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Student Aid Readjustment Act

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IN THE UNITED STATES HOUSE OF REPRESENTATIVES

 

 Mr. Lawson (with thanks to Mr. Ford) for himself and others submits;

 

A BILL To amend the Higher Education Act of 1965 to restore a more reasonable balance in student assistance between grants and loans, 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 `Student Aid Readjustment Act'.

 

SEC. 2. EXPANSION OF PELL GRANT ENTITLEMENT.

 

(a) INCREASE IN PELL GRANT MAXIMUM AMOUNTS- Section 411(b)(2)(A) of the Higher Education Act of 1965 is amended by striking out clauses (iii), (iv), and (v) and inserting in lieu thereof the following: `(iii) $4,800 for academic year 1989-1990, `(iv) $5,000 for academic year 1990-1991, and `(v) $5,200 for academic year 1991-1992,'.

 

(b) RESTRICTION ON YEARS DURING WHICH STUDENT IS ELIGIBLE FOR PELL GRANTS- Section 411(c)(1) of such Act is amended to read as follows: `(c) PERIOD OF ELIGIBILITY FOR GRANTS- (1) The period during which a student may receive basic grants shall be the full-time equivalent of the period required for the completion of the first 2 academic years of the undergraduate baccalaureate course of study being pursued by that student at the institution at which the student is in attendance.'.

 

(c) ENTITLEMENT-BASED ALLOCATION SYSTEM- (1) AMENDMENT- Section 411(g) of such Act is amended to read as follows: `(g) REIMBURSEMENT OF INSTITUTIONAL ADVANCES REQUIRED- (1) Each institution of higher education which has an agreement with the Secretary under paragraph (3) of this subsection-- `(A) shall make awards to its eligible students in the full amount to which such student is entitled under this subpart; `(B) shall, except as provided in paragraph (5), credit the amounts of such awards toward the tuition, fees, room and board, and other expenses incurred by the eligible student; and `(C) shall submit vouchers for reimbursement of such awards at such time, in such form, and containing or accompanied by such information as the Secretary may require by regulation. `(2) The Secretary shall reimburse each institution submitting a proper voucher under paragraph (1)(C) for the full amount of the awards credited by such institution to eligible students as required by paragraph (1)(B). `(3) Each institution desiring to provide grants under this subpart to its eligible students shall enter into an agreement with the Secretary for purposes of this subsection. Such agreement shall-- `(A) specify the conditions with which the institution must comply to obtain reimbursements under this subsection; `(B) specify the obligations of the Secretary with respect to such reimbursements; and `(C) contain such additional terms and conditions as the Secretary may require by regulation. `(4) An institution which-- `(A) has entered into an agreement with the Secretary under paragraph (3), `(B) has awarded grants to eligible students in accordance with this subpart, and `(C) credited such awards in accordance with paragraph (1)(B) of this subsection, shall be deemed to have a contractual right against the United States to receive reimbursement according to the provisions of this subsection. Such reimbursements shall, for purposes of chapter 39 of title 31, United States Code, be considered to be payments made for the acquisition of services by contract with the Department of Education. `(5) In the case of a student who does not reside in institutionally owned or operated housing and whose basic grant exceeds the amount of the tuition and fees owed by that student, the institution shall pay such excess to such student in accordance with such procedures as may be prescribed by the Secretary. For purposes of paragraph (4)(C), any amounts so paid shall be treated as amounts credited in accordance with paragraph (1)(B), and may be used by such student to cover room, board, transportation, child care, books, and other costs of attendance.'.

 

(2) CONFORMING AMENDMENTS- (A) Section 411(a) of such Act is amended-- (i) by inserting `in accordance with subsection (g)' after `pay to each eligible institution' in paragraph (1); `(ii) by striking `paragraph (2)' and inserting `subsection (b)'; (iii) by striking the last sentence of paragraph (1); and (iv) by striking `paragraph (1)' in paragraph (2) and inserting `subsection (g)'. (B) Section 411(b) of such Act is further amended by adding at the end thereof the following new paragraph: `(8) The amount of the basic grant to which a student is entitled under this subpart shall be determined only in accordance with the requirements of this subpart and notwithstanding any other provision of law heretofore or hereafter enacted, unless such other provision of law expressly refers to and expressly amends this subpart.'.

 

(d) ELIMINATION OF PERCENTAGE-OF-COST-OF-ATTENDANCE LIMITATION- Section 411(b) of such Act is further amended-- (1) by striking paragraph (3); and (2) by redesignating paragraphs (4) through (8) as paragraph (3) through (7), respectively.

 

SEC. 3. ELIMINATION OF LOAN ELIGIBILITY FOR FIRST 2 ACADEMIC YEARS OF UNDERGRADUATE STUDY; INCREASE IN LIMITS FOR SUCCEEDING YEARS.

(a) FISL PROGRAM- Sections 425(a)(1)(A) of the Higher Education Act of 1965 is amended to read as follows: `(1) ANNUAL LIMITS; INELIGIBILITY OF FIRST AND SECOND YEAR STUDENTS- (A) The total of loans made to a student in any academic year or its equivalent (as determined by the Secretary) which may be covered by Federal loan insurance under this part may not exceed (i) $8,000 in the case of a student who has successfully completed the first and second years of a program of undergraduate education, but who is not a graduate or professional student (as defined in regulations of the Secretary), or (ii) $8,000 in the case of such a graduate or professional student. Loans made to a student who has not successfully completed the first and second years of a program of undergraduate education may not be covered by Federal loan insurance under this part.'.

 

 (b) GSL PROGRAM- Section 428(b)(1) of such Act is amended-- (1) in subparagraph (A), by striking out clauses (i), (ii), and (iii) and inserting the following: `(i) $8,000 in the case of a student who has successfully completed the first and second years of a program of undergraduate education but who is not a graduate or professional student (as defined in regulations of the Secretary); and `(ii) $8,000 in the case of such a graduate or professional student;'; (2) by striking out subparagraph (C) and inserting the following: `(C) authorizes the insurance of loans to any individual who has successfully completed the first and second years of a program of undergraduate education during any of at least 4 succeeding academic years or their equivalent (as determined under regulations of the Secretary), but does not authorize the insurance of loans to any individual who has not successfully completed such first and second years;'.

 

(c) SUPPLEMENTAL LOANS FOR STUDENTS- Section 428A(b)(1) of such Act is amended to read as follows: `(1) ANNUAL LIMIT- Subject to paragraphs (2) and (3), the maximum amount a student who has successfully completed the first and second years of a program of undergraduate education may borrow in any succeeding academic year or its equivalent (as defined by regulation by the Secretary) is $8,000. A student who has not successfully completed such first and second years may not borrow any amount under this section.'. (d) PLUS LOANS- Section 428B(b)(1) of such Act is amended to read as follows: `(1) ANNUAL LIMIT- Subject to paragraphs (2) and (3), the maximum amount parents may borrow for one student who has successfully completed the first and second years of a program of undergraduate education in any succeeding academic year or its equivalent (as defined by regulation by the Secretary) is $8,000. Parents may not borrow any amount under this section for a student who has not successfully completed such first and second years.'.

 

 SEC. 4. ADJUSTMENT TO NDSL LOAN LIMITS.

Section 464(a)(2) of the Higher Education Act of 1965 (20 U.S.C. 1087dd(a)(2)) is amended-- (1) by inserting `and' at the end of subparagraph (A); and (2) by striking out subparagraphs (B) and (C) and inserting the following: `(B) $9,000 in the case of any other student, except that the amount loaned for any one academic year may not exceed $4,500.'.

 

 SEC. 5. EFFECTIVE DATES.

The amendments made by this Act shall apply to grants and loans made to cover the costs of instruction for periods of enrollment beginning on or after July 1, 1989.

 

 

48 Hours to Vote

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Passes by a vote of 249 ayes, 185 Nays, and 1 Not Voting.

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The bill does not reach cloture in the Senate.

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