A bill to amend the guaranteed student loan provisions of the Higher Education Act of 1963 relating to eligibility for interest subsidy.

Provides that a student who has received a loan under the Higher Education Act of 1965 shall be entitled to have paid to the holder of the loan a portion of the interest on such loan if the loan is for $1500 or less and his adjusted family income is less than $15,000 at the time of execution of the note or written agreement evidencing such loan. States that where a student would be entitled to have a portion of the interest paid on his loan under the preceding sentence, but for the fact that his need for the loan as determined under clause (2) of the next sentence exceeds $1,500, or that his adjusted family income at the time of execution of the note of other written agreement evidencing such loan exceeds $15,000, then such student shall be entitled to have such payments so made if, but only if, the eligible institution at which he has been accepted for enrollment or, in the case of a student who is attending such an institution, at which he is in good standing (as determined by such institution)- (1) has determined he is in need of a loan to attend such institution, (2) has determined the amount of such need by subtracting from the estimated cost of attendance at such institution the expected family contribution with respect to such student plus any other resources or student aid reasonably available to such student, and in the case of a student whose adjusted family income at such time was less than $15,000, that his need as determined under this section exceeds $1,500, and (3) has provided the lender with a statement evidencing the determination made under this section and recommending a loan in the amount of such need. (Amends 20 U.S.C. 1078 (1))