To amend the Higher Education Act of 1965 to permit institutions of higher education to make loans to their students, if such institutions continue to hold such loans until the beginning of the grace period of the loan, and for other purposes.

Amends the Higher Education Act of 1965 to remove certain restrictions on the making of guaranteed loans to their students by institutions of higher education. Permits such institutions to make loans to their students if the institutions continue to hold such loans until the beginning of the loan grace period (i.e. when the borrower ceases to carry at least one-half the normal full-time academic workload).