REVISION OF MAINTENANCE OF EFFORT PROVISION

82 STAT, 1018

SEC. 104. Effective for fiscal years ending on or after June 30, 1970, section 407 (a) (4) of the Higher Education Act of 1965 is amended to 79 Stat. 1234. read as follows:

"(4) provide that the institution will meet the requirements of section 464 of this Act (relating to maintenance of effort);".

CONSOLIDATION AND REVISION OF TALENT SEARCH AND UPWARD. BOUND
PROGRAMS; SPECIAL SERVICES TO DISADVANTAGED STUDENTS IN INSTI-
TUTIONS OF HIGHER EDUCATION

20 USC 1067.

Post, p. 1033.

SEC. 105. (a) Section 408 of the Higher Education Act of 1965 is 20 USC 1068. amended to read as follows:

"IDENTIFYING QUALIFIED LOW-INCOME STUDENTS; PREPARING THEM FOR

POST SECONDARY EDUCATION; SPECIAL SERVICES FOR SUCH STUDENTS IN
INSTITUTIONS OF HIGHER EDUCATION

"SEC. 408. (a) To assist in achieving the objectives of this part the Commissioner is authorized (without regard to section 3709 of the Revised Statutes (41 U.S.C. 5))—

"(1) to make grants to, or contracts with, institutions of higher education and combinations of institutions of higher education for planning, developing, or carrying out one or more of the programs described in subsection (b),

"(2) to make grants to, or contracts with, public and private nonprofit agencies and organizations (including professional and scholarly associations) and to make contracts with public and private agencies and organizations for planning, developing, or carrying out Talent Search programs described in subsection (b) (1), and

"(3) in exceptional cases, to make grants to, or contracts with, secondary schools, and postsecondary educational institutions accredited by a State, for planning, developing, or carrying out Upward Bound programs described in subsection (b) (2). No grant or contract for planning, developing, or carrying out a Talent Search program described in subsection (b) (1) may exceed $100,000 per year.

"(b) The programs referred to in subsection (a) are

"(1) programs, to be known as "Talent Search', designed to

"A) identify qualified youths of financial or cultural need with an exceptional potential for postsecondary educational training and encourage them to complete secondary school and undertake postsecondary educational training.

"(B) publicize existing forms of student financial aid, including aid furnished under this title, and

"(C) encourage secondary-school or college dropouts of demonstrated aptitude to reenter educational programs, including post-secondary-school programs;

"(2) programs, to be known as 'Upward Bound', (A) which are designed to generate skills and motivation necessary for success in education beyond high school and (B) in which enrollees from low-income backgrounds and with inadequate secondary-school preparation participate on a substantially full-time basis during all or part of the program; or

"(3) programs, to be known as 'Special Services for Disadvantaged Students', of remedial and other special services for students

82 STAT. 1019

Appropriation authorization.

81 Stat. 698. 42 USC 2809.

Ante, p. 1018.

"Upward

Bound program."

Supra.

42 USC 2808.

66

with academic potential (A) who are enrolled or accepted for enrollment at the institution which is the beneficiary of the grant or contract, and (B) who, by reason of deprived educational, cultural, or economic background, or physical handicap, are in need of such services to assist them to initiate, continue, or resume their postsecondary education.)

"(c) (1) Upward Bound programs under paragraph (2) of subsection (b) must include arrangements to assure cooperation among one or more institutions of higher education and one or more secondary schools. Such programs must include necessary health services. Enrollees in such programs may not receive stipends in excess of $30 per month. The cost of carrying out any such program may not exceed $150 per enrollee per month. Federal financial assistance by way of grant or contract for such a program may not be in excess of 80 per centum of the cost of carrying out such program. Such programs shall be carried on within the States.

"(2) Special Services for Disadvantaged Students programs carried on under paragraph (3) of subsection (b) may provide, among other things, for

"(A) counseling, tutorial, or other educational services, including special summer programs, to remedy such students' academic deficiencies,

"(B) career guidance, placement, or other student personnel services to encourage or facilitate such students' continuance or reentrance in higher education programs, or

"(C) identification, encouragement, and counseling of any such students with a view to their undertaking a program of graduate or professional education.

"(d) There are authorized to be appropriated to carry out this section $10,000,000 in the fiscal year ending June 30, 1969 (of which $500,000 shall be available in connection with planning and related activities for Upward Bound programs described in subsection (b) (2)), $56,680,000 for the fiscal year ending June 30, 1970, and $96,000,000 for the fiscal year ending June 30, 1971."

(b) Effective July 1, 1969, section 222 (a) of the Economic Opportunity Act of 1964 is amended by striking out paragraph (5) and by redesignating paragraphs (6), (7), and (8) (and references thereto) as paragraphs (5), (6), and (7).

(c) (1) On July 1, 1969, all functions, powers, and duties of the Director of the Office of Economic Opportunity with respect to Upward Bound programs, are transferred to the Commissioner of Education. No provision of law which limits the number of persons who may be appointed as full-time civilian employees, or temporary and part-time employees, in the executive branch of the Government shall apply to employees of the Office of Education whose duties the Director of the Bureau of the Budget determines primarily relate (A) to programs carried out under section 408 (b) (2) of the Higher Education Act of 1965, or (B) to functions transferred by this paragraph. In applying any such provision of law to the departments and agencies in the executive branch, the number of such employees of the Office of Education shall not be taken into account.

(2) For purposes of this subsection the term "Upward Bound program" means a program carried out under section 222 (a) (5) of the Economic Opportunity Act of 1964 (as so designated prior to the amendment made by subsection (b) of this section) or a comparable program carried out under section 221 of such Act.

PART B-AMENDMENTS TO INSURED STUDENT LOAN PROGRAM

EXTENSION OF AUTHORITY FOR PAYMENTS TO REDUCE STUDENT INTEREST
COSTS; ELIMINATION OF AUTHORITY TO MAKE SUCH PAYMENTS DURING
REPAYMENT PERIOD

SEC. 111. (a) Section 428 (a) (4) of the Higher Education Act of 1965 is amended by striking out "October 31, 1968" and inserting in lieu thereof "June 30, 1971, except that, in the case of a loan made or insured under a student loan or loan insurance program to enable a student who has obtained a prior loan made or insured under such program to continue his educational program, such period shall end at the close of June 30, 1975”.

(b) (1) (A) The portion of the first sentence of section 428 (a) (1) which follows subparagraph (C) is amended by striking out ", over the period of the loan,".

(B) The first sentence of section 428 (a) (2) of such Act is amended by striking out ", and 3 per centum per annum of the principal amount of the loan (excluding interest which has been added to principal) thereafter".

82 STAT, 1020

79 Stat. 1240; Ante, p. 634. 20 USC 1078.

(2) The amendments made by this subsection shall apply to loans Effective made on or after the sixtieth day after the date of enactment of this date. Act, except that such amendments shall not apply so as to require violation of any commitment for insurance made to an eligible lender, or of any line of credit granted to a student, prior to such sixtieth day. An application for a certificate of insurance or of comprehensive insur

ance coverage pursuant to section 429 of such Act shall be issued or 20 USC 1079. shall be effective on or after such sixtieth day with respect to loans made prior to such sixtieth day without regard to such amendments.

EXTENSION OF FEDERAL LOAN INSURANCE PROGRAM AND OF AUTHORITY
TO GUARANTEE OUTSTANDING NON-FEDERALLY INSURED LOANS

SEC. 112. (a) Subsection (a) of section 424 of the Higher Education Act of 1965 is amended (1) in the first sentence by striking out 20 USC 1074. "period thereafter ending October 31, 1968" and inserting in lieu thereof "fiscal year ending June 30, 1968, and each of the three succeeding fiscal years"; and (2) in the second sentence by striking out "October 31, 1968" and inserting in lieu thereof "June 30, 1975".

(b) Section 428 (c) (5) of such Act is amended by striking out Ante, p. 636. "October 31, 1968" and inserting in lieu thereof "September 1, 1969".

REPAYMENT BY COMMISSIONER OF LOANS OF DECEASED OR DISABLED

BORROWERS

SEC. 113. (a) Part B of title IV of such Act is amended by insert- 20 USC 1071ing at the end thereof the following new section:

"REPAYMENT BY COMMISSIONER OF LOANS OF DECEASED OR DISABLED

BORROWERS

1086.

"SEC. 437. If a student borrower who has received a loan with respect to which a portion of the interest (1) is payable by the Commissioner under section 428 (a), or (2) would be payable but for the 20 USC 1078. adjusted family income of the borrower, dies or becomes permanently and totally disabled (as determined in accordance with regulations of the Commissioner), then the Commissioner shall discharge the borrower's liability on the loan by repaying the amount owed on the loan."

82 STAT. 1021

79 Stat. 1236. 20 USC 1071. Ante, p. 1020.

20 USC 1077.

20 USC 1078.

Ante, p. 636.

20 USC 1080.

Effective date.

20 USC 1072.

"Unencumbered non-Federal portion."

(b)(1) Section 421(b) (2) of the Higher Education Act of 1965 is amended by inserting after "on student loans" the following: "and for payments under section 437”.

(2) Section 427 (a) (2) (E) of such Act is amended by inserting after the comma at the end thereof the following: "and that the lender will enter into such agreements with the Commissioner as may be necessary for the purpose of section 437,".

66

(3) Section 428 (b) (2) (B) of such Act is amended by inserting after "of this part" the following: ", including such provisions as may be necessary for the purpose of section 437,".

(4) Section 428 (c) of such Act is amended by striking out in paragraph (1) ", death, or permanent and total disability", by striking the last sentence of paragraph (3), and by amending paragraph (4) to read as follows:

"(4) For purposes of this subsection, the terms 'insurance beneficiary' and 'default' shall have the meanings assigned to them by section 430(e)."

(5) Section 430 of such Act is amended

(A) by striking out in the section heading, "DEATH, OR DISABILITY";

(B) by striking out in the first sentence of subsection (a) “or upon the death of the student borrower or a finding by the insurance beneficiary that the borrower has become totally and permanently disabled (as determined in accordance with regulations established by the Commissioner) before the loan has been repaid in full,"; and

(C) by striking out in subsection (c) all that follows "payment on that insurance" and inserting in lieu thereof a period.

(c) The amendments made by this section shall apply only with respect to loans made on or after the sixtieth day following the date of enactment of this Act.

FEDERAL ADVANCES TO RESERVE FUNDS OF NON-FEDERAL STUDENT LOAN
INSURANCE PROGRAMS

SEC. 114. (a) (1) Section 421 (b) of the Higher Education Act of 1965 is amended by striking out "and" at the end of paragraph (2); by striking out the period at the end of the first sentence of that subsection and inserting in lieu thereof ", and"; and by adding thereafter the following new paragraph:

"(4) there is authorized to be appropriated the sum of $12,500,000 for making advances after June 30, 1968, pursuant to section 422 for the reserve funds of State and nonprofit private student loan insurance programs."

(2) The second sentence of section 421 (b) of such Act is amended by striking out "under clauses (1) and (2)" and inserting in lieu thereof "under clauses (1), (2), and (4)".

(b) Section 422 (a) of such Act is amended

(1) by striking out "clause (3)" in the first sentence of paragraph (1) and inserting in lieu thereof "clauses (3) and (4)", and by striking out "of the fiscal years ending June 30, 1966, June 30, 1967, or June 30, 1968," and inserting in lieu thereof "fiscal year" in the second sentence of such paragraph; and

(2) by redesignating paragraph (2) as paragraph (3) and inserting after paragraph (1) the following new paragraph: "(2) No advance shall be made after June 30, 1968, unless matched by an equal amount from non-Federal sources. Such equal amount may include the unencumbered non-Federal portion of a reserve fund. As used in the preceding sentence, the term 'unencumbered non-Federal portion' means the amount (determined as of the time immediately pre

ceding the making of the advance) of the reserve fund less the greater of (A) the sum of (i) advances made under this section prior to July 1, 1968, (ii) an amount equal to twice the amount of advances made under this section after June 30, 1968, and before the advance for purposes of which the determination is made, and (iii) the proceeds of earnings on advances made under this section, or (B) any amount which is required to be maintained in such fund pursuant to State law or regulation, or by agreement with lenders, as a reserve against the insurance of outstanding loans."

82 STAT. 1022

(c) Section 422 (b) of such Act is amended by inserting "(1)" after 79 Stat. 1237. "(b)", by inserting "prior to July 1, 1968" before "pursuant to sub- 20 USC 1072. section (a)" where it appears in the first and third sentences, by delet

ing the last sentence of such subsection, and by adding at the end of

such subsection the following new paragraphs:

"(2) The total of the advances from the sums appropriated pur

suant to clause (4) of section 421(b) (A) to nonprofit private institu- Ante, p. 1021. tions and organizations for the benefit of students in any State and (B) to such State may not exceed an amount which bears the same ratio to such sums as the population of such State aged eighteen to twenty-two, inclusive, bears to the population of all the States aged eighteen to twenty-two, inclusive, but such advances may otherwise be in such amounts as the Commissioner determines will best achieve the purposes for which they are made. The amount available, however, for advances to any State shall not be less than $25,000, and any addtional funds needed to meet this requirement shall be derived by proportionately reducing (but not below $25,000) the amount available for advances to each of the remaining States.

"(3) For the purposes of this subsection, the population aged eighteen to twenty-two, inclusive, of each State and of all the States shall be determined by the Commissioner on the basis of the most recent satisfactory data available to him."

AMENDMENTS RELATING TO ADMINISTRATIVE COST ALLOWANCE

AND INTEREST RATE PROVISIONS

SEC. 115. (a) (1) Section 428 (a)(2) (B) of the Higher Education Act of 1965 is amended to read as follows:

Ante, p. 635.

"(B) If (i) a State student loan insurance program is covered by an 20 USC 1078. agreement under subsection (b), (ii) a statute of such State limits the interest rate on loans insured by such program to a rate which is less than 7 per centum per annum on the unpaid principal balance, and (iii) the Commissioner determines that section 428 (d) does not make Infra. such statutory limitation inapplicable and that such statutory limitation threatens to impede the carrying out of the purposes of this part, then he may pay an administrative cost allowance to the holder of each loan which is insured under such program and which is made during the period beginning on the sixtieth day after the date of enactment of the Higher Education Amendments of 1968 and ending 120 days after the adjournment of such State's first regular legislative session which adjourns after January 1, 1969. Such administrative cost allowance shall be paid over the term of the loan in an amount per annum (determined by the Commissioner) which shall not exceed 1 per centum of the unpaid principal balance of the loan."

(2) Section 428 (a) (2) (A) of such Act is amended by striking out the second sentence and by inserting in the last sentence after "portion of the interest" the following: "and administrative cost allowance". (3) Section 428 of such Act is amended by adding at the end thereof the following new subsection:

"(d) No provision of any law of the United States (other than

sections 427 (a) (2) (D) and 427 (b) of this Act) or of any State (other 20 USC 1077.