College Quality, Affordability, and Diversity Improvement Act of 2003

        [Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 1793 Introduced in Senate (IS)]

108th CONGRESS
1st Session
S. 1793

To provide for college quality, affordability, and diversity, and for
other purposes.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

October 28, 2003

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

_______________________________________________________________________

A BILL

To provide for college quality, affordability, and diversity, and for
other purposes.

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

SECTION 1. SHORT TITLE.

This Act may be cited as the ``College Quality, Affordability, and
Diversity Improvement Act of 2003''.

SEC. 2. TABLE OF CONTENTS.

The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Findings.
TITLE I--ACCESS TO COLLEGE FOR ALL

Sec. 101. Pell Grants.
Sec. 102. Expansion of Hope scholarships.
Sec. 103. Elimination of origination fees and adjustment of fees and
terms.
Sec. 104. Direct Loan Reward Program.
Sec. 105. Costs of higher education.
Sec. 106. Credit for interest on higher education loans.
Sec. 107. Refinancing authority for Federal Direct Consolidation Loan.
Sec. 108. Loans funded through tax-exempt securities.
Sec. 109. Windfall profit offset.
Sec. 110. Support for working students.
Sec. 111. Student eligibility.
Sec. 112. Authorization of appropriations levels for campus-based aid.
Sec. 113. Special programs for students whose families are engaged in
migrant and seasonal farmwork.
Sec. 114. Loan forgiveness and cancellation for certain teachers.
Sec. 115. Revision of tax table.
Sec. 116. Income contingent repayment for public sector employees.
TITLE II--TEACHER QUALITY ENHANCEMENT

Sec. 201. Amendment to title II.
TITLE III--DIVERSITY, RETENTION, AND ENRICHED ACADEMICS FOR
MATRICULATING STUDENTS

Sec. 301. Test preparation for low-income students.
Sec. 302. Admissions and retention.
Sec. 303. Federal Trio program.
Sec. 304. Gear Up.
Sec. 305. Leveraging educational assistance partnership program.
TITLE IV--OPPORTUNITIES AT HISPANIC-SERVING INSTITUTIONS

Sec. 401. Postbaccalaureate opportunities for Hispanic Americans.
Sec. 402. Definitions.
Sec. 403. Authorized activities.
Sec. 404. Elimination of wait-out period.
Sec. 405. Application priority.
TITLE V--HISTORICALLY BLACK COLLEGES AND UNIVERSITIES

Sec. 501. Professional or graduate institutions.
Sec. 502. Graduate and professional degree development program.
Sec. 503. Authorization of appropriations.
Sec. 504. Patsy T. Mink fellowship program.
TITLE VI--RECRUITMENT OF TEACHERS TO TEACH AT TRIBAL COLLEGES OR
UNIVERSITIES

Sec. 601. Loan repayment or cancellation for individuals who teach in
Tribal Colleges or Universities.
Sec. 602. Amounts forgiven not treated as gross income.

SEC. 3. FINDINGS.

Congress finds the following:
(1) A college education is more important than ever, and
the Federal Government should do more to make it affordable and
accessible to all qualified 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 (workers with a Bachelor's degree earn
75 percent more than workers with just a high school
diploma); and
(B) jobs requiring some postsecondary education are
expected to account for about 42 percent of total job
growth from 2000 through 2010.
(2) Increased access to college, reformed admissions
systems, and better retention of students are needed because--
(A) 65 percent of high-income students are on a
college-preparatory track, whereas only 28 percent of
low-income students are on a college-preparatory track;
(B) 7 times as many students from high-income
families (48 percent) graduate from college by age 24
as students from low-income families (7 percent);
(C) 80 percent of 4-year institutions of higher
education use the SAT in the admissions process;
(D) commercial SAT coaching classes, such as those
run by Kaplan, Inc. and Princeton Review, have
demonstrated effectiveness in raising a student's SAT
score by 100 points or more, which can significantly
improve a student's chance of getting into an elite
college;
(E) SAT coaching programs range from $700 to $3,000
per course and the costs are prohibitive for low-income
students;
(F) those students who receive SAT coaching tend to
be disproportionally middle or upper class;
(G) 34 percent of students who receive SAT coaching
are from families whose combined annual income is
between $40,000 and $80,000, and 43 percent are from
families whose combined annual income is more than
$80,000;
(H) applying to college early decision provides an
advantage to an applicant equal to an additional 100
points on the SAT;
(I) low-income students are less able to apply to
colleges early decision because such students need to
compare the financial aid packages at different
colleges;
(J) 40 percent of all Whites age 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;
(K) nearly 4 out of every 10 Hispanics enrolled
full time in 4-year colleges drop out within 3 years of
their initial enrollment, African-Americans are half as
likely as White students to complete a Bachelor's
degree in 4 years, and low-income students are half as
likely as upper-income students to complete a
Bachelor's degree in 4 years;
(L) in 1990, 1 in 4 Americans was a member of a
minority group, and in 2001, 1 in 3 Americans was a
member of a minority group;
(M) 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;
(N) 46 percent of all students who work in addition
to being full-time students report 25 hours or more a
week of employment; and
(O) 50 percent 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.
(3) Federal student aid is too focused on loans instead of
grant aid because--
(A) although approximately $55,000,000,000 is made
available annually in direct and indirect Federal aid
to postsecondary education students and their families,
in 2002, 60 percent of such Federal student aid was in
the form of loans while only 40 percent was in the form
of grants, a reversal of the distribution 20 years ago;
(B) the purchasing power of the Pell Grant has
declined since Pell Grants cover only 40 percent of
average fixed costs at 4-year public colleges, about
half of what they covered 25 years ago;
(C) 15 years ago Pell Grants covered 98 percent of
average tuition at 4-year public colleges, whereas
today Pell Grants only cover 64 percent on average;
(D) the Federal Government saves money under the
Direct Loan program and makes a profit of 3.5 cents on
every dollar lent under the Direct Lending program,
while it loses 10.37 cents on every dollar lent under
the Federal Family Education Loan Program; and
(E) average student indebtedness is $17,000, and
reaches over $120,000 for professional school
graduates.
(4) The Federal Government should do more to help States,
local educational agencies, and schools ensure a qualified
teacher in every classroom because under the No Child Left
Behind Act of 2001, States are required to ensure that all
teachers teaching in core academic subjects within the State
are ``highly qualified'' not later than the end of the 2005-
2006 school year. States need to do much more to meet the
challenges in the new Federal law. In the 1999-2000 school
year, 29 percent of elementary school students, 59 percent of
middle school students, and 29 percent of high school students
were taught by teachers without both a major and certification
in the subject in which they taught.
(5) There is a severe shortage of qualified teachers,
especially in high-need fields and low-income areas because--
(A) approximately a 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 a third higher than it is for
teachers in all schools;
(C) underqualified teachers are more often found in
high-poverty schools; and
(D) in low-poverty secondary schools, approximately
\1/3\ 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 \1/2\ of students are taught by such a
teacher.
(6) Teacher shortages are more severe in some fields than
in others:
(A) Employment opportunities in teaching special
education are expected to grow 21 to 35 percent through
2010, an increase of over 150,000 positions.
(B) The most recent data from a 1994 General
Accounting Office report estimates a shortage of
100,000 to 200,000 bilingual teachers, even as the
limited English proficient student population continues
to grow.
(C) It is estimated that of the 2,000,000 teachers
needed over the next 10 years, almost 200,000 will be
secondary school mathematics and science teachers.

TITLE I--ACCESS TO COLLEGE FOR ALL

SEC. 101. PELL GRANTS.

(a) Appropriation of Funds for Pell Grants.--There are authorized
to be appropriated and there are appropriated, out of any money in the
Treasury not otherwise appropriated for the fiscal year ending
September 30, 2004, for carrying out subpart 1 of part A of title IV of
the Higher Education Act of 1965, $14,515,000,000.
(b) Authorization Amount and Maximum Pell Grant.--Section 401(b) of
the Higher Education Act of 1965 (20 U.S.C. 1070a(b)) is amended--
(1) in paragraph (3)--
(A) in subparagraph (A), by striking
``appropriation Act'' and inserting ``appropriation Act
or subparagraph (C)''; and
(B) by adding at the end the following:
``(C) The maximum Pell Grant for which a student shall be
eligible during award year 2004-2005 shall be $4,500.''; and
(2) in paragraph (2)(A), by striking clauses (i) through
(v) and inserting the following:
``(i) $7,600 for academic year 2005-2006;
``(ii) $8,600 for academic year 2006-2007;
``(iii) $9,600 for academic year 2007-2008;
``(iv) $10,600 for academic year 2008-2009; and
``(v) $11,600 for academic year 2009-2010,''.

SEC. 102. EXPANSION OF HOPE SCHOLARSHIPS.

(a) Expansion of Hope Scholarship Credit.--
(1) Double maximum credit to $3,000.--Subsection (b) of
section 25A of the Internal Revenue Code of 1986 (relating to
Hope and Lifetime Learning credits) is amended by striking
``2'' in paragraph (4) and inserting ``3''.
(2) Credit available for 4 years.--Subsection (b) of
section 25A of such Code is amended by striking ``2'' each
place it appears in paragraphs (2)(A), (2)(C), and (4) and
inserting ``4''.
(3) Refundable credit.--
(A) In general.--Section 25A of such Code is hereby
moved to subpart C of part IV of subchapter A of
chapter 1 of such Code (relating to refundable credits)
and inserted after section 35.
(B) Technical amendments.--
(i) Section 36 of such Code is redesignated
as section 37.
(ii) Section 25A of such Code (as moved by
subsection (a)) is redesignated as section 36.
(iii) Paragraph (1) of section 36(a) of
such Code (as redesignated by paragraph (2)) is
amended by striking ``this chapter'' and
inserting ``this subtitle''.
(iv) Subparagraph (B) of section 72(t)(7)
of such Code is amended by striking ``section
25A(g)(2)'' and inserting ``section 36(g)(2)''.
(v) Subparagraph (A) of section 135(d)(2)
of such Code is amended by striking ``section
25A'' and inserting ``section 36''.
(vi) Section 221(d) of such Code is
amended--
(I) by striking ``section
25A(g)(2)'' in paragraph (2)(B) and
inserting ``section 36(g)(2)'',
(II) by striking ``section
25A(f)(2)'' in paragraph (2)(B) and
inserting ``section 36(f)(2)'', and
(III) by striking ``section
25A(b)(3)'' in paragraph (3) and
inserting ``section 36(b)(3)''.
(vii) Section 222 of such Code is amended--
(I) by striking ``section 25A'' in
subparagraph (A) of subsection (c)(2)
and inserting ``section 36'',
(II) by striking ``section 25A(f)''
in subsection (d)(1) and inserting
``section 36(f)'', and
(III) by striking ``section
25A(g)(2)'' in subsection (d)(1) and
inserting ``section 36(g)(2)''.
(viii) Section 529 of such Code is
amended--
(I) by striking ``section
25A(g)(2)'' in subclause (I) of
subsection (c)(3)(B)(v) and inserting
``section 36(g)(2)'',
(II) by striking ``section 25A'' in
subclause (II) of subsection
(c)(3)(B)(v) and inserting ``section
36'', and
(III) by striking ``section
25A(b)(3)'' in clause (i) of subsection
(e)(3)(B) and inserting ``section
36(b)(3)''.
(ix) Section 530 of such Code is amended--
(I) by striking ``section
25A(g)(2)'' in subclause (I) of
subsection (d)(2)(C)(i) and inserting
``section 36(g)(2)'',
(II) by striking ``section 25A'' in
subclause (II) of subsection
(d)(2)(C)(i) and inserting ``section
36'', and
(III) by striking ``section
25A(g)(2)'' in clause (iii) of
subsection (d)(4)(B) and inserting
``section 36(g)(2)''.
(x) Subsection (e) of section 6050S of such
Code is amended by striking ``section 25A'' and
inserting ``section 36''.
(xi) Subparagraph (J) of section 6213(g)(2)
of such Code is amended by striking ``section
25A(g)(1)'' and inserting ``section 36(g)(1)''.
(xii) Paragraph (2) of section 1324(b) of
title 31, United States Code, is amended by
inserting before the period ``or from section
36 of such Code''.
(xiii) The table of sections for subpart C
of part IV of subchapter A of chapter 1 of the
Internal Revenue Code of 1986 is amended by
striking the item relating to section 36 and
inserting the following:

``Sec. 36. Hope and Lifetime Learning
credits.
``Sec. 37. Overpayments of tax.''.
(xiv) The table of sections for subpart A
of such part IV is amended by striking the item
relating to section 25A.
(4) Credit allowed for cost of attendance.--
(A) In general.--
(i) Subsection (b) of section 36 of such
Code, as moved and redesignated by paragraph
(3), is amended by striking ``qualified tuition
and related expenses'' each place it occurs and
inserting ``cost of attendance''.
(ii) Subsection (f) of such section 36 is
amended by adding at the end the following new
paragraph:
``(3) No pell reduction.--The term `cost of attendance' has
the meaning given such term in section 472 of the Higher
Education Act of 1965, except that the term shall not include
any costs described in paragraph (4) or (5) of such section.''.
(B) Conforming amendments.--
(i) Subsection (b)(1)(B) of such section 36
is amended by striking ``such expenses'' and
inserting ``such cost''.
(ii) Subsections (e) and (g) of such
section 36 are amended by inserting ``the cost
of attendance or'' before ``qualified'' each
place it appears.
(5) Expansion of limitation.--
(A) In general.--Subsection (d) of section 36 of
such Code, as moved and redesignated by paragraph (3),
is amended--
(i) in paragraph (1), by striking the
period and inserting ``in the case of the
Lifetime Learning Credit and paragraph (3) in
the case of the Hope Scholarship Credit.'',
(ii) in paragraph (2), by inserting ``for
the lifetime learning credit'' in the heading
after ``reduction'', and
(iii) by redesignating paragraph (3) as
paragraph (4) and by adding after paragraph (2)
the following new paragraph:
``(3) Amount of reduction for hope scholarship credit.--The
amount determined under this paragraph is the amount which
bears the same ratio to the amount which would be so taken into
account as--
``(A) the excess of--
``(i) the taxpayer's modified adjusted
gross income for such taxable year, over
``(ii) the sum of--
``(I) the amount of any education
assistance received by the student that
is not subject to tax under this
chapter, and
``(II) $40,000 ($80,000 in the case
of a joint return), bears to
``(B) $10,000 ($20,000 in the case of a joint
return).''.
(B) Conforming amendments.--Subsection (h) of such
section 36 is amended--
(i) in paragraph (2), by inserting ``for
the lifetime learning credit'' in the heading
after ``limits'', and
(ii) by inserting at the end the following
new paragraph:
``(3) Income limits for hope scholarship credit.--
``(A) In general.--In the case of a taxable year
beginning after 2003, the $40,000 and $80,000 amounts
in subsection (d)(3) shall each be increased by an
amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year in which the taxable year begins,
determined by substituting `calendar year 2002'
for `calendar year 1992' in subparagraph (B)
thereof.
``(B) Rounding.--If any amount as adjusted under
subparagraph (A) is not a multiple of $1,000, such
amount shall be rounded to the next lowest multiple of
$1,000.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2002.

SEC. 103. ELIMINATION OF ORIGINATION FEES AND ADJUSTMENT OF FEES AND
TERMS.

(a) Direct Loans.--Section 455(c) of the Higher Education Act of
1965 (20 U.S.C. 1087e(c)) is amended to read as follows:
``(c) Loan Fee.--
``(1) In general.--Except as provided in paragraph (2), the
Secretary shall charge the borrower of a loan made under this
part an origination fee of 4.0 percent of the principal amount
of the loan.
``(2) Exception for subsidized loans.--The Secretary may
not charge the borrower of a loan made under this part an
origination fee if the borrower receives an interest subsidy
for such loan.''.
(b) FFEL 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:
``(9) Termination of origination fees for subsidized
loans.--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 this paragraph for which a borrower receives an
interest subsidy under section 428(a)--
``(A) no eligible lender may collect directly or
indirectly from the 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.''.
(c) Adjustment of Fees and Loans for Direct Loans.--Section 455 of
the Higher Education Act of 1965 (20 U.S.C. 1087e) is amended by adding
at the end the following:
``(m) Adjustment of Fees and Loans.--Notwithstanding any other
provision of law, the Secretary shall adjust the fees and terms for
Federal Direct Unsubsidized Stafford Loans to be equal to the fees and
terms for loans made to borrowers under section 428H.''.

SEC. 104. DIRECT LOAN REWARD PROGRAM.

Part D of title IV of the Higher Education Act of 1965 (20 U.S.C.
1087a et seq.) is amended by adding at the end the following:

``SEC. 460A. DIRECT LOAN REWARD PROGRAM.

``(a) Short Title.--This section may be cited as the `Direct Loan
Reward Act'.
``(b) Program Authorized.--The Secretary shall carry out a Direct
Loan Reward Program to encourage institutions of higher education to
participate in the student loan program under this part.
``(c) Program Requirements.--In carrying out the Direct Loan Reward
Program, the Secretary shall--
``(1) provide to each institution of higher education
participating in the student loan program under this part a
financial reward payment, in an amount determined in accordance
with subsection (d), to encourage the institution to provide
student loans under this part;
``(2) require each institution of higher education
receiving a payment under this section to provide student loans
under this part for a period of 5 years from the date the
payment is made;
``(3) require that funds paid to institutions of higher
education under this section be used to award students Federal
Supplemental Educational Opportunity Grants in accordance with
subpart 3 of part A, except that an institution of higher
education shall not be required to provide any matching funds
with respect to such awards; and
``(4) for a period of 2 years beginning on the date of
enactment of this section, encourage all institutions of higher
education to participate in the Direct Loan Reward Program.
``(d) Amount.--The amount of a financial reward payment under this
section shall be--
``(1) in the case of the first year of an institution of
higher education's participation in the Direct Loan Reward
Program, an amount equal to 50 percent of the savings to the
Federal Government generated by the institution's participation
in the student loan program under this part instead of the
institution's participation in the student loan program under
part B; and
``(2) in the case of the second through fifth years of an
institution of higher education's participation in the Direct
Loan Reward Program, an amount equal to 10 percent of the
savings to the Federal Government generated by the
institution's participation in the student loan program under
this part instead of the institution's participation in the
student loan program under part B.--
``(e) Trigger To Ensure Cost Neutrality.--
``(1) Limit to ensure cost neutrality.--Notwithstanding
subsection (d), the Secretary shall not distribute financial
reward payments under the Direct Loan Reward Program that, in
the aggregate, exceed the Federal savings resulting from
implementation of the Direct Loan Reward Program.
``(2) Federal savings.--In calculating Federal savings, as
used in paragraph (1), the Secretary shall determine any
Federal savings on loans made to students at institutions of
higher education that participate in the Direct Loan Reward
Program and that, on the date of enactment of the Direct Loan
Reward Program, participated in the student loan program under
part B, resulting from the difference of--
``(A) the Federal cost of loan volume made under
this part; and
``(B) the Federal cost of an equivalent type and
amount of loan volume made, insured, or guaranteed
under part B.
``(3) Distribution rules.--If the Federal savings
determined under paragraph (2) is not sufficient to distribute
full financial reward payments under the Direct Loan Reward
Program, the Secretary shall--
``(A) first make financial reward payments to those
institutions of higher education that participated in
the student loan program under part B on the date of
enactment of the Direct Loan Reward Program; and
``(B) with any remaining Federal savings after
making payments under subparagraph (A), make financial
reward payments to the institutions of higher education
not described in subparagraph (A) on a pro-rata basis.
``(4) Carry over.--Any institution of higher education that
receives a reduced financial reward payment under paragraph
(3)(B), shall remain eligible for the unpaid portion of such
institution's financial reward payment, as well as any
additional financial reward payments for which the institution
is otherwise eligible, in subsequent fiscal years.''.

SEC. 105. COSTS OF HIGHER EDUCATION.

(a) Supporting Reduced Tuition Increases.--Part C of title I of the
Higher Education Act of 1965 (20 U.S.C. 1015 et seq.) is amended by
adding at the end the following:

``SEC. 132. ECONOMIES OF SCALE.

``(a) Authorization.--
``(1) In general.--The Secretary is authorized to award
grants, on a competitive basis, to university consortia to
enable such consortia to engage in endeavors to reduce college
costs.
``(2) University consortium.--In this section, the term
`university consortium' means a consortium of not less than 5
two- or four-year degree granting institutions of higher
education that receive assistance under title IV.
``(3) Duration.--Grants awarded under this section shall be
for a period of not more than 4 years.
``(b) Application.--
``(1) In general.--A university consortium that desires a
grant under this section shall submit an application to the
Secretary at such time, in such manner, and containing such
information as the Secretary determines appropriate.
``(2) Content.--An application submitted under paragraph
(1) shall include--
``(A) a list of the institutions of higher
education that are partners in the university
consortium;
``(B) a letter of intent to participate in the
university consortium from each partner institution of
higher education;
``(C) a general description of the nature of the
programs, activities, or other cost-cutting measures to
be carried out by the university consortium with funds
received under this section, and the cost of such
programs, activities, or other cost-cutting measures;
``(D) a description of how such activities are
expected to result in cost savings for all partner
institutions of higher education;
``(E) an estimation of how much money will be saved
through such activities;
``(F) an assurance that when the university
consortium efforts begin to post savings for the
partner institutions of higher education, not less than
50 percent of the savings will be passed to students by
cutting or maintaining student tuition rates or
increasing student aid;
``(G) an assurance that each partner institution of
higher education will not raise tuition more than twice
the inflation change tracked pursuant to section
131(c)(4) from academic year to subsequent academic
year during the life of the grant;
``(H) a general timeline of how the university
consortium will carry out planned activities and when
savings are expected to be posted; and
``(I) a statement as to how the university
consortium plans to provide matching funds required
under this section.
``(3) Peer review panel.--
``(A) In general.--The Secretary shall submit to a
peer review panel each application submitted under
paragraph (1).
``(B) Composition.--The peer review panel shall
consist of representatives from--
``(i) higher education, including
professors;
``(ii) the Department; and
``(iii) the business community.
``(C) Approval or disapproval.--With respect to
each application, the peer review panel shall recommend
whether each applicant should be awarded a grant under
this section.
``(c) Awarding of Grants.--
``(1) Geographic distribution.--In awarding grants under
this section, the Secretary shall take into consideration
providing an equitable geographic distribution of the grants
throughout the United States.
``(2) Maximum award.--A grant award under this section
shall be not more than $200,000. Not more than $75,000 may be
awarded in the first year of the grant award and remaining
funds shall be evenly divided over the remaining 3 years.
``(d) Activities.--
``(1) Cost-cutting activities.--A university consortium
awarded a grant under this section shall use the grant funds to
cut partner institution of higher education costs by carrying
out 1 or more of the following activities:
``(A) Cooperative purchasing of health care and
other employee benefit plans.
``(B) Cooperative purchasing of technology
infrastructure.
``(C) Joint degree programs.
``(D) Expansion of joint distance education
programs across institutions of higher education.
``(E) Shared library acquisitions.
``(F) Development and implementation of a credit
transfer system among partner institutions of higher
education.
``(G) Development and implementation of cooperative
billing structures.
``(H) Development and implementation of joint
professional development for faculty and staff.
``(I) Joint legal counsel.
``(J) Other activities that have the effect of
cutting partner institution of higher education costs.
``(2) Further activities.--A university consortium may
carry out activities not listed in paragraph (1) in addition to
carrying out 1 or more activities listed in paragraph (1).
``(3) Cost savings to students.--Each partner institution
of higher education of a university consortium awarded a grant
under this section shall--
``(A) not raise tuition more than twice the rate of
inflation from academic year to subsequent academic
year during the life of the grant; and
``(B) pass on to the students at such institution
not less than 50 percent of the savings from the grant
by cutting or maintaining student tuition rates or
increasing student aid.
``(e) Matching Funds.--
``(1) In general.--Each university consortium awarded a
grant under this section shall provide matching funds from non-
Federal sources to carry out activities under this section in
an amount equal to--
``(A) 40 percent of the grant award in the first
year;
``(B) 50 percent of the grant award in the second
year;
``(C) 65 percent of the grant award in each of the
third and fourth years; and
``(D) 80 percent of the grant award in the fifth
year.
``(2) In-kind contributions.--Not more than 50 percent of
the matching funds required under paragraph (1) may be provided
in the form of in-kind contributions.
``(f) One-Time Award.--A university consortium may receive a grant
under this section only one time.
``(g) Supplement, Not Supplant.--Funds made available under this
section shall be used to supplement, not supplant, other funds
available for institutional or campus-based student aid.
``(h) Reporting.--
``(1) Annual report.--
``(A) In general.--Each university consortium
awarded a grant under this section shall submit an
annual report to the Secretary on progress toward
meeting the purposes of this section.
``(B) Consequences of not making substantial
progress.--If the Secretary, after consultation with
the peer review panel described in subsection (b)(3),
determines that the university consortium is not making
substantial progress in meeting the purposes and goals
of this section, as appropriate, by the end of the
second year of the grant, the grant shall not be
continued for the third and fourth year of the grant.
``(2) Report by the secretary.--The Secretary shall--
``(A) conduct an analysis on the overall
effectiveness of university consortia in cutting
college costs and passing savings on to students; and
``(B) make the analysis under subparagraph (A)
available to Congress and the public biannually.
``(i) National Activities.--The Secretary may reserve not more than
5 percent of the funds appropriated for this section for any fiscal
year for--
``(1) peer review of applications;
``(2) conducting the analysis required under subsection
(h)(3); and
``(3) technical assistance.
``(j) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $5,000,000 for fiscal year 2004
and such sums as may be necessary for each of the 5 succeeding fiscal
years.''.
(b) College Cost Summit.--Part C of title I of the Higher Education
Act of 1965 (20 U.S.C. 1015 et seq.), as amended by subsection (a), is
further amended by adding at the end the following:

``SEC. 133. COLLEGE COST SUMMIT.

``(a) In General.--The Secretary shall convene a college cost
summit with representatives of competing peer institutions of higher
education for the purpose of negotiating voluntarily agreed upon limits
on future college tuition and fee increases.
``(b) Secretarial Approval.--No agreement reached pursuant to
subsection (a) shall take effect absent approval by the Secretary.
``(c) Antitrust Exemption.--
``(1) Definitions.--In this subsection:
``(A) Antitrust laws.--The term `antitrust laws'
has the meaning given such term in subsection (a) of
the first section of the Clayton Act (15 U.S.C. 12(a)),
except that such term includes section 5 of the Federal
Trade Commission Act (15 U.S.C. 45) to the extent such
section 5 applies to unfair methods of competition.
``(B) Institution of higher education.--The term
`institution of higher education'--
``(i) means an institution of higher
education as defined in section 101; and
``(ii) includes any individual acting on
behalf of such an institution.
``(2) Exemption.--The antitrust laws shall not apply to any
joint discussion, consideration, review, action, or agreement
by or among institutions of higher education or their
representatives pursuant to this section and for the purpose
of, and limited to, negotiating voluntarily agreed upon limits
on future college tuition and fee increases, approved by the
Secretary.''.
(c) Maintenance of Effort.--Part A of title IV of the Higher
Education Act of 1965 (20 U.S.C. 1070 et seq.) is amended by adding at
the end the following:

``Subpart 9--Maintenance of Effort

``SEC. 420K. MAINTENANCE OF EFFORT.

``(a) In General.--A public institution of higher education is
eligible to receive the full amount of assistance under this title for
any fiscal year only if the Secretary determines that the State in
which the public institution of higher education is located maintains
not less than 90 percent of its support for higher education from the
preceding fiscal year, as demonstrated by the State aggregate
expenditures with respect to the provision of higher education.
``(b) Waiver.--The Secretary may waive the requirements of this
section if the Secretary determines that a waiver would be equitable
due to--
``(1) exceptional or uncontrollable circumstances, such as
a natural disaster; or
``(2) a precipitous, unpredicted, and unprecedented decline
in State budget authority.
``(c) Consequences of Failure To Maintain Effort.--Notwithstanding
any other provision of this Act, the Secretary shall adjust the level
of assistance available to institutions described in subsection (a) by
restoring the Pell Grant maximum under this part and student loan fees
under parts B and D to their levels on June 30, 2004.''.
(d) Truth-in-Tuition.--Part A of title IV of the Higher Education
Act of 1965 (20 U.S.C. 1070 et seq.), as amended by subsection (c), is
further amended by adding at the end the following:

``Subpart 10--Truth-in-Tuition

``SEC. 420L. DISCLOSURE IN APPLICATION.

``An institution of higher education that receives Federal funds
and is eligible for assistance under this title shall include in
materials accompanying an application for admission to the institution
up to date annual trend information regarding the extent and average
amount of such institution's tuition and fee discounts.''.
(e) College Consumer Price Information.--Section 131(c)(4) of the
Higher Education Act of 1965 (20 U.S.C. 1015(c)(4)) is amended to read
as follows:
``(4) Higher Education Market Basket.--
``(A) In general.--The Bureau of Labor Statistics,
in consultation with the Commissioner for Education
Statistics, shall develop a higher education cost index
that tracks inflation changes in the necessary costs
associated with higher education.
``(B) Authorization of appropriations.--There are
authorized to be appropriated to carry out this
paragraph $7,000,000 for fiscal year 2004 and such sums
as may be necessary for each of the 5 succeeding fiscal
years.''.

SEC. 106. CREDIT FOR INTEREST ON HIGHER EDUCATION LOANS.

(a) In General.--Subpart A of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to nonrefundable
personal credits) is amended by inserting after section 25B the
following new section:

``SEC. 25C. INTEREST ON HIGHER EDUCATION LOANS.

``(a) Allowance of Credit.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to the interest paid by the
taxpayer during the taxable year on any qualified education loan.
``(b) Maximum Credit.--
``(1) In general.--Except as provided in paragraph (2), the
credit allowed by subsection (a) for the taxable year shall not
exceed $1,500.
``(2) Limitation based on modified adjusted gross income.--
``(A) In general.--If the modified adjusted gross
income of the taxpayer for the taxable year exceeds
$50,000 ($100,000 in the case of a joint return), the
amount which would (but for this paragraph) be
allowable as a credit under this section shall be
reduced (but not below zero) by the amount which bears
the same ratio to the amount which would be so
allowable as such excess bears to $10,000 ($20,000 in
the case of a joint return).
``(B) Modified adjusted gross income.--The term
`modified adjusted gross income' means adjusted gross
income determined without regard to sections 911, 931,
and 933.
``(C) Inflation adjustment.--In the case of any
taxable year beginning after 2004, the $50,000 and
$100,000 amounts referred to in subparagraph (A) shall
be increased by an amount equal to--
``(i) such dollar amount, multiplied by
``(ii) the cost-of-living adjustment
determined under section 1(f)(3) for the
calendar year in which the taxable year begins,
by substituting `2003' for `1992'.
``(D) Rounding.--If any amount as adjusted under
subparagraph (C) is not a multiple of $50, such amount
shall be rounded to the nearest multiple of $50.
``(c) Dependents Not Eligible for Credit.--No credit shall be
allowed by this section to an individual for the taxable year if a
deduction under section 151 with respect to such individual is allowed
to another taxpayer for the taxable year beginning in the calendar year
in which such individual's taxable year begins.
``(d) Limit on Period Credit Allowed.--A credit shall be allowed
under this section only with respect to interest paid on any qualified
education loan during the first 60 months (whether or not consecutive)
in which interest payments are required. For purposes of this
paragraph, any loan and all refinancings of such loan shall be treated
as 1 loan.
``(e) Definitions.--For purposes of this section:
``(1) Qualified education loan.--The term `qualified
education loan' has the meaning given such term by section
221(d)(1).
``(2) Dependent.--The term `dependent' has the meaning
given such term by section 152.
``(f) Special Rules.--
``(1) Denial of double benefit.--No credit shall be allowed
under this section for any amount taken into account for any
deduction under any other provision of this chapter.
``(2) Married couples must file joint return.--If the
taxpayer is married at the close of the taxable year, the
credit shall be allowed under subsection (a) only if the
taxpayer and the taxpayer's spouse file a joint return for the
taxable year.
``(3) Marital status.--Marital status shall be determined
in accordance with section 7703.''.
(b) Conforming Amendment.--The table of sections for subpart A of
part IV of subchapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by inserting after the item relating to section 25B the
following new item:

``Sec. 25C. Interest on higher education
loans.''.
(c) Effective Date.--The amendments made by this section shall
apply to any qualified education loan (as defined in section 25C(e)(1)
of the Internal Revenue Code of 1986, as added by this section)
incurred on, before, or after the date of enactment of this Act, but
only with respect to any loan interest payment due after December 31,
2002.

SEC. 107. REFINANCING AUTHORITY FOR FEDERAL DIRECT CONSOLIDATION LOAN.

Section 455(g) of the Higher Education Act of 1965 (20 U.S.C.
1087e(g)) is amended--
(1) by striking ``A borrower'' and inserting the following:
``(1) In general.--A borrower''; and
(2) by adding at the end the following:
``(2) Refinancing authority.--
``(A) In general.--Notwithstanding any other
provision of this part, a borrower may refinance a
Federal Direct Consolidation Loan at the prevailing
fixed rate as determined by the Secretary, if the
interest rate on such borrower's Federal Direct
Consolidation Loan is not less than 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.
``(B) One-time only.--A borrower may refinance
under subparagraph (A) only once.''.

SEC. 108. LOANS FUNDED THROUGH TAX-EXEMPT SECURITIES.

(a) Repeal.--Subparagraph (B) of section 438(b)(2) of the Higher
Education Act of 1965 (20 U.S.C. 1087-1(b)(2)) is repealed.
(b) Loans Funded Through Tax-Exempt Securities.--Section 438(b)(2)
of the Higher Education Act of 1965 is amended further by inserting
after subparagraph (A) the following:
``(B) Notwithstanding any other provision of law, the
quarterly rate of the special allowance for the holders of
loans financed directly, indirectly, or derivatively with funds
obtained by the holders from the issuance of obligations, the
income from which is excluded from gross income under the
Internal Revenue Code of 1986, regardless of the date of the
issuance of the obligations, shall be the quarterly rate of the
special allowance established under subparagraph (A), (E), (F),
(G), or (H), as the case may be.''.

SEC. 109. WINDFALL PROFIT OFFSET.

Section 438 of the Higher Education Act of 1965 (20 U.S.C. 1087-1)
is amended by adding at the end the following:
``(g) Windfall Profit Offset.--
``(1) In general.--Except as provided in paragraph (2), at
the end of every fiscal quarter for which an eligible lender
does not receive a special allowance payment under this
section, the eligible lender shall pay to the Secretary of the
Treasury for deposit into the Treasury as miscellaneous
receipts a windfall profit offset payment for the fiscal
quarter equal to the amount by which--
``(A) the aggregate amount of all payments of
interest received by the eligible lender from borrowers
on all loans made, insured, or guaranteed under this
part during the fiscal quarter; exceeds
``(B) interest guaranteed the lender under this
section for the fiscal quarter, irrespective of the
amount received under subparagraph (A).
``(2) Exception.--An eligible lender shall not be subject
to the requirement of paragraph (1) if the eligible lender is
an organization described in section 501(c)(3) of the Internal
Revenue Code of 1986 and a nonprofit entity as defined by
applicable State law, and meets the following requirements:
``(A) The eligible lender does not confer a salary
or benefits to any employee of the lender in an amount
that is in excess of the salary and benefits provided
to the Secretary by the Department.
``(B) The eligible lender does not maintain an
ongoing relationship whereby it passes on revenue
directly or indirectly through lease, securitization,
resale, or any other financial instrument to a for-
profit entity or to shareholders.
``(C) The eligible lender does not offer benefits
to a borrower in a manner directly or indirectly
predicated on such borrower's participation in a
program under this part, part D, or with any particular
lender.
``(D) The eligible lender certifies that it uses
the windfall profit amount described in paragraph (1)
to carry out the purposes of this Act through
activities such as the following:
``(i) Conferring grants, scholarships, or
loans.
``(ii) Financing work-study student
employment.
``(iii) Carrying out activities authorized
under chapters 1 and 2 of subpart 2 of part A.
``(E) The eligible lender is subject to public
oversight through either a State charter, or not less
than 50 percent of the lender's board of directors
consists of State appointed representatives.
``(F) The eligible lender does not engage in the
marketing of the relative value of programs under this
part as compared to programs under part D, nor does the
lender engage in the marketing of loans or programs
offered by for-profit lenders. This subparagraph shall
not be construed to prohibit the eligible lender from
conferring basic information on lenders under this part
and the related benefits offered by such lenders.''.

SEC. 110. SUPPORT FOR WORKING STUDENTS.

(a) Dependent Students.--Section 475(g)(2) of the Higher Education
Act of 1965 (20 U.S.C. 1087oo(g)(2)) is amended by striking
subparagraph (D) and inserting the following:
``(D) $9,000;''.
(b) Independent Students Without Dependents Other Than a Spouse.--
Section 476(b)(1)(A) of the Higher Education Act of 1965 (20 U.S.C.
1087pp(b)(1)(A)) is amended by striking clause (iv) and inserting the
following:
``(iv) $13,000;''.
(c) Independent Students With Dependents Other Than a Spouse.--
Section 477(b) of the Higher Education Act of 1965 (20 U.S.C.
1087qq(b)) is amended--
(1) in paragraph (1)--
(A) by striking subparagraph (D) and inserting the
following:
``(D) $18,000;''; and
(B) in subparagraph (E), by striking ``paragraph
(5)'' and inserting ``paragraph (4)'';
(2) by striking paragraph (4); and
(3) by redesignating paragraph (5) as paragraph (4).
(d) Conforming Amendments.--Section 478 of the Higher Education Act
of 1965 (20 U.S.C. 1087rr) is amended--
(1) by striking subsection (b) and inserting the following:
``(b) Income Protection Allowance.--For each academic year after
academic year 1993-1994, the Secretary shall publish in the Federal
Register a revised table of income protection allowances for the
purpose of section 475(c)(4). Such revised table shall be developed by
increasing each of the dollar amounts contained in the table in such
section by a percentage equal to the estimated percentage increase in
the Consumer Price Index (as determined by the Secretary) between
December 1992 and the December next preceding the beginning of such
academic year, and rounding the result to the nearest $10.''; and
(2) in subsection (h)--
(A) in the first sentence, by striking
``477(b)(5)'' and inserting ``477(b)(4)''; and
(B) in the second sentence--
(i) by striking ``477(b)(5)(A)'' and
inserting ``477(b)(4)(A)''; and
(ii) by striking ``477(b)(5)(B)'' and
inserting ``477(b)(4)(B)''.

SEC. 111. STUDENT ELIGIBILITY.

Section 484 of the Higher Education Act of 1965 (20 U.S.C. 1091) is
amended by striking subsection (r).

SEC. 112. AUTHORIZATION OF APPROPRIATIONS LEVELS FOR CAMPUS-BASED AID.

(a) Federal Supplemental Educational Opportunity Grants.--Section
413A(b)(1) of the Higher Education Act of 1965 (20 U.S.C. 1070b(b)(1))
is amended by striking ``$675,000,000 for fiscal year 1999 and such
sums as may be necessary for the 4 succeeding fiscal years'' and
inserting ``$1,000,000,000 for fiscal year 2004 and such sums as may be
necessary for each of the 5 succeeding fiscal years''.
(b) Federal Work-Study Programs.--Section 441(b) of the Higher
Education Act of 1965 (42 U.S.C. 2751(b)) is amended by striking
``$1,000,000,000 for fiscal year 1999 and such sums as may be necessary
for each of the 4 succeeding fiscal years'' and inserting
``$1,500,000,000 for fiscal year 2004 and such sums as may be necessary
for each of the 5 succeeding fiscal years''.
(c) Federal Perkins Loans.--Section 461(b)(1) of the Higher
Education Act of 1965 (20 U.S.C. 1087aa(b)(1)) is amended by striking
``$250,000,000 for fiscal year 1999 and such sums as may be necessary
for each of the 4 succeeding fiscal years'' and inserting
``$300,000,000 for fiscal year 2004 and such sums as may be necessary
for each of the 5 succeeding fiscal years''.

SEC. 113. SPECIAL PROGRAMS FOR STUDENTS WHOSE FAMILIES ARE ENGAGED IN
MIGRANT AND SEASONAL FARMWORK.

Section 418A of the Higher Education Act of 1965 (20 U.S.C. 1070d-
2) is amended--
(1) in subsection (f)--
(A) in paragraph (1), by striking ``$150,000'' and
inserting ``$225,000''; and
(B) in paragraph (2), by striking ``$150,000'' and
inserting ``$225,000''; and
(2) in subsection (h)--
(A) in paragraph (1)--
(i) by striking ``$15,000,000'' and
inserting ``$40,000,000'';
(ii) by striking ``1999'' and inserting
``2004''; and
(iii) by striking ``4'' and inserting
``5''; and
(B) in paragraph (2)--
(i) by striking ``$5,000,000'' and
inserting ``$30,000,000'';
(ii) by striking ``1999'' and inserting
``2004''; and
(iii) by striking ``4'' and inserting
``5''.

SEC. 114. LOAN FORGIVENESS AND CANCELLATION FOR CERTAIN TEACHERS.

(a) FFEL Loans.--Section 428J of the Higher Education Act of 1965
(20 U.S.C. 1078-10) is amended--
(1) in subsection (c), by adding at the end the following:
``(3) Additional amounts for highly qualified teachers in
mathematics, science, special education, or bilingual
education.--Notwithstanding the amount specified in paragraph
(1) and the requirements of subsection (b)(1), the Secretary
shall repay not more than $15,000 in the aggregate of the loan
obligation on a loan made under section 428 or 428H that is
outstanding after the completion of the fifth complete school
year of teaching described in subparagraphs (A) and (B) in the
case of a teacher--
``(A) who has been employed as a full-time teacher
for 5 consecutive complete school years in a school
that qualifies under section 465(a)(2)(A) for loan
cancellation for Perkins loan recipients who teach in
such schools, except that the enrollment of children
counted under section 1124(c) of the Elementary and
Secondary Education Act of 1965 exceeds 40 percent of
the total enrollment of such school;
``(B) whose qualifying employment is teaching
mathematics, science, special education, or bilingual
education; and
``(C) who is highly qualified (as defined in
section 9101 of the Elementary and Secondary Education
Act of 1965).''; and
(2) by adding at the end the following:
``(i) Early Education Teachers.--
``(1) Authorization.--The Secretary shall carry out a
program, through the holder of the loan, of assuming the
obligation to repay a qualified loan amount for a loan made
under section 428 or 428H, in accordance with paragraph (2),
for any new borrower on or after October 1, 1998, who--
``(A) has been employed as a full-time teacher for
5 consecutive complete school years in a Head Start or
Early Head Start program under the Head Start Act (42
U.S.C. 9831 et seq.), or in another comparable
prekindergarten program that serves children not less
than 60 percent of whom are eligible to participate in
a Head Start or Early Head Start program; and
``(B) is not in default on a loan for which the
borrower seeks forgiveness.
``(2) Qualified loan amount.--
``(A) In general.--The Secretary shall repay not
more than $15,000 in the aggregate of the loan
obligation on a loan made under section 428 or 428H
that is outstanding after the completion of the fifth
complete school year of teaching described in paragraph
(1)(A).
``(B) Treatment of consolidation loans.--A loan
amount for a loan made under section 428C may be a
qualified loan amount for the purposes of this
paragraph only to the extent that such loan amount was
used to repay a Federal Direct Stafford Loan, a Federal
Direct Unsubsidized Stafford Loan, or a loan made under
section 428 or 428H for a borrower who meets the
requirements of paragraph (1), as determined in
accordance with regulations prescribed by the
Secretary.''.
(b) Direct Loans.--Section 460 of the Higher Education Act of 1965
(20 U.S.C. 1087j) is amended--
(1) in subsection (c), by adding at the end the following:
``(3) Additional amounts for highly qualified teachers in
mathematics, science, special education, or bilingual
education.--Notwithstanding the amount specified in paragraph
(1) and the requirements of subsection (b)(1)(A), the Secretary
shall cancel not more than $15,000 in the aggregate of the loan
obligation on a Federal Direct Stafford Loan or a Federal
Direct Unsubsidized Stafford Loan that is outstanding after the
completion of the fifth complete school year of teaching
described in subparagraphs (A) and (B) in the case of a
teacher--
``(A) who has been employed as a full-time teacher
for 5 consecutive complete school years in a school
that qualifies under section 465(a)(2)(A) for loan
cancellation for Perkins loan recipients who teach in
such schools, except that the enrollment of children
counted under section 1124(c) of the Elementary and
Secondary Education Act of 1965 exceeds 40 percent of
the total enrollment of such school;
``(B) whose qualifying employment is teaching
mathematics, science, special education, or bilingual
education; and
``(C) who is highly qualified (as defined in
section 9101 of the Elementary and Secondary Education
Act of 1965).''; and
(2) by adding at the end the following:
``(i) Early Education Teachers.--
``(1) Authorization.--The Secretary shall carry out a
program of canceling the obligation to repay a qualified loan
amount in accordance with paragraph (2) for Federal Direct
Stafford Loans and Federal Direct Unsubsidized Stafford Loans
made under this part for any new borrower on or after October
1, 1998, who--
``(A) has been employed as a full-time teacher for
5 consecutive complete school years in a Head Start or
Early Head Start program under the Head Start Act (42
U.S.C. 9831 et seq.), or in another comparable
prekindergarten program that serves children not less
than 60 percent of whom are eligible to participate in
a Head Start or Early Head Start program; and
``(B) is not in default on a loan for which the
borrower seeks cancellation.
``(2) Qualified loan amount.--
``(A) In general.--The Secretary shall cancel not
more than $15,000 in the aggregate of the loan
obligation on a Federal Direct Stafford Loan or a
Federal Direct Unsubsidized Stafford Loan that is
outstanding after the completion of the fifth complete
school year of teaching described in paragraph (1)(A).
``(B) Treatment of consolidation loans.--A loan
amount for a Federal Direct Consolidation Loan may be a
qualified loan amount for the purposes of this
paragraph only to the extent that such loan amount was
used to repay a Federal Direct Stafford Loan, a Federal
Direct Unsubsidized Stafford Loan, or a loan made under
section 428 or 428H for a borrower who meets the
requirements of paragraph (1), as determined in
accordance with regulations prescribed by the
Secretary.''.

SEC. 115. REVISION OF TAX TABLE.

Section 478(g) of the Higher Education Act of 1965 (20 U.S.C.
1087rr(g)) is amended by adding at the end the following: ``The
Secretary shall develop such revised table only after consultation with
appropriate committees of Congress.''.

SEC. 116. INCOME CONTINGENT REPAYMENT FOR PUBLIC SECTOR EMPLOYEES.

Section 455(e) of the Higher Education Act of 1965 (20 U.S.C.
1087e(e)) is amended by adding at the end the following:
``(7) Repayment plan for public sector employees.--
``(A) In general.--The Secretary shall forgive the
balance due on any loan made under this part for a
borrower--
``(i) who has made 120 payments on such
loan pursuant to income contingent repayment;
and
``(ii) who is employed, and was employed
for the 10-year period in which the borrower
made the 120 payments described in clause (i),
in a public sector job.
``(B) Public sector job.--In this paragraph, the
term `public sector job' means a full-time job in
emergency management, government, public safety, law
enforcement, public health, education (including early
childhood education), or public interest legal services
(including prosecution or public defense).
``(8) Return to standard repayment.--A borrower who is
repaying a loan made under this part pursuant to income
contingent repayment may choose, at any time, to terminate
repayment pursuant to income contingent repayment and repay
such loan under the standard repayment plan.''.

TITLE II--TEACHER QUALITY ENHANCEMENT

SEC. 201. AMENDMENT TO TITLE II.

Title II of the Higher Education Act of 1965 (20 U.S.C. 1021 et
seq.) is amended to read as follows:

``TITLE II--TEACHER QUALITY ENHANCEMENT

``PART A--TEACHER QUALITY ENHANCEMENT GRANTS FOR STATES AND
PARTNERSHIPS

``SEC. 201. PURPOSES; DEFINITIONS.

``(a) Purposes.--The purposes of this part are to--
``(1) improve student achievement;
``(2) increase the size and scope of programs funded under
this part to meet the goal of having 100 percent of teachers as
highly qualified teachers;
``(3) retain and recruit highly qualified individuals into
the teaching force through incentives;
``(4) hold institutions of higher education accountable for
preparing teachers, through coursework in pedagogy, with
effective methods of teaching as a means of better preparing
teachers for the modern day classroom;
``(5) improve the quality of the current and future
teaching force by improving the preparation of prospective
teachers and enhancing professional development activities;
``(6) hold institutions of higher education accountable for
preparing teachers who have the necessary teaching skills and
are highly competent in the academic content areas in which the
teachers plan to teach, such as mathematics, science, English,
reading or language arts, foreign languages, history,
economics, art, civics, Government, and geography, including
training in the effective uses of technology in the classroom;
``(7) recruit highly qualified individuals, including
individuals from other occupations, into the teaching force,
especially in subject areas of high need (including bilingual
education, special education, mathematics, science, and early
childhood education), geographic areas of high need, and in
geographic areas with teacher vacancy or retention problems;
and
``(8) encourage learning partnerships between students and
parents that lead to improving student academic achievement and
school performance.
``(b) Definitions.--In this part:
``(1) Arts and sciences.--The term `arts and sciences'
means--
``(A) when referring to an organizational unit of
an institution of higher education, any academic unit
that offers 1 or more academic majors in disciplines or
content areas corresponding to the academic subject
matter areas in which teachers provide instruction; and
``(B) when referring to a specific academic subject
matter area, the disciplines or content areas in which
academic majors are offered by the arts and science
organizational unit.
``(2) High need local educational agency.--The term `high
need local educational agency' means a local educational agency
in which--
``(A)(i) 30 percent of the students served by the
agency are from families with incomes below the poverty
line; or
``(ii) there are more than 20,000 students served
by the agency from families with incomes below the
poverty line; and
``(B)(i) there is a high percentage of teachers who
are not highly qualified; or
``(ii) there is a high teacher turnover rate.
``(3) High need school.--The term `high need school' means
an elementary school or secondary school--
``(A) in which there is a high concentration of
students from families with incomes below the poverty
line; or
``(B) that is identified as in need of school
improvement or corrective action pursuant to section
1116 of the Elementary and Secondary Education Act of
1965 (20 U.S.C. 6316).
``(4) Highly qualified.--The term `highly qualified' has
the meaning given the term in section 9101 of the Elementary
and Secondary Education Act of 1965.
``(5) Mentoring.--The term `mentoring' has the meaning
given the term in section 9101 of the Elementary and Secondary
Education Act of 1965.
``(6) Parent.--The term `parent' has the meaning given the
term in section 9101 of the Elementary and Secondary Education
Act of 1965.
``(7) Parental involvement.--The term `parental
involvement' has the meaning given the term in section 9101 of
the Elementary and Secondary Education Act of 1965.
``(8) Poverty line.--The term `poverty line' means the
poverty line (as defined by the Office of Management and
Budget, and revised annually in accordance with section 673(2)
of the Community Services Block Grant Act (42 U.S.C. 9902(2)))
applicable to a family of the size involved.
``(9) Professional development.--The term `professional
development' has the meaning given the term in section 9101 of
the Elementary and Secondary Education Act of 1965.
``(10) Teaching skills.--The term `teaching skills' means
skills--
``(A) grounded in the disciplines of teaching and
learning that teachers use to create effective
instruction in subject matter content and that lead to
student achievement and the ability to apply knowledge;
and
``(B) that require an understanding of the learning
process itself, including an understanding of--
``(i) the use of strategies specific to the
subject matter;
``(ii) the application of on-going
assessment of student learning;
``(iii) individual differences in ability
and instructional needs; and
``(iv) effective classroom management.

``SEC. 202. PROGRAM AUTHORITY.

``(a) Competitive Grant Program.--If the amount appropriated to
carry out this part for a fiscal year is less than $270,000,000, then
the Secretary shall use--
``(1) 25 percent of such funds to carry out the competitive
State grant program under section 203; and
``(2) 75 percent of such funds to carry out the competitive
partnership grant program under section 204.
``(b) Formula Grant Program.--
``(1) In general.--
``(A) Authorization of grants.--If the amount
appropriated to carry out this part for a fiscal year
is equal to or exceeds $270,000,000, then the Secretary
shall use such funds to award a grant to each State
from allotments under subparagraph (B).
``(B) Allotments.--The Secretary shall make an
allotment to each State in an amount that bears the
same relation to the funds as the amount the State
received under part A of title I of the Elementary and
Secondary Education Act of 1965 for the preceding
fiscal year bears to the amount received by all States
under such part for the preceding fiscal year.
``(2) State use of funds.--A State that receives an
allotment under paragraph (1) shall expend--
``(A) 25 percent of such funds to carry out State
level activities under subsections (d) and (e) of
section 203; and
``(B) 75 percent of such funds to carry out the
competitive partnership grant program under section
204.

``SEC. 203. STATE GRANTS.

``(a) In General.--From amounts made available under section 210
for a fiscal year, the Secretary is authorized to award grants under
this section, on a competitive basis, to eligible States to enable the
eligible States to carry out the activities described in subsections
(d) and (e).
``(b) Eligible State.--
``(1) Definition.--In this part, the term `eligible State'
means a State educational agency.
``(2) Consultation.--The State educational agency shall
consult with the Governor, State board of education, or State
agency for higher education, as appropriate, with respect to
the activities assisted under this section.
``(3) Construction.--Nothing in this subsection shall be
construed to negate or supersede the legal authority under
State law of any State agency, State entity, or State public
official over programs that are under the jurisdiction of the
agency, entity, or official.
``(c) Application.--To be eligible to receive a grant under this
section, an eligible State shall, at the time of the initial grant
application, submit an application to the Secretary that--
``(1) meets the requirement of this section;
``(2) includes a description of how the eligible State
intends to use funds provided under this section; and
``(3) contains such other information and assurances as the
Secretary may require.
``(d) Required Uses of Funds.--A State that receives a grant under
this section shall use the grant funds to carry out the following
activities:
``(1) Rigorous teacher certification or licensure
programs.--Ensuring that the State's teacher certification or
licensure program is rigorous and has high standards.
``(2) Teacher recruitment.--
``(A) In general.--Awarding scholarships to help
students pay the costs of tuition, room, board, and
other expenses of completing a teacher preparation
program.
``(B) Support services.--Providing support
services, if needed, to enable scholarship recipients
to complete postsecondary education programs.
``(C) Assistance to become highly qualified
teachers.--Providing teachers who are not highly
qualified with the opportunity to take coursework or
credentialing courses in order to become highly
qualified teachers.
``(D) Followup services.--Providing followup
services to former scholarship recipients during the
recipients' first 3 years of teaching.
``(E) Service requirement.--The Secretary shall
establish such requirements as the Secretary finds
necessary to ensure that recipients of scholarships
under this paragraph who complete teacher education
programs subsequently teach in a high need local
educational agency, for a period of time equivalent to
the period for which the recipients receive scholarship
assistance, or repay the amount of the scholarship. The
Secretary shall use any such repayments to carry out
additional activities under this section.
``(e) Allowable Uses of Funds.--A State that receives a grant under
this section may use such funds to carry out any of the following
activities:
``(1) Reforms.--Implementing reforms that hold institutions
of higher education with teacher preparation programs
accountable for preparing teachers who are highly competent in
the academic content areas in which the teachers plan to teach,
and possess strong teaching skills, which may include the use
of rigorous subject matter competency tests and the requirement
that a teacher have an academic major in the subject area, or
related discipline, in which the teacher plans to teach, and
instruction for such teachers on how to involve parents in
their children's education.
``(2) Certification or licensure requirements.--Reforming
teacher certification or licensure requirements to ensure that
teachers have the necessary teaching skills and academic
content knowledge in the subject areas in which teachers are
assigned to teach. States are encouraged to use funds to develop or
enhance existing licensure and certification requirements for subject
areas of high need (including bilingual education, special education,
mathematics, science, and early childhood education), including
development of a State test.
``(3) Alternative routes to certification for teaching.--
Providing prospective teachers with alternative routes to
traditional preparation for teaching through programs at
colleges of arts and sciences or at nonprofit educational
organizations that have a proven record of effectiveness and
include instruction in teaching skills. Strengthening or
developing alternative routes to State certification of
teachers programs that includes, at a minimum--
``(A) a selective means for admitting individuals
into such programs that includes passage of State
teacher exams in appropriate subject areas;
``(B) pedagogical course work, including formal
instruction that addresses the theories and practices
of teaching and monitoring student performance; and
``(C) support services, including mentoring for the
individuals participating in the alternative State
certification of teachers programs that focuses on--
``(i) helping the individuals develop
effective teaching skills and strategies;
``(ii) professional development; and
``(iii) the disciplines of teaching and
learning to ensure that prospective teachers
have an understanding of research-based
learning practices and possess skills related
to the learning process.
``(4) Teacher support.--Carrying out programs that include
support during the initial teaching experience.
``(5) Recruiting and hiring teachers.--
``(A) Effective mechanisms.--Developing and
implementing effective mechanisms to ensure that local
educational agencies and schools are able to
effectively recruit highly qualified teachers.
``(B) Programs.--Establishing programs that--
``(i) train and hire regular, special
education, and bilingual education teachers
(which may include hiring special education
teachers to team-teach in classrooms that
contain both children with disabilities and
nondisabled children);
``(ii) train and hire highly qualified
teachers of special needs children and limited
English proficient students, as well as
teaching specialists in core academic subjects
who will provide individualized instruction to
students;
``(iii) recruit qualified professionals
from other fields, including highly qualified
paraprofessionals (as defined in section 2102
of the Elementary and Secondary Education Act
of 1965), and provide such professionals with
alternative routes to teacher certification,
including developing and implementing hiring
policies that ensure comprehensive recruitment
efforts as a way to expand the applicant pool,
such as through identifying teachers certified
through alternative routes, and using a system
of intensive screening designed to hire the
most qualified applicants; and
``(iv) provide increased opportunities for
minorities, individuals with disabilities, and
other individuals underrepresented in the
teaching profession.
``(C) Reduction in class size.--Recruiting and
hiring highly qualified teachers to reduce class size,
particularly in the early grades.
``(6) Social promotion.--Development and implementation of
efforts to address the problem of social promotion and to
prepare teachers to effectively address the issues raised by
ending the practice of social promotion.
``(7) Special certification for prospective ap teachers.--
Developing and implementing teacher preparation programs that
provide special certification in advanced placement (AP)-level
or international baccalaureate (IB)-level content and pedagogy,
including undergraduate specializations in in-depth study of
subject-specific content and practical pedagogical experience
through student teaching, and master degree level programs that
lead to a master's degree in AP-level or IB-level content.
``(8) Financial incentives.--Providing financial incentives
for teachers to teach in high need schools in which there
exists a shortage of highly qualified teachers.

``SEC. 204. PARTNERSHIP GRANTS.

``(a) Grants.--The Secretary or State, as appropriate, shall use
funds made available under section 202 to award grants under this
section, on a competitive basis, to eligible partnerships to enable the
eligible partnerships to carry out the activities described in
subsections (d) and (e).
``(b) Definitions.--
``(1) Eligible partnerships.--In this part, the term
`eligible partnerships' means an entity that--
``(A) shall include--
``(i) a partner institution;
``(ii) a school of arts and sciences; and
``(iii) a high need local educational
agency; and
``(B) may include a Governor, State educational
agency, the State board of education, the State agency
for higher education, an institution of higher
education not described in subparagraph (A), a
community college, a public charter school, a public or
private elementary school or secondary school, a public
or private nonprofit educational organization, a
business, a teacher organization, or a prekindergarten program.
``(2) Partner institution.--In this section, the term
`partner institution' means a private independent or State-
supported public institution of higher education, the teacher
training program of which demonstrates that--
``(A) graduates from the teacher training program
exhibit strong performance on State-determined
qualifying assessments for new teachers through--
``(i) demonstrating that 80 percent or more
of the graduates of the program who intend to
enter the field of teaching have passed all of
the applicable State qualification assessments
for new teachers, which shall include an
assessment of each prospective teacher's
subject matter knowledge in the content area or
areas in which the teacher intends to teach; or
``(ii) being ranked among the highest-
performing teacher preparation programs in the
State as determined by the State--
``(I) using criteria consistent
with the requirements for the State
report card under section 207(b); and
``(II) using the State report card
on teacher preparation required under
section 207(b), after the first
publication of such report card and for
every year thereafter; or
``(B) the teacher training program requires all the
students of the program to participate in intensive
clinical experience, to meet high academic standards,
and--
``(i) in the case of secondary school
candidates, to successfully complete an
academic major in the subject area in which the
candidate intends to teach or to demonstrate
competence through a high level of performance
in relevant content areas; and
``(ii) in the case of elementary school
candidates, to successfully complete an
academic major in the arts and sciences or to
demonstrate competence through a high level of
performance in core academic subject areas.
``(c) Application.--Each eligible partnership desiring a grant
under this section shall submit an application to the Secretary or
State, as appropriate, at such time, in such manner, and accompanied by
such information as the Secretary or State, as appropriate, may
require. Each such application shall--
``(1) contain a needs assessment of all the partners with
respect to teaching and learning and a description of how the
partnership will coordinate with other teacher training or
professional development programs, and how the activities of
the partnership will be consistent with State, local, and other
education reform activities that promote student achievement
and parent involvement;
``(2) contain a resource assessment that describes the
resources available to the partnership, the intended use of the
grant funds, including a description of how the grant funds
will be fairly distributed in accordance with subsection (f),
and the commitment of the resources of the partnership to the
activities assisted under this part, including financial
support, faculty participation, time commitments, and
continuation of the activities when the grant ends; and
``(3) contain a description of--
``(A) how the partnership will meet the purposes of
this part;
``(B) how the partnership will carry out the
activities required under subsection (d) and any
permissible activities under subsection (e); and
``(C) the partnership's evaluation plan pursuant to
section 206(b).
``(d) Required Uses of Funds.--An eligible partnership that
receives a grant under this section shall use the grant funds to carry
out the following activities:
``(1) Reforms.--Implementing reforms within teacher
preparation programs to hold the programs accountable for
preparing teachers who are highly competent in the academic
content areas in which the teachers plan to teach, and for
promoting strong teaching skills, including working with a
school of arts and sciences and integrating reliable research-
based teaching methods into the curriculum, which curriculum
shall include programs designed to successfully integrate
technology into teaching and learning.
``(2) Clinical experience and interaction.--Providing
sustained and high-quality preservice clinical experience
including the mentoring of prospective teachers by veteran
teachers, and 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) Professional development.--Creating opportunities for
enhanced and ongoing professional development that improves the
academic content knowledge of teachers in the subject areas in
which the teachers are certified to teach or in which the
teachers are working toward certification to teach, and that
promotes strong teaching skills.
``(4) Ensuring adequate preparation to meet high
standards.--Developing and implementing accountability measures
for preservice--
``(A) training in reading;
``(B) training in addressing the needs of children
with disabilities and limited English proficient
individuals;
``(C) training in data analysis and how to use
student achievement data to improve instruction; and
``(D) optional training in teaching advanced
placement or international baccalaureate courses.
``(5) Teacher preparation and parental involvement.--
Preparing teachers with the knowledge and skills to enable such
teachers to--
``(A) provide instruction to diverse student
populations, including individuals with disabilities
and limited English proficient individuals; and
``(B) work with and involve parents in their
children's education and in the teacher preparation
program reform process.
``(6) Teacher preparation enhancement internship.--
Developing a 1-year paid internship program for students who
have completed a 4-year teacher education program to enable
such students to develop the skills and experience necessary
for success in teaching, including providing intensive clinical
training and combining in-service instruction in teacher
methods and assessments with classroom observations,
experiences, and practices. Such interns would have a reduced
teaching load and a mentor for assistance in the classroom.
``(e) Allowable Uses of Funds.--An eligible partnership that
receives a grant under this section may use such funds to carry out any
of the following activities:
``(1) Dissemination and coordination.--Broadly
disseminating information on effective practices used by the
partnership, and coordinating with the activities of the
Governor, State board of education, State higher education
agency, and State educational agency, as appropriate.
``(2) Managerial and leadership skills.--Developing and
implementing proven mechanisms to provide principals and
superintendents with effective managerial and leadership skills
that result in increased student achievement.
``(3) Scholarships.--
``(A) In general.--Awarding scholarships to help
students pay the costs of tuition, room, board, and
other expenses of completing a teacher preparation
program.
``(B) Support services.--Providing support
services, if needed, to enable scholarship recipients
to complete postsecondary education programs.
``(C) Assistance to become highly qualified
teachers.--Providing teachers who are not highly
qualified with the opportunity to take coursework or
credentialing courses in order to become highly
qualified teachers.
``(D) Followup services.--Providing followup
services to former scholarship recipients during the
recipients' first 3 years of teaching.
``(E) Service requirement.--The Secretary or State,
as appropriate, shall establish such requirements as
the Secretary or State, as appropriate, finds necessary
to ensure that recipients of scholarships under this
paragraph who complete teacher education programs
subsequently teach in a high need local educational
agency, for a period of time equivalent to the period
for which the recipients receive scholarship
assistance, or repay the amount of the scholarship. The
Secretary or State, as appropriate, shall use any such
repayments to carry out additional activities under
this section.
``(4) Financial incentives.--Providing financial incentives
for teachers to teach in high need schools in which there
exists a shortage of highly qualified teachers.
``(5) Recruiting and hiring teachers.--
``(A) In general.--Establishing programs that--
``(i) train and hire regular and special
education teachers (which may include hiring
special education teachers to team-teach in
classrooms that contain both children with
disabilities and nondisabled children);
``(ii) train and hire highly qualified
teachers of special needs children, as well as
teaching specialists in core academic subjects
who will provide increased individualized
instruction to students;
``(iii) recruit qualified professionals
from other fields, including highly qualified
paraprofessionals (as defined in section 2102
of the Elementary and Secondary Education Act
of 1965), and provide such professionals with
alternative routes to teacher certification,
including developing and implementing hiring
policies that ensure comprehensive recruitment
efforts as a way to expand the applicant pool,
such as through identifying teachers certified
through alternative routes, and using a system
of intensive screening designed to hire the
most qualified applicants; and
``(iv) provide increased opportunities for
minorities, individuals with disabilities, and
other individuals underrepresented in the
teaching profession.
``(B) Reduction in class size.--Recruiting and
hiring highly qualified teachers to reduce class size,
particularly in the early grades.
``(6) Faculty opportunity programs.--Awarding competitive
grants to institutions of higher education to enable such
institutions to fill education faculty vacancies in special
education, early childhood education, and bilingual education,
to create new faculty positions that are targeted toward
training highly qualified special education, early childhood
education, and bilingual education teachers, and to develop
doctoral programs in special education, early childhood
education, and bilingual education that will produce new
faculty at institutions of higher education in such subject
areas. Funds from such grants may be used to develop and carry
out recruitment strategies, subsidize moving expenses, provide
bonuses, provide fully subsidized salaries for not more than 2
years per new faculty member, and provide partially subsidized
salaries for not more than an additional 3 years per new
faculty member. If an institution of higher education receives
a grant under this paragraph and uses the grant funds to
provide faculty salaries, such institution shall continue to
fully fund such faculty positions for not less than 5 years
after the end of Federal funding under the grant.
``(f) Special Rule.--No individual member of an eligible
partnership shall retain more than 50 percent of the funds made
available to the partnership under this section.
``(g) Construction.--Nothing in this section shall be construed to
prohibit an eligible partnership from using grant funds to coordinate
with the activities of more than 1 Governor, State board of education,
State educational agency, local educational agency, or State agency for
higher education.

``SEC. 205. ADMINISTRATIVE PROVISIONS.

``(a) Duration; Increased Accountability; Payments.--
``(1) Duration.--
``(A) Eligible states and eligible applicants.--
Grants awarded to eligible States and eligible
applicants under this part shall be awarded for a
period not to exceed 3 years.
``(B) Eligible partnerships.--Grants awarded to
eligible partnerships under this part shall be awarded
for a period of 5 years.
``(2) Increased accountability.--An eligible State,
eligible applicant, or eligible partnership that receives more
than 1 grant under this part has an increased accountability to
disseminate information gained from such grants to States and
local educational agencies.
``(3) Payments.--The Secretary shall make annual payments
of grant funds awarded under this part.
``(b) Peer Review.--
``(1) Panel.--The Secretary shall provide the applications
submitted under this part to a peer review panel for
evaluation. With respect to each application, the peer review
panel shall initially recommend the application for funding or
for disapproval.
``(2) Priority.--In recommending applications to the
Secretary for funding under this part, the panel shall--
``(A) with respect to grants under section 203,
give priority to eligible States serving States that--
``(i) have initiatives to reform State
teacher certification requirements that are
designed to ensure that current and future
teachers possess the necessary teaching skills
and academic content knowledge in the subject
areas in which the teachers are certified or
licensed to teach;
``(ii) include innovative reforms to hold
institutions of higher education with teacher
preparation programs accountable for preparing
teachers who are highly competent in the
academic content area in which the teachers
plan to teach and have strong teaching skills;
or
``(iii) involve the development of
innovative efforts aimed at reducing the
shortage of highly qualified teachers in high
poverty urban and rural areas, and in subject
areas of high need (including bilingual
education, special education, mathematics,
science, early childhood education, and
vocational education); and
``(B) with respect to grants under section 204--
``(i) give priority to applications from
eligible partnerships that involve businesses;
and
``(ii) take into consideration--
``(I) providing an equitable
geographic distribution of the grants
throughout the United States; and
``(II) the potential of the
proposed activities for creating
improvement and positive change.
``(3) Secretarial selection.--The Secretary shall
determine, based on the peer review process, which application
shall receive funding and the amounts of the grants. In
determining grant amounts, the Secretary shall take into
account the total amount of funds available for all grants
under this part and the types of activities proposed to be
carried out.
``(c) Matching Requirements.--
``(1) State grants.--Each eligible State receiving a grant
under section 203 shall provide, from non-Federal sources, an
amount equal to 50 percent of the amount of the grant (in cash
or in kind) to carry out the activities supported by the grant.
``(2) Partnership grants.--Each eligible partnership
receiving a grant under section 204 shall provide, from non-
Federal sources (in cash or in kind), an amount equal to 25
percent of the grant for the first year of the grant, 35
percent of the grant for the second year of the grant, and 50
percent of the grant for each succeeding year of the grant.
``(d) Limitation on Administrative Expenses.--An eligible State or
eligible partnership that receives a grant under this part may not use
more than 2 percent of the grant funds for purposes of administering
the grant.

``SEC. 206. ACCOUNTABILITY AND EVALUATION.

``(a) State Grant Accountability Report.--An eligible State that
receives a grant under section 203 shall submit an annual
accountability report to the Secretary. 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) Student achievement.--Increasing student achievement
for all students as defined by the eligible State.
``(2) Raising standards.--Raising the State academic
standards required to enter the teaching profession, including,
where appropriate, through the use of incentives to incorporate
the requirement of an academic major in the subject, or related
discipline, in which the teacher plans to teach.
``(3) Initial certification or licensure.--Increasing
success in the pass rate for initial State teacher
certification or licensure, and increasing the numbers of
highly qualified individuals being certified or licensed as
teachers, including through alternative routes.
``(4) Highly Qualified Teachers.--Ensuring that all
teachers teaching in core academic subjects within the State
are highly qualified not later than the end of the 2005-2006
school year pursuant to section 1119(a)(2) of the Elementary
and Secondary Education Act of 1965 (20 U.S.C. 6319(a)(2)).
``(5) Decreasing teacher shortages.--Decreasing shortages
of qualified teachers in poor urban and rural areas.
``(6) Increasing opportunities for professional
development.--Increasing opportunities for enhanced and ongoing
professional development that 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 that promotes strong teaching skills.
``(7) Technology integration.--Increasing the number of
teachers prepared to integrate technology in the classroom.
``(b) Eligible Partnership Evaluation.--Each eligible partnership
receiving a grant under section 204 shall establish and include in the
application submitted under section 204(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 secondary school classes in
core academic subject areas taught by highly qualified
teachers;
``(5) increasing the number of teachers trained in
technology; and
``(6) increasing the number of teachers prepared to work
effectively with parents.
``(c) Revocation of Grant.--
``(1) Report.--Each eligible State or eligible partnership
receiving a grant under this part 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 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) Development of Definitions and Reporting Methods; High-
Quality Teacher Preparation Program.--
``(1) In general.--Within 9 months of the date of enactment
of the Higher Education Amendments of 1998, the Commissioner of
the National Center for Education Statistics, in consultation
with States and institutions of higher education, shall develop
key definitions for terms, and uniform reporting methods
(including the key definitions for the consistent reporting of
pass rates and program completers), related to the performance
of elementary school and secondary school teacher preparation
programs.
``(2) High-quality teacher preparation program.--Each
applicant for a grant under this part shall provide assurances
in such applicant's application that the applicant will meet
the following criteria:
``(A) Provide each teacher with each of the
following skills and supports:
``(i) A deep knowledge of the subjects such
teacher teaches.
``(ii) A firm understanding of how students
learn.
``(iii) Teaching skills necessary to help
all students achieve high standards, including
children with disabilities and limited English
proficient students.
``(iv) How to create a positive learning
environment.
``(v) The ability to integrate challenging
State academic content standards and
challenging student academic achievement
standards, and accountability into classroom
teaching.
``(vi) The ability to use a variety of
assessment strategies to diagnose and respond
to individual learning needs.
``(vii) The ability to integrate modern
technology into curricula to support student
learning.
``(viii) Classroom management skills.
``(ix) Opportunities to collaborate with
the teacher's colleagues, with parents,
community members, and other educators.
``(x) The ability to work in partnership
with parents and involve parents in their
children's education.
``(xi) How to reflect on practices in order
to improve teaching and student learning.
``(B) Ensure that each preservice teacher has the
necessary skills to succeed in the classroom, including
providing--
``(i) some training in reading, addressing
the needs of children with disabilities and
limited English proficient students, data
analysis, and how to use student achievement
data to improve instruction; and
``(ii) optional training in teaching
advanced placement courses.
``(b) State Report Card on the Quality of Teacher Preparation.--
Each State that receives funds under this Act shall provide to the
Secretary, within 2 years of the date of enactment of the Higher
Education Amendments of 1998, and annually thereafter, in a uniform and
comprehensible manner that conforms with the definitions and methods
established in subsection (a), a State report card on the quality of
teacher preparation in the State, which shall include at least the
following:
``(1) A description of the teacher certification and
licensure assessments, and any other certification and
licensure requirements, used by the State.
``(2) The standards and criteria that prospective teachers
must meet in order to attain initial teacher certification or
licensure and to be certified or licensed to teach particular
subjects or in particular grades within the State.
``(3) A description 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 teaching candidates who 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) The percentage of teaching candidates who passed each
of the assessments used by the State for teacher certification
and licensure, disaggregated and ranked, by the teacher
preparation program in that State from which the teacher
candidate received the candidate's most recent degree, which
shall be made available widely and publicly.
``(6) Information on the extent to which teachers in the
State are given waivers of State certification or licensure
requirements, including the proportion of such teachers
distributed across high- and low-poverty school districts and
across subject areas.
``(7) A description of each State's alternative routes to
teacher certification, if any, and the percentage of teachers
certified through alternative certification routes who pass
State teacher certification or licensure assessments.
``(8) For each State, a description of proposed criteria
for assessing the performance of teacher preparation programs
within institutions of higher education in the State, including
indicators of teacher candidate knowledge and skills.
``(9) Information on the extent to which teachers or
prospective teachers in each State are required to take
examinations or other assessments of their subject matter
knowledge in the area or areas in which the teachers provide
instruction, the standards established for passing any such
assessments, and the extent to which teachers or prospective
teachers are required to receive a passing score on such
assessments in order to teach in specific subject areas or
grade levels.
``(c) Initial Report.--
``(1) In general.--Each State that receives funds under
this Act, not later than 6 months after the date of enactment
of the College Quality, Affordability, and Diversity
Improvement Act of 2003 and in a uniform and comprehensible
manner, shall submit to the Secretary the information described
in paragraphs (1), (5), and (6) of subsection (b). Such
information shall be compiled by the Secretary and submitted 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 not later than 9 months after the date
of enactment of the College Quality, Affordability, and
Diversity Improvement Act of 2003.
``(2) Construction.--Nothing in this subsection shall be
construed to require a State to gather information that is not
in the possession of the State or the teacher preparation
programs in the State, or readily available to the State or
teacher preparation programs.
``(d) 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 (9) of subsection (b). 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 not later than 2 years 6
months after the date of enactment of the Higher Education
Amendments of 1998 and annually thereafter.
``(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 teacher preparation
programs with fewer than 10 graduates 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.
``(4) Database.--The Secretary shall collect data and
develop a national and public database that provides reports on
States' passage rates on certification and licensure
assessments, the placement rates for teacher preparation
programs, the percentage of full-time faculty in institutions
of higher education in each State who teach classes offered by
a school of education, the tracking of graduates 3 years after
graduating from a teacher preparation program, and other
relevant information, as appropriate.
``(e) 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.
``(f) Institutional Report Cards on the Quality of Teacher
Preparation.--
``(1) Report card.--Each institution of higher education
that conducts a teacher preparation program that enrolls
students receiving Federal assistance under this Act, not later
than 18 months after the date of enactment of the Higher
Education Amendments of 1998 and annually thereafter, shall
report to the State and the general public, in a uniform and
comprehensible manner that conforms with the definitions and
methods established under subsection (a), the following
information:
``(A) Pass rate.--(i) For the most recent year for
which the information is available, the pass rate of
the institution's graduates 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
completing the program.
``(ii) A comparison of the program's pass rate with
the average pass rate for programs in the State.
``(iii) In the case of teacher preparation programs
with fewer than 10 graduates 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.
``(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 faculty-student ratio in supervised
practice teaching.
``(C) Statement.--In States that approve or
accredit teacher education programs, a statement of
whether the institution's program is so approved or
accredited.
``(D) Designation as low-performing.--Whether the
program has been designated as low-performing by the
State under section 208(a).
``(E) Percentage of faculty in school of
education.--The percentage of full-time faculty at the
institution of higher education who teach classes
offered by the school of education.
``(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.
``(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.
``(g) National Academy of Sciences Core Curriculum Study.--
``(1) In general.--The Secretary shall enter into a
contract with the National Academy of Sciences to conduct a 2-
year study to develop a suggested core curriculum in pedagogy
for schools of education for such schools' teacher education
program that assists those within the education profession and
prospective teachers to understand what prospective teachers
need to know to become effective teachers.
``(2) Domains of foundational and pedagogical knowledge.--
The study under paragraph (1) shall include each of the
following domains of foundational and pedagogical knowledge:
``(A) Learning, which would include building on
existing knowledge and experience shaped by social and
cultural context in the community and in the classroom.
``(B) Human development, which would include how
children and adolescents think and behave, taking in
account different ages, contexts, and learning styles.
``(C) Assessment, which would include the
introduction of standards-based reform.
``(D) Teaching strategies, which would include
providing all teachers with the tools needed to be
successful in the classroom, especially with students
who have specific learning disabilities or needs such
as language acquisition.
``(E) Reading instruction, which would include
taking in account different ages, contexts, and
learning styles.
``(3) Best research; suggested training.--The suggested
core curriculum developed under paragraph (1) shall reflect the
best research into how students learn and on the content-
specific methods shown to be effective with students, including
examining how children learn. The suggested core curriculum
shall include suggested training in working with diverse
populations, assessments in the classroom, and classroom
management.
``(4) Collaboration.--
``(A) In general.--In conducting the study under
paragraph (1), the National Academy of Sciences shall
collaborate with interested parties in developing the
suggested core curriculum.
``(B) Interested parties.--In this paragraph, the
term `interested parties' means--
``(i) college presidents;
``(ii) deans of teacher education programs;
``(iii) teacher preparation faculty;
``(iv) chief State school officers;
``(v) school superintendents;
``(vi) teacher organizations;
``(vii) outstanding teachers; and
``(viii) teacher preparation accrediting
organizations.

``SEC. 208. STATE FUNCTIONS.

``(a) State Assessment.--In order to receive funds under this Act,
a State, not later than 2 years after the date of enactment of the
Higher Education Amendments of 1998, 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(b).
``(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;
``(2) shall not be permitted to accept or enroll any
student that receives aid under title IV of this Act in the
institution's teacher preparation program; and
``(3) shall provide transitional support, including
remedial services if necessary, for students enrolled at the
institution at the time of termination of financial support or
withdrawal of approval.
``(c) Negotiated Rulemaking.--If the Secretary develops any
regulations implementing subsection (b)(2), the Secretary shall submit
such proposed regulations to a negotiated rulemaking process, which
shall include representatives of States, institutions of higher
education, and educational and student organizations.

``SEC. 209. GENERAL PROVISIONS.

``(a) Methods.--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 protect the privacy of individuals.
``(b) Special Rule.--For each State in which there are no State
certification or licensure assessments, or for States that do not set
minimum performance levels on those assessments--
``(1) the Secretary shall, to the extent practicable,
collect data comparable to the data required under this part
from States, local educational agencies, institutions of higher
education, or other entities that administer such assessments
to teachers or prospective teachers; and
``(2) notwithstanding any other provision of this part, the
Secretary shall use such data to carry out the requirements of
this part related to assessments or pass rates.
``(c) Limitations.--
``(1) Federal control prohibited.--Nothing in this part
shall be construed to permit, allow, encourage, or authorize
any Federal control over any aspect of any private, religious,
or home school, whether or not a home school is treated as a
private school or home school under State law. This section
shall not be construed to prohibit private, religious, or home
schools from participation in programs or services under this
part.
``(2) No change in state control encouraged or required.--
Nothing in this part shall be construed to encourage or require
any change in a State's treatment of any private, religious, or
home school, whether or not a home school is treated as a
private school or home school under State law.
``(3) National system of teacher certification
prohibited.--Nothing in this part shall be construed to permit,
allow, encourage, or authorize the Secretary to establish or
support any national system of teacher certification.

``SEC. 210. AUTHORIZATION OF APPROPRIATIONS.

``There are authorized to be appropriated to carry out this part
$300,000,000 for fiscal year 2004 and such sums as may be necessary for
each of the 5 succeeding fiscal years.

``PART B--INNOVATIVE STRATEGIES TO RECRUIT, TRAIN, AND RETAIN HIGH
QUALITY TEACHERS AND PRINCIPALS

``SEC. 215. INCENTIVES TO RECRUIT AND RETAIN HIGH QUALITY TEACHERS AND
ADMINISTRATORS.

``(a) Mentoring Program.--
``(1) Authorization.--
``(A) In general.--The Secretary shall award
grants, on a competitive basis, to eligible
partnerships to enable the eligible partnerships to
develop mentoring programs that help train and retain
new teachers and provide professional routes for
experienced teachers.
``(B) Priority.--In awarding grants under this
subsection, the Secretary shall give priority to
eligible partnerships that consist of a high need local
educational agency with--
``(i) high rates of teacher turnover; and
``(ii) shortages of teachers in subject
areas of high need (including bilingual
education, special education, mathematics,
science, vocational education, and early
childhood education) and teachers in rural
areas.
``(2) Eligible partnership.--In this subsection, the term
`eligible partnership' means a partnership among an institution
of higher education, a high need local educational agency, and
a nonprofit entity (including teacher organizations) that has
an established record of providing effective teacher training.
``(3) Application.--An eligible partnership that desires a
grant under this subsection shall submit an application to the
Secretary at such time, in such manner, and containing such
information as the Secretary may require.
``(4) Use of funds.--
``(A) Mandatory uses.--An eligible partnership that
receives a grant under this subsection shall develop a
mentoring program that is not less than 1 year in
duration and does each of the following:
``(i) Provides--
``(I) training for experienced
teachers to become mentors;
``(II) training from trained
mentors to teach teachers in schools
served by high need local educational
agencies;
``(III) stipends to mentors; and
``(IV) release time or a reduced
class load for mentors and the teachers
being mentored, or both.
``(ii) Outlines specific criteria for who
can serve as mentors, coaches, and team
leaders.
``(iii) Requires mentors to--
``(I) be fully licensed;
``(II) be permanent
(nonprobationary) classroom teachers;
``(III) have completed not less
than 3 years of teaching;
``(IV) demonstrate mastery of
pedagogy and the subject matter such
mentor teaches;
``(V) have superior teaching and
interpersonal skills;
``(VI) have the ability to
integrate challenging State academic
content standards and challenging
student academic achievement standards
and accountability into classroom
teaching;
``(VII) use a variety of assessment
strategies to respond to individual
learning needs; and
``(VIII) reflect on their teaching
practices in order to improve teaching
and student learning.
``(iv) Endeavors to match mentors and the
teachers being mentored by geographic proximity
or by the same grade level and subject matter
area of teaching, or both.
``(v) Ensures that teachers who have been
mentored will work in schools served by high
need local educational agencies for a specified
period of time.
``(vi) Provides a plan to evaluate the
mentoring program.
``(B) Permissible uses.--An eligible partnership
that receives a grant under this subsection may use the
grant funds to provide academic credit toward an
advanced degree for mentors and the teachers being
mentored.
``(5) Duration of grants.--Grants awarded under this
subsection shall be for 3 years in duration.
``(6) Evaluation.--
``(A) In general.--Not later than the last day of
the grant award, an eligible partnership that receives
a grant under this subsection shall submit an
accountability report to the Secretary.
``(B) Content.--The accountability report under
subparagraph (A) shall include, at a minimum--
``(i) teacher retention rates for teachers
participating in the mentoring program as
compared with teachers in the high need local
educational agency not participating in the
mentoring program;
``(ii) results of evaluations on mentor and
teachers being mentored satisfaction with the
mentoring program; and
``(iii) results of the plan developed by
the eligible partnership to evaluate the
mentoring program.
``(7) Authorization of appropriations.--There are
authorized to be appropriated to carry out this subsection
$50,000,000 for fiscal year 2004 and such sums as may be
necessary for each of the 5 succeeding fiscal years.
``(b) Housing Incentives Program.--
``(1) Grant program authorized.--The Secretary shall award
grants, on a competitive basis, to eligible partnerships to
enable the eligible partnerships to develop a housing incentive
program that assists teachers who teach in schools served by
high need local educational agencies to afford housing.
``(2) Eligible partnership.--In this subsection:
``(A) In general.--The term `eligible partnership'
means a partnership between--
``(i)(I) a high need local educational
agency; or
``(II) a State educational agency; and
``(ii) an institution of higher education.
``(B) Other entities.--The term `eligible
partnership' may include other public entities or
private entities.
``(3) Application.--An eligible partnership that desires a
grant under this subsection shall submit an application to the
Secretary at such time, in such manner, and containing such
information as the Secretary may require.
``(4) Use of funds.--An eligible partnership that receives
a grant under this subsection shall use the grant funds to
develop a housing incentive program that--
``(A) provides financial incentives to teachers who
teach in schools served by high need local educational
agencies by providing for such teachers funds for--
``(i) a downpayment on a home;
``(ii) closing costs associated with
purchasing a home; or
``(iii) moving expenses; or
``(B) develops a partnership with a lender to
create a home loan program for teachers who teach in
schools served by high need local educational agencies
that provides home loans to such teachers that--
``(i) are insured by the eligible
partnership; or
``(ii) require minimal or no downpayment.
``(5) Service requirement.--A teacher that receives
assistance under this subsection shall--
``(A) teach in a school served by a high need local
educational agency for not less than 5 subsequent
school years; or
``(B) repay the amount of assistance.
``(6) Evaluation.--
``(A) In general.--An eligible partnership that
receives a grant under this subsection shall develop an
evaluation of the partnership's housing incentive
program that includes, at a minimum--
``(i) how many teachers received assistance
under the program and retention rates in
schools served by high need local educational
agencies for such teachers;
``(ii) whether the program helped improve
teacher shortages;
``(iii) a description of the specific
inactive model that was used to develop the
housing incentive program;
``(iv) if applicable, how partnerships with
lenders worked; and
``(v) successful practices.
``(B) Submission of evaluation.--Not later than the
last day of the grant award, the eligible partnership
shall submit to the Secretary the evaluation developed
under subparagraph (A).
``(7) Tax exemption.--The amount of any financial
assistance received by a teacher under a housing incentive
program developed pursuant to this subsection shall not be
considered income for purposes of the Internal Revenue Code of
1986.
``(8) Authorization of appropriations.--There are
authorized to be appropriated to carry out this subsection
$50,000,000 for fiscal year 2004 and such sums as may be
necessary for each of the 5 succeeding fiscal years.
``(c) Community College as a Partner.--
``(1) Grant program authorized.--The Secretary shall award
grants, on a competitive basis, to eligible partnerships to
enable the eligible partnerships to strengthen teacher
preparation programs.
``(2) Eligible partnership.--In this subsection, the term
`eligible partnership' means a partnership between--
``(A) a community college; and
``(B) a 4-year institution of higher education that
has a teacher preparation program.
``(3) Application.--An eligible partnership that desires a
grant under this subsection shall submit an application to the
Secretary at such time, in such manner, and containing such
information as the Secretary may require.
``(4) Use of funds.--
``(A) Mandatory uses.--An eligible partnership that
receives a grant under this subsection shall do both of
the following:
``(i) Community college activities.--The
community college of the eligible partnership
shall develop and strengthen the core
curriculum centered on a liberal arts education
at such college that adequately prepares
students to enter the teacher preparation
program at the 4-year institution of higher
education of the eligible partnership.
``(ii) 4-year institution of higher
education activities.--
``(I) In general.--The 4-year
institution of higher education of the
eligible partnership shall provide
intensive support services for students
that enter the teacher preparation
program from the community college of
the eligible partnership.
``(II) Support services.--The
support services shall be offered prior
to and during such student's tenure at
the 4-year institution of higher
education and shall include mentoring,
and academic and career support.
``(III) Point person.--The 4-year
institution of higher education shall
provide a point person within the
teacher preparation program whose sole
job is to provide support services to
the students described in subclause
(I).
``(B) Permissive uses.--An eligible partnership
that receives a grant under this subsection may use the
grant funds to provide compensation to staff in the
teacher preparation programs at the community college
and 4-year institution of higher education.
``(5) Duration of grants.--Grants awarded under this
subsection shall be for 5 years in duration.
``(6) Evaluation.--
``(A) In general.--An eligible partnership that
receives a grant under this subsection shall develop an
evaluation of the partnerships's activities under this
subsection that--
``(i) includes the number of student
teachers served and the retention rate in the
4-year institution of higher education of such
student teachers;
``(ii) addresses the qualification of such
student teachers when graduating from the 4-
year institution of higher education, including
whether such student teachers found teaching
positions and whether they passed State
certification examinations; and
``(iii) includes successful practices.
``(B) Submission of evaluation.--Not later than the
last day of the grant award, the eligible partnership
shall submit to the Secretary the evaluation developed
under subparagraph (A).
``(7) Authorization of appropriations.--There are
authorized to be appropriated to carry out this subsection
$25,000,000 for fiscal year 2004 and such sums as may be
necessary for each of the 5 succeeding fiscal years.
``(d) Paraprofessionals to Teachers.--
``(1) Grant program authorized.--The Secretary shall award
grants, on a competitive basis, to eligible partnerships to
enable the eligible partnerships to develop a Paraprofessionals
to Teachers Program (in this subsection referred to as the
`Program') to assist paraprofessionals employed by high need
local educational agencies to become teachers.
``(2) Eligible partnership.--In this subsection, the term
`eligible partnership' means a partnership among an institution
of higher education, a high need local educational agency, and
other entities that may include businesses, community colleges,
and teacher organizations.
``(3) Application.--An eligible partnership that desires a
grant under this subsection shall submit an application to the
Secretary at such time, in such manner, and containing such
information as the Secretary may require.
``(4) Use of funds.--
``(A) In general.--An eligible partnership that
receives a grant under this subsection shall develop a
Program to assist paraprofessionals employed by the
high need local educational agency of the eligible
partnership to become teachers by--
``(i) developing a teacher preparation
program at the institution of higher education
of the eligible partnership for
paraprofessionals that allows for part-time
study and flexible student teaching and
coursework schedules;
``(ii) ensuring that paraprofessionals
enrolled in the teacher preparation program
under clause (i) retain such paraprofessionals'
benefit packages with the high need local
educational agency while enrolled in the
teacher preparation program;
``(iii) providing support services for such
paraprofessionals that include tutoring to meet
teacher preparation program requirements, child
care, career counseling, and financial aid
guidance; and
``(iv) providing mentoring for such
paraprofessionals during their first 3 years of
teaching.
``(B) Permissible use of funds.--An eligible
partnership that receives a grant under this subsection
may use the grant funds for--
``(i) tuition expenses of paraprofessionals
in the teacher preparation program;
``(ii) child care expenses of
paraprofessionals;
``(iii) release time for paraprofessionals;
``(iv) compensation for mentors;
``(v) support services for
paraprofessionals;
``(vi) salaries of staff at the institution
of higher education and the high need local
educational agency of the eligible partnership;
and
``(vii) stipends for paraprofessionals.
``(5) Activities of the high need local educational
agency.--The high need local educational agency of the eligible
partnership shall--
``(A) make efforts to recruit paraprofessionals
employed by such agency to participate in the Program;
``(B) arrange for administrative leave for
paraprofessionals employed by such agency who
participate in the Program; and
``(C) guarantee a provisional teaching position to
paraprofessionals employed by such agency who
participate in the Program upon completion of the
Program.
``(6) Duration of grants.--Grants awarded under this
subsection shall be for 3 years in duration.
``(7) Authorization of appropriations.--There are
authorized to be appropriated to carry out this subsection
$50,000,000 for fiscal year 2004 and such sums as may be
necessary for each of the 5 succeeding fiscal years.
``(e) School Leadership Development Program for Principals,
Assistant Principals, and Superintendents.--
``(1) Grant program authorized.--The Secretary shall award
grants, on a competitive basis, to eligible partnerships to
enable the eligible partnerships to provide practical training
to principals, assistant principals, and school superintendents
that focuses on developing and enhancing the skills necessary
to serve as instructional leaders of schools and school
systems.
``(2) Eligible partnership.--In this subsection, the term
`eligible partnership'--
``(A) means a partnership between--
``(i) an institution of higher education;
and
``(ii) 1 or more high need local
educational agencies; and
``(B) may include a school principal professional
organization.
``(3) Application.--An eligible partnership that desires a
grant under this subsection shall submit an application to the
Secretary at such time, in such manner, and containing such
information as the Secretary may require.
``(4) Use of funds.--
``(A) In general.--An eligible partnership that
receives a grant under this subsection shall establish
a certificate program for principals, assistant
principals, and school superintendents that is
developed by education experts and practitioners and
that provides training in--
``(i) diagnostic leadership skills
assessment;
``(ii) the development of knowledge and
skills that contribute to the effective
practice of instructional leadership behaviors;
``(iii) research methodology for
educational leaders that includes understanding
of systematic and empirical research methods,
application of rigorous data analyses,
collections of reliable and valid data,
knowledge of appropriate research designs, and
the importance of peer review and other
external scrutiny, and its application to the
practice of school leadership; and
``(iv) the development of knowledge and
skills to develop and align curriculum,
assessments, and instruction with standards,
legislation, and regulations.
``(B) Permissible use of funds.--An eligible
partnership that receives a grant under this subsection
may use the grant funds--
``(i) to provide training in developing and
enhancing the skills necessary to effectively
run schools for individuals who are about to
become principals, assistant principals, or
school superintendents;
``(ii) for a pre-induction year internship
or apprenticeship with a successful
practitioner to help train individuals who are
about to become principals, assistant
principals, or school superintendents, and,
during an induction year, to support and
develop the capacity of new principals,
assistant principals, and school
superintendents as instructional leaders; and
``(iii) to provide mentoring and peer
coaching services for principals, assistant
principals, and school superintendents to
enable exemplary principals, assistant
principals, and school superintendents to serve
as mentors and role models.
``(5) Technology.--In carrying out activities under this
subsection, an eligible partnership shall use, to the extent
practicable, technology as an outreach mechanism to expand
opportunities for professional development and ongoing support
services for principals, assistant principals, and school
superintendents.
``(6) Report.--An eligible partnership that receives a
grant under this subsection shall submit to the Secretary an
evaluation detailing the use of grant funds under this
subsection and the progress in meeting the goals of the
eligible partnership.
``(7) Duration of grants.--Grants awarded under this
subsection shall be for 3 years in duration.
``(8) Authorization of appropriations.--There are
authorized to be appropriated to carry out this subsection
$25,000,000 for fiscal year 2004 and such sums as may be
necessary for each of the 5 succeeding fiscal years.

``PART C--PREPARING TOMORROW'S TEACHERS TO USE TECHNOLOGY

``SEC. 221. PURPOSE AND PROGRAM AUTHORITY.

``(a) Purpose.--It is the purpose of this part to assist consortia
of public and private entities--
``(1) to carry out programs that prepare prospective
teachers to use advanced technology to prepare all students to
meet challenging State and local academic content and student
academic achievement standards; and
``(2) to improve the ability of institutions of higher
education to carry out such programs.
``(b) Program Authority.--
``(1) In general.--The Secretary is authorized to award
grants to eligible applicants, or enter into contracts or
cooperative agreements with eligible applicants, on a
competitive basis in order to pay for the Federal share of the
cost of projects to develop or redesign teacher preparation
programs to enable prospective teachers to use advanced
technology effectively in their classrooms.
``(2) Period of awards.--The Secretary may award grants, or
enter into contracts or cooperative agreements, under this part
for periods that are not more than 5 years in duration.

``SEC. 222. ELIGIBILITY.

``(a) Eligible Applicants.--In order to receive a grant or enter
into a contract or cooperative agreement under this part, an applicant
shall be a consortium that includes the following:
``(1) At least one institution of higher education that
awards baccalaureate degrees and prepares teachers for their
initial entry into teaching.
``(2) At least one State educational agency or local
educational agency.
``(3) One or more of the following entities:
``(A) An institution of higher education (other
than the institution described in paragraph (1)).
``(B) A school or department of education at an
institution of higher education.
``(C) A school or college of arts and sciences (as
defined in section 201(b)) at an institution of higher
education.
``(D) A professional association, foundation,
museum, library, for-profit business, public or private
nonprofit organization, community-based organization,
or other entity, with the capacity to contribute to the
technology-related reform of teacher preparation
programs.
``(b) Application Requirements.--In order to receive a grant or
enter into a contract or cooperative agreement under this part, an
eligible applicant shall submit an application to the Secretary at such
time, in such manner, and containing such information as the Secretary
may require. Such application shall include the following:
``(1) A description of the proposed project, including how
the project would--
``(A) ensure that individuals participating in the
project would be prepared to use advanced technology to
prepare all students, including groups of students who
are underrepresented in technology-related fields and
groups of students who are economically disadvantaged,
to meet challenging State and local academic content
and student academic achievement standards; and
``(B) improve the ability of at least one
participating institution of higher education described
in section 222(a)(1) to ensure such preparation.
``(2) A demonstration of--
``(A) the commitment, including the financial
commitment, of each of the members of the consortium
for the proposed project; and
``(B) the active support of the leadership of each
organization that is a member of the consortium for the
proposed project.
``(3) A description of how each member of the consortium
will participate in project activities.
``(4) A description of how the proposed project will be
continued after Federal funds are no longer awarded under this
part for the project.
``(5) A plan for the evaluation of the project, which shall
include benchmarks to monitor progress toward specific project
objectives.
``(c) Matching Requirements.--
``(1) In general.--The Federal share of the cost of any
project funded under this part shall not exceed 50 percent.
Except as provided in paragraph (2), the non-Federal share of
the cost of such project may be provided in cash or in kind, fairly
evaluated, including services.
``(2) Acquisition of equipment.--Not more than 10 percent
of the funds awarded for a project under this part may be used
to acquire equipment, networking capabilities, or
infrastructure, and the non-Federal share of the cost of any
such acquisition shall be provided in cash.

``SEC. 223. USE OF FUNDS.

``(a) Required Uses.--A consortium that receives a grant or enters
into a contract or cooperative agreement under this part shall use
funds made available under this part for--
``(1) a project creating one or more programs that prepare
prospective teachers to use advanced technology to prepare all
students, including groups of students who are underrepresented
in technology-related fields and groups of students who are
economically disadvantaged, to meet challenging State and local
academic content and student academic achievement standards;
and
``(2) evaluating the effectiveness of the project.
``(b) Permissible Uses.--The consortium may use funds made
available under this part for a project, described in the application
submitted by the consortium under this part, that carries out the
purpose of this part, such as the following:
``(1) Developing and implementing high-quality teacher
preparation programs that enable educators--
``(A) to learn the full range of resources that can
be accessed through the use of technology;
``(B) to integrate a variety of technologies into
curricula and instruction in order to expand students'
knowledge;
``(C) to evaluate educational technologies and
their potential for use in instruction;
``(D) to help students develop their technical
skills; and
``(E) to use technology to collect, manage, and
analyze data to improve teaching and decisionmaking.
``(2) Developing alternative teacher development paths that
provide elementary schools and secondary schools with well-
prepared, technology-proficient educators.
``(3) Developing achievement-based standards and
assessments aligned with the standards to measure the capacity
of prospective teachers to use technology effectively in their
classrooms.
``(4) Providing technical assistance to entities carrying
out other teacher preparation programs.
``(5) Developing and disseminating resources and
information in order to assist institutions of higher education
to prepare teachers to use technology effectively in their
classrooms.
``(6) Subject to section 222(c)(2), acquiring technology
equipment, networking capabilities, infrastructure, software,
and digital curricula to carry out the project.

``SEC. 224. AUTHORIZATION OF APPROPRIATIONS.

``There are authorized to be appropriated to carry out this part--
``(1) $150,000,000 for fiscal year 2004; and
``(2) such sums as may be necessary for each of the 5
succeeding fiscal years.''.

TITLE III--DIVERSITY, RETENTION, AND ENRICHED ACADEMICS FOR
MATRICULATING STUDENTS

SEC. 301. TEST PREPARATION FOR LOW-INCOME STUDENTS.

Title I of the Elementary and Secondary Education Act of 1965 (20
U.S.C. 6301 et seq.) is amended by adding at the end the following:

``PART J--TEST PREPARATION FOR LOW-INCOME STUDENTS

``SEC. 1910. DEFINITIONS.

``In this part:
``(1) Eligible entity.--The term `eligible entity' means a
public, private, or nonprofit entity (including a secondary
school or a local educational agency) that--
``(A) offers a program to prepare students for
college admissions tests; and
``(B) has a verified track record of not less than
3 years of increasing the average college admissions
test score of students who participate in such program.
``(2) Eligible local educational agency.--The term
`eligible local educational agency' means a local educational
agency for which the number of children determined under section
1124(c) for that local educational agency constitute more than--
``(A) the percentage described in section
1125(c)(2)(B)(v) of the agency's total population aged
5 to 17; or
``(B) the number described in section
1125(c)(2)(C)(v) of the agency's total population aged
5 to 17.
``(3) Eligible secondary school.--The term `eligible
secondary school'--
``(A) means a secondary school that receives
Federal assistance under part A and is served by an
eligible local educational agency; and
``(B) includes a secondary school that does not
receive Federal assistance under part A for a fiscal
year if such secondary school is served by an eligible
local educational agency that serves secondary schools,
none of which received Federal assistance under part A
for such fiscal year.

``SEC. 1911. ESTABLISHMENT.

``From amounts appropriated under section 1917 for a fiscal year,
the Secretary shall award grants, on a competitive basis, to eligible
local educational agencies to enable such agencies to fund college
admissions test preparation programs for juniors and seniors at
eligible secondary schools served by such agencies.

``SEC. 1912. APPLICATION.

``An eligible local educational agency that desires a grant under
this part shall submit an application to the Secretary at such time, in
such manner, and containing such information as the Secretary may
require.

``SEC. 1913. DURATION.

``Grants awarded under this subpart shall be for a period of not
less than 3 years.

``SEC. 1914. USE OF FUNDS.

``(a) In General.--An eligible local educational agency that
receives a grant under this part shall use the grant funds to provide,
through an eligible entity, a college admissions test preparation
program for juniors and seniors at eligible secondary schools served by
such agency that uses methods that have proven effective in preparing
students for college admissions tests.
``(b) Methods.--
``(1) In general.--A college admissions test preparation
program funded under this part shall--
``(A) use methods that have proven effective in
preparing students for college admissions tests;
``(B) to the extent practicable, be administered
through instructor led, classroom-based courses; and
``(C) consist of a minimum of 25 hours of
instructional (nontesting) time.
``(2) Online courses.--
``(A) In general.--An eligible local educational
agency may enter into a contract with an eligible
entity to provide a college admissions test preparation
program that will be offered online if--
``(i) a classroom-based college admissions
test preparation program provided by an
eligible entity is not available; and
``(ii) the eligible entity providing such
online program has a verified track record of
not less than 3 years of increasing the average
college admissions test score of students
served through such online program.
``(B) Supervision; administration.--An online
college admissions test preparation program shall be
supervised or administered by a teacher, administrator,
or coach who has received appropriate professional
development to support student success in such online
program.
``(c) Comparable Service.--An eligible entity that is not a school
or local educational agency and that receives a contract under this
section shall--
``(1) provide comparable services in programs offered under
this part as in programs such entity offers to such entity's
other customers; and
``(2) provide services in programs offered under this part
for not more than 75 percent of such entity's national average
rate per student for comparable programs.
``(d) Practice Examinations.--
``(1) Prior to preparation.--
``(A) In general.--Programs provided under this
section shall require each participating student to
complete a practice examination of the college
admissions test the student will be preparing for,
prior to preparing such student for such college
admissions test.
``(B) Previously administered; same timeframe and
setting.--The practice examination described under
subparagraph (A) shall be--
``(i) an examination previously
administered by the College Board, ACT Inc., or
other college admissions tests' respective
administrator; and
``(ii) administered in a timeframe and
setting similar to that of the examination when
administered by the College Board, ACT Inc., or
other college admissions tests' respective
administrator.
``(2) After preparation.--
``(A) In general.--Programs provided under
subsection (a) shall require each participating student
to complete a practice examination of the college
admissions test the student prepared for at the
completion of the program.
``(B) Previously administered; same timeframe and
setting.--The practice examination described under
subparagraph (A)--
``(i) shall be an examination previously
administered by the College Board, ACT Inc., or
other college admissions tests' respective
administrator;
``(ii) shall not be the same practice
examination given at the start of the program,
given at any time during the program, or used
as a study aid during the program; and
``(iii) shall be administered in a
timeframe and setting similar to that of the
examination when administered by the College
Board, ACT Inc., or other college admissions
tests' respective administrator.
``(e) Supplemental Preparation and Guidance.--An eligible entity
that receives a contract under this section or an eligible local
educational agency that develops and implements a school-based college
admissions test preparation program under this section shall--
``(1) provide supplemental preparation for those students
that need such supplemental preparation to prepare for college
admissions tests in the form of prepreparation review of skills
and knowledge, including in mathematics, grammar, and
vocabulary;
``(2) ensure that students participating in programs funded
under this part receive counseling on college admissions,
including information on selecting an institution of higher
education, the application process and related requirements,
the availability of supports and services to facilitate
transition to and success in postsecondary education, and the
availability of financial aid; and
``(3) offer not less than 1 seminar or class on the
counseling described under paragraph (2) that shall be held
during evening or weekend hours and parents shall be invited to
attend such seminar or class.
``(f) Local Educational Agency Separate Programs.--An eligible
local educational agency that enters into a contract with an eligible
entity pursuant to this section--
``(1) may conduct activities described under subsection (e)
separate from such contract; and
``(2) may not use more than 5 percent of the grant funds to
conduct activities described under subsection (e) separate from
such contract.

``SEC. 1915. REPORTING REQUIREMENT.

``(a) Local Educational Agency.--An eligible local educational
agency that develops and implements a school-based college admissions
test preparation program under section 1914(a)(1) shall submit to the
Secretary a report that includes--
``(1) the number of students who started the program,
disaggregated by race and gender where appropriate;
``(2) the number of students who completed the program,
disaggregated by race and gender where appropriate;
``(3) the number of students participating in the program
who subsequently take the officially administered college
admissions test for which such students were preparing,
disaggregated by race and gender where appropriate; and
``(4) average scores for participating students on the
preprogram test pursuant to section 1914(d)(1), and the end of
program test pursuant to section 1914(d)(2).
``(b) Eligible Entity.--An eligible entity that receives a contract
under section 1914 shall submit to the eligible local educational
agency that has contracted for such eligible entity's services a report
that includes the information described in subsection (a) and any other
information the eligible local educational agency shall reasonably
require.
``(c) Failure To Submit Scores.--An eligible local educational
agency or eligible entity that fails to submit the average scores for
participating students on the preprogram test pursuant to section
1914(d)(1), and the end of program test pursuant to section 1914(d)(2)
shall have such agency or entity's grant terminated at the discretion
of the Secretary.

``SEC. 1916. SCORE IMPROVEMENT.

``(a) Report.--Not less than once every 3 years, the Secretary
shall review and report to Congress on all programs funded under this
part to ensure that such programs are improving the scores of students
participating in the program.
``(b) Non-Eligibility.--Programs funded under this part that are
determined by the Secretary to have not significantly improved the
average score of participating students shall no longer be eligible for
grants under this part.

``SEC. 1917. AUTHORIZATION OF APPROPRIATIONS.

``There are authorized to be appropriated to carry out this part
$50,000,000 for fiscal year 2004 and such sums as may be necessary for
each of the 5 succeeding fiscal years.''.

SEC. 302. ADMISSIONS AND RETENTION.

(a) Prospective Student Information.--Part A of title IV of the
Higher Education Act of 1965 (20 U.S.C. 1070 et seq.), as amended by
section 105, is further amended by adding at the end the following:

``Subpart 11--Prospective Student Information

``SEC. 420M. REPORTING.

``(a) In General.--An institution of higher education that offers a
baccalaureate degree and is eligible to receive assistance under this
part shall include in such institution's application for assistance
under this part the following information:
``(1) The percentage of freshman students enrolled at the
institution in the previous academic year who were self-
identified members of the following disaggregated categories:
``(A) Individual major racial and ethnic groups.
``(B) Male.
``(C) Female.
``(D) The relative of an alumnus, disaggregated by
race and eligibility for Federal Pell Grants.
``(E) Economically disadvantaged, as measured by
eligibility for Federal Pell Grants.
``(2) The percentage of freshman students enrolled at the
institution in the previous academic year who were admitted to
the institution through binding early decision, disaggregated
by race and eligibility for Federal Pell Grants.
``(3) The percentage of freshman students enrolled at the
institution in the previous academic year who were admitted to
the institution through regular decision, disaggregated by race
and eligibility for Federal Pell Grants.
``(b) Disaggregation.--An institution of higher education shall
provide specific disaggregated subgroup information under subsection
(a) only if the number of students in such subgroup is sufficient to
yield statistically reliable information and reporting would not reveal
personally identifiable information about an individual. If such number
is not sufficient, the institution of higher education shall note that
the institution enrolled too few of such students to report with
confidence.''.
(b) Antitrust Exemption.--
(1) Definitions.--In this subsection:
(A) Antitrust laws.--The term ``antitrust laws''
has the meaning given such term in subsection (a) of
the first section of the Clayton Act (15 U.S.C. 12(a)),
except that such term includes section 5 of the Federal
Trade Commission Act (15 U.S.C. 45) to the extent such
section 5 applies to unfair methods of competition.
(B) Institution of higher education.--The term
``institution of higher education''--
(i) means an institution of higher
education as defined in section 101 of the
Higher Education Act of 1965 (20 U.S.C. 1001);
and
(ii) includes any individual acting on
behalf of such an institution.
(2) Exemption.--The antitrust laws shall not apply to any
joint discussion, consideration, review, action, or agreement
by or among institutions of higher education, or their
representatives, for the purpose of, and limited to, developing
and disseminating guidelines designed to end binding early
decision admissions policies.
(c) Retention.--
(1) Grant program.--Part A of title III of the Higher
Education Act of 1965 (20 U.S.C. 1057 et seq.) is amended by
adding at the end the following:

``SEC. 318. GRANT PROGRAM TO INCREASE STUDENT RETENTION AND PROMOTE
ARTICULATION AGREEMENTS.

``(a) Authorization of Program.--The Secretary shall award grants,
on a competitive basis, to eligible institutions to enable the
institutions to--
``(1) focus on increasing traditional and nontraditional
student retention at such institutions; and
``(2) promote articulation agreements among different
institutions that will increase the likelihood of progression
of students at such institutions to baccalaureate degrees.
``(b) Definition of Eligible Institution.--In this section, the
term `eligible institution' means an institution of higher education
(as defined in section 101(a)) where not less than 40 percent of such
institution's student body receives financial aid under subpart 1 of
part A of title IV.
``(c) Application.--An eligible institution that desires a grant
under this section shall submit an application to the Secretary at such
time, in such manner, and containing such information as the Secretary
may require.
``(d) Mandatory Activities.--An eligible institution that receives
a grant under this section shall use the grant funds to carry out each
of the following:
``(1) Offering counseling services to help students cope
with the challenges they are facing and identify the services
that are available to help them persist in their education.
``(2) Making mentors available to all students that are at
risk for not completing a degree.
``(3) Providing detailed assistance to all students who
request help in understanding--
``(A) the options for financing their education,
including information on grants, loans, and loan
repayment programs;
``(B) the process of applying for financial
assistance;
``(C) the outcome of their financial assistance
application; and
``(D) any unanticipated problems related to
financing their education that arise.
``(4) Offering tutoring to all students who request
assistance with any course or subject.
``(5) Conducting outreach activities so that all students
know that these services are available and are aware of how to
access the services.
``(6) Making services listed in paragraphs (1) through (4)
available in students' native languages, if it is not English,
if the percentage of students needing translation services in a
specific language exceeds 5 percent.
``(e) Permissible Activities.--An eligible institution that
receives a grant under this section may use grant funds to carry out
any of the following activities:
``(1) Providing intensive remedial academic instruction.
``(2) Designing innovative course schedules to meet the
needs of working adults, such as classes that are concentrated
on weekends or over short periods of time.
``(3) Designing and implementing online courses or
components of courses to allow nontraditional students to
obtain an education when their family or professional
responsibilities, or both, make it difficult for them to attend
class on campus at prespecified, regular times.
``(4) Offering childcare during the hours when students
have class or are studying.
``(5) Providing transportation assistance to students that
helps such students manage their schedules.
``(6) Partnering with local businesses to create flexible
work-hour programs so that students can balance work and
school.
``(7) Offering time management seminars or personal coaches
to help students improve their time management skills.
``(8) Any other activities the Secretary believes will
promote retention of students attending eligible institutions.
``(f) Authorization of Appropriations.--There is authorized to be
appropriated to carry out this section $100,000,000 for fiscal year
2004 and such sums as may be necessary for each of the 5 succeeding
fiscal years.''.
(2) Institutional support services.--Part B of title I of
the Higher Education Act of 1965 (20 U.S.C. 1011 et seq.) is
amended by adding at the end the following:

``SEC. 123. INSTITUTIONAL SUPPORT SERVICES TO INCREASE STUDENT
RETENTION.

``(a) Determination of Rates.--
``(1) In general.--Beginning on the date that is 2 years
after the date of enactment of this section, and annually
thereafter, an institution of higher education shall determine
for the preceding academic year the rates of baccalaureate
degree completion not later than 6 years after enrollment for
students enrolled at such institution, disaggregated by race,
gender, and eligibility for Federal Pell Grants, if the
institution of higher education--
``(A) receives Federal funds;
``(B) is eligible for assistance under title IV;
``(C) is not eligible for assistance under section
318; and
``(D) awards a baccalaureate degree.
``(2) Disaggregation.--An institution of higher education
shall provide specific disaggregated subgroup information under
paragraph (1) only if the number of students in such subgroup
is sufficient to yield statistically reliable information and
reporting would not reveal personally identifiable information
about an individual. If such number is not sufficient, the
institution of higher education shall note that the institution
enrolled too few of such students to report with confidence.
``(b) Support Services for At Risk Students.--
``(1) In general.--Beginning on the date that is 2 years
after the date of enactment of this section, and annually
thereafter, each institution of higher education that has a
disparity of 20 or more percentage points in the rates
determined under subsection (a) between any 2 or more subgroups
in all the disaggregated categories for an academic year shall
increase, from the level provided in such academic year and in
accordance with paragraph (2), support services for the
students in the subgroups in which the baccalaureate degree
completion rate is 20 or more percentage points below the
completion rate for the subgroup with the highest completion
rate.
``(2) Amount of increase and activities.--
``(A) Increase.--The amount of the increase
required under paragraph (1) for an academic year shall
be equal to 5 percent of the amount of assistance
received by the institution of higher education under
part C of title IV and subpart 3 of part A of title IV
for such academic year.
``(B) Activities.--
``(i) Mandatory activities.--The amount of
the increase required under paragraph (1) shall
be used to carry out the following activities:
``(I) Offering counseling services
to help students cope with the
challenges they are facing and identify
the services that are available to help
them persist in their education.
``(II) Making mentors available to
all students that are at risk for not
completing a degree.
``(III) Providing detailed
assistance to all students who request
help in understanding--
``(aa) the options for
financing their education,
including information on
grants, loans, and loan
repayment programs;
``(bb) the process of
applying for financial
assistance;
``(cc) the outcome of their
financial assistance
application; and
``(dd) any unanticipated
problems related to financing
their education that arise.
``(IV) Offering tutoring to all
students who request assistance with
any course or subject.
``(V) Conducting outreach
activities so that all students know
that these services are available and
are aware of how to access the
services.
``(VI) Making services listed in
subclauses (I) through (IV) available
in students' native languages, if it is
not English, if the percentage of
students needing translation services
in a specific language exceeds 5
percent.
``(ii) Permissible activities.--The amount
of the increase required under paragraph (1)
may be used to carry out any of the following
activities:
``(I) Providing intensive remedial
academic instruction.
``(II) Designing innovative course
schedules to meet the needs of working
adults, such as classes that are
concentrated on weekends or over short
periods of time.
``(III) Designing and implementing
online courses or components of courses
to allow nontraditional students to
obtain an education when their family
or professional responsibilities, or
both, make it difficult for them to
attend class on campus at prespecified,
regular times.
``(IV) Offering childcare during
the hours when students have class or
are studying.
``(V) Providing transportation
assistance to students that helps such
students manage their schedules.
``(VI) Partnering with local
businesses to create flexible work-hour
programs so that students can balance
work and school.
``(VII) Offering time management
seminars or personal coaches to help
students improve their time management
skills.
``(VIII) Any other activities the
Secretary believes will promote
retention of students attending
eligible institutions.''.

SEC. 303. FEDERAL TRIO PROGRAM.

Section 402A of the Higher Education Act of 1965 (20 U.S.C. 1070a-
11) is amended--
(1) in subsection (b)(3)--
(A) in subparagraph (A), by striking ``$170,000''
and inserting ``$190,000'';
(B) in subparagraph (B), by striking ``$180,000''
and inserting ``$200,000''; and
(C) in subparagraph (C), by striking ``$190,000''
and inserting ``$220,000''; and
(2) in subsection (f), by striking the first sentence and
inserting the following: ``For the purpose of making grants and
contracts under this chapter, there are authorized to be
appropriated $1,250,000,000 for fiscal year 2004 and such sums
as may be necessary for each of the 5 succeeding fiscal
years''.

SEC. 304. GEAR UP.

(a) Early Intervention and College Awareness Program Authorized.--
Section 404A(b) of the Higher Education Act of 1965 (20 U.S.C. 1070a-
21(b)) is amended--
(1) in paragraph (1), by inserting ``6 year'' after ``shall
make''; and
(2) by adding at the end the following:
``(3) Current grantees.--An eligible entity that has
received an award under this section, has performed
successfully, and still has need for an award may apply for an
additional award under this section.''.
(b) Authorization of Appropriations.--Section 404H of the Higher
Education Act of 1965 (20 U.S.C. 1070a-28) is amended by striking
``$200,000,000 for fiscal year 1999 and such sums as may be necessary
for each of the 4 succeeding fiscal years'' and inserting
``$500,000,000 for fiscal year 2004 and such sums as may be necessary
for each of the 5 succeeding fiscal years''.

SEC. 305. LEVERAGING EDUCATIONAL ASSISTANCE PARTNERSHIP PROGRAM.

(a) Authorization of Appropriations.--Section 415A(b) of the Higher
Education Act of 1965 (20 U.S.C. 1070c(b)) is amended by striking
paragraphs (1) and (2) and inserting the following:
``(1) In general.--There are authorized to be appropriated
$200,000,000 for fiscal year 2004, and such sums as may be
necessary for each of the 5 succeeding fiscal years.
``(2) Reservation.--For any fiscal year for which the
amount appropriated under paragraph (1)--
``(A) exceeds $30,000,000, the excess amount up to
and including $67,000,000 shall be available to carry
out section 415E; and
``(B) exceeds $67,000,000, the excess amount shall
be available to carry out section 415F.''.
(b) Increase in Maximum Student Grants.--Section 415C(b)(2) of the
Higher Education Act of 1965 (20 U.S.C. 1070c-2(b)(2)) is amended by
striking ``$5,000'' and inserting ``$12,500''.
(c) Special Leveraging Educational Assistance Partnership
Program.--Section 415E(a) of the Higher Education Act of 1965 (20
U.S.C. 1070c-3a(a) is amended by striking ``section 415A(b)(2)'' and
inserting ``section 415A(b)(2)(A)''.
(d) Grants for Access and Persistence.--Subpart 4 of part A of
title IV of the Higher Education Act of 1965 (20 U.S.C. 1070c et seq.)
is amended--
(1) by redesignating section 415F as section 415G; and
(2) by inserting after section 415E the following:

``SEC. 415F. GRANTS FOR ACCESS AND PERSISTENCE.

``(a) Authorization.--From amounts reserved under section
415A(b)(2)(B) for each fiscal year, the Secretary shall make
supplemental allotments among States in the same manner as the
Secretary makes allotments among States under section 415B to pay the
Federal share of the cost of the authorized activities under subsection
(c).
``(b) Application.--
``(1) In general.--
``(A) Submission.--A State that desires to receive
a supplemental allotment under this section shall
submit an application to the Secretary at such time, in
such manner, and containing such information as the
Secretary may require.
``(B) Content.--An application submitted under
subparagraph (A) shall include both of the following:
``(i) A description of the State's plan for
using the supplemental allotment funds.
``(ii) Assurances that the State will
provide matching funds, from State,
institutional, philanthropic, or private funds,
of not less than 33.33 percent of the cost of
carrying out the activities under subsection
(c). The State shall specify the methods by
which matching funds will be paid and include
provisions designed to ensure that funds
provided under this section will be used to
supplement, and not supplant, non-Federal funds available for carrying
out the activities under subsection (c).
``(C) Approval.--The Secretary shall approve and
fund applications that meet the requirements of this
section.
``(2) State agency.--The State agency that submits an
application for a State under section 415C(a) shall be the same
State agency that submits an application under paragraph (1)
for such State.
``(3) Partnership.--
``(A) Mandatory partners.--In applying for a
supplemental allotment under this section, the State
agency shall apply for a supplemental allotment in
partnership with not less than 1 public and 1 private
degree granting institution of higher education that
are located in the State.
``(B) Permissive partners.--In addition to applying
for a supplemental allotment under this section in
partnership with degree granting institutions of higher
education, a State agency may also apply in partnership
with philanthropic organizations that are located in
the State and private corporations that do business in
the State.
``(c) Authorized Activities.--
``(1) In general.--
``(A) Establishment of program.--Each State
receiving a supplemental allotment under this section
shall use the funds to establish a program to award
access and persistence grants to eligible low-income
students in order to increase the amount of financial
assistance such students receive under this subpart for
undergraduate education expenses.
``(B) Amount.--
``(i) Partnerships with less than a
majority of institutions in the state.--
``(I) In general.--In the case
where a State receiving a supplemental
allotment under this section is in a
partnership described in subparagraph
(A) or (B) of subsection (d)(2), the
amount of an access and persistence
grant awarded by such State shall be
not less than the amount that is equal
to the average undergraduate tuition
and mandatory fees at 4-year public
institutions of higher education in the
State where the student resides (less
any other government sponsored grant
amount or scholarship amount, or both,
received by the student) and such
amount shall be used toward the cost of
attendance at an institution of higher
education, located in the State, that
is a partner in the program.
``(II) Cost of attendance.--A State
that has a program, apart from the
program under this section, of
providing eligible low-income students
with grants that are equal to the
average undergraduate tuition and
mandatory fees at 4-year public
institutions of higher education in the
State, may increase the amount of
access and persistence grants awarded
by such State to an amount that is
equal to the average cost of attendance
at 4-year public institutions of higher
education in the State.
``(ii) Partnership with a majority of
institutions in the state.--In the case where a
State receiving a supplemental allotment under
this section is in a partnership described in
subsection (d)(2)(C), the amount of an access
and persistence grant awarded by such State
shall be equal to the average cost of
attendance at 4-year public institutions of
higher education in the State where the student
resides (less any other government sponsored
grant amount or scholarship amount, or both,
received by the student) and such amount shall
be used by the student to attend an institution
of higher education, located in the State, that
is a partner in the program.
``(2) Eligible low-income students.--
``(A) In general.--Each State receiving a
supplemental allotment under this section shall--
``(i) annually make a determination of
which students in grade 7 through grade 12 in
the State are eligible to receive an access and
persistence grant if such students graduate
from secondary school and enroll at an
institution of higher education that is a
partner in the program; and
``(ii) notify such students of their
eligibility to receive an access and
persistence grant.
``(B) Priority.--In determining which students are
eligible to receive access and persistence grants, the
State shall give priority to students--
``(i) with an expected family contribution
equal to zero (as described in section 479(c));
``(ii) who are participating in, or have
participated in, a Federal, State,
institutional, or community early intervention
program, as recognized by the State agency
administering the program; and
``(iii) who qualify for a free or reduced
price lunch under the Richard B. Russell
National School Lunch Act (42 U.S.C. 1751 et
seq.).
``(C) Content of notice.--The notification under
subparagraph (A)(ii) shall include--
``(i) information that a student's
candidacy for an access and persistence grant
is enhanced through participation in an early
intervention program;
``(ii) information that the grant award
shall be used toward the cost of attendance at
an institution of higher education that is a
partner in the program and therefore such award
is contingent upon the student's enrollment at
such an institution;
``(iii) an estimation of the amount of
financial aid a student awarded an access and
persistence grant could expect to receive,
including an estimation of the amount of the
access and persistence grant and an estimation
of the amount of aid from the major Federal and
State financial aid programs; and
``(iv) instructions on how to apply for an
access and persistence grant.
``(3) Grant award.--If an eligible student, as determined
under paragraph (2), has been accepted to an institution of
higher education that is a partner in the program, the State
shall--
``(A) notify the student of the amount of the
access and persistence grant such student will receive
if such student enrolls at such institution; and
``(B) inform the student that the access and
persistence grant will be awarded and grant funds will
be distributed when such student enrolls at such
institution.
``(4) Duration of award.--An eligible student that receives
an access and persistence grant under this section shall
receive such grant award for each year of such student's
undergraduate education.
``(d) Federal Share.--
``(1) In general.--The Federal share of the cost of the
authorized activities described in subsection (c) for any
fiscal year shall be not more than 66.66 percent.
``(2) Formula for federal share.--In awarding supplemental
allotments under this section, the Secretary shall provide a
match of the non-Federal funds provided by the State in
accordance with the following:
``(A) If a State applies for a supplemental
allotment under this section in partnership with only
less than a majority of the degree granting
institutions of higher education located in the State,
then the Federal share shall be equal to 50 percent of
the cost of carrying out the activities under
subsection (c).
``(B) If a State applies for a supplemental
allotment under this section in partnership with less
than a majority of the degree granting institutions of
higher education located in the State, philanthropic
organizations located in the State, and private
corporations doing business in the State, then the
Federal share shall be equal to 57 percent of the cost
of carrying out the activities under subsection (c).
``(C) If a State applies for a supplemental
allotment under this section in partnership with a
majority of the degree granting institutions of higher
education located in the State, philanthropic
organizations located in the State, and private
corporations doing business in the State, then the
Federal share shall be equal to 66.66 percent of the
cost of carrying out the activities under subsection
(c).
``(e) Applicability Rule.--The provisions of this subpart which are
not inconsistent with this section shall apply to the program
authorized by this section.
``(f) Maintenance of Effort Requirement.--Each State receiving a
supplemental allotment under this section for a fiscal year shall
provide the Secretary an assurance that the aggregate amount expended
per student or the aggregate expenditures by the State, from funds
derived from non-Federal sources, for the authorized activities
described in subsection (c) for the preceding fiscal year were not less
than the amount expended per student or the aggregate expenditure by
the State for the activities for the second preceding fiscal year.''.

TITLE IV--OPPORTUNITIES AT HISPANIC-SERVING INSTITUTIONS

SEC. 401. POSTBACCALAUREATE OPPORTUNITIES FOR HISPANIC AMERICANS.

(a) Establishment of Program.--Title V of the Higher Education Act
of 1965 (20 U.S.C. 1101 et seq.) is amended--
(1) by redesignating part B as part C;
(2) by redesignating sections 511 through 518 as sections
521 through 528, respectively; and
(3) by inserting after section 505 the following:

``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, 1 in 4 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 only 3
percent of instructional faculty in colleges 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.
``(9) Research is a key element in graduate education and
undergraduate preparation, particularly in science and
technology, and Congress desires to strengthen the role of
research at Hispanic serving-institutions. University research,
whether performed directly or through a university's nonprofit
research institute or foundation, is considered an integral
part of the institution and mission of the university.
``(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 of high quality that are educating the majority of
Hispanic college students and helping large numbers of Hispanic
students and 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 eligible institutions.
``(b) Eligibility.--For the purposes of this part, an `eligible
institution' means an institution of higher education that--
``(1) is a Hispanic-serving institution (as defined 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 1 or more of the
following activities:
``(1) Purchase, rental, or lease of scientific or
laboratory equipment for educational purposes, including
instructional and research purposes.
``(2) Construction, maintenance, renovation, and
improvement in 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 such students' 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 the Higher Education
Act of 1965 (as redesignated by subsection (a)(2)) is amended by
inserting ``and section 513'' after ``section 503''.
(c) Authorization of Appropriations.--Section 528(a) of the Higher
Education Act of 1965 (as redesignated by subsection (a)(2)) 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
2004 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
2004 and such sums as may be necessary for each of the 5
succeeding fiscal years.''.
(d) Conforming Amendments.--Title V of the Higher Education Act of
1965 (20 U.S.C. 1101 et seq.) is amended--
(1) in section 502--
(A) in subsection (a)(2)(A)(ii), by striking
``section 512(b)'' and inserting ``section 522(b)'';
and
(B) in subsection (b)(2), by striking ``section
512(a)'' and inserting ``section 522(a)'';
(2) in section 521(c)(6) (as redesignated by subsection
(a)(2)), by striking ``section 516'' and inserting ``section
526''; and
(3) in section 526 (as redesignated by subsection (a)(2)),
by striking ``section 518'' and inserting ``section 528''.

SEC. 402. DEFINITIONS.

Section 502(a) of the Higher Education Act of 1965 (20 U.S.C.
1101a(a)) is amended--
(1) in paragraph (5)--
(A) in subparagraph (A), by inserting ``and'' after
the semicolon;
(B) in subparagraph (B), by striking ``; and'' and
inserting a period; and
(C) by striking subparagraph (C); and
(2) by striking paragraph (7).

SEC. 403. AUTHORIZED ACTIVITIES.

Section 503(b)(7) of the Higher Education Act of 1965 (20 U.S.C.
1101b(b)(7)) is amended to read as follows:
``(7) Articulation agreements and student support programs
designed to facilitate the transfer from 2-year to 4-year
institutions.''.

SEC. 404. ELIMINATION OF WAIT-OUT PERIOD.

Section 504(a) 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.''.

SEC. 405. APPLICATION PRIORITY.

Section 521(d) of the Higher Education Act of 1965 (as redesignated
by section 401(a)(2)) is amended by striking ``(from funds other than
funds provided under this title)''.

TITLE V--HISTORICALLY BLACK COLLEGES AND UNIVERSITIES

SEC. 501. PROFESSIONAL OR GRADUATE INSTITUTIONS.

Section 326 of the Higher Education Act of 1965 (20 U.S.C. 1063b)
is amended--
(1) in subsection (a)--
(A) in paragraph (1), by inserting ``business
administration, computer or information science,
nursing and allied health,'' after ``engineering,'';
and
(B) in paragraph (2), by striking ``$1,000,000''
both places such term appears and inserting
``$1,500,000'';
(2) in subsection (d)(2), by striking ``$1,000,000'' and
inserting ``$1,500,000'';
(3) in subsection (e)--
(A) in paragraph (1)--
(i) in subparagraph (Q), by striking
``and'' after the semicolon;
(ii) in subparagraph (R), by striking the
period at the end and inserting a semicolon;
and
(iii) by adding at the end the following:
``(S) Alabama State University qualified graduate
programs;
``(T) Albany State University qualified graduate
programs;
``(U) Alcorn State University qualified graduate
programs;
``(V) Bowie State University qualified graduate
programs;
``(W) Coppin State University qualified graduate
programs;
``(X) Delaware State University qualified graduate
programs;
``(Y) Feyetteville State University qualified
graduate programs;
``(Z) Fisk University qualified graduate programs;
``(AA) Grambling State University qualified
graduate programs;
``(BB) Kentucky State University qualified graduate
programs;
``(CC) Langston University qualified graduate
programs;
``(DD) Lincoln University (MO) qualified graduate
programs;
``(EE) Prairie View A&M University qualified
graduate programs;
``(FF) South Carolina State University qualified
graduate programs;
``(GG) Southern University & A&M College qualified
graduate programs;
``(HH) University of the District of Columbia
qualified graduate programs; and
``(II) Virginia State University qualified graduate
programs.''; and
(B) in paragraph (2)--
(i) in subparagraph (A), by inserting
``business administration, computer or
information science, nursing and allied
health,'' after ``physical or natural
sciences,''; and
(ii) in subparagraph (B), by striking ``not
more than 10 percent'' and inserting ``not more
than 30 percent'';
(4) by striking subsection (f) and inserting the following:
``(f) Funding Rule.--Subject to subsection (g), of the amount
appropriated to carry out this section for any fiscal year--
``(1) the first $26,600,000 (or any lesser amount
appropriated) shall be available only for the purposes of
making grants to institutions or programs described in
subparagraphs (A) through (P) of subsection (e)(1);
``(2) any amount in excess of $26,600,000, but not in
excess of $28,600,000, shall be available for the purpose of
making grants to institutions or programs described in
subparagraphs (Q) and (R) of subsection (e)(1);
``(3) any amount in excess of $28,600,000, but not in
excess of $45,600,000, shall be available for the purpose of
making grants to institutions or programs described in
subparagraphs (S) through (II) of subsection (e)(1);
``(4) any amount in excess of $45,600,000, but not in
excess of $63,100,000, shall be available for the purpose of
increasing the grant amounts to not more than $1,500,000 to
each institution or program described in subparagraphs (A)
through (II) of subsection (e)(1); and
``(5) any amount in excess of $63,100,000, shall be made
available to each of the institutions or programs identified in
subparagraphs (A) through (II) of subsection (e)(1) pursuant to
a formula developed by the Secretary that uses the following
elements:
``(A) The ability of the institution to match
Federal funds with non-Federal funds.
``(B) The number of students enrolled in the
programs for which the eligible institution received
funding under this section in the previous year.
``(C) The average cost of education per student,
for all full-time graduate or professional students (or
the equivalent) enrolled in the eligible professional
or graduate school, or for doctoral students enrolled
in the qualified graduate programs.
``(D) The number of students in the previous year
who received their first professional or doctoral
degree from the programs for which the eligible
institution received funding under this section in the previous year.
``(E) The contribution, on a percent basis, of the
programs for which the institution is eligible to
receive funds under this section to the total number of
African-Americans receiving graduate or professional
degrees in the professions or disciplines related to
the programs for the previous year.''; and
(5) in subsection (g), by striking ``paragraphs (2) and (3)
of subsection (f)'' and inserting ``subsection (f)''.

SEC. 502. GRADUATE AND PROFESSIONAL DEGREE DEVELOPMENT PROGRAM.

Part B of title III of the Higher Education Act of 1965 (20 U.S.C.
1060 et seq.) is amended--
(1) by redesignating section 327 as section 328; and
(2) by inserting after section 326 the following:

``SEC. 327. GRADUATE AND PROFESSIONAL DEGREE DEVELOPMENT PROGRAM.

``(a) Grant Authority.--The Secretary is authorized to award grants
to eligible historically Black colleges and universities to enable such
colleges and universities to--
``(1) develop masters, doctoral, or professional degree
programs; and
``(2) provide assistance, through fellowship awards, to
graduate students at such colleges and universities.
``(b) Eligible Grant Recipient.--Eligibility to receive grants
under this section is limited to historically Black colleges and
universities that are making a substantial contribution to the
education of African-Americans.
``(c) Application.--An eligible historically Black college or
university that desires to receive a grant under this section shall
submit an application to the Secretary that--
``(1) demonstrates how the grant funds will be used to
improve--
``(A) graduate educational opportunities for
African-American and low-income students; and
``(B) the financial independence of such students;
``(2) provides, in the case of applications for grants in
excess of $500,000, the assurances required by subsection (g)
and specifies the manner in which the college or university is
going to pay the non-Federal share of the cost of the
application; and
``(3) contains such information as the Secretary may
require.
``(d) Priority.--In awarding grants under this section, the
Secretary shall give priority consideration to those eligible
historically Black colleges and universities desiring to support
programs and graduate students in areas of national need or academic
disciplines in which African-Americans are underrepresented.
``(e) Use of Funds.--An eligible historically Black college or
university that receives a grant under this section may use the grant
funds for--
``(1) purchase, rental, or lease of 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, journals,
microfilm, microfiche, and other educational materials,
including telecommunications program materials;
``(4) scholarships, fellowships, and other financial
assistance for needy graduate and professional students to
permit the enrollment of the students in and completion of the
graduate or professional degree; and
``(5) assistance in the establishment or maintenance of an
institutional endowment to facilitate financial independence
pursuant to section 331.
``(f) Duration.--Grants shall be made for a period not to exceed 5
years.
``(g) Funding Rule.--No grant in excess of $500,000 may be made
under this section unless the college or university provides assurances
that 50 percent of the cost of the purposes for which the grant is made
will be paid from non-Federal sources, except that no college or
university shall be required to match any portion of the first $500,000
of the college or university's award from the Secretary.
``(h) Two Grants per Institution.--The Secretary may award not more
than 2 grants or an aggregate amount of $1,000,000 under this section
in any fiscal year to any institution of higher education or university
system.
``(i) Institutional Choice.--The president or chancellor of the
college or university may select the program for which to seek funding.
``(j) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section $30,000,000 for fiscal year 2004
and such sums as may be necessary for each of the 5 succeeding fiscal
years.''.

SEC. 503. AUTHORIZATION OF APPROPRIATIONS.

(a) Grants to Institutions.--Section 323(a) of the Higher Education
Act of 1965 (20 U.S.C. 1062(a)) is amended by striking ``section
360(a)(2)'' and inserting ``section 399(a)(2)(C)''.
(b) Authorization.--Section 399(a) of the Higher Education Act of
1965 (20 U.S.C. 1068h(a)) is amended--
(1) in paragraph (2)--
(A) in subparagraph (A), by striking ``section
326'' and inserting ``sections 323 and 326'';
(B) in subparagraph (B), by striking ``$35,000,000
for fiscal year 1999, and such sums as may be necessary
for each of the 4 succeeding fiscal years'' and
inserting ``$75,000,000 for fiscal year 2004, and such
sums as may be necessary for each of the 5 succeeding
fiscal years''; and
(C) by adding at the end the following:
``(C) There are authorized to be appropriated to carry out
section 323, $250,000,000 for fiscal year 2004, and such sums
as may be necessary for each of the 5 succeeding fiscal years'';
(2) in paragraph (3), by striking ``$10,000,000 for fiscal
year 1999, and such sums as may be necessary for each of the 4
succeeding fiscal years'' and inserting ``$25,000,000 for
fiscal year 2004, and such sums as may be necessary for each of
the 5 succeeding fiscal years''; and
(3) in paragraph (5), by striking ``$10,000,000 for fiscal
year 1999, and such sums as may be necessary for each of the 4
succeeding fiscal years'' and inserting ``$20,000,000 for
fiscal year 2004, and such sums as may be necessary for each of
the 5 succeeding fiscal years''.

SEC. 504. PATSY T. MINK FELLOWSHIP PROGRAM.

Part A of title VII of the Higher Education Act of 1965 (20 U.S.C.
1134 et seq.) is amended--
(1) by redesignating subpart 4 as subpart 5;
(2) by redesignating section 731 as section 741;
(3) in section 741 (as redesignated by paragraph (2))--
(A) in subsection (a), by striking ``and 3'' and
inserting ``3, and 4'';
(B) in subsection (b), by striking ``and 3'' and
inserting ``3, and 4''; and
(C) in subsection (d), by striking ``or 3'' and
inserting ``3, or 4''; and
(4) by inserting after subpart 3 the following:

``Subpart 4--Patsy T. Mink Fellowship Program

``SEC. 731. PURPOSE AND DESIGNATION.

``(a) Purpose.--It is the purpose of this subpart to provide,
through eligible institutions, a program of fellowship awards to assist
highly qualified minorities and women to acquire the doctoral degree,
or highest possible degree available, in academic areas in which such
individuals are underrepresented for the purpose of enabling such
individuals to enter the higher education professoriate.
``(b) Designation.--Each recipient of a fellowship award from an
eligible institution receiving a grant under this subpart shall be
known as a `Patsy T. Mink Graduate Fellow'.

``SEC. 732. DEFINITION OF ELIGIBLE INSTITUTION.

``In this subpart, the term `eligible institution' means an
institution of higher education, or a consortium of such institutions,
that offers a program of postbaccalaureate study leading to a graduate
degree.

``SEC. 733. PROGRAM AUTHORIZED.

``(a) Grants by Secretary.--
``(1) In general.--The Secretary shall award grants to
eligible institutions to enable such institutions to make
fellowship awards to individuals in accordance with the
provisions of this subpart.
``(2) Priority consideration.--In awarding grants under
this subpart, the Secretary shall consider the eligible
institution's prior experience in producing doctoral degree, or
highest possible degree available, holders who are minorities
and women, and shall give priority consideration in making
grants under this subpart to those eligible institutions with a
demonstrated record of producing minorities and women who have
earned such degrees.
``(b) Applications.--
``(1) In general.--An eligible institution that desires a
grant under this subpart shall submit an application to the
Secretary at such time, in such manner, and containing such
information as the Secretary may require.
``(2) Applications made on behalf.--
``(A) In general.--The following entities may
submit an application on behalf of an eligible
institution:
``(i) A graduate school or department of
such institution.
``(ii) A graduate school or department of
such institution in collaboration with an
undergraduate college or university of such
institution.
``(iii) An organizational unit within such
institution that offers a program of
postbaccalaureate study leading to a graduate
degree, including an interdisciplinary or an
interdepartmental program.
``(iv) A nonprofit organization with a
demonstrated record of helping minorities and
women earn postbaccalaureate degrees.
``(B) Nonprofit organizations.--Nothing in this
paragraph shall be construed to permit the Secretary to
award a grant under this subpart to an entity other
than an eligible institution.
``(c) Selection of Applications.--In awarding grants under
subsection (a), the Secretary shall--
``(1) take into account the number and distribution of
minority and female faculty nationally, as well as the current
and projected need for highly trained individuals in all areas
of the higher education professoriate;
``(2) take into account the number and distribution of
minority and female faculty nationally, as well as the present
and projected need for highly trained individuals in academic
career fields in which minorities and women are
underrepresented in the higher education professoriate; and
``(3) consider the need to prepare a large number of
minorities and women generally in academic career fields of
high national priority, especially in areas in which such
individuals are traditionally underrepresented in college and
university faculties.
``(d) Distribution and Amounts of Grants.--
``(1) Equitable distribution.--In awarding grants under
subsection (a), the Secretary shall, to the maximum extent
feasible, ensure an equitable geographic distribution of awards
and an equitable distribution among public and independent
eligible institutions that apply for grants under this subpart
and that demonstrate an ability to achieve the purpose of this
subpart.
``(2) Special rule.--To the maximum extent practicable, the
Secretary shall use not less than 50 percent of the amount
appropriated pursuant to section 736 to award grants to the
following eligible institutions:
``(A) Eligible institutions that are eligible for
assistance under title III or title V.
``(B) Eligible institutions that are eligible
institutions, as defined in section 312.
``(C) Eligible institutions that are Tribal
Colleges or Universities, as defined in section 316.
``(D) Eligible institutions that are Alaska Native-
serving institutions, as defined in section 317.
``(E) Eligible institutions that are Native-
Hawaiian-serving institutions, as defined in section
317.
``(F) Eligible institutions that are part B
institutions, as defined in section 322.
``(G) Eligible institutions that are eligible
institutions, as defined in section 502.
``(H) Consortia of eligible institutions that are
nonminority-serving institutions and eligible
institutions that are minority-serving institutions.
``(3) Allocation.--In awarding grants under this subpart,
the Secretary shall allocate appropriate funds to those
eligible institutions whose applications indicate an ability to
significantly increase the numbers of minorities and women
entering the higher education professoriate and that commit
institutional resources to the attainment of the purpose of
this subpart. An eligible institution that receives a grant
under this subpart shall make not less than 15 fellowship
awards.
``(4) Reallotment.--If the Secretary determines that an
eligible institution awarded a grant under this subpart is
unable to use all of the grant funds awarded to the
institution, the Secretary shall reallot, on such date during
each fiscal year as the Secretary may fix, the funds that are
not usable to other eligible institutions that demonstrate that
such institutions can use any reallocated grant funds to make
fellowship awards to individuals under this subpart.
``(e) Institutional Allowance.--
``(1) In general.--
``(A) Number of allowances.--In awarding grants
under this subpart, the Secretary shall pay to each
eligible institution awarded a grant, for each
individual awarded a fellowship by such institution
under this subpart, an institutional allowance.
``(B) Amount.--Except as provided in paragraph (3),
an institutional allowance shall be in an amount equal
to, for academic year 2005-2006 and succeeding academic
years, the amount of institutional allowance made to an
institution of higher education under section 715.
``(2) Use of funds.--Institutional allowances may be
expended in the discretion of the eligible institution and may
be used to provide, except as prohibited under paragraph (4),
academic support and career transition services for individuals
awarded fellowships by such institution.
``(3) Reduction.--The institutional allowance paid under
paragraph (1) shall be reduced by the amount the institution
charges and collects from a fellowship recipient for tuition
and other expenses as part of the recipient's instructional
program.
``(4) Use for overhead prohibited.--Funds made available
pursuant to this subpart may not be used for general
operational overhead of the academic department or institution
receiving funds under this subpart.

``SEC. 734. FELLOWSHIP RECIPIENTS.

``(a) Authorization.--An eligible institution that receives a grant
under this subpart shall use the grant funds to make fellowship awards
to minorities and women who are enrolled at such institution in a
doctoral degree, or highest possible degree available, program and--
``(1) intend to pursue a career in instruction at--
``(A) an institution of higher education (as
defined in section 101);
``(B) an institution of higher education (as
defined in section 102(a)(1));
``(C) an institution of higher education outside
the United States, as that term is described in section
102(a)(2); or
``(D) a proprietary institution of higher education
(as defined in section 102(b)); and
``(2) sign an agreement with the Secretary agreeing to,
within 5 years of receiving the doctoral degree, or highest
possible degree available, begin employment at an institution
described in paragraph (1) for 1 year for each year of
fellowship assistance received under this subpart.
``(b) Failure To Comply.--If an individual who receives a
fellowship award under this subpart fails to comply with the agreement
signed pursuant to subsection (a)(2), then the Secretary shall do 1 or
both of the following:
``(1) Require the individual to repay all or the applicable
portion of the total fellowship amount awarded to the
individual by converting the balance due to a loan at the
interest rate applicable to loans made under part B of title
IV.
``(2) Impose a fine or penalty in an amount to be
determined by the Secretary.
``(c) Waiver and Modification.--
``(1) Regulations.--The Secretary shall promulgate
regulations setting forth criteria to be considered in granting
a waiver for the service requirement under subsection (a).
``(2) Content.--The criteria under paragraph (1) shall
include whether compliance with the service requirement by the
fellowship recipient would be--
``(A) inequitable and represent a substantial
hardship; or
``(B) deemed impossible because the individual is
permanently and totally disabled at the time of the
waiver request.
``(d) Amount of Fellowship Awards.--Fellowship awards under this
subpart shall consist of a stipend in an amount equal to the level of
support provided to the National Science Foundation graduate fellows,
except that such stipend shall be adjusted as necessary so as not to
exceed the fellow's tuition and fees or demonstrated need (as
determined by the institution of higher education where the graduate
student is enrolled), whichever is greater.
``(e) Academic Progress Required.--An individual shall not be
eligible to receive a fellowship award--
``(1) except during periods in which such student is
enrolled, such student is maintaining satisfactory academic
progress in, devoting essentially full time to, study or
research in the pursuit of the degree for which the fellowship
support was awarded; and
``(2) if the student is engaged in gainful employment other
than part-time employment involved in teaching, research, or
similar activity determined by the institution to be consistent
with and supportive of the student's progress toward the
appropriate degree.

``SEC. 735. RULE OF CONSTRUCTION.

``Nothing in this subpart shall be construed to require an eligible
institution that receives a grant under this subpart to--
``(1) grant a preference or to differentially treat any
applicant for a faculty position as a result of the
institution's participation in the program under this subpart;
and
``(2) hire a Patsy T. Mink Fellow who completes this
program and seeks employment at such institution.

``SEC. 736. AUTHORIZATION OF APPROPRIATIONS.

``There is authorized to be appropriated to carry out this subpart
$25,000,000 for fiscal year 2004 and such sums as may be necessary for
each of the 5 succeeding fiscal years.''.

TITLE VI--RECRUITMENT OF TEACHERS TO TEACH AT TRIBAL COLLEGES OR
UNIVERSITIES

SEC. 601. LOAN REPAYMENT OR CANCELLATION FOR INDIVIDUALS WHO TEACH IN
TRIBAL COLLEGES OR UNIVERSITIES.

(a) Short Title.--This title may be cited as the ``Tribal Colleges
and Universities Teacher Loan Forgiveness Act''.
(b) Perkins Loans.--
(1) Amendment.--Section 465(a) of the Higher Education Act
of 1965 (20 U.S.C. 1087ee(a)) is amended--
(A) in paragraph (2)--
(i) in subparagraph (H), by striking ``or''
after the semicolon;
(ii) in subparagraph (I), by striking the
period and inserting ``; or''; and
(iii) by adding at the end the following:
``(J) as a full-time teacher at a Tribal College or
University as defined in section 316(b).''; and
(B) in paragraph (3)(A)(i), by striking ``or (I)''
and inserting ``(I), or (J)''.
(2) Effective date.--The amendments made by paragraph (1)
shall be effective for service performed during academic year
1998-1999 and succeeding academic years, notwithstanding any
contrary provision of the promissory note under which a loan
under part E of title IV of the Higher Education Act of 1965
(20 U.S.C. 1087aa et seq.) was made.
(c) FFEL and Direct Loans.--Part G of title IV of the Higher
Education Act of 1965 (20 U.S.C. 1088 et seq.) is amended by adding at
the end the following:

``SEC. 493C. LOAN REPAYMENT OR CANCELLATION FOR INDIVIDUALS WHO TEACH
IN TRIBAL COLLEGES OR UNIVERSITIES.

``(a) Program Authorized.--The Secretary shall carry out a program,
through the holder of a loan, of assuming or canceling the obligation
to repay a qualified loan amount, in accordance with subsection (b),
for any new borrower on or after the date of enactment of this section,
who--
``(1) has been employed as a full-time teacher at a Tribal
College or University as defined in section 316(b); and
``(2) is not in default on a loan for which the borrower
seeks repayment or cancellation.
``(b) Qualified Loan Amounts.--
``(1) Percentages.--Subject to paragraph (2), the Secretary
shall assume or cancel the obligation to repay under this
section--
``(A) 15 percent of the amount of all loans made,
insured, or guaranteed after the date of enactment of
this section to a student under part B or D, for the
first or second year of employment described in
subsection (a)(1);
``(B) 20 percent of such total amount, for the
third or fourth year of such employment; and
``(C) 30 percent of such total amount, for the
fifth year of such employment.
``(2) Maximum.--The Secretary shall not repay or cancel
under this section more than $15,000 in the aggregate of loans
made, insured, or guaranteed under parts B and D for any
student.
``(3) Treatment of consolidation loans.--A loan amount for
a loan made under section 428C may be a qualified loan amount
for the purposes of this subsection only to the extent that
such loan amount was used to repay a loan made, insured, or
guaranteed under part B or D for a borrower who meets the
requirements of subsection (a), as determined in accordance
with regulations prescribed by the Secretary.
``(c) Regulations.--The Secretary is authorized to issue such
regulations as may be necessary to carry out the provisions of this
section.
``(d) Construction.--Nothing in this section shall be construed to
authorize any refunding of any repayment of a loan.
``(e) Prevention of Double Benefits.--No 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.
12571 et seq.).
``(f) Definition.--For purposes of this section, the term `year',
when applied to employment as a teacher, means an academic year as
defined by the Secretary.''.

SEC. 602. AMOUNTS FORGIVEN NOT TREATED AS GROSS INCOME.

The amount of any loan that is assumed or canceled under an
amendment made by this title shall not, consistent with section 108(f)
of the Internal Revenue Code of 1986, be treated as gross income for
Federal income tax purposes.
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