Pell Grant Reporting under the Common Origination and Disbursement (COD) System (JS)

Wednesday,
November 1, 2006

Part IV

Department of
Education

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34 CFR Parts 668, 690, and 691
Student Assistance General Provisions;
Federal Pell Grant Program; Academic
Competitiveness Grant Program; and
National Science and Mathematics Access
to Retain Talent Grant Program; Final
Rule

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DEPARTMENT OF EDUCATION
34 CFR Parts 668, 690, and 691
RIN 1840–AC86

Student Assistance General
Provisions; Federal Pell Grant
Program; Academic Competitiveness
Grant Program; and National Science
and Mathematics Access to Retain
Talent Grant Program
Office of Postsecondary
Education, Department of Education.
ACTION: Final regulations.

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AGENCY:

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On July 3,
2006, the Secretary published interim
final regulations (71 FR 37990)
implementing the ACG and National
SMART Grant programs added to the
HEA by the HERA. The interim final
regulations were effective on August 2,
2006. At the time the interim final
regulations were published, the
Secretary requested public comment on
whether changes to the regulations were
warranted.
The July 3, 2006, interim final
regulations included a discussion of the
major issues covered by the regulations.
The following list summarizes those
issues and identifies the pages of the
preamble to the July 3, 2006, interim
final regulations on which a discussion
of those issues can be found:
The Secretary repeated in the ACG
and National SMART Grant regulations
several definitions and sections from the
Federal Pell Grant Program regulations
(71 FR 37990–37991).
The Secretary specified that only
students who are United States citizens
are eligible to receive ACG and National
SMART Grants (71 FR 37991).
The Secretary detailed the
requirements for institutions to follow
when resolving overpayments to
students under the ACG and National
SMART Grant programs (71 FR 37991).
The Secretary defined eligible major
for purposes of the National SMART
Grant Program (71 FR 37991).
The Secretary defined eligible
program for the ACG and National
SMART Grant programs (71 FR 37991).
The Secretary specified the duration
of student eligibility for the ACG and
National SMART Grant programs by
academic year (71 FR 37991).
The Secretary delineated the
institutional participation requirements,
including a requirement that an
institution that participates in the
Federal Pell Grant Program and offers an
educational program that is an eligible
program for the ACG or National
SMART Grant programs, must
participate in the ACG and National
SMART Grant programs (71 FR 37992).

SUPPLEMENTARY INFORMATION:

SUMMARY: The Secretary is adopting as
final, with changes, interim final
regulations in: 34 CFR part 691 for the
Academic Competitiveness Grant (ACG)
and National Science and Mathematics
Access to Retain Talent Grant (National
SMART Grant) programs; 34 CFR part
668 (Student Assistance General
Provisions); and 34 CFR part 690
(Federal Pell Grant Program). These
final regulations are needed to
implement provisions of the Higher
Education Act of 1965 (HEA), as
amended by the Higher Education
Reconciliation Act of 2005 (HERA), Pub.
L. 109–171, enacted on February 8,
2006, 20 U.S.C. 1070a–1.
These final regulations for the ACG
and National SMART Grant programs
specify the eligibility requirements for a
student to apply for and receive an
award under these programs for the
2007–2008 award year. For regulations
that will take effect for the 2008–2009
award year and subsequent award years,
the Secretary intends to conduct
negotiated rulemaking, as required
under section 492 of the HEA.
DATES: Effective Date: These final
regulations are effective July 1, 2007.
Implementation Date: The Secretary
has determined, in accordance with
section 482(c)(2)(A) of the HEA (20
U.S.C. 1089(c)(2)(A)), that institutions of
higher education (institutions), State
educational agencies (SEAs), and local
educational agencies (LEAs) that
administer title IV, HEA programs may,
at their discretion, choose to implement
all of the provisions of these final
regulations on or after November 1,
2006, including for the 2006–2007
award year. For further information, see
‘‘Implementation Date of These
Regulations’’ under the SUPPLEMENTARY
INFORMATION section of this preamble.
FOR FURTHER INFORMATION CONTACT:
Jacquelyn Butler, U.S. Department of
Education, 1990 K Street, NW., Room
8053, Washington, DC 20006–8544.
Telephone: (202) 502–7890. Sophia
McArdle, U.S. Department of Education,

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1990 K Street, NW., Room 8019,
Washington, DC 20006–8544.
Telephone: (202) 219–7078.
If you use a telecommunications
device for the deaf (TDD), you may call
the Federal Relay Service (FRS) at 1–
800–877–8339.
Individuals with disabilities may
obtain this document in an alternative
format (e.g., Braille, large print,
audiotape, or computer diskette) on
request to the contact person listed
under FOR FURTHER INFORMATION
CONTACT.

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The Secretary specified the
circumstances under which
correspondence courses may be applied
toward a student’s full-time enrollment
status in a noncorrespondence study
program (71 FR 37992).
The Secretary delineated the
requirements for a student to attend
more than one institution and receive an
ACG or National SMART Grant (71 FR
37992).
The Secretary specified the
procedures that a student must follow
when applying for an ACG or National
SMART Grant (71 FR 37992).
The Secretary set forth the ACG and
National SMART Grant general student
eligibility requirements (71 FR 37992).
The Secretary specified the
application of an academic year to a
student’s eligibility for an ACG and
National SMART Grant (71 FR 37992).
The Secretary provided the grade
point average (GPA) requirements for
receiving an ACG or National SMART
Grant (71 FR 37993).
The Secretary provided the
circumstances under which a student is
not eligible for an ACG in the student’s
first academic year of enrollment if the
student previously enrolled in a
program of undergraduate education (71
FR 37993–37994).
The Secretary specified the
institutional requirements for
documenting a student’s completion of
a rigorous secondary school program of
study (71 FR 37994–37995).
The Secretary stated the student
requirements for declaring an eligible
major in order to be eligible for a
National SMART Grant (71 FR 37994).
The Secretary provided guidelines for
recognizing a rigorous secondary school
program of study for ACG eligibility (71
FR 37994).
The Secretary delineated how eligible
majors will be determined and their
duration for the National SMART Grant
Program (71 FR 37995).
The Secretary specified how the
maximum ACG and National SMART
Grants will be determined each year (71
FR 37995–37996).
The Secretary stipulated how ACG
and National SMART Grant funds are
treated in relation to other aid received
(71 FR 37996).
The Secretary detailed how an
institution calculates an ACG or
National SMART Grant payment for a
payment period (71 FR 37996).
The Secretary specified how an
institution calculates an ACG or
National SMART Grant payment for a
student who transfers from another
institution (71 FR 37996).
The Secretary detailed the
requirements that govern an

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institution’s determination of a
student’s eligibility for a disbursement
of an ACG or National SMART Grant,
including provisions regarding changes
in a student’s GPA, payment prior to
receipt of a GPA, payments for nonterm
self-paced programs, and, for National
SMART Grants, changes to a student’s
major (71 FR 37996–37997).
The Secretary specified how often an
institution may pay a student (71 FR
37997).
Implementation Date of These
Regulations: Section 482(c) of the HEA
requires that regulations affecting
programs under title IV of the HEA be
published in final form by November 1
prior to the start of the award year (July
1) to which they apply. However, that
section also permits the Secretary to
designate any regulations that an entity
subject to the regulations may choose to
implement earlier and the conditions
under which the entity may implement
the provisions early. The Secretary is
using the authority granted to her under
section 482(c) to designate all of the
regulations included in this document
for early implementation, beginning
with the 2006–2007 award year, at the
discretion of each institution, SEA, and
LEA.

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Analysis of Comments and Changes
The regulations in this document
were developed through the analysis of
comments received on the interim final
regulations published on July 3, 2006.
The Secretary invited comments on the
interim final regulations, and we
received 80 comments.
An analysis of the comments and of
the changes in the regulations since
publication of the interim final
regulations follows. We group major
issues according to subject, with
appropriate sections of the regulations
referenced in parentheses. Generally, we
do not address technical and other
minor changes.
General Comments
Comments: One commenter was
concerned that the ACG and National
SMART Grant program requirements
would intrude on the academic policies
of institutions with regard to credit
accrual, calculation of GPA,
determinations of academic progress,
the treatment of transferred credits, and
academic year standing. The commenter
believed that permitting institutions to
follow current business processes and
practices would be in accord with
current delivery systems and be clear to
students.
Discussion: The Secretary has no
intention of interfering with
institutions’ academic policies and

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administration. Many of the program
requirements about which the
commenter is concerned are required by
the HEA. The program requirements in
the regulations are necessary to deliver
ACGs and National SMART Grants to
students and do not mandate any
changes in institutional academic
policies or administration.
Changes: None.
Section 691.2 Definitions
Comments: Several commenters
believed that the term Scheduled Award
is inappropriately applied to the ACG
and National SMART Grant programs.
The commenters believed that the term
is confusing because the term relates to
award year eligibility for Federal Pell
Grants, which are payable for part-time
enrollment, but is being applied to
academic year eligibility for ACGs and
National SMART Grants, which are
payable for full-time enrollment only.
Some commenters acknowledged the
Secretary’s need for a term that could be
applied if the grants were subject to
ratable reduction, but suggested that the
Secretary use a different term. Others
believed that the term would introduce
unnecessary complexity into the ratable
reduction process.
Discussion: The Secretary believes
that it is prudent to keep the ACG and
National SMART Grant programs as
similar to the Federal Pell Grant
Program as possible within the
constraints of the law. The Secretary
believes the term Scheduled Award is
appropriately applied to all three
programs, as it refers to the amount a
full-time student can be awarded for a
full academic year, as in the Federal Pell
Grant Program. Also, the term is
appropriate as funds are allocated by
award year, and the Secretary
establishes the maximum Scheduled
Award for that award year. Because the
programs require only full-time
enrollment as an eligibility criterion,
there will not be Payment and
Disbursement Schedules published as
there are for the Federal Pell Grant
Program, but the concept of Scheduled
Award does apply with regard to such
issues as remaining eligibility for
transfer students and ratable reductions.
Changes: None.
Comments: Several commenters
believed that it was unclear whether
proprietary institutions could
participate in the ACG and National
SMART Grant programs.
Discussion: Under the regulations, an
otherwise eligible proprietary
institution that offers an eligible
program as defined in § 691.2 may
participate in the ACG and National
SMART Grant programs. Section 691.2

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specifies that these regulations use the
definition of eligible institution in 34
CFR part 600. This definition includes
institutions of higher education, as
defined in § 600.4; proprietary
institutions, as defined in § 600.5; and
postsecondary vocational institutions,
as defined in § 600.6.
Changes: None.
Comments: Several commenters
believed that title IV-eligible certificate
programs should be included in the
definition of an eligible program. The
commenters argued that, while the law
provides that a student must be enrolled
or accepted for enrollment in a two- or
four-year degree granting institution to
be eligible for an ACG, or in a four-year
degree granting institution to be eligible
for a National SMART Grant, it does not
prohibit a student from receiving an
ACG or National SMART Grant for
attending a certificate program offered
by such a degree-granting institution.
Many commenters asserted that
certificate programs are just as
important, if not more important, than
degree programs to the future economic
growth of States and the nation, and the
students just as deserving of these grants
as those enrolled in degree programs. In
addition, the commenters asserted that
many certificate programs attract the
same caliber of students as those
enrolled in degree programs. Several
commenters noted that many students
who initially seek certificates
subsequently transfer into degree
programs. A few commenters suggested
including in the definition of eligible
program certificate programs that are
fully transferable into baccalaureate
degree programs and certificate
programs that are fully acceptable for
credit toward an associate’s degree. One
commenter believed that, if certificate
programs were not considered eligible
outright, then the definition of an
eligible program should include oneyear programs that are fully acceptable
for credit toward an associate’s degree.
The commenter asserted that, as with a
two-year program that is fully
acceptable for credit toward a bachelor’s
degree, the end result is an acceptable
two- or four-year degree. One
commenter noted that the Department’s
position is counter to the longstanding
policy permitting an institution to
designate a program as eligible for all
title IV programs.
Several commenters supported
including in the definition of an eligible
program graduate degree programs that
include at least three academic years of
undergraduate education. One
commenter asked the Secretary to
clarify a student’s eligibility for a
National SMART Grant if the student’s

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status has changed to graduate student
because he or she is in the fourth year
of a graduate program that contains at
least three undergraduate years. One
commenter believed that the definition
of an eligible program should not
include a graduate degree program that
includes at least three academic years of
undergraduate education. The
commenter noted that this
interpretation appears broader than the
requirements for Federal Pell Grant
eligibility for programs that include a
fifth year that counts toward a graduate
degree program, primarily education
certification. The commenter suggested
that the regulations reference § 668.8,
which defines an eligible program for
other title IV, HEA eligibility.
Discussion: The Secretary has
determined that because the HEA limits
eligibility to a student enrolled or
accepted for enrollment in a two- or
four-year degree-granting institution,
eligibility must be limited to two- or
four-year degree programs, as defined in
§ 691.2. Therefore, certificate programs
do not qualify as eligible programs for
ACGs. However, a student in a twoacademic-year program acceptable for
full credit toward a bachelor’s degree
may qualify, provided he or she meets
other eligibility criteria. Because only
students attending four-year institutions
are eligible for National SMART Grants
and a student must be enrolled in the
third and fourth academic years to be
eligible, the Secretary believes that a
student must be enrolled in at least a
bachelor’s degree program to be eligible
for a National SMART Grant.
Section 401A(c)(3)(C) of the HEA, in
defining the term eligible student, refers
to a student enrolled or accepted for
enrollment in specific years of a
program of undergraduate education.
Although a graduate degree program
that includes at least three years of
undergraduate education may be an
eligible program for ACG and National
SMART Grant purposes, under section
401A(c) of the HEA, a student enrolled
in such a program is eligible for an ACG
or National SMART Grant only while
the institution considers the student to
be an undergraduate student in
accordance with the definition of
undergraduate student in § 691.2. Once
a student is considered to be a graduate
student, the student is no longer eligible
for a National SMART Grant.
With respect to the definition of an
eligible program, it is important to
define eligibility for students enrolled in
a program that leads directly to a
graduate degree without first awarding a
bachelor’s degree. Students enrolled in
these programs have a period of
undergraduate work for which they

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should be eligible for ACG and National
SMART Grant funds notwithstanding
the fact that the programs are structured
differently than the typical separate
degree programs for undergraduate and
graduate programs. For programs that
start at the undergraduate level and lead
directly to a graduate degree without
defining when the student is considered
an undergraduate and graduate student,
the definition in § 691.5 allows eligible
students to receive the appropriate
funds from these two grant programs.
Changes: None.
Section 691.6 Duration of Student
Eligibility—Undergraduate Course of
Study
Comments: Many commenters
objected to the Department’s decision to
base the duration of eligibility on an
academic year as defined for purposes
of the title IV, HEA programs, as
measured in weeks of instructional time
and, for undergraduate programs, credit
or clock hours. These commenters
stated that using the title IV, HEA
definition of academic year was
administratively burdensome and
unworkable. Some commenters found
the definition of academic year in part
691 to be inconsistent with other uses
of the term in administering title IV,
HEA programs. One commenter
believed that only the credit hour
portion of the definition of academic
year should be used. Commenters also
were concerned that a student’s title IV,
HEA academic year may not match the
student’s grade level used in the other
title IV, HEA programs such as the FFEL
and Direct Loan programs. The
commenters recommended that the
Secretary rely on grade level progression
as in the FFEL and Direct Loan
programs to determine the first, second,
third, or fourth year of a student’s
enrollment.
Discussion: Under section 401A(c)(3)
of the HEA, a student is eligible for an
ACG in the student’s ‘‘first academic
year of a program of undergraduate
education’’ and ‘‘second academic year
of a program of undergraduate
education’’ and for a National SMART
Grant in the ‘‘third or fourth academic
year of a program of undergraduate
education.’’ The term academic year is
defined in section 481(a)(2) of the HEA
as amended by the HERA and explicitly
applies to all title IV, HEA programs.
The definition provides that an
academic year contains a minimum
number of weeks of instructional time
and a minimum number of credit or
clock hours. The Secretary has no
flexibility to deviate from this defined
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Contrary to the assertions of some
commenters, the Secretary believes that
the interpretation of the term academic
year in the regulations is not
inconsistent with other title IV uses of
the term. For example, the HEA
provisions governing loan limits
provide greater flexibility in this regard
than does section 401A for ACGs and
National SMART Grants. Specifically,
section 428(b)(1)(A) of the HEA sets
loan limits based on whether the
student has ‘‘successfully completed’’ a
‘‘year’’ of a program of undergraduate
education. The Secretary has interpreted
the term ‘‘successfully completed the
first year of a program of undergraduate
education’’ in section 428 to relate to a
student’s grade level, as determined by
the institution. The Secretary did not, in
so doing, interpret the term academic
year as referring to the borrower’s year
in college. Instead, the Secretary
interpreted the entirely different phrase
‘‘first year.’’ The Secretary has no
flexibility to interpret section 401A in a
similar fashion, because, unlike section
428, section 401A specifically uses the
statutorily defined term academic year.
The Secretary cannot limit the
definition to the credit hour provisions,
as was suggested by the commenters,
because the statutory definition of
academic year requires a minimum
number of weeks of instructional time,
in addition to the completion of a
minimum number of credit or clock
hours.
Changes: None.
Comments: Some commenters were
concerned with the effect previous
enrollment in eligible programs at other
institutions and the amount of transfer
credits accepted would have on a
student’s academic progression. One
commenter questioned whether
academic progression was based on
attendance in each eligible program
separately, or on the student’s
attendance in all eligible programs at
any institution. Another commenter
thought institutions should be allowed
to count the credits that are being
accepted for a transfer student in the
same way credits are counted for other
programs, rather than trying to monitor
previous credits differently for ACGs
and National SMART Grants.
Discussion: For purposes of ACGs and
National SMART Grants, a student’s
academic progression is not based on
the student’s enrollment in each eligible
program separately, but rather is based
on all eligible programs in which a
student has enrolled over the course of
the student’s undergraduate education.
An institution is responsible for
determining whether any previous
enrollment by a student as measured in

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weeks of instructional time and hours
affects the student’s eligibility for an
academic year. If the student previously
received an ACG or National SMART
Grant for an academic year, or a portion
of an academic year, an institution must
consider the student to have completed
an eligible program through that
academic year, or that portion of an
academic year, in weeks of instructional
time and hours, unless the institution
has information to the contrary. For
example, if an institution accepts a
transfer student who has received a
first-year ACG Scheduled Award, the
institution must consider the student to
have completed his or her first year of
ACG eligibility regardless of the number
of transfer credits the institution
accepts. To the extent a determination
does not conflict with information
related to grants previously received,
when determining the appropriate
academic year for a transfer student, the
institution may rely on the transfer
credits accepted, along with the
estimated number of weeks of
instructional time completed in
proportion to the academic year of the
student’s eligible program at the
institution to which the student
transferred.
Changes: The Secretary has amended
§ 691.6(a) and (b) to clarify that a
student’s academic year progression is
based on attendance in all eligible
programs in which the student has
enrolled over the course of the student’s
undergraduate education.
Comments: Several commenters were
concerned with the treatment of
Advanced Placement (AP) and
International Baccalaureate (IB) credits
and transfer credits. One commenter
sought clarification of the treatment of
AP and IB credits in relation to the
requirement that a student must
successfully complete the hours of an
academic year along with the weeks of
instructional time to progress to the next
academic year. Some commenters were
concerned that including AP and IB
credits, along with transfer credits
earned while enrolled in high school,
would discourage students from taking
these courses in high school if they
resulted in a student being denied
eligibility for a grant.
Discussion: AP or IB credits accepted
toward a student’s eligible program
count toward the completion of the
hours of an academic year. Because AP
and IB credits are earned based on
secondary school courses and
subsequent tests, there are no weeks of
instructional time in postsecondary
education associated with these credits.
A student must successfully complete
both measures of an academic year to

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progress to the next academic year. A
student who entered college with 24
semester hours of AP credits toward an
eligible program may be starting to earn
hours toward completing the second
academic year but would still be in the
first academic year because, for
purposes of an ACG or National SMART
Grant, no weeks of instructional time
while enrolled in an eligible program
would have elapsed. Similarly, a
student who entered college with 24
semester hours earned as a nonregular
student in an undergraduate program
while enrolled in high school, or
possibly after high school, would also
be in the position of starting to earn the
second academic year of credits but
would still be in the first academic year,
because, for purposes of an ACG or
National SMART Grant, no weeks of
instructional time while enrolled in an
eligible program would have elapsed.
As a result, students will not be
discouraged from enrolling in AP or IB
courses in high school or in college
courses as a nonregular student while in
high school because doing so would not
affect their eligibility for an ACG or
National SMART Grant.
Changes: None.
Comment: One commenter
recommended that ‘‘grade level’’ be
determined once at the beginning of
each award year and that the student
maintain that level of eligibility for the
year as long as the student is full-time.
Discussion: The Secretary does not
agree that the regulations should be
changed. Although a single annual
determination may simplify the
programs’ administration, it would deny
an otherwise eligible student an
additional grant if the student
progresses to another academic year
during the award year and qualifies for
another Scheduled Award.
Changes: None.
Section 691.7 Institutional
Participation
Comments: Several commenters
believed that the requirement that an
institution participate in the ACG and
National SMART Grant programs in
order to continue its participation in the
Federal Pell Grant Program is an
infringement on institutional autonomy
and is not supported by the statute.
Commenters noted that even in the
FFEL and Direct Loan programs—
where, similar to the Federal Pell Grant,
ACG, and National SMART Grant
programs, one part of the law
encompasses several programs—
institutional choice of participation is
allowed. Several commenters stated that
it was their understanding that the
longstanding policy for the title IV, HEA

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programs allows an institution to
designate a particular educational
program as eligible for all title IV
programs or only for some title IV, HEA
programs and recommended that the
Secretary continue this policy. With so
little lead time for implementation, the
commenters had concerns about the
impact of the mandatory participation
on an institution’s administrative
capability.
Several commenters objected to the
exclusion of an administrative cost
allowance for the ACG and National
SMART Grant programs, particularly
because of the administrative burden of
the required rapid implementation.
Some commenters believed that the
Secretary was acting inconsistently by
disallowing the administrative cost
allowance for the ACG and National
SMART Grant programs, as the
Secretary apparently otherwise
considers the Federal Pell Grant, ACG
and National SMART Grant programs,
all of which fall under subpart 1 of part
A, to be conjoined, and section 489(a) of
the HEA requires the Secretary to pay an
administrative cost allowance ‘‘equal to
$5 for each student at that institution
who receives assistance under subpart 1
of part A.’’
Discussion: The Secretary believes
that requiring an institution to
participate in the ACG and National
SMART Grant programs in order to
participate in the Federal Pell Grant
Program when eligible programs are
offered at the institution is consistent
with the statute’s requirement that the
Secretary award grants to Pell-eligible
students. The Secretary believes that
Congress intended that financially
needy students receive all of the grants
to which they are entitled under the
HEA. Requiring institutional
participation, thus, assures that students
otherwise eligible for ACGs and
National SMART Grants receive their
awards.
The Secretary believes that the
mandatory participation in the Federal
Pell Grant, ACG, and National SMART
Grant programs is distinguishable from
the flexibility given to institutions to
choose whether to participate in the
FFEL or Direct Loan Programs because
needy students may be eligible for both
a Federal Pell Grant and an ACG or a
National SMART Grant concurrently,
while students may only obtain loans
under either the FFEL program or Direct
Loan program during a term.
Under the HEA, an institution
receives an administrative cost
allowance for each student receiving a
Federal Pell Grant. Because students
receiving ACGs and National SMART
Grants are receiving Federal Pell Grants,

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the institution does not receive an
additional administrative cost
allowance.
Changes: None.

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Section 691.11 Payments From More
Than One Institution
Comments: Two commenters
disagreed with the requirement that the
same school disburse Federal Pell Grant
funds and ACG and National SMART
Grant funds when a student is attending
more than one institution under a
written agreement.
Discussion: The Secretary believes
that it is appropriate to require that the
same institution that administers a
student’s ACG or SMART Grant award
administer the student’s Federal Pell
Grant award, because the programs are
related in many ways. Several
requirements related to the
administration of the Federal Pell Grant
Program and the ACG and National
SMART Grant programs necessitate that
the same institution disburse funds from
these programs.
Requirements such as that a student
receive a Federal Pell Grant
disbursement in the same award year in
which the student receives an ACG or
National SMART Grant, the requirement
that an institution pay only on the
transaction that is the valid institutional
student information record (ISIR) (and
only the institution paying the Federal
Pell Grant will know which ISIR is the
valid one), and the requirements related
to reporting of verification records for
the Federal Pell Grant Program make
this choice necessary. The Secretary is
aware that there may be a few situations
in which a student is attending more
than one institution under a written
agreement. However, based on these
factors, in the very limited
circumstances in which different
institutions would choose to administer
and disburse funds from different title
IV, HEA programs, the regulations
under this section appropriately
mandate that the institution that
chooses to disburse Federal Pell Grant
Program funds must also disburse the
ACG and National SMART Grant funds.
Changes: None.
Section 691.12 Application
Comments: Several commenters
recommended that the 2007–2008 Free
Application for Federal Student Aid
(FAFSA) should request the information
for a student to self-identify that he or
she has successfully completed a
rigorous secondary school program of
study as provided for in § 691.12(b)(2).
Discussion: The Secretary agrees that
this information should be included on
the FAFSA to the extent practicable.

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The 2007—2008 electronic FAFSA form
(FAFSA on the Web) collects this
information, and students are able to
provide the necessary information as a
part of the application. More than 90
percent of all students apply
electronically using FAFSA on the Web
or through their institutions. The small
minority of applicants using a paper
FAFSA currently receive notification by
mail or, if an e-mail address is provided,
an e-mail that the student may call a
toll-free telephone number or go to a
web site to provide the necessary
information. The 2007–2008 FAFSA has
already been approved by OMB under
the Paperwork Reduction Act, but we
will consider future improvements to
the paper FAFSA during the next
clearance cycle.
Changes: None.
Comments: Two commenters
recommended that the regulations
clarify that an institution has the
authority to request additional
application information, similar to the
Secretary’s authority.
Discussion: Under section 483(a) of
the HEA only the Secretary has the
authority to require a student to provide
information concerning the student’s
need and eligibility for the title IV, HEA
programs, and the Secretary is required
to collect the student’s information on
the FAFSA. Institutions may not use
any additional application data
collection beyond the FAFSA to
determine a student’s title IV eligibility.
However, an institution does have the
authority under 34 CFR 668.16(f) and
668.54(a)(3) of the Student Assistance
General Provisions to require a student
to provide any information or
documentation necessary to resolve any
concerns regarding a student’s eligibility
or application information as well as the
authority to require documentation
directly from a cognizant authority
regarding the completion of a rigorous
secondary school program of study
under § 691.15(b)(2)(ii). The Secretary
does not believe that these authorities
need to be repeated in § 691.12.
Changes: None.
Comments: One commenter
recommended that all application
requirements appear only in the Federal
Pell Grant regulations to eliminate the
possibility of conflicting language.
Discussion: Section 691.12, while
similar to the Federal Pell Grant
Program regulations when possible,
does include provisions specific only to
the ACG and National SMART Grant
programs. The Secretary believes that
regulations specific to the ACG and
National SMART Grant programs
should not be included in the Federal

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Pell Grant Program regulations, as it
may cause confusion.
Changes: None.
Section 691.15
Grant

Eligibility To Receive a

Citizenship
Comments: Several commenters
objected to the requirement that
students must be U.S. citizens in order
to qualify for an ACG or National
SMART Grant. One commenter stated
that preventing permanent residents
from receiving a National SMART Grant
excludes from consideration more than
twenty percent of Federal Pell Grant
recipients who are majoring in the
National SMART Grant fields of study.
Discussion: Section 401A(c)(1) of the
HEA specifies that only U.S. citizens are
eligible for ACG and National SMART
Grants. The Secretary does not have the
authority to change this requirement
through regulations.
Changes: None.
Federal Pell Grant Eligibility
Comments: A number of commenters
objected to the requirement that an
eligible student must be receiving a
Federal Pell Grant disbursement for the
same payment period in which he or
she will receive the ACG or National
SMART Grant. They stated that the
statute only requires that a student be
eligible for a Federal Pell Grant, not
receiving a Federal Pell Grant for the
same payment period. These
commenters believed that the Secretary
exceeded her statutory authority and
arbitrarily denied a Federal entitlement
to otherwise eligible students. The
commenters were especially concerned
about eligibility for payment periods
that cross award years, pointing out that
there are various situations in which
students who attend college year-round
may have exhausted their Federal Pell
Grant eligibility yet still have remaining
eligibility for an ACG or National
SMART Grant. For these Pell-eligible
students who have already received a
full scheduled Federal Pell Grant award,
the receipt of an ACG or National
SMART Grant may be of critical
importance. In addition, some students
attending low-cost institutions may
have substantial outside scholarship
assistance that reduces their need and
resultant ACG or National SMART
Grant during the regular fall through
spring academic calendar, but may have
unmet need during the summer term.
Some commenters suggested that it
would be more reasonable to define
Federal Pell Grant eligibility for this
purpose in terms of an expected family
contribution (EFC) within the range for

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a Federal Pell Grant award for the award
year in which the payment period is
placed.
Discussion: The Secretary agrees with
the commenters that students should
not have to receive a Federal Pell Grant
during the same payment period to be
eligible for an ACG or National SMART
Grant. Rather, students who would
otherwise be eligible for an ACG or
National SMART Grant award but have
already exhausted their Federal Pell
Grant eligibility for the award year
should be eligible to receive an ACG or
National SMART Grant award as long as
they received a Federal Pell Grant in the
same award year.
Change: Section 691.15(a)(2) has been
revised to require that a student receive
a Federal Pell Grant in the same award
year, rather than the same payment
period, to be eligible for an ACG or
National SMART Grant. The Secretary
has made conforming changes in
§§ 691.65(a)(2) and 691.80(a) to reflect
this change in the ACG and National
SMART Grant student eligibility
requirements. In addition, the Secretary
has also made conforming changes to
Subpart E of the Student Assistance
General Provisions on verification of
student aid application information by
amending 34 CFR 668.51, 668.52,
668.54, 668.55, 668.58, 668.59, 668.60,
and 668.61. These changes are necessary
to clarify that these sections apply to the
ACG and National SMART Grant
programs to ensure the synchronous
administration of these programs.

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Full-Time Enrollment
Comments: One commenter expressed
concern that the ACG and National
SMART Grant regulations do not serve
nontraditional students. The commenter
believed that assistance from these
programs should be available to
students who enroll less than full-time.
Discussion: Section 401A(c) of the
HEA requires that a student must be
enrolled full-time in order to be eligible
to receive assistance under the ACG and
National SMART Grant programs. The
Secretary does not have the authority to
change this requirement through
regulations.
Changes: None.
Rigorous Secondary School Program of
Study Eligibility
Comments: One commenter asked
whether a student who has completed
his or her secondary school coursework
in December but who graduated after
January 1, 2005, or 2006, is eligible for
an ACG. Another commenter was
concerned that students who are not of
traditional college age would not be
eligible for an ACG.

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Discussion: The requirement that a
student have successfully completed a
rigorous secondary school program of
study after January 1, 2006, for a firstyear student and after January 1, 2005,
for a second-year student in order to
receive an ACG is in section 401A(c)(3)
of the HEA. The Secretary interprets the
statute as requiring a student to have
graduated in order to complete a
rigorous secondary school program of
study. For example, if a student
completed the coursework of a rigorous
secondary school program in December
2005, but actually graduated from the
program after January 1, 2006, the
student is eligible to receive a first year
ACG. Although in the early years of the
ACG program eligible students will be
of traditional college age, as time goes
by, students who are not of traditional
college age may establish eligibility
provided they have completed a
rigorous secondary school program of
study after the dates provided in the
statute.
Changes: None.
Grade Point Average
Comments: Several commenters
claimed that how and when to compute
a cumulative GPA is confusing. One
commenter wanted clarification on
whether GPA for the student’s eligible
program meant cumulative GPA, major
GPA, or something else. This
commenter suggested removing the
reference to eligible program if the
Secretary intended a cumulative GPA
computation. Some commenters
supported the Secretary’s interpretation
of the GPA calculation for National
SMART Grant eligibility in
§ 691.15(c)(3). One commenter pointed
out that, for National SMART Grants,
the Secretary did not follow the
language from section 401A(c)(3)(C)(ii)
of the HEA, which provides that GPA is
determined in the coursework required
for the major, but instead required GPA
to be determined for the coursework
required for a student’s eligible
program. The commenter supported the
burden reduction in this case, but
objected to the regulatory approach.
Another commenter believed that the
GPA for ACGs should be defined the
same way it is for National SMART
Grants. Yet another commenter
indicated that, for National SMART
Grants, institutions should have the
flexibility to review academic major and
GPA no more frequently than is
required by institutions to monitor
students under their Satisfactory
Academic Progress (SAP) policy, so as
to align these two academically related
monitoring policies.

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Discussion: As discussed in the
preamble to the interim final
regulations, the Secretary believes that a
student’s GPA for purposes of eligibility
for the ACG and National SMART Grant
programs should be calculated using the
same standards that are used to
calculate GPA for other academic and
title IV purposes at the institution. The
Secretary does not believe scores on
tests in AP, IB, or College Level
Examination (CLEP) programs should be
converted to grades for any purpose
under the ACG or National SMART
Grant programs. For National SMART
Grants in particular, the Secretary
believes that the student must meet the
GPA requirement based on all courses
required for the student’s eligible
program, not just those required for the
eligible major. The Secretary believes
this approach is appropriate because it
minimizes institutional burden when
determining whether a student meets
the GPA requirement and is in accord
with other title IV, HEA program
requirements related to GPAs. GPA
cannot be computed the same way for
the ACG Program as it is for the
National SMART Grant Program
because section 401A(c)(3) of the HEA
requires a student to meet the necessary
GPA only at the end of the student’s
first academic year for an ACG, but
throughout the student’s third and
fourth academic years for a National
SMART Grant.
The Secretary believes that the
monitoring requirements for SAP would
not be adequate to determine eligibility
for an ACG or National SMART Grant
based on cumulative GPA. Under
§ 668.32(f), although a student may be
making satisfactory progress according
to the institution’s published SAP
standards under § 668.16(e), and if
applicable, under § 668.34, these
standards allow a student to maintain a
GPA below the 3.0 (on a 4.0 scale) GPA
required to be eligible for an ACG or
National SMART Grant. In addition,
§ 668.16(e)(4) provides that an
institution must determine whether a
student is making satisfactory progress
at the end of each increment, which
must not exceed the lesser of one
academic year or one-half the published
length of the program. In contrast,
section 401A(c)(3)(C)(ii) of the HEA
requires that a student meet the GPA
requirement throughout the student’s
third and fourth academic year. Review
of a student’s GPA under the standards
set forth in § 668.16(e) would not ensure
that a student is meeting the
requirements of the National SMART
Grant Program.
Changes: None.

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Transfer Student GPA
Comments: We received several
comments related to the GPA of transfer
students. One commenter supported the
Secretary’s interpretation for transfer
GPA calculations. Another commenter
asked for clarification on how to treat
GPA in the case of transfer students who
are admitted for summer and then take
a 3-credit summer course. Three
commenters requested an option to use
the GPA earned at prior colleges as the
indicator of sufficient academic
performance for payment for the first
term at the new college to determine
eligibility for an ACG or National
SMART Grant because, at many
colleges, it would require a significant
reengineering of the business process to
calculate a GPA based solely on courses
accepted toward the program. The
commenters believed that cumulative
GPA from other institutions should
sufficiently demonstrate academic
achievement. Another commenter
questioned the fairness of the transfer
hours GPA policy. The commenter was
concerned that students who do poorly
at the first institution could transfer to
gain ACG or National SMART Grant
eligibility, because only the hours
accepted by the new institution would
be considered and all poor grades
excluded. The student who does poorly
and stays at the first institution would
not be eligible, but the student who
transfers could be.
Discussion: The interim final
regulations explain that, in the case of
a transfer student, for the first payment
period, institutions must rely on the
grades of the courses from the prior
institution accepted toward the
student’s eligible program. Transfer
credits that were awarded through
programs such as AP, IB, or CLEP
programs should not be converted to
grades to determine a student’s GPA for
purposes of eligibility for an ACG or
National SMART Grant in the student’s
initial payment period after transferring.
Once a student has the grades for a
payment period at the new institution
for coursework taken toward the eligible
program, the institution may use the
GPA calculated from those grades only,
unless there is an institutional policy
that a student’s GPA at the new
institution include transfer grades.
While the Secretary agrees that
cumulative GPA from a prior institution
does serve as an academic performance
indicator, the purpose of calculating
GPA based solely on coursework
accepted toward the eligible program is
to ensure student eligibility for the ACG
or National SMART Grant programs.
Because this GPA calculation is used

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solely to determine a student’s
eligibility under these programs for the
initial payment period of enrollment,
there is no intrusion into institutional
grading policy by the Secretary. Finally,
the Secretary believes that the transfer
hours GPA requirement in § 691.15(d) of
the interim final regulations is an
equitable means of establishing a
transfer student’s eligibility. Students
who perform poorly overall will likely
still transfer in a GPA that is below 3.0.
Thus, these students would not be
significantly more likely to receive a
grant than a student who did poorly but
stayed at the same institution.
Changes: None.
Comments: One commenter asked the
Secretary to clarify whether an
institution is required to follow its
standards for academic and title IV,
HEA program purposes to determine a
transfer student’s GPA once it has
established eligibility using grades in
coursework that the institution accepts
for the student’s first payment period.
For example, if an institution normally
does not use grades on transferred credit
for SAP or other purposes, does the
institution have the option of using such
grades for ACG and National SMART
Grant recipients only?
Discussion: An institution’s policies
for the administration of the title IV,
HEA programs generally must be the
same for all title IV, HEA programs. An
institution may not establish a SAP
policy that treats grades on transferred
credits one way for ACG and National
SMART Grant recipients, but another
way for recipients of other title IV aid.
Changes: None.
Prior Enrollment in a Postsecondary
Educational Program
Comments: Several commenters
believed that students who attended
postsecondary programs while
completing high school should be
considered first-year students for ACG
eligibility purposes. Two commenters
noted that some colleges offer the
opportunity for a high school student to
earn an associate’s degree while
completing high school. One commenter
stated that it was possible for some of
these students to enroll in college
programs that only accept some of the
credits the student has earned while in
high school and, given the institution’s
definition of an academic year, the
student may qualify as a first-year
student. The commenter believed that, if
the institution was treating the student
as a first-year student, the student
should be eligible for a first-year ACG.
One commenter asked the Secretary to
clarify whether a student who attended
a postsecondary institution as part of a

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State-recognized dual-enrollment
program is considered to have been
enrolled as a regular student for
purposes of determining prior
enrollment. A few commenters asked for
clarification of the Secretary’s policy on
prior enrollment. One commenter
requested clarification as to whether a
student who earned an associate’s
degree at the same time as he or she
earned a high school diploma would be
eligible for a second-year ACG, provided
the transfer credits were less than what
would be required to establish the
student as a junior. The commenter also
wanted to know if the same student
would be eligible for a first-year ACG if
he or she did not earn the associate’s
degree, and the transfer credits were less
than what would be required to
establish the student as a sophomore.
Several commenters believed these
final regulations should reflect guidance
from the Department that prior
enrollment in an undergraduate
program after completion of high school
would not affect a student’s first year
eligibility for an ACG and asked the
Secretary to specify an effective date for
this guidance.
Discussion: The Secretary agrees that
the regulations should be clarified to
reflect that only enrollment as a regular
student in an eligible program while in
secondary school disqualifies a student
from receiving a first-year ACG in the
student’s first academic year of
postsecondary education. Under the
Department’s interpretation of section
401A(c)(3)(A), the term ‘‘previously’’ in
the phrase ‘‘previously enrolled in a
program of undergraduate education’’ in
section 401A(c)(3)(A)(ii) relates to
completion of a rigorous secondary
school program of study in section
401A(c)(3)(A)(i).
A student is considered to have been
previously enrolled in an eligible
program if the student was admitted
into that program as a regular student
while still enrolled in a secondary
school program of study. A regular
student is a person who is enrolled or
accepted for enrollment at a
postsecondary educational institution
for the purpose of obtaining a degree,
certificate, or other recognized
postsecondary educational credential
offered by that institution. Therefore, a
high school student who was enrolled
in a dual-enrollment program with the
purpose of obtaining an associate’s
degree is considered to have been
enrolled as a regular student, whether
the student actually earned the
associate’s degree or not. Thus, the
student was previously enrolled in an
eligible program of undergraduate
education and is not eligible for a first-

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year ACG. Such a student may be
eligible for a second-year ACG if his or
her transfer credits were less than what
would be required to establish the
student as enrolled for the student’s
third title IV, HEA academic year.
However, if an otherwise eligible
student took courses that were part of an
associate’s degree program, but was not
enrolled for the purpose of obtaining the
associate’s degree (i.e., was not a regular
student), the student would be eligible
for a first-year ACG.
Changes: Section 691.15(b)(1)(ii)(B)
has been revised to clarify that a student
is not eligible for a first-year ACG if the
student was previously enrolled as a
regular student in an eligible program
while still enrolled in a secondary
school program of study.
Documenting Completion of a Rigorous
Secondary School Program of Study
Comments: Many commenters
expressed concern that the requirements
for determining and documenting a
student’s completion of a rigorous
secondary school program of study are
too onerous. Several commenters
asserted that it is unduly burdensome
for institutions to determine by means
of a postgraduation high school
transcript whether a student has met the
definition of a rigorous secondary
school program of study under
§ 691.16(d). Commenters noted that this
requirement will be a substantial new
undertaking for institutions and they
will have to come up with the resources
or processes to comply.
Several commenters noted that many
community colleges do not collect high
school transcripts as part of their
admissions process; instead, they use
testing to determine readiness. Other
commenters noted that the transcripts
they are evaluating for ACGs reflect only
six or seven semesters of high school
coursework. These commenters were
concerned that there would be a
problem with the timing of admissions
decisions and initial financial aid
package offers, which occur in the
winter or spring prior to enrollment in
the fall, because there may be
uncertainty about whether a student
would complete a rigorous secondary
school program of study. The
commenters proposed several options to
ameliorate the burden of documenting
completion of a rigorous secondary
school program of study. The
commenters suggested adding an option
for defining a rigorous secondary school
program of study that could be applied
at the midpoint of a student’s final year
in high school, noting that this option
would provide greater assurance that
the initial financial aid award package

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for the student would materialize for the
student when the final high school
transcripts are reviewed and also would
provide some measure of administrative
ease for colleges when evaluating the
final secondary school transcripts. One
commenter noted that, in the few cases
when the student substantially deviates
from the level of academic achievement
on the partial transcript, institutions
could withdraw the admissions offer. In
addition, one commenter suggested
adding an option to define a rigorous
secondary school program of study as a
total of 16 subject years of study within
the five defined subject areas. The
commenter noted that this definition
would reflect a higher subject year
count than the current minimum course
requirements and a broader curriculum
than the AP and IB option demonstrates
by requiring certain scores in only two
courses. The commenter believed that
this alternative would be acceptable if
coupled with confirmation of
graduation and successful completion of
senior year courses. Similarly, one
commenter asked that an institution
whose academic policy required the
same coursework from all admitted
students that the Secretary requires for
rigorous secondary school programs of
study under § 691.16(d) be permitted to
assume that an otherwise-eligible
student had completed a rigorous
secondary school program of study,
without requiring the institution to
retrieve and review every transcript.
One commenter requested
clarification as to whether there is a
minimum score required for rigorous
programs like AP and, if so, whether it
is the minimum required by, for
example, the institution or the State.
Finally, one commenter asked for
clarification as to whether it is
necessary to have documentation such
as for AP scores in the Financial Aid
office or if maintaining documentation
at the Admissions or Registrar’s Office
would be acceptable.
Discussion: The Secretary believes the
current regulations appropriately
balance statutory requirements with
institutional burdens raised by
commenters. While the Secretary agrees
that there is a concern with respect to
the timing of the availability of
complete high school transcripts and
admissions and financial aid package
offers for first-year ACGs, section
401A(c)(3)(A)(i) and (c)(3)(B)(i) of the
HEA requires a student to complete, and
graduate from, a rigorous secondary
school program of study in order to be
eligible for an ACG. The Secretary
believes that a rigorous secondary
school program of study continues

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64409

through a student’s fourth year of high
school.
Institutions do not always withdraw
admissions offers when a student’s final
high school transcript differs
significantly from the partial transcript.
In the case of an ACG, the purpose of
the transcript is to document the
completion of a rigorous secondary
school program of study. The Secretary
does not regulate the admissions
standards of postsecondary institutions.
When a student substantially deviates
from the level of academic achievement
on the partial transcript, the Secretary
cannot regulate to require institutions to
withdraw their admissions offers. The
Secretary’s concern, for purposes of
awarding an ACG, would be that the
transcript documented the student’s
completion of a rigorous secondary
school program of study.
While institutions are responsible for
maintaining documentation at the
institution, no specific location is
required. If an institution requires the
same coursework that the Secretary
requires for a rigorous secondary school
program of study from an admitted
student, and the financial aid office is
certain that the transcript or equivalent
document confirming completion of a
rigorous secondary school program of
study is kept at the admissions office or
some other part of the institution, it
could assume a student met the rigorous
secondary school program of study
criterion.
Finally, it should be noted that the
minimum scores for AP exams were
published in § 691.16(d)(5) of the
interim final regulations.
Changes: None.
Declaring an Eligible Major
Comments: One commenter believed
that the Federal Government should not
insert itself into the process of
determining when a student declares a
major as this action usurps an
institution’s prerogative to establish its
own academic requirements. Another
commenter requested clarification on
how to document intent to declare an
eligible major and how to determine
when a student is no longer displaying
an intent to declare an eligible major.
One commenter suggested that, when an
institution’s academic requirements do
not allow a student to declare an eligible
major in time to qualify for a National
SMART Grant, the student should be
allowed to meet the declaration of
eligible major requirement by enrolling
in the courses deemed by the institution
to be consistent with fulfilling the
requirements of an intended eligible
major and declaring an intention to

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complete a major in an eligible field of
study.
Discussion: The Secretary does not
agree that the regulations intrude on an
institution’s prerogative to establish its
own academic requirements. In
addition, the Secretary believes that
documentation of intent to declare an
eligible major should be determined by
institutional policy. The regulations
permit a student to fulfill the
requirement that he or she declare an
eligible major by enrolling in the
courses deemed by the institution to be
consistent with fulfilling the
requirements of an intended eligible
major and declaring an intention to
complete a major in an eligible field of
study if that is the institutional policy.
Changes: None.
Section 691.16 Recognition of a
Rigorous Secondary School Program of
Study
Comments: A few commenters
supported the multiple options for
demonstrating completion of a rigorous
secondary school program of study,
while other commenters believed that
additional secondary school programs of
study should be recognized as rigorous.
One commenter believed that the
recognized State secondary school
programs of study should be the single
standard for a rigorous secondary school
program of study, as it would greatly
reduce the administrative burden for
institutions. A few commenters believed
that the minimum course requirements
in § 691.16(d)(2) are too strict and
would unfairly eliminate from eligibility
students who should be eligible for an
ACG. Two commenters believed that
some students who meet their
admissions requirements but who do
not or cannot take the required courses
in high school should not be eliminated
from eligibility. For example, one
commenter noted that advanced
students who reduce their high school
classes, such as English, during their
last year of high school to take college
classes may not qualify, even though
their secondary school programs of
study were quite rigorous. Another
commenter gave the example of a
student who otherwise qualified as a
student who had completed a rigorous
secondary school program of study, but
who attended a high school that did not
offer physics.
One commenter believed that the
Secretary should ensure that all
approved State programs use wording
consistent with the minimum course
requirements under § 691.16(d)(2) to the
extent possible so that institutions will
know that differences are not just
semantic. For example, the commenter

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questioned whether a particular State
standard requiring three years of math
(at the algebra I level or higher) is
intended to be different from the
Federal standard requiring three years of
math (including algebra I and a higher
level course such as algebra II,
geometry, or data analysis and
statistics). A few commenters were
concerned with the lack of uniformity in
secondary school course descriptions,
noting that States often combine courses
into one general course; such as
combining algebra I and geometry into
a math I course offered over two
academic years. The commenters
believed that it is unreasonable to
expect an institution to be familiar with
the graduation requirements for all
school districts in order to determine
whether a student’s courses meet the
definition of a rigorous secondary
school program of study.
One commenter believed that the
rigorous secondary school programs of
study established by States and
recognized by the Secretary should not
be revised annually as significant
changes would create confusion for
students and undue burden for
institutions.
Discussion: Section 401A(f) of the
HEA requires the Secretary to recognize
at least one rigorous secondary school
program of study in each State. As there
is no statutory requirement for States to
submit programs for recognition, the
Secretary believed it was necessary to
develop additional options for
completion of a rigorous secondary
school program of study that would
ensure that students in each State have
the opportunity to qualify for an ACG.
The Secretary believes that the breadth
of the options provides the vast majority
of students for whom this grant program
was intended with sufficient means to
demonstrate eligibility for an ACG. To
the extent that these options do not
provide sufficient means to demonstrate
eligibility, the Secretary encourages
individuals, high schools, and
postsecondary institutions to work
together with States so that States may
submit additional or revised programs
for recognition. As for an advanced
student who reduces his or her high
school classes to take college classes,
the Secretary reminds commenters that
completion of college courses that meet
the minimum course requirements for a
rigorous secondary school program of
study count toward completion of a
rigorous secondary school program of
study if they are accepted toward the
student’s high school diploma.
The Secretary understands the
commenters’ concerns with inconsistent
wording in State programs and a lack of

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clarity of course descriptions. However,
the Secretary does not believe that it is
appropriate to establish a national
standard for the wording of State
submissions of rigorous secondary
school programs of study or course
descriptions and recommends that
concerns with consistency of wording
be taken up with States and secondary
schools.
The Secretary believes it is imperative
that there be an annual opportunity for
States to submit changes to their
rigorous programs of study because, to
the extent that these changes result in a
more rigorous program of study,
students from that State graduating in
that year would be held to the new
standard when applying for an ACG. If,
however, these changes result in a less
rigorous program of study, the Secretary
may deny recognition if the Secretary
determines the level of rigor has fallen
below the HEA’s intended level.
Changes: None.
Comments: A few commenters
questioned whether coursework taken
prior to high school counts toward the
minimum course requirements under
§ 691.16(d)(2). Specifically, one
commenter asked whether a student
who is otherwise eligible under
§ 691.16(d)(2), and who took a foreign
language in 8th grade but did not take
one later is eligible for an ACG.
Another commenter noted that many
students take algebra I prior to high
school; therefore, it does not appear on
the student’s high school transcript. The
commenter asked the Secretary to
clarify under what circumstances such a
student can be considered to have
completed algebra I for the minimum
mathematics course requirements under
§ 691.16(d)(2). In particular, the
commenter wanted to know if an
institution may assume that a student
has completed algebra I if it is not
included on the transcript, but
geometry, algebra II, or calculus are
included.
Discussion: If a student completed the
secondary school curriculum in a school
system in which the high school does
not include other secondary school
grades, e.g., the high school does not
include grade eight or nine, institutions
should use their normal processes for
determining whether coursework
completed in earlier grades is included.
However, an institution may make
certain assumptions, as appropriate,
based on its knowledge of a school
system’s curriculum. For example, if a
high school transcript covering only
grades 10–12 shows completion of three
years of English, the institution may
assume that the student completed a
year of English in the ninth grade.

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Changes: None.
Comments: One commenter
recommended that the minimum
science course requirements in
§ 691.16(d)(2) be changed to recognize
other challenging science coursework.
The commenter believed that a student
who completed physical science in
ninth grade, biology in tenth grade,
environmental science in eleventh grade
and anatomy and physiology in twelfth
grade should be considered to have met
the minimum science course
requirement.
Discussion: The Secretary believes
that the minimum coursework
requirements in the regulation are
appropriate. These standards are
patterned after the recommendations for
the essentials of a strong curriculum in
the National Commission on Excellence
in Education’s report, A Nation at Risk:
The Imperative for Educational Reform
available on the Department’s Web site
at http://www.ed.gov/pubs/NatAtRisk/
index.html. As previously noted, to the
extent that these options do not provide
sufficient means to demonstrate
eligibility, the Secretary encourages
individuals, high schools, and
postsecondary institutions to work
together with States so that States may
submit additional or revised programs
for recognition.
Changes: None.
Comments: One commenter
recommended that an exception be
made to the foreign language course
requirement under § 691.16(d)(2) for
students with physical limitations such
as hearing loss. The commenter noted
that, because of language deficits that
accompany hearing loss, most deaf
students do not take languages other
than English as a part of their secondary
programs, and few schools for the deaf
require or encourage foreign language as
a part of their curriculum. The
commenter added that even if American
Sign Language (ASL) meets the
definition of a foreign language, most
deaf students are already ASL users and
do not need to study it in secondary
school.
Discussion: While the Secretary
understands the concerns raised by the
commenters, she believes that a change
to this requirement is unnecessary. The
Secretary considers one year of ASL to
meet the requirement of one year of a
language other than English necessary to
meet the minimum course requirements
under § 691.16(d)(2). Also, as stated
previously, the Secretary believed it was
necessary to develop additional options
for completion of a rigorous secondary
school program of study that would
ensure that students in States that did
not submit programs for recognition

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have the opportunity to qualify for an
ACG. The Secretary believes that the
breadth of the options, including
participation in honors programs
established by States or completion of
AB or IB courses and the earning of a
minimum score on the exams for those
courses, provides the vast majority of
students for whom this grant program
was intended with sufficient means to
demonstrate eligibility for the ACG.
Changes: None.
Comments: One commenter
questioned whether students attending
an institution with a ‘‘bridging year’’
program and completing their senior
year of high school at the postsecondary
institution would be eligible for a
second year ACG if they do not receive
a high school diploma, but instead earn
a General Education Development (GED)
certificate. One commenter believed that
the Department was interpreting the
regulations to mean that a student who
obtains a GED is automatically ineligible
for an ACG or National SMART Grant
simply because he or she has obtained
a GED. The commenter noted that some
home-schooled students, who otherwise
qualify as having completed a rigorous
secondary school program of study, are
advised to take the GED to meet college
admission requirements. The
commenter asked the Department to
make clear that such students who
obtain the GED are not automatically
ineligible.
Discussion: A student who obtained a
GED is not automatically ineligible for
an ACG or National SMART Grant.
However, a student who obtains a GED
in lieu of a high school diploma cannot
use the GED, alone, to demonstrate
completion of a rigorous secondary
school program of study. The
Department believes that completion of
a GED program alone does not
demonstrate the academic achievement
of a rigorous secondary school program
of study. Such a student can
nonetheless qualify for an ACG with a
GED by completing one of the rigorous
secondary school programs of study
recognized under § 691.16.
Changes: None.
Comments: Two commenters asked
the Department to clarify which level of
IB examination, standard or higher, a
student must take to qualify for an ACG.
One commenter believed that the
regulations confuse the IB Diploma
program with a stand-alone IB course.
The commenter believed that the
regulations should be changed to make
clear that a student is considered to
have completed a rigorous secondary
school program of study if he or she
completes and achieves the required
minimum score for the exam on at least

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two IB courses, whether or not they are
part of an IB Diploma Program.
Discussion: A score of ‘‘4’’ or higher
on either the standard level or higher
level IB examination for at least two IB
courses meets the exam portion of the
IB standard for completion of a rigorous
secondary school program of study. The
Secretary agrees that a student who
completes and achieves the required
minimum score for the exam on at least
two IB courses, whether or not they are
part of an IB Diploma Program, should
be considered to have completed a
rigorous secondary school program of
study.
Changes: Section 691.16(d)(4) has
been changed to clarify that a student
who completes and achieves the
required minimum score for the exam
on at least two IB courses, whether or
not they are part of an IB Diploma
Program, is considered to have
completed a rigorous secondary school
program of study.
Comments: One commenter believed
that high scores on standardized
achievement tests, such as the SAT and
ACT, should be recognized as a rigorous
secondary school program of study. The
commenters believed that this
recognition would be consistent with
the inclusion of completion of IB or AP
courses with high test scores as rigorous
programs because they establish that a
student has attained a level of ability in
completing his or her secondary school
program that is commensurate with
completing a rigorous secondary school
program of study. The commenter
believed that this proposal would
reduce burden on institutions, as these
test scores are readily accessible. The
commenter believed that States and test
owners could work together to
determine the qualifying test score.
Discussion: The Secretary does not
agree that high scores on standardized
achievement tests should be recognized
as a rigorous secondary school program
of study. Unlike the IB and AP tests,
there are no specific courses or
curriculum that correspond to the
standard achievement tests. The
Secretary believes that both components
are necessary to demonstrate that a
student has successfully completed a
rigorous secondary school program of
study.
Changes: None.
Section 691.17 Determination of
Eligible Majors
Comments: Several commenters
whose institutions do not offer programs
in the eligible majors were concerned
that their institutions were excluded
from the National SMART Grant
Program. In one case, the institution

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offered majors with concentrations in
the eligible fields. The commenter
requested clarification on whether
students in these types of programs
would be eligible. In another case, the
institution offered intensive instruction
in math and science as part of a liberal
arts degree. Two commenters from this
institution requested that this
institution be included among eligible
institutions and one of these
commenters also requested an
alternative means for students whose
institution does not offer eligible majors
to qualify.
Discussion: Section 401A(c)(3)(C) of
the HEA requires a student to pursue a
major in the physical, life, or computer
sciences, mathematics, technology, or
engineering (as determined by the
Secretary pursuant to regulations); or a
critical foreign language in order to be
eligible for a National SMART Grant. No
alternative categories of majors are
indicated in the HEA, and the Secretary
does not have the authority to provide
alternative categories through
regulations in those cases where
ineligible majors include concentrations
in eligible fields or where liberal arts
degrees do not provide eligible majors
but do include some intensive
instruction in eligible fields.
Changes: None.
Comments: Several commenters
addressed the determination of eligible
majors. One commenter expressed
concern that a number of scientific
fields were omitted and that the eligible
languages were too narrowly identified
for purposes of available undergraduate
majors. Another commenter was
concerned that Evolutionary Biology
was omitted from the eligible majors
list. One commenter was concerned that
teaching degrees in the science and
math fields were not included in the list
of eligible majors. Another commenter
suggested taking a more thorough look
at the majors, especially in areas of
national need, such as nursing and
public health. Yet another commenter
was concerned about the consultation
process and thought that the
Department should consult directly
with organizations such as the National
Academy of Sciences and other
professional scientific organization to
receive input on the determination of
eligible majors.
One commenter recommended that, if
the Department was unable to supply
the list of eligible majors by February 1
preceding the academic year for which
determinations of eligibility must be
made, the Department should permit an
institution to use the current list for
first-time determinations of National
SMART Grant eligibility. One

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commenter requested clarification on
whether a student would still be eligible
for a National SMART Grant if that
student’s major is removed from the list
of approved majors at any time
subsequent to the student’s first
National SMART Grant payment, when
the student’s payment was based on the
student’s intent to declare an eligible
major as described in
§ 691.15(c)(2)(i)(B). Finally, one
commenter requested clarification on an
institution’s responsibility to ensure
that qualifying majors are being actively
pursued.
Discussion: Section 401A(c)(3)(C) of
the HEA specifies that a student must
pursue a major in the physical, life, or
computer sciences, mathematics,
technology, or engineering (as
determined by the Secretary pursuant to
regulations); or a critical foreign
language in order to be eligible for a
National SMART Grant. Evolutionary
Biology was omitted from the original
list of eligible majors in error; a revised
list including this major and Exercise
Physiology, which was also omitted in
error, has been posted.
The list of eligible majors will be
reviewed annually; however, section
401A(c)(3)(C)(i)(II) of the HEA only
requires consultation on the list of
critical foreign languages with the
Director of National Intelligence. The
current list of critical foreign languages
was developed in consultation with the
Director of National Intelligence as
required.
The Secretary will continue to
identify a list of eligible majors,
including critical foreign languages,
annually for an award year to ensure
that the most current information is
used and will publish the list in time for
institutions to plan awards accordingly.
Because a student’s intent to declare an
eligible major as described in
§ 691.15(c)(2)(i)(B) serves as a proxy for
actually declaring an eligible major until
the declaration is permitted by an
institution, under § 691.17(c) a student
would still be eligible if a student’s
major is removed from the list of
approved majors at any time subsequent
to the student’s first National SMART
Grant payment, when the student’s
payment was based on the student’s
intent to declare an eligible major as
described in § 691.15(c)(2)(i)(B) as well
as when the student’s payment was
based on a declared eligible major under
§ 691.15(c)(2)(i)(A). Finally, it is the
institution’s responsibility to ensure
that qualifying majors are being actively
pursued. The institution is responsible
for ensuring this active pursuit of
eligible majors and may use any

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institutional process that it chooses to
document this intent.
Changes: None.
Section 691.61 Submission Process
and Deadline for a Student Aid Report
or Institutional Student Information
Record
Comments: One commenter noted
that § 691.61(b) cross-referenced
§§ 668.60 and 668.164 and that
conforming changes were made to
§ 668.164, but that § 668.60 was not
amended to include the ACG and
National SMART Grant programs.
Therefore, the commenter stated that it
is unclear which provisions of § 668.60
apply to the ACG and National SMART
Grant programs.
Discussion: The Secretary agrees that
the requirements in § 668.60 that apply
to the ACG and National SMART Grant
programs need clarification.
Changes: Section 668.60 is revised to
clarify how it applies to the ACG and
National SMART Grant programs.
Comments: One commenter stated
that § 691.61(a) appears to place the
responsibility on institutions to review
the record of all FAFSA filers to identify
eligible students rather than just those
FAFSA filers identified by the Secretary
as potentially eligible students. The
commenter suggested that the
institution should be allowed to rely on
information on the Student Aid Report
(SAR) or ISIR as to whether the student
is potentially eligible to receive an ACG
or National SMART Grant. That is, if the
student’s SAR or ISIR does not indicate
that the student is potentially eligible to
receive an ACG or National SMART
Grant, the institution would not be
required to check its own records or
take any other action to determine
whether the student is potentially
eligible. Rather, the institution could
assume that the student is not eligible
for the ACG or National SMART Grant
and take no further action.
Discussion: To implement the ACG
Program, the Secretary has instituted
procedures for students to self-identify
that they have completed a rigorous
secondary school program of study and
institutions, at their option, may
generally rely on this self-identification
process. Most potentially eligible
students will have had an opportunity
to self-identify through the FAFSA
(application) process on this matter and
will have a positive indication on their
SAR or ISIR with regard to completion
of a rigorous secondary school program
of study. Under § 691.61, an institution
is allowed to rely on the information on
a student’s SAR or ISIR as to whether
the student is potentially eligible for an
ACG, unless the institution has

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information from another source
indicating that the student is potentially
eligible. For example, if a student whose
SAR or ISIR does not indicate potential
eligibility for the ACG (because the
student has not yet self-certified as to
his or her completion of a rigorous
secondary school program of study)
informs the institution that he or she
has completed such a secondary school
program of study, and is thus
potentially eligible for the ACG, then
the institution must follow up on that
information and determine whether the
student is eligible for the ACG.
Outside of the eligibility requirements
common to both the ACG and the
National SMART Grant programs found
in § 691.15(a), i.e., the general eligibility
requirements from 34 CFR part 668,
subpart C; U.S. citizenship; receiving a
Federal Pell Grant; and being enrolled
full-time, the primary eligibility
requirements for receipt of a National
SMART Grant relate to pursuit of an
eligible major and having the requisite
GPA. Information about these eligibility
factors will not be found on the SAR or
ISIR. Thus, for the National SMART
Grant Program, there is not the same
issue of determining eligibility for
students who do not have eligibility
information on their SAR or ISIR as
there is for the ACG Program. However,
it should be noted that an institution
does have to determine whether its
students meet the eligibility
requirements for the National SMART
Grant Program, including which of its
students are in eligible majors, and
award those students, if otherwise
eligible, a National SMART Grant.
Changes: None.

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Section 691.62

Calculation of a Grant

Ratable Reduction
Comments: Two commenters
expressed concern over the potential for
ratable reductions to the awards. One of
the commenters inquired as to when
award maximums would be considered
final for the year. The other commenter
offered multiple suggestions for
avoiding ratable reductions.
Discussion: Section 401A(d)(1)(B)(ii)
of the HEA requires the Secretary to
ratably reduce the maximum grant
amounts for both programs when the
funds available for a given award year
are less than the amount needed to fund
full awards for all eligible students. The
Secretary establishes the ACG and
National SMART Grant Scheduled
Awards based on the availability of
funds appropriated and the anticipated
number of eligible students. Scheduled
Awards for the ACG and National
SMART Grant programs will be

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announced annually in conjunction
with the announcement of Scheduled
Award amounts for the Federal Pell
Grant Program. Historically, these
announcements have occurred between
December and February prior to the
beginning of the award year.
The Secretary uses multiple data
sources to best predict the number of
eligible recipients for the ACG and
National SMART Grant programs and
will monitor disbursements from both
programs based on current year reports
received from postsecondary
institutions. Every effort will be made to
avoid ratable reductions. However, if
ratable reductions are necessary, the
Secretary will notify the community
promptly of the new Scheduled Awards
and the procedures for ratably reducing
the ACG and National SMART Grant
awards.
Changes: None.
Packaging
Comments: Several commenters
objected to the requirement that the
amount of an ACG or National SMART
Grant for an academic year, in
combination with the student’s EFC and
any other student financial assistance
available to the student, cannot exceed
the student’s cost of attendance for that
academic year. One commenter
suggested that grants from both
programs be awarded, similar to Federal
Pell Grants, without regard to either the
student’s financial need or the amount
of other student financial assistance
received. Another commenter proposed
that the grants be allowed to replace
EFC, but not to exceed the student’s cost
of attendance when combined with
other student financial assistance
received.
An additional set of commenters
requested that a $300 overaward
threshold be added to the ACG and
National SMART Grant programs,
similar to the threshold allowed under
§ 673.5(d) for the campus-based
programs. One of these commenters also
believed that there is confusion over
which definition of estimated financial
assistance applies to the ACG and
National SMART Grant programs. Yet
another commenter requested that
Chapter 31 veterans’ education benefits
be excluded from all definitions of
estimated financial assistance.
Discussion: The Secretary believes
that the packaging requirement is
appropriate. As noted in the preamble to
the interim final regulations, ACGs and
National SMART Grants are need-based
grants in that the HEA requires
recipients to be eligible for Federal Pell
Grants. Section 471 of the HEA defines
the amount of need of any student as

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cost of attendance minus EFC minus
estimated financial assistance. Needbased grant assistance cannot replace a
family’s expected contribution toward a
student’s postsecondary expenses.
The overaward threshold allowed
under the campus-based programs exists
to assist institutions with the variations
of earnings under the Federal WorkStudy program and the estimates
institutions must make in projecting
utilization of Federal Perkins Loan and
Federal Supplemental Educational
Opportunity Grant funds as well as the
bearing of collections on the availability
of funds under the Federal Perkins Loan
Program. Because these issues do not
exist for the ACG and National SMART
Grant programs, an overaward threshold
is not necessary.
Regarding the confusion over which
definition of estimated financial
assistance applies to the ACG and
National SMART Grant programs, the
Secretary agrees that the differences
among the three definitions can cause
confusion. Because the definitions in
§§ 682.200(b) and 685.102(b) have
exclusions based on statutory language
that does not apply to the ACG and
National SMART Grant programs, we
intend to modify the language in
§ 691.62(c) to reference the definition of
estimated financial assistance in
§ 673.5(c).
Chapter 31 veterans’ education
benefits may not be excluded from the
definition of estimated financial
assistance because there is no statutory
basis for exclusion of Chapter 31
benefits. Section 428(a)(2)(C)(ii)
authorizes only Chapter 30 veterans’
education benefits and AmeriCorps
benefits and awards to be excluded
when determining subsidized loan
eligibility. Further, when determining a
student’s eligibility for an ACG or
National SMART Grant, an institution
may exclude from estimated financial
assistance any portion of a subsidized
Federal Stafford Loan that is equal to or
less than the amount of the student’s
Chapter 30 veterans’ education benefits
and AmeriCorps education awards or
post-service benefits.
Changes: Section 691.62(c) has been
revised to provide that other student
financial assistance is estimated
financial assistance as defined in
§ 673.5(c).
Section 691.63 Calculation of a Grant
for a Payment Period
Comments: One commenter suggested
that the Department review the Federal
Pell Grant formulas (and thus, these
formulas in § 691.63) to simplify the
payment period calculations. The
commenter also asked the Secretary to

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consider revising the academic year
definition for clock hour programs from
30 weeks to 26 weeks due to the change
made by the HERA.
Discussion: Given the time constraints
associated with the development of
regulations resulting from the enactment
of the HERA (especially with respect to
the implementation of the ACG and the
National SMART Grant programs), the
Secretary does not believe that it would
be prudent to attempt to change
formulas used in the calculation of
grants for the Federal Pell Grant, the
ACG, and the National SMART Grant
programs at this time. While such a
review and possible revision of those
formulas may prove to be beneficial at
a later time, the Secretary believes that,
since the formulas have been used for a
long time and are familiar to the
financial aid community, it would be
unwise to revise them now when the aid
community already has to deal with the
changes resulting from the HERA.
To reflect the change made by the
HERA, a change to the definition of an
academic year for programs offered in
clock hours was made in previously
published regulations. Section 668.3
now contains a definition of an
academic year that provides that 26
weeks of instructional time is the
minimum number of weeks of
instructional time in an academic year
for a clock hour program, while
retaining 30 weeks of instructional time
as the minimum number of weeks of
instructional time for a credit hour
program. That definition also retains the
provision that, under certain conditions,
the Secretary may approve an academic
year with a minimum of 26 weeks of
instructional time for a credit-hour
program.
Changes: None.
Comments: One commenter believed
that the determination of enrollment
status is an eligibility criterion and not
a factor in the calculation of the grant
payment and that for payments for
payment periods calculated under
§ 691.63(d), commonly referred to as
Formula 3, it would seem much simpler
just to direct the institution to use the
same enrollment status determined for a
Federal Pell Grant to determine
eligibility for an ACG or National
SMART Grant award. The commenter
suggested that a cross-reference to the
Federal Pell Grant Program regulations
could be used to determine a student’s
enrollment status for an ACG or
National SMART Grant.
Discussion: The Secretary believes
that the public will benefit from a
complete set of regulations to
implement the ACG and National
SMART Grant programs, rather than

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providing cross-references to the
Federal Pell Grant Program regulations
throughout the ACG and National
SMART Grant regulations.
Changes: None.
Section 691.75 Determination of
Eligibility for Payment
Comments: With respect to the
institution’s determination about
whether a student is pursuing an
eligible major at the beginning of a
payment period, one commenter
suggested changing ‘‘is no longer
pursuing a required major’’ in
§ 691.75(b)(3) to ‘‘is not pursuing a
required major’’ to cover not only those
situations in which the student had at
one time (before the beginning of the
payment period) been pursuing an
eligible major, but stopped doing so, but
also situations in which the student had
never pursued, and is still not pursuing,
an eligible major.
Discussion: The Secretary agrees with
the commenter’s suggestion. With this
change, all situations in which the
institution determines that the student
is not pursuing a required major at the
beginning of the payment period will be
covered. Then, as the regulations go on
to address, if the institution reverses a
determination before the end of the
payment period, the institution may pay
the student a National SMART Grant for
the entire payment period.
Changes: Section 691.75(b)(3) and (c)
has been revised to change ‘‘is no longer
pursuing a required major’’ to ‘‘is not
pursuing a required major.’’
Comments: One commenter asked
how the financial aid office should deal
with eligibility for a student for a
National SMART Grant if the student
was one hour short of being a junior at
the beginning of one term, but reached
junior status by the next term. The
commenter asked if the aid office
should start paying such a National
SMART Grant in the middle of the
academic year. The commenter also
asked whether the aid office should pay
a student for the spring and summer
terms only, if the student does not have
at least a 3.0 GPA before fall starts but
does before spring. The commenter also
asked about the National SMART Grant
eligibility of a student who changed to
an ineligible major. The commenter
asked whether the aid office would stop
paying the student at the point at which
the student changed to an ineligible
major or would retroactively take the
National SMART Grant away from the
student entirely.
Another commenter asked what
should be done if a student has a 3.0
GPA when the fall term starts but drops
below that average after (the previous

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term’s) grades are posted. The
commenter also wanted to know what
would happen if the student’s GPA was
back up to at least 3.0 by the spring
term. Another commenter asked how
grades of incomplete are to be
considered with respect to the GPA
requirement. Another commenter asked
for clarification of how an institution
should determine GPA and academic
year level when the institution first
becomes aware of a student’s prior
postsecondary attendance after the
student’s transfer credits for fall
attendance (for which no aid was
received) are received late in the spring
semester.
Finally, several commenters raised an
issue related to eligible students who, in
fact, did meet during the payment
period in question with the eligibility
requirements for an ACG or a National
SMART Grant associated with the GPA
or with the declaration of an eligible
major, but for whom the institution
erred when it determined that the
students failed to meet those
requirements and did not discover its
mistake until after the end of that
payment period. The commenters
suggested that these students should
receive a grant for the completed
payment period.
Discussion: Section 691.75 addresses
the factors that an institution must
consider to determine that a student is
eligible each time it makes a payment to
a student of an ACG and a National
SMART Grant. Section 691.75(a)(1)
provides that the institution has to
determine that the student meets the
eligibility criteria listed in § 691.15. For
a National SMART Grant, one of those
eligibility criteria is that the student be
in the third or fourth academic year of
an eligible program. (Note that the third
academic year of the student’s program
is not necessarily synonymous with the
junior year of the student’s program.)
Nevertheless, if the student is one hour
short of starting his or her third
academic year at the beginning of a term
(e.g., the fall term), but begins the third
academic year by the next term (the
spring term) (presumably at the
beginning of that term), then the
student, if otherwise eligible, qualifies
for a National SMART Grant for that
spring term. The student would not
qualify for a National SMART Grant
payment for the fall term in this
example but may qualify for any
remaining second-academic-year ACG
eligibility for this fall term. The
institution would start paying the
National SMART Grant in the middle of
the institution’s year, i.e., at the
beginning of the spring term. This issue
is further clarified in § 691.63(h), which

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Federal Register / Vol. 71, No. 211 / Wednesday, November 1, 2006 / Rules and Regulations
provides that, in the case of a payment
period with two academic years, an
institution must calculate the payment
for the payment period using the ACG
or National SMART Grant Scheduled
Award of the academic year being
completed.
With regard to a student who does not
have at least a 3.0 GPA (for the first
academic year for a second-year ACG,
and for the most recently completed
payment period in the student’s eligible
program for a National SMART Grant)
before fall starts, but does before spring,
§ 691.75(b)(2) and (3) indicates that the
student, if otherwise eligible, can
receive an ACG or National SMART
Grant for the entire fall term if the
institution determines that the student
has the required minimum 3.0 GPA
before the end of the fall term. On the
other hand, if the institution does not
make the determination that the student
has at least a 3.0 GPA until after the end
of the fall term, then, under § 691.75(c),
the student cannot receive an ACG or
National SMART Grant for the fall term.
With respect to an eligible student
who is receiving a National SMART
Grant, but then changes to an ineligible
major (and does not change back to an
eligible major), the institution may not
make any additional National SMART
Grant payments (for the payment period
in which the change of majors took
place or for future payment periods) to
the student once the student has
changed to the ineligible major,
regardless of whether that change is
made at the end of a payment period or
during the payment period. However,
any payments that were made to an
eligible student before he or she
changed to an ineligible major are
legitimate payments and do not have to
be repaid.
When a student has a 3.0 GPA when
the fall term begins, but that GPA at that
time does not include grades from the
previous term, the institution may not
have all of the information it needs to
determine whether the student is
eligible for an ACG or National SMART
Grant. For the ACG for the second
academic year of the student’s eligible
program, the HEA requires that the
student have at least a 3.0 GPA for the
first academic year of his or her eligible
program. For the National SMART
Grant, the requirement is that the
student have at least a 3.0 GPA for his
or her courses in the eligible program up
through the most recently completed
payment period (term in this example).
For either program, if there are courses
that have been taken in the previous
term that are part of the coursework for
which the student must have at least a
3.0 GPA and grades for those courses are

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not yet available, § 691.75(d) provides
that the institution may make one
interim disbursement for a payment
period. However, when those grades
become available, they must be factored
into the GPA. At that time, if the student
does not have the required GPA, the
payment made by the institution before
the student’s GPA could be calculated
becomes an overpayment that must be
repaid by the institution. These
provisions would apply, as well, to any
applicable coursework for which the
student initially received a grade of
incomplete.
If information about a student’s
transfer of credit from another
institution comes to the institution’s
attention late in, or after, a term, the
institution may have already made a
determination of eligibility that did not
consider that information. If that
information affects a student’s GPA or
academic year level and thus could
affect the student’s eligibility for an
ACG or National SMART Grant, the
institution must factor it into its
determination of the student’s eligibility
and take appropriate action.
Regarding erroneous determinations
by an institution that, for a particular
payment period, an otherwise eligible
student did not have the required GPA
or had not declared an eligible major, if
such a student in fact had satisfied those
requirements during that payment
period, that student would be eligible
for a payment of the applicable grant
regardless of whether the institution
discovered its mistake before or after the
completion of that payment period.
Section 691.78 Method of
Disbursement—By Check or Credit to a
Student’s Account
Comments: Several commenters noted
that § 691.78(b), which addresses the
return of funds paid to a student who
leaves the institution before the first day
of classes, seems duplicative of § 668.21.
In addition, the commenters also found
references to award year in § 691.78(c)
confusing, as ACG and National SMART
Grant awards are determined on an
academic year basis.
Discussion: The Secretary agrees that
§ 691.78(b) is redundant. The use of the
term ‘‘award year’’ in § 691.78(c) is
appropriate even though a particular
student’s eligibility is determined based
on the student’s completion of an
academic year not an award year. Funds
for the ACG and National SMART Grant
are appropriated for an award year,
which is separate and distinct from the
eligibility determination. The language
in § 691.78(c) addresses what actions
must occur when delivering funds to a
student during an award year.

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Changes: The Secretary has removed
§ 691.78(b) and made a conforming
change by removing the provision from
§ 690.78 of the Federal Pell Grant
Program regulations.
Section 691.80 Redeterminations of
Eligibility for a Grant Award
Comments: One commenter asked the
Secretary to clarify how ACG and
National SMART Grant funds should be
handled if a student receives the funds
prior to dropping to a less than full-time
enrollment status. Specifically, the
commenter wanted to know whether the
institution must remove the funds from
the student’s account, or prorate the
funds as an institution would be
required to do with Federal Pell Grant
funds.
Discussion: According to § 691.80(b),
when there is a change in the student’s
enrollment status, the institution’s
policy for recalculating awards takes
effect. For example, an institution’s
policy may establish a recalculation
date at the end of its drop-add period
(also known as a census date) by which
the student’s enrollment status for the
term will be finalized. The enrollment
status is, thus, defined as the number of
credit hours the student is enrolled in
at the census date. Under such a policy,
if a student was enrolled full-time at the
beginning of the term but, by the census
date, the student had dropped to halftime enrollment status, the institution
must use the half-time enrollment status
to determine eligibility for the ACG or
National SMART Grant. Because the
HEA requires full-time enrollment, the
student in this example would not be
eligible for the ACG or National SMART
Grant for that term, and any ACG or
National SMART Grant funds disbursed
for that term would have to be repaid by
the student. On the other hand, if the
student dropped below full-time
enrollment after the recalculation date,
his or her ACG or National SMART
Grant award would be based upon fulltime enrollment.
Situations in which information is
received after a determination of
eligibility has been made are governed
by § 668.16(f), which states that an
institution must identify and resolve
discrepancies that arise from the
institution’s receipt of any information
that has bearing on a student’s eligibility
for funds under the title IV, HEA
programs. If that information affects the
amounts and or types of title IV aid the
student is receiving or may be eligible
to receive, the institution must take
appropriate actions.
Changes: None.

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Section 691.83 Submission of Reports
Comments: Several commenters asked
the Secretary to clarify whether the
Secretary intends to include the
academic year level of a grant in the
payment data submitted by institutions.
The commenters noted that, without
this information in the National Student
Loan Data System (NSLDS), an
institution would not know whether a
transfer student had already received
grant funds at a given award level, as
the grant level will not always be
apparent from the award (for example,
if the grant amount has been reduced to
avoid an overaward).
Discussion: In addition to data similar
to what is submitted to the Secretary
through the Common Origination and
Disbursement (COD) system,
institutions will also provide the
academic year for the award for both the
ACG and National SMART Grant
programs. This information will be
available to institution through the
NSLDS, which will reflect the academic
year completed by the student.
Institutions will also provide
information on the rigorous secondary
school program of study that was used
to confirm eligibility for an ACG and the
student’s academic major (using CIP
codes) for a National SMART Grant.
Specifications for this COD reporting
has been posted to the Department’s
Information for Financial Aid
Professionals Web site.
Changes: None.
Executive Order 12866
Regulatory Impact Analysis
Under Executive Order 12866, the
Secretary must determine whether this
regulatory action is ‘‘significant’’ and
therefore subject to the requirements of
the Executive Order and subject to
review by the OMB. Under section 3(f)
of Executive Order 12866, the order
defines a ‘‘significant regulatory action’’
as an action that is likely to result in a
rule (1) having an annual effect on the
economy of $100 million or more, or
adversely and materially affecting a
sector of the economy, productivity,
competition, jobs, the environment,
public health or safety, or State, local or
tribal governments or communities (also

referred to as ‘‘economically
significant’’); (2) creating serious
inconsistency or otherwise interfering
with an action taken or planned by
another agency; (3) materially altering
the budgetary impacts of entitlement
grants, user fees, or loan programs or the
rights and obligations of recipients
thereof; or (4) raising novel legal or
policy issues arising out of legal
mandates, the President’s priorities, or
the principles set forth in the Executive
Order.
Pursuant to the terms of the Executive
Order, it has been determined that this
regulatory action will have an annual
effect on the economy of more than
$100 million. Therefore, this action is
‘‘economically significant’’ and subject
to OMB review under section 3(f)(4) of
Executive Order 12866. The Secretary
accordingly has assessed the potential
costs and benefits of this regulatory
action and has determined that the
benefits justify the costs.
Need for Federal Regulatory Action
As noted above, these final
regulations are needed to implement
two programs created in the HERA. The
ACG program provides need-based
grants to encourage students to
complete rigorous secondary school
programs of study. The National
SMART Grant Program provides needbased grants to encourage students to
major in certain scientific and technical
fields or foreign languages deemed vital
to national security. Section
401A(c)(3)(B)(ii) and (3)(C)(ii) of the
HEA specifically requires the Secretary
of Education to issue regulations
implementing these programs.
The Secretary had limited discretion
in implementing these grant programs;
the number of recipients and aid
awarded is largely driven by statutory
eligibility requirements such as that
students be eligible to receive a Federal
Pell Grant, be United States citizens,
attend two-or four-year degree-granting
institutions on a full-time basis, and, in
some cases, maintain a 3.0 GPA. The
Secretary has exercised discretion in the
areas of program eligibility relating to
the definition of a rigorous secondary
school program of study in the case of
the ACG Program and, for the National

SMART Grant Program, the definition of
qualifying fields of study. In both these
cases, the Secretary has regulated to
reflect clear congressional intent.
Benefits
By facilitating the implementation of
these new programs, these final
regulations will support the provision of
over $4 billion in need-based student
aid over the next five years. The ACG
Program will benefit society by
providing an incentive for students to
complete a rigorous secondary school
program of study, which research
indicates increases the likelihood of
successful completion of postsecondary
education. The National SMART Grant
Program will encourage students to
major in technical fields or critical
foreign languages. In the case of
technical fields, these majors will
benefit both national and individual
competitiveness, increasing the nation’s
economic security. With respect to
foreign languages, increases in the
number of fluent speakers of Arabic,
Farsi, Uzbek, and other critical
languages would broaden understanding
of important cultures and contribute
significantly to ongoing efforts to
combat international terrorism. In
addition, awards under both programs
serve to reduce a student’s net cost of
education. Research indicates that
reduction in a student’s cost of
education correlates with increased
student persistence and degree
attainment. Data consistently show that
postsecondary degree holders have
substantially higher lifetime earnings
than high school graduates.
Costs
These programs are supported with
$4.5 billion in mandatory
appropriations: $790 million for fiscal
year 2006, $850 million for fiscal year
2007, $920 million for fiscal year 2008,
$960 million for 2009, and $1,010
million for 2010. Funds not expended in
one year may be carried forward to
support awards in the subsequent year.
If the estimated number of recipients
exceeds the available funding for a
given fiscal year, award levels would be
ratably reduced.

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TABLE 1.—ESTIMATED PROGRAM PARTICIPATION
Estimated
number of
recipients
Award Year 2006–2007:
AC Grants—1st year ............................................................................................................
AC Grants—2nd year ...........................................................................................................
National SMART Grants—3rd year ......................................................................................

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310,000
110,000
40,000

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01NOR4

Estimated avg.
award

Total amount
of aid awarded
(expected)
(in millions)

$657
1,245
3,718

$200
140
150

Federal Register / Vol. 71, No. 211 / Wednesday, November 1, 2006 / Rules and Regulations

64417

TABLE 1.—ESTIMATED PROGRAM PARTICIPATION—Continued
Estimated avg.
award

Total amount
of aid awarded
(expected)
(in millions)

40,000

3,875

160

330,000
130,000
40,000
40,000

682
1,255
3,718
3,875

230
160
150
160

Estimated
number of
recipients

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National SMART Grants—4th year ......................................................................................
Award Year 2007–2008:
AC Grants—1st year ............................................................................................................
AC Grants—2nd year ...........................................................................................................
National SMART Grants— 3rd year .....................................................................................
National SMART Grants—4th year ......................................................................................

The average awards displayed in
Table 1 are less than the statutory
maximum awards due to the cost of
attendance limit on ACG and National
SMART Grant awards. In addition,
average awards also reflect students
who are eligible for an ACG or National
SMART Grant for less than the full
award year. Figures in Table 1 may not
add due to rounding.
Because these programs are title IV,
HEA programs and eligibility for these
programs is linked to Federal Pell Grant
eligibility, participating institutions
must already meet Federal student aid
institutional eligibility requirements. In
addition, the delivery system and many
program operational requirements for
the new programs are patterned after
those that institutions are already using
for Federal Pell Grants. Accordingly,
institutions wishing to participate in the
new programs have already absorbed
most of the administrative costs related
to implementing these final regulations.
Marginal costs over this baseline are
primarily related to initial, and ongoing
eligibility determinations are minimal.
Most data needed to make these
determinations, such as student
citizenship, full-time status, major, and
GPA, are generally already available to
institutions.
In response to the public comment on
the interim final regulations, the
Department has made changes in these
final regulations. The only significant
change with economic impact is to
permit students to receive an ACG or
National SMART Grant for a payment
period during which they are not
receiving a Federal Pell Grant. This
change will enable 32,000 more
students to receive grants in 2006. It
will also increase the cost of the
programs by $27 million in 2006 and by
$145 million between 2006–2010. The
Secretary requested comments on the
regulatory impact analysis in the
interim final regulations, but received
none.

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Assumptions, Limitations, and Data
Sources
Because these final regulations largely
restate statutory requirements that
would be self-implementing in the
absence of regulatory action, cost
estimates provided above reflect a
prestatutory baseline in which the ACG
and National SMART Grant programs
do not exist. Given the limited data
available, estimates for 2007–2008 do
not assume program benefits will
induce increased student participation.
Costs have been quantified for only two
years because the Secretary plans to
revise these final regulations through
negotiated rule-making, after which
more comprehensive cost analyses for
subsequent years will be developed.
In developing these estimates, data
from the 2004 National Postsecondary
Student Aid Survey was used to derive
the percentage of students meeting
initial eligibility requirements for ACG
and National SMART Grant awards,
including enrollment status, Federal
Pell Grant eligibility, citizenship,
academic major, and GPA. The 1994
National Education Longitudinal Study,
1996 Beginning Postsecondary Student
Survey, and 2000 National Assessment
of Educational Progress High School
Transcript Study were used to derive
the percentage of students otherwise
eligible for an ACG who had
successfully completed a rigorous
secondary school program of study. All
these studies were conducted by the
National Center for Education Statistics.
Regulatory Alternatives Considered
In defining eligibility requirements,
particularly those related to rigorous
secondary school programs of study,
these final regulations strike a balance
between complete State discretion,
which could create confusion and
regional inequalities and result in overly
generous criteria that dramatically
reduce award levels, and an overly
prescriptive national determination that
would significantly alter the traditional
State role in determining secondary
school curricula.

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More specifically, in considering the
definition of a rigorous secondary
school program of study, the Secretary
considered a variety of combinations of
coursework and other possible
measures. For example, at the time of
the release of the President’s fiscal year
2007 budget, preliminary estimates
assumed a rigorous program of study
would consist of four English, three
social science, three science, three
mathematics, and two foreign language
courses. Under this scenario, an
estimated 439,000 students would
receive $400 million in ACG awards in
2006–2007—compared with $340
million to 420,000 students under these
final regulations. In subsequently
considering the recognition of rigorous
secondary school programs, the
Secretary determined it would be more
appropriate to include as one option
secondary school programs of study
with specific coursework requirements,
such as, for mathematics, algebra I and
a higher level course such as algebra II,
geometry, or data analysis and statistics,
and for science, at least two years with
one year each of biology, chemistry or
physics, as well as an advanced or
honors program. In addition, the
Secretary included students who
complete secondary school programs
and receive specified scores on the
Advanced Placement or International
Baccalaureate examinations. The latter
provisions offer additional flexibility to
individual students attending private or
home schools.
This approach is consistent with the
programs’ statutory purpose of creating
incentives for certain student behaviors.
To achieve this purpose, the grant level
must be large enough to provide a
meaningful incentive, yet at the same
time, program flexibility must be
sufficient to allow States and
participating institution to recognize
broad differences in secondary school
and higher education academic
structures.
Elsewhere in this SUPPLEMENTARY
INFORMATION section we identify and
explain burdens specifically associated

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Federal Register / Vol. 71, No. 211 / Wednesday, November 1, 2006 / Rules and Regulations
Electronic Access to This Document

with information collection
requirements. See the heading
Paperwork Reduction Act of 1995.
Accounting Statement
As required by OMB Circular A–4
(available at http://
www.Whitehouse.gov/omb/Circulars/
a004/a-4.pdf), in Table 2 below, we
have prepared an accounting statement
showing the classification of the
expenditures associated with the
provisions of these final regulations.
This table provides our best estimate of
the increase in Federal student aid
payments as a result of these final
regulations. All expenditures are
classified as transfers to postsecondary
students.

TABLE 2.—ACCOUNTING STATEMENT:
CLASSIFICATION OF ESTIMATED EXPENDITURES

Annualized Monetized
Transfers.
From Whom To
Whom?

Transfers

List of Subjects in 34 CFR Parts 668,
690, and 691

$694.
Federal Government
To Postsecondary
Students.

Paperwork Reduction Act of 1995
We received no comments on the
Paperwork Reduction Act portion of the
interim final rule.
OMB has approved the information
collection requests identified in the
interim final regulations and has
assigned the following numbers to the
collection of information in these final
regulations: 1845–0001, 1845–0039,
1845–0078.
Intergovernmental Review
This program is subject to Executive
Order 12372 and the regulations in 34
CFR part 79. One of the objectives of the
Executive order is to foster an
intergovernmental partnership and a
strengthened federalism. The Executive
order relies on processes developed by
State and local governments for
coordination and review of proposed
Federal financial assistance.
This document provides early
notification of our specific plans and
actions for this program.

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Assessment of Educational Impact
Based on our own review, we have
determined that these final regulations
do not require transmission of
information that any other agency or
authority of the United States gathers or
makes available.

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17:57 Oct 31, 2006

Note: The official version of this document
is the document published in the Federal
Register. Free Internet access to the official
edition of the Federal Register and the Code
of Federal Regulations is available on GPO
Access at: http://www.gpoaccess.gov/nara/
index.html.
(Catalog of Federal Domestic Assistance
Numbers: 84.375 Academic Competitiveness
Grants; 84.376 National SMART Grants)

[in millions]
Category

You may view this document, as well
as all other Department of Education
documents published in the Federal
Register, in text or Adobe Portable
Document Format (PDF) on the Internet
at the following site: http://www.ed.gov/
news/Fedregister.
To use PDF you must have Adobe
Acrobat Reader, which is available free
at this site. If you have questions about
using PDF, call the U.S. Government
Printing Office (GPO), toll free, at 1–
888–293–6498; or in the Washington,
DC, area at (202) 512–1530.

Jkt 211001

Colleges and universities, Elementary
and secondary education, Grant
programs—education, Student aid.
Dated: October 25, 2006.
Margaret Spellings,
Secretary of Education.

For the reasons discussed in the
preamble, the Secretary amends parts
668, 690, and 691 of title 34 of the Code
of Federal Regulations as follows:

■

PART 668—STUDENT ASSISTANCE
GENERAL PROVISIONS
1. The authority citation for part 668
continues to read as follows:

■

Authority: 20 U.S.C. 1001, 1002, 1003,
1085, 1088, 1091, 1092, 1094, 1099c, and
1099c–1, unless otherwise noted.
§ 668.2

[Amended]

2. Section 668.2 is amended in
paragraph (b) in the definition of ‘‘Valid
institutional student information
report’’ by removing the word ‘‘report’’
and adding in its place the word
‘‘record’’ each place it appears.
■

§ 668.51

[Amended]

3. Section 668.51 is amended in
paragraph (a) by adding the words
‘‘ACG, National SMART Grant,’’
immediately after the words ‘‘Federal
Pell Grant,’’.
■ 4. Section 668.52 is amended by:
■ A. Revising the definition of
‘‘Institutional student information
report’’.
■ B. Revising the definition of ‘‘Student
aid application.’’
■

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The revisions read as follows:
§ 668.52

Definitions.

*

*
*
*
*
Institutional student information
record as defined in 34 CFR 690.2 and
691.2 for purposes of the Federal Pell
Grant, ACG, National SMART Grant,
Federal Perkins Loan, FWS, FSEOG,
Federal Stafford Loan, and William D.
Ford Federal Direct Loan programs.
Student aid application means an
application approved by the Secretary
and submitted by a person to have his
or her EFC determined under the
Federal Pell Grant, ACG, National
SMART Grant, Federal Perkins Loan,
FWS, FSEOG, Federal Stafford Loan, or
William D. Ford Federal Direct Loan
programs.
*
*
*
*
*
§ 668.54

[Amended]

5. Section 668.54 is amended in
paragraph (a)(2)(i) by adding the words
‘‘ACG, National SMART Grant,’’
immediately after the words ‘‘Federal
Pell Grant,’’.

■

§ 668.55

[Amended]

6. Section 668.55 is amended by:
A. In the introductory text to
paragraph (c), adding the words ‘‘ACG,
National SMART Grant,’’ immediately
after the words ‘‘Federal Pell Grant,’’.
■ B. In paragraph (c)(1), adding the
words ‘‘, ACG, National SMART Grant,’’
immediately after the words ‘‘Federal
Pell Grant’’.
■ C. In paragraph (c)(2), adding the
words ‘‘, ACG, National SMART Grant,’’
immediately after the words ‘‘Federal
Pell Grant’’; and by removing the
punctuation ‘‘,’’ after the word
‘‘campus-based’’.
■
■

§ 668.58

[Amended]

7. Section 668.58 is amended by:
A. In paragraph (a)(1)(i), adding the
words ‘‘, ACG, National SMART Grant,’’
immediately after the words ‘‘Federal
Pell Grant’’.
■ B. In paragraph (a)(2)(i), adding the
words ‘‘ACG, National SMART Grant,
or’’ immediately after the words
‘‘Federal Pell Grant,’’.
■ C. In paragraph (a)(2)(ii)(A), adding
the words ‘‘ACG, National SMART
Grant,’’ immediately after the words
‘‘Federal Pell Grant,’’.
■
■

§ 668.59

[Amended]

8. Section 668.59 is amended by:
A. In the introductory text to
paragraph (a), removing the words
‘‘Federal Pell Grant Program’’ and
adding, in their place, the words
‘‘Federal Pell Grant, ACG, and National
SMART Grant programs’’.

■
■

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Federal Register / Vol. 71, No. 211 / Wednesday, November 1, 2006 / Rules and Regulations
B. In paragraph (a)(1)(i), adding the
words ‘‘, ACG, or National SMART
Grant’’ immediately after the words
‘‘Federal Pell Grant’’.
■ C. In paragraph (a)(2) introductory
text, adding the words ‘‘, ACG, or
National SMART Grant’’ immediately
after the words ‘‘Federal Pell Grant’’.
■ D. In the introductory text to
paragraph (b), removing the words
‘‘Federal Pell Grant Program’’ and
adding, in their place, the words
‘‘Federal Pell Grant, ACG, and National
SMART Grant programs’’.
■ E. In paragraph (b)(1), adding the
words ‘‘, ACG, or National SMART
Grant’’ immediately after the words
‘‘Federal Pell Grant’’.
■ F. In paragraph (b)(2)(i)(B), adding the
words ‘‘, ACG, or National SMART
Grant’’ immediately after the words
‘‘Federal Pell Grant’’.
■ G. In paragraph (b)(2)(ii)(A), adding
the words ‘‘, ACG, or National SMART
Grant’’ immediately after the words
‘‘Federal Pell Grant’’.
■

§ 668.60

[Amended]

9. Section 668.60 is amended by:
■ A. In the introductory text to
paragraph (c), removing the words
‘‘Federal Pell Grant Program’’ and
adding, in their place, the words
‘‘Federal Pell Grant, ACG, and National
SMART Grant programs’’.
■ B. In paragraph (c)(1), adding the
words ‘‘and 691.61’’ immediately after
the regulatory citation ‘‘690.61’’.
■ C. In paragraph (c)(2)(i), adding the
words ‘‘, ACG, or National SMART
Grant’’ immediately after the words
‘‘Federal Pell Grant’’.
■ D. In paragraph (c)(2)(ii), adding the
words ‘‘, ACG, or National SMART
Grant’’ immediately after the words
‘‘Federal Pell Grant’’.
■ E. In paragraph (d) by adding the
words ‘‘ACG, or National SMART Grant
program assistance,’’ immediately after
the words ‘‘Federal Pell Grant,’’.
■

§ 668.61

[Amended]

10. Section 668.61 is amended in
paragraph (a)(2)(ii)(B) by adding the
words ‘‘ACG, National SMART Grant,’’
immediately after the words ‘‘Federal
Pell Grant,’’.

sroberts on PROD1PC70 with RULES

■

VerDate Aug<31>2005

17:57 Oct 31, 2006

Jkt 211001

PART 690—FEDERAL PELL GRANT
PROGRAM
11. The authority citation for part 690
continues to read as follows:

■

Authority: 20 U.S.C. 1070a, unless
otherwise noted.
§ 690.78

[Amended]

12. Section 690.78 is amended by
removing paragraph (b) and
redesignating paragraph (c) as paragraph
(b).

■

(b) * * *
(1) * * *
(ii) * * *
(B) Has not previously been enrolled
as a regular student in an eligible
program while enrolled in high school;
*
*
*
*
*
■ 16. Section 691.16 is amended in
paragraph (d)(4) by removing the words
‘‘in the’’ and adding, in their place, the
words ‘‘from an’’.
§ 691.62

PART 691—ACADEMIC
COMPETITIVENESS GRANT (ACG)
AND NATIONAL SCIENCE AND
MATHEMATICS ACCESS TO RETAIN
TALENT GRANT (NATIONAL SMART
GRANT) PROGRAMS

■

13. The authority citation for part 691
continues to read as follows:

■

■

Authority: 20 U.S.C. 1070a–1, unless
otherwise noted.

14. Section 691.6 is amended by
revising paragraphs (a) and (b) to read
as follows:

■

§ 691.6 Duration of student eligibility—
undergraduate course of study.

(a) A student is eligible to receive up
to one ACG Scheduled Award during
each of the student’s first and second
academic years of enrollment over the
course of the student’s undergraduate
education in all eligible programs as
defined in § 691.2(d).
(b) A student is eligible to receive up
to one National SMART Grant
Scheduled Award during each of the
student’s third and fourth academic
years of enrollment over the course of
the student’s undergraduate education
in all eligible programs as defined in
§ 691.2(d).
*
*
*
*
*
■ 15. Section 691.15 is amended by:
■ A. In paragraph (a)(2), removing the
words ‘‘for the same payment period’’
and adding, in their place, the words
‘‘in the same award year’’.
■ B. Revising paragraph (b)(1)(ii)(B).
■ C. In paragraph (b)(1)(iii)(C), removing
the words ‘‘at least’’.
■ D. In paragraph (c)(3), removing the
words ‘‘at least’’.
The revision reads as follows:
§ 691.15

*

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Eligibility to receive a grant.

*

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*

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*

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64419

[Amended]

17. Section 691.62 is amended in
paragraph (c) by removing the
regulatory citations ‘‘, 682.200(b), and
685.102(b)’’.

§ 691.65

[Amended]

18. Section 691.65 is amended in
paragraph (a)(2) by removing the words
‘‘for the same payment period’’ and
adding, in their place, the words ‘‘in the
same award year’’.

§ 691.75

[Amended]

19. Section 691.75 is amended by:
A. In paragraph (b)(3), removing the
words ‘‘is no longer pursuing’’ and
adding, in their place, the words ‘‘is not
pursuing’’.
■ B. In paragraph (c), removing the
words ‘‘is no longer pursuing’’ and
adding, in their place, the words ‘‘is not
pursuing’’.
■
■

§ 691.78

[Amended]

20. Section 691.78 is amended by
removing paragraph (b) and
redesignating paragraph (c) as paragraph
(b).
■ 21. Section 691.80(a) is revised to read
as follows:
■

§ 691.80 Redetermination of eligibility for a
grant award.

(a) Change in receipt of Federal Pell
Grant. If, after the beginning of an award
year, a student otherwise eligible for an
ACG or a National SMART Grant begins
or ceases to receive a Federal Pell Grant
in that award year, the institution must
redetermine the student’s eligibility for
an ACG or a National SMART Grant in
that award year.
*
*
*
*
*
[FR Doc. E6–18197 Filed 10–31–06; 8:45 am]
BILLING CODE 4000–01–P

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