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The Higher Education Amendment Act of 2005

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The Higher Education Amendments Act of 2005


This legislation amends the Higher Education Act of 1965 and the Higher Education Amendments Act of 1998 by making the changes identified below.

Title I – General Provisions
Makes several conforming changes to the Higher Education Act of 1965, including extending authorizations and updating terms. Relaxes the 50 percent rule to permit schools to expand distance education offerings and requires distance education programs to have plans in place in the event of school closure. Clarifies the eligibility of students enrolled in dual or concurrent enrollment programs. Rewrites an existing grant program to reduce drug abuse and underage drinking/alcohol abuse. Establishes a new requirement that the Secretary make public information about the costs of attending postsecondary programs. Updates the Performance Based Organization, which administers the Federal student aid programs. Limits eligibility for Federal student assistance programs for certain foreign medical schools.

Title II – Teacher Quality Enhancement
Retains the current State Grant and Partnership Grant programs that provide funding to improve student achievement and the quality of the current and future teacher workforce. Eliminates the previous recruitment and retention grant program. Revises the accountability section to include State reports of pass rates for students completing teacher education programs. Revises the uses of funds under the State and partnership grants to meet the demand for highly qualified teachers under the No Child Left Behind Act. Enhances the use of technology in instruction, as well as improving the abilities of teachers to use data and technology to improve student achievement.

Title III – Minority Serving Institutions
Reauthorizes programs to support Historically Black Colleges and Universities, Native Hawaiian and Alaskan Institutions, Tribal Colleges and Universities, and Professional or Graduate Institutions for minority serving institutions. Adds three new institutions as qualified graduate programs under the Professional or Graduate Institutions program.

Title IV – Federal Student Aid Programs

Part A -

Pell Grants
Establishes the maximum authorized Pell award at $5,100 in FY06 and increases the authorization to $6,300 over the next 5 years. Eliminates a provision called “tuition sensitivity” that could negatively affect award amounts for students attending low-cost institutions, such as community colleges. Permits the Secretary to award Pell grants on a year-round basis, rather than for only two semesters or the equivalent during a single award year.

TRiO Programs
Reauthorizes the Federal TRiO programs, which provide assistance for first generation and low-income students. Adds a meaningful accountability piece that will ensure programs maintain high quality services to students.

Reauthorizes the GEAR Up program, which provides assistance for States or partnerships to help low-income students in 7th grade through high school prepare for college. Maintains the requirement that States provide scholarships for students. Focuses efforts on reducing the need for remedial education at the postsecondary level and to improve completion rates for high school students.

Leveraging Education Assistance Partnerships (LEAP) –
Reauthorizes the LEAP program, and rewrites the Special LEAP program to improve the ability of the Federal government to leverage funds for students through State and private funds. Permits institutions to make in-kind contributions that help reduce the cost of attendance for students without reducing their eligibility for Federal student aid.

Migrant and Seasonal Programs –
Reauthorizes the migrant and seasonal program, mirrors language in the Senate WIA reauthorization bill making families of migrant workers eligible for services.

Robert C. Byrd Scholarship Program –
Reauthorizes the Byrd scholars program.

Part B – Federal Family Education Loan Program
[additional changes reflected under Title X – Reconciliation]

Adds financial literacy to allowable default reduction activities. Increases consumer information requirements with respect to lending generally, and consolidation lending specifically. Requires lenders to provide borrower repayment information to major credit bureaus.

Part C – Federal Work Study
Permits institutions to waive the volunteer service requirement under this part if they can certify that at least 15 percent of their student enrollment participates in community service activities.

Part D – Ford Direct Lending Program
[additional changes reflected below in Title X – Reconciliation]

Extends the authorization for the program.

Part E – Federal Perkins Loan Program
Reauthorizes the program that permits institutions to operate revolving loan funds. Adds three new provisions to loan cancellation under this part: early childhood educators, instructors at Tribal Colleges or Universities, and librarians with a master’s degree in library science serving in Title I schools or libraries.

Part F – Needs Analysis
Increases the “auto-zero” calculation from $15,000 to $20,000, which allows families with adjusted gross income levels below $20,000 to automatically claim zero expected family contribution in needs analysis. Permits less than half-time students to include certain education related expenses for up to three semesters during their undergraduate study. Equalizes the treatment of prepaid college tuition plans and education savings accounts. Clarifies treatment of State scholarship programs, such as the Hathaway scholarship.

Part G – General Provisions Relating to Student Assistance
Reauthorizes the Advisory Committee for Student Financial Assistance. Requires the Advisory Committee to carry out a review and analysis of regulations related to Title IV of the Higher Education Act. Requires the Secretary to carry out activities that simplify the financial aid process, develop an “EZ FAFSA,” and conduct activities to provide students with early assessments of financial eligibility.

Clarifies that students are not denied eligibility for Federal student aid programs if they have been convicted of drug possession, unless the conviction occurs while the student is receiving Federal assistance. Retains the provision that eliminates a student’s eligibility for distribution of a controlled substance.

Adds a description of transfer of credit policies to information that must be provided to a student. Prohibits institutions from denying transfer of credit based solely on the accreditation of the student’s prior institution.

Adds a requirement that the Secretary provide institutions participating in Federal student aid programs with a calendar of regulatory requirements describing when certain information is due.

Part H – Program Integrity
Amends the accreditation process to ensure that schools have expanded due process procedures in place to resolve disputes over adverse action. Updates accreditation processes with respect to online or distance education that recognizes current trends. Ensures that institutional missions are considered during the accreditation process.

Requires the Secretary to provide information to schools under program review, and provide those institutions with an opportunity to review and respond to that information before a final determination is made.

Title V – Hispanic Serving Institutions
Creates a new grant program to support graduate programs at Hispanic Serving Institutions, similar to programs already established for Historically Black Colleges and Universities. Eliminates a provision that required institutions to wait two years before applying for a grant again under this title. Eliminates a duplicative requirement that institutions certify certain students as low-income.

Title VI – International Education
Reauthorizes international education programs. Establishes an interagency group to determine the priority for international education programs and gives the Secretary authority to eliminate grant funding for programs failing to meet grant requirements.

Title VII – Graduate Education Programs
Reauthorizes programs supporting graduate education. Includes areas of professional workforce shortages as an area of national need in determining priority for grants. Reauthorizes the disability demonstration program.

Title VIII – Miscellaneous Provisions
Authorizes a series of grant programs to help institutions of higher education develop new curriculum and services related to high skill, high growth occupations; to support the Teach for America program; to help institutions retain students and improve articulation agreements with other institutions of higher education; to provide fellowships for minority scholars in math and science areas; to support Native American serving institutions; and to support merit-based math and science scholarships. Authorizes a study on the cost of postsecondary education. Authorizes the Secretary to contract with an independent organization to provide information about to linking secondary school completion with postsecondary school enrollment.

Title IX – Amendments to Other Laws

Education of the Deaf Act:
Reauthorizes Federal grant program for Gallaudet and other institutions serving deaf students at the secondary and postsecondary level.

United States Institute of Peace:
Reauthorizes the Institute and provides for the Institute’s authorization to be extended for 1 year, similar to other Federal education programs. Clarifies that the term of members begins on the date of their confirmation and swearing in.

Tribally Controlled Colleges and Universities Assistance Act and the Navajo Community College Act:
Reauthorizes two programs that provide funding for tribally controlled institutions of higher education.

Program Repeals –
The bill repeals a number of programs, including the following:
Learning Anytime, Anywhere Partnerships
Recruitment and Retention Grants
Academic Achievement Scholarships
Urban Community Service program
Preparing Teachers to Use Technology
Commission on Web-Based Education

Title X – Reconciliation
Provisional Grant Assistance Program (ProGAP) –
Establishes a temporary new mandatory program that provides $5.5 billion in grant aid for students over 5 years, divided into two separate funding streams (ProGAP and SMART grants). $4.5 billion of the total is designated for low-income students to supplement other Federal student grant aid.

SMART Grants –
Targets $1 billion in funds authorized under ProGAP toward students in their third and fourth years majoring in math, science, or foreign language fields by providing an additional award of up to $1,500 per award year. Encourages matching contributions from businesses or other non-Federal sources to provide additional grant assistance for these students.

Fixes a provision known as the SAP-gap that limited special allowance payments to lenders making loans to parent borrowers. Limits lender special allowance payments to the borrower interest rate, also known as a floor income. Requires guaranty agencies to collect and deposit 1 percent of their collections in the Federal reserve fund.

Makes the scheduled shift to a fixed rate on undergraduate and graduate non-consolidation borrowing, fixing the interest rate at 6.8 percent effective July 1, 2006. Increases subsidized borrowing levels for first and second year students to $3,500 and $4,500 respectively, and unsubsidized borrowing amounts for graduate students by $2,000 per year. Does not expand aggregate borrowing ability for undergraduate borrowers. Expands PLUS borrowing eligibility to graduate students. Permanently extends the Taxpayer-Teacher Protection Act, which ends the practice of transferring and refunding 9.5 floor loans.

Places a moratorium on new “school as lender” program participants, which permits participating schools to originate and hold loans, keeping a portion of the proceeds.

Extends provisions allowing schools with low default rates to make one single disbursement to first year students, and also permits schools with low default rates to waive the 30 day wait period before an initial disbursement.

Repeals the single holder rule, which required borrowers to consolidate with their current lender. Charges an additional 50 basis point fee for lenders originating consolidation loans.

Provides additional loan deferment for members of the armed services or the reserve components of the armed services who have borrowed since July 1, 2001, who serve in a combat zone.

Permits the Secretary to waive a portion of borrower origination fees under this part. Extends public service loan cancellation for borrowers who make 120 consecutive on-time payments in the income contingent repayment option.

Reduces lender insurance by 1 percent (from 98 to 97 percent) and repeals the provision that guarantees 100 percent of loans for certain lenders.

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