(6) the liability to repay any such loan shall be canceled upon the death of the borrower, or if he becomes permanently and totally disabled as determined in accordance with regulations of the Commissioner;

(7) such a loan by an institution for any year shall be made in such installments as may be provided in regulations of the Commissioner or the agreement with the institution under this title and, upon notice to the Commissioner by the institution that any recipient of a loan is failing to maintain satisfactory standing, any or all further installments of his loan shall be withheld, as may be appropriate; and

(8) no note or other evidence of such a loan may be transferred or assigned by the institution of higher education making the loan except, upon the transfer of the borrower to another institution of higher education participating in the program under this title (or, if not participating, is eligible to do so and is approved by the Commissioner for such purpose), to such institution. (c) Pursuant to regulations of the Commissioner, an institution may assess a charge with respect to a loan from the loan fund established by the institution pursuant to this title for failure of the borrower to pay all or any part of an installment when it is due and, in the case of a borrower who is entitled to deferment benefits under section 205(b) (2) or cancellation benefits under section 205 (b) (3), for any failure to file timely and satisfactory evidence of such entitlement. The amount of any such charge may not exceed—

(1) in the case of a loan which is repayable in monthly installments, $1 for the first month or part of a month by which such installment or evidence is late and $2 for each such month or part of a month thereafter; and

(2) in the case of a loan which has a bimonthly or quarterly repayment interval, $3 and $6, respectively, for each such interval or part thereof by which such installment or evidence is late. The institution may elect to add the amount of any such charge to the principal amount of the loan as of the first day after the day on which such installment or evidence was due, or to make the amount of the charge payable to the institution not later than the due date of the next installment after receipt by the borrower of notice of the assessment of the charge.

(d) An agreement under this title for payment of Federal capital contributions shall include provisions designed to make loans from the student loan fund established pursuant to such agreement reasonably available (to the extent of the available funds in such fund) to all eligible students in such institution in need thereof.

DISTRIBUTION OF ASSETS FROM STUDENT LOAN FUNDS

SEC. 206. (a) After June 30, 1975, and not later than September 30, 1975, there shall be a capital distribution of the balance of the student loan fund established under this title by each institution of higher education as follows:

(1) The Commissioner shall first be paid an amount which bears the same ratio to the balance in such fund at the close of June 30, 1975, as the total amount of the Federal capital contributions to such fund by the Commissioner under this title bears

to the sum of such Federal capital contributions and the institution's capital contributions to such fund.

(2) The remainder of such balance shall be paid to the institution.

(b) After September 30, 1975, each institution with which the Commissioner has made an agreement under this title shall pay to the Commissioner, not less often than quarterly, the same proportionate share of amounts received by the institution after June 30, 1975, in payment of principal or interest on student loans made from the student loan fund established pursuant to such agreement (which amount shall be determined after deduction of any costs of litigation incurred in collection of the principal or interest on loans from the fund and not already reimbursed from the student loan fund or such payments of principal or interest) as was determined for the Commissioner under subsection (a).

(c) Upon a finding by the institution or the Commissioner prior to July 1, 1975, that the liquid assets of a student loan fund established pursuant to an agreement under this title exceed the amount required for loans or otherwise in the foreseeable future, and upon notice to such institution or to the Commissioner, as the case may be, there shall be, subject to such limitations as may be included in regulations of the Commissioner or in such agreement, a capital distribution from such fund. Such capital distribution shall be made as follows:

(1) The Commissioner shall first be paid an amount which bears the same ratio to the total to be distributed as the Federal capital contributions by the Commissioner to the student loan fund prior to such distribution bear to the sum of such Federal capital contributions and the capital contributions to the fund made by the institution.

(2) The remainder of the capital distribution shall be paid to the institution.

LOANS TO INSTITUTIONS

SEC. 207. (a) Upon application by any institution of higher education with which he has made an agreement under this title, the Commissioner may make a loan to such institution for the purpose of helping to finance the institution's capital contributions to a student loan fund established pursuant to such agreement. Any such loan may be made only if such institution shows it is unable to secure such funds from non-Federal sources upon terms and conditions which the Commissioner determines to be reasonable and consistent with the purposes of this title. Loans made to institutions under this section shall bear interest at a rate which the Commissioner determines to be adequate to cover (1) the cost of the funds to the Treasury as determined by the Secretary of the Treasury, taking into consideration the current average yields of outstanding marketable obligations of the United States having maturities comparable to the maturities of loans made by the Commissioner under this section, (2) the cost of administering this section, and (3) probable losses.

(b) There are hereby authorized to be appropriated such sums as may be necessary to carry out the purposes of this section, but not to exceed a total of $25,000,000.

(c) Loans made by the Commissioner under this section shall mature within such period as may be determined by the Commissioner to be appropriate in each case, but not exceeding fifteen years.

PAYMENTS TO COVER REDUCTIONS IN AMOUNTS OF LOAN

SEC. 208. In addition to the payments otherwise authorized to be made pursuant to this title, the Commissioner shall pay to the appropriate institution, at such time or times as he determines, an amount which bears the same ratio to the interest which has been prevented from accruing and the portion of the principal which has been canceled on student loans pursuant to paragraph (3) of section 205 (b) (and not previously paid pursuant to this subsection) as the total amount of the institution's capital contributions to such fund under this title bears to the sum of such institution's capital contributions and the Federal capital contributions to such fund.

ADMINISTRATIVE PROVISIONS

SEC. 209. (a) The Commissioner, in addition to the other powers conferred upon him by this title, shall have power to agree to modifications of agreements or loans made under this title and to compromise, waive, or release any right, title, claim, or demand, however arising or acquired under this title.

(b) Financial transactions of the Commissioner pursuant to this title, and vouchers approved by him in connection with such financial transactions, shall be final and conclusive upon all officers of the Government; except that all such transactions shall be subject to audit by the General Accounting Office at such times and in such manner as the Comptroller General may by regulation prescribe.

TITLE III-FINANCIAL ASSISTANCE FOR STRENTHENING INSTRUCTION IN SCIENCE, MATHEMATICS, MODERN FOREIGN LANGUAGES, AND OTHER CRITICAL SUBJECTS

PART A-GRANTS TO STATES

APPROPRIATIONS AUTHORIZED

SEC. 301. There are hereby authorized to be appropriated $70,000,000 for the fiscal year ending June 30, 1959, and for each of the five succeeding fiscal years, $90,000,000 for the fiscal year ending June 30, 1965, and $100,000,000 for the fiscal year ending June 30, 1966, and for the succeeding fiscal year and $110,000,000 for each of the fiscal years ending June 30, 1968, and June 30, 1969, $120,000,000 for the fiscal year ending June 30, 1970, and $130,000,000 for the fiscal year ending June 30, 1971, for (1) making payments to State educational agencies under this title for the acquisition of equipment and for minor remodeling, described in paragraph (1) of section 303 (a), and (2) making loans authorized in section 305. There are also authorized to be appropriated $5,000,000 for the fiscal year ending June 30, 1959, and for each of the five succeeding fiscal years, and $10,000,000 for each of the succeeding fiscal years ending prior to July 1, 1971, for making

payments to State educational agenices under this part to carry out the programs described in paragraph (5) of section 303 (a).

ALLOTMENTS TO STATES

SEC. 302. (a) (1) From the sums appropriated pursuant to the first sentence of section 301 for any fiscal year the Commissioner shall reserve such amount, but not in excess of 3 per centum thereof, as he may determine for allotment as provided in section 1008 (A), and such amount, not in excess of 1 per centum thereof, as he may determine for allotment as provided in section 1008 (B), and shall reserve 12 per centum for loans authorized in section 305. From the remainder of such sums the Commissioner shall allot to each State an amount which bears the same ratio to the amount of such remainder as the product of

(A) the school-age population of the State, and

(B) the State's allotment ratio (as determined under paragraph (2)),

bears to the sum of the corresponding products for all the States. (2) The "allotment ratio" for any State shall be 100 per centum less the product of (A) 50 per centum and (B) the quotient obtained by dividing the income per child of school age for the State by the income per child of school age for the United States, except that the allotment ratio shall in no case be less than 333 per centum or more than 6623 per centum. The allotment ratios shall be promulgated by the Commissioner between July 1 and August 31 of each evennumbered year beginning with calendar year 1964, on the basis of the average of the incomes per child of school age for the States and for the United States for the three most recent consecutive years for which satisfactory data are available from the Department of Commerce. Each such promulgation shall be conclusive for each of the two fiscal years in the period July 1 next succeeding such promulgation, except that the ratios promulgated in 1959 shall be conclusive for each of the five fiscal years in the period beginning July 1, 1960, and ending June 30, 1965.

(3) For the purposes of this part

(A) The term "child of school age" means a member of the population between the ages of five and seventeen, both inclusive. (B) The term "United States" means the fifty States and the

District of Columbia.

(C) The term "income per child of school age" for any State or for the United States means the total personal income for the State and the United States, respectively, divided by the number of children of school age in such State and in the United States, respectively.

(b) From the sums appropriated pursuant to the second sentence of section 301 for any fiscal year the Commissioner shall reserve such amount, but not in excess of 2 per centum thereof, as he may determine for allotment as provided in section 1008. From the remainder of such sums the Commissioner shall allot to each State an amount which bears the same ratio to the amount of such remainder as the school-age population of such State bears to the total of the school-age populations of all of the States. The amount allotted to any State under the

preceding sentence for any fiscal year which is less than $50,000 shall be increased to $50,000, the total thereby required being derived by proportionately reducing the amount allotted to each of the remaining States under the preceding sentence, but with such adjustments as may be necessary to prevent the allotment of any of such remaining States from being thereby reduced to less than $50,000.

(c) The amount of any State's allotment under subsection (a) of this section for any fiscal year which the Commissioner determines will not be required for such fiscal year shall be available for reallotment from time to time, on such dates during such year as the Commissioner may fix, to the other States in proportion to the original allotments to such States under subsection (a) of this section, but with such proportionate amount for any such State being reduced to the extent it exceeds the sum the Commissioner estimates such State needs and will be able to use for such year; and the total of such reductions shall be similarly reallotted among the States whose proportionate amounts were not so reduced. Any amount reserved for any fiscal year for making loans under section 305 which the Commissioner determines will not be required for that purpose for such year shall be available for allotment among the States in the manner provided in the preceding sentence for reallotments. Any amount allotted or reallotted to a State under this subsection during a year from funds appropriated pursuant to section 301 shall be deemed part of its allotment under subsection (a) of this section for such year.

STATE PLANS

SEC. 303. (a) Any State which desires to receive payments under this part shall submit to the Commissioner, through its State educational agency, a State plan which meets the requirements of section 1004 (a) and

(1) sets forth a program under which funds paid to the State from its allotment under section 302(a) will be expended solely for projects approved by the State educational agency for (A) acquisition of laboratory and other special equipment (other than supplies consumed in use), including audiovisual materials and equipment, and printed and published materials (other than textbooks), suitable for use in providing education in science, mathematics, history, civics, geography, economics, industrial arts, modern foreign language, English, or reading in public elementary or secondary schools, or both, and of testgrading equipment for such schools and specialized equipment for audiovisual libraries serving such schools, and such equipment may, if there exists a critical need therefor in the judgment of local school authorities, be used when available and suitable in providing education in other subject matter, and (B) minor remodeling of laboratory or other space used for such materials or equipment;

(2) sets forth principles for determining the priority of such projects in the State for assistance under this part and provides for undertaking such projects, insofar as financial resources available therefor make possible, in the order determined by the application of such principles;

(3) provides an opportunity for a hearing before the State educational agency to any applicant for a project under this part;