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S. 1150 (102nd): Higher Education Amendments of 1992

The text of the bill below is as of Jul 23, 1992 (Passed Congress).


S.1150

One Hundred Second Congress of the United States of America

AT THE SECOND SESSION

Begun and held at the City of Washington on Friday, the third day of January,

one thousand nine hundred and ninety-two

An Act

To reauthorize 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,

SECTION 1. SHORT TITLE; REFERENCES; DEFINITIONS; TABLE OF CONTENTS.

    (a) SHORT TITLE- This Act may be cited as the ‘Higher Education Amendments of 1992’.

    (b) REFERENCES- References in this Act to ‘the Act’ are references to the Higher Education Act of 1965.

    (c) DEFINITIONS- Unless otherwise provided therein, terms used in titles XIII, XIV, and XV shall have the same meaning given to such terms in section 1201 of the Higher Education Act of 1965.

    (d) TABLE OF CONTENTS-

      Sec. 1. Short title; references; table of contents.

      Sec. 2. General effective date.

TITLE I--PARTNERSHIPS FOR EDUCATIONAL EXCELLENCE

      Sec. 101. Revision of title I.

‘TITLE I--PARTNERSHIPS FOR EDUCATIONAL EXCELLENCE

‘Part A--School, College, and University Partnerships

‘Sec. 101. Purpose.

‘Sec. 102. Agreement.

‘Sec. 103. Grants.

‘Sec. 104. Grant application.

‘Sec. 105. Peer review.

‘Sec. 106. Authorization of appropriations.

‘Part B--Articulation Agreements

‘Sec. 121. Findings and purpose.

‘Sec. 122. Authorization of grants.

‘Sec. 123. State application.

‘Sec. 124. Local applications.

‘Sec. 125. Articulation agreement.

‘Sec. 126. State administration.

‘Sec. 127. Priority.

‘Sec. 128. Reports.

‘Sec. 129. Authorization of appropriations.

‘Part C--Access and Equity to Education for All Americans Through Telecommunications

‘Sec. 131. Program established; authorization of appropriations; eligibility.

‘Sec. 132. Application.

‘Sec. 133. Authorized activities.

‘Sec. 134. Definition.

‘Sec. 135. Report.

TITLE II--ACADEMIC LIBRARY AND INFORMATION TECHNOLOGY ENHANCEMENT

      Sec. 201. Revision of title II.

‘TITLE II--ACADEMIC LIBRARIES AND INFORMATION SERVICES

‘Sec. 201. Purpose; authorization.

‘Sec. 202. Notification of State agency.

‘Sec. 203. Library experts.

‘Part A--College Library Technology and Cooperation Grants

‘Sec. 211. College library technology and cooperation grants.

‘Part B--Library Education, Research, and Development

‘Sec. 221. Grants authorized.

‘Sec. 222. Library education and human resource development.

‘Sec. 223. Research and demonstration.

‘Sec. 224. Consultation requirements.

‘Part C--Improving Access to Research Library Resources

‘Sec. 231. Research library resources.

‘Sec. 232. Geographical distribution of grants.

‘Part D--Strengthening Library and Information Science Programs and Libraries in Historically Black Colleges and Universities and Other Minority-Serving Institutions

‘Sec. 241. Strengthening library and information science programs and libraries in historically black colleges and universities and other minority-serving institutions.’.

TITLE III--INSTITUTIONAL AID

      Sec. 301. Findings.

      Sec. 302. Amendments to part A.

      Sec. 303. Amendments to part B.

      Sec. 304. Amendments to part C.

      Sec. 305. Amendments to part D.

TITLE IV--STUDENT ASSISTANCE

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

      Sec. 401. Federal Pell Grant program.

      Sec. 402. Federal early outreach and student services programs.

‘Subpart 2--Federal Early Outreach and Student Services Programs

‘CHAPTER 1--FEDERAL TRIO PROGRAMS

‘Sec. 402a. Program authority; authorization of appropriations.

‘Sec. 402b. Talent search.

‘Sec. 402c. Upward Bound.

‘Sec. 402d. Student support services.

‘Sec. 402e. Postbaccalaureate achievement program authority.

‘Sec. 402f. Educational opportunity centers.

‘Sec. 402g. Staff development activities.

‘Sec. 402h. Evaluation for project improvement.

‘CHAPTER 2--NATIONAL EARLY INTERVENTION SCHOLARSHIP AND PARTNERSHIP PROGRAM

‘Sec. 404a. Early intervention program authorized.

‘Sec. 404b. State eligibility and State plan.

‘Sec. 404c. Early intervention.

‘Sec. 404d. Scholarship component.

‘Sec. 404e. Distribution of funds.

‘Sec. 404f. Evaluation and report.

‘Sec. 404g. Appropriations.

‘CHAPTER 3--PRESIDENTIAL ACCESS SCHOLARSHIPS

‘Sec. 406a. Scholarships authorized.

‘Sec. 406b. Scholarship program requirements.

‘Sec. 406c. Eligibility of scholars.

‘Sec. 406d. Eligible early intervention programs.

‘Sec. 406e. Student eligibility.

‘Sec. 406f. Early intervention scholarship agreement.

‘Sec. 406g. Authorization of appropriations.

‘CHAPTER 4--MODEL PROGRAM COMMUNITY PARTNERSHIP AND COUNSELING GRANTS

‘Sec. 408a. Model program grants.

‘Sec. 408b. Diffusion activities.

‘Sec. 408c. Authorization of appropriations.

‘CHAPTER 5--PUBLIC INFORMATION

‘Sec. 409a. Database and information line.

‘Sec. 409b. Early awareness information program.

‘Sec. 409c. Database and information line.

‘CHAPTER 6--NATIONAL STUDENT SAVINGS DEMONSTRATION PROGRAM

‘Sec. 410a. National student savings demonstration program.

‘CHAPTER 7--PREELIGIBILITY FORM

‘Sec. 410b. Information on eligibility for assistance.

‘CHAPTER 8--TECHNICAL ASSISTANCE FOR TEACHERS AND COUNSELORS

‘Sec. 410c. Technical assistance grants.’.

      Sec. 403. Federal supplemental educational opportunity grants.

      Sec. 404. State student incentive grants.

      Sec. 405. HEP/CAMP.

      Sec. 406. Byrd Honors Scholarship Program.

      Sec. 407. Payments to institutions of higher education.

      Sec. 408. Veterans outreach.

      Sec. 409. Child care.

      Sec. 410. Effective dates for amendments to part A.

Part B--Federal Family Education Loans

      Sec. 411. Program designation and duration.

      Sec. 412. Advances for reserve funds of State and nonprofit private loan insurance programs.

      Sec. 413. Limitations on Federal loan insurance.

      Sec. 414. Eligibility of student borrowers and terms of federally insured student loans.

      Sec. 415. Applicable interest rates.

      Sec. 416. Amendments to section 428.

      Sec. 417. Supplemental loan program.

      Sec. 418. PLUS loans.

      Sec. 419. Consolidation loans.

      Sec. 420. Default reduction programs.

      Sec. 421. Disbursement rules.

      Sec. 422. Unsubsidized loans; performance agreements; loan forgiveness.

      Sec. 423. Default rates.

      Sec. 424. Reports to credit bureaus and institutions of higher education.

      Sec. 425. Administrative provisions.

      Sec. 426. Student loan information by eligible lenders.

      Sec. 427. Definitions for student loan insurance program.

      Sec. 428. Repayments by Secretary.

      Sec. 429. Debt management options.

      Sec. 430. Special allowances.

      Sec. 431. Student Loan Marketing Association.

      Sec. 432. Effective dates for amendments to part B.

Part C--Federal Work-Study Programs

      Sec. 441. Designation, purpose, and appropriations.

      Sec. 442. Allocation of funds.

      Sec. 443. Grants for work-study programs.

      Sec. 444. Carry-back authority.

      Sec. 445. Job location and development.

      Sec. 446. Additional funds to conduct community service work-study programs.

      Sec. 447. Work colleges.

Part D--Federal Direct Loans

      Sec. 451. Establishment of Federal direct loan program.

‘Part D--Federal Direct Loan Demonstration Program

‘Sec. 451. Program and payment authority.

‘Sec. 452. Payment rules.

‘Sec. 453. Selection by the Secretary.

‘Sec. 454. Agreement required.

‘Sec. 455. Withdrawal and termination procedures.

‘Sec. 456. Terms and conditions.

‘Sec. 457. Loan collection functions under competitive procurement contracts.

‘Sec. 458. Reports.

‘Sec. 459. Schedule of regulatory activities by the Secretary.

‘Sec. 459A. Funds for administrative expenses.’.

      Sec. 452. Income contingent loan program distribution of funds.

Part E--Federal Perkins Loans

      Sec. 461. Program designation; authorization.

      Sec. 462. Allocation of funds.

      Sec. 463. Agreements with institutions of higher education.

      Sec. 464. Amounts and terms of loans.

      Sec. 465. Cancellation of loans for certain public service.

      Sec. 466. Distribution of assets from student loan funds.

      Sec. 467. Excess capital rule.

      Sec. 468. Effective dates for amendments to part E.

Part F--Need Analysis

      Sec. 471. Revision of part F.

‘Part F--Need Analysis

‘Sec. 471. Amount of need.

‘Sec. 472. Cost of attendance.

‘Sec. 473. Family contribution.

‘Sec. 474. Determination of expected family contribution; data elements.

‘Sec. 475. Family contribution for dependent students.

‘Sec. 476. Family contribution for independent students without dependents other than a spouse.

‘Sec. 477. Family contribution for independent students with dependents other than a spouse.

‘Sec. 478. Regulations; updated tables.

‘Sec. 479. Simplified needs tests.

‘Sec. 479a. Discretion of student financial aid administrators.

‘Sec. 479b. Disregard of student aid in other Federal programs.

‘Sec. 479c. Native American students.

‘Sec. 480. Definitions.’.

Part G--General Provisions

      Sec. 481. Definitions.

      Sec. 482. Master calendar.

      Sec. 483. Forms and regulations.

      Sec. 484. Student eligibility.

      Sec. 485. Refund policy.

      Sec. 486. Information dissemination.

      Sec. 487. National Student Loan Data System.

      Sec. 488. Simplification of the lending process for borrowers.

      Sec. 489. Training in financial aid services.

      Sec. 490. Program participation agreements.

      Sec. 491. Quality assurance; identification numbers.

      Sec. 492. Inter-program transfers.

      Sec. 493. Administrative expenses.

      Sec. 494. Repeal.

      Sec. 495. Criminal penalties.

      Sec. 496. Advisory Committee on Student Financial Assistance.

      Sec. 497. Regional meetings and negotiated rulemaking.

      Sec. 498. Effective dates for amendments to part G.

Part H--Program Integrity

      Sec. 499. Establishment of new part H.

‘Part H--Program Integrity Triad

‘Subpart 1--State Postsecondary Review Program

‘Sec. 494. State postsecondary review program.

‘Sec. 494a. State postsecondary review entity agreements.

‘Sec. 494b. Federal reimbursement of State postsecondary review costs.

‘Sec. 494c. Functions of State review entities.

‘Subpart 2--Accrediting Agency Approval

‘Sec. 496. Approval of accrediting agency or association.

‘Subpart 3--Eligibility and Certification Procedures

‘Sec. 498. Eligibility and certification procedures.

‘Sec. 498a. Program review and data.’.

TITLE V--EDUCATOR RECRUITMENT, RETENTION, AND DEVELOPMENT

      Sec. 501. Revision of title V.

‘TITLE V--EDUCATOR RECRUITMENT, RETENTION, AND DEVELOPMENT

‘Sec. 500. Findings and purposes.

‘Part A--State and Local Programs for Teacher Excellence

‘Sec. 501. Authority and allocation of funds; definitions.

‘Sec. 502. State application.

‘Sec. 503. Local application and use of funds.

‘Sec. 504. State uses of funds.

‘Sec. 505. State academies for teachers.

‘Sec. 506. State academies for school leaders.

‘Sec. 507. Institutions of higher education uses of funds.

‘Sec. 508. Professional development academies.

‘Sec. 509. Federal funds to supplement, not supplant regular non-Federal funds.

‘Sec. 510. Coordination with other programs.

‘Sec. 510a. Authorization of appropriations.

‘Part B--National Teacher Academies

‘Sec. 511. Program established.

‘Sec. 512. Eligible recipients.

‘Sec. 513. Use of funds.

‘Sec. 514. Application.

‘Sec. 515. State delegations.

‘Sec. 516. Selection.

‘Sec. 517. National Teacher Academy evaluation.

‘Sec. 518. Authorization of appropriations.

‘Part C--Teacher Scholarships and Fellowships

‘Subpart 1--Paul Douglas Teacher Scholarships

‘Sec. 521. Purpose; designation.

‘Sec. 522. Allocation among States.

‘Sec. 523. Grant applications.

‘Sec. 524. Amount and duration of and relation to other assistance.

‘Sec. 525. Selection of Paul Douglas teacher scholars.

‘Sec. 526. Scholarship conditions.

‘Sec. 527. Scholarship repayment provisions.

‘Sec. 528. Exceptions to repayment provisions.

‘Sec. 529. Federal administration of State programs; judicial review.

‘Sec. 530. Evaluation.

‘Sec. 530a. Designation of shortage areas.

‘Sec. 530b. Authorization of appropriations.

‘Subpart 2--Christa McAuliffe Fellowship Program

‘Sec. 531. Declaration of purpose; designation.

‘Sec. 532. Program authorized.

‘Sec. 533. Christa McAuliffe fellowships.

‘Sec. 534. Selection of Christa McAuliffe Fellows.

‘Sec. 535. Evaluation of applications.

‘Sec. 536. Fellowship repayment provisions.

‘Sec. 537. Secretary’s responsibilities.

‘Sec. 538. State application.

‘Sec. 539. Evaluation.

‘Sec. 540. Authorization of appropriations.

‘Subpart 3--Teacher Corps

‘Sec. 541. Teacher Corps program authorized.

‘Sec. 542. Use of funds.

‘Sec. 543. Teacher Corps.

‘Sec. 544. State application.

‘Sec. 545. Scholarships.

‘Sec. 546. Scholarship conditions.

‘Sec. 547. Publication and recruitment.

‘Sec. 548. Authorization of appropriations.

‘Part D--Innovation and Research

‘Subpart 1--National Board for Professional Teaching Standards

‘Sec. 551. National Board for Professional Teaching Standards.

‘Subpart 2--Alternative Routes to Teacher Certification and Licensure

‘Sec. 552. Short title.

‘Sec. 553. Findings.

‘Sec. 554. Purpose.

‘Sec. 555. Allotments.

‘Sec. 556. State applications.

‘Sec. 557. Use of funds.

‘Sec. 558. Definition.

‘Sec. 559. Authorization of appropriations.

‘Subpart 3--Class Size Demonstration Grant

‘Sec. 561. Purpose.

‘Sec. 562. Program authorized.

‘Sec. 563. Program requirements.

‘Sec. 564. Application.

‘Sec. 565. Evaluation and dissemination.

‘Sec. 565a. Authorization of appropriations.

‘Subpart 4--Middle School Teaching Demonstration Programs

‘Sec. 566. Statement of purpose.

‘Sec. 567. Definitions.

‘Sec. 568. Program authorized.

‘Sec. 569. Application.

‘Sec. 570. Reports and information dissemination.

‘Sec. 570a. Authorization of appropriations.

‘Part E--Minority Teacher Recruitment

‘Subpart 1--New Teaching Careers

‘Sec. 571. Statement of purpose.

‘Sec. 572. State grant authority; applications.

‘Sec. 573. Agreements.

‘Sec. 574. Application.

‘Sec. 575. Requirements.

‘Sec. 576. Special consideration.

‘Sec. 576a. Use of funds.

‘Sec. 576b. Definitions.

‘Sec. 576c. Authorization of appropriations.

‘Subpart 2--Programs to Encourage Minority Students to Become Teachers

‘Sec. 577. Statement of purpose.

‘Sec. 578. Partnership grants authorized.

‘Sec. 579. Partnership agreement.

‘Sec. 580. Application for teacher partnerships program.

‘Sec. 580a. Teacher placement program.

‘Sec. 580b. Authorization of appropriations.

‘Part F--Programs for Special Populations

‘Subpart 1--National Mini Corps Program

‘Sec. 581. National Mini Corps.

‘Subpart 2--Foreign Language Instruction

‘Sec. 586. Demonstration grants for critical language and area studies.

‘Sec. 587. Development of foreign language and culture instructional materials.

‘Subpart 3--Small State Teaching Initiative

‘Sec. 591. Model programs and educational excellence.

‘Subpart 4--Faculty Development Grants

‘Sec. 593. Training grants.

‘Subpart 5--Early Childhood Education Training

‘Sec. 596. Training in early childhood education and violence counseling.

‘Sec. 597. Early childhood staff training and professional enhancement.

‘Sec. 598. Report.

‘Sec. 599. Authorization of appropriations.’.

TITLE VI--INTERNATIONAL EDUCATION PROGRAMS

      Sec. 601. Revision of title VI.

‘TITLE VI--INTERNATIONAL EDUCATION PROGRAMS

‘Part A--International and Foreign Language Studies

‘Sec. 601. Findings and purposes.

‘Sec. 602. Graduate and undergraduate language and area centers.

‘Sec. 603. Language resource centers.

‘Sec. 604. Undergraduate international studies and foreign language programs.

‘Sec. 605. Intensive summer language institutes.

‘Sec. 606. Research; studies; annual report.

‘Sec. 607. Periodicals and other research materials published outside the United States.

‘Sec. 608. Selection of certain grant recipients.

‘Sec. 609. Equitable distribution of certain funds.

‘Sec. 610. American overseas research centers.

‘Sec. 610a. Authorization of appropriations.

‘Part B--Business and International Education Programs

‘Sec. 611. Findings and purposes.

‘Sec. 612. Centers for International Business Education.

‘Sec. 613. Education and training programs.

‘Sec. 614. Authorization of appropriations.

‘Part C--Institute for International Public Policy

‘Sec. 621. Minority foreign service professional development program.

‘Sec. 622. Junior year abroad program.

‘Sec. 623. Masters degree in international relations.

‘Sec. 624. Internships.

‘Sec. 625. Report.

‘Sec. 626. Gifts and donations.

‘Sec. 627. Authorization.

‘Part D--General Provisions

‘Sec. 631. Definitions.

‘Sec. 632. Preservation of pre-1992 programs.’.

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

      Sec. 701. Purposes.

      Sec. 702. Prior rights and obligations.

      Sec. 703. Improvement of academic and library facilities.

‘Part A--Improvement of Academic and Library Facilities

‘Sec. 711. Short title.

‘Sec. 712. Findings.

‘Sec. 713. Distribution of assistance.

‘Sec. 714. Use of funds.

‘Sec. 715. Application.

‘Sec. 716. Authorization of appropriations.’.

      Sec. 704. Historically black college and university capital financing.

‘Part B--Historically Black College and University Capital Financing

‘Sec. 721. Findings.

‘Sec. 722. Definitions.

‘Sec. 723. Federal insurance for bonds.

‘Sec. 724. Limitations on Federal insurance for bonds issued by the designated bonding authority.

‘Sec. 725. Authority of the Secretary.

‘Sec. 726. Prohibition.

‘Sec. 727. HBCU Capital Financing Advisory Board.

‘Sec. 728. Minority business enterprise utilization.’.

      Sec. 705. Consolidation of parts C and F.

‘Part C--Loans for Construction, Reconstruction and Renovation of Academic, Housing, and Other Educational Facilities

‘Sec. 731. Federal assistance in the form of loans.

‘Sec. 732. General provisions.

‘Sec. 733. Apportionment.

‘Sec. 734. Definitions.

‘Sec. 735. Authorization of appropriations.’.

      Sec. 706. Repeal of parts D, F, G, and J.

      Sec. 707. Redesignation of and amendments to part E.

      Sec. 708. Redesignation of and amendments to part H.

TITLE VIII--COOPERATIVE EDUCATION

      Sec. 801. Cooperative education.

‘TITLE VIII--COOPERATIVE EDUCATION

‘Sec. 801. Statement of purpose; definition.

‘Sec. 802. Authorization of appropriations; reservations.

‘Sec. 803. Grants for cooperative education.

‘Sec. 804. Demonstration and innovation projects; training and resource centers; and research.’.

TITLE IX--GRADUATE PROGRAMS

      Sec. 901. Graduate programs.

‘TITLE IX--GRADUATE PROGRAMS

‘Sec. 901. Purpose and administrative provisions.

‘Part A--Grants to Institutions and Consortia to Encourage Women and Minority Participation in Graduate Education

‘Sec. 911. Grants authorized.

‘Sec. 912. Submission and contents of application.

‘Sec. 913. Use of funds.

‘Sec. 914. Information collection.

‘Sec. 915. Authorization of appropriations.

‘Part B--Patricia Roberts Harris Fellowship Program

‘Sec. 921. Statement of purpose; designation.

‘Sec. 922. Program authorized.

‘Sec. 923. Award of fellowships.

‘Sec. 924. Authorization of appropriations.

‘Part C--Jacob K. Javits Fellowship Program

‘Sec. 931. Award of Jacob K. Javits fellowships.

‘Sec. 932. Allocation of fellowships.

‘Sec. 933. Stipends.

‘Sec. 934. Fellowship conditions.

‘Sec. 935. Authorization of appropriations.

‘Part D--Graduate Assistance in Areas of National Need

‘Sec. 941. Purpose.

‘Sec. 942. Grants to academic departments and programs of institutions.

‘Sec. 943. Institutional eligibility.

‘Sec. 944. Criteria for applications.

‘Sec. 945. Awards to graduate students.

‘Sec. 946. Additional assistance for cost of education.

‘Sec. 947. Authorization of appropriations.

‘Part E--Faculty Development Fellowship Program

‘Sec. 951. Fellowships authorized.

‘Sec. 952. Fellowships.

‘Sec. 953. Application.

‘Sec. 954. Fellowship agreement.

‘Sec. 955. Fellowship repayment provisions.

‘Sec. 956. Exceptions to repayment provisions.

‘Sec. 957. Authorization of appropriations.

‘Part F--Assistance for Training in the Legal Profession

‘Sec. 961. Program requirements.

‘Sec. 962. Authorization of appropriations.

‘Part G--Law School Clinical Experience Programs

‘Sec. 971. Program authorized.

‘Sec. 972. Applications.

‘Sec. 973. Authorization of appropriations.’.

TITLE X--POSTSECONDARY IMPROVEMENT PROGRAMS

      Sec. 1001. Fund for the improvement of postsecondary education.

‘Part A--Fund for the Improvement of Postsecondary Education

‘Subpart 1--Program Authority

‘Sec. 1001. Fund for the improvement of postsecondary education.

‘Sec. 1002. National Board of the Fund for the Improvement of Postsecondary Education.

‘Sec. 1003. Administrative provisions.

‘Sec. 1004. Authorization of appropriations.

‘Subpart 2--Special Projects in Areas of National Need

‘Sec. 1011. Special projects.’.

      Sec. 1002. Amendments to part B.

      Sec. 1003. Women and minorities science and engineering outreach demonstration program.

‘Part C--Women and Minorities Science and Engineering Outreach Demonstration Program

‘Sec. 1061. Purpose.

‘Sec. 1062. Program authorized.

‘Sec. 1063. Eligible institutions.

‘Sec. 1064. Amount, duration, and use of funds.

‘Sec. 1065. Application.

‘Sec. 1066. Evaluation.

‘Sec. 1067. Federal share.

‘Sec. 1068. Supplement not supplant.

‘Sec. 1069. Authorization of appropriations.’.

      Sec. 1004. Dwight D. Eisenhower Leadership Program.

‘Part D--Dwight D. Eisenhower Leadership Program

‘Sec. 1181. Short title; establishment of the program.’.

TITLE XI--COMMUNITY SERVICE PROGRAMS

      Sec. 1101. Urban community service.

‘TITLE XI--COMMUNITY SERVICE PROGRAMS

‘Part A--Urban Community Service

‘Sec. 1101. Findings.

‘Sec. 1102. Purpose; program authorized.

‘Sec. 1103. Application for urban community service grants.

‘Sec. 1104. Allowable activities.

‘Sec. 1105. Peer review.

‘Sec. 1106. Disbursement of funds.

‘Sec. 1107. Designation of urban grant institutions.

‘Sec. 1108. Definitions.

‘Sec. 1109. Authorization of appropriations.

‘Part B--Innovative Projects

‘Subpart 1--Innovative Projects for Community Service

‘Sec. 1121. Statement of purpose.

‘Sec. 1122. Innovative projects for community service.

‘Subpart 2--Student Literacy Corps and Student Mentoring Corps

‘Sec. 1141. Purpose.

‘Sec. 1142. Literacy Corps Program and Mentoring Corps Program.

‘Sec. 1143. Uses of funds.

‘Sec. 1144. Applications.

‘Sec. 1145. Technical assistance and coordination contract.

‘Sec. 1146. Definition.

‘Subpart 3--Authorization of Appropriations

‘Sec. 1151. Authorization of appropriations.’.

TITLE XII--GENERAL PROVISIONS AND DEMONSTRATION PROGRAMS

      Sec. 1201. Definitions.

      Sec. 1202. Antidiscrimination.

      Sec. 1203. National Advisory Committee on Institutional Quality and Integrity.

      Sec. 1204. Disclosure of foreign gifts and foreign ownership.

TITLE XIII--INDIAN HIGHER EDUCATION PROGRAMS

Part A--Tribally Controlled Community Colleges

      Sec. 1301. Reauthorization of the Tribally Controlled Community Colleges Act.

Part B--Higher Education Tribal Grant Authorization Act

      Sec. 1311. Short title.

      Sec. 1312. Findings.

      Sec. 1313. Program authority.

      Sec. 1314. Qualification for grants to tribes.

      Sec. 1315. Allocation of grant funds.

      Sec. 1316. Limitations on use of funds.

      Sec. 1317. Administrative provisions.

Part C--Critical Needs for Tribal Development Act

      Sec. 1321. Short title.

      Sec. 1322. Definitions.

      Sec. 1323. Service conditions permitted.

      Sec. 1324. Critical area service agreements.

      Sec. 1325. General provisions.

Part D--Institute of American Indian Native Culture and Arts Development

      Sec. 1331. Institute of American Indian Native Culture and Arts Development.

Part E--Tribal Development Student Assistance Revolving Loan Program

      Sec. 1341. Short title.

      Sec. 1342. Findings; purposes.

      Sec. 1343. Revolving fund.

      Sec. 1344. Eligible recipients.

      Sec. 1345. Terms of loans.

      Sec. 1346. Service fulfillment and conditions; repayments; waivers.

      Sec. 1347. Administration.

      Sec. 1348. Authorization of appropriations.

Part F--American Indian Postsecondary Economic Development Scholarship

      Sec. 1361. American Indian Postsecondary Economic Development Scholarship.

      Sec. 1362. Indian scholarships.

      Sec. 1363. Scholarship conditions.

      Sec. 1364. Report.

      Sec. 1365. Authorization of appropriations.

Part G--American Indian Teacher Training

      Sec. 1371. American Indian teacher training.

TITLE XIV--STUDIES AND COMMISSIONS

Part A--Studies by the Department of Education

      Sec. 1401. Study of role of guaranty agencies.

      Sec. 1402. Study of statutory protections.

      Sec. 1403. Study of fraud-based defenses.

      Sec. 1404. Data on nontraditional students.

      Sec. 1405. Study of Federal benefit coordination.

      Sec. 1406. National survey of factors associated with participation.

      Sec. 1407. Evaluation of tuition guaranty programs.

      Sec. 1408. Information on graduate education.

      Sec. 1409. Study of environmental hazards in institutions of higher education.

      Sec. 1410. Study of civilian aviation training programs.

      Sec. 1411. Report on the use of Pell Grants by prisoners.

      Sec. 1412. National Job Bank for Teacher Recruitment.

Part B--National Commission on Independent Higher Education

      Sec. 1421. Short title.

      Sec. 1422. Findings.

      Sec. 1423. Purpose.

      Sec. 1424. National Commission on Independent Higher Education.

      Sec. 1425. Duties of the Commission.

      Sec. 1426. Report and recommendations.

      Sec. 1427. Powers of the Commission.

      Sec. 1428. Commission personnel matters.

      Sec. 1429. Termination of the Commission.

Part C--National Commission on the Cost of Higher Education

      Sec. 1441. Establishment of Commission.

      Sec. 1442. Membership of Commission.

      Sec. 1443. Functions of Commission.

      Sec. 1444. Powers of Commission.

      Sec. 1445. Expenses of Commission.

      Sec. 1446. Termination of Commission.

TITLE XV--RELATED PROGRAMS AND AMENDMENTS TO OTHER LAWS

Part A--National Center for the Workplace

      Sec. 1511. Purpose; designation.

      Sec. 1512. Establishment.

      Sec. 1513. Use of funds.

      Sec. 1514. Gifts and donations.

      Sec. 1515. Authorization.

Part B--National Clearinghouse for Postsecondary Education Materials

      Sec. 1521. National Clearinghouse for Postsecondary Education Materials.

Part C--School-Based Decisionmakers

      Sec. 1531. Training and technical assistance for school-based decisionmakers demonstration program.

Part D--Grants for Sexual Offenses Education

      Sec. 1541. Grants for campus sexual offenses education.

Part E--Olympic Scholarships

      Sec. 1543. Olympic scholarships.

Part F--Need-Based Aid

      Sec. 1544. Authority to award need-based aid.

Part G--Advanced Placement Fee Payment Program

      Sec. 1545. Advanced placement fee payment program.

Part H--Amendments to Other Laws

      Sec. 1551. Higher education technical amendments.

      Sec. 1552. Library of Congress access to data.

      Sec. 1553. Liaison for community colleges.

      Sec. 1554. United States Institute of Peace.

      Sec. 1555. Law enforcement unit records.

      Sec. 1556. Excellence in Mathematics, Science and Engineering Education Act of 1990.

      Sec. 1557. National and Community Service Act of 1990.

      Sec. 1558. Omnibus Budget Reconciliation Act of 1990.

      Sec. 1559. Special projects for 2-year schools.

Part I--Buy America

      Sec. 1561. Sense of Congress.

SEC. 2. GENERAL EFFECTIVE DATE.

    Except as otherwise provided in this Act (20 U.S.C. 1001 et seq.), the amendments made by this Act shall take effect on October 1, 1992.

TITLE I--PARTNERSHIPS FOR EDUCATIONAL EXCELLENCE

SEC. 101. REVISION OF TITLE I.

    Title I of the Act (20 U.S.C. 1001 et seq.) is amended to read as follows:

‘TITLE I--PARTNERSHIPS FOR EDUCATIONAL EXCELLENCE

‘PART A--SCHOOL, COLLEGE, AND UNIVERSITY PARTNERSHIPS

‘SEC. 101. PURPOSE.

    ‘It is the purpose of this part to encourage partnerships between institutions of higher education or State higher education agencies and secondary schools serving low-income and disadvantaged students, to support programs that--

      ‘(1) improve the retention and graduation rates at such secondary schools;

      ‘(2) improve the academic skills of public and private nonprofit secondary school students;

      ‘(3) increase such students’ opportunities to continue a program of education after secondary school; and

      ‘(4) improve such students’ prospects for employment after secondary school.

‘SEC. 102. AGREEMENT.

    ‘(a) AGREEMENT- To be eligible for a grant under this part, an institution of higher education, a State higher education agency, or a consortium consisting of any of the preceding entities thereof shall enter into a written partnership agreement with a local educational agency. Such partnership may include businesses, labor organizations, professional associations, community-based organizations, public television stations or other telecommunications entities, or other public or private agencies or organizations. Each entity participating in the partnership shall sign the agreement.

    ‘(b) CONTENTS OF AGREEMENT- The agreement shall include--

      ‘(1) a listing of all participants in the partnership, including a designation of the official representatives of each entity participating in the partnership;

      ‘(2) a description of the responsibilities of each participant in the partnership; and

      ‘(3) a listing of the resources to be contributed by each participant in the partnership.

‘SEC. 103. GRANTS.

    ‘(a) DIVISION BETWEEN SCHOOL-YEAR AND SUMMER PROGRAMS- From the funds appropriated to carry out this part pursuant to section 106, the Secretary shall reserve 65 percent of such funds to carry out programs operating during the regular school year and 35 percent of such funds to carry out programs operating during the summer.

    ‘(b) AMOUNT AND USE OF GRANTS-

      ‘(1) AMOUNT- The Secretary shall make grants under this part in amounts which are not less than $250,000 and not more than $1,000,000.

      ‘(2) PERMITTED USES OF FUNDS- Grants under this part may be used by the partnership for programs that--

      ‘(A) use college students to tutor secondary school students and improve their basic academic skills or to involve secondary school students in community service-learning projects;

      ‘(B) are designed to improve the basic academic skills of secondary school students;

      ‘(C) are designed to increase the understanding of specific subjects of secondary school students;

      ‘(D) are designed to improve the opportunity to continue a program of education after graduation for secondary school students; and

      ‘(E) are designed to increase the prospects for employment after graduation of secondary school students.

    ‘(c) PREFERENCES- In making grants under this part, the Secretary shall give a preference to--

      ‘(1) programs which will serve predominantly low-income communities;

      ‘(2) partnerships which will run programs during the regular school year and summer;

      ‘(3) programs which will serve educationally disadvantaged students; students with disabilities; potential dropouts; pregnant adolescents and teenage parents; children of migratory agricultural workers or of migratory fishermen; or students whose native language is other than English; and

      ‘(4) programs designed to encourage women and minorities who are underrepresented in the fields of science and mathematics to pursue these fields.

    ‘(d) DURATION- Each grant awarded under this part may be awarded for a period not to exceed 5 years.

    ‘(e) EQUITABLE GEOGRAPHIC DISTRIBUTION- The Secretary shall award grants under this part in a manner that achieves an equitable geographic distribution of such grants.

‘SEC. 104. GRANT APPLICATION.

    ‘(a) APPLICATION REQUIRED- A partnership desiring to receive a grant under this part shall submit an application to the Secretary, in such form and providing such information as the Secretary, by regulation, shall require.

    ‘(b) CONTENTS OF APPLICATION- The application shall include--

      ‘(1) the partnership agreement described in section 102;

      ‘(2) a listing of the public and private nonprofit secondary school or schools to be involved in the program;

      ‘(3) a description of the activities and services for which assistance is sought;

      ‘(4) a description of the programs to be developed and operated by the partnership; and

      ‘(5) assurances to the Secretary that--

        ‘(A) the partnership will establish a governing body including one representative of each participant in the partnership;

        ‘(B) Federal funds will provide no more than 70 percent of the cost of the project in the first year, 60 percent of such costs in the second year, and 50 percent of such costs in the third year and any subsequent year;

        ‘(C) a local educational agency or institution of higher education receiving funds under this subpart shall not reduce its combined fiscal effort per student or its aggregate expenditure on education;

        ‘(D) a local educational agency or institution of higher education participating in this partnership shall utilize any Federal funds it shall receive from a grant under this part to supplement, and, to the extent practicable, increase the resources that would, in the absence of such Federal funds, be made available from non-Federal sources for the education of students described in this part; and

        ‘(E) in no case shall funds under such a grant be used to supplant non-Federal funds already available.

    ‘(c) SPECIAL RULE- The non-Federal share of grants awarded under this part may be in cash or in kind fairly evaluated, including services, supplies or equipment.

    ‘(d) WAIVER- The Secretary may waive the matching requirement described in paragraph (5)(B) for any eligible partnership that demonstrates to the satisfaction of the Secretary a unique hardship that prevents compliance with such matching requirement.

‘SEC. 105. PEER REVIEW.

    ‘The Secretary shall designate a peer review panel to review applications submitted under this part and make recommendations for funding to the Secretary. In selecting the peer review panel, the Secretary shall consult with officials of the other Federal agencies and with non-Federal organizations to ensure that the panel membership shall be geographically balanced and be composed of representatives from public and private institutions of elementary, secondary, and higher education, labor, business, and State and local governments, who have expertise in community service or in education.

‘SEC. 106. AUTHORIZATION OF APPROPRIATIONS.

    ‘There are authorized to be appropriated $20,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years to carry out this part.

‘PART B--ARTICULATION AGREEMENTS

‘SEC. 121. FINDINGS AND PURPOSE.

    ‘(a) FINDINGS- The Congress finds that--

      ‘(1) because more than one-half of all first-time first-year students attending postsecondary institutions attend community or junior colleges, and because almost one-half of minority students enrolled in higher education attend 2-year institutions, community and junior colleges represent a substantial and an important educational resource;

      ‘(2) declining participation rates for low-income students and minorities at institutions of higher education is of growing concern to the higher education community and Congress; and

      ‘(3) there is growing awareness of the need to assist low-income, minority and other nontraditional students in bridging the gap between 2-year to 4-year institutions, enabling such students to reach their individual potential, as well as contribute to the larger society.

    ‘(b) PURPOSE- The purpose of this part is to improve the educational opportunities of this Nation’s postsecondary students by creating comprehensive articulation agreements and planning between partnerships of 2-year and 4-year institutions of higher education.

‘SEC. 122. AUTHORIZATION OF GRANTS.

    ‘(a) ASSISTANCE FOR ARTICULATION PARTNERSHIPS- From amounts appropriated for this part, the Secretary shall make grants to States to enable States to make awards, either on a competitive basis or on the basis of a formula determined by the State, to articulation partnerships between--

      ‘(1) a qualified 2-year institution; and

      ‘(2) a qualified 4-year institution.

    ‘(b) QUALIFIED INSTITUTIONS- For purposes of this part--

      ‘(1) a qualified 2-year institution is an institution of higher education (as determined under section 481(a)) that is an eligible institution under section 435(a) and that--

        ‘(A) is a nonprofit institution that offers a 2-year associate degree or a 2-year certificate program; or

        ‘(B) is a proprietary institution that offers a 2-year associate degree program; and

      ‘(2) a qualified 4-year institution is an institution of higher education (as determined under section 481(a)) that is an eligible institution under section 435(a) and that offers a baccalaureate degree program.

    ‘(c) ALLOCATION AND STATE GRANTS-

      ‘(1) FORMULA ALLOCATION- In any fiscal year for which the amount made available under section 129 to carry out the provisions of this part equals or exceeds $50,000,000, the Secretary shall allot an amount that bears the same ratio to the amount appropriated under section 129 for such fiscal year as the total amount received under title IV by students attending institutions of higher education in that State for such fiscal year bears to the total amount received under title IV by all students for such fiscal year, based on the most recent year for which such data are available.

      ‘(2) COMPETITIVE GRANTS- In any fiscal year for which the amount made available under section 129 to carry out the provisions of this part do not equal or exceed $50,000,000, the Secretary is authorized, in accordance with the provisions of this part, to make grants to States to carry out articulation agreements under sections 124 and 125.

‘SEC. 123. STATE APPLICATION.

    ‘Each State that desires to receive a grant under this part shall submit an application to the Secretary in such form and containing or accompanied by such information as the Secretary may require. Such application shall--

      ‘(1) after consultation with the State agencies responsible for supervision of community colleges, technical institutes, or other 2-year postsecondary institutions, designate a sole State agency as the State agency responsible for the administration and supervision of activities carried out with assistance under this part;

      ‘(2) describe how funds will be allocated in a manner consistent with section 124;

      ‘(3) contain assurances that the State will comply with the requirements of this part;

      ‘(4) provide for an annual submission of data concerning the use of funds and students served with assistance under this part; and

      ‘(5) provide that the State will keep such records and provide such information to the Secretary as may be required for purposes of financial audits and program evaluation.

‘SEC. 124. LOCAL APPLICATIONS.

    ‘Any articulation partnership comprised of qualified institutions that desires to receive a grant from a State under this part shall submit an application to the State in such form and containing or accompanied by such information as the State may require and shall--

      ‘(1) include in the articulation agreement--

        ‘(A) assurances that academic credit earned at the qualified institution described in section 122(b)(1) will be transferable to the qualified institution or institutions as described in section 122(b)(2);

        ‘(B) development of articulation agreement programs and services appropriate to the needs of the partnership participants;

        ‘(C) activities that facilitate the development of programs and services appropriate to the needs of the students attending courses covered by the articulation agreement;

        ‘(D) inservice training for faculty designed to implement effective articulation agreements;

        ‘(E) counseling services; and

        ‘(F) information concerning programs contained in the articulation agreement;

      ‘(2) include assurances that the articulation partnership has the qualified personnel required--

        ‘(A) to develop, administer, and implement the program required by this part; and

        ‘(B) to provide special training necessary to prepare staff for the program; and

      ‘(3) include a plan of operation for the program which includes a description of--

        ‘(A) the program goals;

        ‘(B) the uses of funds as required by paragraph (2);

        ‘(C) the activities and services which will be provided under the program (including training and preparation of staff); and

        ‘(D) the subject areas to be included in the articulation agreement.

‘SEC. 125. ARTICULATION AGREEMENT.

    ‘(a) LENGTH OF GRANT- Each recipient of a grant from a State shall use the amounts provided under the grant to develop and operate articulation agreements for 6 years.

    ‘(b) USE OF FUNDS- Funds provided to an articulation partnership under this part may be used--

      ‘(1) to perform any activity or program required by section 124;

      ‘(2) as part of the program’s planning activities, to acquire technical assistance from Federal, State, or local entities that have successfully designed, established, and operated articulation programs;

      ‘(3) to provide workshops with students and teachers, counseling for students to continue their education to a bachelors degree, orientation visits at institutions participating in the partnerships;

      ‘(4) to develop agreements with local educational agencies for vocational course equivalency approval procedures for purposes of satisfying entrance requirements to qualified institutions; and

      ‘(5) to provide outreach to potential students.

‘SEC. 126. STATE ADMINISTRATION.

    ‘A State may reserve not more than 3 percent of the amounts available under this part for any fiscal year for State administrative costs including monitoring and technical assistance.

‘SEC. 127. PRIORITY.

    ‘The State shall give priority to grant applications for programs which--

      ‘(1) encourage teacher education;

      ‘(2) have, as one of the partners participating in an articulation agreement, an entity participating in an articulation agreement described in section 344(b)(1) of the Carl D. Perkins Vocational and Applied Technology Education Act;

      ‘(3) contribute their own institutional resources;

      ‘(4) are not subject to a default reduction agreement under section 428F;

      ‘(5) encourage technology education; or

      ‘(6) encourage articulation in subject areas of national importance as determined by the Secretary.

‘SEC. 128. REPORTS.

    ‘(a) STATE REPORTS- Each State shall submit to the Secretary an annual report on the operation of the program under this part in such State during the preceding year. Such report shall include such information as the Secretary may require by regulation.

    ‘(b) EVALUATION AND DISSEMINATION-

      ‘(1) EVALUATION- The Secretary shall, on the basis of the reports submitted under subsection (a), evaluate all or a sample of the programs conducted under this part for the purposes of--

        ‘(A) determining the success or failure of such programs in increasing access and entry of students from 2-year institutions to 4-year institutions; and

        ‘(B) identifying the most successful programs under this part and the causes for such success.

      ‘(2) DISSEMINATION- The Secretary shall, not later than January 31, 1996, submit a report to the Congress on the results of the evaluation described in paragraph (1). The Secretary shall disseminate the findings made pursuant to subparagraph (B) through appropriate agencies and organizations.

      ‘(3) RESERVATION- The Secretary may reserve up to 3 percent of the amount appropriated under section 129 to carry out this subsection.

‘SEC. 129. AUTHORIZATION OF APPROPRIATIONS.

    ‘There are authorized to be appropriated to carry out this part, $25,000,000 for fiscal year 1993, and such sums as may be necessary for each of the 4 succeeding fiscal years.

‘PART C--ACCESS AND EQUITY TO EDUCATION FOR ALL AMERICANS THROUGH TELECOMMUNICATIONS

‘SEC. 131. PROGRAM ESTABLISHED; AUTHORIZATION OF APPROPRIATIONS; ELIGIBILITY.

    ‘(a) GENERAL AUTHORITY- The Secretary is authorized to make grants to eligible partnerships to enable such partnerships to pay the Federal share of the cost of the activities described in the application submitted pursuant to section 132.

    ‘(b) AUTHORIZATIONS OF APPROPRIATIONS-

      ‘(1) IN GENERAL- There are authorized to be appropriated to carry out this part $10,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years.

      ‘(2) AVAILABILITY- Funds appropriated pursuant to the authority of paragraph (1) shall remain available until expended.

    ‘(c) ELIGIBLE PARTNERSHIP- For the purpose of this part the term ‘eligible partnership’ means a partnership which--

      ‘(1) shall consist of--

        ‘(A) a public broadcasting entity or a consortium thereof; and

        ‘(B) an institution of higher education or a consortium thereof; and

      ‘(2) may also include a State, a unit of local government, or a public or private nonprofit organization.

    ‘(d) FEDERAL SHARE- The Federal share shall be 50 percent.

‘SEC. 132. APPLICATION.

    ‘(a) IN GENERAL- Each eligible partnership desiring to receive a grant under this part shall submit an application to the Secretary at such time, in such manner and containing or accompanied by such information as the Secretary may reasonably require.

    ‘(b) CONTENTS- Each application submitted pursuant to paragraph (1) shall--

      ‘(1) describe the education telecommunications activities or services to be assisted;

      ‘(2) describe the administrative and management structure supporting such activities or services;

      ‘(3) provide assurances that the financial interests of the United States in the telecommunications equipment, software and other facilities shall be protected for the useful life of such equipment, software or facilities;

      ‘(4) describe the manner in which nontraditional postsecondary education students will benefit from the activities and services supported;

      ‘(5) describe the manner in which special services, including captioned films, television, descriptive video and education media for individuals with disabilities, shall be supported; and

      ‘(6) provide assurances that the eligible partnership will provide the non-Federal share of assistance under this part.

    ‘(c) APPROVAL OF APPLICATIONS-

      ‘(1) IN GENERAL- The Secretary shall, in approving applications under this part, give priority to applications which describe programs that--

        ‘(A) include support for services to make captioned films, descriptive video and educational media available to individuals with disabilities who otherwise lack access to such educational materials;

        ‘(B) will provide, directly or indirectly, activities or services to a significant number of postsecondary institutions;

        ‘(C) improve access to accredited telecommunications coursework for individuals with disabilities otherwise denied such access;

        ‘(D) will be available in a multistate area;

        ‘(E) include evidence of significant support for the program from the business community; or

        ‘(F) provide matching funds, in an amount which exceeds the required non-Federal share.

      ‘(2) EQUITABLE GEOGRAPHIC DISTRIBUTION OF ASSISTANCE- In approving applications under this part the Secretary shall ensure the equitable geographic distribution of grants awarded under this part.

‘SEC. 133. AUTHORIZED ACTIVITIES.

    ‘Grants awarded under this part shall be used for one or more of the following activities:

      ‘(1) The acquisition of site equipment to provide the technical ability to receive diverse education services at schools, campuses, and work site locations.

      ‘(2) Satellite, fiber optic and other distribution systems, and for local broadcast or other local distribution capability.

      ‘(3) Pre-service or in-service education and training for kindergarten through 12th grade teachers through interactive television conferencing.

      ‘(4) Preparation of telecommunications programs and software that support national, regional or statewide efforts to provide teaching and learning materials not otherwise available for local use.

      ‘(5) A loan service of captioned films, descriptive video and educational media in order to make such materials available, in accordance with regulations issued by the Secretary, in the United States for nonprofit purposes to individuals with disabilities, parents of individuals with disabilities, and other individuals directly involved in activities for the advancement of individuals with disabilities, including addressing problems of illiteracy among individuals with disabilities.

‘SEC. 134. DEFINITION.

    ‘For the purpose of this part, the term ‘public broadcasting entity’ has the same meaning given to such term by section 397(11) of the Communications Act of 1934.

‘SEC. 135. REPORT.

    ‘(a) IN GENERAL- Each recipient of a grant under this part shall submit a report to the Secretary not later than 30 days after the conclusion of the grant period.

    ‘(b) CONTENTS- Each report described in subsection (a) shall include--

      ‘(1) a description of activities and services assisted under this part;

      ‘(2) a description of the population served by the program; and

      ‘(3) an assessment of the ability of private sector entities participating in the eligible partnership to continue the support of the activities and services in the absence of Federal funding.

    ‘(c) DISSEMINATION- The Secretary shall select reports received under this subsection that are appropriate for dissemination to the education community and shall make such reports available through the National Diffusion Network.’.

TITLE II--ACADEMIC LIBRARY AND INFORMATION TECHNOLOGY ENHANCEMENT

SEC. 201. REVISION OF TITLE II.

    Title II of the Act (20 U.S.C. 1021 et seq.) is amended to read as follows:

‘TITLE II--ACADEMIC LIBRARIES AND INFORMATION SERVICES

‘SEC. 201. PURPOSE; AUTHORIZATION.

    ‘(a) PURPOSE- The Secretary shall carry out a program to assist--

      ‘(1) college and university libraries in acquiring technological equipment and in conducting research in information technology in accordance with part A;

      ‘(2) in the education and training of persons in library and information science and to encourage research and development relating to improvement of libraries (including the promotion of economical and effective information delivery, cooperative efforts, and developmental projects) in accordance with part B;

      ‘(3) the Nation’s major research libraries, in maintaining and strengthening their collections, and in making information resources available to other libraries whose users have need for research materials in accordance with part C; and

      ‘(4) historically black colleges and universities and other minority-serving institutions with programs in library and information sciences to train and educate African-Americans and other underrepresented racial, national origin, and ethnic minorities in such programs in accordance with part D.

    ‘(b) AUTHORIZATION OF APPROPRIATIONS-

      ‘(1) PART A- There are authorized to be appropriated to carry out part A $20,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years.

      ‘(2) PART B- There are authorized to be appropriated to carry out part B $10,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years.

      ‘(3) PART C- There are authorized to be appropriated to carry out part C $20,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years.

      ‘(4) PART D- There are authorized to be appropriated to carry out part D $15,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years.

‘SEC. 202. NOTIFICATION OF STATE AGENCY.

    ‘Each institution of higher education which receives a grant under this title shall annually inform the State agency designated pursuant to section 1203 of its activities under this title.

‘SEC. 203. LIBRARY EXPERTS.

    ‘The Secretary shall make every effort to ensure that programs under this title are administered by appropriate library experts.

‘PART A--COLLEGE LIBRARY TECHNOLOGY AND COOPERATION GRANTS

‘SEC. 211. COLLEGE LIBRARY TECHNOLOGY AND COOPERATION GRANTS.

    ‘(a) GRANTS AUTHORIZED- The Secretary is authorized to make grants for technological equipment, networking, and other special purposes to--

      ‘(1) institutions of higher education which demonstrate a need for special assistance for the planning, development, acquisition, maintenance, or upgrading of technological equipment necessary to organize, access or utilize material in electronic formats and to participate in networks for the accessing and sharing of library and information resources;

      ‘(2) combinations of institutions of higher education which demonstrate a need for special assistance in establishing and strengthening joint-use library facilities, resources, or equipment for the accessing and sharing of library and information resources;

      ‘(3) other public and private nonprofit organizations which provide library and information services to institutions of higher education on a formal, cooperative basis for the purpose of establishing, developing, or expanding programs or projects that improve the services provided by such organizations to institutions of higher education; and

      ‘(4) institutions of higher education conducting research or demonstration projects that improve information services to meet special national or regional needs by utilizing technology to enhance library or information services such as through the National Research and Education Network.

    ‘(b) AWARDS REQUIREMENTS- From funds appropriated for this part, the Secretary shall make competitive awards to institutions, combinations of institutions, or organizations in each of the categories described in paragraphs (1) through (4) of subsection (a).

    ‘(c) AMOUNT-

      ‘(1) IN GENERAL- The Secretary shall award grants under this section in an amount which is not less than $25,000.

      ‘(2) SPECIAL RULE- The Secretary shall award grants pursuant to paragraph (1) of subsection (a) in an amount which is not more than $50,000 for each institution of higher education.

    ‘(d) PRIORITY- In awarding grants pursuant to paragraph (1) of subsection (a), the Secretary shall give priority to institutions of higher education seeking assistance for projects which assist developing institutions of higher education in linking one or more institutions of higher education to resource sharing networks.

    ‘(e) DURATION- The Secretary shall award grants under this section for a period not to exceed 3 years.

    ‘(f) APPLICATION-

      ‘(1) IN GENERAL- Each institution of higher education or combination thereof desiring a grant under this section shall submit an application to the Secretary at such time, in such manner and accompanied by such information as the Secretary may reasonably require.

      ‘(2) CONTENT- Each application submitted pursuant to paragraph (1) shall--

        ‘(A) describe the activities and services for which assistance is sought; and

        ‘(B) contain assurances that the applicant will expend during the period for which the grant is sought (from funds other than funds received under this title), for the same purpose as such grant, an amount from such other sources equal to not less than one-third of such grant.

      ‘(3) CRITERIA- The Secretary shall prescribe by regulation criteria for the approval of applications submitted under this section.

‘PART B--LIBRARY EDUCATION, RESEARCH, AND DEVELOPMENT

‘SEC. 221. GRANTS AUTHORIZED.

    ‘(a) GRANTS- From the amounts appropriated for this part for any fiscal year, the Secretary shall make grants in accordance with sections 222 and 223.

    ‘(b) RESERVATION- Of the amount appropriated for this part for any fiscal year, the Secretary shall make available two-thirds of such amount for the purpose of section 222 and one-third of such amount for the purpose of section 223.

‘SEC. 222. LIBRARY EDUCATION AND HUMAN RESOURCE DEVELOPMENT.

    ‘(a) PURPOSE AND GRANT CRITERIA- The Secretary is authorized to make grants to, and enter into contracts with, institutions of higher education and library organizations or agencies to assist such institutions, library organizations, or agencies in educating and training persons in library and information science, particularly in areas of critical needs, such as recruitment and retention of minorities. Such grants or contracts may be used by such institutions, library organizations, or agencies to--

      ‘(1) assist in covering the cost of courses of study or staff development (including short term or regular session institutes),

      ‘(2) establish and maintain fellowships or traineeships with stipends (including allowances for travel, subsistence, and other expenses) for fellows who demonstrate need and who are working toward a graduate degree (and their dependents), not in excess of such maximum amounts as may be determined by the Secretary, and

      ‘(3) establish, develop, or expand programs of library and information science, including new techniques of information transfer and communication technology.

    ‘(b) ADDITIONAL REQUIREMENTS- Not less than 50 percent of the grants made under this section shall be for the purpose of establishing and maintaining fellowships or traineeships under subsection (a)(2).

‘SEC. 223. RESEARCH AND DEMONSTRATION.

    ‘The Secretary is authorized to make grants to, and enter into contracts with, institutions of higher education and other public and private agencies, institutions, and organizations for research and development projects related to the improvement of libraries, education in library and information science, the enhancement of library services through effective and efficient use of new technologies, and for the dissemination of information derived from such projects.

‘SEC. 224. CONSULTATION REQUIREMENTS.

    ‘The Secretary shall consult with the appropriate library and information science professional bodies in the determination of critical needs under section 222 and in the determination of priorities under section 223.

‘PART C--IMPROVING ACCESS TO RESEARCH LIBRARY RESOURCES

‘SEC. 231. RESEARCH LIBRARY RESOURCES.

    ‘(a) GRANTS-

      ‘(1) GENERAL AUTHORITY- From the amount appropriated for this part, the Secretary shall make grants to institutions with major research libraries.

      ‘(2) MAJOR RESEARCH LIBRARY- For the purposes of this part, the term ‘major research library’ means a public or private nonprofit institution (including the library resources of an institution of higher education), an independent research library, or a State or other public library, having a library collection which is available to qualified users and which--

        ‘(A) makes a significant contribution to higher education and research;

        ‘(B) is broadly based and is recognized as having national or international significance for scholarly research;

        ‘(C) is of a unique nature, and contains material not widely available; and

        ‘(D) is in substantial demand by researchers and scholars not connected with that institution.

    ‘(b) ELIGIBILITY- In determining eligibility for assistance under this part, the Secretary shall permit institutions that do not otherwise qualify to provide additional information or documents to demonstrate the national or international significance for scholarly research of the particular collection described in the grant proposal.

‘SEC. 232. GEOGRAPHICAL DISTRIBUTION OF GRANTS.

    ‘In making grants under this part, the Secretary shall endeavor to achieve broad and equitable geographical distribution throughout the Nation.

‘PART D--STRENGTHENING LIBRARY AND INFORMATION SCIENCE PROGRAMS AND LIBRARIES IN HISTORICALLY BLACK COLLEGES AND UNIVERSITIES AND OTHER MINORITY-SERVING INSTITUTIONS

‘SEC. 241. STRENGTHENING LIBRARY AND INFORMATION SCIENCE PROGRAMS AND LIBRARIES IN HISTORICALLY BLACK COLLEGES AND UNIVERSITIES AND OTHER MINORITY-SERVING INSTITUTIONS.

    ‘(a) ELIGIBLE INSTITUTIONS- For the purposes of this section, the term ‘eligible institution’ means--

      ‘(1) an historically black college or university; or

      ‘(2) an institution of higher education which--

        ‘(A) serves a large number or high percentage of minority students; and

        ‘(B) enrolls and graduates minority students in library and information service programs.

    ‘(b) GENERAL AUTHORITY-

      ‘(1) AUTHORITY OF SECRETARY- The Secretary is authorized to make grants to, and enter into contracts with--

        ‘(A) eligible institutions to assist such institutions in strengthening their library and information science programs and library resources; and

        ‘(B) eligible institutions, and library organizations or agencies which have nationally approved programs in library and information science, to assist such institutions and organizations in the education and training of African Americans and other underrepresented racial, national origin, and ethnic minorities, particularly in areas of critical needs of library and information science.

      ‘(2) USE OF FUNDS- Such grants or contracts may be used by such institutions, library organizations, or agencies to--

        ‘(A) establish, develop, or strengthen libraries and library and information science programs, including new techniques of information transfer and communication technology;

        ‘(B) assist in covering the cost of courses of study or staff development (including short-term or regular session institutes); and

        ‘(C) establish and maintain fellowships or traineeships with stipends (including allowances for travel, subsistence, and other expenses) for fellows who demonstrate need and who are working toward a graduate degree (and their dependents), not in excess of such maximum amounts as may be determined by the Secretary.

    ‘(c) TRAINEESHIPS- Not less than 50 percent of the grants made under this section shall be for the purpose of establishing and maintaining fellowships or traineeships under subsection (a)(2).

    ‘(d) FUNDING PROHIBITION- Notwithstanding any other provision of law, no funds are authorized to be appropriated to carry out this part for any fiscal year unless the amount appropriated to carry out each of parts A, B, and C for such fiscal year equals or exceeds the amount appropriated for such parts, respectively, for fiscal year 1992.’.

TITLE III--INSTITUTIONAL AID

SEC. 301. FINDINGS.

    Section 301(a) of the Act (20 U.S.C. 1051(a)) is amended--

      (1) by amending paragraph (1) to read as follows:

      ‘(1) there are a significant number of institutions of higher education serving high percentages of minority students and students from low-income backgrounds, that face problems that threaten their ability to survive;’.

      (2) in paragraph (2), by striking ‘recruitment activities,’; and

      (3) by amending paragraph (5) to read as follows:

      ‘(5) providing assistance to eligible institutions will enhance the role of such institutions in providing access and quality education to low-income and minority students;’.

SEC. 302. AMENDMENTS TO PART A.

    (a) ELIGIBLE INSTITUTIONS- Section 312(b) of the Act (20 U.S.C. 1058(b)) is amended--

      (1) in paragraph (1)--

        (A) by inserting ‘and’ after the semicolon at the end of subparagraph (D);

        (B) by striking subparagraph (E);

        (C) by redesignating subparagraph (F) as subparagraph (E); and

        (D) by inserting ‘and’ after the semicolon at the end of subparagraph (E) (as redesignated in subparagraph (C));

      (2) by striking the semicolon at the end of paragraph (2) and inserting a period; and

      (3) by striking paragraphs (3), (4), and (5).

    (b) ENROLLMENT OF NEEDY STUDENTS- Section 312(c)(2) of the Act is amended by striking ‘second preceding fiscal year’ and inserting ‘second fiscal year preceding the fiscal year for which the determination is made’.

    (c) AWARD LIMITATIONS- Subsections (a) and (b) of section 313 of the Act (20 U.S.C. 1059 (a) and (b)) are amended to read as follows:

    ‘(a) AWARD PERIOD- The Secretary may award a grant to an eligible institution under this part for 5 years.

    ‘(b) LIMITATIONS- In awarding grants under this part the Secretary shall give priority to applicants who are not already receiving a grant under this part.’.

    (d) PROGRAM GOALS AND HISPANIC-SERVING INSTITUTIONS PROGRAM-

      (1) IN GENERAL- Part A of title III of the Act (20 U.S.C. 1057 et seq.) is further amended by inserting after section 314 the following new sections:

‘SEC. 315. GOALS FOR FINANCIAL MANAGEMENT AND ACADEMIC PROGRAM.

    ‘(a) GOALS- Any application for a grant under this part shall describe measurable goals for the institution’s financial management and academic programs, and include a plan of how the applicant intends to achieve those goals.

    ‘(b) CONTINUATION REQUIREMENTS- Any continuation application shall demonstrate the progress made toward achievement of the goals described pursuant to subsection (a).

‘SEC. 316. HISPANIC-SERVING INSTITUTIONS.

    ‘(a) PROGRAM AUTHORIZED- The Secretary shall provide grants and related assistance to Hispanic-serving institutions to enable such institutions to improve and expand their capacity to serve Hispanic and other low-income students.

    ‘(b) DEFINITIONS- For the purpose of this section--

      ‘(1) the term ‘Hispanic-serving institution’ means an institution of higher education which--

        ‘(A) is an eligible institution under section 312(b);

        ‘(B) at the time of application, has an enrollment of undergraduate full-time equivalent students that is at least 25 percent Hispanic students;

        ‘(C) provides assurances that--

          ‘(i) not less than 50 percent of its Hispanic students are low-income individuals who are first generation college students; and

          ‘(ii) another 25 percent of its Hispanic students are either low-income individuals or first generation college students;

      ‘(2) the term ‘first generation college student’ means--

        ‘(A) an individual both of whose parents did not complete a baccalaureate degree; or

        ‘(B) in the case of any individual who regularly resided with and received support from only one parent, an individual whose only such parent did not complete a baccalaureate degree; and

      ‘(3) the term ‘low-income individual’ means an individual from a family whose taxable income for the preceding year did not exceed 150 percent of an amount equal to the poverty level determined by using criteria of poverty established by the Bureau of the Census.

    ‘(c) AUTHORIZED ACTIVITIES-

      ‘(1) TYPES OF ACTIVITIES AUTHORIZED- Grants awarded under this section shall be used by Hispanic-serving institutions of higher education to assist such institutions to plan, develop, undertake, and carry out programs. Such programs may include--

        ‘(A) purchase, rental, or lease of scientific or laboratory equipment for educational purposes, including instructional and research purposes;

        ‘(B) renovation and improvement in classroom, library, laboratory, and other instructional facilities;

        ‘(C) support of faculty exchanges, and faculty development and faculty fellowships to assist in attaining advanced degrees in their field of instruction;

        ‘(D) curriculum development and academic instruction;

        ‘(E) purchase of library books, periodicals, microfilm, and other educational materials;

        ‘(F) funds and administrative management, and acquisition of equipment for use in strengthening funds management;

        ‘(G) joint use of facilities such as laboratories and libraries; and

        ‘(H) academic tutoring and counseling programs and student support services.

    ‘(d) APPLICATION PROCESS-

      ‘(1) INSTITUTIONAL ELIGIBILITY- Each Hispanic-serving institution desiring to receive assistance under this Act shall submit to the Secretary such enrollment data as may be necessary to demonstrate that it is a Hispanic-serving institution as defined in paragraph (1) of subsection (b), along with such other information and data as the Secretary may by regulation require.

      ‘(2) APPLICATIONS- Any institution which is determined by the Secretary to be a Hispanic-serving institution (on the basis of the information and data submitted under paragraph (1)) may submit an application for assistance under this section to the Secretary. Such application shall include--

        ‘(A) a 5-year plan for improving the assistance provided by the Hispanic-serving institution to Hispanic and other low-income students; and

        ‘(B) such other information and assurance as the Secretary may require.

      ‘(3) PRIORITY- The Secretary shall give priority to applications that contain satisfactory evidence that such institution has entered into or will enter into a collaborative arrangement with at least one local educational agency to provide such agency with assistance (from funds other than funds provided under this part) in reducing Hispanic dropout rates, improving Hispanic rates of academic achievement, and increasing the rates at which Hispanic high school graduates enroll in higher education.

    ‘(e) SPECIAL RULE- For the purposes of this section, no Hispanic-serving college or university which is eligible for and receives funds under this section may concurrently receive other funds under this part or part B.’.

SEC. 303. AMENDMENTS TO PART B.

    (a) USES OF FUNDS- Section 323(a) of the Act (20 U.S.C. 1062(a)) is amended--

      (1) in paragraph (2), by inserting ‘, including purchase or rental of telecommunications technology equipment or services’ after ‘facilities’;

      (2) in paragraph (5), by inserting ‘, including telecommunications program materials’ after ‘materials’; and

      (3) by inserting at the end thereof the following new paragraphs:

      ‘(9) Establishing or improving a development office to strengthen or improve contributions from alumni and the private sector.

      ‘(10) Establishing or enhancing a program of teacher education designed to qualify students to teach in a public elementary or secondary school in the State that shall include, as part of such program, preparation for teacher certification.

      ‘(11) Establishing community outreach programs which will encourage elementary and secondary students to develop the academic skills and the interest to pursue postsecondary education.

      ‘(12) Other activities proposed in the application submitted pursuant to section 325 that--

        ‘(A) contribute to carrying out the purposes of this part; and

        ‘(B) are approved by the Secretary as part of the review and acceptance of such application.’.

    (b) LIMITATIONS- Section 323(b) of the Act (20 U.S.C. 1062(b)) is amended by inserting at the end thereof the following new paragraph:

      ‘(3) The Secretary shall not award a grant under this part for telecommunications technology equipment, facilities or services, if such equipment, facilities or services are available pursuant to section 396(k) of the Communications Act of 1934.’.

    (c) ALLOTMENT- Section 324(c) of the Act (20 U.S.C. 1063(c)) is amended by inserting ‘, within 5 years of graduation with a baccalaureate degree,’ after ‘who are admitted to and in attendance at’.

    (d) MINIMUM ALLOTMENTS- Section 324(d) of the Act is amended by striking ‘$350,000’ and inserting ‘$500,000’.

    (e) GOALS FOR FINANCIAL MANAGEMENT AND ACADEMIC PROGRAMS- Section 325 of the Act (20 U.S.C. 1063a) is amended by adding at the end the following new subsection:

    ‘(c) GOALS FOR FINANCIAL MANAGEMENT AND ACADEMIC PROGRAMS- Any application for a grant under this part shall describe measurable goals for the institution’s financial management and academic programs and include a plan of how the applicant intends to achieve those goals.’.

    (f) Professional or Graduate Institutions.

      (1) ELIGIBLE INSTITUTIONS- Section 326(e) of the Act (20 U.S.C. 1063b(e)) is amended to read as follows:

    ‘(e) ELIGIBILITY-

      ‘(1) IN GENERAL- Independent professional or graduate institutions and programs eligible for grants under subsection (a) include--

        ‘(A) Morehouse School of Medicine;

        ‘(B) Meharry Medical School;

        ‘(C) Charles R. Drew Postgraduate Medical School;

        ‘(D) Clark-Atlanta University;

        ‘(E) Tuskegee University School of Veterinary Medicine;

        ‘(F) Xavier University School of Pharmacy;

        ‘(G) Southern University School of Law;

        ‘(H) Texas Southern University School of Law and School of Pharmacy;

        ‘(I) Florida A&M University School of Pharmaceutical Sciences;

        ‘(J) North Carolina Central University School of Law;

        ‘(K) Morgan State University qualified graduate program;

        ‘(L) Hampton University qualified graduate program;

        ‘(M) Alabama A&M qualified graduate program;

        ‘(N) North Carolina A&T State University qualified graduate program;

        ‘(O) University of Maryland Eastern Shore qualified graduate program; and

        ‘(P) Jackson State qualified graduate program.

      ‘(2) QUALIFIED GRADUATE PROGRAM- For the purposes of this section, the term ‘qualified graduate program’ means a graduate or professional program that--

        ‘(A) provides a program of instruction in the physical or natural sciences, engineering, mathematics, or other scientific discipline in which African Americans are underrepresented;

        ‘(B) has been accredited by a nationally recognized accrediting agency or association or has been approved by a nationally recognized approving agency; and

        ‘(C) has students enrolled in such program at the time of application for a grant under this section.

      ‘(3) SPECIAL RULE- Graduate institutions that were awarded grants under this section prior to October 1, 1992 shall continue to receive such grant payments, regardless of the eligibility of the graduate institutions described in subparagraphs (F) through (P), until such grant period has expired or September 30, 1993, whichever is later.

      ‘(4) ONE GRANT PER INSTITUTION- The Secretary shall not award more than 1 grant under this section in any fiscal year to any institution of higher education or university system.’.

    (g) FUNDING RULES FOR GRADUATE AND PROFESSIONAL INSTITUTIONS- Section 326 of the Act is further amended by adding at the end the following new subsection:

    ‘(f) FUNDING RULE- Of the amount appropriated to carry out this section for any fiscal year--

      ‘(1) the first $12,000,000 (or any lesser amount appropriated) shall be available only for the purposes of making grants to institutions or programs described in subparagraphs (A) through (E) of subsection (e)(1);

      ‘(2) any amount appropriated in excess of $12,000,000 shall be available--

        ‘(A) for the purposes of making grants, in equal amounts not to exceed $500,000, to institutions or programs described in subparagraphs (F) through (P) of subsection (e)(1); and

        ‘(B) secondly for the purposes of making grants to institutions or programs described in subparagraphs (A) through (P) of subsection (e)(1).’.

SEC. 304. AMENDMENTS TO PART C.

    (a) PROGRAM CONSOLIDATION- Part C of title III of the Act (20 U.S.C. 1064 et seq.) is amended--

      (1) by amending the heading of such part to read as follows:

‘Part C--Endowment Challenge Grants for Institutions Eligible for Assistance Under Part A or Part B’;

      (2) by striking section 331; and

      (3) by redesignating section 332 as section 331.

    (b) ENDOWMENT CHALLENGE GRANTS- Section 331 of the Act (20 U.S.C. 1065) (as redesignated in subsection (a)(3)) is amended--

      (1) in subsection (a)--

        (A) in paragraph (1), by striking ‘of higher education’; and

        (B) in paragraph (2), by inserting at the end thereof the following new subparagraph:

        ‘(D)(i) The term ‘eligible institution’ means an institution that is an--

          ‘(I) eligible institution under part A or would be considered to be such an institution if section 312(b)(1)(C) referred to a postgraduate degree rather than a bachelor’s degree;

          ‘(II) institution eligible for assistance under part B or would be considered to be such an institution if section 324 referred to a postgraduate degree rather than a baccalaureate degree; or

          ‘(III) institution of higher education that makes a substantial contribution to postgraduate medical educational opportunities for minorities and the economically disadvantaged.

        ‘(ii) The Secretary may waive the requirements of subclauses (I) and (II) of clause (i) with respect to a postgraduate degree in the case of any institution otherwise eligible under clause (i) for an endowment challenge grant upon determining that the institution makes a substantial contribution to medical education opportunities for minorities and the economically disadvantaged.’;

      (2) in subsection (b)(1)--

        (A) by inserting ‘endowment’ before ‘challenge grants’; and

        (B) by striking ‘of higher education’; and

      (3) in subsection (b)(2), by amending subparagraphs (B) and (C) to read as follows:

        ‘(B) The Secretary may make a grant under this part to an eligible institution under the following circumstances:

          ‘(i) In any fiscal year in which the amount appropriated to carry out this part is less than $15,000,000, the institution--

            ‘(I) may apply for a grant in an amount not exceeding $500,000; and

            ‘(II) shall have deposited in its endowment fund established under this section an amount which is equal to one-half of the amount of such grant.

          ‘(ii) In any fiscal year in which the amount appropriated to carry out this part is equal to or greater than $15,000,000 but less than $25,000,000, the institution--

            ‘(I) may apply for a grant in an amount not exceeding $1,000,000; and

            ‘(II) shall have deposited in its endowment fund established under this section an amount which is equal to one-half of the amount of such grant.

          ‘(iii) In any fiscal year in which the amount appropriated to carry out this part is equal to or greater than $25,000,000, the institution may apply for a grant in an amount not to exceed $1,500,000 if such institution has deposited in its endowment fund established under this section an amount which is equal to one-half of the amount of such grant.

        ‘(C)(i) Except as provided in clause (ii), if the appropriation for this part in a fiscal year is $20,000,000 or less, an eligible institution of higher education that is awarded a grant under subsection (b)(2)(B) of this section shall not be eligible to reapply for a grant under subsection (b)(2)(B) of this section during the 10 years immediately following the period that such institution received such a grant.

        ‘(ii) If the appropriation for this part in any fiscal year is greater than $20,000,000, an eligible institution of higher education that is awarded a grant under subsection (b)(2)(B) of this section shall not be eligible to reapply for a grant under subsection (b)(2)(B) of this section during the 5 years immediately following the period that such institution received such a grant. This provision shall apply for the fiscal year in which the appropriation is greater than $20,000,000 and subsequent fiscal years, regardless of the appropriation in those fiscal years.’;

      (4) in subsection (b)(4)(A), by striking ‘section 331(a)(1)’ and inserting ‘subsection (a)(2)(D) of this section’;

      (5) in subsection (b)(4)(B), by striking ‘a challenge grant under this section’ and inserting ‘an endowment challenge grant under this section’;

      (6) by amending paragraph (5) of subsection (b) to read as follows:

      ‘(5) an endowment challenge grant awarded under this section to an eligible institution shall be in an amount which is not less than $50,000 in any fiscal year.’.

      (7) by amending paragraph (1) of subsection (f) to read as follows:

      ‘(1) give priority to an applicant that is receiving assistance under part A or part B or has received a grant under part A or part B of this title within the 5 fiscal years preceding the fiscal year in which the applicant is applying for a grant under this section;’; and

      (8) in subsection (g), by inserting before the period at the end of the first sentence the following: ‘, including a description of the long- and short-term plans for raising and using the funds under this part’.

SEC. 305. AMENDMENTS TO PART D.

    (a) CONTENTS OF APPLICATIONS- Section 351(b)(7) of the Act (20 U.S.C. 1066(b)(7)) is amended--

      (1) by striking subparagraph (D); and

      (2) by redesignating subparagraphs (E) and (F) as subparagraphs (D) and (E), respectively.

    (b) WAIVER AUTHORITY- Section 352(a) of the Act (20 U.S.C. 1067(a)) is amended in the matter preceding paragraph (1) by striking ‘shall’ and inserting ‘may’.

    (c) REPEALERS- Sections 355 and 359 of the Act (20 U.S.C. 1069a and 1069e) are each repealed.

    (d) ASSISTANCE TO INSTITUTIONS UNDER OTHER PROGRAMS- Section 356(a) of the Act (20 U.S.C. 1069b(a)) is amended by striking ‘shall’ and inserting ‘may’.

    (e) AUTHORIZATIONS- Section 360(a) of the Act is amended to read as follows:

    ‘SEC. 360. (a) AUTHORIZATIONS-

      ‘(1) PART A- (A) There are authorized to be appropriated to carry out part A, $135,000,000 (other than section 316) for fiscal year 1993, and such sums as may be necessary for each of the 4 succeeding fiscal years.

      ‘(B)(i) There are authorized to be appropriated to carry out section 316, $45,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years.

      ‘(ii) No funds are authorized to be appropriated pursuant to clause (i) for any fiscal year unless the amount appropriated pursuant to paragraph (1)(A) for such fiscal year equals or exceeds $80,000,000.

      ‘(2) PART B- (A) There are authorized to be appropriated to carry out part B (other than section 326), $135,000,000 for fiscal year 1993, and such sums as may be necessary for each of the 4 succeeding fiscal years.

      ‘(B) There are authorized to be appropriated to carry out section 326, $20,000,000 for fiscal year 1993, and such sums as may be necessary for each of the 4 succeeding fiscal years.

      ‘(3) PART C- There are authorized to be appropriated to carry out part C, $50,000,000 for fiscal year 1993, and such sums as may be necessary for each of the 4 succeeding fiscal years.’.

    (f) RESERVATIONS- Section 360(c) of the Act is amended by striking ‘1986--’ and paragraphs (1) and (2) and inserting the following: ‘1986, the Secretary shall, for such fiscal year--

      ‘(1) allocate 25 percent of the excess (above the amount appropriated for part A for fiscal year 1986) among eligible institutions at which at least 60 percent of the students are African Americans, Hispanic Americans, Native Americans, Asian Americans, Native Hawaiians, or Pacific Islanders, or any combination thereof; and

      ‘(2) allocate 75 percent of such excess among other eligible institutions.’.

    (g) ADDITIONAL RESERVATION- Section 360 is further amended by adding at the end thereof the following new subsection:

    ‘(e) ADDITIONAL RESERVATION- In any fiscal year beginning after September 30, 1992, the Secretary shall award at least 25 percent of the amount appropriated pursuant to the authority of paragraph (3) of subsection (a) in each fiscal year to historically black colleges and universities that meet the requirements of part C, unless there are an insufficient number of quality applications or an insufficient number of applications due to the provisions in subsection (b)(2)(C) or subsection (b)(4)(B) of section 331.’.

TITLE IV--STUDENT ASSISTANCE

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

SEC. 401. FEDERAL PELL GRANT PROGRAM.

    (a) AUTHORIZATION- Section 411(a)(1) of the Act (20 U.S.C. 1070a(a)(1)) is amended--

      (1) by striking ‘September 30, 1992,’ and inserting ‘September 30, 1998,’; and

      (2) by striking ‘paragraph (2)’ and inserting ‘subsection (b)’.

    (b) NAME OF PROGRAM- Section 411(a)(3) of the Act is amended by striking ‘as ‘Pell Grants’ and inserting ‘as ‘Federal Pell Grants’.

    (c) PROPORTION OF COST- Section 411(b)(1) of the Act is amended--

      (1) by striking ‘(A) as determined’ and all that follows through ‘and (B)’;

      (2) by striking ‘parental or independent student’ and inserting ‘family and student’;

      (3) by striking ‘subparts 2 and 3’ and inserting ‘subparts 3 and 4’; and

      (4) by striking ‘will meet 75 percent’ and inserting ‘will meet at least 75 percent’.

    (d) GRANT AMOUNTS-

      (1) MAXIMUM GRANT AMOUNTS- Section 411(b)(2)(A) of the Act is amended by striking clauses (i) through (v) and inserting the following:

      ‘(i) $3,700 for academic year 1993-1994,

      ‘(ii) $3,900 for academic year 1994-1995,

      ‘(iii) $4,100 for academic year 1995-1996,

      ‘(iv) $4,300 for academic year 1996-1997, and

      ‘(v) $4,500 for academic year 1997-1998,’.

      (2) GRANT AMOUNTS FOR LESS-THAN-HALF-TIME STUDENTS- Section 411(b)(2)(B) of the Act is amended in the first sentence therein--

        (A) by inserting immediately after ‘full-time basis’ the following: ‘(including a student who attends an institution of higher education on less than a half-time basis)’; and

        (B) by inserting before the period at the end thereof the following: ‘, computed in accordance with this subpart’.

      (3) DETERMINATION OF GRANT AMOUNTS BASED ON NEED- Section 411(b)(3) of the Act 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 $2,400, the amount of a student’s basic grant shall equal $2,400 plus--

      ‘(i) one-half of the amount by which such maximum basic grant exceeds $2,400; plus

      ‘(ii) the lesser of--

        ‘(I) the remaining one-half of such excess; or

        ‘(II) the sum of the student’s tuition and the student’s allowance determined under subparagraph (B), if applicable.

    ‘(B) For purposes of subparagraph (A)(ii)(II), a student’s allowance is $750 if the student has dependent care expenses (as defined in section 472(8)) or disability related expenses (as defined in section 472(9)).’.

      (4) CONFORMING AMENDMENT- Section 411(b)(4) of the Act is amended by striking ‘411F’ and inserting ‘472’.

      (5) MINIMUM GRANT AMOUNTS- Section 411(b)(5) of the Act is amended by striking ‘$200’ and inserting ‘$400, except that a student who is eligible for a basic grant that is equal to or greater than $200 but less than $400 shall be awarded a basic grant of $400’.

      (6) EXCEPTION TO MAXIMUM PELL GRANT AWARD; STUDY ABROAD; INCARCERATED STUDENTS- Section 411(b) of the Act is further amended by striking paragraphs (6) and (7) and inserting the following:

    ‘(6) The Secretary may allow, on a case-by-case basis, a student to receive 2 Pell grants during a single 12-month period, if--

      ‘(A) the student is enrolled full-time in a baccalaureate degree program of study that is 2 years or longer at an eligible institution that is computed in credit hours; and

      ‘(B) the student completes course work toward completion of a bachelor’s degree that exceeds the requirements for a full academic year as defined by the institution.

    ‘(7) Notwithstanding any other provision of this subpart, the Secretary shall allow the amount of the basic grant to be exceeded for students participating in a program of study abroad approved for credit by the institution at which the student is enrolled when the reasonable costs of such program are greater than the cost of attendance at the student’s home institution, except that the amount of such basic grant in any fiscal year shall not exceed the grant level specified in the appropriate Appropriation Act for this subpart for such year. If the preceding sentence applies, the financial aid administrator at the home institution may use the cost of the study abroad program, rather than the home institution’s cost, to determine the cost of attendance of the student.

    ‘(8)(A) No basic grant shall be awarded to an incarcerated student under this subpart that exceeds the sum of the amount of tuition and fees normally assessed by the institution of higher education for the course of study such student is pursuing plus an allowance (determined in accordance with regulations issued by the Secretary) for books and supplies associated with such course of study, except that no basic grant shall be awarded to any incarcerated student serving under sentence of death or any life sentence without eligibility for parole or release.

    ‘(B) Basic grants under this subpart shall only be awarded to incarcerated individuals in a State if such grants are used to supplement and not supplant the level of postsecondary education assistance provided by such State to incarcerated individuals in fiscal year 1988.’.

    (e) PERIOD OF ELIGIBILITY-

      (1) REMOVAL OF ACADEMIC YEAR LIMITATIONS- Section 411(c)(1) is amended by striking everything following ‘except that’ and inserting ‘any period during which the student is enrolled in a noncredit or remedial course of study as defined in paragraph (2) shall not be counted for the purpose of this paragraph.’.

      (2) CLARIFICATION OF ELIGIBILITY FOR STUDY ABROAD- Section 411(c)(2) of the Act is amended by adding at the end thereof the following new sentence: ‘Nothing in this section shall exclude from eligibility programs of study abroad that are approved for credit by the home institution at which the student is enrolled.’.

    (f) CALCULATION OF ELIGIBILITY- Section 411(f) of the Act is amended--

      (1) in paragraph (1)--

        (A) in the matter preceding subparagraph (A), by striking ‘an estimate of the eligibility index’ and inserting ‘, as a part of its regular output document, the expected family contribution’;

        (B) in subparagraph (A) by striking ‘eligibility index’ and inserting ‘expected family contribution’;

        (C) in subparagraph (B), by striking ‘eligibility index’ and inserting ‘expected family contribution’; and

        (D) in subparagraph (D), by striking ‘eligibility index’ and inserting ‘expected family contribution’; and

      (2) in paragraph (3), by striking ‘eligibility index’ and inserting ‘expected family contribution’;

    (g) INSUFFICIENT APPROPRIATIONS- Section 411(g) of the Act is amended to read as follows:

    ‘(g) INSUFFICIENT APPROPRIATIONS- If, for any fiscal year, the funds appropriated for payments under this subpart are insufficient to satisfy fully all entitlements, as calculated under subsection (b) (but at the maximum grant level specified in such appropriation), the Secretary shall promptly transmit a notice of such insufficiency to each House of the Congress, and identify in such notice the additional amount that would be required to be appropriated to satisfy fully all entitlements (as so calculated at such maximum grant level).’.

    (h) TREATMENT OF RECIPIENTS- Section 411(i) of the Act is amended--

      (1) by striking ‘NONCONTRACTOR STATUS OF INSTITUTIONS’ and inserting ‘TREATMENT OF INSTITUTIONS AND STUDENTS UNDER OTHER LAWS’; and

      (2) by adding at the end the following new sentence: ‘Recipients of Pell Grants shall not be considered to be individual grantees for purposes of part D of title V of Public Law 100-690.’.

    (i) UNIFICATION OF NEEDS ANALYSIS SYSTEMS- Subpart 1 of part A of title IV of the Act is amended by striking sections 411A through 411F (20 U.S.C. 1070a-1 through 1070a-6).

SEC. 402. FEDERAL EARLY OUTREACH AND STUDENT SERVICES PROGRAMS.

    (a) AMENDMENTS- Part A of title IV of the Act (20 U.S.C. 1070 et seq.) is amended--

      (1) by repealing subpart 4;

      (2) by redesignating subparts 2 and 3 as subparts 3 and 4, respectively;

      (3) by redesignating sections 401 and 411 as sections 400 and 401, respectively; and

      (4) by inserting after section 401 (as redesignated by paragraph (3)) the following new subpart:

‘Subpart 2--Federal Early Outreach and Student Services Programs

‘CHAPTER 1--FEDERAL TRIO PROGRAMS

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

    ‘(a) GRANTS AND CONTRACTS AUTHORIZED- The Secretary shall, in accordance with the provisions of this chapter, carry out a program of making grants and contracts designed to identify qualified individuals from disadvantaged backgrounds, to prepare them for a program of postsecondary education, to provide support services for such students who are pursuing programs of postsecondary education, to motivate and prepare students for doctoral programs, and to train individuals serving or preparing for service in programs and projects so designed.

    ‘(b) RECIPIENTS, DURATION, AND SIZE-

      ‘(1) RECIPIENTS- For the purposes described in subsection (a), the Secretary is authorized, without regard to section 3709 of the Revised Statutes (41 U.S.C. 5), to make grants to, and contracts with, institutions of higher education, public and private agencies and organizations, combinations of such institutions, agencies and organizations, and in exceptional circumstances, secondary schools, for planning, developing, or carrying out one or more of the services assisted under this chapter.

      ‘(2) DURATION- Grants or contracts made under this chapter shall be awarded for a period of 4 years, except that the Secretary shall award such grants or contracts for 5 years to applicants whose peer review scores were in the highest 10 percent of scores of all applicants receiving grants or contracts in each program competition for the same award year.

      ‘(3) MINIMUM GRANT LEVEL- In any year in which the appropriations authorized under this chapter exceed the prior year appropriation as adjusted for inflation, the Secretary shall use 80 percent of the amount appropriated above the current services level to bring each award up to the minimum grant level or the amount requested by the institution or agency, whichever is less. The minimum grant level (A) for programs authorized under section 402D or 402G, shall not be less than $170,000 for fiscal year 1993; (B) for programs authorized under section 402B or 402F shall not be less than $180,000 for fiscal year 1994; and (C) for programs authorized under section 402C or 402E shall not be less than $190,000 for fiscal year 1995.

    ‘(c) PROCEDURES FOR AWARDING GRANTS AND CONTRACTS-

      ‘(1) PRIOR EXPERIENCE- In making grants and contracts under this chapter, the Secretary shall consider the prior experience of service delivery under the particular program for which funds are sought by each applicant. For fiscal years after 1985, the level of consideration given to prior experience shall not vary from the level of consideration given this factor for fiscal year 1985.

      ‘(2) ORDER OF AWARDS; PROGRAM FRAUD- (A) Except as provided in subparagraph (B), the Secretary shall award grants and contracts under this chapter in the order of the scores received by the application for such grant or contract in the peer review process required under section 1210 and adjusted for prior experience in accordance with paragraph (1).

      ‘(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.

      ‘(3) PEER REVIEW PROCESS- (A) The Secretary shall assure that, to the extent practicable, members of groups underrepresented in higher education, including African Americans, Hispanics, Native Americans, Alaska Natives, Asian Americans, Native American Pacific Islanders (including Native Hawaiians), are represented as readers of applications submitted under this chapter. The Secretary shall also assure 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 3 readers who are not employees of the Federal Government (other than as readers of applications).

      ‘(4) 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 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 subpart for a new program regarding the status of their application at least 8 months prior to the proposed startup date of such program.

      ‘(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 not require a separate Director to administer a program funded under this chapter if the imposition of such requirement will hinder coordination among programs funded under this chapter or between programs funded under this subpart and similar programs funded through other sources.

    ‘(d) OUTREACH-

      ‘(1) IN GENERAL- The Secretary shall conduct outreach activities to ensure that entities eligible for assistance under this chapter submit applications proposing programs that serve geographic areas and eligible populations which have been underserved by the programs assisted under this chapter.

      ‘(2) NOTICE- In carrying out the provisions of paragraph (1), the Secretary shall notify the entities described in subsection (b) of the availability of assistance under this subsection not less than 120 days prior to the deadline for submission of applications under this chapter and shall consult national, State, and regional organizations about candidates for notification.

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

      ‘(4) SPECIAL RULE- The Secretary may contract with eligible entities to conduct the outreach activities described in this subsection.

    ‘(e) DOCUMENTATION OF STATUS AS A LOW-INCOME INDIVIDUAL- Documentation of an individual’s status pursuant to subsection (g)(2) shall be made--

      ‘(1) in the case of an individual who is eighteen years of age or younger or a dependent student by providing the Secretary with a signed statement from the parent or legal guardian, verification from another governmental source, a signed financial aid application, or a signed United States or Puerto Rican income tax return; and

      ‘(2) in the case of an individual who is age 18 or older or who is an independent student, by providing the Secretary with a signed statement from the individual, verification from another governmental source, a signed financial aid form, or a signed United States or Puerto Rican income tax return.

    ‘(f) AUTHORIZATION OF APPROPRIATIONS- For the purpose of making grants and contracts under this chapter, there are authorized to be appropriated $650,000,000 for fiscal year 1993, and such sums as may be necessary for each of the 4 succeeding fiscal years. Of the amount appropriated under this chapter, the Secretary may use no more than 1/2 of 1 percent of such amount to obtain additional qualified readers and additional staff to review applications, to increase the level of oversight monitoring, to support impact studies, program assessments and reviews, and to provide technical assistance to potential applicants and current grantees. In expending these funds, the Secretary shall give priority to the additional administrative requirements provided in the Higher Education Amendments of 1992, to outreach activities, and to obtaining additional readers. The Secretary shall report to Congress by October 1, 1994, on the use of these funds.

    ‘(g) DEFINITIONS- For the purpose of this chapter:

      ‘(1) FIRST GENERATION COLLEGE STUDENT- The term ‘first generation college student’ means--

        ‘(A) an individual both of whose parents did not complete a baccalaureate degree; or

        ‘(B) in the case of any individual who regularly resided with and received support from only one parent, an individual whose only such parent did not complete a baccalaureate degree.

      ‘(2) LOW-INCOME INDIVIDUAL- The term ‘low-income individual’ means an individual from a family whose taxable income for the preceding year did not exceed 150 percent of an amount equal to the poverty level determined by using criteria of poverty established by the Bureau of the Census.

      ‘(3) VETERAN ELIGIBILITY- No veteran shall be deemed ineligible to participate in any program under this chapter by reason of such individual’s age who--

        ‘(A) served on active duty for a period of more than 180 days, any part of which occurred after January 31, 1955, and was discharged or released therefrom under conditions other than dishonorable; or

        ‘(B) served on active duty after January 31, 1955, and was discharged or released therefrom because of a service connected disability.

‘SEC. 402B. TALENT SEARCH.

    ‘(a) PROGRAM AUTHORITY- The Secretary shall carry out a program to be known as talent search which shall be designed--

      ‘(1) to identify qualified youths with potential for education at the postsecondary level and to encourage such youths to complete secondary school and to undertake a program of postsecondary education;

      ‘(2) to publicize the availability of student financial assistance available to persons who pursue a program of postsecondary education; and

      ‘(3) to encourage persons who have not completed programs of education at the secondary or postsecondary level, but who have the ability to complete such programs, to reenter such programs.

    ‘(b) PERMISSIBLE SERVICES- Any talent search project assisted under this chapter may provide services such as--

      ‘(1) academic advice and assistance in secondary school and college course selection;

      ‘(2) assistance in completing college admission and financial aid applications;

      ‘(3) assistance in preparing for college entrance examinations;

      ‘(4) guidance on secondary school reentry or entry to general educational development (GED) programs or other alternative education programs for secondary school dropouts;

      ‘(5) personal and career counseling;

      ‘(6) tutorial services;

      ‘(7) exposure to college campuses as well as cultural events, academic programs and other sites or activities not usually available to disadvantaged youth;

      ‘(8) workshops and counseling for parents of students served;

      ‘(9) mentoring programs involving elementary or secondary school teachers, faculty members at institutions of higher education, students, or any combination of such persons; and

      ‘(10) programs and activities as described in paragraphs (1) through (9) which are specially designed for students of limited English proficiency.

    ‘(c) REQUIREMENTS FOR APPROVAL OF APPLICATIONS- In approving applications for talent search projects under this chapter for any fiscal year the Secretary shall--

      ‘(1) require an assurance that not less than two-thirds of the individuals participating in the project proposed to be carried out under any application be low-income individuals who are first generation college students;

      ‘(2) require that such participants be persons who either have completed 5 years of elementary education or are at least 11 years of age but not more than 27 years of age, unless the imposition of any such limitation with respect to any person would defeat the purposes of this section or the purposes of section 402F;

      ‘(3) require an assurance that individuals participating in the project proposed in the application do not have access to services from another project funded under this section or under section 402F; and

      ‘(4) require an assurance that the project will be located in a setting accessible to the persons proposed to be served by the project.

‘SEC. 402C. UPWARD BOUND.

    ‘(a) PROGRAM AUTHORITY- The Secretary shall carry out a program to be known as upward bound which shall be designed to generate skills and motivation necessary for success in education beyond secondary school.

    ‘(b) PERMISSIBLE SERVICES- Any upward bound project assisted under this chapter may provide services such as--

      ‘(1) instruction in reading, writing, study skills, mathematics, and other subjects necessary for success beyond secondary school;

      ‘(2) personal counseling;

      ‘(3) academic advice and assistance in secondary school course selection;

      ‘(4) tutorial services;

      ‘(5) exposure to cultural events, academic programs, and other activities not usually available to disadvantaged youth;

      ‘(6) activities designed to acquaint youths participating in the project with the range of career options available to them;

      ‘(7) instruction designed to prepare youths participating in the project for careers in which persons from disadvantaged backgrounds are particularly underrepresented;

      ‘(8) on-campus residential programs;

      ‘(9) mentoring programs involving elementary or secondary school teachers, faculty members at institutions of higher education, students, or any combination of such persons; and

      ‘(10) programs and activities as described in paragraphs (1) through (9) which are specially designed for students of limited English proficiency.

    ‘(c) REQUIRED SERVICES- Any upward bound project assisted under this chapter which has received funding for two or more years shall include, as part of the core curriculum in the next and succeeding years, instruction in mathematics through precalculus, laboratory science, and foreign language, composition, and literature.

    ‘(d) REQUIREMENTS FOR APPROVAL OF APPLICATIONS- In approving applications for upward bound projects under this chapter for any fiscal year, the Secretary shall--

      ‘(1) require an assurance that not less than two-thirds of the youths participating in the project proposed to be carried out under any application be low-income individuals who are first generation college students;

      ‘(2) require an assurance that the remaining youths participating in the project proposed to be carried out under any application be either low-income individuals or first generation college students;

      ‘(3) require that there be a determination by the institution, with respect to each participant in such project that the participant has a need for academic support in order to pursue successfully a program of education beyond secondary school; and

      ‘(4) require that such participants be persons who have completed 8 years of elementary education and are at least 13 years of age but not more than 19 years of age, unless the imposition of any such limitation would defeat the purposes of this section.

    ‘(e) MAXIMUM STIPENDS- Youths participating in a project proposed to be carried out under any application may be paid stipends not in excess of $60 per month during June, July, and August, and not in excess of $40 per month during the remaining period of the year.

‘SEC. 402D. STUDENT SUPPORT SERVICES.

    ‘(a) PROGRAM AUTHORITY- The Secretary shall carry out a program to be known as student support services which shall be designed--

      ‘(1) to increase college retention and graduation rates for eligible students;

      ‘(2) to increase the transfer rates of eligible students from 2-year to 4-year institutions; and

      ‘(3) to foster an institutional climate supportive of the success of low-income and first generation college students and individuals with disabilities.

    ‘(b) PERMISSIBLE SERVICES- A student support services project assisted under this chapter may provide services such as--

      ‘(1) instruction in reading, writing, study skills, mathematics, and other subjects necessary for success beyond secondary school;

      ‘(2) personal counseling;

      ‘(3) academic advice and assistance in course selection;

      ‘(4) tutorial services and counseling and peer counseling;

      ‘(5) exposure to cultural events and academic programs not usually available to disadvantaged students;

      ‘(6) activities designed to acquaint students participating in the project with the range of career options available to them;

      ‘(7) activities designed to assist students participating in the project in securing admission and financial assistance for enrollment in graduate and professional programs;

      ‘(8) activities designed to assist students currently enrolled in 2-year institutions in securing admission and financial assistance for enrollment in a four-year program of postsecondary education;

      ‘(9) mentoring programs involving faculty or upper class students, or a combination thereof; and

      ‘(10) programs and activities as described in paragraphs (1) through (9) which are specially designed for students of limited English proficiency.

    ‘(c) REQUIREMENTS FOR APPROVAL OF APPLICATIONS- In approving applications for student support services projects under this chapter for any fiscal year, the Secretary shall--

      ‘(1) require an assurance that not less than two-thirds of the persons participating in the project proposed to be carried out under any application--

        ‘(A) be individuals with disabilities; or

        ‘(B) be low-income individuals who are first generation college students;

      ‘(2) require an assurance that the remaining students participating in the project proposed to be carried out under any application either be low-income individuals, first generation college students, or individuals with disabilities;

      ‘(3) require an assurance that not less than one-third of the individuals with disabilities participating in the project be low-income individuals;

      ‘(4) require that there be a determination by the institution, with respect to each participant in such project, that the participant has a need for academic support in order to pursue successfully a program of education beyond secondary school;

      ‘(5) require that such participants be enrolled or accepted for enrollment at the institution which is the recipient of the grant or contract; and

      ‘(6) require an assurance from the institution which is the recipient of the grant or contract that each student enrolled in the project will be offered sufficient financial assistance to meet that student’s full financial need.

‘SEC. 402E. POSTBACCALAUREATE ACHIEVEMENT PROGRAM AUTHORITY.

    ‘(a) PROGRAM AUTHORITY- The Secretary shall carry out a program to be known as the ‘Ronald E. McNair Postbaccalaureate Achievement Program’ that shall be designed to provide disadvantaged college students with effective preparation for doctoral study.

    ‘(b) SERVICES- A postbaccalaureate achievement project assisted under this section may provide services such as--

      ‘(1) opportunities for research or other scholarly activities at the institution or at graduate centers designed to provide students with effective preparation for doctoral study;

      ‘(2) summer internships;

      ‘(3) seminars and other educational activities designed to prepare students for doctoral study;

      ‘(4) tutoring;

      ‘(5) academic counseling;

      ‘(6) activities designed to assist students participating in the project in securing admission to and financial assistance for enrollment in graduate programs;

      ‘(7) mentoring programs involving faculty members at institutions of higher education, students, or any combination of such persons; and

      ‘(8) exposure to cultural events and academic programs not usually available to disadvantaged students.

    ‘(c) REQUIREMENTS- In approving applications for postbaccalaureate achievement projects assisted under this section for any fiscal year, the Secretary shall require--

      ‘(1) an assurance that not less than two-thirds of the individuals participating in the project proposed to be carried out under any application be low-income individuals who are first generation college students;

      ‘(2) an assurance that the remaining persons participating in the project proposed to be carried out be from a group that is underrepresented in graduate education;

      ‘(3) an assurance that participants be enrolled in a degree program at an eligible institution having an agreement with the Secretary in accordance with the provisions of section 487; and

      ‘(4) an assurance that participants in summer research internships have completed their sophomore year in postsecondary education.

    ‘(d) AWARD CONSIDERATIONS- In addition to such other selection criteria as may be prescribed by regulations, the Secretary shall consider in making awards to institutions under this section--

      ‘(1) the quality of research and other scholarly activities in which students will be involved;

      ‘(2) the level of faculty involvement in the project and the description of the research in which students will be involved; and

      ‘(3) the institution’s plan for identifying and recruiting participants including students enrolled in projects authorized under this section.

    ‘(e) MAXIMUM STIPENDS- Students participating in research under a postbaccalaureate achievement project may receive an award that--

      ‘(1) shall include a stipend not to exceed $2,400 per annum; and

      ‘(2) may include, in addition, the costs of summer tuition, summer room and board, and transportation to summer programs.

    ‘(f) FUNDING- From amounts appropriated pursuant to the authority of section 402A(f), the Secretary shall, to the extent practicable, allocate funds for projects authorized by this section in an amount which is not less than $11,000,000 for each of the fiscal years 1993 through 1997.

‘SEC. 402F. EDUCATIONAL OPPORTUNITY CENTERS.

    ‘(a) PROGRAM AUTHORITY; SERVICES PROVIDED- The Secretary shall carry out a program to be known as educational opportunity centers which shall be designed--

      ‘(1) to provide information with respect to financial and academic assistance available for individuals desiring to pursue a program of postsecondary education; and

      ‘(2) to provide assistance to such persons in applying for admission to institutions at which a program of postsecondary education is offered, including preparing necessary applications for use by admissions and financial aid officers.

    ‘(b) PERMISSIBLE SERVICES- An educational opportunity center assisted under this section may provide services such as--

      ‘(1) public information campaigns designed to inform the community regarding opportunities for postsecondary education and training;

      ‘(2) academic advice and assistance in course selection;

      ‘(3) assistance in completing college admission and financial aid applications;

      ‘(4) assistance in preparing for college entrance examinations;

      ‘(5) guidance on secondary school reentry or entry to a general educational development (GED) program or other alternative education programs for secondary school dropouts;

      ‘(6) personal counseling;

      ‘(7) tutorial services;

      ‘(8) career workshops and counseling;

      ‘(9) mentoring programs involving elementary or secondary school teachers, faculty members at institutions of higher education, students, or any combination of such persons; and

      ‘(10) programs and activities as described in paragraphs (1) through (9) which are specially designed for students of limited English proficiency.

    ‘(c) REQUIREMENTS FOR APPROVAL OF APPLICATIONS- In approving applications for educational opportunity centers under this section for any fiscal year the Secretary shall--

      ‘(1) require an assurance that not less than two-thirds of the persons participating in the project proposed to be carried out under any application be low-income individuals who are first generation college students;

      ‘(2) require that such participants be persons who are at least nineteen years of age, unless the imposition of such limitation with respect to any person would defeat the purposes of this section or the purposes of section 402B; and

      ‘(3) require an assurance that individuals participating in the project proposed in the application do not have access to services from another project funded under this section or under section 402B.

‘SEC. 402G. STAFF DEVELOPMENT ACTIVITIES.

    ‘(a) SECRETARY’S AUTHORITY- For the purpose of improving the operation of the programs and projects authorized by this chapter, the Secretary is authorized to make grants to institutions of higher education and other public and private nonprofit institutions and organizations to provide training for staff and leadership personnel employed in, or preparing for employment in, such programs and projects.

    ‘(b) CONTENTS OF TRAINING PROGRAMS- Such training shall include conferences, internships, seminars, workshops, and the publication of manuals designed to improve the operation of such programs and projects and shall be carried out in the various regions of the Nation in order to ensure that the training opportunities are appropriate to meet the needs in the local areas being served by such programs and projects. Such training shall be offered annually for new directors of projects funded under this chapter as well as annually on the following topics and other topics chosen by the Secretary:

      ‘(1) Legislative and regulatory requirements for the operation of programs funded under this chapter.

      ‘(2) Assisting students in receiving adequate financial aid from programs assisted under this title and other programs.

      ‘(3) The design and operation of model programs for projects funded under this chapter.

    ‘(c) CONSULTATION- Grants for the purposes of this section shall be made only after consultation with regional and State professional associations of persons having special knowledge with respect to the needs and problems of such programs and projects.

‘SEC. 402H. EVALUATION FOR PROJECT IMPROVEMENT.

    ‘(a) IN GENERAL- For the purpose of improving the operation of the programs and projects assisted under this chapter, the Secretary is authorized to make grants to and enter into contracts with institutions of higher education and other public and private institutions and organizations to evaluate the effectiveness of the various programs assisted under this subpart in meeting the purposes described in this chapter.

    ‘(b) CONTENT- The evaluations described in subsection (a) shall identify institutional, community and program practices particularly effective in increasing the access of low-income individuals and first-generation college students to postsecondary education, the preparation of such individuals and students for postsecondary education, and such individuals’ and students’ success in postsecondary education.

    ‘(c) RESULTS- In order to improve program effectiveness, the results of the ongoing evaluations described in subsection (a) shall be disseminated by the Secretary to similar programs assisted under this chapter as well as other individuals concerned with the postsecondary access and retention of low-income individuals and first-generation college students.

‘CHAPTER 2--NATIONAL EARLY INTERVENTION SCHOLARSHIP AND PARTNERSHIP PROGRAM

‘SEC. 404A. EARLY INTERVENTION PROGRAM AUTHORIZED.

    ‘The Secretary is authorized, in accordance with the requirements of this chapter, to establish a program that--

      ‘(1) encourages States to provide or maintain a guarantee to eligible low-income students who obtain a high-school diploma (or its equivalent), of the financial assistance necessary to permit them to attend an institution of higher education; and

      ‘(2) provides incentives to States, in cooperation with local educational agencies, institutions of higher education, community organizations and business, to provide--

        ‘(A) additional counseling, mentoring, academic support, outreach, and supportive services to elementary, middle, and secondary school students who are at risk of dropping out of school; and

        ‘(B) information to students and their parents about the advantages of obtaining a postsecondary education and their college financing options.

‘SEC. 404B. STATE ELIGIBILITY AND STATE PLAN.

    ‘(a) PLAN REQUIRED FOR ELIGIBILITY- (1) In order for a State to qualify for a grant under this chapter, the State shall submit to the Secretary a plan for carrying out the program under this chapter. Such plan shall provide for the conduct, under the State program, of both a scholarship component in accordance with section 403C and an early intervention component in accordance with section 403D.

    ‘(2) Each State plan submitted pursuant to paragraph (1) be in such form, contain or be accompanied by such information or assurances, and be submitted at such time as the Secretary may require by regulation and shall--

      ‘(A) describe the activities for which assistance under this section is sought; and

      ‘(B) provide such additional assurances as the Secretary determines necessary to ensure compliance with the requirements of this section.

    ‘(b) MATCHING REQUIREMENT- The Secretary shall not approve a plan submitted under subsection (a) unless such plan--

      ‘(1) provides that the State will provide, from State, local, or private funds, not less than one-half the cost of the program;

      ‘(2) specifies the methods by which such share of the costs will be paid; and

      ‘(3) includes provisions designed to assure that funds provided under this chapter shall supplement and not supplant funds expended for existing State and local programs.

    ‘(c) METHODS FOR COMPLYING WITH MATCHING REQUIREMENT- A State may count toward the contribution required by subsection (b)(1)--

      ‘(1) the amount of the grants paid to students from State, local, or private funds under this chapter;

      ‘(2) the amount of tuition, fees, room or board waived or reduced for recipients of grants under this chapter; and

      ‘(3) the amount expended on documented, targeted, long-term mentoring and counseling provided by volunteers or paid staff of nonschool organizations, including businesses, religious organizations, community groups, postsecondary educational institutions, nonprofit and philanthropic organizations, and other organizations.

    ‘(d) PAYMENT REQUIREMENTS- Upon submission by a State of such documents as the Secretary may, by regulation, require for demonstrating the total amount expended by the State in accordance with this chapter for a fiscal year, the Secretary shall, from such State’s allotment under section 404E for such fiscal year, pay to such State an amount equal to not more than one-half of the total amount so expended.

‘SEC. 404C. EARLY INTERVENTION.

    ‘(a) IN GENERAL- In order to receive payments under section 404B(d), a State shall demonstrate to the satisfaction of the Secretary that the State will provide comprehensive mentoring, counseling, outreach, and supportive services to students participating in programs under this chapter who are enrolled in preschool through grade 12. Such counseling shall include financial aid counseling that provides information on the opportunities for financial assistance under this title. The State shall demonstrate, pursuant to regulations of the Secretary, the methods by which the State will target services on priority students.

    ‘(b) USES OF FUNDS-

      ‘(1) IN GENERAL- The Secretary shall, by regulation, establish criteria for determining whether comprehensive mentoring, counseling, outreach, and supportive services programs may be used to meet the requirements of subsection (a).

      ‘(2) ALLOWABLE PROVIDERS- The activities required by subsection (a) may be provided by service providers such as community-based organizations, schools, institutions of higher education, public and private agencies, nonprofit and philanthropic organizations, businesses, institutions and agencies sponsoring programs authorized under subpart 4 of this part, and other organizations the Secretary deems appropriate.

      ‘(3) PERMISSIBLE ACTIVITIES- Examples of acceptable activities to meet the requirements of subsection (a) include the following:

        ‘(A) Providing eligible students in preschool through grades 12 with a continuing system of mentoring and advising that--

          ‘(i) is coordinated with the Federal and State community service initiatives; and

          ‘(ii) may include such support services as after school and summer tutoring, assistance in obtaining summer jobs, career mentoring and academic counseling.

        ‘(B) Requiring each student to enter into an agreement under which the student agrees to achieve certain academic milestones, such as completing a prescribed set of courses and maintaining satisfactory academic progress as described in section 484(c), in exchange for receiving tuition assistance for a period of time to be established by each State.

        ‘(C) Activities designed to ensure high school completion and college enrollment of at-risk children, including identification of at-risk children, after school and summer tutoring, assistance in obtaining summer jobs, academic counseling, volunteer and parent involvement and former or current scholarship recipients as mentor or peer counselors, skills assessment, personal counseling, family counseling and home visits, and staff development, and programs and activities as described in this subparagraph which are specially designed for students of limited English proficiency.

        ‘(D) Prefreshman summer programs that--

          ‘(i) are at institutions of higher education that also have programs of academic year supportive services for disadvantaged students through projects authorized under section 401D of this subpart or through comparable projects funded by the State or other sources;

          ‘(ii) assure the participation of students who qualify as disadvantaged under the provisions of section 401D of this part or who are eligible for comparable programs funded by the State;

          ‘(iii)(I) provide summer instruction in remedial, developmental or supportive courses; (II) provide such summer services as counseling, tutoring, or orientation; and (III) provide grant aid to students to cover prefreshman summer costs for books, supplies, living costs and personal expenses; and

          ‘(iv) assure that participating students will receive financial aid during each academic year they are enrolled at the participating institution after the prefreshman summer.

        ‘(E) Requiring eligible students to meet other standards or requirements as the State determines necessary to meet the purposes of this section.

    ‘(c) PRIORITY STUDENTS- In administering the early intervention component, the State shall treat as priority students any student in preschool through grade 12 who is eligible--

      ‘(1) to be counted under section 1005(c) of the Elementary and Secondary Education Act of 1965;

      ‘(2) for free or reduced price meals pursuant to the National School Lunch Act; or

      ‘(3) for assistance pursuant to part A of title IV of the Social Security Act (Aid to Families with Dependent Children).

‘SEC. 404D. SCHOLARSHIP COMPONENT.

    ‘(a) IN GENERAL- In order to receive payments under section 404B(d), a State shall establish or maintain a financial assistance program that awards grants to students in accordance with the requirements of this section. The Secretary shall encourage the State to ensure that the tuition assistance provided pursuant to this section is available to an eligible student for use at any eligible institution.

    ‘(b) GRANT AMOUNTS- The maximum amount of the grant that an eligible student in any participating State shall be eligible to receive under this section shall be established by the State. The minimum amount of the grant for each fiscal year shall not be less than the lesser of--

      ‘(1) 75 percent of the average cost of attendance for an in-State student, in a 4-year program of instruction, at public institutions of higher education in such State, as determined in accordance with regulations prescribed by the Secretary; or

      ‘(2) the maximum grant funded under section 401 for such fiscal year.

    ‘(c) RELATION TO OTHER ASSISTANCE- Tuition assistance provided under this chapter shall not be considered for the purpose of awarding Federal grant assistance under this title, except that in no case shall the total amount of student financial assistance awarded to a student under this title exceed such student’s total cost of attendance.

    ‘(d) ELIGIBLE STUDENTS- A student eligible for assistance under this chapter is a student who--

      ‘(1) is less than 22 years old at time of first grant award;

      ‘(2) receives a high school diploma or a certificate of high school equivalence on or after January 1, 1993;

      ‘(3) is enrolled or accepted for enrollment in a program of instruction at an institution of higher education that is located within the State’s boundaries; except that, as a State option, a State may offer grant program portability for recipients who attend institutions of higher education outside such State; and

      ‘(4) who the participated in the State early intervention component required under section 404C.

    ‘(e) PRIORITY; WAIVER- (1) The Secretary shall ensure that each State place a priority on awarding scholarships to students who will receive a Pell Grant for the academic year for which the award is being made under this chapter.

    ‘(2) A State may consider students who have successfully participated in programs funded under chapter 1 of this subpart to have met the requirements of subsection (d)(4).

‘SEC. 404E. DISTRIBUTION OF FUNDS.

    ‘(a) COMPETITIVE AWARDS- If the amount appropriated to carry out this chapter for a fiscal year is less than $50,000,000, then the Secretary shall award grants under this chapter on a competitive basis to States to carry out a program described in section 404A.

    ‘(b) ALLOTMENT BASED ON TITLE I ESEA ALLOCATIONS- If the amount appropriated to carry out this chapter for a fiscal year is $50,000,000 or more, then the Secretary shall allot to each State an amount which bears the same ratio to such sums as--

      ‘(1) the amount allocated under section 1005 of the Elementary and Secondary Education Act of 1965 to the local education agencies in the State,

    bears to--

      ‘(2) the total amount allocated under such section to all such agencies in all States.

    ‘(c) LIMIT ON USE- No State may use less than 25 percent or more than 50 percent of its allotment for the early intervention component of the State program, except that the Secretary may waive the 50 percent limitation if the State demonstrates that the State has another means of providing the student’s tuition assistance that is described in the State plan.

    ‘(d) REALLOTMENT- The amount of any State’s allotment under subsection (b) for any fiscal year which the Secretary determines will not be required for such fiscal year for the program of that State shall be available for reallotment from time to time, on such dates during such year as the Secretary may fix, to other States in proportion to the original allotments to such States for such year, but with such proportionate amount for any of such States being reduced to the extent it exceeds the sum the Secretary estimates such State needs and will be able to use for such year for carrying out such programs. The total of such reductions shall be similarly reallotted among the States whose proportionate amounts were not so reduced. A State shall match, in accordance with section 404B(b) any reallocated funds it receives under this subsection.

    ‘(e) ALLOTMENT SUBJECT TO CONTINUING COMPLIANCE- The Secretary shall make payments for programs only to States which continue to meet the requirements of the State plan pursuant to section 404B.

‘SEC. 404F. EVALUATION AND REPORT.

    ‘(a) EVALUATION- Each State receiving an allotment under this section shall biannually evaluate the early intervention program assisted under this chapter in accordance with the standards described in subsection (b) and shall submit to the Secretary a copy of such evaluation. The evaluation component shall permit service providers to track eligible student progress during the period such students are participating in the program assisted under this section and must be consistent with the standards developed by the Secretary pursuant to subsection (b).

    ‘(b) EVALUATION STANDARDS- The Secretary shall prescribe standards for the evaluation described in subsection (a). Such standards shall--

      ‘(1) provide for input from States and service providers; and

      ‘(2) ensure that data protocols and procedures are consistent and uniform.

    ‘(c) REPORT- The Secretary shall biannually report to the Congress on the activities assisted under this chapter and the evaluations conducted pursuant to subsection (a).

‘SEC. 404G. APPROPRIATIONS.

    ‘There is authorized an appropriation to make grants under this chapter $200,000,000 for fiscal year 1993 and such sums as may be necessary for each of the four succeeding fiscal years. No amount may be expended to carry out the provisions of this chapter unless the amount appropriated for such fiscal year to carry out subpart 4 of part A of this title exceeds $60,000,000.

‘CHAPTER 3--PRESIDENTIAL ACCESS SCHOLARSHIPS

‘SEC. 406A. SCHOLARSHIPS AUTHORIZED.

    ‘The Secretary is authorized in accordance with this chapter to award Presidential Access Scholarships to students who--

      ‘(1) are eligible to receive a Pell Grant for the year in which the scholarship is awarded;

      ‘(2) have participated in a preparatory program for postsecondary education; and

      ‘(3) demonstrate academic achievement.

‘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 25 percent of the Pell Grant that the recipient is awarded for that year or $400, whichever is greater.

      ‘(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 in a fiscal year are insufficient to fully fund all awards for that academic year under this chapter, the amount paid to each student shall be reduced proportionately.

    ‘(b) PERIOD OF AWARD- Scholarships under this chapter shall be awarded for a period of not more than four academic years, or in the case of a student who is enrolled in an undergraduate course of study that requires attendance for the full-time equivalent of five academic years, five academic years.

    ‘(c) USE AT ANY INSTITUTION PERMITTED- An eligible student awarded a scholarship under this chapter may use such scholarship stipend to attend any institution of higher education.

    ‘(d) ASSISTANCE NOT TO EXCEED COST OF ATTENDANCE- A scholarship awarded under this chapter to any student, in combination with the Pell Grant and other student financial assistance available to such student, may not exceed the student’s cost of attendance (as defined in section 472).

    ‘(e) PRESIDENTIAL ACCESS SCHOLARS- Students awarded scholarships under this chapter shall be known as ‘Presidential Access Scholars’.

‘SEC. 406C. ELIGIBILITY OF SCHOLARS.

    ‘(a) REQUIREMENTS FOR STUDENTS IN FIRST YEAR OF POSTSECONDARY EDUCATION- In order for a student who will be attending the student’s first year of postsecondary education to be eligible to receive a scholarship under this chapter for that academic year, the student shall--

      ‘(1) be enrolled or accepted for enrollment in a degree or certificate program of at least 2 years in length;

      ‘(2) have demonstrated academic achievement and preparation for postsecondary education by taking college preparatory level coursework in the following areas while in secondary school or the equivalent:

        ‘(A) 4 years of English;

        ‘(B) 3 years of science;

        ‘(C) 3 years of mathematics;

        ‘(D) either--

          ‘(i) 3 years of history; or

          ‘(ii) 2 years of history and 1 year of social studies; and

        ‘(E) either--

          ‘(i) 2 years of a foreign language; or

          ‘(ii) 1 year of computer science and 1 year of a foreign language.

      ‘(3) earn a grade point average of 2.5 or higher, on a scale of 4.0, in the final 2 years of high school; and

      ‘(4) either--

        ‘(A) have participated, for a minimum period of 36 months, in an early intervention program that meets the requirements of section 406D; or

        ‘(B) rank, or have ranked, in the top 10 percent, by grade point average, of the student’s secondary school graduating class.

    ‘(b) REQUIREMENTS FOR ALL STUDENTS-

      ‘(1) 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.

      ‘(2) In order for a student who will be attending a year of postsecondary education, other than the student’s first year, to continue to be eligible to receive a scholarship under this chapter for that academic year the eligible student shall maintain eligibility to receive a Pell Grant, including fulfilling the requirements for satisfactory academic progress as described in section 484(c).

‘SEC. 406D. ELIGIBLE EARLY INTERVENTION PROGRAMS.

    ‘(a) PARTICIPATION IN TRIO PROGRAMS AND NATIONAL EARLY INTERVENTION SCHOLARSHIP AND PARTNERSHIP PROGRAMS- Participation in a program authorized under section 402B, 402C, or 402F, or chapter 2 of subpart 2 of this part for a 36-month period shall meet the requirement of section 406C(a)(4)(A).

    ‘(b) OTHER ELIGIBLE EARLY INTERVENTION PROGRAM- Participation in another early intervention program, regardless of sponsorship, for a 36-month period, shall meet the requirements of section 406C(a)(4)(A) if the program--

      ‘(1) meets the requirements established by the Secretary; and

      ‘(2) is certified by the Governor as an honors scholars program.

‘SEC. 406E. STUDENT ELIGIBILITY.

    ‘(a) STUDENT ELIGIBILITY- For the purpose of this chapter, the term ‘eligible student’ means an individual who--

      ‘(1) is a graduate of a public or private secondary school or has the equivalent certificate of graduation as recognized by the State in which the eligible student resides;

      ‘(2) not later than 3 years after such individual graduates or obtains an equivalent certificate, has been admitted for enrollment or is enrolled at an institution of higher education; and

      ‘(3) is eligible to receive a Pell Grant for the year in which the scholarship is awarded.

    ‘(b) LIMITATION- For the purpose of this chapter, the term ‘eligible student’ does not include an individual who has been awarded a baccalaureate degree.

    ‘(c) WAIVERS-

      ‘(1) EARLY INTERVENTION PROGRAM PARTICIPATION- The Secretary may waive the requirement described in section 406C(a)(4) for any student who was unable to participate in an early intervention program assisted under this part because such program was not available in the area in which such student resides or the student was unable to participate in an early intervention program where the student resides.

      ‘(2) LIMITED-ENGLISH PROFICIENT STUDENTS- The Secretary may waive the requirement described in section 406C(a)(2)(E) for any limited-English proficient student who is fluent in a language other than English and is participating in a program to teach such student the English language or for any English speaking student fluent in a second language.

‘SEC. 406F. EARLY INTERVENTION SCHOLARSHIP AGREEMENT.

    ‘(a) IN GENERAL- In order for a student to receive a scholarship under this chapter, the State educational agency serving the State in which such child resides shall have entered into an agreement with the Secretary.

    ‘(b) CONTENTS- Each agreement described in subsection (a) shall include provisions designed to ensure that--

      ‘(1) all secondary school students in the State have equal and easy access to the coursework described in section 406C(a)(2);

      ‘(2) the State educational agency has procedures in place to verify to the Secretary that students receiving scholarships under this chapter have taken such coursework and that such coursework has been of a college preparatory level, including a requirement that all secondary schools in the State issue a certificate to each eligible student certifying that such student has completed the necessary coursework to qualify for a scholarship under this chapter;

      ‘(3) the State educational agency has procedures in place to notify institutions of higher education of the availability of scholarships under this chapter, so that such institutions may award additional scholarships in concert with the scholarships received under this chapter; and

      ‘(4) the State educational agency has procedures in place to inform junior high school students and their families about the value of postsecondary education, the availability of student aid to meet college expenses, and the availability of scholarships under this chapter for students who take demanding courses, with particular emphasis on activities designed to ensure that students from low- and moderate-income families have access to such information.

    ‘(c) SPECIAL RULE- The Secretary may allow a State to receive assistance under this chapter for students whose secondary schools do not offer the necessary coursework if such students take the required courses at another local secondary school or community college.

‘SEC. 406G. AUTHORIZATION OF APPROPRIATIONS.

    ‘There are authorized to be appropriated $200,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years to carry out the provisions of this chapter. No amount may be expended to carry out the provisions of this chapter in any fiscal year unless the amount appropriated for such fiscal year to carry out subpart 1 of part A of this title exceeds the amount appropriated to carry out such subpart in the preceding fiscal year.

‘CHAPTER 4--MODEL PROGRAM COMMUNITY PARTNERSHIP AND COUNSELING GRANTS

‘SEC. 408A. MODEL PROGRAM GRANTS.

    ‘(a) PROGRAM AUTHORITY- From the amounts appropriated under section 408C, the Secretary shall award grants to develop model programs--

      ‘(1) to counsel students, at an early age, about college opportunities, precollege requirements, the college admissions procedure, financial aid opportunities, and student support services that are specially designed or customized for use in specific geographic, social, and cultural environments; or

      ‘(2) which stimulate community partnerships with schools by providing tutoring, mentoring, work experiences, and other services which support making postsecondary education a realistic goal for all students.

    ‘(b) PRIORITIES IN SELECTION- The Secretary shall give priority to those model programs which are directed at areas which have a high proportion of minority, limited English proficiency, economically disadvantaged, disabled, nontraditional, or at-risk students and those model programs which serve these students from rural or urban environments.

    ‘(c) PROPOSAL REQUIREMENTS-

      ‘(1) TAILORING- To receive a grant under subsection (a)(1), the proposal submitted to the Secretary shall demonstrate that the counseling on college opportunities, precollege requirements, the college admissions procedure, and financial aid opportunities (including early intervention counseling), is tailored to a specific geographic, social or cultural environment.

      ‘(2) COMMUNITY PARTNERSHIPS- To receive a grant under subsection (a)(2), the proposal submitted to the Secretary shall demonstrate the active involvement of a local educational agency and at least one of the following:

        ‘(A) Local businesses.

        ‘(B) Labor organizations.

        ‘(C) Community groups.

      ‘(3) GOALS AND OUTCOMES- To receive a grant under this section, each proposal shall contain a statement of specific, measurable goals and methods for obtaining statistics on the number of participants who continue on to postsecondary education.

‘SEC. 408B. DIFFUSION ACTIVITIES.

    ‘(a) COLLECTION OF INFORMATION- The Secretary shall collect information concerning--

      ‘(1) programs supported under section 408A and programs of demonstrated effectiveness which counsel students about college opportunities, precollege requirements, the college admissions procedure, and financial aid opportunities;

      ‘(2) early intervention programs of demonstrated effectiveness which set students on the path toward staying in school and pursuing a postsecondary education;

      ‘(3) model programs which counsel students in specific environments, such as urban, rural, and suburban; and

      ‘(4) model programs which develop school/community partnerships to provide mentoring, tutoring, work experiences and other services which support making postsecondary education a realistic goal for all students.

    ‘(b) DISSEMINATION- The Secretary shall ensure that the information collected under subsection (a) is disseminated.

‘SEC. 408C. AUTHORIZATION OF APPROPRIATIONS.

    ‘There are authorized to be appropriated $35,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years to carry out this chapter.

‘CHAPTER 5--PUBLIC INFORMATION

‘SEC. 409A. DATABASE AND INFORMATION LINE.

    ‘From the funds available under section 409C, the Secretary shall award a contract to establish and maintain--

      ‘(1) a computerized database of all public and private financial assistance programs, to be accessible to schools and libraries through either modems or toll-free telephone lines; and

      ‘(2) a toll-free information line, including access by telecommunications devices for the deaf (‘TDD’s’), to provide individualized financial assistance information to parents, students, and other individuals, including individuals with disabilities, and to refer students with disabilities and their families to the postsecondary clearinghouse that is authorized under section 633(c) of the Individuals with Disabilities Education Act.

‘SEC. 409B. EARLY AWARENESS INFORMATION PROGRAM.

    ‘(a) PROGRAM AUTHORITY- The Secretary is authorized to enter into contracts with appropriate public agencies, nonprofit private organizations, and institutions of higher education to conduct an information program designed--

      ‘(1) to broaden the early awareness of postsecondary educational opportunities by secondary school students and their parents; and

      ‘(2) to encourage economically disadvantaged, minority, or at-risk individuals to seek higher education, and to seek higher education and financial assistance counseling at public schools and libraries.

    ‘(b) CONTENTS OF MESSAGES- Announcements and messages supported under this section--

      ‘(1) may be specially designed for students of limited English proficiency,

      ‘(2) shall publicize--

        ‘(A) the availability of Federal student assistance under this Act;

        ‘(B) the importance of postsecondary education in long-term career planning; and

        ‘(C) the need and necessity to complete a secondary education program successfully in order to meet the requirements for college.

    ‘(c) INFORMING CONGRESS- The Secretary shall keep the appropriate committees of the Congress informed with respect to the efforts made pursuant to this section and shall recommend any additional legislative authority that will serve the purposes of this section.

‘SEC. 409C. DATABASE AND INFORMATION LINE.

    ‘There are authorized to be appropriated $20,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years to carry out this chapter.

‘CHAPTER 6--NATIONAL STUDENT SAVINGS DEMONSTRATION PROGRAM

‘SEC. 410A. NATIONAL STUDENT SAVINGS DEMONSTRATION PROGRAM.

    ‘(a) STATEMENT OF PURPOSE- It is the purpose of this section to--

      ‘(1) create a demonstration program to test the feasibility of establishing a national student savings program to encourage families to save for their children’s college education and thereby reduce the loan indebtedness of college students; and

      ‘(2) help determine the most effective means of achieving the activities described in paragraph (1).

    ‘(b) DEMONSTRATION PROGRAM AUTHORIZED-

      ‘(1) IN GENERAL- The Secretary is authorized to award a demonstration grant to not more than 5 States to enable each such State to conduct a student savings program in accordance with this section.

      ‘(2) AMOUNT OF GRANT- The amount of each grant awarded pursuant to paragraph (1) shall be computed on the basis of--

        ‘(A) a Federal match in an amount equal to the initial State deposit into each account established pursuant to subsection (c)(2)(B), except that such Federal match shall not exceed $50 per child; multiplied by

        ‘(B) the number of children participating in the program assisted under this part.

      ‘(3) PRIORITY- In awarding grants under this section the Secretary shall give priority to States proposing programs that establish accounts for a child prior to the age of compulsory school attendance in the State in which such child resides.

      ‘(4) SPECIAL CONSIDERATION- In awarding grants under this section the Secretary shall give special consideration to States--

        ‘(A) that permit employers to use pretax income in making contributions to a child’s account; and

        ‘(B) that provide assurances that interest earned in accounts shall be exempt from State taxes.

    ‘(c) APPLICATION-

      ‘(1) IN GENERAL- Each State desiring a grant under this section shall submit an application to the Secretary at such time, in such manner, and accompanied by such information as the Secretary may reasonably require.

      ‘(2) CONTENTS- Each application submitted pursuant to paragraph (1) shall--

        ‘(A) describe the student savings program to be established and the number of children to be served;

        ‘(B) contain assurances that an account shall be established for each child participating in the program assisted under this section and set forth the initial amount to be deposited into each such account by the State;

        ‘(C) contain assurances that deposits into such account shall be invested in a responsible manner that provides a reasonable rate of return;

        ‘(D) contain assurances that funds in the account shall only be used to pay the cost of attendance (as such term is defined in section 472) at any eligible institution (as such term is defined in section 481);

        ‘(E) describe the amount of the Federal contribution requested for starting each child’s account, which shall not exceed $50 per child participating in the program;

        ‘(F) describe the age at which children in the State may establish such accounts;

        ‘(G) indicate whether the program will be open to all children, regardless of family income, or only to disadvantaged children;

        ‘(H) describe how additional deposits into each account from the State or other resources will be earned by a child for performance of community service, academic performance, or other activities or achievements;

        ‘(I) contain assurances that contributions in an account shall be refundable to the contributor without interest if the child is unable to attend college;

        ‘(J) contain assurances that the State shall encourage individuals and organizations to make contributions to a child’s account;

        ‘(K) contain assurances that the State shall provide incentives to employers to make contributions to a child’s account and participate in the program assisted under this section; and

        ‘(L) contain assurances that if a child leaves the State in which such child has an account, then such child shall retain the right to make contributions to the account, except that the State shall not be required to make any additional deposits other than interest.

    ‘(d) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated $10,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years to carry out this section.

‘CHAPTER 7--PREELIGIBILITY FORM

‘SEC. 410B. INFORMATION ON ELIGIBILITY FOR ASSISTANCE.

    ‘To help ensure access to postsecondary education by providing early notice to students of their potential eligibility for financial aid, the Secretary, as part of the contracts developed pursuant to section 483, may--

      ‘(1) develop and process a common preeligibility Federal financial aid form,

      ‘(2) distribute and process such form on a year-round basis free of charge to students and parents, and

      ‘(3) issue, on the basis of information reported by the student on such form, a preeligibility expected family contribution figure and estimate of the amount of Federal (and, if feasible, non-Federal) funds for which the student might qualify in later completing and submitting the application form called for under section 483.

    The Secretary shall widely disseminate the preeligibility form through post offices and other appropriate Federal installations, schools, institutions of higher education, libraries, and community-based agencies, including projects assisted under subparts 2 and 5 of this part.

‘CHAPTER 8--TECHNICAL ASSISTANCE FOR TEACHERS AND COUNSELORS

‘SEC. 410C. TECHNICAL ASSISTANCE GRANTS.

    ‘(a) PROGRAM AUTHORITY- From the amounts appropriated under subsection (f), the Secretary shall award grants to local educational agencies to use for the purpose of obtaining specialized training for guidance counselors, teachers, and principals to counsel students about college opportunities, precollege requirements, the college admissions procedure, and financial aid opportunities.

    ‘(b) SELECTION OF GRANT RECIPIENTS-

      ‘(1) PRIORITY- In making grants under this section, the Secretary shall give priority to those local educational agencies serving school districts (A) from which the proportion of students who continue on to higher education is significantly below the national average, and (B) in which the proportion of students who are educationally disadvantaged is significantly above the national average.

      ‘(2) SELECTION PROCEDURES- The Secretary shall develop a formal procedure for the submission of proposals and publish in the Federal Register an announcement with respect to that procedure and the availability of funds.

    ‘(c) LOCAL PLAN- To receive a grant under this section, a local educational agency shall submit to the Secretary a plan that--

      ‘(1) specifies the methods to be used for outreach, implementation, and follow-up with those students most in need and at-risk for dropping out or failing to pursue postsecondary education;

      ‘(2) demonstrates the methods by which the agency will target funds to those schools within the district that have the lowest rate of students who continue on to higher education;

      ‘(3) utilizes early intervention programs for counseling minority, economically disadvantaged, disabled, and at-risk students about postsecondary education;

      ‘(4) includes a strategy for keeping the guidance counselors, teachers (including elementary, secondary, vocational, and special education teachers), and principals who have been trained up-to-date on financial aid information;

      ‘(5) contains a statement of specific goals and methods for obtaining statistics on the number of participants who continue on to postsecondary education; and

      ‘(6) contains a description of the costs of the training and other activities to be undertaken.

    ‘(d) DURATION OF GRANTS- Grants under this section shall be available for 2 years.

    ‘(e) EVALUATION-

      ‘(1) CONDUCT OF EVALUATIONS- The Secretary shall reserve not more than 2 percent of any amount appropriated under subsection (f) for the purpose of carrying out an independent evaluation of the effectiveness of the training programs assisted under this section in--

        ‘(A) increasing the number of personnel in a school who regularly counsel students regarding college opportunities, precollege requirements, the college admission procedure, and financial aid opportunities; and

        ‘(B) increasing the number of students who continue on to postsecondary education from a school which has had personnel trained using monies from this section.

      ‘(2) REPORT- The Secretary shall submit to the appropriate committees of the Congress a report which contains the findings of the evaluation required by paragraph (1).

    ‘(f) TECHNICAL ASSISTANCE GRANTS- There are authorized to be appropriated $40,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years to carry out this section.’.

    (b) REFERENCE- Reference in any provision of law (other than the Act) to subpart 2, 3, or 4 of part A of title IV of the Act shall, after the date of enactment of this Act, be deemed to refer to subpart 3, 4, or 2 of such part, respectively.

SEC. 403. FEDERAL SUPPLEMENTAL EDUCATIONAL OPPORTUNITY GRANTS.

    (a) TITLE OF PROGRAM- The heading of subpart 3 of part A of title IV of the Act (as redesignated in section 402(a)) is amended to read as follows:

‘Subpart 3--Federal Supplemental Educational Opportunity Grants’.

    (b) AUTHORIZATION OF APPROPRIATIONS- Section 413A(b) of the Act (20 U.S.C. 1076b(b)) is amended to read as follows:

    ‘(b) AUTHORIZATION OF APPROPRIATIONS- (1) For the purpose of enabling the Secretary to make payments to institutions of higher education which have made agreements with the Secretary in accordance with section 413C(a), for use by such institutions for payments to undergraduate students of supplemental grants awarded to them under this subpart, there are authorized to be appropriated $675,000,000 for fiscal year 1993 and such sums as may be necessary for the 4 succeeding fiscal years.

    ‘(2) Sums appropriated pursuant to this subsection for any fiscal year shall be available for payments to institutions until the end of the second fiscal year succeeding the fiscal year for which such sums were appropriated.’.

    (c) ELIGIBILITY FOR STUDY ABROAD- Section 413B(a) of the Act (20 U.S.C. 1070b-1(a)) is amended--

      (1) in paragraph (1)--

        (A) by striking ‘From’ and inserting ‘Except as provided in paragraph (3), from’; and

        (B) in subparagraph (A), by inserting ‘or in a program of study abroad that is approved for credit by the institution at which the student is enrolled’ after ‘course of study at the institution’; and

      (2) by inserting after paragraph (2) the following new paragraph:

    ‘(3) For students participating in study abroad programs, the institution shall consider all reasonable costs associated with such study abroad when determining student eligibility. The amount of grant to be awarded in such cases may exceed the maximum amount of $4,000 by as much as $400 if reasonable study abroad costs exceed the cost of attendance at the home institution.’.

    (d) FEDERAL SHARE- Section 413C(a)(2) of the Act is amended to read as follows:

      ‘(2) agrees that the Federal share of awards under this subpart will not exceed 75 percent of such awards, except that the Federal share may be exceeded if the Secretary determines, pursuant to regulations establishing objective criteria for such determinations, that a larger Federal share is required to further the purpose of this subpart; and’.

    (e) USE OF FUNDS TO NONTRADITIONAL STUDENTS- Section 413C(d) of the Act (20 U.S.C. 1070b-2(d)) is amended--

      (1) by inserting ‘who are independent students or’ after ‘demonstrated by students’; and

      (2) by inserting before the period at the end thereof the following: ‘, except that if the total financial need of all such students attending the institution exceeds 5 percent of the need of all students attending such institution, then at least 5 percent of such allotment shall be made available to such students’.

    (f) TRANSFER OF FUNDS- Section 413C(e) of the Act is amended by striking ‘, and may transfer such funds in accordance with the provisions of section 488’.

    (g) ALLOCATION OF FUNDS- Section 413D(a) of the Act (20 U.S.C. 1070b-3(a)) is amended by adding at the end the following new paragraph:

    ‘(4)(A) Notwithstanding any other provision of this section, the Secretary may allocate an amount equal to not more than 10 percent of the amount by which the amount appropriated in any fiscal year to carry out this part exceeds $700,000,000 among eligible institutions described in subparagraph (B).

    ‘(B) In order to receive an allocation pursuant to subparagraph (A) an institution shall be an eligible institution from which 50 percent or more of the Pell Grant recipients attending such eligible institution graduate from or transfer to a 4-year institution of higher education.’.

    (h) CONSEQUENCES OF FAILURE TO AWARD- Section 413D(e) of the Act (20 U.S.C. 1070b-3(e)) is amended--

      (1) by inserting ‘(1)’ after the subsection heading; and

      (2) by adding at the end the following new paragraph:

    ‘(2) If under paragraph (1) of this subsection an institution returns more than 10 percent of its allocation, the institution’s allocation for the next fiscal year shall be reduced by the amount returned. The Secretary may waive this paragraph for a specific institution if the Secretary finds that enforcing this paragraph would be contrary to the interest of the program.’.

SEC. 404. STATE STUDENT INCENTIVE GRANTS.

    (a) PURPOSES OF SUBPART- Section 415A of the Act (20 U.S.C. 1070c) 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 providing grants to--

      ‘(1) eligible students attending institutions of higher education or participating in programs of study abroad that are approved for credit by institutions of higher education at which such students are enrolled; and

      ‘(2) eligible students for campus-based community service work-study.

    ‘(b) AUTHORIZATION OF APPROPRIATIONS; AVAILABILITY-

      ‘(1) IN GENERAL- There are authorized to be appropriated $105,000,000 for fiscal year 1993, and such sums as may be necessary for each of the 4 succeeding fiscal years.

      ‘(2) AVAILABILITY- Sums appropriated pursuant to the authority of paragraph (1) for any fiscal year shall remain available for payments to States under this subpart until the end of the fiscal year succeeding the fiscal year for which such sums were appropriated.’.

    (b) MAXIMUM GRANT- Section 415C(b)(2) of the Act (20 U.S.C. 1070c-2(b)(2)) is amended by striking ‘$2,500’ and inserting ‘$5,000’.

    (c) FEES FOR DETERMINATIONS OF NEED PROHIBITED- Section 415C(b)(4) of the Act is amended by inserting before the semicolon the following: ‘, except that for the purpose of collecting data to make such determination of financial need, no student or parent shall be charged a fee that is payable to an entity other than such State’.

    (d) ALLOCATION RULE- Section 415C(b)(7) of the Act is amended to read as follows:

      ‘(7) provides that if the State’s allocation under this subpart is based in part on the financial need demonstrated by students who are independent students or attending the institution less than full time, a reasonable proportion of the State’s allocation shall be made available to such students.

SEC. 405. HEP/CAMP.

    (a) ELIGIBLE PERSONS-

      (1) SERVICES PROVIDED BY HIGH SCHOOL EQUIVALENCY PROGRAM- Section 418A(b) of the Act (20 U.S.C 1070d-2(b)) is amended--

        (A) by striking paragraph (1) and inserting the following:

      ‘(1) recruitment services to reach persons--

        ‘(A)(i) who are 16 years of age and over; or

        ‘(ii) who are beyond the age of compulsory school attendance in the State in which such persons reside and are not enrolled in school;

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

        ‘(ii) who are eligible to participate, or have participated within the preceding 2 years, in programs under subpart 1 of part D of chapter 1 of title I of the Elementary and Secondary Education Act of 1965 or section 402 of the Job Training Partnership Act; and

        ‘(C) who lack a high school diploma or its equivalent;’; and

        (B) in paragraph (4)--

          (i) by inserting a comma after ‘concerning’; and

          (ii) by inserting a comma after ‘obtaining’.

      (2) SERVICES PROVIDED BY COLLEGE ASSISTANCE MIGRANT PROGRAM- Section 418A(c)(1) of the Act is amended to read as follows:

      ‘(1) outreach and recruitment services to reach persons who themselves or whose parents have spent a minimum of 75 days during the past 24 months in migrant and seasonal farmwork or who have participated or are eligible to participate, in programs under subpart 1 of part D of chapter 1 of title I of the Elementary and Secondary Education Act of 1965 or section 402 of the Job Training Partnership Act, and who meet the minimum qualifications for attendance at a college or university;’.

    (b) FOLLOW-UP SERVICES- Section 418A(c) of the Act is further amended--

      (1) in paragraph (2), by redesignating subparagraphs (A) through (E) as clauses (i) through (v), respectively;

      (2) in paragraph (3), by redesignating subparagraphs (A) through (H) as clauses (i) through (viii), respectively;

      (3) by redesignating paragraphs (1) through (6) (as amended) as subparagraphs (A) through (F), respectively;

      (4) by inserting the paragraph designation ‘(1)’ after the subsection heading; and

      (5) by adding at the end thereof the following new paragraph:

    ‘(2) A recipient of a grant to operate a college assistance migrant program under this subpart shall provide followup services for migrant students after such students have completed their first year of college, and shall not use more than 10 percent of such grant for such followup services. Such followup services may include--

      ‘(A) monitoring and reporting the academic progress of students who participated in the project during such student’s first year of college and during such student’s subsequent years in college; and

      ‘(B) referring such students to on- or off-campus providers of counseling services, academic assistance, or financial aid.’.

    (c) GRANT CYCLES- Section 418A(e) of the Act is amended--

      (1) in the subsection heading, by striking ‘THREE-YEAR’ and inserting ‘FIVE-YEAR’; and

      (2) by striking ‘3-year period’ and inserting ‘5-year period’.

    (d) AUTHORIZATION OF APPROPRIATIONS- Section 418A(g) of the Act is amended to read as follows:

    ‘(g) AUTHORIZATION OF APPROPRIATIONS- (1) There are authorized to be appropriated for the high school equivalency program $15,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years.

    ‘(2) There are authorized to be appropriated for the college assistance migrant program $5,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years.’.

SEC. 406. BYRD HONORS SCHOLARSHIP PROGRAM.

    (a) DEFINITIONS- Section 419B of the Act (20 U.S.C. 1070d-32) is repealed.

    (b) PERIOD OF AWARD- Section 419C(b) of the Act (20 U.S.C. 1070d-33(b)) is amended to read as follows:

    ‘(b) PERIOD OF AWARD- Scholarships under this section shall be awarded for a period of not more than 4 years for the first 4 years of study at any institution of higher education eligible to participate in any programs assisted under this title.’.

    (c) ALLOCATION AMONG STATES- Section 419D of the Act (20 U.S.C. 1070d-34) is amended to read as follows:

‘ALLOCATION AMONG STATES

    ‘SEC. 419D. (a) ALLOCATION FORMULA- From the sums appropriated pursuant to the authority of section 419K for any fiscal year, the Secretary shall allocate to each State that has an agreement under section 419E an amount equal to $1,500 multiplied by the number of scholarships determined by the Secretary to be available to such State in accordance with subsection (b).

    ‘(b) NUMBER OF SCHOLARSHIPS AVAILABLE- The number of scholarships to be made available in a State for any fiscal year shall bear the same ratio to the number of scholarships made available to all States as the State’s population ages 5 through 17 bears to the population ages 5 through 17 in all the States, except that not less than 10 scholarships shall be made available to any State.

    ‘(c) USE OF CENSUS DATA- For the purpose of this section, the population ages 5 through 17 in a State and in all the States shall be determined by the most recently available data, satisfactory to the Secretary, from the Bureau of the Census.’.

    (d) SELECTION OF SCHOLARS- Section 419G of the Act (20 U.S.C. 1070d-37) is amended--

      (1) by amending subsection (b) to read as follows:

    ‘(b) ADOPTION OF PROCEDURES- The State educational agency shall adopt selection procedures designed to ensure an equitable geographic distribution of awards within the State (and in the case of the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, or Palau (until such time as the Compact of Free Association is ratified), not to exceed 10 individuals will be selected from such entities).’; and

      (2) by adding at the end the following new subsection:

    ‘(d) TIMING OF SELECTION- The selection process shall be completed, and the awards made, prior to the end of each secondary school academic year.’.

    (e) STIPENDS AND SCHOLARSHIP CONDITIONS- Section 419H(a) of the Act (20 U.S.C. 1070d-38(a)) is amended by inserting before the period the following: ‘, except that in no case shall the total amount of financial aid awarded to such student exceed such student’s total cost-of-attendance’.

    (f) CONSTRUCTION OF NEEDS PROVISIONS- Section 419J of the Act (20 U.S.C. 1070d-40) is amended by striking ‘Nothing’ and inserting ‘Except as provided in section 471, nothing’.

    (g) AWARDS CEREMONY-

      (1) REPEAL- Section 419I of the Act (20 U.S.C. 1070d-39) is repealed.

      (2) CONFORMING AMENDMENTS- Section 419E of the Act (20 U.S.C. 1070d-35) is amended--

        (A) in paragraph (3) by inserting ‘and’ after the semicolon;

        (B) in paragraph (4) by striking ‘at an awards ceremony in accordance with section 419I; and’ and inserting a period; and

      (3) by striking paragraph (5).

    (h) AUTHORIZATION OF APPROPRIATIONS- Section 419K of the Act is amended to read as follows:

‘AUTHORIZATION OF APPROPRIATIONS

    ‘SEC. 419K. There are authorized to be appropriated for this subpart $10,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years.’.

SEC. 407. PAYMENTS TO INSTITUTIONS OF HIGHER EDUCATION.

    Section 420 of the Act (20 U.S.C. 1070e) is repealed.

SEC. 408. VETERANS OUTREACH.

    Section 420A of the Act (20 U.S.C. 1070f(a)) is repealed.

SEC. 409. CHILD CARE.

    Section 420B(c) of the Act is amended by striking ‘fiscal year 1987’ and inserting ‘fiscal year 1993’ and by striking ‘$10,000,000’ and inserting ‘$20,000,000’.

SEC. 410. EFFECTIVE DATES FOR AMENDMENTS TO PART A.

    (a) IN GENERAL- The changes made in part A of title IV of the Act by the amendments made by this part shall take effect on the date of enactment of this Act, except--

      (1) as otherwise provided in such part A;

      (2) that the changes made in section 411, relating to Pell Grants, shall apply to the awarding of Pell Grants for periods of enrollment beginning on or after July 1, 1993; and

      (3) that the changes in section 413C(a)(2), relating to the Federal share for the supplemental educational opportunity grant program, shall apply to funds provided for such program for the award years beginning on or after July 1, 1993.

PART B--FEDERAL FAMILY EDUCATION LOANS

SEC. 411. PROGRAM DESIGNATION AND DURATION.

    (a) NAME OF PROGRAMS- Part B of title IV of the Act (20 U.S.C. 1071 et seq.) is amended--

      (1) by striking the heading of such part and inserting the following:

‘Part B--Federal Family Education Loan Program’; and

      (2) by striking section 421(c) (20 U.S.C. 1070f(c)), and inserting the following:

    ‘(c) DESIGNATION- The program established under this part shall be referred to as the ‘Robert T. Stafford Federal Student Loan Program’. Loans made pursuant to sections 427 and 428 shall be known as ‘Federal Stafford Loans’.’.

    (b) PROGRAM DURATION-

      (1) FEDERAL INSURANCE DURATION- Section 424(a) of the Act (20 U.S.C. 1074(a)) is amended--

        (A) by striking ‘October 1, 1992’ and inserting ‘October 1, 1998’; and

        (B) by striking ‘September 30, 1997’ and inserting ‘September 30, 2002’.

      (2) INTEREST SUBSIDY DURATION- Section 428(a)(5) (20 U.S.C. 1078(a)(5)) of the Act is amended--

        (A) by striking ‘September 30, 1992’ and inserting ‘September 30, 1998’; and

        (B) by striking ‘September 30, 1997’ and inserting ‘September 30, 2002’.

    (c) GUARANTEE AUTHORITY CONTINGENT ON TIMELY RULEMAKING- Section 421 of the Act is amended by inserting after subsection (c) the following new subsection:

    ‘(d) LIMITATION ON AUTHORIZATION TO GUARANTEE NEW LOANS UNDER THIS PART- Notwithstanding any other provision of this part, no new loan guarantees shall be issued after June 30, 1994, if the Secretary does not issue final regulations implementing the changes made to this part under the Higher Education Amendments of 1992 prior to that date. The authority to issue new loan guarantees shall resume upon the Secretary’s issuance of such regulations. This subsection shall not provide the basis for avoiding any requirements for notice and public hearing on such regulations.’.

SEC. 412. ADVANCES FOR RESERVE FUNDS OF STATE AND NONPROFIT PRIVATE LOAN INSURANCE PROGRAMS.

    Section 422 of the Act (20 U.S.C. 1072) is amended--

      (1) in subsection (a)(2), by adding at the end the following new sentence:

      ‘Except as provided in section 428(c)(10)(E) or (F), such unencumbered non-Federal portion shall not be subject to recall, repayment, or recovery by the Secretary.’; and

      (2) by adding at the end thereof the following new subsections:

    ‘(e) CORRECTION FOR ERRORS UNDER REDUCTION OF EXCESS CASH RESERVES-

      ‘(1) IN GENERAL- The Secretary shall pay any guaranty agency the amount of reimbursement of claims under section 428(c)(1), filed between September 1, 1988, and December 31, 1989, which were previously withheld or canceled in order to be applied to satisfy such agency’s obligation to eliminate excess cash reserves held by such agency, based on the maximum cash reserve (as described in subsection (e) of this section as in effect on September 1, 1988) permitted at the end of 1986, if such maximum cash reserve was miscalculated because of erroneous financial information provided by such agency to the Secretary and if (A) such erroneous information is verified by an audited financial statement of the reserve fund, signed by a certified public accountant, and (B) such audited financial statement is provided to the Secretary prior to January 1, 1993.

      ‘(2) AMOUNT- The amount of reimbursement for claims shall be equal to the amount of reimbursement for claims withheld or canceled in order to be applied to such agency’s obligation to eliminate excess cash reserves which exceeds the amount of that which would have been withheld or canceled if the maximum excess cash reserves had been accurately calculated.

    ‘(f) REFUND OF CASH RESERVE PAYMENTS- The Secretary shall, within 30 days after the date of enactment of the Higher Education Amendments of 1992, pay the full amount of payments withheld or canceled under paragraph (3) of this subsection to any guaranty agency which--

      ‘(1) was required to eliminate excess cash reserves, based on the maximum cash reserve (as described in subsection (e) of this section as in effect on September 1, 1988) permitted at the end of 1986;

      ‘(2) appealed the Secretary’s demand that such agency should eliminate such excess cash reserves and received a waiver of a portion of the amount of such excess cash reserves to be eliminated;

      ‘(3) had payments under section 428(c)(1) or section 428(f) previously withheld or canceled in order to be applied to satisfy such agency’s obligation to eliminate excess cash reserves held by such agency, based on the maximum cash reserve (as described in subsection (e) of this section as in effect on September 1, 1988) permitted at the end of 1986; and

      ‘(4) according to a Department of Education review that was completed and forwarded to such guaranty agency prior to January 1, 1992, is expected to become insolvent during or before 1996 and the payments withheld or canceled under paragraph (3) of this subsection are a factor in such agency’s impending insolvency.’.

SEC. 413. LIMITATIONS ON FEDERAL LOAN INSURANCE.

    Section 425 of the Act (20 U.S.C. 1075) is amended--

      (1) in subsection (a)(1)(A) by striking clauses (i), (ii), and (iii) and inserting the following:

        ‘(i) in the case of a student at an eligible institution who has not successfully completed the first year of a program of undergraduate education--

          ‘(I) $2,625, if such student is enrolled in a program whose length is at least one academic year in length (as determined under section 481);

          ‘(II) $1,750, if such student is enrolled in a program whose length is less than one academic year, but at least 2/3 of such an academic year; and

          ‘(III) $875, if such student is enrolled in a program whose length is less than 2/3 , but at least 1/3 , of such an academic year;

        ‘(ii) in the case of a student who has successfully completed such first year but has not successfully completed the remainder of a program of undergraduate study--

          ‘(I) $3,500, if such student is enrolled in a program whose length is at least one academic year in length (as determined under section 481);

          ‘(II) $2,325, if such student is enrolled in a program whose length is less than one academic year, but at least 2/3 of such an academic year; and

          ‘(III) $1,175, if such student is enrolled in a program whose length is less than 2/3 , but at least 1/3 , of such an academic year;

        ‘(iii) in the case of a student at an eligible institution who has successfully completed such first and second year but has not successfully completed the remainder of a program of undergraduate study--

          ‘(I) $5,500, if such student is enrolled in a program whose length is at least one academic year in length (as determined under section 481);

          ‘(II) $3,675, if such student is enrolled in a program whose length is less than one academic year, but at least 2/3 of such an academic year; and

          ‘(III) $1,825, if such student is enrolled in a program whose length is less than 2/3 , but at least 1/3 , of such an academic year; and

        ‘(iv) in the case of a graduate or professional student (as defined in regulations of the Secretary) at an eligible institution, $8,500;’.

      (2) in subsection (a)(2)(A), by striking clauses (i) and (ii) and inserting the following:

      ‘(i) $23,000, in the case of any student who has not successfully completed a program of undergraduate education, excluding loans made under section 428A or 428B; and

      ‘(ii) $65,500, in the case of any graduate or professional student (as defined by regulations of the Secretary) and (I) including any loans which are insured by the Secretary under this section, or by a guaranty agency, made to such student before the student became a graduate or professional student), but (II) excluding loans made under section 428A or 428B,

    except that the Secretary may increase the limit applicable to students who are pursuing programs which the Secretary determines are exceptionally expensive.’.

SEC. 414. ELIGIBILITY OF STUDENT BORROWERS AND TERMS OF FEDERALLY INSURED STUDENT LOANS.

    (a) SECURITY AND ENDORSEMENT- Section 427(a)(2)(A) of the Act (20 U.S.C. 1077(a)(2)(A)) is amended to read as follows:

        ‘(A) is made without security and without endorsement;’.

    (b) INSURED LOAN DEFERMENTS- Section 427(a)(2)(C) of the Act is amended to read as follows:

        ‘(C) provides that periodic installments of principal need not be paid, but interest shall accrue and be paid, during any period--

          ‘(i) during which the borrower--

            ‘(I) is pursuing at least a half-time course of study as determined by an eligible institution; or

            ‘(II) is pursuing a course of study pursuant to a graduate fellowship program approved by the Secretary, or pursuant to a rehabilitation training program for individuals with disabilities approved by the Secretary,

          except that no borrower shall be eligible for a deferment under this clause, or a loan made under this part (other than a loan made under 428B or 428C), while serving in a medical internship or residency program;

          ‘(ii) not in excess of 3 years during which the borrower is seeking and unable to find full-time employment; or

          ‘(iii) not in excess of 3 years for any reason which the lender determines, in accordance with regulations prescribed by the Secretary under section 435(o), has caused or will cause the borrower to have an economic hardship;

        and provides that any such period shall not be included in determining the 10-year period described in subparagraph (B);’.

    (c) GRADUATED REPAYMENT- Section 427 of the Act is amended--

      (1) in subsection (a)(2)--

        (A) by striking ‘and’ at the end of subparagraph (G);

        (B) by redesignating subparagraph (H) as subparagraph (I); and

        (C) by inserting after subparagraph (G) the following:

        ‘(H) provides that, no more than 6 months prior to the date on which the borrower’s first payment on a loan is due, the lender shall offer the borrower the option of repaying the loan in accordance with a graduated or income-sensitive repayment schedule established by the lender and in accordance with the regulations of the Secretary; and’; and

      (2) in subsection (c), by striking ‘MINIMUM REPAYMENT RATE- The total of the payments’ and inserting ‘SPECIAL REPAYMENT RULES- Except as provided in subsection (a)(2)(H), the total of the payments’.

    (d) STUDY ABROAD- Section 427(a)(3) of the Act is amended to read as follows:

      ‘(3) the funds borrowed by a student are disbursed to the institution by check or other means that is payable to and requires the endorsement or other certification by such student, except--

        ‘(A) that nothing in this title shall be interpreted--

          ‘(i) to allow the Secretary to require checks to be made copayable to the institution and the borrower; or

          ‘(ii) to prohibit the disbursement of loan proceeds by means other than by check; and

        ‘(B) in the case of any student who is studying outside the United States in a program of study abroad that is approved for credit by the home institution at which such student is enrolled, the funds shall, at the request of the borrower, be delivered directly to the student and the checks may be endorsed, and fund transfers authorized, pursuant to an authorized power-of-attorney; and’.

    (e) MINIMUM PAYMENT FOR MARRIED COUPLES; MINIMUM PAYMENT OF INTEREST- Section 427(c) of the Act is further amended by striking ‘, except that in the case of a husband and wife’ and all that follows through ‘whichever is less’ and inserting ‘(but in no instance less than the amount of interest due and payable)’.

SEC. 415. APPLICABLE INTEREST RATES.

    (a) PLUS AND SLS LOAN INTEREST RATE- Section 427A(c)(4) of the Act (20 U.S.C. 1077a(c)(4)) is amended by adding at the end the following new subparagraph:

      ‘(D) Notwithstanding subparagraph (A)--

        ‘(i) for any loan made pursuant to section 428A for which the first disbursement is made on or after October 1, 1992--

          ‘(I) subparagraph (B) shall be applied by substituting ‘3.1’ for ‘3.25’; and

          ‘(II) the interest rate shall not exceed 11 percent; and

        ‘(ii) for any loan made pursuant to section 428B for which the first disbursement is made on or after October 1, 1992--

          ‘(I) subparagraph (B) shall be applied by substituting ‘3.1’ for ‘3.25’; and

          ‘(II) the interest rate shall not exceed 10 percent.’.

    (b) EXCESS INTEREST PAYMENTS- Section 427A(e) of the Act is amended--

      (1) in paragraph (1)--

        (A) by striking ‘IN GENERAL’ and inserting ‘EXCESS INTEREST ON 10 PERCENT LOANS’;

        (B) by striking ‘paragraph (3)’ and inserting ‘paragraph (5)’;

      (2) in paragraph (2), by inserting ‘FOR 10 PERCENT LOANS’ after ‘(2) AMOUNT OF ADJUSTMENT’;

      (3) by striking paragraph (5);

      (4) by redesignating paragraphs (3) and (4) as paragraphs (5) and (6), respectively;

      (5) by inserting the following new paragraphs after paragraph (2):

      ‘(3) EXCESS INTEREST ON LOANS AFTER 1992 AMENDMENTS, TO BORROWERS WITH OUTSTANDING BALANCES- If, with respect to a loan made on or after the date of enactment of the Higher Education Amendments of 1992 to a borrower, who on the date of entering into the note or other written evidence of the loan, has an outstanding balance of principal or interest on any other loan made, insured, or guaranteed under this part, the sum of the average of the bond equivalent rates of 91-day Treasury bills auctioned for that quarter and 3.1 percent is less than the applicable interest rate, then an adjustment shall be made--

        ‘(A) by calculating excess interest in the amount computed under paragraph (4) of this subsection; and

        ‘(B)(i) during any period in which a student is eligible to have interest payments paid on his or her behalf by the Government pursuant to section 428(a), by crediting the excess interest to the Government; or

        ‘(ii) during any other period, by crediting such excess interest to the reduction of principal to the extent provided in paragraph (5) of this subsection.

      ‘(4) AMOUNT OF ADJUSTMENT- The amount of any adjustment of interest on a loan to be made under this subsection for any quarter shall be equal to--

        ‘(A) the applicable interest rate minus the sum of (i) the average of the bond equivalent rates of 91-day Treasury bills auctioned for such calendar quarter, and (ii) 3.1 percent; multiplied by

        ‘(B) the outstanding principal balance of the loan (not including unearned interest added to principal) at the end of such calendar quarter; divided by

        ‘(C) four.’; and

      (6) in paragraph (5), as redesignated--

        (A) by striking ‘or by reducing the number of payments’ and inserting ‘by reducing the number of payments’; and

        (B) by striking the period at the end and inserting ‘, or by reducing the amount of the final payment of the loan. Nothing in this paragraph shall be construed to require the lender to make additional disclosures pursuant to section 433(b).’.

    (c) INTEREST RATE FOR NEW BORROWERS- Section 427A of the Act is further amended--

      (1) by redesignating subsections (e), (f) and (g) as subsections (f), (g) and (h), respectively; and

      (2) by inserting after subsection (d) the following new subsection:

    ‘(e) INTEREST RATES FOR NEW BORROWERS AFTER OCTOBER 1, 1992-

      ‘(1) IN GENERAL- Notwithstanding subsections (a), (b), and (d) of this section, with respect to any loan (other than a loan made pursuant to sections 428A, 428B and 428C) for which the first disbursement is made on or after October 1, 1992, to any borrower who, on the date of entering into the note or other written evidence of the loan, has no outstanding balance of principal or interest on any loan made, insured, or guaranteed under this part, the applicable rate of interest shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to--

        ‘(A) the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held prior to such June 1; plus

        ‘(B) 3.10 percent,

      except that such rate shall not exceed 9 percent.

      ‘(2) CONSULTATION- The Secretary shall determine the applicable rate of interest under paragraph (1) after consultation with the Secretary of the Treasury and shall publish such rate in the Federal Register as soon as practicable after the date of determination.’.

SEC. 416. AMENDMENTS TO SECTION 428.

    (a) FEDERAL INTEREST SUBSIDIES-

      (1) REQUIREMENTS TO RECEIVE SUBSIDY- Section 428(a)(2)(C) of the Act (20 U.S.C. 1078(a)(2)(C)) is amended--

        (A) by amending clause (i) to read as follows:

        ‘(i) a student’s estimated financial assistance means, for the period for which the loan is sought, the amount of assistance such student will receive under subpart 1 of part A (as determined in accordance with section 484(b)), subpart 3 of part A, and parts C and E of this title, and any veterans’ education benefits paid because of enrollment in a postsecondary education institution, including veterans’ education benefits (as defined in section 480(c)), plus other scholarship, grant, or loan assistance.’; and

        (B) by amending clause (ii) to read as follows:

        ‘(ii) the determination of need and of the amount of a loan by an eligible institution under subparagraph (B) with respect to a student shall be calculated in accordance with part F.’.

      (2) LIMITATION ON INTEREST PRIOR TO FIRST DISBURSEMENT- Section 428(a)(3)(A) of the Act is amended by adding at the end the following new clause:

      ‘(v) A lender may not receive interest on a loan for any period that precedes the date that is--

        ‘(I) in the case of a loan disbursed by check, 10 days before the first disbursement of the loan; or

        ‘(II) in the case of a loan disbursed by electronic funds transfer, 3 days before the first disbursement of the loan.’.

      (3) LOANS THAT HAVE NOT BEEN CONSUMMATED- Section 428(a) of the Act is amended by inserting after paragraph (6) the following new paragraph:

      ‘(7) LOANS THAT HAVE NOT BEEN CONSUMMATED- Lenders may not charge interest or receive interest subsidies or special allowance payments for loans for which the disbursement checks have not been cashed or for which electronic funds transfers have not been completed.’.

    (b) LOAN AMOUNTS-

      (1) ANNUAL LIMITS- Section 428(b)(1)(A) of the Act is amended--

        (A) by inserting ‘or in a program of study abroad approved for credit by the eligible home institution at which such student is enrolled’ after ‘at an eligible institution’; and

        (B) by striking clauses (i) through (iii) and inserting the following:

          ‘(i) in the case of a student at an eligible institution who has not successfully completed the first year of a program of undergraduate education--

            ‘(I) $2,625, if such student is enrolled in a program whose length is at least one academic year in length (as determined under section 481);

            ‘(II) $1,750, if such student is enrolled in a program whose length is less than one academic year, but at least 2/3 of such an academic year; and

            ‘(III) $875, if such student is enrolled in a program whose length is less than 2/3 , but at least 1/3 , of such an academic year;

          ‘(ii) in the case of a student who has successfully completed such first year but has not successfully completed the remainder of a program of undergraduate study--

            ‘(I) $3,500, if such student is enrolled in a program whose length is at least one academic year in length (as determined under section 481);

            ‘(II) $2,325, if such student is enrolled in a program whose length is less than one academic year, but at least 2/3 of such academic year; and

            ‘(III) $1,175, if such student is enrolled in a program whose length is less than 2/3 , but at least 1/3 , of such academic year;

          ‘(iii) in the case of a student at an eligible institution who has successfully completed such first and second year but has not successfully completed the remainder of a program of undergraduate study--

            ‘(I) $5,500, if such student is enrolled in a program whose length is at least one academic year in length (as determined under section 481);

            ‘(II) $3,675, if such student is enrolled in a program whose length is less than one academic year, but at least 2/3 of such an academic year; and

            ‘(III) $1,825, if such student is enrolled in a program whose length is less than 2/3 , but at least 1/3 , of such an academic year; and

          ‘(iv) in the case of a graduate or professional student (as defined in regulations of the Secretary) at an eligible institution, $8,500;’.

      (2) AGGREGATE LIMITS- Section 428(b)(1)(B) of the Act is amended by striking clauses (i) and (ii) and inserting the following:

          ‘(i) $23,000, in the case of any student who has not successfully completed a program of undergraduate education, excluding loans made under section 428A or 428B; and

          ‘(ii) $65,500, in the case of any graduate or professional student (as defined by regulations of the Secretary), and (I) including any loans which are insured by the Secretary under this section, or by a guaranty agency, made to such student before the student became a graduate or professional student, but (II) excluding loans made under section 428A or 428B,

      except that the Secretary may increase the limit applicable to students who are pursuing programs which the Secretary determines are exceptionally expensive.’.

    (c) REPAYMENT PERIOD CALCULATIONS; INCOME SENSITIVE REPAYMENT-

      (1) AMENDMENT- Subparagraphs (D) and (E) of section 428(b)(1) of the Act are amended to read as follows:

        ‘(D) provides that (i) the student borrower shall be entitled to accelerate without penalty the whole or any part of an insured loan, (ii) the repayment period of any insured loan may not exceed 10 years, and (iii) the note, or other written evidence of any loan, may contain such reasonable provisions relating to repayment in the event of default by the borrower as may be authorized by regulations of the Secretary in effect at the time such note or written evidence was executed, and shall contain a notice that repayment may, following a default by the borrower, be subject to repayment in accordance with the regulations required by subsection (m) if the Secretary has published the finding required by paragraph (2) of such subsection;

        ‘(E) subject to subparagraphs (D) and (L), and except as provided by subparagraph (M), provides that--

          ‘(i) not more than 6 months prior to the date on which the borrower’s first payment is due, the lender shall offer the borrower of a loan made, insured, or guaranteed under this section or section 428A, the option of repaying the loan in accordance with a graduated or income-sensitive repayment schedule established by the lender and in accordance with regulations of the Secretary; and

          ‘(ii) repayment of loans shall be in installments over a period of not less than 5 years (unless the student, during the 6 months immediately preceding the start of the repayment period, specifically requests that repayment be made over a shorter period) nor more than 10 years commencing at the beginning of the repayment period determined under paragraph (7) of this subsection;’.

      (2) DEFINITION OF REPAYMENT PERIOD- Section 428(b) of the Act is amended by adding at the end the following new paragraph:

      ‘(7) REPAYMENT PERIOD- (A) In the case of a loan made under section 427 or 428, the repayment period shall begin on the day immediately following the expiration of the 6-month period after the student ceases to carry at least one-half the normal full-time academic workload as determined by the institution, unless the borrower requests and is granted a repayment schedule that provides for repayment to commence at an earlier point in time, and shall exclude any period of authorized deferment or forbearance.

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

      ‘(C) In the case of a loan made under section 428B or 428C, the repayment period shall begin on the day the loan is disbursed, and shall exclude any period of authorized deferment or forbearance.’.

    (d) MINIMUM PAYMENT FOR MARRIED COUPLES; MINIMUM PAYMENT OF INTEREST- Section 428(b)(1)(L)(i) of the Act is amended by striking ‘, except that, in the case of a husband and wife’ and all that follows through ‘whichever is less’ and inserting ‘(but in no instance less than the amount of interest due and payable)’.

    (e) DEFERMENTS-

      (1) AMENDMENT- Section 428(b)(1)(M) of the Act is amended to read as follows:

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

          ‘(i) during which the borrower--

            ‘(I) is pursuing at least a half-time course of study as determined by an eligible institution; or

            ‘(II) is pursuing a course of study pursuant to a graduate fellowship program approved by the Secretary, or pursuant to a rehabilitation training program for disabled individuals approved by the Secretary,

          except that no borrower shall be eligible for a deferment under this clause, or loan made under this part (other than a loan made under 428B or 428C), while serving in a medical internship or residency program;

          ‘(ii) not in excess of 3 years during which the borrower is seeking and unable to find full-time employment; or

          ‘(iii) not in excess of 3 years for any reason which the lender determines, in accordance with regulations prescribed by the Secretary under section 435(o), has caused or will cause the borrower to have an economic hardship;’.

      (2) DEFINITION OF ECONOMIC HARDSHIP- Section 435 of the Act is amended by adding at the end the following new subsection:

    ‘(o) ECONOMIC HARDSHIP-

      ‘(1) IN GENERAL- For purposes of this part and part E, a borrower shall be considered to have an economic hardship if--

        ‘(A) such borrower is working full-time and is earning an amount which does not exceed the greater of--

          ‘(i) the minimum wage rate described in section 6 of the Fair Labor Standards Act of 1938; or

          ‘(ii) an amount equal to 100 percent of the poverty line for a family of 2 as determined in accordance with section 673(2) of the Community Service Block Grant Act; or

        ‘(B) such borrower meets such other criteria as are established by the Secretary by regulation in accordance with paragraph (2).

      ‘(2) CONSIDERATIONS- In establishing criteria for purposes of paragraph (1)(B), the Secretary shall consider the borrower’s income and debt-to-income ratio as primary factors.’.

    (f) DISBURSEMENT- Section 428(b)(1)(N) of the Act is amended by striking ‘except in the case of attendance at an institution outside the United States, the funds shall be delivered directly to the student;’ and inserting ‘except in the case of students who are studying outside the United States in a program of study abroad that is approved for credit by the home institution at which the student is enrolled, the funds shall, at the request of the borrower, be delivered directly to the student and the checks may be endorsed, and fund transfers authorized, pursuant to an authorized power-of-attorney;’.

    (g) CONSEQUENCES OF LS&T ACTIONS- Section 428(b)(1)(T) is amended to read as follows:

        ‘(T) authorizes (i) the limitation of the total number of loans or volume of loans, made under this part to students attending a particular eligible institution during any academic year; and (ii) the limitation, suspension, or termination of the eligibility of an eligible institution if--

          ‘(I) such institution is ineligible for the emergency action, limitation, suspension, or termination of eligible institutions under regulations issued by the Secretary or is ineligible pursuant to criteria, rules, or regulations issued under the student loan insurance program which are substantially the same as regulations with respect to emergency action, limitation, suspension, or termination of such eligibility issued by the Secretary;

          ‘(II) there is a State constitutional prohibition affecting the eligibility of such an institution;

          ‘(III) such institution fails to make timely refunds to students as required by regulations issued by the Secretary or has not satisfied within 30 days of issuance a final judgment obtained by a student seeking such a refund;

          ‘(IV) such institution or an owner, director, or officer of such institution is found guilty in any criminal, civil, or administrative proceeding, or such institution or an owner, director, or officer of such institution is found liable in any civil or administrative proceeding, regarding the obtaining, maintenance, or disbursement of State or Federal grant, loan, or work assistance funds; or

          ‘(V) such institution or an owner, director, or officer of such institution has unpaid financial liabilities involving the improper acquisition, expenditure, or refund of State or Federal financial assistance funds;

        except that, if a guaranty agency limits, suspends, or terminates the participation of an eligible institution, the Secretary shall apply that limitation, suspension, or termination to all locations of such institution, unless the Secretary finds, within 30 days of notification of the action by the guaranty agency, that the guaranty agency’s action did not comply with the requirements of this section;’.

    (h) AUDITS OF LENDERS- Section 428(b)(1)(U) of the Act is amended--

      (1) in clause (i), by striking ‘and’ at the end thereof;

      (2) by inserting before the semicolon at the end thereof the following: ‘, and (iii) for (I) a compliance audit of each lender at least once a year and covering the period since the most recent audit, conducted by a qualified, independent organization or person in accordance with standards established by the Comptroller General for the audit of governmental organizations, programs, and functions, and as prescribed in regulations of the Secretary, the results of which shall be submitted to the Secretary, or (II) with regard to a lender that is audited under chapter 75 of title 31, United States Code, such audit shall be deemed to satisfy the requirements of subclause (I) for the period covered by such audit, except that the Secretary may waive the requirements of this clause (iii) if the lender submits to the Secretary the results of an audit conducted for other purposes that the Secretary determines provides the same information as the audits required by this clause;’.

    (i) FORBEARANCE- Section 428(b)(1)(V) of the Act is amended--

      (1) by striking out ‘and’ at the end of clause (i);

      (2) in clause (ii), by inserting ‘or (ii)’ after ‘clause (i)’ each place such term appears;

      (3) by striking the period at the end of clause (ii) and inserting a semicolon;

      (4) by redesignating clause (ii) as clause (iv); and

      (5) by inserting after clause (i) the following new clauses:

        ‘(ii) provides that, if the borrower’s debt burden under this title equals or exceeds 20 percent of gross income and the borrower submits a written request, a lender shall grant the borrower forbearance of principal and interest (or principal only at the option of the borrower), and shall renew such forbearance at 12-month intervals for a period not to exceed 3 years, on such terms as are otherwise consistent with the regulations of the Secretary and set forth in writing by the parties to the loan;

        ‘(iii) provides that the form of forbearance granted by the lender for purposes of this subparagraph shall be the temporary cessation of payments, unless the borrower selects forbearance in the form of an extension of time for making payments, or smaller payments than were previously scheduled; and’.

    (j) ADDITIONAL GUARANTY AGREEMENT REQUIREMENTS- Section 428(b)(1) of the Act is amended by striking subparagraphs (W) and (X) and inserting the following:

        ‘(W) provides authority for the guaranty agency to require a participation agreement between the guaranty agency and each eligible institution within the State in which it is designated, as a condition for guaranteeing loans made on behalf of students attending the institution;

        ‘(X) provides assurances that the agency will implement all requirements of the Secretary for uniform claims and procedures pursuant to section 432(l); and

        ‘(Y) provides information to the Secretary in accordance with section 428(c)(10) and maintains reserve funds determined by the Secretary to be sufficient in relation to such agency’s guarantee obligations.’.

    (k) CONTENTS OF INSURANCE PROGRAM AGREEMENTS- Section 428(b)(2) of the Act is amended--

      (1) in subparagraph (C), by striking ‘, as the Secretary may reasonably require to carry out the Secretary’s functions under this part,’ and inserting ‘, including financial information, as the Secretary may reasonably require to carry out the Secretary’s functions under this part and protect the financial interest of the United States,’;

      (2) in subparagraph (D)--

        (A) by striking ‘at least once every 2 years’ in clause (i) and inserting ‘on at least an annual basis’;

        (B) by striking ‘and’ at the end of clause (ii);

      (3) in subparagraph (E)--

        (A) by inserting ‘(i)’ after the subparagraph designation;

        (B) by striking the period at the end thereof and inserting a semicolon and ‘and’; and

        (C) by adding at the end the following new clause:

        ‘(ii) provide that the lender (or the holder of the loan) shall, not later than 120 days after the borrower has left the eligible institution, notify the borrower of the date on which the repayment period begins; and’; and

      (4) inserting at the end thereof the following new subparagraph:

        ‘(F) provide that, if the sale, other transfer, or assignment of a loan made under this part to another holder will result in a change in the identity of the party to whom the borrower must send subsequent payments or direct any communications concerning the loans, then--

          ‘(i) the transferor and the transferee will be required, not later than 45 days from the date the transferee acquires a legally enforceable right to receive payment from the borrower on such loan, each to provide a separate notice to the borrower of--

            ‘(I) the sale or other transfer;

            ‘(II) the identity of the transferee;

            ‘(III) the name and address of the party to whom subsequent payments or communications must be sent; and

            ‘(IV) the telephone numbers of both the transferor and the transferee; and

          ‘(ii) the transferor will be required to notify the guaranty agency, and, upon the request of an institution of higher education, the guaranty agency shall notify the last such institution the student attended prior to the beginning of the repayment period of any loan made under this part, of--

            ‘(I) any sale or other transfer of the loan to another holder; and

            ‘(II) the address and telephone number by which contact may be made with such other holder concerning repayment of the loan,

        except that this subparagraph (F) shall only apply if the borrower is in the grace period described in section 427(a)(2)(B) or 428(b)(7) or is in repayment status.’.

    (l) GUARANTY AGENCY INCENTIVE PAYMENTS- Section 428(b)(3) of the Act is amended--

      (1) by redesignating subparagraphs (B) and (C) as subparagraphs (C) and (D), respectively; and

      (2) by inserting after subparagraph (A) the following new subparagraph:

        ‘(B) offer, directly or indirectly, any premium, incentive payment, or other inducement to any lender, or any agent, employee, or independent contractor of any lender or guaranty agency, in order to administer or market loans made under this part (other than a loan made under section 428H or a loan made as part of a guaranty agency’s lender-of-last-resort program) for the purpose of securing the designation of that guaranty agency as the insurer of such loans;’.

    (m) ELIMINATION OF TEACHER DEFERMENT- Section 428(b) of the Act is amended--

      (1) by striking paragraph (4); and

      (2) by redesignating paragraphs (5) and (6) as paragraphs (4) and (5), respectively.

    (n) PROCEDURES FOR DEFERMENTS- Section 428(b)(4) of the Act (as redesignated in subsection (m)) is amended by adding at the end thereof the following new sentence: ‘Requests for deferment of repayment of loans under this part by students engaged in graduate or postgraduate fellowship-supported study (such as pursuant to a Fulbright grant) outside the United States shall be approved until completion of the period of the fellowship.’.

    (o) INFORMATION FROM STATE LICENSING BOARDS- Section 428(b) of the Act is further amended by inserting after paragraph (5) (as redesignated in subsection (m)) the following new paragraph:

      ‘(6) STATE GUARANTY AGENCY INFORMATION REQUEST OF STATE LICENSING BOARDS- Each guaranty agency is authorized to enter into agreements with each appropriate State licensing board under which the State licensing board, upon request, will furnish the guaranty agency with the address of a student borrower in any case in which the location of the student borrower is unknown or unavailable to the guaranty agency.’.

    (p) GUARANTY AGENCY AGREEMENTS-

      (1) AUTHORITY TO ENTER INTO AGREEMENTS- Section 428(c)(1)(A) of the Act is amended by striking the period at the end and inserting a comma and ‘or later than 45 days after the guaranty agency discharges its insurance obligation on the loan.’.

      (2) ADDITIONAL REVIEW OF EXCEPTIONAL PERFORMANCE PROHIBITED- Section 428(c)(1) is amended by adding at the end the following new subparagraph:

      ‘(D) Reimbursements of losses made by the Secretary on loans submitted for claim by an eligible lender, servicer, or guaranty agency designated for exceptional performance under section 428I shall not be subject to additional review by the Secretary or repurchase by the guaranty agency for any reason other than a determination by the Secretary that the eligible lender, servicer, or guaranty agency engaged in fraud or other purposeful misconduct in obtaining designation for exceptional performance.’.

      (3) CONTENTS OF GUARANTY AGREEMENTS- Section 428(c)(2) of the Act is amended--

        (A) by striking ‘and’ at the end of subparagraph (F);

        (B) by redesignating subparagraph (G) as subparagraph (I); and

        (C) by inserting after subparagraph (F) the following new subparagraphs:

        ‘(G) shall prohibit the Secretary from making any reimbursement under this subsection to a guaranty agency when a default claim is based on an inability to locate the borrower, unless the guaranty agency, at the time of filing for reimbursement, demonstrates to the Secretary that diligent attempts have been made to locate the borrower through the use of reasonable skip-tracing techniques in accordance with regulations prescribed by the Secretary; and

        ‘(H) set forth assurances that--

          ‘(i) upon the request of an eligible institution, the guaranty agency shall, subject to clauses (ii) and (iii), furnish to the institution information with respect to students (including the names and addresses of such students) who received loans made, insured, or guaranteed under this part for attendance at the eligible institution and for whom preclaims assistance activities have been requested under subsection (l);

          ‘(ii) the guaranty agency may require the payment by the institution of a reasonable fee (as determined in accordance with regulations prescribed by the Secretary) for such information; and

          ‘(iii) the guaranty agency will require the institution to use such information only to assist the institution in reminding students of their obligation to repay student loans and shall prohibit the institution from disseminating the information for any other purpose.’.

      (4) FORBEARANCE- Section 428(c)(3) of the Act 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’;

        (C) by inserting after subparagraph (B) the following new subparagraph:

        ‘(C) shall contain provisions that specify that the form of forbearance granted by the lender for purposes of this paragraph shall be the temporary cessation of payments, unless the borrower selects forbearance in the form of an extension of time for making payments, or smaller payments than were previously scheduled.’; and

        (D) by striking the last sentence and inserting the following:

      ‘Guaranty agencies shall not be precluded from permitting the parties to such a loan from entering into a forbearance agreement solely because the loan is in default. The Secretary shall permit lenders to exercise administrative forbearances that do not require the agreement of the borrower, under conditions authorized by the Secretary. Such forbearances shall include (i) forbearances for borrowers who are delinquent at the time of the granting of an authorized period of deferment under section 428(b)(1)(M) or 427(a)(2)(C), and (ii) if the borrower is less than 60 days delinquent on such loans at the time of sale or transfer, forbearances for borrowers on loans which are sold or transferred.’.

      (5) NEW PROGRAMS’ INSURANCE PERCENTAGE- Section 428(c)(7) of the Act is amended--

        (A) in subparagraph (A)--

          (i) in the matter preceding clause (i), by striking ‘(1)(B)’ and inserting ‘(1)(C)’; and

          (ii) in clause (i), by inserting ‘and ends before October 1, 1991’ before the semicolon;

        (B) in subparagraph (B), by inserting ‘or (B)’ after ‘(A)’;

        (C) by redesignating subparagraph (B) (as amended) as subparagraph (C); and

        (D) by inserting after subparagraph (A) the following new subparagraph:

      ‘(B) Notwithstanding the provisions of paragraph (1)(C), the Secretary may pay a guaranty agency 100 percent of the amount expended by such agency in discharge of such agency’s insurance obligation for any fiscal year which--

        ‘(i) begins on or after October 1, 1991; and

        ‘(ii) is the fiscal year in which such guaranty agency begins to actively carry on a student loan insurance program which is subject to a guaranty agreement under subsection (b) or is one of the 4 succeeding fiscal years.’.

      (6) CONSIDERATIONS IN REQUIRING ASSIGNMENT- Section 428(c)(8) of the Act is amended by adding at the end the following new sentences: ‘Prior to making such determination for any guaranty agency, the Secretary shall, in consultation with the guaranty agency, develop criteria to determine whether such agency has made adequate collections efforts. In determining whether a guaranty agency’s collection efforts have met such criteria, the Secretary shall consider the agency’s record of success in collecting on defaulted loans, the age of the loans, and the amount of recent payments received on the loans.’.

      (7) GUARANTY AGENCY RESERVE LEVEL- Section 428(c) of the Act is amended by adding at the end the following new paragraph:

      ‘(10) GUARANTY AGENCY RESERVE LEVEL- (A) Each guaranty agency which has entered into an agreement with the Secretary pursuant to this subsection shall maintain a current minimum reserve level of at least .5 percent of the total attributable amount of all outstanding loans guaranteed by such agency for the fiscal year of the agency that begins in 1993. For purposes of this paragraph, such total attributable amount does not include amounts of outstanding loans transferred to the guaranty agency from another guaranty agency pursuant to a plan of the Secretary in response to the insolvency of the latter such guaranty agency. The minimum reserve level shall increase to--

        ‘(i) .7 percent of such total attributable amount for the fiscal year of the agency that begins in 1994;

        ‘(ii) .9 percent of such total attributable amount for the fiscal year of the agency that begins in 1995; and

        ‘(iii) 1.1 percent of such total attributable amount for each fiscal year of the agency that begins on or after January 1, 1996.

      ‘(B) The Secretary shall collect, on an annual basis, information from each guaranty agency having an agreement under this subsection to enable the Secretary to evaluate the financial solvency of each such agency. The information collected shall include the level of such agency’s current reserves, cash disbursements and accounts receivable.

      ‘(C) If (i) any guaranty agency falls below the required minimum reserve level in any 2 consecutive years, (ii) any guaranty agency’s Federal reimbursement payments are reduced to 80 percent pursuant to section 428(c)(1)(B)(ii), or (iii) the Secretary determines that the administrative or financial condition of a guaranty agency jeopardizes such agency’s continued ability to perform its responsibilities under its guaranty agreement, then the Secretary shall require the guaranty agency to submit and implement a management plan acceptable to the Secretary within 30 working days of any such event.

      ‘(D) Each management plan described in subparagraph (C) shall include the means by which the guaranty agency will improve its financial and administrative condition to the required level within 18 months.

      ‘(E) The Secretary may terminate a guaranty agency’s agreement in accordance with subparagraph (F) if--

        ‘(i) a guaranty agency required to submit a management plan under this paragraph fails to submit a plan that is acceptable to the Secretary;

        ‘(ii) the Secretary determines that a guaranty agency has failed to improve substantially its administrative and financial condition; or

        ‘(iii) the Secretary determines that the guaranty agency is in danger of financial collapse.

      ‘(F) Except as provided in subparagraph (G), if a guaranty agency’s agreement under this subsection is terminated pursuant to subparagraph (E), then the Secretary shall assume responsibility for all functions of the guaranty agency under the loan insurance program of such agency. In performing such functions the Secretary is authorized to--

        ‘(i) permit the transfer of guarantees to another guaranty agency;

        ‘(ii) revoke the reinsurance agreement of the guaranty agency at a specified date, so as to require the merger, consolidation, or termination of the guaranty agency;

        ‘(iii) transfer guarantees to the Department of Education for the purpose of payment of such claims and process such claims using the claims standards of the guaranty agency, if such standards are determined by the Secretary to be in compliance with this Act;

        ‘(iv) design and implement a plan to restore the guaranty agency’s viability;

        ‘(v) provide the guaranty agency with additional advance funds in accordance with section 422(c)(7) in order to meet immediate cash needs of the guaranty agency and ensure the uninterrupted payment of claims, with such restrictions on the use of such funds, as determined appropriate by the Secretary; or

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

      ‘(G) The Secretary may not take any action under subparagraph (E) or (F) against any guaranty agency that is backed by the full faith and credit of the State where such guaranty agency is the primary guarantor.

      ‘(H) The Secretary shall not take any action under subparagraph (E) or (F) without giving the guaranty agency notice and the opportunity for a hearing.

      ‘(I) Notwithstanding any other provision of law, the information transmitted to the Secretary pursuant to this paragraph shall be confidential and exempt from disclosure under section 552 of title 5, United States Code, relating to freedom of information, or any other Federal law.

      ‘(J) The Secretary, within 3 months after the end of each fiscal year, shall submit to the House Committee on Education and Labor and the Senate Committee on Labor and Human Resources a report specifying the Secretary’s assessment of the fiscal soundness of the guaranty agency system, together with recommendations for legislative changes, if necessary, for the maintenance of a strong guaranty agency system.’.

    (8) CONFORMING AMENDMENTS- Section 422(c) of the Act (20 U.S.C. 1072(c)) is amended--

      (A) in paragraph (5), by striking ‘Advances pursuant to this subsection’ in paragraph (5) and inserting ‘Except as provided in paragraph (7), advances pursuant to this subsection’; and

      (B) by inserting, after paragraph (6), the following new paragraph:

      ‘(7) EMERGENCY ADVANCES- The Secretary is authorized to make advances, on terms and conditions satisfactory to the Secretary, to a guaranty agency in accordance with section 428(c)(10)(F)(v) in order to assist the agency in meeting its immediate cash needs and ensure the uninterrupted payment of default claims by lenders.’.

    (q) ADMINISTRATIVE COST ALLOWANCES- Section 428(f)(1) of the Act is amended--

      (1) in subparagraph (A)(i), by striking ‘commercial lender’ and inserting ‘eligible lender’; and

      (2) by adding at the end the following new subparagraph:

      ‘(C) No payment may be made under this paragraph for loans for which the disbursement checks have not been cashed or for which electronic funds transfers have not been completed.’.

    (r) LENDERS-OF-LAST-RESORT- Subsection (j) of section 428 of the Act is amended--

      (1) by striking ‘(j) LENDERS-OF-LAST-RESORT- ’ and inserting the following:

    ‘(j) LENDERS-OF-LAST-RESORT-

      ‘(1) GENERAL REQUIREMENT- ’;

      (2) by indenting the margin of the text of such subsection by 2 em spaces; and

      (3) by adding at the end the following new paragraphs:

      ‘(2) RULES AND OPERATING PROCEDURES- The guaranty agency shall develop rules and operating procedures for the lender of last resort program designed to ensure that--

        ‘(A) the program establishes operating hours and methods of application designed to facilitate application by students;

        ‘(B) information about the availability of loans under the program is made available to institutions of higher education in the State;

        ‘(C) appropriate steps are taken to ensure that borrowers receiving loans under the program are appropriately counseled on their loan obligation; and

        ‘(D) the guaranty agency notifies the Secretary when the guaranty agency believes or has reason to believe that the Secretary may need to exercise the Secretary’s authority under section 439(q).

      ‘(3) LIMITATION ON LENDER-OF-LAST-RESORT PROGRAM- (A) Subject to the provisions of subparagraphs (B) and (C), a guaranty agency or eligible lender is not required to make loans described in this section for attendance at an institution which--

        ‘(i) has a cohort default rate, as defined in section 435(m), which exceeds 25 percent for the most recent year for which a rate has been calculated by the Secretary;

        ‘(ii) has not been eligible for, and has not participated in, the loan program under this part during the most recent 18 consecutive months; or

        ‘(iii) is currently subject to an emergency action or limitation, suspension, or termination proceeding of any guaranty agency or the Secretary.

      ‘(B) Until July 1, 1994, this paragraph shall not apply to any institution that is--

        ‘(i) a part B institution within the meaning of section 322(2) of this Act;

        ‘(ii) a tribally controlled community college within the meaning of section 2(a)(4) of the Tribally Controlled Community College Assistance Act of 1978; or

        ‘(iii) a Navajo Community College under the Navajo Community College Act.

      ‘(C) Notwithstanding the provisions of subparagraph (A), the Secretary may require a guaranty agency or other eligible lender to make loans described in this section for attendance at an institution if there are, in the judgment of the Secretary, exceptional mitigating circumstances that would make the application of this paragraph inequitable.’.

    (s) INFORMATION ON DEFAULTS- Section 428(k) of the Act is amended by adding at the end the following new paragraph:

      ‘(3) BORROWER LOCATION INFORMATION- Any information provided by the institution relating to borrower location shall be used by the guaranty agency in conducting required skip-tracing activities.’.

    (t) INCOME CONTINGENT REPAYMENT- Section 428 of the Act is amended by adding at the end the following new subsection:

    ‘(m) Income Contingent Repayment-

      ‘(1) ESTABLISHMENT OF TERMS AND CONDITIONS- The Secretary may establish by regulation terms and conditions requiring the income contingent repayment of loans that are required to be repaid under this subsection. Such regulations shall specify the schedules under which the borrower’s income will be assessed for repayment of loans, shall permit the discharge of remaining obligation on the loan not later than 25 years after the commencement of income contingent repayment, and may provide for the potential collection of amounts in excess of the principal and interest owed on the original loan or loans.

      ‘(2) COLLECTION MECHANISM- The Secretary shall, to the extent funds are available therefor, enter into one or more contracts or other agreements with private firms or other agencies of the Government as necessary to carry out the purposes of this subsection. The regulations required by paragraph (1) shall not be effective unless the Secretary publishes a finding that--

        ‘(A) the Secretary has, pursuant to this paragraph, established a collection mechanism that will provide a high degree of certainty that collections will be made in accordance with the repayment option established under paragraph (1); and

        ‘(B) the use of such repayment option and collection mechanism will result in an increase in the net amount the Government will collect.

      ‘(3) LOANS FOR WHICH INCOME CONTINGENT REPAYMENT IS REQUIRED- A loan made under this part (other than under section 428B) is required to be repaid under this section if--

        ‘(A) the note or other evidence of the loan contains a notice that it is subject to repayment under this subsection;

        ‘(B) the note or other evidence of the loan has been assigned to the Secretary for collection pursuant to subsection (c)(8); and

        ‘(C) the Secretary has published the finding required by paragraph (2) of this subsection.

      ‘(4) ADDITIONAL AUTHORITY- The Secretary is authorized to prescribe such regulations as are necessary to carry out the purposes of this subsection and to protect the Federal fiscal interest.’.

SEC. 417. SUPPLEMENTAL LOAN PROGRAM.

    (a) NAME OF THE PROGRAM- Section 428A of the Act (20 U.S.C. 1078-1) is amended by striking the heading of such section and inserting the following:

‘FEDERAL SUPPLEMENTAL LOANS FOR STUDENTS’.

    (b) LOAN LIMITS- Section 428A(b) of the Act is amended by striking paragraphs (1) and (2) and inserting the following:

      ‘(1) ANNUAL LIMIT- Subject to paragraphs (2) and (3), the maximum amount a student may borrow in any academic year or its equivalent or in any period of 7 consecutive months, whichever is longer, is:

        ‘(A) In the case of a student at an eligible institution who has not successfully completed the first and second year of a program of undergraduate education--

          ‘(i) $4,000, if such student is enrolled in a program whose length is at least one academic year in length (as determined under section 481);

          ‘(ii) $2,500, if such student is enrolled in a program whose length is less than one academic year, but at least 2/3 of such an academic year; and

          ‘(iii) $1,500, if such student is enrolled in a program whose length is less than 2/3 , but at least 1/3 , of such an academic year.

        ‘(B) In the case of a student at an eligible institution who has successfully completed such first and second year but has not successfully completed the remainder of a program of undergraduate study--

          ‘(i) $5,000, if such student is enrolled in a program whose length is at least one academic year in length (as determined under section 481);

          ‘(ii) $3,325, if such student is enrolled in a program whose length is less than one academic year, but at least 2/3 of such an academic year; and

          ‘(iii) $1,675, if such student is enrolled in a program whose length is less than 2/3 , but at least 1/3 , of such an academic year.

        ‘(C) In the case of a graduate or professional student (as defined in regulations of the Secretary) at an eligible institution, $10,000.

      ‘(2) AGGREGATE LIMIT- The aggregate insured principal amount of insured loans made to any student under this section, minus any interest capitalized under subsection (c), shall not exceed--

        ‘(A) $23,000, in the case of any student who has not successfully completed a program of undergraduate education; and

        ‘(B) $73,000, in the case of any graduate or professional student, as such terms are defined by regulations issued by the Secretary, including any loans which are insured by the Secretary under this section, or by a guaranty agency, made to such student before the student became a graduate or professional student.’.

    (c) COORDINATION OF STAFFORD AND SLS REPAYMENT- Section 428A(c)(1) of the Act is amended by adding at the end the following new sentences: ‘In the case of a borrower under this section who is also a borrower under a program of student loan insurance covered by an agreement under sections 427 or 428(b), the lender shall notify the borrower of the option to defer the commencement of the repayment for six months after the student ceases to carry at an eligible institution at least one-half the normal full-time academic workload, as determined by the institution, except that interest shall begin to accrue, and shall be paid in accordance with paragraph (2), notwithstanding such delay in the commencement of repayment. The lender shall also notify the borrower of the borrower’s option to commence repayment earlier than the beginning of such repayment period and the difference in total cost to the borrower.’.

    (d) CAPITALIZATION OF INTEREST- Section 428A(c)(2) of the Act is amended to read as follows:

      ‘(2) CAPITALIZATION OF INTEREST- (A) Interest on loans made under this section--

        ‘(i) which are disbursed in installments,

        ‘(ii) for which payments of principal are deferred under sections 427(a)(2)(C)(i) and 428(b)(1)(M)(i), or

        ‘(iii) for which the commencement of the repayment period is delayed in accordance with paragraph (1) to coincide with the commencement of the repayment period of a loan made under section 427 or 428,

      shall, if agreed upon by the borrower and the lender--

        ‘(I) be paid monthly or quarterly, or

        ‘(II) be added to the principal amount of the loan not more frequently than quarterly by the lender.

      ‘(B) Such capitalization of interest shall not be deemed to exceed the annual insurable limit on account of the student.’.

    (e) CONFORMING AMENDMENT- Section 428A(c) of the Act is further amended by adding at the end the following new paragraph:

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

SEC. 418. PLUS LOANS.

    (a) NAME OF THE PROGRAM- Section 428B of the Act (20 U.S.C. 1078-2) is amended by striking the heading of such section and inserting the following:

‘FEDERAL PLUS LOANS’.

    (b) CHECKS COPAYABLE- Section 428B of the Act is amended--

      (1) in subsection (a)--

        (A) by striking ‘subsections (c) and (d)’ and inserting ‘subsections (c), (d), and (e)’; and

        (B) by inserting after ‘Parents of a dependent student’ the following: ‘, who do not have an adverse credit history as determined pursuant to regulations of the Secretary,’; and

      (2) in subsection (b)--

        (A) by striking the subsection designation and heading and paragraphs (1) and (2); and

        (B) by redesignating paragraph (3) as subsection (b);

      (3) by redesignating subsections (c) and (d) as subsections (d) and (e), respectively; and

      (4) by inserting after subsection (b) the following new subsection:

    ‘(c) PLUS LOAN DISBURSEMENT- All loans made under this section shall be disbursed by--

      ‘(1) an electronic transfer of funds from the lender to the eligible institution; or

      ‘(2) a check copayable to the eligible institution and the parent borrower.’.

    (c) LIMITATION OF DEFERRAL- Section 428B(d)(1) of the Act (as redesignated in paragraph (3)) is amended to read as follows:

      ‘(1) COMMENCEMENT OF REPAYMENT- Repayment of principal on loans made under this section shall commence not later than 60 days after the date such loan is disbursed by the lender, subject to deferral during any period during which the parent meets the conditions required for a deferral under section 427(a)(2)(C) or 428(b)(1)(M).’.

    (d) CAPITALIZATION OF INTEREST- Section 428B(d)(2) of the Act (as redesignated in paragraph (3)) is amended to read as follows:

      ‘(2) CAPITALIZATION OF INTEREST- Interest on loans made under this section for which payments of principal are deferred pursuant to paragraph (1) of this subsection shall, if agreed upon by the borrower and the lender (A) be paid monthly or quarterly, or (B) be added to the principal amount of the loan not more frequently than quarterly by the lender. Such capitalization of interest shall not be deemed to exceed the annual insurable limit on account of the borrower.’.

SEC. 419. CONSOLIDATION LOANS.

    (a) NAME OF THE PROGRAM- Section 428C of the Act (20 U.S.C. 1078-3) is amended by striking the heading of such section and inserting the following:

‘FEDERAL CONSOLIDATION LOANS’.

    (b) USE OF CONSOLIDATION TO AVOID DEFAULT-

      (1) ELIGIBLE BORROWER- (A) Section 428C(a)(3)(A)(i) is amended by striking ‘$5,000’ and inserting ‘$7,500’.

      (B) Section 428C(a)(3)(A)(ii) is amended to read as follows:

        ‘(ii) is in repayment status, or in a grace period preceding repayment, or is a delinquent or defaulted borrower who will reenter repayment through loan consolidation.’.

      (2) ELIGIBLE LOANS- Section 428C(a)(4)(A) of the Act is amended to read as follows:

        ‘(A) made, insured, or guaranteed under this part, including loans on which the borrower has defaulted (but has made arrangements to repay the obligation on the defaulted loans satisfactory to the Secretary or guaranty agency, whichever insured the loans), except for loans made to parent borrowers under section 428B as in effect prior to the enactment of the Higher Education Amendments of 1986;’.

    (c) EXTENSION OF CONSOLIDATION ELIGIBILITY PERIOD- Section 428C(a)(3)(B) of the Act is amended to read as follows:

      ‘(B)(i) An individual’s status as an eligible borrower under this section terminates upon receipt of a consolidation loan under this section, except--

        ‘(I) with respect to eligible student loans received after the date of receipt of the consolidation loan; and

        ‘(II) that loans received prior to the date of the consolidation loan may be added to the consolidation loan during the 180-day period following the making of the consolidation loan.

      ‘(ii) Loans made under this section shall, to the extent used to discharge loans made under this title, be counted against applicable limitations on aggregate indebtedness contained in sections 425(a)(2), 428(b)(1)(B), 428A(b)(2), and 464(a)(2). Nothing in this section shall be interpreted to authorize the Secretary to require lenders, holders, or guarantors of consolidated loans to receive, to maintain, or to make reports with respect to preexisting records relating to any eligible student loan (as defined under paragraph (4)) discharged by a borrower in receiving a consolidation loan.’.

    (d) CONSOLIDATION OF LOANS OF MARRIED BORROWERS- Section 428C(a)(3) of the Act is amended by adding at the end the following new subparagraph:

      ‘(C)(i) A married couple, each of whom has eligible student loans, may be treated as if such couple were an individual borrowing under subparagraphs (A) and (B) if such couple agrees to be held jointly and severally liable for the repayment of a consolidation loan, without regard to the amounts of the respective loan obligations that are to be consolidated, and without regard to any subsequent change that may occur in such couple’s marital status.

      ‘(ii) Only one spouse in a married couple applying for a consolidation loan under this subparagraph need meet any of the requirements of subsection (b) of this section, except that each spouse shall--

        ‘(I) individually make the initial certification that no other application is pending in accordance with subsection (b)(1)(A); and

        ‘(II) agree to notify the holder concerning any change of address in accordance with subsection (b)(4).’.

    (e) INTEREST DURING DEFERRAL- Section 428C(b)(4)(C) of the Act is amended to read as follows:

        ‘(C) provides that periodic installments of principal need not be paid, but interest shall accrue and be paid by the Secretary, during any period for which the borrower would be eligible for a deferral under section 428(b)(1)(M), and that any such period shall not be included in determining the repayment period pursuant to subsection (c)(2) of this section;’.

    (f) REPAYMENT SCHEDULES- Section 428C(c)(2) of the Act is amended by--

      (1) in the first sentence, by striking ‘may’ and inserting ‘shall’; and

      (2) by striking the second sentence and inserting the following: ‘Such repayment terms shall require that if the sum of the consolidation loan and the amount outstanding on other student loans to the individual--

        ‘(i) is equal to or greater than $7,500 but less than $10,000, then such consolidation loan shall be repaid in not more than 12 years;

        ‘(ii) is equal to or greater than $10,000 but less than $20,000, then such consolidation loan shall be repaid in not more than 15 years;

        ‘(iii) is equal to or greater than $20,000 but less than $40,000, then such consolidation loan shall be repaid in not more than 20 years;

        ‘(iv) is equal to or greater than $40,000 but less than $60,000, then such consolidation loan shall be repaid in not more than 25 years; or

        ‘(v) is equal to or greater than $60,000, then such consolidation loan shall be repaid in not more than 30 years.’.

    (g) EXTENSION OF AUTHORITY- Section 428C(d) of the Act is amended by striking ‘September 30, 1992’ and inserting ‘September 30, 1998’.

SEC. 420. DEFAULT REDUCTION PROGRAMS.

    Section 428F of the Act (20 U.S.C. 1078-6) is amended--

      (1) by striking subsection (a);

      (2) in subsection (b)--

        (A) in paragraph (1)(A)--

          (i) by striking ‘Upon’ and inserting ‘Each guaranty agency shall enter into an agreement with the Secretary which shall provide that upon’; and

          (ii) by adding at the end the following new sentence: ‘Neither the guaranty agency nor the Secretary shall demand from a borrower as monthly payment amounts referred to in this paragraph more than is reasonable and affordable based upon the borrower’s total financial circumstances.’; and

        (B) in paragraph (3), by inserting ‘or grants’ after ‘loans’;

      (3) by redesignating subsection (b) (as amended in paragraph (2)) as subsection (a); and

      (4) by adding at the end the following new subsection:

    ‘(b) SPECIAL RULE- Each guaranty agency shall establish a program which allows a borrower with a defaulted loan or loans to renew eligibility for all title IV student financial assistance (regardless of whether the defaulted loan has been sold to an eligible lender) upon the borrower’s payment of 6 consecutive monthly payments. The guaranty agency shall not demand from a borrower as a monthly payment amount under this subsection more than is reasonable and affordable based upon the borrower’s total financial circumstances.’.

SEC. 421. DISBURSEMENT RULES.

    (a) MONTHLY OR WEEKLY DISBURSEMENT- Section 428G(c) of the Act (20 U.S.C. 1078-7) is amended--

      (1) by striking ‘and’ at the end of paragraph (1);

      (2) by striking the period at the end of paragraph (2) and inserting ‘; and’; and

      (3) by adding at the end the following new paragraph:

      ‘(3) notwithstanding subsection (a)(2), may, with the permission of the borrower, be disbursed on a weekly or monthly basis, provided that the proceeds of the loan are disbursed in substantially equal weekly or monthly installments, as the case may be, over the period of enrollment for which the loan is made.’.

    (b) OVERAWARD ADJUSTMENTS- Section 428G(d)(2) of the Act is amended by inserting before the period at the end of the first sentence the following: ‘, except that overawards permitted pursuant to section 443(b)(4) of the Act shall not be construed to be overawards for purposes of this paragraph’.

    (c) SALES PRIOR TO DISBURSEMENT PROHIBITED- Section 428G of the Act is amended by adding at the end thereof the following new subsection:

    ‘(g) SALES PRIOR TO DISBURSEMENT PROHIBITED- An eligible lender shall not sell or transfer a promissory note for any loan made, insured, or guaranteed under this part until the final disbursement of such loan has been made, except that the prohibition of this subsection shall not apply if--

      ‘(1) the sale of the loan does not result in a change in the identity of the party to whom payments will be made for the loan; and

      ‘(2) the first disbursement of such loan has been made.’.

SEC. 422. UNSUBSIDIZED LOANS; PERFORMANCE AGREEMENTS; LOAN FORGIVENESS.

    Part B of title IV of the Act is amended by inserting after section 428G the following new sections:

‘UNSUBSIDIZED STAFFORD LOANS FOR MIDDLE-INCOME BORROWERS

    ‘SEC. 428H. (a) IN GENERAL- It is the purpose of this section to authorize insured loans under this part for borrowers who do not qualify for Federal interest subsidy payments under section 428 of this Act. Except as provided in this section, all terms and conditions for Federal Stafford loans established under section 428 shall apply to loans made pursuant to this section.

    ‘(b) ELIGIBLE BORROWERS- Any student meeting the requirements for student eligibility under section 484 shall be entitled to borrow an unsubsidized Stafford loan. Such student shall provide to the lender a statement from the eligible institution at which the student has been accepted for enrollment, or at which the student is in attendance, which--

      ‘(1) sets forth such student’s estimated cost of attendance (as determined under section 472);

      ‘(2) sets forth such student’s estimated financial assistance, including a loan which qualifies for subsidy payments under section 428; and

      ‘(3) certifies the eligibility of the student to receive a loan under this section and the amount of the loan for which such student is eligible, in accordance with subsection (c).

    ‘(c) DETERMINATION OF AMOUNT OF LOAN- The determination of the amount of a loan by an eligible institution under subsection (b) shall be calculated by subtracting from the estimated cost of attendance at the eligible institution any estimated financial assistance reasonably available to such student. An eligible institution may not, in carrying out the provisions of subsection (b) of this section, provide a statement which certifies the eligibility of any student to receive any loan under this section in excess of the amount calculated under the preceding sentence.

    ‘(d) LOAN LIMITS- The annual and aggregate limits for loans under this section shall be the same as those established under section 428(b)(1), less any amount received by such student pursuant to the subsidized loan program established under section 428.

    ‘(e) PAYMENT OF PRINCIPAL AND INTEREST-

      ‘(1) COMMENCEMENT OF REPAYMENT- Repayment of principal on loans made under this section shall commence 6 months after the month in which the student ceases to carry at least one-half the normal full-time workload as determined by the institution.

      ‘(2) CAPITALIZATION OF INTEREST- 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 (A) be paid monthly or quarterly, or (B) be added to the principal amount of the loan not more frequently than quarterly by the lender. Such capitalization of interest shall not be deemed to exceed the annual insurable limit on account of the student.

      ‘(3) SUBSIDIES PROHIBITED- No payments to reduce interest costs shall be paid pursuant to section 428(a) of this part on loans made pursuant to this section.

      ‘(4) APPLICABLE RATES OF INTEREST- Interest on loans made pursuant to this section shall be at the applicable rate of interest provided in section 427A(e).

    ‘(f) INSURANCE PREMIUM-

      ‘(1) AMOUNT OF ORIGINATION FEE/INSURANCE PREMIUM- The lender shall charge the borrower a combined origination fee and insurance premium in the amount of 6.5 percent of the principal amount of the loan, to be deducted proportionately from each installment payment of the proceeds of the loan prior to payment to the borrower. A guaranty agency may not charge an insurance premium on any loan made under this section.

      ‘(2) RELATION TO APPLICABLE INTEREST- Such combined fee and premium shall not be taken into account for purposes of determining compliance with section 427A.

      ‘(3) DISCLOSURE REQUIRED- The lender shall disclose to the borrower the amount and method of calculating the combined origination fee and insurance premium.

      ‘(4) USE OF INSURANCE PREMIUM TO OFFSET DEFAULT COSTS- Each lender making loans under this section shall transmit all combined origination fee and insurance premiums authorized to be collected from borrowers to the Secretary, who shall use such fees and premiums to pay the Federal costs of default claims paid for loans under this section and to reduce the cost of special allowances paid thereon, if any, under section 438(b).

      ‘(5) REVIEW OF INSURANCE PREMIUM- In fiscal year 1995, the Secretary is directed to analyze the risk rates of borrowers who have participated in this program in the 2 previous fiscal years. If the Secretary finds, that as a result of this review, the projected defaults and special allowance costs of the unsubsidized program do not exceed the 6.5 percent insurance premium, the Secretary is directed to lower the insurance premium accordingly.

    ‘(g) SINGLE APPLICATION FORM AND LOAN REPAYMENT SCHEDULE- A guaranty agency shall use a single application form and a single repayment schedule for subsidized Federal Stafford loans made pursuant to section 428 and for unsubsidized Federal Stafford loans made pursuant to this section.

‘SPECIAL INSURANCE AND REINSURANCE RULES

    ‘SEC. 428I. (a) DESIGNATION OF LENDERS, SERVICERS, AND GUARANTY AGENCIES-

      ‘(1) AUTHORITY- Whenever the Secretary determines that an eligible lender, servicer, or guaranty agency has a compliance performance rating that equals or exceeds 97 percent, the Secretary shall designate the eligible lender, servicer, or guaranty agency, as the case may be, for exceptional performance. The Secretary shall notify each appropriate guaranty agency of the eligible lenders and servicers designated under this section.

      ‘(2) COMPLIANCE PERFORMANCE RATING- For purposes of paragraph (1), a compliance performance rating is determined with respect to compliance with due diligence in the collection of loans under this part for each year for which the determination is made. Such rating is equal to the percent of all due diligence requirements applicable to each loan, on average, as established by the Secretary by regulation, with respect to--

        ‘(A) loans serviced during the period by the eligible lender or servicer; or

        ‘(B) loans on which loan collection was attempted by the guaranty agency.

    ‘(b) Payment to Lenders and Servicers-

      ‘(1) 100 PERCENT PAYMENT RULE- Each guaranty agency shall pay each eligible lender or servicer (as agent for an eligible lender) designated under subsection (a) 100 percent of the unpaid principal and interest of all loans for which claims are submitted for payment by that eligible lender or servicer for the one-year period following the receipt by the guaranty agency of the notification of designation under this section or until the guaranty agency receives notice from the Secretary that the designation of the lender or servicer under subsection (a) has been revoked.

      ‘(2) REVOCATION AUTHORITY- The Secretary shall revoke the designation of a lender or servicer under subsection (a) if any quarterly audit required under subsection (c)(5) is not received by the Secretary by the date established by the Secretary or if the audit indicates the lender or servicer failed to maintain 97 percent or higher compliance with program regulations, as reflected in the performance of not less than 97 percent of all due diligence requirements applicable to each loan, on average, as established by the Secretary for the purpose of this section, for 2 consecutive months or 90 percent for 1 month.

      ‘(3) DOCUMENTATION- Nothing in this section shall restrict or limit the authority of guaranty agencies to require the submission of claims documentation evidencing servicing performed on loans, except that the guaranty agency may not require greater documentation than that required for lenders and servicers not designated under subsection (a).

      ‘(4) PAYMENTS TO GUARANTY AGENCIES- The Secretary shall pay to each guaranty agency designated under subsection (a) the appropriate percentage under this subsection for the 1-year period following the receipt by the guaranty agency of the notification of designation under subsection (a).

    ‘(c) SUPERVISION OF DESIGNATED LENDERS AND SERVICERS-

      ‘(1) AUDITS FOR LENDERS AND SERVICERS- Each eligible lender or servicer desiring a designation under subsection (a) shall have a financial and compliance audit of the loan portfolio of such eligible lender or servicer conducted annually by a qualified independent organization from a list of qualified organizations promulgated by the Secretary in accordance with standards established by the Comptroller General and the Secretary. The standards shall measure the lender’s or servicer’s compliance with the due diligence standards and shall include a defined statistical sampling technique designed to measure the performance rating of the eligible lender or servicer for the purpose of this section. Each eligible lender or servicer shall submit the audit required by this section to the Secretary and to each appropriate guaranty agency.

      ‘(2) ADDITIONAL INFORMATION ON LENDERS AND SERVICERS- Each appropriate guaranty agency shall provide the Secretary with such other information in its possession regarding an eligible lender or servicer desiring designation as may relate to the Secretary’s determination under subsection (a), including but not limited to any information suggesting that the application of a lender or servicer for designation under subsection (a) should not be approved.

      ‘(3) SECRETARY’S DETERMINATIONS- The Secretary shall make the determination under subsection (a) based upon the audits submitted under this section, such other information as provided by any guaranty agency under paragraph (2), and any information in the possession of the Secretary or submitted by any other agency or office of the Federal Government. If the results of the audit are not persuasively rebutted by such other information, the Secretary shall inform the eligible lender or servicer and the appropriate guaranty agency that its application for designation as an exceptional lender or servicer has been approved.

      ‘(4) COST OF AUDIT- Each eligible lender or servicer shall pay for all the costs of the audits required under this section.

      ‘(5) COMPLIANCE AUDIT- In order to maintain its status as an exceptional eligible lender or servicer, the lender or servicer shall undergo a quarterly compliance audit at the end of each quarter (other than the quarter in which status as an exceptional lender or servicer is established through a financial and compliance audit, as described in subsection (c)(1)), and submit the results of such audit to the Secretary and such appropriate guaranty agency. The compliance audit will review compliance with due diligence requirements for the period since the last audit.

      ‘(6) LOSS OF DESIGNATION- If the audit performed pursuant to paragraph (5) fails to meet the standards for designation as an exceptional lender or servicer under subsection (a)(1), the lender or servicer shall lose its designation as an exceptional lender or servicer. A lender or servicer receiving a compliance audit not meeting the standard for designation as an exceptional lender or servicer may reapply for designation under subsection (a) at any time.

      ‘(7) DUE DILIGENCE STANDARDS- Due diligence standards used for determining compliance under paragraph (5) shall be promulgated by the Secretary after consultation with lenders, guaranty agencies and servicers and shall consist of a list of specific elements for the Federal regulations selected to provide an indication of systems degradation.

      ‘(8) ADDITIONAL REVOCATION AUTHORITY- Notwithstanding any other provision of this section, designation under subsection (a) may be revoked at any time by the Secretary if the Secretary determines that the eligible lender or servicer has failed to maintain an overall level of regulatory compliance consistent with the audit submitted by the eligible lender or servicer under this section or if the Secretary believes the lender or servicer may have engaged in fraud in securing designation under subsection (a) or is failing to service loans in accordance with program regulations.

    ‘(d) SUPERVISION OF DESIGNATED GUARANTY AGENCIES-

      ‘(1) AUDIT OF GUARANTY AGENCIES- Each guaranty agency desiring a designation under subsection (a) shall have a financial and compliance audit of the defaulted loan portfolio of such guaranty agency conducted annually by a qualified independent organization or person from a list of qualified organizations or persons promulgated by the Secretary in accordance with standards established by the Comptroller General and the Secretary. The standards shall include defined statistical sampling techniques designed to measure the performance rating of the guaranty agency for the purpose of this section. Each guaranty agency shall submit the audit required by this paragraph to the Secretary.

      ‘(2) QUARTERLY SAMPLE AUDITS- The Secretary may require quarterly sample audits as a means of determining continued qualification of the guaranty agency for designation as an exceptional guaranty agency.

      ‘(3) SECRETARY’S DETERMINATIONS- The Secretary shall make the determination under subsection (a) based upon the audits submitted under this section and other information in his possession. If the results of the audit are not persuasively rebutted by such other information, the Secretary shall inform the guaranty agency that its application for designation as an exceptional guaranty agency has been approved.

      ‘(4) COSTS OF AUDITS- Each guaranty agency shall pay for all of the costs of the audits regulated by this section.

      ‘(5) REVOCATION FOR FRAUD- The Secretary may revoke the designation of a guaranty agency under subsection (a) at any time if the Secretary has reason to believe the guaranty agency secured its designation under subsection (a) through fraud or fails to comply with applicable regulations.

      ‘(6) REVOCATION BASED ON PERFORMANCE- Designation as an exceptional guaranty agency may be revoked at any time by the Secretary upon 30 days notice and an opportunity for a hearing before the Secretary upon a finding by the Secretary that the guaranty agency has failed to maintain an acceptable overall level of regulatory compliance.

    ‘(e) SPECIAL RULE- Reimbursements made by the Secretary on loans submitted for claim by an eligible lender or loan servicer designated for exceptional performance under this section shall not be subject to additional review by the Secretary or repurchase by the guaranty agency for any reason other than a determination by the Secretary that the eligible lender, loan servicer, or guaranty agency engaged in fraud or other purposeful misconduct in obtaining designation for exceptional performance.

    ‘(f) LIMITATION- Nothing in this section shall be construed to affect the processing of claims on student loans of eligible lenders not subject to this paragraph.

    ‘(g) CLAIMS- A lender, servicer, or guaranty agency designated under subsection (a) failing to service loans or otherwise comply with applicable program regulations shall be considered in violation of the Federal False Claims Act.

    ‘(h) EVALUATION- Not later than 3 years after the date of enactment of this Act, the Comptroller General shall submit to the Chairman of the Senate Labor and Human Resources Committee and the House Committee on Education and Labor, an evaluation of the provisions of this section including, but not limited to, the following:

      ‘(1) The effectiveness of due diligence performed by lenders and servicers receiving designation as exceptional lenders or servicers from the perspective of securing maximum collections from borrowers.

      ‘(2) A quantification of the dollar volume of claims that were paid to exceptional lenders and servicers that would not have been paid under applicable program provisions prior to the enactment of this section.

      ‘(3) An assessment of the impact of this section on the financial condition of guaranty agencies.

      ‘(4) An assessment of the savings to lenders, servicers, and guaranty agencies resulting from designation as exceptional performance.

      ‘(5) An identification of specific administration steps that lenders, servicers, and guaranty agencies do not have to perform as a result of designation as exceptional lenders, servicers, or guaranty agencies.

      ‘(6) A recommendation for program modifications applicable to all program participants based on the findings of the evaluation.

      ‘(7) A recommendation for modifications to this section and whether the program should be continued.

    ‘(i) TERMINATION- After receipt of the study authorized in subsection (h), the Secretary may terminate such program if he determines such termination to be in the fiscal interest of the United States.

    ‘(j) DEFINITIONS- For the purpose of this section--

      ‘(1) the term ‘due diligence requirements’ means the activities required to be performed by lenders on delinquent loans pursuant to regulations issued by the Secretary;

      ‘(2) the term ‘eligible loan’ means a loan made, insured or guaranteed under part B of title IV;

      ‘(3) the term ‘servicer’ means an entity servicing and collecting student loans which--

        ‘(A) has substantial experience in servicing and collecting consumer loans or student loans;

        ‘(B) has an independent financial audit annually which is furnished to the Secretary and any other parties designated by the Secretary;

        ‘(C) has business systems which are capable of meeting the requirements of part B of title IV;

        ‘(D) has adequate personnel who are knowledgeable about the student loan programs authorized by part B of title IV; and

        ‘(E) does not have any owner, majority shareholder, director, or officer of the entity who has been convicted of a felony.

‘LOAN FORGIVENESS FOR TEACHERS, INDIVIDUALS PERFORMING NATIONAL COMMUNITY SERVICE AND NURSES

    ‘SEC. 428J. (a) STATEMENT OF PURPOSE- It is the purpose of this section to encourage individuals to--

      ‘(1) enter the teaching and nursing profession; and

      ‘(2) perform national and community service.

    ‘(b) DEMONSTRATION PROGRAM-

      ‘(1) IN GENERAL- The Secretary, in consultation with the Secretary of Health and Human Services, is authorized to carry out a demonstration program of assuming the obligation to repay a loan made, insured or guaranteed under this part (excluding loans made under sections 428A, 428B, or 428C) for any new borrower after October 1, 1992, who--

        ‘(A) is employed as a full-time teacher--

          ‘(i) in a school which qualifies under section 465(a)(2)(A) for loan cancellation for Perkins loan recipients who teach in such schools; and

          ‘(ii) of mathematics, science, foreign languages, special education, bilingual education, or any other field of expertise where the State educational agency determines there is a shortage of qualified teachers;

        ‘(B) agrees in writing to volunteer for service under the Peace Corps Act or under the Domestic Volunteer Service Act of 1973, or to perform comparable service as a full-time employee of an organization which is exempt from taxation under section 501(c)(3) of the Internal Revenue Code of 1986, if the borrower does not receive compensation which exceeds the greater of--

          ‘(i) the minimum wage rate described in section 6 of the Fair Labor Standards Act of 1938; or

          ‘(ii) an amount equal to 100 percent of the poverty line for a family of two (as defined in section 673(2) of the Community Services Block Grant Act); or

        ‘(C) is employed full-time as a nurse in a public hospital, a rural health clinic, a migrant health center, an Indian Health Service, an Indian health center, a Native Hawaiian health center or in an acute care or long-term care facility.

      ‘(2) REGULATIONS- The Secretary is authorized to issue such regulations as may be necessary to carry out the provisions of this section.

    ‘(c) LOAN REPAYMENT-

      ‘(1) IN GENERAL- The Secretary shall assume the obligation to repay--

        ‘(A) 15 percent of the total amount of Stafford loans incurred by the student borrower during such borrower’s last 2 years of undergraduate education for the first or second academic year in which such borrower meets the requirements described in subsection (a);

        ‘(B) 20 percent of such total amount for such third or fourth academic year; and

        ‘(C) 30 percent of such total amount for such fifth academic year.

      ‘(2) CONSTRUCTION- Nothing in this subsection shall be construed to authorize the refunding of any repayment of a Stafford loan.

      ‘(3) INTEREST- If a portion of a loan is repaid by the Secretary under this section for any year, the proportionate amount of interest on such loan which accrues for such year shall be repaid by the Secretary.

      ‘(4) SPECIAL RULE- In the case where a student borrower who is not participating in loan repayment pursuant to this section returns to an institution of higher education after graduation from an institution of higher education for the purpose of obtaining a teaching certificate, the Secretary is authorized to assume the obligation to repay the total amount of Stafford loans incurred for a maximum of 2 academic years in returning to an institution of higher education for the purpose of obtaining a teaching certificate or additional certification. Such Stafford loans shall only be repaid for borrowers who qualify for loan repayment pursuant to the provisions of this section, and shall be repaid in accordance with the provisions of paragraph (1).

    ‘(d) REPAYMENT OF ELIGIBILITY LENDERS- The Secretary shall pay to each eligible lender or holder for each fiscal year an amount equal to the aggregate amount of Stafford loans which are subject to repayment pursuant to this section for such year.

    ‘(e) APPLICATION FOR REPAYMENT- Each eligible individual desiring loan repayment under this section shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may reasonably require.

    ‘(f) DEFINITIONS- For the purpose of this section the term ‘eligible lender’ has the same meaning given such term in section 435(d).

    ‘(g) EVALUATION-

      ‘(1) IN GENERAL- The Secretary shall conduct, by grant or contract, an independent national evaluation of the impact of the program assisted under this part on the fields of teaching, nursing, and community service.

      ‘(2) COMPETITIVE BASIS- The grant or contract described in paragraph (1) shall be awarded on a competitive basis.

      ‘(3) CONTENTS- The evaluation described in this section shall--

        ‘(A) assess whether the program assisted under this section has brought into teaching, nursing, and community service a significant number of highly capable individuals who otherwise would not have entered such fields;

        ‘(B) assess whether a significant number of students perform the service described in subsection (b) or opt to repay the loans instead of remaining in the career for which such student received loan repayment under this section;

        ‘(C) identify the barriers to the effectiveness of the program assisted under this section;

        ‘(D) assess the cost-effectiveness of such program in improving teacher, nursing, and community service worker quality and quantity and the ways to improve the cost-effectiveness of such program;

        ‘(E) identify the reasons for which participants in the program have chosen to take part in such program; and

        ‘(F) identify other areas of community service or employment which may serve as appropriate methods of loan repayment.

      ‘(4) INTERIM EVALUATION REPORTS- The Secretary shall prepare and submit to the President and the Congress such interim reports on the evaluation described in this section as the Secretary deems appropriate, and shall submit such a final report by January 1, 1997.

      ‘(5) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this section $10,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years.’.

SEC. 423. DEFAULT RATES.

    Section 430 of the Act (20 U.S.C. 1080) is amended by adding at the end the following new subsection:

    ‘(e) DEFAULT RATE OF LENDERS, HOLDERS, AND GUARANTY AGENCIES-

      ‘(1) IN GENERAL- The Secretary shall annually publish a list indicating the cohort default rate (determined in accordance with section 435(m)) for each originating lender, subsequent holder, and guaranty agency participating in the program assisted under this part and an average cohort default rate for all institutions of higher education within each State.

      ‘(2) REGULATIONS- The Secretary shall prescribe regulations designed to prevent an institution from evading the application to that institution of a cohort default rate through the use of such measures as branching, consolidation, change of ownership or control, or any similar device.

      ‘(3) RATE ESTABLISHMENT AND CORRECTION- The Secretary shall establish a cohort default rate for lenders, holders, and guaranty agencies (determined consistent with section 435(m)), except that the rate for lenders, holders, and guaranty agencies shall not reflect any loans issued in accordance with section 428(j). The Secretary shall allow institutions, lenders, holders, and guaranty agencies the opportunity to correct such cohort default rate information.

SEC. 424. REPORTS TO CREDIT BUREAUS AND INSTITUTIONS OF HIGHER EDUCATION.

    Section 430A(f) of the Act (20 U.S.C. 1080a(f)) is amended--

      (1) by striking ‘or’ at the end of paragraph (1);

      (2) by striking paragraph (2) and inserting the following:

      ‘(2) 7 years from the date the Secretary, guaranty agency, eligible lender, or subsequent holder first reported the account to the consumer reporting agency; or

      ‘(3) in the case of a borrower who reenters repayment after defaulting on a loan and subsequently goes into default on such loan, 7 years from the date the loan entered default such subsequent time.’.

SEC. 425. ADMINISTRATIVE PROVISIONS.

    (a) AUTHORITY TO REGULATE SERVICERS- Section 432(a)(1) of the Act (20 U.S.C. 1082) is amended by inserting before the semicolon the following: ‘, including regulations applicable to third party servicers (including regulations concerning financial responsibility standards for, and the assessment of liabilities for program violations against, such servicers) to establish minimum standards with respect to sound management and accountability of programs under this part, except that in no case shall damages be assessed against the United States for the actions or inactions of such servicers’.

    (b) AGENCY PROCEDURE- Section 432 of the Act is amended--

      (1) in subsection (a)(3), by striking ‘on the record’;

      (2) in subsection (g)(1), by striking ‘on the record’;

      (3) in subsection (h)(2)(A), by striking out ‘shall, in accordance with sections 556 and 557 of title 5, United States Code,’ in the first sentence and inserting ‘shall’; and

      (4) in subsection (h)(3)(A), by striking out ‘shall, in accordance with sections 556 and 557 of title 5, United States Code,’ in the first sentence and inserting ‘shall’.

    (c) CIVIL PENALTIES- Section 432(g) of the Act is further amended--

      (1) by amending paragraph (2) to read as follows:

      ‘(2) LIMITATIONS- No civil penalty may be imposed under paragraph (1) of this subsection unless the Secretary determines that--

        ‘(A) the violation, failure, or substantial misrepresentation referred to in that paragraph resulted from a violation, failure, or misrepresentation that is material; and

        ‘(B) the lender or guaranty agency knew or should have known that its actions violated or failed to carry out the provisions of this part or the regulations thereunder.’;

      (2) in paragraph (3), by striking ‘the institution of an action under that paragraph’ and inserting ‘notification by the Secretary under that paragraph’; and

      (3) in paragraph (4)--

        (A) by inserting ‘, and occurring prior to notification by the Secretary under that paragraph,’ after ‘guaranty agency’; and

        (B) by striking ‘or both, and the’ and inserting ‘or both. The’.

    (d) LS&T AUTHORITY- Section 432(h) of the Act is amended--

      (1) in paragraph (2)(A), by striking ‘The Secretary’ and all that follows through ‘disqualification--’ in the second sentence and inserting the following: ‘The Secretary shall uphold the imposition of such limitation, suspension, or termination in the student loan insurance program of each of the guaranty agencies under this part, and shall notify such guaranty agencies of such sanction--’;

      (2) in paragraph (2)(B), by striking ‘disqualification’ each place it appears and inserting ‘sanction’; and

      (3) by redesignating subparagraph (B) of paragraph (2) as subparagraph (C), and by inserting after subparagraph (A) the following new subparagraph:

      ‘(B) The Secretary’s review under this paragraph of the limitation, suspension, or termination imposed by a guaranty agency pursuant to section 428(b)(1)(U) shall be limited to--

        ‘(i) a review of the written record of the proceedings in which the guaranty agency imposed such sanctions; and

        ‘(ii) a determination as to whether the guaranty agency complied with section 428(b)(1)(U) and any notice and hearing requirements prescribed in regulations of the Secretary under this part.’;

      (4) in paragraph (3)(A), by striking out ‘The Secretary’ and all that follows through ‘disqualification--’ in the second sentence and inserting the following: ‘The Secretary shall uphold the imposition of such limitation, suspension, or termination in the student loan insurance program of each of the guaranty agencies under this part, and shall notify such guaranty agencies of such sanctions--’;

      (5) in subsection (h)(3)(B), by striking ‘disqualification’ each place such term appears and inserting ‘sanction’; and

      (6) by redesignating subparagraph (B) of subsection (h)(3) as subparagraph (C) of such subsection, and by inserting after subparagraph (A) the following new subparagraph:

      ‘(B) The Secretary’s review under this paragraph of the limitation, suspension, or termination imposed by a guaranty agency pursuant to section 428(b)(1)(T) shall be limited to--

        ‘(i) a review of the written record of the proceedings in which the guaranty agency imposed such sanctions; and

        ‘(ii) a determination as to whether the guaranty agency complied with section 428(b)(1)(T) and any notice and hearing requirements prescribed in regulations of the Secretary under this part.’.

    (e) ADDITIONAL LEGAL POWERS AND RESPONSIBILITIES- Section 432 of the Act is amended by adding at the end the following new subsections:

    ‘(k) Program of Assistance for Borrowers-

      ‘(1) IN GENERAL- The Secretary shall undertake a program to encourage corporations and other private and public employers, including the Federal Government, to assist borrowers in repaying loans received under this title, including providing employers with options for payroll deduction of loan payments and offering loan repayment matching provisions as part of employee benefit packages.

      ‘(2) PUBLICATION- The Secretary shall publicize models for providing the repayment assistance described in paragraph (1) and each year select entities that deserve recognition, through means devised by the Secretary, for the development of innovative plans for providing such assistance to employees.

      ‘(3) RECOMMENDATION- Within 1 year after the date of enactment of the Higher Education Amendments of 1992, the Secretary shall recommend to the appropriate committees in the Senate and House of Representatives changes to statutes that could be made in order to further encourage such efforts.

    ‘(l) UNIFORM ADMINISTRATIVE AND CLAIMS PROCEDURES-

      ‘(1) IN GENERAL- The Secretary shall, by regulation developed in consultation with guaranty agencies, lenders, institutions of higher education, secondary markets, students, third party servicers and other organizations involved in providing loans under this part, prescribe standardized forms and procedures regarding--

        ‘(A) origination of loans;

        ‘(B) electronic funds transfer;

        ‘(C) guaranty of loans;

        ‘(D) deferments;

        ‘(E) forbearance;

        ‘(F) servicing;

        ‘(G) claims filing;

        ‘(H) borrower status change; and

        ‘(I) cures.

      ‘(2) SPECIAL RULES- (A) The forms and procedures described in paragraph (1) shall include all aspects of the loan process as such process involves eligible lenders and guaranty agencies and shall be designed to minimize administrative costs and burdens (other than the costs and burdens involved in the transition to new forms and procedures) involved in exchanges of data to and from borrowers, schools, lenders, secondary markets, and the Department.

      ‘(B) Nothing in this paragraph shall be construed to limit the development of electronic forms and procedures.

      ‘(3) SIMPLIFICATION REQUIREMENTS- Such regulations shall include--

        ‘(A) standardization of computer formats, forms design, and guaranty agency procedures relating to the origination, servicing, and collection of loans made under this part;

        ‘(B) authorization of alternate means of document retention, including the use of microfilm, microfiche, laser disc, compact disc, and other methods allowing the production of a facsimile of the original documents;

        ‘(C) authorization of the use of computer or similar electronic methods of maintaining records relating to the performance of servicing, collection, and other regulatory requirements under this Act; and

        ‘(D) authorization and implementation of electronic data linkages for the exchange of information to and from lenders, guarantors, institutions of higher education, third party servicers, and the Department of Education for student status confirmation reports, claim filing, interest and special allowance billing, deferment processing, and all other administrative steps relating to loans made pursuant to this part where using electronic data linkage is feasible.

      ‘(4) ADDITIONAL RECOMMENDATIONS- The Secretary shall review regulations prescribed pursuant to paragraph (1) and seek additional recommendations from guaranty agencies, lenders, institutions of higher education, students, secondary markets, third party servicers and other organizations involved in providing loans under this part, not less frequently than annually, for additional methods of simplifying and standardizing the administration of the programs authorized by this part.

    ‘(m) COMMON FORMS AND FORMATS-

      ‘(1) COMMON GUARANTEED STUDENT LOAN APPLICATION FORM AND PROMISSORY NOTE-

        ‘(A) IN GENERAL- The Secretary, in cooperation with representatives of guaranty agencies, eligible lenders, and organizations involved in student financial assistance, shall prescribe a common application form and promissory note to be used for applying for loans under part B of this title.

        ‘(B) REQUIREMENTS- The form prescribed by the Secretary shall--

          ‘(i) use clear, concise, and simple language to facilitate understanding of loan terms and conditions by applicants;

          ‘(ii) be formatted to require the applicant to clearly indicate a choice of lender; and

          ‘(iii) permit, to the maximum extent practicable, application for any loan under part B.

        ‘(C) APPROVAL OF FORM- The Secretary shall approve a form for use not later than 360 days after the date of enactment of the Higher Education Amendments of 1992.

        ‘(D) SPECIAL RULE- Nothing in this section shall be construed to limit the development of electronic forms and procedures.

      ‘(2) COMMON DEFERMENT FORM- The Secretary, in cooperation with representatives of guaranty agencies, institutions of higher education, and lenders involved in loans made under part B of this title, shall prescribe a common deferment reporting form to be used for the processing of deferments of loans made under this title.

      ‘(3) COMMON REPORTING FORMATS- The Secretary shall promulgate standards including necessary rules, regulations (including the definitions of all relevant terms), and procedures so as to require all lenders and guaranty agencies to report information on all aspects of loans made under this part in uniform formats, so as to permit the direct comparison of data submitted by individual lenders, servicers, or guaranty agencies.

    ‘(n) DEFAULT REDUCTION MANAGEMENT-

      ‘(1) AUTHORIZATION- There are authorized to be appropriated $25,000,000 for fiscal year 1993 and each of the four succeeding fiscal years, for the Secretary to expend for default reduction management activities for the purposes of establishing a performance measure that will reduce defaults by 5 percent relative to the prior fiscal year. Such funds shall be in addition to, and not in lieu of, other appropriations made for such purposes.

      ‘(2) ALLOWABLE ACTIVITIES- Allowable activities for which such funds shall be expended by the Secretary shall include the following: (A) program reviews; (B) audits; (C) debt management programs; (D) training activities; and (E) such other management improvement activities approved by the Secretary.

      ‘(3) PLAN FOR USE REQUIRED- The Secretary shall submit a plan, for inclusion in the materials accompanying the President’s budget each fiscal year, detailing the expenditure of funds authorized by this section to accomplish the 5 percent reduction in defaults. At the conclusion of the fiscal year, the Secretary shall report the Secretary’s findings and activities concerning the expenditure of funds and whether the performance measure was met. If the performance measure was not met, the Secretary shall report the following:

        ‘(A) why the goal was not met, including an indication of any managerial deficiencies or of any legal obstacles;

        ‘(B) plans and a schedule for achieving the established performance goal;

        ‘(C) recommended legislative or regulatory changes necessary to achieve the goal; and

        ‘(D) if the performance standard or goal is impractical or infeasible, why that is the case and what action is recommended, including whether the goal should be changed or the program altered or eliminated.

      This report shall be submitted to the Appropriations Committees of the House of Representatives and the Senate and to the Committee on Education and Labor of the House of Representatives and the Committee on Labor and Human Resources of the Senate.

    ‘(o) CONSEQUENCES OF GUARANTY AGENCY INSOLVENCY- In the event that the Secretary has determined that a guaranty agency is unable to meet its insurance obligations under this part, the holder of loans insured by the guaranty agency may submit insurance claims directly to the Secretary and the Secretary shall pay to the holder the full insurance obligation of the guaranty agency, in accordance with insurance requirements no more stringent than those of the guaranty agency. Such arrangements shall continue until the Secretary is satisfied that the insurance obligations have been transferred to another guarantor who can meet those obligations or a successor will assume the outstanding insurance obligations.

    ‘(p) REPORTING REQUIREMENT- All officers and directors, and those employees and paid consultants of eligible institutions, eligible lenders, guaranty agencies, loan servicing agencies, accrediting agencies or associations, State licensing agencies or boards, State postsecondary reviewing entities designated under subpart 1 of part H, and entities acting as secondary markets (including the Student Loan Marketing Association), who are engaged in making decisions as to the administration of any program or funds under this title or as to the eligibility of any entity or individual to participate under this title, shall report to the Secretary, in such manner and at such time as the Secretary shall require, on any financial interest which such individual may hold in any other entity participating in any program assisted under this title.’.

SEC. 426. STUDENT LOAN INFORMATION BY ELIGIBLE LENDERS.

    (a) REQUIRED DISCLOSURE BEFORE DISBURSEMENT- Section 433(a) of the Act (20 U.S.C. 1083) is amended--

      (1) by redesignating paragraphs (1) through (13) as paragraphs (2) through (14), respectively; and

      (2) by inserting before paragraph (2) (as redesignated in subparagraph (A)) the following new paragraph:

      ‘(1) a statement prominently and clearly displayed and in bold print that the borrower is receiving a loan that must be repaid;’.

    (b) REQUIRED DISCLOSURE BEFORE REPAYMENT- Section 433(b) of the Act is amended--

      (1) in the matter preceding paragraph (1), by striking the second sentence and inserting the following: ‘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 60 days nor more than 240 days before the first payment on the loan is due from the borrower.’; and

      (2) in paragraph (8), by inserting ‘except as provided in subsection (e),’ before ‘the projected’.

    (c) SPECIAL RULES- Section 433 of the Act is further amended by adding at the end the following new subsections:

    ‘(e) SPECIAL DISCLOSURE RULES ON SLS LOANS AND PLUS LOANS AND UNSUBSIDIZED LOANS- Loans made under section 428A, 428B, and 428H shall not be subject to the disclosure of projected monthly payment amounts required under subsection (b)(8) if the lender, in lieu of such disclosure, provides the borrower with sample projections of monthly repayment amounts assuming different levels of borrowing and interest accruals resulting from capitalization of interest while the borrower is in school. Such sample projections shall disclose the cost to the student of capitalizing--

      ‘(1) principal and interest; and

      ‘(2) interest only.’.

SEC. 427. DEFINITIONS FOR STUDENT LOAN INSURANCE PROGRAM.

    (a) ELIGIBLE INSTITUTION- Section 435(a) of the Act (20 U.S.C. 1085) is amended--

      (1) by striking paragraphs (1) and (2) and inserting the following:

      ‘(1) IN GENERAL- Except as provided in paragraph (2), the term ‘eligible institution’ means an institution of higher education, as defined in section 481, except that, for the purposes of sections 427(a)(2)(C)(i) and 428(b)(1)(M)(i), an eligible institution includes any institution that is within this definition without regard to whether such institution is participating in any program under this title and includes any institution ineligible for participation in any program under this part pursuant to paragraph (2) of this subsection.’;

      (2) by redesignating paragraph (3) as paragraph (2);

      (3) in paragraph (2)(B) (as redesignated)--

        (A) in clause (i), by striking ‘and’ at the end thereof;

        (B) in clause (ii), by striking ‘any succeeding fiscal year.’ and inserting ‘fiscal year 1993; and’; and

        (C) by inserting at the end the following new clause:

        ‘(iii) 25 percent for any succeeding fiscal year.’.

    (b) REPEAL OF SEPARATE DEFINITION OF INSTITUTION OF HIGHER EDUCATION-

      (1) AMENDMENT- Subsection (b) of section 435 of the Act is repealed.

      (2) REFERENCE- With respect to reference in any other provision of law to the definition of institution of higher education contained in section 435(b) of the Act, such provision shall be deemed to refer to section 481(a) of the Act.

    (c) REPEAL OF DEFINITION OF VOCATIONAL SCHOOL- Subsection (c) of section 435 of the Act is repealed.

    (d) ELIGIBLE LENDER- Section 435(d) of the Act is amended--

      (1) in paragraph (1)(A)--

        (A) in the matter preceding clause (i), by striking ‘a trust company,’; and

        (B) in clause (ii)--

          (i) by inserting at the end of subclause (I) the following: ‘or a bank which is subject to examination and supervision by an agency of the United States, makes student loans as a trustee pursuant to an express trust, operated as a lender under this part prior to January 1, 1975, and which meets the requirements of this provision prior to the enactment of the Higher Education Amendments of 1992, or’; and

          (ii) by striking ‘, or (III)’ and all that follows through ‘January 1, 1981;’ and inserting a semicolon; and

      (2) in paragraph (2)--

        (A) in subparagraph (C), by striking ‘institutions; and’ and inserting ‘institution;’;

        (B) by inserting ‘and’ after the semicolon at the end of subparagraph (D); and

        (C) by inserting after subparagraph (D) the following new subparagraphs:

        ‘(E) shall not have a cohort default rate (as defined in section 435(m)) greater than 15 percent; and

        ‘(F) shall use the proceeds from special allowance payments and interest payments from borrowers for need-based grant programs, except for reasonable reimbursement for direct administrative expenses;’.

    (e) DUE DILIGENCE- Section 435(f) of the Act is amended by inserting ‘servicing and’ before ‘collection practices’.

    (f) REPEAL OF ADDITIONAL DEFINITIONS- Section 435 of the Act is further amended by striking subsections (g), (h), and (n).

    (g) DEFINITION OF COHORT DEFAULT RATE- Section 435(m) of the Act is amended to read as follows:

    ‘(m) COHORT DEFAULT RATE-

      ‘(1) IN GENERAL- (A) Except as provided in paragraph (2), the term ‘cohort default rate’ means, for any fiscal year in which 30 or more current and former students at the institution enter repayment on loans under section 428 or 428A received for attendance at the institution, the percentage of those current and former students who enter repayment on such loans received for attendance at that institution in that fiscal year who default before the end of the following fiscal year.

      ‘(B) In determining the number of students who default before the end of such fiscal year, the Secretary shall include only loans for which the Secretary or a guaranty agency has paid claims for insurance, and, in calculating the cohort default rate, exclude any loans which, due to improper servicing or collection, would result in an inaccurate or incomplete calculation of the cohort default rate.

      ‘(C) For any fiscal year in which fewer than 30 of the institution’s current and former students enter repayment, the term ‘cohort default rate’ means the percentage of such current and former students who entered repayment on such loans in any of the three most recent fiscal years, who default before the end of the fiscal year immediately following the year in which they entered repayment.

      ‘(2) SPECIAL RULES- (A) In the case of a student who has attended and borrowed at more than one school, the student (and such student’s subsequent repayment or default) is attributed to each school for attendance at which the student received a loan that entered repayment in the fiscal year.

      ‘(B) A loan on which a payment is made by the school, such school’s owner, agent, contractor, employee, or any other entity or individual affiliated with such school, in order to avoid default by the borrower, is considered as in default for purposes of this subsection.

      ‘(C) Any loan which has been rehabilitated before the end of such following fiscal year is not considered as in default for the purposes of this subsection.

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

      ‘(3) REGULATIONS TO PREVENT EVASIONS- The Secretary shall prescribe regulations designed to prevent an institution from evading the application to that institution of a default rate determination under this subsection through the use of such measures as branching, consolidation, change of ownership or control, or any similar device.’.

SEC. 428. REPAYMENTS BY SECRETARY.

    Section 437 of the Act (20 U.S.C. 1087) is amended to read as follows:

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

    ‘SEC. 437. (a) REPAYMENT IN FULL FOR DEATH AND DISABILITY- If a student borrower who has received a loan described in subparagraph (A) or (B) of section 428(a)(1) dies or becomes permanently and totally disabled (as determined in accordance with regulations of the Secretary), then the Secretary shall discharge the borrower’s liability on the loan by repaying the amount owed on the loan.

    ‘(b) REPAYMENT OF AMOUNT SUBJECT TO BANKRUPTCY ACTION- If the collection of a loan described in subparagraph (A) or (B) of section 428(a)(1) or sections 428A, 428B, 428C, or 428H is stayed in any action under title 11, United States Code, the Secretary shall repay the unpaid balance of principal and interest owed on the loan.

    ‘(c) DISCHARGE-

      ‘(1) IN GENERAL- If a student borrower who received, on or after January 1, 1986, a loan made, insured, or guaranteed under this part is unable to complete the program in which the borrower is enrolled due to the closure of the institution or if such student’s eligibility to borrow under this part was falsely certified by the eligible institution, then the Secretary shall discharge the borrower’s liability on the loan (including interest and collection fees) by repaying the amount owed on the loan and shall subsequently pursue any claim available to such borrower against the institution and its affiliates and principals or settle the loan obligation pursuant to the financial responsibility authority under subpart 3 of part H.

      ‘(2) ASSIGNMENT- A borrower whose loan has been discharged pursuant to this subsection shall be deemed to have assigned to the United States the right to a loan refund up to the amount discharged against the institution and its affiliates and principals.

      ‘(3) ELIGIBILITY FOR ADDITIONAL ASSISTANCE- The period of a student’s attendance at an institution at which the student was unable to complete a course of study due to the closing of the institution shall not be considered for purposes of calculating the student’s period of eligibility for additional assistance under this title.

      ‘(4) SPECIAL RULE- A borrower whose loan has been discharged pursuant to this subsection shall not be precluded from receiving additional grants, loans, or work assistance under this title for which the borrower would be otherwise eligible (but for the default on such discharged loan).

      ‘(5) REPORTING- The Secretary shall report to credit bureaus with respect to loans which have been discharged pursuant to this subsection.

    ‘(d) REPAYMENT OF LOANS TO PARENTS- If a student on whose behalf a parent has received a loan described in section 428B dies, then the Secretary shall discharge the borrower’s liability on the loan by repaying the amount owed on the loan.’.

SEC. 429. DEBT MANAGEMENT OPTIONS.

    Part B of title IV of the Act is amended by inserting after section 437 the following new section:

‘DEBT MANAGEMENT OPTIONS

    ‘SEC. 437A. (a) PROGRAM AUTHORITY- For the purpose of offering additional debt management options, the Secretary is authorized, to the extent of funds appropriated under subsection (d)--

      ‘(1) to acquire from eligible holders the notes of borrowers under this part (other than section 428B) who are considered to be at high risk of default and who submit a request to the Secretary for an alternative repayment option;

      ‘(2) to offer such borrowers one or more alternative repayment options, which may include graduated or extended repayment and which shall, subject to subsection (b)(2), include an income contingent repayment option established in accordance with subsection (b); and

      ‘(3) to enter into contracts or other agreements with private firms or other agencies of the Government as necessary to carry out the purposes of this section.

    ‘(b) Income Contingent Repayment Option-

      ‘(1) REGULATIONS- For the purposes of subsection (a)(2), the Secretary shall, by regulation, establish the terms and conditions for an income contingent repayment option. Such regulations shall specify the schedules under which income will be assessed for repayment of loans, shall permit the discharge of the remaining obligation on the loan not later than 25 years after the commencement of income contingent repayment, and may provide for the potential collection of amounts in excess of the principal and interest owed on the original loan or loans.

      ‘(2) COLLECTION MECHANISM DETERMINATION REQUIRED- Such regulations shall not be effective unless the Secretary publishes a finding that--

        ‘(A) the Secretary has, pursuant to subsection (a)(3), established a collection mechanism that will provide a high degree of certainty that collections will be made in accordance with the repayment option established under paragraph (1); and

        ‘(B) the use of such repayment option and collection mechanism will result in an increase in the net amount the Government will collect.

    ‘(c) DETERMINATIONS OF HIGH RISK OF DEFAULT- In making determinations under subsection (a)(1), the Secretary shall--

      ‘(1) consider the ratio of part B debt repayment to income; or

      ‘(2) establish, by regulation, such other indicators of high risk as the Secretary considers appropriate

    ‘(d) LOAN LIMITATION- Not more than $200,000,000 may be used to acquire loans under this section in any fiscal year.

    ‘(e) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this section such sums as may be necessary for fiscal year 1994 and for each of the 4 succeeding fiscal years.’.

SEC. 430. SPECIAL ALLOWANCES.

    (a) SPECIAL ALLOWANCE- Section 438(b)(2) of the Act is amended--

      (1) in subparagraph (A)(iii), by striking ‘3.25’ and inserting ‘3.10’;

      (2) by adding at the end of subparagraph (A) the following new sentence: ‘If such computation produces a number less than zero, such loans shall be subject to section 427A(e).’;

      (3) in subparagraph (B)(i), by striking ‘3.25’ and inserting ‘3.10’; and

      (4) by striking division (ii) of subparagraph (B) and inserting the following:

      ‘(ii) The quarterly rate of the special allowance set under division (i) of this subparagraph shall not be less than 9.5 percent minus the applicable interest rate on such loans, divided by 4.’;

      (5) in subparagraph (C)--

        (A) by inserting ‘before October 1, 1992,’ after ‘made’;

        (B) by inserting ‘(i)’ before ‘In’; and

        (C) by adding at the end the following new clause:

      ‘(ii) In the case of loans disbursed on or after October 1, 1992, pursuant to section 428A or 428B for which the interest rate is determined under section 427A(c)(4), a special allowance shall not be paid unless the rate determined for any 12-month period under section 427A(c)(4)(B) exceeds--

        ‘(I) 11 percent in the case of a loan under section 428A; or

        ‘(II) 10 percent in the case of a loan under section 428B.’;

      (6) in subparagraph (D)(i), by striking ‘3.25’ and inserting ‘3.10’.

    (b) SPECIAL ALLOWANCE PERMITTED ON UNSUBSIDIZED LOANS- Section 438(b)(5)(A)(ii) of the Act is amended by inserting ‘428H,’ after ‘428C,’.

    (c) SPECIAL RULE- Section 438(b)(5) is amended by adding at the end thereof the following flush sentence:

    ‘As used in this section, the term ‘eligible loan’ includes all loans subject to section 428I.’.

    (d) ORIGINATION FEES- Section 438(c) is amended--

      (1) in paragraph (2), by striking ‘With’ and inserting ‘Subject to paragraph (6) of this subsection, with’; and

      (2) by adding at the end the following new paragraphs:

      ‘(6) SLS AND PLUS LOANS- With respect to any loans made under section 428A or 428B on or after October 1, 1992, each eligible lender under this part shall charge the borrower an origination fee of 5 percent of the principal amount of the loan, to be deducted proportionately from each installment payment of the proceeds of the loan prior to payments to the borrower.

      ‘(7) DISTRIBUTION OF ORIGINATION FEES- All origination fees collected pursuant to this section on loans authorized under section 428A or 428B shall be paid to the Secretary by the lender and deposited in the fund authorized under section 431 of this part.’.

    (e) DISCOUNTING- Section 438(d)(2)(C) of the Act is amended by striking ‘or discount’.

SEC. 431. STUDENT LOAN MARKETING ASSOCIATION.

    (a) BOARD OF DIRECTORS- Subsection (c) of section 439 of the Act (20 U.S.C. 1087-2(c)) is amended to read as follows:

    ‘(c) BOARD OF DIRECTORS-

      ‘(1) COMPOSITION OF BOARD; CHAIRMAN- (A) The Association shall have a Board of Directors which shall consist of 21 persons, 7 of whom shall be appointed by the President and shall be representative of the general public. The remaining 14 directors shall be elected by the common stockholders of the Association entitled to vote pursuant to subsection (f). Commencing with the annual shareholders meeting to be held in 1993--

        ‘(i) 7 of the elected directors shall be affiliated with an eligible institution; and

        ‘(ii) 7 of the elected directors shall be affiliated with an eligible lender.

      ‘(B) The President shall designate 1 of the directors to serve as Chairman.

      ‘(2) TERMS OF APPOINTED AND ELECTED MEMBERS- The directors appointed by the President shall serve at the pleasure of the President and until their successors have been appointed and have qualified. The remaining directors shall each be elected for a term ending on the date of the next annual meeting of the common stockholders of the Association, and shall serve until their successors have been elected and have qualified. Any appointive seat on the Board which becomes vacant shall be filled by appointment of the President. Any elective seat on the Board which becomes vacant after the annual election of the directors shall be filled by the Board, but only for the unexpired portion of the term.

      ‘(3) AFFILIATED MEMBERS- For the purpose of this subsection, the references to a director ‘affiliated with the eligible institution’ or a director ‘affiliated with an eligible lender’ means an individual who is, or within 5 years of election to the Board has been, an employee, officer, director, or similar official of--

        ‘(A) an eligible institution or an eligible lender;

        ‘(B) an association whose members consist primarily of eligible institutions or eligible lenders; or

        ‘(C) a State agency, authority, instrumentality, commission, or similar institution, the primary purpose of which relates to educational matters or banking matters.

      ‘(4) MEETINGS AND FUNCTIONS OF THE BOARD- The Board of Directors shall meet at the call of its Chairman, but at least semiannually. The Board shall determine the general policies which shall govern the operations of the Association. The Chairman of the Board shall, with the approval of the Board, select, appoint, and compensate qualified persons to fill the offices as may be provided for in the bylaws, with such functions, powers, and duties as may be prescribed by the bylaws or by the Board of Directors, and such persons shall be the officers of the Association and shall discharge all such functions, powers, and duties.’.

    (b) AUTHORITY OF ASSOCIATION- Subparagraph (C) of section 439(d)(1) of the Act is amended to read as follows:

        ‘(C) to buy, sell, hold, insure, underwrite, and otherwise deal in obligations issued for the purpose of financing or refinancing the construction, reconstruction, renovation, improvement, or purchase at institutions of higher education of any of the following facilities (including the underlying property) and materials at an eligible institution of higher education:

          ‘(i) educational and training facilities;

          ‘(ii) housing for students and faculties;

          ‘(iii) library facilities, including the acquisition of library materials at institutions of higher education; and

          ‘(iv) related equipment, instrumentation, and furnishings for facilities and materials described in clause (i) or (iii);

        except that not more than 15 percent of the value of transactions entered into under this subparagraph shall involve transactions of the type described in clause (ii);’.

    (c) RESTRICTIONS ON ACTIVITIES- Section 439(d)(5) of the Act is amended by striking ‘third highest rating’ and inserting ‘second highest rating’.

    (d) STOCK OF ASSOCIATION- Subsection (f) of section 439 of the Act is amended to read as follows:

    ‘(f) STOCK OF THE ASSOCIATION-

      ‘(1) VOTING COMMON STOCK- The Association shall have voting common stock having such par value as may be fixed by its Board of Directors from time to time. Each share of voting common stock shall be entitled to one vote with rights of cumulative voting at all elections of directors.

      ‘(2) NUMBER OF SHARES; TRANSFERABILITY- The maximum number of shares of voting common stock that the Association may issue and have outstanding at any one time shall be fixed by the Board of Directors from time to time. Any voting common stock issued shall be fully transferable, except that, as to the Association, it shall be transferred only on the books of the Association.

      ‘(3) DIVIDENDS- To the extent that net income is earned and realized, subject to subsection (g)(2), dividends may be declared on voting common stock by the Board of Directors. Such dividends as may be declared by the Board of Directors shall be paid to the holders of outstanding shares of voting common stock, except that no such dividends shall be payable with respect to any share which has been called for redemption past the effective date of such call.

      ‘(4) SINGLE CLASS OF VOTING COMMON STOCK- As of the effective date of the Higher Education Amendments of 1992, all of the previously authorized shares of voting common stock and nonvoting common stock of the Association shall be converted to shares of a single class of voting common stock on a share-for-share basis, without any further action on the part of the Association or any holder. Each outstanding certificate for voting or nonvoting common stock shall evidence ownership of the same number of shares of voting stock into which it is converted. All preexisting rights and obligations with respect to any class of common stock of the Association shall be deemed to be rights and obligations with respect to such converted shares.’.

    (e) SAFETY AND SOUNDNESS OF ASSOCIATION- Section 439 of the Act is amended by adding at the end the following new subsection:

    ‘(r) SAFETY AND SOUNDNESS OF ASSOCIATION-

      ‘(1) REPORTS BY THE ASSOCIATION- The Association shall promptly furnish to the Secretary of Education and Secretary of the Treasury copies of all--

        ‘(A) periodic financial reports publicly distributed by the Association; and

        ‘(B) reports concerning the Association that are received by the Association and prepared by nationally recognized statistical rating organizations.

      ‘(2) AUDIT BY SECRETARY OF THE TREASURY- (A) The Secretary of the Treasury may--

        ‘(i) appoint auditors to conduct audits of the Association from time to time to determine the condition of the Association for the purpose of assessing its financial safety and soundness; and

        ‘(ii) enter into contracts to obtain the services of such technical experts as the Secretary of the Treasury determines necessary and appropriate to provide technical assistance to any auditor appointed under this paragraph.

      ‘(B) Each auditor appointed under this paragraph shall conduct an audit of the Association to the extent requested by the Secretary of the Treasury and shall prepare and submit a report to the Secretary of the Treasury concerning the results of such audit. A copy of such report shall be furnished to the Association and the Secretary of Education on the date on which it is delivered to the Secretary of the Treasury.

      ‘(C) The Association shall provide full and prompt access to the Secretary of the Treasury to its books and records and other information requested by the Secretary of the Treasury.

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

      ‘(4) CAPITAL STANDARD- If the capital ratio is less than 2 percent and is greater than or equal to 1.75 percent at the end of the Association’s most recent calendar quarter the Association shall, within 60 days of such occurrence, submit to the Secretary of the Treasury a capital restoration plan, in reasonable detail, that the Association believes is adequate to cause the capital ratio to equal or exceed 2 percent within 36 months.

      ‘(5) CAPITAL RESTORATION PLAN-

        ‘(A) SUBMISSION, APPROVAL, AND IMPLEMENTATION- The Secretary of the Treasury and the Association shall consult with respect to any capital restoration plan submitted pursuant to paragraph (4) and the Secretary of the Treasury shall approve such plan (or a modification thereof accepted by the Association) or disapprove such plan within 30 days after such plan is first submitted to the Secretary of the Treasury by the Association, unless the Association and Secretary of the Treasury mutually agree to a longer consideration period. If the Secretary of the Treasury approves a capital restoration plan (including a modification of a plan accepted by the Association), the Association shall forthwith proceed with diligence to implement such plan to the best of its ability.

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

        ‘(C) ASSOCIATION IMPLEMENTATION AND RESPONSE- Upon receipt of the submission by the Association, the Association shall forthwith proceed with diligence to implement the most recently proposed capital restoration plan of the Association. The Association, within 30 days after receipt from the Secretary of the Treasury of such submission, shall submit to such Chairmen and ranking minority members a written response to such submission, setting out fully the nature and extent of the Association’s agreement or the disagreement with the Secretary of the Treasury with respect to the capital restoration plan submitted to the Secretary of the Treasury and any findings of the Secretary of the Treasury.

      ‘(6) SUBSTANTIAL CAPITAL RATIO REDUCTION-

        ‘(A) ADDITIONAL PLAN REQUIRED- If the capital ratio is less than 1.75 percent and is greater than or equal to 1 percent at the end of the Association’s most recent calendar quarter, the Association shall submit to the Secretary of the Treasury within 60 days after such occurrence a capital restoration plan (or an appropriate modification of any plan previously submitted or approved under paragraph (4)) to increase promptly its capital ratio to equal or exceed 1.75 percent. The Secretary of the Treasury and the Association shall consult with respect to any plan or modified plan submitted pursuant to this paragraph. The Secretary of the Treasury shall approve such plan or modified plan (or a modification thereof accepted by the Association) or disapprove such plan or modified plan within 30 days after such plan or modified plan is first submitted to the Secretary of the Treasury by the Association, unless the Association and Secretary of the Treasury mutually agree to a longer consideration period. If the Secretary of the Treasury approves a plan or modified plan (including a modification of a plan accepted by the Association), the Association shall forthwith proceed with diligence to implement such plan or modified plan to the best of the Association’s ability.

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

        ‘(C) REVIEW BY CONGRESS; ASSOCIATION IMPLEMENTATION- Congress shall have 60 legislative days after the date on which Congress receives the alternative plan under subparagraph (B) from the Secretary of the Treasury to review such plan. If Congress does not take statutory action with respect to any such plan within such 60-day period, the Association shall immediately proceed with diligence to implement the alternative capital restoration plan of the Secretary of the Treasury under subparagraph (B). If Congress is out of session when any such alternative plan is received, such 60-day period shall begin on the first day of the next session of Congress.

      ‘(7) ACTIONS BY SECRETARY OF THE TREASURY- If the capital ratio of the Association does not equal or exceed 1.75 percent at the end of the Association’s most recent calendar quarter, the Secretary of the Treasury may, until the capital ratio equals or exceeds 1.75 percent, take any one or more of the following actions:

        ‘(A) LIMIT INCREASE IN LIABILITIES- Limit any increase in, or order the reduction of, any liabilities of the Association, except as necessary to fund student loan purchases and warehousing advances.

        ‘(B) RESTRICT GROWTH- Restrict or eliminate growth of the Association’s assets, other than student loans purchases and warehousing advances.

        ‘(C) RESTRICT DISTRIBUTIONS- Restrict the Association from making any capital distribution.

        ‘(D) REQUIRE ISSUANCE OF NEW CAPITAL- Require the Association to issue new capital in any form and in any amount sufficient to restore at least a 1.75 percent capital ratio.

        ‘(E) LIMIT EXECUTIVE COMPENSATION- Prohibit the Association from increasing for any executive officer any compensation including bonuses at a rate exceeding that officer’s average rate of compensation during the previous 12 calendar months and prohibiting the Board from adopting any new employment severance contracts.

      ‘(8) CRITICAL CAPITAL STANDARD- (A) If the capital ratio is less than 1 percent at the end of the Association’s most recent calendar quarter and the Association has already submitted a capital restoration plan to the Secretary of the Treasury pursuant to paragraph (4) or (6)(A), the Association shall forthwith proceed with diligence to implement the most recently proposed plan with such modifications as the Secretary of the Treasury determines are necessary to cause the capital ratio to equal or exceed 2 percent within 60 months.

      ‘(B) If the capital ratio is less than 1 percent at the end of the Association’s most recent calendar quarter and the Association has not submitted a capital restoration plan to the Secretary of the Treasury pursuant to paragraph (4) or (6)(A), the Association shall--

        ‘(i) within 14 days of such occurrence submit a capital restoration plan to the Secretary of the Treasury which the Association believes is adequate to cause the capital ratio to equal or exceed 2 percent within 60 months; and

        ‘(ii) forthwith proceed with diligence to implement such plan with such modifications as the Secretary of the Treasury determines are necessary to cause the capital ratio to equal or exceed 2 percent within 60 months.

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

      ‘(9) ADDITIONAL REPORTS TO COMMITTEES- The Association shall submit a copy of its capital restoration plan, modifications proposed to the Secretary of the Treasury, and proposed modifications received from the Secretary of the Treasury to the Congressional Budget Office and General Accounting Office upon their submission to the Secretary of the Treasury or receipt from the Secretary of the Treasury. Notwithstanding any other provision of law, the Congressional Budget Office and General Accounting Office shall maintain the confidentiality of information received pursuant to the previous sentence. In the event that the Secretary of the Treasury does not approve a capital restoration plan as provided in paragraph (5)(A) or (6)(A), or in the event that a capital restoration plan is modified by the Secretary of the Treasury pursuant to paragraph (6)(B) or (8), the Congressional Budget Office and General Accounting Office shall each submit a report within 30 days of the Secretary of the Treasury’s submission to the Chairmen and ranking minority members as required in paragraphs (5)(B), (6)(B), and (8)(C) to such Chairmen and ranking members--

        ‘(A) analyzing the financial condition of the Association;

        ‘(B) analyzing the capital restoration plan and reasons for disapproval of the plan contained in the Secretary of the Treasury’s submission made pursuant to paragraph (5)(B), or the capital restoration plan proposed by the Association and the modifications made by the Secretary of the Treasury pursuant to paragraph (6)(B) or (8);

        ‘(C) analyzing the impact of the capital restoration plan and reasons for disapproval of the plan contained in the Secretary of the Treasury’s submission made pursuant to paragraph (5)(B), or the impact of the capital restoration plan proposed by the Association and the modifications made by the Secretary of the Treasury pursuant to paragraph (6)(B) or (8), and analyzing the impact of the recommendations made pursuant to subparagraph (D) of this paragraph, on--

          ‘(i) the ability of the Association to fulfill its purpose and authorized activities as provided in this section, and

          ‘(ii) the operation of the student loan programs; and

        ‘(D) recommending steps which the Association should take to increase its capital ratio without impairing its ability to perform its purpose and authorized activities as provided in this section.

      ‘(10) REVIEW BY SECRETARY OF EDUCATION- The Secretary of Education shall review the Secretary of the Treasury’s submission required pursuant to paragraph (5)(B), (6)(B), or (8) and shall submit a report within 30 days to the Chairman and ranking minority member of the Senate Committee on Labor and Human Resources and to the Chairman and ranking minority member of the House Committee on Education and Labor--

        ‘(A) describing any administrative or legislative provisions governing the student loan programs which contributed to the decline in the Association’s capital ratio; and

        ‘(B) recommending administrative and legislative changes in the student loan programs to maintain the orderly operation of such programs and to enable the Association to fulfill its purpose and authorized activities consistent with the capital ratio specified in paragraph (4).

      ‘(11) SAFE HARBOR- The Association shall be deemed in compliance with the capital ratios described in paragraphs (4) and (6)(A) if the Association is rated in 1 of the 2 highest full rating categories (such categories to be determined without regard to designations within categories) by 2 nationally recognized statistical rating organizations, determined without regard to the Association’s status as a federally chartered corporation.

      ‘(12) TREATMENT OF CONFIDENTIAL INFORMATION- Notwithstanding any other provision of law, the Secretary of the Treasury, the Secretary of Education, the Congressional Budget Office, and the General Accounting Office shall not disclose any information treated as confidential by the Association and obtained pursuant to this subsection. Nothing in this paragraph shall authorize the Secretary of the Treasury, the Secretary of Education, the Congressional Budget Office, and the General Accounting Office to withhold information from Congress, or prevent the Secretary of Education, the Congressional Budget Office, and the General Accounting Office from complying with a request for information from any other Federal department or agency requesting the information for purposes within the scope of its jurisdiction, or complying with an order of a court of the United States in an action brought by the United States. For purposes of section 522 of title 5, United States Code, this paragraph shall be considered a statute described in subsection (b)(3) of such section 552.

      ‘(13) DEFINITIONS- As used in this subsection:

        ‘(A) The term ‘nationally recognized statistical rating organization’ means any entity recognized as such by the Securities and Exchange Commission.

        ‘(B) The term ‘capital ratio’ means the ratio of total stockholders’ equity, as shown on the Association’s most recent quarterly consolidated balance sheet prepared in the ordinary course of its business, to the sum of--

          ‘(i) the total assets of the Association, as shown on the balance sheet prepared in the ordinary course of its business; and

          ‘(ii) 50 percent of the credit equivalent amount of the following off-balance sheet items of the Association as of the date of such balance sheet--

            ‘(I) all financial standby letters of credit and other irrevocable guarantees of the repayment of financial obligations of others; and

            ‘(II) all interest rate contracts and exchange rate contracts, including interest exchange agreements, floor, cap, and collar agreements and similar arrangements.

        For purposes of this subparagraph, the calculation of the credit equivalent amount of the items set forth in clause (ii) of this subparagraph, the netting of such items and eliminations for the purpose of avoidance of double-counting of such items shall be made in accordance with the measures for computing credit conversion factors for off-balance sheet items for capital maintenance purposes established for commercial banks from time to time by the Federal Reserve Board, but without regard to any risk weighting provisions in such measures.

        ‘(C) The term ‘legislative days’ means only days on which either House of Congress is in session.’.

SEC. 432. EFFECTIVE DATES FOR AMENDMENTS TO PART B.

    (a) IN GENERAL- The changes made in part B of title IV of the Act by the amendments made by this part shall take effect on the date of enactment of this Act, except--

      (1) as otherwise provided in such part B;

      (2) that the changes made in sections 425(a), 428(b)(1)(A), 428(b)(1)(B), 428A(b), 428B(b), relating to annual and aggregate loan limits, shall apply with respect to loans for which the first disbursement is made on or after July 1, 1993, except that--

        (A) the changes made in section 425(a)(1)(A)(i) and 428(b)(1)(A)(i) shall apply with respect to loans for which the first disbursement is made on or after October 1, 1992; and

        (B) the changes made in section 425(a)(1)(A)(iv) and 428(b)(1)(A)(iv) shall apply with respect to loans to cover the costs of instruction for periods of enrollment beginning on or after October 1, 1993;

      (3) that the changes made in sections 427(a)(2)(C) and 428(b)(1)(M), relating to deferments, shall apply with respect to loans for which the first disbursement is made on or after July 1, 1993, to an individual who is a new borrower on the date such individual applies for a loan;

      (4) that the changes made in sections 428(a)(7) and 428(f)(1)(C), relating to payments for unconsummated loans, shall apply with respect to loans made on or after October 1, 1992;

      (5) that the changes made in sections 427(a)(2)(H) and 428(b)(1)(E)(i), relating to offering graduated or income sensitive repayment options, shall apply with respect to loans for which the first disbursement is made on or after July 1, 1993, to an individual who is a new borrower on the date such individual applies for a loan;

      (6) that the changes made in section 428(b)(4), relating to teacher deferment, shall apply with respect to loans for which the first disbursement is made on or after July 1, 1993, to an individual who is a new borrower on the date such individual applies for a loan;

      (7) that section 428(c)(2)(H)(i) as added by such amendments shall be effective on and after October 1, 1992;

      (8) that the changes in section 428(c)(3) with respect to forbearance after a default shall be effective on and after October 1, 1992;

      (9) that the changes made in section 428B(a) with respect to use of credit histories shall apply with respect to loans for which the first disbursement is made on or after July 1, 1993;

      (10) that section 428B(c) as added by such amendments, relating to disbursement of Federal PLUS Loans, shall apply with respect to loans for which the first disbursement is made on or after October 1, 1992;

      (11) that the changes made in section 428C, relating to consolidation loans, shall apply with respect to loans under such section for which the application is received by an eligible lender on or after January 1, 1993;

      (12) that section 428H as added by such amendments shall be effective with respect to loans made to cover the cost of instruction for periods of enrollment beginning on or after October 1, 1992;

      (13) that the changes made in section 438 shall apply with respect to loans for which the first disbursement is made on or after October 1, 1992;

      (14) that the changes in section 439(d)(1), relating to facilities loans, shall apply with respect to applications received on or after July 1, 1992; and

      (15) that the changes in the designation or names of loans or programs under part B is effective with respect to applications or other documents (used in making such loans) that are printed after the date of enactment of this Act.

    (b) NEW BORROWERS- For purposes of the section, the term ‘new borrower’ means, with respect to any date, an individual who on that date has no outstanding balance of principal or interest owing on any loan made, insured, or guaranteed under part B of title IV of the Act.

PART C--FEDERAL WORK-STUDY PROGRAMS

SEC. 441. DESIGNATION, PURPOSE, AND APPROPRIATIONS.

    (a) PROGRAM TITLE-

      (1) AMENDMENT- The heading of part C of title IV of the Act is amended to read as follows:

‘Part C--Federal Work-Study Programs’.

      (2) CONFORMING AMENDMENT- The heading of section 443 is amended by inserting ‘FEDERAL’ before ‘WORK-STUDY’.

    (b) PURPOSE- Section 441(a) of the Act is amended by inserting ‘, and to encourage students receiving Federal student financial assistance to participate in community service activities that will benefit the Nation and engender in the students a sense of social responsibility and commitment to the community’ before the period at the end thereof.

    (c) AUTHORIZATION OF APPROPRIATIONS- Section 441(b) of the Act is amended to read as follows:

    ‘(b) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this part, $800,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years.’.

    (d) DEFINITION OF COMMUNITY SERVICE- Section 441 of the Act is amended by adding at the end the following new subsection:

    ‘(c) COMMUNITY SERVICES- For purposes of this part, the term ‘community services’ means services which are identified by an institution of higher education, through formal or informal consultation with local nonprofit, governmental, and community-based organizations, as designed to improve the quality of life for community residents, particularly low-income individuals, or to solve particular problems related to their needs, including--

      ‘(1) such fields as health care, child care, literacy training, education (including tutorial services), welfare, social services, transportation, housing and neighborhood improvement, public safety, crime prevention and control, recreation, rural development, and community improvement;

      ‘(2) work in service opportunities or youth corps as defined in section 101 of the National and Community Service Act of 1990, and service in the agencies, institutions and activities designated in section 124(a) of the National and Community Service Act of 1990;

      ‘(3) support services to students with disabilities; and

      ‘(4) activities in which a student serves as a mentor for such purposes as--

        ‘(A) tutoring;

        ‘(B) supporting educational and recreational activities; and

        ‘(C) counseling, including career counseling.’.

SEC. 442. ALLOCATION OF FUNDS.

    (a) GRANTS TO SCHOOLS WITH HIGH CONCENTRATIONS OF PELL GRANT RECIPIENTS- Section 442(a) of the Act (42 U.S.C. 2752(a)) is amended by adding at the end the following new paragraph:

    ‘(4)(A) Notwithstanding any other provision of this section, the Secretary may allocate an amount equal to not more than 10 percent of the amount by which the amount appropriated in any fiscal year to carry out this part exceeds $700,000,000 among eligible institutions described in subparagraph (B).

    ‘(B) In order to receive an allocation pursuant to subparagraph (A) an institution shall be an eligible institution from which 50 percent or more of the Pell Grant recipients attending such eligible institution graduate or transfer to a 4-year institution of higher education.’.

    (b) CONSEQUENCES OF FAILURE TO AWARD- Section 442(e) of the Act is amended to read as follows:

    ‘(e) REALLOCATION OF EXCESS ALLOCATIONS- If institutions return to the Secretary any portion of the sums allocated to such institutions under this section for any fiscal year, the Secretary shall reallot such excess to eligible institutions which used at least 10 percent of the total amount of funds granted to such institution under this section to compensate students employed in community service in the preceding fiscal year. Such excess funds shall be reallotted to institutions which qualify under this subsection on the same basis as excess eligible amounts are allocated to institutions pursuant to subsection (c). Funds received by institutions pursuant to this subsection shall be used to compensate students employed in community service.’.

SEC. 443. GRANTS FOR WORK-STUDY PROGRAMS.

    (a) CONTENTS OF AGREEMENTS- Section 443(b)(1) of the Act (42 U.S.C. 2753) is amended, in the matter preceding subparagraph (A), by inserting ‘, work in community service’ after ‘itself’.

    (b) USE FOR COMMUNITY SERVICE- Section 443(b)(2)(A) of the Act is amended to read as follows:

        ‘(A) in fiscal year 1994 and succeeding fiscal years, an institution shall use at least 5 percent of the total amount of funds granted to such institution under this section in any fiscal year to compensate students employed in community service, except that the Secretary may waive this subparagraph if the Secretary determines that enforcing it would cause hardship for students at an institution;’.

    (c) ALLOCATION- Section 443(b)(3) of the Act 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 of this title, and who meet the requirements of section 484 will be assisted, except that--

        ‘(A) if the institution’s grant under this part is directly or indirectly based in part on the financial need demonstrated by students who are (i) attending the institution less than full time, or (ii) independent students; and

        ‘(B) if the total financial need of all such less than full-time and independent students at the institution exceeds 5 percent of the total financial need of all students at such institution,

      then at least 5 percent of the grant shall be made available to such less than full-time and independent students;’.

    (d) OVERAWARD INCOME LIMIT- Section 443(b)(4) of the Act is amended to read as follows:

      ‘(4) provide that for a student employed in a work-study program under this part, at the time income derived from any need-based employment is in excess of the determination of the amount of such student’s need by more than $300, continued employment shall not be subsidized with funds appropriated under this part;’.

    (e) FEDERAL SHARE- Section 443(b)(5) of the Act 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 for academic year 1993-1994 and succeeding academic years, except that--

        ‘(A) the Federal share may exceed such amounts of such compensation if the Secretary determines, pursuant to regulations promulgated by the Secretary establishing objective criteria for such determinations, that a Federal share in excess of such amounts is required in furtherance of the purpose of this part; and

        ‘(B) when a student engaged in work in community service performs such work for a private nonprofit organization other than the eligible institution, the contribution of such agency or organization shall not exceed 40 percent of the institution’s share of the compensation of the student, and the eligible institution in its discretion may count such contribution toward satisfaction of the non-Federal share of the compensation of the student;’.

    (f) PROPRIETARY SCHOOLS- Section 443(b)(8) of the Act is amended--

      (1) in subparagraph (A), by inserting ‘, except as required in subparagraph (A) of paragraph (2)’ before the semicolon at the end thereof; and

      (2) in subparagraph (C), by inserting ‘that are directly related to the student’s education’ after ‘student services’.

    (g) INDIVIDUALS WITH DISABILITIES- Section 443(b) of the Act is amended--

      (1) by redesignating paragraph (9) as paragraph (11);

      (2) by striking ‘and’ at the end of paragraph (8); and

      (3) by inserting after paragraph (8) the following new paragraphs:

      ‘(9) provide assurances that employment made available from funds under this part may be used to support programs for supportive services to students with disabilities;

      ‘(10) provide assurances that the institution will inform all eligible students of the opportunity to perform community service, and will consult with local nonprofit, governmental, and community-based organizations to identify such opportunities; and’.

SEC. 444. CARRY-BACK AUTHORITY.

    Section 445(b) of the Act is amended--

      (1) by inserting ‘(1)’ after the subsection heading; and

      (2) by adding at the end the following new paragraph:

    ‘(2) An eligible institution may make payments to students of wages earned after the end of the academic year, but prior to the beginning of the succeeding fiscal year, from such succeeding fiscal year’s appropriations.’.

SEC. 445. JOB LOCATION AND DEVELOPMENT.

    Section 446 of the Act is amended to read as follows:

‘JOB LOCATION AND DEVELOPMENT PROGRAMS

    ‘SEC. 446. (a) AGREEMENTS REQUIRED- (1) The Secretary is authorized to enter into agreements with eligible institutions under which such institution may use not more than 10 percent or $50,000 of its allotment under section 442, whichever is less, to establish or expand a program under which such institution, separately or in combination with other eligible institutions, locates and develops jobs, including community service jobs, for currently enrolled students.

    ‘(2) Jobs located and developed under this section shall be jobs that are suitable to the scheduling and other needs of such students and that, to the maximum extent practicable, complement and reinforce the educational programs or vocational goals of such students.

    ‘(b) CONTENTS OF AGREEMENTS- Agreements under subsection (a) shall--

      ‘(1) provide that the Federal share of the cost of any program under this section will not exceed 80 percent of such cost;

      ‘(2) provide satisfactory assurance that funds available under this section will not be used to locate or develop jobs at an eligible institution;

      ‘(3) provide satisfactory assurance that funds available under this section will not be used for the location or development of jobs for students to obtain upon graduation, but rather for the location and development of jobs available to students during and between periods of attendance at such institution;

      ‘(4) provide satisfactory assurance that the location or development of jobs pursuant to programs assisted under this section will not result in the displacement of employed workers or impair existing contracts for services;

      ‘(5) provide satisfactory assurance that Federal funds used for the purpose of this section can realistically be expected to help generate student wages exceeding, in the aggregate, the amount of such funds, and that if such funds are used to contract with another organization, appropriate performance standards are part of such contract; and

      ‘(6) provide that the institution will submit to the Secretary an annual report on the uses made of funds provided under this section and an evaluation of the effectiveness of such program in benefiting the students of such institution.’.

SEC. 446. ADDITIONAL FUNDS TO CONDUCT COMMUNITY SERVICE WORK-STUDY PROGRAMS.

    (a) IN GENERAL- Section 447 of the Act (42 U.S.C. 2756a) is amended--

      (1) by striking subsections (a) and (b); and

      (2) in subsection (c)--

        (A) in the matter preceding paragraph (1), by striking ‘funds made available under the last sentence of section 489(a)’ and inserting ‘up to 10 percent of the funds made available under section 489(a) and attributable to the amount of the institution’s expenditures under this part’;

        (B) in paragraph (3), by inserting ‘, and programs assisted under the National and Community Service Act of 1990’ after ‘nonprofit agencies’; and

        (C) by striking ‘(c) USE OF OTHER FUNDS TO CONDUCT PROGRAM- ’.

    (b) AMENDMENT TO HEADING- The heading for section 447 of the Act is amended to read as follows:

‘ADDITIONAL FUNDS TO CONDUCT COMMUNITY SERVICE WORK-STUDY PROGRAMS’.

    (c) CONFORMING AMENDMENTS- Subsection (a) of section 489 of the Act (20 U.S.C. 1096(a)) is amended--

      (1) in the second sentence, by striking ‘(other than section 447)’; and

      (2) by striking the fourth sentence (relating to payments with respect to section 447).

SEC. 447. WORK COLLEGES.

    Part C of title IV of the Act (42 U.S.C. 2751 et seq.) is amended by adding at the end thereof the following new section:

‘WORK COLLEGES

    ‘SEC. 448. (a) PURPOSE- The purpose of this section is to recognize, encourage, and promote the use of comprehensive work-learning programs as a valuable educational approach when it is an integral part of the institution’s educational program and a part of a financial plan which decreases reliance on grants and loans.

    ‘(b) SOURCE AND USE FUNDS-

      ‘(1) SOURCE OF FUNDS- In addition to the sums appropriated under subsection (f), funds allocated to the institution under part C and part E of this title may be transferred for use under this section to provide flexibility in strengthening the self-help-through-work element in financial aid packaging.

      ‘(2) ACTIVITIES AUTHORIZED- From the sums appropriated pursuant to subsection (f), and from the funds available under paragraph (1), eligible institutions may, following approval of an application under subsection (c) by the Secretary--

        ‘(A) support the educational costs of qualified students through self-help payments or credits provided under the work-learning program of the institution within the limits of part F of this title;

        ‘(B) promote the work-learning-service experience as a tool of postsecondary education, financial self-help and community service-learning opportunities;

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

        ‘(D) be used for the administration, development and assessment of comprehensive work-learning programs, including--

          ‘(i) community-based work-learning alternatives that expand opportunities for community service and career-related work; and

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

    ‘(c) APPLICATION- Each eligible institution may submit an application for funds authorized by subsection (f) to use funds under subsection (b)(1) at such time and in such manner as the Secretary, by regulation, may reasonably require.

    ‘(d) MATCH REQUIRED- Funds made available to work-colleges pursuant to this section shall be matched on a dollar-for-dollar basis from non-Federal sources.

    ‘(e) DEFINITIONS- For the purpose of this section--

      ‘(1) the term ‘work-college’ means an eligible institution that--

        ‘(A) has been a public or private nonprofit institution with a commitment to community service;

        ‘(B) has operated a comprehensive work-learning program for at least 2 years;

        ‘(C) requires all resident students who reside on campus to participate in a comprehensive work-learning program and the provision of services as an integral part of the institution’s educational program and as part of the institution’s educational philosophy; and

        ‘(D) provides students participating in the comprehensive work-learning program with the opportunity to contribute to their education and to the welfare of the community as a whole; and

      ‘(2) the term ‘comprehensive student work-learning program’ means a student work/service program that is an integral and stated part of the institution’s educational philosophy and program; requires participation of all resident students for enrollment, participation, and graduation; includes learning objectives, evaluation and a record of work performance as part of the student’s college record; provides programmatic leadership by college personnel at levels comparable to traditional academic programs; recognizes the educational role of work-learning supervisors; and includes consequences for nonperformance or failure in the work-learning program similar to the consequences for failure in the regular academic program.

    ‘(f) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this section $5,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years.’.

PART D--FEDERAL DIRECT LOANS

SEC. 451. ESTABLISHMENT OF FEDERAL DIRECT LOAN PROGRAM.

    Part D of title IV of the Act (20 U.S.C. 1087a et seq.) is amended to read as follows:

‘PART D--FEDERAL DIRECT LOAN DEMONSTRATION PROGRAM

‘SEC. 451. PROGRAM AND PAYMENT AUTHORITY.

    ‘(a) PROGRAM AUTHORITY- The Secretary shall, in accordance with the provisions of this part, carry out a loan demonstration program for qualified students and parents at selected institutions of higher education to enable the students to pursue their courses of study at such institutions during the period beginning on July 1, 1994 and ending on June 30, 1998.

    ‘(b) PAYMENT AUTHORITY-

      ‘(1) GENERAL AUTHORITY- The Secretary shall make payments under this part for any fiscal year to institutions of higher education having an agreement under section 454, on the basis of the estimated needs of students at each institution and parents for student or parent loans, taking into consideration the demand and eligibility of such students and parents for loans under this part.

      ‘(2) ENTITLEMENT PROVISION- An institution of higher education which has an agreement with the Secretary under section 454 shall be deemed to have a contractual right against the United States to receive payments according to that agreement.

‘SEC. 452. PAYMENT RULES.

    ‘(a) IN GENERAL- The Secretary shall make payments required by section 451 in such installments as the Secretary determines--

      ‘(1) reflect accurately the disbursement of funds for student and parent loans by the institution of higher education, and

      ‘(2) will best carry out the objectives of this part.

    ‘(b) INITIAL PAYMENTS- The initial payments for any academic year required by section 451 shall be made available to each institution of higher education not later than 10 days prior to the beginning of the academic year at such institution.

‘SEC. 453. SELECTION BY THE SECRETARY.

    ‘(a) ENTRY REQUIREMENT- The Secretary shall enter into agreements with institutions of higher education, at which the total loan volume under the Federal Stafford Loan program, the Federal Supplemental Loans for Students program, and the Federal PLUS loan program was $500,000,000 in the most recent year for which data is available, to participate in the loan demonstration program to make loans for the period beginning with the academic year beginning on July 1, 1994, and ending with loans made before June 30, 1998. Such agreements shall be concluded not later than January 1, 1994.

    ‘(b) SELECTION CRITERIA- The Secretary shall enter into agreements with institutions of higher education which represent a cross-section of all institutions of higher education participating in part B of this title in terms of control of the institution, length of academic program, highest degree offered, size of student enrollment, percentage of students borrowing under part B, geographic location, annual loan volume, default experience and composition of the student body.

    ‘(c) PREFERENCE FOR APPLYING INSTITUTIONS- In constituting the cross-section of institutions of higher education required by the previous subsection, the Secretary shall first enter into agreements, to the maximum extent possible consistent with the requirements of constituting the cross-section, with institutions of higher education which apply to participate in the loan demonstration program. Institutions of higher education desiring to participate in the demonstration shall submit an application containing such information as the Secretary may by regulation prescribe.

    ‘(d) DESIGNATION OF ADDITIONAL INSTITUTIONS- If an insufficient number of institutions of higher education apply and satisfy the conditions provided in subsections (a) and (b) of this section, the Secretary shall designate additional institutions of higher education from among those eligible to participate in part B to participate in the loan demonstration program in order to satisfy the conditions provided in subsections (a) and (b) of this section. An institution of higher education designated by the Secretary pursuant to this subsection may decline to participate in the loan demonstration program for good cause pursuant to regulations established by the Secretary.

    ‘(e) LIMITATION- The Secretary shall ensure that the annual loan volume under the Federal Stafford Loan program, the Federal Supplemental Loans for Students program, and the Federal Plus loan program at the institutions of higher education with which the Secretary enters into agreements under this part, in the most recent fiscal year for which data are available, represents not more than 15 percent of the loan guarantees of any guaranty agency under such programs and the Secretary shall determine that such guaranty agency will remain financially sound.

    ‘(f) SELECTION OF SUBGROUP TO TEST INCOME CONTINGENT REPAYMENT-

      ‘(1) SELECTION- Within the institutions of higher education selected or designated to participate in the loan demonstration program under this part, the Secretary shall select 35 percent of such institutions to offer income contingent repayment methods in accordance with section 454(6).

      ‘(2) FINDING REQUIRED- The Secretary shall not select institutions to offer such repayment methods unless the Secretary publishes a finding that--

        ‘(A) the Secretary has established a collection mechanism that will provide a high degree of certainty that collections will be made in accordance with the repayment option; and

        ‘(B) the use of such repayment option and collection mechanism will result in an increase in the net amount the Government will collect.

    ‘(g) CONSORTIA- Institutions of higher education may apply to participate in the program pursuant to subsection (c) as consortia. The Secretary shall consider the members of the consortia as individual institutions for the purposes of subsection (b). Institutions of higher education selected by the Secretary to participate in the program may also enter into consortia for the purpose of carrying out the agreement required by section 454.

‘SEC. 454. AGREEMENT REQUIRED.

    ‘An agreement with any institution of higher education for participation in the loan demonstration program shall--

      ‘(1) provide for the establishment and maintenance of a loan demonstration program at the institution of higher education under which--

        ‘(A) the institution of higher education will identify eligible students who seek student financial assistance at such institution, in accordance with section 484;

        ‘(B) the institution of higher education will estimate the need of each such student as required by part F;

        ‘(C) the institution of higher education will originate loans to such eligible students and eligible parents in accordance with this part, and will not charge any administrative fees to such students or parents for such origination activities;

        ‘(D) the institution of higher education will provide timely information concerning the status of student and parent borrowers to the contractor or contractors responsible for loan collection pursuant to section 457; and

        ‘(E) the institution of higher education will participate in the loan demonstration program for its duration, subject to procedures for withdrawal established by section 455;

      ‘(2) provide assurances that the institution of higher education will comply with the provisions of section 463A, relating to student loan information, with respect to loans made under this part;

      ‘(3) provide that the note or evidence of obligation on the loan shall be the property of the Secretary and that the institution of higher education will act as the agent of the Secretary for the purpose of making loans under the loan demonstration program;

      ‘(4) provide that the institution of higher education will accept responsibility and liability stemming from its failure to perform its functions pursuant to the agreement;

      ‘(5) provide that students at the institution of higher education and their parents (with respect to such students) will not be eligible to participate in the Federal Stafford Loan program, the Federal Supplemental Loans to Students program, or the Federal Plus loan program for the period during which such institution participates in the loan demonstration program;

      ‘(6) in the case of the institutions selected by the Secretary pursuant to section 453(f), include such terms and conditions as the Secretary may require by regulation for testing income contingent repayment methods, which shall include--

        ‘(A) requiring such institutions to offer the option of income contingent repayment, based on an annual review of the borrowers Federal income tax return, to any student who applies for a loan under this part;

        ‘(B) the additional or different terms and conditions to be included in the notes or other agreements entered into by the borrower, as required by such regulations, including provisions with respect to the disclosure by the borrower of subsequent income;

        ‘(C) providing for the discharge of loans after not more than 25 years of income contingent repayment; and

        ‘(D) such data and reporting requirements and such other provisions as the Secretary considers necessary to carry out the purposes of section 458(d)(2) and to the protection of the Federal fiscal interest; and

      ‘(7) include such other provisions as may be necessary to protect the financial interest of the United States and to promote the purposes of this part.

‘SEC. 455. WITHDRAWAL AND TERMINATION PROCEDURES.

    ‘The Secretary shall establish by regulation procedures which enable institutions of higher education who have made agreements with the Secretary pursuant to section 454 to withdraw or to be terminated from the loan demonstration program.

‘SEC. 456. TERMS AND CONDITIONS.

    ‘Unless otherwise specified in this part, the loans made under this part shall have the same terms, conditions, and benefits as loans made under sections 428, 428A, and 428B of this title. Any loan made under this part shall be eligible for consolidation under section 428C of part B of this title.

‘SEC. 457. LOAN COLLECTION FUNCTIONS UNDER COMPETITIVE PROCUREMENT CONTRACTS.

    ‘(a) IN GENERAL- The Secretary shall provide, through contracts awarded on a competitive basis, for--

      ‘(1) the collection of principal and interest on loans made under this part by not less than 5 contracts, at least one of which shall be for servicing loans that are subject to income contingent repayment;

      ‘(2) the collection of defaulted loans made under this part;

      ‘(3) the establishment and operation of a central data system for the maintenance of records on all loans made under this part;

      ‘(4) programs for default prevention; and

      ‘(5) such other programs as the Secretary determines are necessary to ensure the success of the loan demonstration program.

    ‘(b) SERVICING FOR INCOME CONTINGENT LOANS- The Secretary shall, through contract, ensure the availability of servicing of loans made pursuant to section 454(6) at a cost comparable to that available for loans under part B of this title (that are not subject to income contingent repayment).

    ‘(c) INFORMATION ON INCOME CONTINGENT LOANS- The Secretary shall acquire such information as is necessary regarding the adjusted gross income of borrowers (under this part and under part B) of loans that are subject to income contingent repayment for the purpose of determining the annual repayment obligations of such borrowers. The Secretary, not less often than once per year, shall provide to the servicer, lender, or holder of a loan under this part the Secretary’s determination of the borrower’s repayment obligation on that loan for such year.

‘SEC. 458. REPORTS.

    ‘(a) ANNUAL REPORTS- The Secretary shall submit to the Congress not later than July 1, 1993, and each July 1 for the 5 succeeding years an annual report describing the progress and status of the loan demonstration program.

    ‘(b) INTERIM FINAL REPORT- The Comptroller General shall submit to the Congress not later than January 1, 1997, an interim final report evaluating the experience of the Department of Education, the participating institutions of higher education, students, and parents with respect to the loan demonstration program. The report shall include--

      ‘(1) the administrative costs, including costs per loan, incurred by participating institutions of higher education in administering the loan demonstration program;

      ‘(2) the administrative costs, including costs per loan, incurred by the Department of Education and its contractors in carrying out its responsibilities, including the costs of origination, data systems, servicing, and collection;

      ‘(3) an evaluation of the effectiveness of the loan demonstration program in providing services to students and parents, including loan application, loan origination, student financial aid packaging, tracking of student status, responsiveness to student inquiries and processing of deferments, forbearances, and repayments;

      ‘(4) the frequency and cost of borrower delinquency and default under the loan demonstration program and losses incurred by institutions of higher education and servicers, including losses caused by improper origination or servicing of loans;

      ‘(5) the timeliness of capital availability to institutions of higher education and of loans to students and parents and the cost of loan capital;

      ‘(6) an evaluation of the effectiveness of the income contingent repayment option;

      ‘(7) a comparison of the experience of institutions of higher education, students, and parents participating in loan demonstration program with the experience of institutions, students, and parents in the control group described in subsection (d) with respect to the subjects indicated in paragraphs (1) through (6) of this subsection;

      ‘(8) an evaluation of the administrative performance of the Department;

      ‘(9) an analysis of the reasons institutions selected by the Secretary pursuant to section 453(d) chose not to participate and the reasons institutions withdrew or were terminated pursuant to section 455;

      ‘(10) an analysis of the experience of borrowers with loans under both this part and part B and recommendations for the most effective repayment procedures for such borrowers;

      ‘(11) a comparison of the cost of loan capital for loans for the loan demonstration program with the cost of loan capital for the comparable programs in part B of this title;

      ‘(12) an analysis, where practicable, of the experience of institutions which participate as part of a consortia; and

      ‘(13) recommendations for modifications, continuation, expansion, suspension, or termination of the loan demonstration program or replacement of all or some of the programs authorized by part B.

    ‘(c) FINAL REPORT- The Comptroller General shall submit to the Congress not later than May 1, 1998, a final report evaluating the experience of the Department of Education, the participating institutions of higher education, and students with respect to the loan demonstration program. The report shall include the same matters provided for in subsection (b) of this section.

    ‘(d) CONTROL GROUP-

      ‘(1) REGULAR REPAYMENT- To assist the Comptroller General in preparing the reports required by subsections (b)(6) and (c) of this section, the Secretary shall select a control group of institutions of higher education, which represent a cross-section of all institutions of higher education participating in part B of this title and which is comparable to the cross-section of institutions of higher education selected for participation in the loan demonstration program pursuant to section 453. The Secretary shall select the control groups in the same manner, pursuant to section 453, that the institutions of higher education are selected to participate in the demonstration program.

      ‘(2) INCOME CONTINGENT REPAYMENT- If the Secretary makes a selection of institutions to test income contingent repayment methods in accordance with section 453(f), the Secretary shall, within the control group selected under paragraph (1), identify a group of institutions to serve as a control group for comparison with the institutions offering income contingent loans under this part pursuant to section 454(6). The institutions selected for the control group under this paragraph shall represent a reasonable cross section of the institutions selected under paragraph (1). The Secretary shall publish a list of the institutions that are so selected. Any eligible lender of a loan to a student for attendance at any such institution shall, in accordance with regulations prescribed by the Secretary, offer such students the option of repaying such loans on an income contingent basis consistent with such regulations.

      ‘(3) INCOME CONTINGENT TERMS AND CONDITIONS- The Secretary shall, by regulation, establish the terms and conditions for loans that are subject to paragraph (2) of this subsection. Such terms and conditions shall, to the extent practicable, be the same as the terms and conditions of loans made pursuant to section 454(6). The Secretary is authorized to enter into such agreements (and amendments to agreements) under part B of this title as may be necessary to carry out paragraph (2) and this paragraph.

    ‘(e) TREATMENT OF COSTS- In reporting with respect to costs in the reports required by subsections (b) and (c) of this section, the Comptroller General shall report separately the nonrecurrent costs such as start-up costs associated with the loan demonstration program, the administrative costs incurred by institutions of higher education in providing information to enable the Comptroller General to prepare the reports required by subsections (b) and (c) of this section and the normal costs of operating the loan demonstration program.

‘SEC. 459. SCHEDULE OF REGULATORY ACTIVITIES BY THE SECRETARY.

    ‘(a) PROPOSED REGULATIONS- The Secretary shall publish in the Federal Register not later than April 1, 1993, all proposed regulations for carrying out the program established by this part, including regulations with respect to--

      ‘(1) payments to institutions of higher education;

      ‘(2) the selection of institutions of higher education to participate in the loan demonstration program;

      ‘(3) application by institutions of higher education to participate in the loan demonstration program;

      ‘(4) agreements between the Secretary and institutions of higher education participating in the loan demonstration program;

      ‘(5) procedures with respect to the withdrawal and termination of institutions of higher education from the loan demonstration program; and

      ‘(6) procedures by which institutions designated by the Secretary pursuant to section 453(d) may decline to participate in the loan demonstration program.

    ‘(b) FINAL REGULATIONS- The Secretary shall publish in the Federal Register not later than July 1, 1993, all final regulations for carrying out the program established by this part, including regulations with respect to the same matters provided for in subsection (a) of this section.

    ‘(c) CLOSING DATE FOR APPLICATIONS FROM INSTITUTIONS- The Secretary shall establish October 1, 1993, as the closing date for receiving applications from institutions of higher education desiring to participate in the loan demonstration program pursuant to section 453(c).

    ‘(d) PUBLICATION OF LIST OF PARTICIPATING INSTITUTIONS AND CONTROL GROUP- Not later than January 1, 1994, the Secretary shall publish in the Federal Register a list of the institutions of higher education selected to participate in the loan demonstration program pursuant to section 453 and a list of the institutions of higher education in the control group required by section 458(d).

    ‘(e) PROCUREMENT CONTRACTS- The Secretary shall award contracts pursuant to section 457 not later than February 1, 1994.

‘SEC. 459A. FUNDS FOR ADMINISTRATIVE EXPENSES.

    ‘Each fiscal year, there shall be available to the Secretary of Education from funds not otherwise appropriated, funds to be obligated for administrative costs under this part, not to exceed $10,000,000 in fiscal year 1993, $17,000,000 in fiscal year 1994, $37,000,000 in fiscal year 1995, $54,000,000 in fiscal year 1996, and $65,000,000 in fiscal year 1997.’.

SEC. 452. INCOME CONTINGENT LOAN DISTRIBUTION OF FUNDS.

    (a) IN GENERAL- After September 30, 1992, and not later than March 31, 1992, the capital balance of the student loan fund established under part D of title IV of the Higher Education Act of 1965 (as such Act was in effect on the date of enactment of this Act) shall be distributed by allowing institutions to transfer any remaining funds, including future collections and all other funds at the institution’s discretion, to such institution’s part E account, part C fund, or subpart 3 of part A fund under the terms and conditions of the appropriate program.

    (b) CONVERSION OF EXISTING LOANS- Institutions may, after July 1, 1992, convert all outstanding loans made under part D of title IV of the Higher Education Act of 1965 (as such Act was in effect on such date) to part E loans, provided that such institution--

      (1) notify the borrower of such conversion;

      (2) obtain a signed part E promissory note from the borrower for the remaining amount outstanding; and

      (3) provide the borrower in writing with a description of all terms and conditions of the new loan.

PART E--FEDERAL PERKINS LOANS

SEC. 461. PROGRAM DESIGNATION; AUTHORIZATION.

    (a) PROGRAM TITLE-

      (1) HEADING- The heading of part E of title IV is amended to read as follows:

‘Part E--Federal Perkins Loans’.

      (2) NAME OF LOANS- Section 461(a) of the Act is amended by striking ‘as ‘Perkins Loans’ and inserting ‘as ‘Federal Perkins Loans’ ’.

    (b) ELIGIBILITY FOR STUDY ABROAD- Section 461(a) of the Act is amended by inserting ‘or while engaged in programs of study abroad approved for credit by such institutions’ after ‘in such institutions’.

    (c) AUTHORIZATION OF APPROPRIATIONS- Section 461(b) of the Act is amended to read as follows:

    ‘(b) AUTHORIZATION OF APPROPRIATIONS- (1) For the purpose of enabling the Secretary to make contributions to student loan funds established under this part, there are authorized to be appropriated $250,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years.

    ‘(2) In addition to the funds authorized under paragraph (1), there are hereby authorized to be appropriated such sums for fiscal year 1997 and each of the 5 succeeding fiscal years as may be necessary to enable students who have received loans for academic years ending prior to October 1, 1997, to continue or complete courses of study.’.

SEC. 462. ALLOCATION OF FUNDS.

    (a) INSTITUTIONAL ALLOCATION- Section 462(a)(1)(A) of the Act is amended by striking ‘such institution received’ and inserting ‘allocated to such institution’.

    (b) APPEALS PROCESS- Section 462(e) (20 U.S.C. 1087bb(e)) is amended--

      (1) by striking ‘An’ and inserting ‘(1) An’; and

      (2) by adding at the end the following new paragraph:

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

    (c) DEFAULT REDUCTION AND DEFAULT PENALTIES- Section 462(f) of the Act is amended to read as follows:

    ‘(f) DEFAULT REDUCTION AND DEFAULT PENALTIES- (1) For any fiscal year prior to fiscal year 1994, any institution which has a default rate which equals or exceeds 7.5 percent but does not exceed the maximum default rate applicable to the award year under subsection (g), the institution’s default penalty is a percentage equal to the complement of such default rate. For any institution which has a default rate that does not exceed 7.5 percent, the institution’s default penalty is equal to one.

    ‘(2) For fiscal year 1994 and any succeeding fiscal year, any institution with a cohort default rate (as defined under subsection (h)) which--

      ‘(A) equals or exceeds 15 percent, shall establish a default reduction plan pursuant to regulations issued by the Secretary;

      ‘(B) equals or exceeds 20 percent, but is less than 25 percent, shall have a default penalty of 0.9;

      ‘(C) equals or exceeds 25 percent, but is less than 30 percent, shall have a default penalty of 0.7; and

      ‘(D) equals or exceeds 30 percent shall have a default penalty of zero.’.

    (d) APPLICABLE MAXIMUM DEFAULT RATE- Section 462(g) of the Act is amended to read as follows:

    ‘(g) APPLICABLE MAXIMUM DEFAULT RATE- (1) For award years 1992 and 1993, the applicable maximum default rate is 15 percent.

    ‘(2) For award year 1994 and subsequent years, the maximum cohort default rate is 30 percent.’.

    (e) DEFINITIONS OF DEFAULT RATE AND COHORT DEFAULT RATE- Section 462(h) of the Act is amended--

      (1) by striking the title of the subsection and inserting ‘DEFINITIONS OF DEFAULT RATE AND COHORT DEFAULT RATE.’;

      (2) in paragraph (1), by striking ‘For the purpose of this section,’ and inserting ‘For any award year prior to award year 1994, for the purpose of this section,’;

      (3) by redesignating paragraph (3) as paragraph (4);

      (4) by striking ‘120’ in subparagraph (A) of such paragraph and inserting ‘240’;

      (5) by amending subparagraph (B) of such paragraph to read as follows:

        ‘(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,’; and

      (6) by inserting after paragraph (2) the following new paragraph:

      ‘(3)(A) For award year 1994 and any succeeding year, the term ‘cohort default rate’ means, for any award year in which 30 or more current and former students at the institution enter repayment on loans under this part (received for attendance at the institution), the percentage of those current and former students who enter repayment on such loans (received for attendance at that institution) in that award year who default before the end of the following award year.

      ‘(B) In determining the number of students who default before the end of such award year, the Secretary shall, in calculating the cohort default rate, exclude any loans which, due to improper servicing or collection, would result in an inaccurate or incomplete calculation of the cohort default rate.

      ‘(C) For any award year in which less than 30 of the institution’s current and former students enter repayment, the term ‘cohort default rate’ means the percentage of such current and former students who entered repayment on such loans in any of the three most recent award years and who default before the end of the award year immediately following the year in which they entered repayment.

      ‘(D) A loan on which a payment is made by the institution of higher education, its owner, agency, contractor, employee, or any other entity or individual affiliated with such institution, in order to avoid default by the borrower, is considered as in default for the purposes of this subsection.

      ‘(E) Any loan that is in default but on which the borrower has made satisfactory arrangements to resume payment or any loan which has been rehabilitated before the end of such following award year is not considered as in default for purposes of this subsection.

      ‘(F) In the case of a student who has attended and borrowed at more than one school, the student (and his or her subsequent repayment or default) is attributed to the school for attendance at which the student received the loan that entered repayment in the award year.

      ‘(G) The Secretary shall prescribe regulations designed to prevent an institution from evading the application to that institution of a default rate determination under this subsection through the use of such measures as branching, consolidation, change of ownership or control or other means as determined by the Secretary.’.

    (f) REALLOCATION OF EXCESS ALLOCATIONS- Section 462(j) of the Act (20 U.S.C. 1087bb(j)) is amended to read as follows:

    ‘(j) REALLOCATION OF EXCESS ALLOCATIONS-

      ‘(1) IN GENERAL- (A) If an institution of higher education returns to the Secretary any portion of the sums allocated to such institution under this section for any fiscal year, the Secretary shall reallocate 80 percent of such returned portions to participating institutions in an amount not to exceed such participating institution’s excess eligible amounts as determined under paragraph (2).

      ‘(B) For the purpose of this subsection, the term ‘participating institution’ means an institution of higher education that--

        ‘(i) was a participant in the program assisted under this part in fiscal year 1985; and

        ‘(ii) did not receive an allocation under subsection (a) in the fiscal year for which the reallocation determination is made.

      ‘(2) EXCESS ELIGIBLE AMOUNT- For any participating institution, the excess eligible amount is the amount, if any, by which--

        ‘(A)(i) that institution’s eligible amount (as determined under paragraph (3) of subsection (c)), divided by (ii) the sum of the eligible amounts of all participating institutions (as determined under paragraph (3)), multiplied by (iii) the amount of funds available for reallocation under this subsection; exceeds

        ‘(B) the amount required to be allocated to that institution under subsection (c) of section 462.

      ‘(3) REMAINDER- The Secretary shall reallocate the remainder of such returned portions in accordance with regulations of the Secretary.

      ‘(4) ALLOCATION REDUCTIONS- If under paragraph (1) of this subsection an institution returns more than 10 percent of its allocation, the institution’s allocation for the next fiscal year shall be reduced by the amount returned. The Secretary may waive this paragraph for a specific institution if the Secretary finds that enforcing it is contrary to the interest of the program.’.

SEC. 463. AGREEMENTS WITH INSTITUTIONS OF HIGHER EDUCATION.

    (a) CAMPUS MATCH- Section 463(a)(2)(B) of the Act is amended to read as follows:

        ‘(B) a capital contribution--

          ‘(i) by an institution that--

            ‘(I) is granted permission by the Secretary to participate in an Expanded Lending Option under the program, and

            ‘(II) has a default rate which does not exceed 7.5 percent,

          in an amount not less than the amount of the Federal capital contributions described in subparagraph (A); or

          ‘(ii) by any other institution, in an amount not less than three-seventeenths of such Federal capital contribution in fiscal year 1993, and one-third of such Federal capital contribution in each of the succeeding fiscal years, of the amount of the Federal capital contributions described in subparagraph (A);’.

    (b) VERIFICATION- Section 463(c) of the Act is amended--

      (1) in subparagraph (B) of paragraph (3), by striking ‘, if that account has not been previously reported by any other holder of the note’;

      (2) by adding at the end the following new paragraph:

    ‘(4) Each institution of higher education, after consultation with the Secretary and pursuant to the agreements entered into under paragraph (1), shall disclose to any credit bureau organization with which the Secretary has such an agreement--

      ‘(A) the amount of loans made to any borrower under this part at the time of the disbursement of the loan; and

      ‘(B) the information set forth in section 430A(a).’.

    (c) ADDITIONAL RULES-

      (1) DEFINITION OF DEFAULT- Paragraph (11) of section 463A(a) of the Act (20 U.S.C. 1087cc(a)(1)) is amended by striking ‘including a statement that the default may be’ and inserting ‘together with a statement that the disbursement of, and the default on, a loan under this part, shall be’.

      ‘(2) ADDITIONAL REQUIREMENTS- Section 463A of the Act is amended by adding at the end the following new subsections:

    ‘(d) LIMITATION ON USE OF INTEREST BEARING ACCOUNTS- In carrying out the provisions of subsection (a)(10), the Secretary may not require that any collection agency, collection attorney, or loan servicer collecting loans made under this part deposit amounts collected on such loans in interest bearing accounts, unless such agency, attorney, or servicer holds such amounts for more than 45 days.

    ‘(e) SPECIAL DUE DILIGENCE RULE- In carrying out the provisions of subsection (a)(5) relating to due diligence, the Secretary shall make every effort to ensure that institutions of higher education may use Internal Revenue Service skip-tracing collection procedures on loans made under this part.’.

SEC. 464. AMOUNTS AND TERMS OF LOANS.

    (a) ANNUAL AND AGGREGATE LOAN LIMITS- Section 464(a)(2) of the Act is amended to read as follows:

    ‘(2)(A) Except as provided in paragraph (4), the total of loans made to a student in any academic year or its equivalent by an institution of higher education from a loan fund established pursuant to an agreement under this part shall not exceed--

      ‘(i) for institutions that have an agreement with the Secretary to participate in the Expanded Lending Option under section 463(a)(2)(B)(i)--

        ‘(I) $4,000, in the case of a student who has not successfully completed a program of undergraduate education; or

        ‘(II) $6,000, in the case of a graduate or professional student (as defined in regulations issued by the Secretary).

      ‘(ii) for all other institutions--

        ‘(I) $3,000, in the case of a student who has not successfully completed a program of undergraduate education; or

        ‘(II) $5,000, in the case of a graduate or professional student (as defined in regulations issued by the Secretary).

    ‘(B) Except as provided in paragraph (4), the aggregate of the loans for all years made to a student by institutions of higher education from loan funds established pursuant to agreements under this part may not exceed--

      ‘(i) for institutions that have an agreement with the Secretary to participate in the Expanded Lending Option under section 463(a)(2)(B)(i)--

        ‘(I) $40,000 in the case of any graduate or professional student (as defined by regulations of the Secretary, and including any loans from such funds made to such person before he became a graduate or professional student);

        ‘(II) $20,000 in the case of a student who has successfully completed 2 years of a program of education leading to a bachelor’s degree but who has not completed the work necessary for such a degree (determined under regulations of the Secretary, and including any loans from such funds made to such person before he became such a student); and

        ‘(III) $8,000 in the case of any other student; or

      ‘(ii) for all other institutions--

        ‘(I) $15,000, in the case of any student who has not successfully completed a program of undergraduate education; or

        ‘(II) $30,000, in the case of any graduate or professional student (as defined by regulations issued by the Secretary) and including any loans from such funds made to such student before the student became a graduate or professional student.’.

    (b) STUDY ABROAD LIMITS- Section 464(a) of the Act is amended by inserting after paragraph (3) the following new paragraph:

    ‘(4) In the case of a program of study abroad that is approved for credit by the home institution at which a student is enrolled and that has reasonable costs in excess of the home institution’s budget, the annual and aggregate loan limits for the student may exceed the amounts described in paragraphs (2)(A) and (2)(B) by 20 percent.’.

    (c) ELIGIBILITY- Section 464(b) of the Act is amended--

      (1) in paragraph (1), by striking ‘this title and who meets the requirements of section 484’ and inserting ‘this title, who meets the requirements of section 484, and who provides the institution with the student’s drivers license number, if any, at the time of application for the loan’; and

      (2) by amending paragraph (2) to read as follows:

    ‘(2) If the institution’s capital contribution under section 462 is directly or indirectly based in part on the financial need demonstrated by students who are (A) attending the institution less than full time, or (B) independent students, and if the total financial need of all such less than full-time and independent students at the institution exceeds 5 percent of the total financial need of all students at such institution, then at least 5 percent of such loans shall be made available to such less than full-time and independent students.’.

    (d) MINIMUM MONTHLY PAYMENTS- Section 464(c)(1)(C) of the Act is amended by striking ‘$30’ each place it appears and inserting ‘$40’.

    (e) ELIMINATION OF DEFENSE OF INFANCY- Section 464(c)(1)(E) of the Act is amended by striking ‘unless the borrower is a minor and the note or other evidence of obligation executed by him would not, under applicable law, create a binding obligation,’.

    (f) DEFERMENTS- Section 464(c)(2)(A) is amended to read as follows:

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

      ‘(i) during which the borrower--

        ‘(I) is pursuing at least a half-time course of study as determined by an eligible institution; or

        ‘(II) is pursuing a course of study pursuant to a graduate fellowship program approved by the Secretary, or pursuant to a rehabilitation training program for disabled individuals approved by the Secretary,

      except that no borrower shall be eligible for a deferment under this clause, or loan made under this part while serving in a medical internship or residency program;

      ‘(ii) not in excess of 3 years during which the borrower is seeking and unable to find full-time employment;

      ‘(iii) not in excess of 3 years for any reason which the lender determines, in accordance with regulations prescribed by the Secretary under section 435(o), has caused or will cause the borrower to have an economic hardship; or

      ‘(iv) during which the borrower is engaged in service described in section 465(a)(2);

    and provides that any such period shall not be included in determining the 10-year period described in subparagraph (B).’.

    (g) REPAYMENT PERIOD- Section 464(c) of the Act is further amended--

      (1) in paragraph (2), by striking subparagraphs (B) and (C) and inserting the following:

    ‘(B) No repayment or principal of, or interest on, any loan for any period described in subparagraph (A) shall begin until 6 months after the completion of such period.’.

      (2) by redesignating paragraph (4) as paragraph (5);

      (3) by inserting after paragraph (3) the following new paragraph:

    ‘(4) The repayment period for a loan made under this part shall begin on the day immediately following the expiration of the period, specified in paragraph (1)(A), after the student ceases to carry the required academic workload, unless the borrower requests and is granted a repayment schedule that provides for repayment to commence at an earlier point in time, and shall exclude any period of authorized deferment, forbearance, or cancellation.’; and

      (4) by adding at the end thereof the following new paragraph:

    ‘(6) Requests for deferment of repayment of loans under this part by students engaged in graduate or post-graduate fellowship-supported study (such as pursuant to a Fullbright grant) outside the United States shall be approved until completion of the period of the fellowship.’.

    (h) FORBEARANCE; SPECIAL REPAYMENT RULE- Section 464 of the Act is amended by adding at the end the following new subsections:

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

      ‘(1) the borrower’s debt burden equals or exceeds 20 percent of such borrower’s gross income; or

      ‘(2) the institution determines that the borrower should qualify for forbearance for other reasons.

    ‘(f) SPECIAL REPAYMENT RULE AUTHORITY- (1) Subject to such restrictions as the Secretary may prescribe to protect the interest of the United States, in order to encourage repayment of loans made under this part which are in default, the Secretary may, in the agreement entered into under this part, authorize an institution of higher education to compromise on the repayment of such defaulted loans in accordance with paragraph (2). The Federal share of the compromise repayment shall bear the same relation to the institution’s share of such compromise repayment as the Federal capital contribution to the institution’s loan fund under this part bears to the institution’s capital contribution to such fund.

    ‘(2) No compromise repayment of a defaulted loan as authorized by paragraph (1) may be made unless the student borrower pays--

      ‘(A) 90 percent of the loan under this part;

      ‘(B) the interest due on such loan; and

      ‘(C) any collection fees due on such loan;

    in a lump sum payment.’.

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

    (a) CANCELLATION FOR TEACHING- Section 465(a)(2) of the Act is amended--

      (1) in subparagraph (A), by striking ‘and such determination shall not be made with respect to not more than 50 percent of the total number of schools in the State receiving assistance under such chapter 1’;

      (2) by amending subparagraph (C) to read as follows:

      ‘(C) as a full-time special education teacher, including teachers of infants, toddlers, children, or youth with disabilities in a public or other nonprofit elementary or secondary school system, or as a full-time qualified professional provider of early intervention services in a public or other nonprofit program under public supervision by the lead agency as authorized in section 676(b)(9) of the Individuals With Disabilities Education Act;’;

      (3) by striking ‘or’ at the end of subparagraph (E);

      (4) by striking the period at the end of subparagraph (F) and inserting ‘; or’; and

      (5) by adding at the end the following new subparagraphs:

      ‘(G) as a full-time teacher of mathematics, science, foreign languages, bilingual education, or any other field of expertise where the State educational agency determines there is a shortage of qualified teachers;

      ‘(H) as a full-time nurse or medical technician providing health care services; or

      ‘(I) as a full-time employee of a public or private nonprofit child or family service agency who is providing, or supervising the provision of, services to high-risk children who are from low-income communities and the families of such children.’.

    (b) RATE OF CANCELLATION- Section 465(a)(3)(A)(i) of such Act is amended by striking ‘(A), (C), or (F)’ and inserting ‘(A), (C), (F), (G), (H), or (I)’.

    (c) SPECIAL RULES- Section 465 of the Act is amended by adding at the end the following new subsection:

    ‘(c) SPECIAL RULES-

      ‘(1) LIST- If the list of schools in which a teacher may perform service pursuant to subsection (a)(2)(A) is not available before May 1 of any year, the Secretary may use the list for the year preceding the year for which the determination is made to make such service determination.

      ‘(2) CONTINUING ELIGIBILITY- Any teacher who performs service in a school which--

        ‘(A) meets the requirements of subsection (a)(2)(A) in any year; and

        ‘(B) in a subsequent year fails to meet the requirements of such subsection,

      may continue to teach in such school and shall be eligible for loan cancellation pursuant to subsection (a)(1) such subsequent years.’.

    (d) CONFORMING AMENDMENT: DEFINITIONS; LIMITATIONS- Part E of title IV is further amended by adding at the end the following new section:

‘DEFINITIONS

    ‘SEC. 469. (a) LOW-INCOME COMMUNITIES- For the purpose of this part, the term ‘low-income communities’ means communities in which there is a high concentration of children eligible to be counted under chapter 1 of title I of the Elementary and Secondary Education Act of 1965.

    ‘(b) HIGH-RISK CHILDREN- For the purposes of this part, the term ‘high-risk children’ means individuals under the age of 21 who are low-income or at risk of abuse or neglect, have been abused or neglected, have serious emotional, mental, or behavioral disturbances, reside in placements outside their homes, or are involved in the juvenile justice system.

    ‘(c) INFANTS, TODDLERS, CHILDREN, AND YOUTH WITH DISABILITIES- For purposes of this part, the term ‘infants, toddlers, children, and youth with disabilities’ means children with disabilities and infants and toddlers with disabilities as defined in sections 602(a)(1) and 672(1), respectively, of the Individuals with Disabilities Education Act, and the term ‘qualified professional provider of early intervention services’ has the meaning specified in section 672(2) of such Act.’.

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

    Section 466 of the Act (20 U.S.C. 1087ff) is amended--

      (1) in subsection (b), by striking ‘1997’ and inserting ‘2005’;

      (2) in subsection (c)--

        (A) by striking ‘Upon’ and inserting ‘(1) Upon’;

        (B) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively; and

        (C) by adding at the end the following new paragraph:

      ‘(2) No finding that the liquid assets of a student loan fund established under this part exceed the amount required under paragraph (1) may be made prior to a date which is 2 years after the date on which the institution of higher education received the funds from such institution’s allocation under section 462.’.

SEC. 467. EXCESS CAPITAL RULE.

    (a) RECAPTURE OF CERTAIN LOAN FUNDS- Section 467 of the Act is amended by adding at the end thereof the following new subsection:

    ‘(c) PERKINS LOAN REVOLVING FUND- (1) There is established a Perkins Loan Revolving Fund which shall be available without fiscal year limitation to the Secretary to make payments under this part, in accordance with paragraph (2) of this subsection. There shall be deposited in the Perkins Revolving Loan Fund--

      ‘(A) all funds collected by the Secretary on any loan referred, transferred, or assigned under paragraph (5)(A), (5)(B)(i), or (6) of section 463(a);

      ‘(B) all funds collected by the Secretary on any loan referred under paragraph (5)(B)(ii) of section 463(a);

      ‘(C) all funds paid to the Secretary under section 466(c)(1)(A);

      ‘(D) all funds from a student loan fund under this part received by the Secretary as the result of the closure of an institution of higher education;

      ‘(E) all funds received by the Secretary as a result of an audit of a student loan fund established under this part; and

      ‘(F) all funds which have been appropriated and which the Secretary determines are not necessary for carrying out section 465, relating to the cancellation of certain loans under this part for qualifying service.

    ‘(2) Notwithstanding any other provision of law, the Secretary shall, from the Perkins Loan Revolving Fund established under paragraph (1), pay allocations of additional capital contributions to eligible institutions of higher education in accordance with section 462, except that funds described in subparagraph (B) of paragraph (1) shall be repaid to the institution of higher education which referred the loan, as specified in section 463(a)(5)(B)(ii). The Secretary shall make the payments required by this paragraph in a manner designed to maximize the availability of capital loan funds under this part.’.

    (b) CONFORMING AMENDMENT- The heading of section 467 of the Act is amended to read as follows:

‘COLLECTION OF DEFAULTED LOANS: PERKINS LOAN REVOLVING FUND’.

SEC. 468. EFFECTIVE DATES FOR AMENDMENTS TO PART E.

    The changes made in part E of title IV of the Act by the amendments made by this part shall take effect on the date of enactment of this Act, except that--

      (1) the changes in section 463(a)(2)(B), relating to the matching of Federal capital contributions, shall apply to funds provided for such program for the award years beginning on or after July 1, 1993;

      (2) the changes made in section 464(c)(1)(C), relating to minimum monthly payments shall apply with respect to loans for which the first disbursement is made on or after October 1, 1992, to an individual who, on the date the loan is made, has no outstanding balance of principal or interest owing on any loan made under part E of title IV of the Act;

      (3) the changes made in section 464(c)(2)(A), relating to deferments, shall apply with respect to loans for which the first disbursement is made on or after July 1, 1993; and

      (4) the changes made in section 467, relating to the creation of a Perkins Loan Revolving Fund, shall take effect on September 15, 1997.

PART F--NEED ANALYSIS

SEC. 471. REVISION OF PART F.

    (a) AMENDMENT- Part F of title IV of the Act is amended to read as follows:

‘PART F--NEED ANALYSIS

‘SEC. 471. AMOUNT OF NEED.

    ‘Except as otherwise provided therein, the amount of need of any student for financial assistance under this title (except subparts 1 or 4 of part A) is equal to--

      ‘(1) the cost of attendance of such student, minus

      ‘(2) the expected family contribution for such student, minus

      ‘(3) estimated financial assistance not received under this title (as defined in section 480(j)).

‘SEC. 472. COST OF ATTENDANCE.

    ‘For the purpose of this title, the term ‘cost of attendance’ means--

      ‘(1) tuition and fees normally assessed a student carrying the same academic workload as determined by the institution, and including costs for rental or purchase of any equipment, materials, or supplies required of all students in the same course of study;

      ‘(2) an allowance for books, supplies, transportation, and miscellaneous personal expenses for a student attending the institution on at least a half-time basis, as determined by the institution;

      ‘(3) an allowance (as determined by the institution) for room and board costs incurred by the student which--

        ‘(A) shall be an allowance of not less than $1,500 for a student without dependents residing at home with parents;

        ‘(B) for students without dependents residing in institutionally owned or operated housing, shall be a standard allowance determined by the institution based on the amount normally assessed most of its residents for room and board; and

        ‘(C) for all other students shall be an allowance based on the expenses reasonably incurred by such students for room and board, except that the amount may not be less than $2,500;

      ‘(4) for less than half-time students (as determined by the institution) tuition and fees and an allowance for only books, supplies, and transportation (as determined by the institution) and dependent care expenses (in accordance with paragraph (8));

      ‘(5) for a student engaged in a program of study by correspondence, only tuition and fees and, if required, books and supplies, travel, and room and board costs incurred specifically in fulfilling a required period of residential training;

      ‘(6) for incarcerated students only tuition and fees and, if required, books and supplies;

      ‘(7) for a student enrolled in an academic program in a program of study abroad approved for credit by the student’s home institution, reasonable costs associated with such study (as determined by the institution at which such student is enrolled);

      ‘(8) for a student with one or more dependents, an allowance based on the estimated actual expenses incurred for such dependent care, based on the number and age of such dependents, except that--

        ‘(A) such allowance shall not exceed the reasonable cost in the community in which such student resides for the kind of care provided; and

        ‘(B) the period for which dependent care is required includes, but is not limited to, class-time, study-time, field work, internships, and commuting time;

      ‘(9) for a student with a disability, an allowance (as determined by the institution) for those expenses related to the student’s disability, including special services, personal assistance, transportation, equipment, and supplies that are reasonably incurred and not provided for by other assisting agencies;

      ‘(10) for a student receiving all or part of the student’s instruction by means of telecommunications technology, no distinction shall be made with respect to the mode of instruction in determining costs, but this paragraph shall not be construed to permit including the cost of rental or purchase of equipment; and

      ‘(11) for a student placed in a work experience under a cooperative education program, an allowance for reasonable costs associated with such employment (as determined by the institution).

‘SEC. 473. FAMILY CONTRIBUTION.

    ‘For the purpose of this title, except subpart 4 of part A, the term ‘family contribution’ with respect to any student means the amount which the student and the student’s family may be reasonably expected to contribute toward the student’s postsecondary education for the academic year for which the determination is made, as determined in accordance with this part.

‘SEC. 474. DETERMINATION OF EXPECTED FAMILY CONTRIBUTION; DATA ELEMENTS.

    ‘(a) GENERAL RULE FOR DETERMINATION OF EXPECTED FAMILY CONTRIBUTION- The expected family contribution--

      ‘(1) for a dependent student shall be determined in accordance with section 475;

      ‘(2) for a single independent student or a married independent student without dependents (other than a spouse) shall be determined in accordance with section 476; and

      ‘(3) for an independent student with dependents other than a spouse shall be determined in accordance with section 477.

    ‘(b) DATA ELEMENTS- The following data elements are considered in determining the expected family contribution:

      ‘(1) the available income of (A) the student and the student’s spouse, or (B) the student and the student’s parents, in the case of a dependent student;

      ‘(2) the number of dependents in the family of the student;

      ‘(3) the number of dependents in the family of the student who are enrolled or accepted for enrollment, on at least a half-time basis, in a degree, certificate, or other program leading to a recognized educational credential at an institution of higher education that is an eligible institution in accordance with the provisions of section 487 and for whom the family may reasonably be expected to contribute to their postsecondary education;

      ‘(4) the net assets of (A) the student and the student’s spouse, and (B) the student and the student’s parents, in the case of a dependent student;

      ‘(5) the marital status of the student;

      ‘(6) the age of the older parent, in the case of a dependent student, and the student; and

      ‘(7) the additional expenses incurred (A) in the case of a dependent student, when both parents of the student are employed or when the family is headed by a single parent who is employed, or (B) in the case of an independent student, when the student is married and the student’s spouse is employed, or when the employed student qualifies as a surviving spouse or as a head of a household under section 2 of the Internal Revenue Code of 1986.

‘SEC. 475. FAMILY CONTRIBUTION FOR DEPENDENT STUDENTS.

    ‘(a) COMPUTATION OF EXPECTED FAMILY CONTRIBUTION- For each dependent student, the expected family contribution is equal to the sum of--

      ‘(1) the parents’ contribution from adjusted available income (determined in accordance with subsection (b));

      ‘(2) the student contribution from available income (determined in accordance with subsection (g)); and

      ‘(3) the student contribution from assets (determined in accordance with subsection (h)).

    ‘(b) PARENTS’ CONTRIBUTION FROM ADJUSTED AVAILABLE INCOME- The parents’ contribution from adjusted available income is equal to the amount determined by--

      ‘(1) computing adjusted available income by adding--

        ‘(A) the parents’ available income (determined in accordance with subsection (c)); and

        ‘(B) the parents’ contribution from assets (determined in accordance with subsection (d));

      ‘(2) assessing such adjusted available income in accordance with the assessment schedule set forth in subsection (e); and

      ‘(3) dividing the assessment resulting under paragraph (2) by the number of the family members who are enrolled or accepted for enrollment, on at least a half-time basis, in a degree, certificate, or other program leading to a recognized educational credential at an institution of higher education that is an eligible institution in accordance with the provisions of section 487 during the award period for which assistance under this title is requested;

    except that the amount determined under this subsection shall not be less than zero.

    ‘(c) Parents’ Available Income-

      ‘(1) IN GENERAL- The parents’ available income is determined by deducting from total income (as defined in section 480)--

        ‘(A) Federal income taxes;

        ‘(B) an allowance for State and other taxes, determined in accordance with paragraph (2);

        ‘(C) an allowance for social security taxes, determined in accordance with paragraph (3);

        ‘(D) an income protection allowance, determined in accordance with paragraph (4); and

        ‘(E) an employment expense allowance, determined in accordance with paragraph (5).

      ‘(2) ALLOWANCE FOR STATE AND OTHER TAXES- The allowance for State and other taxes is equal to an amount determined by multiplying total income (as defined in section 480) by a percentage determined according to the following table (or a successor table prescribed by the Secretary under section 478):

                 ‘Percentages for Computation of State and Other Tax Allowance
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     If parents’ State or territory of residence is--                                                                                         And parents’ total income is--                 
                                                                                                                                                                                              less than $15,000 or           $15,000 or more 
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            then the percentage is-- Alaska, Puerto Rico, Wyoming                                                                                                              3                              2              
                                                     American Samoa, Guam, Louisiana, Nevada, Texas, Trust Territory, Virgin Islands                                                           4                              3              
                                                     Florida, South Dakota, Tennessee, New Mexico                                                                                              5                              4              
                                                     North Dakota, Washington                                                                                                                  6                              5              
                                                     Alabama, Arizona, Arkansas, Indiana, Mississippi, Missouri, Montana, New Hampshire, Oklahoma, West Virginia                               7                              6              
                                                     Colorado, Connecticut, Georgia, Illinois, Kansas, Kentucky                                                                                8                              7              
                                                     California, Delaware, Idaho, Iowa, Nebraska, North Carolina, Ohio, Pennsylvania, South Carolina, Utah, Vermont, Virginia, Canada, Mexico  9                              8              
                                                     Maine, New Jersey                                                                                                                        10                              9              
                                                     District of Columbia, Hawaii, Maryland, Massachusetts, Oregon, Rhode Island                                                              11                             10              
                                                     Michigan, Minnesota                                                                                                                      12                             11              
                                                     Wisconsin                                                                                                                                13                             12              
                                                     New York                                                                                                                                 14                             13              
                                                     Other                                                                                                                                     9                              8              
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

      ‘(3) ALLOWANCE FOR SOCIAL SECURITY TAXES- The allowance for social security taxes is equal to the amount earned by each parent multiplied by the social security withholding rate appropriate to the tax year of the earnings, up to the maximum statutory social security tax withholding amount for that same tax year.

      ‘(4) INCOME PROTECTION ALLOWANCE- The income protection allowance is determined by the following table (or a successor table prescribed by the Secretary under section 478):

                ‘Income Protection Allowance
---------------------------------------------------------------------------------------------------
 Family Size         Number in College                                                             
 (including student)                 1      2      3       4       5 For each additional subtract: 
---------------------------------------------------------------------------------------------------
 2                             $10,520 $8,720                                               $1,790 
 For each                       22,330 20,530 18,740  16,940  15,150                               
 additional                                                                                        
  add:                           2,520  2,520  2,520   2,520   2,520                               
---------------------------------------------------------------------------------------------------

      ‘(5) EMPLOYMENT EXPENSE ALLOWANCE- The employment expense allowance is determined as follows (or using a successor provision prescribed by the Secretary under section 478):

        ‘(A) If both parents were employed in the year for which their income is reported and both have their incomes reported in determining the expected family contribution, such allowance is equal to the lesser of $2,500 or 35 percent of the earned income of the parent with the lesser earned income.

        ‘(B) If a parent qualifies as a surviving spouse or as a head of household as defined in section 2 of the Internal Revenue Code, such allowance is equal to the lesser of $2,500 or 35 percent of such parent’s earned income.

    ‘(d) Parents’ Contribution From Assets-

      ‘(1) IN GENERAL- The parents’ contribution from assets is equal to--

        ‘(A) the parental net worth (determined in accordance with paragraph (2)); minus

        ‘(B) the education savings and asset protection allowance (determined in accordance with paragraph (3)); multiplied by

        ‘(C) the asset conversion rate (determined in accordance with paragraph (4)), except that the result shall not be less than zero.

      ‘(2) PARENTAL NET WORTH- The parental net worth is calculated by adding--

        ‘(A) the current balance of checking and savings accounts and cash on hand;

        ‘(B) the net value of investments and real estate, excluding the net value of the principal place of residence; and

        ‘(C) the adjusted net worth of a business or farm, computed on the basis of the net worth of such business or farm (hereafter in this subsection referred to as ‘NW’), determined in accordance with the following table (or a successor table prescribed by the Secretary under section 478), except as provided under section 480(f):

                ‘Adjusted Net Worth of a Business or Farm
-------------------------------------------------------------------------------------------
 If the net worth of a business or farm is-- Then the adjusted net worth is:               
-------------------------------------------------------------------------------------------
 Less than $1                                $0                                            
 $1-$75,000                                  40 percent of NW                              
 $75,001-$225,000                            $30,000 plus 50 percent of NW over $75,000    
 $225,001-$375,000                           $105,000 plus 60 percent of NW over $225,000  
 $375,001 or more                            $195,000 plus 100 percent of NW over $375,000 
-------------------------------------------------------------------------------------------

      ‘(3) EDUCATION SAVINGS AND ASSET PROTECTION ALLOWANCE- The education savings and asset protection allowance is calculated according to the following table (or a successor table prescribed by the Secretary under section 478):

             ‘Education Savings and Asset Protection Allowances for Families and Students
-------------------------------------------------------------------------------------------------------------------
                                                     If the age of the oldest parent is-- And there are            
                                                                                          two parents   one parent 
-------------------------------------------------------------------------------------------------------------------
                             then the allowance is-- 25 or less                           $  0             $0      
                                                     26                                    2,200         1,600     
                                                     27                                    4,300         3,200     
                                                     28                                    6,500         4,700     
                                                     29                                    8,600         6,300     
                                                     30                                   10,800         7,900     
                                                     31                                   13,000         9,500     
                                                     32                                   15,100        11,100     
                                                     33                                   17,300        12,600     
                                                     34                                   19,400        14,200     
                                                     35                                   21,600        15,800     
                                                     36                                   23,800        17,400     
                                                     37                                   25,900        19,000     
                                                     38                                   28,100        20,500     
                                                     39                                   30,200        22,100     
                                                     40                                   32,400        23,700     
                                                     41                                   33,300        24,100     
                                                     42                                   34,100        24,700     
                                                     43                                   35,000        25,200     
                                                     44                                   35,700        25,800     
                                                     45                                   36,600        26,300     
                                                     46                                   37,600        26,900     
                                                     47                                   38,800        27,600     
                                                     48                                   39,800        28,200     
                                                     49                                   40,800        28,800     
                                                     50                                   41,800        29,500     
                                                     51                                   43,200        30,200     
                                                     52                                   44,300        31,100     
                                                     53                                   45,700        31,800     
                                                     54                                   47,100        32,600     
                                                     55                                   48,300        33,400     
                                                     56                                   49,800        34,400     
                                                     57                                   51,300        35,200     
                                                     58                                   52,900        36,200     
                                                     59                                   54,800        37,200     
                                                     60                                   56,500        38,100     
                                                     61                                   58,500        39,200     
                                                     62                                   60,300        40,300     
                                                     63                                   62,400        41,500     
                                                     64                                   64,600        42,800     
                                                     65 or more                           66,800        44,000     
-------------------------------------------------------------------------------------------------------------------

      ‘(4) ASSET CONVERSION RATE- The asset conversion rate is 12 percent.

    ‘(e) ASSESSMENT SCHEDULE- The adjusted available income (as determined under subsection (b)(1) and hereafter in this subsection referred to as ‘AAI’) is assessed according to the following table (or a successor table prescribed by the Secretary under section 478):

              ‘Parents’ Assessment From Adjusted Available Income (AAI)
-----------------------------------------------------
 If AAI is--        Then the assessment is--         
-----------------------------------------------------
 Less than -$3,409  -$750                            
 -$3,409 to $9,400  22% of AAI                       
 $9,401 to $11,800  $2,068 + 25% of AAI over $9,400  
 $11,801 to $14,200 $2,668 + 29% of AAI over $11,800 
 $14,201 to $16,600 $3,364 + 34% of AAI over $14,200 
 $16,601 to $19,000 $4,180 + 40% of AAI over $16,600 
 $19,001 or more    $5,140 + 47% of AAI over $19,000 
-----------------------------------------------------

    ‘(f) Computations in Case of Separation, Divorce, Remarriage, or Death-

      ‘(1) DIVORCED OR SEPARATED PARENTS- Parental income and assets for a student whose parents are divorced or separated is determined under the following procedures:

        ‘(A) Include only the income and assets of the parent with whom the student resided for the greater portion of the 12-month period preceding the date of the application.

        ‘(B) If the preceding criterion does not apply, include only the income and assets of the parent who provided the greater portion of the student’s support for the 12-month period preceding the date of application.

        ‘(C) If neither of the preceding criteria apply, include only the income and assets of the parent who provided the greater support during the most recent calendar year for which parental support was provided.

      ‘(2) DEATH OF A PARENT- Parental income and assets in the case of the death of any parent is determined as follows:

        ‘(A) If either of the parents has died, the student shall include only the income and assets of the surviving parent.

        ‘(B) If both parents have died, the student shall not report any parental income or assets.

      ‘(3) REMARRIED PARENTS- Income in the case of a parent whose income and assets are taken into account under paragraph (1) of this subsection, or a parent who is a widow or widower and whose income is taken into account under paragraph (2) of this subsection, has remarried, is determined as follows: The income of that parent’s spouse shall be included in determining the parent’s adjusted available income only if--

        ‘(A) the student’s parent and the stepparent are married as of the date of application for the award year concerned; and

        ‘(B) the student is not an independent student.

    ‘(g) Student Contribution From Available Income-

      ‘(1) IN GENERAL- The student contribution from available income is equal to--

        ‘(A) the student’s total income (determined in accordance with section 480); minus

        ‘(B) the adjustment to student income (determined in accordance with paragraph (2); multiplied by

        ‘(C) the assessment rate as determined in paragraph (5);

      except that the amount determined under this subsection shall not be less than zero.

      ‘(2) ADJUSTMENT TO STUDENT INCOME- The adjustment to student income is equal to the sum of--

        ‘(A) Federal income taxes of the student;

        ‘(B) an allowance for State and other income taxes (determined in accordance with paragraph (3));

        ‘(C) an allowance for social security taxes determined in accordance with paragraph (4); and

        ‘(D) an income protection allowance of $1,750.

      ‘(3) ALLOWANCE FOR STATE AND OTHER INCOME TAXES- The allowance for State and other income taxes is equal to an amount determined by multiplying total income (as defined in section 480) by a percentage determined according to the following table (or a successor table prescribed by the Secretary under section 478):

               ‘Percentages for Computation of State and Other Tax Allowance
---------------------------------------------------------------------------------------------------------------------------------------------------------
 If the students’ State or territory of residence is--                                                                               The percentage is-- 
---------------------------------------------------------------------------------------------------------------------------------------------------------
 Alaska, American Samoa, Florida, Guam, Nevada, South Dakota, Tennessee, Texas, Trust Territory, Virgin Islands, Washington, Wyoming 0                   
 Connecticut, Louisiana, Puerto Rico                                                                                                 1                   
 Arizona, New Hampshire, New Mexico, North Dakota                                                                                    2                   
 Alabama, Colorado, Illinois, Indiana, Kansas, Mississippi, Missouri, Montana, Nebraska, New Jersey, Oklahoma                        3                   
 Arkansas, Georgia, Iowa, Kentucky, Maine, Pennsylvania, Utah, Vermont, Virginia, West Virginia, Canada, Mexico                      4                   
 California, Idaho, Massachusetts, North Carolina, Ohio, Rhode Island, South Carolina                                                5                   
 Hawaii, Maryland, Michigan, Wisconsin                                                                                               6                   
 Delaware, District of Columbia, Minnesota, Oregon                                                                                   7                   
 New York                                                                                                                            8                   
---------------------------------------------------------------------------------------------------------------------------------------------------------

      ‘(4) ALLOWANCE FOR SOCIAL SECURITY TAXES- The allowance for social security taxes is equal to the amount earned by the student multiplied by the social security withholding rate appropriate to the tax year of the earnings, up to the maximum statutory social security tax withholding amount for that same tax year.

      ‘(5) The student’s available income (determined in accordance with paragraph (1) of this subsection) is assessed at 50 percent.

    ‘(h) STUDENT CONTRIBUTION FROM ASSETS- The student contribution from assets is determined by calculating the net assets of the student and multiplying such amount by 35 percent, except that the result shall not be less than zero.

    ‘(i) ADJUSTMENTS TO PARENTS’ CONTRIBUTION FOR ENROLLMENT PERIODS OTHER THAN 9 MONTHS FOR PURPOSES OTHER THAN SUBPART 2 OF PART A OF THIS TITLE- For periods of enrollment other than 9 months, the parents’ contribution from adjusted available income (as determined under subsection (b)) is determined as follows for purposes other than subpart 2 of part A of this title:

      ‘(1) For periods of enrollment less than 9 months, the parents’ contribution from adjusted available income is divided by 9 and the result multiplied by the number of months enrolled.

      ‘(2) For periods of enrollment greater than 9 months--

        ‘(A) the parents’ adjusted available income (determined in accordance with subsection (b)(1)) is increased by the difference between the income protection allowance (determined in accordance with subsection (c)(4)) for a family of four and a family of five, each with one child in college;

        ‘(B) the resulting revised parents’ adjusted available income is assessed according to subsection (e) and adjusted according to subsection (b)(3) to determine a revised parents’ contribution from adjusted available income;

        ‘(C) the original parents’ contribution from adjusted available income is subtracted from the revised parents’ contribution from adjusted available income, and the result is divided by 12 to determine the monthly adjustment amount; and

        ‘(D) the original parents’ contribution from adjusted available income is increased by the product of the monthly adjustment amount multiplied by the number of months greater than 9 for which the student will be enrolled.

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

    ‘(a) COMPUTATION OF EXPECTED FAMILY CONTRIBUTION- For each independent student without dependents other than a spouse, the expected family contribution is determined by--

      ‘(1) adding--

        ‘(A) the family’s contribution from available income (determined in accordance with subsection (b)); and

        ‘(B) the family’s contribution from assets (determined in accordance with subsection (c)); and

      ‘(2) dividing the sum resulting under paragraph (1) by the number of students who are enrolled or accepted for enrollment, on at least a half-time basis, in a degree, certificate, or other program leading to a recognized educational credential at an institution of higher education that is an eligible institution in accordance with the provisions of section 487 during the award period for which assistance under this title is requested;

    except that the amount determined under this subsection shall not be less than zero.

    ‘(b) Family’s Contribution From Available Income-

      ‘(1) IN GENERAL- The family’s contribution from income is determined by--

        ‘(A) deducting from total income (as defined in section 480)--

          ‘(i) Federal income taxes;

          ‘(ii) an allowance for State and other taxes, determined in accordance with paragraph (2);

          ‘(iii) an allowance for social security taxes, determined in accordance with paragraph (3);

          ‘(iv) an income protection allowance of--

            ‘(I) $3,000 for single students;

            ‘(II) $3,000 for married students where both are enrolled pursuant to subsection (a)(2); and

            ‘(III) $6,000 for married students where one is enrolled pursuant to subsection (a)(2); and

          ‘(v) in the case where a spouse is present, an employment expense allowance, as determined in accordance with paragraph (4); and

        ‘(B) assessing such available income in accordance with paragraph (5).

      ‘(2) ALLOWANCE FOR STATE AND OTHER TAXES- The allowance for State and other taxes is equal to an amount determined by multiplying total income (as defined in section 480) by a percentage determined according to the following table (or a successor table prescribed by the Secretary under section 478):

               ‘Percentages for Computation of State and Other Tax Allowance
---------------------------------------------------------------------------------------------------------------------------------------------------------
 If the students’ State or territory of residence is--                                                                               The percentage is-- 
---------------------------------------------------------------------------------------------------------------------------------------------------------
 Alaska, American Samoa, Florida, Guam, Nevada, South Dakota, Tennessee, Texas, Trust Territory, Virgin Islands, Washington, Wyoming 0                   
 Connecticut, Louisiana, Puerto Rico                                                                                                 1                   
 Arizona, New Hampshire, New Mexico, North Dakota                                                                                    2                   
 Alabama, Colorado, Illinois, Indiana, Kansas, Mississippi, Missouri, Montana, Nebraska, New Jersey, Oklahoma                        3                   
 Arkansas, Georgia, Iowa, Kentucky, Maine, Pennsylvania, Utah, Vermont, Virginia, West Virginia, Canada, Mexico                      4                   
 California, Idaho, Massachusetts, North Carolina, Ohio, Rhode Island, South Carolina                                                5                   
 Hawaii, Maryland, Michigan, Wisconsin                                                                                               6                   
 Delaware, District of Columbia, Minnesota, Oregon                                                                                   7                   
 New York                                                                                                                            8                   
 Other                                                                                                                               4                   
---------------------------------------------------------------------------------------------------------------------------------------------------------

      ‘(3) ALLOWANCE FOR SOCIAL SECURITY TAXES- The allowance for social security taxes is equal to the amount earned by the student (and spouse, if appropriate), multiplied by the social security withholding rate appropriate to the tax year preceding the award year, up to the maximum statutory social security tax withholding amount for that same tax year.

      ‘(4) EMPLOYMENT EXPENSES ALLOWANCE- The employment expense allowance is determined as follows (or using a successor provision prescribed by the Secretary under section 478):

        ‘(A) If the student is married and the student’s spouse is employed in the year for which income is reported, such allowance is equal to the lesser of $2,500 or 35 percent of the earned income of the student or spouse with the lesser earned income.

        ‘(B) If a student is not married, the employment expense allowance is zero.

      ‘(5) ASSESSMENT OF AVAILABLE INCOME- The family’s available income (determined in accordance with paragraph (1)(A) of this subsection) is assessed at 50 percent.

    ‘(c) FAMILY CONTRIBUTION FROM ASSETS-

      ‘(1) IN GENERAL- The family’s contribution from assets is equal to--

        ‘(A) the family’s net worth (determined in accordance with paragraph (2)); minus

        ‘(B) the asset protection allowance (determined in accordance with paragraph (3)); multiplied by

        ‘(C) the asset conversion rate (determined in accordance with paragraph (4));

      except that the family’s contribution from assets shall not be less than zero.

      ‘(2) FAMILY’S NET WORTH- The family’s net worth is calculated by adding--

        ‘(A) the current balance of checking and savings accounts and cash on hand;

        ‘(B) the net value of investments and real estate, excluding the net value in the principal place of residence; and

        ‘(C) the adjusted net worth of a business or farm, computed on the basis of the net worth of such business or farm (hereafter referred to as ‘NW’), determined in accordance with the following table (or a successor table prescribed by the Secretary under section 478), except as provided under section 480(f):

                ‘Adjusted Net Worth of a Business or Farm
-------------------------------------------------------------------------------------------
 If the net worth of a business or farm is-- Then the adjusted net worth is--              
-------------------------------------------------------------------------------------------
 Less than $1                                $0                                            
 $1-$75,000                                  40 percent of NW                              
 $75,001-$225,000                            $30,000 plus 50 percent of NW over $75,000    
 $225,001-$375,000                           $105,000 plus 60 percent of NW over $225,000  
 $375,001 or more                            $195,000 plus 100 percent of NW over $375,000 
-------------------------------------------------------------------------------------------

      ‘(3) ASSET PROTECTION ALLOWANCE- The asset protection allowance is calculated according to the following table (or a successor table prescribed by the Secretary under section 478):

               ‘Asset Protection Allowances for Families and Students
-------------------------------------------------------------------------------------------------------------
                                                    If the age of the student is-- And the student is        
                                                                                              married single 
-------------------------------------------------------------------------------------------------------------
                            then the allowance is-- 25 or less                                   $  0     $0 
                                                    26                                          2,200  1,600 
                                                    27                                          4,300  3,200 
                                                    28                                          6,500  4,700 
                                                    29                                          8,600  6,300 
                                                    30                                         10,800  7,900 
                                                    31                                         13,000  9,500 
                                                    32                                         15,100 11,100 
                                                    33                                         17,300 12,600 
                                                    34                                         19,400 14,200 
                                                    35                                         21,600 15,800 
                                                    36                                         23,800 17,400 
                                                    37                                         25,900 19,000 
                                                    38                                         28,100 20,500 
                                                    39                                         30,200 22,100 
                                                    40                                         32,400 23,700 
                                                    41                                         33,300 24,100 
                                                    42                                         34,100 24,700 
                                                    43                                         35,000 25,200 
                                                    44                                         35,700 25,800 
                                                    45                                         36,600 26,300 
                                                    46                                         37,600 26,900 
                                                    47                                         38,800 27,600 
                                                    48                                         39,800 28,200 
                                                    49                                         40,800 28,800 
                                                    50                                         41,800 29,500 
                                                    51                                         43,200 30,200 
                                                    52                                         44,300 31,100 
                                                    53                                         45,700 31,800 
                                                    54                                         47,100 32,600 
                                                    55                                         48,300 33,400 
                                                    56                                         49,800 34,400 
                                                    57                                         51,300 35,200 
                                                    58                                         52,900 36,200 
                                                    59                                         54,800 37,200 
                                                    60                                         56,500 38,100 
                                                    61                                         58,500 39,200 
                                                    62                                         60,300 40,300 
                                                    63                                         62,400 41,500 
                                                    64                                         64,600 42,800 
                                                    65 or more                                 66,800 44,000 
-------------------------------------------------------------------------------------------------------------

      ‘(4) ASSET CONVERSION RATE- The asset conversion rate is 35 percent.

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

    ‘(a) COMPUTATION OF EXPECTED FAMILY CONTRIBUTION- For each independent student with dependents other than a spouse, the expected family contribution is equal to the amount determined by--

      ‘(1) computing adjusted available income by adding--

        ‘(A) the family’s available income (determined in accordance with subsection (b)); and

        ‘(B) the family’s contribution from assets (determined in accordance with subsection (c));

      ‘(2) assessing such adjusted available income in accordance with an assessment schedule set forth in subsection (d); and

      ‘(3) dividing the assessment resulting under paragraph (2) by the number of family members who are enrolled or accepted for enrollment, on at least a half-time basis, in a degree, certificate, or other program leading to a recognized educational credential at an institution of higher education that is an eligible institution in accordance with the provisions of section 487 during the award period for which assistance under this title is requested;

    except that the amount determined under this subsection shall not be less than zero.

    ‘(b) Family’s Available Income-

      ‘(1) IN GENERAL- The family’s available income is determined by deducting from total income (as defined in section 480)--

        ‘(A) Federal income taxes;

        ‘(B) an allowance for State and other taxes, determined in accordance with paragraph (2);

        ‘(C) an allowance for social security taxes, determined in accordance with paragraph (3);

        ‘(D) an income protection allowance, determined in accordance with paragraph (4); and

        ‘(E) an employment expense allowance, determined in accordance with paragraph (5).

      ‘(2) ALLOWANCE FOR STATE AND OTHER TAXES- The allowance for State and other taxes is equal to an amount determined by multiplying total income (as defined in section 480) by a percentage determined according to the following table (or a successor table prescribed by the Secretary under section 478):

                ‘Percentages for Computation of State and Other Tax Allowance
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     If student’s State or territory of residence is--                                                                                        And family’s total income is--                 
                                                                                                                                                                                              less than $15,000              $15,000 or more 
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                            then the percentage is-- Alaska, Puerto Rico, Wyoming                                                                                                              3                              2              
                                                     American Samoa, Guam, Louisiana, Nevada, Texas, Trust Territory, Virgin Islands                                                           4                              3              
                                                     Florida, South Dakota, Tennessee, New Mexico                                                                                              5                              4              
                                                     North Dakota, Washington                                                                                                                  6                              5              
                                                     Alabama, Arizona, Arkansas, Indiana, Mississippi, Missouri, Montana, New Hampshire, Oklahoma, West Virginia                               7                              6              
                                                     Colorado, Connecticut, Georgia, Illinois, Kansas, Kentucky                                                                                8                              7              
                                                     California, Delaware, Idaho, Iowa, Nebraska, North Carolina, Ohio, Pennsylvania, South Carolina, Utah, Vermont, Virginia, Canada, Mexico  9                              8              
                                                     Maine, New Jersey                                                                                                                        10                              9              
                                                     District of Columbia, Hawaii, Maryland, Massachusetts, Oregon, Rhode Island                                                              11                             10              
                                                     Michigan, Minnesota                                                                                                                      12                             11              
                                                     Wisconsin                                                                                                                                13                             12              
                                                     New York                                                                                                                                 14                             13              
                                                     Other                                                                                                                                    9                              8               
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

      ‘(3) ALLOWANCE FOR SOCIAL SECURITY TAXES- The allowance for social security taxes is equal to the amount estimated to be earned by the student (and spouse, if appropriate) multiplied by the social security withholding rate appropriate to the tax year preceding the award year, up to the maximum statutory social security tax withholding amount for that same tax year.

      ‘(4) INCOME PROTECTION ALLOWANCE- The income protection allowance is determined by the following table (or a successor table prescribed by the Secretary under section 478):

                ‘Income Protection Allowance
---------------------------------------------------------------------------------------------------
 Family Size         Number in College                                                             
 (including student)                 1      2      3       4       5 For each additional subtract: 
---------------------------------------------------------------------------------------------------
 2                             $10,520 $8,720                                               $1,790 
 For each                       22,330 20,530 18,740  16,940  15,150                               
 additional                                                                                        
  add:                           2,520  2,520  2,520   2,520   2,520                               
---------------------------------------------------------------------------------------------------

      ‘(5) EMPLOYMENT EXPENSE ALLOWANCE- The employment expense allowance is determined as follows (or a successor table prescribed by the Secretary under section 478):

        ‘(A) If the student is married and the student’s spouse is employed in the year for which their income is reported, such allowance is equal to the lesser of $2,500 or 35 percent of the earned income of the student or spouse with the lesser earned income.

        ‘(B) If a student qualifies as a surviving spouse or as a head of household as defined in section 2 of the Internal Revenue Code, such allowance is equal to the lesser of $2,500 or 35 percent of the student’s earned income.

    ‘(c) Family’s Contribution From Assets-

      ‘(1) IN GENERAL- The family’s contribution from assets is equal to--

        ‘(A) the family net worth (determined in accordance with paragraph (2)); minus

        ‘(B) the asset protection allowance (determined in accordance with paragraph (3)); multiplied by

        ‘(C) the asset conversion rate (determined in accordance with paragraph (4)), except that the result shall not be less than zero.

      ‘(2) FAMILY NET WORTH- The family net worth is calculated by adding--

        ‘(A) the current balance of checking and savings accounts and cash on hand;

        ‘(B) the net value of investments and real estate, excluding the net value in the principal place of residence; and

        ‘(C) the adjusted net worth of a business or farm, computed on the basis of the net worth of such business or farm (hereafter referred to as ‘NW’), determined in accordance with the following table (or a successor table prescribed by the Secretary under section 478), except as provided under section 480(f):

                ‘Adjusted Net Worth of a Business or Farm
-------------------------------------------------------------------------------------------
 If the net worth of a business or farm is-- Then the adjusted net worth is--              
-------------------------------------------------------------------------------------------
 Less than $1                                $0                                            
 $1-$75,000                                  40 percent of NW                              
 $75,001-$225,000                            $30,000 plus 50 percent of NW over $75,000    
 $225,001-$375,000                           $105,000 plus 60 percent of NW over $225,000  
 $375,001 or more                            $195,000 plus 100 percent of NW over $375,000 
-------------------------------------------------------------------------------------------

      ‘(3) ASSET PROTECTION ALLOWANCE- The asset protection allowance is calculated according to the following table (or a successor table prescribed by the Secretary under section 478):

               ‘Asset Protection Allowances for Families and Students
-------------------------------------------------------------------------------------------------------------
                                                    If the age of the student is-- And the student is        
                                                                                              married single 
-------------------------------------------------------------------------------------------------------------
                            then the allowance is-- 25 or less                                   $  0     $0 
                                                    26                                          2,200  1,600 
                                                    27                                          4,300  3,200 
                                                    28                                          6,500  4,700 
                                                    29                                          8,600  6,300 
                                                    30                                         10,800  7,900 
                                                    31                                         13,000  9,500 
                                                    32                                         15,100 11,100 
                                                    33                                         17,300 12,600 
                                                    34                                         19,400 14,200 
                                                    35                                         21,600 15,800 
                                                    36                                         23,800 17,400 
                                                    37                                         25,900 19,000 
                                                    38                                         28,100 20,500 
                                                    39                                         30,200 22,100 
                                                    40                                         32,400 23,700 
                                                    41                                         33,300 24,100 
                                                    42                                         34,100 24,700 
                                                    43                                         35,000 25,200 
                                                    44                                         35,700 25,800 
                                                    45                                         36,600 26,300 
                                                    46                                         37,600 26,900 
                                                    47                                         38,800 27,600 
                                                    48                                         39,800 28,200 
                                                    49                                         40,800 28,800 
                                                    50                                         41,800 29,500 
                                                    51                                         43,200 30,200 
                                                    52                                         44,300 31,100 
                                                    53                                         45,700 31,800 
                                                    54                                         47,100 32,600 
                                                    55                                         48,300 33,400 
                                                    56                                         49,800 34,400 
                                                    57                                         51,300 35,200 
                                                    58                                         52,900 36,200 
                                                    59                                         54,800 37,200 
                                                    60                                         56,500 38,100 
                                                    61                                         58,500 39,200 
                                                    62                                         60,300 40,300 
                                                    63                                         62,400 41,500 
                                                    64                                         64,600 42,800 
                                                    65 or more                                 66,800 44,000 
-------------------------------------------------------------------------------------------------------------

      ‘(4) ASSET CONVERSION RATE- The asset conversion rate is 12 percent.

    ‘(d) ASSESSMENT SCHEDULE- The adjusted available income (as determined under subsection (a)(1) and hereafter referred to as ‘AAI’) is assessed according to the following table (or a successor table prescribed by the Secretary under section 478):

               ‘Assessment From Adjusted Available Income (AAI)
-----------------------------------------------------
 If AAI is--        Then the assessment is--         
-----------------------------------------------------
 Less than -$3,409  -$750                            
 -$3,409 to $9,400  22% of AAI                       
 $9,401 to $11,800  $2,068 + 25% of AAI over $9,400  
 $11,801 to $14,200 $2,668 + 29% of AAI over $11,800 
 $14,201 to $16,600 $3,364 + 34% of AAI over $14,200 
 $16,601 to $19,000 $4,180 + 40% of AAI over $16,600 
 $19,001 or more    $5,140 + 47% of AAI over $19,000 
-----------------------------------------------------

‘SEC. 478. REGULATIONS; UPDATED TABLES.

    ‘(a) AUTHORITY TO PRESCRIBE REGULATIONS RESTRICTED- (1) Notwithstanding any other provision of law, the Secretary shall not have the authority to prescribe regulations to carry out this part except--

      ‘(A) to prescribe updated tables in accordance with subsections (b) through (h) of this section; or

      ‘(B) to propose modifications in the need analysis methodology required by this part.

    ‘(2) Any regulation proposed by the Secretary that (A) updates tables in a manner that does not comply with subsections (b) through (h) of this section, or (B) that proposes modifications under paragraph (1)(B) of this subsection, shall not be effective unless approved by joint resolution of the Congress by May 1 following the date such regulations are published in the Federal Register in accordance with section 482. If the Congress fails to approve such regulations by such May 1, the Secretary shall publish in the Federal Register in accordance with section 482 updated tables for the applicable award year that are prescribed in accordance with subsections (b) through (h) of this section.

    ‘(b) INCOME PROTECTION ALLOWANCE- For each academic year after academic year 1992-1993, the Secretary shall publish in the Federal Register a revised table of income protection allowances for the purpose of sections 475(c)(4) and 477(b)(4). Such revised table shall be developed by increasing each of the dollar amounts contained in the table in each such section by a percentage equal to the estimated percentage increase in the Consumer Price Index (as determined by the Secretary) between December 1992 and the December next preceding the beginning of such academic year, and rounding the result to the nearest $10.

    ‘(c) ADJUSTED NET WORTH OF A FARM OR BUSINESS- For each award year after award year 1992-1993, the Secretary shall publish in the Federal Register a revised table of adjusted net worth of a farm or business for purposes of sections 475(d)(2)(C), 476(c)(2)(C), and 477(c)(2)(C). Such revised table shall be developed--

      ‘(1) by increasing each dollar amount that refers to net worth of a farm or business by a percentage equal to the estimated percentage increase in the Consumer Price Index (as determined by the Secretary) between 1992 and the December next preceding the beginning of such award year, and rounding the result to the nearest $5,000; and

      ‘(2) by adjusting the dollar amounts ‘$30,000’, ‘$105,000’, and ‘$195,000’ to reflect the changes made pursuant to paragraph (1).

    ‘(d) EDUCATION SAVINGS AND ASSET PROTECTION ALLOWANCE- For each award year after award year 1992-1993, the Secretary shall publish in the Federal Register a revised table of allowances for the purpose of sections 475(d)(3), 476(c)(3), and 477(c)(3). Such revised table shall be developed by determining the present value cost, rounded to the nearest $100, of an annuity that would provide, for each age cohort of 40 and above, a supplemental income at age 65 (adjusted for inflation) equal to the difference between the moderate family income (as most recently determined by the Bureau of Labor Statistics), and the current average social security retirement benefits. For each age cohort below 40, the allowance shall be computed by decreasing the allowance for age 40, as updated, by one-fifteenth for each year of age below age 40 and rounding the result to the nearest $100. In making such determinations--

      ‘(1) inflation shall be presumed to be 6 percent per year;

      ‘(2) the rate of return of an annuity shall be presumed to be 8 percent; and

      ‘(3) the sales commission on an annuity shall be presumed to be 6 percent.

    ‘(e) ASSESSMENT SCHEDULES AND RATES- For each award year after award year 1992-1993, the Secretary shall publish in the Federal Register a revised table of assessments from adjusted available income for the purpose of sections 475(e) and 477(d). Such revised table shall be developed--

      ‘(1) by increasing each dollar amount that refers to adjusted available income by a percentage equal to the estimated percentage increase in the Consumer Price Index (as determined by the Secretary) between December 1992 and the December next preceding the beginning of such academic year, rounded to the nearest $100; and

      ‘(2) by adjusting the other dollar amounts to reflect the changes made pursuant to paragraph (1).

    ‘(f) DEFINITION OF CONSUMER PRICE INDEX- As used in this section, the term ‘Consumer Price Index’ means the Consumer Price Index for All Urban Consumers published by the Department of Labor. Each annual update of tables to reflect changes in the Consumer Price Index shall be corrected for misestimation of actual changes in such Index in previous years.

    ‘(g) STATE AND OTHER TAX ALLOWANCE- For each award year after award year 1992-1993, the Secretary shall publish in the Federal Register a revised table of State and other tax allowances for the purpose of sections 475(c)(2), 475(g)(3), 476(b)(2), and 477(b)(2). The Secretary shall develop such revised table after review of the Department of the Treasury’s Statistics of Income file and determination of the percentage of income that each State’s taxes represent.

    ‘(h) EMPLOYMENT EXPENSE ALLOWANCE- For each award year after award year 1992-1993, the Secretary shall publish in the Federal Register a revised table of employment expense allowances for the purpose of sections 475(c)(5), 476(b)(4), and 477(b)(5). Such revised table shall be developed by increasing the dollar amount specified in sections 475(c)(5)(A), 475(c)(5)(B), 476(b)(4)(A), 476(b)(4)(B), 477(b)(5)(A), and 477(b)(5)(B) to reflect increases in the amount and percent of the Bureau of Labor Standards budget of the marginal costs for meals away from home, apparel and upkeep, transportation, and housekeeping services for a two-worker versus one-worker family.

‘SEC. 479. SIMPLIFIED NEEDS TESTS.

    ‘(a) SIMPLIFIED APPLICATION SECTION-

      ‘(1) IN GENERAL- The Secretary shall develop and use an easily identifiable simplified application section as part of the common financial reporting form prescribed under section 483(a) for families described in subsections (b) and (c) this section.

      ‘(2) REDUCED DATA REQUIREMENTS- The simplified application form shall--

        ‘(A) in the case of a family meeting the requirements of subsection (b)(1), permit such family to submit only the data elements required under subsection (b)(2) for the purposes of establishing eligibility for student financial aid under this part; and

        ‘(B) in the case of a family meeting the requirements of subsection (c), permit such family to be treated as having an expected family contribution equal to zero for purposes of establishing such eligibility and to submit only the data elements required to make a determination under subsection (c).

    ‘(b) SIMPLIFIED NEEDS TEST-

      ‘(1) ELIGIBILITY- An applicant is eligible to file a simplified form containing the elements required by paragraph (2) if--

        ‘(A) in the case of an applicant who is a dependent student--

          ‘(i) the student’s parents file or are eligible to file a form described in paragraph (3) or certify that they are not required to file an income tax return and the student files or is eligible to file such a form or certifies that the student is not required to file an income tax return; and

          ‘(ii) the total adjusted gross income of the parents (excluding any income of the dependent student) is less than $50,000; or

        ‘(B) in the case of an applicant who is an independent student--

          ‘(i) the student files or is eligible to file a form described in paragraph (3) or certifies that the student is not required to file such an income tax return; and

          ‘(ii) the adjusted gross income of the student (and the student’s spouse, if any) is less than $50,000.

      ‘(2) SIMPLIFIED TEST ELEMENTS- The five elements to be used for the simplified needs analysis are--

        ‘(A) adjusted gross income,

        ‘(B) Federal taxes paid,

        ‘(C) untaxed income and benefits,

        ‘(D) the number of family members,

        ‘(E) the number of family members in postsecondary education; and

        ‘(F) an allowance (A) for State and other taxes, as defined in section 475(c)(2) for dependent students and in section 477(b)(2) for independent students with dependents other than a spouse, or (B) for State and other income taxes, as defined in section 476(b)(2) for independent students without dependents other than a spouse.

      ‘(3) QUALIFYING FORMS- A student or family files a form described in this paragraph if the student or family, respectively, files--

        ‘(A) a form 1040A or 1040EZ required pursuant to the Internal Revenue Code of 1986; or

        ‘(B) an income tax return required pursuant to the tax code of the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, or Palau.

    ‘(c) ZERO EXPECTED FAMILY CONTRIBUTION- The Secretary shall consider an applicant to have an expected family contribution equal to zero if--

      ‘(1) in the case of a dependent student--

        ‘(A) the student’s parents did not file, and were not required to file, a form 1040 required pursuant to the Internal Revenue Code of 1986; and

        ‘(B) the sum of the adjusted gross income of the parents is less than or equal to the maximum amount of income (rounded annually to the nearest thousand dollars) that may be earned in order to claim the maximum Federal earned income credit; or

      ‘(2) in the case of an independent student with dependents other than a spouse--

        ‘(A) the student (and the student’s spouse, if any) did not file, and was not required to file, a form 1040 required pursuant to the Internal Revenue Code of 1986; and

        ‘(B) the sum of the adjusted gross income of the student and spouse (if appropriate) is less than or equal to the maximum amount of income (rounded annually to the nearest thousand dollars) that may be earned in order to claim the maximum Federal earned income credit.

    An individual is not required to qualify or file for the earned income credit in order to be eligible under this subsection.

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

    ‘(a) IN GENERAL- Nothing in this part shall be interpreted as limiting the authority of the financial aid administrator, on the basis of adequate documentation, to make adjustments on a case-by-case basis to the cost of attendance or the values of the data items required to calculate the expected student or parent contribution (or both) to allow for treatment of an individual eligible applicant with special circumstances. However, this authority shall not be construed to permit aid administrators to deviate from the contributions expected in the absence of special circumstances. Special circumstances shall be conditions that differentiate an individual student from a class of students rather than conditions that exist across a class of students. Adequate documentation for such adjustments shall substantiate such special circumstances of individual students. In addition, nothing in this title shall be interpreted as limiting the authority of the student financial aid administrator in such cases to request and use supplementary information about the financial status or personal circumstances of eligible applicants in selecting recipients and determining the amount of awards under this title. No student or parent shall be charged a fee for collecting, processing, or delivering such supplementary information.

    ‘(b) ADJUSTMENTS TO ASSETS TAKEN INTO ACCOUNT- A student financial aid administrator shall be considered to be making a necessary adjustment in accordance with subsection (a) if--

      ‘(1) the administrator makes adjustments excluding from family income any proceeds of a sale of farm or business assets of a family if such sale results from a voluntary or involuntary foreclosure, forfeiture, or bankruptcy or an involuntary liquidation; or

      ‘(2) the administrator makes adjustments in the award level of a student with a disability so as to take into consideration the additional costs such student incurs as a result of such student’s disability.

‘SEC. 479B. DISREGARD OF STUDENT AID IN OTHER FEDERAL PROGRAMS.

    ‘Notwithstanding any other provision of law, student financial assistance received under this title, or under Bureau of Indian Affairs student assistance programs, shall not be taken into account in determining the need or eligibility of any person for benefits or assistance, or the amount of such benefits or assistance, under any Federal, State, or local program financed in whole or in part with Federal funds.

‘SEC. 479C. NATIVE AMERICAN STUDENTS.

    ‘In determining family contributions for Native American students, computations performed pursuant to this part shall exclude--

      ‘(1) any income and assets of $2,000 or less per individual payment received by the student (and spouse) and student’s parents under the Per Capita Act or the Distribution of Judgment Funds Act; and

      ‘(2) any income received by the student (and spouse) and student’s parents under the Alaskan Native Claims Settlement Act or the Maine Indian Claims Settlement Act.

‘SEC. 480. DEFINITIONS.

    ‘As used in this part:

    ‘(a) TOTAL INCOME- (1) Except as provided in paragraph (2), the term ‘total income’ is equal to adjusted gross income plus untaxed income and benefits for the preceding tax year minus excludable income (as defined in subsection (e)).

    ‘(2) No portion of any student financial assistance received from any program by an individual shall be included as income or assets in the computation of expected family contribution for any program funded in whole or in part under this Act.

    ‘(b) UNTAXED INCOME AND BENEFITS- The term ‘untaxed income and benefits’ means--

      ‘(1) child support received;

      ‘(2) welfare benefits, including aid to families with dependent children under a State plan approved under part A of title IV of the Social Security Act and aid to dependent children;

      ‘(3) workman’s compensation;

      ‘(4) veterans’ benefits such as death pension, dependency, and indemnity compensation, but excluding veterans’ education benefits as defined in subsection (c);

      ‘(5) interest on tax-free bonds;

      ‘(6) housing, food, and other allowances (excluding rent subsidies for low-income housing) for military, clergy, and others (including cash payments and cash value of benefits);

      ‘(7) cash support or any money paid on the student’s behalf, except, for dependent students, funds provided by the student’s parents;

      ‘(8) the amount of earned income credit claimed for Federal income tax purposes;

      ‘(9) untaxed portion of pensions;

      ‘(10) credit for Federal tax on special fuels;

      ‘(11) the amount of foreign income excluded for purposes of Federal income taxes;

      ‘(12) untaxed social security benefits;

      ‘(13) payments to individual retirement accounts and Keogh accounts excluded from income for Federal income tax purposes; and

      ‘(14) any other untaxed income and benefits, such as Black Lung Benefits, Refugee Assistance, railroad retirement benefits, or Job Training Partnership Act noneducational benefits.

    ‘(c) VETERAN AND VETERANS’ EDUCATION BENEFITS- (1) The term ‘veteran’ means any individual who--

      ‘(A) has engaged in the active duty in the United States Army, Navy, Air Force, Marines, or Coast Guard; and

      ‘(B) was released under a condition other than dishonorable.

    ‘(2) The term ‘veterans’ education benefits’ means veterans’ benefits the student will receive during the award year, including but not limited to the following:

      ‘(A) Title 10, chapter 2: Reserve Officer Training Corps scholarship.

      ‘(B) Title 10, chapter 106: Selective Reserve.

      ‘(C) Title 10, chapter 107: Selective Reserve Educational Assistance Program.

      ‘(D) Title 37, chapter 2: Reserve Officer Training Corps Program.

      ‘(E) Title 38, chapter 30: Montgomery GI Bill--active duty.

      ‘(F) Title 38, chapter 31: vocational rehabilitation.

      ‘(G) Title 38, chapter 32: Post-Vietnam Era Veterans’ Educational Assistance Program.

      ‘(H) Title 38, chapter 35: Dependents Educational Assistance Program.

      ‘(I) Public Law 97-376, section 156: Restored Entitlement Program for Survivors (or Quayle benefits).

      ‘(J) Public Law 96-342, section 903: Educational Assistance Pilot Program.

    ‘(d) INDEPENDENT STUDENT- The term ‘independent’, when used with respect to a student, means any individual who--

      ‘(1) is 24 years of age or older by December 31 of the award year;

      ‘(2) is an orphan or ward of the court;

      ‘(3) is a veteran of the Armed Forces of the United States (as defined in subsection (c)(1));

      ‘(4) is a graduate or professional student;

      ‘(5) is a married individual;

      ‘(6) has legal dependents other than a spouse; or

      ‘(7) is a student for whom a financial aid administrator makes a documented determination of independence by reason of other unusual circumstances.

    ‘(e) EXCLUDABLE INCOME- The term ‘excludable income’ means--

      ‘(1) any student financial assistance awarded based on need as determined in accordance with the provisions of this part, including any income earned from work under part C of this title;

      ‘(2) any living allowance received by a participant in a program established under the National and Community Service Act of 1990;

      ‘(3) child support payments made by the student or parent; and

      ‘(4) payments made and services provided under part E of title IV of the Social Security Act.

    ‘(f) ASSETS- (1) The term ‘assets’ means cash on hand, including the amount in checking and savings accounts, time deposits, money market funds, trusts, stocks, bonds, other securities, mutual funds, tax shelters, and the net value of real estate, income producing property, and business and farm assets.

    ‘(2) With respect to determinations of need under this title, other than for subpart 4 of part A, the term ‘assets’ shall not include the net value of--

      ‘(A) the family’s principal place of residence; or

      ‘(B) a family farm on which the family resides.

    ‘(g) NET ASSETS- The term ‘net assets’ means the current market value at the time of application of the assets (as defined in subsection (f)), minus the outstanding liabilities or indebtedness against the assets.

    ‘(h) TREATMENT OF INCOME TAXES PAID TO OTHER JURISDICTIONS- (1) The tax on income paid to the Governments of the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands, or the Commonwealth of the Northern Mariana Islands, the Republic of the Marshall Islands, the Federated States of Micronesia, or Palau under the laws applicable to those jurisdictions, or the comparable tax paid to the central government of a foreign country, shall be treated as Federal income taxes.

    ‘(2) References in this part to the Internal Revenue Code of 1986, Federal income tax forms, and the Internal Revenue Service shall, for purposes of the tax described in paragraph (1), be treated as references to the corresponding laws, tax forms, and tax collection agencies of those jurisdictions, respectively, subject to such adjustments as the Secretary may provide by regulation.

    ‘(i) CURRENT BALANCE- The term ‘current balance of checking and savings accounts’ does not include any funds over which an individual is barred from exercising discretion and control because of the actions of any State in declaring a bank emergency due to the insolvency of a private deposit insurance fund.

    ‘(j) OTHER FINANCIAL ASSISTANCE; TUITION PREPAYMENT PLANS- (1) For purposes of determining a student’s eligibility for funds under this title, estimated financial assistance not received under this title shall include all scholarships, grants, loans, or other assistance known to the institution at the time the determination of the student’s need is made, including veterans’ education benefits as defined in subsection (c).

    ‘(2)(A) Except as provided in subparagraph (B), for purposes of determining a student’s eligibility for funds under this title, tuition prepayment plans shall reduce the cost of attendance (as determined under section 472) by the amount of the prepayment, and shall not be considered estimated financial assistance.

    ‘(B) If the institutional expense covered by the prepayment must be part of the student’s cost of attendance for accounting purposes, the prepayment shall be considered estimated financial assistance.’.

    (b) EFFECTIVE DATE FOR AMENDMENT TO PART F- The changes made in part F of title IV of the Act by the amendment made by this section shall apply with respect to determinations of need under such part F for award years beginning on or after July 1, 1993.

PART G--GENERAL PROVISIONS

SEC. 481. DEFINITIONS.

    (a) INSTITUTION OF HIGHER EDUCATION- Section 481 of the Act (20 U.S.C. 1088(a)) is amended by striking the heading of such section and subsection (a) and inserting the following:

‘SEC. 481. DEFINITIONS.

    ‘(a) INSTITUTION OF HIGHER EDUCATION- (1) Subject to paragraphs (2) through (4) of this subsection, the term ‘institution of higher education’ for purposes of this title includes, in addition to the institutions covered by the definition in section 1201(a)--

      ‘(A) a proprietary institution of higher education;

      ‘(B) a postsecondary vocational institution; and

      ‘(C) only for the purposes of part B of this title, an institution outside the United States which is comparable to an institution of higher education as defined in section 1201(a) and which has been approved by the Secretary for the purpose of part B.

    ‘(2)(A) For the purpose of qualifying as an institution under paragraph (1)(C) of this subsection, the Secretary shall establish criteria by regulation for the approval of institutions outside the United States and for the determination that such institutions are comparable to an institution of higher education as defined in section 1201(a). In the case of a graduate medical school outside the United States, such criteria shall include a requirement that a student attending a graduate medical school outside the United States is ineligible for loans made, insured, or guaranteed under part B of this title unless--

      ‘(i)(I) at least 60 percent of those enrolled and at least 60 percent of the graduates of the graduate medical school outside the United States were not persons described in section 484(a)(5) in the year preceding the year for which a student is seeking a loan under part B of this title; and

      ‘(II) at least 60 percent of the individuals who were students or graduates of the graduate medical school outside the United States (both nationals of the United States and others) taking the examinations administered by the Educational Commission for Foreign Medical Graduates received a passing score in the year preceding the year for which a student is seeking a loan under part B of this title; or

      ‘(ii) the institution’s clinical training program was approved by a State as of January 1, 1992.

    ‘(B) For the purpose of qualifying as an institution under paragraph (1)(C), the Secretary shall establish an advisory panel of medical experts which shall--

      ‘(i) evaluate the standards of accreditation applied to applicant foreign medical schools; and

      ‘(ii) determine the comparability of those standards to standards for accreditation applied to United States medical schools.

    If such accreditation standards are determined not to be comparable, the foreign medical school shall be required to meet the requirements of section 1201(a).

    ‘(C) The failure of an institution outside the United States to provide, release, or authorize release to the Secretary of such information as may be required by subparagraph (A) of this paragraph shall render such institution ineligible for the purpose of part B of this title.

    ‘(D) The Secretary shall, not later than one year after the date of enactment of the Higher Education Amendments of 1992, prepare and submit to the Committee on Education and Labor of the House of Representatives and the Committee on Labor and Human Resources of the Senate a report on the implementation of the regulations required by subparagraph (A) of this paragraph.

    ‘(E) If, pursuant to this paragraph, an institution loses eligibility to participate in the programs under this title, then a student enrolled at such institution may, notwithstanding such loss of eligibility, continue to be eligible to receive a loan under part B while attending such institution for the academic year succeeding the academic year in which such loss of eligibility occurred.

    ‘(3) An institution shall not be considered to meet the definition of an institution of higher education in paragraph (1), if such institution--

      ‘(A) offers more than 50 percent of such institution’s courses by correspondence, unless the institution is an institution that meets the definition in section 521(4)(C) of the Carl D. Perkins Vocational and Applied Technology Education Act;

      ‘(B) enrolls 50 percent or more of its students in correspondence courses, unless the institution is an institution that meets the definition in such section;

      ‘(C) has a student enrollment in which more than 25 percent of the students are incarcerated, except that the Secretary may waive the prohibition of this subparagraph for a nonprofit institution that provides a 4-year or a 2-year program of instruction (or both) for which it awards a bachelor’s or associate’s degree, respectively; or

      ‘(D) has a student enrollment in which more than 50 percent of the students are admitted pursuant to section 484(d) and does not provide a 4-year or a 2-year program of instruction (or both) for which it awards a bachelor’s or associate’s degree, respectively.

    ‘(4) An institution shall not be considered to meet the definition of an institution of higher education in paragraph (1) if--

      ‘(A) such institution has filed for bankruptcy; or

      ‘(B) the institution, its owner, or its chief executive officer has been convicted of, or has pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of funds under this title, or has been judicially determined to have committed fraud involving funds under this title.

    ‘(5) The Secretary shall certify an institution’s qualification as an institution of higher education in accordance with the requirements of subpart 3 of part H.

    ‘(6) An institution of higher education shall not be considered to meet the definition of an institution of higher education in paragraph (1) if such institution is removed from eligibility for funds under this title as a result of an action pursuant to part H of this title.’.

    (b) PROPRIETARY INSTITUTIONS OF HIGHER EDUCATION- Section 481(b) of the Act is amended by--

      (1) in clause (1), by striking ‘not less than a 6-month program’ and inserting ‘an eligible program’;

      (2) in clause (4)--

        (A) by striking ‘for this purpose’ and inserting ‘pursuant to part H of this title’; and

        (B) by striking ‘and’ at the end thereof;

      (3) by striking the period at the end of clause (5) and inserting the following: ‘, and (6) which has at least 15 percent of its revenues from sources that are not derived from funds provided under this title, as determined in accordance with regulations prescribed by the Secretary.’; and

      (4) by striking the last sentence.

    (c) POSTSECONDARY VOCATIONAL INSTITUTION- Section 481(c)(1) of the Act is amended by striking ‘not less than a 6-month program’ and inserting ‘an eligible program’.

    (d) AWARD YEAR- Section 481(d) of the Act is amended to read as follows:

    ‘(d) ACADEMIC AND AWARD YEAR- (1) For the purpose of any program under this title, the term ‘award year’ shall be defined as the period beginning July 1 and ending June 30 of the following year.

    ‘(2) For the purpose of any program under this title, the term ‘academic year’ shall require a minimum of 30 weeks of instructional time in which a full-time student is expected to complete at least 24 semester or trimester hours or 36 quarter hours at an institution which measures program length in credit hours or at least 900 clock hours at an institution which measures program length in clock hours.’.

    (e) ELIGIBLE PROGRAM- Section 481(e) of the Act is amended to read as follows:

    ‘(e) ELIGIBLE PROGRAM- (1) For purposes of this title, the term ‘eligible program’ means a program of at least--

      ‘(A) 600 clock hours of instruction, 16 semester hours, or 24 quarter hours, offered during a minimum of 15 weeks, in the case of a program that--

        ‘(i) provides a program of training to prepare students for gainful employment in a recognized profession; and

        ‘(ii) admits students who have not completed the equivalent of an associate degree; or

      ‘(B) 300 clock hours of instruction, 8 semester hours, or 12 hours, offered during a minimum of 10 weeks, in the case of--

        ‘(i) an undergraduate program that requires the equivalent of an associate degree for admissions; or

        ‘(ii) a graduate or professional program.

    ‘(2) The Secretary shall develop regulations to determine the quality of programs of less than 600 clock hours in length. Such regulations shall require, at a minimum, that the programs have a verified rate of completion of at least 70 percent and a verified rate of placement of at least 70 percent. Pursuant to these regulations and notwithstanding paragraph (1), the Secretary shall allow programs of less than 600 clock hours, but greater than 300 clock hours, in length to be eligible to participate in the programs authorized under part B of this title.’.

    (f) THIRD PARTY SERVICER- Section 481 of the Act is amended by adding the following new subsection after subsection (e):

    ‘(f) THIRD PARTY SERVICER- For purposes of this title, the term ‘third party servicer’ means any State or private, profit or nonprofit organization which enters into a contract with--

      ‘(1) any eligible institution of higher education to administer, through either manual or automated processing, any aspect of such institution’s student assistance programs under this title; or

      ‘(2) any guaranty agency, or any eligible lender, to administer, through either manual or automated processing, any aspect of such guaranty agency’s or lender’s student loan programs under part B of this title, including originating, guaranteeing, monitoring, processing, servicing, or collecting loans.’.

SEC. 482. MASTER CALENDAR.

    (a) AMENDMENT- Section 482(c) of the Act (20 U.S.C. 1089(c)) is amended to read as follows:

    ‘(c) DELAY OF EFFECTIVE DATE OF LATE PUBLICATIONS- Any regulatory changes initiated by the Secretary affecting the programs pursuant to this title that have not been published in final form by December 1 prior to the start of the award year shall not become effective until the beginning of the second award year after such December 1 date.’.

    (b) CONFORMING AMENDMENTS-

      (1) Section 482(a)(1) of the Act is amended by striking ‘sections 411E and’ each place it appears in subparagraphs (B) and (C) and inserting ‘section’.

      (2) Section 482(b) of the Act is amended by striking ‘subpart 2’ and inserting ‘subpart 3’.

SEC. 483. FORMS AND REGULATIONS.

    (a) FORMS AND PROCESSING- Section 483 of the Act (20 U.S.C. 1090) is amended by striking subsections (a) and (b) and inserting the following:

    ‘SEC. 483. (a) COMMON FINANCIAL AID FORM AND PROCESSING-

      ‘(1) SINGLE FORM REQUIRED- The Secretary, in cooperation with representatives of agencies and organizations involved in student financial assistance, shall produce, distribute, and process free of charge a common financial reporting form to be used to determine the need and eligibility of a student for financial assistance under parts A, C, D, and E of this title (other than under subpart 4 of part A) and to determine the need of a student for the purpose of part B of this title. The Secretary may include on the form developed pursuant to this paragraph not more than eight nonfinancial data items selected in consultation with the States to assist the States in awarding State student financial assistance. Such form shall satisfy the requirements of section 411(d) of this title. For the purpose of collecting eligibility and other data for the purpose of part B, the Secretary shall develop a separate, identifiable loan application document (pursuant to section 432(m)) that applicants or institutions in which the students are enrolled or accepted for enrollment shall submit directly to eligible lenders and on which the applicant shall clearly indicate a choice of a lender.

      ‘(2) CHARGES TO STUDENTS AND PARENTS FOR USE OF FORM PROHIBITED- The common financial reporting form prescribed by the Secretary under paragraph (1) shall be produced, distributed, and processed by the Secretary and no parent or student shall be charged a fee for the collection, processing, or delivery of financial aid through the use of such form. The need and eligibility of a student for financial assistance under parts A, C, D, and E of this title (other than under subpart 4 of part A) and the need of a student for the purpose of part B of this title, may only be determined by using the form developed by the Secretary pursuant to paragraph (1) of this subsection. No student may receive assistance under parts A, C, D, and E of this title (other than under subpart 4 of part A) or have the student’s need established for the purpose of part B of this title, except by use of the form developed by the Secretary pursuant to this section.

      ‘(3) DISTRIBUTION OF DATA- Institutions of higher education and States shall receive, without charge, the data collected by the Secretary using the form developed pursuant to this section for the purposes of determining need and eligibility for institutional and State financial aid awards.

      ‘(4) CONTRACTS FOR COLLECTION AND PROCESSING- (A) The Secretary shall, to the extent practicable, enter into not less than 5 contracts with States, institutions of higher education, or private organizations for the purposes of the timely collection and processing of the form developed pursuant to paragraph (1) and the timely delivery of the data submitted on such form. The Secretary shall use such contracts to assist States and institutions of higher education with the collection of additional data required to award State or institutional financial assistance, except that the Secretary shall not include these additional data items on the common financial reporting form developed pursuant to this section. The Secretary shall include in each such contract a requirement that--

        ‘(i) any charges by the contractor to the student or parent for additional data items required by a State or institution for any purpose (regardless of the method of collection) shall be reasonable and shall not exceed the marginal cost of collecting, processing, and delivering such additional data, taking into account any payment received by the contractor to produce, distribute, and process the common financial reporting form prescribed by the Secretary pursuant to paragraph (1); and

        ‘(ii) the contractor will require any person or entity to whom the contractor provides such additional data to agree not to collect from any student or parent any charge that would not be permitted under this subparagraph for any such additional data.

      ‘(B) To the extent practicable, the Secretary shall ensure that at least one contractor, or a portion of one contract, under this paragraph will serve graduate and professional students.

      ‘(C) As part of the procurement process for the 1993-1994 award year, and for all procurements thereafter pertaining to the contracts under this paragraph, the Secretary shall require all entities competing for such contracts to comply with all requirements of this subsection and to--

        ‘(i) use the common financial reporting form as prescribed in paragraph (1), which shall be clearly identified as the ‘Free Application for Federal Student Aid’; and

        ‘(ii) use a common, simplified reapplication form as the Secretary shall prescribe pursuant to subsection (b), in each award year.

      ‘(D) The Secretary shall reimburse all approved contractors at a reasonable predetermined rate for processing such applications, for issuing eligibility reports, and for carrying out other services or requirements that may be prescribed by the Secretary.

      ‘(E) All approved contractors shall be required to adhere to all editing, processing, and reporting requirements established by the Secretary to ensure consistency.

      ‘(F) No approved contractor shall enter into exclusive arrangements with guarantors, lenders, secondary markets, or institutions of higher education for the purpose of reselling or sharing of data collected for the multiple data entry process. All data collected under a contract issued by the Secretary pursuant to this paragraph for the multiple data entry process is the exclusive property of the Secretary and may not be transferred to a third party by an approved contractor without the Secretary’s express written approval.

    ‘(b) STREAMLINED REAPPLICATION PROCESS- (1) The Secretary shall, within 240 days after the date of enactment of the Higher Education Amendments of 1992, develop a streamlined reapplication form and process, including electronic reapplication process, consistent with the requirements of subsection (a), for those recipients who apply for financial aid funds under this title in the next succeeding academic year subsequent to the initial year in which such recipients apply.

    ‘(2) The Secretary shall develop appropriate mechanisms to support reapplication.

    ‘(3) The Secretary shall determine, in cooperation with States, institutions of higher education, agencies and organizations involved in student financial assistance, the data elements that can be updated from the previous academic year’s application.

    ‘(4) Nothing in this title shall be interpreted as limiting the authority of the Secretary to reduce the number of data elements required of reapplicants.

    ‘(5) Individuals determined to have a zero family contribution pursuant to section 479 shall not be required to provide any financial data, except that which is necessary to determine eligibility under that section.’.

    (b) ADDITIONAL AMENDMENTS- Section 483 is further amended--

      (1) by striking subsections (d) and (f);

      (2) by amending subsection (e) to read as follows:

    ‘(e) TOLL-FREE INFORMATION- The Secretary shall contract for, or establish, and publicize a toll-free telephone service to provide timely and accurate information to the general public. The information provided shall include specific instructions on completing the application form for assistance under this title. Such service shall also include a service accessible by telecommunications devices for the deaf (TDD’s) and shall, in addition to the services provided for in the previous sentence, refer such students to the national clearinghouse on postsecondary education that is authorized under section 633(c) of the Individuals with Disabilities Education Act.’; and

      (3) by adding at the end the following new subsections:

    ‘(f) PREPARER- Any financial aid application required to be made under this title shall include the name, signature, address, social security number, and organizational affiliation of the preparer of such financial aid application.

    ‘(g) SPECIAL RULE- Nothing in section 1544 of the Higher Education Amendments of 1992 shall relieve processors or institutions of higher education of any or all obligations under this section.’.

SEC. 484. STUDENT ELIGIBILITY.

    (a) IN GENERAL- Section 484 of the Act (20 U.S.C. 1091) is amended--

      (1) in paragraph (1) of subsection (a), by inserting ‘(including a program of study abroad approved for credit by the eligible institution at which such student is enrolled)’ after ‘or other program’; and

      (2) by striking paragraph (4) of subsection (a) and inserting the following:

      ‘(4) file with the institution of higher education which the student intends to attend, or is attending (or in the case of a loan or loan guarantee with the lender), a document, which need not be notarized, but which shall include--

        ‘(A) a statement of educational purpose stating that the money attributable to such grant, loan, or loan guarantee will be used solely for expenses related to attendance or continued attendance at such institution; and

        ‘(B) such student’s social security number;’.

    (b) Exceptions to Eligible Student Definition-

      (1) AMENDMENTS- Section 484(b) of the Act is amended--

        (A) in paragraph (4) by striking ‘part B’ and inserting ‘part B, D, or E or work-study assistance under part C’; and

        (B) by adding at the end the following new paragraph:

    ‘(5) Notwithstanding any other provision of this subsection, no incarcerated student is eligible to receive a loan under this title.’.

      (2) EFFECTIVE DATE- The amendments made by paragraph (1)(A) of this subsection shall be effective on and after December 1, 1987.

    (c) ABILITY TO BENEFIT- Section 484(d) of the Act is amended to read as follows:

    ‘(d) STUDENTS WHO ARE NOT HIGH SCHOOL GRADUATES- In order for a student who does not have a certificate of graduation from a school providing secondary education, or the recognized equivalent of such certificate, to be eligible for any assistance under subparts 1, 3, and 4 of part A and parts B, C, D, and E of this title, the student shall meet either one of the following standards:

      ‘(1) The student shall take an independently administered examination and shall achieve a score, specified by the Secretary, demonstrating that such student can benefit from the education or training being offered. Such examination shall be approved by the Secretary on the basis of compliance with such standards for development, administration, and scoring as the Secretary may prescribe in regulations.

      ‘(2) The student shall be determined as having the ability to benefit from the education or training in accordance with such process as the State shall prescribe. Any such process described or approved by a State for the purposes of this section shall be effective 6 months after the date of submission to the Secretary unless the Secretary disapproves such process. In determining whether to approve or disapprove such process, the Secretary shall take into account the effectiveness of such process in enabling students without high school diplomas or the equivalent thereof to benefit from the instruction offered by institutions utilizing such process, and shall also take into account the cultural diversity, economic circumstances, and educational preparation of the populations served by the institutions.’.

    (d) VERIFICATION- Section 484(f) of the Act is amended by adding at the end the following new sentence: ‘Nothing in this subsection shall preclude the Secretary from verifying all applications for aid through the use of any means available, including through the exchange of information with any other Federal agency.’.

    (e) LOSS OF ELIGIBILITY- Section 484(g) of the Act is amended--

      (1) by inserting ‘(1)’ before ‘No student’;

      (2) by inserting ‘, part D’ after ‘part B’ each place it appears;

      (3) by inserting ‘fraudulently’ before ‘borrowed’ each place it appears; and

      (4) by adding at the end the following new paragraph:

    ‘(2) If the institution determines that the student inadvertently borrowed amounts in excess of such annual or aggregate maximum loan limits, such institution shall allow the student to repay any amount borrowed in excess of such limits prior to certifying the student’s eligibility for further assistance under this title.’.

    (f) VERIFICATION OF IMMIGRANT STATUS- Section 484(h) of the Act is amended to read as follows:

    ‘(h) VERIFICATION OF IMMIGRATION STATUS-

      ‘(1) IN GENERAL- The Secretary shall implement a system under which the statements and supporting documentation, if required, of an individual declaring that such individual is in compliance with the requirements of subsection (a)(5) shall be verified prior to the individual’s receipt of a grant, loan, or work assistance under this title.

      ‘(2) SPECIAL RULE- The documents collected and maintained by an eligible institution in the admission of a student to the institution may be used by the student in lieu of the documents used to establish both employment authorization and identity under section 274A(b)(1)(B) of the Immigration and Nationality Act (8 U.S.C. 1324a) to verify eligibility to participate in work-study programs under part C of this title.

      ‘(3) VERIFICATION MECHANISMS- The Secretary is authorized to verify such statements and supporting documentation through a data match, using an automated or other system, with other Federal agencies that may be in possession of information relevant to such statements and supporting documentation.

      ‘(4) REVIEW- In the case of such an individual who is not a citizen or national of the United States, if the statement described in paragraph (1) is submitted but the documentation required under paragraph (2) is not presented or if the documentation required under paragraph (2)(A) is presented but such documentation is not verified under paragraph (3)--

        ‘(A) the institution--

          ‘(i) shall provide a reasonable opportunity to submit to the institution evidence indicating a satisfactory immigration status, and

          ‘(ii) may not delay, deny, reduce, or terminate the individual’s eligibility for the grant, loan, or work assistance on the basis of the individual’s immigration status until such a reasonable opportunity has been provided; and

        ‘(B) if there are submitted documents which the institution determines constitutes reasonable evidence indicating such status--

          ‘(i) the institution shall transmit to the Immigration and Naturalization Service photostatic or other similar copies of such documents for official verification,

          ‘(ii) pending such verification, the institution may not delay, deny, reduce, or terminate the individual’s eligibility for the grant, loan, or work assistance on the basis of the individual’s immigration status, and

          ‘(iii) the institution shall not be liable for the consequences of any action, delay, or failure of the Service to conduct such verification.’.

    (g) ADDITIONAL PROVISIONS- Section 484 of the Act is further amended by adding at the end the following new subsections:

    ‘(l) SPECIAL RULE FOR CORRESPONDENCE COURSES- A student shall not be eligible to receive grant, loan, or work assistance under this title for a correspondence course unless such course is part of a program leading to an associate, bachelor or graduate degree.

    ‘(m) COURSES OFFERED THROUGH TELECOMMUNICATIONS-

      ‘(1) RELATION TO CORRESPONDENCE COURSES- A student enrolled in a course of instruction at an eligible institution of higher education (other than an institution that meets the definition in section 521(4)(C) of the Carl D. Perkins Vocational and Applied Technology Education Act) that is offered in whole or in part through telecommunications and leads to a recognized associate, bachelor, or graduate degree conferred by such institution shall not be considered to be enrolled in correspondence courses unless the total amount of telecommunications and correspondence courses at such institution equals or exceeds 50 percent of such courses.

      ‘(2) RESTRICTION OR REDUCTIONS OF FINANCIAL AID- A student’s eligibility to receive grants, loans, or work assistance under this title shall be reduced if a financial aid officer determines under the discretionary authority provided in section 479A that telecommunications instruction results in a substantially reduced cost of attendance to such student.

      ‘(3) SPECIAL RULE- For award years prior to the date of enactment of this subsection, the Secretary shall not take any compliance, disallowance, penalty, or other action against a student or an eligible institution when such action arises out of such institution’s prior award of student assistance under this title if the institution demonstrates to the satisfaction of the Secretary that its course of instruction would have been in conformance with the requirements of this subsection.

      ‘(4) DEFINITION- For the purposes of this subsection, the term ‘telecommunications’ means the use of television, audio, or computer transmission, including open broadcast, closed circuit, cable, microwave, or satellite, audio conferencing, computer conferencing, or video cassettes or discs, except that such term does not include a course that is delivered using video cassette or disc recordings at such institution and that is not delivered in person to other students of that institution.

    ‘(n) STUDENTS WITH A FIRST BACCALAUREATE OR PROFESSIONAL DEGREE- A student shall not be ineligible for assistance under part B, C, D, and E of this title because such student has previously received a baccalaureate or professional degree.

    ‘(o) DATA BASE MATCHING- To enforce the Selective Service registration provisions of section 1113 of Public Law 97-252, the Secretary shall conduct data base matches with the Selective Service, using common demographic data elements. Appropriate confirmation, through an application output document or through other means, of any person’s registration shall fulfill the requirement to file a separate statement of compliance. In the absence of a confirmation from such data matches, an institution may also use data or documents that support either the student’s registration, or the absence of a registration requirement for the student, to fulfill the requirement to file a separate statement of compliance. The mechanism for reporting the resolution of nonconfirmed matches shall be prescribed by the Secretary in regulations.

    ‘(p) STUDY ABROAD- Nothing in this Act shall be construed to limit or otherwise prohibit access to study abroad programs approved by the home institution at which a student is enrolled. An otherwise eligible student who is engaged in a program of study abroad approved for academic credit by the home institution at which the student is enrolled shall be eligible to receive grant, loan, or work assistance under this title, without regard to whether such study abroad program is required as part of the student’s degree program.

    ‘(q) VERIFICATION OF SOCIAL SECURITY NUMBER- The Secretary of Education, in cooperation with the Commissioner of the Social Security Administration, shall verify any social security number provided by a student to an eligible institution under subsection (a)(4) and shall enforce the following conditions:

      ‘(1) Except as provided in paragraphs (2) and (3), an institution shall not deny, reduce, delay, or terminate a student’s eligibility for assistance under this part because social security number verification is pending.

      ‘(2) If there is a determination by the Secretary that the social security number provided to an eligible institution by a student is incorrect, the institution shall deny or terminate the student’s eligibility for any grant, loan, or work assistance under this title until such time as the student provides a correct social security number.

      ‘(3) If there is a determination by the Secretary that the social security number provided to an eligible institution by a student is incorrect, and a correct social security number cannot be provided by such student, and a loan has been guaranteed for such student under part B of this title, the institution shall notify and instruct the lender and guaranty agency making and guaranteeing the loan, respectively, to cease further disbursements of the loan, but such guaranty shall not be voided or otherwise nullified with respect to such disbursements made before the date that the lender and the guaranty agency receives such notice.

      ‘(4) Nothing in this subsection shall permit the Secretary to take any compliance, disallowance, penalty, or other regulatory action against--

        ‘(A) any institution of higher education with respect to any error in a social security number, unless such error was a result of fraud on the part of the institution; or

        ‘(B) any student with respect to any error in a social security number, unless such error was a result of fraud on the part of the student.’.

    (h) CLERICAL AMENDMENT- Section 801(a) of the National Literacy Act of 1991 is amended by striking ‘the Act’ and inserting ‘the Higher Education Act of 1965’.

SEC. 485. REFUND POLICY.

    (a) REFUND POLICIES AND REQUIREMENTS- Part G of title IV of the Act is further amended by inserting after section 484A the following new section:

‘SEC. 484B. INSTITUTIONAL REFUNDS.

    ‘(a) REFUND POLICY REQUIRED- Each institution of higher education participating in a program under this title shall have in effect a fair and equitable refund policy under which the institution refunds unearned tuition, fees, room and board, and other charges to a student who received grant, loan, or work assistance under this title, or whose parent received a loan made under section 428B on behalf of the student, if the student--

      ‘(1) does not register for the period of attendance for which the assistance was intended; or

      ‘(2) withdraws or otherwise fails to complete the period of enrollment for which the assistance was provided.

    ‘(b) DETERMINATIONS- The institution’s refund policy shall be considered to be fair and equitable for purposes of this section if that policy provides for a refund in an amount of at least the largest of the amounts provided under--

      ‘(1) the requirements of applicable State law;

      ‘(2) the specific refund requirements established by the institution’s nationally recognized accrediting agency and approved by the Secretary; or

      ‘(3) the pro rata refund calculation described in subsection (d), except that this paragraph will not apply to the institution’s refund policy for any student whose date of withdrawal from the institution is after the 60 percent point (in time) in the period of enrollment for which the student has been charged.

    ‘(c) DEFINITIONS- (1) As used in this section, the term ‘pro rata refund’ means a refund by the institution to a student attending such institution for the first time of not less than that portion of the tuition, fees, room and board, and other charges assessed the student by the institution equal to the portion of the period of enrollment for which the student has been charged that remains on the last day of attendance by the student, rounded downward to the nearest 10 percent of that period, less any unpaid charges owed by the student for the period of enrollment for which the student has been charged, and less a reasonable administrative fee not to exceed the lesser of 5 percent of the tuition, fees, room and board, and other charges assessed the student, or $100.

    ‘(2) For purposes of paragraph (1), ‘the portion of the period of enrollment for which the student has been charged that remains’, shall be determined--

      ‘(A) in the case of a program that is measured in credit hours, by dividing the total number of weeks comprising the period of enrollment for which the student has been charged into the number of weeks remaining in that period as of the last recorded day of attendance by the student;

      ‘(B) in the case of a program that is measured in clock hours, by dividing the total number of clock hours comprising the period of enrollment for which the student has been charged into the number of clock hours remaining to be completed by the student in that period as of the last recorded day of attendance by the student; and

      ‘(C) in the case of a correspondence program, by dividing the total number of lessons comprising the period of enrollment for which the student has been charged into the total number of such lessons not submitted by the student.’.

SEC. 486. INFORMATION DISSEMINATION.

    (a) INFORMATION DISSEMINATION ACTIVITIES- Section 485(a)(1) of the Act (20 U.S.C. 1092(a)(1)) is amended--

      (1) in subparagraph (F)--

        (A) by inserting ‘, as determined under section 484B,’ after ‘of the institution’;

        (B) by inserting before the semicolon at the end the following: ‘, which refunds shall be credited in the following order:

          ‘(i) to outstanding balances on loans under part B of this title,

          ‘(ii) to outstanding balances on loans under part D of this title,

          ‘(iii) to outstanding balances on loans under part E of this title,

          ‘(iv) to awards subpart 1 of part A of this title,

          ‘(v) to awards under subpart 3 of part A of this title,

          ‘(vi) to awards under part C of this title,

          ‘(vii) to other student assistance provided under this title, and

          ‘(viii) to the student.’.

      (2) by striking ‘and’ at the end of subparagraph (K);

      (3) by striking the period at the end of subparagraph (L) (as added by section 1 of Public Law 101-542) and inserting a semicolon;

      (4) by redesignating subparagraph (L) (as added by section 201 of Public Law 101-610) as subparagraph (M);

      (5) by striking the period at the end of subparagraph (M) (as redesignated by paragraph (3)) and inserting a semicolon and ‘and’; and

      (6) by adding at the end thereof the following new subparagraph:

      ‘(N) that enrollment in a program of study abroad approved for credit by the home institution may be considered enrollment in the home institution for purposes of applying for Federal student financial assistance.’.

    (b) EXIT COUNSELING- Section 485(b) of the Act is amended to read as follows:

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

      ‘(i) the average anticipated monthly repayments, a review of the repayment options available, and such debt and management strategies as the institution determines are designed to facilitate the repayment of such indebtedness; and

      ‘(ii) the terms and conditions under which the student may obtain partial cancellation or defer repayment of the principal and interest pursuant to sections 428(b), 464(c)(2), and 465.

    ‘(B) In the case of borrower who leaves an institution without the prior knowledge of the institution, the institution shall attempt to provide the information described in subparagraph (A) to the student in writing.

    ‘(2)(A) Each eligible institution shall require that the borrower of a loan made under parts B, D, or E submit to the institution, during the exit interview required by this subsection--

      ‘(i) the borrower’s expected permanent address after leaving the institution (regardless of the reason for leaving);

      ‘(ii) the name and address of the borrower’s expected employer after leaving the institution;

      ‘(iii) the address of the borrower’s next of kin; and

      ‘(iv) any corrections in the institution’s records relating the borrower’s name, address, social security number, references, and driver’s license number.

    ‘(B) The institution shall, within 60 days after the interview, forward any corrected or completed information received from the borrower to the guaranty agency indicated on the borrower’s student aid records.’.

    (c) CAMPUS SECURITY POLICY-

      (1) STATISTICS- Section 485(f)(1)(F) of the Act is amended to read as follows:

      ‘(F) Statistics concerning the occurrence on campus, during the most recent calendar year, and during the 2 preceding calendar years for which data are available, of the following criminal offenses reported to campus security authorities or local police agencies--

        ‘(i) murder;

        ‘(ii) sex offenses, forcible or nonforcible;

        ‘(iii) robbery;

        ‘(iv) aggravated assault;

        ‘(v) burglary; and

        ‘(vi) motor vehicle theft.’.

      (2) POLICY DEVELOPMENT- Section 485(f) of the Act is amended by adding at the end the following new paragraph:

    ‘(7)(A) Each institution of higher education participating in any program under this title shall develop and distribute as part of the report described in paragraph (1) a statement of policy regarding--

      ‘(i) such institution’s campus sexual assault programs, which shall be aimed at prevention of sex offenses; and

      ‘(ii) the procedures followed once a sex offense has occurred.

    ‘(B) The policy described in subparagraph (A) shall address the following areas:

      ‘(i) Education programs to promote the awareness of rape, acquaintance rape, and other sex offenses.

      ‘(ii) Possible sanctions to be imposed following the final determination of an on-campus disciplinary procedure regarding rape, acquaintance rape, or other sex offenses, forcible or nonforcible.

      ‘(iii) Procedures students should follow if a sex offense occurs, including who should be contacted, the importance of preserving evidence as may be necessary to the proof of criminal sexual assault, and to whom the alleged offense should be reported.

      ‘(iv) Procedures for on-campus disciplinary action in cases of alleged sexual assault, which shall include a clear statement that--

        ‘(I) the accuser and the accused are entitled to the same opportunities to have others present during a campus disciplinary proceeding; and

        ‘(II) both the accuser and the accused shall be informed of the outcome of any campus disciplinary proceeding brought alleging a sexual assault.

      ‘(v) Informing students of their options to notify proper law enforcement authorities, including on-campus and local police, and the option to be assisted by campus authorities in notifying such authorities, if the student so chooses.

      ‘(vi) Notification of students of existing counseling, mental health or student services for victims of sexual assault, both on campus and in the community.

      ‘(vii) Notification of students of options for, and available assistance in, changing academic and living situations after an alleged sexual assault incident, if so requested by the victim and if such changes are reasonably available.

    ‘(C) Nothing in this paragraph shall be construed to confer a private right of action upon any person to enforce the provisions of this paragraph.’.

      (3) EFFECTIVE DATE PROVISION- The amendment made by this subsection to subparagraph (F)(ii) of section 485(f)(1) of the Act shall be effective with respect to reports made pursuant to such section on or after September 1, 1993. The statistics required by subparagraph (F) of such section shall--

        (A) in the report required on September 1, 1992, include statistics concerning the occurrence on campus of offenses during the period from August 1, 1991, to July 31, 1992;

        (B) in the report required on September 1, 1993, include statistics concerning the occurrence on campus of offenses during (i) the period from August 1, 1991, to December 31, 1991, and (ii) the calendar year 1992;

        (C) in the report required on September 1, 1994, include statistics concerning the occurrence on campus of offenses during (i) the period from August 1, 1991, to December 31, 1991, and (ii) the calendar years 1992 and 1993; and

        (D) in the report required on September 1 of 1995 and each succeeding year, include statistics concerning the occurrence on campus of offenses during the three calendar years preceding the year in which the report is made.

SEC. 487. NATIONAL STUDENT LOAN DATA SYSTEM.

    (a) SYSTEM DEVELOPMENT- Section 485B(a) of the Act (20 U.S.C. 1093(a)) is amended in the matter preceding paragraph (1) by striking ‘and loans made under part E’ and inserting ‘and loans made under part E, and for allowing the electronic exchange of data between program participants and the system. In establishing such data system, the Secretary shall place a priority on providing for the monitoring of enrollment, student status, information about current loan holders and servicers, and internship and residency information. Such data system shall also permit borrowers to use the system to identify the current loan holders and servicers of such borrower’s loan.’.

    (b) STANDARDIZATION OF DATA REPORTING; USE OF COMMON IDENTIFIERS; INTEGRATION OF SYSTEMS- Section 485B of the Act is amended by adding at the end the following new subsections:

    ‘(e) STANDARDIZATION OF DATA REPORTING-

      ‘(1) IN GENERAL- The Secretary shall by regulation prescribe standards and procedures (including relevant definitions) that require all lenders and guaranty agencies to report information on all aspects of loans made under this part in uniform formats in order to permit the direct comparison of data submitted by individual lenders, servicers or guaranty agencies.

      ‘(2) ACTIVITIES- For the purpose of establishing standards under this section, the Secretary shall--

        ‘(A) consult with guaranty agencies, lenders, institutions of higher education, and organizations representing the groups described in paragraph (1);

        ‘(B) develop standards designed to be implemented by all guaranty agencies and lenders with minimum modifications to existing data processing hardware and software; and

        ‘(C) publish the specifications selected to be used to encourage the automation of exchanges of information between all parties involved in loans under this part.

    ‘(f) COMMON IDENTIFIERS- The Secretary shall, not later than July 1, 1993--

      ‘(1) revise the codes used to identify institutions and students in the student loan data system authorized by this section to make such codes consistent with the codes used in each database used by the Department of Education that contains information of participation in programs under this title; and

      ‘(2) modify the design or operation of the system authorized by this section to ensure that data relating to any institution is readily accessible and can be used in a form compatible with the integrated postsecondary education data system (IPEDS).

    ‘(g) INTEGRATION OF DATABASES- The Secretary shall integrate the National Student Loan Data System with the Pell Grant applicant and recipient databases as of January 1, 1994, and any other databases containing information on participation in programs under this title.’.

SEC. 488. SIMPLIFICATION OF THE LENDING PROCESS FOR BORROWERS.

    Part G of title IV of the Act (20 U.S.C. 1088 et seq.) is amended by inserting after section 485B the following new section:

‘SEC. 485C. SIMPLIFICATION OF THE LENDING PROCESS FOR BORROWERS.

    ‘(a) ALL LIKE LOANS TREATED AS ONE- To the extent practicable, and with the cooperation of the borrower, eligible lenders shall treat all loans made to a borrower under the same section of part B as one loan and shall submit one bill to the borrower for the repayment of all such loans for the monthly or other similar period of repayment. Any deferments on one such loan will be considered a deferment on the total amount of all such loans.

    ‘(b) ONE LENDER, ONE GUARANTY AGENCY- To the extent practicable, and with the cooperation of the borrower, the guaranty agency shall ensure that a borrower only have one lender, one holder, one guaranty agency, and one servicer with which to maintain contact.’.

SEC. 489. TRAINING IN FINANCIAL AID SERVICES.

    Section 486 of the Act (20 U.S.C. 1093) is amended to read as follows:

‘SEC. 486. TRAINING IN FINANCIAL AID SERVICES.

    ‘(a) PROGRAM AUTHORITY- The Secretary is authorized to provide grants to appropriate nonprofit private organizations or combinations of such organizations to provide training for student financial aid administrators and TRIO personnel, at all levels of experience, who provide or are involved in student financial aid services.

    ‘(b) USE OF FUNDS- Financial assistance under this section may be used for--

      ‘(1) the operation of short-term training institutes and special training programs for student financial aid administrators or TRIO personnel designed to--

        ‘(A) improve the professional management skills of participants in such institutes and programs;

        ‘(B) improve the delivery of student services;

        ‘(C) improve students’ or prospective students’ information on the availability and operation of student financial assistance programs; and

        ‘(D) improve the understanding and knowledge of the participants concerning the legislative and regulatory requirements of the student financial assistance programs and changes in such requirements; and

      ‘(2) the development of appropriate training materials.

    ‘(c) LIMITATIONS- Grants authorized under this section--

      ‘(1) shall be limited to not less than $1,000,000 in the case of single-year grants;

      ‘(2) shall be limited to not less than $1,000,000 per year in the case of multiple-year grants;

      ‘(3) shall be limited to a maximum of 3 years in the case of multiple-year grants; and

      ‘(4) may be renewed at the discretion of the Secretary.

    ‘(d) AUTHORIZATION OF APPROPRIATIONS AND USE OF FUNDS- There are authorized to be appropriated $5,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years to carry out the provisions of this section.’.

SEC. 490. PROGRAM PARTICIPATION AGREEMENTS.

    (a) IN GENERAL- Section 487(a) of the Act (20 U.S.C. 1094(a)) is amended--

      (1) in paragraph (3), by inserting before the period a comma and the following: ‘together with assurances that the institution will provide, upon request and in a timely fashion, information relating to the administrative capability and financial responsibility of the institution to--

        ‘(A) the Secretary;

        ‘(B) the appropriate State review entity designated under subpart 1 of part H;

        ‘(C) the appropriate guaranty agency; and

        ‘(D) the appropriate accrediting agency or association’;

      (2) in paragraph (8)--

        (A) by striking ‘at or before the time of application,’ and inserting ‘at or before the time of application (A)’; and

        (B) by inserting before the period at the end the following: ‘, and (B) relevant State licensing requirements of the State in which such institution is located for any job for which the course of instruction is designed to prepare such prospective students’; and

      (3) by adding at the end the following new paragraphs:

      ‘(13) The institution will not deny any form of Federal financial aid to any student who meets the eligibility requirements of this title on the grounds that the student is participating in a program of study abroad approved for credit by the institution.

      ‘(14)(A) The institution, in order to participate as an eligible institution under part B, will develop a Default Management Plan for approval by the Secretary as part of its initial application for certification as an eligible institution and will implement such Plan for two years thereafter.

      ‘(B) Any institution of higher education which changes ownership and any eligible institution which changes its status as a parent or subordinate institution shall, in order to participate as an eligible institution under part B, develop a Default Management Plan for approval by the Secretary and implement such Plan for two years after its change of ownership or status.

      ‘(15) The institution acknowledges the authority of the Secretary, guaranty agencies, lenders, accrediting agencies, the Secretary of Veterans Affairs, and State review entities under subpart 1 of part H to share with each other any information pertaining to the institution’s eligibility to participate in programs under this title or any information on fraud and abuse.

      ‘(16)(A) The institution will not knowingly employ an individual in a capacity that involves the administration of programs under this title, or the receipt of program funds under this title, who has been convicted of, or has pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of funds under this title, or has been judicially determined to have committed fraud involving funds under this title or contract with an institution or third party servicer that has been terminated under section 432 involving the acquisition, use, or expenditure of funds under this title, or who has been judicially determined to have committed fraud involving funds under this title.

      ‘(B) The institution will not knowingly contract with or employ any individual, agency, or organization that has been, or whose officers or employees have been--

        ‘(i) convicted of, or pled nolo contendere or guilty to, a crime involving the acquisition, use, or expenditure of funds under this title; or

        ‘(ii) judicially determined to have committed fraud involving funds under this title.

      ‘(17) The institution will complete surveys conducted as a part of the Integrated Postsecondary Education Data System (IPEDS) or any other Federal postsecondary institution data collection effort, as designated by the Secretary, in a timely manner and to the satisfaction of the Secretary.

      ‘(18)(A) With respect to any institution that offers athletically related student aid, the institution will--

        ‘(i) cause an annual compilation, independently audited not less often than every 3 years, to be prepared within 6 months after the end of its fiscal year, of--

          ‘(I) the total revenues, and the revenues from football, men’s basketball, women’s basketball, all other men’s sports combined, and all other women’s sports combined, derived by the institution from its intercollegiate athletics activities;

          ‘(II) the total expenses, and the expenses attributable to football, men’s basketball, women’s basketball, all other men’s sports combined and all other women’s sports combined, made by the institution for its intercollegiate athletics activities; and

          ‘(III) the total revenues and operating expenses of the institution; and

        ‘(ii) make the reports on such compilations and, where allowable by State law, the audits, available for inspection by the Secretary and the public.

      ‘(B) For the purpose of subparagraph (A)--

        ‘(i) revenues from intercollegiate athletics activities allocable to a sport shall include without limitation gate receipts, broadcast revenues, appearance guarantees and options, concessions and advertising, but revenues such as student activities fees or alumni contributions not so allocable shall be included in the calculation of total revenues only; and

        ‘(ii) expenses for intercollegiate athletics activities allocable to a sport shall include without limitation grants-in-aid, salaries, travel, equipment, and supplies, but expenses such as general and administrative overhead not so allocable shall be included in the calculation of total expenses only.

      ‘(19) The institution will not impose any penalty, including the assessment of late fees, the denial of access to classes, libraries, or other institutional facilities, or the requirement that the student borrow additional funds, on any student because of the student’s inability to meet his or her financial obligations to the institution as a result of the delayed disbursement of the proceeds of a loan made under this title due to compliance with the provisions of this title, or delays attributable to the institution.

      ‘(20) The institution will not provide any commission, bonus, or other incentive payment based directly or indirectly on success in securing enrollments or financial aid to any persons or entities engaged in any student recruiting or admission activities or in making decisions regarding the award of student financial assistance, except that this paragraph shall not apply to the recruitment of foreign students residing in foreign countries who are not eligible to receive Federal student assistance.

      ‘(21) The institution will meet the requirements established by the Secretary, State postsecondary review entities, and accrediting agencies pursuant to part H of this title.

      ‘(22) The institution will comply with the refund policy established pursuant to section 484B.’.

    (b) HEARINGS- Section 487 of the Act is amended--

      (1) in subsection (b)(2), by striking out ‘on the record’; and

      (2) in subsection (c)--

        (A) in the matter preceding subparagraph (A) of paragraph (1), by striking ‘is authorized to’ and inserting ‘shall’;

        (B) in paragraph (1)(D), by striking out ‘on the record,’ and inserting in lieu thereof a comma;

        (C) in paragraph (1)(F), by striking out ‘on the record’; and

        (D) in paragraph (2)--

          (i) in subparagraph (A), by striking out ‘on the record,’ and inserting in lieu thereof a comma; and

          (ii) in subparagraph (B)(i), by striking out ‘on the record,’ and inserting in lieu thereof a comma.

    (c) AUDITS; AVAILABILITY OF AUDIT INFORMATION- Section 487(c)(1)(A)(i) of the Act is amended--

      (1) by striking ‘a financial and compliance audit of an eligible institution,’ and inserting ‘a financial audit of an eligible institution with regard to the financial condition of the institution in its entirety, and a compliance audit of such institution’;

      (2) by striking ‘at least once every 2 years’ and inserting ‘on at least an annual basis’; and

      (3) by inserting ‘and shall be available to cognizant guaranty agencies, eligible lenders, State agencies, and the State review entities referred to in subpart 1 of part H’ after ‘submitted to the Secretary’.

    (d) INFORMATION- Section 487(c) of the Act is amended--

      (1) in paragraph (1)(B), by inserting ‘, including any matter the Secretary deems necessary to the sound administration of the financial aid programs, such as the pertinent actions of any owner, shareholder, or person exercising control over an eligible institution’ before the semicolon at the end thereof;

      (2) in paragraph (1), by redesignating subparagraphs (C) through (G) as subparagraphs (E) through (I), respectively;

      (3) by inserting after subparagraph (B) of such paragraph the following new subparagraphs:

      ‘(C)(i) except as provided in clause (ii), a compliance audit of a third party servicer (other than with respect to the servicer’s functions as a lender if such functions are otherwise audited under this part and such audits meet the requirements of this clause), with regard to any contract with an eligible institution, guaranty agency, or lender for administering or servicing any aspect of the student assistance programs under this title, at least once every year and covering the period since the most recent audit, conducted by a qualified, independent organization or person in accordance with standards established by the Comptroller General for the audit of governmental organizations, programs, and functions, and as prescribed in regulations of the Secretary, the results of which shall be submitted to the Secretary; or

      ‘(ii) with regard to a third party servicer that is audited under chapter 75 of title 31, United States Code, such audit shall be deemed to satisfy the requirements of clause (i) for the period covered by such audit;

      ‘(D)(i) a compliance audit of a secondary market with regard to its transactions involving, and its servicing and collection of, loans made under this title, at least once a year and covering the period since the most recent audit, conducted by a qualified, independent organization or person in accordance with standards established by the Comptroller General for the audit of governmental organizations, programs, and functions, and as prescribed in regulations of the Secretary, the results of which shall be submitted to the Secretary; or

      ‘(ii) with regard to a secondary market that is audited under chapter 75 of title 31, United States Code, such audit shall be deemed to satisfy the requirements of clause (i) for the period covered by the audit;’;

      (4) in subparagraph (H) (as redesignated) of such paragraph, by striking out ‘an individual or an organization’ and inserting in lieu thereof ‘a third party servicer’;

      (5) in subparagraph (I) (as redesignated) of such paragraph, by striking out ‘an individual or an organization’ and inserting in lieu thereof ‘a third party servicer’;

      (6) in paragraph (3), by inserting ‘, after consultation with each State review entity designated under subpart 1 of part H,’ after ‘shall publish’;

      (7) by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively;

      (8) by inserting immediately after paragraph (1) the following new paragraph:

    ‘(2) If an individual who, or entity that, exercises substantial control, as determined by the Secretary in accordance with the definition of substantial control in subpart 3 of part H, over one or more institutions participating in any program under this title, or, for purposes of paragraphs (1) (H) and (I), over one or more organizations that contract with an institution to administer any aspect of the institution’s student assistance program under this title, is determined to have committed one or more violations of the requirements of any program under this title, or has been suspended or debarred in accordance with the regulations of the Secretary, the Secretary may use such determination, suspension, or debarment as the basis for imposing an emergency action on, or limiting, suspending, or terminating, in a single proceeding, the participation of any or all institutions under the substantial control of that individual or entity.’; and

      (9) by adding at the end the following new paragraphs:

    ‘(5) The Secretary shall make readily available to appropriate guaranty agencies, eligible lenders, State review entities designated under subpart 1 of part H, and accrediting agencies or associations the results of the audits of eligible institutions conducted pursuant to paragraph (1)(A).

    ‘(6) The Secretary is authorized to provide any information collected as a result of audits conducted under this section, together with audit information collected by guaranty agencies, to any Federal or State agency having responsibilities with respect to student financial assistance, including those referred to in subsection (a)(15) of this section.’.

    ‘(7) Effective with respect to any audit conducted under this subsection after December 31, 1988, if, in the course of conducting any such audit, the personnel of the Department of Education discover, or are informed of, grants or other assistance provided by an institution in accordance with this title for which the institution has not received funds appropriated under this title (in the amount necessary to provide such assistance), including funds for which reimbursement was not requested prior to such discovery or information, such institution shall be permitted to offset that amount against any sums determined to be owed by the institution pursuant to such audit, or to receive reimbursement for that amount (if the institution does not owe any such sums).’.

    (e) CONSTRUCTION- Section 487 of the Act, as amended by subsection (a), is further amended by adding at the end the following:

    ‘(e) CONSTRUCTION- Nothing in the amendments made by the Higher Education Amendments of 1992 shall be construed to prohibit an institution from recording, at the cost of the institution, a hearing referred to in subsection (b)(2), subsection (c)(1)(D), or subparagraph (A) or (B)(i) of subsection (c)(2), of this section to create a record of the hearing, except the unavailability of a recording shall not serve to delay the completion of the proceeding. The Secretary shall allow the institution to use any reasonable means, including stenographers, of recording the hearing.’.

    (f) CONFORMING AMENDMENTS- Section 487 of the Act is amended--

      (1) by striking ‘subpart 3’ in subsection (a) and inserting ‘subpart 4’;

      (2) by striking ‘provided for in section 483(e)’ in subsection (a)(2); and

      (3) by striking ‘435(a)’ in subsection (d) and inserting ‘481’.

SEC. 491. QUALITY ASSURANCE; IDENTIFICATION NUMBERS.

    Part G of title IV of the Act is further amended by inserting after section 487 the following new sections:

‘SEC. 487A. QUALITY ASSURANCE PROGRAM.

    ‘(a) IN GENERAL- The Secretary is authorized to select institutions for voluntary participation in a Quality Assurance Program that provides participating institutions with an alternative management approach through which individual schools develop and implement their own comprehensive systems to verify student financial aid application data, thereby enhancing program integrity within the student aid delivery system. The Quality Assurance Program authorized by this section shall be based on criteria that include demonstrated institutional performance, as determined by the Secretary, and shall take into consideration current quality assurance goals, as determined by the Secretary.

    ‘(b) EXEMPTION FROM REQUIREMENTS- The Secretary is authorized to exempt any institution participating in the Quality Assurance Program from any reporting or verification requirements in this title, and may substitute such quality assurance reporting as the Secretary deems necessary to ensure accountability and compliance with the purposes of the programs under this title.

    ‘(c) REMOVAL FROM THE PROGRAM- The Secretary is authorized to determine--

      ‘(1) when an institution that is unable to administer the Quality Assurance Program must be removed from such program, and

      ‘(2) when institutions desiring to cease participation in such program will be required to complete the current award year under the requirements of the Quality Assurance Program.

    ‘(d) EXPERIMENTAL SITES- (1) The Secretary is authorized to select institutions for voluntary participation as experimental sites to provide recommendations to the Secretary on the impact and effectiveness of proposed regulations or new management initiatives.

    ‘(2) The Secretary is authorized to exempt any institution participating as an experimental site from any requirements in this title, or in regulations prescribed under this title, that would bias experimental results.

    ‘(e) DEFINITIONS- For purposes of this section, ‘current award year’ is defined as the award year during which the participating institution indicates its intention to cease participation.

‘SEC. 487B. ASSIGNMENT OF IDENTIFICATION NUMBERS.

    ‘The Secretary shall assign to each participant in title IV programs, including institutions, lenders, and guaranty agencies, a single Department of Education identification number to be used to identify its participation in each of the title IV programs.’.

SEC. 492. INTER-PROGRAM TRANSFERS.

    Section 488 of the Act (20 U.S.C. 1095) is amended by striking the first sentence and inserting the following: ‘In order to offer an arrangement of types of aid, including institutional and State aid which best fits the needs of each individual student, an institution may (1) transfer a total of 25 percent of the institutions allotment under section 462 to the institution’s allotment under section 413D or 442 (or both); and (2) transfer 25 percent of the institution’s allotment under section 442 to the institution’s allotment under section 413D. Funds transferred to an institution’s allotment under another section may be used as a part of and for the same purposes as funds allotted under that section.’.

SEC. 493. ADMINISTRATIVE EXPENSES.

    (a) ADMINISTRATIVE EXPENSES- Section 489(a) of the Act is amended--

      (1) in the second sentence, by striking ‘(other than section 447)’;

      (2) by striking the fourth sentence (relating to payments with respect to section 447); and

      (3) by striking ‘subpart 2’ each place it appears and inserting ‘subpart 3’.

    (b) NONTRADITIONAL STUDENTS- Section 489(b) of the Act (20 U.S.C. 1096) is amended--

      (1) by inserting ‘(1)’ before ‘The sums’; and

      (2) by adding at the end the following new paragraph:

    ‘(2) If the institution enrolls a significant number of students who are (A) attending the institution less than full time, or (B) independent students, the institution shall use a reasonable proportion of the funds available under this section for financial aid services during times and in places that will most effectively accommodate the needs of such students.’.

SEC. 494. REPEAL.

    Section 489A of the Act is repealed.

SEC. 495. CRIMINAL PENALTIES.

    Section 490 of the Act (20 U.S.C. 1097) is amended to read as follows:

    ‘(a) IN GENERAL- Any person who knowingly and willfully embezzles, misapplies, steals, obtains by fraud, false statement, or forgery, or fails to refund any funds, assets, or property provided or insured under this title or attempts to so embezzle, misapply, steal, obtain by fraud, false statement or forgery, or fail to refund any funds, assets, or property, shall be fined not more than $20,000 or imprisoned for not more than 5 years, or both, except if the amount so embezzled, misapplied, stolen, obtained by fraud, false statement, or forgery, or failed to be refunded does not exceed $200, then the fine shall not be more than $5,000 and imprisonment shall not exceed one year, or both.

    ‘(b) ASSIGNMENT OF LOANS- Any person who knowingly and willfully makes any false statement, furnishes any false information, or conceals any material information in connection with the assignment of a loan which is made or insured under this title or attempts to so make any false statement, furnish any false information, or conceal any material information in connection with such assignment shall, upon conviction thereof, be fined not more than $10,000 or imprisoned for not more than one year, or both.

    ‘(c) INDUCEMENTS TO LEND OR ASSIGN- Any person who knowingly and willfully makes an unlawful payment to an eligible lender under part B or attempts to make such unlawful payment as an inducement to make, or to acquire by assignment, a loan insured under such part shall, upon conviction thereof, be fined not more than $10,000 or imprisoned for not more than one year, or both.

    ‘(d) OBSTRUCTION OF JUSTICE- Any person who knowingly and willfully destroys or conceals any record relating to the provision of assistance under this title or attempts to so destroy or conceal with intent to defraud the United States or to prevent the United States from enforcing any right obtained by subrogation under this part, shall upon conviction thereof, be fined not more than $20,000 or imprisoned not more than 5 years, or both.’.

SEC. 496. ADVISORY COMMITTEE ON STUDENT FINANCIAL ASSISTANCE.

    (a) INDEPENDENT CONTROL- Section 491(b) of the Act (20 U.S.C. 1098) is amended by inserting after the first sentence the following: ‘Notwithstanding Department of Education policies and regulations, the Advisory Committee shall exert independent control of its budget allocations and expenditures, personnel decisions and processes, procurements, and other administrative and management functions. The Advisory Committee’s administration and management shall be subject to the usual and customary Federal audit procedures.’.

    (b) FUNCTIONS; MEMBERSHIP- Section 491(d) of the Act is amended--

      (1) by striking ‘and in assessing the impact of legislative and administrative policy proposals’ in paragraph (3);

      (2) by redesignating paragraphs (4), (5), (6), and (7) as paragraphs (5), (6), (7), and (8), respectively; and

      (3) by inserting after paragraph (3) the following new paragraph:

      ‘(4) assess the impact of legislative and administrative policy proposals;’;

      (4) by striking ‘and’ at the end of paragraph (7) (as redesignated);

      (5) by striking the period at the end of paragraph (8) (as redesignated) and inserting a semicolon and ‘and’; and

      (6) by adding at the end the following new paragraph--

      ‘(9) make special efforts to advise Members of Congress and such Members’ staff of the findings and recommendations made pursuant to this paragraph.’.

    (c) EXEMPTION- Section 491(h)(4) of the Act is amended--

      (1) by striking ‘in accordance with’ and inserting ‘without regard to’; and

      (2) by inserting ‘and to set pay in accordance with such section’ before the period.

    (d) AVAILABILITY OF FUNDS- Section 491(i) of the Act is amended by striking ‘$500,000’ and inserting ‘$750,000’.

    (e) ADDITIONAL PROVISIONS- Section 491 of the Act is amended by striking subsection (j) and inserting in lieu thereof:

    ‘(j) SPECIAL ANALYSES AND ACTIVITIES- The committee shall--

      ‘(1) monitor and evaluate the program modifications resulting from the enactment of the Higher Education Amendments of 1992, especially as such amendments relate to the need analysis;

      ‘(2) monitor and evaluate the implementation, pursuant to section 483, of a Free Application for Federal Student Aid and the process for determining eligibility and awards for programs under this title, including a simplified reapplication process;

      ‘(3) assess the adequacy of current methods for disseminating information about programs under this title and recommend improvements, as appropriate, regarding early needs assessment and information for first-year high school students; and

      ‘(4) assess the adequacy of methods of monitoring student debt burden.

    ‘(k) TERM OF THE COMMITTEE- Notwithstanding the sunset and charter provisions of the Federal Advisory Committee Act (5 U.S.C. App. I) or any other statute or regulation, the Advisory Committee shall be authorized until October 1, 1998.

    ‘(l) STUDENT LOAN PROGRAM SIMPLIFICATION STUDY- (1) The Advisory Committee shall conduct a thorough study of means of simplifying all aspects of the loan programs under part B of this title. In carrying out the study, the Advisory Committee shall examine, at a minimum--

      ‘(A) reduction of paperwork burdens experienced by financial aid administrators resulting from the current structure of such loan programs;

      ‘(B) promotion of simplification and standardization of forms, procedures, and all other aspects of guaranty agency operations for the purpose of facilitating data exchanges with such agencies (including the National Student Loan Database) and facilitating Department of Education oversight;

      ‘(C) simplification of the repayment process to minimize borrower confusion, including encouragement of single holder ownership of all of an individual’s loans;

      ‘(D) encouragement of efficient utilization of loan programs to minimize multiple program borrowing in postsecondary education; and

      ‘(E) other proposals which are designed to reduce the administrative burdens on, and paperwork required of, students, educational institutions, guaranty agencies, lenders, secondary markets, and the Secretary submitted in response to a general solicitation by the Advisory Committee.

    ‘(2) The Advisory Committee shall consult with the Committee on Education and Labor of the House of Representatives and the Committee on Labor and Human Resources of the Senate in carrying out the study required by this subsection.

    ‘(3) The Advisory Committee shall, not later than 1 year after the date of enactment of this Act, prepare and submit to the Committee on Education and Labor of the House of Representatives and the Committee on Labor and Human Resources of the Senate a report on the study required by this subsection.’.

SEC. 497. REGIONAL MEETINGS; NEGOTIATED RULEMAKING; ADMINISTRATIVE EXPENSES.

    Part G of title IV of the Act is further amended by adding at the end the following new sections:

‘SEC. 492. REGIONAL MEETINGS AND NEGOTIATED RULEMAKING.

    ‘(a) MEETINGS-

      ‘(1) IN GENERAL- The Secretary shall convene regional meetings to obtain public involvement in the development of proposed regulations for parts B, G, and H of this title. Such meetings shall include individuals and representatives of the groups involved in student financial assistance programs under this title, such as students, legal assistance organizations that represent students, institutions of higher education, guaranty agencies, lenders, secondary markets, loan servicers, guaranty agency servicers, and collection agencies.

      ‘(2) ISSUES- During such meetings, the Secretary shall provide for a comprehensive discussion and exchange of information concerning the implementation of parts B, G, and H, as amended by the Higher Education Amendments of 1992. The Secretary shall take into account the information received at such meetings in the development of proposed regulations and shall publish a summary of such information in the Federal Register together with such proposed regulations.

    ‘(b) DRAFT REGULATIONS- After holding regional meetings and before publishing proposed regulations in the Federal Register, the Secretary shall prepare draft regulations implementing parts B, G, and H of this title as amended by the Higher Education Amendments of 1992 and shall submit such regulations to a negotiated rulemaking process. The Secretary shall follow the guidance provided in sections 305.82-4 and 305.85-5 of chapter 1, Code of Federal Regulations, and any successor recommendation, regulation, or law. Participants in the negotiations process shall be chosen by the Secretary from individuals nominated by groups participating in the regional meetings described in subsection (a)(1), and shall include both representatives of such groups from Washington, D.C., and industry participants. To the extent possible, the Secretary shall select individuals reflecting the diversity in the industry, representing both large and small participants, as well as individuals serving local areas and national markets. The negotiation process shall be conducted in a timely manner in order that the final regulations may be issued by the Secretary within the 240-day period described in section 431(g) of the General Education Provisions Act.

    ‘(c) APPLICABILITY OF FEDERAL ADVISORY COMMITTEE ACT- The Federal Advisory Committee Act shall not apply to activities carried out under this section.

    ‘(d) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated in any fiscal year or made available from funds appropriated to carry out this part in any fiscal year such sums as may be necessary to carry out the provisions of this section, except that if no funds are appropriated pursuant to this subsection, the Secretary shall make funds available to carry out this section from amounts appropriated for the operations and expenses of the Department of Education.

‘SEC. 493. AUTHORIZATION OF APPROPRIATIONS FOR ADMINISTRATIVE EXPENSES.

    ‘There are authorized to be appropriated such sums as may be necessary for fiscal year 1993 and for each succeeding fiscal year thereafter for administrative expenses necessary for carrying out this title, including expenses for staff personnel, program reviews, and compliance activities.’.

SEC. 498. EFFECTIVE DATES FOR AMENDMENTS TO PART G.

    The changes made in part G of title IV of the Act by the amendments made by this part shall take effect on the date of enactment of this Act, except that--

      (1) as otherwise provided in such part G;

      (2) the changes in section 481(a), relating to the definition of institution of higher education, other than paragraph (4) of such section, shall be effective on and after October 1, 1992;

      (3) section 481(e) as added by such amendments, relating to the definition of eligible program, shall be effective on and after July 1, 1993;

      (4) section 484(m)(1), relating to proportion of courses permitted to be correspondence courses, as added by such amendments shall be effective on and after October 1, 1992;

      (5) the changes in section 485, relating to disclosures, shall be effective with respect to periods of enrollment beginning on or after July 1, 1993;

      (6) the changes in section 488, relating to transfers of allotments, shall apply with respect to funds provided for award years beginning on or after July 1, 1993; and

      (7) the changes in section 489, relating to payments for administrative expenses, shall apply with respect to funds provided for award years beginning on or after July 1, 1993.

PART H--PROGRAM INTEGRITY

SEC. 499. ESTABLISHMENT OF NEW PART H.

    Title IV of the Act is amended by adding at the end the following new part:

‘PART H--PROGRAM INTEGRITY TRIAD

‘Subpart 1--State Postsecondary Review Program

‘SEC. 494. STATE POSTSECONDARY REVIEW PROGRAM.

    ‘(a) PURPOSE- It is the purpose of this section to authorize the Secretary to enter into agreements that--

      ‘(1) designate one State postsecondary review entity in each State to be responsible for the conduct or coordination of the review under section 494C(d) of institutions of higher education, reported to the State by the Secretary pursuant to section 494C(a), for the purposes of determining eligibility under this title; and

      ‘(2) provide Federal funds to each State postsecondary review entity for performing the functions required by such agreements with the Secretary.

    ‘(b) PROGRAM AUTHORITY- The Secretary shall, in accordance with the provisions of this subpart, enter into agreements with each of the States to carry out the purposes of this subpart. If any State declines to enter into an agreement with the Secretary for the purposes of this subpart, the provisions of this subpart which refer to the State, with respect to such State, shall refer to the Secretary, who may make appropriate arrangements with agencies or organizations of demonstrated competence in reviewing institutions of higher education.

    ‘(c) FAILURE TO COMPLY WITH AGREEMENT- If a State fails to enter into an agreement under this section or fails to meet the requirements of its agreement with the Secretary under this subpart--

      ‘(1) the Secretary--

        ‘(A) may not designate as eligible for participation in any program under this title any new institution (including new branch campuses) or any institution that has changed ownership, pursuant to section 481 and subpart 3 of this part; and

        ‘(B) may grant only provisional certification for all institutions in the State pursuant to subpart 3 of this part; and

      ‘(2) the State shall be ineligible to receive funds under section 494B of this subpart, subpart 4 of part A of this title, and chapter 2 of subpart 2 of part A of this title.

‘SEC. 494A. STATE POSTSECONDARY REVIEW ENTITY AGREEMENTS.

    ‘(a) STATE ORGANIZATION STRUCTURES- (1) Each agreement under this subpart shall describe a State organizational structure responsible for carrying out the review under section 494C(d) of institutions reported to the State by the Secretary pursuant to section 494C(a). Each such entity’s action in reviewing such institutions shall, for purposes of this subpart, be considered to be the action of the State.

    ‘(2) For the purposes of this subpart, the designation of a State postsecondary review entity for the purpose of entering into an agreement with the Secretary shall be in accordance with the State law of each individual State with respect to the authority to make legal agreements between the State and the Federal Government.

    ‘(3) Except as provided in paragraph (6), nothing in this subpart shall be construed to authorize the Secretary to require any State to adopt, as a condition for entering into an agreement, a specific State organizational structure.

    ‘(4) Except as provided in paragraph (6), nothing in this subpart shall be construed--

      ‘(A) as a limitation on the authority of any State to adopt a State organization structure for postsecondary education agencies, or programs, or institutions of higher education as appropriate to the needs, traditions, and circumstances of that State;

      ‘(B) as a limitation on the authority of a State entering into an agreement pursuant to this subpart to modify the State organizational structure at any time subsequent to entering into such agreement;

      ‘(C) as a limitation on the authority of any State to enter into an agreement for purposes of this subpart as a member of a consortium of States;

      ‘(D) as an authorization for the Secretary to withhold funds from any State or postsecondary institution on the basis of compliance with a State’s constitution or laws;

      ‘(E) as an authorization for any State postsecondary review entity to exercise planning, policy, coordinating, supervisory, budgeting, or administrative powers over any postsecondary institution; or

      ‘(F) as a limitation on the use of State audits for the purpose of compliance with applicable standards under section 494C(d).

    ‘(5) Nothing in this subpart shall be construed to limit the authority or activities of any State loan insurance program established under section 428(b) of this title or of any relevant State licensing authority which grants approval for institutions of higher education to operate within a State or their authority to contact the Secretary directly.

    ‘(6) Notwithstanding the provisions of paragraphs (2), (3), and (4) of this subsection, the Secretary may require each State to designate an entity responsible for the conduct or coordination of the review of institutions under this title.

    ‘(b) CONTENTS OF AGREEMENTS- Agreements between each State and the Secretary shall contain the following elements:

      ‘(1) A designation of a single State postsecondary review entity, which represents all entities of that State which are responsible for--

        ‘(A) granting State authorization to each institution of higher education in that State for the purposes of this title, and

        ‘(B) ensuring that each institution of higher education in that State remains in compliance with the standards developed pursuant to section 494C.

      ‘(2) Assurances that the State will review institutions of higher education for the purpose of determining eligibility under this title on a schedule to coincide with the dates set by the Secretary to certify or recertify such institutions of higher education as provided in section 481 and subpart 3 of this part.

      ‘(3) Assurances that the appropriate State postsecondary review entity will perform the functions authorized by this subpart and will keep such records and provide such information to the Secretary as may be requested for financial and compliance audits and program evaluation, consistent with the responsibilities of the Secretary.

      ‘(4) A description of the relationship between the State postsecondary review entity designated for the purposes of this subpart and (A) the agency or agencies designated for the purposes of chapter 36 of title 38 of the United States Code, (B) the loan insurance program established under section 428(b) of this title for that State, and (C) the grant agency established under section 415C of this title.

      ‘(5) A plan for performing the functions described in section 494C of this subpart.

    ‘(c) FEDERAL RESPONSIBILITY- Notwithstanding any other provision of law, no State shall be required to enter into an agreement with the Secretary under this subpart for performing the review functions required by such agreement unless the Congress appropriates funds for this subpart.

‘SEC. 494B. FEDERAL REIMBURSEMENT OF STATE POSTSECONDARY REVIEW COSTS.

    ‘(a) PAYMENTS- Subject to subsection (b), the Secretary shall reimburse the States for the costs of performing the functions required by agreements with the Secretary authorized under this subpart. Such costs shall include expenses for providing initial and continuing training to State personnel and other personnel in the State, including personnel at institutions of higher education subject to review, to serve the purposes of this subpart. Reimbursement shall be provided for necessary activities which supplement, but do not supplant, existing licensing or review functions conducted by the State. The Secretary shall also reimburse such entities for work performed by their subcontractors and consultants where such work has a direct relationship to the requirements of agreements with the Secretary under this subpart.

    ‘(b) AUTHORIZATION OF APPROPRIATIONS- For the purpose of enabling the Secretary to make payments to States which have made agreements with the Secretary under this subpart, there is authorized to be appropriated $75,000,000 for fiscal year 1993, and such sums as may be necessary for each of the 4 succeeding fiscal years.

‘SEC. 494C. FUNCTIONS OF STATE REVIEW ENTITIES.

    ‘(a) INITIAL REVIEW- The Secretary shall review all institutions of higher education in a State which are eligible or which desire to become eligible under this title to determine if such institutions meet any of the criteria provided in subsection (b). With respect to those institutions of higher education that meet one or more of the criteria provided in subsection (b), the Secretary shall inform the State in which such institutions are located that the institutions have met such criteria, and these institutions shall be reviewed by the State pursuant to the standards provided in subsection (d). The Secretary shall supply the State with a copy of the institutional audits, required pursuant to section 487(c), for the institutions which shall be reviewed by the State. In addition to those institutions identified by the Secretary, the State may, subject to approval by the Secretary, review additional institutions which meet one or more of the criteria provided in subsection (b), based on more recent data available to the State, or which the State has reason to believe are engaged in fraudulent practices. If the Secretary fails to approve or disapprove a State request to review additional institutions within 21 days, the State may proceed to review such additional institutions as if approved by the Secretary.

    ‘(b) REVIEW CRITERIA- The criteria for the initial review of institutions of higher education are as follows:

      ‘(1) A cohort default rate (as defined in section 435(m)) equal to or greater than 25 percent.

      ‘(2) A cohort default rate (as defined in such section) equal to or greater than 20 percent and either--

        ‘(A) more than two-thirds of the institution’s total undergraduates who are enrolled on at least a half-time basis receive assistance under this title (except subparts 4 and 6 of part A); or

        ‘(B) two-thirds or more of the institution’s education and general expenditures are derived from funds provided to students enrolled at the institution from the programs established under this title (except subparts 4 and 6 of part A and section 428B).

      ‘(3) Two-thirds or more of the institution’s education and general expenditures are derived from funds provided to students enrolled at the institution pursuant to subpart 1 of part A of this title.

      ‘(4) A limitation, suspension, or termination action by the Secretary against the institution pursuant to section 487 during the preceding 5 years.

      ‘(5) An audit finding during the 2 most recent audits of an institution of higher education’s conduct of the programs established by this title that resulted in the repayment by the institution of amounts greater than 5 percent of the funds such institution received from the programs assisted under this title for any one year.

      ‘(6) A citation of an institution by the Secretary for failure to submit audits required by this title in a timely fashion.

      ‘(7) A year-to-year fluctuation of more than 25 percent in the amounts received by students enrolled at the institution from either Federal Pell Grant, Federal Stafford Loan, or Federal Supplemental Loans to Students programs, which are not accounted for by changes in these programs.

      ‘(8) Failure to meet financial responsibility standards pursuant to subpart 3 of this part.

      ‘(9) A change of ownership of the institution that results in a change of control which includes (but is not limited to)--

        ‘(A) the sale of the institution or the majority of its assets;

        ‘(B) the division of 1 or more institutions into 2 or more institutions;

        ‘(C) the transfer of the controlling interest in stock of the institution or its parent corporation;

        ‘(D) the transfer of the controlling interest of stock of the institution to its parent corporation; or

        ‘(E) the transfer of the liabilities of the institution to its parent corporation.

      ‘(10) Except with regard to any public institution that is affiliated with a State system of higher education, participation in any of the programs established pursuant to subparts 1 and 3 of part A, part B, part C, and part E of this title for less than 5 years.

      ‘(11) A pattern of student complaints pursuant to subsection (j) related to the management or conduct of the programs established by this title or relating to misleading or inappropriate advertising and promotion of the institution’s program, which in the judgment of the Secretary are sufficient to justify review of the institution.

    ‘(c) USE OF RECENT DATA- The criteria provided for in subsection (b) shall be measured on the basis of the most recent data available to the Secretary. Institutions may request verification of the data used by the Secretary.

    ‘(d) REVIEW STANDARDS- Institutions which meet 1 or more of the criteria in subsection (b) shall be reviewed by the appropriate State entity in accordance with published State standards that are consistent with the constitution and laws of the State, developed in consultation with the institutions in the State, and subject to disapproval by the Secretary. Such review shall determine the following:

      ‘(1) The availability to students and prospective students of catalogs, admissions requirements, course outlines, schedules of tuition and fees, policies regarding course cancellations, and the rules and regulations of the institution relating to students and the accuracy of such catalogs and course outlines in reflecting the courses and programs offered by the institution.

      ‘(2) Assurance that the institution has a method to assess a student’s ability to successfully complete the course of study for which he or she has applied.

      ‘(3) Assurance that the institution maintains and enforces standards relating to academic progress and maintains adequate student and other records.

      ‘(4) Compliance by the institution with relevant safety and health standards, such as fire, building, and sanitation codes.

      ‘(5) The financial and administrative capacity of the institution as appropriate to a specified scale of operations and the maintenance of adequate financial and other information necessary to determine the financial and administrative capacity of the institution.

      ‘(6) For institutions financially at risk, the adequacy of provisions to provide for the instruction of students and to provide for the retention and accessibility of academic and financial aid records of students in the event the institution closes.

      ‘(7) If the stated objectives of the courses or programs of the institution are to prepare students for employment, the relationship of the tuition and fees to the remuneration that can be reasonably expected by students who complete the course or program and the relationship of the courses or programs (including the appropriateness of the length of such courses) to providing the student with quality training and useful employment in recognized occupations in the State.

      ‘(8) Availability to students of relevant information by institutions of higher education, including--

        ‘(A) information relating to market and job availability for students in occupational, professional, and vocational programs; and

        ‘(B) information regarding the relationship of courses to specific standards necessary for State licensure in specific occupations.

      ‘(9) The appropriateness of the number of credit or clock hours required for the completion of programs or of the length of 600-hour courses.

      ‘(10) Assessing the actions of any owner, shareholder, or person exercising control over the educational institution which may adversely affect eligibility for programs under this title.

      ‘(11) The adequacy of procedures for investigation and resolution of student complaints.

      ‘(12) The appropriateness of advertising and promotion and student recruitment practices.

      ‘(13) That the institution has a fair and equitable refund policy to protect students.

      ‘(14) The success of the program at the institution, including--

        ‘(A) the rates of the institution’s students’ program completion and graduation, taking into account the length of the program at the institution and the selectivity of the institution’s admissions policies;

        ‘(B) the withdrawal rates of the institution’s students;

        ‘(C) with respect to vocational and professional programs, the rates of placement of the institution’s graduates in occupations related to their course of study;

        ‘(D) where appropriate, the rate at which the institution’s graduates pass licensure examinations; and

        ‘(E) the variety of student completion goals, including transfer to another institution of higher education, full-time employment in the field of study, and military service.

      ‘(15) With respect to an institution which meets 1 or more of the criteria in subsection (b), the State shall contract with the appropriate approved accrediting agency or association (described in subpart 2 of this part) or another peer review system with demonstrated competence in assessing programs (pursuant to the authority contained in subsection (f)) to carry out a review or provide information regarding such agency’s or association’s assessment of the following: The quality and content of the institution’s courses or programs of instruction, training, or study in relation to achieving the stated objectives for which the courses or programs are offered, including the adequacy of the space, equipment, instructional materials, staff, and student support services (including student orientation, counseling, and advisement) for providing education and training that meets such stated objectives.

    ‘(e) SUBSTITUTIONS PROHIBITED- The appropriate State postsecondary review entity may not substitute either (1) accreditation by a private accrediting agency or body, or (2) compliance audits performed by a State guaranty agency established under section 428(b) of this title, for State review of compliance with the standards in subsection (d).

    ‘(f) STATE CONTRACTS- If the appropriate State postsecondary review entity contracts with a private agency or body or an accreditation body or peer review system for assistance in performing State postsecondary review entity functions, such contract shall be provided for in the agreement with the Secretary required by section 494A.

    ‘(g) PROHIBITION ON UNRELATED REQUIREMENTS- Notwithstanding any of the provisions of this subpart, the Secretary shall not require a State to establish standards that are unrelated to ensuring institutional or program integrity or that violate the provisions of a State’s constitution or laws.

    ‘(h) INSTITUTIONAL ELIGIBILITY- A State postsecondary review entity may determine that an institution of higher education shall not be eligible to participate in programs under this title based on its own findings or the findings of a Federal entity in accordance with the following procedures:

      ‘(1) STATE FINDINGS- If the appropriate State postsecondary review entity finds that an institution of higher education does not meet one or more of the standards in subsection (d) of this section, such State postsecondary review entity shall notify the Secretary of its findings and the actions that such entity is taking, or has taken, in response to such findings within a time period prescribed by the Secretary by regulation. If a State postsecondary review entity determines an institution of higher education shall not be eligible for participation in programs under this title, such State postsecondary review entity shall so notify the Secretary. Upon receipt of such notification of ineligibility, the Secretary shall immediately terminate the participation of such institutions in the programs authorized by this title.

      ‘(2) SECRETARY’S FINDINGS- If the Secretary or any other Federal entity takes, or plans to take, any action against any institution of higher education (including any actions taken under section 487), the Secretary shall notify the appropriate State postsecondary review entity (or entities, in the case of multi-State institutions) of such action within a time period prescribed in the Secretary’s regulations.

      ‘(3) PROCEDURAL PROTECTIONS FOR DISAPPROVAL- The Secretary shall, by regulation, prescribe minimum procedural standards for the disapproval of institutions of higher education by the appropriate State postsecondary review entity or entities for purposes of this title.

    ‘(i) LIMIT ON STATE POSTSECONDARY REVIEW AGENCY FUNCTIONS- The functions of State postsecondary review entity shall not include performing financial and compliance audits as may be required under sections 428 or 487 of this Act.

    ‘(j) CONSUMER COMPLAINTS- A State, in consultation with the institutions of higher education in the State, shall establish and publicize the availability of procedures for receiving and responding to complaints from students, faculty, and others about institutions of higher education and shall keep records of such complaints in order to determine their frequency and nature for specific institutions of higher education.

    ‘(k) ENFORCEMENT MECHANISMS- Nothing in this subpart shall restrict the authority of the States to establish mechanisms to enforce the standards established under subsection (d) or require the States to establish specific mechanisms recommended by the Secretary.

‘Subpart 2--Accrediting Agency Approval

‘SEC. 496. APPROVAL OF ACCREDITING AGENCY OR ASSOCIATION.

    ‘(a) STANDARDS REQUIRED- No accrediting agency or association may be determined by the Secretary to be a reliable authority as to the quality of education or training offered for the purposes of this Act or for other Federal purposes, unless the agency or association meets standards established by the Secretary pursuant to this section. The Secretary shall, after notice and opportunity for a hearing, establish standards for such determinations. Such standards shall include an appropriate measure or measures of student achievement. Such standards shall require that--

      ‘(1) the accrediting agency or association shall be a State, regional, or national agency or association and shall demonstrate the ability and the experience to operate as an accrediting agency or association within the State, region, or nationally, as appropriate;

      ‘(2) such agency or association--

        ‘(A)(i) for the purpose of participation in programs under this Act, has a voluntary membership and has as a principal purpose the accrediting of institutions of higher education; or

        ‘(ii) for the purpose of participation in other programs administered by the Department of Education or other Federal agencies, has a voluntary membership and has as its principal purpose the accrediting of institutions of higher education or programs;

        ‘(B) is a State agency approved by the Secretary for the purpose described in subparagraph (A); or

        ‘(C) is an agency or association that, for the purpose of determining eligibility for student assistance under this title, conducts accreditation through (i) a voluntary membership organization of individuals participating in a profession, or (ii) an agency or association which has as its principal purpose the accreditation of programs within institutions, which institutions are accredited by another agency or association recognized by the Secretary;

      ‘(3) if such agency or association is an agency or association described in--

        ‘(A) subparagraph (A) of paragraph (2), then such agency or association is separate and independent, both administratively and financially of any related, associated, or affiliated trade association or membership organization;

        ‘(B) subparagraph (B) of paragraph (2), then such agency or association has been recognized by the Secretary on or before October 1, 1991; or

        ‘(C) subparagraph (C) of paragraph (2) and such agency or association has been recognized by the Secretary on or before October 1, 1991, then the Secretary may waive the requirement that such agency or association is separate and independent, both administratively and financially of any related, associated, or affiliated trade association or membership organization upon a demonstration that the existing relationship has not served to compromise the independence of its accreditation process;

      ‘(4) such agency or association consistently applies and enforces standards that ensure that the courses or programs of instruction, training, or study at the institution of higher education are of sufficient quality to achieve, for the duration of the accreditation period, the stated objective for which the courses or the programs are offered;

      ‘(5) the standards of accreditation of the agency or association assess the institution’s--

        ‘(A) curricula;

        ‘(B) faculty;

        ‘(C) facilities, equipment, and supplies;

        ‘(D) fiscal and administrative capacity as appropriate to the specified scale of operations;

        ‘(E) student support services;

        ‘(F) recruiting and admissions practices, academic calendars, catalogs, publications, grading and advertising;

        ‘(G) program length and tuition and fees in relation to the subject matters taught and the objectives of the degrees or credentials offered;

        ‘(H) measures of program length in clock hours or credit hours;

        ‘(I) success with respect to student achievement in relation to its mission, including, as appropriate, consideration of course completion, State licensing examination, and job placement rates;

        ‘(J) default rates in the student loan programs under title IV of this Act, based on the most recent data provided by the Secretary;

        ‘(K) record of student complaints received by, or available to, the agency or association; and

        ‘(L) compliance with its program responsibilities under title IV of this Act, including any results of financial or compliance audits, program reviews, and such other information as the Secretary may provide to the agency or association.

      ‘(6) such agency or association shall apply procedures throughout the accrediting process, including evaluation and withdrawal proceedings, that comply with due process, including--

        ‘(A) adequate specification of requirements and deficiencies at the institution of higher education or program being examined;

        ‘(B) notice of an opportunity for a hearing by any such institution;

        ‘(C) the right to appeal any adverse action against any such institution; and

        ‘(D) the right to representation by counsel for any such institution;

      ‘(7) such agency or association shall notify the Secretary and the appropriate State postsecondary review entity within 30 days of the accreditation of an institution or any final denial, withdrawal, suspension, or termination of accreditation or placement on probation of an institution, together with any other adverse action taken with respect to an institution; and

      ‘(8) such agency or association shall make available to the public, upon request, and to the Secretary, and the State postsecondary review entity of the State in which the institution of higher education is located a summary of any review resulting in a final accrediting decision involving denial, termination, or suspension of accreditation, together with the comments of the affected institution.

    ‘(b) SEPARATE AND INDEPENDENT DEFINED- For the purpose of subsection (a)(3), the term ‘separate and independent’ means that--

      ‘(1) the members of the postsecondary education governing body of the accrediting agency or association are not elected or selected by the board or chief executive officer of any related, associated, or affiliated trade association or membership organization;

      ‘(2) among the membership of the board of the accrediting agency or association there shall be one public member (who is not a member of any related trade or membership organization) for each six members of the board, with a minimum of one such public member, and guidelines are established for such members to avoid conflicts of interest;

      ‘(3) dues to the accrediting agency or association are paid separately from any dues paid to any related, associated, or affiliated trade association or membership organization; and

      ‘(4) the budget of the accrediting agency or association is developed and determined by the accrediting agency or association without review or resort to consultation with any other entity or organization.

    ‘(c) OPERATING PROCEDURES REQUIRED- No accrediting agency or association may be approved by the Secretary for the purpose of this title, unless the agency or association--

      ‘(1) performs, at regularly established intervals, on-site inspections and reviews of institutions of higher education (at least one of which inspections at each institution that provides vocational education and training shall be unannounced), with particular focus on educational quality and program effectiveness, and ensures that accreditation team members are well-trained and knowledgeable with respect to their responsibilities;

      ‘(2) requires that any institution of higher education subject to its jurisdiction which plans to establish a branch campus submit a business plan, including projected revenues and expenditures, prior to opening the branch campus;

      ‘(3) agrees to conduct, as soon as practicable, but within a period of not more than 6 months of the establishment of a new branch campus or a change of ownership of an institution of higher education, an on-site visit of that branch campus or of the institution after a change of ownership;

      ‘(4) requires that teach-out agreements among institutions are subject to approval by the accrediting agency or association consistent with standards promulgated by such agency or association;

      ‘(5) maintains and makes publicly available written materials regarding standards and procedures for accreditation, appeal procedures, and the accreditation status of each institution subject to its jurisdiction; and

      ‘(6) discloses publicly whenever an institution of higher education subject to its jurisdiction is being considered for accreditation or reaccreditation.

    ‘(d) LENGTH OF APPROVAL- No accrediting agency or association may be approved by the Secretary for the purpose of this Act for a period of more than 5 years.

    ‘(e) INITIAL ARBITRATION RULE- The Secretary may not recognize the accreditation of any institution of higher education unless the institution of higher education agrees to submit any dispute involving the final denial, withdrawal, or termination of accreditation to initial arbitration prior to any other legal action.

    ‘(f) JURISDICTION- Notwithstanding any other provision of law, any civil action brought by an institution of higher education seeking accreditation from, or accredited by, an accrediting agency or association approved by the Secretary for the purpose of this title and involving the denial, withdrawal, or termination of accreditation of the institution of higher education, shall be brought in the appropriate United States district court.

    ‘(g) LIMITATION ON SCOPE OF STANDARDS- Nothing in this Act shall be construed to permit the Secretary to establish standards for accrediting agencies or associations that are not required by this section. Nothing in this Act shall be construed to prohibit or limit any accrediting agency or association from adopting additional standards not provided for in this section.

    ‘(h) CHANGE OF ACCREDITING AGENCY- The Secretary shall not recognize the accreditation of any otherwise eligible institution of higher education if the institution of higher education is in the process of changing its accrediting agency or association, unless the eligible institution submits to the Secretary all materials relating to the prior accreditation, including materials demonstrating reasonable cause for changing the accrediting agency or association.

    ‘(i) DUAL ACCREDITATION RULE- The Secretary shall not recognize the accreditation of any otherwise eligible institution of higher education if the institution of higher education is accredited, as an institution, by more than one accrediting agency or association, unless the institution submits to each such agency and association and to the Secretary the reasons for accreditation by more than one such agency or association and demonstrates to the Secretary reasonable cause for its accreditation by more than one agency or association. If the institution is accredited, as an institution, by more than one accrediting agency or association, the institution shall designate which agency’s accreditation shall be utilized in determining the institution’s eligibility for programs under this Act.

    ‘(j) IMPACT OF LOSS OF ACCREDITATION- An institution may not be certified or recertified as an institution of higher education under section 481 and subpart 3 of this part or participate in any of the other programs authorized by this Act if such institution--

      ‘(1) is not currently accredited by any agency or association recognized by the Secretary;

      ‘(2) has had its accreditation withdrawn, revoked, or otherwise terminated for cause during the preceding 24 months, unless such withdrawal, revocation, or termination has been rescinded by the same accrediting agency; or

      ‘(3) has withdrawn from accreditation voluntarily under a show cause or suspension order during the preceding 24 months, unless such order has been rescinded by the same accrediting agency.

    ‘(k) RELIGIOUS INSTITUTION RULE- Notwithstanding subsection (j), the Secretary shall allow an institution that has had its accreditation withdrawn, revoked, or otherwise terminated, or has voluntarily withdrawn from an accreditation agency, to remain certified as an institution of higher education under section 481 and subpart 3 of this part for a period sufficient to allow such institution to obtain alternative accreditation, if the Secretary determines that the reason for the withdrawal, revocation, or termination--

      ‘(1) is related to the religious mission or affiliation of the institution; and

      ‘(2) is not related to the accreditation standards provided for in this section.

    ‘(l) LIMITATION, SUSPENSION OR TERMINATION OF APPROVAL- (1) The Secretary shall limit, suspend, or terminate the approval of an accrediting agency or association if the Secretary determines, after notice and opportunity for a hearing, that the accrediting agency or association has failed to apply effectively the standards or operate according to the procedures provided in this section.

    ‘(2) The Secretary may determine that an accrediting agency or association has failed to apply effectively the standards provided in this section if an institutution of higher education seeks and receives accreditation from the accrediting agency or association during any period in which the institution is the subject of any interim action by another accrediting agency or association leading to the suspension, revocation, or termination of accreditation or the institution has been notified of the threatened loss of accreditation, and the due process procedures required by such suspension, revocation, termination, or threatened loss have not been completed.

    ‘(m) LIMITATION ON THE SECRETARY’S AUTHORITY- The Secretary may only recognize accrediting agencies or associations which accredit institutions of higher education for the purpose of enabling such institutions to establish eligibility to participate in the programs under this Act or which accredit institutions of higher education or higher education programs for the purpose of enabling them to establish eligibility to participate in other programs administered by the Department of Education or other Federal agencies.

    ‘(n) INDEPENDENT EVALUATION- (1) The Secretary shall conduct a comprehensive review and evaluation of the performance of all accrediting agencies or associations which seek recognition by the Secretary in order to determine whether such accrediting agencies or associations meet the standards established by this section. The Secretary shall conduct an independent evaluation of the information provided by such agency or association. Such evaluation shall include--

      ‘(A) the solicitation of third-party information concerning the performance of the accrediting agency or association; and

      ‘(B) site visits at both the accrediting agency or association and member institutions, including unannounced visits where appropriate.

    ‘(2) The Secretary shall place a priority for review of accrediting agencies or associations on those agencies or associations that accredit institutions of higher education that participate most extensively in the programs authorized by this title and on those agencies or associations which have been the subject of the most complaints or legal actions.

    ‘(3) The Secretary shall consider all available relevant information concerning the compliance of the accrediting agency or association with the standards provided for in this section, including any complaints or legal actions against such agency or association. In cases where deficiencies in the performance of an accreditation agency or association with respect to the requirements of this section are noted, the Secretary shall take these deficiencies into account in the approval process. The Secretary shall not, under any circumstances, base decisions on the approval or disapproval of accreditation agencies or associations on standards other than those contained in this section.

    ‘(4) The Secretary shall maintain sufficient documentation to support the conclusions reached in the approval process, and, upon disapproval of any accreditation agency or association, shall make publicly available the reason for such disapproval, including reference to the specific standards under this section which have not been fulfilled.

    ‘(o) REGULATIONS- The Secretary shall by regulation provide procedures for the recognition of accrediting agencies or associations and for the appeal of the Secretary’s decisions.

‘Subpart 3--Eligibility and Certification Procedures

‘SEC. 498. ELIGIBILITY AND CERTIFICATION PROCEDURES.

    ‘(a) GENERAL REQUIREMENT- For purposes of qualifying institutions of higher education for participation in programs under this title, the Secretary shall determine the legal authority to operate within a State, the accreditation status, and the administrative capability and financial responsibility of an institution of higher education in accordance with the requirements of this section.

    ‘(b) SINGLE APPLICATION FORM- The Secretary shall prepare and prescribe a single application form which--

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

      ‘(2) requires a specific description of the relationship between a main campus of an institution of higher education and all of its branches, including a description of the student aid processing that is performed by the main campus and that which is performed at its branches;

      ‘(3) requires a description of third party servicers of an institution of higher education, together with a copy of any contract with the institution of higher education and a financial aid service provider or loan servicer; and

      ‘(4) requires such other information as the Secretary determines will ensure compliance with the requirements of this title with respect to eligibility, accreditation, administrative capability and financial responsibility.

    ‘(c) FINANCIAL RESPONSIBILITY STANDARDS- (1) The Secretary shall determine whether an institution has the financial responsibility required by this title on the basis of whether the institution is able--

      ‘(A) to provide the services described in its official publications and statements;

      ‘(B) to provide the administrative resources necessary to comply with the requirements of this title; and

      ‘(C) to meet all of its financial obligations, including (but not limited to) refunds of institutional charges and repayments to the Secretary for liabilities and debts incurred in programs administered by the Secretary.

    ‘(2) Notwithstanding paragraph (1), if an institution fails to meet criteria prescribed by the Secretary with respect to operating losses, net worth, asset-to-liabilities ratios, or operating fund deficits then the institution shall provide the Secretary with satisfactory evidence of its financial responsibility in accordance with paragraph (3).

    ‘(3) The Secretary may determine an institution to be financially responsible, notwithstanding the institution’s failure to meet the criteria under paragraphs (1) and (2), if--

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

      ‘(B) such institution has its liabilities backed by the full faith and credit of a State, or its equivalent;

      ‘(C) such institution establishes to the satisfaction of the Secretary, with the support of a report of an independent certified public accountant prepared under generally accepted accounting principles, that the institution is a going concern capable of meeting all of its financial obligations, including (but not limited to) refunds of institutional charges and repayments to the Secretary for liabilities and debts incurred in programs administered by the Secretary; or

      ‘(D) such institution has met standards of financial responsibility, prescribed by the Secretary by regulation, that indicate a level of financial strength not less than those required in paragraph (2).

    ‘(4) The determination as to whether an institution has met the standards of financial responsibility provided for in paragraphs (2) and (3)(C) shall be based on an audited and certified financial statement of the institution. Such audit shall be conducted by a qualified independent organization or person in accordance with standards established by the American Institute of Certified Public Accountants. Such statement shall be submitted to the Secretary at the time such institution is considered for certification or recertification under this section. If the institution is permitted to be certified (provisionally or otherwise) and such audit does not establish compliance with paragraph (2), the Secretary may require that additional audits be submitted.

    ‘(5)(A) The Secretary shall establish requirements for the maintenance by an institution of higher education of sufficient cash reserves to ensure repayment of any required refunds.

    ‘(B) The Secretary shall provide for a process under which the Secretary shall exempt an institution of higher education from the requirements described in subparagraph (A) if the Secretary determines that the institution--

      ‘(i) is located in a State that has a tuition recovery fund that ensures that the institution meets the requirements of subparagraph (A);

      ‘(ii) contributes to the fund; and

      ‘(iii) otherwise has legal authority to operate within the State.

    ‘(d) ADMINISTRATIVE CAPACITY STANDARD- The Secretary is authorized--

      ‘(1) to establish procedures and requirements relating to the administrative capacities of institutions of higher education, including--

        ‘(A) consideration of past performance of institutions or persons in control of such institutions with respect to student aid programs; and

        ‘(B) maintenance of records;

      ‘(2) to establish such other reasonable procedures as the Secretary determines will contribute to ensuring that the institution of higher education will comply with administrative capability required by this title.

    ‘(e) FINANCIAL GUARANTEES FROM OWNERS- (1) Notwithstanding any other provision of law, the Secretary may, to the extent necessary to protect the financial interest of the United States, require--

      ‘(A) financial guarantees from an institution participating, or seeking to participate, in a program under this title, or from one or more individuals who the Secretary determines, in accordance with paragraph (2), exercise substantial control over such institution, or both, in an amount determined by the Secretary to be sufficient to satisfy the institution’s potential liability to the Federal Government, student assistance recipients, and other program participants for funds under this title; and

      ‘(B) the assumption of personal liability, by one or more individuals who exercise substantial control over such institution, as determined by the Secretary in accordance with paragraph (2), for financial losses to the Federal Government, student assistance recipients, and other program participants for funds under this title, and civil and criminal monetary penalties authorized under this title.

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

      ‘(i) the individual directly or indirectly controls a substantial ownership interest in the institution;

      ‘(ii) the individual, either alone or together with other individuals, represents, under a voting trust, power of attorney, proxy, or similar agreement, one or more persons who have, individually or in combination with the other persons represented or the individual representing them, a substantial ownership interest in the institution; or

      ‘(iii) the individual is a member of the board of directors, the chief executive officer, or other executive officer of the institution or of an entity that holds a substantial ownership interest in the institution.

    ‘(B) The Secretary may determine that an entity exercises substantial control over one or more institutions participating in a program under this title if the Secretary determines that the entity directly or indirectly holds a substantial ownership interest in the institution.

    ‘(3) For purposes of this subsection, an ownership interest is defined as a share of the legal or beneficial ownership or control of, or a right to share in the proceeds of the operation of, an institution or institution’s parent corporation. An ownership interest may include, but is not limited to--

      ‘(A) a sole proprietorship;

      ‘(B) an interest as a tenant-in-common, joint tenant, or tenant by the entireties;

      ‘(C) a partnership; or

      ‘(D) an interest in a trust.

    ‘(4) The Secretary shall not impose the requirements described in subparagraphs (A) and (B) of paragraph (1) on an institution that--

      ‘(A) has not been subjected to a limitation, suspension, or termination action by the Secretary or a guaranty agency within the preceding 5 years;

      ‘(B) has not had, during its 2 most recent audits of the institutions conduct of programs under this title, an audit finding that resulted in the institution being required to repay an amount greater than 5 percent of the funds the institution received from programs under this title for any year;

      ‘(C) meets and has met, for the preceding 5 years, the financial responsibility standards under subsection (c); and

      ‘(D) has not been cited during the preceding 5 years for failure to submit audits required under this title in a timely fashion.

    ‘(5) For purposes of section 487(c)(1)(G), this section shall also apply to individuals or organizations that contract with an institution to administer any aspect of an institution’s student assistance program under this title.

    ‘(f) ACTIONS ON APPLICATIONS; SITE VISITS AND FEES- The Secretary shall ensure that prompt action is taken by the Department on any application required under subsection (b). The personnel of the Department of Education shall conduct a site visit at each institution before certifying or recertifying its eligibility for purposes of any program under this title. The Secretary may charge reasonable fees to cover the expenses of certification and site visits and, to the extent permitted by appropriations Acts, may retain such fees to cover such expenses.

    ‘(g) TIME LIMITATIONS ON, AND RENEWAL OF, ELIGIBILITY- (1) The eligibility for the purposes of any program authorized under this title of any institution that is participating in any such program on the date of enactment of the Higher Education Amendments of 1992 shall expire in accordance with the schedule prescribed by the Secretary in accordance with paragraph (2), but not later than 5 years after such date of enactment.

    ‘(2) The Secretary shall establish a schedule for the expiration of the eligibility for purposes of any such program of all institutions of higher education within the 5-year period specified in paragraph (1). Such schedule shall place a priority for the expiration of the certification of institutions on those that meet the following criteria:

      ‘(A) institutions subject to review by a State postsecondary review entity pursuant to subpart 1 of part H; or

      ‘(B) other categories of institutions which the Secretary deems necessary.

    ‘(3) After the expiration of the certification of any institution under the schedule prescribed under this subsection, or upon request for initial certification from an institution not previously certified, the Secretary may certify the eligibility for the purposes of any program authorized under this title of each such institution for a period not to exceed 4 years.

    ‘(h) PROVISIONAL CERTIFICATION OF INSTITUTIONAL ELIGIBILITY- (1) Notwithstanding subsections (d) and (g), the Secretary may provisionally certify an institution’s eligibility to participate in programs under this title--

      ‘(A) for not more than one complete award year in the case of an institution of higher education seeking an initial certification; and

      ‘(B) for not more than 3 complete award years if--

        ‘(i) the institution’s administrative capability and financial responsibility is being determined for the first time;

        ‘(ii) there is a complete or partial change of ownership, as defined under subsection (i), of an eligible institution; or

        ‘(iii) the Secretary determines that the institution is, in the judgment of the Secretary, in an administrative or financial condition that may jeopardize its ability to perform its responsibilities under its program participation agreement.

    ‘(2) Whenever the Secretary withdraws the approval of any accrediting agency, an institution of higher education which meets the requirements of accreditation, eligibility, and certification on the day prior to such withdrawal, the Secretary may, notwithstanding the withdrawal, continue the eligibility of the institution of higher education to participate in the programs authorized by this title for a period not to exceed 18 months from the date of the withdrawal of approval.

    ‘(3) If, prior to the end of a period of provisional certification under this subsection, the Secretary determines that the institution is unable to meet its responsibilities under its program participation agreement, the Secretary may terminate the institution’s participation in programs under this title.

    ‘(i) TREATMENT OF CHANGES OF OWNERSHIP- (1) For the purpose of certifying the eligibility of an institution, an eligible institution of higher education that has a change in ownership resulting in a change in control shall not be considered to be the same institution (except as provided in paragraph (3)) and shall be considered a new institution for the purpose of establishing eligibility, except that such institution shall not be required (under section 481(b)(5) or 481(c)(3)) to be in existence for 2 years prior to seeking such certification unless such institution was in existence as a branch for less than 2 years.

    ‘(2) An action resulting in a change in control may include (but is not limited to)--

      ‘(A) the sale of the institution or the majority of its assets;

      ‘(B) the transfer of the controlling interest of stock of the institution or its parent corporation;

      ‘(C) the merger of two or more eligible institutions;

      ‘(D) the division of one or more institutions into two or more institutions;

      ‘(E) the transfer of the controlling interest of stock of the institutions to its parent corporation; or

      ‘(F) the transfer of the liabilities of the institution to its parent corporation.

    ‘(3) An action that may be treated as not resulting in a change in control includes (but is not limited to)--

      ‘(A) the death of an owner of an institution, when the owner’s interest is sold or transferred to either a family member or a current stockholder of the corporation; or

      ‘(B) another action determined by the Secretary to be a routine business practice.

    ‘(j) TREATMENT OF BRANCHES- (1) For the purposes of this title, a branch of an eligible institution, as defined pursuant to regulations of the Secretary, is a separate institution of higher education and shall separately meet all the requirements of this title, except that such institution shall not be required (under section 481(b)(5) or 481(c)(3)) to be in existence for 2 years prior to seeking such certification unless such institution was in existence as a branch for less than 2 years.

    ‘(2) The Secretary may waive the requirement of section 1201(a)(2) for a branch that (A) is not located in a State, (B) is affiliated with an eligible institution, and (C) was participating in one or more programs under this title on or before January 1, 1992.

‘SEC. 498A. PROGRAM REVIEW AND DATA.

    ‘(a) GENERAL AUTHORITY- In order to strengthen the administrative capability and financial responsibility provisions of this title, the Secretary--

      ‘(1) shall provide for the conduct of program reviews on a systematic basis designed to include all institutions of higher education participating in programs authorized by this title;

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

        ‘(A) institutions with a cohort default rate for loans under part B of this title in excess of 25 percent or which places such institutions in the highest 25 percent of such institutions;

        ‘(B) institutions with a default rate in dollar volume for loans under part B of this title which places the institutions in the highest 25 percent of such institutions;

        ‘(C) institutions with a significant fluctuation in Federal Stafford Loan volume or Federal Pell Grant awards, or both, in the year for which the determination is made compared to the year prior to such year;

        ‘(D) institutions reported to have deficiencies or financial aid problems by the appropriate State postsecondary review entity designated under subpart 1 of this part or by the appropriate accrediting agency or association;

        ‘(E) institutions with high annual dropout rates;

        ‘(F) any institution which is required to be reviewed by a State postsecondary review entity pursuant to subpart 1 of part H under section 494C(b); and

        ‘(G) such other institutions as the Secretary deems necessary; and

      ‘(3) shall establish and operate a central data base of information on institutional accreditation, eligibility, and certification that includes--

        ‘(A) all information available to the Department;

        ‘(B) all relevant information made available by the Secretary of Veterans Affairs;

        ‘(C) all relevant information from accrediting agencies or associations;

        ‘(D) all relevant information available from a guaranty agency; and

        ‘(E) all relevant information available from States under subpart 1.

    ‘(b) SPECIAL ADMINISTRATIVE RULES- (1) In carrying out paragraphs (1) and (2) of subsection (a), the Secretary shall establish guidelines designed to ensure uniformity of practice in the conduct of program reviews of institutions of higher education.

    ‘(2) The Secretary shall review the regulations of the Department and the application of such regulations to ensure the uniformity of interpretation and application of the regulations.

    ‘(c) DATA COLLECTION RULES- The Secretary shall develop and carry out a plan for the data collection responsibilities described in paragraph (3) of subsection (a). The Secretary shall make the information obtained under such paragraph (3) readily available to all institutions of higher education, guaranty agencies, States, and other organizations participating in the programs authorized by this title.

    ‘(d) TRAINING- The Secretary shall provide training to personnel of the Department, including criminal investigative training, designed to improve the quality of financial and compliance audits and program reviews conducted under this title.

    ‘(e) SPECIAL RULE- The provisions of section 103(b) of the Department of Education Organization Act, shall not apply to Secretarial determinations made regarding the appropriate length of instruction for programs measured in clock hours.’.

TITLE V--EDUCATOR RECRUITMENT, RETENTION, AND DEVELOPMENT

SEC. 501. REVISION OF TITLE V.

    (a) AMENDMENT- Title V of the Act (20 U.S.C. 1101 et seq.) is amended to read as follows:

‘TITLE V--EDUCATOR RECRUITMENT, RETENTION, AND DEVELOPMENT

‘SEC. 500. FINDINGS AND PURPOSES.

    ‘(a) FINDINGS- The Congress finds that--

      ‘(1) teachers in the classroom are the men and women who must play an integral role in leading our Nation’s schools into the 21st century;

      ‘(2) we should encourage individuals to enter the education profession so that our teaching force is representative both of the diversity of our Nation and of the tremendous talents and skills of our citizens;

      ‘(3) the methods used to prepare prospective teachers and the continuing education and support provided to practicing teachers have a significant influence on the effectiveness of classroom teachers;

      ‘(4) the postsecondary education of education professionals has not been linked to local, State and national goals and standards;

      ‘(5) the inservice and continuing professional development of educators has not promoted systematic and sustained improvement of the education system;

      ‘(6) State educational agencies have not been funded and staffed adequately to carry out a mission of supporting a process to achieve local, State, or national goals and standards;

      ‘(7) in order to encourage more women and underrepresented minorities to enter the fields of science and mathematics and succeed in these fields, we must provide proper training for existing mathematics and science teachers and recruit women and underrepresented minorities as teachers in these fields;

      ‘(8) educators must have the expertise and the support that allow them to adapt to the changing environment in our schools and to the evolving skills required of our schools’ graduates; and

      ‘(9) the Federal Government plays an essential role in providing support to educator training and professional development that will enable teachers to be classroom leaders and administrators to be school leaders at the forefront of reforming our Nation’s schools.

    ‘(b) PURPOSE- It is the purpose of this title--

      ‘(1) to provide assistance to our Nation’s teaching force for the continued improvement of their professional skills;

      ‘(2) to provide assistance for professional development activities enabling teachers, school administrators, and institutions of higher education to work collaboratively to improve educational performance through school reform and restructuring;

      ‘(3) to address the Nation’s teacher shortage, particularly in areas where there are heavy concentrations of low-income students, by encouraging talented persons, including the individuals already employed as school paraprofessionals and individuals who have been employed in other areas of endeavor, to enter the teaching profession;

      ‘(4) to encourage academically qualified students to become teachers through scholarship assistance;

      ‘(5) to support the recruitment of underrepresented populations into teaching careers;

      ‘(6) to provide scholarship assistance to encourage women and minorities who are underrepresented in the fields of science and mathematics to enter the teaching profession in these fields;

      ‘(7) to encourage the establishment and maintenance of programs that provide professional teacher preparation to individuals who are moving to careers in education from other occupations;

      ‘(8) to promote partnerships between institutions of higher education and local educational agencies for the purpose of promoting the simultaneous restructuring and renewal of elementary and secondary schools and college-based teacher education programs;

      ‘(9) to improve the leadership and administrative skills of elementary and secondary school administrators;

      ‘(10) to provide assistance to schools of education in institutions of higher education in order to reform teacher education programs by encouraging new developments in teacher preparation which provide for greater integration of subject matter and pedagogical training and which prepare classroom teachers to effectively meet changing noneducational challenges in the schools; and

      ‘(11) to promote high quality child development and early childhood education specialist training programs, including preschool and early intervention services for infants and toddlers with disabilities.

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

‘SEC. 501. AUTHORITY AND ALLOCATION OF FUNDS; DEFINITIONS.

    ‘(a) PURPOSE AND AUTHORITY-

      ‘(1) PURPOSE- It is the purpose of this part to provide funds to State educational agencies, local educational agencies and institutions of higher education in order to update and improve the skills of classroom teachers, including preschool and early childhood education specialists and school administrators, to establish State academies for teachers and school leaders, and to provide for a comprehensive examination of State requirements for teacher preservice and certification.

      ‘(2) PROGRAM AUTHORIZED- The Secretary is authorized to make allotments to State educational agencies for the purposes of enhancing and improving the quality of teaching, including early childhood education, in each of the several States.

    ‘(b) ALLOTMENT OF FUNDS-

      ‘(1) IN GENERAL- From the funds appropriated in each fiscal year pursuant to section 510A, the Secretary shall allot to each State--

        ‘(A) 50 percent of such funds on the basis of the number of individuals in the State aged 5 through 17 compared to the number of all such individuals in all States; and

        ‘(B) 50 percent of such funds on the basis of the amount the State receives under sections 1005 and 1006 of chapter 1 of title I of the Elementary and Secondary Education Act of 1965 compared to the total amount that all States receive under such sections.

      ‘(2) ALLOCATIONS FROM STATE ALLOTMENTS-

        ‘(A)(i) Except as provided in subsection (c), from the amount allotted to each State in each fiscal year pursuant to paragraph (1) and not reserved pursuant to subparagraph (B)(i), the State education agency shall allocate 50 percent of such amount in accordance with clause (ii) to local eduational agencies to carry out the activities described in section 503.

        ‘(ii) The State educational agency shall allocate 50 percent of the amount allotted to the State in each fiscal year under paragraph (1) so that--

          ‘(I) one-half of such amount is allocated to local educational agencies within such State based on the local educational agency’s relative share of the enrollments in public schools within the State; and

          ‘(II) one-half of such amount is allocated to local educational agencies within such State based on the local educational agency’s relative share of the State’s allocation of funds under sections 1005 and 1006 of the Elementary and Secondary Education Act of 1965,

        except that any local educational agency that would receive an allocation of less than $10,000 shall be required to form a consortium with at least one other local educational agency in order to receive an allocation under this part. In making allocations under this part, the State educational agency shall use the most recent data available.

        ‘(B)(i) From the amount allotted to each State in each fiscal year pursuant to paragraph (1) the State educational agency shall reserve not more than 3 percent of such funds for the purposes of administering the program under this title, including evaluation and dissemination activities.

        ‘(ii) From the amount allotted to each State in each fiscal year under paragraph (1) and not reserved pursuant to clause (i), the State educational agency--

          ‘(I) shall reserve not more than 25 percent of such funds to carry out sections 504, 505, and 506; and

          ‘(II) shall reserve not more than 25 percent of such funds to award grants to institutions of higher education in accordance with sections 507 and 508.

    ‘(c) SPECIAL RULE- Notwithstanding the provisions of subsection (b)(2)(A), if the amount appropriated to carry out this part for any fiscal year is less than $250,000,000, then each State educational agency shall use 50 percent of the amount allotted to such State under paragraph (1) and not reserved pursuant to subsection (b)(2)(B)(i) to award grants to local educational agencies on a competitive basis.

    ‘(d) REALLOTMENT- If a State or local educational agency elects not to receive assistance under this part in any fiscal year or the Secretary determines in any fiscal year that a State or local educational agency will not be able to use all or any portion of the funds available to such State or local educational agency under this part, then the Secretary shall reallot such funds. The Secretary shall reallot such funds in such fiscal year in accordance with the provisions of this part among the States or local educational agencies who are eligible for assistance under this part and are not described in the preceding sentence.

    ‘(e) DEFINITIONS- For purposes of this part--

      ‘(1) the term ‘State’ means each of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, American Samoa, and the Republic of Palau (until the Compact of Free Association takes effect pursuant to section 101(a) of Public Law 99-658); and

      ‘(2) the term ‘key academic subjects’ means English, mathematics, science, history, geography, foreign languages, civics and government, and economics.

‘SEC. 502. STATE APPLICATION.

    ‘(a) IN GENERAL- Any State which desires to receive an allotment under this part shall submit to the Secretary an application which--

      ‘(1) designates the State educational agency as the State agency responsible for the administration and supervision of programs assisted under this part;

      ‘(2) provides for a process of active discussion and consultation with a committee, convened by the chief State school officer, which is broadly representative of the following educational interests within the State, including--

        ‘(A) a representative nominated by each of the following:

          ‘(i) the State teacher organizations;

          ‘(ii) the organizations representing preschool and early childhood education specialists;

          ‘(iii) the State school administrators organization;

          ‘(iv) the State parents organizations;

          ‘(v) the State business organizations; and

          ‘(vi) the State student organizations;

        ‘(B) a representative from the State board of education;

        ‘(C) a representative of faculty from departments, schools or colleges of educations;

        ‘(D) other representatives of institutions of higher education, including community colleges;

        ‘(E) the State director of vocational education; and

        ‘(F) the State director of special education;

      ‘(3) describes the competitive process that the State will use to distribute funds among local educational agencies pursuant to section 501(c);

      ‘(4) describes the process the State will use to conduct the assessment required by section 504(c);

      ‘(5) describes how the State will allocate funds among activities required under section 504;

      ‘(6) with respect to the State academies to be established under sections 505 and 506--

        ‘(A) describes the academies to be established under this part and the goals and objectives for each such academy;

        ‘(B) describes how the academies assisted under this part shall relate to the overall plan for the attainment of the national education goals by the State;

        ‘(C) describes the competitive process that shall be used to select applicants to operate the academies assisted under this part;

        ‘(D) assures that the Academies for Teachers shall provide instruction in the key academic subjects;

        ‘(E) assures that the State shall continue to operate the academies assisted under this part when Federal funds provided pursuant to this title are no longer available;

        ‘(F) assures that Federal funds provided under this part shall not be used for construction of new facilities or substantial remodeling;

        ‘(G) assures that the Academies for Teachers shall provide activities designed to enhance the ability of teachers to work with special educational populations, including--

          ‘(i) limited-English proficient children;

          ‘(ii) children with disabilities;

          ‘(iii) economically and educationally disadvantaged children; and

          ‘(iv) gifted and talented children; and

        ‘(H) contains such other assurances and information as the Secretary may reasonably require;

      ‘(7) describes the competitive process that the State will use to distribute funds among institutions of higher education pursuant to section 507;

      ‘(8) describes a plan to promote learning among the State educational agency staff in order to support and facilitate systemic improvement of the State educational agency, schools or colleges of education at institutions of higher education, and local educational agencies; and

      ‘(9) includes such other information and assurances as the Secretary may require.

    ‘(b) FUNCTIONS OF COMMITTEE- The application required by subsection (a) shall identify the procedures by which the committee required by paragraph (2) of such subsection will be engaged in--

      ‘(1) ensuring that activities assisted under this part are effective, coordinated with other State, local, and Federal activities and programs, and meet the needs of the State for improving the quality of teaching and teacher education programs, including those programs concerned with preschool education and the training of early childhood education specialists, and school leadership programs;

      ‘(2) advising the State on criteria for awarding funds under sections 501(c), 505, 506, and 507; and

      ‘(3) advising the State on criteria for approving local educational agency applications under section 503(a).

    ‘(c) EVALUATION AND REPORT-

      ‘(1) REPORT TO SECRETARY- Each State educational agency receiving an allotment under this part shall evaluate the work of each academy that is located in the State and assisted under this part every 2 years, including the impact of each academy’s programs on participants, and report the findings of such evaluation to the Secretary. The initial report shall be submitted 3 years after funds are first allotted to such State educational agency under section 501 and subsequent reports shall be submitted every 2 years thereafter. Such report shall also describe the characteristics of the participants and activities provided at each academy assisted under this part.

      ‘(2) REPORT TO CONGRESS- The Secretary shall submit to the Congress a summary of the reports required under subsection (a). The initial summary shall be submitted 60 days after the due date of the first report described in subsection (a) and subsequent summaries shall be submitted every 2 years thereafter.

‘SEC. 503. LOCAL APPLICATION AND USE OF FUNDS.

    ‘(a) LOCAL APPLICATION- Any local educational agency which desires to receive assistance under section 501(b)(2)(A) or 501(c) shall submit to the State educational agency an application which--

      ‘(1) describes the needs of such local educational agency with respect to inservice training programs for teachers and preschool and early childhood education specialists pursuant to the assessment conducted under subsection (b)(2)(A), and, if appropriate, describes the need of such local educational agency for teacher recruitment, business partnerships, outreach to military veterans, and the provision of other opportunities for teachers to improve their skills;

      ‘(2) describes the process used to determine such needs, including consultation with teachers, preschool and early childhood specialists, principals, parents, representatives from departments, schools or colleges of education, and others in the community;

      ‘(3) describes the activities such agency intends to conduct with the funds provided under section 501(b)(2)(A) or 501(c) consistent with the provisions of this section in order to improve the quality of teaching within such agency;

      ‘(4) describes the processes and methods used to promote systematic improvement through continual learning in order to achieve agreed upon local, State and National standards; and

      ‘(5) any other information that the State educational agency may reasonably require.

    ‘(b) LOCAL USES OF FUNDS-

      ‘(1) IN GENERAL- Local educational agencies receiving assistance under section 501(b)(2)(A) or 501(c) shall use such funds for the inservice training of teachers and, if appropriate, for preschool and early childhood education specialists, and may use funds for--

        ‘(A) development of programs to recruit individuals into the teaching profession and the field of early childhood education;

        ‘(B) business partnerships;

        ‘(C) outreach to military veterans; and

        ‘(D) other purposes consistent with improving the quality of teaching in the local educational agency, as approved by the State educational agency.

      ‘(2) INSERVICE TRAINING-

        ‘(A) In order to receive assistance under section 501(b)(2)(A) or 501(c), a local educational agency or a consortium of local educational agencies shall first assess the needs of such agency or agencies for inservice training.

        ‘(B) Funds expended for inservice training shall be used, in accordance with the assessment conducted under subparagraph (A), for the cost of--

          ‘(i) the expansion and improvement of inservice training and retraining of teachers and other appropriate school personnel, including vocational teachers, special education teachers, and preschool teachers, consistent with the assessment conducted under subparagraph (A);

          ‘(ii) providing funds for grants for individual teachers within the local educational agency to undertake projects to improve their teaching ability or to improve the instructional materials used in their classrooms;

          ‘(iii) activities designed to address the effects of chronic community violence on children, such as violence counseling training for teachers and early childhood specialists, and activities and training aimed at resolving conflicts;

          ‘(iv) activities designed to enhance the ability of teachers to work with culturally diverse students;

          ‘(v) activities designed to integrate academic and vocational education;

          ‘(vi) as appropriate, activities designed to assist teacher participation in a Tech-Prep program under section 344 of the Carl D. Perkins Vocational and Applied Technology Act, in order to develop the skills of such teachers in activities such as organizational development leadership and interdisciplinary curricula development; and

          ‘(vii) other activities consistent with the goals of this part as approved by the State educational agency.

        ‘(C) Such activities may be carried out through agreements with institutions of higher education, nonprofit organizations, public agencies, and museums.

        ‘(D) Activities related to inservice training shall be coordinated with such activities carried out under part A of title II of the Elementary and Secondary Education Act of 1965.

      ‘(3) RECRUITMENT OF TEACHERS-

        ‘(A) Local educational agencies receiving assistance under section 501(b)(2)(A) or 501(c) may use such assistance--

          ‘(i) to establish, operate, or expand programs to encourage and recruit interested individuals to pursue a course of study that will lead to a career in education; and

          ‘(ii) to establish, operate, or expand a program where such agency recruits students currently enrolled in a school in the local educational agency to be teachers or early childhood education specialists.

        ‘(B) Activities under this paragraph may include--

          ‘(i) academic and career counseling of and support services for students;

          ‘(ii) programs in which students act as tutors while they are enrolled in schools in the local educational agency;

          ‘(iii) programs in which students enrolled in institutions of higher education and other individuals tutor students within schools in the local educational agency;

          ‘(iv) information and recruitment efforts to attract individuals into the teaching profession; and

          ‘(v) programs to support early childhood education efforts at the preschool and school level.

        ‘(C) In conducting programs under this paragraph, local educational agencies shall place a priority on recruiting students and individuals from minority groups.

        ‘(D) Local educational agencies may conduct programs under this paragraph in consortia with institutions of higher education.

      ‘(4) BUSINESS PARTNERSHIPS- Local educational agencies receiving assistance under section 501(b)(2)(A) or 501(c) may use such assistance to establish partnerships with representatives of the business community to sponsor--

        ‘(A) programs which allow representatives of local business or firms to go into the classroom and work with the classroom teacher to provide instruction in subject areas where the expertise of the teacher could be supplemented, especially in the subject areas of mathematics, science, and vocational and technology education training;

        ‘(B) internship programs which provide an opportunity for classroom teachers to work in local businesses or firms to gain practical experience or to develop new skills or expertise;

        ‘(C) programs which bring students and teachers into business settings to see applications of course work and in specialized areas, and to learn to use advanced technical equipment;

        ‘(D) programs which allow representatives of local businesses and firms to work with school administrators to develop instructional material; and

        ‘(E) other activities appropriate to forming a working relationship between business leaders and classroom leaders.

      ‘(5) OUTREACH TO MILITARY VETERANS- Local educational agencies receiving assistance under section 501(b)(2)(A) or 501(c) may use such assistance to establish programs to inform United States military veterans of teaching opportunities and to provide assistance in the establishment of teaching opportunities for such veterans by--

        ‘(A) planning and implementing informational and outreach programs leading to the development of programs specifically designed to inform United States military veterans about teaching opportunities and the qualifications necessary for such opportunities;

        ‘(B) planning and implementing programs leading to the creation of teaching opportunities for such veterans;

        ‘(C) supporting programs to assist such veterans to meet the qualifications to become teachers;

        ‘(D) disseminating information on the program described in this paragraph and on sources of student financial assistance available under title IV of this Act and under programs administered by the Department of Veterans Affairs and other Federal agencies; and

        ‘(E) making scholarships available to such military veterans under the same terms and conditions specified in subpart 1 of part C of this title.

‘SEC. 504. STATE USES OF FUNDS.

    ‘(a) IN GENERAL- Each State educational agency receiving funds reserved pursuant to section 501(b)(2)(B)(ii)(I) shall use such funds--

      ‘(1) first, to conduct a study of teacher education programs within such State, as required under subsection (c); and

      ‘(2) secondly, for--

        ‘(A) the establishment of State Academies for Teachers under section 505;

        ‘(B) the establishment of State Academies for School Leaders under section 506; and

        ‘(C) activities directly related to the implementation of the teacher education study required under subsection (c).

    ‘(b) SPECIAL RULE- If a State educational agency can demonstrate that the amount of funds reserved pursuant to section 501(b)(2)(B)(ii)(I) is insufficient to establish one State academy, then the State educational agency shall distribute such funds to local educational agencies in accordance with section 501(b)(2)(A) or 501(c) to carry out the activities described in section 503(b).

    ‘(c) TEACHER EDUCATION STUDY-

      ‘(1) STUDY REQUIRED- Each State educational agency receiving funds under this part shall, in consultation with institutions of higher education, local educational agencies, teachers, parents, the State legislature, the State board of education, and business, undertake a study of--

        ‘(A) teacher education programs and State teacher professional development requirements, including programs and requirements intended to train preschool and early childhood education specialists; and

        ‘(B) the State laws and regulations relating to such programs and requirements, including any standards or requirements for certification and licensure,

      in order to determine if such programs and requirements are adequately preparing teachers to effectively educate students.

      ‘(2) CONSIDERATIONS- Such study shall consider whether such programs or requirements--

        ‘(A) would be improved if teacher education programs were required to coordinate courses with other departments on campus in order to provide prospective teachers with a strong background in their subject matter;

        ‘(B) integrate academic and vocational education instruction;

        ‘(C) give enough flexibility in order to allow experimentation and innovation;

        ‘(D) would be improved if such programs provided preparation for students desiring to become teachers, but who are pursuing a bachelor’s degree in an area of study other than education;

        ‘(E) would be improved if teacher certification required a bachelor’s degree in a subject area and a master’s degree in education; and

        ‘(F) would be improved if institutions of higher education that have developed innovative materials and curricula for inservice training were required to incorporate these improvements into their preservice programs.

      ‘(3) DEADLINES-

        ‘(A) Such study shall be completed by two years from the end of the first fiscal year in which funding was made available for this part. The results of such study shall be reported to the Secretary. In submitting the report to the Secretary, the State educational agency shall include in the report the most successful practices used to enhance the profession of teaching. The Secretary may disseminate such successful practices in order to assist other States in their efforts to enhance the profession of teaching.

        ‘(B) Except as provided in paragraph (4), beginning in the third fiscal year for which funding under this part is available, State educational agencies shall use all funds provided under section 501(b)(2)(B)(ii)(I) which are not allotted for State Academies for Teachers and State Academies for School Leaders--

          ‘(i) to implement the program and policy changes resulting from the findings of such study; and

          ‘(ii) to assist schools and programs of education throughout the State in meeting any new requirements that result from such study.

        ‘(C) The State educational agency shall award grants pursuant to section 507(b)(9) to institutions of higher education to implement the programs and policy changes resulting from the findings of such study.

      ‘(4) WAIVER- If a State demonstrates to the Secretary that it has completed a study comparable to the study required by this subsection within the previous 5 years prior to the fiscal year for which funds are first made available under this part, then the Secretary may waive the requirements of this subsection. States receiving a waiver shall use funds provided under section 501(b)(2)(B)(ii)(I) to implement the program and policy changes resulting from the findings of such study. If the State can demonstrate to the Secretary that such program and policy changes have been implemented, then the State shall use funds provided under section 501(b)(2)(B)(ii)(I) to carry out the activities authorized under sections 505 and 506.

‘SEC. 505. STATE ACADEMIES FOR TEACHERS.

    ‘(a) PURPOSE; DEFINITIONS-

      ‘(1) PURPOSE- It is the purpose of this section to improve elementary and secondary school teacher subject matter knowledge and teaching skills in each of the key academic subjects by establishing one or more Academies in the key academic subjects in every State.

      ‘(2) DEFINITIONS- For purposes of this section--

        ‘(A) the term ‘Academy’ means a course of instruction and related activities to increase a teacher’s knowledge of a specific subject area, a teacher’s ability to impart such knowledge to students, and a teacher’s ability to address any other issue described in this section, except that such term--

          ‘(i) does not mean a physical facility; and

          ‘(ii) does not require a separate location from another Academy or other training program; and

        ‘(B) the term ‘eligible entity’ means a local educational agency, an institution of higher education, a museum, a private nonprofit educational organization of demonstrated effectiveness, or a consortium of any 2 or more of such entities.

    ‘(b) APPLICATION REQUIRED-

      ‘(1) IN GENERAL- Each eligible entity desiring to operate an Academy under this section shall submit an application to the State educational agency at such time, in such manner, and accompanied by such information as the State may reasonably require.

      ‘(2) CONTENTS- Each application submitted pursuant to paragraph (1) shall describe--

        ‘(A) the goals of the Academy and the steps that shall be taken to evaluate the extent to which the Academy reaches its goals;

        ‘(B) the curriculum to be used or developed by the Academy;

        ‘(C) steps to be taken to recruit teachers for the Academy’s program, including outreach efforts to identify and attract--

          ‘(i) minority group members;

          ‘(ii) individuals with disabilities;

          ‘(iii) individuals from areas with large numbers or concentrations of disadvantaged students; and

          ‘(iv) other teachers with the potential to serve as mentor teachers;

        ‘(D) steps to be taken to ensure that faculty members teaching at the Academy shall be of exceptional ability and experience, including outreach efforts to identify and attract as faculty members--

          ‘(i) minority group members;

          ‘(ii) individuals with disabilities; and

          ‘(iii) individuals from areas with large numbers or concentrations of disadvantaged students.

        ‘(E) efforts to be undertaken to disseminate information about the Academy;

        ‘(F) selection criteria to be used in identifying teachers to participate in the Academy;

        ‘(G) steps to be taken to assure that the programs offered by the Academy shall be of sufficient length and comprehensiveness to significantly improve participants’ knowledge; and

        ‘(H) efforts to be undertaken to evaluate the impact of the Academy on participants.

    ‘(c) USE OF ALLOTTED FUNDS-

      ‘(1) GRANTS- Each State educational agency receiving an allotment under this part shall use the funds reserved pursuant to section 501(b)(2)(B)(ii)(I) to award one or more competitive grants to eligible entities to enable such eligible entities to operate an Academy in accordance with the provisions of this section.

      ‘(2) COORDINATION OF ACTIVITIES- To the extent practicable, such academies shall coordinate efforts with teacher inservice activities of local educational agencies.

      ‘(3) COMBINATION OF RESOURCES- Each State educational agency receiving an allotment under this part may combine the funds reserved pursuant to section 501(b)(2)(B)(ii)(I) with such funds reserved by another State educational agency to operate academies assisted under this part on a multistate or regional basis.

      ‘(4) COSTS- Each eligible entity receiving a grant under this section shall use such funds to meet the operating costs of carrying out the activities described in subsection (d), which may include reasonable startup and initial operating costs, and costs associated with release time, stipends, travel, and living expenses for teachers who participate in the Academy’s program if no other funds are available to pay such costs.

    ‘(d) AUTHORIZED ACTIVITIES- Each eligible entity receiving a grant to operate an Academy under this section may use such grant funds for--

      ‘(1) renewal and enhancement of participants’ knowledge in key academic subjects;

      ‘(2) skills and strategies to improve academic achievement of students, especially students who are educationally disadvantaged, are limited-English proficient, are drug- or alcohol-exposed, or have disabilities;

      ‘(3) improved teaching and classroom management skills;

      ‘(4) techniques for the integration of academic and vocational subject matter, including the application of such techniques in tech/prep education programs;

      ‘(5) the use of educational technologies in teaching the key academic subjects;

      ‘(6) training needed to participate in curriculum development in a key academic subject;

      ‘(7) training in the development and use of assessment tools;

      ‘(8) review of existing teacher enhancement programs to identify the most promising approaches;

      ‘(9) development of a curriculum for use by the Academy;

      ‘(10) follow-up activities for previous participants;

      ‘(11) dissemination of information about the Academy, including the training curricula developed; and

      ‘(12) any other activities proposed by the applicant and approved by the State educational agency.

    ‘(e) COST SHARING- Funds received for this section may be used to pay not more than 75 percent of the cost of operating an Academy in the first year an eligible entity receives a grant under this section, 65 percent of such cost in such second year, 55 percent of such cost in such third year, 45 percent of such cost in such fourth year, and 35 percent of such cost in such fifth year. The remaining share shall be provided from non-Federal sources, and may be in cash or in-kind contributions, fairly valued.

    ‘(f) SPECIAL RULES-

      ‘(1) USES OF FUNDS-

        ‘(A) KEY ACADEMIC SUBJECTS- At least 70 percent of funds received for this section shall be used for enhancement of participant knowledge in key academic subjects.

        ‘(B) OTHER SUBJECTS- At least 20 percent of the funds received for this section shall be used for enhancement of participant knowledge in areas not related to academic subjects.

      ‘(2) SPECIAL RULE- In awarding grants under this section the State educational agency may provide for training in 2 or more key academic subjects at a single site.

      ‘(3) ADDITIONAL ACADEMIES OR AWARDS- If a State can demonstrate that the State’s need for academies in key academic subjects has been met, and if the State can demonstrate that it is implementing the findings of the teacher education study described in section 504(c), then the State may use a portion of the amount reserved pursuant to section 501(b)(2)(B)(ii)(I) to establish one or more of the following academies or awards:

        ‘(A) EARLY CHILDHOOD ACADEMIES- A State educational agency may establish an academy aimed at early childhood education training. Such an academy shall give a priority to recruiting candidates from underrepresented groups in the early childhood education profession and shall provide intensive childhood training in violence counseling.

        ‘(B) TECH-PREP ACADEMIES- A State educational agency may establish an academy for--

          ‘(i) assisting educators in secondary schools and community colleges to more effectively understand organizational structures and organizational change strategies;

          ‘(ii) assisting educators to learn effective peer leadership strategies;

          ‘(iii) assisting secondary school teachers and community college faculty to identify the knowledge and skills required in highly technical industries and workplaces;

          ‘(iv) assisting secondary school teachers and community college faculty to apply creative strategies to the development of interdisciplinary curricula; and

          ‘(v) assisting educators in integrating academic and vocational education.

        ‘(C) TEACHER AWARDS- (i) A State educational agency may make awards to State Academies for Teachers to provide for a program of cash awards and recognition to outstanding teachers in the key academic subject or subjects covered by the program of the Academy.

        ‘(ii) Any full-time public or private elementary or secondary school teacher of a key academic subject or vocational and technology education subject, including an elementary school teacher of the general curriculum, shall be eligible to receive an award under this subparagraph.

        ‘(iii) The amount of a teacher’s award under this subparagraph shall not exceed $5,000 and shall be available for any purpose the recipient chooses.

        ‘(iv) Each Academy receiving an award under clause (i) of this subparagraph shall select teachers to receive awards from nominations received from local educational agencies, public and private elementary and secondary schools, teachers, associations of teachers, parents, associations of parents and teachers, businesses, business groups, and student groups.

        ‘(v) The Academy shall select award recipients under this subparagraph in accordance with criteria developed by the Academy and approved by the State educational agency. The selection criteria may take into account teacher’s success in--

          ‘(I) educating disadvantaged children and children with disabilities;

          ‘(II) educating gifted and talented children;

          ‘(III) encouraging students to enroll, and succeed, in advanced classes in a key academic subject or vocational and technology education subject;

          ‘(IV) teaching a key academic subject or vocational and technology education subject successfully in schools educating large numbers of educationally disadvantaged students, including schools in low-income inner-city or rural areas;

          ‘(V) introducing a new curriculum in a key academic subject into a school or strengthening an established curriculum;

          ‘(VI) acting as a master teacher; and

          ‘(VII) other criteria as developed by the Academies and approved by the State educational agency.

‘SEC. 506. STATE ACADEMIES FOR SCHOOL LEADERS.

    ‘(a) PURPOSE; DEFINITIONS-

      ‘(1) PURPOSE- It is the purpose of this section to improve the training and performance of school principals and other school leaders and to increase the number of persons who are highly trained to be principals and school leaders by establishing an Academy for current and prospective school leaders in every State.

      ‘(2) DEFINITIONS- For the purpose of this section--

        ‘(A) the term ‘Academy’ means a course of instruction and related activities to increase a school leader’s knowledge of the tools and techniques of school management and leadership, and such leader’s ability to exercise such tools and techniques in the school setting, and may include a course of instruction for school district level system leaders separately or in combination with school leaders and teachers, except that such term--

          ‘(i) does not mean a physical facility; and

          ‘(ii) does not require a separate location from another Academy or other training program; and

        ‘(B) the term ‘eligible entity’ means a technical assistance center assisted under subpart 2 of part C of title V of this Act as such Act was in effect on the day before the date of enactment of the Higher Education Amendments of 1992, a local educational agency, an institution of higher education, a museum, a private nonprofit educational organization of demonstrated effectiveness, or a consortium of any 2 or more such entities.

    ‘(b) APPLICATION REQUIRED-

      ‘(1) IN GENERAL- (A) Each eligible entity desiring to operate an Academy under this section shall submit an application to the State educational agency at such time, in such manner and accompanied by such information as the State may reasonably require. Such Academy may be operated in cooperation or consortium with an Academy of another State.

      ‘(B) A priority for awards shall be given to entities who received funds under subpart 2 of part C of title V of the Higher Education Act as in effect on September 30, 1991.

      ‘(2) CONTENTS- Each application submitted pursuant to paragraph (1) shall describe--

        ‘(A) the goals of the Academy and the steps that shall be taken to evaluate the extent to which the Academy reaches its goals;

        ‘(B) the curriculum to be used or developed by the Academy;

        ‘(C) the steps to be taken to recruit school leaders for the Academy’s program, including outreach efforts to identify and attract--

          ‘(i) minority group members;

          ‘(ii) individuals with disabilities;

          ‘(iii) individuals from areas with large numbers or concentrations of disadvantaged students; and

          ‘(iv) other individuals with potential to become school leaders;

        ‘(D) efforts to be taken to disseminate information about the Academy;

        ‘(E) selection criteria to be used in identifying school leaders to participate in the Academy;

        ‘(F) steps to be taken to assure that the programs offered by the Academy shall be of sufficient length and comprehensiveness to significantly improve participants’ knowledge;

        ‘(G) steps to be taken to assure the involvement of private sector managers and executives from businesses in the conduct of the Academy’s programs; and

        ‘(H) efforts to be undertaken to evaluate the impact of the Academy on participants.

    ‘(c) USE OF ALLOTTED FUNDS-

      ‘(1) GRANTS- Each State educational agency receiving an allotment under this part shall use the funds reserved pursuant to section 501(b)(2)(B)(ii)(I) to award a competitive grant to an eligible entity to enable such eligible entity to operate an Academy in accordance with the provisions of this subpart.

      ‘(2) COSTS- Each eligible entity receiving a grant under this section shall use such funds to meet the costs of carrying out the activities described in subsection (d), which may include reasonable startup and initial operating costs, and stipends, travel, and living expenses for participants in the Academy if no other funds are available to pay such costs.

      ‘(3) LIMITATIONS-

        ‘(A) PARTICIPANTS- At least 70 percent of the participants in an Academy shall be from the school building level.

        ‘(B) SPECIAL RULE- In awarding grants under this section, the State educational agency may provide for the location at the same site of Academies assisted under this section and Academies assisted under section 505.

    ‘(d) AUTHORIZED ACTIVITIES- Each eligible entity receiving a grant to operate an Academy under this section may use such grant funds for--

      ‘(1) developing and enhancing of participants’ knowledge in instructional leadership, school-based management, shared decisionmaking, school improvement strategies and school-level accountability mechanisms;

      ‘(2) identifying candidates, including members of minority groups, individuals with disabilities, and individuals from schools with high numbers or concentrations of educationally disadvantaged students and individuals who are bilingual, to be trained as new school leaders;

      ‘(3) conducting programs which provide for the involvement of private sector managers and executives from businesses;

      ‘(4) identifying models and methods of leadership training and development that are promising or have proven to be successful;

      ‘(5) providing intensive training and development programs for current school leaders seeking enhanced and up-to-date knowledge needed to perform their jobs effectively;

      ‘(6) identifying local educational agencies and schools with principal and other school leader vacancies and working with such agencies and schools to match Academy participants with such vacancies;

      ‘(7) facilitating internships for graduates of the program for new school leaders, under the guidance and supervision of experienced administrators;

      ‘(8) providing periodic follow-up development activities for school leaders trained through the Academy’s programs;

      ‘(9) disseminating information about the Academy, including the training curricula developed;

      ‘(10) coordinating activities with those of any State Academies for Teachers established in the State; and

      ‘(11) any other activity proposed by the applicant in the application submitted pursuant to subsection (b) and approved by the State educational agency.

    ‘(e) COST-SHARING- Funds received under this section may be used to pay not more than 75 percent of the cost of operating an Academy in the first year an eligible entity receives a grant under this subpart, 65 percent of such cost in such second year, 55 percent of such cost in such third year, 45 percent of such cost in such fourth year, and 35 percent of such cost in such fifth year. The remaining share shall be provided from non-Federal sources, and be in cash or in kind, fairly valued.

‘SEC. 507. INSTITUTIONS OF HIGHER EDUCATION USES OF FUNDS.

    ‘(a) APPLICATIONS- Institutions of higher education desiring to receive a grant under section 501(b)(2)(B)(ii)(II) shall submit to the State educational agency an application which--

      ‘(1) describes the types of activities that the institution plans to undertake with funds provided;

      ‘(2) describes the process used by the institution to determine the State’s needs for improving teacher education and training for preschool and early childhood education specialists, including consulting with current students, teachers, representatives from local educational agencies, parents, and representatives from preschool and early childhood specialists;

      ‘(3) if such institution is applying for a grant to assist local educational agencies in providing inservice training for teachers, describes the training and services that such institution plans to provide for teachers within the local educational agency and demonstrates that such training and services are consistent with the needs of the local educational agencies to be served;

      ‘(4) if such institution is applying for a grant to establish a professional development academy, contains the information required pursuant to section 508;

      ‘(5) describes how the institution plans to integrate academic and vocational teacher education programs; and

      ‘(6) contains any other information that may be required by the State educational agency.

    ‘(b) AWARDS- The State educational agency shall award grants on a competitive basis to institutions of higher education that have departments, schools, or colleges of education. In awarding grants, the State educational agency shall award funds for the following purposes:

      ‘(1) For the establishment of professional development academies pursuant to section 508.

      ‘(2) For the establishment and maintenance of programs that provide teacher training to individuals who are moving to a career in education from another occupation.

      ‘(3) For institutions of higher education in consultation and cooperation with a local educational agency or a consortium of local educational agencies, to develop and provide technical assistance to local education agencies in providing inservice training for teachers.

      ‘(4) For improving teacher education programs in order to further innovation in teacher education programs within an institution of higher education and to better meet the needs of the local educational agencies for well-prepared teachers.

      ‘(5) For improving training for preschool and early childhood education specialists, including preschool and early intervention services for infants and toddlers with disabilities, in order to further innovation in such programs with institutions of higher education and to better meet the needs of preschool and early childhood education programs for well-prepared personnel.

      ‘(6) To integrate the instruction of academic and vocational teacher education programs.

      ‘(7) For activities to encourage individuals, especially individuals from minority groups, to pursue a career in education.

      ‘(8) For expanding cooperative educational programs between State educational agencies and offices, schools, and school systems, institutions of higher education, appropriate educational entities, and private sector establishments involved in education between the United States and the Republic of Mexico for the purpose of providing bilateral teaching initiatives and programs that provide teacher training experiences between the educational communities of the United States and those of the Republic of Mexico and to enhance mutually beneficial educational activities involving researchers, scholars, faculty members, teachers, educational administrators, and other specialists to lecture, teach, conduct research, and develop cooperative programs.

      ‘(9) When the study of teacher education programs is completed in accordance with section 504(c), to implement the program and policy changes for teacher education programs resulting from the findings of such study.

‘SEC. 508. PROFESSIONAL DEVELOPMENT ACADEMIES.

    ‘(a) AUTHORITY; DEFINITIONS-

      ‘(1) AUTHORITY- From amounts reserved pursuant to section 501(b)(2)(B)(ii)(II), the State educational agency is authorized to make grants to, and enter into contracts and cooperative agreements with, eligible entities to plan, establish, and operate professional development academies.

      ‘(2) DEFINITIONS- For purposes of this section--

        ‘(A) the term ‘Academy’ means school-based teacher training operated as a partnership between one or more elementary or secondary schools and one or more institutions of higher education that provides prospective and novice teachers an opportunity to work under the guidance of master teachers and college faculty members. Such Academy shall be established for the purpose of--

          ‘(i) the training of prospective and novice teachers (including preschool and early childhood education specialists, where appropriate) under the guidance of master teachers and teacher educators;

          ‘(ii) the continuing development of experienced teachers;

          ‘(iii) research and development to improve teaching and learning and the organization of schools;

          ‘(iv) public demonstration of exemplary learning programs for diverse students; and

          ‘(v) dissemination of knowledge produced in the research and development process;

        except that such term--

          ‘(i) does not mean a physical facility; and

          ‘(ii) does not require a separate location from another Academy or other training program; and

        ‘(B) the term ‘eligible entity’ means a partnership that includes one or more local educational agencies and one or more institutions of higher education and may include teachers and the business community.

    ‘(b) AWARDS AND RENEWALS- An award made under this section may be in the form of a one-year planning grant. Such award may be renewed for implementation purposes without further competition annually for 4 additional years, upon submission of an evaluation of the project to the State educational agency and assurances that the recipient--

      ‘(1) has achieved the goals set out in its application for the original term;

      ‘(2) shows promise of continuing its progress;

      ‘(3) will meet its share of the project costs; and

      ‘(4) has developed a plan for continuing the Academy after Federal funding is no longer available.

    ‘(c) APPLICATION REQUIRED-

      ‘(1) IN GENERAL- Each eligible entity desiring to operate an Academy under this section shall submit an application to the State educational agency at such time, in such manner, and accompanied by such information as the State educational agency may reasonably require.

      ‘(2) CONTENTS- Each application submitted pursuant to subsection (a) shall describe--

        ‘(A) what schools within the local educational agency and what institutions of higher education shall participate in the partnership or otherwise participate in the program;

        ‘(B) the goals of the Academy and the steps that shall be taken to evaluate the extent to which the Academy reaches such goals;

        ‘(C) a plan for monitoring progress and evaluating the effectiveness of the Academy in meeting the goals it has developed for teacher and student performance;

        ‘(D) a description of the partnership’s plan for systemic change in education, and a description of the activities and services for which assistance is sought;

        ‘(E) ways in which the professional development programs shall cover course content in key academic subjects, methods of instruction, and classroom and school-based management skills;

        ‘(F) plans to involve prospective and novice teachers in the programs offered by the Academy, including outreach efforts to identify and attract--

          ‘(i) minority group members;

          ‘(ii) individuals with disabilities; and

          ‘(iii) individuals from areas with large numbers or concentrations of disadvantaged students; and

        ‘(G) estimates of the number of prospective and beginning teachers to be trained in the Academy in each year of the project and assurances that a significant number of prospective and beginning teachers will be trained in the Academy in each year of the project.

      ‘(3) ASSURANCES- Each application submitted pursuant to this subsection shall contain assurances that--

        ‘(A) professional development programs at the Academy shall be designed and conducted by faculty members from institutions of higher education and teachers from local schools of demonstrated excellence;

        ‘(B) in establishing the Academy, the applicant has consulted with teachers, administrators, and parents who will be affected at the teaching school site;

        ‘(C) participating faculty from institutions of higher education shall include faculty members who are experts in the key academic subjects; and

        ‘(D) the activities, services and programs offered by the Academy shall be of sufficient length and comprehensiveness to significantly improve participants’ knowledge.

      ‘(4) PRIORITIES- In making awards under this part, the State educational agency shall give priority to applicants that--

        ‘(A) select Academy sites based on need, as evidenced by such measures as a high rate of teacher attrition or a high proportion of the student body at risk of educational failure;

        ‘(B) propose projects that demonstrate the strong commitment to or previous active support for educational innovation;

        ‘(C) propose projects that demonstrate collaboration with other educational organizations, social or human service agencies, other community organizations, and the business community in the teaching school’s operation;

        ‘(D) demonstrate potential for a significant impact on the quality of the future education work force; and

        ‘(E) demonstrate the long-term feasibility of the partnership.

      ‘(5) SPECIAL RULES- Each such application shall describe--

        ‘(A) how the local educational agency will address the need to change or waive a local rule or regulation that is found by an Academy to impede the school’s progress in achieving its goals; and

        ‘(B) how partners that are institutions of higher education will involve the School of Education, the School of Arts and Sciences, and the School of Technology or Engineering and any other department of the institution.

    ‘(d) USE OF ALLOTTED FUNDS-

      ‘(1) PERMITTED USES- Each eligible entity receiving a grant under this section shall use such funds to meet the operating costs of carrying out the activities described in subsection (e), which may include reasonable startup and initial operating costs, staff development, purchase of books, materials, and equipment, including new technology, costs associated with release time, payment of personnel directly related to the operation of the Academy, and participation in the activities of a network of Academies.

      ‘(2) LIMITATIONS- The Secretary may limit the amounts of funds that may be used for minor remodeling and the purchase of equipment under this part.

    ‘(e) AUTHORIZED ACTIVITIES- Each eligible entity receiving a grant to operate an Academy under this section may use such grant funds for--

      ‘(1) training and internship activities for prospective or novice teachers in a school setting under the guidance of master or mentor teachers and faculty from institutions of higher education, especially faculty who are experts in key academic subjects;

      ‘(2) mentoring and induction activities for prospective and novice teachers, including such teachers seeking to enter teaching through alternative routes;

      ‘(3) participation of experienced teachers in the internship training and assessment of prospective and beginning teachers;

      ‘(4) teaching skills and strategies to increase the ability of prospective, novice and experienced teachers to teach disadvantaged students, students with disabilities (including students with severe and multiple disabilities and students with lesser known or newly emerging disabilities), students who are limited-English proficient, and students from diverse cultural backgrounds;

      ‘(5) programs to enhance teaching and classroom management skills, including school-based management skills, of novice, prospective and experienced teachers;

      ‘(6) experimentation and research to improve teaching and learning conducted in the Academy by teachers and university faculty;

      ‘(7) activities to integrate academic and vocational education;

      ‘(8) training and other activities to promote the continued learning of experienced teachers, especially in their subject matter knowledge and how to teach it;

      ‘(9) participation of expert practicing teachers and administrators in the university-based education studies of prospective teachers;

      ‘(10) activities designed to disseminate information about the teaching strategies acquired through the Academy with other teachers in the district’s schools;

      ‘(11) organizational restructuring, including the introduction of new roles and staffing patterns in the school and university;

      ‘(12) activities intended to address the effects of chronic community violence, such as violence counseling and conflict resolution training; and

      ‘(13) other activities proposed by the applicant and approved by the Secretary.

    ‘(f) COST-SHARING- Funds received under this section may be used to pay 100 percent of the cost of a planning grant and not more than 75 percent of the cost of operating an Academy in the first 2 years an eligible entity receives a grant under this subpart and not more than 50 percent of such cost in such third and fourth years. The remaining share shall be provided from non-Federal sources, and may be in-kind, fairly valued.

‘SEC. 509. FEDERAL FUNDS TO SUPPLEMENT, NOT SUPPLANT REGULAR NONFEDERAL FUNDS.

    ‘A State educational agency, local educational agency, or institution of higher education may use funds received under this part only so as to supplement and, to the extent practicable, increase the level of funds that would be available from non-Federal sources for the uses of funds under this part and in no case may such funds be so used as to supplant such funds from such non-Federal sources.

‘SEC. 510. COORDINATION WITH OTHER PROGRAMS.

    ‘The State educational agency shall ensure that activities conducted under this part shall be consistent with the goals and objectives of any Federal or State systemic educational reform activities.

‘SEC. 510A. AUTHORIZATION OF APPROPRIATIONS.

    ‘There are authorized to be appropriated to carry out this part $350,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years.

‘PART B--NATIONAL TEACHER ACADEMIES

‘SEC. 511. PROGRAM ESTABLISHED.

    ‘(a) IN GENERAL- The Secretary is authorized, in accordance with the provisions of this part, to make grants to eligible recipients to establish and operate National Teacher Academies.

    ‘(b) SUBJECT AREAS AND STAFF-

      ‘(1) SUBJECT AREAS- At least 1 but not more than 3 National Teacher Academies shall be established in each of the following subject areas commonly taught in elementary and secondary schools:

        ‘(A) English.

        ‘(B) Mathematics.

        ‘(C) Science.

        ‘(D) History.

        ‘(E) Geography.

        ‘(F) Civics and government.

        ‘(G) Foreign languages.

      ‘(2) STAFF- Academy staff shall be selected from the most accomplished and prominent scholars in the relevant fields of study and in the methodologies which improve the skills of persons who teach in such fields of study.

    ‘(c) DURATION OF GRANT- Each grant to establish and operate a National Teacher Academy shall be for a period of 3 years, and is renewable.

    ‘(d) COMPETITIVE GRANT AWARDS- The Secretary shall award grants under this part on a competitive basis.

    ‘(e) CONSISTENCY WITH SYSTEMIC REFORMS- In awarding grants under this part, the Secretary shall ensure that activities conducted under this part are consistent with the goals and objectives of other Federal or State systemic educational reform activities.

‘SEC. 512. ELIGIBLE RECIPIENTS.

    ‘(a) IN GENERAL- For the purposes of this part, the term ‘eligible recipient’ means--

      ‘(1) an institution of higher education;

      ‘(2) a private nonprofit educational organization of demonstrated effectiveness; or

      ‘(3) a combination of the institutions or organizations set forth in paragraphs (1) and (2) of this paragraph.

    ‘(b) EXPERTISE REQUIREMENTS- The Secretary shall only award grants to eligible recipients that have demonstrated expertise in the--

      ‘(1) subject area of the National Teacher Academy to be established and operated; and

      ‘(2) in-service training of teachers at the national, State, and local levels.

‘SEC. 513. USE OF FUNDS.

    ‘(a) IN GENERAL- Funds provided pursuant to this part shall be used to--

      ‘(1) provide in-service training programs for teachers and administrators, including--

        ‘(A) programs which emphasize improving the teachers’ knowledge in the particular subject area of the National Teacher Academy;

        ‘(B) programs which integrate knowledge of subject matter with techniques for communicating that knowledge to students, including students who are disadvantaged, limited-English proficient, drug- or alcohol-exposed, or who have disabilities;

        ‘(C) the use of the most recent applied research findings concerning education and the classroom; and

        ‘(D) integration of materials from different disciplines into classroom instruction, especially for elementary school teachers;

      ‘(2) conduct each year at least one summer institute of at least 3 weeks duration for the State delegations described in section 515; and

      ‘(3) provide support services to the State Academies for Teachers, including--

        ‘(A) the establishment of a national network of individuals to assist in teacher education programs in State Academies for Teachers;

        ‘(B) consultation assistance in the design and implementation of in-service teacher training programs; and

        ‘(C) monthly newsletters or other methods of communicating useful information.

    ‘(b) ADMINISTRATIVE COSTS- Not more than 10 percent of the amount of funds received under this part may be used by an eligible recipient for administrative costs.

‘SEC. 514. APPLICATION.

    ‘(a) APPLICATION- Each eligible recipient desiring a grant under this part shall submit an application to the Secretary at such time and in such manner as the Secretary may reasonably require.

    ‘(b) CONTENTS- Each application submitted pursuant to subsection (a) shall--

      ‘(1) describe the activities, services, and programs for which assistance is sought;

      ‘(2) describe how at least 70 percent of the National Teacher Academy’s time shall be devoted to basic course content relevant to the particular subject field and necessary for improving the quality of teaching in public and private elementary and secondary schools;

      ‘(3) describe how not more than 30 percent of the National Teacher Academy’s time shall be devoted to methods of instruction relevant to the particular subject field;

      ‘(4) describe how the National Teacher Academy’s activities will be coordinated with or administered cooperatively with institutes established by other Federal entities, such as the National Science Foundation and the National Endowment for the Humanities; and

      ‘(5) provide such additional assurances or information as the Secretary may reasonably require.

‘SEC. 515. STATE DELEGATIONS.

    ‘(a) IN GENERAL- Each selection panel established pursuant to section 516(b) shall select a State delegation to participate in each National Teacher Academy assisted under this part.

    ‘(b) COMPOSITION-

      ‘(1) IN GENERAL- Except as provided in paragraphs (2) and (3), each State delegation described in subsection (a) shall, at a minimum, be composed of--

        ‘(A) 1 school administrator with authority to design and conduct in-service teacher training and academic programs; and

        ‘(B) at least 5 teachers, of whom at least 2 shall be elementary school teachers.

      ‘(2) SPECIAL RULE- The State delegations for the Commonwealth of the Northern Mariana Islands, Guam, the Virgin Islands, American Samoa and the Republic of Palau (until the Compact of Free Association is ratified) shall, at a minimum, be composed of--

        ‘(A) 1 school administrator with authority to design and conduct in-service teacher training and academic programs; and

        ‘(B) at least 3 teachers, of whom at least 1 shall be an elementary school teacher.

      ‘(3) ADDITIONAL TEACHERS-

        ‘(A) Each State that has obtained the approval of the appropriate National Teacher Academy may send to such National Teacher Academy the number of additional teachers determined in accordance with subparagraph (B).

        ‘(B) The appropriate National Teacher Academy shall determine the number of additional teachers to attend such National Teacher Academy on the basis of the number of full-time equivalent teachers in the State compared to such number in all States.

    ‘(c) DUTIES- Each State delegation shall--

      ‘(1) attend the appropriate subject area summer institute at the appropriate National Teacher Academy; and

      ‘(2) after participation in the National Teacher Academy assist in the development and operation of the appropriate National Teacher Academy.

‘SEC. 516. SELECTION.

    ‘(a) IN GENERAL- Individuals participating in a National Teacher Academy shall be selected by the selection panel described in subsection (b) in accordance with the provisions of section 515.

    ‘(b) SELECTION PANEL-

      ‘(1) ESTABLISHMENT- Each State educational agency receiving assistance under part A of this title shall establish a 10-member selection panel to select teachers to attend the National Teacher Academies established pursuant to this part.

      ‘(2) COMPOSITION AND REPRESENTATION-

        ‘(A) COMPOSITION- At least 50 percent of the membership of each selection panel shall be classroom teachers, selected in consultation with teacher organizations, if any, in the State.

        ‘(B) REPRESENTATION- The composition of each selection panel shall be broadly representative of the elementary and secondary schools and the State.

      ‘(3) FUNCTION- Each selection panel shall--

        ‘(A) annually select the State delegations in accordance with section 515; and

        ‘(B) involve the individuals selected pursuant to subparagraph (A) in the operation of the State academies, if any, or other in-service training activities in the local educational agency in which such individuals teach.

‘SEC. 517. NATIONAL TEACHER ACADEMY EVALUATION.

    ‘The Secretary shall evaluate the system of National Teacher Academies and the effects of such academies on teachers every 2 years. The Secretary shall make available to the Congress and the public the results of such evaluation.

‘SEC. 518. AUTHORIZATION OF APPROPRIATIONS.

    ‘(a) IN GENERAL- There are authorized to be appropriated $35,000,000 for fiscal year 1993 and such sums as may be necessary for the 4 succeeding fiscal years to carry out the provisions of this part, of which not more than $5,000,000 shall be available for each of the National Teacher Academy subject areas listed in section 511(b)(1).

    ‘(b) SPECIAL RULES-

      ‘(1) APPROPRIATIONS LESS THAN $14,000,000- If the amount appropriated pursuant to the authority of subsection (a) is less than $14,000,000, then not more than $2,000,000 shall be available for each National Teacher Academy subject area in the order in which such subject areas are listed in section 511(b)(1), until such funds are expended.

      ‘(2) APPROPRIATIONS EQUAL TO OR IN EXCESS OF $14,000,000- If the amount appropriated pursuant to the authority of subsection (a) is equal to or exceeds $14,000,000, then such funds as equals or exceeds $14,000,000 shall be allocated equitably among each of the National Teacher Academy subject areas listed in section 511(b)(1).

‘PART C--TEACHER SCHOLARSHIPS AND FELLOWSHIPS

‘Subpart 1--Paul Douglas Teacher Scholarships

‘SEC. 521. PURPOSE; DESIGNATION.

    ‘(a) PURPOSE- It is the purpose of this subpart to make available, through grants to the States, scholarships to individuals who are outstanding secondary school graduates and who demonstrate an interest in teaching, in order to enable and encourage those individuals to pursue teaching careers in education at the preschool, elementary or secondary level.

    ‘(b) DESIGNATION- Scholarships awarded under this subpart shall be referred to as the ‘Paul Douglas Teacher Scholarships’.

‘SEC. 522. ALLOCATION AMONG STATES.

    ‘(a) ALLOCATION- From the sums appropriated for this subpart for any fiscal year, the Secretary shall allocate to any State an amount based on the school-age population in the State compared to the school-age population in all States.

    ‘(b) USE OF CENSUS DATA- For the purpose of this section, the number of persons in a State and in all States shall be determined by the most recently available data from the Bureau of the Census.

‘SEC. 523. GRANT APPLICATIONS.

    ‘(a) SUBMISSION OF APPLICATIONS- The Secretary is authorized to make grants to States in accordance with the provisions of this subpart. In order to receive a grant under this subpart, a State shall submit an application at such time or times, in such manner, and containing such information as the Secretary may prescribe by regulation. Such application shall set forth a program of activities for carrying out the purposes set forth in section 521 in such detail as will enable the Secretary to determine the degree to which such program will accomplish such purposes and such other policies, procedures, and assurances as the Secretary may require by regulation.

    ‘(b) CONTENT OF APPLICATIONS- The Secretary shall approve an application under this subpart only if the application--

      ‘(1) describes the selection criteria and procedures to be used by the State in the selection of scholarship recipients under this subpart;

      ‘(2) designates as the State agency responsible for administering the grants received under this subpart the State agency which administers the program under subpart 4 of part A of title IV (relating to State student incentive grants), the State agency with which the Secretary has an agreement under section 428(b), or another appropriate State agency approved by the Secretary;

      ‘(3) describes the outreach effort the State agency intends to use to publicize the availability of Paul Douglas Scholarships to secondary school students in the State;

      ‘(4) describes how the State will inform recipients, upon receipt of the award, of current and projected teacher shortages and surpluses within the State;

      ‘(5) provides assurances that each recipient eligible under section 525(b) of this subpart who receives a Paul Douglas Scholarship shall enter into an agreement with the State agency under which the recipient shall--

        ‘(A) within the 10-year period after completing the postsecondary education for which the Paul Douglas Teacher Corps Scholarship was awarded, teach for a period of not less than 2 years for each year for which assistance was received, in a public or private nonprofit preschool, elementary, or secondary school in any State, or, on a full-time basis, children with disabilities or children with limited English proficiency in a private nonprofit school, except that, in the case of individuals who teach in a shortage area established by the Secretary pursuant to section 530A, the requirements of this subparagraph shall be reduced by one-half;

        ‘(B) provide the State agency evidence of compliance with section 526 as required by the State agency; and

        ‘(C) repay all or part of a Paul Douglas Scholarship received under section 524 plus interest and, if applicable, reasonable collection fees, in compliance with regulations issued by the Secretary under section 527, in the event that the conditions of subparagraph (A) are not complied with, except as provided for in section 528;

      ‘(6) provides that the agreement entered into with recipients shall fully disclose the terms and conditions under which assistance under this subpart is provided and under which repayment may be required, including--

        ‘(A) a description of the procedures required to be established under paragraph (7); and

        ‘(B) a description of the appeals procedures required to be established under paragraph (8) under which a recipient may appeal a determination of noncompliance with any provision under this subpart;

      ‘(7) provides for procedures under which a recipient of assistance received under this subpart who teaches for less than the period required under paragraph (5)(A) will have the repayment requirements reduced or eliminated consistent with the provisions of sections 527 and 528;

      ‘(8) provides for appeals procedures under which a recipient may appeal any determination of noncompliance with any provision under this subpart; and

      ‘(9) provides assurances that the State agency shall make particular efforts to attract students from low-income backgrounds; ethnic and racial minority students; individuals with disabilities; other individuals from groups historically underrepresented in teaching; individuals who express a willingness or desire to teach in rural schools, urban schools, or schools having less than average academic results or serving large numbers of economically disadvantaged students; or women or minorities who show interest in pursuing teaching careers in mathematics and science and who are underrepresented in such fields.

    ‘(c) SELECTION CRITERIA AND PROCEDURES- The State educational agency, in cooperation with the State higher education agency, and pursuant to scholarship selection criteria included in section 525, shall establish criteria to select Paul Douglas Teacher Scholarship recipients. These criteria shall be intended to attract highly qualified individuals into teaching, to ensure that these students are enrolled or are accepted for enrollment in approved teacher education programs, and to meet the present and projected needs of States in addressing teacher shortages, including the demand for and supply of early childhood and elementary teachers in the State, the demand for and supply of secondary teachers in the State, and the demand for teachers with training in specific academic disciplines in the State.

    ‘(d) SPECIAL CONSIDERATION- The State educational agency, in cooperation with the State higher education agency, shall give special consideration in the selection of scholarship recipients to individuals who--

      ‘(1) intend to teach or provide related services to students with disabilities;

      ‘(2) intend to teach limited English proficient students;

      ‘(3) intend to teach preschool age children;

      ‘(4) intend to teach in schools servicing inner city or rural or geographically isolated areas (as defined by the Secretary by regulations consistent with the purposes of this section);

      ‘(5) intend to teach in curricular areas or geographic areas where there are demonstrated shortages of qualified teachers; or

      ‘(6) are from disadvantaged backgrounds, including racial and ethnic minorities and individuals with disabilities, and are underrepresented in the teaching profession or in the curricular areas in which they are preparing to teach.

    ‘(e) SOLICITATION OF VIEWS ON SELECTION CRITERIA AND PROCEDURES- In developing the selection criteria and procedures to be used by the State, the State shall solicit the views of local educational agencies, private educational institutions, and other interested parties. Such views--

      ‘(1) shall be solicited by means of--

        ‘(A) written comments; and

        ‘(B) publication of proposed selection criteria and procedures in final form for implementation; and

      ‘(2) may be solicited by means of--

        ‘(A) public hearings on the teaching needs of elementary and secondary schools in the State (including the number of new teachers needed, the expected supply of new teachers, and the shortages in the State of teachers with specific preparation); or

        ‘(B) such other methods as the State may determine to be appropriate to gather information on such needs.

‘SEC. 524. AMOUNT AND DURATION OF AND RELATION TO OTHER ASSISTANCE.

    ‘(a) LIMITATIONS ON AMOUNT AND DURATION- Subject to subsection (c) each Paul Douglas Teacher Scholarship recipient shall receive a $5,000 scholarship for each academic year of postsecondary education for study in preparation to become a preschool, special education, elementary, or secondary teacher. No individual shall receive scholarship assistance for more than 4 years of postsecondary education, as determined by the State agency.

    ‘(b) CONSIDERATION OF AWARD IN OTHER PROGRAMS- Notwithstanding the provisions of title IV of this Act, scholarship funds awarded pursuant to this part shall be considered in determining eligibility for student assistance under title IV of this Act.

    ‘(c) ASSISTANCE NOT TO EXCEED COST OF ATTENDANCE- No individual shall receive an award under the Paul Douglas Teacher Scholarship established under this subpart, in any academic year, which exceeds the cost of attendance, as defined in section 472 of this Act, at the institution the individual is attending. A scholarship awarded under this part shall not be reduced on the basis of the student’s receipt of other forms of Federal student financial assistance, but shall be taken into account in determining the eligibility of the student for those other forms of Federal student financial assistance.

‘SEC. 525. SELECTION OF PAUL DOUGLAS TEACHER SCHOLARS.

    ‘(a) SELECTION BY STATEWIDE PANELS- Paul Douglas Teacher Scholars shall be selected by a 7-member statewide panel appointed by the chief State elected official, acting in consultation with the State educational agency, or by an existing grant agency or panel designated by the chief State elected official and approved by the Secretary. The statewide panel shall be representative of school administrators, teachers, including preschool and special education teachers, and parents.

    ‘(b) ELIGIBILITY FOR SELECTION; SELECTION CRITERIA AND PROCEDURES- Selections of Paul Douglas Scholars shall be made from students who have graduated or who are graduating from secondary school and who rank in the top 10 percent of their graduating class. The State educational agency shall make applications available to public and private nonprofit secondary schools in the State and in other locations convenient to applicants, parents, and others. The statewide panel shall develop criteria and procedures for the selection of Paul Douglas Scholars. Such criteria may include the applicant’s secondary school grade point average, involvement in extracurricular activities, financial need, and expression of interest in teaching as expressed in an essay written by the applicant. The panel may also require the applicant to furnish letters of recommendation from teachers and others.

    ‘(c) WAIVER- The Secretary may waive the requirements of section 523(d) for not more than 25 percent of all individuals receiving a scholarship under this subpart.

‘SEC. 526. SCHOLARSHIP CONDITIONS.

    ‘Recipients of scholarship assistance under this subpart shall continue to receive such scholarship payments only during such periods that the State agency finds that the recipient is--

      ‘(1) enrolled as a full-time student in an accredited postsecondary institution;

      ‘(2) pursuing a course of study leading to teacher certification; and

      ‘(3) maintaining satisfactory progress as determined by the postsecondary institution the recipient is attending.

‘SEC. 527. SCHOLARSHIP REPAYMENT PROVISIONS.

    ‘Recipients found by the State agency to be in noncompliance with the agreement entered into under section 523(b)(5) of this subpart shall be required to repay a pro rata amount of the scholarship awards received, plus interest (but in no event at an interest rate higher than the rate applicable to loans in the applicable period under part B of title IV of this Act) and, where applicable, reasonable collection fees, on a schedule and at a rate of interest to be prescribed by the Secretary by regulations issued pursuant to this subpart.

‘SEC. 528. EXCEPTIONS TO REPAYMENT PROVISIONS.

    ‘(a) DEFERRAL DURING CERTAIN PERIODS- A recipient shall not be considered in violation of the agreement entered into pursuant to section 523(b)(5)(C) during any period in which the recipient--

      ‘(1) is pursuing a full-time course of study related to the field of teaching at an eligible institution;

      ‘(2) is serving, not in excess of 3 years, as a member of the armed services of the United States;

      ‘(3) is temporarily totally disabled for a period of time not to exceed 3 years as established by sworn affidavit of a qualified physician;

      ‘(4) is unable to secure employment for a period not to exceed 12 months by reason of the care required by a spouse who is disabled;

      ‘(5) is seeking and unable to find full-time employment for a single period not to exceed 12 months;

      ‘(6) is seeking and unable to find full-time employment as a teacher in a public or private nonprofit preschool, elementary or secondary school, or education program for a single period not to exceed 27 months; or

      ‘(7) satisfies the provisions of additional repayment exceptions that may be prescribed by the Secretary in regulations issued pursuant to this subpart.

    ‘(b) FORGIVENESS IF PERMANENTLY TOTALLY DISABLED- A recipient shall be excused from repayment of any scholarship assistance received under this subpart if the recipient becomes permanently totally disabled as established by sworn affidavit of a qualified physician.

‘SEC. 529. FEDERAL ADMINISTRATION OF STATE PROGRAMS; JUDICIAL REVIEW.

    ‘(a) DISAPPROVAL HEARING REQUIRED- The Secretary shall not finally disapprove any application for a State program submitted under section 523, or any modification thereof, without first affording the State agency submitting the program reasonable notice and opportunity for a hearing.

    ‘(b) SUSPENSION OF ELIGIBILITY- Whenever the Secretary, after reasonable notice and opportunity for a hearing to the State agency administering a State program approved under this subpart, finds--

      ‘(1) that the State program has been so changed that it no longer complies with the provisions of this subpart, or

      ‘(2) that in the administration of the program there is a failure to comply substantially with any such provisions,

    the Secretary shall notify such State agency that the State will not be regarded as eligible to participate in the program under this subpart until the Secretary is satisfied that there is no longer any such failure to comply.

    ‘(c) COURT REVIEW-

      ‘(1) IN GENERAL- If any State is dissatisfied with the Secretary’s final action under subsection (b) (1) or (2), such State may appeal to the United States court of appeals for the circuit in which such State is located. The summons and notice of appeal may be served at any place in the United States. The Secretary shall forthwith certify and file in the court the transcript of the proceedings and the record on which the action was based.

      ‘(2) FINDINGS- The findings of fact by the Secretary, if supported by substantial evidence, shall be conclusive; but the court, for good cause shown, may remand the case to the Secretary to take further evidence, and the Secretary may thereupon make new or modified findings of fact and may modify any previous action, and shall certify to the court the transcript and record of further proceedings. Such new or modified findings of fact shall likewise be conclusive if supported by substantial evidence.

      ‘(3) JURISDICTION- The court shall have jurisdiction to affirm the action of the Secretary or to set it aside, in whole or in part. The judgment of the court shall be subject to review by the Supreme Court of the United States upon certiorari or certification as provided in section 1254 of title 28, United States Code.

‘SEC. 530. EVALUATION.

    ‘(a) IN GENERAL- The Secretary shall conduct, by grant or contract, an independent evaluation of recipients of scholarship assistance under this subpart, which shall summarize and evaluate the State activities assisted under this subpart and the performance of such recipients. The evaluation shall assess the impact of the scholarship program assisted under this subpart to determine whether such program has brought into teaching a significant number of highly able individuals who otherwise would not have entered teaching.

    ‘(b) CONTENTS- The evaluation described in subsection (a) shall include--

      ‘(1) a description of the characteristics, including the educational preparation and achievement, of recipients of scholarship assistance under this subpart compared to similar students participating in teacher training who do not receive such scholarships;

      ‘(2) the rate at which such recipients successfully complete academic training and go on to teaching careers in preschool, elementary, or secondary education, compared to such rate for similar individuals who do not receive scholarship assistance under this subpart;

      ‘(3) the extent to which it is possible to determine objectively that the receipt of scholarship assistance under this subpart was the primary reason for an individual’s choice of a teaching education and career;

      ‘(4) the extent to which such recipients comply with the provisions of this subpart;

      ‘(5) the length of time such recipients remain in teaching careers, compared to similar teachers who do not receive scholarships;

      ‘(6) the barriers to the effectiveness of the program assisted under this subpart; and

      ‘(7) the cost-effectiveness of such program in improving teacher quality and quantity.

    ‘(c) EVALUATION REPORTS- The Secretary shall submit such interim evaluation reports to the President and the Congress as may be appropriate, and shall submit a final report on or before January 1, 1997.

    ‘(d) FUNDING- The Secretary shall reserve a total of not more than $1,000,000 from the amounts appropriated pursuant to the authority of section 530B in fiscal years 1993 through 1997 to carry out this section.

‘SEC. 530A. DESIGNATION OF SHORTAGE AREAS.

    ‘For the purposes of this part, the term ‘shortage areas’ means (1) geographic areas of the State in which there is a shortage of elementary and secondary school teachers, and (2) an area of shortage of elementary and secondary school teachers in specific grade levels and in specific academic, instructional, subject matter, and discipline classifications. Such shortage areas shall be prescribed by the Secretary, in consultation with the chief State school officer or, in the case of nonprofit private elementary or secondary schools, with appropriate officials of nonprofit private schools in each State in accordance with this section. In carrying out the provisions of this section, the Secretary shall give special consideration to areas in which emergency certification of individuals in a State is being used to correct teacher shortages and to States which have retirement laws permitting early retirement.

‘SEC. 530B. AUTHORIZATION OF APPROPRIATIONS.

    ‘There are authorized to be appropriated $26,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years to carry out this subpart.

‘Subpart 2--Christa McAuliffe Fellowship Program

‘SEC. 531. DECLARATION OF PURPOSE; DESIGNATION.

    ‘(a) PURPOSE- It is the purpose of this subpart to establish a national fellowship program for experienced and outstanding teachers.

    ‘(b) DESIGNATION- A recipient of a fellowship under this subpart shall be known as a ‘Christa McAuliffe fellow’.

‘SEC. 532. PROGRAM AUTHORIZED.

    ‘(a) IN GENERAL- The Secretary is authorized to make grants, in accordance with the provisions of this subpart, to State educational agencies to enable such State educational agencies to--

      ‘(1) conduct Christa McAuliffe fellowship activities; and

      ‘(2) award fellowships to Christa McAuliffe fellows in accordance with the provisions of this subpart.

    ‘(b) AMOUNT OF GRANTS- The amount awarded to each State educational agency pursuant to paragraph (1) of subsection (a) shall be an amount awarded on the basis of the school-age population in the State compared to the school-age population in all States, except that the Secretary may adjust the awards to ensure that such awards are of sufficient size to carry out the purposes of this subpart.

    ‘(c) STATE ACTIVITIES- Each State educational agency receiving a grant pursuant to subsection (a) shall use not more than 3 percent of such grant for administrative purposes.

    ‘(d) USE OF FUNDS FOR FELLOWSHIPS AND ADMINISTRATION- Funds appropriated for any fiscal year for fellowships to teachers under this subpart shall be used to award fellowships in accordance with the requirements of this subpart, except that not more than 1 percent of such funds shall be used by the Secretary for purposes of administering this subpart, including activities authorized under section 537(b).

‘SEC. 533. CHRISTA MCAULIFFE FELLOWSHIPS.

    ‘(a) AWARD DISTRIBUTION AND AMOUNT-

      ‘(1) AWARD DISTRIBUTION- Each State educational agency receiving a grant under this subpart shall use such funds to award Christa McAuliffe fellowships to public and private school teachers who have been employed as teachers for 8 or more years to enable such teachers to engage in the activities described in subsection (b).

      ‘(2) AMOUNT- Fellowships shall be in an amount equal to the annual salary the individual would earn in such individual’s current place of employment for the award period.

      ‘(3) RATABLE REDUCTION- If an individual receives a fellowship award for less than a school year, such fellowship shall be ratably reduced to equal the salary forgone.

      ‘(4) DURATION- No Christa McAuliffe fellow may receive an award for 2 consecutive years.

      ‘(5) REQUIREMENT- Subject to the repayment provisions of section 536, each Christa McAuliffe fellow shall be required to return to a teaching position, in their place of employment prior to receiving the fellowship award, for at least 2 years following such award. The Secretary is authorized, in extraordinary circumstances, to waive or defer all or a portion of the service requirement, or allow fellows to fulfill their service requirement by going into a teaching position in another school or school district within the State or in another State upon approval of the sending and receiving State.

    ‘(b) USE OF FELLOWSHIPS- Each Christa McAuliffe fellowship may be used for--

      ‘(1) sabbaticals for study, research or academic improvement to--

        ‘(A)(i) improve such teacher’s knowledge base in an area of expertise; or

        ‘(ii) learn a new area of expertise;

        ‘(B) increase skills and professional ability; and

        ‘(C) enhance the ability of teachers to work with special education populations, including--

          ‘(i) gifted and talented children;

          ‘(ii) limited-English proficient children;

          ‘(iii) children with disabilities; and

          ‘(iv) economically and educationally disadvantaged children;

      ‘(2)(A) consultation with or assistance to other school districts or private school systems; or

      ‘(B) development of special innovative programs;

      ‘(3) projects or partnerships that involve the business community and the schools;

      ‘(4) programs that incorporate the use and the sharing of technologies to help students learn; or

      ‘(5) expanding or replicating model programs of staff development.

‘SEC. 534. SELECTION OF CHRISTA MCAULIFFE FELLOWS.

    ‘(a) IN GENERAL- Christa McAuliffe fellows in each State shall be selected (in accordance with section 535) by a 7-member statewide panel appointed by the chief State school officer, or by an existing panel designated by the chief State school officer. The statewide panel shall be representative of school administrators, teachers, parents, and institutions of higher education.

    ‘(b) SPECIAL RULE- Each State educational agency may choose to administer the program assisted under this subpart through a pre-existing panel which is experienced in administering similar programs.

‘SEC. 535. EVALUATION OF APPLICATIONS.

    ‘(a) SUBMISSION TO AND REVIEW BY STATEWIDE PANEL- An applicant for a Christa McAuliffe fellowship shall submit a proposal for a project in accordance with section 533(b), and shall indicate the extent to which the applicant wishes to continue current teaching duties. The applicant shall submit such a proposal to the local educational agency for comment prior to submission to the statewide panel (appointed under section 534) for the State in which the project will be conducted. Each such application shall contain such information as such State educational agency may reasonably require.

    ‘(b) CONSULTATION AND CONSIDERATION-

      ‘(1) IN GENERAL- In evaluating proposals, the statewide panel shall consult with the local educational agency, and shall consider--

        ‘(A) evaluations during employment as a teacher;

        ‘(B) demonstrated commitment to teaching in the future; and

        ‘(C) intended activities during the award period;

      ‘(2) RECOMMENDATIONS- The statewide panel may request recommendations from teaching peers and the applicant’s principal and superintendent on the quality of the proposal, the benefit of such proposal to education, and any other criteria for awarding fellowships as are considered appropriate by such statewide panel.

      ‘(3) SELECTION- Selection of members of the statewide panel shall be made in accordance with regulations prescribed by the Secretary.

    ‘(c) PUBLIC ANNOUNCEMENT- Announcement of fellowship awards shall be made in a public ceremony.

‘SEC. 536. FELLOWSHIP REPAYMENT PROVISIONS.

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

‘SEC. 537. SECRETARY’S RESPONSIBILITIES.

    ‘(a) GENERAL- The Secretary shall--

      ‘(1) make awards to State educational agencies having applications approved under section 538; and

      ‘(2) in cooperation with the State educational agency, conduct activities which foster communication among and bring together Christa McAuliffe fellows including activities such as written communications, meetings, or training sessions.

    ‘(b) INFORMATION DISSEMINATION- The Secretary shall establish a clearinghouse or otherwise provide for the collection and dissemination of information on exemplary projects for improving education that were developed in accordance with section 533(b) of this part. The Secretary may utilize the National Diffusion Network in carrying out the requirements of this section.

‘SEC. 538. STATE APPLICATION.

    ‘(a) APPLICATION REQUIRED- Each State educational agency desiring a grant under this subpart shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may reasonably require.

    ‘(b) CONTENTS- Each application submitted pursuant to subsection (a) shall--

      ‘(1) provide assurances that Christa McAuliffe fellows will be released from teaching responsibilities for up to one school year (if the fellow’s proposal requires such release time) without jeopardizing the rights such members would have had without participating in the program assisted under this subpart;

      ‘(2) provide assurances that the State educational agency, or its designee, in cooperation with local educational agencies, shall maintain accurate records regarding the activities of Christa McAuliffe fellows within the State to ensure that such members are meeting all conditions of the fellowships provided pursuant to this subpart, and shall notify the Secretary immediately upon a change in a Christa McAuliffe fellow’s status rendering such fellow in violation of the conditions of the fellowship; and

      ‘(3) provide assurances that the State educational agency has consulted with local educational agencies in designing and developing the Christa McAuliffe Fellowship program.

‘SEC. 539. EVALUATION.

    ‘(a) IN GENERAL-

      ‘(1) IN GENERAL- The Secretary shall conduct, by grant or contract, an independent evaluation of--

        ‘(A) Christa McAuliffe fellows; and

        ‘(B) the impact of the activities undertaken by the Christa McAuliffe fellows on teachers, teacher research, curricula, staff development, improvement of programs and improvement of student achievement.

      ‘(2) COMPETITIVE BASIS- The grant or contract described in paragraph (1) shall be awarded on a competitive basis.

    ‘(b) CONTENTS- The evaluation shall--

      ‘(1) include information on the nature of projects developed and implemented by Christa McAuliffe fellows;

      ‘(2) assess the measurable effects of such projects on the academic performance of the students served by such projects;

      ‘(3) assess the effect of the fellowship program assisted under this subpart on the postfellowship experiences of Christa McAuliffe fellows;

      ‘(4) identify the barriers to such program’s effectiveness;

      ‘(5) assess the extent to which successful projects were disseminated and adopted by other teachers and schools without further Federal assistance; and

      ‘(6) determine and explore ways to improve the cost-effectiveness of such program.

    ‘(c) EVALUATION REPORTS- The Secretary shall submit such interim evaluation reports to the President and the Congress as may be appropriate, and shall submit a final report on or before January 1, 1997.

    ‘(d) FUNDING- The Secretary shall reserve a total of not more than $1,000,000 from the amounts appropriated pursuant to the authority of section 540 in fiscal years 1993 through 1997 to carry out this section.

‘SEC. 540. AUTHORIZATION OF APPROPRIATIONS.

    ‘There are authorized to be appropriated $20,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years to carry out this subpart.

‘Subpart 3--Teacher Corps

‘SEC. 541. TEACHER CORPS PROGRAM AUTHORIZED.

    ‘(a) GRANTS BY THE SECRETARY- In any fiscal year in which the appropriations for this subpart do not equal or exceed $50,000,000, the Secretary is authorized, in accordance with the provisions of this subpart, to make grants, on a competitive basis, to State educational agencies to carry out Teacher Corps activities.

    ‘(b) STATE GRANT PROGRAM- In any fiscal year in which the appropriations for this subpart equal or exceed $50,000,000, the Secretary is authorized, in accordance with the provisions of this subpart, to make grants to State educational agencies from allocations under subsection (c) to carry out Teacher Corps activities.

    ‘(c) ALLOCATION- Except as provided in subsection (a), each State educational agency shall be eligible to receive a grant under this subpart in each fiscal year that bears the same ratio to the amount appropriated under section 548 in that fiscal year as the school-age population of the State bears to the school-age population of all States.

    ‘(d) TEACHER CORPS SCHOOL- For the purpose of this subpart the term ‘Teacher Corps school’ means a public elementary or secondary school identified by the State educational agency as having the highest levels of poverty and the lowest levels of student achievement based on a ranking of such elementary schools and secondary schools in the State according to the number of children living in poverty and the levels of student achievement. In carrying out the preceding sentence, the State educational agency shall identify and inform not more than 10 percent of such elementary schools and not more than 10 percent of such secondary schools in the State which have the highest levels of poverty and the lowest levels of student achievement.

    ‘(e) DESIGNATION-

      ‘(1) SCHOLARSHIP- A scholarship awarded under this subpart shall be referred to as a ‘Teacher Corps scholarship’.

      ‘(2) RECIPIENT- A recipient of a scholarship under this subpart shall be referred to as a ‘Teacher Corps member’.

‘SEC. 542. USE OF FUNDS.

    ‘(a) SECRETARY- The Secretary shall use funds provided pursuant to this subpart to--

      ‘(1) disseminate information nationally about the availability of scholarships under this subpart;

      ‘(2) conduct activities, with the cooperation of the State and local educational agencies, which foster communication among, and bring together, members of the Teacher Corps, including activities such as written communications, meetings, or training sessions;

      ‘(3) establish and conduct summer preservice orientation programs for Teacher Corps members about to begin teaching;

      ‘(4) ensure that Teacher Corps members recognize the challenges of teaching in a Teacher Corps school;

      ‘(5) inform Teacher Corps members of Teacher Corps schools and facilitate the hiring and placement of Teacher Corps members at Teacher Corps schools;

      ‘(6) evaluate applications from and award grants to State educational agencies to enable such agencies to award Teacher Corps scholarships in accordance with the provisions of this subpart; and

      ‘(7) collect scholarship repayments from individual Teacher Corps members, in accordance with the provisions of section 546.

    ‘(b) STATE EDUCATIONAL AGENCY- Each State educational agency receiving a grant under this subpart shall use such grant funds to--

      ‘(1) evaluate applications for Teacher Corps membership and award scholarships to Teacher Corps members;

      ‘(2) provide technical assistance to local educational agencies establishing and operating induction programs;

      ‘(3) ensure that Teacher Corps members understand the obligation to repay the scholarships received under this subpart upon failure to comply with the conditions of the scholarship; and

      ‘(4) ensure that Teacher Corps members are fulfilling the obligation to repay scholarships received under this subpart, and provide the Secretary with the names and addresses of Teacher Corps members who have not fulfilled such obligation.

    ‘(c) SPECIAL RULE- The Secretary may enter into contracts with or make grants to nonprofit educational organizations for--

      ‘(1) recruiting members of the Teacher Corps;

      ‘(2) establishing and conducting summer preservice training programs; and

      ‘(3) conducting activities that foster communications among and bring together members of the Teacher Corps.

    ‘(d) RESERVATIONS- Each State receiving a grant under this subpart may reserve--

      ‘(1) 5 percent of such grant funds to provide technical assistance to local educational agencies and to pay administrative costs; and

      ‘(2) 5 percent of such grant funds to provide for induction and mentoring programs.

    ‘(e) SPECIAL RULE- Each State educational agency receiving a grant under this subpart may enter into contracts with or award grants to nonprofit educational agencies to conduct the activities described in subsection (b).

‘SEC. 543. TEACHER CORPS.

    ‘(a) SELECTION- The State educational agency shall select Teacher Corps members.

    ‘(b) CRITERIA-

      ‘(1) IN GENERAL- The State educational agency shall establish criteria to select Teacher Corps members that are intended to--

        ‘(A) attract highly qualified individuals to teaching; and

        ‘(B) meet the needs of Teacher Corps schools in addressing teacher shortages.

      ‘(2) CRITERIA- The criteria described in paragraph (1) may include--

        ‘(A) in the case of students or recent graduates, outstanding academic records, or in other cases, contributions which may be made by individuals working in other careers; and

        ‘(B) a demonstrated commitment to teaching or professional experience in substantive fields of expertise in which the State is experiencing or expects to experience teacher shortages.

    ‘(c) SPECIAL CONSIDERATION- The State educational agency, in selecting Teacher Corps members, shall give special consideration to individuals who--

      ‘(1) intend to teach or provide related services to students with disabilities;

      ‘(2) intend to teach limited-English proficient students;

      ‘(3) intend to teach preschool age children;

      ‘(4) are from disadvantaged backgrounds, including racial and ethnic minorities and individuals with disabilities;

      ‘(5) are members of populations that are underrepresented in the teaching profession or in the curricular areas in which such individuals are preparing to teach;

      ‘(6) intend to teach in the areas of science or mathematics, especially women and minorities who are underrepresented in such fields; or

      ‘(7) intend to teach on Indian reservations or in Alaska Native villages named or certified pursuant to section 3(c) of the Alaska Native Claims Settlement Act, Public Law 92-203, or in areas with high concentrations of Native Hawaiians.

    ‘(d) APPLICATION- Each individual desiring to participate in the program assisted under this subpart shall submit an application at such time, in such manner, and containing such information as the State educational agency may reasonably require.

‘SEC. 544. STATE APPLICATION.

    ‘In order to receive funds under this subpart, a State educational agency, in consultation with the Governor, shall submit an application to the Secretary at such time, in such manner, and containing such information as the Secretary may reasonably require. Each such application shall--

      ‘(1) describe how the State educational agency shall select Teacher Corps members;

      ‘(2) identify Teacher Corps schools within the State, where Teacher Corps members shall be assigned, provided that not more than 10 percent of all public schools in the State may be designated Teacher Corps schools;

      ‘(3) provide assurances that the State educational agency, in cooperation with local educational agencies, shall assist in employment placement within such State for Teacher Corps members in Teacher Corps schools;

      ‘(4) provide assurances that the State educational agency, in cooperation with local educational agencies, shall ensure that Teacher Corps members are paid at rates comparable to other entry level teachers in the school district where the Teacher Corps member is assigned;

      ‘(5) provide assurances that the local educational agencies in which the Teacher Corps members shall be placed shall establish or expand induction programs that assist Teacher Corps members in adjusting to the new school and community where such members shall teach, including working with a mentor teacher in the school building where the Teacher Corps members are placed; and

      ‘(6) describe how the State educational agency shall monitor and report to the Secretary not less than annually on the operation of programs assisted under this subpart and on the compliance of individuals who receive Teacher Corps scholarships with the provisions of this subpart.

‘SEC. 545. SCHOLARSHIPS.

    ‘(a) ELIGIBILITY-

      ‘(1) IN GENERAL- An individual is eligible to receive Teacher Corps scholarships for a maximum of 3 years during enrollment in any of the following programs of study, or a combination thereof:

        ‘(A) a program of study leading to a baccalaureate degree;

        ‘(B) a 1- or 2-year postbaccalaureate program of study leading to a master’s or specialist degree or a teaching certificate; or

        ‘(C) a 2-year program of study leading to an associate’s degree in early childhood education or early childhood development, or a 1-year program of study leading to a child development associate credential.

      ‘(2) SPECIAL RULES- (A) An individual pursuing a program of study described in subparagraph (B) of paragraph (1) is eligible to receive a Teacher Corps scholarship during any of the first 3 years that such individual is employed as a teacher to defray the costs of pursuing such postbaccalaureate instruction.

      ‘(B) An individual in possession of a bachelor’s degree, who wishes to enter teaching from another profession, is eligible to receive a Teacher Corps scholarship to enable such individual to receive the instruction necessary to enter the teaching profession, as determined by the State in which the individual wishes to teach. Such instruction may be provided while the individual is employed as a provisional teacher.

    ‘(b) LIMITATIONS ON AMOUNT AND DURATION- Subject to subsection (d), each Teacher Corps member shall receive a $5,000 scholarship for each academic year of postsecondary education, except that no individual shall receive scholarship assistance for more than 3 years of postsecondary education (including postbaccalaureate), as determined by the Secretary.

    ‘(c) CONSIDERATION OF AWARD IN OTHER PROGRAMS- Each Teacher Corps scholarship awarded pursuant to this subpart shall be considered as student financial assistance in determining eligibility for student assistance under title IV.

    ‘(d) ASSISTANCE NOT TO EXCEED NEED- Each Teacher Corps scholarship, when added to assistance received under title IV, if any, shall not exceed the cost of attendance, as defined in section 472, at the institution the individual is attending. If the amount of the Teacher Corps scholarship and assistance received under title IV exceeds the cost of attendance, loans received under parts B, D, or E of such title shall be reduced by an amount equal to the amount by which the combined awards exceed the cost of attendance.

    ‘(e) CONTINUED ELIGIBILITY- Each individual who receives a Teacher Corps scholarship shall continue to receive such scholarship payments only during such periods that the State educational agency finds that such individual is--

      ‘(1) enrolled as a full-time student in an accredited postsecondary institution; and

      ‘(2) maintaining satisfactory progress defined under section 484.

‘SEC. 546. SCHOLARSHIP CONDITIONS.

    ‘(a) SCHOLARSHIP AGREEMENT- Each individual receiving a scholarship under this subpart shall enter into a written agreement with the State educational agency which shall provide assurances that each such individual--

      ‘(1) shall pursue a course of study which meets State requirements for teacher preparation;

      ‘(2) has completed at least 2 years of undergraduate education at an institution of higher education;

      ‘(3) shall maintain satisfactory academic progress and participate in teaching-related activities while in undergraduate or post-baccalaureate programs;

      ‘(4) shall work as a teacher upon completion of such individual’s education for 3 years in a Teacher Corps school, as identified by the State educational agency pursuant to section 541(d), except that Teacher Corps members may transfer to another such school within the State or in another State upon approval of the State educational agency;

      ‘(5) in carrying out the obligation described in paragraph (4), shall meet the performance requirements of--

        ‘(A) the school in which such individual teaches; and

        ‘(B) the local educational agency exercising administrative control or direction of, or performing a service function for such school;

      ‘(6) shall repay all or part of a Teacher Corps scholarship received under section 545(b) plus interest and, if applicable, reasonable collection fees, in compliance with regulations issued by the Secretary under subsection (b), in the event that the conditions of this subsection are not complied with, except as provided for in subsection (c);

      ‘(7) at least during the first year of employment, shall participate in an induction program which includes working with a mentor teacher selected by the local educational agency in which the Teacher Corps member is employed and who, to the extent practicable, is teaching in the same subject as the Teacher Corps member; and

      ‘(8) who is not enrolled in a program of study as set forth in section 545(a)(1)(C) shall obtain State teacher certification during the period of employment or as soon as possible as State law requires.

    ‘(b) Scholarship Repayment-

      ‘(1) IN GENERAL- Individuals found by the State educational agency to be in noncompliance with the agreement entered into under subsection (a) shall be required to repay to the Secretary a pro rata amount of the scholarship awards received, plus interest at the highest rate applicable to loans under part B of title IV and, where applicable, reasonable collection fees, in accordance with the provisions of paragraph (3).

      ‘(2) EXCEPTIONS TO REPAYMENT- An individual shall not be considered to be in violation of the agreement entered into pursuant to subsection (a) during any period in which such individual meets the exceptions to repayment provisions set forth in section 528(a)(2), 528(a)(3) or 528(b), or if the individual dies.

      ‘(3) REPAYMENT PERCENTAGES- Each individual found by the Secretary to be in noncompliance with the agreement entered into under subsection (a) shall be required to repay--

        ‘(A) 100 percent of the total amount of scholarships awarded under this subpart if such individual does not teach pursuant to the agreement described in subsection (a) or teaches pursuant to such agreement for less than 1 year;

        ‘(B) 67 percent of such amount if such individual teaches pursuant to such agreement for at least 1 year but less than 2 years; and

        ‘(C) 34 percent of such amount if such individual teaches pursuant to such agreement for at least 2 years but less than 3 years.

      ‘(4) INTEREST- If a portion of scholarship is repaid under this subsection in any year, the entire amount of interest on such portion of such scholarship which accrues for such year shall be repaid.

      ‘(5) USE OF REPAYMENTS- Any repayments of scholarships made to the Secretary pursuant to the provisions of this section shall be used by the Secretary to make additional grants in accordance with the provisions of this subpart.

    ‘(c) WAIVER- The Secretary may provide for the partial or total waiver or suspension of any service obligation or repayment by an individual who received a Teacher Corps scholarship whenever compliance by such individual is impossible or would involve extreme hardship to such individual.

‘SEC. 547. PUBLICATION AND RECRUITMENT.

    ‘(a) IN GENERAL- The Secretary shall--

      ‘(1) publicize the availability of, and procedure to apply for, Teacher Corps scholarships, particularly among students participating in teaching-related activities through summer teaching institutes, future teacher clubs, and other teaching-related activities, at institutions of higher education nationwide, particularly in institutions of higher education with large minority enrollments, historically black colleges and universities, secondary schools nationwide (especially such schools with minority enrollment in excess of the statewide average minority enrollment), and with--

        ‘(A) individuals participating in programs assisted under subpart 4 of part A of title IV;

        ‘(B) individuals leaving the armed services, the Peace Corps, VISTA, and programs funded under the National and Community Service Act of 1990;

        ‘(C) community-based organizations working in minority education; and

        ‘(D) other agencies and entities likely to attract individuals interested in entering teaching from another career;

      ‘(2) recruit minority students to participate in the program assisted under this subpart; and

      ‘(3) recruit students with outstanding academic records to participate in such program.

    ‘(b) SPECIAL RULE- The publications required under subsection (a) shall describe substantive fields of expertise and geographic areas experiencing teacher shortages within the Nation.

‘SEC. 548. AUTHORIZATION OF APPROPRIATIONS.

    ‘There are authorized to be appropriated $25,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years to carry out the provisions of this subpart.

‘PART D--INNOVATION AND RESEARCH

‘Subpart 1--National Board for Professional Teaching Standards

‘SEC. 551. NATIONAL BOARD FOR PROFESSIONAL TEACHING STANDARDS.

    ‘(a) DEFINITIONS- For the purpose of this subpart--

      ‘(1) The term ‘Board’ means the National Board for Professional Teaching Standards.

      ‘(2) The term ‘Committee’ means the Fund for Improvement and Reform of Schools and Teaching Board established in section 3231 of the Fund for the Improvement and Reform of Schools and Teaching Act.

      ‘(3) The term ‘Director’ means the Director of the National Science Foundation.

    ‘(b) PROGRAM AUTHORIZATION-

      ‘(1) PROGRAM AUTHORIZED- From sums appropriated pursuant to the authority of subsection (k) in any fiscal year, the Secretary shall, in accordance with this subpart, provide financial assistance to the National Board for Professional Teaching Standards, in order to pay the Federal share of the costs of the activities described in subsection (d).

      ‘(2) TERMS AND CONDITIONS- (A) No financial assistance may be made available under this subpart except upon an application as required by subsection (e).

      ‘(B) No financial assistance may be made available under this subpart unless the Secretary determines that--

        ‘(i) the Board will comply with the provisions of this subpart;

        ‘(ii) the Board will use the Federal funds only for research and development activities in accordance with subsection (d) and such teacher assessment and certification procedures will be free from racial, cultural, gender or regional bias;

        ‘(iii) the Board--

          ‘(I) will widely disseminate for review and comment announcements of specific research projects to be conducted with Federal funds, including a description of the goals and focus of the specific project involved and the specific merit review procedures and evaluation criteria to be used in the competitive award process; and

          ‘(II) will send such announcements to the Secretary, the Director, the National Research Council, and the educational research community;

        ‘(iv) the Secretary, pursuant to an arrangement with the Board, will publish the announcements described in clause (iii) in the Federal Register (or such other publication deemed appropriate by the Secretary) and in publications of general circulation designed to disseminate such announcements widely to the educational research community;

        ‘(v) the Board will, after offering any interested party an opportunity to make comment upon, and take exception to, the projects contained in the announcements described in clause (iii) for a 30-day period following publication, and after reconsidering any project upon which comment is made or to which exception is taken, issue through the Secretary a request for proposals in the Federal Register (or such other publication deemed appropriate by the Secretary) containing any revised project information;

        ‘(vi) the Board will make awards of Federal funds competitively on the basis of merit, and, in the award process, the Board will select, to the extent practicable consistent with standards of excellence--

          ‘(I) a broad range of institutions associated with educational research and development; and

          ‘(II) individuals who are broadly representative of the educational research and teaching communities with expertise in the specific area of research and development in question;

        ‘(vii) the Board will adopt audit practices customarily applied to nonprofit private organizations and will comply with subsection (g)(4);

        ‘(viii) the Board will not use Federal funds to meet the administrative and operating expenses of the Board;

        ‘(ix) the Board will submit an annual report to the Congress in accordance with the provisions of subsection (g)(1); and

        ‘(x) the Board will, upon request, disseminate to States, local educational agencies, or other public educational entities the results of any research or research project produced with funds authorized by this subpart, upon the payment of the cost of reproducing the appropriate material.

      ‘(3) AVAILABILITY OF FUNDS- (A) Notwithstanding any other provision of law, funds appropriated to carry out this subpart shall remain available for obligation and expenditure until the end of the second fiscal year succeeding the fiscal year for which the funds were appropriated.

      ‘(B) No funds shall be made available to the Board after September 30, 1997, except as authorized by subparagraph (A) of this subsection.

    ‘(c) CONSULTATION- The Board shall consult at least twice annually with the Committee on the design and execution of its overall research and development strategy, including procedures to assure compliance with the requirements of this subpart. The procedures shall include--

      ‘(1) an outline of specific research and development agenda and activities to be conducted with the Federal funds; and

      ‘(2) provisions to ensure compliance with the open competition and merit review requirements of this subpart for proposals and projects assisted under this subpart.

    ‘(d) AUTHORIZED ACTIVITIES-

      ‘(1) IN GENERAL- Federal funds received under this subpart may only be used for research and development activities directly related to the development of teacher assessment and certification procedures for elementary and secondary school teachers.

      ‘(2) PRIORITIES- (A) The Board shall give priority to research and development activities in--

        ‘(i) mathematics;

        ‘(ii) the sciences;

        ‘(iii) foreign languages; and

        ‘(iv) literacy, including the ability to read, write and analyze.

      ‘(B) The Board shall give priority to research and development activities for the certification of elementary and secondary school teachers and the need and ability of such teachers to teach special educational populations, including--

        ‘(i) limited English proficient children;

        ‘(ii) gifted and talented children;

        ‘(iii) children with disabilities; and

        ‘(iv) economically and educationally disadvantaged children.

    ‘(e) APPLICATION-

      ‘(1) IN GENERAL- The Board shall submit applications to the Secretary at such time and in such manner as the Secretary may reasonably require. Each such application shall--

        ‘(A) describe the activities for which assistance is sought; and

        ‘(B) provide assurances that the non-Federal share of the cost of activities of the Board is paid from non-Federal sources, together with a description of the manner in which the Board will comply with the requirements of this subparagraph.

      ‘(2) APPROVAL- The Secretary shall approve an application unless such application fails to comply with the provisions of this subpart.

    ‘(f) FEDERAL SHARE-

      ‘(1) IN GENERAL- The Secretary shall pay to the Board the Federal share of the costs of the activities of the Board for the period for which the application is approved under subsection (e).

      ‘(2) AMOUNT OF FEDERAL SHARE- The Federal share shall be 50 percent of the costs of the activities described in subsection (d).

    ‘(g) REPORTS AND AUDITING PROVISION-

      ‘(1) NATIONAL BOARD FOR PROFESSIONAL TEACHING STANDARDS REPORT- The Board shall submit an annual report to the appropriate committees of the Congress not later than June 30 of any fiscal year in which Federal funds are expended pursuant to this subpart. The Board shall disseminate the report for review and comment to the Department of Education, the National Science Foundation, the National Research Council, and the education research community. The report shall--

        ‘(A) include a detailed financial statement and a report of the audit practices described in subsection (b)(2)(B)(vii);

        ‘(B) include a description of the general procedures to assure compliance with the requirements of this subpart as required in subsection (d); and

        ‘(C) provide a comprehensive and detailed description of the Board’s agenda, activities, and planned activities for the preceding and succeeding fiscal years, including--

          ‘(i) the Board’s overall research and development program and activities;

          ‘(ii) the specific research and development projects and activities conducted with Federal funds during the preceding fiscal year, including--

            ‘(I) a description of the goals and methodology of the project;

            ‘(II) a description and assessment of the findings (or status and preliminary findings if the project is not yet completed);

            ‘(III) a description of the competitive bidding process, the merit review procedures, and the evaluation criteria used to award project funds; and

            ‘(IV) a description of the Board’s plans for dissemination of the findings described in clause (ii);

          ‘(iii) the specific research and development projects and activities planned to be conducted with Federal funds during the succeeding fiscal year, including the goals and methodologies to be used; and

          ‘(iv) a listing of available publications of the Board, including publications related to policies, standards and general information, research reports, and commissioned papers of the Board.

      ‘(2) FIRST ANNUAL REPORT- The first annual report required by this subsection shall include a description of the Board’s research and development agenda for the succeeding 5-year period. Such first report shall include to the maximum extent practicable, a description of specific research and development projects and activities, and the goals and methodologies of such projects and activities.

      ‘(3) ADDITIONAL REPORTS- The Secretary, the Director, and the National Research Council shall report to the appropriate committees of the Congress on the compliance of the Board with the requirements of this part not later than 30 days after the Board submits its annual report pursuant to paragraph (1).

      ‘(4) AUDITING PROVISION- The Comptroller General of the United States, and any of the Comptroller’s authorized representatives, shall have access, for the purpose of audit and examination, to any books, documents, papers, and records of the Board, and to any recipient of the Board, that is pertinent to the sums received and disbursed under this subpart.

    ‘(h) EVALUATION-

      ‘(1) IN GENERAL- After September 30, 1995, the Secretary shall reserve not more than 2 percent of the amount appropriated pursuant to the authority of subsection (k) to provide for an independent, ongoing evaluation of the research program of teacher assessments carried out by the Board and the fairness and the accuracy of the data such evaluations produce. The evaluation shall include an analysis of the impact of teacher assessments on minority teachers. The findings of the evaluation shall be submitted to the Labor and Human Resources Committee of the Senate and the Education and Labor Committee of the House of Representatives.

      ‘(2) SPECIAL RULE- The Secretary shall enter into a contract for the performance of the evaluation described in paragraph (1) with a nationally recognized organization (such as the National Academy of Sciences or the National Academy of Education).

    ‘(i) CONSTRUCTION- Nothing in this subpart shall be construed to--

      ‘(1) establish a preferred national curriculum or preferred teaching methodology for elementary and secondary school instruction;

      ‘(2) infringe upon the rights and responsibilities of the States to license elementary and secondary school teachers;

      ‘(3) infringe upon the practice or accreditation of home school or private school teaching;

      ‘(4) provide an individual certified by the Board with a right of action against a State, local educational agency, or other public educational entity for any decisions related to hiring, promotion, retention or dismissal;

      ‘(5) authorize the Board to--

        ‘(A) study, create, or promulgate separate standards applicable to home school or private school teachers;

        ‘(B) take any action to require home school, private school, or public school teachers to participate in any program offered by the Board; or

        ‘(C) take any action that infringes in any manner on the right of parents to direct the education of their children; or

      ‘(6) authorize the Secretary to exercise supervision or control over the research program, standards, assessment practices, administration, or staffing policies of the Board.

    ‘(j) VOLUNTARY PARTICIPATION- Notwithstanding any other provision of this subpart, voluntary participation in certification assessments by the Board shall be open to home school, private school, and public school teachers.

    ‘(k) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated $20,000,000 for the period beginning October 1, 1992, and ending September 30, 1997, to carry out the provisions of this subpart.

‘Subpart 2--Alternative Routes to Teacher Certification and Licensure

‘SEC. 552. SHORT TITLE.

    ‘This subpart may be cited as the ‘Alternative Routes to Teacher Certification and Licensure Act of 1992’.

‘SEC. 553. FINDINGS.

    ‘The Congress finds that--

      ‘(1) effective elementary and secondary schools require competent teachers and strong leadership;

      ‘(2) school systems would benefit greatly by increasing the pool of qualified individuals from which to recruit teachers;

      ‘(3) many talented professionals who have demonstrated a high level of subject area competence outside the education profession may wish to pursue careers in education, but have not fulfilled the requirements to be certified or licensed as teachers;

      ‘(4) alternative routes can enable qualified individuals to fulfill State certification or licensure requirements and would allow school systems to utilize the expertise of such professionals and improve the pool of qualified individuals available to local educational agencies as teachers; and

      ‘(5) alternative routes to certification or licensure requirements that do not exclude qualified individuals from teaching solely because such individuals do not meet traditional certification or licensure requirements would allow school systems to take advantage of these professionals and improve the supply of well-qualified teachers.

‘SEC. 554. PURPOSE.

    ‘It is the purpose of this subpart to improve the supply of well-qualified elementary and secondary school teachers by encouraging and assisting States to develop and implement programs for alternative routes to teacher certification or licensure requirements. Such programs shall place special emphasis on the participation of individuals who are members of minority groups.

‘SEC. 555. ALLOTMENTS.

    ‘(a) ALLOTMENTS TO STATES-

      ‘(1) IN GENERAL- From the amount appropriated to carry out this subpart, the Secretary shall allot to each State the lesser of either the amount the State applies for under section 556 or an amount that is proportional to the State’s share of the total population of children ages five through seventeen in all the States (based on the most recent data available that is satisfactory to the Secretary).

      ‘(2) REALLOCATION- If a State does not apply for its allotment, or the full amount of its allotment, under the preceding paragraph, the Secretary may reallocate the excess funds to one or more other States that demonstrate, to the satisfaction of the Secretary, a current need for the funds.

    ‘(b) SPECIAL RULE- Notwithstanding section 412(b) of the General Education Provisions Act, funds awarded under this subpart shall remain available for obligation by a recipient for a period of two calendar years from the date of the grant.

‘SEC. 556. STATE APPLICATIONS.

    ‘(a) IN GENERAL- Any State desiring to receive a grant under this subpart shall, through the State educational agency, submit an application at such time, in such manner, and containing such information, as the Secretary may reasonably require.

    ‘(b) REQUIREMENTS- Each application shall--

      ‘(1) describe the programs, projects, and activities to be undertaken; and

      ‘(2) contain such assurances as the Secretary considers necessary, including assurances that--

        ‘(A) assistance provided to the State educational agency under this subpart will be used to supplement, and not to supplant, any State or local funds available for the development and implementation of programs to provide alternative routes to fulfilling teacher certification or licensure requirements;

        ‘(B) the State educational agency has, in developing and designing the application, consulted with--

          ‘(i) representatives of local educational agencies, including superintendents and school board members (including representatives of their professional organizations where applicable);

          ‘(ii) elementary and secondary school teachers, including representatives of their professional organizations;

          ‘(iii) institutions of higher education with schools or departments of education;

          ‘(iv) parents; and

          ‘(v) other interested organizations and individuals; and

        ‘(C) the State educational agency will submit to the Secretary, at such time as the Secretary may specify, a final report describing the activities carried out with assistance provided under this subpart and the results achieved.

    ‘(c) GEPA PROVISIONS INAPPLICABLE- Sections 435 and 436 of the General Education Provisions Act, except to the extent that such sections relate to fiscal control and fund accounting procedures, shall not apply to this subpart.

‘SEC. 557. USE OF FUNDS.

    ‘(a) USE OF FUNDS-

      ‘(1) IN GENERAL- A State educational agency shall use assistance provided under this subpart to support programs, projects, or activities that develop and implement new, or expand and improve existing, programs that enable individuals to move to a career in education from another occupation through an alternative route to teacher certification or licensure.

      ‘(2) TYPES OF ASSISTANCE- A State educational agency may carry out such programs, projects, or activities directly, through contracts, or through grants to local educational agencies, intermediate educational agencies, institutions of higher education, or consortia of such agencies.

    ‘(b) USES- Funds received under this subpart may be used for--

      ‘(1) the design, development, implementation, and evaluation of programs that enable qualified professionals who have demonstrated a high level of subject area competence outside the education profession and are interested in entering the education profession to fulfill State certification or licensure requirements;

      ‘(2) the establishment of administrative structures necessary for the development and implementation of programs to provide alternative routes to fulfilling State requirements for certification or licensure;

      ‘(3) training of staff, including the development of appropriate support programs, such as mentor programs, for teachers entering the school system through alternative routes to teacher certification or licensure;

      ‘(4) the development of recruitment strategies;

      ‘(5) the development of reciprocity agreements between or among States for the certification or licensure of teachers; and

      ‘(6) other appropriate programs, projects, and activities designed to meet the objectives of this subpart.

‘SEC. 558. DEFINITION.

    ‘For purposes of this subpart, the term ‘State’ means each of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Northern Mariana Islands, and Palau (until the Compact of Free Association with Palau takes effect pursuant to section 101(a) of Public Law 99-658).

‘SEC. 559. AUTHORIZATION OF APPROPRIATIONS.

    ‘There are authorized to be appropriated to carry out this subpart $15,000,000 for fiscal year 1993.

‘Subpart 3--Class Size Demonstration Grant

‘SEC. 561. PURPOSE.

    ‘It is the purpose of this subpart to provide grants to local educational agencies to enable such agencies to determine the benefits in various school settings of reducing class size on the educational performance of students and on classroom management and organization.

‘SEC. 562. PROGRAM AUTHORIZED.

    ‘(a) PROGRAM AUTHORIZED-

      ‘(1) IN GENERAL- The Secretary shall carry out a program of awarding grants, in accordance with the provisions of this subpart, to local educational agencies to pay the Federal share of the costs of conducting demonstration projects that demonstrate methods of reducing class size which may provide information meaningful to other State and local educational agencies.

      ‘(2) FEDERAL SHARE- The Federal share shall be 50 percent.

    ‘(b) RESERVATION- The Secretary may reserve not more than 5 percent of the amount appropriated pursuant to the authority of section 565A in each fiscal year to carry out the evaluation activities described in section 565.

    ‘(c) SELECTION CRITERIA- The Secretary shall make grants to local educational agencies on the basis of--

      ‘(1) the need and the ability of a local educational agency to reduce the class size of an elementary or secondary school served by such agency;

      ‘(2) the ability of a local educational agency to furnish the non-Federal share of the costs of the demonstration project for which assistance is sought;

      ‘(3) the ability of a local educational agency to continue the project for which assistance is sought after the termination of Federal financial assistance under this subpart; and

      ‘(4) the degree to which a local educational agency demonstrates in the application submitted pursuant to section 564 consultation in program implementation and design with parents, teachers, school administrators, and local teacher organizations, where applicable.

    ‘(d) PRIORITY- In awarding grants under this subpart, the Secretary shall give priority to demonstration projects that involve at-risk students, including educationally or economically disadvantaged students, students with disabilities, limited-English proficient students, and young students.

    ‘(e) GRANTS MUST SUPPLEMENT OTHER FUNDS- A local educational agency shall use the Federal funds received under this subpart to supplement and not supplant other Federal, State and local funds available to the local educational agency.

‘SEC. 563. PROGRAM REQUIREMENTS.

    ‘(a) ANNUAL COMPETITION- In each fiscal year, the Secretary shall announce the factors to be examined in a demonstration project assisted under this subpart. Such factors may include--

      ‘(1) the magnitude of the reduction in class size to be achieved;

      ‘(2) the level of education and the subject areas in which the demonstration projects shall occur;

      ‘(3) the form of the instructional strategy to be demonstrated; and

      ‘(4) the duration of the project.

    ‘(b) RANDOM TECHNIQUES AND APPROPRIATE COMPARISON GROUPS- Demonstration projects assisted under this subpart shall be designed to utilize randomized techniques or appropriate comparison groups, where feasible.

‘SEC. 564. APPLICATION.

    ‘(a) IN GENERAL- In order to receive a grant under this subpart a local educational agency shall submit an application to the Secretary that is responsive to the announcement described in section 563(a), at such time, in such manner, and containing or accompanied by such information as the Secretary may reasonably require.

    ‘(b) DURATION- The Secretary shall encourage local educational agencies to submit applications under this subpart for a period of 3 years.

    ‘(c) CONTENTS- Each application submitted pursuant to subsection (a) shall include--

      ‘(1) a description of the objectives to be attained with the financial assistance made available under this subpart and the manner in which such financial assistance shall be used to reduce class size;

      ‘(2) a description of the steps to be taken to achieve target class sizes, including, where applicable, the acquisition of additional teaching personnel and classroom space;

      ‘(3) a statement of the methods for the collection of data necessary for the evaluation of the impact of class size reduction programs on student achievement;

      ‘(4) an assurance that the local educational agency shall pay from non-Federal sources the non-Federal share of the costs of the demonstration project for which assistance is sought; and

      ‘(5) such additional assurances as the Secretary may reasonably require.

    ‘(d) SUFFICIENT SIZE AND SCOPE REQUIRED- The Secretary shall only award grants under this subpart to applicants having applications which describe projects of sufficient size and scope to contribute to carrying out the purposes of this subpart.

‘SEC. 565. EVALUATION AND DISSEMINATION.

    ‘(a) NATIONAL EVALUATION- The Secretary shall conduct a national evaluation of the demonstration projects assisted under this subpart to determine the costs incurred in achieving the reduction in class size and the effects of the reductions on outcomes, such as student performance in the affected subjects or grades, attendance, discipline, classroom organization, management, and teacher satisfaction and retention.

    ‘(b) COOPERATION- Each local educational agency receiving a grant under this subpart shall cooperate in the national evaluation described in subsection (a) and shall provide such information to the Secretary as the Secretary may reasonably require.

    ‘(c) REPORTS- The Secretary shall report to the Congress on the results of the evaluation conducted pursuant to subsection (a).

    ‘(d) DISSEMINATION- The Secretary shall widely disseminate information about the results of the class size demonstration projects assisted under this subpart.

‘SEC. 565A. AUTHORIZATION OF APPROPRIATIONS.

    ‘There are authorized to be appropriated $3,000,000 for fiscal year 1993, and such sums as may be necessary for each of the 4 succeeding fiscal years to carry out this subpart.

‘Subpart 4--Middle School Teaching Demonstration Programs

‘SEC. 566. STATEMENT OF PURPOSE.

    ‘It is the purpose of this subpart to provide financial assistance to institutions of higher education which offer teacher training or retraining programs to develop model programs with a specialized focus on teaching grades 6 through 9.

‘SEC. 567. DEFINITIONS.

    ‘As used in this subpart:

      ‘(1) The term ‘developmentally appropriate’ means a program that is appropriate for a child’s age and all areas of an individual child’s development, including educational, physical, emotional, social, cognitive, and communication.

      ‘(2) The term ‘middle school’ means a school which enrolls students in at least two of the grades 6, 7, 8, and 9.

‘SEC. 568. PROGRAM AUTHORIZED.

    ‘(a) IN GENERAL- The Secretary is authorized to make grants, on a competitive basis, to institutions of higher education to develop model programs with a specialized focus on teaching grades 6 through 9.

    ‘(b) SPECIAL RULE-

      ‘(1) EQUITABLE DISTRIBUTION- The Secretary shall ensure an equitable geographic distribution of grants awarded under this subpart.

      ‘(2) CONSIDERATION- The Secretary shall take into consideration equitable levels of funding for urban and rural areas in awarding grants under this subpart.

    ‘(c) GRANT PERIOD- Grants under this subpart may be awarded for a period not to exceed 3 years.

    ‘(d) FUNDING LIMITATION- Grants awarded under this subpart may not exceed $250,000 in the first year of funding.

‘SEC. 569. APPLICATION.

    ‘(a) IN GENERAL- Each institution of higher education desiring a grant under this subpart shall submit an application to the Secretary at such time, in such manner, and accompanied by such information as the Secretary may reasonably require.

    ‘(b) CONTENTS- Each application submitted pursuant to subsection (a) shall demonstrate that--

      ‘(1) the applicant will establish and maintain a program of teacher training or retraining designed to offer specialized preparation for individuals teaching grades 6 through 9;

      ‘(2) the applicant has designed a program of teacher training or retraining which includes--

        ‘(A) a study of adolescent development (including cognitive, social, and emotional) with particular emphasis on early adolescent development;

        ‘(B) a study of the influence of institutions such as schools, families, and peer groups in the socialization of adolescents;

        ‘(C) information concerning the organization of schools for students in grades 6 through 9, with particular emphasis on developmentally appropriate school and classroom organization and practices;

        ‘(D) training in at least 2 subject areas and related instructional strategies;

        ‘(E) direct experience through internships in middle grade schools under the guidance of teachers who demonstrate exemplary classroom practices;

        ‘(F) strategies for the prevention and detection of high risk behavior, particularly drug and alcohol abuse, and for the enhancement of self esteem among adolescents;

        ‘(G) a study of effective methods and models of presenting substance abuse information and education to adolescent students; and

        ‘(H) methods of encouraging parental and community involvement with middle schools; and

      ‘(3) the program will be designed and operated with the active participation of classroom teachers and will include an in-service training component.

‘SEC. 570. REPORTS AND INFORMATION DISSEMINATION.

    ‘Each institution of higher education receiving a grant under this subpart shall submit to the Secretary such reports and other information regarding programs conducted under this subpart as the Secretary deems necessary. The Secretary shall disseminate such information to other institutions of higher education, State educational agencies, and local educational agencies.

‘SEC. 570A. AUTHORIZATION OF APPROPRIATIONS.

    ‘There are authorized to be appropriated $5,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years to carry out the provisions of this subpart.

‘PART E--MINORITY TEACHER RECRUITMENT

‘Subpart 1--New Teaching Careers

‘SEC. 571. STATEMENT OF PURPOSE.

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

‘SEC. 572. STATE GRANT AUTHORITY; APPLICATIONS.

    ‘(a) AUTHORITY-

      ‘(1) GRANTS BY SECRETARY- In any fiscal year in which appropriations for this subpart do not equal or exceed $50,000,000, the Secretary is authorized, in accordance with this subpart, to award grants, on a competitive basis, to States to enable States to pay the Federal share of supporting programs that carry out the purpose of this subpart.

      ‘(2) STATE GRANT PROGRAM- In any fiscal year in which appropriations for this subpart equal or exceed $50,000,000, the Secretary is authorized, in accordance with the provisions of this subpart, to make grants to States in accordance with allocations under subsection (b) to enable States to pay the Federal share of supporting programs that carry out the purposes of this subpart.

    ‘(b) ALLOCATION AMONG STATES- Except as provided in subsection (a)(1), each State shall be eligible to receive a grant under this subpart in each fiscal year that bears as nearly as possible the same ratio to the amount appropriated under section 576C as the allocation of funds under part A of chapter 1 of title I of the Elementary and Secondary Education Act of 1965 in that State bears to the total allocation of such funds in all States, except that no State grant shall be less than $500,000 in any fiscal year.

    ‘(c) DURATION OF GRANT- Each grant awarded under this subpart shall be awarded for a term of 5 years, subject to the availability of appropriations.

    ‘(d) FEDERAL SHARE- The Federal share of each grant awarded under this subpart shall be 75 percent in the first year in which the State receives a grant, 65 percent in the second such year, 55 percent in the third such year, 45 percent in the fourth such year, and 35 percent in the fifth such year.

    ‘(e) NON-FEDERAL SHARE- The non-Federal share of each grant awarded under this subpart may be in cash or in kind fairly evaluated, including planned equipment or services.

    ‘(f) SUBMISSION OF STATE APPLICATIONS- In order to receive a grant under this subpart, a State shall submit an application at such time or times, in such manner, and containing such information as the Secretary may prescribe by regulation. Such application shall--

      ‘(1) contain assurances that the State will award grants on a competitive basis to eligible recipients submitting applications described in section 574;

      ‘(2) set forth a program of activities for carrying out the purposes set forth in this subpart in such detail as will enable the Secretary to determine the degree to which such program will accomplish such purposes and such other policies, procedures, and assurances as the Secretary may require by regulation.

‘SEC. 573. AGREEMENTS.

    ‘Each State receiving a grant under this subpart shall enter into an agreement with the Secretary. Each such agreement shall include provisions designed to ensure that--

      ‘(1) the State educational agency, the State higher education agency, or the State agency which administers subpart 4 of part A of title IV, relating to State student incentive grants, will administer the program authorized by this subpart in the State;

      ‘(2) the State educational agency or higher education agency will use not more than 5 percent of the grant it receives for administrative expenses;

      ‘(3) the State educational agency or higher education agency will keep such records and provide such information to the Secretary as may be required for fiscal audit and program evaluation, consistent with the responsibilities of the Secretary; and

      ‘(4) the State will establish a system for the evaluation of the programs assisted under this subpart.

‘SEC. 574. APPLICATION.

    ‘(a) IN GENERAL- A grant under this subpart may be made only to an eligible recipient which submits an application to the State containing or accompanied by such information as the State may reasonably require.

    ‘(b) CONTENTS OF APPLICATION- Each such application shall--

      ‘(1) describe the activities and services for which assistance is sought;

      ‘(2) set forth the number of expected participants in each program assisted under this subpart;

      ‘(3) demonstrate steps on a career ladder leading to the position of fully credentialed teacher, ranging from nonskilled entry positions, extending through intermediate subprofessional functions, and terminating in full professional status as a certified teacher duly recognized by the appropriate State agency;

      ‘(4) contain assurances that advancement within such career ladders would be based on merit, but that the opportunity for professional growth is available to all;

      ‘(5) demonstrate a plan for employing permanently individuals who have participated in the program at their new level of training, including individuals who terminate the program at a level below that of fully credentialed teacher;

      ‘(6) demonstrate a plan for bringing a sizable portion of the educational program and coursework to the place of the participant’s employment;

      ‘(7) demonstrate a plan for providing academic credit for in-service training and other relevant experience as well as formal academic coursework;

      ‘(8) provide for participation of individuals who have attained various levels of education, including individuals who have not completed high school, with special consideration for such participation given to individuals already serving within the school system;

      ‘(9) provide assurances that the program assisted under this subpart will be available to individuals with disabilities; and

      ‘(10) contain such other assurances as the State may reasonably require.

‘SEC. 575. REQUIREMENTS.

    ‘(a) GENERAL REQUIREMENTS- An eligible recipient of a grant under this subpart shall require that any paraprofessional who receives student financial assistance under this subpart and who becomes a fully certified or licensed teacher enter into an agreement under which the paraprofessional shall--

      ‘(1) within the 10-year period after completing the postsecondary education for which the assistance was provided, act as an educational professional or a paraprofessional in the local educational agency that is a consortium member of the eligible recipient providing such assistance, or, if no teaching position is offered by such local educational agency, in a shortage area school approved by the State for a period of not less than one year for each full-time academic year or equivalent for which the assistance was received;

      ‘(2) provide to the State evidence of compliance with paragraph (1); and

      ‘(3) repay that portion of the student financial assistance received under this subpart which was provided for tuition, plus interest and reasonable collection costs (if applicable), in the event that the teacher fails to comply with the conditions of paragraph (1), in accordance with the regulations prescribed by the Secretary under section 527, except that the provisions of this paragraph shall not apply to anyone for whom no teaching position was made available by the local educational agency or State, or in the circumstances provided in section 528.

    ‘(b) AMOUNT OF FINANCIAL ASSISTANCE- The amount of financial assistance awarded under this subpart shall be reduced by the amount that the financial assistance exceeds the student’s cost of attendance, as defined in section 472. Financial assistance awarded under this subpart shall not be reduced on the basis of the student’s receipt of other forms of Federal student financial assistance but shall be taken into account in determining the eligibility of the student for those other forms of Federal student financial assistance.

‘SEC. 576. SPECIAL CONSIDERATION.

    ‘In awarding grants under this subpart, the State shall give special consideration to--

      ‘(1) programs designed to identify, recruit, and certify--

        ‘(A) speakers of non-English languages who have been trained as teachers in their home country; or

        ‘(B) individuals already employed in a local educational agency; and

      ‘(2) eligible recipients located in shortage areas as defined in section 576B.

‘SEC. 576A. USE OF FUNDS.

    ‘Funds provided to eligible recipients pursuant to this subpart may be used for--

      ‘(1) tuition or part or all of the costs of attendance (as determined under section 472) for participants in programs assisted under this subpart;

      ‘(2) the release time of such participants;

      ‘(3) instructional and supportive services for such participants in such programs; and

      ‘(4) stipends for child care to such participants whose academic coursework takes place outside the normal workday.

‘SEC. 576B. DEFINITIONS.

    ‘For the purpose of this subpart--

      ‘(1) the term ‘certified or licensed teacher’ means an individual who possesses a document certifying that the individual has met the requirements of a State for employment as a teacher in the public schools of that State (including individuals who have been certified as specialists in preschool and early childhood education);

      ‘(2) the term ‘eligible recipient’ means a consortium of--

        ‘(A) an institution of higher education, and

        ‘(B) one or more local educational agencies.

      ‘(3) the term ‘paraprofessional’ means an individual with at least a high school diploma or recognized equivalent who is employed in a preschool or elementary or secondary school under the supervision of a certified or licensed teacher, including individuals employed in bilingual education, special education, and migrant education;

      ‘(4) the term ‘school support’ means an individual who is employed by a local educational agency; and

      ‘(5) the term ‘shortage area’ means (A) an area the Secretary has designated as an area with a shortage of elementary and secondary school teachers, or (B) a shortage in a designated subject area as described in section 530A of this Act.

‘SEC. 576C. AUTHORIZATION OF APPROPRIATIONS.

    ‘There are authorized to be appropriated $30,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years to carry out this subpart.

‘Subpart 2--Programs to Encourage Minority Students to Become Teachers

‘SEC. 577. STATEMENT OF PURPOSE.

    ‘It is the purpose of the program conducted pursuant to section 578 to carry out activities designed to--

      ‘(1) improve recruitment and training opportunities in education for minority individuals, including language minority individuals;

      ‘(2) increase the number of minority teachers, including language minority teachers, in elementary and secondary schools; and

      ‘(3) to identify and encourage minority students in the 7th through the 12th grades to aspire to, and to prepare for, careers in elementary and secondary school teaching.

‘SEC. 578. PARTNERSHIP GRANTS AUTHORIZED.

    ‘(a) AUTHORITY- The Secretary is authorized to make grants to pay the Federal share of carrying out the purposes of this subpart to a partnership between--

      ‘(1) one or more institutions of higher education which have a demonstrated record and special expertise in carrying out the purposes of this subpart; and

      ‘(2)(A) one or more local educational agencies;

      ‘(B) a State educational agency or a State higher education agency; or

      ‘(C) community-based organizations.

    ‘(b) FEDERAL SHARE- The Federal share of each grant awarded under this section shall be 50 percent.

    ‘(c) NON-FEDERAL SHARE- The non-Federal share of each grant awarded under this section may be in cash or kind fairly evaluated, including planned equipment or services.

    ‘(d) ADMINISTRATIVE COSTS- Not more than 5 percent of any grant awarded under this section may be used for administrative expenses.

‘SEC. 579. PARTNERSHIP AGREEMENT.

    ‘(a) IN GENERAL- In order to be eligible for a grant under section 578, a partnership shall enter into a written partnership agreement. All partners shall sign the agreement.

    ‘(b) CONTENTS OF AGREEMENT- The agreement shall include--

      ‘(1) a listing of all participants in the partnership;

      ‘(2) a description of the responsibilities of each participant in the partnership; and

      ‘(3) a listing of the resources, if any, to be contributed to the partnership.

    ‘(c) SELECTION CRITERIA- In making grants under section 578, the Secretary shall approve applications which contain provision for projects designed to carry out the purposes described in section 577 and which--

      ‘(1) identify students who indicate an interest in entering the teaching profession, and provide such individuals with support programs such as--

        ‘(A) scholarship funds to meet expenses;

        ‘(B) remedial and tutoring programs;

        ‘(C) counseling and support services;

        ‘(D) academic advice and guidance in course selection to prepare for teacher certification;

        ‘(E) information and advice regarding eligibility for membership in the Teacher Corps established under subpart 3 of part C of this title, and other financial assistance programs;

        ‘(F) teaching mentors;

        ‘(G) motivational activities;

        ‘(H) teaching skill development;

        ‘(I) future teacher clubs; and

        ‘(J) instruction in test-taking skills.

      ‘(2) establish or strengthen teacher training programs;

      ‘(3) establish or enhance early identification/articulation partnership programs with secondary schools and community colleges;

      ‘(4) establish partnerships with graduate schools of education to foster and facilitate the movement of minority students into post-graduate studies;

      ‘(5) establish programs and activities which foster and facilitate the movement of students interested in pursuing teaching careers from 2-year institutions to 4-year institutions, focusing particular attention on facilitating the transfer of academic credit; and

      ‘(6) improve existing assessment practices that determine an individual’s qualifications to become a teacher.

‘SEC. 580. APPLICATION FOR TEACHER PARTNERSHIPS PROGRAM.

    ‘(a) APPLICATION REQUIRED- A partnership desiring to receive a grant under section 578 shall submit an application to the Secretary.

    ‘(b) CONTENTS OF APPLICATION- The application shall include--

      ‘(1) the written and signed partnership agreement required by section 579;

      ‘(2) set forth the individuals to be served;

      ‘(3) a listing of the elementary, if applicable, and secondary schools of the local educational agency to be involved in the program assisted under this subpart;

      ‘(4) a description of the services and activities to be offered under the program assisted under this subpart; and

      ‘(5) such additional information and assurances as the Secretary may reasonably require.

    ‘(c) STATE EDUCATIONAL AGENCY REVIEW- Each application from a partnership for a grant under section 578 shall be forwarded to the appropriate State educational agency (unless the State educational agency is a member of the partnership) for review and comment if the State educational agency requests the opportunity for such a review. The State educational agency must complete a review of such application and comment to the Secretary within 30 calendar days of receipt. Failure of the State educational agency to submit comments to the Secretary shall not prejudice such application.

‘SEC. 580A. TEACHER PLACEMENT PROGRAM.

    ‘(a) GRANTS AUTHORIZED-

      ‘(1) IN GENERAL- The Secretary is authorized to make grants to institutions of higher education that have schools or departments of education to pay the Federal share of developing and carrying out programs and activities designed to--

        ‘(A) prepare and train students to become elementary and secondary school teachers; and

        ‘(B) to the extent practicable, place the students as teachers in urban and rural public or private nonprofit elementary or secondary schools where at least 50 percent of students enrolled are from minority groups.

      ‘(2) FEDERAL SHARE- The Federal share of each grant awarded under this section shall be 50 percent.

      ‘(3) NON-FEDERAL SHARE- The non-Federal share of each grant awarded under this section may be in cash or in kind fairly evaluated, including planned equipment or services.

    ‘(b) USE OF FUNDS- Grants under this section may be used for the costs of developing and carrying out the program of teacher preparation, training, and placement described in subsection (a).

    ‘(c) APPLICATIONS- No grant may be made under this section unless an application to the Secretary is made by the institution of higher education at such time, in such manner, and containing or accompanied by such information as the Secretary may reasonably require.

    ‘(d) SPECIAL CONSIDERATION- The Secretary is authorized, in making grants under this section, to give special consideration to historically Black colleges and universities and to institutions which--

      ‘(1) are eligible to receive funds under part C of title X; and

      ‘(2) have enrollments of at least 50 percent minority students in their teacher education programs.

    ‘(e) PERFORMANCE INCENTIVE- In any fiscal year beginning after September 30, 1993, the Secretary may, based upon evaluation and monitoring of programs assisted under this section, increase the Federal share for a recipient of funds under this section for the succeeding fiscal year to 75 percent, if the Secretary determines that there is demonstrated success in the operation of the program assisted by such recipient.

    ‘(f) ADMINISTRATIVE COSTS- Not more than 5 percent of any grant awarded under this section may be used for administrative expenses.

‘SEC. 580B. AUTHORIZATION OF APPROPRIATIONS.

    ‘(a) AUTHORIZATION- There are authorized to be appropriated $15,000,000 for fiscal year 1993, and such sums as may be necessary for each of the 4 succeeding fiscal years, of which not more than 2/3 shall be available to carry out programs under section 578 and not less than 1/3 shall be available to carry out programs under section 580A.

‘PART F--PROGRAMS FOR SPECIAL POPULATIONS

‘Subpart 1--National Mini Corps Program

‘SEC. 581. NATIONAL MINI CORPS.

    ‘(a) PROGRAM AUTHORIZED- The Secretary is authorized to make grants to institutions of higher education to enable such institutions to establish partnerships with local educational agencies to carry out the purposes of the National Mini Corps Program.

    ‘(b) DEFINITIONS- As used in this subpart--

      ‘(1) the term ‘children’ means children who are eligible to receive services under part A or subpart 1 of part D of chapter 1 of title I of the Elementary and Secondary Education Act of 1965; and

      ‘(2) the term ‘individual’ (A) has the same meaning as the terms ‘first generation college student’ and ‘low income individual’ as defined under section 402A(g)(2) of this Act, or (B) means a student enrolled in an institution of higher education who is the child of current or former migratory workers (including migratory agricultural dairy workers) or of migratory fishermen.

    ‘(c) PURPOSE OF THE PROGRAM- It is the purpose of the National Mini Corps Program to--

      ‘(1) provide individuals who are enrolled or plan to enroll in an institution of higher education with advisement, training, and instructional services, and to encourage individuals to be role models for children;

      ‘(2) provide outreach and recruitment services to encourage individuals to enroll in teacher education programs;

      ‘(3) provide support and instructional services to individuals who are enrolled in an institution of higher education to enable such individuals to provide direct instructional services, which are coordinated with the overall educational goals of the State or local educational agency, to children eligible to receive services under chapter 1 of title I of the Elementary and Secondary Education Act of 1965 during the regular school year or summer term. Such support and services may include--

        ‘(A) lessons and provision of materials that meet the academic needs of children in the classroom;

        ‘(B) supplemental instruction to reinforce the basic skills and concepts provided through instruction by the teacher;

        ‘(C) instruction in other subject areas;

        ‘(D) academic assistance, home visits, parental involvement, parent-student advisement services, and family advocacy; and

        ‘(E) stipends for individuals who participate in the program assisted under this subpart for at least 10 but not more than 15 hours per week;

      ‘(4) designate college coordinators at participating institutions of higher education to train, supervise, and assign individuals to carry out the activities of this subpart in cooperation with State and local educational agencies in which children with special needs have been identified; and

      ‘(5) support other appropriate activities related to encouraging individuals to enter the teaching profession and to provide a link to the community.

    ‘(d) APPLICATION REQUIRED- Institutions of higher education desiring to receive a grant under this subpart shall submit an application to the Secretary which shall include--

      ‘(1) a written partnership agreement with the State and local educational agency in which the children have been identified for participation in the activities under this subpart;

      ‘(2) a description of the strategies that will be employed to engage the community generally in the activities and programs supported by the programs under this subpart;

      ‘(3) a description of the process by which individuals will be recruited and selected to participate in the programs assisted under this subpart;

      ‘(4) a description of the programs and activities which will be supported by the programs under this subpart; and

      ‘(5) such other information as the Secretary considers necessary to determine the nature of the local needs, the quality of the proposed Mini Corps Program, and the capability of the applicant to implement the proposed Mini Corps Program.

    ‘(e) AWARDING OF GRANTS- In awarding grants under this subpart, the Secretary shall ensure, to the extent practicable, that--

      ‘(1) grants are equitably distributed on a geographic basis throughout the Nation and among a variety of communities;

      ‘(2) the amount of the grant awarded is proportionate to the number of individuals and children who, on the basis of the grant application, are expected to be involved in the programs and activities supported by the National Mini Corps; and

      ‘(3) not less than 30 percent of the grants awarded under this subpart are awarded for programs serving migrant students and children.

    ‘(f) USES OF FUNDS- Funds provided under this part may be used for planning, implementing and operating a National Mini Corps Program, except that not more than 5 percent of any grant received under this subpart may be used for administrative costs.

    ‘(g) EVALUATION- The Secretary shall, by January 1, 1996, evaluate the demonstration program assisted under this part and report the results of such evaluation to the appropriate committees of the Congress.

    ‘(h) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this subpart $10,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years.

‘Subpart 2--Foreign Language Instruction

‘SEC. 586. DEMONSTRATION GRANTS FOR CRITICAL LANGUAGE AND AREA STUDIES.

    ‘(a) PROGRAM AUTHORITY- The Secretary is authorized to make demonstration grants to eligible consortia to enable such eligible consortia to--

      ‘(1) operate critical language and area studies programs;

      ‘(2) develop and acquire educational equipment and materials; and

      ‘(3) develop teacher training programs, texts, curriculum, and other activities designed to improve and expand the instruction of foreign languages at elementary and secondary schools across the Nation.

    ‘(b) GRANT LIMITATION- The Secretary shall not award a grant which exceeds $2,000,000 to an eligible consortium under this section in any fiscal year, but shall award grants of sufficient size, scope and quality for a program of comprehensive instruction of foreign languages.

    ‘(c) SPECIAL RULES-

      ‘(1) PRIORITY- In awarding grants under this section, the Secretary shall give priority to eligible consortia with demonstrated, proven effectiveness in the field of critical language and area studies and which have been in existence for at least 1 year prior to applying for a grant under this section.

      ‘(2) EQUITABLE DISTRIBUTION- In awarding grants under this section, the Secretary shall take into consideration providing an equitable geographic distribution of such grants among the regions of the United States.

      ‘(3) PROGRAM REQUIREMENT- Each eligible consortium receiving a grant under this section shall include in the activities assisted pursuant to such grant, a study abroad or cultural exchange program.

    ‘(d) Eligible Consortium-

      ‘(1) IN GENERAL- For the purposes of this section, the term ‘eligible consortium’ means a cooperative effort between entities in one or more States that must include at least 4 schools, of which--

        ‘(A) one shall be an institution of higher education;

        ‘(B) one shall be a secondary school with experience in teaching critical languages;

        ‘(C) one shall be a secondary school with experience in teaching critical languages and in which at least 25 percent of the students are eligible to be counted under chapter 1 of title I of the Elementary and Secondary Education Act of 1965; and

        ‘(D) one shall be a secondary school in which at least 25 percent of the students are eligible to be counted under chapter 1 of title I of the Elementary and Secondary Education Act of 1965.

      ‘(2) NONPROFIT ORGANIZATIONS- Each eligible consortium described in paragraph (1) may include a nonprofit organization to provide services not otherwise available from the entities described in paragraph (1).

    ‘(e) ADMINISTRATION- Each eligible consortium receiving a grant under this section may use not more than 10 percent of such grant for administrative expenses.

    ‘(f) Application-

      ‘(1) IN GENERAL- Except as provided in paragraph (2), each eligible consortium desiring a grant under this section shall submit an application to the Secretary at such time, in such manner and accompanied by such information as the Secretary may reasonably require.

      ‘(2) SPECIAL RULE- The State educational agency or State higher education agency responsible for the supervision of any one school participating in an eligible consortium may submit the application described in paragraph (1) on behalf of such eligible consortium.

    ‘(g) DEFINITIONS- For purposes of this section, the term ‘critical language’ means each of the languages contained in the list of critical foreign languages designated by the Secretary pursuant to section 212(d) of the Education for Economic Security Act (50 Fed. Reg. 149, 31413).

    ‘(h) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated $15,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years to carry out the provisions of this section.

‘SEC. 587. DEVELOPMENT OF FOREIGN LANGUAGE AND CULTURE INSTRUCTIONAL MATERIALS.

    ‘(a) GRANTS AUTHORIZED- The Secretary is authorized to provide one or more grants on a competitive basis to a State or local educational agency, an institution of higher education, a private nonprofit foreign language organization, a nonprofit education association, or a consortium thereof, to enable such entity to act as a resource center for--

      ‘(1) coordinating the development of and disseminating foreign language and culture instructional material, including children’s literature in foreign languages, videotapes and computer software, and teacher’s instructional kits relating to international study; and

      ‘(2) encouraging the expanded use of technology in teaching foreign languages and culture at the elementary school level and, when the needs of elementary schools have been met, at the secondary school level, with a particular emphasis on expanding the use of technology in teaching foreign languages and culture at elementary and secondary schools that have proportionally fewer resources available for teaching foreign languages and cultures, including schools in urban and rural areas.

    ‘(b) COORDINATION- In developing materials and technologies under this section, the Secretary shall, where appropriate, make use of materials and technologies developed under the Star Schools Program Assistance Act.

    ‘(c) AUTHORIZATION OF APPROPRIATION- There are authorized to be appropriated $4,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years to carry out the provisions of this section.

‘Subpart 3--Small State Teaching Initiative

‘SEC. 591. MODEL PROGRAMS AND EDUCATIONAL EXCELLENCE.

    ‘(a) PURPOSE- It is the purpose of this section to provide sufficient funds to small States to enable such States to develop model programs for educational excellence, teacher training and educational reform.

    ‘(b) PROGRAM AUTHORIZED-

      ‘(1) AUTHORITY- The Secretary is authorized to make grants to small States in order to enable such States to make grants to eligible institutions for the purpose of enhancing and improving the quality of teacher education, training, and recruitment in the Nation’s smallest States.

      ‘(2) EQUITABLE DISTRIBUTION- The Secretary shall award grants described in paragraph (1) in equal amounts among small States having applications approved under subsection (e).

    ‘(c) INSTITUTIONAL USE OF FUNDS- Eligible institutions receiving funds under this section may use such funds for the development of innovative teaching techniques and materials, preservice and inservice training programs, renovation of training facilities and construction of model classrooms.

    ‘(d) DEFINITIONS-

      ‘(1) SMALL STATE- For the purposes of this section the term ‘small State’ means a State the total population of which is less than 1,108,500 as reported in the 1990 Census of Population and Housing.

      ‘(2) ELIGIBLE INSTITUTION- For the purposes of this section, the term ‘eligible institution’ means any institution of higher education (as such term is defined in section 1201(a)) that is located in a small State and that provides a course of study which prepares an individual to become a classroom teacher.

    ‘(e) APPLICATION- Any eligible institution which desires to receive a grant under this section shall submit to the State an application which--

      ‘(1) if the State educational agency is not administering the program assisted under this subpart, certifies that the State educational agency has participated in the development of the application;

      ‘(2) provides for a process of active discussion and consultation with an advisory committee convened by the State educational agency and the eligible institution; and

      ‘(3) describes how the institution will use the funding.

    ‘(f) AUTHORIZATION OF APPROPRIATIONS- For the purposes of this part there are authorized to be appropriated $5,000,000 for fiscal year 1993 and such sums as may be necessary in each of the 4 succeeding fiscal years.

‘Subpart 4--Faculty Development Grants

‘SEC. 593. TRAINING GRANTS.

    ‘(a) GRANTS AUTHORIZED- The Secretary is authorized to award grants to institutions of higher education to enable such institutions to--

      ‘(1) develop model programs that provide training to secondary school faculty to prepare students with disabilities for postsecondary educational opportunities; and

      ‘(2) establish programs of faculty development for faculty who teach in an institution of higher education to prepare such faculty for the enrollment of students with disabilities at such institution.

    ‘(b) USE OF GRANTS- The grants described in subsection (a) may be used to--

      ‘(1) provide scholarships, including stipends and allowances, to faculty described in paragraph (1) or (2) of subsection (a);

      ‘(2) develop materials and inservice programs to assist such faculty in making the curriculum at an institution of higher education accessible to students with disabilities; and

      ‘(3) provide funds to support the release of such faculty from teaching assignments for the purpose of educating such faculty regarding the needs of students with disabilities.

    ‘(c) SPECIAL RULES- The Secretary shall ensure that grants awarded under subsection (a)(1) are used for programs that are in compliance with State and professionally recognized standards for the training of special education personnel.

    ‘(d) APPLICATION- Each institution of higher education desiring a grant under this section shall submit an application to the Secretary at such time, in such manner and accompanied by such information as the Secretary may reasonably require.

    ‘(e) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this subpart $5,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years.

‘Subpart 5--Early Childhood Education Training

‘SEC. 596. TRAINING IN EARLY CHILDHOOD EDUCATION AND VIOLENCE COUNSELING.

    ‘(a) PROGRAM AUTHORIZED- The Secretary shall award grants to institutions of higher education to enable such institutions to establish innovative programs to recruit and train students for careers in--

      ‘(1) early childhood development and care, or preschool programs; or

      ‘(2) providing counseling to young children from birth to 6 years of age who have been affected by violence and to adults who work with such young children.

    ‘(b) APPLICATION- An institution of higher education desiring a grant pursuant to subsection (a) shall submit an application to the Secretary at such time, in such form and containing or accompanied by such information or assurances as the Secretary may require. Each such application shall--

      ‘(1) describe the activities and services for which assistance is sought;

      ‘(2) contain a plan in accordance with subsection (c);

      ‘(3) demonstrate that such institution has the capacity to implement such plan; and

      ‘(4) provide assurances that such plan was developed in consultation with agencies and organizations that will assist the institution in carrying out such plan.

    ‘(c) PLAN- Each application described in subsection (a) shall contain a comprehensive plan for the recruitment, retention and training of students seeking careers in early childhood development or violence counseling. Such plan shall include a description of--

      ‘(1) specific strategies for reaching students at secondary schools, community colleges, undergraduate institutions, or other agencies and institutions from which such students are to be drawn for participation in the program, including any partnerships with such institutions;

      ‘(2) specific strategies for retaining such students in the program, such as summer sessions, internships, mentoring, and other activities;

      ‘(3) methods that will be used to ensure that students trained pursuant to the plan will find employment in early childhood education, development and care, or violence counseling;

      ‘(4) the goals, objectives, and timelines to be used in assessing the success of the plan and of the activities assisted under this section;

      ‘(5) the curriculum and training leading to the degree or credential that prepares students for the careers described in the plan;

      ‘(6) the special plans, if any, to assure that students trained pursuant to the plan will be prepared for serving in economically disadvantaged areas; and

      ‘(7) sources of financial aid, to ensure that the training program offered pursuant to this section is available to all qualified students.

    ‘(d) SELECTION AND PRIORITIES- In evaluating the applications submitted under this section, the Secretary shall prescribe criteria regarding such evaluation and shall give priority in granting funds to institutions that--

      ‘(1) prepare students for work in economically disadvantaged areas;

      ‘(2) plan to focus their recruitment, retention, and training efforts on disadvantaged students; and

      ‘(3) have demonstrated effectiveness in providing the type of training for which the institution seeks assistance under this section.

    ‘(e) DURATION AND AMOUNT-

      ‘(1) DURATION- A grant under this section shall be awarded for a period of not less than 3 years nor more than 5 years.

      ‘(2) AMOUNT- The total amount of the grant awarded under this section to any institution of higher education for any 1 year shall not be less than $500,000 nor more than $1,000,000.

‘SEC. 597. EARLY CHILDHOOD STAFF TRAINING AND PROFESSIONAL ENHANCEMENT.

    ‘(a) PROGRAM AUTHORIZED-

      ‘(1) IN GENERAL- The Secretary shall award grants, on a competitive basis, to States in accordance with the provisions of this section.

      ‘(2) DURATION- Grants under this section shall be awarded for a period of 5 years.

    ‘(b) APPLICATION- A State desiring a grant pursuant to this section shall submit an application to the Secretary at such time, in such form and containing or accompanied by such information or assurances as the Secretary may require.

    ‘(c) LEAD AGENCY-

      ‘(1) DESIGNATION OF LEAD AGENCY- The chief executive officer of a State, in consultation with the State educational agency, desiring to receive a grant shall designate an appropriate State agency to act as the lead agency to--

        ‘(A) administer funds received under this section;

        ‘(B) develop a State plan pursuant to subsection (e); and

        ‘(C) coordinate the provision of services with other appropriate Federal, State, and local programs.

      ‘(2) ADVISORY COMMITTEE- The lead agency shall establish an advisory committee, described in subsection (d), to assist in developing the plan required under subsection (e).

    ‘(d) ADVISORY COMMITTEE- Each advisory committee established pursuant to subsection (c)(2) shall consist of a representative of the following agencies, institutions, organizations, divisions, programs or departments in the State to the extent such entities exist within such State:

      ‘(1) The lead State agency responsible for administering funds received under the Child Care Development and Block Grant Act.

      ‘(2) Other State agencies administering or regulating childcare, early childhood development or education programs.

      ‘(3) Institutions of higher education.

      ‘(4) Organizations representing early childhood development staff and parents.

      ‘(5) A local child care resource and referral agency or an organization representing local child care resource and referral.

      ‘(6) A State Head Start association.

      ‘(7) An organization with significant experience in training in the fields of early childhood development, early care and early education.

      ‘(8) State agencies or departments administering or regulating employment, job training, and community development programs.

    ‘(e) STATE PLAN-

      ‘(1) IN GENERAL- Each State desiring a grant under this section shall submit, through the lead agency, a plan to the Secretary at such time, in such manner and accompanied by such information as the Secretary may reasonably require. The Secretary shall consult with the Secretary of Health and Human Services regarding the contents of such plan.

      ‘(2) CONTENTS- Each plan submitted pursuant to subsection (a) shall--

        ‘(A) identify the lead agency as described in subsection (c);

        ‘(B) assess the training offerings and content of such offerings, amount of training required for an early childhood development staff license or certificate, compensation, recruitment and turnover of staff, and any coordination of training offerings and professional growth of early childhood development staff in the State;

        ‘(C) describe the goals of the activities assisted under this part; and

        ‘(D) describe how the State shall--

          ‘(i) identify and maintain a career development path, based on a progression of roles for early childhood development staff, with each role articulated with training and different levels of responsibility and suggested compensation, in such manner as will permit an individual to qualify for a more responsible role;

          ‘(ii) ensure that trainers of early childhood development staff in the State are qualified, licensed or certified in accordance with State law;

          ‘(iii) describe the ways in which the State will encourage the coordination of training programs among institutions of higher education, including, if practicable, transfer of credits among institutions;

          ‘(iv) set forth the ways in which the State will pay the costs of any assessment, credentialing, certification, licensing, training offering, training inventory, increase in staff participation in training, or other services assisted by a grant under this section;

          ‘(v) describe the ways in which the State plans to coordinate the various State and local agencies and organizations to maximize coordination of standards and requirements for certifications, licenses, and accreditations;

          ‘(vi) describe the ways in which the State will compile and disseminate information on--

            ‘(I) training offerings;

            ‘(II) requirements for admission into courses and programs;

            ‘(III) requirements for a license, certificate, credential, or degree to which such offerings may be applied;

            ‘(IV) funding sources available for such activities; and

            ‘(V) the cost of training offerings; and

          ‘(vii) describe the ways in which the State will use the funds received under this section and any other funds available to the State to carry out the activities described in the State plan.

‘SEC. 598. REPORT.

    ‘Each institution of higher education or State receiving a grant under this subpart shall submit to the Secretary program reports and evaluations at such times and containing such information as the Secretary may require.

‘SEC. 599. AUTHORIZATION OF APPROPRIATIONS.

    ‘(a) TRAINING IN EARLY CHILDHOOD EDUCATION AND VIOLENCE COUNSELING- To carry out activities described in section 596, there are authorized to be appropriated $20,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years.

    ‘(b) EARLY CHILDHOOD STAFF TRAINING AND PROFESSIONAL ENHANCEMENT- To carry out activities described in section 597, there are authorized to be appropriated $10,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years.’.

    (b) EXPIRATION DATE- Effective July 1, 1995, the Alternative Routes to Teacher and Principal Certification and Licensure Act of 1992 (as contained in subpart 2 of part D of title V of this Act) is repealed.

TITLE VI--INTERNATIONAL EDUCATION PROGRAMS

SEC. 601. REVISION OF TITLE VI.

    Title VI of the Act (20 U.S.C. 1121 et seq.) is amended to read as follows:

‘TITLE VI--INTERNATIONAL EDUCATION PROGRAMS

‘PART A--INTERNATIONAL AND FOREIGN LANGUAGE STUDIES

‘SEC. 601. FINDINGS AND PURPOSES.

    ‘(a) FINDINGS- The Congress finds that--

      ‘(1) the well-being of the United States, its economy and long-range security, is dependent on the education and training of Americans in international and foreign language studies and on a strong research base in these areas;

      ‘(2) knowledge of other countries and the ability to communicate in other languages is essential to the promotion of mutual understanding and cooperation among nations; and

      ‘(3) present and future generations of Americans must be afforded the opportunity to develop to the fullest extent possible their intellectual capacities in all areas of knowledge.

    ‘(b) PURPOSES- It is the purpose of this part to assist in the development of knowledge, international study, resources and trained personnel, to stimulate the attainment of foreign language acquisition and fluency, to develop a pool of international experts to meet national needs, and to coordinate the programs of the Federal Government in the areas of foreign language, area and other international studies, including professional international affairs education, and research.

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

    ‘(a) NATIONAL LANGUAGE AND AREA CENTERS AUTHORIZED-

      ‘(1) GENERAL AUTHORITY- The Secretary is authorized--

        ‘(A) to make grants to institutions of higher education, or combinations thereof, for the purpose of establishing, strengthening, and operating comprehensive language and area centers and programs; and

        ‘(B) to make grants to such institutions or combinations for the purpose of establishing, strengthening, and operating a diverse network of undergraduate language and area centers and programs,

      which will be national resources for teaching of any modern foreign language, for instruction in fields needed to provide full understanding of areas, regions, or countries in which such language is commonly used, for research and training in international studies, and the international and foreign language aspects of professional and other fields of study, and for instruction and research on issues in world affairs which concern one or more countries.

      ‘(2) AUTHORIZED ACTIVITIES- Any such grant may be used to pay all or part of the cost of establishing or operating a center or program, including the cost of--

        ‘(A) faculty, staff, and student travel in foreign areas, regions, or countries;

        ‘(B) teaching and research materials;

        ‘(C) curriculum planning and development;

        ‘(D) bringing visiting scholars and faculty to the center to teach or to conduct research;

        ‘(E) establishing and maintaining linkages with overseas institutions of higher education and other organizations that may contribute to the educational objectives of this section for the purpose of contributing to the teaching and research of the center or program; and

        ‘(F) training and improvement of the staff, for the purpose of, and subject to such conditions as the Secretary finds necessary, for carrying out the objectives of this section.

      ‘(3) GRANTS TO MAINTAIN LIBRARY COLLECTIONS- The Secretary may make grants to centers described in paragraph (1)(A) having important library collections for the maintenance of such collections.

      ‘(4) OUTREACH GRANTS AND SUMMER INSTITUTES- The Secretary may make additional grants to centers described in paragraph (1)(A) for any one or combination of the following purposes:

        ‘(A) Programs of linkage or outreach between foreign language, area studies, and other international fields and professional schools and colleges.

        ‘(B) Programs of linkage or outreach with 2 and 4-year colleges and universities.

        ‘(C) Programs of linkage or outreach with departments or agencies of Federal and State Governments.

        ‘(D) Programs of linkage or outreach with the news media, business, professional, or trade associations.

        ‘(E) Summer institutes in foreign area and other international fields designed to carry out the programs of linkage and outreach in subparagraphs (A), (B), (C), and (D) of this paragraph.

    ‘(b) STIPENDS FOR FOREIGN LANGUAGE AND AREA STUDIES-

      ‘(1) GRADUATE STIPENDS- (A) The Secretary is authorized to make grants to institutions of higher education or combinations of such institutions for the purpose of paying stipends to individuals undergoing advanced training in any center or program approved by the Secretary under this part.

      ‘(B) Students receiving stipends described in subparagraph (A) shall be individuals who are engaged in an instructional program with stated performance goals for functional foreign language use or in a program developing such performance goals, in combination with area studies, international studies, or the international aspects of a professional studies program.

      ‘(C) Stipends awarded to graduate level recipients may include allowances for dependents and for travel for research and study in the United States and abroad.

      ‘(2) DOCTORAL STIPENDS- (A) The Secretary is authorized to make grants to institutions of higher education or combinations of such institutions for the purpose of paying stipends to students beginning with their third year of graduate training in any center or program approved by the Secretary under this part.

      ‘(B) Students receiving stipends described in subparagraph (A) shall be individuals engaged in completing advanced degree requirements in foreign language, foreign area studies, or other international fields.

      ‘(C) Stipends shall be for the purpose of completing degree requirements, such as the predissertation level studies, preparation for dissertation research including the study of less commonly taught languages, dissertation research abroad, and dissertation writing.

      ‘(D) Students may receive stipends described in subparagraph (A) for a maximum of 4 years if such students make satisfactory progress toward completion of a degree program.

      ‘(3) FUNDING LIMITATIONS- The Secretary is not authorized to make awards under paragraph (2) for any fiscal year unless the amount made available under paragraph (1) for such fiscal year equals or exceeds the current services equivalent of the level of funding during fiscal year 1992 under paragraph (1).

    ‘(c) SPECIAL RULE WITH RESPECT TO TRAVEL- No funds may be expended under this part for undergraduate travel except in accordance with rules prescribed by the Secretary setting forth policies and procedures to assure that Federal funds made available for such travel are expended as part of a formal program of supervised study.

‘SEC. 603. LANGUAGE RESOURCE CENTERS.

    ‘(a) LANGUAGE RESOURCES CENTERS AUTHORIZED- The Secretary is authorized to make grants to and enter into contracts with institutions of higher education, or combinations of such institutions, for the purpose of establishing, strengthening, and operating a small number of national language resource and training centers, which shall serve as resources to improve the capacity to teach and learn foreign languages effectively. Activities carried out by such centers may include--

      ‘(1) the conduct of research on new and improved teaching methods, including the use of advanced educational technology;

      ‘(2) the development of new teaching materials reflecting the use of such research in effective teaching strategies;

      ‘(3) the development and application of performance testing appropriate to an educational setting for use as a standard and comparable measurement of skill levels in all languages;

      ‘(4) the training of teachers in the administration and interpretation of performance tests, the use of effective teaching strategies, and the use of new technologies;

      ‘(5) the publication of instructional materials in the less commonly taught languages; and

      ‘(6) the widespread dissemination of research results, teaching materials, and improved pedagogical strategies to others within the postsecondary education community.

    ‘(b) CONDITIONS FOR GRANTS- Grants under this section shall be made on such conditions as the Secretary determines to be necessary to carry out the provisions of this section.

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

    ‘(a) INCENTIVES FOR THE CREATION OF UNDERGRADUATE INTERNATIONAL STUDIES AND FOREIGN LANGUAGE PROGRAMS-

      ‘(1) AUTHORITY- The Secretary is authorized to make grants to institutions of higher education or combinations of such institutions to assist such institutions or combinations in planning, developing, and carrying out a program to improve undergraduate instruction in international studies and foreign languages. Such grants shall be awarded to institutions of higher education or combinations of such institutions seeking to create new programs or curricula in area studies, foreign languages, and other international fields.

      ‘(2) FEDERAL SHARE AND USE OF FUNDS- Grants made under this section may be used to pay not more than 50 percent of the cost of projects and activities which are an integral part of such a program, such as--

        ‘(A) planning for the development and expansion of undergraduate programs in international studies;

        ‘(B) teaching, research, curriculum development, and other related activities;

        ‘(C) training of faculty members in foreign countries;

        ‘(D) expansion of foreign language courses;

        ‘(E) programs under which foreign teachers and scholars may visit institutions as visiting faculty;

        ‘(F) international education programs designed to develop or enhance linkages between two- and four-year institutions of higher education, or baccalaureate and post-baccalaureate programs or institutions;

        ‘(G) the development of an international dimension in preservice and inservice teacher training;

        ‘(H) the development of undergraduate study abroad programs in locations abroad in which such study opportunities are not otherwise available or which serve students for whom such opportunities are not otherwise available and which provide courses that are closely related to on-campus foreign language and international studies curricula; and

        ‘(I) the integration of new study abroad opportunities for undergraduate students into curricula of specific degree programs.

      ‘(3) NON-FEDERAL SHARE- The non-Federal share of the cost of the programs assisted under this subsection may be provided either in cash or in kind. Such assistance may be composed of institutional and noninstitutional funds, including State and private contributions.

      ‘(4) PRIORITY- In awarding grants under this section, the Secretary shall give priority to applications from institutions of higher education or combinations of such institutions that require entering students to have successfully completed at least 2 years of secondary school foreign language instruction or that require each graduating student to earn 2 years of postsecondary credit in a foreign language (or have demonstrated equivalent competence in the foreign language) or, in the case of a two-year degree granting institution, offer 2 years of postsecondary credit in a foreign language.

    ‘(b) GRANTS TO STRENGTHEN PROGRAMS OF DEMONSTRATED EXCELLENCE IN UNDERGRADUATE INTERNATIONAL STUDIES AND FOREIGN LANGUAGE PROGRAMS-

      ‘(1) IN GENERAL- The Secretary is authorized to make grants to institutions of higher education, combinations of such institutions, or partnerships between nonprofit educational organizations and institutions of higher education to enable such institutions of higher education, combinations of such institutions or partnerships to--

        ‘(A) strengthen programs of demonstrated excellence in area studies, foreign languages, and other international fields in order to ensure the self-sustaining maintenance and growth of such programs; and

        ‘(B) enhance the capacity-building and dissemination functions of such programs.

      ‘(2) FEDERAL SHARE AND USE OF GRANT FUNDS- Grants awarded under this subsection may be used to pay not more than 50 percent of the cost of projects and activities which are an integral part of the programs described in paragraph (1), such as--

        ‘(A) teaching, research, curriculum development, and other related activities;

        ‘(B) strengthening undergraduate majors and minors directly related to the generation of international expertise;

        ‘(C) developing new foreign language courses, especially in languages previously not taught at such institution or combination of such institutions, and improving the quality of existing foreign language programs;

        ‘(D) expanding library and teaching resources;

        ‘(E) establishing linkages overseas with institutions of higher education and organizations that contribute to the educational objectives of this subsection;

        ‘(F) developing programs designed to integrate professional and technical education with area studies, foreign languages, and other international fields;

        ‘(G) disseminating curricular materials and program designs to other educational institutions;

        ‘(H) integrating on-campus undergraduate curriculum with study abroad and exchange programs;

        ‘(I) training faculty and staff in area studies, foreign languages, and other international fields;

        ‘(J) conducting summer institutes in foreign area and other international fields to provide faculty and curriculum development, including the integration of professional and technical education with foreign area and other international studies, and to provide foreign area and other international knowledge or skills to government personnel or private sector professionals in international activities;

        ‘(K) developing study and internship abroad programs--

          ‘(i) in locations in which such opportunities are not otherwise available; or

          ‘(ii) which serve students for whom such opportunities are not otherwise available; and

        ‘(L) developing model programs to enrich or enhance the effectiveness of study abroad programs, including predeparture and post return orientation programs, integration of study abroad into the curriculum of the home institution, credit transfer, improved faculty involvement, cross-disciplinary programs, student selection and advising services, and academic advising.

      ‘(3) NON-FEDERAL SHARE- The non-Federal share of the cost of the programs assisted under this subsection may be provided either in cash or in kind. Such assistance may be composed of institutional and noninstitutional funds, including State and private contributions.

      ‘(4) EVALUATION CRITERIA AND REPORT- As a condition for the award of any grant under this subsection, the Secretary may establish criteria for evaluating programs and require an annual report which evaluates the progress and performance of students in such programs.

    ‘(c) PROGRAMS OF NATIONAL SIGNIFICANCE- The Secretary may also award grants to public and private nonprofit agencies and organizations, including professional and scholarly associations, whenever the Secretary determines such grants will make an especially significant contribution to attaining the objective of this section.

‘SEC. 605. INTENSIVE SUMMER LANGUAGE INSTITUTES.

    ‘(a) INTENSIVE SUMMER LANGUAGE INSTITUTES AUTHORIZED-

      ‘(1) GRANTS AUTHORIZED- The Secretary is authorized to make grants to institutions of higher education, or combinations of such institutions, for the purpose of establishing and conducting intensive summer language institutes.

      ‘(2) ELIGIBLE GRANT RECIPIENTS- Training authorized by this section shall be provided through--

        ‘(A) institutes designed to meet the needs for intensive language training by advanced foreign language students;

        ‘(B) institutes designed to provide professional development and improve language instruction through preservice and inservice training for language teachers; or

        ‘(C) institutes that combine the purposes of subparagraphs (A) and (B).

      ‘(3) AUTHORIZED ACTIVITIES- Grants made under this section may be used for--

        ‘(A) intensive training in critical languages;

        ‘(B) training in neglected languages; and

        ‘(C) stipends for students and faculty attending the institutes authorized by this section.

      ‘(4) INSTRUCTIONAL PROGRAM- Institutes supported under this section may provide instruction on a full-time or part-time basis to supplement instruction not fully available in centers supported under section 602.

    ‘(b) PEER REVIEW- Grants made under this section shall be awarded on the basis of recommendations made by peer review panels composed of broadly representative professionals.

‘SEC. 606. RESEARCH; STUDIES; ANNUAL REPORT.

    ‘(a) AUTHORIZED ACTIVITIES- The Secretary may, directly or through grants or contracts, conduct research and studies which contribute to the purposes of this part. Such research and studies may include but are not limited to--

      ‘(1) studies and surveys to determine needs for increased or improved instruction in foreign language, area studies, or other international fields, including the demand for foreign language, area, and other international specialists in government, education, and the private sector;

      ‘(2) studies and surveys to assess the utilization of graduates of programs supported under this title by governmental, educational, and private sector organizations and other studies assessing the outcomes and effectiveness of programs so supported;

      ‘(3) comparative studies of the effectiveness of strategies to provide international capabilities at institutions of higher education;

      ‘(4) research on more effective methods of providing instruction and achieving competency in foreign languages;

      ‘(5) the development and publication of specialized materials for use in foreign language, area studies, and other international fields, or for training foreign language, area, and other international specialists; and

      ‘(6) the application of performance tests and standards across all areas of foreign language instruction and classroom use.

    ‘(b) ANNUAL REPORT- The Secretary shall prepare, publish, and announce an annual report listing the books and research materials produced with assistance under this section.

‘SEC. 607. PERIODICALS AND OTHER RESEARCH MATERIALS PUBLISHED OUTSIDE THE UNITED STATES.

    ‘(a) PROGRAM AUTHORIZED; AUTHORIZATION OF APPROPRIATIONS-

      ‘(1) PROGRAM AUTHORIZED- From the amount appropriated under paragraph (2), the Secretary is authorized to award grants to institutions of higher education, public or nonprofit private library institutions, or consortia of such institutions for the acquisition of, and provision of access to, periodicals and other research materials published outside the United States.

      ‘(2) AUTHORIZATION OF APPROPRIATIONS- In addition to the amount authorized to be appropriated by section 610A, there are authorized to be appropriated $5,000,000 for fiscal year 1993, and such sums as may be necessary for each of the 4 succeeding fiscal years to carry out this section.

    ‘(b) AUTHORIZED ACTIVITIES- Grants under this section shall be used for the following purposes:

      ‘(1) To acquire periodicals and other research materials published outside the United States which are not commonly held by American academic libraries and which are of scholarly or research importance.

      ‘(2) To maintain in machine-readable form current bibliographic information on periodicals and other research materials thus acquired, and to enter such information into one or more of the widely available bibliographic data bases.

      ‘(3) To preserve such periodicals and other research materials.

      ‘(4) To make such periodicals and other research materials widely available to researchers and scholars.

    ‘(c) APPLICATION AND PREFERENCE-

      ‘(1) APPLICATION- Each institution or consortium desiring a grant under this section shall submit an application to the Secretary at such time, in such manner, and accompanied by such information and assurances as the Secretary may reasonably require.

      ‘(2) PREFERENCE- The Secretary shall give preference to grant applications according to the following criteria:

        ‘(A) The total number of library research materials in an institution’s or consortium’s collection.

        ‘(B) The comprehensiveness, both current and retrospective, of the institution’s or consortium’s collection of periodicals and other research materials published outside the United States.

        ‘(C) Public accessibility to the institution’s or consortium’s collection of periodicals and other research materials published outside the United States.

        ‘(D) The institution’s or consortium’s technological capability to share its collection of periodicals and other research materials published outside the United States with other institutions of higher education, with public or nonprofit institutions, and with individual scholars.

        ‘(E) The institution’s or consortium’s budget and staff capability to build, maintain, and service periodicals and other research materials published outside the United States.

      ‘(2) SUFFICIENT SIZE- The Secretary shall award grants under this section of sufficient size to enable an institution or consortium to--

        ‘(A) substantially improve its collection of foreign periodicals and other research materials published outside the United States; and

        ‘(B) contribute to a comprehensive national base of foreign language materials for students and scholars.

    ‘(d) WRITTEN AGREEMENT-

      ‘(1) AGREEMENT REQUIRED- Prior to the awarding of grants authorized under subsection (c), each recipient institution or consortium shall file a formal written agreement with the Secretary which outlines their collecting responsibilities regarding periodicals and other research materials published outside the United States and ensures public access.

      ‘(2) FUNDING LIMITATION- No funds from grants authorized under subsection (c) may be used by a recipient institution or consortium to acquire and process periodicals and other research materials published outside the United States other than that specified in the agreement filed with the Secretary under paragraph (1).

    ‘(e) COPYRIGHT- Nothing in this section shall be considered to amend, affect, or define the provisions of title 17, United States Code, relating to copyright.

‘SEC. 608. SELECTION OF CERTAIN GRANT RECIPIENTS.

    ‘(a) COMPETITIVE GRANTS- The Secretary shall award grants under section 602 competitively on the basis of criteria that separately, but not less rigorously, evaluates the applications for comprehensive and undergraduate language and area centers and programs.

    ‘(b) SELECTION CRITERIA- The Secretary shall set criteria for grants awarded under section 602 by which a determination of excellence shall be made to meet the differing objectives of graduate and undergraduate institutions.

    ‘(c) EQUITABLE DISTRIBUTION OF GRANTS- The Secretary shall, to the extent practicable, award grants under this part (other than section 602) in such manner as to achieve an equitable distribution of funds throughout the United States, based on the merit of a proposal with peer review by broadly representative professionals.

‘SEC. 609. EQUITABLE DISTRIBUTION OF CERTAIN FUNDS.

    ‘(a) SELECTION CRITERIA- The Secretary shall make excellence the criterion for selection of grants awarded under section 602.

    ‘(b) EQUITABLE DISTRIBUTION- To the extent practicable and consistent with the criterion of excellence, the Secretary shall award grants under this part (other than section 602) in such a manner as will achieve an equitable distribution of funds throughout the Nation.

    ‘(c) SUPPORT FOR UNDERGRADUATE EDUCATION- The Secretary shall also award grants under this part in such manner as to ensure that an appropriate portion of the funds appropriated for this part (as determined by the Secretary) are used to support undergraduate education.

‘SEC. 610. AMERICAN OVERSEAS RESEARCH CENTERS.

    ‘(a) CENTERS AUTHORIZED- The Secretary is authorized to make grants to and enter into contracts with any American overseas research center that is a consortium of institutions of higher education (hereafter in this section referred to as a ‘center’) to enable such center to promote postgraduate research, exchanges and area studies.

    ‘(b) USE OF GRANTS- Grants made and contracts entered into pursuant to this section may be used to pay all or a portion of the cost of establishing or operating a center or program, including the cost of faculty and staff stipends and salaries, faculty, staff and student travel, the operation and maintenance of overseas facilities, the cost of teaching and research materials, the cost of acquisition, maintenance and preservation of library collections, the cost of bringing visiting scholars and faculty to a center to teach or to conduct research, the cost of organizing and managing conferences and the cost of publication and dissemination of material for the scholarly and general public.

    ‘(c) LIMITATION- The Secretary shall only award grants to and enter into contracts with centers under this section that--

      ‘(1) receive more than 50 percent of their funding from public or private United States sources;

      ‘(2) have a permanent presence in the country in which the center is located; and

      ‘(3) are organizations described in section 501(c)(3) of the Internal Revenue Code of 1986 which are exempt from taxation under section 501(a) of such Code.

‘SEC. 610A. AUTHORIZATION OF APPROPRIATIONS.

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

‘PART B--BUSINESS AND INTERNATIONAL EDUCATION PROGRAMS

‘SEC. 611. FINDINGS AND PURPOSES.

    ‘(a) FINDINGS- The Congress finds that--

      ‘(1) the future economic welfare of the United States will depend substantially on increasing international skills in the business and educational community and creating an awareness among the American public of the internationalization of our economy;

      ‘(2) concerted efforts are necessary to engage business schools, language and area study programs, professional international affairs education programs, public and private sector organizations, and United States business in a mutually productive relationship which benefits the Nation’s future economic interests;

      ‘(3) few linkages presently exist between the manpower and information needs of United States business and the international education, language training and research capacities of institutions of higher education in the United States, and public and private organizations; and

      ‘(4) organizations such as world trade councils, world trade clubs, chambers of commerce and State departments of commerce are not adequately used to link universities and business for joint venture exploration and program development.

    ‘(b) PURPOSES- It is the purpose of this part--

      ‘(1) to enhance the broad objective of this Act by increasing and promoting the Nation’s capacity for international understanding and economic enterprise through the provision of suitable international education and training for business personnel in various stages of professional development; and

      ‘(2) to promote institutional and noninstitutional educational and training activities that will contribute to the ability of United States business to prosper in an international economy.

‘SEC. 612. CENTERS FOR INTERNATIONAL BUSINESS EDUCATION.

    ‘(a) PROGRAM AUTHORIZED-

      ‘(1) IN GENERAL- The Secretary is authorized to make grants to institutions of higher education, or combinations of such institutions, to pay the Federal share of the cost of planning, establishing and operating centers for international business education which--

        ‘(A) will be national resources for the teaching of improved business techniques, strategies, and methodologies which emphasize the international context in which business is transacted;

        ‘(B) will provide instruction in critical foreign languages and international fields needed to provide understanding of the cultures and customs of United States trading partners; and

        ‘(C) will provide research and training in the international aspects of trade, commerce, and other fields of study.

      ‘(2) SPECIAL RULE- In addition to providing training to students enrolled in the institution of higher education in which a center is located, such centers shall serve as regional resources to businesses proximately located by offering programs and providing research designed to meet the international training needs of such businesses. Such centers shall also serve other faculty, students, and institutions of higher education located within their region.

    ‘(b) AUTHORIZED EXPENDITURES- Each grant made under this section may be used to pay the Federal share of the cost of planning, establishing or operating a center, including the cost of--

      ‘(1) faculty and staff travel in foreign areas, regions, or countries;

      ‘(2) teaching and research materials;

      ‘(3) curriculum planning and development;

      ‘(4) bringing visiting scholars and faculty to the center to teach or to conduct research; and

      ‘(5) training and improvement of the staff, for the purpose of, and subject to such conditions as the Secretary finds necessary for, carrying out the objectives of this section.

    ‘(c) AUTHORIZED ACTIVITIES-

      ‘(1) MANDATORY ACTIVITIES- Programs and activities to be conducted by centers assisted under this section shall include--

        ‘(A) interdisciplinary programs which incorporate foreign language and international studies training into business, finance, management, communications systems, and other professional curricula;

        ‘(B) interdisciplinary programs which provide business, finance, management, communications systems, and other professional training for foreign language and international studies faculty and advanced degree candidates;

        ‘(C) evening or summer programs, such as intensive language programs, available to members of the business community and other professionals which are designed to develop or enhance their international skills, awareness, and expertise;

        ‘(D) collaborative programs, activities, or research involving other institutions of higher education, local educational agencies, professional associations, businesses, firms, or combinations thereof, to promote the development of international skills, awareness, and expertise among current and prospective members of the business community and other professionals;

        ‘(E) research designed to strengthen and improve the international aspects of business and professional education and to promote integrated curricula; and

        ‘(F) research designed to promote the international competitiveness of American businesses and firms, including those not currently active in international trade.

      ‘(2) PERMISSIBLE ACTIVITIES- Programs and activities to be conducted by centers assisted under this section may include--

        ‘(A) the establishment of overseas internship programs for students and faculty designed to provide training and experience in international business activities, except that no Federal funds provided under this section may be used to pay wages or stipends to any participant who is engaged in compensated employment as part of an internship program;

        ‘(B) the establishment of linkages overseas with institutions of higher education and other organizations that contribute to the educational objectives of this section;

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

        ‘(D) the development of opportunities for business students to study abroad in locations which are important to the existing and future economic well-being of the United States;

        ‘(E) outreach activities or consortia with business programs located at other institutions of higher education for the purpose of providing expertise regarding the internationalization of such programs, such as assistance in research, curriculum development, faculty development, or educational exchange programs; and

        ‘(F) other eligible activities prescribed by the Secretary.

    ‘(d) ADVISORY COUNCIL-

      ‘(1) ESTABLISHMENT- In order to be eligible for assistance under this section, an institution of higher education, or combination of such institutions, shall establish a center advisory council which will conduct extensive planning prior to the establishment of a center concerning the scope of the center’s activities and the design of its programs.

      ‘(2) MEMBERSHIP ON ADVISORY COUNCIL- The center advisory council shall include--

        ‘(A) one representative of an administrative department or office of the institution of higher education;

        ‘(B) one faculty representative of the business or management school or department of such institution;

        ‘(C) one faculty representative of the international studies or foreign language school or department of such institution;

        ‘(D) one faculty representative of another professional school or department of such institution, as appropriate;

        ‘(E) one or more representatives of local or regional businesses or firms;

        ‘(F) one representative appointed by the Governor of the State in which the institution of higher education is located whose normal responsibilities include official oversight or involvement in State-sponsored trade-related activities or programs; and

        ‘(G) such other individuals as the institution of higher education deems appropriate.

      ‘(3) MEETINGS- In addition to the initial planning activities required under subsection (d)(1), the center advisory council shall meet not less than once each year after the establishment of the center to assess and advise on the programs and activities conducted by the center.

    ‘(e) GRANT DURATION; FEDERAL SHARE-

      ‘(1) DURATION OF GRANTS- The Secretary shall make grants under this section for a minimum of 3 years unless the Secretary determines that the provision of grants of shorter duration is necessary to carry out the objectives of this section.

      ‘(2) FEDERAL SHARE- The Federal share of the cost of planning, establishing and operating centers under this section shall be--

        ‘(A) not more than 90 percent for the first year in which Federal funds are received;

        ‘(B) not more than 70 percent for the second such year; and

        ‘(C) not more than 50 percent for the third such year and for each such year thereafter.

      ‘(3) NON-FEDERAL SHARE- The non-Federal share of the cost of planning, establishing, and operating centers under this section may be provided either in cash or in-kind.

      ‘(4) WAIVER OF NON-FEDERAL SHARE- In the case of an institution of higher education receiving a grant under this part and conducting outreach or consortia activities with another institution of higher education in accordance with section 612(c)(2)(E), the Secretary may waive a portion of the requirements for the non-Federal share required in paragraph (2) equal to the amount provided by the institution of higher education receiving such grant to such other institution of higher education for carrying out such outreach or consortia activities. Any such waiver shall be subject to such terms and conditions as the Secretary deems necessary for carrying out the purposes of this section.

    ‘(f) GRANT CONDITIONS- Grants under this section shall be made on such conditions as the Secretary determines to be necessary to carry out the objectives of this section. Such conditions shall include--

      ‘(1) evidence that the institution of higher education, or combination of such institutions, will conduct extensive planning prior to the establishment of a center concerning the scope of the center’s activities and the design of its programs in accordance with subsection (d)(1);

      ‘(2) assurance of ongoing collaboration in the establishment and operation of the center by faculty of the business, management, foreign language, international studies, professional international affairs, and other professional schools or departments, as appropriate;

      ‘(3) assurance that the education and training programs of the center will be open to students concentrating in each of these respective areas, as appropriate; and

      ‘(4) assurance that the institution of higher education, or combination of such institutions, will use the assistance provided under this section to supplement and not to supplant activities conducted by institutions of higher education described in subsection (c)(1).

‘SEC. 613. EDUCATION AND TRAINING PROGRAMS.

    ‘(a) PROGRAM AUTHORIZED- The Secretary shall make grants to, and enter into contracts with, institutions of higher education to pay the Federal share of the cost of programs designed to promote linkages between such institutions and the American business community engaged in international economic activity. Each program assisted under this section shall both enhance the international academic programs of institutions of higher education and provide appropriate services to the business community which will expand its capacity to engage in commerce abroad.

    ‘(b) AUTHORIZED ACTIVITIES- Eligible activities to be conducted by institutions of higher education pursuant to grants or contracts awarded under this section shall include--

      ‘(1) innovation and improvement in international education curricula to serve the needs of the business community, including development of new programs for nontraditional, mid-career, or part-time students;

      ‘(2) development of programs to inform the public of increasing international economic interdependence and the role of American business within the international economic system;

      ‘(3) internationalization of curricula at the junior and community college level, and at undergraduate and graduate schools of business;

      ‘(4) development of area studies programs, and interdisciplinary international programs;

      ‘(5) establishment of export education programs through cooperative arrangements with regional and world trade centers and councils, and with bilateral and multilateral trade associations;

      ‘(6) research for and development of specialized teaching materials, including language materials, and facilities appropriate to business-oriented students;

      ‘(7) establishment of student and faculty fellowships and internships for training and education in international business activities;

      ‘(8) development of opportunities for junior business and other professional school faculty to acquire or strengthen international skills and perspectives;

      ‘(9) development of research programs on issues of common interest to institutions of higher education and private sector organizations and associations engaged in or promoting international economic activity;

      ‘(10) the establishment of internships overseas to enable foreign language students to develop their foreign language skills and knowledge of foreign cultures and societies;

      ‘(11) the establishment of linkages overseas with institutions of higher education and organizations that contribute to the educational objectives of this section; and

      ‘(12) summer institutes in international business, foreign area and other international studies designed to carry out the purposes of this section.

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

    ‘(d) FEDERAL SHARE- The Federal share under this part for each fiscal year shall not exceed 50 percent of the cost of such program.

‘SEC. 614. AUTHORIZATION OF APPROPRIATIONS.

    ‘(a) CENTERS FOR INTERNATIONAL BUSINESS EDUCATION- There are authorized to be appropriated $11,000,000 for the fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years to carry out the provisions of section 612.

    ‘(b) EDUCATION AND TRAINING PROGRAMS- There are authorized to be appropriated $7,000,000 for fiscal year 1993, and such sums as may be necessary for the 4 succeeding fiscal years, to carry out the provisions of section 613.

‘PART C--INSTITUTE FOR INTERNATIONAL PUBLIC POLICY

‘SEC. 621. MINORITY FOREIGN SERVICE PROFESSIONAL DEVELOPMENT PROGRAM.

    ‘(a) ESTABLISHMENT- The Secretary is authorized to award a grant, on a competitive basis, to an eligible recipient to enable such recipient to establish an Institute for International Public Policy (hereafter in this part referred to as the ‘Institute’). The Institute shall conduct a program to significantly increase the numbers of African Americans and other underrepresented minorities in the international service, including private international voluntary organizations and the foreign service of the United States. Such program shall include a program for such students to study abroad in their junior year, fellowships for graduate study, internships, intensive academic programs such as summer institutes, or intensive language training.

    ‘(b) DEFINITION OF ELIGIBLE RECIPIENT-

      ‘(1) IN GENERAL- For the purpose of this part, the term ‘eligible recipient’ means a consortium consisting of 1 or more of the following entities:

        ‘(A) An institution eligible for assistance under part B of title III of this Act.

        ‘(B) An institution of higher education which serves substantial numbers of African American or other underrepresented minority students.

        ‘(C) An institution of higher education with programs in training foreign service professionals.

      ‘(2) HOST INSTITUTION- Each eligible recipient receiving a grant under this section shall designate an institution of higher education as the host institution for the Institute.

    ‘(c) APPLICATION- Each eligible recipient desiring a grant under this section shall submit an application at such time, in such manner, and accompanied by such information as the Secretary may reasonably require.

    ‘(d) DURATION- Grants made pursuant to this section shall be awarded for a period not to exceed 5 years.

    ‘(e) MATCH REQUIRED- The eligible recipient of a grant under this section shall contribute to the conduct of the program supported by the grant an amount from non-Federal sources equal to at least one-fourth the amount of the grant, which contribution may be in cash or in kind.

‘SEC. 622. JUNIOR YEAR ABROAD PROGRAM.

    ‘(a) PROGRAM AUTHORITY- The Institute shall conduct, by grant or contract, a junior year abroad program. The junior year abroad program shall be open to eligible students at institutions of higher education, including historically Black colleges and universities as defined in section 322 of this Act, tribally controlled Indian community colleges as defined in the Tribally Controlled Community College Assistance Act of 1978, and other institutions of higher education with significant minority student populations. Eligible student expenses shall be shared by the Institute and the institution at which the student is in attendance. Each student may spend not more than 9 months abroad in a program of academic study, as well as social, familial and political interactions designed to foster an understanding of and familiarity with the language, culture, economics and governance of the host country.

    ‘(b) DEFINITION OF ELIGIBLE STUDENT- For the purpose of this section, the term ‘eligible student’ means a student that is--

      ‘(1) enrolled full-time in a baccalaureate degree program at an institution of higher education; and

      ‘(2) entering the third year of study at an institution of higher education which nominates such student for participation in the junior year abroad program.

    ‘(c) SPECIAL RULE- An institution of higher education desiring to send a student on the junior year abroad program shall enter into a Memorandum of Understanding with the Institute under which such institution of higher education agrees to--

      ‘(1) provide the requisite academic preparation for students participating in the junior year abroad or internship programs;

      ‘(2) pay one-half the cost of each student it nominates for participation in the junior year abroad program; and

      ‘(3) meet such other requirements as the Secretary may from time to time, by regulation, reasonably require.

‘SEC. 623. MASTERS DEGREE IN INTERNATIONAL RELATIONS.

    ‘The Institute shall provide, in cooperation with the other members participating in the eligible recipient consortium, a program of study leading to a masters degree in international relations. The masters degree program designed by the consortia shall be reviewed and approved by the Secretary. The Institute may grant fellowships in an amount not to exceed the level of support comparable to that provided by the National Science Foundation graduate fellowships, except such amount shall be adjusted as necessary so as not to exceed the fellow’s demonstrated level of need according to measurement of need approved by the Secretary. A fellowship recipient shall agree to undertake full-time study and to enter the international service (including work with private international voluntary organizations) or foreign service of the United States.

‘SEC. 624. INTERNSHIPS.

    ‘The Institute shall enter into agreements with historically Black colleges and universities as defined in section 322 of this Act, tribally controlled Indian community colleges as defined in the Tribally Controlled Community College Assistance Act of 1978, other institutions of higher education with significant numbers of minority students, and institutions of higher education with programs in training foreign service professionals, to provide academic year internships during the junior and senior year and summer internships following the sophomore and junior academic years, by work placements with an international voluntary or government organizations or agencies, including the Agency for International Development, the United States Information Agency, the International Monetary Fund, the National Security Council, the Organization of American States, the Export-Import Bank, the Overseas Private Investment Corporation, the Department of State, Office of the United States Trade Representative, the World Bank, and the United Nations.

‘SEC. 625. REPORT.

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

‘SEC. 626. GIFTS AND DONATIONS.

    ‘The Institute is authorized to receive money and other property donated, bequeathed, or devised to the Institute with or without a condition of restriction, for the purpose of providing financial support for the fellowships or underwriting the cost of the Junior Year Abroad Program. All funds or property given, devised, or bequeathed shall be retained in a separate account, and an accounting of those funds and property shall be included in the annual report described in section 625.

‘SEC. 627. AUTHORIZATION.

    ‘There is authorized to be appropriated $10,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years to carry out this part.

‘PART D--GENERAL PROVISIONS

‘SEC. 631. DEFINITIONS.

    ‘(a) DEFINITIONS- As used in this title--

      ‘(1) the term ‘area studies’ means a program of comprehensive study of the aspects of a society or societies, including study of its history, culture, economy, politics, international relations and languages;

      ‘(2) the term ‘international business’ means profit-oriented business relationships conducted across national boundaries and includes activities such as the buying and selling of goods, investments in industries, the licensing of processes, patents and trademarks, and the supply of services;

      ‘(3) the term ‘export education’ means educating, teaching and training to provide general knowledge and specific skills pertinent to the selling of goods and services to other countries, including knowledge of market conditions, financial arrangements, laws and procedures;

      ‘(4) the term ‘internationalization of curricula’ means the incorporation of international or comparative perspectives in existing courses of study or the addition of new components to the curricula to provide an international context for American business education;

      ‘(5) the term ‘comprehensive language and area center’ means an administrative unit of a university that contributes significantly to the national interest in advanced research and scholarship, employs a critical mass of scholars in diverse disciplines related to a geographic concentration, offers intensive language training in languages of its area specialization, maintains important library collections related to the area, and makes training available in language and area studies to a graduate, postgraduate, and undergraduate clientele; and

      ‘(6) the term ‘undergraduate language and area center’ means an administrative unit of an institution of higher education, including but not limited to 4-year colleges, that contributes significantly to the national interest through the education and training of students who matriculate into advanced language and area studies programs, professional school programs, or incorporates substantial international and foreign language content into baccalaureate degree programs, engages in research, curriculum development and community outreach activities designed to broaden international and foreign language knowledge, employs faculty with strong language, area, and international studies credentials, maintains library holdings, including basic reference works, journals, and works in translation, and makes training available predominantly to undergraduate students;

      ‘(7) the term ‘critical languages’ means each of the languages contained in the list of critical languages designated by the Secretary pursuant to section 212(d) of the Education for Economic Security Act (50 Fed. Reg. 149, 31413), except that, in the implementation of this definition, the Secretary may set priorities according to the purposes of this title; and

      ‘(8) the term ‘institution of higher education’ means, in addition to institutions which meet the definition of section 1201(a) of this Act, institutions which meet the requirements of section 1201(a) of this Act except that (1) they are not located in the United States, and (2) they apply for assistance under this title in consortia with institutions which meet the definition of 1201(a) of this Act.

    ‘(b) SPECIAL CONDITIONS- All references to individuals or organizations, unless the context otherwise requires, mean individuals who are citizens or permanent residents of the United States or organizations which are organized or incorporated in the United States.

‘SEC. 632. PRESERVATION OF PRE-1992 PROGRAMS.

    ‘Notwithstanding any other provision of law, amendments to this title establishing new programs or expanding existing programs enacted pursuant to the Higher Education Amendments of 1992 shall not be funded in fiscal year 1993, or the 4 succeeding fiscal years, unless and until Congress enacts appropriations for programs under this title enacted prior to such Amendments at a level no less than the level of funding in effect for such preexisting programs for fiscal year 1992.

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

SEC. 701. PURPOSES.

    Section 701 of the Act (20 U.S.C. 1132a) is amended--

      (1) in the matter preceding paragraph (1) of subsection (a)--

        (A) by inserting a period after ‘instructional instrumentation and equipment’;

        (B) by striking ‘if the primary purpose of such assistance is to enable such institutions--’ in subsection (a) and inserting the following: ‘In making such grants, the Secretary shall include assistance to enable institutions--’;

      (2) in subsection (a)(1)--

        (A) by striking subparagraphs (A) and (B) and inserting the following:

        ‘(A) Federal, State, and local laws requiring removal of barriers to full participation by individuals with disabilities;’;

        (B) by redesignating subparagraphs (C) and (D) as subparagraphs (B) and (C), respectively; and

      (3) in subsection (a)(4), by inserting ‘(including renovation of libraries to promote the use of new technologies and preservation of library materials)’ after ‘libraries’.

SEC. 702. PRIOR RIGHTS AND OBLIGATIONS.

    Section 702 of the Act (20 U.S.C. 1132a-1) is amended to read as follows:

‘SEC. 702. PRIOR RIGHTS AND OBLIGATIONS.

    ‘(a) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated such sums as may be necessary for fiscal year 1993 and for each of the 4 succeeding fiscal years to pay obligations incurred prior to 1987 under parts C and D of this title, as such parts were in effect before the effective date of the Higher Education Act Amendments of 1992.

    ‘(b) LEGAL RESPONSIBILITIES- Except as provided in section 783, all entities with continuing obligations incurred under parts A, B, C, and D of this title, as such parts were in effect before the effective date of the Higher Education Act Amendments of 1992, shall be subject to the requirements of such part as in effect before the effective date of the Higher Education Act Amendments of 1992.’.

SEC. 703. IMPROVEMENT OF ACADEMIC AND LIBRARY FACILITIES.

    Part A of title VII of the Act (20 U.S.C. 1132b et seq.) is amended to read as follows:

‘PART A--IMPROVEMENT OF ACADEMIC AND LIBRARY FACILITIES

‘SEC. 711. SHORT TITLE.

    ‘This part may be cited as the ‘Higher Education Facilities Act of 1992’.

‘SEC. 712. FINDINGS.

    ‘The Congress finds that--

      ‘(1) over the past 50 years institutions of higher education have expanded dramatically, while at the same time traditional sources of funding facilities maintenance and repair have declined and even disappeared in some instances;

      ‘(2) in order to meet the rising cost of educating students, resulting mainly from inflation and the higher costs of research, many colleges and universities made the choice to defer renovations and improvements;

      ‘(3) overall, the need for capital investment by institutions of higher education has been estimated to exceed $60,000,000,000;

      ‘(4) the deterioration of facilities has caused valuable research experiments and programs to be postponed, delayed or canceled; and

      ‘(5) the United States’ competitive position within the world economy is vulnerable if the necessary research facilities are not available to provide advanced training in the fields of science and technology.

‘SEC. 713. DISTRIBUTION OF ASSISTANCE.

    ‘(a) COMPETITIVE OR FORMULA DISTRIBUTION-

      ‘(1) COMPETITIVE GRANTS- If the amount appropriated pursuant to section 716 for a fiscal year is less than $50,000,000, then the Secretary shall award grants under this part on a competitive basis in accordance with subsection (h) to institutions of higher education to carry out the activities described in section 714.

      ‘(2) ALLOTMENT FORMULA-

        ‘(A) FORMULA- If the amount appropriated pursuant to section 716 for a fiscal year is equal to or greater than $50,000,000, then the Secretary shall allot to each State higher education agency with an approved application--

          ‘(i) 50 percent of such funds on the basis of the population of the State compared to the population of all States; and

          ‘(ii) 50 percent of such funds on the basis of the number of students attending institutions of higher education within the State compared to the number of students attending institutions of higher education in all States.

        ‘(B) USE OF FORMULA GRANTS- Each State higher education agency receiving an allotment pursuant to subparagraph (A), shall use such allotment to award grants, on a competitive basis, to institutions of higher education within the State to enable such institutions to carry out the activities described in section 714.

        ‘(C) REALLOTMENT- Except as provided in subsection (f), any amount that the Secretary determines will not be available to a State higher education agency because such agency elects not to participate in the program assisted under this part shall be reallotted to other States in the same manner as the original allotments were made.

    ‘(b) MATCHING REQUIREMENTS-

      ‘(1) STATE MATCHING REQUIREMENT-

        ‘(A) IN GENERAL- In order to receive an allotment under subsection (a)(2)(A), each State higher education agency shall provide matching funds equal to 25 percent of the amount of any allotment received pursuant to such subsection. The Secretary may waive the requirements of the preceding sentence if the State can demonstrate to the satisfaction of the Secretary that such matching requirement would present a severe financial hardship to the State.

        ‘(B) CASH REQUIREMENT- Each State higher education agency receiving funds under this part shall only provide matching funds pursuant to paragraph (1) in cash.

      ‘(2) INSTITUTIONAL MATCHING REQUIREMENT- In order to receive a grant under subsection (a)(1) or (a)(2)(B), each eligible institution shall provide matching funds equal to 50 percent of the amount of any grant received pursuant to such subsection. Such matching funds may be provided by the State higher education agency or the institution of higher education.

    ‘(c) PRIORITY- In awarding grants pursuant to subsection (a), the Secretary or each State higher education agency shall give priority to institutions of higher education that serve large numbers or percentages of minority or disadvantaged students.

    ‘(d) EQUITABLE PARTICIPATION- In awarding grants pursuant to subsection (a), the Secretary or each State higher education agency shall ensure the equitable participation of both public and private eligible institutions within the State.

    ‘(e) SPECIAL RULE- If the Secretary determines that any eligible institution within a State has received, within the 2 preceding fiscal years, a direct, noncompetitive award of Federal funds for facilities construction, renovation, improvement or repair, then the eligible institution shall be ineligible to receive assistance under this part.

    ‘(f) USE FOR MAINTENANCE- An amount less than or equal to 10 percent of that portion of funds awarded under this part which is allotted by the recipient to meet costs of--

      ‘(1) research and instructional instrumentation and equipment; and

      ‘(2) equipment and structural changes necessary to ensure the proper functioning of such research or instructional instrumentation and equipment;

    may be allocated by the recipient for maintenance of equipment and changes described in paragraphs (1) and (2). Part or all of this percentage may also be applied to costs of upgrading such equipment and structural changes within 3 years of the date of initial use, if the recipient deems such upgrading essential to the continued usefulness of such research or instructional instrumentation and equipment.

    ‘(g) SUPPLEMENTATION- Grants awarded pursuant to subsection (a) shall be used to supplement and not supplant other Federal, State, and local funds available for improvement of academic and library facilities.

    ‘(h) PEER REVIEW REQUIRED- In making grants under subsection (a)(1), the Secretary shall utilize a national peer review panel. The panel shall be broadly representative of all types and classes of institutions of higher education in the United States.

‘SEC. 714. USE OF FUNDS.

    ‘(a) IN GENERAL- Institutions of higher education shall use funds awarded under this part for any one or more of the following activities:

      ‘(1) The improvement, renovation, and repair of academic facilities.

      ‘(2) The improvement and renovation of library facilities.

      ‘(3) The improvement and renovation of broadcast, cable, and satellite interconnection equipment for use in postsecondary educational television and radio programming, including interactive technology and communications.

      ‘(4) The construction of academic and library facilities if the State determines such construction necessary.

‘SEC. 715. APPLICATION.

    ‘(a) STATE HIGHER EDUCATION AGENCY-

      ‘(1) APPLICATION- Each State higher education agency desiring an allotment pursuant to section 713(a)(2)(A) shall submit an application to the Secretary at such time, in such manner and accompanied by such information as the Secretary may reasonably require.

      ‘(2) CONTENTS- Each application described in paragraph (1) shall--

        ‘(A) describe the activities and services for which assistance is sought;

        ‘(B) contain assurances that the State higher education agency will comply with the matching requirement described in section 713(b)(1);

        ‘(C) contain a description and the amount of any direct, noncompetitive appropriation of funds for facilities construction, renovation, improvement or repair which the State provides to any institution of higher education within the State; and

        ‘(D) contain such other assurances as the Secretary determines necessary to ensure compliance with the provisions of this part.

    ‘(b) INSTITUTIONS OF HIGHER EDUCATION-

      ‘(1) STATE GRANTS-

        ‘(A) APPLICATION- Each institution of higher education desiring a grant pursuant to section 713(a)(1) or 713(a)(2)(B) shall submit an application to the Secretary or the State higher education agency, as appropriate, at such time, in such manner and accompanied by such information as the Secretary or such agency may reasonably require.

        ‘(B) CONTENTS- Each application described in paragraph (1) shall--

          ‘(i) describe the activities and services for which assistance is sought;

          ‘(ii) contain assurances that the eligible institution will comply with the matching requirement described in section 713(b)(2); and

          ‘(iii) contain such other assurances as the Secretary or State higher education agency determines necessary to ensure compliance with the provisions of this part.

‘SEC. 716. AUTHORIZATION OF APPROPRIATIONS.

    ‘There are authorized to be appropriated $350,000,000 for fiscal year 1993 and each of the 4 succeeding fiscal years to carry out the provisions of this part.’.

SEC. 704. HISTORICALLY BLACK COLLEGE AND UNIVERSITY CAPITAL FINANCING.

    Part B of title VII of the Act (20 U.S.C. 1132c et seq.) is amended to read as follows:

‘PART B--HISTORICALLY BLACK COLLEGE AND UNIVERSITY CAPITAL FINANCING

‘SEC. 721. FINDINGS.

    ‘The Congress finds that--

      ‘(1) a significant part of the Federal mission in education has been to attain equal opportunity in higher education for low-income, educationally disadvantaged Americans and African Americans;

      ‘(2) the Nation’s historically Black colleges and universities have played a prominent role in American history and have an unparalleled record of fostering the development of African American youth by recognizing their potential, enhancing their academic and technical skills, and honing their social and political skills through higher education;

      ‘(3) the academic and residential facilities on the campuses of all historically Black colleges and universities have suffered from neglect, deferred maintenance and are in need of capital improvements in order to provide appropriate settings for learning and social development through higher education;

      ‘(4) due to their small enrollments, limited endowments and other financial factors normally considered by lenders in construction financing, historically Black colleges and universities often lack access to the sources of funding necessary to undertake the necessary capital improvements through borrowing and bond financing;

      ‘(5) despite their track record of long-standing and remarkable institutional longevity and viability, historically Black colleges and universities often lack the financial resources necessary to gain access to traditional sources of capital financing such as bank loans and bond financing; and

      ‘(6) Federal assistance to facilitate low-cost capital basis for historically Black colleges and universities will enable such colleges and universities to continue and expand their educational mission and enhance their significant role in American higher education.

‘SEC. 722. DEFINITIONS.

    ‘For the purposes of this part:

      ‘(1) The term ‘eligible institution’ means a ‘part B institution’ as that term is defined in section 322(2) of the Higher Education Act of 1965 (20 U.S.C. 1061(2)).

      ‘(2) The term ‘loan’ means a loan made to an eligible institution under the provisions of this part and pursuant to an agreement with the Secretary.

      ‘(3) The term ‘qualified bond’ means any obligation issued by the designated bonding authority at the direction of the Secretary, the net proceeds of which are loaned to an eligible institution for the purposes described in section 723(b).

      ‘(4) The term ‘funding’ means any payment under this part from the Secretary to the eligible institution or its assignee in fulfillment of the insurance obligations of the Secretary pursuant to an agreement under section 723.

      ‘(5) The term ‘capital project’ means, subject to section 724(b) the repair, renovation, or, in exceptional circumstances, the construction or acquisition, of--

        ‘(A) any classroom facility, library, laboratory facility, dormitory (including dining facilities) or other facility customarily used by colleges and universities for instructional or research purposes or for housing students, faculty, and staff;

        ‘(B) instructional equipment, research instrumentation, and any capital equipment or fixture related to facilities described in subparagraph (A);

        ‘(C) any other facility, equipment or fixture which is essential to the maintaining of accreditation of the member institution by a nationally recognized accrediting agency or association; and

        ‘(D) any real property or interest therein underlying facilities described in subparagraph (A) or (C).

      ‘(6) The term ‘interest’ includes accredited value or any other payment constituting interest on an obligation.

      ‘(7) The term ‘outstanding’, when used with respect to bonds, shall not include bonds the payment of which shall have been provided for by the irrevocable deposit in trust of obligations maturing as to principal and interest in such amounts and at such times as will ensure the availability of sufficient moneys to make payments on such bonds.

      ‘(8) The term ‘designated bonding authority’ means the private, for-profit corporation selected by the Secretary pursuant to section 725(1) for the purpose of issuing taxable construction bonds in furtherance of the purposes of this part.

      ‘(9) The term ‘Advisory Board’ means the Advisory Board established by section 727 of this part.

‘SEC. 723. FEDERAL INSURANCE FOR BONDS.

    ‘(a) GENERAL RULE- Subject to the limitations in section 724, the Secretary is authorized to enter into insurance agreements to provide financial insurance to guarantee the full payment of principal and interest on qualified bonds upon the conditions set forth in subsections (b), (c) and (d).

    ‘(b) RESPONSIBILITIES OF THE DESIGNATED BONDING AUTHORITY- The Secretary may not enter into an insurance agreement described in subsection (a) unless the Secretary designates a qualified bonding authority in accordance with sections 725(1) and 726 and the designated bonding authority agrees in such agreement to--

      ‘(1) use the proceeds of the qualified bonds, less costs of issuance not to exceed 2 percent of the principal amount thereof, to make loans to eligible institutions or for deposit into an escrow account for repayment of the bonds;

      ‘(2) provide in each loan agreement with respect to a loan that not less than 95 percent of the proceeds of the loan will be used--

        ‘(A) to finance the repair, renovation, and, in exceptional cases, construction or acquisition, of a capital project; or

        ‘(B) to refinance an obligation the proceeds of which were used to finance the repair, renovation, and, in exceptional cases, construction or acquisition, of a capital project;

      ‘(3)(A) charge such interest on loans, and provide for such a schedule of repayments of loans, as will, upon the timely repayment of the loans, provide adequate and timely funds for the payment of principal and interest on the bonds; and

      ‘(B) require that any payment on a loan expected to be necessary to make a payment of principal and interest on the bonds be due not less than 60 days prior to the date of the payment on the bonds for which such loan payment is expected to be needed;

      ‘(4) prior to the making of any loan, provide for a credit review of the institution receiving the loan and assure the Secretary that, on the basis of such credit review, it is reasonable to anticipate that the institution receiving the loan will be able to repay the loan in a timely manner pursuant to the terms thereof;

      ‘(5) provide in each loan agreement with respect to a loan that, if a delinquency on such loan results in a funding under the insurance agreement, the institution obligated on such loan shall repay the Secretary, upon terms to be determined by the Secretary, for such funding;

      ‘(6) assign any loans to the Secretary, upon the demand of the Secretary, if a delinquency on such loan has required a funding under the insurance agreement;

      ‘(7) in the event of a delinquency on a loan, engage in such collection efforts as the Secretary shall require for a period of not less than 45 days prior to requesting a funding under the insurance agreement;

      ‘(8) establish an escrow account--

        ‘(A) into which each eligible institution shall deposit 10 percent of the proceeds of any loan made under this part; and

        ‘(B) the balance of which--

          ‘(i) shall be available to the Secretary to pay principal and interest on the bonds in the event of delinquency in loan repayment; and

          ‘(ii) when all bonds under this part are retired or canceled, shall be divided among the eligible institutions making deposits into such account on the basis of the amount of each such institution’s deposit;

      ‘(9) provide in each loan agreement with respect to a loan that, if a delinquency on such loan results in amounts being withdrawn from the escrow account to pay principal and interest on bonds, subsequent payments on such loan shall be available to replenish such escrow account;

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

      ‘(11) make loans only to eligible institutions under this part in accordance with regulations prescribed by the Secretary to ensure that loans are fairly allocated among as many eligible institutions as possible, consistent with making loans of amounts that will permit capital projects of sufficient size and scope to significantly contribute to the educational program of the eligible institutions.

    ‘(c) ADDITIONAL AGREEMENT PROVISIONS- Any insurance agreement described in subsection (a) of this section shall provide as follows:

      ‘(1) The payment of principal and interest on bonds shall be insured by the Secretary until such time as such bonds have been retired or canceled.

      ‘(2) The Federal liability for delinquencies and default for bonds guaranteed under this part shall only become effective upon the exhaustion of all the funds held in the escrow account described in subsection (b)(8).

      ‘(3) The Secretary shall create a letter of credit authorizing the Department of the Treasury to disburse funds to the designated bonding authority or its assignee.

      ‘(4) The letter of credit shall be drawn upon in the amount determined by paragraph (5) of this subsection upon the certification of the designated bonding authority to the Secretary or the Secretary’s designee that there is a delinquency on 1 or more loans and there are insufficient funds available from loan repayments and the escrow account to make a scheduled payment of principal and interest on the bonds.

      ‘(5) Upon receipt by the Secretary or the Secretary’s designee of the certification described in paragraph (4) of this subsection, the designated bonding authority may draw a funding under the letter of credit in an amount equal to--

        ‘(A) the amount required to make the next scheduled payment of principal and interest on the bonds, less

        ‘(B) the amount available to the designated bonding authority from loan repayments and the escrow account.

      ‘(6) All funds provided under the letter of credit shall be paid to the designated bonding authority within 2 business days following receipt of the certification described in paragraph (4).

    ‘(d) FULL FAITH AND CREDIT PROVISIONS- Subject to section 723(c)(1) the full faith and credit of the United States is pledged to the payment of all funds which may be required to be paid under the provisions of this section.

‘SEC. 724. LIMITATIONS ON FEDERAL INSURANCE FOR BONDS ISSUED BY THE DESIGNATED BONDING AUTHORITY.

    ‘(a) LIMIT ON AMOUNT- At no time shall the aggregate principal amount of outstanding bonds insured under this part together with any accrued unpaid interest thereon exceed $375,000,000, of which--

      ‘(1) not more than $250,000,000 shall be used for loans to eligible institutions that are private historically Black colleges and universities; and

      ‘(2) not more than $125,000,000 shall be used for loans to eligible institutions which are historically Black public colleges and universities.

    For purposes of paragraphs (1) and (2), Lincoln University of Pennsylvania is an historically Black public institution. No institution of higher education that has received assistance under section 8 of the Act of March 2, 1867 (20 U.S.C. 123) shall be eligible to receive assistance under this part.

    ‘(b) LIMITATION ON CREDIT AUTHORITY- The authority of the Secretary to issue letters of credit and insurance under this part is effective only to the extent provided in advance by appropriations Acts.

    ‘(c) RELIGIOUS ACTIVITY PROHIBITION- No loan may be made under this part for any educational program, activity or service related to sectarian instruction or religious worship or provided by a school or department of divinity or to an institution in which a substantial portion of its functions is subsumed in a religious mission.

    ‘(d) DISCRIMINATION PROHIBITION- No loan may be made to an institution under this part if the institution discriminates on account of race, color, religion, national origin, sex (to the extent provided in title IX of the Education Amendments of 1972), or disabling condition; except that the prohibition with respect to religion shall not apply to an institution which is controlled by or which is closely identified with the tenets of a particular religious organization if the application of this section would not be consistent with the religious tenets of such organization.

‘SEC. 725. AUTHORITY OF THE SECRETARY.

    ‘In the performance of, and with respect to, the functions vested in the Secretary by this part, the Secretary--

      ‘(1) shall, within 120 days of enactment of the Higher Education Amendments of 1992, publish in the Federal Register a notice and request for proposals for any private for-profit organization or entity wishing to serve as the designated bonding authority under this part, which notice shall--

        ‘(A) specify the time and manner for submission of proposals; and

        ‘(B) specify any information, qualifications, criteria, or standards the Secretary determines to be necessary to evaluate the financial capacity and administrative capability of any applicant to carry out the responsibilities of the designated bonding authority under this part;

      ‘(2) may sue and be sued in any court of record of a State having general jurisdiction or in any district court of the United States, and such district courts shall have jurisdiction of civil actions arising under this part without regard to the amount in controversy, and any action instituted under this part without regard to the amount in controversy, and any action instituted under this section by or against the Secretary shall survive notwithstanding any change in the person occupying the office of the Secretary or any vacancy in such office;

      ‘(3)(A) may foreclose on any property and bid for and purchase at any foreclosure, or any other sale, any property in connection with which the Secretary has been assigned a loan pursuant to this part; and

      ‘(B) in the event of such an acquisition, notwithstanding any other provisions of law relating to the acquisition, handling, or disposal of real property by the United States, complete, administer, remodel and convert, dispose of, lease, and otherwise deal with, such property, except that--

        ‘(i) such action shall not preclude any other action by the Secretary to recover any deficiency in the amount of a loan assigned to the Secretary; and

        ‘(ii) any such acquisition of real property shall not deprive any State or political subdivision thereof of its civil or criminal jurisdiction in and over such property or impair the civil rights under the State or local laws of the inhabitants on such property;

      ‘(4) may sell, exchange, or lease real or personal property and securities or obligations; and

      ‘(5) may include in any contract such other covenants, conditions, or provisions necessary to ensure that the purposes of this part will be achieved.

‘SEC. 726. PROHIBITION.

    ‘No institution that receives a loan under this part shall also receive a grant under part A of this title or a loan under part D of this title.

‘SEC. 727. HBCU CAPITAL FINANCING ADVISORY BOARD.

    ‘(a) ESTABLISHMENT AND PURPOSE- There is established within the Department of Education, the Historically Black College and Universities Capital Financing Advisory Board (hereinafter in this part referred to as the ‘Advisory Board’) which shall provide advice and counsel to the Secretary and the designated bonding authority as to the most effective and efficient means of implementing construction financing on African American college campuses, and advise the Congress of the United States regarding the progress made in implementing this part. The Advisory Board shall meet with the Secretary at least twice each year to advise him as to the capital needs of historically Black colleges and universities, how those needs can be met through the program authorized by this part, and what additional steps might be taken to improve the operation and implementation of the construction financing program.

    ‘(b) BOARD MEMBERSHIP-

      ‘(1) COMPOSITION- The Advisory Board shall be appointed by the Secretary and shall be composed of 9 members as follows:

        ‘(A) The Secretary or the Secretary’s designee.

        ‘(B) Three members who are presidents of private historically Black colleges or universities.

        ‘(C) Two members who are presidents of public historically Black colleges or universities.

        ‘(D) The president of the United Negro College Fund, Inc.

        ‘(E) The president of the National Association for Equal Opportunity in Higher Education.

        ‘(F) The executive director of the White House Initiative on historically Black colleges and universities.

      ‘(2) TERMS- The term of office of each member appointed under paragraphs (1)(B) and (1)(C) shall be 3 years, except that--

        ‘(A) of the members first appointed pursuant to paragraphs (1)(B) and (1)(C), 2 shall be appointed for terms of 1 year, and 3 shall be appointed for terms of 2 years;

        ‘(B) members appointed to fill a vacancy occurring before the expiration of a term of a member shall be appointed to serve the remainder of that term; and

        ‘(C) a member may continue to serve after the expiration of a term until a successor is appointed.

    ‘(c) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated $50,000 for fiscal year 1993 and each of the 4 succeeding fiscal years to carry out this section.

‘SEC. 728. MINORITY BUSINESS ENTERPRISE UTILIZATION.

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

SEC. 705. CONSOLIDATION OF PARTS C AND F.

    Part C of title VII of the Act (20 U.S.C. 1132d et seq.) is amended to read as follows:

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

‘SEC. 731. FEDERAL ASSISTANCE IN THE FORM OF LOANS.

    ‘(a) AUTHORITY AND CONDITIONS FOR LOANS- To assist institutions of higher education and higher education building agencies in the construction, reconstruction, or renovation of housing, undergraduate and graduate academic facilities, and other educational facilities for students and faculties, the Secretary may make loans of funds to such institutions for the construction, reconstruction, or renovation of such facilities. No such assistance shall be provided unless--

      ‘(1) the educational institution involved is unable to secure the necessary funds for the construction or purchase from other sources upon terms and conditions equally as favorable as the terms and conditions applicable to loans under this title; and

      ‘(2) the Secretary finds that any such construction will be undertaken in an economical manner, and that any such facilities are not or will not be of elaborate or extravagant design or materials.

    ‘(b) AMOUNT AND CONDITIONS OF LOANS- A loan to institutions of higher education or higher education building agency--

      ‘(1) may be in an amount not exceeding the total development cost of the facility, as determined by the Secretary;

      ‘(2) shall be secured in such manner and be repaid within such period, not exceeding 50 years, as may be determined by the Secretary; and

      ‘(3) shall bear interest at a rate determined by the Secretary which shall be not more than the lower of (A) 5.5 percent per annum, or (B) the total of one-quarter of 1 percent per annum added to the rate of interest paid by the Secretary on funds obtained from the Secretary of the Treasury.

    ‘(c) USE OF LOANS FOR PREVIOUSLY MADE CONTRACTS- Any institution of higher education or higher education building agency which, prior to October 17, 1986, had contracted for housing or other educational facilities may, in connection therewith, receive loans authorized under this part, as the Secretary may determine. No such loan shall be made for any housing or other educational facilities, the construction of which was begun prior to enactment of such date, or completed prior to the filing of an application under this part.

    ‘(d) MATCHING REQUIREMENT- The Secretary shall not make a loan under this part unless the institution of higher education or higher education building agency receiving such loan provides from non-Federal sources at least 20 percent of the development cost of the project for which the loan is made.

‘SEC. 732. GENERAL PROVISIONS.

    ‘(a) BUDGET AND ACCOUNTING- In the performance of, and with respect to, the functions, powers, and duties under this part, the Secretary, notwithstanding the provisions of any other law, shall--

      ‘(1) prepare annually and submit a budget program as provided for wholly owned Government corporations by chapter 91 of title 31, United States Code; and

      ‘(2) maintain a set of accounts which shall be audited by the Comptroller General in accordance with the provisions of chapter 35 of title 31, United States Code, but such financial transactions of the Secretary, as the making of loans and vouchers approved by the Secretary, in connection with such financial transactions shall be final and conclusive upon all officers of the Government.

    ‘(b) USE OF FUNDS- Funds made available to the Secretary pursuant to the provisions of this part shall be deposited in a checking account or accounts with the Treasurer of the United States. Receipts and assets obtained or held by the Secretary in connection with the performance of functions under this part, and all funds available for carrying out the functions of the Secretary under this part (including appropriations therefor, which are hereby authorized), shall be available, in such amounts as may from year to year be authorized by the Congress, for the administrative expenses of the Secretary in connection with the performance of such functions.

    ‘(c) LEGAL POWERS- In the performance of, and with respect to, the functions, powers, and duties under this part, the Secretary, notwithstanding the provisions of any other law, may--

      ‘(1) prescribe such rules and regulations as may be necessary to carry out the purposes of this part;

      ‘(2) sue and be sued;

      ‘(3) foreclose on any property or commence any action to protect or enforce any right conferred upon the Secretary by any law, contract, or other agreement, and bid for and purchase at any foreclosure or any other sale any property in connection with which the Secretary has made a loan pursuant to this part;

      ‘(4) in the event of any such acquisition, notwithstanding any other provision of law relating to the acquisition, handling, or disposal of real property by the United States, complete, administer, remodel and convert, dispose of, lease, and otherwise deal with, such property, but any such acquisition of real property shall not deprive any State or political subdivision thereof of its civil or criminal jurisdiction in and over such property or impair the civil rights under the State or local laws of the inhabitants on such property;

      ‘(5) sell or exchange at public or private sale, or lease, real or personal property, and sell or exchange any securities or obligations, upon such terms as the Secretary may fix;

      ‘(6) obtain insurance against loss in connection with property and other assets held;

      ‘(7) subject to the specific limitations in this part, consent to the modification, with respect to the rate of interest, time of payment of any installment of principal or interest, security, or any other term of any contract or agreement to which the Secretary is a party or which has been transferred to the Secretary pursuant to this part, granting to a borrower of a loan made before October 1, 1992, the option of repaying the loan at a discount computed in accordance with subsection (d) if the repayment is (A) made from non-Federal sources, (B) not derived from proceeds of obligations the income of which is exempt from taxation under the Internal Revenue Code of 1986, and (C) made on a loan that has been outstanding for at least 5 years; and

      ‘(8) include in any contract or instrument made pursuant to this part such other covenants, conditions, or provisions as may be necessary to assure that the purposes of this part will be achieved.

    ‘(d) COMPUTATION OF ALLOWABLE DISCOUNTS- The Secretary shall compute the discount which may be offered to a borrower as an inducement to early repayment under subsection (c)(7) in an amount determined by the Secretary to be in the best financial interests of the Government, taking into account the yield on outstanding marketable obligations of the United States having maturities comparable to the remaining term of such loan.

    ‘(e) NONDISCRIMINATION BETWEEN BORROWERS IN OFFERING DISCOUNTED PREPAYMENT-

      ‘(1) GENERAL RULE- If the Secretary offers a discount as an inducement to early repayment under subsection (c)(7), such offer shall be available without regard to whether the borrower is delinquent or in default on the loan on or before October 1, 1992, but the Secretary shall refuse to make such offer to a borrower that becomes delinquent or goes into default after that date.

      ‘(2) APPLICABILITY- The discount offered shall apply, in the case of a borrower that complies with paragraph (1), to the entire amount outstanding on the loan (including any amount owed with respect to payments that are overdue).

    ‘(f) CONTRACTS FOR SUPPLIES OR SERVICES- Section 3709 of the Revised Statutes shall not apply to any contract for services or supplies on account of any property acquired pursuant to this part if the amount of such contract does not exceed $1,000.

    ‘(g) APPLICABILITY OF GOVERNMENT CORPORATION CONTROL ACT- The provisions of section 9107(a) of title 31, United States Code, which are applicable to corporations or agencies subject to chapter 91 of such title, shall also be applicable to the activities of the Secretary under this part.

    ‘(h) WAGE RATES- The Secretary shall take such action as may be necessary to ensure that all laborers and mechanics employed by contractors or subcontractors on any project assisted under this part--

      ‘(1) shall be paid wages at rates not less than those prevailing on the same type of work on similar construction in the immediate locality as determined by the Secretary of Labor in accordance with the Act of March 3, 1931 (Davis-Bacon Act), as amended; and

      ‘(2) shall be employed not more than 40 hours in any one week unless the employee receives wages for the employee’s employment in excess of the hours specified above at a rate not less than one and one-half times the regular rate at which the employee is employed,

    but the Secretary may waive the application of this subsection in cases or classes of cases where laborers or mechanics, not otherwise employed at any time in the construction of such project, voluntarily donate their services without full compensation for the purpose of lowering the costs of construction and the Secretary determines that any amounts saved thereby are fully credited to the educational institution undertaking the construction.

    ‘(i) LIMITATION- No loan may be made under this part for any facility on the campus of any postsecondary educational institution until 5 years after the date on which a previous loan for another facility on such campus was made under this part, unless the loan is intended to be used to construct or reconstruct a facility damaged as a result of a national disaster, as declared by the President.

‘SEC. 733. APPORTIONMENT.

    ‘(a) LIMITATION- Not more than 12.5 percent of the amount of the funds provided for in this part in the form of loans shall be made available to educational institutions within any one State.

    ‘(b) PRIORITIES- In awarding loans under this part, the Secretary shall give priority--

      ‘(1) to loans for renovation or reconstruction of undergraduate and graduate academic facilities; and

      ‘(2) to loans for renovation or reconstruction of older undergraduate and graduate academic facilities that have gone without major renovation or reconstruction for an extended period.

‘SEC. 734. DEFINITIONS.

    ‘For the purpose of this part:

    ‘(a) HOUSING- The term ‘housing’ means--

      ‘(1) new or existing structures suitable for dwelling use, including single-room dormitories and apartments; and

      ‘(2) dwelling facilities provided for rehabilitation, alteration, conversion, or improvement of existing structures which are otherwise inadequate for the proposed dwelling use.

    ‘(b) EDUCATIONAL INSTITUTION- The term ‘institution of higher education or higher education building agency’ means--

      ‘(1)(A) any educational institution which offers, or provides satisfactory assurance to the Secretary that it will offer within a reasonable time after completion of a facility for which assistance is requested under this part, at least a 2-year program acceptable for full credit toward a baccalaureate degree (including any public educational institution, or any private educational institution no part of the net earnings of which inures to the benefit of any private shareholder or individual); or

      ‘(B) any public educational institution which--

        ‘(i) is administered by a college or university which is accredited by a nationally recognized accrediting agency or association;

        ‘(ii) offers technical or vocational instruction; and

        ‘(iii) provides residential facilities for some or all of the students receiving such instruction;

      ‘(2) any hospital operating a school of nursing beyond the level of high school approved by the appropriate State authority, or any hospital approved for internships, by recognized authority, if such hospital is either a public hospital or a private hospital, no part of the net earnings of which inures to the benefit of any private shareholder or individual;

      ‘(3) any corporation (no part of the net earnings of which inures to the benefit of any private shareholder or individual)--

        ‘(A) established for the sole purpose of providing housing or other educational facilities for students or students and faculty of one or more institutions included in paragraph (1) without regard to their membership in or affiliation with any social, fraternal, or honorary society or organization; and

        ‘(B) upon dissolution of which all title to any property purchased or built from the proceeds of any loan which is made under section 731 (as such section was in effect prior to the date of enactment of the Higher Education Amendments of 1992), will pass to such institution (or to any one or more of such institutions) unless it is shown to the satisfaction of the Secretary that such property or the proceeds from its sale will be used for some other nonprofit educational purpose;

      ‘(4) any agency, public authority, or other instrumentality of any State, established for the purpose of providing or financing housing or other educational facilities for students or faculty of any educational institution included in paragraph (1), but nothing in this paragraph shall require an institution included in paragraph (1) to obtain loans or grants through any instrumentality included in this paragraph; and

      ‘(5) any nonprofit student housing cooperative corporation established for the purpose of providing housing for students or students and faculty of any institution included in paragraph (1).

    In the case of any loan made under section 731 (as such section was in effect prior to the date of enactment of the Higher Education Amendments of 1992) to a corporation described in paragraph (3) which was not established by the institution or institutions for whose students or students and faculty it would provide housing, or to a student housing cooperative corporation described in paragraph (5), and in the case of any loan which is obtained from other sources by such a corporation, the Secretary shall require that the note securing such loan be cosigned by such institution (or by any one or more of such institutions). Where the law of any State in effect on the date of enactment of the Housing Act of 1964 prevents the institution or institutions, for whose students or students and faculty housing is to be provided, from cosigning the note, the Secretary shall require the corporation and the proposed project to be approved by such institution (or by any one or more of such institutions) in lieu of such cosigning.

    ‘(c) UNDERGRADUATE AND GRADUATE ACADEMIC FACILITIES-

      ‘(1) IN GENERAL- Except as provided in paragraph (2), the term ‘undergraduate and graduate academic facilities’ means structures suitable for use as classrooms, laboratories, libraries, and related facilities, the primary purpose of which is the instruction of students pursuing at least a 2-year program acceptable for full credit toward a baccalaureate degree, or for administration of the educational programs serving such students, of an institution of higher education, and maintenance, storage, or utility facilities essential to operation of the foregoing facilities, as well as infirmaries or other facilities designed to provide primarily for outpatient care of student and instructional personnel. Plans for such facilities shall be in compliance with such standards as the Secretary may prescribe or approve in order to ensure that projects assisted with the use of Federal funds under this part shall be, to the extent appropriate in view of the uses to be made of the facilities, accessible to and usable by individuals with disabilities.

      ‘(2) EXCEPTIONS- The term ‘undergraduate and graduate academic facilities’ shall not include (A) any facility intended primarily for events for which admission is to be charged to the general public, (B) any gymnasium or other facility specially designed for athletic or recreational activities, other than for an academic course in physical education or where the Secretary finds that the physical integration of such facilities with other undergraduate academic facilities included under this part is required to carry out the objectives of this part, (C) any facility used or to be used for sectarian instruction or as a place for religious worship, or (D) any facility which (although not a facility described in the preceding clause) is used or to be used primarily in connection with any part of the program of a school or department of divinity.

    ‘(d) DEVELOPMENT COST- The term ‘development cost’ means costs of the construction of the housing or other educational facilities and the land on which it is located, including necessary site improvements to permit its use for housing, academic facilities, or other educational facilities, except that in the case of the purchase of facilities such term means the cost as approved by the Secretary.

    ‘(e) FACULTIES- The term ‘faculties’ means members of the faculty and their families.

    ‘(f) OTHER EDUCATIONAL FACILITIES- The term ‘other educational facilities’ means (1) new or existing structures suitable for use as cafeterias or dining halls, student centers or student unions, infirmaries or other inpatient or outpatient health facilities, or for other essential service facilities, and (2) structures suitable for the above uses provided by rehabilitation, alteration, conversion, or improvement of existing structures which are otherwise inadequate for such uses.

‘SEC. 735. AUTHORIZATION OF APPROPRIATIONS.

    ‘There are authorized to be appropriated to carry out this part, $50,000,000 for fiscal year 1993 and such sums as may be necessary for each of the 4 succeeding fiscal years.’.

SEC. 706. REPEAL OF PARTS D, F, G, AND J.

    Parts D, F, G, and J of title VII of the Act (20 U.S.C. 1132e et seq., 1132g et seq., 1132h-1 et seq., 1132j et seq., respectively) are repealed.

SEC. 707. REDESIGNATION OF AND AMENDMENTS TO PART E.

    (a) REDESIGNATION- Part E of title VII of the Act (20 U.S.C. 1132f et seq.) is redesignated as part D.

    (b) AUTHORITY TO PROVIDE DIRECT INSURANCE TO HIGHER RATED INSTITUTIONS- Section 752(c) of the Act (20 U.S.C. 1132f-1(c)) is amended by adding at the end the following new paragraph:

      ‘(5) Notwithstanding paragraph (1), the Corporation may issue primary insurance or guarantees covering the assets or obligations of institutions which are, without insurance or guarantee, listed by a nationally recognized statistical rating organization at or above the third highest rating of such organization, subject to all of the following conditions and limitations:

        ‘(A) The proposed transaction shall have been declined for coverage by all unaffiliated monoline insurers that are authorized to write financial guarantee insurance and that, in the previous year, provided primary insurance or guarantees on educational facility obligations. The Secretary shall publish by January 31 of each year a list of all such insurers.

        ‘(B) Within 2 business days of receiving complete documentation concerning a proposed transaction by an institution seeking insurance from the Corporation pursuant to this paragraph (5), an insurer shall offer to provide coverage or execute an affidavit of declination, or its failure to respond shall be deemed a declination. The institution seeking insurance from the Corporation shall file with the Corporation the affidavits from all declining insurers, as well as an affidavit of the institution’s financial advisor specifically identifying the pertinent terms of the proposed transaction, the requested insurance coverage, and the date on which complete documentation concerning the proposed transaction was submitted to each insurer and certifying that such information was provided to each insurer that declined coverage.

        ‘(C) The proceeds of the assets or obligations insured or guaranteed by the Corporation pursuant to this paragraph shall be used exclusively for the renovation, repair, replacement, or construction of academic and educational facilities and shall not be used for the renovation, repair, replacement, or construction of athletic facilities.

        ‘(D) The aggregate par value of assets and obligations insured or guaranteed by the Corporation under this paragraph (5) shall not exceed--

          ‘(i) $100,000,000 per year during calendar years 1993, 1994, and 1995; or

          ‘(ii) $150,000,000 per year during calendar years 1996 and 1997.

        ‘(E) The aggregate dollar amount of transactions under this paragraph (5) shall not exceed--

          ‘(i) in calendar year 1993, 1994, or 1995, 10 percent of the aggregate dollar amount of assets and obligations directly covered by primary insurance or guarantees issued by the Corporation under this section in such year; or

          ‘(ii) in calendar year 1996 or 1997, 15 percent of the aggregate dollar amount of assets and obligations directly covered by primary insurance or guarantees issued by the Corporation under this section in such year.’.

SEC. 708. REDESIGNATION OF AND AMENDMENTS TO PART H.

    (a) REDESIGNATION- Part H of title VII of the Act (20 U.S.C. 1132i et seq.) is redesignated as part E.

    (b) RECOVERY OF PAYMENTS- Section 781 of the Act (20 U.S.C. 1132i) is amended by striking ‘part A or B of this title’ each place such term appears and inserting ‘part A of this title, or part B of this title as such part was in effect prior to the enactment of the Higher Education Amendments of 1992,’.

    (c) ELIMINATION OF UNNECESSARY DEFINITIONS- Section 782 of the Act (20 U.S.C. 1089) is amended--

      (1) by striking paragraphs (5) and (7); and

      (2) by redesignating paragraphs (6), (8), and (9) as paragraph (5), (6), and (7), respectively.

    (d) FORGIVENESS OF CERTAIN LOANS- Section 783 of the Act (20 U.S.C. 1132i-2) is amended to read as follows:

‘FORGIVENESS OF CERTAIN LOANS

    ‘SEC. 783. (a) FORGIVENESS AUTHORIZED- The Secretary may forgive the entire balance due, or any portion thereof, on any loan made under part C or part F of this title (as in effect on the day before the date of enactment of the Higher Education Amendments of 1992), or under the College Housing and Academic Facilities Loan program, or any other federally subsidized, insured, or authorized loan program designed to assist institutions of higher education to construct academic or dormitory facilities, whenever the Secretary determines that--

      ‘(1) the institution of higher education is current in its payments to the Department or has entered into a moratorium agreement with the Secretary with respect to such payments; and

      ‘(2) the outstanding indebtedness equals at least one-quarter of the annual budget for the most recent fiscal year of the institution of higher education seeking forgiveness of its housing loan indebtedness, exclusive of funds provided under titles III and IV of this Act, and in the judgment of the Secretary the survival of the institution of higher education is threatened.

    ‘(b) DEFINITION- For the purpose of this section the term ‘institution of higher education’ includes a postsecondary educational institution.

    ‘(c) APPLICATION- Each institution of higher education requesting forgiveness of any loan under this section shall submit an application to the Secretary at such time, in such manner and containing or accompanied by such information, as the Secretary may reasonably require.’.

TITLE VIII--COOPERATIVE EDUCATION

SEC. 801. COOPERATIVE EDUCATION.

    Title VIII of the Act (20 U.S.C. 1133 et seq.) is amended to read as follows:

‘TITLE VIII--COOPERATIVE EDUCATION

‘SEC. 801. STATEMENT OF PURPOSE; DEFINITION.

    ‘(a) PURPOSE- It is the purpose of this title to award grants to institutions of higher education or combinations of such institutions to encourage such institutions to develop and make available to as many of their students as possible work experience that will aid such students in future careers and will enable such students to support themselves financially while in school.

    ‘(b) DEFINITION- For the purpose of this title the term ‘cooperative education’ means the provision of alternating or parallel periods of academic study and public or private employment in order to give students work expe