Student Financial Aid Act

Student Financial Aid Act - States that the purpose of this Act is to provide basic and supplemental educational opportunity grants to eligible students for postsecondary education.

Directs the Commissioner of Education to pay to each student enrolled in an institution of higher education a basic educational opportunity grant in an amount up to $600, determined by the expected family contributions to the student's higher education. Sets forth criteria for determining the expected family contribution, including the amount of family income and the number of dependents.

Requires the Commissioner to carry out a program of supplemental grants to financially needy students who demonstrate outstanding academic performance or clear promise of such performance.

Authorizes appropriations for supplemental grants of $200,000,000 for fiscal year 1976 and for each succeeding fiscal year prior to September 30, 1980.

States that supplemental grants shall be equal to the full cost of tuition, fees, books and other direct instructional costs at the institution attended by such student, together with a cost-of-living allowance. Requires students receiving supplemental grants to maintain satisfactory academic progress.

Establishes a program of incentive grants to the States to assist them in providing grants to eligible students in attendance at institutions of higher education, in providing work-study programs, or in providing additional capacity for enrollment of students at public institutions of higher education which do not charge tuition or fees. Permits the States to determine how such grants shall be utilized.

Authorizes appropriations of $200,000,000 for fiscal year 1976 and for each of the succeeding fiscal years ending prior to September 30, 1980, for incentive grants to States. Sets forth a formula for determining each State's allotment.

Directs the Commissioner to carry out a program designed to identify qualified students from low income families and veterans, to prepare them for a program of postsecondary education, and to provide special services for them. Authorizes the Commissioner to make grants to, and contracts with, institutions for such services, including (1) "Talent Search" programs to identify such individuals with exceptional potential, (2) "Upward Bound" programs, (3) "Special Services for Disadvantaged Students" programs, and (4) a program for paying up to 75 percent of the cost of establishing and operating Educational Opportunity Centers.

Authorizes appropriations for incentive grants of $125,000,000 for fiscal year 1976 and for each of the succeeding fiscal years ending prior to September 30, 1980.

Establishes a federal loan insurance program to encourage States and nonprofit private institutions and organizations to provide adequate loan programs for students in eligible institutions. States that the total of loans made to a student in any academic year covered by Federal loan insurance may not exceed $1,000 for the first year of postsecondary education and $1,500 in subsequent years.

Sets forth criteria governing the eligibility of student borrowers and the terms of federally insured student loans. Limits the interest rate on such loans to 7 percent. Authorizes the Commissioner to pay to each holder of loans insured under this Act a special allowance equal to a specified percentage of the average unpaid balance of disbursed principal of all such loans held by such holder.

Permits any State or any nonprofit institution or organization to enter into an agreement with the Commissioner for the purpose of entitling students who receive loans which are insured under a student loan insurance program of that State, institution, or organization to have made on their behalf the payments provided for by this Act if the Commissioner determines that the student loan insurance program meets the requirements of this Act.

Authorizes the Commissioner to issue certificates of Federal loan insurance to eligible applicants. Requires the Commissioner to pay beneficiaries of loan insurance the amount of the unpaid balance of the principal plus interest whenever a student borrower defaults on such loan. Establishes a student loan insurance fund for making payments in connection with the default of insured loans.

Directs the Commissioner to repay loans of student borrowers who die or become permanently disabled.

Authorizes appropriations of such sums as are necessary to carry out the student loan program.

Establishes a student loan marketing association to serve as a secondary market and warehousing facility for insured student loans. States that such Association will be financed by private capital. Authorizes appropriations to the Secretary of Health, Education, and Welfare of $5,000,000 for making advances for the purpose of establishing the Association. Permits the Association to make advances on the security of, purchase, service, or sale of insured student loans. Directs the Association to report annually to the President and Congress on its operations and activities.

Authorizes appropriations for fiscal year 1969 through 1980 for student work-study programs. Directs the Commissioner to enter into agreements with eligible institutions for the making of grants to such institutions for work-study programs. Sets forth provisions and conditions governing such agreements. Requires institutions to provide matching funds.

Authorizes the Commissioner to make grants to institutions to pay for the costs of establishing a program under which such institutions will, in cooperation with other employers in the localities of such institutions, find and create jobs for students enrolled at such institutions which are suitable to the scheduling and other needs of such students.

Directs the Commissioner to make grants to institutions of higher education for the planning, establishment, expansion, or carrying out by such institutions of programs of cooperative education that alternate periods of full-time academic study with periods of full-time public or private employment.

Provides that institutions which establish and maintain a student loan fund and meet other specified criteria are eligible for capital contributions to such fund by the Federal government. Sets forth conditions governing loans to students from such fund. States that such loans shall be cancelled if the student engages in specified public service activities.

Defines the terms used in this Act. Requires that students receiving assistance from loans, grants, or loan guarantees must file an affidavit with the institution he is attending stating that the money received will be used solely for educational purposes.