To amend the Higher Education Act of 1965.

June 17, 2005

Mr. GEORGE MILLER of California (for himself, Mr. KILDEE, Ms. PELOSI, Mr. OWENS, Mr. PAYNE, Ms. WOOLSEY, Mr. HINOJOSA, Mrs. MCCARTHY, Mr. TIERNEY, Mr. WU, Mr. KUCINICH, Mr. HOLT, Ms. MCCOLLUM of Minnesota, Mrs. DAVIS of California, Mr. DAVIS of Illinois, Mr. GRIJALVA, Mr. VAN HOLLEN, Mr. RYAN of Ohio, Mr. BISHOP of New York, Mr. BARROW, Mr. HIGGINS, Mr. DOGGETT, Ms. MATSUI, Ms. BALDWIN, Mr. MICHAUD, Mrs. JONES of Ohio, Mr. STARK, Mr. CONYERS, Ms. SOLIS, Ms. BERKLEY, and Mr. STRICKLAND) introduced the following bill; which was referred to the Committee on Education and the Workforce

To amend the Higher Education Act of 1965.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the `College Opportunity for All Act'.

(b) Table of Contents-

Sec. 1. Short title; table of contents.

Sec. 2. References.

Sec. 3. Findings.

TITLE I--BOOSTING COLLEGE OPPORTUNITIES

Sec. 101. Pell grants.

Sec. 102. College affordability and accountability.

Sec. 103. Elimination of loan fees to borrowers.

Sec. 104. Authority to refinance consolidation loans.

Sec. 105. Providing low cost loans.

Sec. 106. Recapture of excess interest.

Sec. 107. Termination of excessive allowances.

Sec. 108. Public service scholarships.

Sec. 109. Significantly simplifying the student aid application process.

Sec. 110. Authorizations of appropriations for campus-based aid.

Sec. 111. Special programs for students whose families are engaged in migrant and seasonal farm work.

Sec. 112. Initiative to enhance college graduation rates and to accelerate time to degree.

`SUBPART 8--INITIATIVE TO ENHANCE COLLEGE GRADUATION RATES AND TO ACCELERATE TIME TO DEGREE

Sec. 113. Consolidation loan lender of choice.

Sec. 114. Establishing additional safeguards on schools acting as lenders under the Federal Family Education Loan Program.

Sec. 115. Boosting opportunities for low-income parents to pursue college degrees.

Sec. 116. Support for community service in college work-study program.

Sec. 117. B.J. Stupak Olympic Scholarships.

Sec. 118. Reduction of guaranty agency payments.

TITLE II--TEACHER QUALITY

Sec. 201. Teacher Recruiting and Preparation.

`Part C--TEACH Grants

`Part D--Recruiting Teachers With Math, Science, or Language Majors

Sec. 202. Teacher Quality Enhancement Grants.

TITLE III--ENHANCING COLLEGE OUTREACH

Sec. 301. Federal TRIO Program.

Sec. 302. GEARUP.

Sec. 303. Leveraging Educational Assistance Partnership.

TITLE IV--OPPORTUNITIES AT HISPANIC-SERVING COLLEGES AND UNIVERSITIES

Sec. 401. Postbaccalaureate opportunities for Hispanic Americans.

`Part B--Promoting Postbaccalaureate Opportunities for Hispanic Americans

Sec. 402. Authorization of appropriations for Hispanic Serving Institutions.

TITLE V--HISTORICALLY BLACK COLLEGES AND UNIVERSITIES

Sec. 501. Centers of excellence.

`Part E--Centers of Excellence

Sec. 502. Authorization of appropriations.

SEC. 2. REFERENCES.

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

SEC. 3. FINDINGS.

The Congress finds the following:

(1) A college education is more important than ever, and the Federal Government should significantly increase its investment to make college more affordable and accessible to all students because--

(A) recent shifts in the economy have increased the demand for college-educated workers and increased the wage gap between college-educated workers and those without a degree;

(B) jobs requiring some postsecondary education are expected to account for about 42 percent of total job growth from 2000 through 2010; and

(C) closing the college participation gap between White and minority students would result in $85 billion in increased tax revenue.

(2) Increased access to college and better retention rates are necessary because--

(A) seven times as many students from high-income families graduate from college by age 24 as students from low-income families;

(B) forty percent of all white students ages 18 through 24 are enrolled in institutions of higher education, whereas only 30 percent of all African-Americans and only 16 percent of all Hispanics are enrolled in institutions of higher education;

(C) nearly 4 out of every 10 Hispanics enrolled full time in 4-year colleges drop out within 3 years of their initial enrollment;

(D) African-Americans are half as likely as white students to complete a Bachelor's degree in 4 years; and

(E) low-income students are half as likely as upper-income students to complete a Bachelor's degree in 4 years.

(3) High loan debt and long work hours threaten college access:

(A) Seventy percent of such Federal student aid was in the form of loans and less than 20 percent was in the form of grants--while in 1975 grants accounted for 75 percent of Federal student aid funding.

(B) The maximum Pell grant scholarship is worth nearly $800 less, in real terms, than the maximum award in 1975-1976.

(C) The typical student now graduates with $19,000 in debt.

(D) Forty-six percent of all students who work in addition to being full-time students report 25 hours or more a week of employment.

(E) Half of those employed more than 25 hours a week report that working hurts their grades and retention in college, and students who work more than 35 hours a week are considerably less likely to complete a year of college than those who work less than 15 hours a week.

(F) Low-income, college-qualified high school graduates have an annual `unmet need' of $3,800 in college expenses, expenses not covered by grants, loans, work, or family savings.

(4) There is a severe shortage of qualified teachers, especially in high-need fields and low-income areas because--

(A) approximately one-third of America's teachers leave teaching sometime during their first 3 years of teaching and almost half leave during the first 5 years;

(B) overall turnover rate for teachers in high-poverty areas is almost 33 percent higher than it is for teachers in all schools; and

(C) in low-poverty secondary schools, approximately one-third of students are taught by a teacher who lacks either a college degree in the subject area in which the teacher teaches or certification in such subject area, while in high-poverty secondary schools, approximately one-half of students are taught by such a teacher.

TITLE I--BOOSTING COLLEGE OPPORTUNITIES

SEC. 101. PELL GRANTS.

(a) Maximum Grants- Section 401(b)(2)(A) (20 U.S.C. 1070a(b)(2)(A)) is amended by striking clauses (i) through (v) and inserting the following:

`(i) $7,600 for academic year 2006-2007;

`(ii) $8,600 for academic year 2007-2008;

`(iii) $9,600 for academic year 2008-2009;

`(iv) $10,600 for academic year 2009-2010; and

`(v) $11,600 for academic year 2010-2011,'.

(b) Year-Round Pell Grants- Section 401 is further amended by adding at the end the following new subsection:

`(k) Year-Round Pell Grants-

`(1) PILOT PROGRAM ESTABLISHED- The Secretary shall establish in accordance with this subsection a year-round Pell grant pilot program. Any institution of higher education that desires to participate in the program under this subsection shall submit an application to the Secretary at such time and containing or accompanied by such information and assurances as the Secretary may require. The Secretary may select not more than 500 institutions of higher education for participation in the program.

`(2) PROGRAM ELEMENTS- With respect to students who are eligible for a Pell grant under this section and who are enrolled in institutions participating in the program under this subsection, the Secretary is authorized--

`(A) to award such students two Pell grants in one calendar year to permit such students to accelerate progress towards their degree or certificate objectives by enrolling in academic programs for 12 rather than 9 months of the year at participating institutions; and

`(B) to award such two Pell grants to such students in a total amount up to 133 percent of the maximum Pell under subsection (b)(2)(A) that is applicable for the academic year.

`(3) LIMITATION- The Secretary shall limit the awarding of additional Pell grants under this subsection in a single calendar year to students who attend bachelor's or associate's degree-granting institutions with the following characteristics:

`(A) in the case of a bachelor's degree-granting institution, the graduation rate for the institution of higher education reported by the Integrated Postsecondary Education Data System for the preceding five academic years is at least 50 percent;

`(B) in the case of an associate's degree-granting institution, the completion rate for the institution of higher education reported by the Integrated Postsecondary Education Data System for the preceding three academic years has improved by a total of at least five percent; and

`(C) the average time of enrollment required to complete a degree at the institution--

`(i) among students who enter as freshman and earn bachelor's degrees is 14 or fewer quarters, or 9 or fewer semesters or the equivalent; or

`(ii) among students who enter as full-time freshmen and earn associate's degrees is 8 or fewer quarters, or 7 or fewer semesters equivalent.

`(4) TERMINATION; EVALUATION- The authority of the Secretary under this subsection shall cease to be effective on October 1, 2011. Not later than October 1, 2010, the Secretary shall conduct an evaluation of the program under this subsection and submit to the Congress a report on the results of such evaluation.'.

(c) Elimination of Tuition Sensitivity Provision- Section 401(b) is further amended--

(1) by striking paragraph (3); and

(2) by redesignating paragraphs (4) though (8) as paragraphs (3) through (7), respectively.

SEC. 102. COLLEGE AFFORDABILITY AND ACCOUNTABILITY.

(a) State Commitment to Affordable College Education- Title I is amended by inserting after section 131 (20 U.S.C. 1015) the following new section:

`SEC. 132. STATE COMMITMENT TO AFFORDABLE COLLEGE EDUCATION.

`(a) Maintenance of Effort Required- No State shall reduce the total amount provided by the State for public institutions of higher education in such State for any academic year beginning on or after July 1, 2005, to an amount which is less than the average amount provided by such State to such institutions of higher education during the academic years between July 1, 1998, and July 1, 2003.

`(b) Withholding of All Education Administrative Funds for Violations- Notwithstanding any other provision of law, the Secretary of Education shall withhold from any State that violates subsection (a) any amount that would otherwise be available to the State for administrative expenses and costs under any Federal education program until such State has corrected such violation.'.

(b) Cost Containment Strategies- Title I is further amended by inserting after section 132 (as added by section 4) the following new section:

`SEC. 133. COST CONTAINMENT STRATEGIES.

`(a) Requirements- Each institution of higher education shall in accordance with the requirements of this section engage in, and report upon, cost containment strategies. Such strategies may include (but are not limited to) the following activities:

`(1) bulk purchasing;

`(2) joint faculty appointments;

`(3) streamlining administration;

`(4) energy conservation and savings;

`(5) technological innovations; and

`(6) joint degree offerings.

`(b) Five-Year Plans- Within 2 years after the enactment of the Act, each institution of higher education shall submit a 5-year plan on their cost containment strategies and any progress made to date to the Secretary of Education.

`(c) Research Into Cost Containment Methods-

`(1) RESEARCH AUTHORIZED- From the funds appropriated under paragraph (2), the Secretary is authorized--

`(A) to conduct or provide for the conduct of research to identify methods of cost containment currently utilized by institutions of higher education and systems of such institutions, and research into other possible methods of cost containment;

`(B) to disseminate--

`(i) the information obtained by such research to such institutions and systems; and

`(ii) other research that has identified successful methods of cost containment;

`(C) to publicly recognize institutions of higher education that are doing an effective job at cost containment; and

`(D) to work together with such institutions and systems to implement these methods.

`(2) AUTHORIZATION OF APPROPRIATIONS- There are authorized to be appropriated to carry out this subsection $1,000,000 for fiscal year 2006 and such sums as may be necessary for each of the 5 succeeding fiscal years.

`(d) Consumer Information-

`(1) ANNUAL REPORT REQUIRED-

`(A) CONTENTS OF REPORT- The Secretary shall annually prepare and publish a report on college affordability in America. The college affordability report shall provide, at a minimum, comprehensive information on--

`(i) the sticker price, total price of attendance, net tuition price, and net access price for every institution of higher education that participates in the Federal student aid programs under title IV of this Act;

`(ii) the percentage change in the listed sticker price, total price of attendance, net tuition price, and net access price over a 3-, 5-, and 10-year time period for each such institution; and

`(iii) the level of Federal and State support for higher education per capita and per pupil.

`(B) ADVISORY GROUP- To ensure that the annual college affordability in America report provides consumer-friendly information, the Secretary shall convene an advisory group of students, parents, and college officials to help determine the information that shall be included in the report.

`(2) DATA DISSEMINATION- The Secretary shall make publicly available the data collected pursuant to this section, including an institution's net price tuition index as calculated in accordance with subsection (e). Such data shall be made available in a manner that permits the review and comparison of data submissions of individual institutions of higher education. Such data shall be presented in a form that is easily accessible and understandable and allows parents and students to make informed decisions based on the average prices for full-time undergraduate students and the institution's rate of increase in the sticker price, total price of attendance, net tuition price, and net access price.

`(3) WEBSITE ENHANCEMENT-

`(A) WEBSITE INFORMATION- In order to further enhance public knowledge and understanding of college affordability, the Secretary shall modify the college opportunities on line (COOL) web site. The goal of such changes shall be to make the website the single best source of information about applying to and paying for a postsecondary education. Such changes shall make the website more user friendly and facilitate the comparison of multiple institutions at the same time. Such website shall provide detailed tuition and student aid data for each institution (including data from the annual college affordability in America report). As part of improving the website, the Secretary shall establish an advisory board of students and parents to guide the redesign. The college price calculator required by paragraph (4) shall be included on the COOL website.

`(B) AVAILABILITY IN OTHER FORM- In addition, the Secretary shall publish all of the institutional information found on the COOL website, minus the college price calculator, and instruct all local educational agencies to notify all their secondary schools of the publication of the COOL web site, both on-line and in-print, and of the steps necessary to procure such information both on-line and in-print.

`(4) COLLEGE PRICE CALCULATOR-

`(A) ESTABLISHMENT- The Secretary shall establish a system for reporting to prospective students and families on the net tuition price of institutions of higher education. Using the most recent data available, the Secretary shall make available the amount of aid typically granted for students based on family income and college attended. Such information shall be made available in the form of a web site price calculator that permits students to be able to enter an institution of higher education and their family income and be presented the sticker price, net tuition price, and net access price for students in their income bracket in order to determine the approximate cost of attending such a school. The calculator shall include a clear disclaimer that financial aid decisions are made on a case-by-case basis and that the included calculations are based on previous years' data and can therefore serve only as general guidelines for the financial aid that a student may expect to receive.

`(B) INFORMATION DISTRIBUTION BY INSTITUTIONS- Each institution of higher education shall make available its sticker price, total price of attendance, net tuition price, and net access price and list examples of what families in each of the quartile income brackets might be expected to pay in the net tuition price for the most recent academic year. This information shall be provided in written form and distributed to all students and applicants and made widely available to the public.

`(e) Net Tuition Price Index-

`(1) IN GENERAL- The Secretary shall, on the basis of the data submitted under subsection (a), calculate a net tuition price index for each institution of higher education submitting such data and shall make the index available in accordance with subsection (b) as soon as operationally possible on the Department's college opportunity on line (COOL) website.

`(2) CALCULATION OF INDEX- The net tuition price index shall be equal to the percentage increase in the net tuition price charged for a first-time, full-time, full-year undergraduate student between a preceding academic year and the most recent academic year for which satisfactory data are available.

`(f) Definitions- For the purposes of this section:

`(1) NET ACCESS PRICE- The term `net access price' means the average total price of attendance for full-time undergraduate students, minus the average grants, loans, and work-study provided to such students, for any academic year.

`(2) NET TUITION PRICE- The term `net tuition price' means the average tuition and fees charged to full-time undergraduate students, minus the average grants provided to such students, for any academic year.

`(3) STICKER PRICE- The term `sticker price' means the average tuition and fees charged to full-time undergraduate students by an institution of higher education for any academic year.

`(4) TOTAL PRICE OF ATTENDANCE- The term `total price of attendance' means the average tuition and fees charged to full-time undergraduate students, as well as the average of the other expenses of such students related to obtaining a higher education, including housing (room and board if the student lives on campus, or rent or related housing costs if the student does not live on campus), books, transportation, for any academic year.

`(5) TUITION- The term `tuition' means the average price of or payment for actual instruction of full-time undergraduate students at an institution of higher education, for any academic year.'.

(c) Pell Plus- Subpart 1 of part A of title IV is amended by inserting after section 401 (20 U.S.C. 1070a) the following new section:

`SEC. 401A. INCENTIVES AND REWARDS: PELL PLUS.

`(a) Rewards for Low Tuition- For any institution of higher education that, for academic year 2005-2006 or any succeeding academic year, such institution's annual net tuition price increase (expressed as a percentage) for the most recent academic year for which satisfactory data is available is equal to or less than the percentage change in the higher education price index for such academic year, the Secretary shall, notwithstanding any other provision of the law, provide such institution an amount sufficient to provide a 25 percent increase under subpart 1 of part A of title IV to each Pell Grant recipient attending such institution for the next award year beginning after the date of such determination. Each such institution shall distribute any amounts received under this subsection among such Pell Grant recipients by increasing the amount of their Pell Grant awards by 25 percent.

`(b) Rewards for Guaranteed Tuition-

`(1) BONUS- For each institution of higher education that the Secretary of Education determines complies with the requirements of paragraph (2) or paragraph (3) of this subsection, the Secretary shall, notwithstanding any other provision of the law, provide such institution an amount sufficient to provide a 10 percent increase under subpart 1 of part A of title IV to each Pell Grant recipient attending such institution for the next award year beginning after the date of such determination. Each such institution shall distribute any amounts received under this subsection among such Pell Grant recipients by increasing the amount of their Pell Grant awards by 10 percent.

`(2) 4-YEAR INSTITUTIONS- An institution of higher education that provides a program of instruction for which it awards a bachelor's degree complies with the requirements of this paragraph if such institution guarantees that for any academic year beginning on or after July 1, 2005, and for each of the 5 succeeding continuous academic years, the net tuition price charged to an undergraduate student will not exceed--

`(A) the amount that the student was charged for an academic year at the time he or she first enrolled in the institution of higher education, plus

`(B) the product of the percentage increase in the higher education price index for the prior academic year, or the most recent prior academic year for which data is available, multiplied by the amount determined under subparagraph (A).

`(3) LESS THAN 4-YEAR INSTITUTIONS- An institution of higher education that does not provide a program of instruction for which it awards a bachelor's degree complies with the requirements of this paragraph if such institution guarantees that for any academic year (or the equivalent) beginning on or after July 1, 2005, and for each of the 1.5 succeeding continuous academic years, the net tuition price charged to an undergraduate student will not exceed--

`(A) the amount that the student was charged for an academic year at the time he or she first enrolled in the institution of higher education, plus

`(B) the product of the percentage increase in the higher education price index for the prior academic year, or the most recent prior academic year for which data is available, multiplied by the amount determined under subparagraph (A).

`(c) Maintaining Affordable Tuition- For any institution of higher education whose increase in the annual net tuition price (expressed as a percentage), for the most recent academic year for which satisfactory data is available, is greater than the percentage increase in the higher education price index for such academic year, the Secretary shall require such institution to submit to the Secretary the following information, within 6 months of such determination:

`(1) a detailed report on the exact causes for the net tuition price increase that outlines revenues and expenditures; and

`(2) cost containment strategies to lower net tuition prices.

`(d) Definitions-

`(1) NET TUITION PRICE- The term `net tuition price' has the same meaning as provided in section 133(f).

`(2) HIGHER EDUCATION PRICE INDEX- The term `higher education price index' means a statistical measure of change over time in the prices of a fixed market basket of goods and services purchased by colleges and universities through current fund educational and general expenditures (excluding expenditures for research), as developed by the Bureau of Labor Statistics pursuant to section 131(c)(4).'.

(d) Articulation Agreement Demonstration Program- Part G of title IV is amended by inserting after section 486 (20 U.S.C. 1093) the following new section:

`SEC. 486A. ARTICULATION AGREEMENT DEMONSTRATION PROGRAM.

`(a) Purpose; Definition-

`(1) PURPOSE- It is the purpose of this section to allow demonstration programs that are monitored by the Department of Education to encourage institutions of higher education to enter into articulation agreements or consortia groups, as a means to lower tuition prices to students.

`(2) DEFINITION- For the purposes of this section, the term `articulation agreement' means an agreement between institutions of higher education that specifies the acceptability of courses in transfer toward meeting specific degree requirements.

`(b) Demonstration Programs Authorized-

`(1) IN GENERAL- The Secretary is authorized to select institutions of higher education, systems of such institutions, or consortia of such institutions for voluntary participation in an articulation agreement demonstration program.

`(2) ELIGIBLE APPLICANTS-

`(A) ELIGIBLE INSTITUTIONS- Except as provided in subparagraphs (B), (C), and (D), only an institution of higher education that is eligible to participate in programs under this title shall be eligible to participate in the articulation program authorized under this section.

`(B) PROHIBITION- An institution of higher education described in section 102(a)(1)(C) shall not be eligible to participate in the articulation program authorized under this section.

`(C) SPECIAL RULE- Subject to subparagraph (B), an institution of higher education that meets the requirements of subsection (a) of section 102, other than the requirement of paragraph (3)(A) or (3)(B) of such subsection, and that provides a 2-year or 4-year program of instruction for which the institution awards an associate or baccalaureate degree, shall be eligible to participate in the demonstration program authorized under this section.

`(c) Application-

`(1) IN GENERAL- Each institution, system, or consortium of institutions desiring to participate in a demonstration program under this section shall submit an application to the Secretary at such time and in such manner as the Secretary may require.

`(2) CONTENTS- Each application shall include--

`(A) a description of the institution, system, or consortium's consultation with a recognized accrediting agency or association with respect to quality assurances for the articulation programs to be offered;

`(B) a description of the articulation program to be offered;

`(C) a description of the students to whom the articulation programs will be offered;

`(D) an assurance that the institution, system, or consortium will offer full cooperation with the ongoing evaluations of the demonstration program provided for in this section; and

`(E) such other information as the Secretary may require.

`(d) Selection-

`(1) IN GENERAL- For the first year of the demonstration program authorized under this section, the Secretary is authorized to select for participation in the program not more than 100 institutions, systems of institutions, or consortia of institutions. For the third year of the demonstration program authorized under this section, the Secretary may select not more than 250 institutions, systems, or consortia, in addition to the institutions, systems, or consortia selected pursuant to the preceding sentence, to participate in the demonstration program if the Secretary determines that such expansion is warranted based on the evaluations conducted in accordance with subsections (f) and (g).

`(2) CONSIDERATIONS- In selecting institutions to participate in the articulation program in the first or succeeding years of the program, the Secretary shall take into account--

`(A) the number and quality of applications received;

`(B) the Department's capacity to oversee and monitor each institution's participation;

`(C) an applicant's--

`(i) financial responsibility;

`(ii) administrative capability; and

`(D) the need to ensure the participation of a diverse group of institutions with respect to size, mission, and geographic distribution.

`(3) PRIORITY- In selecting institutions to participate in the articulation program in the first or succeeding years of the program, the Secretary shall give priority to applicants that involve a large number of schools; public and private agreements; innovative technology to help reduce costs; and, multi-state projects.

`(4) NOTIFICATION- The Secretary shall make available to the public and to the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Education and the Workforce of the House of Representatives a list of institutions, systems or consortia selected to participate in the articulation program authorized by this section.

`(e) Evaluations and Reports-

`(1) EVALUATION- The Secretary shall evaluate the demonstration programs authorized under this section on an annual basis. Such evaluations specifically shall review--

`(A) the extent to which the institution, system or consortium has met the goals set forth in its application to the Secretary;

`(B) the number and types of institutions participating in the programs offered;

`(C) the cost containment strategies pursued and the success of such strategies; and

`(D) the effective use of technologies to keep college prices low, while maintaining quality.

`(2) REPORTS-

`(A) IN GENERAL- Within 18 months of the initiation of the demonstration program, the Secretary shall report to the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Education and the Workforce of the House of Representatives with respect to the evaluations of the demonstration programs authorized under this section.

`(B) ADDITIONAL REPORTS- The Secretary shall provide additional reports to the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Education and the Workforce of the House of Representatives on an annual basis regarding--

`(i) the demonstration programs authorized under this section; and

`(ii) best practices to contain college costs.'.

(e) Advisory Committee on Student Financial Assistance- Section 491(j) (20 U.S.C. 1098(j)) is amended

(1) by striking `and' at the end of paragraph (4);

(2) by striking the period at the end of paragraph (5) and inserting `; and'; and

(3) by adding at the end the following new paragraph:

`(6) convene a task force of experts, to be representative of the key constituents in higher education--

`(A) to determine the best methods to finance higher education in the long-term;

`(B) to help public institutions utilize long-term budgeting to plan for the future;

`(C) to review the trends of financing of higher education;

`(D) to define the role played by the States, the Federal Government, families, and outside entities in financing higher education, and determine the best methods to strengthen this partnership.'.

SEC. 103. ELIMINATION OF LOAN FEES TO BORROWERS.

(a) Federal Family Education Loan Program- Section 438(c) of the Higher Education Act of 1965 (20 U.S.C. 1087-1(c)) is amended by adding at the end the following new paragraph:

`(9) ORIGINATION FEES TERMINATED- Notwithstanding any other provision of this subsection, with respect to any loan made, insured, or guaranteed under this part on or after the first July 1 after the date of enactment of the College Opportunity for All Act--

`(A) no eligible lender may collect directly or indirectly from any borrower any origination fee with respect to such loan, or any other fee relating to the origination of a loan however described; and

`(B) the Secretary shall not collect any origination fee from the lender under this subsection.'.

(b) Federal Direct Loan Program-

(1) AMENDMENT- Section 455(c) of such Act (20 U.S.C. 1087e(c)) is amended to read as follows:

`(c) Loan Fee- The Secretary shall not collect directly or indirectly from any borrower any origination fee with respect to such loan, or any other fee relating to the origination of a loan however described.'.

(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply with respect to any loan made under part D of title IV on an after the first July 1 after the date of enactment of this Act.

SEC. 104. AUTHORITY TO REFINANCE CONSOLIDATION LOANS.

(a) Consolidation Loan Refinancing-

(1) FFEL CONSOLIDATION LOANS- Section 428C(a)(3)(B) of the Higher Education Act of 1965 (20 U.S.C. 1078-3(a)(3)(B)) is amended by adding at the end the following new clause:

`(ii) Notwithstanding clause (i) of this subparagraph, a borrower of a consolidation loan on which the interest is established at a fixed rate under section 427A, 428C(c), or 455 may obtain a subsequent consolidation loan for the purposes of refinancing such earlier consolidation loan at a fixed or variable rate under section 427A(l)(3) or 455(b)(7)(C) if the interest rate on such earlier consolidation loan exceeds the sum of 3.3 percent and the average of the bond equivalent rates of the 91-day Treasury bills auctioned for the previous calendar quarter.'.

(2) PARALLEL TERMS FOR FEDERAL DIRECT CONSOLIDATION LOANS- Section 455(a) of the Higher Education Act of 1965 (20 U.S.C. 1087e(a)) is amended--

(A) in paragraph (1), by inserting `428C,' after `428B,'; and

(B) in paragraph (2)--

(i) by striking `and' at the end of subparagraph (B);

(ii) by redesignating subparagraph (C) as subparagraph (D); and

(iii) by inserting after subparagraph (B) the following:

`(C) section 428C shall be know as `Federal Direct Consolidation Loans'.'.

(b) Consolidation Loan Interest Rates-

(1) FFEL LOANS- Paragraph (3) of section 427A(l) (20 U.S.C. 1077a(l)) is amended to read as follows:

`(3) CONSOLIDATION LOANS-

`(A) BORROWER ELECTION- With respect to any consolidation loan under section 428C for which the application is received by an eligible lender on or after July 1, 2006 (including an application for a subsequent consolidation loan under section 428C(a)(3)(B)(ii)), the applicable rate of interest shall, at the election of the borrower at the time of application for the loan, be either at the rate determined under subparagraph (B) or the rate determined under subparagraph (C).

`(B) VARIABLE RATE- Except as provided in subparagraph (D), the rate determined under this subparagraph shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal, for such 12-month period, to--

`(i) the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held prior to such June 1; plus

`(ii) 2.3 percent,

except that such rate shall not exceed 6.8 percent.

`(C) FIXED RATE- Except as provided in subparagraph (D), the rate determined under this subparagraph shall be determined on the date on which the obligation to repay the loan is signed, and be equal, for the duration of the term of the loan, to the lesser of--

`(i) the weighted average of the interest rates on the loans consolidated, rounded to the nearest higher one-eighth of 1 percent; or

`(ii) 6.8 percent.

`(D) CONSOLIDATION OF PLUS LOANS- In the case of any such consolidation loan that is used to repay loans each of which was made under section 428B or was a Federal Direct PLUS Loan (or both), the rates determined under subparagraphs (B) and (C) shall be determined--

`(i) by substituting `3.1 percent' for `2.3 percent'; and

`(ii) by substituting `7.9 percent' for `6.8 percent'.'.

(2) DIRECT LOANS- Subparagraph (C) of section 455(b)(7) (20 U.S.C. 1087e(b)(7)) is amended to read as follows:

`(C) CONSOLIDATION LOANS-

`(i) BORROWER ELECTION- With respect to any consolidation loan under section 428C for which the application is received by an eligible lender on or after July 1, 2006 (including an application for a subsequent consolidation loan under section 428C(a)(3)(B)(ii)), the applicable rate of interest shall, at the election of the borrower at the time of application for the loan, be either at the rate determined under clause (ii) or the rate determined under clause (iii).

`(ii) VARIABLE RATE- Except as provided in clause (iv), the rate determined under this subparagraph shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal, for such 12-month period, to--

`(I) the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held prior to such June 1; plus

`(II) 2.3 percent,

except that such rate shall not exceed 6.8 percent.

`(iii) FIXED RATE- Except as provided in clause (iv), the rate determined under this subparagraph shall be determined on the date on which the obligation to repay the loan is signed, and be equal, for the duration of the term of the loan, to the lesser of--

`(I) the weighted average of the interest rates on the loans consolidated, rounded to the nearest higher one-eighth of 1 percent; or

`(II) 6.8 percent.

`(iv) CONSOLIDATION OF PLUS LOANS- In the case of any such Federal Direct Consolidation Loan that is used to repay loans each of which was made under section 428B or was a Federal Direct PLUS Loan, the rates determined under clauses (ii) and (iii) shall be determined--

`(I) by substituting `3.1 percent' for `2.3 percent' in clause (ii)(II); and

`(II) by substituting `7.9 percent' for `6.8 percent' each place it appears.'.

SEC. 105. PROVIDING LOW COST LOANS.

(a) FFEL Interest Rates- Section 427A(l) (20 U.S.C. 1077a(l)) is further amended--

(1) by redesignating paragraph (3) (as amended by section 104(b)(1)) as paragraph (4); and

(2) by striking paragraphs (1) and (2) and inserting the following:

`(1) IN GENERAL- Notwithstanding subsection (h), but subject to paragraph (2) of this subsection, with respect to any loan made, insured, or guaranteed under this part (other than a loan made pursuant to section 428B or 428C) for which the first disbursement is made on or after July 1, 2006, the applicable rate of interest shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to--

`(A) the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held prior to such June 1; plus

`(B) 2.3 percent,

except that such rate shall not exceed 6.8 percent.

`(2) IN SCHOOL AND GRACE PERIOD RULES- Notwithstanding subsection (h), with respect to any loan under this part (other than a loan made pursuant to section 428B or 428C) for which the first disbursement is made on or after July 1, 2006, the applicable rate of interest for interest which accrues--

`(A) prior to the beginning of the repayment period of the loan; or

`(B) during the period in which principal need not be paid (whether or not such principal is in fact paid) by reason of a provision described in section 427(a)(2)(C) or 428(b)(1)(M),

shall be determined under paragraph (1) by substituting `1.7 percent' for `2.3 percent'.

`(3) PLUS LOANS- Notwithstanding subsection (h), with respect to any loan under section 428B for which the first disbursement is made on or after July 1, 2006, the applicable rate of interest shall be determined under paragraph (1)--

`(A) by substituting `3.1 percent' for `2.3 percent'; and

`(B) by substituting `7.9 percent' for `6.8 percent'.'.

(b) Direct Loans- Section 455(b)(7) (20 U.S.C. 1087e(b)(7)) is further amended--

(1) by redesignating subparagraph (C) (as amended by section 104(b)(2)) as subparagraph (D); and

(2) by striking subparagraph (A) and (B) and inserting the following:

`(A) RATES FOR FDSL AND FDUSL- Notwithstanding the preceding paragraphs of this subsection, for Federal Direct Stafford Loans and Federal Direct Unsubsidized Stafford Loans for which the first disbursement is made on or after July 1, 2006, the applicable rate of interest shall, during any 12-month period beginning on July 1 and ending on June 30, be determined on the preceding June 1 and be equal to--

`(i) the bond equivalent rate of 91-day Treasury bills auctioned at the final auction held prior to such June 1; plus

`(ii) 2.3 percent,

except that such rate shall not exceed 6.8 percent.

`(B) IN SCHOOL AND GRACE PERIOD RULES- Notwithstanding the preceding paragraphs of this subsection, with respect to any Federal Direct Stafford Loan or Federal Direct Unsubsidized Stafford Loan for which the first disbursement is made on or after July 1, 2006, the applicable rate of interest for interest which accrues--

`(i) prior to the beginning of the repayment period of the loan; or

`(ii) during the period in which principal need not be paid (whether or not such principal is in fact paid) by reason of a provision described in section 428(b)(1)(M) or 427(a)(2)(C),

shall be determined under subparagraph (A) by substituting `1.7 percent' for `2.3 percent'.

`(C) PLUS LOANS- Notwithstanding the preceding paragraphs of this subsection, with respect to Federal Direct PLUS Loan for which the first disbursement is made on or after October 1, 1998, and before July 1, 2006, the applicable rate of interest shall be determined under subparagraph (A)--

`(i) by substituting `3.1 percent' for `2.3 percent'; and

`(ii) by substituting `7.9 percent' for `6.8 percent'.'.

SEC. 106. RECAPTURE OF EXCESS INTEREST.

(a) Amendment- Subparagraph (I) of section 438(b)(2) (20 U.S.C. 1087-1(b)(2)) is amended by inserting after clause (vii) the following new clause:

`(viii) RECAPTURE OF EXCESS INTEREST-

`(I) EXCESS CREDITED- With respect to a loan on which the applicable interest rate is determined under subsection (l) of section 427A and for which the first disbursement of principal is made on or after July 1, 2006, if the applicable interest rate for any 3-month period exceeds the special allowance rate applicable to such loan under this subparagraph for such period, then an adjustment shall be made by calculating the excess interest in the amount computed under subclause (II) of this clause, and by crediting the excess interest to the Government not less often than annually.

`(II) CALCULATION OF EXCESS- The amount of any adjustment of interest on a loan to be made under this subsection for any quarter shall be equal to--

`(aa) the applicable interest rate minus the special allowance rate determined under this subparagraph; multiplied by

`(bb) the average daily principal balance of the loan (not including unearned interest added to principal) during such calendar quarter; divided by

`(cc) four.'.

(b) Effective Date- The amendments made by this section shall not apply with respect to any special allowance payment made under section 438 of the Higher Education Act of 1965 (20 U.S.C 1087-1) before July 1, 2006.

SEC. 107. TERMINATION OF EXCESSIVE ALLOWANCES.

(a) Amendment- Section 438(b)(2)(B) of the Higher Education Act of 1965 (20 U.S.C. 1087-1(b)(2)(B)) is amended by striking clause (v) and inserting the following:

`(v) This subparagraph shall not apply to--

`(I) any loan made or purchased after the date of enactment of the College Opportunity for All Act;

`(II) any loan that had not qualified before such date of enactment for receipt of a special allowance payment determined under this subparagraph; or

`(III) any loan made or purchased before such date of enactment with funds described in the first or second sentence of clause (i) if--

`(aa) the obligation described in the first such sentence has, after such date of enactment, matured, or been retired or defeased; or

`(bb) the maturity date or the date of retirement of the obligation described in the first such sentence has, after such date of enactment, been extended.'.

(b) Continuing Audits of Prior Claims- The Inspector General of the Department of Education shall conduct an audit of each holder of student loans who, at any time after September 30, 1993, submitted claims for special allowance payments under subparagraph (B) of section 438(b)(2) of the Higher Education Act of 1965 (20 U.S.C. 1087-1(b)(2)(B)), with respect to the claims made pursuant to such subparagraph. In conducting such audit, the Inspector General shall use the methodology used in preparing the audit report on special allowance payments issued in May 2005 (ED-OIG/A05E0017).

SEC. 108. PUBLIC SERVICE SCHOLARSHIPS.

Section 428K (20 U.S.C. 1078-11) is amended to read as follows:

`SEC. 428K. LOAN FORGIVENESS FOR PUBLIC SERVICE EMPLOYEES.

`(a) Purposes- The purposes of this section are--

`(1) to reduce the burden of student debt, particularly for Americans who dedicate their careers to meeting certain urgent national needs; and

`(2) to attract more excellent individuals into important public service careers.

`(b) Loan Forgiveness-

`(1) IN GENERAL- The Secretary shall assume the obligation to repay, pursuant to subsection (c), a loan made under section 428 or 428H, a Federal Direct Stafford Loan or Federal Direct Unsubsidized Stafford Loan, a Federal Direct Consolidation Loan, or a Federal Perkins Loan for any new borrower after the date of enactment of the Higher Education Amendments of 1998, who--

`(A) is employed full time in a qualified public service position described in paragraph (2); and

`(B) is not in default on a loan for which the borrower seeks forgiveness.

`(2) QUALIFIED PUBLIC SERVICE POSITIONS- For purposes of this section, an individual shall be treated as employed in a qualified public service position if the individual is any of the following:

`(A) HIGHLY QUALIFIED TEACHERS IN LOW-INCOME COMMUNITIES AND OF MATHEMATICS, SCIENCE, AND BILINGUAL AND SPECIAL EDUCATION- An individual who--

`(i)(I) is a public school teacher who is highly qualified as such term is defined in section 9101 of the Elementary and Secondary Education Act of 1965; or

`(II) is a teacher who has obtained employment in a nonprofit private elementary or secondary school who holds at least a bachelors degree and--

`(aa) has demonstrated subject knowledge and teaching skills in reading, writing, mathematics, and other areas of the basic elementary school curriculum if such teacher is an elementary teacher; and

`(bb) has demonstrated a high level of competency in each of the academic subjects in which the teacher teaches if such teacher is a secondary school teacher; and

`(ii)(I) has obtained employment as a teacher for service in a public or nonprofit private elementary or secondary school which is in the school district of a local educational agency which is eligible in such year for assistance pursuant to title I of the Elementary and Secondary Education Act of 1965, and which for the purpose of this paragraph and for that year has been determined by the Secretary (pursuant to regulations and after consultation with the State educational agency of the State in which the school is located) to be a school in which the enrollment of children counted under section 1113(a)(5) of the Elementary and Secondary Education Act of 1965 exceeds 40 percent of the total enrollment of that school; or

`(II) has obtained employment as a full-time teacher of mathematics, science, or bilingual or special education.

`(B) EARLY CHILDHOOD EDUCATORS- An individual who--

`(i) has received a degree in early childhood education; and

`(ii) has obtained employment in a child care facility, such as employment as a preschool teacher, in a low-income community.

`(C) NURSES- An individual who has obtained employment--

`(i) in a clinical setting; or

`(ii) as a member of the nursing faculty at an accredited school of nursing (as those terms are defined in section 801 of the Public Health Service Act (42 U.S.C. 296)).

`(D) CHILD WELFARE WORKERS- An individual who--

`(i) has completed a degree in social work or related field with a focus on serving children and families (as determined in accordance with regulations prescribed by the Secretary); and

`(ii) has obtained employment in public or private child welfare services.

`(E) NUTRITION PROFESSIONALS- An individual who--

`(i) is a certified registered dietician who has completed a degree in a relevant field; and

`(ii) has obtained employment in a local agency of the special supplemental nutrition program for women, infants, and children under section 17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786).

`(F) INFANT AND TODDLER SPECIALISTS- An individual who--

`(i) has obtained an associate's or bachelor's degree in a discipline that would qualify the individual to work in the program under part C of the Individuals with Disabilities Education Act in the State in which such individual resides; and

`(ii) has obtained employment in an occupation that is directly related to such degree and that (I) provides services to infants, toddlers, and their families under an individualized family service plan under section 636 of the Individuals with Disabilities Education Act (20 U.S.C. 1436) or an individualized education plan under section 614(d) of such Act (20 U.S.C. 1414(d)); or (II) provides training or technical assistance to providers of such services.

`(G) READING SPECIALISTS- An individual who is employed as an elementary or secondary school teacher who primarily teaches reading and who--

`(i) has obtained a separate reading instruction credential from the State in which the teacher is employed; and

`(ii) who is certified by the chief administrative officer of the public or nonprofit private elementary or secondary school in which the borrower is employed to teach reading--

`(I) as being proficient in teaching the essential components of reading instruction as defined in section 1208 of the Elementary and Secondary Education Act of 1965; and

`(II) as having such credential.

`(H) ADDITIONAL PUBLIC SERVANTS- An individual who, as determined by the Secretary of Education by regulation--

`(i) works in a public service profession that suffers from a critical lack of qualified personnel;

`(ii) serves a low-income or needy community; and

`(iii) is highly qualified.

`(c) Loan Repayment-

`(1) IN GENERAL- The Secretary shall assume the obligation to repay--

`(A) after each of the first or second years of service by an individual in a qualified public service position, 15 percent of the total amount of principal and interest of the loans described in subsection (b)(1) to such individual that are outstanding immediately preceding such first year of such service;

`(B) after each of the third or fourth years of such service, 20 percent of such total amount; and

`(C) after the fifth year of such service, 30 percent of such total amount.

`(2) TOTAL OBLIGATION- The Secretary shall repay for an individual under this section not more than $20,000 in the aggregate of the loan obligation on loans described in subsection (b)(1).

`(3) TREATMENT OF CONSOLIDATION LOANS- A loan amount for a loan made under section 428C or for a Federal Direct Consolidation Loan may be a qualified loan amount for the purposes of this subsection only to the extent that such loan amount was used to repay a loan described in subsection (b)(1) for a borrower who meets the requirements of subsection (b), as determined in accordance with regulations prescribed by the Secretary.

`(4) CONSTRUCTION- Nothing in this section shall be construed to authorize the refunding of any repayment of a loan made under section 428 or 428H, a Federal Direct Stafford Loan or Federal Direct Unsubsidized Stafford Loan, a Federal Direct Loan, or a Federal Perkins Loan.

`(5) 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 that accrues for such year shall be repaid by the Secretary.

`(6) INELIGIBILITY OF NATIONAL SERVICE AWARD RECIPIENTS- No student borrower may, for the same service, receive a benefit under both this section and subtitle D of title I of the National and Community Service Act of 1990 (42 U.S.C. 12601 et seq.).

`(7) INELIGIBILITY FOR DOUBLE BENEFITS- No borrower may receive a reduction of loan obligations under both this section and section 428J or 460.

`(8) CONTINUED ELIGIBILITY-

`(A) TEACHERS- Any teacher who performs service in a school that--

`(i) meets the requirements of subsection (b)(2)(A)(ii)(I) in any year during such service; and

`(ii) in a subsequent year fails to meet the requirements of such subsection,

may continue to teach in such school and shall be eligible for loan forgiveness pursuant to subsection (b).

`(B) TEACHERS IN LOW-INCOME COMMUNITIES- Any early childhood educator who performs service in a community that--

`(i) meets the definition of low-income community in any year during such service; and

`(ii) in a subsequent year fails to meet such definition,

may continue to perform service in such community and shall be eligible for loan forgiveness pursuant to subsection (b).

`(d) Repayment to Eligible Lenders and Holders- The Secretary shall pay to each eligible lender or holder for each fiscal year an amount equal to the aggregate amount of the lender's or holder's loans that are subject to repayment pursuant to this section for such year.

`(e) Application for Repayment-

`(1) IN GENERAL- Each eligible individual desiring loan repayment under this section shall submit a complete and accurate application to the Secretary at such time, in such manner, and containing such information as the Secretary may require.

`(2) CONDITIONS- An eligible individual may apply for loan repayment under this section after completing each of the consecutive years of qualifying service described in subsection (c)(1). The borrower may elect to receive forbearance while engaged in qualifying service described in subsection (c)(1) unless the borrower is in deferment while so engaged.

`(3) NOTICE CONCERNING ELIGIBILITY FOR APPLICATION- The Secretary shall notify education agencies and other public agencies of the benefits available under this section, and encourage such agencies to notify individuals in eligible public service positions of such benefits.

`(f) Regulations- The Secretary is authorized to prescribe such regulations as may be necessary to carry out the provisions of this section. Such regulations shall require the Secretary to actively inform individuals eligible for the provisions of this section of the loan forgiveness described under this section.

`(g) Definitions- In this section:

`(1) CHILD CARE FACILITY- The term `child care facility' means a facility, including a home, that--

`(A) provides child care services; and

`(B) meets applicable State or local government licensing, certification, approval, or registration requirements, if any.

`(2) CHILD CARE SERVICES- The term `child care services' means activities and services provided for the education and care of children from birth through age 5 by an individual who has a degree in early childhood education, including a preschool teacher.

`(3) CHILD WELFARE SERVICES- The term `child welfare services' has the meaning given the term in section 425 of the Social Security Act.

`(4) DEGREE- The term `degree' means an associate's or bachelor's degree awarded by an institution of higher education.

`(5) EARLY CHILDHOOD EDUCATION- The term `early childhood education' means education in the area of early child development and education, child care, or any other educational area related to early child education or child care that the Secretary determines to be appropriate.

`(6) ELIGIBLE NURSE- The term `eligible nurse' means a nurse who meets all of the following:

`(A) The nurse graduated from--

`(i) an accredited school of nursing (as those terms are defined in section 801 of the Public Health Service Act (42 U.S.C. 296));

`(ii) a nursing center; or

`(iii) an academic health center that provides nurse training.

`(B) The nurse holds a valid and unrestricted license to practice nursing in the State in which the nurse practices in a clinical setting.

`(C) The nurse holds 1 or more of the following:

`(i) A graduate degree in nursing, or an equivalent degree.

`(ii) A nursing degree from a collegiate school of nursing (as defined in section 801 of the Public Health Service Act (42 U.S.C. 296)).

`(iii) A nursing degree from an associate degree school of nursing (as defined in section 801 of the Public Health Service Act (42 U.S.C. 296)).

`(iv) A nursing degree from a diploma school of nursing (as defined in section 801 of the Public Health Service Act (42 U.S.C. 296)).

`(7) ELIGIBLE PRESCHOOL PROGRAM PROVIDER- The term `eligible preschool program provider' means a preschool program provider serving children younger than the age of compulsory school attendance that is--

`(A) a public or private school;

`(B) a provider that is supported, sponsored, supervised, or administered by a local educational agency;

`(C) a Head Start agency designated under the Head Start Act (42 U.S.C. 9831 et seq.);

`(D) a nonprofit or community-based organization; or

`(E) a licensed child care center or family child care provider.

`(8) LOW-INCOME COMMUNITY- In this subsection, the term `low-income community' means a community in which 70 percent of households earn less than 85 percent of the State median household income.

`(9) PRESCHOOL TEACHER- The term `preschool teacher' means an individual--

`(A) who has received at least an associate's degree in early childhood education and who is working toward or who has already received a bachelor's degree in early childhood education; and

`(B) who works for an eligible preschool program provider supporting the children's cognitive, social, emotional, and physical development to prepare the children for the transition to kindergarten.

`(10) YEAR- The term `year', where applied to service as a teacher (or service as a member of an accredited school of nursing (as those terms are defined in section 801 of the Public Health Service Act (42 U.S.C. 296))), means an academic year as defined by the Secretary.'.

SEC. 109. SIGNIFICANTLY SIMPLIFYING THE STUDENT AID APPLICATION PROCESS.

(a) Expanding the Auto-Zero and Further Simplifying the Simplified Needs Test-

(1) SIMPLIFIED NEEDS TEST- Section 479 (20 U.S.C. 1087ss) is amended--

(A) in subsection (b)--

(i) in paragraph (1)--

(I) by striking clause (i) of subparagraph (A) and inserting the following:

`(i) the student's parents--

`(I) file, or are eligible to file, a form described in paragraph (3); or

`(II) certify that they are not required to file an income tax return; or

`(III) or the student received benefits at some time during the previous 12-month period under a means-tested Federal benefit program as defined under subsection (d); and'; and

(II) by striking clause (i) of subparagraph (B) and inserting the following:

`(i) the student (and the student's spouse, if any)--

`(I) files, or is eligible to file, a form described in paragraph (3); or

`(II) certifies that the student (and the student's spouse, if any) is not required to file an income tax return; or

`(III) received benefits at some time during the previous 12-month period under a means-tested Federal benefit program as defined under subsection (d); and'; and

(ii) in paragraph (3), by striking `A student or family files a form described in this subsection, or subsection (c), as the case may be, if the student or family, respectively, files' and inserting `In the case of an independent student, the student, or in the case of a dependent student, the parent, files a form described in this subsection, or subsection (c), as the case may be, if the student or parent, as appropriate, files';

(B) in subsection (c)--

(i) in paragraph (1), by striking subparagraphs (A) and (B) and inserting the following:

`(A) the student's parents--

`(i) file, or are eligible to file, a form described in subsection (b)(3); or

`(ii) certify that they are not required to file an income tax return; or

`(iii) or the student received benefits at some time during the previous 12-month period under a means-tested Federal benefit program as defined under subsection (d); and

`(B) the sum of the adjusted gross income of the parents is less than or equal to $25,000; or'; and

(ii) in paragraph (2), by striking subparagraphs (A) and (B) and inserting the following:

`(A) the student (and the student's spouse, if any)--

`(i) files, or is eligible to file, a form described in subsection (b)(3); or

`(ii) certifies that the student (and the student's spouse, if any) is not required to file an income tax return; or

`(iii) received benefits at some time during the previous 12-month period under a means-tested Federal benefit program as defined under subsection (d); and

`(B) the sum of the adjusted gross income of the student and spouse (if appropriate) is less than or equal to $25,000.'; and

(iii) by inserting after the last sentence of such subsection the following: `The Secretary shall annually adjust the income level necessary to qualify an applicant for the zero expected family contribution under this subsection. The income level shall be adjusted according to increases in the Consumer Price Index, as specified in section 478(f).'; and

(C) by adding at the end the following new subsections:

`(d) Means-Tested Federal Benefit Program- For the purposes of this section, the term `means-tested Federal benefit program' means a mandatory spending program of the Federal Government in which eligibility for the program's benefits, or the amount of such benefits, or both, are determined on the basis of income or resources of the individual or family seeking the benefit, and includes the supplemental security income program under title XVI of the Social Security Act, the food stamp program under the Food Stamp Act of 1977, the free and reduced price school lunch program established under the Richard B. Russell National School Lunch Act, the temporary assistance to needy families program established under part A of title IV of the Social Security Act, and the women, infants and children program established under Section 17 of the Child Nutrition Act of 1966.

`(e) Reporting Requirements- The Secretary shall regularly evaluate the impact of the eligibility guidelines in subsections (b)(1)(A)(i), (b)(1)(B)(i), (c)(1)(A) and (c)(2)(A) of this section. In particular, the Secretary shall evaluate whether the means-tested Federal benefit programs (as defined by subsection (d)) ensure that the Simplified Needs Test continues to be targeted to the maximum number of low- and moderate-income students.'.

(b) Improvements to Paper and Electronic Forms-

(1) COMMON FINANCIAL AID FORM DEVELOPMENT AND PROCESSING- Section 483 (20 U.S.C. 1090) is amended--

(A) in subsection (a)--

(i) by striking paragraphs (1), (2), and (5);

(ii) by redesignating paragraphs (3), (4), (6), and (7), as paragraphs (9), (10), (11), and (12), respectively;

(iii) by inserting before paragraph (9), as redesignated by subparagraph (B), the following:

`(1) IN GENERAL- The Secretary, in cooperation with representatives of agencies and organizations involved in student financial assistance, shall produce, distribute, and process free of charge common financial reporting forms as described in this subsection to be used for application and reapplication to determine the need and eligibility of a student for financial assistance under parts A through E (other than subpart 4 of part A). These forms shall be made available to applicants in both paper and electronic formats and shall be referred to as the `Free Application for Federal Student Aid' or the `FAFSA' .

`(2) EARLY ESTIMATES- The Secretary shall permit applicants to complete such forms as described in this subsection in the years prior to enrollment in order to obtain an estimate of the family contribution, as defined by section 473. Such applicants shall be permitted to update information submitted on forms described in this subsection using the process required under paragraph (5)(A).

`(3) PAPER FORMAT-

`(A) IN GENERAL- The Secretary shall produce, distribute, and process common forms in paper format to meet the requirements of paragraph (1). The Secretary shall develop a common paper form for applicants who do not meet the requirements of subparagraph (B).

`(B) EZ FAFSA-

`(i) IN GENERAL- The Secretary shall develop and use a simplified paper application form, to be known as the `EZ FAFSA', to be used for applicants meeting the requirements of section 479(c).

`(ii) REDUCED DATA REQUIREMENTS- The EZ FAFSA shall permit an applicant to submit for financial assistance purposes, only the data elements required to make a determination of whether the applicant meets the requirements under section 479(c).

`(iii) STATE DATA- The Secretary shall include on the EZ FAFSA such data items as may be necessary to award State financial assistance, as provided under paragraph (6), except that the Secretary shall not include a State's data if that State does not permit its applicants for State assistance to use the EZ FAFSA.

`(iv) FREE AVAILABILITY AND PROCESSING- The provisions of paragraph (7) shall apply to the EZ FAFSA, and the data collected by means of the EZ FAFSA shall be available to institutions of higher education, guaranty agencies, and States in accordance with paragraph (9).

`(v) TESTING- The Secretary shall conduct appropriate field testing on the EZ FAFSA.

`(C) PROMOTING THE USE OF ELECTRONIC FAFSA-

`(i) IN GENERAL- The Secretary shall make all efforts to encourage all applicants to utilize the electronic forms described in paragraph (4).

`(ii) MAINTENANCE OF THE FAFSA IN A PRINTABLE ELECTRONIC FILE- The Secretary shall maintain a version of the paper forms described in subparagraphs (A) and (B) in a printable electronic file that is easily portable. The printable electronic file will be made easily accessible and downloadable to students on the same website used to provide students with the electronic application forms described in paragraph (4) of this subsection. The Secretary shall enable students to submit a form created under this subparagraph that is downloaded and printed from an electronic file format in order to meet the filing requirements of this section and in order to receive aid from programs under this title.

`(iii) REPORTING REQUIREMENT- The Secretary shall report annually to Congress on the impact of the digital divide on students completing applications for title IV aid described under this paragraph and paragraph (4). The Secretary will also report on the steps taken to eliminate the digital divide and phase out the paper form described in subparagraph (A) of this paragraph. The Secretary's report will specifically address the impact of the digital divide on the following student populations: independent students, adults, and dependent students.

`(4) ELECTRONIC FORMAT-

`(A) IN GENERAL- The Secretary shall produce, distribute, and process common forms in electronic format to meet the requirements of paragraph (1). The Secretary shall develop common electronic forms for applicants who do not meet the requirements of subparagraph (C) of this paragraph.

`(B) STATE DATA- The Secretary shall include on the common electronic forms space for information that needs to be submitted from the applicant to be eligible for State financial assistance, as provided under paragraph (6), except the Secretary shall not require applicants to complete data required by any State other than the applicant's State of residence.

`(C) SIMPLIFIED APPLICATIONS: FAFSA ON THE WEB-

`(i) IN GENERAL- The Secretary shall develop and use a simplified electronic application form to be used by applicants meeting the requirements under subsection (c) of section 479 and an additional, separate simplified electronic application form to be used by applicants meeting the requirements under subsection (b) of section 479.

`(ii) REDUCED DATA REQUIREMENTS- The simplified electronic application forms shall permit an applicant to submit for financial assistance purposes, only the data elements required to make a determination of whether the applicant meets the requirements under subsection (b) or (c) of section 479.

`(iii) STATE DATA- The Secretary shall include on the simplified electronic application forms such data items as may be necessary to award state financial assistance, as provided under paragraph (6), except that the Secretary shall not require applicants to complete data required by any State other than the applicant's state of residence.

`(iv) AVAILABILITY AND PROCESSING- The data collected by means of the simplified electronic application forms shall be available to institutions of higher education, guaranty agencies, and States in accordance with paragraph (9).

`(v) TESTING- The Secretary shall conduct appropriate field testing on the forms developed under this subparagraph.

`(D) USE OF FORMS- Nothing in this subsection shall be construed to prohibit the use of the forms developed by the Secretary pursuant to this paragraph by an eligible institution, eligible lender, guaranty agency, State grant agency, private computer software provider, a consortium thereof, or such other entities as the Secretary may designate.

`(E) PRIVACY- The Secretary shall ensure that data collection under this paragraph complies with section 552a of title 5, United States Code, and that any entity using the electronic version of the forms developed by the Secretary pursuant to this paragraph shall maintain reasonable and appropriate administrative, technical, and physical safeguards to ensure the integrity and confidentiality of the information, and to protect against security threats, or unauthorized uses or disclosures of the information provided on the electronic version of the forms. Data collected by such electronic version of the forms shall be used only for the application, award, and administration of aid awarded under this title, State aid awarded under section 415C, or aid awarded by eligible institutions or such entities as the Secretary may designate. No data collected by such electronic version of the forms shall be used for making final aid awards under this title until such data have been processed by the Secretary or a contractor or designee of the Secretary, except as may be permitted under this title.

`(F) SIGNATURE- Notwithstanding any other provision of this Act, the Secretary may permit an electronic form under this paragraph to be submitted without a signature, if a signature is subsequently submitted by the applicant or if the applicant uses a personal identification number provided by the Secretary under subparagraph (G) of this paragraph.

`(G) PERSONAL IDENTIFICATION NUMBERS AUTHORIZED- The Secretary may assign to applicants personal identification numbers--

`(i) to enable the applicants to use such numbers in lieu of a signature for purposes of completing a form under this paragraph;

`(ii) to enable the applicants to use such numbers in lieu of a signature for purposes of completing forms required by States under section 415C; and

`(iii) for any purpose determined by the Secretary to enable the Secretary to carry out this title.

`(5) STREAMLINING-

`(A) STREAMLINED REAPPLICATION PROCESS-

`(i) IN GENERAL- The Secretary shall develop streamlined reapplication forms and processes, including both paper and electronic reapplication processes, consistent with the requirements of this subsection, for an applicant who applies for financial assistance under this title in the next succeeding academic year subsequent to the year in which such applicant first applied for financial assistance under this title.

`(ii) MECHANISMS FOR REAPPLICATION- The Secretary shall develop appropriate mechanisms to support reapplication.

`(iii) IDENTIFICATION OF UPDATED DATA- 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.

`(iv) REDUCED DATA AUTHORIZED- Nothing in this title shall be construed as limiting the authority of the Secretary to reduce the number of data elements required of reapplicants.

`(v) ZERO FAMILY CONTRIBUTION- Applicants determined to have a zero family contribution pursuant to section 479(c) shall not be required to provide any financial data in a reapplication form, except that which is necessary to determine eligibility under such section.

`(B) REDUCTION OF DATA ELEMENTS-

`(i) REDUCTION REQUIRED- Of the number of data elements on the FAFSA on the date of enactment of the College Opportunity for All Act (including questions on the FAFSA for the purposes described in paragraph (6)), the Secretary, in cooperation with representatives of agencies and organizations involved in student financial assistance, shall reduce the number of such data elements by 50 percent within 5 years after such date of enactment. Reductions of data elements under paragraph (3)(B), (4)(C), or (5)(A)(iv) shall not be counted towards such 50 percent reduction unless those data elements are reduced for all applicants.

`(ii) REPORT- The Secretary shall submit a report on the process of this reduction to each House of Congress within 2 years after such date of enactment.

`(6) STATE REQUIREMENTS-

`(A) IN GENERAL- The Secretary shall include on the forms developed under this subsection, such State-specific nonfinancial data items as the Secretary determines are necessary to meet State requirements for need-based State aid under section 415C, except as provided in paragraphs (3)(B)(iii) and (4)(C)(iii) of this subsection. Such items shall be selected in consultation with State agencies that submit applications under section 415C in order to assist in the awarding of State financial assistance in accordance with the terms of this subsection, except as provided in paragraphs (3)(B)(iii) and (4)(C)(iii) of this subsection. The number of such data items shall not be less than the number included on the form on October 7, 1998, unless a State notifies the Secretary that the State no longer requires those data items for the distribution of State need-based aid.

`(B) ANNUAL REVIEW- The Secretary shall conduct an annual review process to determine which forms and nonfinancial data items the States require to award need-based State aid and other application requirements that the States may impose.

`(C) STATE USE OF SIMPLIFIED FORMS- The Secretary shall encourage states to take such steps as necessary to encourage the use of simplified application forms, including those described in paragraphs (3)(B) and (4)(C), to meet the requirements under subsection (b) or (c) of section 479.

`(D) FEDERAL REGISTER NOTICE- The Secretary shall publish on an annual basis a notice in the Federal Register requiring State agencies to inform the Secretary--

`(i) if the State agency is unable to permit applicants to utilize the simplified application forms described in paragraphs (3)(B) and (4)(C); and

`(ii) of the State-specific nonfinancial data that the State agency requires for delivery of State need-based financial aid.

`(E) STATE NOTIFICATION TO THE SECRETARY-

`(i) IN GENERAL- Each State agency that submits an application under section 415C shall notify the Secretary--

`(I) whether the State permits an applicant to file a form described in paragraph (3)(B) or (4)(A) of this subsection for purposes of determining eligibility for State need-based grant aid; and

`(II) the State-specific nonfinancial data that the State agency requires for delivery of State need-based financial aid.

`(ii) ACCEPTANCE OF FORMS- In the event that a State does not permit an applicant to file a form described in paragraph (3)(B) or (4)(A) of this subsection for purposes of determining eligibility for State need-based grant aid--

`(I) the State shall notify the Secretary if the State is not permitted to do so because of either State law or because of agency policy; and

`(II) the notification under subclause (I) shall include an estimate of the program cost to permit applicants to complete simplified application forms under paragraphs (3)(B) and (4)(A) of this subsection.

`(iii) LACK OF NOTIFICATION BY THE STATE- If a State does not notify the Secretary pursuant to clause (i), the Secretary shall--

`(I) permit residents of that State to complete simplified application forms under paragraphs (3)(B) and (4)(A) of this subsection; and

`(II) not require any resident of that State to complete any nonfinancial data previously required by that State under this section.

`(7) CHARGES TO STUDENTS AND PARENTS FOR USE OF FORMS PROHIBITED-

`(A) FEES PROHIBITED- The FAFSA, in whatever form (including the EZ-FAFSA, paper, electronic, simplified, or reapplication), 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 the FAFSA. The need and eligibility of a student for financial assistance under parts A through E of this title (other than under subpart 4 of part A) may only be determined by using the FAFSA developed by the Secretary pursuant to this subsection. No student may receive assistance under parts A through E of this title (other than under subpart 4 of part A), except by use of the FAFSA developed by the Secretary pursuant to this subsection. No data collected on a form for which a fee is charged shall be used to complete the FAFSA.

`(B) NOTICE- Any entity that provides to students and parents, or charges students or parents for, any value-added services with respect to or in connection with the FAFSA, such as completion of the FAFSA, submission of the FAFSA, or tracking of the FAFSA for a student, shall provide to students and parents clear and conspicuous notice that--

`(i) the FAFSA is a free Federal student aid application;

`(ii) the FAFSA can be completed without professional assistance; and

`(iii) includes the current Internet address for the FAFSA on the Department's web site.

`(8) APPLICATION PROCESSING CYCLE- The Secretary shall enable students to submit a form created under this subsection in order to meet the filing requirements of this section and in order to receive aid from programs under this title and shall initiate the processing of applications under this subsection as early as practicable prior to January 1 of the student's planned year of enrollment.';

(B) by adding at the end of subsection (a) the following paragraph:

`(13) EARLY APPLICATION AND AWARD DEMONSTRATION PROGRAM-

`(A) PROGRAM REQUIRED- The Secretary shall, no later than two years after the date of enactment of the College Opportunity for All Act, implement an early application demonstration program enabling dependent students to complete applications under this subsection in their junior year of high school, or in the academic year that is two years prior to their intended year of enrollment, and to be eligible to receive aid under this title and such aid as may be available from participants, including State financial assistance as provided under section 415C and other aid provided by participating institutions.

`(B) PURPOSE AND OBJECTIVES- The purpose of the demonstration program under this paragraph shall be to measure the benefits, in terms of student aspirations and plans to attend college, and the adverse effects, in terms of program costs, integrity, distribution, and delivery of aid under this title, of implementing an early application system for all dependent students that allows dependent students to apply for financial aid using information from the year prior to the year prior to enrollment. Additional objectives associated with implementation of the demonstration program are the following:

`(i) Measure the feasibility of enabling dependent students to apply for Federal, State, and institutional financial aid in their junior year of high school, using information from the year prior to the year prior to enrollment, by completing any of the application forms under this subsection.

`(ii) Determine the feasibility, benefits, and adverse effects of implementing a data match with the Internal Revenue Service (IRS).

`(iii) Identify whether receiving final financial aid awards no later than the fall of the senior year provides students with additional time to compete for the limited resources available for State and institutional financial aid and positively impacts the college aspirations and plans of these students.

`(iv) Measure the impact of using income information from the year prior to the year prior to enrollment on--

`(I) eligibility for financial aid under this title and for other institutional aid; and

`(II) the cost of financial aid programs under this title.

`(iv) Effectively evaluate the benefits and adverse effects of the demonstration program on program costs, integrity, distribution, and delivery of aid.

`(C) PARTICIPANTS- The Secretary shall select States and institutions within those States to participate in the demonstration program under this paragraph that are participating in the programs under this title and that are willing to make final financial aid awards to students based on their application information from the year prior to the year prior to enrollment. The Secretary shall also select as participants in the demonstration program secondary schools and dependent students that are located in the participating States.

`(D) APPLICATION PROCESS- The Secretary shall insure that the following provisions are included in the demonstration program:

`(i) Participating States and institutions shall allow participating students to apply for financial aid during their junior year of high school using information from the year prior to the year prior to enrollment and all provisions available under this title and shall award final financial aid awards to participating students based on the applications provided under this demonstration program.

`(ii) Participating States and institutions shall not require students participating in this demonstration program to complete an additional application in the year prior to enrollment in order to receive State aid under section 415C and any other institutional aid.

`(iii) Financial aid administrators at participating institutions shall be allowed to use their discretion in awarding financial aid to participating students, as outlined under section 479A and section 480(d)(7).

`(E) DATA MATCH WITH THE INTERNAL REVENUE SERVICE- The Secretary shall include in this demonstration project a data match with the Internal Revenue Service in order to verify data provided by participating students and gauge the feasibility of implementing such a data match for all students applying for aid under this title.

`(F) EVALUATION- The Secretary shall conduct a rigorous evaluation of this demonstration program in order to measure its benefits and adverse effects as indicated under subparagraph (A).

`(G) OUTREACH- The Secretary shall make appropriate efforts in order to notify States of the demonstration program under this paragraph. Upon determination of participating States, the Secretary shall continue to make efforts to notify institutions and dependent students within participating States of the opportunity to participate in the demonstration program and of the participation requirements.'

(C) by striking subsection (b);

(D) by redesignating subsections (c), (d), and (e) as subsections (b), (c), and (d), respectively.

(2) MASTER CALENDAR- Section 482(a)(1)(B) (20 U.S.C. 1089) is amended to read as follows:

`(B) by March 1: proposed modifications, updates, and notices pursuant to sections 479(c)(2)(C), 478, and 483(a)(6) published in the Federal Register;'.

(c) Increasing Access to Technology- Section 483 (20 U.S.C. 1087ss) is further amended by adding at the end the following:

`(e) Addressing the Digital Divide- The Secretary shall utilize savings accrued by moving more applicants to the electronic forms described in subsection (a)(4) to improve access to the electronic forms described in subsection (a)(4) for applicants meeting the requirements of section 479(c).'

(d) Simplify the Treatment of Income: Reducing Untaxed Income and Benefits- Subsection (b) of section 480 (20 U.S.C. 1087vv(b)) is amended to read as follows:

`(b) Untaxed Income and Benefits-

`(1) The term `untaxed income and benefits' means--

`(A) child support received;

`(B) workman's compensation;

`(C) veteran's benefits such as death pension, dependency, and indemnity compensation, but excluding veterans' education benefits as defined in subsection (c);

`(D) interest on tax-free bonds;

`(E) housing, food, and other allowances (excluding rent subsidies for low-income housing) for military, clergy, and others (including cash payments and cash value of benefits);

`(F) cash support or any money paid on the student`s behalf, except, for dependent students, funds provided by the student's parents;

`(G) untaxed portion of pensions;

`(H) payments to individual retirement accounts and Keogh accounts excluded from income for Federal income tax purposes; and

`(I) any other untaxed income and benefits, such as Black Lung Benefits, Refugee Assistance, railroad retirement benefits, or Job Training Partnership Act noneducational benefits or benefits received through participation in employment and training activities under title I of the Workforce Investment Act of 1998.

`(2) The term `untaxed income and benefits' shall not include the amount of additional child tax credit claimed for Federal income tax purposes.'.

(e) Reducing the Number of Questions- Section 484 (20 U.S.C. 1091) is amended by striking subsection (r).

(f) Allowance for State and Other Taxes-

(1) ALLOWANCE FOR STATE AND LOCAL TAXES- Section 478 (20 U.S.C. 1087rr) is amended--

(A) by striking subsection (g); and

(B) by redesignating subsection (h) as subsection (g).

(2) HOLDING STUDENTS HARMLESS- Section 475(c) (20 U.S.C. 1087oo(c)) is amended--

(A) in paragraph (1):

(i) by striking subparagraph (B); and

(ii) by redesignating subparagraphs (C), (D), (E), and (F) as subparagraphs (B), (C), (D), and (E), respectively;

(B) by striking paragraph (2);

(C) by striking paragraph (4) and inserting the following:

`(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 $15,207 $12,599                                                          $3,641 

                       3  18,937  16,350           $13,742                                               

                       4  23,388  20,779            18,193 $15,596                                       

                       5  27,595  24,986            22,400  19,802 $17,216                               

                       6  32,268  29,670            27,084  24,487  21,900                               

For each additional add:   2,586   2,586             2,586   2,586   2,586                            '; 

---------------------------------------------------------------------------------------------------------

and

(D) by redesignating paragraphs (3), (4) and (5) as paragraphs (2), (3) and (4), respectively.

(3) DEPENDENT STUDENT INCREASE IN INCOME PROTECTION ALLOWANCE- Section 475(g) (20 U.S.C. 1087oo(g)) is amended--

(A) in paragraph (2)--

(i) by striking subparagraph (B);

(ii) by striking subparagraph (D) and inserting the following:

`(D) an income protection allowance of $2,589 (or a successor amount prescribed by the Secretary under section 478);'; and

(iii) by redesignating subparagraphs (C), (D), (E), and (F) as subparagraphs (B), (C), (D), and (E), respectively;

(B) by striking paragraph (3); and

(C) by redesignating paragraphs (4), (5), and (6) as paragraphs (3), (4), and (5), respectively.

(4) INDEPENDENT STUDENT (WITHOUT DEPENDENTS) INCREASE IN INCOME PROTECTION ALLOWANCE- Section 476(b) (20 U.S.C. 1087pp(b)) is amended--

(A) in subparagraph (A) of paragraph (1)--

(i) by striking clause (ii);

(ii) by striking subclauses (I), (II) and (III) of clause (iv) and inserting the following:

`(I) $5,874 for single students;

`(II) $5,874 for married students who are both enrolled pursuant to subsection (a)(2); and

`(III) $9,395 for married students where one is enrolled pursuant to subsection (a)(2);'; and

(iii) by redesignating clauses (iii), (iv), (v), (vi), as clauses (ii), (iii), (iv), and (v), respectively;

(B) by striking paragraph (2); and

(C) by redesignating paragraphs (3), (4), and (5) as paragraphs (2), (3), and (4), respectively.

(5) INDEPENDENT STUDENT (WITH DEPENDENTS) INCREASE IN INCOME PROTECTION ALLOWANCE- Section 477(b) (20 U.S.C. 1087qq(b)) is amended--

(A) in paragraph (1)--

(i) by striking subparagraph (B); and

(ii) by redesignating (C), (D), (E), and (F) as subparagraphs (B), (C), (D), and (E), respectively;

(B) by striking paragraph (2);

(C) by striking paragraph (4) and inserting the following:

`(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 $16,935 $12,599                                                          $3,641 

                       3  18,937  16,350           $13,742                                               

                       4  23,384  20,779            18,193 $15,596                                       

                       5  27,596  24,986            22,400  19,802 $17,216                               

                       6  32,268  29,670            27,084  24,487  21,900                               

For each additional add:   2,586   2,586             2,586   2,586   2,586                            '; 

---------------------------------------------------------------------------------------------------------

and

(D) by redesignating paragraphs (3), (4), and (5) as paragraphs (2), (3), and (4), respectively.

(6) CONFORMING AMENDMENT: UPDATES- Section 478(b) (20 U.S.C. 1087rr(b)) is amended--

(A) in paragraph (1)--

(i) by striking `1993-1994' and inserting `2005-2006';

(ii) by striking `475(c)(4) and 477(b)(4)' and inserting `475(c)(3) and 477(b)(3)'; and

(iii) by striking `December 1992' and inserting `December 2004'; and

(B) in paragraph (2)--

(i) by striking `2000-2001' and inserting `2005-2006';

(ii) by striking `475(g)(2)(D) and 476(b)(1)(A)(iv)' and inserting `475(g)(2)(C) and 476(b)(1)(A)(iii)'; and

(iii) by striking `December 1999' and inserting `December 2004'.

(g) Relief for Working Students-

(1) DEPENDENT STUDENTS- Paragraph (4) of section 475(g) (20 U.S.C. 1087oo(g)(4)), as redesignated by subsection (f)(3)(C), is amended to read as follows:

`(4) the student's available income (determined in accordance with paragraph (1) of this subsection) is assessed at 40 percent.'

(2) INDEPENDENT STUDENTS WITHOUT DEPENDENTS OTHER THAN A SPOUSE- Paragraph (4) of section 476(b) (20 U.S.C. 1087pp(b)), as redesignated by subsection (f)(3)(C), is amended to read as follows:

`(4) ASSESSMENT OF AVAILABLE INCOME- The family's available income (determined in accordance with paragraph (1)(A) of this subsection) is assessed at 40 percent.'.

(h) Simplifying for Students With Special Circumstances- Section 480 (20 U.S.C. 1087vv) is amended by striking subsection (d) and inserting the following:

`(d) Independent Student-

`(1) DEFINITION- The term `independent' when used with respect to a student, means any individual who--

`(A) is 24 years of age or older by December 31 of the award year;

`(B) is an orphan, in foster care, or a ward of the court, or was in foster care or a ward of the court until the individual reached the age of 18;

`(C) is an emancipated youth as defined by his or her state of legal residence or is in legal guardianship as defined by section 475(7) of the Social Security Act;

`(D) is a veteran of the Armed Forces of the United States (as defined in subsection (c)(1));

`(E) is a graduate or professional student;

`(F) is a married individual;

`(G) has legal dependents other than a spouse; or

`(H) is a student for whom a financial aid administrator makes a documented determination of independence by reason of unusual circumstances.

`(2) SIMPLIFYING THE DEPENDENCY OVERRIDE PROCESS- Nothing in this subsection shall prohibit a financial aid administrator to make a determination of independence, as defined in paragraph (1)(H), based upon a documented determination of independence, as defined in paragraph (1)(H), previously made by another financial aid administrator in the same application year.'.

(i) Tailoring Electronic Applications for Students With Special Circumstances- Section 483(a) of the Higher Education Act is further amended by inserting after paragraph (13), as added by subsection (b)(1)(B) of this section, the following new paragraph:

`(14) APPLICATIONS FOR STUDENTS SEEKING A DOCUMENTED DETERMINATION OF INDEPENDENCE- In the case of dependent students seeking a documented determination of independence by a financial aid administrator (as defined by section 480(d)), nothing in this section shall prohibit the Secretary from--

`(A) allowing such students to indicate their special circumstance on an electronic form developed pursuant for this section;

`(B) collecting and processing on a preliminary basis data provided by such students using the electronic forms developed pursuant for this section; and

`(C) distributing such data to institutions of higher education, guaranty agencies, and States for the purposes of processing loan applications and determining need and eligibility for institutional and State financial aid awards on a preliminary basis, pending a documented determination of independence by a financial aid administrator.'.

SEC. 110. AUTHORIZATIONS OF APPROPRIATIONS FOR CAMPUS-BASED AID.

(a) Federal TRIO Program Authorizations- Section 402A(f) (20 U.S.C. 1070a-11(f)) is amended--

(1) by striking `$700,000,000 for fiscal year 1999' and inserting `$1,250,000,000 for fiscal year 2004'; and

(2) by striking `4 succeeding fiscal years' and inserting `5 succeeding fiscal years'.

(b) GEARUP- Section 404H (20 U.S.C. 1070a-28) is amended to read as follows:

`SEC. 404H. AUTHORIZATION OF APPROPRIATIONS.

`There are authorized to be appropriated to carry out this chapter--

`(1) $500,000,000 for fiscal year 2006; and

`(2) such sums as may be necessary for each of the 5 succeeding fiscal years.'.

(c) Federal Supplemental Educational Opportunity Grants-

(1) AUTHORIZATION- Section 413A(b)(1) (20 U.S.C. 1070b(b)(1)) is amended--

(A) by striking `$675,000,000 for fiscal year 1999' and inserting `$1,000,000,000 for fiscal year 2006'; and

(B) by striking `4 succeeding fiscal years' and inserting `5 succeeding fiscal years'.

(2) MAXIMUM GRANT- Section 413B(a)(2) (20 U.S.C. 1070b-1(a)(2)) is amended by striking `$4,000' and inserting `$8,000'.

(d) College Work-Study- Section 441(b) (20 U.S.C. 2751(b)) is amended to read as follows:

`(b) Authorization of Appropriations- There are authorized to be appropriated to carry out this part--

`(1) $1,500,000,000 for fiscal year 2006; and

`(2) such sums as may be necessary for each of the 5 succeeding fiscal years.'.

SEC. 111. SPECIAL PROGRAMS FOR STUDENTS WHOSE FAMILIES ARE ENGAGED IN MIGRANT AND SEASONAL FARM WORK.

Section 418A (20 U.S.C. 1070d-2) is amended--

(1) in subsection (b)(1)(B)(i), by inserting `or whose spouse' after `themselves';

(2) in subsection (b)(3)(B), by inserting `, including preparation for college entrance exams,' after `program';

(3) in subsection (b)(8), by inserting `, including child care and transportation' after `students';

(4) by striking `and' at the end of subsection (b)(7), by striking the period at the end of subsection (b)(8) and inserting `; and', and by adding at the end of subsection (b) the following new paragraph:

`(9) follow up activity and reporting requirements, except that not more than 2 percent of the funds provided under this section may be used for such purposes.';

(5) in subsection (c)(1)(A), by inserting `or whose spouse' after `themselves';

(6) in subsection (c)(2)(B), by inserting `(including mentoring and guidance of such students)' after `services';

(7) in subsection (c)(2), by striking `and' at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting `; and', and by adding at the end of subsection (c)(2) the following new subparagraph:

`(C) for students in any program that does not award a bachelor's degree, encouraging the transfer to, and persistence in, such a program, and monitoring the rate of such transfer, persistence, and completion.'; and

(8) in subsection (h)--

(A) in paragraph (1), by striking `$15,000,000 for fiscal year 1999 and such sums as may be necessary for each of the 4 succeeding fiscal years' and inserting `$24,000,000 for fiscal year 2006 and such sums as may be necessary for each of the 5 succeeding fiscal years'; and

(B) in paragraph (2), by striking `$5,000,000 for fiscal year 1999 and such sums as may be necessary for each of the 4 succeeding fiscal years' and inserting `$16,000,000 for fiscal year 2006 and such sums as may be necessary for each of the 5 succeeding fiscal years'.

SEC. 112. INITIATIVE TO ENHANCE COLLEGE GRADUATION RATES AND TO ACCELERATE TIME TO DEGREE.

Part A of title IV is amended by inserting after subpart 7 the following new subpart:

`Subpart 8--Initiative to Enhance College Graduation Rates and to Accelerate Time to Degree

`SEC. 419P. PROGRAM AUTHORIZED.

`(a) Purpose- It is the purpose of this subpart to establish a six-year demonstration initiative to test whether Federal financial aid can be leveraged more effectively to reduce postsecondary remediation rates and improve degree attainment rates for low-income students and former high school dropouts by allowing income-eligible high school students to use Federal grants to get a head start on college.

`(b) Definition of an Early College High School- A secondary school is eligible for purposes of this subpart if such school--

`(1) is a secondary school that has an enrollment of high school-aged students--

`(A) all of which are taking at least 50 percent of their courses at the college level over 4 or 5 years; and

`(B) all of which, upon their graduation from high school, are working towards earning an associates degree or up to 2 years of transferable college credit; or

`(2) is a secondary school that--

`(A) has a partnership agreement establishing co-governance of the demonstration sites between local educational agencies, secondary schools, postsecondary institutions, or other partnering agencies (or any combination thereof), including through a non-profit intermediary facilitating such partnerships;

`(B) supports cohorts of students in a coherent course of study with strong individualized services supporting students;

`(C) encourages accelerated accumulation of college credits;

`(D) allows students to earn both a high school diploma and college credit through a coherent course of study enabling the attainment of credit towards a postsecondary degree or credential;

`(E) provides services to underrepresented populations such as students eligible for Pell grants, first-generation college students, students from school districts with high concentrations of poverty, English language learners, or former high school dropouts; and

`(F) includes the participation of postsecondary institutions that are in good standing under the Title IV programs.

`(c) Application- An early college high school which is a local education agency or a local education agency on behalf of an early college high school which desires to receive a grant under this section may submit an application to the Secretary at such time and containing such information as the Secretary may require. Such application shall require applicants to establish goals for how many students will participate in the program, and goals for the academic progress of participating students toward earning their high school diploma and associate's degree, or transferable college credit, or both.

`(d) Selection of Grant Recipients- The Secretary shall select grant recipients on a competitive basis. In making grants under this section the Secretary shall award grants in an amount not less than $1,000,000.

`(e) Evaluation-

`(1) ANNUAL EVALUATION- The Secretary of Education shall evaluate the programs under this section on an annual basis. Such evaluations shall include--

`(A) the extent to which the institution, or partnership has met the goals set forth in its application to the Secretary;

`(B) the number of students participating in the program offered, including the progress of participating students towards earning their high school diploma and their associate's degree, or transferable college credit, or both; and

`(C) as consistent with the goals set forth in the application to the Secretary, the number of former high school drop outs participating in the program.

`(2) OTHER EVALUATIONS- Within 18 months of the start of the demonstration initiative, the Secretary of Education shall report to the Committee on Education and the Workforce of the House of Representatives and the Committee on Health, Education, Labor, and Pensions of the Senate with respect to--

`(A) the evaluation of the demonstration program under this section; and

`(B) any proposed statutory changes to enhance the success of the programs under this section.

`(f) Authorization- There are authorized to be appropriated to carry out this subpart $100,000,000 for fiscal year 2006 and such sums as may be necessary for each of the 5 succeeding fiscal years.'.

SEC. 113. CONSOLIDATION LOAN LENDER OF CHOICE.

(a) Student Loan Borrower Choice of Loan Consolidator- Section 428C(b)(1)(A) of the Higher Education Act of 1965 (20 U.S.C. 1078-3(b)(1)(A)) is amended by striking `and (i) the lender holds' and all that follows through `selected for consolidation)'.

(b) Consolidation Loan Disclosure by Lenders- Section 428C(b)(1) of the Higher Education Act of 1965 (20 U.S.C. 1078-3(b)(1)) is amended--

(1) by striking `and' at the end of subparagraph (E);

(2) by redesignating subparagraph (F) as subparagraph (G); and

(3) by inserting after subparagraph (E) the following new subparagraph:

`(F) that each applicant for a consolidation loan will be provided a clear and conspicuous notice, in such form as the Secretary shall prescribe, describing--

`(i) the effects of a consolidation loan and its available repayment plans on the borrower's interest rate;

`(ii) the amount of his or her monthly and total payments, total interest accrued, and the length of the repayment term;

`(iii) the ability of the student borrower to pre-pay loans; and

`(iv) the differences between variable and fixed interest rates;'.

(c) Disclosures by Institutions During Exit Counseling- Section 485(b) of the Higher Education Act of 1965 (20 U.S.C. 1092(b)) is amended by adding at the end the following new paragraph:

`(3) Each eligible institution shall provide to the borrower of a loan made under part B, D, or E, during the exit interview required by this subsection, a clear and conspicuous notice, in such form as the Secretary shall prescribe, describing the effect of using a consolidation loan to discharge the borrower's student loans, and including, with respect to a series of loan amounts ranges--

`(A) the differences between fixed and variable interest rates;

`(B) the effects of consolidation loan and its available repayment plans on the borrower's interest rate, the amount of his or her monthly and total payments, total interest accrued, and the length of repayment term; and

`(C) the ability of the student to prepay loans.'.

SEC. 114. ESTABLISHING ADDITIONAL SAFEGUARDS ON SCHOOLS ACTING AS LENDERS UNDER THE FEDERAL FAMILY EDUCATION LOAN PROGRAM.

Section 435(d)(2) (20 U.S.C. 1085(d)(2)) is amended to read as follows:

`(2) REQUIREMENTS FOR ELIGIBLE INSTITUTIONS-

`(A) IN GENERAL- To be an eligible lender under this part, an eligible institution

`(i) shall employ at least one person whose full-time responsibilities are limited to the administration of programs of financial aid for students attending such institution;

`(ii) shall not be a home study school;

`(iii) shall make loans to not more than 50 percent of the undergraduate students at the institution;

`(iv) shall not make a loan, other than a loan to a graduate or professional student, unless the borrower has previously received a loan from the school;

`(v) shall award any contract for financing, servicing, administration, or administration of loans under this title on a competitive basis;

`(vi) shall offer loans which carry a reduced origination fee, or a lower interest rate, or both, than are authorized under the provisions of this title;

`(vii) shall not have a cohort default rate (as defined in section 435(m)) greater than 10 percent;

`(viii) shall use any proceeds from special allowance payments and interest payments from borrowers, and any proceeds from the sale or other disposition of loans, for need-based grant programs; and

`(ix) shall, for any year for which the institution engages in activities as an eligible lender, provide for a compliance audit conducted in accordance with section 428(b)(1)(U)(iii)(I), and the regulations thereunder, and submit the results of such audit to the Secretary.

`(B) ADMINISTRATIVE EXPENSES- An eligible lender under subparagraph (A) shall be permitted to use a portion of the proceeds described in subparagraph (A)(viii) for reasonable and direct administrative expenses.

`(C) SUPPLEMENT, NOT SUPPLANT- An eligible lender under subparagraph (A) shall ensure that the proceeds described in subparagraph (A)(viii) are used to supplement, and not to supplant, non-Federal funds that would otherwise be used for need-based grant programs.'.

SEC. 115. BOOSTING OPPORTUNITIES FOR LOW-INCOME PARENTS TO PURSUE COLLEGE DEGREES.

(a) Minimum Grant- Section 419N(b)(2)(B) (20 U.S.C. 1070e(b)(2)(B)) is amended by striking `$10,000' and inserting `$30,000'.

(b) Eligible Institutions- Section 419N(b)(4) is amended by striking `$350,000' and inserting `$250,000'.

(c) Income Eligibility- Section 419N(b)(7) is amended by striking `who is eligible to receive' and inserting `whose income qualifies for eligibility for'.

(d) Publicity- Section 419N(b) is further amended by adding at the end the following new paragraph:

`(8) PUBLICITY- The Secretary shall publicize the availability of grants under this section in appropriate periodicals, in addition to publication in the Federal Register, and shall inform appropriate educational organizations of such availability.'.

(e) Authorization of Appropriations- Section 419N(g) is amended by striking `$45,000,000 for fiscal year 1999' and inserting `$75,000,000 for fiscal year 2006'.

SEC. 116. SUPPORT FOR COMMUNITY SERVICE IN COLLEGE WORK-STUDY PROGRAM.

(a) Authorization of Appropriations-

(1) AMENDMENT- Section 441(b) (20 U.S.C. 2751(b)) is amended to read as follows:

`(b) Authorization of Appropriations-

`(1) IN GENERAL- There are authorized to be appropriated to carry out this part (other than for community service competitive grants)--

`(A) $1,500,000,000 for fiscal year 2006; and

`(B) such sums as may be necessary for each of the 5 succeeding fiscal years.

`(2) COMMUNITY SERVICE COMPETITIVE GRANTS- There are authorized to be appropriated to make community service competitive grants under section 447(b)--

`(A) $350,000,000 for fiscal year 2006; and

`(B) such sums as may be necessary for each of the 5 succeeding fiscal years.'.

(2) CONFORMING AMENDMENTS- Section 442 (42 U.S.C. 2752) is amended by striking `section 441(b)' each place it appears and inserting `section 441(b)(1)'.

(b) Competitive Community Service Grants- Section 447 (42 U.S.C. 2756a) is amended--

(1) by striking `Each institution' and inserting the following:

`(a) Use of Administrative Funds- '; and

(2) by adding at the end the following new subsection:

`(b) Competitive Grants to Further Enhance Community Service-

`(1) GRANTS AUTHORIZED- From the amounts appropriated under section 441(b)(2), the Secretary is authorized to award competitive grants to institutions that dedicate a significantly greater proportion of their allocations under section 442 to providing community service opportunities under this part.

`(2) MINIMUM GRANT; DURATION- The minimum grant the Secretary shall award under this subsection shall be $500,000, except that the Secretary may increase such amount based on the number of participants and the level of community service. A grant awarded under this subsection shall be for a single academic year, but such grants may be continued in subsequent years to successful competitors.

`(3) APPLICATIONS; AGREEMENTS- Any institution of higher education desiring to obtain a grant under this subsection shall submit an application therefor to the Secretary at such time, in such form, and containing or accompanied by such information and agreements as the Secretary may require.'.

SEC. 117. B.J. STUPAK OLYMPIC SCHOLARSHIPS.

Section 1543(d) of the Higher Education Amendments of 1992 (20 U.S.C. 1070 note) is amended by striking `1999' and inserting `2006'.

SEC. 118. REDUCTION OF GUARANTY AGENCY PAYMENTS.

(a) Insurance Percentages- Subparagraph (G) of section 428(b)(1) (20 U.S.C. 1078(b)(1)(G)) is amended to read as follows:

`(G) insures 98 percent of the unpaid principal of loans insured under the program, except that--

`(i) such program shall insure 100 percent of the unpaid principal of loans made with funds advanced pursuant to section 428(j) or 439(q); and

`(ii) with respect to any loan for which the first disbursement of principal is made on or after October 1, 2006, the preceding provisions of this subparagraph shall be applied--

`(I) by substituting `95 percent' for `98 percent'; and

`(II) by substituting `97 percent' for `100 percent';'.

(b) Retention of Collections- Subparagraph (B) of section 428(c)(6) (20 U.S.C. 1078(c)(6)(B)) is amended to read as follows:

`(B) an amount equal to the following percentage of such payments for use in accordance with section 422B--

`(i) from October 1, 2003, until September 30, 2006, inclusive, 23 percent;

`(ii) from October 1, 2006, until September 30, 2008, inclusive, 20 percent;

`(iii) from October 1, 2008, until September 30, 2010, inclusive, 18 percent; and

`(iv) after September 30, 2010, 16 percent.'.

TITLE II--TEACHER QUALITY

SEC. 201. TEACHER RECRUITING AND PREPARATION.

(a) TEACH Grants- Title II of the Higher Education Act of 1965 (20 U.S.C. 1021 et seq.) is amended by adding at the end the following new part:

`PART C--TEACH GRANTS

`SEC. 231. PURPOSES.

`The purposes of the part are--

`(1) to improve student academic achievement;

`(2) to help recruit and prepare teachers to meet the national demand for a highly qualified teacher in every classroom; and

`(3) to increase opportunities for Americans of all educational, ethnic, class, and geographic backgrounds to become highly qualified teachers.

`SEC. 232. PROGRAM ESTABLISHED.

`(a) Program Authority-

`(1) PAYMENTS REQUIRED- For each of the fiscal years 2006 through 2013, the Secretary shall pay to each eligible institution such sums as may be necessary to pay to each eligible student (defined in accordance with section 484) who files an application and agreement in accordance with section 233, and qualifies under subsection (a)(2) of such section, a TEACH Grant in the amount of $4,000 for each academic year during which that student is in attendance at an institution of higher education.

`(2) REFERENCE- Grants made under this part shall be known as `Teacher Education Assistance for College and Higher Education Grants' or `TEACH Grants'.

`(b) Payment Methodology-

`(1) PREPAYMENT- Not less than 85 percent of such sums shall be advanced to eligible institutions prior to the start of each payment period and shall be based upon an amount requested by the institution as needed to pay eligible students until such time as the Secretary determines and publishes in the Federal Register with an opportunity for comment, an alternative payment system that provides payments to institutions in an accurate and timely manner, except that this sentence shall not be construed to limit the authority of the Secretary to place an institution on a reimbursement system of payment.

`(2) DIRECT PAYMENT- Nothing in this section shall be interpreted to prohibit the Secretary from paying directly to students, in advance of the beginning of the academic term, an amount for which they are eligible, in cases where the eligible institution elects not to participate in the disbursement system required by paragraph (1).

`(3) DISTRIBUTION OF GRANTS TO STUDENTS- Payments under this part shall be made, in accordance with regulations promulgated by the Secretary for such purpose, in such manner as will best accomplish the purpose of this part. Any disbursement allowed to be made by crediting the student's account shall be limited to tuition and fees and, in the case of institutionally owned housing, room and board. The student may elect to have the institution provide other such goods and services by crediting the student's account.

`(c) Reductions in Amount-

`(1) PART TIME STUDENTS- In any case where a student attends an institution of higher education on less than a full-time basis (including a student who attends an institution of higher education on less than a half-time basis) during any academic year, the amount of the TEACH Grant for which that student is eligible shall be reduced in proportion to the degree to which that student is not so attending on a full-time basis, in accordance with a schedule of reductions established by the Secretary for the purposes of this part, computed in accordance with this part. Such schedule of reductions shall be established by regulation and published in the Federal Register in accordance with section 482 of this Act.

`(2) NO EXCEEDING COST- No TEACH Grant under this part shall exceed the the cost of attendance (as defined in section 472) at the institution at which that student is in attendance. If, with respect to any student, it is determined that the amount of a TEACH Grant exceeds the cost of attendance for that year, the amount of the TEACH Grant shall be reduced until the TEACH Grant does not exceed the cost of attendance at such institution.

`(d) Period of Eligibility for Grants-

`(1) UNDERGRADUATE STUDENTS- The period during which an undergraduate student may receive TEACH Grants shall be the period required for the completion of the first undergraduate baccalaureate course of study being pursued by that student at the institution at which the student is in attendance except that--

`(A) any period during which the student is enrolled in a noncredit or remedial course of study as defined in paragraph (3) shall not be counted for the purpose of this paragraph; and

`(B) the total amount that a student may receive under this part for undergraduate study shall not exceed $16,000.

`(2) GRADUATE STUDENTS- The period during which a graduate student may receive TEACH Grants shall be the period required for the completion of a master's degree course of study being pursued by that student at the institution at which the student is in attendance, except that the total amount that a student may receive under this part for graduate study shall not exceed $8,000.

`(3) REMEDIAL COURSE; STUDY ABROAD- Nothing in this section shall exclude from eligibility courses of study which are noncredit or remedial in nature (including courses in English language acquisition) which are determined by the institution to be necessary to help the student be prepared for the pursuit of a first undergraduate baccalaureate degree or certificate or, in the case of courses in English language instruction, to be necessary to enable the student to utilize already existing knowledge, training, or skills. Nothing in this section shall exclude from eligibility programs of study abroad that are approved for credit by the home institution at which the student is enrolled.

`SEC. 233. ELIGIBILITY AND APPLICATIONS FOR GRANTS.

`(a) Applications; Demonstration of Eligibility-

`(1) FILING REQUIRED- The Secretary shall from time to time set dates by which students shall file applications for TEACH Grants under this part. Each student desiring a TEACH Grant for any year shall file an application therefore containing such information and assurances as the Secretary may deem necessary to enable the Secretary to carry out the functions and responsibilities of this part.

`(2) DEMONSTRATION OF ELIGIBILITY- Each such application shall contain such information as is necessary to demonstrate that--

`(A) if the applicant is an enrolled student--

`(i) the student is an eligible student for purposes of section 484 (other than subsection (r) of such section);

`(ii) the student--

`(I) has a grade point average that is determined, under standards prescribed by the Secretary, to be comparable to a 3.25 average on a zero to 4.0 scale, except that, if the student is in the first year of a program of undergraduate education, such grade point average shall be determined on the basis of the student's cumulative high school grade point average; or

`(II) displayed high academic aptitude by receiving a score above the 75th percentile on at least one of the batteries in a undergraduate or graduate school admissions test; and

`(iii) the student is completing coursework and other requirements necessary to begin a career in teaching, or plans to complete such coursework and requirements prior to graduating; or

`(B) if the applicant is a current or prospective teacher applying for a grant to obtain a graduate degree--

`(i) the applicant is a teacher or a retiree from another occupation with expertise in a field in which there is a shortage of teachers, such as math, science, special education, English language acquisition, or another high-need subject; or

`(ii) the applicant is or was a teacher who is using high-quality alternative certification routes, such as Teach for America, to get certified.

`(b) Agreements to Serve- Each application under subsection (a) shall contain or be accompanied by an agreement by the applicant that--

`(1) the applicant will--

`(A) serve as a full-time teacher for a total of not less than 4 academic years within 8 years after completing the course of study for which the applicant received a TEACH Grant under this part;

`(B) teach--

`(i) in a school described in section 465(a)(2)(A); and

`(ii) in any of the following fields: mathematics, science, a foreign language, bilingual education, or special education, or as a reading specialist, or another field documented as high-need by the Federal Government, State government, or local education agency and submitted to the Secretary;

`(C) submit evidence of such employment in the form of a certification by the chief administrative officer of the school upon completion of each year of such service; and

`(D) comply with the requirements for being a highly qualified teacher as defined in section 9101 of the Elementary and Secondary Education Act of 1965; and

`(2) in the event that the applicant is determined to have failed or refused to carry out such service obligation, the sum of the amounts of such Grants will be treated as a loan and collected from the applicant in accordance with subsection (c) and the regulations thereunder.

`(c) Repayment for Failure to Complete Service- In the event that any recipient of an TEACH Grant fails or refuses to comply with the service obligation in the agreement under subsection (b), the sum of the amounts of such Grants provided to such recipient shall be treated as a Direct Loan under part D of title IV, and shall be subject to repayment in accordance with terms and conditions specified by the Secretary in regulations under this part.'.

(b) Recruiting Teachers With Math, Science, or Language Major- Title II of the Higher Education Act of 1965 is further amended by adding after part C (as added by subsection (a)) the following new part:

`PART D--RECRUITING TEACHERS WITH MATH, SCIENCE, OR LANGUAGE MAJORS

`SEC. 241. PROGRAM AUTHORIZED.

`(a) Grants Authorized- From the amounts appropriated under section 242, the Secretary shall make competitive grants to institutions of higher education to improve the availability and recruitment of teachers from among students majoring in math, science, foreign languages, special education, or teaching the English language to students with limited English proficiency. In making such grants, the Secretary shall give priority to programs that focus on preparing teachers in subjects in which there is a shortage of highly qualified teachers and that prepare students to teach in high-need schools.

`(b) Application- Any institution of higher education desiring to obtain a grant under this part shall submit to the Secretary an application at such time, in such form, and containing such information and assurances as the Secretary may require, which shall--

`(1) include reporting on baseline production of teachers with expertise in math, science, a foreign language, or teaching English language learners; and

`(2) establish a goal and timeline for increasing the number of such teachers who are prepared by the institution.

`(c) Use of Funds- Funds made available by grant under this part--

`(1) shall be used to create new recruitment incentives to teaching from other majors, with an emphasis on high-need subjects such as math, science, foreign languages, and teaching the English language to students with limited English proficiency;

`(2) may be used to upgrade curriculum in order to provide all students studying to become teachers with high-quality instructional strategies for teaching reading and teaching the English language to students with limited English proficiency, and for modifying instruction to teach students with special needs;

`(3) may be used to integrate school of education faculty with other arts and science faculty in math, science, foreign languages, and teaching the English language to students with limited English proficiency through steps such as--

`(A) dual appointments for faculty between schools of education and schools of arts and science; and

`(B) integrating coursework with clinical experience; and

`(4) may be used to develop strategic plans between schools of education and local school districts to better prepare teachers for high-need schools, including the creation of professional development partnerships for training new teachers in state-of-the-art practice.

`SEC. 242. AUTHORIZATION OF APPROPRIATIONS.

`There are authorized to be appropriated to make grants under this part $200,000,000 for fiscal year 2006 and such sums as may be necessary for each of the 5 succeeding fiscal years.'.

(c) Part A Authorization- Section 210 of the Higher Education Act of 1965 (20 U.S.C. 1030) is amended--

(1) by striking `$300,000,000 for fiscal year 1999' and inserting `$400,000,000 for fiscal year 2006'; and

(2) by striking `4 succeeding' and inserting `5 succeeding'.

SEC. 202. TEACHER QUALITY ENHANCEMENT GRANTS.

Part A of title II of the Higher Education Act of 1965 is amended by striking sections 206 through 209 (20 U.S.C. 1026-1029) and inserting the following:

`SEC. 206. ACCOUNTABILITY AND EVALUATION.

`(a) State Grant Accountability Report- An eligible State that receives a grant under section 202 shall submit an annual accountability report to the Secretary, the Committee on Health, Education, Labor, and Pensions of the Senate, and the Committee on Education and the Workforce of the House of Representatives. Such report shall include a description of the degree to which the eligible State, in using funds provided under such section, has made substantial progress in meeting the following goals:

`(1) PERCENTAGE OF HIGHLY QUALIFIED TEACHERS- Increasing the percentage of highly qualified teachers in the State as required by section 1119 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6319).

`(2) STUDENT ACADEMIC ACHIEVEMENT- Increasing student academic achievement for all students, which may be measured through the use of value-added assessments, as defined by the eligible State.

`(3) RAISING STANDARDS- Raising the State academic standards required to enter the teaching profession as a highly qualified teacher.

`(4) INITIAL CERTIFICATION OR LICENSURE- Increasing success in the pass rate for initial State teacher certification or licensure, or increasing the numbers of qualified individuals being certified or licensed as teachers through alternative routes to certification and licensure.

`(5) DECREASING TEACHER SHORTAGES- Decreasing shortages of highly qualified teachers in poor urban and rural areas.

`(6) INCREASING OPPORTUNITIES FOR RESEARCH-BASED PROFESSIONAL DEVELOPMENT- Increasing opportunities for enhanced and ongoing professional development that--

`(A) improves the academic content knowledge of teachers in the subject areas in which the teachers are certified or licensed to teach or in which the teachers are working toward certification or licensure to teach; and

`(B) promotes strong teaching skills.

`(7) TECHNOLOGY INTEGRATION- Increasing the number of teachers prepared effectively to integrate technology into curricula and instruction and who use technology to collect, manage, and analyze data to improve teaching, learning, and parental involvement decisionmaking for the purpose of increasing student academic achievement.

`(b) Eligible Partnership Evaluation- Each eligible partnership applying for a grant under section 203 shall establish, and include in the application submitted under section 203(c), an evaluation plan that includes strong performance objectives. The plan shall include objectives and measures for--

`(1) increased student achievement for all students, as measured by the partnership;

`(2) increased teacher retention in the first 3 years of a teacher's career;

`(3) increased success in the pass rate for initial State certification or licensure of teachers;

`(4) increased percentage of highly qualified teachers; and

`(5) increasing the number of teachers trained effectively to integrate technology into curricula and instruction and who use technology to collect, manage, and analyze data to improve teaching, learning, and decisionmaking for the purpose of improving student academic achievement.

`(c) Revocation of Grant-

`(1) REPORT- Each eligible State or eligible partnership receiving a grant under section 202 or 203 shall report annually on the progress of the eligible State or eligible partnership toward meeting the purposes of this part and the goals, objectives, and measures described in subsections (a) and (b).

`(2) REVOCATION-

`(A) ELIGIBLE STATES AND ELIGIBLE APPLICANTS- If the Secretary determines that an eligible State or eligible applicant is not making substantial progress in meeting the purposes, goals, objectives, and measures, as appropriate, by the end of the second year of a grant under this part, then the grant payment shall not be made for the third year of the grant.

`(B) ELIGIBLE PARTNERSHIPS- If the Secretary determines that an eligible partnership is not making substantial progress in meeting the purposes, goals, objectives, and measures, as appropriate, by the end of the third year of a grant under this part, then the grant payments shall not be made for any succeeding year of the grant.

`(d) Evaluation and Dissemination- The Secretary shall evaluate the activities funded under this part and report annually the Secretary's findings regarding the activities to the Committee on Health, Education, Labor, and Pensions of the Senate and the Committee on Education and the Workforce of the House of Representatives. The Secretary shall broadly disseminate successful practices developed by eligible States and eligible partnerships under this part, and shall broadly disseminate information regarding such practices that were found to be ineffective.

`SEC. 207. ACCOUNTABILITY FOR PROGRAMS THAT PREPARE TEACHERS.

`(a) State Report Card on the Quality of Teacher and Principal Preparation- Each State that receives funds under this Act shall provide to the Secretary annually, in a uniform and comprehensible manner that conforms with the definitions and methods established by the Secretary, a State report card on the quality of teacher preparation in the State, both for traditional certification or licensure programs and for alternative certification or licensure programs, which shall include at least the following:

`(1) A description of the teacher and principal certification and licensure assessments, and any other certification and licensure requirements, used by the State.

`(2) The standards and criteria that prospective teachers and principals must meet in order to attain initial teacher and principal certification or licensure and to be certified or licensed to teach particular subjects or in particular grades within the State.

`(3) A demonstration of the extent to which the assessments and requirements described in paragraph (1) are aligned with the State's standards and assessments for students.

`(4) The percentage of students who have completed at least 50 percent of the requirements for a teacher preparation program at an institution of higher education or alternative certification program and who have taken and passed each of the assessments used by the State for teacher certification and licensure, and the passing score on each assessment that determines whether a candidate has passed that assessment.

`(5) For students who have completed at least 50 percent of the requirements for a teacher preparation program at an institution of higher education or alternative certification program, and who have taken and passed each of the assessments used by the State for teacher certification and licensure, each such institution's and each such program's average raw score, ranked by teacher preparation program, which shall be made available widely and publicly.

`(6) A description of each State's alternative routes to teacher certification, if any, and the number and percentage of teachers certified through each alternative certification route who pass State teacher certification or licensure assessments.

`(7) For each State, a description of proposed criteria for assessing the performance of teacher and principal preparation programs in the State, including indicators of teacher and principal candidate skills, placement and retention rates (to the extent feasible), and academic content knowledge and evidence of gains in student academic achievement.

`(8) For each teacher preparation program in the State, the number of students in the program, the number of minority students in the program, the average number of hours of supervised practice teaching required for those in the program, and the number of full-time equivalent faculty, adjunct faculty, and students in supervised practice teaching.

`(9) For the State as a whole, and for each teacher preparation program in the State, the number of teachers prepared, in the aggregate and reported separately by--

`(A) number of minority students;

`(B) level (elementary or secondary);

`(C) academic major;

`(D) subject or subjects for which the student has been prepared to teach; and

`(E) teacher candidates who speak a language other than English and have been trained specifically to teach English-language learners.

`(10) The State shall refer to the data generated for paragraph (9) to report on the extent to which teacher preparation programs are helping to address shortages of qualified teachers, by level, subject, and specialty, in the State's public schools, especially in poor urban and rural areas as required by section 206(a)(5).

`(b) Report of the Secretary on the Quality of Teacher Preparation-

`(1) REPORT CARD- The Secretary shall provide to Congress, and publish and make widely available, a report card on teacher qualifications and preparation in the United States, including all the information reported in paragraphs (1) through (11) of subsection (a). Such report shall identify States for which eligible States and eligible partnerships received a grant under this part. Such report shall be so provided, published and made available annually.

`(2) REPORT TO CONGRESS- The Secretary shall report to Congress--

`(A) a comparison of States efforts to improve teaching quality; and

`(B) regarding the national mean and median scores on any standardized test that is used in more than 1 State for teacher certification or licensure.

`(3) SPECIAL RULE- In the case of programs with fewer than 10 students who have completed at least 50 percent of the requirements for a teacher preparation program taking any single initial teacher certification or licensure assessment during an academic year, the Secretary shall collect and publish information with respect to an average pass rate on State certification or licensure assessments taken over a 3-year period.

`(c) Coordination- The Secretary, to the extent practicable, shall coordinate the information collected and published under this part among States for individuals who took State teacher certification or licensure assessments in a State other than the State in which the individual received the individual's most recent degree.

`(d) Institution and Program Report Cards on Quality of Teacher Preparation-

`(1) REPORT CARD- Each institution of higher education or alternative certification program that conducts a teacher preparation program that enrolls students receiving Federal assistance under this Act shall report annually to the State and the general public, in a uniform and comprehensible manner that conforms with the definitions and methods established by the Secretary, both for traditional certification or licensure programs and for alternative certification or licensure programs, the following information, disaggregated by major racial and ethnic groups:

`(A) PASS RATE- (i) For the most recent year for which the information is available, the pass rate of each student who has completed at least 50 percent of the requirements for the teacher preparation program on the teacher certification or licensure assessments of the State in which the institution is located, but only for those students who took those assessments within 3 years of receiving a degree from the institution or completing the program.

`(ii) A comparison of the institution or program's pass rate for students who have completed at least 50 percent of the requirements for the teacher preparation program with the average pass rate for institutions and programs in the State.

`(iii) A comparison of the institution or program's average raw score for students who have completed at least 50 percent of the requirements for the teacher preparation program with the average raw scores for institutions and programs in the State.

`(iv) In the case of programs with fewer than 10 students who have completed at least 50 percent of the requirements for a teacher preparation program taking any single initial teacher certification or licensure assessment during an academic year, the institution shall collect and publish information with respect to an average pass rate on State certification or licensure assessments taken over a 3-year period.

`(v) A report on the number of times candidates have to take the test before passing.

`(B) PROGRAM INFORMATION- The number of students in the program, the average number of hours of supervised practice teaching required for those in the program, and the number of full-time equivalent faculty and students in supervised practice teaching.

`(C) STATEMENT- In States that require approval or accreditation of teacher education programs, a statement of whether the institution's program is so approved or accredited, and by whom.

`(D) DESIGNATION AS LOW-PERFORMING- Whether the program has been designated as low-performing by the State under section 208(a).

`(2) REQUIREMENT- The information described in paragraph (1) shall be reported through publications such as school catalogs and promotional materials sent to potential applicants, secondary school guidance counselors, and prospective employers of the institution's program graduates, including materials sent by electronic means.

`(3) FINES- In addition to the actions authorized in section 487(c), the Secretary may impose a fine not to exceed $25,000 on an institution of higher education for failure to provide the information described in this subsection in a timely or accurate manner.

`(e) Data Quality- Either--

`(1) the Governor of the State; or

`(2) in the case of a State for which the constitution or law of such State designates another individual, entity, or agency in the State to be responsible for teacher certification and preparation activity, such individual, entity, or agency;

shall attest annually, in writing, as to the reliability, validity, integrity, and accuracy of the data submitted pursuant to this section.

`SEC. 208. STATE FUNCTIONS.

`(a) State Assessment- In order to receive funds under this Act, a State shall have in place a procedure to identify and assist, through the provision of technical assistance, low-performing programs of teacher preparation within institutions of higher education. Such State shall provide the Secretary an annual list of such low-performing institutions that includes an identification of those institutions at risk of being placed on such list. Such levels of performance shall be determined solely by the State and may include criteria based upon information collected pursuant to this part. Such assessment shall be described in the report under section 207(a). A State receiving Federal funds under this title shall develop plans to close or reconstitute underperforming programs of teacher preparation within institutions of higher education.

`(b) Termination of Eligibility- Any institution of higher education that offers a program of teacher preparation in which the State has withdrawn the State's approval or terminated the State's financial support due to the low performance of the institution's teacher preparation program based upon the State assessment described in subsection (a)--

`(1) shall be ineligible for any funding for professional development activities awarded by the Department of Education; and

`(2) shall not be permitted to accept or enroll any student who receives aid under title IV of this Act in the institution's teacher preparation program.

`SEC. 209. GENERAL PROVISIONS.

`In complying with sections 207 and 208, the Secretary shall ensure that States and institutions of higher education use fair and equitable methods in reporting and that the reporting methods do not allow identification of individuals.'.

TITLE III--ENHANCING COLLEGE OUTREACH

SEC. 301. FEDERAL TRIO PROGRAM.

(a) TRIO Duration of Grant- Section 402A(b) (20 U.S.C. 1070a-11(b)) is amended by striking paragraph (2) and inserting the following:

`(2) DURATION- Grants or contracts made under this chapter shall be awarded for a period of 5 years, except that--

`(A) grants made under section 402G shall be awarded for a period of 2 years; and

`(B) grants under section 402H shall be awarded for a period determined by the Secretary.'.

(b) Minimum Grants- Section 402A(b)(3) is amended--

(1) by striking `$170,000' and inserting `$200,000';

(2) by striking `$180,000' and inserting `$210,000'; and

(3) by striking `$190,000' and inserting `$220,000'.

(c) Maximum Upward Bound Stipends- Section 402C(e) (20 U.S.C. 1070a-13(e)) is amended--

(1) by striking `$60' and inserting `$100'; and

(2) by striking `$40' and inserting `$60'.

(d) Maximum Mcnair Stipends- Section 402E(e)(1) (20 U.S.C. 1070a-15(e)(1)) is amended by striking `$2,800' and inserting `$5,000'.

SEC. 302. GEARUP.

(a) Current Grantees- Section 404A(b)(1) (20 U.S.C. 1070a-21(b)(1)) is amended--

(1) by inserting `6-year' after `shall make'; and

(2) by adding at the end the following: `An eligible entity that has received an award under this section, has performed successfully, and still has a need for an award may apply for an additional award under this section.'.

(b) Eligible Entity Plans- Section 404C(a)(2) (20 U.S.C. 1070a-23(a)(2)) is amended--

(1) by striking `and' at the end of subparagraph (A);

(2) by redesignating subparagraph (B) as subparagraph (C); and

(3) by inserting after subparagraph (A) the following new subparagraph:

`(B) describe activities for coordinating, complementing, and enhancing services under this chapter provided by other eligible entities in the State; and'.

SEC. 303. LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP.

(a) Authorization of Appropriations- Section 415A(b)(1) (20 U.S.C. 1070c(b)(1)) is amended--

(1) by striking `$105,000,000 for fiscal year 1999' and inserting `$200,000,000 for fiscal year 2004'; and

(2) by striking `4 succeeding fiscal years' and inserting `5 succeeding fiscal years'.

(b) Maximum Grant- Section 415C(b)(2) (20 U.S.C. 1070c-2(b)(2)) is amended by striking `$5,000' and inserting `$12,500'.

TITLE IV--OPPORTUNITIES AT HISPANIC-SERVING COLLEGES AND UNIVERSITIES

SEC. 401. POSTBACCALAUREATE OPPORTUNITIES FOR HISPANIC AMERICANS.

(a) Establishment of Program- Title V of the Higher Education Act is amended--

(1) by redesignating part B as part C;

(2) by redesignating section 511 through 518 as sections 521 through 528, respectively; and

(3) inserting after section 505 (20 U.S.C. 1101d) the following new part:

`PART B--PROMOTING POSTBACCALAUREATE OPPORTUNITIES FOR HISPANIC AMERICANS

`SEC. 511. FINDINGS AND PURPOSES.

`(a) Findings- Congress finds the following:

`(1) According to the United States Census, by the year 2050 one in four Americans will be of Hispanic origin.

`(2) Despite the dramatic increase in the Hispanic population in the United States, the National Center for Education Statistics reported that in 1999, Hispanics accounted for only 4 percent of the master's degrees, 3 percent of the doctor's degrees, and 5 percent of first-professional degrees awarded in the United States.

`(3) Although Hispanics constitute 10 percent of the college enrollment in the United States, they comprise 3 only percent of instructional faculty in college and universities.

`(4) The future capacity for research and advanced study in the United States will require increasing the number of Hispanics pursuing postbaccalaureate studies.

`(5) Hispanic-serving institutions are leading the nation in increasing the number of Hispanics attaining graduate and professional degrees.

`(6) Among Hispanics who received master's degrees in 1999-2000, 25 percent earned them at Hispanic-serving institutions.

`(7) Between 1991 and 2000, the number of Hispanic students earning master's degrees at Hispanic-serving institutions grew 136 percent, the number receiving doctor's degrees grew by 85 percent, and the number earning first-professional degrees grew by 47 percent.

`(8) It is in the National interest to expand the capacity of Hispanic-serving institutions to offer graduate and professional degree programs.

`(b) Purposes- The purposes of this part are--

`(1) to expand postbaccalaureate educational opportunities for, and improve the academic attainment of, Hispanic students; and

`(2) to expand and enhance the postbaccalaureate academic offerings, program quality, that are educating the majority of Hispanic college students and helping large numbers of Hispanic students and other low-income individuals complete postsecondary degrees.

`SEC. 512. PROGRAM AUTHORITY AND ELIGIBILITY.

`(a) Program Authorized- Subject to the availability of funds appropriated to carry out this part, the Secretary shall award competitive grants to Hispanic-serving institutions that offer postbaccalaureate certifications or degrees.

`(b) Eligibility- For the purposes of this part, an `eligible institution' means an institution of higher education that--

`(1) is an eligible institution under section 502; and

`(2) offers a postbaccalaureate certificate or degree granting program.

`SEC. 513. AUTHORIZED ACTIVITIES.

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

`(1) Purchase, rental, or lease of scientific or laboratory equipment for educational purposes, including instructional and research purposes.

`(2) Construction, maintenance, renovation, and improvement in classroom, library, laboratory, and other instructional facilities, including purchase or rental of telecommunications technology equipment or services.

`(3) Purchase of library books, periodicals, technical and other scientific journals, microfilm, microfiche, and other educational materials, including telecommunications program materials.

`(4) Support for needy postbaccalaureate students including outreach, academic support services, mentoring, scholarships, fellowships, and other financial assistance to permit the enrollment of such students in postbaccalaureate certificate and degree granting programs.

`(5) Support of faculty exchanges, faculty development, faculty research, curriculum development, and academic instruction.

`(6) Creating or improving facilities for Internet or other distance learning academic instruction capabilities, including purchase or rental of telecommunications technology equipment or services.

`(7) Collaboration with other institutions of higher education to expand postbaccalaureate certificate and degree offerings.

`(8) Other activities proposed in the application submitted pursuant to section 514 that--

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

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

`SEC. 514. APPLICATION AND DURATION.

`(a) Application- Any eligible institution may apply for a grant under this part by submitting an application to the Secretary at such time and in such manner as determined by the Secretary. Such application shall demonstrate how the grant funds will be used to improve postbaccalaureate education opportunities for Hispanic and low-income students and will lead to greater financial independence.

`(b) Duration- Grants under this part shall be awarded for a period not to exceed 5 years.

`(c) Limitation- The Secretary shall not award more than 1 grant under this part in any fiscal year to any Hispanic-serving institution.'.

(b) Cooperative Arrangements- Section 524 of such Act (as redesignated by subsection (a)(2)) (20 U.S.C. 1103c) is amended by inserting `and section 513' after `section 503'.

SEC. 402. AUTHORIZATION OF APPROPRIATIONS FOR HISPANIC SERVING INSTITUTIONS.

(a) Authorization of Appropriations- Subsection (a) of section 528 of such Act (as redesignated by section 401(a)(2)) (20 U.S.C. 1103g) is amended to read as follows:

`(a) Authorizations-

`(1) PART A- There are authorized to be appropriated to carry out part A of this title $175,000,000 for fiscal year 2005 and such sums as may be necessary for each of the 5 succeeding fiscal years.

`(2) PART B- There are authorized to be appropriated to carry out part B of this title $125,000,000 for fiscal year 2005 and such sums as may be necessary for each of the 5 succeeding fiscal years.'.

(b) Definitions- Section 502(a) of the Higher Education Act of 1965 (20 U.S.C. 1101a(a)) is amended--

(1) in paragraph (5)--

(A) by inserting `and' after the semicolon at the end of subparagraph (A);

(B) by striking `; and' at the end of subparagraph (B) and inserting a period; and

(C) by striking subparagraph (C); and

(2) by striking paragraph (7).

(c) Reducing Regulatory Barriers for Hispanic-Serving Institutions- Section 503(b) of the Higher Education Act of 1965 (20 U.S.C. 1101b(a)) is amended by striking paragraph (7) and inserting the following:

`(7) Articulation agreements and student support programs designed to facilitate the transfer from two-year to four-year institutions.'.

(d) Elimination of Wait-Out Period- Subsection (a) of section 504 of the Higher Education Act of 1965 (20 U.S.C. 1101c(a)) is amended to read as follows:

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

(e) Application Priority- Section 521(d) of the Higher Education Act of 1965 (as redesignated by section 401(a)(2)) (20 U.S.C. 1103(d)) is amended by striking `(from funds other than funds provided under this title)'.

TITLE V--HISTORICALLY BLACK COLLEGES AND UNIVERSITIES

SEC. 501. CENTERS OF EXCELLENCE.

Title II is amended by inserting after part D as added by section 201 of this Act the following new part:

`PART E--CENTERS OF EXCELLENCE

`SEC. 251. PURPOSES; DEFINITIONS.

`(a) Purposes- The purposes of this part are--

`(1) to help recruit and prepare teachers, including minority teachers, to meet the national demand for a highly qualified teacher in every classroom; and

`(2) to increase opportunities for Americans of all educational, ethnic, class, and geographic backgrounds to become highly qualified teachers.

`(b) Definitions- As used in this part:

`(1) ELIGIBLE INSTITUTION- The term `eligible institution' means--

`(A) an institution of higher education that has a teacher preparation program that meets the requirements of section 203(b)(2) and that is--

`(i) a part B institution (as defined in section 322);

`(ii) a Hispanic-serving institution (as defined in section 502);

`(iii) a Tribal College or University (as defined in section 316);

`(iv) an Alaska Native-serving institution (as defined in section 317(b)); or

`(v) a Native Hawaiian-serving institution (as defined in section 317(b));

`(B) a consortium of institutions described in subparagraph (A); or

`(C) an institution described in subparagraph (A), or a consortium described in subparagraph (B), in partnership with any other institution of higher education, but only if the center of excellence established under section 252 is located at an institution described in subparagraph (A).

`(2) HIGHLY QUALIFIED- The term `highly qualified' has the meaning given such term in section 9101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801).

`(3) SCIENTIFICALLY BASED READING RESEARCH- The term `scientifically based reading research' has the meaning given such term in section 1208 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6368).

`(4) SCIENTIFICALLY BASED RESEARCH- The term `scientifically based research' has the meaning given such term in section 9101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801).

`SEC. 252. CENTERS OF EXCELLENCE.

`(a) Program Authorized- From the amounts appropriated to carry out this part, the Secretary is authorized to award competitive grants to eligible institutions to establish centers of excellence.

`(b) Use of Funds- Grants provided by the Secretary under this part shall be used to ensure that current and future teachers are highly qualified, by carrying out one or more of the following activities:

`(1) Implementing reforms within teacher preparation programs to ensure that such programs are preparing teachers who are highly qualified, are able to understand scientifically based research, and are able to use advanced technology effectively in the classroom, including use for instructional techniques to improve student academic achievement, by--

`(A) retraining faculty; and

`(B) designing (or redesigning) teacher preparation programs that--

`(i) prepare teachers to close student achievement gaps, are based on rigorous academic content, scientifically based research (including scientifically based reading research), and challenging State student academic content standards; and

`(ii) promote strong teaching skills.

`(2) Providing sustained and high-quality preservice clinical experience, including the mentoring of prospective teachers by exemplary teachers, substantially increasing interaction between faculty at institutions of higher education and new and experienced teachers, principals, and other administrators at elementary schools or secondary schools, and providing support, including preparation time, for such interaction.

`(3) Developing and implementing initiatives to promote retention of highly qualified teachers and principals, including minority teachers and principals, including programs that provide--

`(A) teacher or principal mentoring from exemplary teachers or principals; or

`(B) induction and support for teachers and principals during their first 3 years of employment as teachers or principals, respectively.

`(4) Awarding scholarships based on financial need to help students pay the costs of tuition, room, board, and other expenses of completing a teacher preparation program.

`(5) Disseminating information on effective practices for teacher preparation and successful teacher certification and licensure assessment preparation strategies.

`(6) Activities authorized under sections 202, 203, and 204.

`(c) Application- Any eligible institution desiring a grant under this section shall submit an application to the Secretary at such a time, in such a manner, and accompanied by such information the Secretary may require.

`(d) Minimum Grant Amount- The minimum amount of each grant under this part shall be $1,500,000.

`(e) Limitation on Administrative Expenses- An eligible institution that receives a grant under this part may not use more than 2 percent of the grant funds for purposes of administering the grant.

`(f) Regulations- The Secretary shall prescribe such regulations as may be necessary to carry out this part.

`SEC. 253. AUTHORIZATION OF APPROPRIATIONS.

`There are authorized to be appropriated to carry out this part $20,000,000 for fiscal year 2006 and such sums as may be necessary for each of the 5 succeeding fiscal years.'.

SEC. 502. AUTHORIZATION OF APPROPRIATIONS.

(a) Authorizations of Appropriations- Section 399(a) (20 U.S.C. 1068h(a)(2)) is amended--

(1) by striking paragraphs (1), (2), and (3) and inserting the following:

`(1) PART A- (A) There are authorized to be appropriated to carry out part A (other than section 316 and 317)--

`(i) $170,000,000 for fiscal year 2006; and

`(ii) such sums as may be necessary for each of the 5 succeeding fiscal years.

`(B) There are authorized to be appropriated to carry out section 316--

`(i) $45,000,000 for fiscal year 2006; and

`(ii) such sums as may be necessary for each of the 5 succeeding fiscal years.

`(C) There are authorized to be appropriated to carry out section 317--

`(i) $20,000,000 for fiscal year 2006; and

`(ii) such sums as may be necessary for each of the 5 succeeding fiscal years.

`(2) PART B- (A) There are authorized to be appropriated to carry out part B (other than section 326)--

`(i) $270,000,000 for fiscal year 2006; and

`(ii) such sums as may be necessary for each of the 5 succeeding fiscal years.

`(B) There are authorized to be appropriated to carry out section 326--

`(i) $90,000,000 for fiscal year 2006; and

`(ii) such sums as may be necessary for each of the 5 succeeding fiscal years.

`(3) PART C- There are authorized to be appropriated to carry out part C--

`(A) $30,000,000 for fiscal year 2006; and

`(B) such sums as may be necessary for each of the 5 succeeding fiscal years.'; and

(2) by striking paragraph (5) and inserting the following:

`(5) PART E- There are authorized to be appropriated to carry out part E--

`(A) $40,000,000 for fiscal year 2006; and

`(B) such sums as may be necessary for each of the 5 succeeding fiscal years.'.

(b) Authorized Uses of Funds for Title III- Section 323(a) (20 U.S.C. 1062(a)) is amended--

(1) by redesignating paragraph (12) as paragraph (13); and

(2) by inserting after paragraph (11) the following new paragraph:

`(12) Technical assistance services, including financial management, enrollment management, strategic planning, replication of best practices, and other needed services, except that the amount expended under this paragraph shall not exceed 2 percent of the institution's annual award under this part.'.

END