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108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    108-182

======================================================================



 
             TEACHER RECRUITMENT AND RETENTION ACT OF 2003

                                _______
                                

 June 26, 2003.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Boehner, from the Committee on Education and the Workforce, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 438]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Education and the Workforce, to whom was 
referred the bill (H.R. 438) to increase the amount of student 
loans that may be forgiven for teachers in mathematics, 
science, and special education, having considered the same, 
report favorably thereon with an amendment and recommend that 
the bill as amended do pass.

  The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Teacher Recruitment and Retention Act 
of 2003''.

SEC. 2. INCREASED QUALIFIED LOAN AMOUNTS.

  (a) FFEL Loans.--Section 428J(c) of the Higher Education Act of 1965 
(20 U.S.C. 1078-10(c)) is amended by adding at the end the following 
new paragraph:
          ``(3) Increased amounts for teachers in mathematics, science, 
        or special education.--
                  ``(A) Service qualifying for increased amounts.--
                Notwithstanding the amount specified in paragraph (1), 
                the aggregate amount that the Secretary shall repay 
                under this section shall not be more than $17,500 in 
                the case of--
                          ``(i) a secondary school teacher--
                                  ``(I) who meets the requirements of 
                                subsection (b), subject to subparagraph 
                                (D) of this paragraph; and
                                  ``(II) whose qualifying employment 
                                for purposes of such subsection has 
                                been teaching mathematics or science on 
                                a full-time basis; and
                          ``(ii) an elementary or secondary school 
                        teacher--
                                  ``(I) who meets the requirements of 
                                subsection (b), subject to subparagraph 
                                (D) of this paragraph;
                                  ``(II) whose qualifying employment 
                                for purposes of such subsection has 
                                been as a special education teacher 
                                whose primary responsibility is to 
                                provide special education to children 
                                with disabilities (as those terms are 
                                defined in section 602 of the 
                                Individuals with Disabilities Act); and
                                  ``(III) who, as certified by the 
                                chief administrative officer of the 
                                public or nonprofit private elementary 
                                or secondary school in which the 
                                borrower is employed, is teaching 
                                children with disabilities that 
                                correspond with the borrower's special 
                                education training and has demonstrated 
                                knowledge and teaching skills in the 
                                content areas of the elementary or 
                                secondary school curriculum that the 
                                borrower is teaching.
                  ``(B) Accelerated payment.--Notwithstanding the 
                requirements of subsection (b)(1) and paragraph (1) of 
                this subsection that 5 consecutive complete years of 
                service have been completed prior to the receipt of 
                loan forgiveness, in the case of service described in 
                subparagraph (A) of this paragraph, the Secretary shall 
                repay a portion of a borrower's loan obligation 
                outstanding at the commencement of the qualifying 
                service under this subsection, not to exceed a total of 
                $17,500, in the following increments:
                          ``(i) up to $1,750, or 10 percent of such 
                        outstanding loan obligation, whichever is less, 
                        at the completion of the second year of such 
                        service;
                          ``(ii) up to $2,625, or 15 percent of such 
                        outstanding loan obligation, whichever is less, 
                        at the completion of the third year of such 
                        service;
                          ``(iii) up to $4,375, or 25 percent of such 
                        outstanding loan obligation, whichever is less, 
                        at the completion of the fourth year of such 
                        service; and
                          ``(iv) up to $8,750, or 50 percent of such 
                        outstanding loan obligation, whichever is less, 
                        at the completion of the fifth year of such 
                        service.
                  ``(C) Promise to complete service required for 
                accelerated payment.--Any borrower who receives 
                accelerated payment under this paragraph shall enter 
                into an agreement to continue in the qualifying service 
                for not less than 5 consecutive complete school years, 
                or, upon a failure to complete such 5 years, to repay 
                the United States, in accordance with regulations 
                prescribed by the Secretary, the amount of the loans 
                repaid by the Secretary under this paragraph, together 
                with interest thereon and, to the extent required in 
                such regulations, the reasonable costs of collection. 
                Such regulations may provide for waiver by the 
                Secretary of such repayment obligations upon proof of 
                economic hardship as specified in such regulations.
                  ``(D) Higher poverty enrollment required.--In order 
                to qualify for an increased repayment amount under this 
                paragraph, section 465(a)(2)(A) shall, for purposes of 
                subsection (b)(1)(A) of this section, be applied by 
                substituting `40 percent of the total enrollment' for 
                `30 percent of the total enrollment'.''.
  (b) Direct Loans.--Section 460(c) of the Higher Education Act of 1965 
(20 U.S.C. 1087j(c)) is amended by adding at the end the following new 
paragraph:
          ``(3) Increased amounts for teachers in mathematics, science, 
        or special education.--
                  ``(A) Service qualifying for increased amounts.--
                Notwithstanding the amount specified in paragraph (1), 
                the aggregate amount that the Secretary shall repay 
                under this section shall not be more than $17,500 in 
                the case of--
                          ``(i) a secondary school teacher--
                                  ``(I) who meets the requirements of 
                                subsection (b)(1), subject to 
                                subparagraph (D) of this paragraph; and
                                  ``(II) whose qualifying employment 
                                for purposes of such subsection has 
                                been teaching mathematics or science on 
                                a full-time basis; and
                          ``(ii) an elementary or secondary school 
                        teacher--
                                  ``(I) who meets the requirements of 
                                subsection (b)(1), subject to 
                                subparagraph (D) of this paragraph; and
                                  ``(II) whose qualifying employment 
                                for purposes of such subsection has 
                                been as a special education teacher 
                                whose primary responsibility is to 
                                provide special education to children 
                                with disabilities (as those terms are 
                                defined in section 602 of the 
                                Individuals with Disabilities Act); and
                                  ``(III) who, as certified by the 
                                chief administrative officer of the 
                                public or nonprofit private elementary 
                                or secondary school in which the 
                                borrower is employed, is teaching 
                                children with disabilities that 
                                correspond with the borrower's special 
                                education training and has demonstrated 
                                knowledge and teaching skills in the 
                                content areas of the elementary or 
                                secondary school curriculum that the 
                                borrower is teaching.
                  ``(B) Accelerated payment.--Notwithstanding the 
                requirements of subsection (b)(1)(A) and paragraph (1) 
                of this subsection that 5 consecutive complete years of 
                service have been completed prior to the receipt of 
                loan forgiveness, in the case of service described in 
                subparagraph (A) of this paragraph, the Secretary shall 
                repay a portion of a borrower's loan obligation 
                outstanding at the commencement of the qualifying 
                service under this subsection, not to exceed a total of 
                $17,500, in the following increments:
                          ``(i) up to $1,750, or 10 percent of such 
                        outstanding loan obligation, whichever is less, 
                        at the completion of the second year of such 
                        service;
                          ``(ii) up to $2,625, or 15 percent of such 
                        outstanding loan obligation, whichever is less, 
                        at the completion of the third year of such 
                        service;
                          ``(iii) up to $4,375, or 25 percent of such 
                        outstanding loan obligation, whichever is less, 
                        at the completion of the fourth year of such 
                        service; and
                          ``(iv) up to $8,750, or 50 percent of such 
                        outstanding loan obligation, whichever is less, 
                        at the completion of the fifth year of such 
                        service.
                  ``(C) Promise to complete service required for 
                accelerated payment.--Any borrower who receives 
                accelerated payment under this paragraph shall enter 
                into an agreement to continue in the qualifying service 
                for not less than 5 consecutive complete school years, 
                or, upon a failure to complete such 5 years, to repay 
                the United States, in accordance with regulations 
                prescribed by the Secretary, the amount of the loans 
                repaid by the Secretary under this paragraph, together 
                with interest thereon and, to the extent required in 
                such regulations, the reasonable costs of collection. 
                Such regulations may provide for waiver by the 
                Secretary of such repayment obligations upon proof of 
                economic hardship as specified in such regulations.
                  ``(D) Higher poverty enrollment required.--In order 
                to qualify for an increased repayment amount under this 
                paragraph, section 465(a)(2)(A) shall, for purposes of 
                subsection (b)(1)(A)(i) of this section, be applied by 
                substituting `40 percent of the total enrollment' for 
                `30 percent of the total enrollment'.''.

SEC. 3. IMPLEMENTING HIGHLY QUALIFIED TEACHER REQUIREMENTS.

  (a) Amendments.--
          (1) FFEL Loans.--Section 428J(b)(1) of the Higher Education 
        Act of 1965 (20 U.S.C. 1078-10(b)(1)) is amended--
                  (A) by inserting ``and'' after the semicolon at the 
                end of subparagraph (A); and
                  (B) by striking subparagraphs (B) and (C) and 
                inserting the following:
                  ``(B) if employed as an elementary or secondary 
                school teacher, is highly qualified as defined in 
                section 9101(23) of the Elementary Secondary Education 
                Act of 1965; and''.
          (2) Direct Loans.--Section 460(b)(1)(A) of such Act (20 
        U.S.C. 1087j(b)(1)(A)) is amended--
                  (A) by inserting ``and'' after the semicolon at the 
                end of clause (i); and
                  (B) by striking clauses (ii) and (iii) and inserting 
                the following:
                          ``(ii) if employed as an elementary or 
                        secondary school teacher, is highly qualified 
                        as defined in section 9101(23) of the 
                        Elementary Secondary Education Act of 1965; 
                        and''.
  (b) Transition Rule.--
          (1) Rule.--The amendments made by subsection (a) of this 
        section to sections 428J(b)(1) and 460(b)(1)(A) of the Higher 
        Education Act of 1965 shall not be applied to disqualify any 
        individual who, before the date of enactment of this Act, 
        commenced service that met and continues to meet the 
        requirements of such sections as in effect before such date of 
        enactment.
          (2) Rule not applicable to increased qualified loan 
        amounts.--Paragraph (1) of this subsection not shall apply for 
        purposes of obtaining increased qualified loan amounts under 
        sections 428J(b)(3) and 460(b)(3) of the Higher Education Act 
        of 1965 as added by section 2 of this Act.

SEC. 4. INFORMATION ON BENEFITS TO RURAL SCHOOL DISTRICTS.

  The Secretary shall--
          (1) notify local educational agencies eligible to participate 
        in the Small Rural Achievement Program authorized under subpart 
        1 of part B of title VI of the Elementary and Secondary 
        Education of 1965 of the benefits available under the 
        amendments made by this Act; and
          (2) encourage such agencies to notify their teachers of such 
        benefits.

                                Purpose

    H.R. 438, the Teacher Recruitment and Retention Act of 
2003, provides for an increase in the total loan forgiveness 
for elementary and secondary school teachers who specialize in 
math, science or special education, in title I schools. This 
legislation addresses the need to increase the number of 
quality teachers in our nation's classrooms by increasing the 
maximum loan forgiveness from $5,000 to $17,500 for highly 
qualified math, science and special education teachers. H.R. 
438 provides an incentive for teachers to work in disadvantaged 
areas and provides flexibility for high need schools to recruit 
and retain these teachers.

                            Committee Action


                           LEGISLATIVE ACTION

    On January 29, 2003, Representative Joe Wilson (R-SC) 
introduced H.R. 438, the Teacher Recruitment and Retention Act 
of 2003. The Subcommittee on 21st Century Competitiveness 
considered H.R. 438 during a legislative session on Wednesday, 
June 4, 2003, during which an amendment in the nature of a 
substitute was offered and by unanimous consent accepted as the 
base text to which any amendments would be considered.
    The Subcommittee on 21st Century Competitiveness with a 
majority of the Committee present, ordered H.R. 438 favorably 
reported, as amended, to the Full Committee by voice vote on 
June 4, 2003.
    The Committee on Education and the Workforce considered 
H.R. 438 during a legislative session on Tuesday, June 10, 
2003, during which Representative Joe Wilson (R-SC) offered an 
amendment in the nature of a substitute. By unanimous consent, 
the substitute was accepted as the base text to which any 
amendments would be considered. The Committee considered the 
following amendments to H.R. 438:

          The Committee adopted by voice vote, an amendment 
        offered by Representative Kind (D-WI) to have the 
        Secretary of Education notify local educational 
        agencies eligible to participate in the Small Rural 
        Achievement Program within the Elementary and Secondary 
        Education Act of 1965, about the benefits of the 
        teacher loan forgiveness program within H.R. 438, and 
        to encourage those agencies to notify their teachers of 
        the program.

    The Committee on Education and the Workforce, with the 
majority of the Committee present, favorably reported H.R. 438 
as amended, to the House of Representatives by voice vote.
    Below is a summary of H.R. 438.

                                Summary

    H.R. 438 provides for an increase in the allowable maximum 
loan forgiveness in the Federal Family Education Loan Program 
(FFELP) and the Federal Direct Loan Program to $17,500. This 
increased loan forgiveness is available for highly qualified 
math, science and special education teachers teaching in high 
need, title I schools. To be eligible, a teacher must teach in 
a title I school with a poverty level exceeding 40 percent. 
H.R. 438 coordinates the requirement for teachers to be highly 
qualified, as well as the poverty level for school wide 
programs, as defined in the No Child Left Behind Act, with 
eligibility for teacher loan forgiveness. H.R. 438 also 
provides a transition period for those teachers serving under 
the requirements found in the Higher Education Act prior to 
enactment of H.R. 438 in that those teachers will not be 
adversely affected by the highly qualified definition when 
applying for the current loan forgiveness applicable for all 
teachers in title I schools. However, all teachers applying for 
the increased loan forgiveness of $17,500 must be highly 
qualified upon application for the benefits.
    To further reduce financial burden on these teachers, H.R. 
438 provides loan forgiveness in annual increments beginning 
after the second year of the required five years of service. It 
is extremely important not only to recruit and retain highly 
qualified teachers but also to retain those now providing 
invaluable service to disadvantaged students. A teacher who 
meets the highly qualified definition as provided in the No 
Child Left Behind Act and is currently a math, science or 
special education teacher in an eligible school may receive the 
increased loan forgiveness benefits. For example, a teacher, 
eligible pursuant to H.R. 438, in his third year of service, 
may apply for and receive the allowable increments of loan 
forgiveness to cover the service completed to that point.
    Should the borrower fail to complete five years of teaching 
service as required, repayment of any funds provided prior to 
that time will be required. The Secretary has authority to 
provide the borrower a waiver of that repayment obligation if 
the borrower can prove, in accordance with regulations 
promulgated by the Secretary, economic hardship.
    H.R. 438 also requires the Secretary of Education to notify 
local educational agencies eligible to participate in the Small 
Rural Achievement Program authorized within the No Child Left 
Behind Act, of the availability of teacher loan forgiveness and 
encourage those agencies to notify their teachers.

                            Committee Views

    President Bush signed the No Child Left Behind Act into law 
on January 8, 2002. The No Child Left Behind Act requires each 
State educational agency to develop a plan to ensure that all 
teachers teaching in core academic subjects within the State 
are highly qualified not later than the end of the 2005-2006 
school year. Additionally, over the next ten years, school 
districts will need to hire over 2 million additional teachers 
to keep up with increased student enrollment.
    States and school districts must recruit a greater quantity 
of people to the teaching profession while also ensuring 
teacher quality. Unfortunately, schools with concentrated 
poverty have greater teacher and administrator shortages, fewer 
applications for vacancies, higher absenteeism among teachers 
and staff, and higher rates of teacher and administrator 
turnover. Shortages of math, science and special education 
teachers are at a critical level. While the No Child Left 
Behind Act will help school districts recruit and train high 
quality teachers, more help is needed. In the release of the FY 
2004 budget, President Bush put forth his plan to increase the 
number of highly qualified math, science and special education 
teachers.
    There is no doubt that the nation's classrooms are facing a 
crisis. In a report entitled The Urban Teacher Challenge 
(January 2000), almost all of the nation's largest urban school 
districts responding to a national survey reported immediate 
needs for math (95 percent), science (98 percent) and special 
education teachers (98 percent). The National Center for 
Education Statistics reports, for the 1999-2000 school year, 
that 67 percent of public elementary and middle schools had 
vacancies in special education, 70 percent in mathematics, 61 
percent in biology and 51 percent in physical science. 
According to the Center for the Study of Teaching Policy, 
almost 57 percent of public school teachers are teaching 
physical science without a major or minor in their field. H.R. 
438 will provide incentives that will allow flexibility to 
local schools to recruit and retain highly qualified teachers 
in these critical subject areas in both public and private 
elementary and secondary schools across the country.
    H.R. 438 complements our focus on improving the education 
that children receive, particularly the education that 
disadvantaged students and students with disabilities receive, 
by supporting quality teachers for our children. H.R 438 
expands the current teacher loan forgiveness maximum amount 
from $5,000 to $17,500 of a teacher's outstanding loan 
obligation for those teaching math, science or special 
education. The teacher must be teaching in a title I school 
with a poverty level exceeding 40 percent. To further assist 
teachers in high need schools, H.R. 438 provides the loan 
forgiveness in incremental payments beginning after the second 
year of service and continuing annually thereafter. This will 
further reduce the debt burden of these teachers and give them 
an incentive to continue teaching in title I schools.
    By offering additional financial support for public and 
private elementary and secondary teachers who have made a 
commitment to teach in title I schools in the defined critical 
subject areas, math, science and special education, this bill 
can make it possible for more disadvantaged students to be 
taught by caring and competent teachers in subject areas that 
will help shape not only the student but the economic future of 
the country. Teaching in high need, low income schools isn't 
always easy, but nowhere is it more important. We are asking a 
lot of teachers and they deserve our full support.
    We need to do everything we can to encourage college 
students to enter a field that, while challenging, is one of 
the most rewarding careers one can undertake. H.R. 438 will 
help to encourage the best and the brightest of our nation's 
college students to enter the teaching profession and for 
highly qualified experienced teachers to remain committed to 
the profession and the schools in which they teach. H.R. 438 
provides guaranteed funding in order to allow public and 
private elementary school teachers an opportunity to know the 
amounts they will receive in loan forgiveness for the service 
they provide. There will be no question, if they are eligible, 
they will receive the loan forgiveness.

                      Section-by-Section Analysis

    Section 1. Short title.
    Section 2. Makes amendments to section 482J(c) and 460(c) 
of the Higher Education Act of 1965, as amended, to increase 
the maximum loan forgiveness currently available in both the 
Federal Family Education Loan Program (FFELP) and the Federal 
Direct Student Loan Program to $17,500. Provides for increased 
loan forgiveness only for mathematics, science and special 
education teachers serving in high need schools. Section 2 
provides for the $17,500 in loan forgiveness in annual payments 
beginning after the second full year of eligible teaching 
service. To be eligible, a teacher must teach in a title I 
school with a poverty level exceeding 40 percent. Section 2 
also requires repayment of any loan amounts forgiven on behalf 
of the teacher if the full five years of required teaching 
service is not fulfilled.
    Section 3. Section 3 incorporates the requirement from the 
No Child Left Behind Act that all teachers be highly qualified 
by the 2005-2006 school year. In order to be eligible for the 
increased loan forgiveness, all teachers must be highly 
qualified. This section also provides for a transition for 
those teachers eligible for the currently available loan 
forgiveness of $5,000 so as not to adversely affect any 
teachers, due to the new requirement, now within their service 
requirement.
    Section 4. Section 4 requires the Secretary of Education to 
notify local educational agencies eligible to participate in 
the Small Rural Achievement Program authorized within the No 
Child Left Behind Act, of the availability of teacher loan 
forgiveness and encourage those agencies to notify their 
teachers.

                       Explanation of Amendments

    The Amendment in the Nature of a Substitute is explained in 
the body of this report.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. H.R. 438 amends the Higher Education Act of 1965 to 
increase the total loan forgiveness for elementary and 
secondary school teachers who specialize in math, science or 
special education, in title I schools. The bill does not 
prevent legislative branch employees from receiving services 
provided under this legislation.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement of 
whether the provisions of the reported bill include unfunded 
mandates. H.R. 438 amends the spending programs under the 
Higher Education Act. As such, the bill does not contain any 
unfunded mandates.

                             Rollcall Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee Report to include for 
each record vote on a motion to report the measure or matter 
and on any amendments offered to the measure or matter the 
total number of votes for and against and the names of the 
Members voting for and against.


  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the body of this report.

   New Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974 and with respect to 
requirements of 3(c)(3) of rule XIII of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for H.R. 438 from the Director of the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 16, 2003.
Hon. John A. Boehner,
Chairman, Committee on Education and the Workforce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 438, the Teacher 
Recruitment and Retention Act of 2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Deborah 
Kalcevic.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

H.R. 438--Teacher Recruitment and Retention Act of 2003

    Summary: H.R. 438 would make two changes in the current 
teacher loan forgiveness provisions for federal student loans. 
The first change would restrict the participation in those loan 
forgiveness provisions to only those teachers deemed ``highly 
qualified'' as defined in the Elementary and Secondary 
Education Act (ESEA) of 1965. The other change would make 
certain special education, mathematics, and science teachers 
eligible for additional and earlier loan forgiveness.
    Because the costs of federal student loans are not subject 
to appropriation, enacting this bill would affect direct 
spending. CBO estimates that enacting H.R. 438 would cost $60 
million in 2003, $25 million in 2004, and $340 million over the 
2003-2013 period.
    H.R. 438 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated Cost to the Federal Government: The estimated 
budgetary impact of H.R. 438 is shown in the following table. 
The costs of this legislation fall within budget function 500 
(education, training, employment, and social services).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           By fiscal year (millions of dollars)
                                                                 ---------------------------------------------------------------------------------------
                                                                   2003    2004    2005    2006    2007    2008    2009    2010    2011    2012    2013
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     DIRECT SPENDING

Student loan program spending under baseline projections: \1\
    Estimated budget authority..................................   4,839   4,661   5,502   6,184   6,472   6,692   6,887   7,059   7,230   7,398   7,646
    Estimated outlays...........................................   4,310   3,879   4,843   5,423   5,789   6,050   6,233   6,396   6,551   6,706   6,941
Proposed changes:
    Estimated budget authority..................................      70      25      25      25      25      30      30      30      30      30      30
    Estimated outlays...........................................      60      25      25      25      25      30      30      30      30      30      30
Student loan program spending under H.R. 438:
    Estimated budget authority..................................   4,909   4,686   5,527   6,209   6,497   6,722   6,917   7,089   7,260   7,428   7,676
    Estimated outlays...........................................   4,370   3,904   4,868   5,448   5,814   6,080   6,263   6,426   6,581   6,736   6,971
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Spending includes liquidating and program accounts for both direct and guaranteed student loans, as well as the federal student loan reserve
  account.

    Basis of estimate: The costs of the student loan programs 
are included in the budget resolution baseline reflecting the 
assumption that the authorization for the existing loan 
programs is extended. (Specifically, section 257 of the 
Balanced Budget and Emergency Deficit Control Act requires that 
certain expiring programs be assumed to continue for baseline 
projection purposes. The authority for certain elements of the 
guaranteed loan programs is scheduled to expire September 30, 
2004; but the baseline assumes that the entire program will be 
reauthorized.) The provisions affecting the student loan 
programs are assessed under the requirements of the federal 
credit reform act. As such, the budget records all the costs 
and collections associated with a new loan on a present-value 
basis in the year the loan is obligated and the costs of all 
changes (i.e., ``modifications'') affecting outstanding loans 
are displayed in the fiscal year the bill is enacted--assumed 
to be 2003 for this estimate.
    Under current law, all new student borrowers as of October 
1998 who subsequently teach in public or private elementary 
schools in a school district eligible for funds under title I 
of the Elementary and Secondary Education Act (Title I) and in 
a school with more than 30 percent of the students from low-
income families are eligible to have the government pay off or 
cancel part of their outstanding subsidized or unsubsidized 
student loan debt. To qualify, teachers must teach full time 
for five consecutive years, and then only if they are 
determined qualified by the chief administrative authority in 
the case of elementary school teachers or teaching in an area 
relevant to their college major in the case of secondary school 
teachers. If they meet those criteria, 100 percent of their 
outstanding debt is canceled up to a maximum of $5,000. Under 
the current budget resolution baseline, CBO estimates that the 
total federal costs for teacher loan forgiveness is 
approximately $1.9 billion over the 2003-2013 period. When 
fully implemented, about 75,000 teachers are expected to apply 
each year for the $5,000 in loan forgiveness.

New restriction on loan forgiveness participation

    Under H.R. 438, new teachers would have to be deemed 
``highly qualified'' teachers as defined by the ESEA to receive 
the loan forgiveness described above. For elementary teachers 
this means that they would have to hold a bachelor's degree and 
pass a rigorous state examination testing skills and knowledge 
in teaching reading, writing, mathematics, and other required 
subjects. Middle school and high school teachers would have to 
hold a bachelor's degree and pass a rigorous state exam for 
each academic subject they teach. Teachers who were teaching 
prior to enactment of this bill and eligible for the loan 
forgiveness under current law would be exempt from the new 
standards.
    Existing federal education statutes already encourage 
states to move towards a highly qualified teaching force by 
academic year 2005-2006. As a result, the new restriction will 
likely affect relatively few teachers. Based on data from the 
National Center on Education Statistics (NCES), CBO estimates 
about 3,000 fewer teachers each year--about 4 percent--would be 
eligible for loan forgiveness as a result of this restriction. 
CBO estimates that this change would save $20 million in 2003, 
$10 million in 2004, and $110 million over the 2003-2013 
period.

Increase in loan forgiveness amounts

    H.R. 438 also would increase the maximum amount of loan 
cancellation from $5,000 to $17,500 for highly qualified 
mathematics and science teachers and special education teachers 
who teach in public or private elementary schools in school 
districts eligible for assistance under Title I and in schools 
with more than 40 percent of the students from low-income 
families. While teachers would still be required to teach full 
time for five consecutive years, they would begin to receive 
loan forgiveness earlier. After the second year of teaching, 
$1,750 or 10 percent of their loan obligation, whichever is 
less, would be forgiven. After the third, fourth, and fifth 
years the cancellation levels would be $2,625 or 15 percent, 
$4,375 or 25 percent, and $8,750 or 50 percent, respectively. 
Any teacher who fails to complete five consecutive years of 
full-time teaching would be required to repay the government 
with interest. The Secretary of Education would have some 
discretion with regard to the repayment. The Secretary could 
either waive the repayment in the case of economic hardship or 
could charge collection fees on the repayments.
    CBO estimates this provision would cost approximately $80 
million in 2003, $35 million in 2004, and $450 million over the 
2003-2013 period.
    H.R. 438 would provide additional benefits only to a small 
portion of those who would be eligible for loan forgiveness 
under current law. First, based on data from the Department of 
Education, requiring the share of low-income students to be at 
least 40 percent rather than 30 percent would reduce the number 
of schools where teachers could receive this benefit from about 
53,000 schools to 31,000--a decrease of 40 percent. Second, 
based on data compiled from NCES, CBO estimates that 
mathematics, science, and special education teachers would 
represent approximately 13 percent of teachers at these 
schools.
    CBO estimates that under H.R. 438 approximately 5,500 
mathematics, science, and special education teachers would 
become eligible each year to begin participating in the four 
years of loan forgiveness once the program is fully 
implemented. (Few, if any teachers would be eligible for the 
expanded benefits in 2004 because of the way the loan 
forgiveness is phased in.) The average loan forgiveness for 
these teachers would total roughly $16,000 once they complete 
the required five years of service. CBO estimates that roughly 
550 new participants each year who received some loan 
forgiveness would drop out of teaching before completing five 
years, and would be required to repay the government with 
interest.
    For modeling the participating rate for various loan 
forgiveness alternatives for teachers, CBO used data from the 
Perkins loan program where loan forgiveness provisions have 
been in place for 25 years. To the extent that these data 
reflect the impact of loan forgiveness on teacher turnover 
rates, CBO has incorporated similar effects for teachers with 
federal direct or guaranteed student loans. Although different 
amounts of loan forgiveness may have marginally different 
effects on teacher retention, any such effects would likely be 
small relative to the overall budgetary costs.
    Intergovernmental and Private-Sector Impact: H.R. 438 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate Prepared by: Federal costs: Deborah Kalcevic; 
impact on state, local, and tribal governments: Gregory Waring; 
and impact on the private sector: Nabeel Alsalam.
    Estimate Approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

         Statement of General Performance Goals and Objectives

    In accordance with clause (3)(c) of House rule XIII, the 
goal of H.R. 438 is to provide for an increase in the total 
loan forgiveness for elementary and secondary school teachers 
who specialize in math, science or special education, in title 
I schools. The Committee expects the Department of Education to 
comply with H.R. 438 and implement the changes to the law in 
accordance with these stated goals.

                   Constitutional Authority Statement

    Under clause 3(d)(1) of rule XIII of the Rules of the House 
of Representatives, the Committee must include a statement 
citing the specific powers granted to Congress in the 
Constitution to enact the law proposed by H.R. 438. The 
Committee believes that the amendments, made by this bill to 
the Higher Education Act, are within Congress' authority under 
Article I, section 8, clause 1 of the Constitution.

                           Committee Estimate

    Clause 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 438. However, clause 3(d)(3)(B) of that rule provides that 
this requirement does not apply when the Committee has included 
in its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 402 of the Congressional Budget Act.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

HIGHER EDUCATION ACT OF 1965

           *       *       *       *       *       *       *



TITLE IV--STUDENT ASSISTANCE

           *       *       *       *       *       *       *



Part B--Federal Family Education Loan Program

           *       *       *       *       *       *       *



SEC. 428J. LOAN FORGIVENESS FOR TEACHERS.

  (a) * * *
  (b) Program Authorized.--The Secretary shall carry out a 
program, through the holder of the loan, of assuming the 
obligation to repay a qualified loan amount for a loan made 
under section 428 or 428H, in accordance with subsection (c), 
for any new borrower on or after October 1, 1998, who--
          (1) has been employed as a full-time teacher for 5 
        consecutive complete school years--
                  (A) in a school that qualifies under section 
                465(a)(2)(A) for loan cancellation for Perkins 
                loan recipients who teach in such schools; and
                  [(B) if employed as a secondary school 
                teacher, is teaching a subject area that is 
                relevant to the borrower's academic major as 
                certified by the chief administrative officer 
                of the public or nonprofit private secondary 
                school in which the borrower is employed; and
                  [(C) if employed as an elementary school 
                teacher, has demonstrated, as certified by the 
                chief administrative officer of the public or 
                nonprofit private elementary school in which 
                the borrower is employed, knowledge and 
                teaching skills in reading, writing, 
                mathematics, and other areas of the elementary 
                school curriculum; and]
                   (B) if employed as an elementary or 
                secondary school teacher, is highly qualified 
                as defined in section 9101(23) of the 
                Elementary Secondary Education Act of 1965; and

           *       *       *       *       *       *       *

  (c) Qualified Loans Amount.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Increased amounts for teachers in mathematics, 
        science, or special education.--
                  (A) Service qualifying for increased 
                amounts.--Notwithstanding the amount specified 
                in paragraph (1), the aggregate amount that the 
                Secretary shall repay under this section shall 
                not be more than $17,500 in the case of--
                          (i) a secondary school teacher--
                                  (I) who meets the 
                                requirements of subsection (b), 
                                subject to subparagraph (D) of 
                                this paragraph; and
                                  (II) whose qualifying 
                                employment for purposes of such 
                                subsection has been teaching 
                                mathematics or science on a 
                                full-time basis; and
                          (ii) an elementary or secondary 
                        school teacher--
                                  (I) who meets the 
                                requirements of subsection (b), 
                                subject to subparagraph (D) of 
                                this paragraph;
                                  (II) whose qualifying 
                                employment for purposes of such 
                                subsection has been as a 
                                special education teacher whose 
                                primary responsibility is to 
                                provide special education to 
                                children with disabilities (as 
                                those terms are defined in 
                                section 602 of the Individuals 
                                with Disabilities Act); and
                                  (III) who, as certified by 
                                the chief administrative 
                                officer of the public or 
                                nonprofit private elementary or 
                                secondary school in which the 
                                borrower is employed, is 
                                teaching children with 
                                disabilities that correspond 
                                with the borrower's special 
                                education training and has 
                                demonstrated knowledge and 
                                teaching skills in the content 
                                areas of the elementary or 
                                secondary school curriculum 
                                that the borrower is teaching.
                  (B) Accelerated payment.--Notwithstanding the 
                requirements of subsection (b)(1) and paragraph 
                (1) of this subsection that 5 consecutive 
                complete years of service have been completed 
                prior to the receipt of loan forgiveness, in 
                the case of service described in subparagraph 
                (A) of this paragraph, the Secretary shall 
                repay a portion of a borrower's loan obligation 
                outstanding at the commencement of the 
                qualifying service under this subsection, not 
                to exceed a total of $17,500, in the following 
                increments:
                          (i) up to $1,750, or 10 percent of 
                        such outstanding loan obligation, 
                        whichever is less, at the completion of 
                        the second year of such service;
                          (ii) up to $2,625, or 15 percent of 
                        such outstanding loan obligation, 
                        whichever is less, at the completion of 
                        the third year of such service;
                          (iii) up to $4,375, or 25 percent of 
                        such outstanding loan obligation, 
                        whichever is less, at the completion of 
                        the fourth year of such service; and
                          (iv) up to $8,750, or 50 percent of 
                        such outstanding loan obligation, 
                        whichever is less, at the completion of 
                        the fifth year of such service.
                  (C) Promise to complete service required for 
                accelerated payment.--Any borrower who receives 
                accelerated payment under this paragraph shall 
                enter into an agreement to continue in the 
                qualifying service for not less than 5 
                consecutive complete school years, or, upon a 
                failure to complete such 5 years, to repay the 
                United States, in accordance with regulations 
                prescribed by the Secretary, the amount of the 
                loans repaid by the Secretary under this 
                paragraph, together with interest thereon and, 
                to the extent required in such regulations, the 
                reasonable costs of collection. Such 
                regulations may provide for waiver by the 
                Secretary of such repayment obligations upon 
                proof of economic hardship as specified in such 
                regulations.
                  (D) Higher poverty enrollment required.--In 
                order to qualify for an increased repayment 
                amount under this paragraph, section 
                465(a)(2)(A) shall, for purposes of subsection 
                (b)(1)(A) of this section, be applied by 
                substituting ``40 percent of the total 
                enrollment'' for ``30 percent of the total 
                enrollment''.

           *       *       *       *       *       *       *


PART D--WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM

           *       *       *       *       *       *       *


SEC. 460. LOAN CANCELLATION FOR TEACHERS.

  (a) * * *
  (b) Program Authorized.--
          (1) In general.--The Secretary shall carry out a 
        program of canceling the obligation to repay a 
        qualified loan amount in accordance with subsection (c) 
        for Federal Direct Stafford Loans and Federal Direct 
        Unsubsidized Stafford Loans made under this part for 
        any new borrower on or after October 1, 1998, who--
                  (A) has been employed as a full-time teacher 
                for 5 consecutive complete school years--
                          (i) in a school that qualifies under 
                        section 465(a)(2)(A) for loan 
                        cancellation for Perkins loan 
                        recipients who teach in such schools; 
                        and
                          [(ii) if employed as a secondary 
                        school teacher, is teaching a subject 
                        area that is relevant to the borrower's 
                        academic major as certified by the 
                        chief administrative officer of the 
                        public or non-profit private secondary 
                        school in which the borrower is 
                        employed; and
                          [(iii) if employed as an elementary 
                        school teacher, has demonstrated, as 
                        certified by the chief administrative 
                        officer of the public or nonprofit 
                        private elementary school in which the 
                        borrower is employed, knowledge and 
                        teaching skills in reading, writing, 
                        mathematics and other areas of the 
                        elementary school curriculum; and]
                          (ii) if employed as an elementary or 
                        secondary school teacher, is highly 
                        qualified as defined in section 
                        9101(23) of the Elementary Secondary 
                        Education Act of 1965; and

           *       *       *       *       *       *       *

  (c) Qualified Loan Amounts.--
          (1) * * *

           *       *       *       *       *       *       *

          (3) Increased amounts for teachers in mathematics, 
        science, or special education.--
                  (A) Service qualifying for increased 
                amounts.--Notwithstanding the amount specified 
                in paragraph (1), the aggregate amount that the 
                Secretary shall repay under this section shall 
                not be more than $17,500 in the case of--
                          (i) a secondary school teacher--
                                  (I) who meets the 
                                requirements of subsection 
                                (b)(1), subject to subparagraph 
                                (D) of this paragraph; and
                                  (II) whose qualifying 
                                employment for purposes of such 
                                subsection has been teaching 
                                mathematics or science on a 
                                full-time basis; and
                          (ii) an elementary or secondary 
                        school teacher--
                                  (I) who meets the 
                                requirements of subsection 
                                (b)(1), subject to subparagraph 
                                (D) of this paragraph; and
                                  (II) whose qualifying 
                                employment for purposes of such 
                                subsection has been as a 
                                special education teacher whose 
                                primary responsibility is to 
                                provide special education to 
                                children with disabilities (as 
                                those terms are defined in 
                                section 602 of the Individuals 
                                with Disabilities Act); and
                                  (III) who, as certified by 
                                the chief administrative 
                                officer of the public or 
                                nonprofit private elementary or 
                                secondary school in which the 
                                borrower is employed, is 
                                teaching children with 
                                disabilities that correspond 
                                with the borrower's special 
                                education training and has 
                                demonstrated knowledge and 
                                teaching skills in the content 
                                areas of the elementary or 
                                secondary school curriculum 
                                that the borrower is teaching.
                  (B) Accelerated payment.--Notwithstanding the 
                requirements of subsection (b)(1)(A) and 
                paragraph (1) of this subsection that 5 
                consecutive complete years of service have been 
                completed prior to the receipt of loan 
                forgiveness, in the case of service described 
                in subparagraph (A) of this paragraph, the 
                Secretary shall repay a portion of a borrower's 
                loan obligation outstanding at the commencement 
                of the qualifying service under this 
                subsection, not to exceed a total of $17,500, 
                in the following increments:
                          (i) up to $1,750, or 10 percent of 
                        such outstanding loan obligation, 
                        whichever is less, at the completion of 
                        the second year of such service;
                          (ii) up to $2,625, or 15 percent of 
                        such outstanding loan obligation, 
                        whichever is less, at the completion of 
                        the third year of such service;
                          (iii) up to $4,375, or 25 percent of 
                        such outstanding loan obligation, 
                        whichever is less, at the completion of 
                        the fourth year of such service; and
                          (iv) up to $8,750, or 50 percent of 
                        such outstanding loan obligation, 
                        whichever is less, at the completion of 
                        the fifth year of such service.
                  (C) Promise to complete service required for 
                accelerated payment.--Any borrower who receives 
                accelerated payment under this paragraph shall 
                enter into an agreement to continue in the 
                qualifying service for not less than 5 
                consecutive complete school years, or, upon a 
                failure to complete such 5 years, to repay the 
                United States, in accordance with regulations 
                prescribed by the Secretary, the amount of the 
                loans repaid by the Secretary under this 
                paragraph, together with interest thereon and, 
                to the extent required in such regulations, the 
                reasonable costs of collection. Such 
                regulations may provide for waiver by the 
                Secretary of such repayment obligations upon 
                proof of economic hardship as specified in such 
                regulations.
                  (D) Higher poverty enrollment required.--In 
                order to qualify for an increased repayment 
                amount under this paragraph, section 
                465(a)(2)(A) shall, for purposes of subsection 
                (b)(1)(A)(i) of this section, be applied by 
                substituting ``40 percent of the total 
                enrollment'' for ``30 percent of the total 
                enrollment''.

           *       *       *       *       *       *       *


                            ADDITIONAL VIEWS

    Many school districts, especially the most disadvantaged, 
struggle to attract and retain highly qualified teachers in all 
critical subject areas. These school districts do not have the 
resources to reward high quality teachers who seek to teach in 
some of our most disadvantaged schools. While H.R. 438 provides 
some relief to these problems by providing $17,500 in loan 
forgiveness to highly qualified math, science and special 
education teachers, more should and must be done. This 
legislation could be significantly improved by expanding loan 
forgiveness to all teachers in high poverty schools, head start 
teachers and teachers in extremely rural school districts.
    Ensuring that all of our children have highly qualified 
teachers--whether they are in elementary or secondary schools, 
head start or other prekindergarten programs--is critical to 
ensuring their achievement, especially for our most 
disadvantaged children. In the 1992-2000 school year, over a 
fifth of secondary school students took at least one class from 
a teacher who neither majored nor minored in that subject in 
college; over a third received instruction in at least one 
class from a teacher who was not certified in the subject 
taught and did not have a major in that subject.\1\
---------------------------------------------------------------------------
    \1\ Education Week, Quality Counts 2003: Ensuring a Highly 
Qualified Teacher for Every Classroom, January 9, 2003.
---------------------------------------------------------------------------
    In addition, our nation's Head Start and prekindergarten 
classrooms are desperately in need of high qualify teachers. 
During the 2001-2002 program year, nearly 8,000 teachers, or 15 
percent of all teachers, left head start programs. Over half of 
those who left did so due to low salaries or a desire to change 
job fields. These statistics highlight the inability of head 
start programs to retain their teachers, especially their most 
experienced and qualified.
    Further showing the lack of commitment to our youngest 
children, the Bush Administration has also proposed to 
eliminate the Loan Forgiveness for Day Care Providers program. 
This program, which has been tragically underfunded by the 
Republican Congress, had led to limited numbers of day care 
providers receiving loan forgiveness. Without resources for 
this program and other early childhood education personnel, we 
are robbing our youngest and most disadvantaged children of a 
high quality early educational experience.
    Unfortunately, this legislation only provides assistance to 
math, science and special education teachers. While there are 
shortages in these fields on a national basis, our most 
disadvantaged school districts and communities need highly 
qualified teachers in all subjects and early education. 
Democratic Members offered a series of amendments to address 
the shortcomings of this legislation:
     Representative Tierney, Andrews and Woolsey 
offered an amendment to expand loan forgiveness to Head Start 
teachers in Prekindergarten programs. This amendment would have 
provided important recruitment and retention tools to programs 
that serve our youngest children. In addition, this amendment 
would have provided relief to these teachers who make 
significantly less than their colleagues who teach in 
elementary and secondary schools from staggering amounts of 
student loan debt. Unfortunately, this amendment was defeated 
on a party line vote.
     Representative Payne offered an amendment to 
expand loan forgiveness to all Title I teachers in schools with 
at least 65 percent of their students being from low income 
families. This amendment would have ensured that children in 
our most disadvantaged schools would have the benefit of a 
highly qualified teacher for all of their academic subjects. In 
addition, this amendment would have provided a critical 
recruitment and retention tool to school districts as they seek 
to hire teachers for positions that are some of their hardest 
to fill. Unfortunately, this amendment was also defeated on a 
party line vote.
     Representative Kind offered an amendment to extend 
loan forgiveness to teachers in rural school districts. This 
amendment would have addressed the critical needs that rural 
areas have in recruiting teachers. Unfortunately, this 
amendment was defeated on a voice vote.
    Fortunately, a major improvement to this legislation sought 
by Democratic Members was included in the Committee Reported 
bill. Representative Holt offered an amendment during 
Subcommittee consideration of H.R. 438 which provided for loan 
forgiveness to be dispensed incrementally over the 5 years of 
service as a teacher, rather than at the end of 5 years. This 
incremental disbursement provides a real incentive for teachers 
to stay at a high need school by providing relief from their 
student loan debt up front. This amendment was adopted as part 
of the Full Committee Substitute.
    While this legislation is a good first step, both our 
schools and children deserve more. This bill should be improved 
to cover other critical areas of teaching that the majority has 
ignored. To not cover these areas relegates the children served 
by these teachers to a substandard educational experience.

                                   George Miller.
                                   Raul M. Grijalva.
                                   Ron Kind.
                                   Timothy Bishop.
                                   Rush Holt.
                                   Timothy Ryan.
                                   Danny K. Davis.
                                   John F. Tierney.
                                   Chris Van Hollen.
                                   Ruben Hinojosa.
                                   Lynn C. Woolsey.
                                   Dale E. Kildee.
                                   Carolyn McCarthy.
                                   Susan A. Davis.
                                   David Wu.
                                   Ed Case.
                                   Dennis J. Kucinich.
                                   Betty McCollum.
                                   Denise L. Majette.
                                   Robert E. Andrews.
                                   Major R. Owens.
                                   Donald M. Payne.