A bill to amend the Higher Education Act of 1965 to make certain alterations in Federal, State, and private programs of low-interest insured loans for students in institutions of higher education.

[AI summary unavailable — showing source text] Amends part B (Federal, State, and Private Programs of Low-Interest Insured Loans to Students in Institutions of Higher Education) of title IV of the Higher Education Act of 1965 to direct the Secretary of Education to take necessary actions, including direct payments to eligible institutions, to insure that the proceeds of any loan under the guaranteed student loan (GSL) program are used for educational expenses. Requires, as a condition for a loan under the GSL program, the endorsement of: (1) an individual who claims the student as a dependent for Federal income tax purposes for the taxable year during which the loan is made; or (2) any individual at least 21 years of age, if the student is not claimed as such a dependent. Shortens from six months to three months the deferral period before repayment of such loans must begin. Provides for a late charge for GSL installment payments not paid within ten days after due date. Revises provisions for Federal interest subsidy payments under the GSL program to require student borrowers to pay the holder of a GSL loan an amount equal to nine percent of the unpaid principal amount of the loan. Requires that such interest assessment be paid …