseling staff
dedicated to students participating in the program under
this subsection. Each such counselor shall—
(i) have a caseload of less than 125 students;
(ii) use a proactive, team-oriented approach to
counseling;
(iii) hold a minimum of two meetings with each
student each semester; and
(iv) provide referrals to and follow-up with other
student services staff, including financial aid and career services.
(B) COUNSELING SERVICES AVAILABILITY.—The counseling services provided under this subsection shall be
available to participating students during the daytime and
evening hours.
(d) STUDENT SUCCESS GRANT PILOT PROGRAM.—
(1) DEFINITIONS.—
(A) ELIGIBLE INSTITUTION.—In this subsection, the
term ‘‘eligible institution’’ means an institution of higher
education in which, during the three-year period preceding
the year in which the institution is applying for a grant
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cent of the institution’s entering first-year students are assessed as needing developmental courses to bring reading,
writing, or mathematics skills up to college level.
(B) ELIGIBLE STUDENT.—In this subsection, the term
‘‘eligible student’’ means a student who—
(i) is eligible to receive assistance under section
401;
(ii) is a first-year student at the time of entering
the program;
(iii) is assessed as needing developmental education to bring reading, writing, or mathematics skills
up to college level; and
(iv) is selected by an eligible institution to participate in the program.
(2) STUDENT SUCCESS GRANT AMOUNT.—The Secretary
shall award grants under this subsection to eligible institutions
in an amount equal to $1,500 multiplied by the number of students the institution selects to participate in the program in
such year. An institution shall not select more than 200 students to participate in the program under this subsection during such year.
(3) REQUIRED USES.—An eligible institution that receives a
grant under this subsection shall use the grant funds to assign
a student success coach to each first-year student participating
in the program to provide intensive career and academic advising, ongoing personal help in navigating college services (such
as financial aid and registration), and assistance in connecting
to community resources that can help students overcome family and personal challenges to success. Student success coaches—
(A) shall work with not more than 50 new students
during any academic period;
(B) may be employees of academic departments, student services offices, community-based organizations, or
other entities as determined appropriate by the institution;
and
(C) shall meet with each eligible student selected for
the program before registration for courses.
(4) ALLOWABLE USES.—An eligible institution that receives
a grant under this subsection may use the grant funds to provide services and program innovations for students participating in the program, including the following:
(A) College and career success courses provided at no
charge to participating students. These courses may cover
college success topics, including how to take notes, how to
study, how to take tests, and how to budget time, and may
also include a substantial career exploration component.
Institutions may use such courses to help students develop
a college and career success plan, so that by the end of the
first semester the students have a clear sense of their career goals and what classes to take to achieve such goals.
(B) Work-study jobs with private employers in the students’ fields of study.
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(C) Learning communities that ensure that students
participating in the program are clustered together for at
least two courses beginning in the first semester after enrolling and have other opportunities to create and maintain bonds that allow them to provide academic and social
support to each other.
(D) Curricular redesign, which may include such innovations as blended or accelerated remediation classes that
help student success grant recipients to attain college-level
reading, writing, or math skills (or a combination thereof)
more rapidly than traditional remediation formats allow,
and intensive skills refresher classes, offered prior to each
semester, to help students who have tested into remedial
coursework to reach entry level assessment scores for the
postsecondary programs they wish to enter.
(E) Instructional support, such as learning labs, supplemental instruction, and tutoring.
(F) Assistance with support services, such as child
care and transportation.
(5) REQUIRED NON-FEDERAL SHARE.—Each institution participating in the program under this subsection shall provide
a non-Federal share of 25 percent of the amount of the grant
to carry out the activities of the program. The non-Federal
share under this subsection may be provided in cash or in
kind.
(e) PERIOD OF GRANT.—The Secretary may award a grant
under subsection (c) or (d) of this section for a period of five years.
(f) TECHNICAL ASSISTANCE AND EVALUATION.—
(1) CONTRACTOR.—From the funds appropriated under this
section, the Secretary shall enter into a contract with one or
more private, nonprofit entities to provide technical assistance
to grantees and to conduct the evaluations required under
paragraph (3).
(2) EVALUATIONS.—The evaluations required under paragraph (3) shall be conducted by entities that are capable of designing and carrying out independent evaluations that identify
the impact of the activities carried out by eligible institutions
under this section on improving persistence and success of student participants under this section.
(3) CONDUCT OF EVALUATIONS.—The Secretary shall conduct an evaluation of the impact of the persistence and success
grant programs as follows:
(A) PROGRAM TO INCREASE PERSISTENCE IN COMMUNITY
COLLEGES.—The evaluation of the program under subsection (c) shall be conducted using a random assignment
research design with the following requirements:
(i) When students are recruited for the program,
all students will be told about the program and the
evaluation.
(ii) Baseline data will be collected from all applicants for assistance under subsection (c).
(iii) Students will be assigned randomly to two
groups, which will consist of—
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(I) a program group that will receive the
scholarship and the additional counseling services;
and
(II) a control group that will receive whatever
regular financial aid and counseling services are
available to all students at the institution of higher education.
(B) STUDENT SUCCESS GRANT PROGRAM.—Eligible institutions receiving a grant to carry out the program under
subsection (d) shall work with the evaluator to track persistence and completion outcomes for students in such program, specifically the proportion of these students who
take and complete developmental education courses, the
proportion who take and complete college-level coursework,
and the proportion who complete certificates and degrees.
The data shall be broken down by gender, race, ethnicity,
and age and the evaluator shall assist institutions in analyzing these data to compare program participants to comparable nonparticipants, using statistical techniques to
control for differences in the groups.
(g) REPORT.—The Secretary shall—
(1) provide a report to the authorizing committees that includes the evaluation and information on best practices and
lessons learned during the pilot programs described in this section; and
(2) disseminate the report to the public by making the report available on the Department’s website.
(h) 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 institution to carrying out the activities described in subsections (c) and (d).
(i) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years. The Secretary may use not more than two percent of the
amounts appropriated to provide the technical assistance and conduct the evaluations required under subsection (f).
PART L—STUDENT SAFETY AND CAMPUS
EMERGENCY MANAGEMENT
SEC. 821. ø20 U.S.C. 1161l¿ STUDENT SAFETY AND CAMPUS EMERGENCY
MANAGEMENT.
(a) GRANTS AUTHORIZED.—
(1) IN GENERAL.—From the amounts appropriated under
subsection (f), the Secretary is authorized to award grants, on
a competitive basis, to institutions of higher education or consortia of institutions of higher education to enable institutions
of higher education or consortia to pay the Federal share of the
cost of carrying out the authorized activities described in subsection (c).
(2) CONSULTATION WITH THE ATTORNEY GENERAL AND THE
SECRETARY OF HOMELAND SECURITY.—Where appropriate, the
Secretary shall award grants under this section in consultation
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with the Attorney General and the Secretary of Homeland Security.
(3) DURATION.—The Secretary shall award each grant
under this section for a period of two years.
(4) LIMITATION ON INSTITUTIONS AND CONSORTIA.—An institution of higher education or consortium shall be eligible for
only one grant under this section.
(b) FEDERAL SHARE; NON-FEDERAL SHARE.—
(1) IN GENERAL.—The Federal share of the activities described in subsection (c) shall be 50 percent.
(2) NON-FEDERAL SHARE.—An institution of higher education or consortium that receives a grant under this section
shall provide the non-Federal share, which may be provided
from State and local resources dedicated to emergency preparedness and response.
(c) AUTHORIZED ACTIVITIES.—Each institution of higher education or consortium receiving a grant under this section may use
the grant funds to carry out one or more of the following:
(1) Developing and implementing a state-of-the-art emergency communications system for each campus of an institution of higher education or consortium, in order to contact students via cellular, text message, or other state-of-the-art communications methods when a significant emergency or dangerous situation occurs. An institution or consortium using
grant funds to carry out this paragraph shall also, in coordination with the appropriate State and local emergency management authorities—
(A) develop procedures that students, employees, and
others on a campus of an institution of higher education
or consortium will be directed to follow in the event of a
significant emergency or dangerous situation; and
(B) develop procedures the institution of higher education or consortium shall follow to inform, in a reasonable
and timely manner, students, employees, and others on a
campus in the event of a significant emergency or dangerous situation, which procedures shall include the emergency communications system described in this paragraph.
(2) Supporting measures to improve safety at the institution of higher education or consortium, such as—
(A) security assessments;
(B) security training of personnel and students at the
institution of higher education or consortium;
(C) where appropriate, coordination of campus preparedness and response efforts with local law enforcement,
local emergency management authorities, and other agencies, to improve coordinated responses in emergencies
among such entities;
(D) establishing a hotline that allows a student or
staff member at an institution or consortium to report another student or staff member at the institution or consortium who the reporting student or staff member believes
may be a danger to the reported student or staff member
or to others; and
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(E) acquisition and installation of access control, video
surveillance, intrusion detection, and perimeter security
technologies and systems.
(3) Coordinating with appropriate local entities for the provision of mental health services for students and staff of the
institution of higher education or consortium, including mental
health crisis response and intervention services for students
and staff affected by a campus or community emergency.
(d) APPLICATION.—Each institution of higher education or consortium desiring 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.
(e) TECHNICAL ASSISTANCE.—The Secretary shall coordinate
technical assistance provided by State and local emergency management agencies, the Department of Homeland Security, and
other agencies as appropriate, to institutions of higher education or
consortia that request assistance in developing and implementing
the activities assisted under this section.
(f) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this part such sums as may be necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
SEC. 822. ø20 U.S.C. 1161l–1¿ MODEL EMERGENCY RESPONSE POLICIES,
PROCEDURES, AND PRACTICES.
The Secretary, in consultation with the Attorney General and
the Secretary of Homeland Security, shall continue to—
(1) advise institutions of higher education on model emergency response policies, procedures, and practices; and
(2) disseminate information concerning those policies, procedures, and practices.
SEC. 823. ø20 U.S.C. 1161l–2¿ PREPARATION FOR FUTURE DISASTERS
PLAN BY THE SECRETARY.
The Secretary shall continue to coordinate with the Secretary
of Homeland Security and other appropriate agencies to develop
and maintain procedures to address the preparedness, response,
and recovery needs of institutions of higher education in the event
of a natural or manmade disaster with respect to which the President has declared a major disaster or emergency (as such terms are
defined in section 824).
SEC. 824. ø20 U.S.C. 1161l–3¿ EDUCATION DISASTER AND EMERGENCY
RELIEF LOAN PROGRAM.
(a) PROGRAM AUTHORIZED.—The Secretary, in consultation
with the Secretary of Homeland Security, is authorized to establish
an Education Disaster and Emergency Relief Loan Program for institutions of higher education impacted by a major disaster or
emergency declared by the President.
(b) USE OF ASSISTANCE.—The Secretary shall, subject to the
availability of appropriations, provide loans under this section to
institutions of higher education after the declaration of a major disaster or emergency by the President. Loan funds provided under
this section may be used for construction, replacement, renovation,
and operations costs resulting from a major disaster or emergency
declared by the President.
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(c) APPLICATION REQUIREMENTS.—To be considered for a loan
under this section, an institution of higher education shall—
(1) submit a financial statement and other appropriate
data, documentation, or evidence requested by the Secretary
that indicates that the institution incurred losses resulting
from the impact of a major disaster or emergency declared by
the President, and the monetary amount of such losses;
(2) demonstrate that the institution had appropriate insurance policies prior to the major disaster or emergency and filed
claims, as appropriate, related to the major disaster or emergency; and
(3) demonstrate that the institution attempted to minimize
the cost of any losses by pursuing collateral source compensation from the Federal Emergency Management Agency prior to
seeking a loan under this section, except that an institution of
higher education shall not be required to receive collateral
source compensation from the Federal Emergency Management
Agency prior to being eligible for a loan under this section.
(d) AUDIT.—The Secretary may audit a financial statement
submitted under subsection (c) and an institution of higher education shall provide any information that the Secretary determines
necessary to conduct such an audit.
(e) REDUCTION IN LOAN AMOUNTS.—To determine the amount
of a loan to make available to an institution of higher education
under this section, the Secretary shall calculate the monetary
amount of losses incurred by such institution as a result of a major
disaster or emergency declared by the President, and shall reduce
such amount by the amount of collateral source compensation the
institution has already received from insurance, the Federal Emergency Management Agency, and the Small Business Administration.
(f) ESTABLISHMENT OF LOAN PROGRAM.—Prior to disbursing
any loans under this section, the Secretary shall prescribe regulations that establish the Education Disaster and Emergency Relief
Loan Program, including—
(1) terms for the loan program;
(2) procedures for an application for a loan;
(3) minimum requirements for the loan program and for
receiving a loan, including—
(A) online forms to be used in submitting a request for
a loan;
(B) information to be included in such forms; and
(C) procedures to assist in filing and pursuing a loan;
and
(4) any other terms and conditions the Secretary may prescribe after taking into consideration the structure of other existing capital financing loan programs under this Act.
(g) DEFINITIONS.—In this section:
(1) INSTITUTION AFFECTED BY A GULF HURRICANE DISASTER.—The term ‘‘institution affected by a Gulf hurricane disaster’’ means an institution of higher education that—
(A) is located in an area affected by a Gulf hurricane
disaster; and
(B) is able to demonstrate that the institution—
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(i) incurred physical damage resulting from the
impact of a Gulf hurricane disaster; and
(ii) was not able to fully reopen in existing facilities or to fully reopen to the pre-hurricane levels for
30 days or more on or after August 29, 2005.
(2) AREA AFFECTED BY A GULF HURRICANE DISASTER; GULF
HURRICANE DISASTER.—The terms ‘‘area affected by a Gulf hurricane disaster’’ and ‘‘Gulf hurricane disaster’’ have the meanings given such terms in section 209 of the Higher Education
Hurricane Relief Act of 2005 (Public Law 109–148, 119 Stat.
2808).
(3) EMERGENCY.—The term ‘‘emergency’’ has the meaning
given such term in section 102(1) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122(1)).
(4) INSTITUTIONS OF HIGHER EDUCATION.—The term ‘‘institution of higher education’’ has the meaning given such term
in section 101.
(5) MAJOR DISASTER.—The term ‘‘major disaster’’ has the
meaning given the term in section 102(2) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C.
5122(2)).
(h) EFFECTIVE DATE.—Loans provided to institutions of higher
education pursuant to this section shall be available only with respect to major disasters or emergencies declared by the President
that occur after the date of the enactment of theHigher Education
Opportunity Act, except that loans may be provided pursuant to
this section to an institution affected by a Gulf hurricane disaster
with respect to such disaster.
(i) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
SEC. 825. ø20 U.S.C. 1161l–4¿ GUIDANCE ON MENTAL HEALTH DISCLOSURES FOR STUDENT SAFETY.
(a) GUIDANCE.—The Secretary shall continue to provide guid-
ance that clarifies the role of institutions of higher education with
respect to the disclosure of education records, including to a parent
or legal guardian of a dependent student, in the event that such
student demonstrates that the student poses a significant risk of
harm to himself or herself or to others, including a significant risk
of suicide, homicide, or assault. Such guidance shall further clarify
that an institution of higher education that, in good faith, discloses
education records or other information in accordance with the requirements of this Act and section 444 of the General Education
Provisions Act (commonly known as the ‘‘Family Educational
Rights and Privacy Act of 1974’’) shall not be liable to any person
for that disclosure.
(b) INFORMATION TO CONGRESS.—The Secretary shall provide
an update to the authorizing committees on the Secretary’s activities under subsection (a) not later than 180 days after the date of
enactment of theHigher Education Opportunity Act.
SEC. 826. ø20 U.S.C. 1161l–5¿ RULE OF CONSTRUCTION.
Nothing in this part shall be construed—
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(1) to provide a private right of action to any person to enforce any provision of this section;
(2) to create a cause of action against any institution of
higher education or any employee of the institution for any
civil liability; or
(3) to affect section 444 of the General Education Provisions Act (commonly known as the ‘‘Family Educational Rights
and Privacy Act of 1974’’) or the regulations issued under section 264 of the Health Insurance Portability and Accountability
Act of 1996 (42 U.S.C. 1320d–2note).
PART M—LOW TUITION
SEC. 830. ø20 U.S.C. 1161m¿ INCENTIVES AND REWARDS FOR LOW TUITION.
(a) REWARDS FOR LOW TUITION.—
(1) GRANTS.—From funds made available under subsection
(e), the Secretary shall award grants to institutions of higher
education that, for academic year 2009–2010 or any succeeding
academic year—
(A) have an annual tuition and fee increase, expressed
as a percentage change, for the most recent academic year
for which satisfactory data is available, that is in the lowest 20 percent of such increases for each category described in subsection (b);
(B) are public institutions of higher education that
have tuition and fees that are in the lowest quartile of institutions in each category described in subsection (b)(1),
(b)(4), or (b)(7); or
(C) are public institutions of higher education that
have a tuition and fee increase of less than $600 for a
first-time, full-time undergraduate student.
(2) USE OF FUNDS.—Funds awarded to an institution of
higher education under paragraph (1) shall be distributed by
the institution in the form of need-based grant aid to students
who are eligible for Federal Pell Grants, except that no student
shall receive an amount under this section that would cause
the amount of total financial aid received by such student to
exceed the cost of attendance of the institution.
(b) CATEGORIES OF INSTITUTIONS.—The categories of institutions described in subsection (a) shall be the following:
(1) four-year public institutions of higher education;
(2) four-year private, nonprofit institutions of higher education;
(3) four-year private, for-profit institutions of higher education;
(4) two-year public institutions of higher education;
(5) two-year private, nonprofit institutions of higher education;
(6) two-year private, for-profit institutions of higher education;
(7) less than two-year public institutions of higher education;
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(8) less than two-year private, nonprofit institutions of
higher education; and
(9) less than two-year private, for-profit institutions of
higher education.
(c) REWARDS FOR GUARANTEED TUITION.—
(1) BONUS.—For each institution of higher education that
the Secretary determines complies with the requirements of
paragraph (2) or (3) of this subsection, the Secretary shall provide to such institution a bonus amount. Such institution shall
award the bonus amount in the form of need-based aid first to
students who are eligible for Federal Pell Grants who were in
attendance at the institution during the award year that such
institution satisfied the eligibility criteria for maintaining low
tuition and fees, then to students who are eligible for Federal
Pell Grants who were not in attendance at the institution during such award year.
(2) FOUR-YEAR INSTITUTIONS.—An institution of higher
education that provides a program of instruction for which it
awards a bachelor’s degree complies with the requirements of
this paragraph if—
(A) for a public institution of higher education, such
institution’s tuition and fees are in the lowest quartile of
institutions in the same category as described under subsection (b); or
(B) for any institution of higher education, such institution guarantees that for any academic year (or the
equivalent) beginning on or after July 1, 2009, and for
each of the four succeeding continuous academic years, the
tuition and fees charged to an undergraduate student will
not exceed—
(i) for a public institution of higher education,
$600 per year for a full-time undergraduate student;
or
(ii) for any other institution of higher education—
(I) the amount that the student was charged
for an academic year at the time the student first
enrolled in the institution of higher education,
plus
(II) the percentage change in tuition and fees
at the institution for the three most recent academic years for which data is available, multiplied
by the amount determined under subclause (I).
(3) LESS-THAN FOUR-YEAR INSTITUTIONS.—An institution of
higher education that does not provide a program of instruction for which it awards a bachelor’s degree complies with the
requirements of this paragraph if—
(A) for a public institution of higher education, such
institution’s tuition is in the lowest quartile of institutions
in the same category as described under subsection (b); or
(B) for any institution of higher education, such institution guarantees that for any academic year (or the
equivalent) beginning on or after July 1, 2009, and for
each of the 1.5 succeeding continuous academic years, the
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Sec. 832
tuition and fees charged to an undergraduate student will
not exceed—
(i) for a public institution of higher education,
$600 per year for a full-time undergraduate student;
or
(ii) for any other institution of higher education—
(I) the amount that the student was charged
for an academic year at the time the student first
enrolled in the institution of higher education,
plus
(II) the percentage change in tuition and fees
at the institution for the three most recent academic years for which data is available, multiplied
by the amount determined under subclause (I).
(d) DEFINITIONS.—In this section, the terms ‘‘tuition and fees’’
and ‘‘net price’’ have the meaning given to such terms in section
132 of this Act.
(e) AUTHORIZATION.—There are authorized to be appropriated
to carry out this section such sums as may be necessary for fiscal
year 2009 and each of the five succeeding fiscal years.
PART N—COOPERATIVE EDUCATION
SEC. 831. ø20 U.S.C. 1161n¿ STATEMENT OF PURPOSE; DEFINITION.
(a) PURPOSE.—It is the purpose of this part to award grants
to
institutions of higher education or consortia of such institutions to
encourage such institutions to develop and make available to their
students work experience that will aid such students in future careers and will enable such students to support themselves financially while in school.
(b) DEFINITION.—In this part the term ‘‘cooperative education’’
means the provision of alternating or parallel periods of academic
study and public or private employment to give students work experiences related to their academic or occupational objectives and
an opportunity to earn the funds necessary for continuing and completing their education.
SEC. 832. ø20 U.S.C. 1161n–1¿ RESERVATIONS.
(a) RESERVATIONS.—Of the amount appropriated
to carry out
this part in each fiscal year—
(1) not less than 50 percent shall be available for awarding
grants to institutions of higher education and consortia of such
institutions described in section 833(a)(1)(A) for cooperative
education under section 833;
(2) not less than 25 percent shall be available for awarding
grants to institutions of higher education described in section
833(a)(1)(B) for cooperative education under section 833;
(3) not to exceed 11 percent shall be available for demonstration projects under paragraph (1) of section 834(a);
(4) not to exceed 11 percent shall be available for training
and resource centers under paragraph (2) of section 834(a); and
(5) not to exceed 3 percent shall be available for research
under paragraph (3) of section 834(a).
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(b) AVAILABILITY OF APPROPRIATIONS.—Amounts appropriated
under this part shall not be used for the payment of compensation
of students for employment by employers participating in a program under this part.
SEC. 833. ø20 U.S.C. 1161n–2¿ GRANTS FOR COOPERATIVE EDUCATION.
(a) GRANTS AUTHORIZED.—
(1) IN GENERAL.—The Secretary is authorized, from the
amount available to carry out this section under section 835 in
each fiscal year and in accordance with the provisions of this
part—
(A) to award grants to institutions of higher education
or consortia of such institutions that have not received a
grant under this paragraph in the ten-year period preceding the date for which a grant under this section is requested to pay the Federal share of the cost of planning,
establishing, expanding, or carrying out programs of cooperative education by such institutions or consortia of institutions; and
(B) to award grants to institutions of higher education
that are operating an existing cooperative education program as determined by the Secretary to pay the Federal
share of the cost of planning, establishing, expanding, or
carrying out programs of cooperative education by such institutions.
(2) PROGRAM REQUIREMENT.—Cooperative education programs assisted under this section shall provide alternating or
parallel periods of academic study and of public or private employment, giving students work experience related to their academic or occupational objectives and the opportunity to earn
the funds necessary for continuing and completing their education.
(3) AMOUNT OF GRANTS.—
(A) The amount of each grant awarded pursuant to
paragraph (1)(A) to any institution of higher education or
consortia of such institutions in any fiscal year shall not
exceed $500,000.
(B)(i) Except as provided in clauses (ii) and (iii), the
Secretary shall award grants in each fiscal year to each institution of higher education described in paragraph (1)(B)
that has an application approved under subsection (b) in
an amount that bears the same ratio to the amount reserved pursuant to section 832(a)(2) for such fiscal year as
the number of unduplicated students placed in cooperative
education jobs during the preceding fiscal year by such institution of higher education (other than cooperative education jobs under section 834 and as determined by the
Secretary) bears to the total number of all such students
placed in such jobs during the preceding fiscal year by all
such institutions.
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Sec. 833
cation program’s personnel and operating budget for the preceding fiscal year.
(iii) The minimum annual grant amount that an institution of higher education is eligible to receive under paragraph
(1)(B) is $1,000 and the maximum annual grant amount is
$75,000.
(4) LIMITATION.—The Secretary shall not award grants
pursuant to subparagraphs (A) and (B) of paragraph (1) to the
same institution of higher education or consortia of such institution in any one fiscal year.
(5) USES.—Grants awarded under paragraph (1)(B) shall
be used exclusively—
(A) to expand the quality of and participation in a cooperative education program;
(B) for outreach to potential participants in new curricular areas; and
(C) for outreach to potential participants including
underrepresented and nontraditional populations.
(b) APPLICATIONS.—Each institution of higher education or consortium of such institutions desiring to receive a grant under this
section shall submit an application to the Secretary at such time
and in such manner as the Secretary shall prescribe. Each such application shall—
(1) set forth the program or activities for which a grant is
authorized under this section;
(2) specify each portion of such program or activities which
will be performed by a nonprofit organization or institution
other than the applicant, and the amount of grant funds to be
used for such program or activities;
(3) provide that the applicant will expend, during the fiscal
year for which the grant is awarded for the purpose of such
program or activities, not less than the amount expended for
such purpose during the previous fiscal year;
(4) describe the plans which the applicant will carry out to
assure, and contain a formal statement of the institution’s commitment that assures, that the applicant will continue the cooperative education program beyond the five-year period of
Federal assistance described in subsection (c)(1) at a level that
is not less than the total amount expended for such program
during the first year such program was assisted under this section;
(5) provide that, in the case of an institution of higher education that provides a two-year program that is acceptable for
full credit toward a bachelor’s degree, the cooperative education program will be available to students who are certificate
or associate degree candidates and who carry at least one-half
of the normal full-time academic workload;
(6) provide that the applicant will—
(A) make such reports as may be necessary to ensure
that the applicant is complying with the provisions of this
section, including reports for the second and each succeeding fiscal year for which the applicant receives a grant
with respect to the impact of the cooperative education
program in the previous fiscal year, including—
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(i) the number of unduplicated student applicants
in the cooperative education program;
(ii) the number of unduplicated students placed in
cooperative education jobs;
(iii) the number of employers who have hired cooperative education students;
(iv) the income for students derived from working
in cooperative education jobs; and
(v) the increase or decrease in the number of
unduplicated students placed in cooperative education
jobs in each fiscal year compared to the previous fiscal
year; and
(B) keep such records as may be necessary to ensure
that the applicant is complying with the provisions of this
part, including the notation of cooperative education employment on the student’s transcript;
(7) describe the extent to which programs in the academic
disciplines for which the application is made have satisfactorily
met the needs of public and private sector employers;
(8) describe the extent to which the institution is committed to extending cooperative education on an institutionwide basis for all students who can benefit;
(9) describe the plans that the applicant will carry out to
evaluate the applicant’s cooperative education program at the
end of the grant period;
(10) provide for such fiscal control and fund accounting
procedures as may be necessary to ensure proper disbursement
of, and accounting for, Federal funds paid to the applicant
under this part;
(11) demonstrate a commitment to serving underserved
populations at the institution; and
(12) include such other information as may be necessary to
carry out the provisions of this part.
(c) DURATION OF GRANTS; FEDERAL SHARE.—
(1) DURATION OF GRANTS.—No individual institution of
higher education may receive, individually or as a participant
in a consortium of such institutions—
(A) a grant pursuant to subsection (a)(1)(A) for more
than five fiscal years; or
(B) a grant pursuant to subsection (a)(1)(B) for more
than five fiscal years.
(2) FEDERAL SHARE.—The Federal share of a grant under
subsection (a)(1)(A) may not exceed—
(A) 85 percent of the cost of carrying out the program
or activities described in the application in the first year
the applicant receives a grant under this section;
(B) 70 percent of such cost in the second such year;
(C) 55 percent of such cost in the third such year;
(D) 40 percent of such cost in the fourth such year;
and
(E) 25 percent of such cost in the fifth such year.
(3) SPECIAL RULE.—Notwithstanding any other provision of
law, the Secretary may not waive the provisions of paragraphs
(1) and (2).
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(d) MAINTENANCE OF EFFORT.—If the Secretary determines
that a recipient of funds under this section has failed to maintain
the fiscal effort described in subsection (b)(3), then the Secretary
may elect not to make grant payments under this section to such
recipient.
(e) FACTORS FOR SPECIAL CONSIDERATION OF APPLICATIONS.—
(1) IN GENERAL.—In approving applications under this section, the Secretary shall give special consideration to applications from institutions of higher education or consortia of such
institutions for programs that show the greatest promise of
success based on—
(A) the extent to which programs in the academic discipline with respect to which the application is made have
satisfactorily met the needs of public and private sector
employers;
(B) the strength of the commitment of the institution
of higher education or consortium of such institutions to
cooperative education as demonstrated by the plans and
formalized institutional commitment statement which such
institution or consortium has made to continue the program after the termination of Federal financial assistance;
(C) the extent to which the institution or consortium
of institutions is committed to extending cooperative education for students who can benefit; and
(D) such other factors as are consistent with the purpose of this part.
(2) ADDITIONAL SPECIAL CONSIDERATION.—The Secretary
shall also give special consideration to applications from institutions of higher education or consortia of such institutions
that demonstrate a commitment to serving underserved populations attending such institutions.
SEC. 834. ø20 U.S.C. 1161n–3¿ DEMONSTRATION AND INNOVATION
PROJECTS; TRAINING AND RESOURCE CENTERS; AND RESEARCH.
(a) AUTHORIZATION.—From the amounts appropriated under
section 835, the Secretary is authorized, in accordance with the
provisions of this section, to make grants and enter into contracts—
(1) from the amounts available in each fiscal year under
section 832(a)(3), for the conduct of demonstration projects designed to demonstrate or determine the effectiveness of innovative methods of cooperative education;
(2) from the amounts available in each fiscal year under
section 832(a)(4), for the conduct of training and resource centers designed to—
(A) train personnel in the field of cooperative education;
(B) improve materials used in cooperative education
programs if such improvement is conducted in conjunction
with other activities described in this paragraph;
(C) provide technical assistance to institutions of higher education to increase the potential of the institution to
continue to conduct a cooperative education program without Federal assistance;
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(D) encourage model cooperative education programs
that furnish education and training in occupations in
which there is a national need;
(E) support partnerships under which an institution
carrying out a comprehensive cooperative education program joins with one or more institutions of higher education in order to—
(i) assist the institution that is not the institution
carrying out the cooperative education program to develop and expand an existing program of cooperative
education; or
(ii) establish and improve or expand comprehensive cooperative education programs; and
(F) encourage model cooperative education programs
in the fields of science and mathematics for women and
minorities who are underrepresented in such fields; and
(3) from the amounts available in each fiscal year under
section 832(a)(5), for the conduct of research relating to cooperative education.
(b) ADMINISTRATIVE PROVISION.—
(1) IN GENERAL.—To carry out this section, the Secretary
may—
(A) make grants to or contracts with institutions of
higher education or consortia of such institutions; and
(B) make grants to or contracts with other public or
private nonprofit agencies or organizations, whenever such
grants or contracts will contribute to the objectives of this
section.
(2) LIMITATION.—
(A) CONTRACTS WITH INSTITUTIONS OF HIGHER EDUCATION.—The Secretary may use not more than three percent of the amount appropriated to carry out this section
in each fiscal year to enter into contracts described in
paragraph (1)(A).
(B) CONTRACTS WITH OTHER AGENCIES OR ORGANIZATIONS.—The Secretary may use not more than three percent of the amount appropriated to carry out this section
in each fiscal year to enter into contracts described in
paragraph (1)(B).
(c) SUPPLEMENT NOT SUPPLANT.—A recipient of a grant or contract under this section may use the funds provided only to supplement funds made available from non-Federal sources to carry out
the activities supported by such grant or contract, and in no case
to supplant such funds from non-Federal sources.
SEC. 835. ø20 U.S.C. 1161n–4¿ AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this part
such sums as may be necessary for fiscal year 2009 and each of the
five succeeding fiscal years.
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PART O—COLLEGE PARTNERSHIP GRANTS
SEC. 841. ø20 U.S.C. 1161o¿ COLLEGE PARTNERSHIP GRANTS AUTHORIZED.
(a) GRANTS AUTHORIZED.—From the amount appropriated to
carry out this section, the Secretary shall award grants to eligible
partnerships for the purposes of developing and implementing articulation agreements.
(b) ELIGIBLE PARTNERSHIPS.—For purposes of this part, an eligible partnership shall include at least two institutions of higher
education, or a system of institutions of higher education, and may
include either or both of the following:
(1) A consortia of institutions of higher education.
(2) A State higher education agency.
(c) PRIORITY.—The Secretary shall give priority to eligible partnerships that—
(1) are located in a State that has employed strategies described in section 486A(b)(1); or
(2) include—
(A) one or more junior or community colleges (as defined by section 312(f)) that award associate’s degrees; and
(B) one or more institutions of higher education that
offer a baccalaureate or post-baccalaureate degree not
awarded by the institutions described in subparagraph (A)
with which it is partnered.
(d) MANDATORY USE OF FUNDS.—Grants awarded under this
part shall be used for—
(1) the development of policies and programs to expand opportunities for students to earn bachelor’s degrees, by facilitating the transfer of academic credits between institutions
and expanding articulation and guaranteed transfer agreements between institutions of higher education, including
through common course numbering and general education core
curriculum;
(2) academic program enhancements; and
(3) programs to identify and remove barriers that inhibit
student transfers, including technological and informational
programs.
(e) OPTIONAL USE OF FUNDS.—Grants awarded under this part
may be used for—
(1) support services to students participating in the program, such as tutoring, mentoring, and academic and personal
counseling; and
(2) any service that facilitates the transition of students
between the partner institutions.
(f) PROHIBITION.—No funds provided under this section shall be
used to financially compensate an institution for the purposes of
entering into an articulation agreement or for accepting students
transferring into such institution.
(g) APPLICATIONS.—Any eligible partnership that desires to obtain a grant under this section shall submit to the Secretary an application at such time, in such manner, and containing such information or assurances as the Secretary may require.
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820
(h) DEFINITION.—For purposes of this section, the term ‘‘articulation agreement’’ means an agreement between institutions of
higher education that specifies the acceptability of courses in transfer toward meeting specific degree requirements.
(i) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
PART P—JOBS TO CAREERS
SEC. 851. ø20 U.S.C. 1161p¿ GRANTS TO CREATE BRIDGES FROM JOBS
TO CAREERS.
(a) PURPOSE.—The purpose of this section is to provide grants
on a competitive basis to institutions of higher education for the
purpose of improving developmental education to help students
move more rapidly into for-credit occupational courses and into better jobs that may require a certificate or degree.
(b) AUTHORIZATION OF PROGRAM.—From amounts appropriated
to carry out this section, the Secretary shall award grants, on a
competitive basis, to institutions of higher education, as defined in
section 101(a), to create workforce bridge programs between developmental courses and for-credit courses in occupational certificate
programs that are articulated to degree programs. Such workforce
bridge programs shall focus on—
(1) improving developmental education, including English
language instruction, by customizing developmental education
to student career goals; and
(2) helping students move rapidly from developmental
coursework into for-credit occupational courses and through
program completion.
(c) APPLICATION.—An institution of higher education desiring a
grant under this section shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may reasonably require.
(d) PRIORITIES.—The Secretary shall give priority to applications that—
(1) are from institutions of higher education in which not
less than 50 percent of the institution’s entering first-year students who are subject to mandatory assessment are assessed
as needing developmental courses to bring reading, writing, or
mathematics skills up to college level; and
(2) propose to replicate practices that have proven effective
with adults, or propose to collaborate with adult education providers.
(e) REQUIRED ACTIVITY.—An institution of higher education
that receives a grant under this section shall use the grant funds
to create workforce bridge programs to customize developmental
education curricula, including English language instruction, to reflect the content of for-credit occupational certificate or degree programs, or clusters of such programs, in which developmental education students are enrolled or plan to enroll. Such workforce
bridge programs shall integrate the curricula and the instruction
of the developmental and college-level coursework.
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(f) PERMISSIBLE ACTIVITIES.—An institution of higher education
that receives a grant under this section may use the grant funds
to carry out one or more of the following activities:
(1) Designing and implementing innovative ways to improve retention in and completion of developmental education
courses, including enrolling students in cohorts, accelerating
course content, dually enrolling students in developmental and
college-level courses, tutoring, providing counseling and other
supportive services, and giving small, material incentives for
attendance and performance.
(2) In consultation with faculty in the appropriate departments, reconfiguring courses offered on-site during standard
academic terms for modular, compressed, or other alternative
schedules, or for distance-learning formats, to meet the needs
of working adults.
(3) Developing counseling strategies that address the
needs of students in remedial education courses, and including
counseling students on career options and the range of programs available, such as certificate programs that are articulated to degree programs and programs designed to facilitate
transfer to four-year institutions of higher education.
(4) Improving the quality of teaching in remedial courses
through professional development, reclassification of such
teaching positions, or other means the institution of higher
education determines appropriate.
(5) Any other activities the institution of higher education
and the Secretary determine will promote retention of, and
completion by, students attending institutions of higher education.
(g) GRANT PERIOD.—Grants made under this section shall be
for a period of not less than three years and not more than five
years.
(h) TECHNICAL ASSISTANCE.—The Secretary shall provide technical assistance to recipients of, and applicants for, grants under
this section.
(i) REPORT AND SUMMARY.—Each institution of higher education that receives a grant under this section shall report to the
Secretary on the effectiveness of the program in enabling students
to move rapidly from developmental coursework into for-credit occupational courses and through program completion. The Secretary
shall summarize the reports, identify best practices, and disseminate the information from such summary and identification to the
public.
(j) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
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PART Q—RURAL DEVELOPMENT GRANTS FOR
RURAL-SERVING COLLEGES AND UNIVERSITIES
SEC. 861. ø20 U.S.C. 1161q¿ GRANTS TO RURAL-SERVING INSTITUTIONS
OF HIGHER EDUCATION.
(a) PURPOSES.—The purposes of this section are—
(1) to increase enrollment and graduation rates of secondary school graduates and nontraditional students from
rural areas at two-year and four-year institutions of higher
education, and their articulation from two-year degree programs into four-year degree programs; and
(2) to promote economic growth and development in rural
America through partnership grants to consortia of rural-serving institutions of higher education, local educational agencies,
and regional employers.
(b) DEFINITIONS.—For the purposes of this section:
(1) RURAL-SERVING INSTITUTION OF HIGHER EDUCATION.—
The term ‘‘rural-serving institution of higher education’’ means
an institution of higher education that primarily serves rural
areas.
(2) RURAL AREA.—The term ‘‘rural area’’ means an area
that is defined, identified, or otherwise recognized as rural by
a governmental agency of the State in which the area is located.
(3) NONTRADITIONAL STUDENT.—The term ‘‘nontraditional
student’’ means an individual who—
(A) delays enrollment in an institution of higher education by three or more years after secondary school graduation;
(B) attends an institution of higher education parttime; or
(C) attends an institution of higher education and—
(i) works full-time;
(ii) is an independent student, as defined in section 480;
(iii) has one or more dependents other than a
spouse;
(iv) is a single parent; or
(v) does not have a secondary school diploma or
the recognized equivalent of such a diploma.
(4) REGIONAL EMPLOYER.—The term ‘‘regional employer’’
means an employer within a rural area.
(c) PARTNERSHIP.—
(1) REQUIRED PARTNERS.—A rural-serving institution of
higher education, or a consortium of rural-serving institutions
of higher education, that receives a grant under this section
shall carry out the activities of the grant in partnership with—
(A) one or more local educational agencies serving a
rural area; and
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vestment Act of 1998 (29 U.S.C. 2801)) serving a rural
area.
(2) OPTIONAL PARTNERS.—A rural-serving institution of
higher education, or a consortium of rural-serving institutions
of higher education, that receives a grant under this section,
may carry out the activities of the grant in partnership with—
(A) an educational service agency (as defined in section 9101 of the Elementary and Secondary Education Act
of 1965); or
(B) a nonprofit organization with demonstrated expertise in rural education at the secondary and postsecondary
levels.
(d) GRANTS AUTHORIZED.—
(1) IN GENERAL.—From amounts made available under
subsection (g), the Secretary is authorized to award grants, on
a competitive basis, to eligible rural-serving institutions of
higher education or a consortium of such institutions, to carry
out the activities described in subsection (f).
(2) DURATION.—A grant awarded under this section shall
be awarded for a period not to exceed three years.
(3) MAXIMUM AND MINIMUM GRANTS.—No grant awarded
under this section shall be less than $200,000.
(4) SPECIAL CONSIDERATIONS.—In awarding grants under
this section, the Secretary shall give special consideration to
applications that demonstrate the most potential and propose
the most promising and innovative approaches for—
(A) increasing the percentage of graduates of rural secondary schools attending rural-serving institutions of higher education;
(B) meeting the employment needs of regional employers with graduates of rural-serving institutions of higher
education; and
(C) improving the health of the regional economy of a
rural area through a partnership of local educational agencies serving the rural area, rural-serving institutions of
higher education, and regional employers.
(5) LIMITATION.—A rural-serving institution of higher education shall not receive more than one grant under this section.
(e) APPLICATIONS.—Each rural-serving institution of higher
education desiring a grant under this section shall submit to the
Secretary an application at such time, in such manner, and containing such information as the Secretary may reasonably require.
(f) REQUIRED USE OF FUNDS.—A rural-serving institution of
higher education that receives a grant under this section shall use
grant funds for at least three of the following four purposes:
(1) To improve postsecondary enrollment rates for rural
secondary school students at rural-serving institutions of higher education, which may include—
(A) programs to provide students and families with
counseling related to applying for postsecondary education,
and Federal and State financial assistance for postsecondary education;
(B) programs that provide students and families of
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es, programs, and internships of rural-serving institutions
of higher education, including covering the cost of transportation to and from such institutions; and
(C) other initiatives that assist students and families
in applying for and developing interest in attending ruralserving institutions of higher education.
(2) To increase enrollment rates of nontraditional students
in degree programs at rural-serving institutions of higher education, which may include—
(A) programs to provide nontraditional students with
counseling related to applying for postsecondary education,
and Federal and State financial assistance for postsecondary education;
(B) community outreach initiatives to encourage nontraditional students to enroll in a rural-serving institution
of higher education; and
(C) programs to improve the enrollment of nontraditional students in two-year degree programs and the transition of nontraditional students articulating from two-year
degree programs to four-year degree programs.
(3) To create or strengthen academic programs at ruralserving institutions of higher education to prepare graduates to
enter into high-need occupations in the regional and local
economies.
(4) To provide additional career training to students of
rural-serving institutions of higher education in fields relevant
to the regional economy.
(g) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as many be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
PART R—CAMPUS-BASED DIGITAL THEFT
PREVENTION
SEC. 871. ø20 U.S.C. 1161r¿ CAMPUS-BASED DIGITAL THEFT PREVENTION.
(a) PROGRAM AUTHORITY.—From the amounts appropriated
under subsection (d), 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, education, and cost-effective technological solutions, to reduce and eliminate the illegal downloading
and distribution of intellectual property. Such grants or contracts
may also be used for the support of higher education centers 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
higher education.
(b) AWARDS.—Grants and contracts shall be awarded under
this section on a competitive basis.
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tract under this section 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.
(d) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
PART S—TRAINING FOR REALTIME WRITERS
SEC. 872. ø20 U.S.C. 1161s¿ PROGRAM TO PROMOTE TRAINING AND JOB
PLACEMENT OF REALTIME WRITERS.
(a) AUTHORIZATION OF GRANT PROGRAM.—
(1) IN GENERAL.—From the amounts appropriated to carry
out this section, the Secretary shall award grants, on a competitive basis, to eligible entities under paragraph (2) to promote training and placement of individuals, including individuals who have completed a court reporting training program,
as realtime writers in order to meet the requirements for
closed captioning of video programming set forth in section 713
of the Communications Act of 1934 (47 U.S.C. 613) and the
rules prescribed thereunder.
(2) ELIGIBLE ENTITIES.—For purposes of this section, an eligible entity is a court reporting program that—
(A) has a curriculum capable of training realtime writers qualified to provide captioning services;
(B) is accredited by an accrediting agency or association recognized by the Secretary; and
(C) is participating in student aid programs under title
IV.
(3) PRIORITY IN GRANTS.—In determining whether to make
grants under this section, the Secretary shall give a priority to
eligible entities that, as determined by the Secretary—
(A) possess the most substantial capability to increase
their capacity to train realtime writers;
(B) demonstrate the most promising collaboration with
educational institutions, businesses, labor organizations, or
other community groups having the potential to train or
provide job placement assistance to realtime writers; or
(C) propose the most promising and innovative approaches for initiating or expanding training or job placement assistance efforts with respect to realtime writers.
(4) DURATION OF GRANT.—A grant under this section shall
be for a period of up to five years.
(5) MAXIMUM AMOUNT OF GRANT.—The amount of a grant
provided under this subsection to an eligible entity may not exceed $1,500,000 for the period of the grant.
(b) APPLICATION.—
(1) IN GENERAL.—To receive a grant under subsection (a),
an eligible entity shall submit an application to the Secretary
at such time and in such manner as the Secretary may require.
The application shall contain the information set forth under
paragraph (2).
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(2) INFORMATION.—Information in the application of an eligible entity for a grant under subsection (a) shall include the
following:
(A) A description of the training and assistance to be
funded using the grant amount, including how such training and assistance will increase the number of realtime
writers.
(B) A description of performance measures to be utilized to evaluate the progress of individuals receiving such
training and assistance in matters relating to enrollment,
completion of training, and job placement and retention.
(C) A description of the manner in which the eligible
entity will ensure that recipients of scholarships, if any,
funded by the grant will be employed and retained as
realtime writers.
(D) A description of the manner in which the eligible
entity intends to continue providing the training and assistance to be funded by the grant after the end of the
grant period, including any partnerships or arrangements
established for that purpose.
(E) A description of how the eligible entity will work
with local boards (as defined in section 101 of the Workforce Investment Act of 1998 (29 U.S.C. 2801)) to ensure
that training and assistance to be funded with the grant
will further local workforce goals, including the creation of
educational opportunities for individuals who are from economically disadvantaged backgrounds or are displaced
workers.
(F) Additional information, if any, on the eligibility of
the eligible entity for priority in the making of grants
under subsection (a)(3).
(G) Such other information as the Secretary may require.
(c) USE OF FUNDS.—
(1) IN GENERAL.—An eligible entity receiving a grant under
subsection (a) shall use the grant amount for purposes relating
to the recruitment, training and assistance, and job placement
of individuals, including individuals who have completed a
court reporting training program, as realtime writers, including—
(A) recruitment;
(B) subject to paragraph (2), the provision of scholarships;
(C) distance learning;
(D) further developing and implementing both English
and Spanish curricula to more effectively train individuals
in realtime writing skills, and education in the knowledge
necessary for the delivery of high quality closed captioning
services;
(E) mentoring students to ensure successful completion of the realtime training and providing assistance in
job placement;
(F) encouraging individuals with disabilities to pursue
a career in realtime writing; and
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(G) the employment and payment of personnel for the
purposes described in this paragraph.
(2) SCHOLARSHIPS.—
(A) AMOUNT.—The amount of a scholarship under
paragraph (1)(B) shall be based on the amount of need of
the scholarship recipient for financial assistance, as determined in accordance with part F of title IV.
(B) AGREEMENT.—Each recipient of a scholarship
under paragraph (1)(B) shall enter into an agreement with
the school in which the recipient is enrolled to provide
realtime writing services for the purposes described in subsection (a)(1) for a period of time appropriate (as determined by the Secretary) for the amount of the scholarship
received.
(C) COURSEWORK AND EMPLOYMENT.—The Secretary
shall establish requirements for coursework and employment for recipients of scholarships under paragraph (1)(B),
including requirements for repayment of scholarship
amounts in the event of failure to meet such requirements
for coursework and employment. The Secretary may waive,
in whole or in part, the requirements for repayment of
scholarship amounts on the basis of economic conditions
which may affect the ability of scholarship recipients to
find work as realtime writers.
(3) ADMINISTRATIVE COSTS.—The recipient of a grant under
this section may not use more than five percent of the grant
amount to pay administrative costs associated with activities
funded by the grant. The Secretary shall use not more than
five percent of the amount available for grants under this section in any fiscal year for administrative costs of the program.
(4) SUPPLEMENT NOT SUPPLANT.—Grant amounts under
this section shall supplement and not supplant other Federal
or non-Federal funds of the grant recipient for purposes of promoting the training and placement of individuals as realtime
writers.
(d) REPORT.—
(1) IN GENERAL.—Each eligible entity receiving a grant
under subsection (a) shall submit to the Secretary, at the end
of the grant period, a report on the activities of such entity
with respect to the use of grant amounts during the grant period.
(2) REPORT INFORMATION.—Each report of an eligible entity under paragraph (1) shall include—
(A) an assessment by the entity of the effectiveness of
activities carried out using such funds in increasing the
number of realtime writers, using the performance measures submitted by the eligible entity in the application for
the grant under subsection (b)(2); and
(B) a description of the best practices identified by the
eligible entity for increasing the number of individuals
who are trained, employed, and retained in employment as
realtime writers.
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(3) SUMMARIES.—The Secretary shall summarize the reports submitted under paragraph (2) and make such summary
available on the Department’s website.
(e) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
PART T—CENTERS OF EXCELLENCE FOR
VETERAN STUDENT SUCCESS
SEC. 873. ø20 U.S.C. 1161t¿ MODEL PROGRAMS FOR CENTERS OF EXCELLENCE FOR VETERAN STUDENT SUCCESS.
(a) PURPOSE.—It is the purpose of this section to encourage
model programs to support veteran student success in postsecondary education by coordinating services to address the academic,
financial, physical, and social needs of veteran students.
(b) GRANTS AUTHORIZED.—
(1) IN GENERAL.—Subject to the availability of appropriations under subsection (f), the Secretary shall award grants to
institutions of higher education to develop model programs to
support veteran student success in postsecondary education.
(2) GRANT PERIOD.—A grant awarded under this section
shall be awarded for a period of three years.
(c) USE OF GRANTS.—
(1) REQUIRED ACTIVITIES.—An institution of higher education receiving a grant under this section shall use such grant
to carry out a model program that includes—
(A) establishing a Center of Excellence for Veteran
Student Success on the campus of the institution to provide a single point of contact to coordinate comprehensive
support services for veteran students;
(B) establishing a veteran student support team, including representatives from the offices of the institution
responsible for admissions, registration, financial aid, veterans benefits, academic advising, student health, personal
or mental health counseling, career advising, disabilities
services, and any other office of the institution that provides support to veteran students on campus;
(C) providing a coordinator whose primary responsibility is to coordinate the model program carried out under
this section;
(D) monitoring the rates of veteran student enrollment, persistence, and completion; and
(E) developing a plan to sustain the Center of Excellence for Veteran Student Success after the grant period.
(2) OTHER AUTHORIZED ACTIVITIES.—An institution of higher education receiving a grant under this section may use such
grant to carry out any of the following activities with respect
to veteran students:
(A) Outreach and recruitment of such students.
(B) Supportive instructional services for such students,
which may include—
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(i) personal, academic, and career counseling, as
an ongoing part of the program;
(ii) tutoring and academic skill-building instruction assistance, as needed; and
(iii) assistance with special admissions and transfer of credit from previous postsecondary education or
experience.
(C) Assistance in obtaining student financial aid.
(D) Housing support for veteran students living in institutional facilities and commuting veteran students.
(E) Cultural events, academic programs, orientation
programs, and other activities designed to ease the transition to campus life for veteran students.
(F) Support for veteran student organizations and veteran student support groups on campus.
(G) Coordination of academic advising and admissions
counseling with military bases and national guard units in
the area.
(H) Other support services the institution determines
to be necessary to ensure the success of veterans in achieving educational and career goals.
(d) APPLICATION; SELECTION.—
(1) APPLICATION.—To be considered for a grant under this
section, an institution of higher education shall submit to the
Secretary an application at such time, in such manner, and accompanied by such information as the Secretary may require.
(2) SELECTION CONSIDERATIONS.—In awarding grants
under this section, the Secretary shall consider—
(A) the number of veteran students enrolled at an institution of higher education; and
(B) the need for model programs to address the needs
of veteran students at a wide range of institutions of higher education, including the need to provide—
(i) an equitable distribution of such grants to institutions of higher education of various types and
sizes;
(ii) an equitable geographic distribution of such
grants; and
(iii) an equitable distribution of such grants
among rural and urban areas.
(e) EVALUATION AND ACCOUNTABILITY PLAN.—The Secretary
shall develop an evaluation and accountability plan for model programs funded under this section to objectively measure the impact
of such programs, including a measure of whether postsecondary
education enrollment, persistence, and completion for veterans increases as a result of such programs.
(f) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
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PART U—UNIVERSITY SUSTAINABILITY
PROGRAMS
SEC. 881. ø20 U.S.C. 1161u¿ SUSTAINABILITY PLANNING GRANTS AUTHORIZED.
(a) PROGRAM AUTHORIZED.—
(1) IN GENERAL.—From the amounts appropriated to carry
out this section, the Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall make
grants to eligible entities to establish sustainability programs
to design and implement sustainability practices, including in
the areas of energy management, greenhouse gas emissions reductions, green building, waste management, purchasing,
transportation, and toxics management, and other aspects of
sustainability that integrate campus operations with multidisciplinary academic programs and are applicable to the private and government sectors.
(2) PERIOD OF GRANT.—The provision of payments under a
grant under paragraph (1) shall extend over a period of not
more than four fiscal years.
(3) DEFINITION OF ELIGIBLE ENTITY.—For purposes of this
part, the term ‘‘eligible entity’’ means—
(A) an institution of higher education; or
(B) a nonprofit consortium, association, alliance, or collaboration operating in partnership with one or more institutions of higher education that received funds for the implementation of work associated with sustainability programs under this part.
(b) APPLICATIONS.—
(1) IN GENERAL.—To receive a grant under subsection
(a)(1), an eligible entity shall submit an application to the Secretary at such time, in such form, and containing such information as the Secretary may reasonably require.
(2) ASSURANCES.—Such application shall include assurances that the eligible entity—
(A) has developed a plan, including an evaluation component, for the program component established pursuant
to subsection (c);
(B) shall use Federal funds received from a grant
under subsection (a) to supplement, not supplant, non-Federal funds that would otherwise be available for projects
funded under this section;
(C) shall provide, with respect to any fiscal year in
which such entity receives funds from a grant under subsection (a)(1), non-Federal funds or an in-kind contribution
in an amount equal to 20 percent of funds from such
grant, for the purpose of carrying out the program component established pursuant to subsection (c); and
(D) shall collaborate with business, government, and
the nonprofit sectors in the development and implementation of its sustainability plan.
(c) USE OF FUNDS.—
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vidual institution of higher education for the following purposes:
(A) To develop and implement administrative and operations practices at an institution of higher education
that test, model, and analyze principles of sustainability.
(B) To establish multidisciplinary education, research,
and outreach programs at an institution of higher education that address the environmental, social, and economic dimensions of sustainability.
(C) To support research and teaching initiatives that
focus on multidisciplinary and integrated environmental,
economic, and social elements.
(D) To establish initiatives in the areas of energy management, greenhouse gas emissions reductions, green
building, waste management, purchasing, toxics management, transportation, and other aspects of sustainability.
(E) To support student, faculty, and staff work at an
institution of higher education to implement, research, and
evaluate sustainable practices.
(F) To expand sustainability literacy on campus.
(G) To integrate sustainability curricula in all programs of instruction, particularly in business, architecture,
technology, manufacturing, engineering, and science programs.
(2) PARTNERSHIPS.—Grants made under subsection (a) may
be used by an eligible entity that is a nonprofit consortium, association, alliance, or collaboration operating in partnership
with one or more institutions of higher education for the following purposes:
(A) To conduct faculty, staff and administrator training on the subjects of sustainability and institutional
change.
(B) To compile, evaluate, and disseminate best practices, case studies, guidelines and standards regarding sustainability.
(C) To conduct efforts to engage external stakeholders
such as business, alumni, and accrediting agencies in the
process of building support for research, education, and
technology development for sustainability.
(D) To conduct professional development programs for
faculty in all disciplines to enable faculty to incorporate
sustainability content in their courses.
(E) To create the analytical tools necessary for institutions of higher education to assess and measure their individual progress toward fully sustainable campus operations and fully integrating sustainability into the curriculum.
(F) To develop educational benchmarks for institutions
of higher education to determine the necessary rigor and
effectiveness of academic sustainability programs.
(d) REPORTS.—An eligible entity that receives a grant under
subsection (a) shall submit to the Secretary, for each fiscal year in
which the entity receives amounts from such grant, a report that
describes the work conducted pursuant to subsection (c), research
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findings and publications, administrative savings experienced, and
an evaluation of the program.
(e) ALLOCATION REQUIREMENT.—The Secretary may not make
grants under subsection (a) to any eligible entity in a total amount
that is less than $250,000 or more than $2,000,000.
(f) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
PART V—MODELING AND SIMULATION
PROGRAMS
SEC. 891. ø20 U.S.C. 1161v¿ MODELING AND SIMULATION.
(a) PURPOSE; DEFINITION.—
(1) PURPOSE.—The purpose of this section
is to promote
the study of modeling and simulation at institutions of higher
education, through the collaboration with new and existing
programs, and specifically to promote the use of technology in
such study through the creation of accurate models that can
simulate processes or recreate real life, by—
(A) establishing a task force at the Department of
Education to raise awareness of and define the study of
modeling and simulation;
(B) providing grants to institutions of higher education
to develop new modeling and simulation degree programs;
and
(C) providing grants for institutions of higher education to enhance existing modeling and simulation degree
programs.
(2) DEFINITION.—In this section, the term ‘‘modeling and
simulation’’ means a field of study related to the application of
computer science and mathematics to develop a level of understanding of the interaction of the parts of a system and of a
system as a whole.
(b) ESTABLISHMENT OF TASK FORCE.—
(1) IN GENERAL.—Subject to the availability of appropriations, the Secretary shall establish a task force within the Department to study modeling and simulation and to support the
development of the modeling and simulation field. The activities of such task force shall include—
(A) helping to define the study of modeling and simulation (including the content of modeling and simulation
classes and programs);
(B) identifying best practices for such study;
(C) identifying core knowledge and skills that individuals who participate in modeling and simulation programs
should acquire; and
(D) providing recommendations to the Secretary with
respect to—
(i) the information described in subparagraphs (A)
through (C); and
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(ii) a system by which grants under this section
will be distributed.
(2) TASK FORCE MEMBERSHIP.—The membership of the task
force under this subsection shall be composed of representatives from—
(A) institutions of higher education with established
modeling and simulation degree programs;
(B) the National Science Foundation;
(C) Federal Government agencies that use modeling
and simulation extensively, including the Department of
Defense, the National Institutes of Health, the Department of Homeland Security, the Department of Health and
Human Services, the Department of Energy, and the Department of Transportation;
(D) private industries with a primary focus on modeling and simulation;
(E) national modeling and simulation organizations;
and
(F) the Office of Science and Technology Policy.
(c) ENHANCING MODELING AND SIMULATION AT INSTITUTIONS OF
HIGHER EDUCATION.—
(1) ENHANCEMENT GRANTS AUTHORIZED.—
(A) IN GENERAL.—The Secretary is authorized to
award grants, on a competitive basis, to eligible institutions to enhance modeling and simulation degree programs
at such eligible institutions.
(B) DURATION OF GRANT.—A grant awarded under this
subsection shall be awarded for a three-year period, and
such grant period may be extended for not more than two
years if the Secretary determines that an eligible institution has demonstrated success in enhancing the modeling
and simulation degree program at such eligible institution.
(C) MINIMUM GRANT AMOUNT.—Subject to the availability of appropriations, a grant awarded to an eligible institution under this subsection shall not be less than
$750,000.
(D) NON-FEDERAL SHARE.—Each eligible institution receiving a grant under this subsection shall provide, from
non-Federal sources, in cash or in-kind, an amount equal
to 25 percent of the amount of the grant to carry out the
activities supported by the grant. The Secretary may waive
the non-Federal share requirement under this subparagraph for an eligible institution if the Secretary determines a waiver to be appropriate based on the financial
ability of the institution.
(2) ELIGIBLE INSTITUTIONS.—For the purposes of this subsection, an eligible institution is an institution of higher education that—
(A) has an established modeling and simulation degree
program, including a major, minor, or career-track program; or
(B) has an established modeling and simulation certificate or concentration program.
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(3) APPLICATION.—To be considered for a grant under this
subsection, an eligible institution shall submit to the Secretary
an application at such time, in such manner, and containing
such information as the Secretary may require. Such application shall include—
(A) a letter from the president or provost of the eligible institution that demonstrates the institution’s commitment to the enhancement of the modeling and simulation
program at the institution of higher education;
(B) an identification of designated faculty responsible
for the enhancement of the institution’s modeling and simulation program; and
(C) a detailed plan for how the grant funds will be
used to enhance the modeling and simulation program of
the institution.
(4) USES OF FUNDS.—A grant awarded under this subsection shall be used by an eligible institution to carry out the
plan developed in accordance with paragraph (3)(C) to enhance
modeling and simulation programs at the institution, which
may include—
(A) in the case of an institution that is eligible under
paragraph (2)(B), activities to assist in the establishment
of a major, minor, or career-track modeling and simulation
program at the eligible institution;
(B) expanding the multidisciplinary nature of the institution’s modeling and simulation programs;
(C) recruiting students into the field of modeling and
simulation through the provision of fellowships or
assistantships;
(D) creating new courses to complement existing
courses and reflect emerging developments in the modeling
and simulation field;
(E) conducting research to support new methodologies
and techniques in modeling and simulation; and
(F) purchasing equipment necessary for modeling and
simulation programs.
(d) ESTABLISHING MODELING AND SIMULATION PROGRAMS.—
(1) ESTABLISHMENT GRANTS AUTHORIZED.—
(A) IN GENERAL.—The Secretary is authorized to
award grants to institutions of higher education to establish a modeling and simulation program, including a
major, minor, career-track, certificate, or concentration
program.
(B) DURATION OF GRANT.—A grant awarded under this
subsection shall be awarded for a three-year period, and
such grant period may be extended for not more than two
years if the Secretary determines that an eligible institution has demonstrated success in establishing a modeling
and simulation degree program at such eligible institution.
(C) MINIMUM GRANT AMOUNT.—Subject to the availability of appropriations, a grant awarded to an eligible institution under this subsection shall not be less than
$750,000.
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(D) NON-FEDERAL SHARE.—Each eligible institution receiving a grant under this subsection shall provide, from
non-Federal sources, in cash or in-kind, an amount equal
to 25 percent of the amount of the grant to carry out the
activities supported by the grant. The Secretary may waive
the non-Federal share requirement under this subparagraph for an eligible institution if the Secretary determines a waiver to be appropriate based on the financial
ability of the institution.
(2) APPLICATION.—To apply for a grant under this subsection, an eligible institution shall submit to the Secretary an
application at such time, in such manner, and containing such
information as the Secretary may require. Such application
shall include—
(A) a letter from the president or provost of the eligible institution that demonstrates the institution’s commitment to the establishment of a modeling and simulation
program at the institution of higher education;
(B) a detailed plan for how the grant funds will be
used to establish a modeling and simulation program at
the institution; and
(C) a description of how the modeling and simulation
program established under this subsection will complement existing programs and fit into the institution’s
current program and course offerings.
(3) USES OF FUNDS.—A grant awarded under this subsection may be used by an eligible institution to—
(A) establish, or work toward the establishment of, a
modeling and simulation program, including a major,
minor, career-track, certificate, or concentration program
at the eligible institution;
(B) provide adequate staffing to ensure the successful
establishment of the modeling and simulation program,
which may include the assignment of full-time dedicated or
supportive faculty; and
(C) purchase equipment necessary for a modeling and
simulation program.
(e) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years. Of the amounts authorized to be appropriated for each fiscal
year—
(1) $1,000,000 is authorized to carry out the activities of
the task force established pursuant to subsection (b); and
(2) of the amount remaining after the allocation for paragraph (1)—
(A) 50 percent is authorized to carry out the grant program under subsection (c); and
(B) 50 percent is authorized to carry out the grant program under subsection (d).
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PART W—PATH TO SUCCESS
SEC. 892. ø20 U.S.C. 1161w¿ PATH TO SUCCESS.
(a) PURPOSE.—The purpose of this section
is to encourage community supported programs that—
(1) leverage and enhance community support for at-risk
young adults by facilitating the transition of such young adults
who are eligible individuals into productive learning environments where such young adults can obtain the life, social, academic, career, and technical skills and credentials necessary to
strengthen the Nation’s workforce;
(2) provide counseling, as appropriate, for eligible individuals participating in the programs to allow the eligible individuals to build a relationship with one or more guidance counselors during the period that the individuals are enrolled in the
programs, including providing referrals and connections to
community resources that help eligible individuals transition
back into the community with the necessary life, social, academic, career, and technical skills after being in detention, or
incarcerated, particularly resources related to health, housing,
job training, and workplace readiness;
(3) provide training and education for eligible individuals
participating in the programs, to allow such individuals to assist community officials and law enforcement agencies with the
deterrence and prevention of gang and youth violence by participating in seminars, training, and workshops throughout the
community; and
(4) provide each eligible individual participating in the programs with individual attention based on a curriculum that
matches the interests and abilities of the individual to the resources of the program.
(b) REENTRY EDUCATION PROGRAM.—
(1) GRANT PROGRAM ESTABLISHED.—From the amounts appropriated under subsection (g), the Secretary is authorized to
award grants to community colleges to enter into and maintain
partnerships with juvenile detention centers and secure juvenile justice residential facilities to provide assistance, services,
and education to eligible individuals who reenter the community and pursue, in accordance with the requirements of this
section, at least one of the following:
(A) A certificate of completion for a specialized area of
study, such as career and technical training and other alternative postsecondary educational programs.
(B) An associate’s degree.
(2) GRANT PERIOD.—A grant awarded under this part shall
be for one four-year period, and may be renewed for an additional period as the Secretary determines to be appropriate.
(3) APPLICATION.—A community college desiring to receive
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 shall require. Such application
shall include—
(A) an assessment of the existing community resources
available to serve at-risk youth;
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(B) a detailed description of the program and activities
the community college will carry out with such grant; and
(C) a proposed budget describing how the community
college will use the funds made available by such grant.
(4) PRIORITY.—In awarding grants under this part, the
Secretary shall give priority to community colleges that propose to serve the highest number of priority individuals, and,
among such community colleges, shall give priority to community colleges that the Secretary determines will best carry out
the purposes of this part, based on the applications submitted
in accordance with paragraph (3).
(c) ALLOWABLE USES OF FUNDS.—A community college awarded a grant under this part may use such grant to—
(1) pay for tuition and transportation costs of eligible individuals;
(2) establish and carry out an education program that includes classes for eligible individuals that—
(A) provide marketable life and social skills to such individuals;
(B) meet the education program requirements under
subsection (d), including as appropriate, courses necessary
for the completion of a secondary school diploma or the
recognized equivalent;
(C) promote the civic engagement of such individuals;
and
(D) facilitate a smooth reentry of such individuals into
the community;
(3) create and carry out a mentoring program that is—
(A) specifically designed to help eligible individuals
with the potential challenges of the transitional period
from detention to release;
(B) created in consultation with guidance counselors,
academic advisors, law enforcement officials, and other
community resources; and
(C) administered by a program coordinator, selected
and employed by the community college, who shall oversee
each individual’s development and shall serve as the immediate supervisor and reporting officer to whom the academic advisors, guidance counselors, and volunteers shall
report regarding the progress of each such individual;
(4) facilitate employment opportunities for eligible individuals by entering into partnerships with public and private entities to provide opportunities for internships, apprenticeships,
and permanent employment, as possible, for such individuals;
and
(5) provide training for eligible individuals participating in
the programs, to allow such individuals to assist community officials and law enforcement agencies with the deterrence and
prevention of gang and youth violence by participating in seminars and workshop series throughout the community.
(d) EDUCATION PROGRAM REQUIREMENTS.—An education program established and carried out under subsection (c) shall—
(1) include classes that are required for completion of a
certificate, diploma, or degree described in subparagraph (A) or
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(B) of subsection (b)(1), including as appropriate courses necessary for the completion of a secondary school diploma or the
recognized equivalent;
(2) provide a variety of academic programs, with various
completion requirements, to accommodate the diverse academic
backgrounds, learning styles, and academic and career interests of the eligible individuals who participate in the education
program;
(3) offer flexible academic programs that are designed to
improve the academic development and achievement of eligible
individuals, and to avoid high attrition rates for such individuals; and
(4) provide for a uniquely designed education plan for each
eligible individual participating in the program, which shall require such individual to receive, at a minimum, a certificate or
degree described in subparagraph (A) or (B) of subsection (b)(1)
to successfully complete such program.
(e) REPORTS.—Each community college awarded a grant under
this part shall submit to the Secretary a report—
(1) documenting the results of the program carried out
with such grant; and
(2) evaluating the effectiveness of activities carried out
through such program.
(f) DEFINITIONS.—In this section:
(1) COMMUNITY COLLEGE.—The term ‘‘community college’’
has the meaning given the term ‘‘junior or community college’’
in section 312(f).
(2) ELIGIBLE INDIVIDUAL.—The term ‘‘eligible individual’’
means an individual who—
(A) is 16 to 25 years of age (inclusive); and
(B)(i) has been convicted of a criminal offense; and
(ii) is detained in, or has been released from, a juvenile detention center or secure juvenile justice residential facility.
(3) GANG-RELATED OFFENSE.—
(A) IN GENERAL.—The term ‘‘gang-related offense’’
means an offense that involves the circumstances described in subparagraph (B) and that is—
(i) a Federal or State felony involving a controlled
substance (as defined in section 102 of the Controlled
Substances Act (21 U.S.C. 802)) for which the maximum penalty is not less than five years;
(ii) a Federal or State crime of violence that has
as an element the use or attempted use of physical
force against the person of another for which the maximum penalty is not less than six months; or
(iii) a conspiracy to commit an offense described in
clause (i) or (ii).
(B) CIRCUMSTANCES.—The circumstances described in
this subparagraph are that the offense described in subparagraph (A) was committed by a person who—
(i) participates in a criminal street gang (as defined insection 521(a)of title 18, United States Code)
with knowledge that such gang’s members engage in
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HIGHER EDUCATION ACT OF 1965
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or have engaged in a continuing series of offenses described in subparagraph (A); and
(ii) intends to promote or further the felonious activities of the criminal street gang or maintain or increase the person’s position in the gang.
(4) PRIORITY INDIVIDUAL.—The term ‘‘priority individual’’
means an individual who—
(A) is an eligible individual;
(B) has been convicted of a gang-related offense; and
(C) has served or is serving a period of detention in a
juvenile detention center or secure juvenile justice residential facility for such offense.
(5) GUIDANCE COUNSELOR.—The term ‘‘guidance counselor’’
means an individual who works with at-risk youth on a oneon-one basis, to establish a supportive relationship with such
at-risk youth and to provide such at-risk youth with academic
assistance and exposure to new experiences that enhance their
ability to become responsible citizens.
(g) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
PART X—SCHOOL OF VETERINARY MEDICINE
COMPETITIVE GRANT PROGRAM
SEC. 893. ø20 U.S.C. 1161x¿ SCHOOL OF VETERINARY MEDICINE COMPETITIVE GRANT PROGRAM.
(a) IN GENERAL.—From the amounts appropriated under sub-
section (g), the Secretary of Health and Human Services shall
award competitive grants to eligible entities for the purpose of improving public health preparedness through increasing the number
of veterinarians in the workforce.
(b) ELIGIBLE ENTITIES.—To be eligible to receive a grant under
subsection (a), an entity shall—
(1) be—
(A) a public or other nonprofit school of veterinary
medicine that is accredited by a nationally recognized accrediting agency or association recognized by the Secretary
of Education pursuant to part H of title IV;
(B) a public or nonprofit, department of comparative
medicine, department of veterinary science, school of public health, or school of medicine that is accredited by a nationally recognized accrediting agency or association recognized by the Secretary of Education pursuant to part H of
title IV and that offers graduate training for veterinarians
in a public health practice area as determined by the Secretary of Health and Human Services; or
(C) a public or nonprofit entity that—
(i) conducts recognized residency training programs for veterinarians that are approved by a veterinary specialty organization that is recognized by the
American Veterinary Medical Association; and
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(ii) offers postgraduate training for veterinarians
in a public health practice area as determined by the
Secretary of Health and Human Services; and
(2) prepare and submit to the Secretary of Health and
Human Services an application, at such time, in such manner,
and containing such information as the Secretary of Health
and Human Services may require.
(c) CONSIDERATION OF APPLICATIONS.—The Secretary of Health
and Human Services shall establish procedures to ensure that applications under subsection (b)(2) are rigorously reviewed and that
grants are competitively awarded based on—
(1) the ability of the applicant to increase the number of
veterinarians who are trained in specified public health practice areas as determined by the Secretary of Health and
Human Services;
(2) the ability of the applicant to increase capacity in research on high priority disease agents; or
(3) any other consideration the Secretary of Health and
Human Services determines necessary.
(d) PREFERENCE.—In awarding grants under subsection (a), the
Secretary of Health and Human Services shall give preference to
applicants that demonstrate a comprehensive approach by involving more than one school of veterinary medicine, department of
comparative medicine, department of veterinary science, school of
public health, school of medicine, or residency training program
that offers postgraduate training for veterinarians in a public
health practice area as determined by the Secretary of Health and
Human Services.
(e) USE OF FUNDS.—Amounts received under a grant under
this section shall be used by a grantee to increase the number of
veterinarians in the workforce through paying costs associated with
the expansion of academic programs at schools of veterinary medicine, departments of comparative medicine, departments of veterinary science, or entities offering residency training programs, or
academic programs that offer postgraduate training for veterinarians or concurrent training for veterinary students in specific areas
of specialization, which costs may include minor renovation and improvement in classrooms, libraries, and laboratories.
(f) DEFINITION OF PUBLIC HEALTH PRACTICE AREA.—In this
section, the term ‘‘public health practice area’’ includes the areas
of bioterrorism and emergency preparedness, environmental health,
food safety and food security, regulatory medicine, diagnostic laboratory medicine, and biomedical research.
(g) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years. Amounts appropriated under this subsection shall remain
available until expended.
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PART Y—EARLY FEDERAL PELL GRANT
COMMITMENT DEMONSTRATION PROGRAM
SEC. 894. ø20 U.S.C. 1161y¿ EARLY FEDERAL PELL GRANT COMMITMENT DEMONSTRATION PROGRAM.
(a) DEMONSTRATION PROGRAM AUTHORITY.—
(1) IN GENERAL.—The Secretary is authorized to carry out
an Early Federal Pell Grant Commitment Demonstration Program under which—
(A) the Secretary awards grants to four State educational agencies, in accordance with paragraph (2), to pay
the administrative expenses incurred in participating in
the demonstration program under this section; and
(B) the Secretary awards Federal Pell Grants to participating students in accordance with this section and consistent with section 401.
(2) GRANTS.—
(A) IN GENERAL.—From amounts appropriated under
subsection (h) for a fiscal year, the Secretary is authorized
to award grants to four State educational agencies to enable the State educational agencies to pay the administrative expenses incurred in participating in the demonstration program under this section by carrying out a demonstration project under which eighth grade students described in subsection (b)(1)(B) receive a commitment early
in the students’ academic careers to receive a Federal Pell
Grant.
(B) EQUAL AMOUNTS.—The Secretary shall award
grants under this section in equal amounts to each of the
four participating State educational agencies.
(b) DEMONSTRATION PROJECT REQUIREMENTS.—Each of the
four demonstration projects assisted under this section shall meet
the following requirements:
(1) PARTICIPANTS.—
(A) IN GENERAL.—The State educational agency shall
make participation in the demonstration project available
to two cohorts of students, which shall consist of—
(i) one cohort of eighth grade students who begin
participating in the first academic year for which
funds have been appropriated to carry out this section;
and
(ii) one cohort of eighth grade students who begin
participating in the academic year succeeding the academic year described in clause (i).
(B) STUDENTS IN EACH COHORT.—Each cohort of students shall consist of not more than 10,000 eighth grade
students who qualify for a free or reduced price school
lunch under the Richard B. Russell National School Lunch
Act (42 U.S.C. 1751 et seq.) or the Child Nutrition Act of
1966 (42 U.S.C. 1771 et seq.).
(2) STUDENT DATA.—The State educational agency shall
ensure that student data from local educational agencies serving students who participate in the demonstration project, as
well as student data from local educational agencies serving a
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comparable group of students who do not participate in the
demonstration project, are available for evaluation of the demonstration project, and are made available in accordance with
the requirements of section 444 of the General Education Provisions Act (commonly known as the ‘‘Family Educational
Rights and Privacy Act of 1974’’).
(3) FEDERAL PELL GRANT COMMITMENT.—Each student who
participates in the demonstration project receives a commitment from the Secretary to receive a Federal Pell Grant during
the first academic year that the student is in attendance at an
institution of higher education as an undergraduate, provided
that the student applies for Federal financial aid (via the
FAFSA or EZ FAFSA) for such academic year.
(4) APPLICATION PROCESS.—Each State educational agency
shall establish an application process to select local educational
agencies within the State to participate in the demonstration
project in accordance with subsection (d)(2).
(5) LOCAL EDUCATIONAL AGENCY PARTICIPATION.—Subject
to the 10,000 statewide student limitation described in paragraph (1), a local educational agency serving students, not less
than 50 percent of whom are eligible for a free or reduced price
school lunch under the Richard B. Russell National School
Lunch Act (42 U.S.C. 1751 et seq.) or the Child Nutrition Act
of 1966 (42 U.S.C. 1771 et seq.), shall be eligible to participate
in the demonstration project.
(c) STATE EDUCATIONAL AGENCY APPLICATIONS.—
(1) IN GENERAL.—Each State educational agency desiring
to participate in the demonstration program under this section
shall submit an application to the Secretary at such time and
in such manner as the Secretary may require.
(2) CONTENTS.—Each application shall include—
(A) a description of the proposed targeted information
campaign for the demonstration project and a copy of the
plan described in subsection (f)(2);
(B) a description of the student population that will receive an early commitment to receive a Federal Pell Grant
under this section;
(C) an assurance that the State educational agency
will fully cooperate with the ongoing evaluation of the
demonstration project; and
(D) such other information as the Secretary may require.
(d) SELECTION CONSIDERATIONS.—
(1) SELECTION OF STATE EDUCATIONAL AGENCIES.—In selecting State educational agencies to participate in the demonstration program under this section, the Secretary shall consider—
(A) the number and quality of State educational agency applications received;
(B) a State educational agency’s—
(i) financial responsibility;
(ii) administrative capability;
(iii) commitment to focusing resources, in addition
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sistance under part A of title I of the Elementary and
Secondary Education Act of 1965;
(iv) ability and plans to run an effective and thorough targeted information campaign for students
served by local educational agencies eligible to participate in the demonstration project; and
(v) ability to ensure the participation in the demonstration project of a diverse group of students, including with respect to ethnicity and gender.
(2) LOCAL EDUCATIONAL AGENCY.—In selecting local educational agencies to participate in a demonstration project
under this section, the State educational agency shall consider—
(A) the number and quality of local educational agency
applications received;
(B) a local educational agency’s—
(i) financial responsibility;
(ii) administrative capability;
(iii) commitment to focusing resources on students
who receive assistance under part A of title I of the Elementary and Secondary Education Act of 1965;
(iv) ability and plans to run an effective and thorough targeted information campaign for students
served by the local educational agency; and
(v) ability to ensure the participation in the demonstration project of a diverse group of students.
(e) EVALUATION.—
(1) IN GENERAL.—From amounts appropriated under subsection (h) for a fiscal year, the Secretary shall reserve not
more than $1,000,000 to award a grant or contract to an organization outside the Department for an independent evaluation
of the impact of the demonstration program assisted under this
section.
(2) COMPETITIVE BASIS.—The grant or contract shall be
awarded on a competitive basis.
(3) MATTERS EVALUATED.—The evaluation described in this
subsection shall—
(A) determine the number of students who were encouraged by the demonstration program to pursue higher
education;
(B) identify the barriers to the effectiveness of the
demonstration program;
(C) assess the cost-effectiveness of the demonstration
program in improving access to higher education;
(D) identify the reasons why participants in the demonstration program either received or did not receive a
Federal Pell Grant;
(E) identify intermediate outcomes related to postsecondary education attendance, such as whether participants—
(i) were more likely to take a college-preparatory
curriculum while in secondary school;
(ii) submitted any applications to institutions of
higher education; and
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(iii) took the PSAT, SAT, or ACT;
(F) identify the number of students participating in
the demonstration program who pursued an associate’s degree or a bachelor’s degree, or other postsecondary education;
(G) compare the findings of the demonstration program with respect to participants to comparison groups (of
similar size and demographics) that did not participate in
the demonstration program; and
(H) identify the impact of the demonstration program
on the parents of students eligible to participate in the
program.
(4) DISSEMINATION.—The findings of the evaluation shall
be reported to the Secretary, who shall widely disseminate the
findings to the public.
(f) TARGETED INFORMATION CAMPAIGN.—
(1) IN GENERAL.—Each State educational agency receiving
a grant under this section shall, in cooperation with the participating local educational agencies within the State and the
Secretary, develop a targeted information campaign for the
demonstration project assisted under this section.
(2) PLAN.—Each State educational agency receiving a
grant under this section shall include in the application submitted under subsection (c) a written plan for the State educational agency proposed targeted information campaign. The
plan shall include the following:
(A) OUTREACH.—A description of the outreach to students and the students’ families at the beginning and end
of each academic year of the demonstration project, at a
minimum.
(B) DISTRIBUTION.—A description of how the State
educational agency plans to provide the outreach described
in subparagraph (A) and to provide the information described in subparagraph (C).
(C) INFORMATION.—The annual provision by the State
educational agency to all students and families participating in the demonstration project of information regarding—
(i) the estimated statewide average cost of attendance for an institution of higher education for each
academic year, which cost data shall be disaggregated
by—
(I) type of institution, including—
(aa) two-year public degree-granting institutions of higher education;
(bb) four-year public degree-granting institutions of higher education; and
(cc) four-year private degree-granting institutions of higher education;
(II) component, including—
(aa) tuition and fees; and
(bb) room and board;
(ii) Federal Pell Grants, including—
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(I) the Federal Pell Grant amount, determined under section 401(b)(2)(A), for which a student may be eligible for each award year;
(II) when and how to apply for a Federal Pell
Grant; and
(III) what the application process for a Federal Pell Grant requires;
(iii) State-specific postsecondary education savings
programs;
(iv) State merit-based financial aid;
(v) State need-based financial aid; and
(vi) Federal financial aid available to students, including eligibility criteria for such aid and an explanation of the Federal financial aid programs under
title IV, such as the Student Guide published by the
Department (or any successor to such document).
(3) COHORTS.—The information described in paragraph
(2)(C) shall be provided annually to the two successive cohorts
of students described in subsection (b)(1)(A) for the duration of
the students’ participation in the demonstration project.
(4) RESERVATION.—Each State educational agency receiving a grant under this section shall reserve not more than 15
percent of the grant funds received each fiscal year to carry out
the targeted information campaign described in this subsection.
(g) SUPPLEMENT, NOT SUPPLANT.—A State educational agency
shall use grant funds received under this section only to supplement the funds that would, in the absence of such grant funds, be
made available from non-Federal sources for students participating
in the demonstration project under this section, and not to supplant such funds.
(h) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
PART Z—HENRY KUUALOHA GIUGNI KUPUNA
MEMORIAL ARCHIVES
SEC. 895. ø20 U.S.C. 1161z¿ HENRY KUUALOHA GIUGNI KUPUNA MEMORIAL ARCHIVES.
(a) GRANTS AUTHORIZED.—From the amounts appropriated
under subsection (c), the Secretary is authorized to award a grant
to the University of Hawaii Academy for Creative Media for the establishment, maintenance, and periodic modernization of the Henry
Kuualoha Giugni Kupuna Memorial Archives at the University of
Hawaii.
(b) USE OF FUNDS.—The Henry Kuualoha Giugni Kupuna Memorial Archives shall use the grant funds received under this section—
(1) to facilitate the acquisition of a secure web-accessible
repository of Native Hawaiian historical data rich in ethnic
and cultural significance to the United States for preservation
and access by future generations;
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(2) to award scholarships to facilitate access to postsecondary education for students who cannot afford such education;
(3) to support programmatic efforts associated with the
web-based media projects of the archives;
(4) to create educational materials, from the contents of
the archives, that are applicable to a broad range of indigenous
students, such as Native Hawaiians, Alaskan Natives, and Native American Indians;
(5) to develop outreach initiatives that introduce the archival collections to elementary schools and secondary schools;
(6) to develop supplemental web-based resources that define terms and cultural practices innate to Native Hawaiians;
(7) to rent, lease, purchase, maintain, or repair educational
facilities to house the archival collections;
(8) to rent, lease, purchase, maintain, or repair computer
equipment for use by elementary schools and secondary schools
in accessing the archival collections;
(9) to provide preservice and in-service teacher training to
develop a core group of kindergarten through grade 12 teachers who are able to provide instruction in a way that is relevant to the unique background of indigenous students, such
as Native Hawaiians, Alaskan Natives, and Native American
Indians, in order to—
(A) facilitate greater understanding by teachers of the
unique background of indigenous students; and
(B) improve student achievement; and
(10) to increase the economic and financial literacy of postsecondary education students through the dissemination of
best practices used at other institutions of higher education regarding debt and credit management and economic decisionmaking.
(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized
to be appropriated to carry out this section such sums as may be
necessary for fiscal year 2009 and each of the five succeeding fiscal
years.
PART AA—MASTERS AND
POSTBACCALAUREATE PROGRAMS
SEC. 897. ø20 U.S.C. 1161aa¿ MASTERS DEGREE PROGRAMS.
In addition to any amounts appropriated under section 725,
there are authorized to be appropriated, and there are appropriated, out of any funds in the Treasury not otherwise appropriated, $11,500,000 for fiscal year 2009 and for each of the five
succeeding fiscal years to carry out subpart 4 of part A of title VII
in order to provide grants under sections 723 and 724, in the minimum amount authorized under such sections, to all institutions eligible for grants under such sections.
SEC. 898. ø20 U.S.C. 1161aa–1¿ POSTBACCALAUREATE PROGRAMS.
In addition to any amounts appropriated under part B of title
V, there are authorized to be appropriated, and there are appropriated, out of any funds in the Treasury not otherwise approMay 7, 2013
\\143.231.149.13\DATA\COMP\EDIII\HEA65.005
847
HIGHER EDUCATION ACT OF 1965
898
priated, $11,500,000 for fiscal year 2009 and for each of the five
succeeding fiscal years to carry out part B of title V.
May 7, 2013
| File Type | application/pdf |
| File Title | F:\COMP\EDIII\HEA65.CMD |
| File Modified | 2013-06-17 |
| File Created | 2013-05-07 |