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S. 2815 (110th): Strengthening Student Aid for All Act

The text of the bill below is as of Apr 3, 2008 (Introduced).


II

110th CONGRESS

2d Session

S. 2815

IN THE SENATE OF THE UNITED STATES

April 3, 2008

(for himself, Mr. Sanders, Mrs. Murray, Mr. Dodd, Mr. Reed, and Mr. Levin) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions

A BILL

To amend the Higher Education Act of 1965 in order to increase unsubsidized Stafford loan limits for undergraduate students, provide for a secondary market for FFEL loans, allow for the in-school deferment of PLUS loans, augment the maximum Federal Pell Grant for the lowest income students, and expand the number of students eligible to obtain loans under the lender-of-last-resort program, and for other purposes.

1.

Short title

This Act may be cited as the Strengthening Student Aid for All Act.

2.

Increasing unsubsidized Stafford loan limits for undergraduate students

(a)

Amendments

Section 428H(d) of the Higher Education Act of 1965 (20 U.S.C. 1078–8(d)) is amended—

(1)

in paragraph (1), by striking paragraphs (2) and (3) and inserting paragraphs (2) through (5); and

(2)

by adding at the end the following:

(4)

Annual and aggregate limits for undergraduate dependent students

(A)

Annual limits

The maximum annual amount of loans under this section an undergraduate dependent student (except an undergraduate dependent student whose parents are unable to borrow under section 428B or the Federal Direct PLUS Loan Program) may borrow in any academic year (as defined in section 481(a)(2)) or its equivalent shall be the sum of the amount determined under paragraph (1), plus $1,000.

(B)

Aggregate limits

The maximum aggregate amount of loans under this section a student described in subparagraph (A) may borrow shall be $29,500. Interest capitalized shall not be deemed to exceed such maximum aggregate amount.

(5)

Annual and aggregate limits for undergraduate independent students

(A)

Annual limits

The maximum annual amount of loans under this section an undergraduate independent student, or an undergraduate dependent student whose parents are unable to borrow under section 428B or the Federal Direct PLUS Loan Program, may borrow in any academic year (as defined in section 481(a)(2)) or its equivalent shall be the sum of the amount determined under paragraph (1), plus—

(i)

in the case of such a student attending an eligible institution who has not completed such student's first 2 years of undergraduate study—

(I)

$6,000, if such student is enrolled in a program whose length is at least one academic year in length; or

(II)

if such student is enrolled in a program of undergraduate education which is less than one academic year, the maximum annual loan amount that such student may receive may not exceed the amount that bears the same ratio to the amount specified in clause (i) as the length of such program measured in semester, trimester, quarter, or clock hours bears to one academic year;

(ii)

in the case of such a student at an eligible institution who has successfully completed such first and second years but has not successfully completed the remainder of a program of undergraduate education—

(I)

$7,000; or

(II)

if such student is enrolled in a program of undergraduate education, the remainder of which is less than one academic year, the maximum annual loan amount that such student may receive may not exceed the amount that bears the same ratio to the amount specified in subclause (I) as such remainder measured in semester, trimester, quarter, or clock hours bears to one academic year; and

(iii)

in the case of such a student enrolled in coursework specified in sections 484(b)(3)(B) and 484(b)(4)(B), $6,000 for coursework necessary for enrollment in an undergraduate degree or certificate program.

(B)

Aggregate limits

The maximum aggregate amount of loans under this section a student described in subparagraph (A) may borrow shall be $57,500. Interest capitalized shall not be deemed to exceed such maximum aggregate amount.

.

(b)

Conforming amendments

Section 428H(d) of the Higher Education Act of 1965 (as amended by subsection (a)) (20 U.S.C. 1078–8(d)) is further amended—

(1)

in paragraph (2)—

(A)

in the paragraph heading, by striking independent, graduate, and inserting graduate;

(B)

in the matter preceding subparagraph (A), by striking an independent student and all that follows through Program) and inserting a student who is a graduate or professional student;

(C)

by striking subparagraphs (A) and (B);

(D)

in subparagraph (D)—

(i)

in the matter preceding clause (i), by inserting graduate before student;

(ii)

in clause (i), by striking $4,000 and all that follows through degree,; and

(iii)

in clause (ii), by striking in the case and all that follows through degree,; and

(E)

by redesignating subparagraphs (C) and (D) (as amended by subparagraph (D)) as subparagraphs (A) and (B), respectively; and

(2)

in the paragraph heading of paragraph (3), by striking independent, graduate, and inserting graduate.

3.

In-school deferment of PLUS loans

Section 428B(d)(1) of the Higher Education Act of 1965 (20 U.S.C. 1078–2(d)(1)) is amended—

(1)

by striking deferral during and inserting

deferral—

(B)

during

; and

(2)

by inserting before subparagraph (B) (as added by paragraph (1)) the following:

(A)

in the case of the parents of a dependent student, until the student ceases to be enrolled in an undergraduate program of study at an institution of higher education on at least a half-time basis; or

.

4.

Secondary market of last resort

(a)

In general

Part B of title IV of the Higher Education Act of 1965 (20 U.S.C. 1071 et seq.) is amended by adding at the end the following:

440B.

Secondary market of last resort

(a)

In general

Notwithstanding any other provision of this Act and subject to subsections (b), (c), and (d), the Secretary—

(1)

shall serve as the secondary market of last resort for loans under section 428, 428B, 428C, or 428H;

(2)

shall buy any such loan that an eligible lender wishes to sell to the Secretary, at a price equal to the sum of—

(A)

the total of the outstanding principal of such loan and any accrued, unpaid interest due on such loan; and

(B)

a premium in the amount equal to the cost of originating a similar loan under part D;

(3)

shall hold and service such loan under section 428, 428B, 428C or 428H in the same manner as the Secretary holds and services similar loans under part D; and

(4)

may not alter the terms and conditions of a promissory note of such loan under section 428, 428B, 428C, or 428H except as necessary to comply with paragraphs (1) through (3), and shall not require the execution of a new promissory note.

(b)

Representative subset of loans

An eligible lender that wishes to sell to the Secretary loans under section 428, 428B, 428C, or 428H, that do not represent 100 percent of all loans under such sections that are held by the lender, shall offer for sale to the Secretary a subset of the loans under such sections held by the lender that is representative (including representative with respect to risk of default) of the lender's total portfolio of loans under such sections.

(c)

Sunset provision

(1)

In general

Except as provided in paragraph (2), the authority provided to the Secretary under subsection (a) shall expire on July 1, 2009.

(2)

Extension

If the Secretary determines that economic circumstances necessitate extending the authority provided under subsection (a) in order to continue to ensure timely, uninterrupted access to student loans, the Secretary may extend the sunset provision under paragraph (1). The Secretary may make multiple extensions under this paragraph, except that each such extension may not be for a period of more than 12 months.

.

(b)

Effective date

The amendment made by subsection (a) shall take effect on the date of enactment of this Act.

5.

Negative expected family contribution

(a)

Dependent students

Section 475 of the Higher Education Act of 1965 (20 U.S.C. 1087oo) is amended—

(1)

in subsection (b)(3)—

(A)

in subparagraph (C)—

(i)

by striking dividing the assessment resulting under paragraph (2) and inserting if the amount of the assessment resulting under paragraph (2) is a positive number, dividing such assessment; and

(ii)

by striking the semicolon and inserting a period; and

(B)

by striking the matter following subparagraph (C); and

(2)

in subsection (g)(6), by inserting and the absolute value of the amount of the lowest assessment of adjusted available income in the table described in section 475(e) (or a successor table prescribed by the Secretary under section 478), after subsection (c)(1).

(b)

Independent students without dependents other than a spouse

Section 476 of the Higher Education Act of 1965 (20 U.S.C. 1087pp) is amended—

(1)

in subsection (a)—

(A)

in paragraph (2), by striking dividing the sum resulting under paragraph (1) and inserting if the sum resulting under paragraph (1) is a positive number, dividing such sum; and

(B)

in the matter following paragraph (3)(B), by striking less than zero and inserting less than the amount of the lowest assessment of adjusted available income in the table described in section 477(d) (or a successor table prescribed by the Secretary under section 478); and

(2)

in paragraph (b)(5), by inserting before the period at the end , except that in no case shall the assessed amount be less than the amount of the lowest assessment of adjusted available income in the table described in section 477(d) (or a successor table prescribed by the Secretary under section 478)..

(c)

Independent students with dependents other than a spouse

Section 477(a) of the Higher Education Act of 1965 (20 U.S.C. 1087qq(a)) is amended—

(1)

in paragraph (3), by striking dividing the assessment resulting under paragraph (2) and inserting if the amount of the assessment resulting under paragraph (2) is a positive number, dividing such assessment;

(2)

in paragraph (4)(B), by striking the semicolon and inserting a period; and

(3)

by striking the matter following paragraph (4)(B).

(d)

Assessment schedules and rates

Section 478(e)(1) of the Higher Education Act of 1965 (20 U.S.C. 1087rr(e)(1)) is amended by striking increasing and inserting adjusting.

(e)

Simplified needs tests

(1)

Simplified needs tests

Section 479(c) of the Higher Education Act of 1965 (20 U.S.C. 1087ss) is further amended—

(A)

in the subsection heading, by striking expected; and

(B)

in the matter preceding paragraph (1), by striking equal to zero and inserting equal to the amount of the lowest assessment of adjusted available income in the table described in section 477(d) (or a successor table prescribed by the Secretary under section 478).

(2)

Conforming amendments to the College Cost Reduction and Access Act

(A)

Amendment

Section 602(a)(3) of the College Cost Reduction and Access Act (Public Law 110–84) is amended in the quoted material inserted by subparagraph (C), by striking zero expected family contribution and inserting expected family contribution under this subsection..

(B)

Effective date

The amendment made by subparagraph (A) shall take effect on July 1, 2009, as if enacted on the date of enactment of the College Cost Reduction and Access Act (Public Law 110–84).

(f)

Federal Pell Grants

Section 401(b) of the Higher Education Act of 1965 (20 U.S.C. 1070a(b)) is amended by inserting after paragraph (7) the following:

(8)

Increased amount for students with negative expected family contribution

(A)

In general

Notwithstanding paragraph (2)(A) and any other provision of law and subject to subparagraph (B) and (C), in the case of a student whose expected family contribution is a negative number, such student shall be eligible for a Federal Pell Grant under this section in the amount equal to the sum of—

(i)

the maximum Federal Pell Grant for which a student shall be eligible during an award year, as specified in the last enacted appropriation Act applicable to that award year;

(ii)

the Federal Pell Grant increase described in paragraph (9) applicable to that award year; and

(iii)

an additional amount equal to the absolute value of the student's expected family contribution.

(B)

Cost of attendance limit

Notwithstanding paragraph (3), in the case of a student whose expected family contribution is a negative number, the student's Federal Pell Grant under this subpart, as calculated under subparagraph (A), shall not exceed the student's cost of attendance at such institution, and if the amount of the student's Federal Pell Grant exceeds such cost of attendance for that year, such amount shall be reduced accordingly.

(C)

Formula otherwise unaffected

Except as provided in subparagraphs (A) and (B), nothing in this paragraph shall be construed to alter the requirements of this section, or authorize the imposition of additional requirements, for the determination and allocation of Federal Pell Grants under this section.

.

6.

Lender-of-last-resort

(a)

In general

Section 428(j) of the Higher Education Act of 1965 (20 U.S.C. 1078(j)) is amended—

(1)

in the first sentence of paragraph (1), by striking part. and inserting part or who attend an institution of higher education in the State that is designated under paragraph (4).;

(2)

in paragraph (2)(B), by inserting , in the case of students applying for loans under this subsection because of an inability to otherwise obtain loans under this part, after lender, nor;

(3)

in paragraph (3)(C)—

(A)

in the first sentence, by inserting or designates an institution of higher education for participation in the program under this subsection under paragraph (4), after under this part; and

(B)

in the third sentence, by inserting or to eligible borrowers who attend an institution in the State that is designated under paragraph (4) after problems; and

(4)

by adding at the end the following:

(4)

Institution-wide student qualification

Upon the request of an institution of higher education, the Secretary shall designate such institution for participation in the lender-of-last-resort program under this paragraph in the State where the institution is located. If the Secretary designates an institution under this paragraph, the guaranty agency shall make loans, in the same manner as such loans are made under paragraph (1), to students of the designated institution who are eligible to receive interest benefits paid on the students' behalf under subsection (a) of this section, regardless of whether the students are otherwise unable to obtain loans under this part.

.

(b)

Effective date

The amendments made by subsection (a) shall take effect on the date of enactment of this Act.

7.

Mandatory advances

(a)

In general

Section 421(b) of the Higher Education Act of 1965 (20 U.S.C. 1071(b)) is amended—

(1)

in paragraph (4), by striking programs, and and inserting programs,;

(2)

in paragraph (5), by striking agencies. and inserting agencies, and; and

(3)

by adding at the end the following:

(6)

there is authorized to be appropriated, and there are appropriated, out of any money in the Treasury not otherwise appropriated, such sums as may be necessary for the purpose of carrying out section 427(c)(7).

.

(b)

Effective date

The amendments made by subsection (a) shall take effect on the date of enactment of this Act.

8.

Effective date

Except as otherwise provided, the amendments made by this Act shall take effect on July 1, 2008.