; (B) in paragraph (1)— (i) by striking tutoring in reading and inserting school-based activities, including residency programs, tutoring in reading, ; and (ii) by striking subparagraphs (A) and (B) and inserting the following: (A) employed— (i) as reading tutors for children who are preschool age or are in elementary school; or (ii) in family literacy projects; or (B) serving in a residency program of the institution. ; and (C) in paragraph (2)— (i) in subparagraph (A)(ii), by striking and after the semicolon; (ii) in subparagraph (B), by striking the period and inserting ; and ; and (iii) by adding at the end the following: (C) ensure that any student compensated with the funds described in paragraph (1) who is serving in a residency program receives compensation for time spent in training and travel directly related to such residency. ; and (2) by adding at the end the following: (f) Residency programs for teachers, principals, and other school leaders (1) Use of funds Funds granted to an institution under this section may be used to support students serving in residency programs, including compensation for time spent in training and travel directly related to such residency. (2) Priority An institution shall— (A) give priority to students who are serving in a residency program and who have been determined to be eligible for a Federal Pell Grant under section 401; and (B) ensure that any student compensated with the funds described in paragraph (1) for a residency program receives appropriate training to acquire teaching skills or school leader skills. (3) Federal share The Federal share of the compensation of work-study students compensated under this subsection may exceed 75 percent. (4) Definitions In this subsection: (A) Residency program The term residency program means a school-based educator preparation program in which a prospective teacher, principal, or other school leader— (i) for 1 academic year, works alongside a mentor teacher, principal, or other school leader who is— (I) the teacher of record