 
      CHAPTER 28--HIGHER EDUCATION RESOURCES AND STUDENT ASSISTANCE
 
                    SUBCHAPTER IV--STUDENT ASSISTANCE
 
              Part B--Federal Family Education Loan Program
 
Sec. 1078-11. Loan forgiveness for child care providers


(a) Purpose

    It is the purpose of this section--
        (1) to bring more highly trained individuals into the early 
    child care profession; and
        (2) to keep more highly trained child care providers in the 
    early child care field for longer periods of time.

(b) 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.

                             (3) Degree

        The term ``degree'' means an associate's or bachelor's degree 
    awarded by an institution of higher education.

                    (4) Early childhood education

        The term ``early childhood education'' means education in the 
    areas of early child education, child care, or any other educational 
    area related to child care that the Secretary determines 
    appropriate.

                 (5) Institution of higher education

        Notwithstanding section 1002 of this title, the term 
    ``institution of higher education'' has the meaning given the term 
    in section 1001 of this title.

(c) Demonstration program

                           (1) In general

        The Secretary may carry out a demonstration program of assuming 
    the obligation to repay, pursuant to subsection (d) of this section, 
    a loan made, insured, or guaranteed under this part or part C of 
    this subchapter (excluding loans made under sections 1078-2 and 
    1078-3 of this title or comparable loans made under part C of this 
    subchapter) for any new borrower after October 7, 1998, who--
            (A) completes a degree in early childhood education;
            (B) obtains employment in a child care facility; and
            (C) has worked full time for the 2 consecutive years 
        preceding the year for which the determination is made as a 
        child care provider in a low-income community.

                      (2) Low-income community

        For the purposes of this subsection, the term ``low-income 
    community'' means a community in which 70 percent of households 
    within the community earn less than 85 percent of the State median 
    household income.

                      (3) Award basis; priority

        (A) Award basis

            Subject to subparagraph (B), loan repayment under this 
        section shall be on a first-come, first-served basis and subject 
        to the availability of appropriations.

        (B) Priority

            The Secretary shall give priority in providing loan 
        repayment under this section for a fiscal year to student 
        borrowers who received loan repayment under this section for the 
        preceding fiscal year.

                           (4) Regulations

        The Secretary is authorized to prescribe such regulations as may 
    be necessary to carry out the provisions of this section.

(d) Loan repayment

                           (1) In general

        The Secretary shall assume the obligation to repay--
            (A) after the second consecutive year of employment 
        described in subparagraphs (B) and (C) of subsection (c)(1) of 
        this section, 20 percent of the total amount of all loans made 
        after October 7, 1998, to a student under this part or part C of 
        this subchapter;
            (B) after the third consecutive year of such employment, 20 
        percent of the total amount of all such loans; and
            (C) after each of the fourth and fifth consecutive years of 
        such employment, 30 percent of the total amount of all such 
        loans.

                          (2) Construction

        Nothing in this section shall be construed to authorize the 
    refunding of any repayment of a loan made under this part or part C 
    of this subchapter.

                            (3) 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 which accrues for such year shall be repaid by the Secretary.

                          (4) Special rule

        In the case where a student borrower who is not participating in 
    loan repayment pursuant to this section returns to an institution of 
    higher education after graduation from an institution of higher 
    education for the purpose of obtaining a degree in early childhood 
    education, the Secretary is authorized to assume the obligation to 
    repay the total amount of loans made under this part or part C of 
    this subchapter incurred for a maximum of two academic years in 
    returning to an institution of higher education for the purpose of 
    obtaining a degree in early childhood education. Such loans shall 
    only be repaid for borrowers who qualify for loan repayment pursuant 
    to the provisions of this section, and shall be repaid in accordance 
    with the provisions of paragraph (1).

       (5) Ineligibility of national service award recipients

        No student borrower may, for the same volunteer 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.).

(e) Repayment to eligible lenders

    The Secretary shall pay to each eligible lender or holder for each 
fiscal year an amount equal to the aggregate amount of loans which are 
subject to repayment pursuant to this section for such year.

(f) 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 year of qualifying employment. The 
    borrower shall receive forbearance while engaged in qualifying 
    employment unless the borrower is in deferment while so engaged.

(g) Evaluation

                           (1) In general

        The Secretary shall conduct, by grant or contract, an 
    independent national evaluation of the impact of the demonstration 
    program assisted under this section on the field of early childhood 
    education.

                        (2) Competitive basis

        The grant or contract described in subsection (b) \1\ of this 
    section shall be awarded on a competitive basis.
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    \1\ So in original. Probably should be a reference to paragraph (1).
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                            (3) Contents

        The evaluation described in this subsection shall--
            (A) determine the number of individuals who were encouraged 
        by the demonstration program assisted under this section to 
        pursue early childhood education;
            (B) determine the number of individuals who remain employed 
        in a child care facility as a result of participation in the 
        program;
            (C) identify the barriers to the effectiveness of the 
        program;
            (D) assess the cost-effectiveness of the program in 
        improving the quality of--
                (i) early childhood education; and
                (ii) child care services;

            (E) identify the reasons why participants in the program 
        have chosen to take part in the program;
            (F) identify the number of individuals participating in the 
        program who received an associate's degree and the number of 
        such individuals who received a bachelor's degree; and
            (G) identify the number of years each individual 
        participates in the program.

              (4) Interim and final evaluation reports

        The Secretary shall prepare and submit to the President and the 
    Congress such interim reports regarding the evaluation described in 
    this subsection as the Secretary deems appropriate, and shall 
    prepare and so submit a final report regarding the evaluation by 
    January 1, 2002.

(h) Authorization of appropriations

    There are authorized to be appropriated to carry out this section 
$10,000,000 for fiscal year 1999, and such sums as may be necessary for 
each of the 4 succeeding fiscal years.

(Pub. L. 89-329, title IV, Sec. 428K, as added Pub. L. 105-244, title 
IV, Sec. 425, Oct. 7, 1998, 112 Stat. 1699.)

                       References in Text

    The National and Community Service Act of 1990, referred to in 
subsec. (d)(5), is Pub. L. 101-610, Nov. 16, 1990, 104 Stat. 3127, as 
amended. Subtitle D of title I of the Act is classified generally to 
division D of subchapter I (Sec. 12601 et seq.) of chapter 129 of Title 
42, The Public Health and Welfare. For complete classification of this 
Act to the Code, see Short Title note set out under section 12501 of 
Title 42 and Tables.


                             Effective Date

    Section effective Oct. 1, 1998, except as otherwise provided in Pub. 
L. 105-244, see section 3 of Pub. L. 105-244, set out as an Effective 
Date of 1998 Amendment note under section 1001 of this title.
