,,ii  #aai? ,,congress  #b;d ,session   
,s4 #dafi  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,m>* #bd1 #bjbf,mr4    
,wel* introduc$ ! foll[+ bill2 :i* 0    
read twice & ref]r$ to ! ,committee on  
,heal?1 ,education1 ,labor1 & ,p5sions  
,a ,,bill  ,to am5d ! ,high] ,education 
,act ( #aife to elim9ate int]e/ on /ud5t
 loans1 e/abli% ! ,education            
,af=dability ,tru/ ,fund1 increase      
annual & aggregate loan limits1 & = o!r 
purposes4  #a4 ,%ort title2 table (     
cont5ts  7a7 ,%ort title ,?is ,act may  
be cit$ z ! ,/ud5t ,loan ,int]e/        
,elim9ation ,act4  7b7 ,table ( cont5ts 
,! table ( cont5ts = ?is ,act is z      
foll[s3 ,sec4 #a4 ,%ort title2 table (  
cont5ts4,title ,i--,loan modification & 
ref9anc+ = exi/+ ,f$]al /ud5t loans,sec4
 #aja4 ,program au?ority4,sec4 #ajb4    
,program = ! loan modification (        
eligible ,f$]al ,direct loans1 &        
ref9anc+ ( o!r ,f$]al /ud5t loan4,title 
,,ii--,t]ms & conditions = new ,f$]al   
/ud5t loans,sec4 #bja4 ,applicable rates

 ( int]e/ = loans made on or aft] ,july 
#a1 #bjbf4,sec4 #bjb4 ,t]m9ation (      
int]e/ subsidiz$ loans4,sec4 #bjc4      
,annual & aggregate loan limits4,title  
,,iii--,tru/ ,fund,sec4 #cja4           
,supplem5tal ,f$]al ,pell ,grant        
,program4,sec4 #cjb4 ,use ( funds f !   
repaym5t ( ,f$]al /ud5t loans4,sec4     
#cjc4 ,education ,af=dability ,tru/     
,fund4,title ,,iv--,g5]al               
,provisions,sec4 #dja4 ,implem5tation4  
,i ,loan modification & ref9anc+ = exi/+
 ,f$]al /ud5t loans  #aja4 ,program     
au?ority ,section #dea7;a7 ( ! ,high]   
,education ,act ( #aife 7#bj ,u4,s4,c4  
#ajhg;a7a77 is am5d$-- 7#a7 by /rik+    
,!re are h]eby made available & ins]t+  
,aft] us+ funds available f ! ,education
 ,af=dability ,tru/ ,fund 9 accordance )
 section #did;,a1 !re are h]eby made    
available2  7#b7 by /rik+ & 7#b7 &      
ins]t+ 7#b72 &  7#c7 by ins]t+ 2 & 7#c7 
to make loans "u section #dfj;,a7b7 aft]
 section #dei;,a4  #ajb4 ,program = !   
loan modification ( eligible ,f$]al     

,direct loans1 & ref9anc+ ( o!r ,f$]al  
/ud5t loans  7a7 ,loan modification &   
ref9anc+ ,"p ,d ( title ,,iv ( ! ,high] 
,education ,act ( #aife 7#bj ,u4,s4,c4  
#ajhg;a et seq47 is am5d$ by add+ at !  
end ! foll[+3  #dfj;,a4 ,program = !    
loan modification ( eligible ,f$]al     
,direct loans1 & ref9anc+ ( o!r ,f$]al  
/ud5t loans  7a7 ,f$]al ,direct ,loan   
,modification ,! ,secret>y %all e/abli% 
& implem5t1 ) respect to ea* borr[] ( an
 eligible ,f$]al direct loan1 proc$ures 
to-- 7#a7 modify1 )\t any action f !    
borr[]1 ! t]ms ( su* loan s t beg9n+ on 
,july #a1 #bjbf1 no int]e/ %all accrue  
on su* loan2 &  7#b7 all[ ! borr[]1 at  
any "t1 to opt out ( ! loan modification
 "u p>agraph 7#a7 = su* loan4  7b7      
,ref9anc+ eligible non-,f$]al direct    
loans z ,f$]al ,direct ,consolidation   
,loans  7#a7 ,9 g5]al ,! ,secret>y %all 
e/abli% & implem5t1 ) respect to ea*    
borr[] ( an eligible non-,f$]al direct  
loan1 proc$ures to-- 7,a7 ref9ance su*  
loan 9 accordance ) proc$ures li/$ 9    

p>agraph 7#b72 &  7,b7 all[ ! borr[]1 at
 any "t1 to opt out ( ! loan ref9anc+ "u
 subp>agraph 7,a7 = su* loan4  7#b7     
,proc$ures ,9 ref9anc+ an eligible      
non-,f$]al direct loan ) respect to a   
borr[] ( su* loan1 ! ,secret>y %all c>ry
 out ! foll[+3 7,a7 ,! ,secret>y %all   
make a ,f$]al ,direct ,consolidation    
,loan "u ?is subsection1 9 an am\nt     
equal to ! sum ( ! unpaid pr9cipal1     
accru$ unpaid int]e/1 & late *>ges ( !  
eligible non-,f$]al direct loan4  7,b7  
,! ,secret>y %all pay ! proce$s ( su*   
,f$]al ,direct ,consolidation ,loan to !
 hold] ( ! eligible non-,f$]al direct   
loan1 9 ord] to dis*>ge ! borr[] f any  
rema9+ obligation ) respect to su*      
eligible non-,f$]al direct loan4  7#c7  
,t]ms & conditions ( ref9anc$ loans     
7,a7 ,9 g5]al ,a ,f$]al ,direct         
,consolidation ,loan made "u ?is        
subsection %all h ! same t]ms &         
conditions z a ,f$]al ,direct           
,consolidation ,loan t 0 n made "u ?is  
subsection1 except-- 7i7 not)/&+ any o!r

 provision ( ?is title1 a borr[] ( a    
,f$]al ,direct ,consolidation ,loan made
 "u ?is subsection may repay su* loan "u
 any repaym5t plan or program describ$ 9
 section #dee7;d77#a72  7ii7 t !        
,secret>y may adju/ su* t]ms &          
conditions z necess>y to enable ! borr[]
 to access loan =giv5ess or o!r b5efits 
available to ! borr[] "u ! loan be=e    
ref9anc+ "u ?is subsection1 9 any case  
:]e su* b5efits are m g5]\s ?an provid$ 
"u a ,f$]al ,direct ,consolidation ,loan
 "u ?is subsection2 &  7iii7 z o!rwise  
provid$ 9 ?is subsection4  7,b7 ,no     
orig9ation fees ,not)/&+ section        
#dee7;c71 ! ,secret>y may n *>ge a      
borr[] ( a loan made "u ?is subsection  
an orig9ation fee = su* loan4  7,c7     
,int]e/ rates ,no int]e/ %all accrue on 
a loan t is made "u ?is subsection4     
7,d7 ,no automatic ext5sion ( repaym5t  
p]iod ,a loan made "u ?is subsection    
%all n result 9 ! ext5sion ( ! duration 
( ! repaym5t p]iod ( ! orig9al loan1 & !
 borr[] %all reta9 ! same repaym5t t]m t

 0 9 effect on ! orig9al loan4 ,no?+ 9  
?is p>agraph %all be con/ru$ to prev5t a
 borr[] f elect+ a diff]5t repaym5t plan
 at any "t 9 accordance ) section       
#dee7;d77#c74  7,e7 ,rule ( con/ruction 
,no?+ 9 ?is section %all be con/ru$ to  
prev5t a borr[] ( a ,f$]al /ud5t loan   
describ$ 9 subp>agraph 7,b7 or 7,c7 (   
subsection 7d77#b7 f consolidat+ su*    
loans ) o!r loans eligible =            
consolidation "u ?is section1 or to     
require su* a borr[] to consolidate su* 
loans ) o!r ,f$]al /ud5t loans into a   
s+le consolidation loan "u ?is section4 
7c7 ,report ,n lat] ?an #a ye> aft] !   
date ( ! enactm5t ( ! ,/ud5t ,loan      
,int]e/ ,elim9ation ,act1 & on an annual
 basis !reaft]1 ! ,secret>y %all submit 
a report to ! au?oriz+ committees t     
includes--  7#a7 ! total numb] ( borr[]s
 ^: loans h be5 modifi$ or ref9anc$ "u  
?is section dur+ ! prec$+ ye>2 &  7#b7 !
 numb] ( su* borr[]s :o are del9qu5t 9  
mak+ paym5ts on su* a loan4  7d7        
,def9itions ,9 ?is section3 7#a7        

,eligible ,f$]al direct loan ,! t]m     
eligible ,f$]al direct loan means-- 7,a7
 a loan made "u ?is "p1 & fir/ disburs$ 
be=e ,july #a1 #bjbf2  7,b7 a loan made1
 insur$1 or gu>ante$ "u "p ,b1 & :i* is 
held by ! ,secret>y2  7,c7 a loan made  
"u "p ,e1 & :i* is held by ! ,secret>y2 
or  7,d7 a loan made "u subp>t #a ( "p  
,a ( title ,,vii ( ! ,public ,heal?     
,s]vice ,act 7#db ,u4,s4,c4 #bib et     
seq471 & :i* is held by ! ,secret>y4    
7#b7 ,eligible non-,f$]al direct loan ,!
 t]m eligible non-,f$]al direct loan    
means a loan-- 7,a7 made1 insur$1 or    
gu>ante$ "u "p ,b1 & :i* is n held by ! 
,secret>y2  7,b7 made "u "p ,e1 & :i* is
 n held by ! ,secret>y2 or  7,c7 made   
"u-- 7i7 subp>t ,i ( "p ,a ( title ,,vii
 ( ! ,public ,heal? ,s]vice ,act 7#db   
,u4,s4,c4 #bib et seq471 & :i* is n held
 by ! ,secret>y2  7ii7 subp>t ,,ii ( "p 
,a ( title ,,vii ( ! ,public ,heal?     
,s]vice ,act 7#db ,u4,s4,c4 #bibq et    
seq471 & 9 ! case ( a loan made "u      
section #gbc ( su* ,act 7#db ,u4,s4,c4  

#bibs71 only if ! borr[] ( ! loan has   
complet$ ! full p]iod ( s]vice1         
practice1 or tra9+ t 0 impos$ z a       
condition on receipt ( su* loan2 or     
7iii7 "p ,e ( title ,,viii ( ! ,public  
,heal? ,s]vice ,act 7#db ,u4,s4,c4      
#big;a et seq471 & 9 ! case ( a loan    
made "u section #hdf;,a ( su* ,act 7#db 
,u4,s4,c4 #bign-#a71 only if ! borr[]   
has complet$ ! #d-ye>s ( full-"t        
employm5t z a faculty memb] at a s*ool (
 nurs+ z describ$ 9 subsection 7c77#c7 (
 su* section #hdf;,a4  7#c7 ,orig9al    
loan ,! t]m orig9al loan1 us$ ) respect 
to a ,f$]al ,direct ,consolidation ,loan
 made "u subsection 7b71 means a loan = 
:i* a borr[]'s liability is dis*>g$ by  
su* ,f$]al ,direct ,consolidation ,loan4
  4  7b7 ,income-,cont+5t repaym5t      
,section #dee7;e7 ( ! ,high] ,education 
,act ( #aife 7#bj ,u4,s4,c4 #ajhg;e7e77 
is am5d$ by add+ at ! end ! foll[+ new  
p>agraph3  7#i7 ,special rule = ref9anc$
 loans ,= purposes ( p>agraph 7#g71 !   
p]iod ( "t dur+ :i* a borr[] ( a ,f$]al 

,direct ,consolidation ,loan made "u    
section #dfj;,a7b7 has made mon?ly      
paym5ts %all be calculat$ 9 ! mann]     
describ$ 9 section #dic;,c7f74  4  7c7  
,repaym5t ,assi/ance ,plan ,section     
#dee7q77#a7 ( ! ,high] ,education ,act (
 #aife 7#bj ,u4,s4,c4 #ajhg;e7q77#a77 is
 am5d$ by add+ at ! end ! foll[+3  7,h7 
,= purposes ( subp>agraph 7,e71 ! p]iod 
( "t dur+ :i* a borr[] ( a ,f$]al       
,direct ,consolidation ,loan made "u    
section #dfj;,a7b7 has made mon?ly      
paym5ts %all be calculat$ 9 ! mann]     
describ$ 9 section #dic;,c7f74  4  7d7  
,income-,bas$ repaym5t  7#a7 ,exclusion 
f ,except$ ,consolidation ,loan ,section
 #dic;,c7a77#b77;,b7 ( ! ,high]         
,education ,act ( #aife 7#bj ,u4,s4,c4  
#ajih;e7a77#b77;,b77 is am5d$ by ins]t+ 
a ,f$]al ,direct ,consolidation ,loan "u
 section #dfj;,a1 & does n include aft] 
does n include4  7#b7 ,calculation (    
qualify+ paym5ts ,section #dic;,c ( !   
,high] ,education ,act ( #aife 7#bj     
,u4,s4,c4 #ajih;e7 is am5d$ by add+ at !

 end ! foll[+3  7f7 ,special rule =     
ref9anc$ loans  7#a7 ,ref9anc$ ,f$]al   
,direct ,consolidation ,loans ,9        
calculat+ ! p]iod ( "t dur+ :i* a borr[]
 ( a ,f$]al ,direct ,consolidation ,loan
 t is made "u section #dfj;,a7b7 has    
made mon?ly paym5ts = ! purposes (      
subsection 7b77#g71 ! ,secret>y %all--  
7,a7 review ! borr[]'s paym5t hi/ory to 
id5tify ea* compon5t loan ( su* ,f$]al  
,direct ,consolidation ,loan2  7,b7 =   
ea* su* compon5t loan-- 7i7 calculate ! 
weight$ factor ( ! compon5t loan1 :i*   
%all be ! factor t repres5ts ! portion (
 su* ,f$]al ,direct ,consolidation ,loan
 t is attributable to su* compon5t loan2
 &  7ii7 det]m9e ! numb] ( qualify+     
mon?ly paym5ts made on su* compon5t loan
 be=e consolidation2  7,c7 calculate !  
numb] ( qualify+ mon?ly paym5ts det]m9$ 
"u subp>agraph 7,b77ii7 ) respect to a  
compon5t loan t %all be deem$ z qualify+
 mon?ly paym5ts made on ! ,f$]al ,direct
 ,consolidation ,loan by multiply+-- 7i7
 ! weight$ factor ( su* compon5t loan z 

det]m9$ "u subp>agraph 7,b77i72 by  7ii7
 ! numb] ( qualify+ mon?ly paym5ts made 
on su* compon5t loan z det]m9$ "u       
subp>agraph 7,b77ii72 &  7,d7 calculate 
& in=m ! borr[] ( ! total numb] (       
qualify+ mon?ly paym5ts ) respect to !  
compon5t loans ( ! ,f$]al ,direct       
,consolidation ,loan t %all be deem$ z  
qualify+ mon?ly paym5ts made on !       
ref9anc$ ,f$]al ,consolidation ,loan1   
by-- 7i7 add+ toge!r ! result ( ea*     
calculation made "u subp>agraph 7,c7 )  
respect to ea* su* compon5t loan2 &     
7ii7 r\nd+ ! numb] det]m9$ "u clause 7i7
 to ! ne>e/ :ole numb]4  7#b7 ,compon5t 
loan def9$ ,9 ?is subsection1 ! t]m     
compon5t loan1 us$ ) respect to a ,f$]al
 ,direct ,consolidation ,loan1 means a  
loan = :i* ! liability 0 dis*>g$ by !   
proce$s ( su* ,f$]al ,direct            
,consolidation ,loan4  4  7e7 ,con=m+   
am5dm5ts ,! ,high] ,education ,act (    
#aife 7#bj ,u4,s4,c4 #ajja et seq47 is  
am5d$-- 7#a7 9 section #dee7;d77#a71 by 
/rik+ %all (f] a borr[] ( a loan &      

ins]t+ %all (f] a borr[] ( a ,f$]al     
,direct ,consolidation ,loan "u section 
#dfj;,a 7) respect to ! ,f$]al ,direct  
,consolidation ,loan "u su* section     
only1 & )\t reg>d to :5 o!r loans may h 
be5 receiv$71 & %all (f] a borr[] ( a   
loan2  7#b7 9 section #dee7;d77#g7--    
7,a7 9 ! matt] prec$+ subp>agraph 7,a71 
by /rik+ ,beg9n+ & ins]t+ ,subject to   
subp>agraph 7,f71 beg9n+2  7,b7 9       
subp>agraph 7,c71 by /rik+ ,a borr[] is 
requir$ & ins]t+ ,subject to subp>agraph
 7,f71 a borr[] is requir$2  7,c7 9     
subp>agraph 7,e77ii77,,ii71 by ins]t+   
7exclud+ su* loans "u section #dfj;,a7  
aft] a ,f$]al ,direct ,consolidation    
,loan2 &  7,d7 by add+ at ! end !       
foll[+3  7,f7 ,consolidation ,loans "u  
section #dfj;,a ,not)/&+ any o!r        
provision ( ?is title1 includ+ ?is      
subsection1 a borr[] ( a ,f$]al ,direct 
,consolidation ,loan "u section #dfj;,a 
%all be eligible to repay ! ,f$]al      
,direct ,consolidation ,loan "u su*     
section only "u any repaym5t plan or    

program describ$ "u p>agraph 7#a71 )\t  
reg>d to :5 o!r loans may h be5 receiv$4
  2 &  7#c7 9 section                   
#dbh;,c7a77#c77;,b77i77,v7 7#bj         
,u4,s4,c4 #ajgh-c7c77;,b77i77,v77-- 7,a7
 by /rik+ ! p]iod at ! end ( item 7cc7 &
 ins]t+ a semicolon2  7,b7 by /rik+ !   
p]iod at ! end ( item 7dd7 & ins]t+ 2   
or2 &  7,c7 by add+ at ! end ! foll[+3  
7ee7 = ! purpose ( obta9+ a ,f$]al      
,direct ,consolidation ,loan "u section 
#dfj;,a7b74  4  ,,ii ,t]ms & conditions 
= new ,f$]al /ud5t loans  #bja4         
,applicable rates ( int]e/ = loans made 
on or aft] ,july #a1 #bjbf ,section     
#dee7;b77#h7 ( ! ,high] ,education ,act 
( #aife 7#bj ,u4,s4,c4 #ajhg;e7b77#h77  
is am5d$-- 7#a7 9 ! p>agraph head+1 by  
ins]t+ & be=e ,july #a1 #bjbf aft] ,july
 #a1 #bjac2  7#b7 9 subp>agraph 7,a71 by
 ins]t+ & be=e ,july #a1 #bjbf aft]     
,july #a1 #bjac2  7#c7 9 subp>agraph    
7,b71 by ins]t+ & be=e ,july #a1 #bjbf  
aft] ,july #a1 #bjac2  7#d7 9           
subp>agraph 7,c71 by ins]t+ & be=e ,july

 #a1 #bjbf aft] ,july #a1 #bjac2  7#e7 9
 subp>agraph 7,d71 by ins]t+ & be=e     
,july #a1 #bjbf aft] ,july #a1 #bjac2   
7#f7 by r$esignat+ subp>agraph 7,f7 z   
subp>agraph 7,g72 &  7#g7 by ins]t+ aft]
 subp>agraph 7,e7 ! foll[+3  7,f7 ,new  
loans on or aft] ,july #a1 #bjbf        
,not)/&+ ! prec$+ subp>agraphs ( ?is    
p>agraph1 = ,f$]al ,direct ,unsubsidiz$ 
,/af=d ,loans1 ,f$]al ,direct ,,plus    
,loans1 & ,f$]al ,direct ,consolidation 
,loans = :i* ! fir/ disbursem5t is made1
 or ! application is receiv$1 on or aft]
 ,july #a1 #bjbf1 ! applicable rate (   
int]e/ %all be #j p]c5t on ! unpaid     
pr9cipal balance ( ! loan4  4  #bjb4    
,t]m9ation ( int]e/ subsidiz$ loans  7a7
 ,program au?ority ,section #dea7;a7 ( !
 ,high] ,education ,act ( #aife 7#bj    
,u4,s4,c4 #ajhg;a7a77 is am5d$ by add+  
at ! end ! foll[+3 ,no new ,f$]al       
,direct ,/af=d ,loans1 z ref]5c$ "u     
section #dee7;a77#b77;,a71 may be made  
"u ?is "p aft] ,june #cj1 #bjbf1 & no   
funds are au?oriz$ to be appropriat$1 or

 may be exp5d$1 "u ?is ,act or any o!r  
,act to make su* ,f$]al ,direct ,/af=d  
,loans = :i* ! fir/ disbursem5t is aft] 
,june #cj1 #bjbf44  7b7 ,t]m9ation (    
au?ority ,section #dee7;a7 ( ! ,high]   
,education ,act ( #aife 7#bj ,u4,s4,c4  
#ajhg;e7a77 is am5d$ by add+ at ! end ! 
foll[+3  7#i7 ,t]m9ation ( au?ority to  
make int]e/ subsidiz$ loans to any /ud5t
 ,not)/&+ any provision ( ?is "p or "p  
,b1 = any p]iod ( in/ruction beg9n+ on  
or aft] ,july #a1 #bjbf-- 7,a7 a /ud5t  
%all n be eligible to receive a ,f$]al  
,direct ,/af=d loan "u ?is "p2 &  7,b7 !
 maximum annual am\nt ( ,f$]al ,direct  
,unsubsidiz$ ,/af=d loans su* a /ud5t   
may borr[ 9 any academic ye> 7z def9$ 9 
section #dha7;a77#b77 or its equival5t  
%all be ! maximum annual am\nt = su*    
/ud5t det]m9$ "u section #dbh;,h1 plus  
an am\nt equal to ! am\nt ( ,f$]al      
,direct ,/af=d loans ! /ud5t w\ld h     
receiv$ 9 ! abs5ce ( ?is p>agraph4  4   
#bjc4 ,annual & aggregate loan limits   
,section #dee7;a7 ( ! ,high] ,education 

,act ( #aife 7#bj ,u4,s4,c4 #ajhg;e7a77 
is am5d$-- 7#a7 9 p>agraph 7#d7-- 7,a7 9
 subp>agraph 7,a71 9 ! matt] prec$+     
clause 7i71 by /rik+ & 7#h7 & ins]t+ 1  
7#h71 & 7#i72 &  7,b7 9 subp>agraph     
7,b71 9 ! matt] prec$+ clause 7i71 by   
/rik+ & 7#h7 & ins]t+ 1 7#h71 & 7#i72   
7#b7 9 p>agraph 7#f71 by /rik+ p>agraph 
7#h7 & ins]t+ p>agraphs 7#h7 & 7#i72 &  
7#c7 by add+ at ! end ! foll[+3  7#i7   
,adju/m5t = inflation  7,a7 ,9 g5]al    
,ea* am\nt specifi$ 9 p>agraphs 7#d7 &  
7#f7 %all1 = any p]iod ( in/ruction     
beg9n+ on or aft] ,july #a1 #bjbg1 be   
deem$ increas$ by a p]c5tage equal to ! 
annual adju/m5t p]c5tage4  7,b7 ,annual 
adju/m5t p]c5tage def9$ ,9 ?is p>agraph1
 ! t]m annual adju/m5t p]c5tage1 z      
appli$ to an academic ye>1 means !      
e/imat$ p]c5tage *ange 9 ! ,consum]     
,price ,index 7z det]m9$ by ! ,secret>y1
 us+ ! def9ition 9 section #dgh7;f7 or !
 mo/ rec5t cal5d> ye> end+ prior to !   
beg9n+ ( t academic ye>74  4  ,,iii     
,tru/ ,fund  #cja4 ,supplem5tal ,f$]al  

,pell ,grant ,program ,section #dja7;b7 
( ! ,high] ,education ,act ( #aife 7#bj 
,u4,s4,c4 #ajgj;a7b77 is am5d$ by add+  
at ! end ! foll[+3  7#aj7 ,supplem5tal  
,pell ,grants us+ excess ,tru/ fund     
am\nts ,= any aw>d ye> = :i* ! ,secret>y
 elects to use ! excess am\nts 7or a    
portion ( su* excess am\nts7 describ$ 9 
section #did;,a7c7 to c>ry out a        
,supplem5tal ,pell ,grant ,program "u   
?is p>agraph1 ! ,secret>y %all-- 7,a7   
aw>d ea* /ud5t t receives a ,f$]al ,pell
 grant "u ?is subp>t = su* aw>d ye>1 an 
additional ,f$]al ,pell ,grant 9 an     
am\nt t-- 7i7 be>s ! same relation%ip to
 su* excess am\nt 7or su* portion7 z !  
am\nt ( ! ,f$]al ,pell ,grant su* /ud5t 
receives "u ?is subp>t 7exclud+ ?is     
p>agraph7 = su* aw>d ye> be>s to ! total
 am\nt aw>d$ 9 ,f$]al ,pell ,grants "u  
?is subp>t 7exclud+ ?is p>agraph7 = su* 
aw>d ye>2 &  7ii7 may-- 7,i7 exce$ !    
total maximum ,f$]al ,pell ,grant       
available = su* aw>d ye>2 &  7,,ii7 be  
l[] ?an ! m9imum ,f$]al ,pell ,grant 7z 

def9$ 9 section 7a77#b77;,f77 = su* aw>d
 ye>2 &  7,b7 ensure t-- 7i7 9 ! case ( 
a /ud5t aw>d$ an additional ,f$]al ,pell
 ,grant "u subp>agraph 7,a7 = an aw>d   
ye>1 ! total am\nt ( ,f$]al ,pell       
,grants aw>d$ to su* /ud5t "u ?is subp>t
 7includ+ su* additional ,f$]al ,pell   
,grant7 = su* aw>d ye> may exce$ ! total
 maximum ,f$]al ,pell ,grant available =
 su* aw>d ye>2 &  7ii7 any p]iod ( /udy 
cov]$ by an additional ,f$]al ,pell     
,grant aw>d$ "u subp>agraph 7,a7 %all n 
be includ$ 9 det]m9+ a /ud5t's duration 
limit "u subsection 7d77#e74  4  #cjb4  
,use ( funds f ! repaym5t ( ,f$]al /ud5t
 loans ,"p ,g ( title ,,iv ( ! ,high]   
,education ,act ( #aife 7#bj ,u4,s4,c4  
#ajhh et seq47 is am5d$ by add+ at ! end
 ! foll[+3  #did;,a4 ,use ( funds f !   
repaym5t ( ,f$]al /ud5t loans  7a7 ,9   
g5]al ,! ,secret>y ( ,education %all1   
)\t fur!r appropriation1 deposit all    
am\nts repaid on loans made1 insur$1 or 
gu>ante$ "u ?is title into ! ,education 
,af=dability ,tru/ ,fund e/abli%$ "u    

section #did;,b 7ref]r$ to 9 ?is section
 z ! ,tru/ ,fund74  7b7 ,use ( ,tru/    
,fund assets  7#a7 ,9 g5]al ,! ,tru/    
,fund ,bo>d %all transf] ! assets f !   
inve/m5ts ( ! ,tru/ ,fund to ! ,secret>y
 ( ,education1 to pay = ! adm9i/rative  
co/s ( ! ,dep>tm5t ( ,education 9 mak+  
loans "u "p ,d1 includ+ loans "u section
 #dfj;,a7b71 to all eligible /ud5ts 7& !
 eligible p>5ts ( su* /ud5ts7 9         
att5dance at p>ticipat+ in/itutions (   
high] education select$ by ! ,secret>y1 
to enable su* /ud5ts to pursue _! c\rses
 ( /udy at su* in/itutions1 9 ! foll[+  
am\nts3 7,a7 ,dur+ any p]iod ( "t :5 !  
,tru/ ,fund has assets "u managem5t (   
#ejj1jjj1jjj or m ov] a #ahj-;day p]iod1
 #ajj p]c5t ( su* assets4  7,b7 ,dur+   
any p]iod ( "t :5 ! ,tru/ ,fund has     
assets ( less ?an #ejj1jjj1jjj1 b m ?an 
or equal to #djj1jjj1jjj ov] a #ahj-;day
 p]iod1 #dj p]c5t ( su* assets4  7,c7   
,dur+ any p]iod ( "t :5 ! ,tru/ ,fund   
has assets ( less ?an #djj1jjj1jjj b m  
?an or equal to #cjj1jjj1jjj ov] a      

#ahj-;day p]iod1 #aj p]c5t ( su* assets4
  7,d7 ,dur+ any p]iod ( "t :5 ! ,tru/  
,fund has assets ( less ?an #cjj1jjj1jjj
 ov] a #ahj-;day p]iod1 #j p]c5t ( su*  
assets4  7#b7 ,assets def9$ ,9 ?is      
subsection1 ! t]m assets means ! am\nt t
 ! return on inve/m5t f bond inve/m5ts  
made by ! ,tru/ ,fund exce$s ! am\nt    
repaid on loans & deposit$ into ! ,tru/ 
,fund "u subsection 7a74  7c7 ,use (    
excess am\nts ,if ! am\nts requir$ to be
 transf]r$ "u subsection 7b7 are 9      
excess ( ! am\nts ne$$ to pay = ! co/s (
 ! ,dep>tm5t ( ,education describ$ "u   
subsection 7b71 ! ,secret>y ( ,education
 may elect to use su* excess am\nts 7or 
a portion ( su* excess am\nts7-- 7#a7 to
 c>ry out ! ,supplem5tal ,f$]al ,pell   
,grant ,program "u section              
#dja7;b77#aj72 &  7#b7 = ! ,po/second>y 
,/ud5t ,success ,program au?oriz$ "u "p 
,b ( title ,,vii & = :i* ! ,dep>tm5t    
issu$ a notice invit+ applications 9 !  
,f$]al ,regi/] on ,augu/ #ab1 #bjbb 7#hg
 ,f$4 ,reg4 #dihaa et seq471 except t1  

not)/&+ ! t]ms & condition ( su* program
 describ$ 9 ! notice--  7,a7 any        
in/itution ( high] education def9$ 9    
section #aja or #ajb7;a77#a77;,b7 is    
eligible to receive a grant "u ! program
 if--  7i7 ! av]age co/ ( tuition to    
att5d su* in/itution = ! #c mo/ rec5t   
academic ye>s has n increas$ by m ?an #c
 p]c5t2  7ii7 ! in/itution provides an  
assurance t ! av]age co/ ( tuition to   
att5d su* in/itution = ! succe$+ #c     
academic ye>s w n increase by m ?an #c  
p]c5t2 or  7iii7 ! size ( ! end[m5t fund
 7z def9$ 9 section #cab7;c77 ( !       
in/itution on ! fir/ day ( ! previ\s    
cal5d> ye> 0 n great] ?an #ajj1jjj1jjj2 
&  7,b7 grants "u ! program w be aw>d$  
on a competitive basis1 & ! am\nt ( any 
su* grant w be n less ?an #fjj1jjj1 & n 
m ?an #a1jjj1jjj4  7d7 ,report &        
te/imony to ,congress ,if ! ,secret>y ( 
,education elects to use excess am\nts  
describ$ "u subsection 7c7 ! ,secret>y  
%all provide to ,congress a report on ! 
use ( su* am\nts 7& provide te/imony on 

su* use7 n lat] ?an #ahj days aft] mak+ 
use ( su* funds4  4  #cjc4 ,education   
,af=dability ,tru/ ,fund ,"p ,g ( title 
,,iv ( ! ,high] ,education ,act ( #aife 
7#bj ,u4,s4,c4 #ajhh et seq47 is fur!r  
am5d$ by add+ at ! end ! foll[+3        
#did;,b4 ,education ,af=dability ,tru/  
,fund  7a7 ,e/abli%m5t ,!re is e/abli%$ 
)9 ! ,dep>tm5t a tru/ fund to be kn[n z 
! ,education ,af=dability ,tru/ ,fund   
7ref]r$ to 9 ?is section z ! ,tru/      
,fund74  7b7 ,bo>d  7#a7 ,9 g5]al ,!    
head ( ! ,tru/ ,fund %all be a #f-memb] 
,education ,af=dability ,tru/ ,fund     
,bo>d 7ref]r$ to 9 ?is section z !      
,bo>d74  7#b7 ,appo9tm5t ( memb]s ,!    
memb]s ( ! ,bo>d %all be appo9t$ by !   
,presid5t1 by & ) ! advice & cons5t ( ! 
,s5ate1 f among individuals :o-- 7,a7 h 
exp]i5ce & exp]tise 9 ! managem5t (     
f9ancial inve/m5ts2  7,b7 h at lea/ #aj 
ye>s ( exp]i5ce 9 ! f9ancial inve/m5t   
field2  7,c7 at lea/ #c ( :i* h exp]i5ce
 work+ ) rural l5d]s1 hi/orically       
dis5fran*is$ gr\ps1 or l[-income        

communities2 &  7,d7 are n curr5tly an  
elect$ (ficial4  7#c7 ,disqualifications
 = appo9tm5ts  7,a7 ,lobby+ ,no         
individual requir$ to regi/] z a lobbyi/
 "u section #d ( ! ,lobby+ ,disclosure  
,act ( #aiie 7#b ,u4,s4,c4 #afjc7 may be
 appo9t$ to1 or s]ve on1 ! ,bo>d4  7,b7 
,incompatible (fice ,no memb] ( ! ,bo>d 
may hold or may h held ! position (     
,memb] ( ! ,h\se ( ,repres5tatives or   
,s5ator1 may hold ! position ( (fic] or 
employee ( ! ,h\se ( ,repres5tatives1   
,s5ate1 or in/rum5tality or o!r entity (
 ! legislative bran*1 or may h held su* 
a position )9 #d ye>s ( ! date (        
appo9tm5t4  7#d7 ,t]m  7,a7 ,9 g5]al ,! 
memb]s ( ! ,bo>d %all s]ve #f-ye> t]ms1 
/agg]$ su* t ! t]ms ( #b memb]s ends e  
#b ye>s4  7,b7 ,political affiliation ,!
 #b memb]s s]v+ t]ms t end at ! same "t 
may n be memb]s ( ! same political p>ty4
  7,c7 ,memb]s take (fice toge!r ,)     
respect to ! #b individuals appo9t$ to  
fill t]ms end+ at ! same "t1 nei!r      
individual may beg9 s]v+ z a memb] ( !  

,bo>d until bo? h be5 appo9t$ & confirm$
 by ! ,s5ate4  7,d7 ,au?ority to s]ve   
until a successor is appo9t$ ,^u !      
expiration ( a t]m ( a memb] ( ! ,bo>d1 
t memb] %all cont9ue to s]ve until a    
successor is appo9t$4  7,e7 ,limitation 
,an individual may only s]ve z a memb] (
 ! ,bo>d = a maximum ( #b t]ms4  7,f7   
,removal = cause ,! ,presid5t may remove
 a memb] ( ! ,bo>d only = ineffici5cy1  
neglect ( duty1 or malfeasance 9 (fice4 
7#e7 ,deadl9e = initial appo9tm5ts ,!   
initial memb]s ( ! ,bo>d %all be appo9t$
 no lat] ?an #ij days aft] ! date (     
enactm5t ( ?is section4  7#f7 ,*air ,ea*
 memb] ( ! ,bo>d %all s]ve z ! ,*air ( !
 ,bo>d dur+ ! f9al ye> ( ! t]m = :i* !  
memb] is appo9t$4  7#g7 ,conflicts (    
int]e/ ,ea* memb] ( ! ,bo>d %all1 )     
respect to entities 9 :i* ! ,tru/ ,fund 
inve/s1 ei!r dive/ any int]e/ 9 su*     
entities or place su* int]e/s into a    
bl9d tru/4  7#h7 ,meet+s  7,a7 ,9 g5]al 
,! ,bo>d %all meet no less ?an once p]  
qu>t]4  7,b7 ,p>ticipation by fund      

manag]s ,! fund manag] appo9t$ "u       
subsection 7c7 %all att5d n less ?an #b 
meet+s ( ! ,bo>d ea* ye>1 to discuss    
=eca/+ & curr5t inve/m5t p]=mance4  7,c7
 ,em]g5cy meet+ requirem5t ,if1 once !  
assets "u managem5t ( ! ,tru/ ,fund h   
rea*$ #ejj1jjj1jjj1jjj1 ! assets "u     
managem5t ( ! ,tru/ ,fund drops bel[    
#cjj1jjj1jjj1jjj1 ! ,bo>d %all          
imm$iately hold an em]g5cy meet+ to     
discuss ensur+ ! long-t]m solv5cy ( !   
,tru/ ,fund4  7#i7 ,vot+ ,inve/m5t      
guidel9es %all be adopt$ by a unanim\s  
vote ( ! entire ,bo>d4 ,all o!r         
decisions ( ! ,bo>d %all be decid$ by a 
majority vote4 ,all decisions ( ! ,bo>d 
%all be ent]$ ^u ! records ( ! ,bo>d4   
7#aj7 ,comp5sation ,:ile s]v+ on !      
bus9ess ( ! ,bo>d 7includ+ travel "t71 a
 memb] ( ! ,bo>d %all be entitl$ to     
comp5sation at ! p] diem equival5t ( !  
rate provid$ = level ,,iv ( ! ,executive
 ,s*$ule "u section #ecae ( title #e1   
,unit$ ,/ates ,code1 & :ile s s]v+ away 
f home & ! memb]'s regul> place (       

bus9ess1 a memb] may be all[$ travel    
exp5ses1 z au?oriz$ by ! ,*air ( !      
,bo>d4  7c7 ,p[]s & responsibilities ( !
 ,bo>d  7#a7 ,appo9tm5t ( fund manag]s  
7,a7 ,9 g5]al ,! ,bo>d %all appo9t      
indep5d5t fund manag]s f among          
individuals :o h met su* e?ics vett+    
requirem5ts z ! ,bo>d may e/abli%4  7,b7
 ,failure to make a unanim\s appo9tm5t  
,if ! ,bo>d fails to make an appo9tm5t  
"u subp>agraph 7,a71 ! ,*air %all1 n    
lat] #aj days aft] ! date ( su* failure1
 make ! appo9tm5t4  7,c7 ,initial fund  
manag]s ,! ,bo>d %all make ! initial    
appo9tm5t ( indep5d5t fund manag]s "u   
subp>agraph 7,a7 n lat] ?an #fj days    
aft] ! date on :i* all memb]s ( ! ,bo>d 
are fir/ appo9t$4  7#b7 ,o!r duties ,!  
,bo>d %all-- 7,a7 reta9 indep5d5t       
advis]s to assi/ x 9 ! =mulation &      
adoption ( its inve/m5t guidel9es2  7,b7
 pay ! adm9i/rative exp5ses ( ! ,tru/   
,fund f ! assets 9 ! ,tru/ ,fund2 &     
7,c7 dis*>ge _! duties 7includ+ ! vot+ (
 proxies7 ) respect to ! assets ( !     

,tru/ ,fund solely 9 ! int]e/ ( ! ,tru/ 
,fund & ?r\gh x1 ! p>ticipants &        
b5efici>ies ( ! programs fund$ "u ?is   
,act-- 7i7 = ! exclusive purpose (--    
7,i7 provid+ z]o-int]e/ ,f$]al /ud5t    
loans to exi/+ & future borr[]s2 &      
7,,ii7 defray+ reasonable exp5ses (     
adm9i/]+ ! functions ( ! ,tru/ ,fund2   
7ii7 ) ! c>e1 skill1 prud5ce1 & dilig5ce
 "u ! circum/ances !n prevail+ t a      
prud5t p]son act+ 9 a l capacity &      
famili> ) su* matt]s w\ld use 9 !       
conduct ( an ent]prise ( a l "* & ) l   
aims2  7iii7 by div]sify+ inve/m5ts s z 
to m9imize ! risk ( l>ge losses & to    
avoid disproportionate influ5ce ov] a   
p>ticul> indu/ry or firm1 unless "u !   
circum/ances x is cle>ly prud5t n to d  
s2 &  7iv7 9 accordance ) ,tru/ ,fund   
gov]n+ docum5ts & in/rum5ts ins(> z su* 
docum5ts & in/rum5ts are consi/5t ) ?is 
,act4  7#c7 ,prohibitions ) respect to  
memb]s ( ! ,bo>d ,no memb] ( ! ,bo>d    
%all-- 7,a7 deal ) ! assets ( ! ,tru/   
,fund 9 ! memb]'s own int]e/ or = !     

memb]'s own acc\nt2  7,b7 9 an          
individual or 9 any o!r capacity act 9  
any transaction involv+ ! assets ( !    
,tru/ ,fund on behalf ( a p>ty 7or      
repres5t a p>ty7 ^: int]e/s are adv]se  
to ! int]e/s ( ! ,tru/ ,fund or !       
int]e/s ( borr[]s2 or  7,c7 receive any 
consid]ation = ! memb]'s own p]sonal    
acc\nt f any p>ty deal+ ) ! assets ( !  
,tru/ ,fund4  7#d7 ,audit & report  7,a7
 ,audit ,! ,bo>d %all annually engage an
 indep5d5t qualifi$ public acc\ntant to 
audit ! f9ancial /atem5ts ( ! ,tru/     
,fund4  7,b7 ,report to ,congress  7i7  
,9 g5]al ,! ,bo>d %all submit an annual 
managem5t report to ! ,secret>y (       
,education1 ! ,secret>y ( ! ,treasury1 !
 ,presid5t1 & ! ,congress n lat] ?an    
#ahj days aft] ! end ( ea* fiscal ye>1  
includ+-- 7,i7 a /atem5t ( f9ancial     
position1 includ+ ! total am\nt 9 !     
,tru/ ,fund2  7,,ii7 a /atem5t (        
op]ations2  7,,iii7 a /atem5t ( ca%     
fl[s2  7,,iv7 a breakd[n ( ! inve/m5ts  
made by ! ,tru/ ,fund1 includ+ by type2 

7,v7 a /atem5t on int]nal acc\nt+ &     
adm9i/rative control sy/ems2  7,,vi7 !  
report result+ f an audit ( ! f9ancial  
/atem5ts ( ! ,tru/ ,fund conduct$ "u    
subp>agraph 7,a72 &  7,,vii7 any o!r    
comm5ts & in=mation necess>y to in=m !  
,congress ab\t ! op]ations & f9ancial   
condition ( ! ,tru/ ,fund4  7ii7 ,public
 availability ( report ,! ,bo>d %all    
make ea* report requir$ "u ?is          
subp>agraph available to ! public1      
includ+ on ! website ( ! ,dep>tm5t (    
,education4  7#e7 ,rules & adm9i/rative 
p[]s ,! ,bo>d %all h ! au?ority to make 
rules to gov]n ! op]ations ( ! ,tru/    
,fund1 employ pr(essional /aff1 &       
contract ) outside advis]s to provide   
legal1 acc\nt+1 inve/m5t advisory1 or   
o!r s]vices necess>y = ! prop]          
adm9i/ration ( ?is section4 ,9 ! case ( 
contracts ) inve/m5t advisory s]vices1  
comp5sation = su* s]vices may be on a   
fix$ contract fee basis or on su* o!r   
t]ms & conditions z are cu/om>y = su*   
s]vices4  7#f7 ,f9ancial ,disclosure    

,reports ,ea* ,memb] & employee ( !     
,bo>d %all file ) ! ,secret>y (         
,education & appropriate committees (   
,congress f9ancial disclosure reports t 
comply ) ! requirem5ts "u sub*apt] ,i ( 
*apt] #aca ( title #e1 ,unit$ ,/ates    
,code4  7#g7 ,fund+ ,! exp5ses ( ! ,tru/
 ,fund & ! ,bo>d incurr$ "u ?is section 
%all be paid f ! ,tru/ ,fund4  7d7      
,duties ( ! fund manag]s  7#a7 ,9 g5]al 
,! fund manag]s %all inve/ ! assets ( ! 
,tru/ ,fund 9 a mann] consi/5t ) !      
inve/m5t guidel9es adopt$ by ! ,bo>d4   
7#b7 ,in/rum5ts ,! fund manag]s %all    
inve/ ! am\nts 9 ! ,tru/ ,fund 9 bonds t
 consi/ ( ! foll[+3 7,a7 ,municipal     
bonds4  7,b7 ,bonds issu$ by ! ,dep>tm5t
 ( ! ,treasury1 :i* may n make up m ?an 
#dj p]c5t ( ! total inve/m5ts ( ! ,tru/ 
,fund4  7,c7 ,o!r ,f$]al bonds4  7,d7   
,bonds issu$ by ! ,f$]al ,home ,loan    
,mortgage ,corporation1 ! ,f$]al        
,national ,mortgage ,association1 or a  
,f$]al ,home ,loan ,bank4  7,e7         
,int]national bonds1 :i* may n make up m

 ?an #aj p]c5t ( ! total inve/m5ts ( !  
,tru/ ,fund4  7,f7 ,corporate bonds1 :i*
 may n make up m ?an #aj p]c5t ( ! total
 inve/m5ts ( ! ,tru/ ,fund4  7#c7       
,inve/m5t requirem5ts  7,a7 ,rat+s ,!   
inve/m5ts ( ! ,tru/ ,fund %all consi/-- 
7i7 only ( inve/m5ts rat$ at lea/ ,baa#a
 or ,,bbb by ,moody's1 ,s,p1 or ,fit*   
,rat+s2  7ii7 at lea/ #hj p]c5t (       
inve/m5ts rat$ at lea/ ,a#c or ,a- by   
,moody's1 ,s,p1 or ,fit* ,rat+s2  7iii7 
at lea/ #fj p]c5t ( inve/m5ts rat$ at   
lea/ ,aa#a or ,,aa by ,moody's1 ,s,p1 or
 ,fit* ,rat+s2 &  7iv7 at lea/ #dj p]c5t
 ( inve/m5ts rat$ at lea/ ,aaa or ,,aaa 
by ,moody's1 ,s,p1 or ,fit* ,rat+s4     
7,b7 ,div]sification ,! inve/m5ts ( !   
,tru/ ,fund %all be div]sifi$ to m9imize
 ! risk ( l>ge losses & to avoid        
disproportionate influ5ce ov] a p>ticul>
 region1 indu/ry1 or firm1 unless "u !  
circum/ances x is cle>ly prud5t n to d  
s4  7,c7 ,limitation on inve/+ 9 c]ta9  
c\ntries ,! ,tru/ ,fund may n inve/ 9   
entities or subsidi>ies ( entities t    

are-- 7i7 bas$ 9 any c\ntry t does n h  
diplomatic relations ) ! ,unit$ ,/ates2 
7ii7 bas$ 9 any c\ntry1 ! gov]nm5t ( :i*
 is subject to sanctions by ! ,unit$    
,/ates2 or  7iii7 on a sanctions li/ ( !
 ,dep>tm5t ( ! ,treasury4  7#d7         
,%ort-t]m initial inve/m5ts ,dur+ !     
#aj-ye> p]iod beg9n+ on ! date (        
enactm5t ( ?is section1 ! fund manag]s  
%all prioritize inve/m5ts 9 bonds ) a   
maturity date ( less ?an #aj ye>s4  7e7 
,means ( f9anc+ ,= purposes ( !         
,congressional ,budget ,act ( #aigd 7#b 
,u4,s4,c4 #fba et seq471 ! ,balanc$     
,budget & ,em]g5cy ,deficit ,control    
,act ( #aihe 7#b ,u4,s4,c4 #ijj et      
seq471 & *apt] #aa ( title #ca1 ,unit$  
,/ates ,code1 & not)/&+ section #bj (   
,(fice ( ,managem5t & ,budget ,circul>  
,no4 ,a-#aa1 or any successor !reto1    
e>n+s ( ! ,tru/ ,fund %all be calculat$ 
on an accrual basis4  4  ,,iv ,g5]al    
,provisions  #dja4 ,implem5tation ,9    
c>ry+ out ! am5dm5ts made by titles ,i1 
,,ii1 & ,,iii1 ! ,secret>y ( ,education 

may waive ! application (-- 7#a7 ! ma/] 
cal5d> requirem5ts "u section #dhb ( !  
,high] ,education ,act ( #aife 7#bj     
,u4,s4,c4 #ajhi72 &  7#b7 negotiat$     
rulemak+ "u section #dib ( ! ,high]     
,education ,act ( #aife 7#bj ,u4,s4,c4  
#ajih;a74