,,ii #aaith ,,congress #b;d ,session ,s4 #dafi ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,march #bd1 #bjbf,mr4 ,welch introduced the following bill2 which was read twice and referred to the ,committee on ,health1 ,education1 ,labor1 and ,pensions ,a ,,bill ,to amend the ,higher ,education ,act of #aife to eliminate interest on student loans1 establish the ,education ,affordability ,trust ,fund1 increase annual and aggregate loan limits1 and for other purposes4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,student ,loan ,interest ,elimination ,act4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4,title ,i--,loan modification and refinancing for existing ,federal student loans,sec4 #aja4 ,program authority4,sec4 #ajb4 ,program for the loan modification of eligible ,federal ,direct loans1 and refinancing of other ,federal student loan4,title ,,ii--,terms and conditions for new ,federal student loans,sec4 #bja4 ,applicable rates of interest for loans made on or after ,july #a1 #bjbf4,sec4 #bjb4 ,termination of interest subsidized loans4,sec4 #bjc4 ,annual and aggregate loan limits4,title ,,iii--,trust ,fund,sec4 #cja4 ,supplemental ,federal ,pell ,grant ,program4,sec4 #cjb4 ,use of funds from the repayment of ,federal student loans4,sec4 #cjc4 ,education ,affordability ,trust ,fund4,title ,,iv--,general ,provisions,sec4 #dja4 ,implementation4 ,i ,loan modification and refinancing for existing ,federal student loans #aja4 ,program authority ,section #dea7;a7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;a7a77 is amended-- 7#a7 by striking ,there are hereby made available and inserting ,after using funds available from the ,education ,affordability ,trust ,fund in accordance with section #did;,a1 there are hereby made available2 7#b7 by striking and 7#b7 and inserting 7#b72 and 7#c7 by inserting 2 and 7#c7 to make loans under section #dfj;,a7b7 after section #dei;,a4 #ajb4 ,program for the loan modification of eligible ,federal ,direct loans1 and refinancing of other ,federal student loans 7a7 ,loan modification and refinancing ,part ,d of title ,,iv of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;a et seq47 is amended by adding at the end the following3 #dfj;,a4 ,program for the loan modification of eligible ,federal ,direct loans1 and refinancing of other ,federal student loans 7a7 ,federal ,direct ,loan ,modification ,the ,secretary shall establish and implement1 with respect to each borrower of an eligible ,federal direct loan1 procedures to-- 7#a7 modify1 without any action from the borrower1 the terms of such loan so that beginning on ,july #a1 #bjbf1 no interest shall accrue on such loan2 and 7#b7 allow the borrower1 at any time1 to opt out of the loan modification under paragraph 7#a7 for such loan4 7b7 ,refinancing eligible non-,federal direct loans as ,federal ,direct ,consolidation ,loans 7#a7 ,in general ,the ,secretary shall establish and implement1 with respect to each borrower of an eligible non-,federal direct loan1 procedures to-- 7,a7 refinance such loan in accordance with procedures listed in paragraph 7#b72 and 7,b7 allow the borrower1 at any time1 to opt out of the loan refinancing under subparagraph 7,a7 for such loan4 7#b7 ,procedures ,in refinancing an eligible non-,federal direct loan with respect to a borrower of such loan1 the ,secretary shall carry out the following3 7,a7 ,the ,secretary shall make a ,federal ,direct ,consolidation ,loan under this subsection1 in an amount equal to the sum of the unpaid principal1 accrued unpaid interest1 and late charges of the eligible non-,federal direct loan4 7,b7 ,the ,secretary shall pay the proceeds of such ,federal ,direct ,consolidation ,loan to the holder of the eligible non-,federal direct loan1 in order to discharge the borrower from any remaining obligation with respect to such eligible non-,federal direct loan4 7#c7 ,terms and conditions of refinanced loans 7,a7 ,in general ,a ,federal ,direct ,consolidation ,loan made under this subsection shall have the same terms and conditions as a ,federal ,direct ,consolidation ,loan that was not made under this subsection1 except-- 7i7 notwithstanding any other provision of this title1 a borrower of a ,federal ,direct ,consolidation ,loan made under this subsection may repay such loan under any repayment plan or program described in section #dee7;d77#a72 7ii7 that the ,secretary may adjust such terms and conditions as necessary to enable the borrower to access loan forgiveness or other benefits available to the borrower under the loan before refinancing under this subsection1 in any case where such benefits are more generous than provided under a ,federal ,direct ,consolidation ,loan under this subsection2 and 7iii7 as otherwise provided in this subsection4 7,b7 ,no origination fees ,notwithstanding section #dee7;c71 the ,secretary may not charge a borrower of a loan made under this subsection an origination fee for such loan4 7,c7 ,interest rates ,no interest shall accrue on a loan that is made under this subsection4 7,d7 ,no automatic extension of repayment period ,a loan made under this subsection shall not result in the extension of the duration of the repayment period of the original loan1 and the borrower shall retain the same repayment term that was in effect on the original loan4 ,nothing in this paragraph shall be construed to prevent a borrower from electing a different repayment plan at any time in accordance with section #dee7;d77#c74 7,e7 ,rule of construction ,nothing in this section shall be construed to prevent a borrower of a ,federal student loan described in subparagraph 7,b7 or 7,c7 of subsection 7d77#b7 from consolidating such loans with other loans eligible for consolidation under this section1 or to require such a borrower to consolidate such loans with other ,federal student loans into a single consolidation loan under this section4 7c7 ,report ,not later than #a year after the date of the enactment of the ,student ,loan ,interest ,elimination ,act1 and on an annual basis thereafter1 the ,secretary shall submit a report to the authorizing committees that includes-- 7#a7 the total number of borrowers whose loans have been modified or refinanced under this section during the preceding year2 and 7#b7 the number of such borrowers who are delinquent in making payments on such a loan4 7d7 ,definitions ,in this section3 7#a7 ,eligible ,federal direct loan ,the term eligible ,federal direct loan means-- 7,a7 a loan made under this part1 and first disbursed before ,july #a1 #bjbf2 7,b7 a loan made1 insured1 or guaranteed under part ,b1 and which is held by the ,secretary2 7,c7 a loan made under part ,e1 and which is held by the ,secretary2 or 7,d7 a loan made under subpart #a of part ,a of title ,,vii of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bib et seq471 and which is held by the ,secretary4 7#b7 ,eligible non-,federal direct loan ,the term eligible non-,federal direct loan means a loan-- 7,a7 made1 insured1 or guaranteed under part ,b1 and which is not held by the ,secretary2 7,b7 made under part ,e1 and which is not held by the ,secretary2 or 7,c7 made under-- 7i7 subpart ,i of part ,a of title ,,vii of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bib et seq471 and which is not held by the ,secretary2 7ii7 subpart ,,ii of part ,a of title ,,vii of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #bibq et seq471 and in the case of a loan made under section #gbc of such ,act 7#db ,u4,s4,c4 #bibs71 only if the borrower of the loan has completed the full period of service1 practice1 or training that was imposed as a condition on receipt of such loan2 or 7iii7 part ,e of title ,,viii of the ,public ,health ,service ,act 7#db ,u4,s4,c4 #big;a et seq471 and in the case of a loan made under section #hdf;,a of such ,act 7#db ,u4,s4,c4 #bign-#a71 only if the borrower has completed the #d-years of full-time employment as a faculty member at a school of nursing as described in subsection 7c77#c7 of such section #hdf;,a4 7#c7 ,original loan ,the term original loan1 used with respect to a ,federal ,direct ,consolidation ,loan made under subsection 7b71 means a loan for which a borrower's liability is discharged by such ,federal ,direct ,consolidation ,loan4 4 7b7 ,income-,contingent repayment ,section #dee7;e7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;e7e77 is amended by adding at the end the following new paragraph3 7#i7 ,special rule for refinanced loans ,for purposes of paragraph 7#g71 the period of time during which a borrower of a ,federal ,direct ,consolidation ,loan made under section #dfj;,a7b7 has made monthly payments shall be calculated in the manner described in section #dic;,c7f74 4 7c7 ,repayment ,assistance ,plan ,section #dee7q77#a7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;e7q77#a77 is amended by adding at the end the following3 7,h7 ,for purposes of subparagraph 7,e71 the period of time during which a borrower of a ,federal ,direct ,consolidation ,loan made under section #dfj;,a7b7 has made monthly payments shall be calculated in the manner described in section #dic;,c7f74 4 7d7 ,income-,based repayment 7#a7 ,exclusion from ,excepted ,consolidation ,loan ,section #dic;,c7a77#b77;,b7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajih;e7a77#b77;,b77 is amended by inserting a ,federal ,direct ,consolidation ,loan under section #dfj;,a1 and does not include after does not include4 7#b7 ,calculation of qualifying payments ,section #dic;,c of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajih;e7 is amended by adding at the end the following3 7f7 ,special rule for refinanced loans 7#a7 ,refinanced ,federal ,direct ,consolidation ,loans ,in calculating the period of time during which a borrower of a ,federal ,direct ,consolidation ,loan that is made under section #dfj;,a7b7 has made monthly payments for the purposes of subsection 7b77#g71 the ,secretary shall-- 7,a7 review the borrower's payment history to identify each component loan of such ,federal ,direct ,consolidation ,loan2 7,b7 for each such component loan-- 7i7 calculate the weighted factor of the component loan1 which shall be the factor that represents the portion of such ,federal ,direct ,consolidation ,loan that is attributable to such component loan2 and 7ii7 determine the number of qualifying monthly payments made on such component loan before consolidation2 7,c7 calculate the number of qualifying monthly payments determined under subparagraph 7,b77ii7 with respect to a component loan that shall be deemed as qualifying monthly payments made on the ,federal ,direct ,consolidation ,loan by multiplying-- 7i7 the weighted factor of such component loan as determined under subparagraph 7,b77i72 by 7ii7 the number of qualifying monthly payments made on such component loan as determined under subparagraph 7,b77ii72 and 7,d7 calculate and inform the borrower of the total number of qualifying monthly payments with respect to the component loans of the ,federal ,direct ,consolidation ,loan that shall be deemed as qualifying monthly payments made on the refinanced ,federal ,consolidation ,loan1 by-- 7i7 adding together the result of each calculation made under subparagraph 7,c7 with respect to each such component loan2 and 7ii7 rounding the number determined under clause 7i7 to the nearest whole number4 7#b7 ,component loan defined ,in this subsection1 the term component loan1 used with respect to a ,federal ,direct ,consolidation ,loan1 means a loan for which the liability was discharged by the proceeds of such ,federal ,direct ,consolidation ,loan4 4 7e7 ,conforming amendments ,the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajja et seq47 is amended-- 7#a7 in section #dee7;d77#a71 by striking shall offer a borrower of a loan and inserting shall offer a borrower of a ,federal ,direct ,consolidation ,loan under section #dfj;,a 7with respect to the ,federal ,direct ,consolidation ,loan under such section only1 and without regard to when other loans may have been received71 and shall offer a borrower of a loan2 7#b7 in section #dee7;d77#g7-- 7,a7 in the matter preceding subparagraph 7,a71 by striking ,beginning and inserting ,subject to subparagraph 7,f71 beginning2 7,b7 in subparagraph 7,c71 by striking ,a borrower is required and inserting ,subject to subparagraph 7,f71 a borrower is required2 7,c7 in subparagraph 7,e77ii77,,ii71 by inserting 7excluding such loans under section #dfj;,a7 after a ,federal ,direct ,consolidation ,loan2 and 7,d7 by adding at the end the following3 7,f7 ,consolidation ,loans under section #dfj;,a ,notwithstanding any other provision of this title1 including this subsection1 a borrower of a ,federal ,direct ,consolidation ,loan under section #dfj;,a shall be eligible to repay the ,federal ,direct ,consolidation ,loan under such section only under any repayment plan or program described under paragraph 7#a71 without regard to when other loans may have been received4 2 and 7#c7 in section #dbh;,c7a77#c77;,b77i77,v7 7#bj ,u4,s4,c4 #ajgh-c7c77;,b77i77,v77-- 7,a7 by striking the period at the end of item 7cc7 and inserting a semicolon2 7,b7 by striking the period at the end of item 7dd7 and inserting 2 or2 and 7,c7 by adding at the end the following3 7ee7 for the purpose of obtaining a ,federal ,direct ,consolidation ,loan under section #dfj;,a7b74 4 ,,ii ,terms and conditions for new ,federal student loans #bja4 ,applicable rates of interest for loans made on or after ,july #a1 #bjbf ,section #dee7;b77#h7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;e7b77#h77 is amended-- 7#a7 in the paragraph heading1 by inserting and before ,july #a1 #bjbf after ,july #a1 #bjac2 7#b7 in subparagraph 7,a71 by inserting and before ,july #a1 #bjbf after ,july #a1 #bjac2 7#c7 in subparagraph 7,b71 by inserting and before ,july #a1 #bjbf after ,july #a1 #bjac2 7#d7 in subparagraph 7,c71 by inserting and before ,july #a1 #bjbf after ,july #a1 #bjac2 7#e7 in subparagraph 7,d71 by inserting and before ,july #a1 #bjbf after ,july #a1 #bjac2 7#f7 by redesignating subparagraph 7,f7 as subparagraph 7,g72 and 7#g7 by inserting after subparagraph 7,e7 the following3 7,f7 ,new loans on or after ,july #a1 #bjbf ,notwithstanding the preceding subparagraphs of this paragraph1 for ,federal ,direct ,unsubsidized ,stafford ,loans1 ,federal ,direct ,,plus ,loans1 and ,federal ,direct ,consolidation ,loans for which the first disbursement is made1 or the application is received1 on or after ,july #a1 #bjbf1 the applicable rate of interest shall be #j percent on the unpaid principal balance of the loan4 4 #bjb4 ,termination of interest subsidized loans 7a7 ,program authority ,section #dea7;a7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;a7a77 is amended by adding at the end the following3 ,no new ,federal ,direct ,stafford ,loans1 as referenced under section #dee7;a77#b77;,a71 may be made under this part after ,june #cj1 #bjbf1 and no funds are authorized to be appropriated1 or may be expended1 under this ,act or any other ,act to make such ,federal ,direct ,stafford ,loans for which the first disbursement is after ,june #cj1 #bjbf44 7b7 ,termination of authority ,section #dee7;a7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;e7a77 is amended by adding at the end the following3 7#i7 ,termination of authority to make interest subsidized loans to any student ,notwithstanding any provision of this part or part ,b1 for any period of instruction beginning on or after ,july #a1 #bjbf-- 7,a7 a student shall not be eligible to receive a ,federal ,direct ,stafford loan under this part2 and 7,b7 the maximum annual amount of ,federal ,direct ,unsubsidized ,stafford loans such a student may borrow in any academic year 7as defined in section #dha7;a77#b77 or its equivalent shall be the maximum annual amount for such student determined under section #dbh;,h1 plus an amount equal to the amount of ,federal ,direct ,stafford loans the student would have received in the absence of this paragraph4 4 #bjc4 ,annual and aggregate loan limits ,section #dee7;a7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhg;e7a77 is amended-- 7#a7 in paragraph 7#d7-- 7,a7 in subparagraph 7,a71 in the matter preceding clause 7i71 by striking and 7#h7 and inserting 1 7#h71 and 7#i72 and 7,b7 in subparagraph 7,b71 in the matter preceding clause 7i71 by striking and 7#h7 and inserting 1 7#h71 and 7#i72 7#b7 in paragraph 7#f71 by striking paragraph 7#h7 and inserting paragraphs 7#h7 and 7#i72 and 7#c7 by adding at the end the following3 7#i7 ,adjustment for inflation 7,a7 ,in general ,each amount specified in paragraphs 7#d7 and 7#f7 shall1 for any period of instruction beginning on or after ,july #a1 #bjbg1 be deemed increased by a percentage equal to the annual adjustment percentage4 7,b7 ,annual adjustment percentage defined ,in this paragraph1 the term annual adjustment percentage1 as applied to an academic year1 means the estimated percentage change in the ,consumer ,price ,index 7as determined by the ,secretary1 using the definition in section #dgh7;f7 or the most recent calendar year ending prior to the beginning of that academic year74 4 ,,iii ,trust ,fund #cja4 ,supplemental ,federal ,pell ,grant ,program ,section #dja7;b7 of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajgj;a7b77 is amended by adding at the end the following3 7#aj7 ,supplemental ,pell ,grants using excess ,trust fund amounts ,for any award year for which the ,secretary elects to use the excess amounts 7or a portion of such excess amounts7 described in section #did;,a7c7 to carry out a ,supplemental ,pell ,grant ,program under this paragraph1 the ,secretary shall-- 7,a7 award each student that receives a ,federal ,pell grant under this subpart for such award year1 an additional ,federal ,pell ,grant in an amount that-- 7i7 bears the same relationship to such excess amount 7or such portion7 as the amount of the ,federal ,pell ,grant such student receives under this subpart 7excluding this paragraph7 for such award year bears to the total amount awarded in ,federal ,pell ,grants under this subpart 7excluding this paragraph7 for such award year2 and 7ii7 may-- 7,i7 exceed the total maximum ,federal ,pell ,grant available for such award year2 and 7,,ii7 be lower than the minimum ,federal ,pell ,grant 7as defined in section 7a77#b77;,f77 for such award year2 and 7,b7 ensure that-- 7i7 in the case of a student awarded an additional ,federal ,pell ,grant under subparagraph 7,a7 for an award year1 the total amount of ,federal ,pell ,grants awarded to such student under this subpart 7including such additional ,federal ,pell ,grant7 for such award year may exceed the total maximum ,federal ,pell ,grant available for such award year2 and 7ii7 any period of study covered by an additional ,federal ,pell ,grant awarded under subparagraph 7,a7 shall not be included in determining a student's duration limit under subsection 7d77#e74 4 #cjb4 ,use of funds from the repayment of ,federal student loans ,part ,g of title ,,iv of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhh et seq47 is amended by adding at the end the following3 #did;,a4 ,use of funds from the repayment of ,federal student loans 7a7 ,in general ,the ,secretary of ,education shall1 without further appropriation1 deposit all amounts repaid on loans made1 insured1 or guaranteed under this title into the ,education ,affordability ,trust ,fund established under section #did;,b 7referred to in this section as the ,trust ,fund74 7b7 ,use of ,trust ,fund assets 7#a7 ,in general ,the ,trust ,fund ,board shall transfer the assets from the investments of the ,trust ,fund to the ,secretary of ,education1 to pay for the administrative costs of the ,department of ,education in making loans under part ,d1 including loans under section #dfj;,a7b71 to all eligible students 7and the eligible parents of such students7 in attendance at participating institutions of higher education selected by the ,secretary1 to enable such students to pursue their courses of study at such institutions1 in the following amounts3 7,a7 ,during any period of time when the ,trust ,fund has assets under management of #ejj1jjj1jjj or more over a #ahj-;day period1 #ajj percent of such assets4 7,b7 ,during any period of time when the ,trust ,fund has assets of less than #ejj1jjj1jjj1 but more than or equal to #djj1jjj1jjj over a #ahj-;day period1 #dj percent of such assets4 7,c7 ,during any period of time when the ,trust ,fund has assets of less than #djj1jjj1jjj but more than or equal to #cjj1jjj1jjj over a #ahj-;day period1 #aj percent of such assets4 7,d7 ,during any period of time when the ,trust ,fund has assets of less than #cjj1jjj1jjj over a #ahj-;day period1 #j percent of such assets4 7#b7 ,assets defined ,in this subsection1 the term assets means the amount that the return on investment from bond investments made by the ,trust ,fund exceeds the amount repaid on loans and deposited into the ,trust ,fund under subsection 7a74 7c7 ,use of excess amounts ,if the amounts required to be transferred under subsection 7b7 are in excess of the amounts needed to pay for the costs of the ,department of ,education described under subsection 7b71 the ,secretary of ,education may elect to use such excess amounts 7or a portion of such excess amounts7-- 7#a7 to carry out the ,supplemental ,federal ,pell ,grant ,program under section #dja7;b77#aj72 and 7#b7 for the ,postsecondary ,student ,success ,program authorized under part ,b of title ,,vii and for which the ,department issued a notice inviting applications in the ,federal ,register on ,august #ab1 #bjbb 7#hg ,fed4 ,reg4 #dihaa et seq471 except that1 notwithstanding the terms and condition of such program described in the notice-- 7,a7 any institution of higher education defined in section #aja or #ajb7;a77#a77;,b7 is eligible to receive a grant under the program if-- 7i7 the average cost of tuition to attend such institution for the #c most recent academic years has not increased by more than #c percent2 7ii7 the institution provides an assurance that the average cost of tuition to attend such institution for the succeeding #c academic years will not increase by more than #c percent2 or 7iii7 the size of the endowment fund 7as defined in section #cab7;c77 of the institution on the first day of the previous calendar year was not greater than #ajj1jjj1jjj2 and 7,b7 grants under the program will be awarded on a competitive basis1 and the amount of any such grant will be not less than #fjj1jjj1 and not more than #a1jjj1jjj4 7d7 ,report and testimony to ,congress ,if the ,secretary of ,education elects to use excess amounts described under subsection 7c7 the ,secretary shall provide to ,congress a report on the use of such amounts 7and provide testimony on such use7 not later than #ahj days after making use of such funds4 4 #cjc4 ,education ,affordability ,trust ,fund ,part ,g of title ,,iv of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhh et seq47 is further amended by adding at the end the following3 #did;,b4 ,education ,affordability ,trust ,fund 7a7 ,establishment ,there is established within the ,department a trust fund to be known as the ,education ,affordability ,trust ,fund 7referred to in this section as the ,trust ,fund74 7b7 ,board 7#a7 ,in general ,the head of the ,trust ,fund shall be a #f-member ,education ,affordability ,trust ,fund ,board 7referred to in this section as the ,board74 7#b7 ,appointment of members ,the members of the ,board shall be appointed by the ,president1 by and with the advice and consent of the ,senate1 from among individuals who-- 7,a7 have experience and expertise in the management of financial investments2 7,b7 have at least #aj years of experience in the financial investment field2 7,c7 at least #c of which have experience working with rural lenders1 historically disenfranchised groups1 or low-income communities2 and 7,d7 are not currently an elected official4 7#c7 ,disqualifications for appointments 7,a7 ,lobbying ,no individual required to register as a lobbyist under section #d of the ,lobbying ,disclosure ,act of #aiie 7#b ,u4,s4,c4 #afjc7 may be appointed to1 or serve on1 the ,board4 7,b7 ,incompatible office ,no member of the ,board may hold or may have held the position of ,member of the ,house of ,representatives or ,senator1 may hold the position of officer or employee of the ,house of ,representatives1 ,senate1 or instrumentality or other entity of the legislative branch1 or may have held such a position within #d years of the date of appointment4 7#d7 ,term 7,a7 ,in general ,the members of the ,board shall serve #f-year terms1 staggered such that the terms of #b members ends every #b years4 7,b7 ,political affiliation ,the #b members serving terms that end at the same time may not be members of the same political party4 7,c7 ,members take office together ,with respect to the #b individuals appointed to fill terms ending at the same time1 neither individual may begin serving as a member of the ,board until both have been appointed and confirmed by the ,senate4 7,d7 ,authority to serve until a successor is appointed ,upon the expiration of a term of a member of the ,board1 that member shall continue to serve until a successor is appointed4 7,e7 ,limitation ,an individual may only serve as a member of the ,board for a maximum of #b terms4 7,f7 ,removal for cause ,the ,president may remove a member of the ,board only for inefficiency1 neglect of duty1 or malfeasance in office4 7#e7 ,deadline for initial appointments ,the initial members of the ,board shall be appointed no later than #ij days after the date of enactment of this section4 7#f7 ,chair ,each member of the ,board shall serve as the ,chair of the ,board during the final year of the term for which the member is appointed4 7#g7 ,conflicts of interest ,each member of the ,board shall1 with respect to entities in which the ,trust ,fund invests1 either divest any interest in such entities or place such interests into a blind trust4 7#h7 ,meetings 7,a7 ,in general ,the ,board shall meet no less than once per quarter4 7,b7 ,participation by fund managers ,the fund manager appointed under subsection 7c7 shall attend not less than #b meetings of the ,board each year1 to discuss forecasting and current investment performance4 7,c7 ,emergency meeting requirement ,if1 once the assets under management of the ,trust ,fund have reached #ejj1jjj1jjj1jjj1 the assets under management of the ,trust ,fund drops below #cjj1jjj1jjj1jjj1 the ,board shall immediately hold an emergency meeting to discuss ensuring the long-term solvency of the ,trust ,fund4 7#i7 ,voting ,investment guidelines shall be adopted by a unanimous vote of the entire ,board4 ,all other decisions of the ,board shall be decided by a majority vote4 ,all decisions of the ,board shall be entered upon the records of the ,board4 7#aj7 ,compensation ,while serving on the business of the ,board 7including travel time71 a member of the ,board shall be entitled to compensation at the per diem equivalent of the rate provided for level ,,iv of the ,executive ,schedule under section #ecae of title #e1 ,united ,states ,code1 and while so serving away from home and the member's regular place of business1 a member may be allowed travel expenses1 as authorized by the ,chair of the ,board4 7c7 ,powers and responsibilities of the ,board 7#a7 ,appointment of fund managers 7,a7 ,in general ,the ,board shall appoint independent fund managers from among individuals who have met such ethics vetting requirements as the ,board may establish4 7,b7 ,failure to make a unanimous appointment ,if the ,board fails to make an appointment under subparagraph 7,a71 the ,chair shall1 not later #aj days after the date of such failure1 make the appointment4 7,c7 ,initial fund managers ,the ,board shall make the initial appointment of independent fund managers under subparagraph 7,a7 not later than #fj days after the date on which all members of the ,board are first appointed4 7#b7 ,other duties ,the ,board shall-- 7,a7 retain independent advisers to assist it in the formulation and adoption of its investment guidelines2 7,b7 pay the administrative expenses of the ,trust ,fund from the assets in the ,trust ,fund2 and 7,c7 discharge their duties 7including the voting of proxies7 with respect to the assets of the ,trust ,fund solely in the interest of the ,trust ,fund and through it1 the participants and beneficiaries of the programs funded under this ,act-- 7i7 for the exclusive purpose of-- 7,i7 providing zero-interest ,federal student loans to existing and future borrowers2 and 7,,ii7 defraying reasonable expenses of administering the functions of the ,trust ,fund2 7ii7 with the care1 skill1 prudence1 and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims2 7iii7 by diversifying investments so as to minimize the risk of large losses and to avoid disproportionate influence over a particular industry or firm1 unless under the circumstances it is clearly prudent not to do so2 and 7iv7 in accordance with ,trust ,fund governing documents and instruments insofar as such documents and instruments are consistent with this ,act4 7#c7 ,prohibitions with respect to members of the ,board ,no member of the ,board shall-- 7,a7 deal with the assets of the ,trust ,fund in the member's own interest or for the member's own account2 7,b7 in an individual or in any other capacity act in any transaction involving the assets of the ,trust ,fund on behalf of a party 7or represent a party7 whose interests are adverse to the interests of the ,trust ,fund or the interests of borrowers2 or 7,c7 receive any consideration for the member's own personal account from any party dealing with the assets of the ,trust ,fund4 7#d7 ,audit and report 7,a7 ,audit ,the ,board shall annually engage an independent qualified public accountant to audit the financial statements of the ,trust ,fund4 7,b7 ,report to ,congress 7i7 ,in general ,the ,board shall submit an annual management report to the ,secretary of ,education1 the ,secretary of the ,treasury1 the ,president1 and the ,congress not later than #ahj days after the end of each fiscal year1 including-- 7,i7 a statement of financial position1 including the total amount in the ,trust ,fund2 7,,ii7 a statement of operations2 7,,iii7 a statement of cash flows2 7,,iv7 a breakdown of the investments made by the ,trust ,fund1 including by type2 7,v7 a statement on internal accounting and administrative control systems2 7,,vi7 the report resulting from an audit of the financial statements of the ,trust ,fund conducted under subparagraph 7,a72 and 7,,vii7 any other comments and information necessary to inform the ,congress about the operations and financial condition of the ,trust ,fund4 7ii7 ,public availability of report ,the ,board shall make each report required under this subparagraph available to the public1 including on the website of the ,department of ,education4 7#e7 ,rules and administrative powers ,the ,board shall have the authority to make rules to govern the operations of the ,trust ,fund1 employ professional staff1 and contract with outside advisers to provide legal1 accounting1 investment advisory1 or other services necessary for the proper administration of this section4 ,in the case of contracts with investment advisory services1 compensation for such services may be on a fixed contract fee basis or on such other terms and conditions as are customary for such services4 7#f7 ,financial ,disclosure ,reports ,each ,member and employee of the ,board shall file with the ,secretary of ,education and appropriate committees of ,congress financial disclosure reports that comply with the requirements under subchapter ,i of chapter #aca of title #e1 ,united ,states ,code4 7#g7 ,funding ,the expenses of the ,trust ,fund and the ,board incurred under this section shall be paid from the ,trust ,fund4 7d7 ,duties of the fund managers 7#a7 ,in general ,the fund managers shall invest the assets of the ,trust ,fund in a manner consistent with the investment guidelines adopted by the ,board4 7#b7 ,instruments ,the fund managers shall invest the amounts in the ,trust ,fund in bonds that consist of the following3 7,a7 ,municipal bonds4 7,b7 ,bonds issued by the ,department of the ,treasury1 which may not make up more than #dj percent of the total investments of the ,trust ,fund4 7,c7 ,other ,federal bonds4 7,d7 ,bonds issued by the ,federal ,home ,loan ,mortgage ,corporation1 the ,federal ,national ,mortgage ,association1 or a ,federal ,home ,loan ,bank4 7,e7 ,international bonds1 which may not make up more than #aj percent of the total investments of the ,trust ,fund4 7,f7 ,corporate bonds1 which may not make up more than #aj percent of the total investments of the ,trust ,fund4 7#c7 ,investment requirements 7,a7 ,ratings ,the investments of the ,trust ,fund shall consist-- 7i7 only of investments rated at least ,baa#a or ,,bbb by ,moody's1 ,s,p1 or ,fitch ,ratings2 7ii7 at least #hj percent of investments rated at least ,a#c or ,a- by ,moody's1 ,s,p1 or ,fitch ,ratings2 7iii7 at least #fj percent of investments rated at least ,aa#a or ,,aa by ,moody's1 ,s,p1 or ,fitch ,ratings2 and 7iv7 at least #dj percent of investments rated at least ,aaa or ,,aaa by ,moody's1 ,s,p1 or ,fitch ,ratings4 7,b7 ,diversification ,the investments of the ,trust ,fund shall be diversified to minimize the risk of large losses and to avoid disproportionate influence over a particular region1 industry1 or firm1 unless under the circumstances it is clearly prudent not to do so4 7,c7 ,limitation on investing in certain countries ,the ,trust ,fund may not invest in entities or subsidiaries of entities that are-- 7i7 based in any country that does not have diplomatic relations with the ,united ,states2 7ii7 based in any country1 the government of which is subject to sanctions by the ,united ,states2 or 7iii7 on a sanctions list of the ,department of the ,treasury4 7#d7 ,short-term initial investments ,during the #aj-year period beginning on the date of enactment of this section1 the fund managers shall prioritize investments in bonds with a maturity date of less than #aj years4 7e7 ,means of financing ,for purposes of the ,congressional ,budget ,act of #aigd 7#b ,u4,s4,c4 #fba et seq471 the ,balanced ,budget and ,emergency ,deficit ,control ,act of #aihe 7#b ,u4,s4,c4 #ijj et seq471 and chapter #aa of title #ca1 ,united ,states ,code1 and notwithstanding section #bj of ,office of ,management and ,budget ,circular ,no4 ,a-#aa1 or any successor thereto1 earnings of the ,trust ,fund shall be calculated on an accrual basis4 4 ,,iv ,general ,provisions #dja4 ,implementation ,in carrying out the amendments made by titles ,i1 ,,ii1 and ,,iii1 the ,secretary of ,education may waive the application of-- 7#a7 the master calendar requirements under section #dhb of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajhi72 and 7#b7 negotiated rulemaking under section #dib of the ,higher ,education ,act of #aife 7#bj ,u4,s4,c4 #ajih;a74