[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6 Enrolled Bill (ENR)]
H.R.6
One Hundred Fifth Congress
of the
United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Tuesday,
the twenty-seventh day of January, one thousand nine hundred and ninety-
eight
An Act
To extend the authorization of programs under the Higher Education Act
of 1965, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

e21027fb2f9ba8d12f665e64857746a2e32131879efa64cdbb9f17cc1b0842f0

(a) Short Title.--This Act may be cited as the ``Higher Education
Amendments of 1998''.
(b) Table of Contents.--The table of contents is as follows:

f183a4e888b7d8155029c33dbd0ea07c3b4bc05ee7713b089540ce1f7d350873

bbc3e69a8a3a3c3e27e67c654c68deccdde8be44049c30a68340d86b9780ec67

TITLE III

-INSTITUTIONAL AID

9fb8deaaa5b87d54d43922d5f7ae9a6d3ffef19146a293ff0902d5e32eb17c6a

TITLE IV

-STUDENT ASSISTANCE

Sec. 410A. Learning anytime anywhere partnerships.
Part B--Federal Family Education Loan Program

ecd51c4b1f31c0357ea6394084d3cd05b18ed91ca1a02c9b1cd7664d53d2de2a

73cbbbaf2283dacbf41e8e07069f764776235d2aed273702ce571ba339da954e

0d0df627449e2ad79a648b7ec854d457af8ef194dadc0fcc27f74610bbef66ed

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

eae0b86bf13cb724efc50e866213d589aaa6d34f47e200f91340904b5db60a60

102b400a69fe57ea37f968bc10e4928ee94ca7c9d9a465e833d3fa30df9fa557

44f4f88bb142bb937084da6ee6c5ab79914d8ddedeefd2900a729ff458111213

ad1da9f8ae38266d20be74d37dfd51a00986a7c721cb308853f437471d39b997

449428fe048783d6334ff9ef81f25b95de44c2f35a94f0ce49f8995351f7b9fd

Sec. 480A. Effective dates.
Part G--General Provisions

1e32aa1aadf4b03ec5ff971a2c72a973123190811f0c0937b9646606238ad3e1

9be99050c00f8368773b975a913cd44c480e804264c34586f6840b146865b221

Sec. 490A. Garnishment requirements.
Sec. 490B. Administrative subpoena authority.
Sec. 490C. Advisory Committee on Student Financial Assistance.
Sec. 490D. Meetings and negotiated rulemaking.
Sec. 490E. Year 2000 requirements at the Department of Education.
Sec. 490F. Procedures for cancellations and deferments for eligible
disabled veterans.
Part H--Program Integrity

5dc9aae4b5dc40a4a00ddb92ae1f05b443282fab6bbe897cabff46e65ce6b51b

3a3434e42e049d9509d8041f173f1d5f059c1535c0a9f26a4d00d883fce072db

TITLE VII

-GRADUATE AND POSTSECONDARY IMPROVEMENT PROGRAMS

47a28db2080aa9de1e04f51cb21110e37108e84b680de517087caf43e8f3d332

TITLE VIII

-STUDIES, REPORTS, AND RELATED PROGRAMS

0a6ff1bb188b05e95a26ae2c03e65914c4e861a77eeb2aa1dedecbb35dfc8739

institutions with few student loan borrowers.
Part B--Advanced Placement Incentive Program

643f06ebc39e43676ecfbb8dd4a888da4c9570eb63ada4283cd8ac15011154c5

Part C--Community Scholarship Mobilization

e079662c323984299674bf7c16991b2709ea2bd4253bbc120535c63761e0b888

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

6677faa04932e2009210f22badecae16ecaeb957d3682a55de0ee08fd1a1bfc9

training for incarcerated youth offenders.
Part E--Grants to Combat Violent Crimes Against Women on Campuses

32a12bc0b978919a335a876e63003ba20568974e060fffd3bcc6f1e541d1e0d9

Part F--Improving United States Understanding of Science, Engineering,
and Technology in East Asia

93851d8dd67dd2ec3c2c24cf2464af96a6b3ec52f326c7678a8021fcaf209d53

and technology in East Asia.
Part G--Olympic Scholarships

11bb4a0acd0440720e5c7cfb21b46a1e2b06983d72b144e24b6b604134eea9f8

5809f3dd6203600834773100efa331e0951f92d008ef9f2234e69b4c069b736a

21863a56de9742dfbb04ac37b1e4b40eb4a0ec43f6d813d9b07e77f2a0c4acc0

439deca385b89d438a8b99fb4a194dad4474006abe750cbcfcc2ae54b1498021

ae43de7e1503c45609342d8ed4b1290742292bd9dd1f38174ccb9467c4985e8d

Guam Community College conveyance, Barrigada, Guam.

d58fc0ce2fe084a2389a2449971cbd6e3053f378990f1c212bae068e4828f3bb

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

64da4d98cee7faf3f17833b52f0d082bcd57b8d1264189090714a11fe1fef9ff

74d9f73695cbcac980d84ba3265a8fe6a0ce497694ac142c97614166a10d56db

TITLE IX

-AMENDMENTS TO OTHER LAWS

401ffd4400c316566fe1e72a17ccbdd6e19ba91af34485c06e12035bf3c403b8

Part D--Voluntary Retirement Incentive Plans

ad990eabc2406207b6738f47501ddd1de145bd7a5a9deee8e13f304d1aa2486e

Part E--General Education Provisions Act Amendment

0227b4f227df085e38854e3c0db2348fa830bade74f3a0e38e8e0c17e441aa61

31eac381d3037a33361f00a79410a2ddb955bfa6dada6d1aebde6ec282d19995

Part F--Liaison for Proprietary Institutions of Higher Education

be7080e50ccfb57c4be8633aa15c2e644bcc6695158ce6ef6124cf79ac92438b

2e077fd3375ada2832f1b5cbc6f286ec985b794a9635dd452d1512dd21a02007

d401f321a7316910f117b0440421ec49372ac2506d6f14d7b3454c0b8f3fd0e7

f0c2cbb55e4fd64c676e032aa5158269346667627accc32415cbd497b3e9cf57

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

22a18572795ee69e0275ed9048e82e09e553e5e4e692629c19d75b7791fe7b96

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

2ae35ec6a0b95239dc22742230df4227014eb449974462ed25ea17fb9be48de4

257a06f1152c3688a4fabdb05a7b5d7618e7d55fd9e0fe455788f3bd75b7c33f

TITLE I

-GENERAL PROVISIONS

(a) Conforming Amendments Correcting References to Section 1201.--
(1) Agriculture.--
(A) Student internship programs.--Section 922 of the
Federal Agriculture Improvement and Reform Act of 1996 (7
U.S.C. 2279c) is amended--
(i) in subsection (a)(1)(B)--
(I) by striking ``1201'' and inserting ``101''; and
(II) by striking ``(20 U.S.C. 1141)''; and
(ii) in subsection (b)(1)--
(I) by striking ``1201'' and inserting ``101''; and
(II) by striking ``(20 U.S.C. 1141)''.
(B) Agricultural sciences education.--Section 1417(j)(1)(A)
of the National Agricultural Research, Extension, and Teaching
Policy Act of 1977 (7 U.S.C. 3152(j)(1)(A)) is amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(2) Armed forces.--
(A) Science and mathematics education improvement
program.--Section 2193(c)(1) of title 10, United States Code,
is amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(B) Support of science, mathematics, and engineering
education.--Section 2199(2) of title 10, United States Code, is
amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(C) Allowable costs under defense contracts.--Section
841(c)(2) of the National Defense Authorization Act for fiscal
year 1994 (10 U.S.C. 2324 note) is amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(D) Environmental restoration institutional grants for
training dislocated defense workers and young adults.--Section
1333(i)(3) of the National Defense Authorization Act for fiscal
year 1994 (10 U.S.C. 2701 note) is amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(E) Environmental education opportunities program.--Section
1334(k)(3) of the National Defense Authorization Act for fiscal
year 1994 (10 U.S.C. 2701 note) is amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(F) Environmental scholarship and fellowship programs.--
Section 4451(b)(1) of the National Defense Authorization Act
for 1993 (10 U.S.C. 2701 note) is amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(3) Application of antitrust laws to award of need-based
educational aid.--Section 568(c)(3) of the Improving America's
Schools Act of 1994 (15 U.S.C. 1 note) is amended--
(A) by striking ``1201(a)'' and inserting ``101''; and
(B) by striking ``(20 U.S.C. 1141(a))''.
(4) Omnibus parks and public lands management act of 1996.--
Section 1007(c)(5) of the Omnibus Parks and Public Lands Management
Act of 1996 (16 U.S.C. 698u-5) is amended by striking ``1201(a) of
the Higher Education Act of 1965 (20 U.S.C. 1141(a))'' and
inserting ``101 of the Higher Education Act of 1965''.
(5) Restrictions on former officers, employees, and elected
officials of the executive and legislative branches.--Section
207(j)(2)(B) of title 18, United States Code, is amended by
striking ``1201(a)'' and inserting ``101''.
(6) Education.--
(A) Higher education amendments of 1992.--Section 1(c) of
the Higher Education Amendments of 1992 (20 U.S.C. 1001 note)
is amended by striking ``1201'' and inserting ``101''.
(B) Treatment of branches.--Section 498(j)(2) of the Higher
Education Act of 1965 (20 U.S.C. 1099c(j)(2)) is amended by
striking ``1201(a)(2)'' and inserting ``101(a)(2)''.
(C) Disclosure requirements.--Section 429(d)(2)(B)(ii) of
the General Education Provisions Act (20 U.S.C.
1228c(d)(2)(B)(ii)) is amended by striking ``1201(a)'' and
inserting ``101''.
(D) Harry s. truman scholarships.--Section 3(4) of the
Harry S. Truman Memorial Scholarship Act (20 U.S.C. 2002(4)) is
amended by striking ``1201(a)'' and inserting ``101''.
(E) Tech-prep education.--Section 347(2)(A) of the Carl D.
Perkins Vocational and Applied Technology Education Act (20
U.S.C. 2394e(2)(A)) is amended by striking ``1201(a)'' and
inserting ``101''.
(F) Education for economic security.--Section 3(6) of the
Education for Economic Security Act (20 U.S.C. 3902(6)) is
amended by striking ``1201(a)'' and inserting ``101''.
(G) James madison memorial fellowships.--Section 815 of the
James Madison Memorial Fellowship Act (20 U.S.C. 4514) is
amended--
(i) in paragraph (3), by striking ``1201(a)'' and
inserting ``101''; and
(ii) in paragraph (4), by striking ``1201(d) of the
Higher Education Act of 1965'' and inserting ``14101 of the
Elementary and Secondary Education Act of 1965''.
(H) Barry goldwater scholarships.--Section 1403(4) of the
Barry Goldwater Scholarship and Excellence in Education Act (20
U.S.C. 4702(4)) is amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(I) Morris k. udall scholarships.--Section 4(6) of the
Morris K. Udall Scholarship and Excellence in National
Environmental and Native American Public Policy Act of 1992 (20
U.S.C. 5602(6)) is amended by striking ``1201(a)'' and
inserting ``101''.
(J) Bilingual education, and language enhancement and
acquisition.--Section 7501(4) of the Elementary and Secondary
Education Act of 1965 (20 U.S.C. 7601(4)) is amended by
striking ``1201(a)'' and inserting ``101''.
(K) General definitions.--Section 14101(17) of the
Elementary and Secondary Education Act of 1965 (20 U.S.C.
8801(17)) is amended by striking ``1201(a)'' and inserting
``101''.
(L) National education statistics.--Section 402(c)(3) of
the National Education Statistics Act of 1994 (20 U.S.C.
9001(c)(3)) is amended by striking ``1201(a)'' and inserting
``101''.
(7) Foreign relations.--
(A) Environment and sustainable development exchange
program.--Section 240(d) of the Foreign Relations Authorization
Act, Fiscal Years 1994 and 1995 (22 U.S.C. 2452 note) is
amended by striking ``1201(a)'' and inserting ``101''.
(B) Samantha smith memorial exchange program.--Section
112(a)(8) of the Mutual Educational and Cultural Exchange Act
of 1961 (22 U.S.C. 2460(a)(8)) is amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(C) Soviet-eastern european training.--Section 803(1) of
the Soviet-Eastern European Research and Training Act of 1983
(22 U.S.C. 4502(1)) is amended by striking ``1201(a)'' and
inserting ``101''.
(D) Developing country scholarships.--Section 603(d) of the
Foreign Relations Authorization Act, Fiscal Years 1986 and 1987
(22 U.S.C. 4703(d)) is amended by striking ``1201(a)'' and
inserting ``101''.
(8) Indians.--
(A) Snyder act.--The last paragraph of section 410 of the
Act entitled ``An Act authorizing appropriations and
expenditures for the administration of Indian Affairs, and for
other purposes'', approved November 2, 1921 (25 U.S.C. 13)
(commonly known as the Snyder Act) is amended by striking
``1201'' and inserting ``101''.
(B) Tribally controlled community college assistance.--
Section 2(a)(5) of the Tribally Controlled Community College
Assistance Act (25 U.S.C. 1801(a)(5)) is amended by striking
``1201(a)'' and inserting ``101''.
(C) Construction of new facilities.--Section 113(b)(2) of
the Tribally Controlled Community College Assistance Act (25
U.S.C. 1813(b)(2)) is amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(D) American indian teacher training.--Section
1371(a)(1)(B) of the Higher Education Amendments of 1992 (25
U.S.C. 3371(a)(1)(B)) is amended by striking ``1201(a)'' and
inserting ``101''.
(9) Labor.--
(A) Rehabilitation definitions.--Section 6(23) of the
Rehabilitation Act of 1973 (29 U.S.C. 705(23)) is amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(B) Technology related assistance for individuals with
disabilities act of 1988.--Section 3(8) of the Technology
Related Assistance for Individuals with Disabilities Act of
1988 (29 U.S.C. 2202(8)) is amended by striking ``1201(a) of
the Higher Education Act of 1965 (20 U.S.C. 1141(a))'' and
inserting ``101 of the Higher Education Act of 1965''.
(10) Surface mining control.--Section 701(32) of the Surface
Mining Control and Reclamation Act of 1977 (30 U.S.C. 1291(32)) is
amended by striking ``1201(a)'' and inserting ``101''.
(11) Pollution prevention.--Section 112(a)(1) of the Federal
Water Pollution Control Act (33 U.S.C. 1262(a)(1)) is amended by
striking ``1201'' and inserting ``101''.
(12) Postal service.--Section 3626(b)(3) of title 39, United
States Code, is amended--
(A) by striking ``1201(a)'' and inserting ``101''; and
(B) by striking ``(20 U.S.C. 1141(a))''.
(13) Public health and welfare.--
(A) Public health service act.--Section 705(a)(2)(C) of the
Public Health Service Act (42 U.S.C. 292d(a)(2)(C)) is amended
by striking ``section 481(a)'' and inserting ``section
102(a)''.
(B) Scientific and technical education.--Section 3(g) of
the Scientific and Advanced-Technology Act of 1992 (42 U.S.C.
1862i(g)) is amended--
(i) in paragraph (2)--
(I) by striking ``1201(a)'' and inserting ``101'';
and
(II) by striking ``(20 U.S.C. 1141(a))''; and
(ii) in paragraph (3)--
(I) by striking ``1201(a)'' and inserting ``101'';
and
(II) by striking ``(20 U.S.C. 1141(a))''.
(C) Older americans.--Section 102(32) of the Older
Americans Act of 1965 (42 U.S.C. 3002(32)) is amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(D) Justice system improvement.--Section 901(17) of the
Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C.
3791(17)) is amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(E) Energy technology commercialization services program.--
Section 362(f)(5)(A) of the Energy Policy and Conservation Act
(42 U.S.C. 6322(f)(5)(A)) is amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(F) Environmental restoration and waste management.--
Section 3132(b)(1) of the National Defense Authorization Act
for Fiscal Years 1992 and 1993 (42 U.S.C. 7274e(b)(1)) is
amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(G) Head start.--Section 649(c)(3) of the Head Start Act
(42 U.S.C. 9844(c)(3)) is amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(H) State dependent care development grants.--Section
670G(5) of the Child Care and Development Block Grant Act of
1990 (42 U.S.C. 9877(5)) is amended by striking ``1201(a)'' and
inserting ``101''.
(I) Instructional activities for low-income youth.--The
matter preceding subparagraph (A) of section 682(b)(1) of the
Community Services Block Grant Act (42 U.S.C. 9910c(b)(1)) is
amended by striking ``1201(a)'' and inserting ``101''.
(J) Drug abuse education.--Section 3601(7) of the Anti-Drug
Abuse Act of 1988 (42 U.S.C. 11851(7)) is amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(K) National and community service.--Section 101(13) of the
National and Community Service Act of 1990 (42 U.S.C.
12511(13)) is amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(L) Civilian community corps.--Section 166(6) of the
National and Community Service Act of 1990 (42 U.S.C. 12626(6))
is amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(M) Cranston-gonzalez national affordable housing act.--
Section 457(9) of the Cranston-Gonzalez National Affordable
Housing Act (42 U.S.C. 12899f(9)) is amended by striking
``1201(a)'' and inserting ``101''.
(N) Community schools youth services and supervision grant
program.--The definition of public school in section 30401(b)
of the Community Schools Youth Services and Supervision Grant
Program Act of 1994 (42 U.S.C. 13791(b)) is amended--
(i) by striking ``1201'' each place the term appears
and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(i))''.
(O) Police corps.--The definition of institution of higher
education in section 200103 of the Police Corps Act (42 U.S.C.
14092) is amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(P) Law enforcement scholarship program.--The definition of
institution of higher education in section 200202 of the Law
Enforcement Scholarship and Recruitment Act (42 U.S.C. 14111)
is amended--
(i) by striking ``1201(a)'' and inserting ``101''; and
(ii) by striking ``(20 U.S.C. 1141(a))''.
(14) Telecommunications.--Section 223(h)(4) of the
Telecommunications Act of 1934 (47 U.S.C. 223(h)(4)) is amended--
(A) by striking ``1201'' and inserting ``101''; and
(B) by striking ``(20 U.S.C. 1141)''.
(15) War and national defense.--Section 808(3) of the David L.
Boren National Security Education Act of 1991 (50 U.S.C. 1908(3))
is amended--
(A) by striking ``1201(a)'' and inserting ``101''; and
(B) by striking ``(20 U.S.C. 1141(a))''.
(b) Internal Cross References.--The Act (20 U.S.C. 1001 et seq.) is
amended--
(1) in section 402A(c)(2) (20 U.S.C. 1070a-11(c)(2)), by
striking ``1210'' and inserting ``118'';
(2) in section 435(a) (20 U.S.C. 1085(a)), by striking
``section 481'' and inserting ``section 102'';
(3) in section 485(f)(1)(I) (20 U.S.C. 1092(f)(1)(I)), by
striking ``1213'' and inserting ``120'';
(4) in section 487(d) (20 U.S.C. 1094(d)), by striking
``section 481'' and inserting ``section 102'';
(5) in subsections (j) and (k) of section 496 (20 U.S.C.
1099b), by striking ``section 481'' each place the term appears and
inserting ``section 102'';
(6) in section 498(i) (20 U.S.C. 1099c) is amended by striking
``section 481'' and inserting ``section 102'';
(7) in section 498(j) (20 U.S.C. 1099c(j))--
(A) in paragraph (1), by striking ``sections 481(b)(5) and
481(c)(3)'' and inserting ``sections 102(b)(1)(E) and
102(c)(1)(C)''; and
(B) in paragraph (2), by striking ``1201(a)(2)'' and
inserting ``101(a)(2)''; and
(8) in section 631(a)(8) (20 U.S.C. 1132(a)(8))--
(A) by striking ``section 1201(a)'' each place the term
appears and inserting ``section 101''; and
(B) by striking ``of 1201(a)'' and inserting ``of section
101''.
(c) Additional Conforming Amendments Correcting References to
Section 481.--
(1) School-to-work opportunities act of  1994.--Section 4 of
the School-to-Work Opportunities Act of 1994 (20 U.S.C. 6103) is
amended--
(A) in paragraph (11)(B)(viii), by striking ``section
481(b)'' and inserting ``section 102(b)''; and
(B) in paragraph (12), by striking ``section 481'' and
inserting ``section 102''.
(2) National and community service act of 1990.-- Section
148(g) of the National and Community Service Act of 1990 (42 U.S.C.
12604(g)) is amended by striking ``section 481(a) of the Higher
Education Act of 1965 (20 U.S.C. 1088(a))'' and inserting ``section
102 of the Higher Education Act of 1965''.
(d) Workforce Investment Act of 1998.--The Workforce Investment Act
of 1998 is amended--
(1) in section 101(35) (29 U.S.C. 2801(35)), by striking
``section 481 of the Higher Education Act of 1965 (20 U.S.C.
1088)'' and inserting ``section 102 of the Higher Education Act of
1965''; and
(2) in section 203(11) (20 U.S.C. 9202(11)), by striking
``section 1201 of the Higher Education Act of 1965 (20 U.S.C.
1141)'' and inserting ``section 101 of the Higher Education Act of
1965''.

423e3fd8259453c098e746b91b6e0fd2b128f7ab667ae21b5cd017df7f4be763

6dd8d86d8b659be5bb749b02159ebd5a0e61ca8b1f454eca202564fcc91166ab

TITLE II

-TEACHER QUALITY

(a) In General.--The Higher Education Act of 1965 is amended--
(1) by redesignating part D of title III (20 U.S.C. 1066 et
seq.) as part F of title III;
(2) by redesignating sections 351, 352, 353, 354, 356, 357,
358, and 360 (20 U.S.C. 1066, 1067, 1068, 1069, 1069b, 1069c,
1069d, and 1069f) as sections 391, 392, 393, 394, 395, 396, 397,
and 399, respectively;
(3) by transferring part B of title VII (20 U.S.C. 1132c et
seq.) to title III to follow part C of title III (20 U.S.C. 1065 et
seq.), and redesignating such part B as part D;
(4) by redesignating sections 721 through 728 (20 U.S.C. 1132c
and 1132c-7) as sections 341 through 348, respectively;
(5) by transferring subparts 1 and 3 of part B of title X (20
U.S.C. 1135b et seq. and 1135d et seq.) to title III to follow part
D of title III (as redesignated by paragraph (3)), and
redesignating such subpart 3 as subpart 2;
(6) by inserting after part D of title III (as redesignated by
paragraph (3)) the following:
``PART E--MINORITY SCIENCE AND ENGINEERING IMPROVEMENT PROGRAM'';
(7) by redesignating sections 1021 through 1023 (20 U.S.C.
1135b and 1135b-2), and sections 1041, 1042, 1043, 1044, 1046, and
1047 (20 U.S.C. 1135d, 1135d-1, 1135d-2, 1135d-3, 1135d-5, and
1135d-6) as sections 351 through 353, and sections 361, 362, 363,
364, 365, and 366, respectively; and
(8) by repealing section 366 (as redesignated by paragraph (7))
(20 U.S.C. 1135d-6).
(b) Conforming Amendments.--Section 361 (as redesignated by
subsection (a)(7)) (20 U.S.C. 1135d) is amended--
(1) in paragraph (1), by inserting ``and'' after the semicolon;
(2) in paragraph (2), by striking ``; and'' and inserting a
period; and
(3) by striking paragraph (3).
(c) Cross References.--Title III (20 U.S.C. 1051 et seq.) is
amended--
(1) in section 311(b) (20 U.S.C. 1057(b)), by striking
``360(a)(1)'' and inserting ``399(a)(1)'';
(2) in section 312 (20 U.S.C. 1058)--
(A) in subsection (b)(1)(B), by striking ``352(b)'' and
inserting ``392(b)''; and
(B) in subsection (c)(2), by striking ``352(a)'' and
inserting ``392(a)'';
(3) in section 313(b) (20 U.S.C. 1059(b)), by striking
``354(a)(1)'' and inserting ``394(a)(1)'';
(4) in section 342 (as redesignated by subsection (a)(4)) (20
U.S.C. 1132c-1)--
(A) in paragraph (3), by striking ``723(b)'' and inserting
``343(b)'';
(B) in paragraph (4), by striking ``723'' and inserting
``343'';
(C) in the matter preceding subparagraph (A) of paragraph
(5), by striking ``724(b)'' and inserting ``344(b)'';
(D) in paragraph (8), by striking ``725(1)'' and inserting
``345(1)''; and
(E) in paragraph (9), by striking ``727'' and inserting
``347'';
(5) in section 343 (as redesignated by subsection (a)(4)) (20
U.S.C. 1132c-2)--
(A) in subsection (a), by striking ``724'' and inserting
``344''; and
(B) in subsection (b)--
(i) in the matter preceding paragraph (1), by striking
``725(1) and 726'' and inserting ``345(1) and 346'';
(ii) in paragraph (10), by striking ``724'' and
inserting ``344''; and
(iii) in subsection (d), by striking ``723(c)(1)'' and
inserting ``343(c)(1)'';
(6) in section 345(2) (as redesignated by subsection (a)(4))
(20 U.S.C. 1132c-4(2)), by striking ``723'' and inserting ``343'';
(7) in section 348 (as redesignated by subsection (a)(4)) (20
U.S.C. 1132c-7), by striking ``725(1)'' and inserting ``345(1)'';
(8) in section 353(a) (as redesignated by subsection (a)(7))
(20 U.S.C. 1135b-2(a))--
(A) in paragraph (1), by striking ``1046(6)'' and inserting
``365(6)'';
(B) in paragraph (2), by striking ``1046(7)'' and inserting
``365(7)'';
(C) in paragraph (3), by striking ``1046(8)'' and inserting
``365(8)''; and
(D) in paragraph (4), by striking ``1046(9)'' and inserting
``365(9)'';
(9) in section 361(1) (as redesignated by subsection (a)(7))
(20 U.S.C. 1135d(1)), by striking ``1046(3)'' and inserting
``365(3)'';
(10) in section 362(a) (as redesignated by subsection (a)(7))
(20 U.S.C. 1135d-1(a))--
(A) in the matter preceding paragraph (1), by striking
``1041'' and inserting ``361''; and
(B) in paragraph (1), by striking ``1021(b)'' and inserting
``351(b)''; and
(11) in section 391(b)(6) (as redesignated by subsection
(a)(2)), by striking ``357'' and inserting ``396''.

914a543df711c29532ee59d2089503ea396cb2c49b9037aa18582487077c3afb

Section 301(a) (20 U.S.C. 1051(a)) is amended--
(1) by redesignating paragraphs (3) through (7) as paragraphs
(4) through (8), respectively; and
(2) by inserting after paragraph (2) the following:
``(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;''.

48cbe6b5295554abecb7fc41e38658c2ea96c1b65293763487adf670b2af118a

(a) Grants.--Section 311 (20 U.S.C. 1057) is amended by adding at
the end the following:
``(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.
``(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.
``(11) Creating or improving facilities for Internet or other
distance learning academic instruction capabilities, including
purchase or rental of telecommunications technology equipment or
services.
``(12) Other activities proposed in the application submitted
pursuant to subsection (c) 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).''.
(b) Endowment Fund Definition.--Section 312 (as amended by section
301(c)(2)) (20 U.S.C. 1058) is amended--
(1) by redesignating subsections (c) through (f) as subsections
(d) through (g), respectively; and
(2) by inserting after subsection (b) the following:
``(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.''.
(c) Duration of Grant.--Section 313 (20 U.S.C. 1059) is amended--
(1) in subsection (b), by inserting ``subsection (c) and a
grant under'' before ``section 394(a)(1)''; and
(2) by adding at the end the following:
``(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.''.
(d) Applications.--Title III is amended by striking section 314 (20
U.S.C. 1059a) and inserting the following:
``SEC. 314. APPLICATIONS.
``Each eligible institution desiring to receive assistance under
this part shall submit an application in accordance with the
requirements of section 391.''.
(e) American Indian Tribally Controlled Colleges and
Universities.--Section 316 (20 U.S.C. 1059c) is amended to read as
follows:
``SEC. 316. AMERICAN INDIAN TRIBALLY CONTROLLED COLLEGES AND
UNIVERSITIES.
``(a) Program Authorized.--The Secretary shall provide grants and
related assistance to Indian Tribal Colleges and Universities to enable
such institutions to improve and expand their capacity to serve Indian
students.
``(b) Definitions.--In this section:
``(1) Indian.--The term `Indian' has the meaning given the term
in section 2 of the Tribally Controlled College or University
Assistance Act of 1978.
``(2) Indian tribe.--The term `Indian tribe' has the meaning
given the term in section 2 of the Tribally Controlled College or
University Assistance Act of 1978.
``(3) Tribal college or university.--The term `Tribal College
or University' has the meaning give the term `tribally controlled
college or university' in section 2 of the Tribally Controlled
College or University Assistance Act of 1978, and includes an
institution listed in the Equity in Educational Land Grant Status
Act of 1994.
``(4) Institution of higher education.--The term `institution
of higher education' means an institution of higher education as
defined in section 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;
``(C) support of faculty exchanges, faculty development,
and faculty fellowships to assist in attaining advanced degrees
in the faculty's field of instruction;
``(D) academic instruction in disciplines in which Indians
are underrepresented;
``(E) purchase of library books, periodicals, and other
educational materials, including telecommunications program
material;
``(F) tutoring, counseling, and student service programs
designed to improve academic success;
``(G) funds management, administrative management, and
acquisition of equipment for use in strengthening funds
management;
``(H) joint use of facilities, such as laboratories and
libraries;
``(I) establishing or improving a development office to
strengthen or improve contributions from alumni and the private
sector;
``(J) establishing or enhancing a program of teacher
education designed to qualify students to teach in elementary
schools or secondary schools, with a particular emphasis on
teaching Indian children and youth, that shall include, as part
of such program, preparation for teacher certification;
``(K) establishing community outreach programs that
encourage Indian elementary school and secondary school
students to develop the academic skills and the interest to
pursue postsecondary education; and
``(L) other activities proposed in the application
submitted pursuant to subsection (d) that--
``(i) contribute to carrying out the activities
described in subparagraphs (A) through (K); and
``(ii) are approved by the Secretary as part of the
review and acceptance of such application.
``(3) Endowment fund.--
``(A) In general.--A Tribal College or University may use
not more than 20 percent of the grant funds provided under this
section to establish or increase an endowment fund at the
institution.
``(B) Matching requirement.--In order to be eligible to use
grant funds in accordance with subparagraph (A), the Tribal
College or University shall provide matching funds, in an
amount equal to the Federal funds used in accordance with
subparagraph (A), for the establishment or increase of the
endowment fund.
``(C) Comparability.--The provisions of part C regarding
the establishment or increase of an endowment fund, that the
Secretary determines are not inconsistent with this paragraph,
shall apply to funds used under subparagraph (A).
``(d) Application Process.--
``(1) Institutional eligibility.--To be eligible to receive
assistance under this section, a Tribal College or University shall
be an eligible institution under section 312(b).
``(2) Application.--Any Tribal College or University desiring
to receive assistance under this section shall submit an
application to the Secretary at such time, and in such manner, as
the Secretary may by regulation reasonably require. Each such
application shall include--
``(A) a 5-year plan for improving the assistance provided
by the Tribal College or University to Indian students,
increasing the rates at which Indian secondary school students
enroll in higher education, and increasing overall
postsecondary retention rates for Indian students; and
``(B) such enrollment data and other information and
assurances as the Secretary may require to demonstrate
compliance with paragraph (1).
``(3) Special rule.--For the purposes of this part, no Tribal
College or University that is eligible for and receives funds under
this section may concurrently receive other funds under this part
or part B.''.
(f) Alaska Native and Native Hawaiian-Serving Institutions.--Part A
of title III (20 U.S.C. 1057 et seq.) is amended by adding at the end
the following:
``SEC. 317. ALASKA NATIVE AND NATIVE HAWAIIAN-SERVING INSTITUTIONS.
``(a) Program Authorized.--The Secretary shall provide grants and
related assistance to Alaska Native-serving institutions and 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 9308 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 9212 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; and
``(H) academic tutoring and counseling programs and student
support services.
``(d) Application Process.--
``(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. 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.
``(e) Special Rule.--For the purposes of this section, no Alaska
Native-serving institution or Native Hawaiian-serving institution which
is eligible for and receives funds under this section may concurrently
receive other funds under this part or part B.''.

c1ed6d3371bedfc3b5bcff5867e878e7b91d73176a5148306690735b534f786a

(a) Grants.--Section 323 (20 U.S.C. 1062) is amended--
(1) by redesignating subsection (b) as subsection (c);
(2) by inserting after subsection (a) the following:
``(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).''; and
(3) in subsection (c) (as redesignated by paragraph (1)), by
striking paragraph (3).
(b) Professional or Graduate Institutions.--
(1) General authorization.--Section 326(a) (20 U.S.C. 1063b(a))
is amended--
(A) in subsection (a)--
(i) in paragraph (1), by inserting ``in mathematics,
engineering, or the physical or natural sciences'' after
``graduate education opportunities''; and
(ii) in paragraph (2)--
(I) by striking ``$500,000'' and inserting
``$1,000,000''; and
(II) by striking ``except that'' and all that
follows and inserting the following: ``, except that no
institution shall be required to match any portion of
the first $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.''; and
(B) in subsection (d)(2), by striking ``$500,000'' and
inserting ``$1,000,000''.
(2) Use of funds.--Section 326(c) (20 U.S.C. 1063b(c)) is
amended by striking paragraphs (1) through (3) and inserting the
following:
``(1) purchase, rental or lease of scientific or laboratory
equipment for educational purposes, including instructional and
research purposes;
``(2) construction, maintenance, renovation, and improvement in
classroom, library, laboratory, and other instructional facilities,
including purchase or rental of telecommunications technology
equipment or services;
``(3) purchase of library books, periodicals, technical and
other scientific journals, microfilm, microfiche, and other
educational materials, including telecommunications program
materials;
``(4) scholarships, fellowships, and other financial assistance
for needy graduate and professional students to permit 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) establish or improve a development office to strengthen
and increase contributions from alumni and the private sector;
``(6) assist in the establishment or maintenance of an
institutional endowment to facilitate financial independence
pursuant to section 331; and
``(7) funds and administrative management, and the acquisition
of equipment, including software, for use in strengthening funds
management and management information systems.''.
(3) Eligibility.--Section 326(e) (20 U.S.C. 1063b(e)) is
amended--
(A) in paragraph (1)--
(i) by striking ``include--'' and inserting ``are the
following'';
(ii) by inserting ``and other qualified graduate
programs'' before the semicolon at the end of subparagraphs
(E) through (J);
(iii) by striking ``and'' at the end of subparagraph
(O); and
(iv) in subparagraph (P)--
(I) by inserting ``University'' after ``State'';
and
(II) by striking the period and inserting a
semicolon; and
(III) by adding at the end the following:
``(Q) Norfolk State University qualified graduate programs;
and
``(R) Tennessee State University qualified graduate
programs.'';
(B) by striking paragraphs (2) and (3) and inserting the
following:
``(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 the
physical or natural sciences, engineering, mathematics, or other
scientific discipline in which African Americans are
underrepresented and has students enrolled in such program at the
time of application for a grant under this section.
``(B) 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.
``(3) Special rule.--Institutions that were awarded grants
under this section prior to October 1, 1998, shall continue to
receive such grants, subject to the availability of appropriated
funds, regardless of the eligibility of the institutions described
in subparagraphs (Q) and (R) of paragraph (1).''; and
(C) by adding at the end the following:
``(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.''.
(4) Funding rule.--Section 326(f) (20 U.S.C. 1063b(f)) is
amended--
(A) by striking ``Of the amount appropriated'' and
inserting ``Subject to subsection (g), of the amount
appropriated'';
(B) in paragraph (1)--
(i) by striking ``$12,000,000'' and inserting
``$26,600,000''; and
(ii) by striking ``(A) through (E)'' and inserting
``(A) through (P)'';
(C) by striking paragraph (2) and inserting the following:
``(2) any amount in excess of $26,600,000, but not in excess of
$28,600,000, shall be available for the purpose of making grants to
institutions or programs described in subparagraphs (Q) and (R) of
subsection (e)(1); and
``(3) any amount in excess of $28,600,000, shall be made
available to each of the institutions or programs identified in
subparagraphs (A) through (R) pursuant to a formula developed by
the Secretary that uses the following elements:
``(A) The ability of the institution to match Federal funds
with non-Federal funds.
``(B) The number of students enrolled in the programs for
which the eligible institution received funding under this
section in the previous year.
``(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.''.
(5) Hold harmless rule.--Section 326 is further amended by
adding at the end the following new subsection:
``(g) Hold Harmless Rule.--Notwithstanding paragraphs (2) and (3)
of subsection (f), no institution or qualified program identified in
subsection (e)(1) that received a grant for fiscal year 1998 and that
is eligible to receive a grant in a subsequent fiscal year shall
receive a grant amount in any such subsequent fiscal year that is less
than the grant amount received for fiscal year 1998, unless the amount
appropriated is not sufficient to provide such grant amounts to all
such institutions and programs, or the institution cannot provide
sufficient matching funds to meet the requirements of this section.''.

d3532fcffbbebbaa33e51c8d83a011e237b07cda5b9363327b598a8898f02239

Section 331(b) (20 U.S.C. 1065(b)) is amended--
(1) in paragraph (1), by striking ``360'' and inserting
``399''; and
(2) in paragraph (2), by striking subparagraphs (B) and (C) and
inserting the following:
``(B) The Secretary may make a grant under this part to an eligible
institution in any fiscal year if the institution--
``(i) applies for a grant in an amount not exceeding $500,000;
and
``(ii) has deposited in the eligible institution's endowment
fund established under this section an amount which is equal to \1/
2\ of the amount of such grant.
``(C) An eligible institution of higher education that is awarded a
grant under subparagraph (B) shall not be eligible to receive an
additional grant under subparagraph (B) until 10 years after the date
on which the grant period terminates.''.

040daad71ae147a3f3eace30c3771899a5d43764b685901fbc25c25fdcc8d2b6

(a) Definition.--Section 342(5) (as redesignated by section
301(a)(4)) (20 U.S.C. 1132c-1(5)) is amended--
(1) by redesignating subparagraphs (B), (C), and (D) as
subparagraphs (C), (G), and (H), respectively;
(2) by inserting after subparagraph (A) the following:
``(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;'';
(3) in subparagraph (C) (as redesignated by paragraph (1)),
insert ``technology,'' after ``instructional equipment'';
(4) by inserting after subparagraph (C) (as redesignated by
paragraph (1)) the following:
``(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;''; and
(5) in subparagraph (H) (as redesignated by paragraph (2)), by
striking ``(C)'' and inserting ``(G)''.
(b) Responsibilities.--Section 343 (as redesignated by section
301(a)(4)) (20 U.S.C. 1132c-2) is amended--
(1) in subsection (b)(8) (as redesignated by section 301(a)(4))
(20 U.S.C. 1132c-2(b)(8)), by striking ``10 percent'' each place
the term appears and inserting ``5 percent''; and
(2) by adding at the end the following:
``(e) 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.''.
(c) Technical Assistance.--Section 345 (as redesignated by section
301(a)(4)) (20 U.S.C. 1132c-4) is amended--
(1) in paragraph (5), by striking ``and'' after the semicolon;
(2) in paragraph (6), by striking the period and inserting ``;
and''; and
(3) by adding at the end the following:
``(7) 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.''.
(d) Prohibition.--Section 346 (as redesignated by section
301(a)(4)) (20 U.S.C. 1132c-5) is repealed.
(e) Advisory Board.--Section 347 (as redesignated by section
301(a)(4)) (20 U.S.C. 1132c-6) is amended--
(1) in subsection (b)--
(A) in subparagraph (D), by inserting ``, or the
president's designee.'' after the period; and
(B) in subparagraph (E), by inserting ``, or the designee
of the Association'' before the period; and
(2) by striking subsection (c).

fba45e4c9e9461e77a99f86af20db62a0ca18a5285ea6613fa2158517cb93fd6

(a) Minority Science and Engineering Improvement Program
Findings.--Subpart 1 of part E of title III (as redesignated by
paragraphs (6) and (7) of section 301) (20 U.S.C. 1135b et seq.) is
amended by inserting after the subpart heading the following:
``SEC. 350. 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.''.
(b) Eligibility for Grants.--Section 361 (as redesignated by
section 301(a)(7)) (20 U.S.C. 1135d) is amended to read as follows:
``SEC. 361. 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) 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; or
``(4) consortia of organizations, that provide needed services
to one or more minority institutions, the membership of which may
include--
``(A) 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;
``(D) private organizations that have science or
engineering facilities; or
``(E) quasi-governmental entities that have a significant
scientific or engineering mission.''.
(c) Definitions.--Section 365(4) (as redesignated by section
301(a)(7)) (20 U.S.C. 1135d-5(4)) is amended by inserting
``behavioral,'' after ``physical,''.
(d) Conforming amendments.--The heading for subpart 1 of part E of
title III (as redesignated by paragraphs (6) and (7) of section 301(a))
is amended by inserting ``and Engineering'' before ``Improvement
Program''.

acf28079eb8873cedbd78a17137ad5378e388317fbc94067b93b04d2a0ec073a

(a) Applications for Assistance.--Subsection (a) of section 391(a)
(as redesignated by section 301(a)(2)) (20 U.S.C. 1066(a)) is amended
to read as follows:
``(a) Applications.--
``(1) Applications required.--Any institution which is eligible
for assistance under this title shall submit to the Secretary an
application for assistance at such time, in such form, and
containing such information, as may be necessary to enable the
Secretary to evaluate 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) Applications.--Paragraph (1) of section 391(b) (as redesignated
by section 301(a)(2)) (20 U.S.C. 1066(b)) is amended by inserting ``, D
or E'' after ``part C''.
(c) Contents of Applications.--Section 391(b)(6) (as redesignated
by section 301(a)(2)) is amended by inserting before the semicolon the
following: ``, except that for purposes of section 316, paragraphs (2)
and (3) of section 396 shall not apply''.
(d) Waivers.--Section 392(a) (as redesignated by section 301(a)(2))
(20 U.S.C. 1067(a)) is amended--
(1) by striking ``or'' at the end of paragraph (5);
(2) by redesignating paragraph (6) as paragraph (7); and
(3) by inserting after paragraph (5) the following new
paragraph:
``(6) that is a tribally controlled college or university as
defined in section 2 of the Tribally Controlled College or
University Assistance Act of 1978; or''.
(e) Application Review Process.--Section 393(a) (as redesignated by
section 301(a)(2)) (20 U.S.C. 1068(a)) is amended--
(1) in paragraph (2), by striking ``Native American colleges
and universities'' and inserting ``Tribal Colleges and
Universities''; and
(2) by adding at the end the following:
``(d) Exclusion.--The provisions of this section shall not apply to
applications submitted under part D.''.
(f) Waivers.--Paragraph (2) of section 395(b) (as redesignated by
section 301(a)(2)) (20 U.S.C. 1069b(b)) is amended by striking ``title
IV, VII, or VIII'' and inserting ``part D or title IV''.
(g) Continuation Awards.--Part F of title III is amended by
inserting after section 397 (as redesignated by section 301(a)(2)) (20
U.S.C. 1069d) the following:
``SEC. 398. 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.''.
(h) Authorization of Appropriations.--Section 399(a) (as
redesignated by section 301(a)(2)) (20 U.S.C. 1069f) is amended--
(1) in paragraph (1)--
(A) in subparagraph (A), by striking ``1993'' and inserting
``1999'';
(B) in subparagraph (B)--
(i) in clause (i), by striking ``$45,000,000 for fiscal
year 1993'' and inserting ``$10,000,000 for fiscal year
1999'';
(ii) by striking clause (ii); and
(iii) by striking ``(B)(i) There'' and inserting ``(B)
There''; and
(C) by adding at the end the following:
``(C) There are authorized to be appropriated to carry out
section 317, $5,000,000 for fiscal year 1999 and such sums as may
be necessary for each of the 4 succeeding fiscal years.'';
(2) in paragraph (2)--
(A) in subparagraph (A), by striking ``1993'' and inserting
``1999''; and
(B) in subparagraph (B), by striking ``$20,000,000 for
fiscal year 1993'' and inserting ``$35,000,000 for fiscal year
1999'';
(3) in paragraph (3), by striking ``$50,000,000 for fiscal year
1993'' and inserting ``$10,000,000 for fiscal year 1999'';
(4) by adding at the end the following:
``(4) Part d.--(A) There are authorized to be appropriated to
carry out part D (other than section 345(7), but including section
347), $110,000 for fiscal year 1999, and such sums as may be
necessary for each of the 4 succeeding fiscal years.
``(B) There are authorized to be appropriated to carry out
section 345(7), such sums as may be necessary for fiscal year 1999
and each of the 4 succeeding fiscal years.
``(5) Part e.--There are authorized to be appropriated to carry
out part E, $10,000,000 for fiscal year 1999, and such sums as may
be necessary for each of the 4 succeeding fiscal years.''; and
(5) by striking subsections (c), (d), and (e).
PART A--GRANTS TO STUDENTS

f0efde2d87c248485d4f49b358f76433fe36159cd4d39dae33cd7d0c72895831

(a) Extension of Authority.--Section 401(a)(1) (20 U.S.C.
1070a(a)(1)) is amended--
(1) in the first sentence, by striking ``The Secretary shall,
during the period beginning July 1, 1972, and ending September 30,
1998,'' and inserting ``For each fiscal year through fiscal year
2004, the Secretary shall''; and
(2) in the second sentence, by inserting ``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,'' after ``pay eligible students''.
(b) Amount of Grant.--Paragraph (2)(A) of section 401(b) is amended
to read as follows:
``(2)(A) The amount of the Federal Pell Grant for a student
eligible under this part shall be--
``(i) $4,500 for academic year 1999-2000;
``(ii) $4,800 for academic year 2000-2001;
``(iii) $5,100 for academic year 2001-2002;
``(iv) $5,400 for academic year 2002-2003; and
``(v) $5,800 for academic year 2003-2004,
less an amount equal to the amount determined to be the expected family
contribution with respect to that student for that year.''.
(c) Relation of Maximum Grant to Tuition and Expenses.--Paragraph
(3) of section 401(b) is amended to read as follows:
``(3)(A) For any academic year for which an appropriation Act
provides a maximum basic grant in an amount in excess of $2,700, the
amount of a student's basic grant shall equal $2,700 plus--
``(i) one-half of the amount by which such maximum basic grant
exceeds $2,700; plus
``(ii) the lesser of--
``(I) the remaining one-half of such excess; or
``(II) the sum of the student's tuition and, if the student
has dependent care expenses (as described in section 472(8)) or
disability-related expenses (as described in section 472(9)),
an allowance determined by the institution for such expenses.
``(B) An institution that charged only fees in lieu of tuition as
of October 1, 1998, may include in the institution's determination of
tuition charged, fees that would normally constitute tuition.''.
(d) Regulations for Multiple Awards.--Section 401(b)(6) is
amended--
(1) by redesignating subparagraphs (A) and (B) as clauses (i)
and (ii), respectively;
(2) by inserting ``(A)'' after the paragraph designation; and
(3) by adding at the end the following:
``(B) The Secretary shall promulgate regulations implementing this
paragraph.''.
(e) Time Limit To Receive Grants.--Section 401(c) is amended by
adding at the end the following:
``(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.''.
(f) Institutional Ineligibility Based on Default Rates.--Section
401 is amended by adding at the end the following:
``(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.''.
(g) Conforming Amendments.--
(1) Section 400(a)(1) (20 U.S.C. 1070(a)(1)) is amended by
striking ``basic educational opportunity grants'' and inserting
``Federal Pell Grants''.
(2) The heading of subpart 1 of part A of title IV (20 U.S.C.
1070a et seq.) is amended to read as follows:
``Subpart 1--Federal Pell Grants''.
(3) Section 401 is amended--
(A) in the heading of the section, by striking ``basic
educational opportunity'' and inserting ``federal pell'';
(B) in subsection (a)(3), by striking ``Basic grants'' and
inserting ``Grants'';
(C) by striking ``basic grant'' each place the term appears
and inserting ``Federal Pell Grant''; and
(D) by striking ``basic grants'' each place the term
appears and inserting ``Federal Pell Grants''.
(4) Section 401(f)(3) is amended by striking ``Education and
Labor'' and inserting ``Education and the Workforce''.
(5) Section 452(c) (20 U.S.C. 1087b(c)) is amended by striking
``basic grants'' and inserting ``Federal Pell Grants''.
(6) Subsections (j)(2) and (k)(3) of section 455 (20 U.S.C.
1087e) are each amended by striking ``basic grants'' and inserting
``Federal Pell Grants''.

ee5ad26260ecc36bd5ec83f72582fbcbafb4325eb1401f753602fb6bd0393bc9

(a) Program Authority; Authorization of Appropriations.--
(1) Duration of grants.--Section 402A(b)(2) (20 U.S.C. 1070a-
11(b)(2)) is amended--
(A) by striking ``and'' at the end of subparagraph (A);
(B) by striking the period at the end of subparagraph (B)
and inserting ``; and''; and
(C) by inserting after subparagraph (B) the following new
subparagraph:
``(C) grants under section 402H shall be awarded for a
period determined by the Secretary.''.
(2) Minimum grants.--Section 402A(b)(3) is amended to read as
follows:
``(3) Minimum grants.--Unless the institution or agency
requests a smaller amount, individual grants under this chapter
shall be no less than--
``(A) $170,000 for programs authorized by sections 402D and
402G;
``(B) $180,000 for programs authorized by sections 402B and
402F; and
``(C) $190,000 for programs authorized by sections 402C and
402E.''.
(3) Procedures for awarding grants and contracts.--Subsection
(c) of section 402A is amended to read as follows:
``(c) Procedures for Awarding Grants and Contracts.--
``(1) Application requirements.--An eligible entity that
desires to receive a grant or contract under this chapter shall
submit an application to the Secretary in such manner and form, and
containing such information and assurances, as the Secretary may
reasonably require.
``(2) Prior experience.--In making grants under this chapter,
the Secretary shall consider each applicant's prior experience of
service delivery under the particular program for which funds are
sought. The level of consideration given the factor of prior
experience shall not vary from the level of consideration given
such factor during fiscal years 1994 through 1997, except that
grants made under section 402H shall not be given prior experience
consideration.
``(3)  Order of awards; program fraud.--(A) Except with respect
to grants made under sections 402G and 402H and as provided in
subparagraph (B), the Secretary shall award grants and contracts
under this chapter in the order of the scores received by the
application for such grant or contract in the peer review process
required under paragraph (4) and adjusted for prior experience in
accordance with paragraph (2) of this subsection.
``(B) The Secretary is not required to provide assistance to a
program otherwise eligible for assistance under this chapter, if
the Secretary has determined that such program has involved the
fraudulent use of funds under this chapter.
``(4) Peer review process.--(A) The Secretary shall 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 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 campuses.
``(6) Coordination with other programs for disadvantaged
students.--The Secretary shall encourage coordination of programs
assisted under this chapter with other programs for disadvantaged
students operated by the sponsoring institution or agency,
regardless of the funding source of such programs. The Secretary
shall not limit an entity's eligibility to receive funds under this
chapter because such entity sponsors a program similar to the
program to be assisted under this chapter, regardless of the
funding source of such program. The Secretary shall permit the
Director of a program receiving funds under this chapter to
administer one or more additional programs for disadvantaged
students operated by the sponsoring institution or agency,
regardless of the funding sources of such programs.
``(7)  Application status.--The Secretary shall inform each
entity operating programs under this chapter regarding the status
of their application for continued funding at least 8 months prior
to the expiration of the grant or contract. The Secretary, in the
case of an entity that is continuing to operate a successful
program under this chapter, shall ensure that the start-up date for
a new grant or contract for such program immediately follows the
termination of 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.''.
(4) Authorization of appropriations.--Section 402A(f) is
amended by striking ``$650,000,000 for fiscal year 1993'' and
inserting ``$700,000,000 for fiscal year 1999''.
(5) Waiver.--Section 402A(g) is amended by adding at the end
the following:
``(4) Waiver.--The Secretary may waive the service requirements
in subparagraph (A) or (B) of paragraph (3) if the Secretary
determines the application of the service requirements to a veteran
will defeat the purpose of a program under this chapter.''.
(b) Talent Search.--Section 402B(b) (20 U.S.C. 1070a-12(b)) is
amended--
(1) by striking paragraph (4) and inserting the following:
``(4) guidance on and assistance in secondary school reentry,
entry to general educational development (GED) programs, other
alternative education programs for secondary school dropouts, or
postsecondary education;'';
(2) in paragraph (5), by inserting ``, or activities designed
to acquaint individuals from disadvantaged backgrounds with careers
in which the individuals are particularly underrepresented'' before
the semicolon;
(3) in paragraph (8), by striking ``parents'' and inserting
``families''; and
(4) in paragraph (9), by inserting ``or counselors'' after
``teachers''.
(c) Upward Bound.--Section 402C (20 U.S.C. 1070a-13) is amended--
(1) in subsection (b)--
(A) in paragraph (2), by striking ``personal counseling''
and inserting ``counseling and workshops'';
(B) in paragraph (9)--
(i) by inserting ``or counselors'' after ``teachers'';
and
(ii) by striking ``and'' after the semicolon;
(C) by redesignating paragraph (10) as paragraph (12);
(D) by inserting after paragraph (9) the following:
``(10) work-study positions where youth participating in the
project are exposed to careers requiring a postsecondary degree;
``(11) special services to enable veterans to make the
transition to postsecondary education; and''; and
(E) in paragraph (12) (as redesignated by subparagraph
(C)), by striking ``(9)'' and inserting ``(11)''; and
(2) in subsection (e), by striking ``and not in excess of $40
per month during the remaining period of the year.'' and inserting
``except that youth participating in a work-study position under
subsection (b)(10) may be paid a stipend of $300 per month during
June, July, and August. Youths participating in a project proposed
to be carried out under any application may be paid stipends not in
excess of $40 per month during the remaining period of the year.''.
(d) Student Support Services.--Paragraph (6) of section 402D(c) (20
U.S.C. 1070a-14(c)(6)) is amended to read as follows:
``(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.''.
(e) Postbaccalaureate Achievement Program.--Section 402E(e)(1) (20
U.S.C. 1070a-15(e)(1)) is amended by striking ``$2,400'' and inserting
``$2,800''.
(f) Staff Development Activities.--Section 402G (20 U.S.C. 1070a-
17) is amended--
(1) in subsection (a), by inserting ``participating in,'' after
``leadership personnel employed in,''; and
(2) in subsection (b), by inserting after paragraph (3) the
following new paragraph:
``(4) The use of appropriate educational technology in the
operation of projects assisted under this chapter.''.
(g) Evaluation and Dissemination.--Section 402H (20 U.S.C. 1070a-
18) is amended to read as follows:
``SEC. 402H. EVALUATIONS AND GRANTS FOR PROJECT IMPROVEMENT AND
DISSEMINATION PARTNERSHIP PROJECTS.
``(a) Evaluations.--
``(1) In general.--For the purpose of improving the
effectiveness of the programs and projects assisted under this
chapter, the Secretary may make grants to or enter into contracts
with institutions of higher education and other public and private
institutions and organizations to evaluate the effectiveness of the
programs and projects assisted under this chapter.
``(2) Practices.--The evaluations described in paragraph (1)
shall identify institutional, community, and program or project
practices that are particularly effective in enhancing the access
of low-income individuals and first-generation college students to
postsecondary education, the preparation of the individuals and
students for postsecondary education, and the success of the
individuals and students in postsecondary education. Such
evaluations shall also investigate the effectiveness of alternative
and innovative methods within Federal TRIO programs of increasing
access to, and retention of, students in postsecondary education.
``(b) Grants.--The Secretary may award grants to institutions of
higher education or other private and public institutions and
organizations, that are carrying out a program or project assisted
under this chapter prior to the date of enactment of the Higher
Education Amendments of 1998, to enable the institutions and
organizations to expand and leverage the success of such programs or
projects by working in partnership with other institutions, community-
based organizations, or combinations of such institutions and
organizations, that are not receiving assistance under this chapter and
are serving low-income students and first generation college students,
in order to--
``(1) disseminate and replicate best practices of programs or
projects assisted under this chapter; and
``(2) provide technical assistance regarding programs and
projects assisted under this chapter.
``(c) Results.--In order to improve overall program or project
effectiveness, the results of evaluations and grants described in this
section shall be disseminated by the Secretary to similar programs or
projects assisted under this subpart, as well as other individuals
concerned with postsecondary access for and retention of low-income
individuals and first-generation college students.''.

b2107ba8396bf61dec8166fd9c4900c3e088467cb09b69cf68cb42503a4d5c8d

c046b63276aa34182a1deb621b56ca3c916f05d283853812673cd6e5c992186b

Chapter 3 of subpart 2 of part A of title IV (20 U.S.C. 1070a-31 et
seq.) is amended to read as follows:
``CHAPTER 3--ACADEMIC ACHIEVEMENT INCENTIVE SCHOLARSHIPS
``SEC. 406A. SCHOLARSHIPS AUTHORIZED.
``The Secretary is authorized to award scholarships to students who
graduate from secondary school after May 1, 2000, to enable the
students to pay the cost of attendance at an institution of higher
education during the students first 2 academic years of undergraduate
education, if the students--
``(1) are eligible to receive Federal Pell Grants for the year
in which the scholarships are awarded; and
``(2) demonstrate academic achievement by graduating in the top
10 percent of their secondary school graduating class.
``SEC. 406B. SCHOLARSHIP PROGRAM REQUIREMENTS.
``(a) Amount of Award.--
``(1) In general.--Except as provided in paragraph (2), the
amount of a scholarship awarded under this chapter for any academic
year shall be equal to 100 percent of the amount of the Federal
Pell Grant for which the recipient is eligible for the academic
year.
``(2) Adjustment for insufficient appropriations.--If, after
the Secretary determines the total number of eligible applicants
for an academic year in accordance with section 406C, funds
available to carry out this chapter for the academic year are
insufficient to fully fund all awards under this chapter for the
academic year, the amount of the scholarship paid to each student
under this chapter shall be reduced proportionately.
``(b) Assistance Not To Exceed Cost of Attendance.--A scholarship
awarded under this chapter to any student, in combination with the
Federal Pell Grant assistance and other student financial assistance
available to such student, may not exceed the student's cost of
attendance.
``SEC. 406C. ELIGIBILITY OF SCHOLARS.
``(a) Procedures Established by Regulation.--The Secretary shall
establish by regulation procedures for the determination of eligibility
of students for the scholarships awarded under this chapter. Such
procedures shall include measures to prevent any secondary school from
certifying more than 10 percent of the school's students for
eligibility under this section.
``(b) Coordination.--In prescribing procedures under subsection
(a), the Secretary shall ensure that the determination of eligibility
and the amount of the scholarship is determined in a timely and
accurate manner consistent with the requirements of section 482 and the
submission of the financial aid form required by section 483. For such
purposes, the Secretary may provide that, for the first academic year
of a student's 2 academic years of eligibility under this chapter,
class rank may be determined prior to graduation from secondary school,
at such time and in such manner as the Secretary may specify in
regulations prescribed under this chapter.
``SEC. 406D. STUDENT REQUIREMENTS.
``(a) In General.--Each eligible student desiring a scholarship
under this chapter shall submit an application to the Secretary at such
time, in such manner, and containing such information as the Secretary
may reasonably require.
``(b) Continuing Eligibility.--In order for a student to continue
to be eligible to receive a scholarship under this chapter for the
second year of undergraduate education, the eligible student shall
maintain eligibility to receive a Federal Pell Grant for that year,
including fulfilling the requirements for satisfactory progress
described in section 484(c).
``SEC. 407E. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated to carry out this chapter
$200,000,000 for fiscal year 1999 and such sums as may be necessary for
each of the 4 succeeding fiscal years.''.

d12acd500354a70ef8118cc35c6c4e419d95658cd1e68bbef0c06ea9b6a9ac98

Chapters 4 through 8 of subpart 2 of part A of title IV (20 U.S.C.
1070a-41 et seq. and 1070a-81 et seq.) are repealed.

652f68fce26f7f1f725c153e2b7e139a26d7c0be2f530808964e8106966ba760

(a) Authorization of Appropriations.--Section 413A(b)(1) (20 U.S.C.
1070b(b)(1)) is amended by striking ``1993'' and inserting ``1999''.
(b) Use of Funds for Less-Than-Full-Time Students.--Subsection (d)
of section 413C (20 U.S.C. 1070b-2) is amended to read as follows:
``(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.''.
(c) Allocation of Funds.--
(1) Updating the base period.--Section 413D(a) (20 U.S.C.
1070b-3(a)) is amended--
(A) in paragraph (1), by striking ``received and used under
this part for fiscal year 1985'' and inserting ``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)'';
(B) in paragraph (2)--
(i) in subparagraphs (A) and (B), by striking ``1985''
each place the term appears and inserting ``1999''; and
(ii) in subparagraph (C)(i), by striking ``1986'' and
inserting ``2000''.
(2) Elimination of pro rata share.--Section 413D is further
amended--
(A) by striking subsection (b);
(B) in subsection (c)(1), by striking ``three-quarters of
the remainder'' and inserting ``the remainder'';
(C) in subsection (c)(2)(A)(i), by striking ``subsection
(d)'' and inserting ``subsection (c)''; and
(D) by redesignating subsections (c), (d), (e), and (f) as
subsections (b), (c), (d), and (e), respectively.
(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.
(d) Carryover and Carryback Authority.--Subpart 3 of part A of
title IV (20 U.S.C. 1070b et seq.) is amended by adding at the end the
following:
``SEC. 413E. 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
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.''.

e6665be43a762254691f191eb91e4403f27c5cc9366a8e8ab98147e860d62fc5

(a) Amendment to Subpart Heading.--
(1) In general.--The heading for subpart 4 of part A of title
IV (20 U.S.C. 1070c et seq.) is amended to read as follows:
``Subpart 4--Leveraging Educational Assistance Partnership Program''.
(2) Conforming amendments.--Subpart 4 of part A of title IV (20
U.S.C. 1070c et seq.) is amended--
(A) in section 415B(b) (20 U.S.C. 1070c-1(b)), by striking
``State student grant incentive'' and inserting ``leveraging
educational assistance partnership''; and
(B) in the heading for section 415C (20 U.S.C. 1070c-2), by
striking ``state student incentive grant'' and inserting
``leveraging educational assistance partnership''.
(b) Authorization of Appropriations.--Section 415A(b) (20 U.S.C.
1070c(b)) is amended--
(1) in paragraph (1), by striking ``1993'' and inserting
``1999'';
(2) by redesignating paragraph (2) as paragraph (3); and
(3) by inserting after paragraph (1) the following:
``(2) Reservation.--For any fiscal year for which the amount
appropriated under paragraph (1) exceeds $30,000,000, the excess
shall be available to carry out section 415E.''.
(c) Special Leveraging Educational Assistance Partnership
Program.--Subpart 4 of part A of title IV (20 U.S.C. 1070c et seq.) is
amended--
(1) by redesignating section 415E as 415F; and
(2) by inserting after section 415D the following:
``SEC. 415E. SPECIAL LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP
PROGRAM.
``(a) In General.--From amounts reserved under section 415A(b)(2)
for each fiscal year, the Secretary shall--
``(1) make allotments among States in the same manner as the
Secretary makes allotments among States under section 415B; and
``(2) award grants to States, from allotments under paragraph
(1), to enable the States to pay the Federal share of the cost of
the authorized activities described in subsection (c).
``(b) Applicability Rule.--The provisions of this subpart which are
not inconsistent with this section shall apply to the program
authorized by this section.
``(c) Authorized Activities.--Each State receiving a grant under
this section may use the grant funds for--
``(1) increasing the dollar amount of grants awarded under
section 415B to eligible students who demonstrate financial need;
``(2) carrying out transition programs from secondary school to
postsecondary education for eligible students who demonstrate
financial need;
``(3) carrying out a financial aid program for eligible
students who demonstrate financial need and wish to enter careers
in information technology, or other fields of study determined by
the State to be critical to the State's workforce needs;
``(4) making funds available for community service work-study
activities for eligible students who demonstrate financial need;
``(5) creating a postsecondary scholarship program for eligible
students who demonstrate financial need and wish to enter teaching;
``(6) creating a scholarship program for eligible students who
demonstrate financial need and wish to enter a program of study
leading to a degree in mathematics, computer science, or
engineering;
``(7) carrying out early intervention programs, mentoring
programs, and career education programs for eligible students who
demonstrate financial need; and
``(8) awarding merit or academic scholarships to eligible
students who demonstrate financial need.
``(d) Maintenance of Effort Requirement.--Each State receiving a
grant under this section for a fiscal year shall provide the Secretary
an assurance that the aggregate amount expended per student or the
aggregate expenditures by the State, from funds derived from non-
Federal sources, for the authorized activities described in subsection
(c) for the preceding fiscal year were not less than the amount
expended per student or the aggregate expenditures by the State for the
activities for the second preceding fiscal year.
``(e) Federal Share.--The Federal share of the cost of the
authorized activities described in subsection (c) for any fiscal year
shall be not more than 33\1/3\ percent.''.
(c) Technical and Conforming Amendments.--
(1) Purpose.--Subsection (a) of section 415A (20 U.S.C.
1070c(a)) is amended to read as follows:
``(a) Purpose of Subpart.--It is the purpose of this subpart to
make incentive grants available to States to assist States in--
``(1) providing grants to--
``(A) eligible students attending institutions of higher
education or participating in programs of study abroad that are
approved for credit by institutions of higher education at
which such students are enrolled; and
``(B) eligible students for campus-based community service
work-study; and
``(2) carrying out the activities described in section 415F.''.
(2) Allotment.--Section 415B(a)(1) (20 U.S.C. 1070c-1(a)(1)) is
amended by inserting ``and not reserved under section 415A(b)(2)''
after ``415A(b)(1)''.

6aab2ca8cb6ceaf05adae9b763e0db3748f22e0eb2420d69124791c372cf6227

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

0466c6ecb39973159bad9e5d5629b8d6a7187388ba3e0fee091406a93ef1550b

(a) FAS Eligibility.--Section 419D (20 U.S.C. 1070d-34) is amended
by adding at the end thereof the following:
``(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.''.
(b) Authorization of Appropriations.--Section 419K (20 U.S.C.
1070d-41) is amended by striking ``$10,000,000 for fiscal year 1993''
and inserting ``$45,000,000 for fiscal year 1999''.

051d9d102ba2d10df06ecde6580046c7dceed9802a6c91ffc7018e046cd78f1e

Part A of title IV (20 U.S.C. 1070 et seq.) is amended by inserting
after subpart 6 (20 U.S.C. 1070d-31 et seq.) the following:
``Subpart 7--Child Care Access Means Parents in School
``SEC. 419N. CHILD CARE ACCESS MEANS PARENTS IN SCHOOL.
``(a) Purpose.--The purpose of this section is to support the
participation of low-income parents in postsecondary education through
the provision of campus-based child care services.
``(b) Program Authorized.--
``(1) Authority.--The Secretary may award grants to
institutions of higher education to assist the institutions in
providing campus-based child care services to low-income students.
``(2) Amount of grants.--
``(A) In general.--The amount of a grant awarded to an
institution of higher education under this section for a fiscal
year shall not exceed 1 percent of the total amount of all
Federal Pell Grant funds awarded to students enrolled at the
institution of higher education for the preceding fiscal year.
``(B) Minimum.--A grant under this section shall be awarded
in an amount that is not less than $10,000.
``(3) Duration; renewal; and payments.--
``(A) Duration.--The Secretary shall award a grant under
this section for a period of 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.
``(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 who
is eligible to receive a Federal Pell Grant for the fiscal year for
which the determination is made.
``(c) Applications.--An institution of higher education desiring a
grant under this section shall submit an application to the Secretary
at such time, in such manner, and accompanied by such information as
the Secretary may require. Each application shall--
``(1) demonstrate that the institution is an eligible
institution described in subsection (b)(4);
``(2) specify the amount of funds requested;
``(3) demonstrate the need of low-income students at the
institution for campus-based child care services by including in
the application--
``(A) information regarding student demographics;
``(B) an assessment of child care capacity on or near
campus;
``(C) information regarding the existence of waiting lists
for existing child care;
``(D) information regarding additional needs created by
concentrations of poverty or by geographic isolation; 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--
``(1) leverage significant local or institutional resources,
including in-kind contributions, to support the activities assisted
under this section; and
``(2) utilize a sliding fee scale for child care services
provided under this section in order to support a high number of
low-income parents pursuing postsecondary education at the
institution.
``(e) Reporting Requirements; Continuing Eligibility.--
``(1) Reporting requirements.--
``(A) Reports.--Each institution of higher education
receiving a grant under this section shall report to the
Secretary 18 months, and 36 months, after receiving the first
grant payment under this section.
``(B) Contents.--The report shall include--
``(i) data on the population served under this section;
``(ii) information on campus and community resources
and funding used to help low-income students access child
care services;
``(iii) information on progress made toward
accreditation of any child care facility; and
``(iv) information on the impact of the grant on the
quality, availability, and affordability of campus-based
child care services.
``(2) Continuing eligibility.--The Secretary shall make the
third annual grant payment under this section to an institution of
higher education only if the Secretary determines, on the basis of
the 18-month report submitted under paragraph (1), that the
institution is making a good faith effort to ensure that low-income
students at the institution have access to affordable, quality
child care services.
``(f) Construction.--No funds provided under this section shall be
used for construction, except for minor renovation or repair to meet
applicable State or local health or safety requirements.
``(g) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $45,000,000 for fiscal year 1999
and such sums as may be necessary for each of the 4 succeeding fiscal
years.''.

b29814e518e05d25327b3d12f85f0285fa28330035548638036bada236441a63

Subpart 8 of part A of title IV (20 U.S.C. 1070 et seq.) is amended
to read as follows:
``Subpart 8--Learning Anytime Anywhere Partnerships
``SEC. 420D. FINDINGS.
``Congress makes the following findings:
``(1) The nature of postsecondary education delivery is
changing, and new technology and other related innovations can
provide promising education opportunities for individuals who are
currently not being served, particularly for individuals without
easy access to traditional campus-based postsecondary education or
for whom traditional courses are a poor match with education or
training needs.
``(2) Individuals, including individuals seeking basic or
technical skills or their first postsecondary experience,
individuals with disabilities, dislocated workers, individuals
making the transition from welfare-to-work, and individuals who are
limited by time and place constraints can benefit from
nontraditional, noncampus-based postsecondary education
opportunities and appropriate support services.
``(3) The need for high-quality, nontraditional, technology-
based education opportunities is great, as is the need for skill
competency credentials and other measures of educational progress
and attainment that are valid and widely accepted, but neither need
is likely to be adequately addressed by the uncoordinated efforts
of agencies and institutions acting independently and without
assistance.
``(4) Partnerships, consisting of institutions of higher
education, community organizations, or other public or private
agencies or organizations, can coordinate and combine institutional
resources--
``(A) to provide the needed variety of education options to
students; and
``(B) to develop new means of ensuring accountability and
quality for innovative education methods.
``SEC. 420E. PURPOSE; PROGRAM AUTHORIZED.
``(a) Purpose.--It is the purpose of this subpart to enhance the
delivery, quality, and accountability of postsecondary education and
career-oriented lifelong learning through technology and related
innovations.
``(b) Program Authorized.--
``(1) Grants.--
``(A) In general.--The Secretary may, from funds
appropriated under section 420J make grants to, or enter into
contracts or cooperative agreements with, eligible partnerships
to carry out the authorized activities described in section
420G.
``(B) Duration.--Grants under this subpart shall be awarded
for periods that do not exceed 5 years.
``(2) Definition of eligible partnership.--For purposes of this
subpart, the term `eligible partnership' means a partnership
consisting of 2 or more independent agencies, organizations, or
institutions. The agencies, organizations, or institutions may
include institutions of higher education, community organizations,
and other public and private institutions, agencies, and
organizations.
``SEC. 420F. APPLICATION.
``(a) Requirement.--An eligible partnership desiring to receive a
grant under this subpart shall submit an application to the Secretary,
in such form and containing such information, as the Secretary may
require.
``(b) Contents.--Each application shall include--
``(1) the name of each partner and a description of the
responsibilities of the partner, including the designation of a
nonprofit organization as the fiscal agent for the partnership;
``(2) a description of the need for the project, including a
description of how the project will build on any existing services
and activities;
``(3) a listing of human, financial (other than funds provided
under this subpart), and other resources that each member of the
partnership will contribute to the partnership, and a description
of the efforts each member of the partnership will make in seeking
additional resources; and
``(4) a description of how the project will operate, including
how funds awarded under this subpart will be used to meet the
purpose of this subpart.
``SEC. 420G. AUTHORIZED ACTIVITIES.
``Funds awarded to an eligible partnership under this subpart shall
be used to--
``(1) develop and assess model distance learning programs or
innovative educational software;
``(2) develop methodologies for the identification and
measurement of skill competencies;
``(3) develop and assess innovative student support services;
or
``(4) support other activities that are consistent with the
purpose of this subpart.
``SEC. 420H. MATCHING REQUIREMENT.
``Federal funds shall provide not more than 50 percent of the cost
of a project under this subpart. The non-Federal share of project costs
may be in cash or in kind, fairly evaluated, including services,
supplies, or equipment.
``SEC. 420I. PEER REVIEW.
``The Secretary shall use a peer review process to review
applications under this subpart and to make recommendations for funding
under this subpart to the Secretary.
``SEC. 420J. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated to carry out this subpart
$10,000,000 for fiscal year 1999 and such sums as may be necessary for
each of the 4 succeeding fiscal years.''.
PART B--FEDERAL FAMILY EDUCATION LOAN PROGRAM

ffbb5b2fa03dc7a5b6e124b3530b40d7fe243dc28ddeec213e0ed5cc54bd131f

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

8d92fe0ab72b6adc9653403ed187393918983a21c80c690dfaa66e419d0e9ddd

Section 422 (20 U.S.C. 1072) is amended--
(1) in subsection (a)(2), by striking ``428(c)(10)(E)'' and
inserting ``428(c)(9)(E)'';
(2) in subsection (c)--
(A) in paragraph (6)(B)(i), by striking ``written'' and
inserting ``written, electronic,'';
(B) in paragraph (7)(A), by striking ``during the
transition from the Federal Family Education Loan Program under
this part to the Federal Direct Student Loan Program under part
D of this title''; and
(C) in paragraph (7)(B), by striking ``428(c)(10)(F)(v)''
and inserting ``428(c)(9)(F)(v)'';
(3) in the first and second sentences of subsection (g)(1), by
striking ``or the program authorized by part D of this title'' each
place it appears; and
(4) by adding at the end the following:
``(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;
``(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) 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.''.

92a6616ee582c99f2c2e53fee545bfdbb14093a30711d3e4153e43bfbca6aa49

(a) Federal Student Loan Reserve Fund.--Part B of title IV is
amended by inserting after section 422 (20 U.S.C. 1072) the following
new section:
``SEC. 422A. FEDERAL STUDENT LOAN RESERVE FUND.
``(a) Establishment.--Each guaranty agency shall, not later than 60
days after the date of enactment of this section, deposit all funds,
securities, and other liquid assets contained in the reserve fund
established pursuant to section 422 into a Federal Student Loan Reserve
Fund (in this section and section 422B referred to as the `Federal
Fund'), which shall be an account of a type selected by the agency,
with the approval of the Secretary.
``(b) Investment of Funds.--Funds 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), 437, and 439(q); 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 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--
``(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.''.
(b) Agency Operating Fund Established.--Part B of title IV is
further amended by inserting after section 422A (as added by subsection
(a)) the following new section:
``SEC. 422B. AGENCY OPERATING FUND.
``(a) Establishment.--Each guaranty agency shall, not later than 60
days after the date of enactment of this section, establish a fund
designated as the Operating Fund.
``(b) Investment of Funds.--Funds deposited into the Operating Fund
shall be invested at the discretion of the guaranty agency in
accordance with prudent investor standards.
``(c) Additional Deposits.--After the establishment of the
Operating Fund, the guaranty agency shall deposit into the Operating
Fund--
``(1) the loan processing and issuance fee paid by the
Secretary pursuant to section 428(f);
``(2) 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 principal amount of the loan guaranteed, and
an examination of the note or agreement to assure that the
repayment provisions are consistent with the provisions of this
part.
``(e) Ownership 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.''.

345266ade12819f1557a1b90b09460d9d3e4918456cb87dddee55a6cade83d13

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

a4e05acbdabb16272ec0b01c4cc435a0a83e7b3fd74afe0a4f036c8d11e6611a

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

151c9fde950e3fdb873ce432601e5797cf88b34963b4b7a3315ff452bd211cc6

(a) Applicable Interest Rates.--
(1) Amendment.--Section 427A (20 U.S.C. 1077a) is amended--
(A) by redesignating subsections (k) and (l) as subsections
(l) and (m), respectively; and
(B) by inserting after subsection (j) the following:
``(k) Interest Rates for New Loans on or After October 1, 1998, and
Before July 1, 2003.--
``(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, 2003, 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, 2003, 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 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, 2003, 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,
2003, the applicable rate of interest shall be at an annual rate on
the unpaid principal balance of the loan that is equal to the
lesser of--
``(A) the weighted average of the interest rates on the
loans consolidated, rounded to the nearest higher one-eighth of
1 percent; or
``(B) 8.25 percent.
``(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.''.
(2) Conforming amendment.--Section 428B(d)(4) (20 U.S.C. 1078-
2(d)(4)) is amended by striking ``section 427A(c)'' and inserting
``section 427A''.
(b) Special Allowances.--
(1) Amendment.--Section 438(b)(2) (20 U.S.C. 1087-1(b)(2)) is
amended by adding at the end the following:
``(H) Loans disbursed on or after october 1, 1998, and
before july 1, 2003.--
``(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 July 1, 2003, 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 July 1, 2003, 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 July 1, 2003, 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
July 1, 2003, 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
July 1, 2003, for which the interest rate is determined
under section 427A(k)(3), a special allowance shall not be
paid for such loan during any 12-month period beginning on
July 1 and ending on June 30 unless, on the June 1
preceding such July 1--
``(I) the bond equivalent rate of 91-day Treasury
bills auctioned at the final auction held prior to such
June 1 (as determined by the Secretary for purposes of
such section); plus
``(II) 3.1 percent,
exceeds 9.0 percent.
``(vi) Limitation on special allowances for
consolidation loans.--In the case of consolidation loans
made under section 428C and for which the application is
received on or after October 1, 1998, and before July 1,
2003, 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).''.
(2) Consolidation loans.--Section 428C(c)(1) (20 U.S.C. 1078-
3(c)(1)) is amended by striking everything preceding subparagraph
(B) and inserting the following:
``(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 on or after October
1, 1998, and before July 1, 2003, the applicable interest rate
shall be determined under section 427A(k)(4).''.
(3) Conforming amendment.--Section 438(b)(2) (20 U.S.C. 1087-
1(b)(2)(C)(ii)) is amended--
(A) in subparagraph (A), by striking ``(F), and (G)'' and
inserting ``(F), (G), and (H)'';
(B) in subparagraph (B)(iv), by striking ``(F), or (G)''
and inserting ``(F), (G), or (H)''; and
(C) in subparagraph (C)(ii), by striking ``subparagraph
(G)'' and inserting ``subparagraphs (G) and (H)''.
(c) Effective Date.--The amendments made by this section shall
apply with respect to any loan made, insured, or guaranteed under part
B of title IV of the Higher Education Act of 1965 for which the first
disbursement is made on or after October 1, 1998, and before July 1,
2003, except that such amendments shall apply with respect to any loan
made under section 428C of such Act for which the application is
received by an eligible lender on or after October 1, 1998, and before
July 1, 2003.

9b465ef13a3bc186254bf2e8077f804c9f1c0676cf2affe1c7b3aee06f840820

495bfa36818101180c6c2bb9c2932f008679e39234701b9b3cf6f79e7766e35f

Part B of title IV (20 U.S.C. 1071 et seq.) is amended by inserting
after section 428 (20 U.S.C. 1078) the following:
``SEC. 428A. VOLUNTARY FLEXIBLE AGREEMENTS WITH GUARANTY AGENCIES.
``(a) Voluntary Agreements.--
``(1) Authority.--Subject to paragraph (2), the Secretary may
enter into a voluntary, flexible agreement with a guaranty agency
under this section, in lieu of agreements with a guaranty agency
under subsections (b) and (c) of section 428. The Secretary may
waive or modify any requirement under such subsections, except that
the Secretary may not waive--
``(A) any statutory requirement pertaining to the terms and
conditions attached to student loans or default claim payments
made to lenders; or
``(B) the prohibitions on inducements contained in section
428(b)(3) unless the Secretary determines that such a waiver is
consistent with the purposes of this section and is limited to
activities of the guaranty agency within the State or States
for which the guaranty agency serves as the designated
guarantor.
``(2) Special rule.--If the Secretary grants a waiver pursuant
to paragraph (1)(B), any guaranty agency doing business within the
affected State or States may request, and the Secretary shall
grant, an identical waiver to such guaranty agency under the same
terms and conditions (including service area limitations) as govern
the original waiver.
``(3) Eligibility.--During fiscal years 1999, 2000, and 2001,
the Secretary may enter into a voluntary, flexible agreement with
not more than 6 guaranty agencies that had 1 or more agreements
with the Secretary under subsections (b) and (c) of section 428 as
of the day before the date of enactment of the Higher Education
Amendments of 1998. Beginning in fiscal year 2002, any guaranty
agency or consortium thereof may enter into a voluntary flexible
agreement with the Secretary.
``(4) Report required.--Not later than September 30, 2001, the
Secretary shall report to the Committee on Labor and Human
Resources of the Senate and the Committee on Education and the
Workforce of the House of Representatives regarding the impact that
the voluntary flexible agreements have had upon program integrity,
program and cost efficiencies, and the availability and delivery of
student financial aid. Such report shall include--
``(A) a description of each voluntary flexible agreement
and the performance goals established by the Secretary for each
agreement;
``(B) a list of participating guaranty agencies and the
specific statutory or regulatory waivers provided to each
guaranty agency and any waivers provided to other guaranty
agencies under paragraph (2);
``(C) a description of the standards by which each agency's
performance under the agency's voluntary flexible agreement was
assessed and the degree to which each agency achieved the
performance standards; and
``(D) an analysis of the fees paid by the Secretary, and
the costs and efficiencies achieved under each voluntary
agreement.
``(b) Terms of Agreement.--An agreement between the Secretary and a
guaranty agency under this section--
``(1) shall be developed by the Secretary, in consultation with
the guaranty agency, on a case-by-case basis;
``(2) may 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 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
Chairperson and the Ranking Minority Member of the Committee on
Labor and Human Resources of the Senate and the Committee on
Education and the Workforce of the House of Representatives not
later than 30 days prior to 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
Chairperson and the Ranking Minority Member of the Committee on
Labor and Human Resources of the Senate and the Committee on
Education and the Workforce of the House of Representatives not
later than 30 days prior to the granting of a waiver pursuant to
subsection (a)(2) to a guaranty agency that is not a party to a
voluntary flexible agreement.
``(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
Chairperson and the Ranking Minority Members of the Committee on
Labor and Human Resources of the Senate and the Committee on
Education and the Workforce of the House of Representatives 30 days
prior to any modifications to an agreement under this section.
``(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.''.

fa26a59a0abe49ad36c5034f0ac95443949af71412a92eb15f9287937acd76ff

Section 428B (20 U.S.C. 1078-2) is amended--
(1) by amending subsection (a) to read as follows:
``(a) Authority To Borrow.--
``(1) Authority and eligibility.--Parents of a dependent
student shall be eligible to borrow funds under this section in
amounts specified in subsection (b), if--
``(A) the parents do not have an adverse credit history as
determined pursuant to regulations promulgated by the
Secretary; and
``(B) the parents meet such other eligibility criteria as
the Secretary may establish by regulation, after consultation
with guaranty agencies, eligible lenders, and other
organizations involved in student financial assistance.
``(2) Terms, conditions, and benefits.--Except as provided in
subsections (c), (d), and (e), loans made under this section shall
have the same terms, conditions, and benefits as all other loans
made under this part.
``(3) Special rule.--Whenever necessary to carry out the
provisions of this section, the terms `student' and `borrower' as
used in this part shall include a parent borrower under this
section.''; and
(2) by adding at the end the following:
``(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).''.

436548dda4c8af0e1529006a1293c376425ab4162ecd9907c568117749eb39d1

(a) Definition of Eligible Borrower.--Section 428C(a)(3) (20 U.S.C.
1078-3(a)(3)) is amended by striking everything preceding subparagraph
(C) and inserting the following:
``(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;
``(II) is in a grace period preceding repay- ment; or
``(III) is a defaulted borrower who has made
arrangements to repay the obligation on the defaulted loans
satisfactory to the holders of the defaulted loans.
``(B)(i) An individual's status as an eligible borrower under
this section terminates upon receipt of a consolidation loan under
this section, except 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; and
``(IV) loans received prior to the date of the first
consolidation loan may be added to a subsequent consolidation
loan.''.
(b) Definition of Eligible Student Loan.--Section 428C(a)(4) is
amended by striking subparagraph (C) and inserting the following:
``(C) made under part D of this title;''.
(c) Contents of Agreements.--Section 428C(b) is amended--
(1) in paragraph (1)(A)(i), by inserting ``except that this
clause shall not apply in the case of a borrower with multiple
holders of loans under this part,'' after ``under this section,'';
(2) in paragraph (4)(C)(ii)--
(A) in the matter preceding subclause (I), by inserting
``during any such period'' after ``and be paid'';
(B) in subclause (I), by striking ``, or on or after
October 1, 1998,''; and
(C) in subclause (II), by striking ``and before October 1,
1998,'';
(3) in paragraph (6)(A), by inserting before the semicolon at
the end the following: ``, 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)''.
(d) Extension of Authority.--Section 428C(e) is amended by striking
``September 30, 2002'' and inserting ``September 30, 2004''.
(e) Special Rule.--Section 428C(f) is amended--
(1) by redesignating paragraph (2) as paragraph (3); and
(2) by inserting after paragraph (1) the following:
``(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.''.

bc358c92fc41130b981422d129fd8a38894021fbacb35fd3b15b9e6e628e71c0

The heading for subsection (b) of section 428F (20 U.S.C. 1078-6)
is amended by striking ``Special Rule'' and inserting ``Satisfactory
Repayment Arrangements To Renew Eligibility''.

2ce26cefea6305662fee5d72034ae9e581cd7308646829199c442c9cd1ea189f

(a) Special Rule.--Section 428G(a) (20 U.S.C. 1078-7(a)) is amended
by adding at the end the following:
``(3) Special rule.--An institution whose cohort default rate
(as determined under section 435(m)) for each of the 3 most recent
fiscal years for which data are available is less than 10 percent
may disburse any loan made, insured, or guaranteed under this part
in a single installment for any period of enrollment that is not
more than 1 semester, 1 trimester, 1 quarter, or 4 months.''.
(b) Disbursement.--Section 428G(b)(1) is amended by adding at the
end the following new sentence: ``An institution whose cohort default
rate (as determined under section 435(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.''.
(c) Exclusions.--Section 428G(e) is amended--
(1) by striking ``or made'' and inserting ``, made''; and
(2) by inserting ``, 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'' before the period.
(d) Effective Date.--The amendments made by subsections (a) and (b)
shall be effective during the period beginning on October 1, 1998, and
ending on September 30, 2002.

ae09640fcc47f37acf75ae63b3ee6971110a3cf56f3cfede03f4829f4500a6ee

(a) Eligible Borrowers.--Subsection (b) of section 428H (20 U.S.C.
1078-8(b)) is amended to read as follows:
``(b) Eligible Borrowers.--Any student meeting the requirements for
student eligibility under section 484 (including graduate and
professional students as defined in regulations promulgated by the
Secretary) shall be entitled to borrow an unsubsidized Federal Stafford
Loan if the eligible institution at which the student has been accepted
for enrollment, or at which the student is in attendance, has--
``(1) determined and documented the student's need for the loan
based on the student's estimated cost of attendance (as determined
under section 472) and the student's estimated financial
assistance, including a loan which qualifies for interest subsidy
payments under section 428; and
``(2) provided the lender a statement--
``(A) certifying the eligibility of the student to receive
a loan under this section and the amount of the loan for which
such student is eligible, in accordance with subsection (c);
and
``(B) setting forth a schedule for disbursement of the
proceeds of the loan in installments, consistent with the
requirements of section 428G.''.
(b) Loan Limits.--Section 428H(d) is amended--
(1) in paragraph (2)--
(A) in the matter preceding subparagraph (A)--
(i) by inserting ``(as defined in section 481(a)(2))''
after ``academic year''; and
(ii) by striking ``or in any period of 7 consecutive
months, whichever is longer,'';
(B) in subparagraph (A)--
(i) in clause (i), by striking ``length (as determined
under section 481);'' and inserting ``length; and''; and
(ii) by striking clauses (ii) and (iii) and inserting
the following:
``(ii) if such student is enrolled in a program of
undergraduate education which is less than one academic
year, the maximum annual loan amount that such student may
receive may not exceed the amount that bears the same ratio
to the amount specified in clause (i) as the length of such
program measured in semester, trimester, quarter, or clock
hours bears to one academic year;''.
(C) in subparagraph (C), by inserting ``and'' after the
semicolon; and
(D) by inserting before the matter following subparagraph
(C) the following:
``(D) in the case of a student enrolled in coursework
specified in sections 484(b)(3)(B) and 484(b)(4)(B)--
``(i) $4,000 for coursework necessary for enrollment in
an undergraduate degree or certificate program, and, in the
case of a student who has obtained a baccalaureate degree,
$5,000 for coursework necessary for enrollment in a
graduate or professional program; and
``(ii) in the case of a student who has obtained a
baccalaureate degree, $5,000 for coursework necessary for a
professional credential or certification from a State
required for employment as a teacher in an elementary or
secondary school;''; and
(2) in paragraph (3), by adding at the end the following:
``Interest capitalized shall not be deemed to exceed such maximum
aggregate amount.''.
(c) Capitalization of Interest.--Paragraph (2) of section 428H(e)
is amended to read as follows:
``(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.
``(B) The capitalization of interest described in subparagraph
(A) shall not be deemed to exceed the annual insurable limit on
account of the student.''.
(d) Extended Repayment Plan.--Section 428H(e)(6) is amended by
striking ``10 year repayment period under section 428(b)(1)(D)'' and
inserting ``repayment period under section 428(b)(9)''.
(e) Qualification.--Section 428H(e) is amended by adding at the end
the following:
``(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.''.
(f) Repeal.--Subsection (f) of section 428H is repealed.

25218768fbd0cc17673d184796e69744d13d806e5761d07030f18f30151f20cf

Section 428J (20 U.S.C. 1078-10) is amended to read as follows:
``SEC. 428J. LOAN FORGIVENESS FOR TEACHERS.
``(a) Statement of Purpose.--It is the purpose of this section to
encourage individuals to enter and continue in the teaching profession.
``(b) Program Authorized.--The Secretary 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 that qualifies under section 465(a)(2)(A)
for loan cancellation for Perkins loan recipients who teach in
such schools;
``(B) if employed as a secondary school teacher, is
teaching a subject area that is relevant to the borrower's
academic major as certified by the chief administrative officer
of the public or nonprofit private secondary school in which
the borrower is employed; and
``(C) if employed as an elementary school teacher, has
demonstrated, as certified by the chief administrative officer
of the public or nonprofit private elementary school in which
the borrower is employed, knowledge and teaching skills in
reading, writing, mathematics, and other areas of the
elementary school curriculum; and
``(2) is not in default on a loan for which the borrower seeks
forgiveness.
``(c) 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.
``(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 subsection and
subtitle D of title I of the National and Community Service Act of
1990 (42 U.S.C. 12571 et seq.).
``(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.''.

f0866e9f164e579a22071931a66c8e479127f2ff9e789e42824d5dafcdf00373

Part B (20 U.S.C. 1071 et seq.) is amended by inserting after
section 428J (20 U.S.C. 1078-10) the following:
``SEC. 428K. LOAN FORGIVENESS FOR CHILD CARE PROVIDERS.
``(a) Purpose.--It is the purpose of this section--
``(1) to bring more highly trained individuals into the early
child care profession; and
``(2) to keep more highly trained child care providers in the
early child care field for longer periods of time.
``(b) Definitions.--In this section:
``(1) Child care facility.--The term `child care facility'
means a facility, including a home, that--
``(A) provides child care services; and
``(B) meets applicable State or local government licensing,
certification, approval, or registration requirements, if any.
``(2) Child care services.--The term `child care services'
means activities and services provided for the education and care
of children from birth through age 5 by an individual who has a
degree in early childhood education.
``(3) Degree.--The term `degree' means an associate's or
bachelor's degree awarded by an institution of higher education.
``(4) Early childhood education.--The term `early childhood
education' means education in the areas of early child education,
child care, or any other educational area related to child care
that the Secretary determines appropriate.
``(5) Institution of higher education.--Notwithstanding section
102, the term `institution of higher education' has the meaning
given the term in section 101.
``(c) Demonstration Program.--
``(1) In general.--The Secretary may carry out a demonstration
program of assuming the obligation to repay, pursuant to subsection
(d), a loan made, insured, or guaranteed under this part or part D
(excluding loans made under sections 428B and 428C or comparable
loans made under part D) for any new borrower after the date of
enactment of the Higher Education Amendments of 1998, who--
``(A) completes a degree in early childhood education;
``(B) obtains employment in a child care facility; and
``(C) has worked full time for the 2 consecutive years
preceding the year for which the determination is made as a
child care provider in a low-income community.
``(2) Low-income community.--For the purposes of this
subsection, the term `low-income community' means a community in
which 70 percent of households within the community earn less than
85 percent of the State median household income.
``(3) Award basis; priority.--
``(A) Award basis.--Subject to subparagraph (B), loan
repayment under this section shall be on a first-come, first-
served basis and subject to the availability of appropriations.
``(B) Priority.--The Secretary shall give priority in
providing loan repayment under this section for a fiscal year
to student borrowers who received loan repayment under this
section for the preceding fiscal year.
``(4) Regulations.--The Secretary is authorized to prescribe
such regulations as may be necessary to carry out the provisions of
this section.
``(d) Loan Repayment.--
``(1) In general.--The Secretary shall assume the obligation to
repay--
``(A) after the second consecutive year of employment
described in subparagraphs (B) and (C) of subsection (c)(1), 20
percent of the total amount of all loans made after date of
enactment of the Higher Education Amendments of 1998, to a
student under this part or part D;
``(B) after the third consecutive year of such employment,
20 percent of the total amount of all such loans; and
``(C) after each of the fourth and fifth consecutive years
of such employment, 30 percent of the total amount of all such
loans.
``(2) Construction.--Nothing in this section shall be construed
to authorize the refunding of any repayment of a loan made under
this part or part D.
``(3) Interest.--If a portion of a loan is repaid by the
Secretary under this section for any year, the proportionate amount
of interest on such loan which accrues for such year shall be
repaid by the Secretary.
``(4) Special rule.--In the case where a student borrower who
is not participating in loan repayment pursuant to this section
returns to an institution of higher education after graduation from
an institution of higher education for the purpose of obtaining a
degree in early childhood education, the Secretary is authorized to
assume the obligation to repay the total amount of loans made under
this part or part D incurred for a maximum of two academic years in
returning to an institution of higher education for the purpose of
obtaining a degree in early childhood education. Such loans shall
only be repaid for borrowers who qualify for loan repayment
pursuant to the provisions of this section, and shall be repaid in
accordance with the provisions of paragraph (1).
``(5) Ineligibility of national service award recipients.--No
student borrower may, for the same volunteer service, receive a
benefit under both this section and subtitle D of title I of the
National and Community Service Act of 1990 (42 U.S.C. 12601 et
seq.).
``(e) Repayment to Eligible Lenders.--The Secretary shall pay to
each eligible lender or holder for each fiscal year an amount equal to
the aggregate amount of loans which are subject to repayment pursuant
to this section for such year.
``(f) Application for Repayment.--
``(1) In general.--Each eligible individual desiring loan
repayment under this section shall submit a complete and accurate
application to the Secretary at such time, in such manner, and
containing such information as the Secretary may require.
``(2) Conditions.--An eligible individual may apply for loan
repayment under this section after completing each year of
qualifying employment. The borrower shall receive forbearance while
engaged in qualifying employment unless the borrower is in
deferment while so engaged.
``(g) Evaluation.--
``(1) In general.--The Secretary shall conduct, by grant or
contract, an independent national evaluation of the impact of the
demonstration program assisted under this section on the field of
early childhood education.
``(2) Competitive basis.--The grant or contract described in
subsection (b) shall be awarded on a competitive basis.
``(3) Contents.--The evaluation described in this subsection
shall--
``(A) determine the number of individuals who were
encouraged by the demonstration program assisted under this
section to pursue early childhood education;
``(B) determine the number of individuals who remain
employed in a child care facility as a result of participation
in the program;
``(C) identify the barriers to the effectiveness of the
program;
``(D) assess the cost-effectiveness of the program in
improving the quality of--
``(i) early childhood education; and
``(ii) child care services;
``(E) identify the reasons why participants in the program
have chosen to take part in the program;
``(F) identify the number of individuals participating in
the program who received an associate's degree and the number
of such individuals who received a bachelor's degree; and
``(G) identify the number of years each individual
participates in the program.
``(4) Interim and final evaluation reports.--The Secretary
shall prepare and submit to the President and the Congress such
interim reports regarding the evaluation described in this
subsection as the Secretary deems appropriate, and shall prepare
and so submit a final report regarding the evaluation by January 1,
2002.
``(h) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $10,000,000 for fiscal year
1999, and such sums as may be necessary for each of the 4 succeeding
fiscal years.''.

89203bd9b0f874a444961cba9a5c9bdd003e4cb280d76de68761be4c106f69ca

The third sentence of section 430(a) (20 U.S.C. 1080(a)) is amended
by inserting ``the institution was contacted and other'' after ``submit
proof that''.

f76b6f5aa5e85341b87800c843ee63e1ba4d203e9eab9be67db39c42fe65be2c

(a) Audit of Financial Transactions.--Section 432(f)(1) is
amended--
(1) in subparagraph (B), by striking ``section 435(d)(1) (D),
(F), or (H);'' and inserting ``section 435(d)(1); and'';
(2) in subparagraph (C)--
(A) by striking ``and Labor'' and inserting ``and the
Workforce''; and
(B) by striking ``; and'' inserting a period; and
(3) by striking subparagraph (D).
(b) Program of Assistance.--Section 432(k)(3) is amended by
striking ``Within 1 year'' and everything that follows through ``1992,
the'' and inserting ``The''.
(c) Common Forms and Formats.--Section 432(m) is amended--
(1) in paragraph (1)--
(A) in subparagraph (A), by striking ``a common application
form and promissory note'' and inserting ``common application
forms and promissory notes, or master promissory notes,'';
(B) in subparagraph (B)--
(i) by striking ``The form'' and inserting ``The
forms'';
(ii) by striking clause (iii); and
(C) by amending subparagraph (C) to read as follows:
``(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) by amending subparagraph (D) to read as follows:
``(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.
``(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.
``(iv) 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 loans made
under this part created on behalf of any eligible lender as
defined in section 435(d) may be perfected either through
the taking of possession of such loans (which can be
through taking possession of an original or copy of the
master promissory note) 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.''; and
(2) by adding at the end the following:
``(4) Electronic forms.--Nothing in this section shall be
construed to limit the development and use of electronic forms and
procedures.''.
(d) Default Reduction Management.--Section 432(n) is amended--
(1) in paragraph (1), by striking ``1993'' and inserting
``1999''; and
(2) in paragraph (3), by striking ``and Labor'' and inserting
``and the Workforce''.
(e) Reporting Requirement.--Section 432(p) is amended by striking
``State postsecondary reviewing entities designated under subpart 1 of
part H,''.

bfc23e6b89cee1f1c45244193f87bc04b9dc8547225023f090cc5f51470cc547

(a) Required Disclosure Before Disbursement.--Section 433(a) (20
U.S.C. 1083(a)) is amended by amending the matter preceding paragraph
(1) to read as follows:
``(a) Required Disclosure Before Disbursement.--Each eligible
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--''.
(b) Required Disclosure Before Repayment.--Section 433(b) is
amended by amending the matter preceding paragraph (1) to read as
follows:
``(b) Required Disclosure Before Repayment.--Each eligible lender
shall, at or prior to the start of the repayment period of the student
borrower on loans made, insured, or guaranteed under this part,
disclose to the borrower by written or electronic means the information
required under this subsection 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. For any loan made, insured, or guaranteed
under this part, other than a loan made under section 428B or 428C,
such disclosure required by this subsection shall be made not less than
30 days nor more than 240 days before the first payment on the loan is
due from the borrower. The disclosure shall include--''.

f95e774a4ab35ecaaef014a2ef73e2c5bb0e012b4b6737255d1363d50e3c0990

(a) Cohort Default Rate.--Section 435(a) (20 U.S.C. 1085(a)) is
amended--
(1) in paragraph (2)--
(A) in subparagraph (A)--
(i) by striking ``or'' at the end of clause (i);
(ii) by striking clause (ii) and inserting the
following:
``(ii) there are exceptional mitigating circumstances
within the meaning of paragraph (4); or
``(iii) there are, in the judgment of the Secretary, other
exceptional mitigating circumstances that would make the
application of this paragraph inequitable.''; and
(iii) by adding after the matter following clause (iii)
(as added by clause (ii)) the following:
``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.''; and
(B) in subparagraph (C), by striking ``July 1, 1998,'' and
inserting ``July 1, 1999,'';
(2) in the matter following subparagraph (C) of para- graph
(3)--
(A) by inserting ``for a reasonable period of time, not to
exceed 30 days,'' after ``access''; and
(B) by striking ``of the affected guaranty agencies and
loan servicers for a reasonable period of time, not to exceed
30 days'' and inserting ``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''; and
(3) by adding at the end the following new paragraphs:
``(4) Definition of mitigating circumstances.--(A) For purposes
of paragraph (2)(A)(ii), an institution of higher education shall
be treated as having exceptional mitigating circumstances that make
application of that paragraph inequitable 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 maximum
Federal Pell Grant award for which a student would be
eligible based on the student's enrollment status; or
``(II) have an adjusted gross income that when added
with the adjusted gross income of the student's parents
(unless the student is an independent student), 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 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.
``(5) 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, 2002, 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,
2000, and 2001, 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.
``(6) Participation rate index.--
``(A) In general.--An institution that demonstrates to the
Secretary that the institution's participation rate index is
equal to or less than 0.0375 for any of the 3 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.
``(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).''.
(b) Eligible Lender.--Section 435(d) (20 U.S.C. 1085(d)) is
amended--
(1) in paragraph (1)--
(A) in subparagraph (A)(ii)--
(i) by striking ``or'' after ``1992,''; and
(ii) by inserting before the semicolon the following:
``, or (III) it is a bank (as defined in section 3(a)(1) of
the Federal Deposit Insurance Act (12 U.S.C. 1813(a)(1))
that is a wholly owned subsidiary of a nonprofit
foundation, the foundation is described in section
501(c)(3) of the Internal Revenue Code of 1986 and exempt
from taxation under section 501(1) of such Code, and the
bank makes loans under this part only to undergraduate
students who are age 22 or younger and has a portfolio of
such loans that is not more than $5,000,000'';
(B) by striking ``and'' at the end of subparagraph (I);
(C) by striking the period at the end of subparagraph (J)
and inserting ``; and''; and
(D) by adding at the end the following new subparagraph:
``(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.''; and
(2) in paragraph (5), by adding at the end the following new
sentence:
``It shall not be a violation of this paragraph for a lender to
provide assistance to institutions of higher education comparable
to the kinds of assistance provided to institutions of higher
education by the Department of Education.''.
(c) Definition of Default.--
(1) Amendment.--Section 435(l) is amended--
(A) by striking ``180 days'' and inserting ``270 days'';
and
(B) by striking ``240 days'' and inserting ``330 days''.
(2) Effective date.--The amendment made by paragraph (1) shall
apply with respect to loans for which the first day of delinquency
occurs on or after the date of enactment of this Act.
(d) Cohort Default Rate.--Section 435(m) is amended--
(1) in paragraph (1)(B), by striking ``insurance, and, in
considering appeals with respect to cohort default rates pursuant
to subsection (a)(3), exclude'' and inserting ``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,''; and
(2) in paragraph (2)(C), by adding at the end the following:
``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 following fiscal year, and (ii)
a guaranty agency has renewed the borrower's title IV eligibility
as provided in section 428F(b).''; and
(3) in paragraph (4), by adding at the end the following:
``(D) The Secretary shall publish the report described in
subparagraph (C) by September 30 of each year.''.

9b10d464de96313d80949c10a95e4adfd7d0ab8476d1a630913091c9ce281e7e

Section 436 (20 U.S.C. 1086) is amended to read as follows:
``SEC. 436. DELEGATION OF FUNCTIONS.
``(a) In General.--An eligible lender or guaranty agency that
contracts with another entity to perform any of the lender's or
agency's functions under this title, or otherwise delegates the
performance of such functions to such other entity--
``(1) shall not be relieved of the lender's or agency's duty to
comply with the requirements of this title; and
``(2) shall monitor the activities of such other entity for
compliance with such requirements.
``(b) Special Rule.--A lender that holds a loan made under part B
in the lender's capacity as a trustee is responsible for complying with
all statutory and regulatory requirements imposed on any other holder
of a loan made under this part.''.

07cc3ed3e8af06ca643d1d052b2758588ff0530fc5d8f90ec6232e629c356735

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

1d83ab6d8596d389d3474d7f14140e52bd04722ef37bca2aec206e367b2c1645

Section 437A (20 U.S.C. 1087-0) is repealed.

5f69dfc26680651d5404af2b51a50a4c6b4184cca3281f1234ea9a3a598392c5

(a) Deduction From Interest and Special Allowance Subsidies.--
Paragraph (1) of section 438(c) (20 U.S.C. 1087-1) is amended to read
as follows:
``(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.''.
(b) Origination Fees.--Section 438(c) is amended--
(1) in paragraph (2)--
(A) by striking ``(other than'' and inserting ``(including
loans made under section 428H, but excluding''; and
(B) by adding at the end the following new sentence:
``Except as provided in paragraph (8), a lender that charges an
origination fee under this paragraph shall assess the same fee
to all student borrowers.''; and
(2) by adding at the end the following new paragraph:
``(8) Exception.--Notwithstanding paragraph (2), a lender may
assess a lesser origination fee for a borrower demonstrating
greater financial need as determined by such borrower's adjusted
gross family income.''.
(c) Collection of Fees.--Paragraph (1) of section 438(d) is amended
to read as follows:
``(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.''.
(d) Lending From Proceeds of Tax-Exempt Obligations.--
(1) Amendment.--Subsection (e) of section 438 is amended to
read as follows:
``(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, 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.''.
(2) Effective date.--The amendment made by paragraph (1) shall
be effective as of the date the plan required by section 438(e)(1)
(as such section was in effect prior to such amendment) was
approved by the Secretary or the Governor (whichever was the case).
No Authority shall have a right or cause of action against the
Secretary for any amounts paid to or offset by the Secretary
pursuant to a final settlement agreement entered into prior to July
1, 1998, resolving any audit or program review findings alleging
violations of any provision of section 438(e) (as in effect prior
to such amendment).

480ff0b10d92f5322fb92ee5190c7b3b7db772a371af960331a9f55fc1b4fd06

Any funds in the insurance fund, as established under section 431
of the Higher Education Act of 1965 (20 U.S.C. 1081), on the date of
enactment of this Act shall be transferred to and deposited in the
Treasury. All funds received by the Secretary of Education under
subsection (a) of such section after the date of enactment of this Act
shall be deposited into the fund in accordance with such subsection.
PART C--FEDERAL WORK-STUDY PROGRAMS

20241377ced0178b70861767ac53edbc72186eb35618eab4661134fe8433eb15

(a) Authorization of Appropriations.--Section 441(b) (42 U.S.C.
2751(b)) is amended by striking ``$800,000,000 for fiscal year 1993''
and inserting ``$1,000,000,000 for fiscal year 1999''.
(b) Definition of Community Services.--Section 441(c) is amended--
(1) in paragraph (1), by inserting ``(including child care
services provided on campus that are open and accessible to the
community)'' after ``child care''; and
(2) in paragraph (3), by inserting ``, including students with
disabilities who are enrolled at the institution'' before the
semicolon.

1f61ce37c6a5fbc1b7dc2576d8cf8ac7f08d4fa319e9199572e5d63bcd3ec999

(a) Updating the Base Period.--Section 442(a) (20 U.S.C. 2752(a))
is amended--
(1) in paragraph (1), by striking ``received and used under
this part for fiscal year 1985'' and inserting ``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) in paragraph (2)--
(A) in subparagraphs (A) and (B), by striking ``1985'' each
place the term appears and inserting ``1999''; and
(B) in subparagraph (C)(i), by striking ``1986'' and
inserting ``2000''.
(b) Elimination of Pro Rata Share.--Section 442 is amended--
(1) by striking subsection (b);
(2) by redesignating subsections (c) through (f) as subsections
(b) through (e), respectively;
(3) in subsection (b)(1) (as redesignated by paragraph (2)), by
striking ``three-quarters of'';
(4) in subsection (b)(2)(A)(i) (as so redesignated), by
striking ``subsection (d)'' and inserting ``subsection (c)'';
(5) in subsection (c)(3) (as so redesignated), by striking
``the Secretary, for academic year 1988-1989 shall use the
procedures employed for academic year 1986-1987, and, for any
subsequent academic years,''; and
(6) in subsection (d)(1) (as so redesignated)--
(A) by striking ``10 percent'' and inserting ``5 percent'';
(B) by striking ``in community service'' and inserting ``in
tutoring in reading and family literacy activities''; and
(C) by striking ``subsection (c)'' and inserting
``subsection (b)''.
(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.

6416ec7889e81741342bc64e414fd172db4c47ca6ffe5e49ef4c654d9a2032ed

(a) Eligible Employment.--Section 443(b)(1) (42 U.S.C. 2753(b)(1))
is amended by inserting ``, including internships, practica, or
research assistantships as determined by the Secretary,'' after ``part-
time employment''.
(b) Community Service.--Section 443(b)(2)(A) is amended--
(1) by striking ``in fiscal year 1994 and succeeding fiscal
years,'' and inserting ``for fiscal year 1999,''; and
(2) by inserting ``(including a reasonable amount of time spent
in travel or training directly related to such community service)''
after ``community service''.
(c) Tutoring and Literacy Activities.--Section 443 is amended--
(1) in subsection (b)(2)--
(A) by striking ``and'' at the end of subparagraph (A);
(B) by redesignating subparagraph (B) as subparagraph (C);
and
(C) by inserting after subparagraph (A) the following:
``(B) 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''; and
(2) by adding at the end the following new subsection:
``(d) Tutoring and Literacy Activities.--
``(1) Use of funds.--In any academic year to which subsection
(b)(2)(B) applies, an institution shall 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 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.''.
(d) Use of Funds for Independent and Less Than Full-Time
Students.--Paragraph (3) of section 443(b) is amended to read as
follows:
``(3) provide that in the selection of students for employment
under such work-study program, only students who demonstrate
financial need in accordance with part F 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;''.
(e) Federal Share.--Paragraph (5) of section 443(b) is amended to
read as follows:
``(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--
``(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;''.
(f) Availability of Employment.--Section 443(b)(6) is amended by
striking ``, and to make'' and all that follows through ``such
employment''.
(g) Academic Relevance.--Section 443(c)(4) is amended by inserting
before the semicolon at the end the following: ``, to the maximum
extent practicable''.

9fde08d46bba97811ba5a0a5f20bfca2c0e4a29785cb56ac6c6f0450c5a7e83f

Section 445 (42 U.S.C. 2755) is amended by adding at the end the
following:
``(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.''.

3a0a78f2122c9ce19034fdbeee4c4e44001b7e179a46e9c7f1ca4b7898b13094

Section 448 (42 U.S.C. 2756b) is amended--
(1) in subsection (b)(2)--
(A) in subparagraph (C), by striking ``and'' after the
semicolon;
(B) in subparagraph (D)(ii), by striking the period and
inserting a semicolon; and
(C) by adding at the end the following:
``(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.''; and
(2) in subsection (f), by striking ``1993'' and inserting
``1999''.
PART D--WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM

89c67fb958a7e7046e6892ad933fe25640e1077bed7affee1a45e1ae5a82b3dd

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

6048be20e3867e4cedbf066a8142e1cca4332da8a42991b432b67f9cfd983c9b

(a) Direct Loan Interest Rates.--
(1) Amendment.--Section 455(b) (20 U.S.C. 1087e(b)) is amended
by adding at the end the following:
``(6) Interest rate provision for new loans on or after october
1, 1998, and before july 1, 2003.--
``(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, 2003, 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, 2003, the applicable
rate of interest for interest which accrues--
``(i) prior to the beginning of the repayment period of
the loan; or
``(ii) during the period in which principal need not be
paid (whether or not such principal is in fact paid) by
reason of a provision described in section 428(b)(1)(M) or
427(a)(2)(C),
shall be determined under subparagraph (A) by substituting `1.7
percent' for `2.3 percent'.
``(C) PLUS loans.--Notwithstanding the preceding paragraphs
of this subsection, with respect to Federal Direct PLUS Loan
for which the first disbursement is made on or after October 1,
1998, and before July 1, 2003, 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, 2003, 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.''.
(2) Limitation on consolidation loans during temporary interest
rate.--Notwithstanding section 455(g) of the Higher Education Act
of 1965, a borrower who is enrolled or accepted for enrollment in
an institution of higher education may not consolidate loans under
such section during the period beginning October 1, 1998, and
ending February 1, 1999, unless the borrower certifies that the
borrower has no outstanding loans made, insured, or guaranteed
under title IV of such Act other than loans made under part D of
such title.
(b) Repayment Incentives.--Section 455(b) (20 U.S.C. 1087e(b)) is
further amended by adding at the end the following:
``(7) Repayment incentives.--
``(A) In general.--Notwithstanding any other provision of
this part, the Secretary is authorized to prescribe by
regulation such reductions in the interest rate paid by a
borrower of a loan made under this part as the Secretary
determines appropriate to encourage on-time repayment of the
loan. Such reductions may be offered only if the Secretary
determines the reductions are cost neutral and in the best
financial interest of the Federal Government. Any increase in
subsidy costs resulting from such reductions shall be
completely offset by corresponding savings in funds available
for the William D. Ford Federal Direct Loan Program in that
fiscal year from section 458 and other administrative accounts.
``(B) Accountability.--Prior to publishing regulations
proposing repayment incentives, the Secretary shall ensure the
cost neutrality of such reductions. The Secretary shall not
prescribe such regulations in final form unless an official
report from the Director of the Office of Management and Budget
to the Secretary and a comparable report from the Director of
the Congressional Budget Office to the Congress each certify
that any such reductions will be completely cost neutral. Such
reports shall be transmitted to the Committee on Labor and
Human Resources of the Senate and the Committee on Education
and the Workforce of the House of Representatives not less than
60 days prior to the publication of regulations proposing such
reductions.''.
(c) Consolidation Loans.--The first sentence of section 455(g) is
amended by striking everything after ``section 428C(a)(4)'' and
inserting a period.
(d) Effective Date.--The amendments made by subsection (a) shall
apply with respect to any loan made under part D of title IV of the
Higher Education Act of 1965 for which the first disbursement is made
on or after October 1, 1998, and before July 1, 2003, except that such
amendments shall apply with respect to a Federal Direct Consolidation
Loan for which the application is received on or after October 1, 1998,
and before July 1, 2003.

c70ab2fb892df535bcdce25a8bbc721bd490ced6688b0df744ec9b8cef1d675f

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

a09f9aad3c6fdb221e44556f11038e4b080f50317e1fae2d4107f954729be5fb

Section 458 (20 U.S.C. 1087h) is amended--
(1) by amending subsection (a) to read as follows:
``(a) Administrative Expenses.--
``(1) In general.--Each fiscal year there shall be available to
the Secretary, from funds not otherwise appropriated, funds to be
obligated for--
``(A) administrative costs under this part and part B,
including the costs of the direct student loan programs under
this part; and
``(B) account maintenance fees payable to guaranty agencies
under part B and calculated in accordance with subsections (b)
and (c),
not to exceed (from such funds not otherwise appropriated)
$617,000,000 in fiscal year 1999, $735,000,000 in fiscal year 2000,
$770,000,000 in fiscal year 2001, $780,000,000 in fiscal year 2002,
and $795,000,000 in fiscal year 2003.
``(2) Account maintenance fees.--Account maintenance fees under
paragraph (1)(B) shall be paid quarterly and deposited in the
Agency Operating Fund established under section 422B.
``(3) Carryover.--The Secretary may carry over funds made
available under this section to a subsequent fiscal year.'';
(2) by amending subsection (b) to read as follows:
``(b) Calculation Basis.--Except as provided in subsection (c),
account maintenance fees payable to guaranty agencies under paragraph
(1)(B) shall be calculated--
``(1) for fiscal years 1999 and 2000, on the basis of 0.12
percent of the original principal amount of outstanding loans on
which insurance was issued under part B; and
``(2) for fiscal years 2001, 2002, and 2003, on the basis of
0.10 percent of the original principal amount of outstanding loans
on which insurance was issued under part B.'';
(3) by striking subsection (d);
(4) by redesignating subsection (c) as subsection (d); and
(5) by inserting after subsection (b) the following:
``(c) Special Rules.--
``(1) Fee cap.--The total amount of account maintenance fees
payable under this section--
``(A) for fiscal year 1999, shall not exceed $177,000,000;
``(B) for fiscal year 2000, shall not exceed $180,000,000;
``(C) for fiscal year 2001, shall not exceed $170,000,000;
``(D) for fiscal year 2002, shall not exceed $180,000,000;
and
``(E) for fiscal year 2003, shall not exceed $195,000,000.
``(2) Insufficient funding.--
``(A) In general.--If the amounts set forth in paragraph
(1) are insufficient to pay the account maintenance fees
payable to guaranty agencies pursuant to subsection (b) for a
fiscal year, the Secretary shall pay the insufficiency by
requiring guaranty agencies to transfer funds from the Federal
Student Loan Reserve Funds under section 422A to the Agency
Operating Funds under section 422B.
``(B) Entitlement.--A guaranty agency shall be deemed to
have a contractual right against the United States to receive
payments according to the provisions of subparagraph (A).''.

996510be4fae75ee0db6e2aeff308f3dcf1e7f7675f833d656a1bdf31c7f6276

Part D of title IV (20 U.S.C. 1087a et seq.) is amended by adding
at the end the following:
``SEC. 459. AUTHORITY TO SELL LOANS.
``The Secretary, in consultation with the Secretary of the
Treasury, is authorized to sell loans made under this part on such
terms as the Secretary determines are in the best interest of the
United States, except that any such sale shall not result in any cost
to the Federal Government. Notwithstanding any other provision of law,
the proceeds of any such sale may be used by the Secretary to offer
reductions in the interest rate paid by a borrower of a loan made under
this part as the Secretary determines appropriate to encourage on-time
repayment 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.''.

af1d27ec9a3cd754a5ac1b0ebbc38391a7778a2fde6327f1032304764e257dbf

Part D of title IV (20 U.S.C. 1087a et seq.) is further amended by
adding after section 459 (as added by section 455) the following:
``SEC. 460. 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.--
``(1) In general.--The Secretary shall carry out a program of
canceling the obligation to repay a qualified loan amount in
accordance with subsection (c) for Federal Direct Stafford Loans
and Federal Direct Unsubsidized Stafford Loans made under this part
for any new borrower on or after October 1, 1998, who--
``(A) has been employed as a full-time teacher for 5
consecutive complete school years--
``(i) in a school that qualifies under section
465(a)(2)(A) for loan cancellation for Perkins loan
recipients who teach in such schools;
``(ii) if employed as a secondary school teacher, is
teaching a subject area that is relevant to the borrower's
academic major as certified by the chief administrative
officer of the public or non-profit private secondary
school in which the borrower is employed; and
``(iii) if employed as an elementary school teacher,
has demonstrated, as certified by the chief administrative
officer of the public or nonprofit private elementary
school in which the borrower is employed, knowledge and
teaching skills in reading, writing, mathematics and other
areas of the elementary school curriculum; and
``(B) is not in default on a loan for which the borrower
seeks forgiveness.
``(2) Special rule.--No borrower may obtain a reduction of loan
obligations under both this section and section 428J.
``(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)(A).
``(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.
``(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 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 volunteer service, receive a benefit under both this section
and subtitle D of title I of the National and Community Service Act
of 1990 (42 U.S.C. 12571 et seq.).
``(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

44c83d0595f84b898f9de736d1cdb05fdc442cd6906c2548bba4566a6f646731

Subsection (b) of section 461 (20 U.S.C. 1087aa) is amended--
(1) in paragraph (1), by striking ``1993'' and inserting
``1999''; and
(2) in paragraph (2), by striking ``1997'' each place the term
appears and inserting ``2003''.

acce65dba9a2859760aa0d8e4b755fdd2b172b6d20325d1383fb9d1abcef3e55

(a) Changes in Allocation Formula.--
(1) Updating the base period.--Section 462(a) (20 U.S.C.
1087bb(a)) is amended--
(A) in paragraph (1)(A), by striking ``the amount of the
Federal capital contribution allocated to such institution
under this part for fiscal year 1985'' and inserting ``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)'';
(B) in paragraph (2)--
(i) in subparagraphs (A) and (B), by striking ``1985''
each place the term appears and inserting ``1999''; and
(ii) in subparagraph (C)(i), by striking ``1986'' and
inserting ``2000''.
(2) Elimination of pro rata share.--Section 462 is further
amended--
(A) in subsection (a)--
(i) in paragraph (1)(B), by striking ``subsection (f)''
and inserting ``subsection (e)'';
(ii) in the matter following paragraph (1)(B), by
striking ``subsection (g)'' and inserting ``subsection
(f)'';
(iii) in paragraph (2)(D)(ii), by striking ``subsection
(f)'' and inserting ``subsection (e)''; and
(iv) in the matter following paragraph (2)(D)(ii), by
striking ``subsection (g)'' and inserting ``subsection
(f)'';
(B) by striking subsection (b);
(C) in subsection (c)(1), by striking ``three-quarters of
the remainder'' and inserting ``the remainder'';
(D) in the matter following subsection (c)(2)(B), by
striking ``subsection (g)'' and inserting ``subsection (f)'';
(E) in subsection (c)(3)--
(i) in subparagraph (A), by striking ``subsection (d)''
and inserting ``subsection (c)'';
(ii) in subparagraph (C), by striking ``subsection
(f)'' and inserting ``subsection (e)''; and
(iii) in the matter following subparagraph (C), by
striking ``subsection (g)'' and inserting ``subsection
(f)'';
(F) in subsection (j)(1)(B)(i), by striking ``1985'' and
inserting ``1999'';
(G) in subsection (j)(2)--
(i) in subparagraph (A), by striking ``paragraph (3) of
subsection (c)'' and inserting ``subsection (b)(3)''; and
(ii) in subparagraph (B), by striking ``subsection (c)
of section 462'' and inserting ``subsection (b)''; and
(H) by redesignating subsections (c) through (j) as
subsections (b) through (i), respectively.
(3) Effective Date.--The amendments made by this subsection
shall apply with respect to allocations of amounts appropriated
pursuant to section 461(b) for fiscal year 2000 or any succeeding
fiscal year.
(b) Self-Help Need.--The matter preceding subparagraph (A) of
section 462(c)(3) (as redesignated by subsection (a)(2)(G)) is amended
by striking ``the Secretary, for'' and all that follows through
``years,''.
(c) Default Penalties.--Subsections (e) and (f) of section 462 (as
redesignated by subsection (a)(2)(G)) are amended to read as follows:
``(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), 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.''.
(d) Cohort Default Rate Definition.--Section 462(g) (as
redesignated by subsection (a)(2)(G)) is amended--
(1) by striking the subsection heading and paragraphs (1) and
(2) and inserting the following:
``(g) Definition of Cohort Default Rate.--'';
(2) by striking ``(3)(A) For award year 1994 and any succeeding
award year, the term'' and inserting the following:
``(1)(A) The term'';
(3) in paragraph (1) (as redesignated by paragraph (2))--
(A) by striking subparagraphs (B) and (E); and
(B) by redesignating subparagraphs (C), (D), (F), and (G)
as subparagraphs (B), (C), (D), and (F), respectively;
(C) by inserting after subparagraph (D) (as redesignated by
subparagraph (B)) the following:
``(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.''; and
(4) by striking paragraph (4) and inserting the following:
``(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.''.
(e) Conforming Amendments.--Section 462 (20 U.S.C. 1087bb) is
amended--
(1) in the matter following paragraphs (1)(B) and (2)(D)(ii) of
subsection (a), by inserting ``cohort'' before ``default'' each
place the term appears;
(2) in the matter following paragraphs (2)(B) and (3)(C) of
subsection (b) (as redesignated by subsection (a)(2)(G)), by
inserting ``cohort'' before ``default'' each place the term
appears;
(3) in subsection (d)(2) (as redesignated by subsection
(a)(2)(G)), by inserting ``cohort'' before ``default''; and
(4) in subsection (g)(1)(F) (as redesignated by subsections
(a)(2)(G) and (d)(3)(B)), by inserting ``cohort'' before
``default''.

6bde901bba9fd97a37d04d248be6a3594b6ff062ec9964e474f7a1d4793b3b76

Higher Education Amendments of 1998

Other Sections