DEFINITIONS.

SEC. 304. DEFINITIONS. Section 435 (20 U.S.C. 1085) is amended—(1) in subsection (o)(1)—(A) in subparagraph (A)(ii)—(i) by striking “100 percent of the poverty line for a family of 2” and inserting “150 percent of the poverty line applicable to the borrower’s family size”; and(ii) by inserting “or” after the semicolon;(B) by striking subparagraph (B); and(C) by redesignating subparagraph (C) as subparagraph (B);(2) in subsection (o)(2), by striking “(1)(C)” and inserting “(1)(B)”; and(3) by adding at the end the following:“(p) Eligible Not-for-Profit Holder.—“(1) Definition.—Subject to the limitations in paragraph (2) and the prohibition in paragraph (3), the term ‘eligible not-for-profit holder’ means an eligible lender under subsection (d) (except for an eligible lender described in subsection (d)(1)(E)) that requests a special allowance payment under section 438(b)(2)(I)(vi)(II) or a payment under section 771 and that is—“(A) a State, or a political subdivision, authority, agency, or other instrumentality thereof, including such entities that are eligible to issue bonds described in section 1.103–1 of title 26, Code of Federal Regulations, or section 144(b) of the Internal Revenue Code of 1986;“(B) an entity described in section 150(d)(2) of such Code that has not made the election described in section 150(d)(3) of such Code;“(C) an entity described in section 501(c)(3) of such Code; or“(D) a trustee acting as an eligible lender on behalf of a State, political subdivision, authority, agency, instrumentality, or other entity described in subparagraph (A), (B), or (C).“(2) Limitations.—121 STAT. 798“(A) Existing on date of enactment.—“(i) In general.—An eligible lender shall not be an eligible not-for-profit holder under this Act unless such lender—“(I) was a State, political subdivision, authority, agency, instrumentality, or other entity described in paragraph (1)(A), (B), or (C) that was, on the date of the enactment of the College Cost Reduction and Access Act, acting as an eligible lender under subsection (d) (other than an eligible lender described in subsection (d)(1)(E)); or“(II) is a trustee acting as an eligible lender under this Act on behalf of such a State, political subdivision, authority, agency, instrumentality, or other entity described in subclause (I) of this clause.“(ii) Exception.—Notwithstanding clause (i), a State may elect, in accordance with regulations of the Secretary, to waive the requirements this subparagraph for a new not-for-profit holder determined by the State to be necessary to carry out a public purpose of such State, except that a State may not make such election with respect the requirements of clause (i)(II).“(B) No for-profit ownership or control.—No political subdivision, authority, agency, instrumentality, or other entity described in paragraph (1)(A), (B), or (C) shall be an eligible not-for-profit holder under this Act if such entity is owned or controlled, in whole or in part, by a for-profit entity.“(C) Sole ownership of loans and income.—No State, political subdivision, authority, agency, instrumentality, or other entity described in paragraph (1)(A), (B), or (C) shall be an eligible not-for-profit holder under this Act with respect to any loan, or income from any loan, unless the State, political subdivision, authority, agency, instrumentality, or other entity described in paragraph (1)(A), (B), or (C) is the sole owner of the beneficial interest in such loan and the income from such loan.“(D) Trustee compensation limitations.—A trustee described in paragraph (1)(D) shall not receive compensation as consideration for acting as an eligible lender on behalf of an entity described in described in paragraph (1)(A), (B), or (C) in excess of reasonable and customary fees.“(E) Rule of construction.—For purposes of subparagraphs (B), (C), and (D) of this paragraph, a State, political subdivision, authority, agency, instrumentality, or other entity described in paragraph (1)(A), (B), or (C) shall not—“(i) be deemed to be owned or controlled, in whole or in part, by a for-profit entity, or“(ii) lose its status as the sole owner of a beneficial interest in a loan and the income from a loan by that political subdivision, authority, agency, instrumentality, or other entity,by granting a security interest in, or otherwise pledging as collateral, such loan, or the income from such loan, 121 STAT. 799 to secure a debt obligation in the operation of an arrangement described in paragraph (1)(D).“(3) Prohibition.—In the case of a loan for which the special allowance payment is calculated under section 438(b)(2)(I)(vi)(II) and that is sold by the eligible not-for-profit holder holding the loan to an entity that is not an eligible not-for-profit holder under this Act, the special allowance payment for such loan shall, beginning on the date of the sale, no longer be calculated under section 438(b)(2)(I)(vi)(II) and shall be calculated under section 438(b)(2)(I)(vi)(I) instead.“(4) Regulations.—Not later than 1 year after the date of enactment of the College Cost Reduction and Access Act, the Secretary shall promulgate regulations in accordance with the provisions of this subsection.”.