Mr. Milam, for himself, and Mr. Garwood, Mr. Miller, Mr. Adams, Mr. Palafox, and Mr. Laveron submit the following legislation to be submitted to the Committee on Education and the Workforce.

A BILL
To provide student loan forgiveness to Americans employed in service to the public, 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; REFERENCES.

(a) SHORT TITLE- This Act may be cited as the `College Opportunity for a Better America Act of 2004'.

(b) REFERENCE- Except as otherwise expressly provided in this Act, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.).

SEC. 2. FINDINGS.

The Congress finds the following:

(1) Education after high school, including two-year and four-year college degrees, is more important than ever for Americans' future economic security. A four-year college degree is estimated to be worth $1 million in earnings more than a high school diploma over the course of a lifetime.

(2) The cost of attending college has steadily increased faster than the rate of inflation. The average tuition and fees at four-year public and private universities are now $4,081 and $18,273, respectively, an increase of approximately 75 percent over the past decade.

(3) More and more, American students are relying on debt to finance higher education . In 1999-2000, the average student loan debt totaled $16,948, a dramatic increase from the average debt of $9,188 in 1992-93. At the same time, the percentage of students borrowing increased from 42 percent to 64 percent.

(4) Student debt constrains the career options of millions of college graduates. Nearly two-fifths of graduates with debt find it unmanageable, defined as exceeding eight percent of their income. As a result, many college graduates may chose higher-paying jobs rather than enter public service.

(5) Many of our Nation's public service professions, including teaching, nursing, and child care, face shortages of highly qualified personnel that imperil the health and future welfare of our citizens.

(6) Record school enrollments, an aging teaching force, and chronic attrition of new teachers make it difficult to ensure that every child has a qualified, engaged, caring teacher. Excellent teachers are particularly rare in high-poverty schools and in subjects like mathematics, science, and special education .

(7) There is a national shortage of 126,000 nurses, according to the American Hospital Association. At the same time, the number of nursing school graduates decreased by 29 percent between 1995 and 2001.

(8) According to a growing body of research, the single most important determinant of child care quality is the presence of consistent, well-trained child care providers. However, the Nation's child care programs are plagued by high staff turnover fueled by poor compensation.

(9) A well-trained and stable child welfare workforce is needed to protect our country's most vulnerable children and families. The number of unfilled child welfare jobs is large and growing rapidly. Nearly one-tenth of positions in State child welfare agencies are unfilled and staff turnover has doubled since 1991.

(10) The number of infant and toddler specialists are insufficient to meet the health and special education needs of infants and toddlers.

SEC. 3. LOAN FORGIVENESS FOR PUBLIC SERVICE EMPLOYEES.

Section 428K (20 U.S.C. 1078-11) is amended to read as follows:

`SEC. 428K. LOAN FORGIVENESS FOR PUBLIC SERVICE EMPLOYEES.

`(a) PURPOSES- The purposes of this section are--

`(1) to reduce the burden of student debt, particularly for Americans who dedicate their careers to meeting certain urgent national needs; and

`(2) to attract more excellent individuals into important public service careers.

`(b) LOAN FORGIVENESS-

`(1) IN GENERAL- The Secretary shall assume the obligation to repay, pursuant to subsection �, a loan made under section 428 or 428H, a Federal Direct Stafford Loan or Federal Direct Unsubsidized Stafford Loan, a Federal Direct Consolidation Loan, or a Federal Perkins Loan for any new borrower after the date of enactment of the Higher Education Amendments of 1998, who--

`(A) is employed full time in a qualified public service position described in paragraph (2); and

`(B) is not in default on a loan for which the borrower seeks forgiveness.

`(2) QUALIFIED PUBLIC SERVICE POSITIONS- For purposes of this section, an individual shall be treated as employed in a qualified public service position if the individual is any of the following:

`(A) HIGHLY QUALIFIED TEACHERS IN LOW-INCOME COMMUNITIES AND OF MATHEMATICS, SCIENCE, AND BILINGUAL AND SPECIAL EDUCATION - An individual who--

`(i) is highly qualified as such term is defined in section 9101 of the Elementary and Secondary Education Act of 1965; and

`(ii)(I) has obtained employment as a teacher for service in a public or nonprofit private elementary or secondary school which is in the school district of a local educational agency which is eligible in such year for assistance pursuant to title I of the Elementary and Secondary Education Act of 1965, and which for the purpose of this paragraph and for that year has been determined by the Secretary (pursuant to regulations and after consultation with the State educational agency of the State in which the school is located) to be a school in which the enrollment of children counted under section 1113(a)(5) of the Elementary and Secondary Education Act of 1965 exceeds 40 percent of the total enrollment of that school; or

`(II) has obtained employment as a full-time teacher of mathematics, science, or bilingual or special education .

`(B) EARLY CHILDHOOD EDUCATORS- An individual who--

`(i) has received a degree in early childhood education ; and

`(ii) has obtained employment in a child care facility, such as employment as a preschool teacher, in a low-income community.

`� NURSES- An individual who has obtained employment--

`(i) in a clinical setting; or

`(ii) as a member of the nursing faculty at an accredited school of nursing (as those terms are defined in section 801 of the Public Health Service Act (42 U.S.C. 296)).

`(D) CHILD WELFARE WORKERS- An individual who--

`(i) has completed a degree in social work or related field with a focus on serving children and families (as determined in accordance with regulations prescribed by the Secretary); and

`(ii) has obtained employment in public or private child welfare services.

`(E) NUTRITION PROFESSIONALS- An individual who--

`(i) is a certified registered dietician who has completed a degree in a relevant field; and

`(ii) has obtained employment in a local agency of the special supplemental nutrition program for women, infants, and children under section 17 of the Child Nutrition Act of 1966 (42 U.S.C. 1786).

`(F) INFANT AND TODDLER SPECIALISTS- An individual who--

`(i) has obtained an associate's or bachelor's degree in a discipline that would qualify the individual to work in the program under part C of the Individuals with Disabilities Education Act in the State in which such individual resides; and

`(ii) has obtained employment in an occupation that is directly related to such degree and that (I) provides services to infants, toddlers, and their families under an individualized family service plan under section 636 of the Individuals with Disabilities Education Act (20 U.S.C. 1436) or an individualized education plan under section 614(d) of such Act (20 U.S.C. 1414(d)); or (II) provides training or technical assistance to providers of such services.

`(G) ADDITIONAL PUBLIC SERVANTS- An individual who, as determined by the Secretary of Education by regulation--

`(i) works in a public service profession that suffers from a critical lack of qualified personnel;

`(ii) serves a low-income or needy community; and

`(iii) is highly qualified.

`� LOAN REPAYMENT-

`(1) IN GENERAL- The Secretary shall assume the obligation to repay--

`(A) after each of the first or second years of service by an individual in a qualified public service position, 15 percent of the total amount of principal and interest of the loans described in subsection (b)(1) to such individual that are outstanding immediately preceding such first year of such service;

`(B) after each of the third or fourth years of such service, 20 percent of such total amount; and

`� after the fifth year of such service, 30 percent of such total amount.

`(2) TREATMENT OF CONSOLIDATION LOANS- A loan amount for a loan made under section 428C or for a Federal Direct Consolidation Loan may be a qualified loan amount for the purposes of this subsection only to the extent that such loan amount was used to repay a loan described in subsection (b)(1) for a borrower who meets the requirements of subsection (b), as determined in accordance with regulations prescribed by the Secretary.

`(3) CONSTRUCTION- Nothing in this section shall be construed to authorize the refunding of any repayment of a loan made under section 428 or 428H, a Federal Direct Stafford Loan or Federal Direct Unsubsidized Stafford Loan, a Federal Direct Loan, or a Federal Perkins Loan.

`(4) INTEREST- If a portion of a loan is repaid by the Secretary under this section for any year, the proportionate amount of interest on such loan that accrues for such year shall be repaid by the Secretary.

`(5) INELIGIBILITY OF NATIONAL SERVICE AWARD RECIPIENTS- No student borrower may, for the same service, receive a benefit under both this section and subtitle D of title I of the National and Community Service Act of 1990 (42 U.S.C. 12601 et seq.).

`(6) INELIGIBILITY FOR DOUBLE BENEFITS- No borrower may receive a reduction of loan obligations under both this section and section 428J or 460.

`(7) CONTINUED ELIGIBILITY-

`(A) TEACHERS- Any teacher who performs service in a school that--

`(i) meets the requirements of subsection (b)(2)(A)(ii)(I) in any year during such service; and

`(ii) in a subsequent year fails to meet the requirements of such subsection,

may continue to teach in such school and shall be eligible for loan forgiveness pursuant to subsection (b).

`(B) TEACHERS IN LOW-INCOME COMMUNITIES- Any early childhood educator who performs service in a community that--

`(i) meets the definition of low-income community in any year during such service; and

`(ii) in a subsequent year fails to meet such definition,

may continue to perform service in such community and shall be eligible for loan forgiveness pursuant to subsection (b).

`(d) REPAYMENT TO ELIGIBLE LENDERS AND HOLDERS- The Secretary shall pay to each eligible lender or holder for each fiscal year an amount equal to the aggregate amount of the lender's or holder's loans that are subject to repayment pursuant to this section for such year.

`(e) APPLICATION FOR REPAYMENT-

`(1) IN GENERAL- Each eligible individual desiring loan repayment under this section shall submit a complete and accurate application to the Secretary at such time, in such manner, and containing such information as the Secretary may require.

`(2) CONDITIONS- An eligible individual may apply for loan repayment under this section after completing each of the consecutive years of qualifying service described in subsection �(1). The borrower may elect to receive forbearance while engaged in qualifying service described in subsection �(1) unless the borrower is in deferment while so engaged.

`(f) REGULATIONS- The Secretary is authorized to prescribe such regulations as may be necessary to carry out the provisions of this section.

`(g) DEFINITIONS- In this section:

`(1) CHILD CARE FACILITY- The term `child care facility' means a facility, including a home, that--

`(A) provides child care services; and

`(B) meets applicable State or local government licensing, certification, approval, or registration requirements, if any.

`(2) CHILD CARE SERVICES- The term `child care services' means activities and services provided for the education and care of children from birth through age 5 by an individual who has a degree in early childhood education , including a preschool teacher.

`(3) CHILD WELFARE SERVICES- The term `child welfare services' has the meaning given the term in section 425 of the Social Security Act.

`(4) DEGREE- The term `degree' means an associate's or bachelor's degree awarded by an institution of higher education .

`(5) EARLY CHILDHOOD EDUCATION - The term `early childhood education' means education in the area of early child development and education , child care, or any other educational area related to early child education or child care that the Secretary determines to be appropriate.

`(6) ELIGIBLE NURSE- The term `eligible nurse' means a nurse who meets all of the following:

`(A) The nurse graduated from--

`(i) an accredited school of nursing (as those terms are defined in section 801 of the Public Health Service Act (42 U.S.C. 296));

`(ii) a nursing center; or

`(iii) an academic health center that provides nurse training.

`(B) The nurse holds a valid and unrestricted license to practice nursing in the State in which the nurse practices in a clinical setting.

`� The nurse holds 1 or more of the following:

`(i) A graduate degree in nursing, or an equivalent degree.

`(ii) A nursing degree from a collegiate school of nursing (as defined in section 801 of the Public Health Service Act (42 U.S.C. 296)).

`(iii) A nursing degree from an associate degree school of nursing (as defined in section 801 of the Public Health Service Act (42 U.S.C. 296)).

`(iv) A nursing degree from a diploma school of nursing (as defined in section 801 of the Public Health Service Act (42 U.S.C. 296)).

`(7) ELIGIBLE PRESCHOOL PROGRAM PROVIDER- The term `eligible preschool program provider' means a preschool program provider serving children younger than the age of compulsory school attendance that is--

`(A) a public or private school;

`(B) a provider that is supported, sponsored, supervised, or administered by a local educational agency;

`� a Head Start agency designated under the Head Start Act (42 U.S.C. 9831 et seq.);

`(D) a nonprofit or community-based organization; or

`(E) a licensed child care center or family child care provider.

`(8) LOW-INCOME COMMUNITY- In this subsection, the term `low-income community' means a community in which 70 percent of households earn less than 85 percent of the State median household income.

`(9) PRESCHOOL TEACHER- The term `preschool teacher' means an individual--

`(A) who has received at least an associate's degree in early childhood education and who is working toward or who has already received a bachelor's degree in early childhood education ; and

`(B) who works for an eligible preschool program provider supporting the children's cognitive, social, emotional, and physical development to prepare the children for the transition to kindergarten.

`(10) YEAR- The term `year', where applied to service as a teacher (or service as a member of an accredited school of nursing (as those terms are defined in section 801 of the Public Health Service Act (42 U.S.C. 296))), means an academic year as defined by the Secretary.'.

SEC. 4. INCOME-CONTINGENT LOAN REFORM.

(a) FFEL INCOME CONTINGENT REPAYMENT-

(1) REPAYMENT PLANS CONSISTENT WITH DIRECT LOANS- Clause (iii) of section 428(b)(9)(A) (20 U.S.C. 1078(b)(9)(A)(iii)) is amended to read as follows:

`(iii) an income contingent repayment plan consistent with the income contingent repayment plans offered pursuant to section 455(e), with income contingent repayment amounts paid over a fixed period of time, not to exceed 25 years; and'.

(2) CONFORMING AMENDMENTS-

(A) Each of the following provisions is amended by striking `income-sensitive' each place it appears and inserting `income contingent': section 427(a)(2)(H), subsections (b)(1)(E)(i) and (e) of section 428, and subsections (b)(1)(E), (b)(5), and �(2) of section 428C.

(B) The heading of subsection (e) of section 428 is amended by striking `INCOME-SENSITIVE' and inserting `INCOME CONTINGENT.'.

� Section 428C(b)(1)(E) is amended by striking `July 1, 1994' and inserting `July 1, 2004'.

(3) EFFECTIVE DATE- The amendments made by this subsection shall apply with respect to loans made on or after July 1, 2004.

(b) DIRECT LOAN INCOME CONTINGENT REPAYMENT-

(1) MAXIMUM TERM FOR PUBLIC SERVICE EMPLOYEES- Section 455(d) (20 U.S.C. 1087e(d)) is amended--

(A) in subparagraph (D) of paragraph (1) by striking `except that' and all that follows through the period at the end and inserting the following:

`except that--

`(i) the plan described in this subparagraph shall not be available to the borrower of a Federal Direct PLUS loan; and

`(ii) in the case of a borrower who, after electing to repay a loan on the income contingent repayment plan, has been employed by a qualified public service employer, whether or not continuously, for a least 8 years on a full-time basis, the extended period of time prescribed by the Secretary shall not exceed 15 years.'; and

(B) by adding at the end the following new paragraph:

`(6) DEFINITION OF QUALIFIED PUBLIC SERVICE EMPLOYER- For purposes of paragraph (1)(D)(ii), the term `qualified public service employer' means--

`(A) any agency of Federal, State, or local government;

`(B) an other organization within the meaning of section 3371(4) of title 5, United States Code; and

`� an employer that is exempt from taxation under section 501�(3) or 501�(4) of the Internal Revenue Code of 1986.'.

(2) TREATMENT OF SPOUSAL INCOME- Section 455(e)(2) is amended by striking `of the borrower' and all that follows through the period at the end and inserting `of the borrower. If the borrower is married, one-half the combined adjusted gross income of the borrower and the borrower's spouse shall be attributed to the borrower for the purposes of the preceding sentence.'.