Higher Education Extension bill

(This measure has not been amended since it was passed by the House on September 27, 2006. The summary of that version is repeated here.)

Third Higher Education Extension Act of 2006 - Amends the Higher Education Extension Act of 2005 to extend the programs under the Higher Education Act of 1965 through June 30, 2007.

Amends the Higher Education Act of 1965 to bar trustees of institutions of higher education (IHEs), or of institution-affiliated organizations, from serving as eligible lenders under the Federal Family Education Loan (FFEL) program, unless the trusteeship continues pursuant to a contract entered into before the enactment of this Act. Imposes specified requirements on exempt lender-trustees and the IHEs or institution-affiliated organizations they serve. Subjects exempt lender-trustee loans to compliance audits.

Alters the grant program for Hispanic-serving IHEs to: (1) move the time at which at least 25% of their full-time students must be Hispanic, from the time such IHEs apply for a new grant back to the end of the preceding grant year; (2) eliminate the requirement that at least 50% of their Hispanic students be poor; and (3) eliminate the two-year waiting period between grant applications.

Requires that account maintenance fees payable to guarantee agencies under the FFEL program be calculated on the basis of .10% of the original principal amount of such outstanding loans on which insurance was issued. (Currently, such fees are capped at such percentage.)

Directs the Secretary of Education to discharge or cancel the federal student loan indebtedness of spouses and parents of individuals who died (or die) or who became (or become) permanently and totally disabled from injuries suffered in the terrorist attacks on September 11, 2001.

States that, in the case of a consolidation loan used jointly by a victim of such attacks and his or her spouse, the discharge or cancellation shall apply only to that portion of debt incurred on behalf of the victim; except that, where the victim served as a police officer, firefighter, other safety or rescue personnel, or member of the Armed Forces, all of the debt on such loan shall be discharged or canceled.