The passage of S. 2539, the College Opportunity Act of 1978, to amend the Higher Education Act of 1965 to improve the basic educational opportunity grants program, is recommended in this Senate report from Senator Claiborne Pell. The bill provides for: (1) a rate no higher than 10.5 percent in determining a family's expected contributions from parental discretionary income for calculating the size of a student's grant under the Basic Educational Opportunity Grant program; (2) an increase in the mandatory minimum funding for the College Work-Study Program; (3) an increase in the mandatory minimum funding for the Supplemental Educational Opportunity Grant program; (4) a technical amendment to the state student incentive grant program to allow continued participation in that program of states having constitutional prohibitions against participation of nonprofit institutions of higher education in state grant programs; and (5) repealing the unsubsidized portion of the Guaranteed Loan Program, making students eligible for a subsidy of interest on their loans during their in-school period, regardless of their families' income. Provisions of the bill, justification for it, votes in the Committee on Human Resources, cost estimates, the regulatory impact of the bill, and changes in existing law made by the bill are provided. (SPG)