NPRM Publication

Friday,
August 21, 2009

Part II

Department of
Education

srobinson on DSKHWCL6B1PROD with PROPOSALS2

34 CFR Parts 600, 668, 675, et al.
General and Non-Loan Programmatic
Issues; Proposed Rule

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Federal Register / Vol. 74, No. 161 / Friday, August 21, 2009 / Proposed Rules
comments only information that they wish to
make publicly available on the Internet.

DEPARTMENT OF EDUCATION
[Docket ID ED–2009–OPE–0005]

34 CFR Parts 600, 668, 675, 686, 690,
and 692
RIN 1840–AC99

General and Non-Loan Programmatic
Issues

srobinson on DSKHWCL6B1PROD with PROPOSALS2

AGENCY: Office of Postsecondary
Education, Department of Education.
ACTION: Notice of proposed rulemaking.
SUMMARY: The Secretary proposes to
implement various general and non-loan
provisions that were added to the
Higher Education Act of 1965, as
amended (HEA), by the Higher
Education Opportunity Act of 2008
(HEOA) by amending the regulations for
Institutional Eligibility Under the
Higher Education Act of 1965, the
Student Assistance General Provisions,
the Federal Work-Study (FWS)
Programs, the Teacher Education
Assistance for College and Higher
Education (TEACH) Grant Program, the
Federal Pell Grant Program, and the
Leveraging Educational Assistance
Partnership Program (LEAP).
DATES: We must receive your comments
on or before September 21, 2009.
ADDRESSES: Submit your comments
through the Federal eRulemaking Portal
or via postal mail, commercial delivery,
or hand delivery. We will not accept
comments by fax or by e-mail. Please
submit your comments only one time, in
order to ensure that we do not receive
duplicate copies. In addition, please
include the Docket ID at the top of your
comments.
• Federal eRulemaking Portal: Go to
http://www.regulations.gov to submit
your comments electronically.
Information on using Regulations.gov,
including instructions for accessing
agency documents, submitting
comments, and viewing the docket, is
available on the site under ‘‘How To Use
This Site.’’
• Postal Mail, Commercial Delivery,
or Hand Delivery. If you mail or deliver
your comments about these proposed
regulations, address them to Jessica
Finkel, U.S. Department of Education,
1990 K Street, NW., room 8031,
Washington, DC 20006–8502.

Privacy Note: The Department’s policy for
comments received from members of the
public (including those comments submitted
by mail, commercial delivery, or hand
delivery) is to make these submissions
available for public viewing in their entirety
on the Federal eRulemaking Portal at http://
www.regulations.gov. Therefore, commenters
should be careful to include in their

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FOR FURTHER INFORMATION CONTACT: For
general information or information
related to the non-Title IV revenue
requirement (90/10), John Kolotos.
Telephone: (202) 502–7762 or via the
Internet at: [email protected].
For information related to all Federal
Pell Grant Program issues and the
LEAP/GAP Program, Fred Sellers and
Jacquelyn Butler. Telephone: (202) 502–
7502 and (202) 502–7890, respectively,
or via the Internet at: Fred.Sellers@
ed.gov or [email protected].
For information related to the
provisions for readmission for
servicemembers, teach-outs, peer-topeer file sharing, baccalaureate in liberal
arts, and institutional plans for
improving the academic program,
Wendy Macias. Telephone: (202) 502–
7526 or via the Internet at:
[email protected].
For information related to all Federal
Work-Study Program issues, Nikki
Harris and Harold McCullough.
Telephone: (202) 219–7050 and (202)
377–4030, respectively, or via the
Internet at [email protected] or
[email protected].
For information related to the
provisions for fire safety standards,
missing students procedures, hate crime
reporting, emergency response and
evacuation, and students with
intellectual disabilities, Jessica Finkel.
Telephone: (202) 502–7647 or via the
Internet at: [email protected].
For information related to the
provisions for extenuating
circumstances under the TEACH Grant
Program, Jacquelyn Butler. Telephone:
(202) 502–7890, or via the Internet at:
[email protected].
For information related to the
consumer information requirements,
Brian Kerrigan. Telephone: (202) 219–
7058, or via the Internet at:
[email protected].
If you use a telecommunications
device for the deaf, call the Federal
Relay Service (FRS), toll free, at 1–800–
877–8339.
Individuals with disabilities can
obtain this document in an accessible
format (e.g., Braille, large print,
audiotape, or computer diskette) on
request to one of the contact persons
listed under FOR FURTHER INFORMATION
CONTACT.
SUPPLEMENTARY INFORMATION:

Invitation to Comment
As outlined in the section of this
notice entitled Negotiated Rulemaking,
significant public participation, through
six public hearings and three negotiated

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rulemaking sessions, has occurred in
developing this notice of proposed
rulemaking (NPRM). In accordance with
the requirements of the Administrative
Procedure Act, the Department invites
you to submit comments regarding these
proposed regulations on or before
September 21, 2009. To ensure that your
comments have maximum effect in
developing the final regulations, we
urge you to identify clearly the specific
section or sections of the proposed
regulations that each of your comments
addresses and to arrange your comments
in the same order as the proposed
regulations. Note that enactment as final
regulations of any and all provisions of
these proposed regulations is subject to
the availability of sufficient
administrative savings and any
provision may be removed from the
final rules if sufficient savings do not
materialize.
We invite you to assist us in
complying with the specific
requirements of Executive Order 12866,
including its overall requirements to
assess both the costs and the benefits of
the proposed regulations and feasible
alternatives, and to make a reasoned
determination that the benefits of these
proposed regulations justify their costs.
Please let us know of any further
opportunities we should take to reduce
potential costs or increase potential
benefits while preserving the effective
and efficient administration of the
programs.
As noted elsewhere in the NPRM, two
of the Department’s negotiated
rulemaking committees were to a minor
extent involved in the proposed
revisions to 34 CFR 668.184(a)(1)
(Determining cohort default rates for
institutions that have undergone a
change in status) in part 668, subpart M
of the Student Assistance General
Provisions. Team V–General and NonLoan Programmatic Issues (Team V),
was the negotiating committee
responsible for the regulations regarding
the treatment of cohort default rates for
institutions that conduct teach-outs of
closed institutions. Team II–LoansSchool-based Issues (Team II),
negotiated all other changes to cohort
default rates.
We have included the proposed
change to 34 CFR 668.184(a)(1) in this
NPRM as well as in the notice of
proposed rulemaking that we are
publishing as a result of the negotiations
of Team II. The proposed change is
simply a cross-reference in 34 CFR
668.184(a)(1) to 34 CFR 600.32(d) which
provides that under certain
circumstances the cohort default rate of
a closed institution does not transfer in
any way to the institution that conducts

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Federal Register / Vol. 74, No. 161 / Friday, August 21, 2009 / Proposed Rules
a teach-out at the site of the closed
institution. We ask that when
submitting any comments on the
proposed changes to §§ 600.32(d) or
668.184(a)(1), you submit the comments
in the docket for this NPRM (Docket ID
ED–2009–OPE–0005).
During and after the comment period,
you may inspect all public comments
about these proposed regulations by
accessing Regulations.gov. You may also
inspect the comments, in person, in
room 8031, 1990 K Street, NW.,
Washington, DC, between the hours of
8:30 a.m. and 4 p.m., Eastern time,
Monday through Friday of each week
except Federal holidays.

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Assistance to Individuals With
Disabilities in Reviewing the
Rulemaking Record
On request, we will supply an
appropriate aid, such as a reader or
print magnifier, to an individual with a
disability who needs assistance to
review the comments or other
documents in the public rulemaking
record for these proposed regulations. If
you want to schedule an appointment
for this type of aid, please contact one
of the persons listed under FOR FURTHER
INFORMATION CONTACT.
Negotiated Rulemaking
Section 492 of the HEA requires the
Secretary, before publishing any
proposed regulations for programs
authorized by Title IV of the HEA, to
obtain public involvement in the
development of the proposed
regulations. After obtaining advice and
recommendations from the public,
including individuals and
representatives of groups involved in
the Federal student financial assistance
programs, the Secretary must subject the
proposed regulations to a negotiated
rulemaking process. All proposed
regulations that the Department
publishes on which the negotiators
reached consensus must conform to
final agreements resulting from that
process unless the Secretary reopens the
process or provides a written
explanation to the participants stating
why the Secretary has decided to depart
from the agreements. Further
information on the negotiated
rulemaking process can be found at:
http://www.ed.gov/policy/highered/leg/
hea08/index.html.
On December 31, 2009, the
Department published a notice in the
Federal Register (73 FR 80314)
announcing our intent to establish five
negotiated rulemaking committees to
prepare proposed regulations. One
committee would focus on issues
related to lender and general loan issues

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(Team I—Loans—Lender General Loan
Issues). A second committee would
focus on school-based loan issues (Team
II—Loans—School-based Loan Issues).
A third committee would focus on
accreditation (Team III—Accreditation).
A fourth committee would focus on
discretionary grants (Team IV—
Discretionary Grants). A fifth committee
would focus on general and non-loan
programmatic issues (Team V—General
and Non-Loan Programmatic Issues).
The notice requested nominations of
individuals for membership on the
committees who could represent the
interests of key stakeholder
constituencies on each committee.
Team V—General and Non-Loan
Programmatic Issues (Team V) met to
develop proposed regulations during the
months of March 2009, April 2009, and
May 2009. Team V agreed to establish
five subcommittees to facilitate the
discussion of the issues and expedite
the development of the proposed
regulations. The subcommittees
included some of non-Federal
negotiators and their alternates, outside
experts regarding the particular issues
addressed by a subcommittee, ED staff,
and other interested parties. The
subcommittees were:
(1) Campus Safety, responsible for
issues relating to Fire Safety Standards,
Missing Student Procedures, Hate Crime
Reporting, and Emergency Response
and Evacuation Procedures.
(2) Peer-to-Peer File Sharing,
responsible for issues relating to illegal
downloading of copyrighted materials.
(3) Intellectual Disabilities,
responsible for issues relating to
establishing title IV eligible educational
programs for students with intellectual
disabilities.
(4) LEAP/GAP, responsible for issues
relating to LEAP and GAP programs.
(5) 90/10, responsible for issues
relating to the requirement that a
proprietary institution must derive at
least 10 percent of its revenue from
sources other than funds from the title
IV, HEA programs.
In this NPRM we propose regulations
for a variety of provisions, stemming
from the work of the subcommittees and
main committee, relating to the Federal
grant and work-study programs, campus
safety, educational programs for
students with intellectual disabilities,
copyright infringement, teach-outs,
readmission of servicemembers, and
non-Title IV revenue.
The Department developed a list of
proposed regulatory provisions based on
the provisions contained in the HEOA
and from advice and recommendations
submitted by individuals and
organizations as testimony to the

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Department in a series of six public
hearings held on:
• September 19, 2008, at Texas
Christian University in Fort Worth,
Texas;
• September 29, 2008, at the
University of Rhode Island, in
Providence, Rhode Island;
• October 2, 2008, at Pepperdine
University, in Malibu, California;
• October 6, 2008, at Johnson C.
Smith University, in Charlotte, North
Carolina;
• October 8, 2008, at the U.S.
Department of Education in
Washington, DC; and
• October 15, 2008, at Cuyahoga
Community College, in Cleveland, Ohio.
In addition, the Department accepted
written comments on possible
regulatory provisions submitted directly
to the Department by interested parties
and organizations. A summary of all
comments received orally and in writing
is posted as background material in the
docket for this NPRM. Transcripts of the
regional meetings can be accessed at
http://www.ed.gov/policy/highered/leg/
hea08/index.html.
Staff within the Department also
identified issues for discussion and
negotiation.
At its first meeting, Team V reached
agreement on its protocols. These
protocols provided that for each
community of interest identified as
having interests that were significantly
affected by the subject matter of the
negotiations, the non-Federal
negotiators would represent the
organizations listed after their names in
the protocols in the negotiated
rulemaking process.
Team V included the following
members:
• Clais Daniels-Edwards, University
of California Student Association, and
Serena Unrein (alternate), Arizona
Students Association, representing
students.
• David Baime, American Association
of Community Colleges, and Dr. Karla
Leach (alternate), Western Wyoming
Community College, representing twoyear public institutions.
• John Curtice, State University of
New York, and Karen Fooks (alternate),
University of Florida, representing fouryear public institutions.
• Scott Fleming, Georgetown
University, and Suzanne Day (alternate),
Harvard University, representing
private, non-profit institutions.
• Elaine Neely, Kaplan Higher
Education Corp., and Mark Pelesh
(alternate), Corinthian Colleges, Inc.,
representing private, for-profit
institutions.
• Ray Testa, Empire Education
Group, and Dr. Richard Dumaresq

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(alternate), Pennsylvania Association of
Private School Administrators,
representing cosmetology schools.
• David Tipton, Berea College, and
Ian Robertson (alternate), Warren
Wilson College, representing work
colleges.
• Dr. Ray Keck, Texas A&M
International University, and Karl
Brockenbrough (alternate), Bowie State
University, representing minorityserving institutions.
• David Gelinas, Davidson College,
and David Smedley (alternate), George
Washington University, representing
financial aid administrators.
• Sandy Tallman, Ross Education
LLC, and Diane Fleming (alternate),
Central Michigan University,
representing financial aid
administrators.
• Karen McCarthy, NASFAA, and
Joan Berkes (alternate), NASFAA,
representing financial aid
administrators.
• Maureen Laffey, Delaware Higher
Education Commission, and Dr. Alan
Edwards (alternate), State Council of
Higher Education for Virginia,
representing State student grant
agencies.
• Dr. Nick Bruno, University of
Louisiana System, and John Higgins
(alternate), Purdue University,
representing business officers and
bursars.
• Dr. John Cavanaugh, Pennsylvania
State Systems of Higher Education,
representing State higher education
executive officers.
• S. Daniel Carter, Security on
Campus, Inc., and Jonathan Kassa
(alternate), Security on Campus, Inc.,
representing campus safety advocates.
• Brendan McCluskey, UMDJ Office
of Emergency Management, and Dr.
John Petrie (alternate), George
Washington University, representing
campus safety administrators.
• Ed Comeau, Campus Firewatch, and
Phil Hagen (alternate) Georgetown
University, representing fire safety
advocates and administrators.
• Paul D. Martin, Center for Campus
Fire Safety, representing fire safety
advocates.
• Michael Lieberman, AntiDefamation League, and Cristina Finch
(alternate), Human Rights Campaign,
representing human rights advocates.
• Delores Stafford, George
Washington University, and Lisa
Phillips (alternate), IACLEA,
representing law enforcement.
• Stephanie Smith Lee, NDSS, and
Madeleine C. Will (alternate),
representing individuals with
intellectual disabilities.
• Gregory Jackson, The University of
Chicago, and Matthew Arthur

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(alternate), representing institutions on
peer-to-peer file sharing.
• David Green, NBC Universal, and
Jennifer Jacobsen (alternate), Sony
Music Entertainment, representing
digital content owners on peer-to-peer
file sharing.
• Brian Kerrigan, U.S. Department of
Education, representing the Federal
Government.
These protocols also provided that,
unless agreed to otherwise, consensus
on all of the amendments in the
proposed regulations had to be achieved
for consensus to be reached on the
entire NPRM. Consensus means that
there must be no dissent by any
member.
During the meetings, Team V
reviewed and discussed drafts of
proposed regulations. At the final
meeting in May 2009, Team V did not
reach consensus on the proposed
regulations in this document.
Summary of Proposed Changes
These proposed regulations would
implement general and non-Loan
provisions of the HEA, as amended by
the HEOA, including:
• Establishing requirements under
which students may receive up to two
Federal Pell Grant Scheduled Awards
during a single award year (see section
401(b)(5)(A) of the HEA);
• Providing the maximum Federal
Pell Grant eligibility to a student whose
parent was in the armed forces and died
in Iraq or Afghanistan if the student was
under 24 years old or enrolled in an
institution of higher education at the
time the parent died (see section
401(F)(4) of the HEA);
• Establishing extenuating
circumstances under which a TEACH
Grant recipient may be excused from
fulfilling all or part of his or her service
obligation (see section 420N(d)(2) of the
HEA);
• Expanding the use of FWS funds to
permit institutions to compensate
students employed in projects that teach
civics in school, raise awareness of
government functions or resources, or
increase civic participation (see section
443 of the HEA);
• Allowing institutions located in
major disaster areas to make FWS
payments to disaster-affected students
(see section 445(d) of the HEA).
• Revising definitions and terms
relating to work colleges (see section
448 of the HEA).
• Establishing new requirements for
determining how proprietary
institutions calculate the amount and
percent of revenue derived from sources
other than title IV, HEA program funds
(see section 487(d) of the HEA).

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• Expanding the information that
institutions must make available to
prospective and enrolled students to
include information on: The
employment and placement of students,
the retention rates of first-time, full-time
undergraduate students, and completion
and graduation rate data that is
disaggregated by gender, race, and grant
or loan assistance (see section 485(a) of
the HEA).
• Establishing requirements for
institutions that maintain on-campus
housing facilities to publish annually a
fire safety report, maintain a fire log,
and report fire statistics to the
Department (see section 485(i) of the
HEA).
• Requiring institutions that provide
on-campus housing facilities to develop
and make available a missing student
notification policy and allow students
who reside on campus to confidentially
register contact information (see section
485(j) of the HEA).
• Expanding the list of crimes that
institutions must include in the hate
crimes statistics reported to the
Department (see section 485(f) of the
HEA).
• Requiring institutions to include in
the annual security report a statement of
emergency response and evacuation
procedures (see section 485(f) of the
HEA).
• Expanding the eligibility for Federal
Pell Grant, FWS, and FSEOG Program
funds to students with intellectual
disabilities (see sections 484(s) and 760
of the HEA).
• Establishing requirements under
which an institution must readmit
servicemembers to the same academic
status they had when they last attended
the institution (see section 484C of the
HEA).
• Providing that an institution that
conducts a teach-out at a site of a closed
institution may, under certain
conditions, establish that site as an
additional location (see sections 487(f)
and 498 of the HEA).
• Amending the definition of
‘‘proprietary institution of higher
education’’ to include institutions that
provide a program leading to a
baccalaureate degree in liberal arts, if
the institution provided that program
since January 1, 2009, and has been
accredited by a regional accrediting
agency since October 1, 2007, or earlier
(see section 102(b)(1)(A) of the HEA).
• Providing that an institution must
certify that it has plans to effectively
combat unauthorized distribution of
copyrighted material and will offer
alternatives to illegal downloading or
peer-to-peer distribution of intellectual

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property (see sections 485(a)(1) and
487(a) of the HEA).
• Expanding the information that an
institution must make available to
prospective and enrolled students to
include a description of any plans the
institution has to improve its academic
program (see section 485(a) of the HEA).
• Providing that the non-Federal
share of student grants or work-study
jobs under the LEAP Program must be
State funds and that the non-Federal
share no longer has to come from a
direct appropriation of State funds (see
section 415C(b)(10) of the HEA).
• Requiring the State program to
notify students that grants are LEAP
Grants that are funded by the Federal
Government, the State, and for LEAP
Grants to students under the new Grants
for Access and Persistence (GAP)
Program, other contributing partners
(see section 415C(b) of the HEA).
• Establishing the activities, awards,
allotments to States, matching funds
requirements, consumer information
requirements, application requirements,
and other requirements needed to begin
and continue participating in the GAP
Program (see sections 415B and 415E of
the HEA).
Significant Proposed Regulations
We group major issues according to
subject, with appropriate sections of the
proposed regulations referenced in
parentheses. We discuss other
substantive issues under the sections of
the proposed regulations to which they
pertain. Generally, we do not address
proposed regulatory provisions that are
technical or otherwise minor in effect.
Part 600 Institutional Eligibility Under
the Higher Education Act of 1965, as
Amended

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Definition of Baccalaureate Liberal Arts
Programs Offered by Proprietary
Institutions (§ 600.5)
Statute: Effective July 1, 2010, the
HEOA amends the definition of
proprietary institution of higher
education in section 102(b)(1)(A) of the
HEA to include an institution that
provides a program leading to a
baccalaureate degree in liberal arts that
the institution has provided since
January 1, 2009, so long as the
institution has been accredited by a
recognized regional accreditation
agency or organization since October 1,
2007, or earlier. As the language in
section 102(b)(1)(A)(i) of the HEA is not
new, this change does not affect the
eligibility of current programs or alter
the method used by the Department in
determining that a program of training
prepares students for gainful

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employment in a recognized
occupation.
Current Regulations: Section
600.5(a)(5) defines a proprietary
institution of higher education as one
that provides an eligible program of
training, defined in § 668.8, to prepare
students for gainful employment in a
recognized occupation.
Proposed Regulations: The proposed
change to § 600.5(a)(5) would add to the
definition of proprietary institution of
higher education, an institution that
provides a program leading to a
baccalaureate degree in liberal arts that
the institution has provided since
January 1, 2009, so long as the
institution has been accredited by a
recognized regional accreditation
agency or organization since October 1,
2007, or earlier. In addition, a new
paragraph (e) would be added to § 600.5
to include a definition of a program
leading to a baccalaureate degree in
liberal arts. The definition would
require that the institution’s recognized
regional accreditation agency or
organization determine that the program
is a general instructional program in the
liberal arts subjects, the humanities
disciplines, or the general curriculum,
falling within one or more generally
accepted instructional categories
comprising such programs, but
including only instruction in regular
programs, and excluding independently
designed programs, individualized
programs, and unstructured studies. The
generally accepted instructional
categories would be:
• A program that is a structured
combination of the arts, biological and
physical sciences, social sciences, and
humanities, emphasizing breadth of
study;
• An undifferentiated program that
includes instruction in the general arts
or general science;
• A program that focuses on
combined studies and research in the
humanities subjects as distinguished
from the social and physical sciences,
emphasizing languages, literatures, art,
music, philosophy and religion; and
• Any single instructional program in
liberal arts and sciences, general studies
and humanities not listed above.
Reasons: The regulations are amended
to reflect the changes made by the
HEOA. The regulations would require
that an institution’s accrediting agency
determine that a program is a liberal arts
program as defined in this section in
order to ensure that a program meets a
generally accepted standard for liberal
arts programs. The proposed definition
of a program leading to a baccalaureate
degree in liberal arts is from the U.S.
Department of Education’s National

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Center for Education Statistics’ (NCES)
Classification of Instructional Programs
(CIP), the Federal government statistical
standard on instructional program
classifications. Specifically, the
instructional categories are from the
description of CIP 24, Liberal Arts and
Sciences, General Studies, and
Humanities, which would ensure that a
program meets a generally accepted
standard for liberal arts programs. The
definition excludes independentlydesigned programs, individualized
programs, and unstructured studies as
the Department believes that, to meet
the statutory requirement that an
institution offer a program, it must be an
organized program of study that is
essentially the same for all students,
except that it could include some
elective courses.
Institutional Requirements for TeachOuts and Eligibility and Certification
Procedures (§§ 600.2, 600.32, 668.14)
Statute: The HEOA added paragraph
(f) to section 487 of the HEA to provide
that, whenever the Department initiates
an action to limit, suspend, or terminate
(LS&T) an institution’s participation in
any Title IV program or initiates an
emergency action against an institution,
the institution must prepare a teach-out
plan for submission to its accrediting
agency. The teach-out plan must be
prepared in accordance with section
496(c)(6) of the HEA (mistakenly cited
as section 496(c)(4) in the HEA) and any
applicable title IV, HEA program
regulations or accrediting agency
standards. A teach-out plan is defined
as a written plan that provides for
equitable treatment of students if an
institution ceases to operate before all
students have completed their program
of study, and may include, if required
by the institution’s accrediting agency, a
teach-out agreement.
The HEOA also added section 498(k)
of the HEA to provide that a location of
a closed institution is eligible as an
additional location of another
institution for the purpose of
conducting a teach-out if the teach-out
is approved by the institution’s
accrediting agency. The institution that
conducts the teach-out under this
provision is permitted to establish a
permanent additional location at the
closed institution without having to
satisfy the requirements for additional
locations in sections 102(b)(1)(E) and
102(c)(1))(C) of the HEA—i.e., that a
proprietary institution or a
postsecondary vocational institution
must have been in existence for two
years to be eligible—and without
assuming the liabilities of the closed
institution.

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Federal Register / Vol. 74, No. 161 / Friday, August 21, 2009 / Proposed Rules

One of the four new accrediting
agency operating procedures added by
the HEOA as section 496(c)(3) of the
HEA requires accrediting agencies to
approve teach-out plans submitted by
institutions they accredit if the
Department notifies the agency of an
action against an institution in
accordance with section 487(f) of the
HEA, if the institution’s accreditation is
withdrawn, terminated or suspended, or
if the institution intends to cease
operations. This provision was
negotiated by Team III—Accreditation
and will be reflected in the NPRM
developed to implement accreditation
issues (Docket ID ED–2009–OPE–).
Because of the overlap in these three
provisions, the development of
proposed regulatory language was
coordinated between the two
negotiating committees.
Current Regulations: Section 600.32
provides that an additional location is
eligible to participate in the title IV,
HEA programs if it meets the
requirements for institutional eligibility
in (1) § 600.4 (eligibility requirements
for an institution of higher education),
§ 600.5 (eligibility requirements for a
proprietary institution), or § 600.6
(eligibility requirements for a
postsecondary vocational institution);
(2) § 600.8 (treatment of a branch
campus), and (3) § 600.10 (date, extent,
duration, and consequences of
eligibility). However, to qualify as an
eligible additional location, a location is
not required to have been in existence
for two years unless (1) the location was
a facility of another institution that has
closed or ceased to provide educational
programs for a reason other than a
normal vacation period or a natural
disaster that directly affects the
institution or the institution’s students;
(2) the applicant institution acquired,
either directly from the institution that
closed or ceased to provide educational
programs, or through an intermediary,
the assets at the location; and (3) the
institution from which the applicant
institution acquired the assets of the
location owes a liability for a violation
of an HEA program requirement and is
not making payments in accordance
with an agreement to repay that
liability. An additional location that
must meet the two-year rule for these
reasons, nevertheless, is exempt from
the two-year rule if it agrees (1) to be
liable for all improperly expended or
unspent title IV program funds received
by the institution that has closed or
ceased to provide educational programs;
(2) to be liable for all unpaid refunds
owed to students who received title IV
program funds; and (3) to abide by the

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policy of the institution that has closed
or ceased to provide educational
programs regarding refunds of
institutional charges to students in
effect before the date of the acquisition
of the assets of the additional location
for the students who were enrolled
before that date.
Proposed Regulations: Section 600.2
would define a teach-out plan as a
written plan developed by an institution
that provides for the equitable treatment
of students if an institution, or an
institutional location that provides 100
percent of at least one program, ceases
to operate before all students have
completed their program of study, and
may include, if required by the
institution’s accrediting agency, a teachout agreement between institutions.
Section 668.14 would be amended to
include in the program participation
agreement the requirement in section
487(f) of the HEA. In addition to
requiring an institution to submit a
teach-out plan to its accrediting agency
whenever the Department initiates an
LS&T, or an emergency action against
the institution, as required by statute,
proposed § 668.14(b)(31) would require
an institution to submit a teach-out plan
when (1) the institution’s accrediting
agency acts to withdraw, terminate, or
suspend the accreditation or
preaccreditation of the institution; (2)
the institution’s State licensing or
authorizing agency revokes the
institution’s license or legal
authorization to provide an educational
program; (3) the institution intends to
close a location that provides 100
percent of at least one program; or (4)
the institution otherwise intends to
cease operations.
Proposed § 600.32(d) would
implement section 498(k) of the HEA to
provide that an institution that conducts
a teach-out for a closed institution
whenever the Department initiates an
LS&T, or an emergency action against
the institution, may apply to have that
site approved as an additional location,
if the teach-out plan was approved by
the closed institution’s accrediting
agency. If the Department approves the
institution to add the additional
location, the ‘‘two-year rule’’ would not
apply to the additional location. In
addition, the institution would not
assume the liabilities of the closed
institution, and the institution would
not assume the cohort default rate of the
closed institution, provided the
institutions are not related parties and
there is no commonality of ownership
or management between the
institutions, as described in proposed 34
CFR 668.188(b) and 34 CFR 668.207(b)
(these sections address the

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determination of cohort default rates for
institutions that have undergone a
change in status). An institution that
accepts responsibility for conducting a
teach-out of students under such an
arrangement would still have to comply
with § 600.32(c)(3), which requires the
additional location to abide by the
policy of the institution that has closed
or ceased to provide educational
programs regarding refunds of
institutional charges to students in
effect before the date of the acquisition
of the assets of the additional location
for the students who were enrolled
before that date. As a condition for
approval of the additional location, the
Department may require that payments
from the institution conducting the
teach-out to the owners of the closed
institution, or related parties, be used to
pay any liabilities owed by the closed
institution.
Reasons: The regulations are amended
to reflect the changes made by the
HEOA.
In proposed § 668.14(b)(31), the
circumstances under which an
institution would be required to submit
a teach-out plan to its accrediting
agency would be expanded beyond the
circumstances listed in the statute to
specifically address other situations
where the Department believes the
potential closure will put significant
numbers of students at risk of being
unable to complete their program,
including the closure of a location that
provides 100 percent of at least one
program. This list of circumstances
would conform with proposed changes
in §§ 602.3 and 602.24 of the Team III—
Accreditation NPRM (Docket ID ED–
2009–OPE–) for implementing section
496(c)(3) of the HEA, which directs
accrediting agencies to require
institutions to submit a teach-out plan
for approval upon the occurrence of
certain events. As a result, the definition
of a teach-out plan would apply to an
institutional location that provides 100
percent of at least one program, and
would be the same definition used in 34
CFR part 602 for the Secretary’s
Recognition of Accrediting Agencies.
Proposed § 600.32(d) would be
consistent with statutory intent to
encourage an institution to conduct a
teach-out of a closed institution and our
view that the cohort default rate of a
closed institution could be a potential
impediment that could dissuade another
institution from conducting the teachout if its default rate would be adversely
affected by the closed institution’s
default rate. However, the proposed
regulations would ensure that this
provision is not used by an owner to
circumvent an undesirable cohort

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default rate or liabilities for one
institution by having it become an
additional location of another
institution under the same, or related,
ownership. Preserving the Department’s
right to require that payments from the
institution conducting the teach-out to
the owners of the closed institution, or
related parties, be used to pay any
liabilities owed by the closed
institution, provides the benefit to the
institution that conducts the teach-out
of not assuming any liabilities owed by
the closed school, while ensuring that
any funds paid to the owners of the
closed school are applied against any
title IV program liabilities owed by that
institution.
No changes are proposed to the
applicability of § 600.32(c)—that the
institution opening the additional
location must continue to apply the
refund policy for the students from the
institution that has closed or ceased to
provide educational programs. This
obligation to protect the students by
keeping the same refund policy in place
continues because it is different from
the pre-existing liabilities that the
institution is not required to assume
under this provision.
Some non-Federal negotiators felt
that, in keeping with proposed 34 CFR
668.14(b)(31), proposed § 600.32(d)
should be expanded to allow the
exemptions from the two-year rule, the
assumption of liabilities, and the
assumption of the cohort default rate, to
apply when an institution conducts a
teach-out at an institution that closes for
reasons other than those listed in
section 498(k) of the HEA—i.e., the
initiation of a limitation, suspension, or
termination of the institution, or an
emergency action against the institution
by the Department. The Department
would limit the availability of this
procedure (allowing an institution to
conduct a teach-out of a closed
institution without the imposition of
customary restrictions to discourage
institutions not subject to an LS&T, or
emergency action from arranging a
closure and sale of the institution)
without liabilities in situations where a
buyer would otherwise purchase the
institution and assume the institution’s
liabilities under existing change of
ownership rules.
Part 668 Student Assistance General
Provisions
Readmission Requirements for
Servicemembers (§ 668.18)
Statute: The HEOA added new
section 484C to the HEA to address
institutional readmission requirements
for servicemembers. Section 484C of the

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HEA provides that an institution of
higher education may not deny
readmission to a servicemember of the
uniformed services for reasons relating
to that service. In addition, a student
who is readmitted to an institution
under this section must be readmitted
with the same academic status as the
student had when he or she last
attended the institution. An affected
servicemember is any individual who is
a member of, applies to be a member of,
or performs, has performed, applies to
perform, or has the obligation to
perform, service in the uniformed
services. This requirement applies to
service in the uniformed services,
whether voluntary or involuntary, on
active duty in the Armed Forces,
including service as a member of the
National Guard or Reserve, for a period
of more than 30 days under a call or
order to active duty of more than 30
days.
Any student whose absence from an
institution of higher education is
necessitated by reason of service in the
uniformed services is entitled to
readmission if:
• The student (or an appropriate
officer of the Armed Forces or official of
the Department of Defense) gives
advance written or verbal notice of such
service to the appropriate official at the
institution;
• The cumulative length of the
absence and of all previous absences
from that institution of higher education
by reason of service in the uniformed
services does not exceed five years; and
• Except as otherwise provided in
this section, the student submits a
notification of intent to reenroll in the
institution.
However, no advance notice by the
student is required if the giving of such
notice is precluded by military
necessity, such as a mission, operation,
exercise, or requirement that is
classified; or a pending or ongoing
mission, operation, exercise, or
requirement that may be compromised
or otherwise adversely affected by
public knowledge. In addition, any
student (or an appropriate officer of the
Armed Forces or official of the
Department of Defense) who did not
give advance notice of service to the
appropriate official at the institution
may meet the notice requirement by
submitting, at the time the student seeks
readmission, an attestation to the
student’s institution that the student
performed service in the uniformed
services that necessitated the student’s
absence from the institution.
When determining the cumulative
length of the student’s absence for

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service, the period of service does not
include any service:
• That is required, beyond five years,
to complete an initial period of
obligated service;
• During which the student was
unable to obtain orders releasing the
student from a period of service in the
uniformed services before the expiration
of the five-year period and the inability
to obtain those orders was through no
fault of the student; or
• That is performed by a member of
the Armed Forces (including the
National Guard and Reserves) who is—
» Ordered to or retained on active
duty under section 688, 12301(a),
12301(g), 12302, 12304, or 12305 of
Title 10, U.S.C., or under section 331,
332, 359, 360, 367, or 712 of Title 14,
U.S.C.;
» Ordered to or retained on active
duty (other than for training) under any
provision of law because of a war or
national emergency declared by the
President or the Congress;
» Ordered to active duty (other than
for training) in support of an operational
mission for which personnel have been
ordered to active duty under section
12304 of Title 10, U.S.C.;
» Odered to active duty in support of
a critical mission or requirement of the
Armed Forces (including the National
Guard or Reserve); or
» Called into Federal service as a
member of the National Guard under
chapter 15 of Title 10, U.S.C., or section
12406 of Title 10, U.S.C.
An affected servicemember must,
upon the completion of a period of
service in the uniformed services, notify
the institution of his or her intent to
return to the institution not later than
three years after the completion of the
period of service. However, a student
who is hospitalized for or convalescing
from an illness or injury incurred in or
aggravated during the performance of
service in the uniformed services must
notify the institution of his or her intent
to return to the institution not later than
two years after the end of the period that
is necessary for recovery from such
illness or injury. A student who fails to
apply for readmission within the
required period does not automatically
forfeit eligibility for readmission to the
institution, but is subject to the
institution’s established leave of
absence policy and general practices.
A student who submits an application
for readmission to an institution must
provide to the institution
documentation to establish that:
• The student has not exceeded the
specified service limitations; and
• The student’s eligibility for
readmission has not been terminated.

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An institution may not delay or
attempt to avoid a readmission of a
student under this section by
demanding documentation that does not
exist, or is not readily available, at the
time of readmission.
A student’s eligibility for readmission
to an institution under this section by
reason of such student’s service in the
uniformed services terminates upon the
occurrence of any of the following
events:
• A separation of such person from
the Armed Forces (including the
National Guard and reserves) with a
dishonorable or bad conduct discharge;
• A dismissal of such person
permitted under section 1161(a) of Title
10, U.S.C.; or
• A dropping of such person from the
rolls pursuant to section 1161(b) of Title
10, U.S.C.
Current Regulations: None.
Proposed Regulations:
General
Section 668.18(a) would include the
general requirements of the statute that
an institution may not deny readmission
to a servicemember, but must readmit
the servicemember with the same
academic status as the student had
when the student was last admitted to
the institution. The proposed
regulations would clarify that the
requirements of this section also apply
to a student who was admitted to an
institution, but did not begin attendance
because of service in the uniformed
services. The proposed regulations
would specify that the institution must
promptly readmit a student, and would
define ‘‘promptly readmit’’ as
readmitting a student into the next class
or classes in the student’s program
unless the student requests a later date
of admission, or unusual circumstances
require the institution to admit the
student at a later date.
Section 668.18(a)(2)(iii) would specify
that to readmit a person with the ‘‘same
academic status’’ means that the
institution admits the student:
• To the same program to which he
or she was last admitted by the
institution or, if that program is no
longer offered, the program that is most
similar, unless the student requests or
agrees to admission to a different
program;
• At the same enrollment status that
the student last held at the institution,
unless the student requests or agrees to
admission at a different enrollment
status;
• With the same number of credit
hours or clock hours completed
previously by the student, unless the
student is readmitted to a different

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program to which the completed credit
hours or clock hours are not
transferable;
• With the same academic standing
(e.g., with the same satisfactory
academic progress status) the student
previously had;
• If the student is readmitted to the
same program, for the first academic
year in which the student returns, by
assessing the same institutional charges
that the student was or would have been
assessed for the academic year during
which the student left the institution;
• If the student is admitted to a
different program, and for subsequent
academic years for a student admitted to
the same program, by assessing no more
than the institutional charges that other
students in the program are assessed for
that academic year; and
• Waiving charges for equipment
required in lieu of equipment the
student paid for when the student was
previously enrolled.
In the case of a student who is not
prepared to resume the program at the
point where he or she left off or will not
be able to complete the program,
§ 668.18(a)(2)(iv) would require the
institution to make reasonable efforts to
help the student become prepared or to
enable the student to complete the
program including, but not limited to,
providing refresher courses at no extra
cost and allowing the student to retake
a pretest at no extra cost. The institution
would not be required to readmit the
student if, after reasonable efforts by the
institution, the student is still not
prepared to resume the program at the
point where he or she left off, or is still
unable to complete the program. In
addition, an institution would not be
required to readmit a student if there are
no reasonable efforts the institution can
take to prepare the student to resume
the program, or to enable the student to
complete the program.
The proposed regulations would
define ‘‘reasonable efforts’’ as actions
that do not place an undue hardship on
the institution. An ‘‘undue hardship’’
would be defined as requiring
significant difficulty or expense to the
institution. An institution would carry
the burden to prove by a preponderance
of the evidence that the student is not
prepared to resume the program with
the same academic status at the point
where the student left off, or that the
student will not be able to complete the
program.
Section 668.18(a)(3) would make clear
that the requirements of this section
apply to an institution even if that
institution has undergone a change of
ownership since the student ceased
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Finally, § 668.18(a)(4) would make
clear that the provisions of this section
supersede any State law or other
requirement that reduce, limit, or
eliminate any right or benefit provided
by this section.
Service in the Uniformed Services
Section 668.18(b) would delineate
what service in the uniformed services
means for purposes of this section. This
section would expand upon the
statutory language to clarify that service
in the uniformed services includes
active duty for training and full-time
National Guard duty under Federal
authority (i.e., not National Guard
service under authority of State law). In
addition, the regulations would specify
that qualifying service must be for more
than 30 consecutive days under a call or
order to active duty of more than 30
consecutive days.
Readmission Procedures
Section 668.18(c) would list the
statutory conditions under which an
institution must readmit a
servicemember. In addition,
§ 668.18(c)(2)(i) would require an
institution to designate one or more
offices for the purpose of receiving
advance notice from students of their
absence from the institution
necessitated by service in the uniformed
services, and notice from students of an
intent to return to the institution.
Section 668.18(c)(1)(i) would make clear
that advance notice must be provided by
the student as far in advance as is
reasonable under the circumstances.
However under § 668.18(c)(2)(ii) and
(iii), such notice would not need to
follow any particular format, nor would
a student have to indicate as part of the
notice whether the student intends to
return to the institution. Also, the
regulations would make clear that an
institution may not set a brightline
deadline for submission of any such
notice, but must judge the timeliness of
submission by the facts of a particular
case. As such notice may be provided by
an appropriate officer of the Armed
Forces, § 668.18(c)(2)(iv) would clarify
who an ‘‘appropriate officer’’ is. The
regulations would also provide that a
student’s notice of intent to return may
be provided orally or in writing and
would not need to follow any particular
format. Section 668.18(c)(1)(ii) would
make clear that the cumulative length of
all previous absences by an affected
student from the institution would
include only the time the student
spends actually performing service in
the uniformed services. A period of
absence from the institution before or
after performing service in the

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uniformed services would not count
against the five year limit. For example,
after the individual completes a period
of service in the uniformed services, he
or she is provided a certain amount of
time to return to the institution. The
period between completing the
uniformed service and returning to the
institution would not count against the
five-year limit.
Exceptions to Advance Notice
Section 668.18(d) would restate the
statutory language for exceptions to
advance notice.
Cumulative Length of Absence
Section 668.18(e) would restate the
statutory types of service that are not
included in the cumulative length of the
student’s absence, including a brief
description of the types of services
referenced in titles 10 and 14 of the
United States Code.
Notification of Intent to Reenroll
Section 668.18(f) would restate the
statutory provision providing that a
student who fails to apply for
readmission within the required periods
does not automatically forfeit eligibility
for readmission to the institution, but is
subject to the institution’s established
leave of absence policy and general
practices.

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Documentation
Section 668.18(g) would list the
documentation required by the statute
that a student must submit with an
application for readmission. The
regulations would list several specific
types of documentation that satisfy the
statutory documentation requirements,
making clear that the types of
documentation available or necessary
will vary from case to case.
Termination of Readmission Eligibility
Section 668.18(h) would list the
circumstances listed in the statute under
which a student’s eligibility for
readmission to an institution would be
terminated, including a brief description
of the types of circumstances referenced
in title 10 of the United States Code.
Reasons: The regulations are amended
to reflect the changes made by the
HEOA. The statutory provisions for
readmission of servicemembers to
institutions of higher education were
based on the provisions of the
Uniformed Services Employment and
Reemployment Rights Act (USERRA)
(38 U.S.C. 4301–4334), which
established the process for
servicemembers to return to
employment after serving on active
duty. Therefore, in developing these

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proposed regulations, the Department
sought to be as consistent as possible
with the regulations implementing the
USERRA. The Department believes that
the purpose of these provisions, as with
the USERRA, is to minimize the
disruption to the lives of persons
performing service in the uniformed
services, allowing a student to return to
an institution without penalty for
having left because of service in the
uniformed services.
General
Because the statute refers to
‘‘readmission’’ of servicemembers, the
Department believes that the statute was
intended to apply not just to a student
who began attendance at an institution
and left because of service in the
uniformed services, but also to a student
who was admitted to an institution, but
did not begin attendance because of
service in the uniformed services.
In line with the goal of minimizing
the disruption to the lives of persons
performing service in the uniformed
services and to prevent an institution
from unduly delaying an individual’s
readmission, the proposed regulations
would require an institution to
promptly readmit a student, and would
define ‘‘promptly readmit’’ as
readmitting a student into the next class
or classes in the student’s program
unless the student requests a later date
of admission, or unusual circumstances
require the institution to admit the
student at a later date. If, for example,
an institution must make efforts to help
the student become prepared to resume
the program, and such efforts would not
be completed in time for the student to
begin the next class, a later date of
admission would be justified.
The proposed requirements in
§ 668.18(a)(2)(iii) for readmitting a
person with the ‘‘same academic status’’
are consistent with USERRA regulations
(20 CFR 1002.191 and 1002.192), which
require an employer to employ a
returning servicemember in the same
position he or she left, so as to not
penalize the individual for having left to
serve in the uniformed services. The
Department has chosen to focus only on
the readmission of a servicemember by
requiring that, if the student is
readmitted to the same program, for the
first academic year in which the student
returns, the institution would have to
assess the same institutional charges
that the student had or would have been
assessed for the academic year during
which the student left the institution.
However, this protection would not
apply to subsequent years, when the
institution could assess the institutional
charges that other students in the

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program are assessed for that academic
year.
To address concerns voiced by nonFederal negotiators that the regulations
would not allow an institution to
readmit a student with a different
academic status, even if the student
wanted the change, the regulations
would make clear that the institution
may admit the student with a different
academic status if the student requests
or agrees to the change.
Consistent with USERRA regulations
(20 CFR 1002.198) which require an
employer to make reasonable efforts, if
necessary, to help an employee become
qualified for the reemployment position,
§ 668.18(a)(2)(iv) would require the
institution to make reasonable efforts, if
necessary, to help a returning student
become prepared or to enable the
student to complete the program
including, but not limited to, providing
refresher courses at no extra cost and
allowing the student to retake a pretest
at no extra cost. The Department
believes requiring an institution to make
such an effort is in line with the goal of
allowing a student to return to an
institution without penalty for having
left because of service in the uniformed
services. To ensure that such an effort
does not unduly burden the institution
financially or administratively, the
proposed regulations would use the
USERRA regulations definitions of
‘‘reasonable efforts’’—actions that do
not place an undue hardship on the
institution and ‘‘undue hardship’’—
requiring significant difficulty or
expense to the institution.
In addition, as USERRA regulations
(20 CFR 1002.139) provide an employer
with a degree of flexibility in meeting its
reemployment obligations by not
requiring an employer to reemploy an
individual under very limited
circumstances, so would
§ 668.18(a)(2)(iv)(B) provide institutions
with some flexibility to not readmit a
student if, (1) after reasonable efforts by
the institution, the student is still not
prepared to resume the program at the
point where he or she left off, or is still
unable to complete the program; or (2)
if there are no reasonable efforts the
institution can take to prepare the
student to resume the program, or to
enable the student to complete the
program. Consistent with USERRA
regulations (20 CFR 1002.139), an
institution would carry the burden to
prove by a preponderance of the
evidence that the student is not
prepared to resume the program with
the same academic status at the point
where the student left off, or that the
student will not be able to complete the
program.

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Consistent with the Department’s
practice of treating an institution that
has undergone a change of ownership as
the same institution, § 668.18(a)(3)
provides that the requirements of this
section would apply to an institution
even if that institution has undergone a
change of ownership since the student
ceased attendance.
As with USERRA regulations (20 CFR
1002.7(b)), § 668.18(a)(4) would make
clear that the provisions of this section
supersede any State law or other
requirement that reduces, limits, or
eliminates any right or benefit provided
by this section. This provision would
make it possible, for example, to
readmit a servicemember into a class for
a semester even if that class was at the
maximum enrollment level set by the
institution’s State. The preemption only
applies when it is the admission of the
returning servicemember that would be
prevented by the State law or other
requirement. The institution is expected
to take other steps to come into
compliance with the State law or other
requirements for future periods of
enrollment. As with USERRA
regulations, these regulations would not
supersede, nullify or diminish any
Federal or State law (including any local
law or ordinance), contract, agreement,
policy, plan, practice, or other matter
that establishes an individual’s right or
benefit that is more beneficial than, or
is in addition to, a right or benefit
provided under the HEA.

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Service in the Uniformed Services
Section 668.18(b) clarifies that service
in the uniformed services includes
active duty for training, because it is a
form of active duty in the Armed Forces.
Consistent with USERRA regulations
(20 CFR 1002.57), service in the
uniformed services would include fulltime National Guard duty under Federal
authority, but not National Guard
service under authority of State law,
which is not considered to be service in
the uniformed services for purposes of
these provisions. As explained in 20
CFR 1002.57 of the USERRA
regulations:
The National Guard has a dual status. It is
a Reserve component of the Army, or, in the
case of the Air National Guard, of the Air
Force. Simultaneously, it is a State military
force subject to call-up by the State Governor
for duty not subject to Federal control, such
as emergency duty in cases of floods or riots.
National Guard members may perform
service under either Federal or State
authority, but only Federal National Guard
service is covered by USERRA.

In addition, the regulations would
specify that qualifying service must be
for more than 30 consecutive days under

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a call or order to active duty of more
than 30 consecutive days. This would
exclude shorter periods of Reserve and
National Guard service from being
added together to trigger this provision.
Readmission Procedures
Section 668.18(c) would list the
statutory conditions under which an
institution must readmit a
servicemember. An institution would be
required to designate one or more
offices for the purpose of receiving
advance notice from students of their
absence from the institution
necessitated by service in the uniformed
services, and notice from students of an
intent to return to the institution to ease
administrative burden for institutions
and to assist students in directing their
notice to the appropriate individuals.
Also, consistent with USERRA
regulations (20 CFR 1002.85), to ease
administrative burden for institutions, a
student would have to provide notice
that he or she is leaving as far in
advance as is reasonable under the
circumstances. However, also consistent
with USERRA regulations (20 CFR
1002.85 and 1002.88), to ensure that a
student’s advance notice is not subject
to unreasonable requirements by an
institution: (1) Such notice would not
need to follow any particular format; (2)
an institution would have to judge the
timeliness of submission by the facts of
a particular case; and (3) a student
would not have to indicate as part of the
notice whether the student intends to
return to the institution. For the same
reason, the regulations would also
provide that a student’s notice of intent
to return may be provided orally or in
writing and would not need to follow
any particular format (consistent with
USERRA regulations section 1002.118).
Consistent with USERRA regulations
(20 CFR 1002.100), § 668.18(c)(1)(ii)
would make clear that the cumulative
length of all previous absences by an
affected student from the institution
would include only the time the student
spends actually performing service in
the uniformed services. This means that
the time a servicemember spent away
from the institution either before, after,
or in-between periods of service in the
uniformed services does not count
toward the maximum amount of time
the servicemember may spend in active
service before losing the protections in
this provision.
Documentation
The list of specific types of
documentation was included to assist
students and institutions in identifying
documents that satisfy the statutory
documentation requirements.

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Non-Title IV
(90/10)

Revenue Requirement

Institutional Eligibility and Sanctions
(§§ 668.14(b)(16), 668.28(c), and
668.13(c))
Statute: The HEOA moved the
requirement that a proprietary
institution derive at least 10 percent of
its revenue from sources other than title
IV, HEA program funds from the
institutional eligibility provisions in
section 102(b) of the HEA to the general
provisions in section 487(d) of the HEA.
As a result, a proprietary institution that
does not satisfy the 90/10 revenue
requirement for a fiscal year, no longer
loses its eligibility to participate in the
title IV, HEA programs. Instead, as
provided in section 487(d)(2) of the
HEA, the institution’s participation
becomes provisional for two fiscal years.
If the institution does not satisfy the
90/10 revenue requirement for two
consecutive fiscal years, it loses its
eligibility to participate in the title IV,
HEA programs for at least two fiscal
years.
During the two fiscal years the
institution is provisionally certified
because it failed to satisfy the 90/10
revenue requirement for a fiscal year,
the institution’s provisional certification
terminates on the expiration date of its
program participation agreement or the
date it loses its eligibility to participate
because it failed to satisfy the
requirement for two consecutive fiscal
years. To regain eligibility, the
institution must demonstrate that it
complied with all eligibility and
certification requirements under section
498 of the HEA for a minimum of two
fiscal years after the fiscal year it
became ineligible.
Current Regulations: The regulations
in 34 CFR 600.5(a)(8), (e), (f), and (g),
identify the requirements for, and
consequences of failing, the 90/10
revenue provision.
Proposed Regulations: In general, the
proposed regulations would remove all
of the 90/10 revenue provisions from 34
CFR 600.5 and relocate those
provisions, as amended by the HEOA, to
subpart B of part 668. Accordingly,
proposed § 668.14(b)(16) would amend
the program participation agreement to
specify that a proprietary institution
must derive at least 10 percent of its
revenue for each fiscal year from
sources other than title IV, HEA
program funds. If an institution does not
satisfy the 90/10 requirement, the
proposed regulations in § 668.28(c)
would incorporate the statutory
consequences and require the
institution to notify the Secretary no
later than 45 days after the end of its

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fiscal year that it failed the 90/10
requirement. Also, and in keeping with
the provisional certification requirement
in the statute, § 668.13(c) would be
amended by adding proposed paragraph
(1)(ii) to provide that a proprietary
institution’s certification automatically
becomes provisional if it fails the 90/10
requirement for any fiscal year.
Reasons: The proposed regulations
reflect the statutory requirements. The
provision under which an institution
would notify the Department that it
failed the 90/10 requirement no later
than 45 after its fiscal year, parallels, but
would shorten, the current 90-day
timeframe in 34 CFR 600.5(f). An
institution at risk of failing the 90/10
requirement is expected to monitor its
revenue sources and amounts carefully
throughout the year, and is expected to
know if it failed shortly after the end of
its fiscal year. Consequently, we believe
that 45 days provides ample time for the
institution to confirm on-going
assessments of its compliance with this
requirement.
Calculating the Revenue Percentage
(§ 668.28(a))
Statute: Section 487(d) of the HEA
prescribes the requirements that
proprietary institutions must follow in
calculating their 90/10 revenue
percentage. Under these requirements,
an institution must—
(1) Use the cash basis of accounting,
except for certain loans made by the
institution;
(2) Consider as revenue only those
funds generated by the institution from:
• Tuition, fees, and other institutional
charges for students enrolled in eligible
programs.
• Activities conducted by the
institution that are necessary for the
education and training of the
institution’s students, if those activities
are conducted on campus or at a facility
under the control of the institution, are
performed under the supervision of a
member of the institution’s faculty, and
are required to be performed by all
students in a specific educational
program at the institution.
• Funds paid by a student, or on
behalf of a student by a party other than
the institution, for an education or
training program that is not eligible for
title IV, HEA program funds, if the
program is approved or licensed by the
appropriate State agency, is accredited
by an accrediting agency recognized by
the Department, or provides an
industry-recognized credential or
certification;
(3) Presume that any title IV, HEA
program funds are disbursed or
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will be used to pay the student’s tuition,
fees, or other institutional charges,
regardless of whether the institution
credits those funds to the student’s
account or pays those funds directly to
the student, except to the extent that the
student’s tuition, fees, or other
institutional charges are satisfied by:
• Grant funds provided by nonFederal public agencies or private
sources independent of the institution;
• Funds provided under a contractual
arrangement with a Federal, State, or
local government agency for the purpose
of providing job training to low-income
individuals who are in need of that
training;
• Funds used by a student from
savings plans for educational expenses
established by or on behalf of the
student and which qualify for special
tax treatment under the Internal
Revenue Code of 1986; or
• Institutional scholarships.
(4) Include institutional aid as
revenue to the school only as follows:
• For loans made by the institution
on or after July 1, 2008 and prior to July
1, 2012, the net present value (NPV) of
those loans made by the institution
during the applicable institutional fiscal
year accounted for on an accrual basis
and estimated in accordance with
generally accepted accounting
principles and related standards and
guidance, if the loans are bona fide as
evidenced by enforceable promissory
notes; are issued at intervals related to
the institution’s enrollment periods; and
are subject to regular loan repayments
and collections.
• For loans made by the institution
on or after July 1, 2012, only the amount
of loan repayments received during the
applicable institutional fiscal year,
excluding repayments on loans made
and accounted for which the NPV was
used.
• For scholarships provided by the
institution, only those scholarships
provided by the institution in the form
of monetary aid or tuition discounts
based upon the academic achievements
or financial need of students, disbursed
during each fiscal year from an
established restricted account, and only
to the extent that funds in that account
represent designated funds from an
outside source or from income earned
on those funds.
(5) For each student who receives a
loan on or after July 1, 2008, and prior
to July 1, 2011, that is authorized under
section 428H of the HEA or that is a
Federal Direct Unsubsidized Stafford
Loan, treat as revenue received by the
institution from sources other than
funds received under this title, the
amount by which the disbursement of

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the loan received by the institution
exceeds the limit on such loan in effect
on the day before the date of enactment
of the Ensuring Continued Access to
Student Loans Act (ECASLA) of 2008;
and
(6) Exclude from revenues—
• The amount of funds the institution
received under part C (Federal Work
Study), unless the institution used those
funds to pay a student’s institutional
charges.
• The amount of funds the institution
received under subpart 4 of part A
(LEAP, SLEAP, or GAP).
• The amount of funds provided by
the institution as matching funds for a
title IV, HEA program.
• The amount of title IV, HEA
program funds provided by the
institution that are required to be
refunded or returned.
• The amount charged for books,
supplies, and equipment, unless the
institution includes that amount as
tuition, fees, or other institutional
charges.
Current regulations: The regulations
in 34 CFR 600.5 address many, but not
all, of the statutory requirements for
calculating the 90/10 revenue
percentage. However, as discussed
previously, the regulations in this
section would be removed.
Section 668.23(d)(4) requires a
proprietary institution to report its
90/10 ratio in a footnote to its audited
financial statements.
Proposed regulations: Proposed
§ 668.28(a) incorporates the statutory
requirements.
We propose to implement the
statutory provision relating to counting
revenue from non-title IV eligible
programs by providing that these
programs may prepare students to take
an examination for an industryrecognized credential or certificate
issued by an independent third-party,
provide training needed for students to
maintain State licensing requirements,
or provide additional training for
practitioners.
An institution would continue to
report the revenue percentages in a
footnote to its audited financial
statements, but the revisions in
proposed § 668.23(d)(4) would require
the institution to identify in that
footnote the non-Federal and Federal
revenues by category.
With regard to institutional loans for
which an NPV would be calculated, the
proposed regulations establish that
institutional loans would have to be
credited in-full to the student’s account,
be evidenced by standalone repayment
agreements between students and the
institution, and be separate from

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enrollment contracts signed by students.
Loans made to students by third parties
but subsequently acquired by the
institution would not meet this
definition of institutional loans, and
could not be included in either of the
NPV calculations. Moreover, all
payments from the institution to acquire
the loans would be counted against any
non-Federal revenues from the loan
proceeds the institution received.
For the purpose of counting revenue
from loan funds in excess of the loan
limits in effect prior to ECASLA, we
propose that institutions count the
excess amount on a payment-period
basis.
Finally, in proposed appendix C to
subpart B of part 668 we illustrate how
an institution calculates its 90/10
revenue percentage.
Reasons: To a large extent, the
proposed regulations adopt the statutory
provisions which, also to a large extent,
reflect current regulations and practice.
However, we are incorporating
suggestions from some of the nonFederal negotiators in implementing
three of the new provisions for nonFederal sources of revenue that may be
included in the 90/10 calculation. First,
we would identify the types of non-title
IV eligible programs from which an
institution could count, as revenue, the
funds paid for students taking those
programs. We believe this eliminates
much of the ambiguity regarding
whether the revenue from a non-title IV
eligible program offered by an
institution could be counted for 90/10
purposes. Second, for purposes of the
90/10 calculation, we are identifying the
elements that will distinguish an
institutional loan from other types of
student account receivables. Third, the
regulations would allocate the excess
loan funds that are treated as nonFederal revenue to each payment period
to simplify the 90/10 calculation. This
will minimize some complexities that
may result if the excess funds were only
counted after all of the pre-ECASLA
loan funds were provided to a student,
particularly if the disbursements for a
loan are received by an institution in
two different fiscal years.
An institution would continue to
report its 90/10 ratio in a footnote
included with the institution’s annual
audited financial statements. Given the
additional revenues that may be
counted as non-Federal funds in this
calculation, and that Federal funds may
be treated as non-Federal funds (i.e.,
loan amounts in excess of the preECASLA limits), we believe it is
necessary for the institution to report in
that footnote the amounts of the
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Federal and non-Federal funds that are
included in its 90/10 calculation. The
certified public accountant that prepares
the institution’s audited financial
statements will be required to review
that information and test the
institution’s calculation. On a case by
case basis, Department staff will
continue to review the accountant’s
work papers when more information is
needed to determine if the calculation is
correct.
Some of the non-Federal negotiators
suggested that the regulations permit
tuition discounts given to students be
counted for 90/10 purposes, since
tuition discounts are mentioned in the
HEA, along with monetary aid provided
to students, as types of scholarships
provided by a proprietary institution.
The HEA also requires that these
scholarships be disbursed to a student’s
account from an established restricted
account at the institution holding funds
from an outside source, or income
earned on those funds. The proposed
regulations implement the statutory
provision that institutions may pay
scholarships with tuition discounts that
are credited from such restricted
accounts.
Net Present Value (NPV) (§ 668.28(c))
Statute: For loans an institution
makes to students on or after July 1,
2008 and prior to July 1, 2012, section
497(d)(1)(D)(i) of the HEA requires an
institution to count as revenue the NPV
of the loans it makes during a fiscal
year.
Current regulations: There are no
current regulations regarding NPV,
however 34 CFR 600.5(d)(3)(i) allows an
institution to count as revenue the
amount of loan repayments it receives
on institutional loans during its fiscal
year.
Proposed regulations: In proposed
§ 668.28(b), the Department defines the
NPV as the sum of the discounted cash
flows Rt/(1+i)t. The variable ‘‘i’’ is the
discount rate, which would, for 90/10
purposes, be the most recent annual
inflation rate. The variable ‘‘t’’ is the
time or period of the cash flow, in years,
starting from the time the loan entered
repayment. The variable ‘‘Rt’’ is the net
cash flow at time or period t.
If the institution’s loans made during
the fiscal year have substantially the
same repayment period, the proposed
regulations provide that an institution
may use that repayment period for those
loans to set the range of values of
variable ‘‘t’’ in the NPV formula.
However, if an institution’s loans have
different repayment periods, the
institution would group the loans by
repayment period and use the

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repayment period for each group to set
the range of values for variable ‘‘t’’. For
each group of loans, as applicable, the
institution would multiply the total
annual payments due on the loans by
the institution’s collection rate (the total
amount of payments collected divided
by the total amount of payments due).
The resulting amount is the cash flow
used for variable ‘‘R’’ in each period ‘‘t’’
for each group of loans for which an
NPV is calculated. Proposed appendix C
to subpart B of part 668 illustrates this
NPV calculation.
As a simpler alternative to performing
the NPV calculation, the proposed
regulations allow an institution the
option to use 50 percent of the total
amount of loans it made during the
fiscal year as the NPV. However, if the
institution chooses to use this
alternative, it may not sell any of the
associated loans until they have been in
repayment for at least two years.
Reasons: The Department would
implement the statutory requirement to
establish the net present value of an
institution’s loans by adopting the
formula—NPV = sum of the discounted
cash flows Rt/(1+i)t. However, this
formula is generally intended for, and
used primarily, in making investment
decisions. Nevertheless, the discount
rate ‘‘i’’ is the rate of return that could
be earned on an investment in the
financial markets with similar risk, or
more generally, the rate of return sought
or expected by the investor. Translating
this for 90/10 purposes, the formula
determines the NPV of institutional
loans by taking into consideration the
discounted value caused by inflation.
The proposed regulations define the
expected cash flows represented by
variable ‘‘R’’ to be the annual payments
due on the loans (i.e., the scheduled
payments) multiplied by the
institution’s loan collection rate (the
total amount of payments collected on
loans for a fiscal year divided by the
total amount of payments due on those
loans for that year). In this way, the
expected cash flows are adjusted to take
into account loans that are not collected
or loan payments that are not collected
timely. The institution’s loan collection
rate should be based on the institution’s
own loan collection history, and may be
a prior annual rate or historical rate
covering several years. We seek public
comment on other ways that an
institution may establish a loan
collections rate. In any case, the
institution would need to document that
rate and the institution’s auditor would
examine that information as a part of the
institution’s annual financial statement
audit.

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With regard to the alternative
provision that allows an institution to
use 50 percent of the total amount of
loans it made during the fiscal year as
the NPV, we propose this option as an
administrative convenience for
institutions that either prefer a simpler
method to establish the NPV or who do
not need the additional non-Federal
revenues that might be counted if the
formula were used. This option
provides a conservative, simple
calculation for the NPV that is intended
to be a fair compromise in exchange for
choosing not to perform the NPV
calculations. However, if the institution
chooses this option, it may not sell the
loans associated with the 50 percent
calculation until those loans have been
in repayment for two years. As provided
in section 487(d)(1)(D)(i)(III) of the HEA,
institutional loans are subject to regular
loan repayment and collections. The
regular NPV formula would use the
institution’s own collection rate, but the
alternative formula would not. To make
sure that alternative formula
institutional loans are legitimate, the
institution may not sell them until they
have been in repayment for two years.
This will permit the Department, or
another oversight entity, to determine
whether these loans were subject to
regular loan repayment and collection
as required by the statute. Moreover, we
wish to avoid an outcome where an
institution would sell the loans in the
short term for less than the 50 percent
amount it claimed for 90/10 purposes.
Institutional Plans for Improving the
Academic Program (§ 668.43(a))
Statute: As part of the required
information on its academic program
that an institution must make available
to prospective and enrolled students
under section 485(a) of the HEA, the
HEOA adds the requirement that an
institution make available any plans the
institution has for improving that
academic program.
Current Regulations: Section
668.43(a)(5) requires an institution to
make readily available to enrolled and
prospective students information on the
academic program of the institution,
including (1) the current degree
programs and other educational and
training programs; (2) the instructional,
laboratory, and other physical facilities
that relate to the academic program; and
(3) the institution’s faculty and other
instructional personnel.
Proposed Regulations: Section
668.43(a)(5) would be amended to add
to the information on the academic
program of the institution that an
institution must make readily available
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any plans by the institution for
improving the academic program of the
institution. An institution would be
allowed to determine what a ‘‘plan’’ is,
including when a plan becomes a plan.
Reasons: The regulations are amended
to reflect the changes made by the
HEOA.
Peer-to-Peer File Sharing and
Copyrighted Material (§§ 668.14(b) and
668.43(a))
Statute: The HEOA added a new
requirement to section 487 of the HEA
(Program Participation Agreement)
under which an institution must certify
that it has developed plans to effectively
combat the unauthorized distribution of
copyrighted material (including through
the use of a variety of technology-based
deterrents) and will, to the extent
practicable, offer alternatives to illegal
downloading or peer-to-peer
distribution of intellectual property, as
determined by the institution in
consultation with the chief technology
officer or other designated officer of the
institution.
In addition, as part of the required
information an institution must make
available to prospective and enrolled
students, the HEOA added new
subparagraph (P) to section 485(a)(1) of
the HEA to require a description of
institutional policies and sanctions
related to the unauthorized distribution
of copyrighted material. This
description includes (1) an annual
disclosure that explicitly informs
students that unauthorized distribution
of copyrighted material, including peerto-peer file sharing, may subject the
students to civil and criminal liabilities;
(2) a summary of the penalties for
violation of Federal copyright laws; and
(3) the institution’s policies with respect
to unauthorized peer-to-peer file
sharing, including disciplinary actions
that are taken against students who
engage in unauthorized distribution of
copyrighted materials using the
institution’s information technology
system.
Current Regulations: Section
668.41(c) requires an institution to
provide to enrolled students an annual
notice containing a list and brief
description of the consumer information
it must disclose and the procedures for
obtaining this consumer information.
The term notice is defined in § 668.41(a)
as a means of notification of the
availability of information an institution
is required to disclose on a one-to-one
basis through a direct individual notice
to each enrolled student. This notice
must be made through an appropriate
mailing or publication, including direct
mailing through the U.S. Postal Service,

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campus mail or electronic mail. Posting
on Internet or Intranet Web sites does
not constitute notice. If the institution
discloses the consumer information
listed in § 668.41(c) by posting the
information on a Web site, it must
include in the notice the exact
electronic address at which the
information is posted, and a statement
that the institution will provide a paper
copy of the information on request.
Section 668.41(a) defines a
prospective student as an individual
who has contacted an eligible
institution requesting information
concerning admission to that
institution.
Proposed Regulations:
Program Participation Agreement (PPA)
Section 668.14(b)(30)(i) would
implement section 487(a)(29)(A) of the
HEA to require an institution, as a
condition of participation in a title IV,
HEA program, to agree that it has
developed and implemented written
plans to effectively combat the
unauthorized distribution of
copyrighted material by users of the
institution’s network without unduly
interfering with the educational and
research use of the network.
An institution would have to include
in its plan:
• The use of one or more technologybased deterrents;
• Mechanisms for educating and
informing its community about
appropriate versus inappropriate use of
copyrighted material. The written plan
would include the information
contained in proposed § 668.43(a)(10).
These mechanisms could include any
additional information and approaches
determined by the institution to
contribute to the effectiveness of the
plan, such as including pertinent
information in student handbooks,
honor codes, and codes of conduct in
addition to e-mail and/or paper
disclosures.
• Procedures for handling
unauthorized distribution of
copyrighted material, including
disciplinary procedures; and
• Procedures for periodically
reviewing the effectiveness of the plans
to combat the unauthorized distribution
of copyrighted materials by users of the
institution’s network using relevant
assessment criteria. It would be left to
each institution to determine what
relevant assessment criteria are.
The regulations would make clear that
no particular technology measures are
favored or required for inclusion in an
institution’s plans, and each institution
retains the authority to determine what
its particular plans for compliance will

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be, including those that prohibit content
monitoring.
Proposed § 668.14(b)(30)(ii) would
implement section 487(a)(29)(B) of the
HEA by requiring that an institution, in
consultation with the chief technology
officer or other designated officer of the
institution, to the extent practicable,
offer legal alternatives to illegal
downloading or otherwise acquiring
copyrighted material, as determined by
the institution. The proposed
regulations would also require that
institutions (1) be required to
periodically review the legal
alternatives for downloading or
otherwise acquiring copyrighted
material and (2) make the results of the
review available to their students
through a Web site or other means.
Consumer Information
Proposed § 668.43(a)(10) would
implement section 485(a)(1)(P) of the
HEA. Information regarding
institutional policies and sanctions
related to the unauthorized distribution
of copyrighted material would be
included in the list of institutional
information provided upon request to
prospective and enrolled students. This
information would be required to (1)
explicitly inform its students that
unauthorized distribution of
copyrighted material, including peer-topeer file sharing, may subject a student
to civil and criminal liabilities; (2)
include a summary of the penalties for
violation of Federal copyright laws; and
(3) describe the institution’s policies
with respect to unauthorized peer-topeer file sharing, including disciplinary
actions that are taken against students
who engage in illegal downloading or
unauthorized distribution of
copyrighted materials using the
institution’s information technology
system. The Department will work with
representatives of copyright holders and
institutions to develop a summary of the
civil and criminal penalties for violation
of Federal copyright laws to include as
part of the Federal Student Aid
Handbook that an institution may use to
meet this requirement.
As current § 668.41(c) requires an
institution to provide to enrolled
students an annual notice containing a
list and brief description of the
consumer information it must disclose
and the procedures for obtaining this
consumer information, an institution
would be required to add to this list the
fact that it must make readily available
information regarding institutional
policies and sanctions related to the
unauthorized distribution of
copyrighted material. Consistent with
the current definition of notice in

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§ 668.41(a), an institution would be
required to provide this annual notice
on a one-to-one basis through a direct
individual notice to each enrolled
student. This notice must be made
through an appropriate mailing or
publication, including direct mailing
through the U.S. Postal Service, campus
mail or electronic mail. Posting on
Internet or Intranet Web sites does not
constitute notice. If the institution
discloses the consumer information by
posting the information on a Web site,
it must include in the notice the exact
electronic address at which the
information is posted, and a statement
that the institution will provide a paper
copy of the information on request.
The current definition of prospective
student in § 668.41(a) would be used—
i.e., an individual who has contacted an
eligible institution requesting
information concerning admission to
that institution.
Reasons: The regulations are amended
to reflect the changes made by the
HEOA.
These proposed regulations reflect the
work of a subcommittee of
representatives of institutions, digital
content owners, and Department staff
that was formed by the larger committee
to address copyright issues. The
members of the subcommittee were able
to successfully reconcile vastly
disparate viewpoints on several
contentious parts of the statute to
develop proposed regulatory language
that was then presented to, and
tentatively agreed upon by, the full
committee. The Department has chosen
to preserve the compromises made by
all sides on this issue by including the
proposed regulatory language on which
tentative agreement was reached. The
Department believes that the proposed
regulations provide enough specificity
to emphasize that institutions must take
seriously their role in combating
unauthorized distribution of
copyrighted materials by users of their
network, while providing enough
flexibility to institutions in how they
combat any unauthorized distribution to
acknowledge the differences among
institutions and their networks, as well
as variances in the scope of the problem
of unauthorized distribution of
copyrighted material.
Program Participation Agreement
The Department believes the intent of
the statute was to require institutions to
actively combat the unauthorized
distribution of copyrighted material.
Accordingly, § 668.14(b)(30)(i) would
require an institution to agree as part of
its program participation agreement that
it not only has developed a plan to do

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so, but has also implemented that plan.
In recognition that there must be a
balance between network security and
the functioning of a network for its
intended use, § 668.14(b)(30)(i) would
also make clear that an institution is not
required to take measures to effectively
combat the unauthorized distribution of
copyrighted material that would unduly
interfere with the educational and
research use of the network. The
Department believes that all institutions
can achieve this balance, given the
flexibility provided by the proposed
regulations allowing individual
institutions to determine how to best
effectively combat such unauthorized
distribution. Institutions should not
view this provision as a justification for
not effectively combating the
unauthorized distribution of
copyrighted material. Although there
was some discussion of requiring an
institution to effectively combat the
unauthorized distribution of
copyrighted material by only student
users of the institution’s network, the
regulatory language on which tentative
agreement was reached would apply the
requirement more broadly to ‘‘users.’’
This approach ensures that institutions
will be more likely to deter and prevent
downloads of copyrighted material by
employees and members of the public
that may use computers at a school
library, for example, and also allow
them to identify illegal downloads being
made by students who are not accessing
the computer systems using their
student accounts. The Department
believes that this approach meets the
intent of the statute that institutions
secure their networks from misuse by
individuals who are given access to the
networks.
In recognition of the diversity among
institutions and how technology is
continuously evolving,
§ 668.14(b)(30)(i)(A) would leave it up
to an institution’s discretion to
determine how many and what type of
technology-based deterrents it uses as a
part of its plan—although every
institution must employ at least one.
The Statement of Managers in the
Conference Report for the HEOA
discusses this issue on pages 547–549
(H. R. Conf. Rep. No. 110–803, at 547–
549 (2008)), and provides context and
clarification to this requirement as
follows:
Experience shows that a technology-based
deterrent can be an effective element of an
overall solution to combat copyright
infringement, when used in combination
with other internal and external solutions to
educate users and enforce institutional
policies.

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Effective technology-based deterrents are
currently available to institutions of higher
education through a number of vendors.
These approaches may provide an institution
with the ability to choose which one best
meets its needs, depending on that
institution’s own unique characteristics, such
as cost and scale. These include bandwidth
shaping, traffic monitoring to identify the
largest bandwidth users, a vigorous program
of accepting and responding to Digital
Millennium Copyright Act (DMCA) notices,
and a variety of commercial products
designed to reduce or block illegal file
sharing.
Rapid advances in information technology
mean that new products and techniques are
continually emerging. Technologies that are
promising today may be obsolete a year from
now and new products that are not even on
the drawing board may, at some point in the
not too distant future, prove highly effective.
The Conferees intend that this Section be
interpreted to be technology neutral and not
imply that any particular technology
measures are favored or required for
inclusion in an institution’s plans. The
Conferees intend for each institution to retain
the authority to determine what its particular
plans for compliance with this Section will
be, including those that prohibit content
monitoring. The Conferees recognize that
there is a broad range of possibilities that
exist for institutions to consider in
developing plans for purposes of complying
with this Section.

The Department believes that some
institutions may be able to effectively
combat the unauthorized distribution of
copyrighted material using only one of
the four types of technology-based
deterrents (bandwidth shaping, traffic
monitoring, accepting and responding to
DMCA notices, or a commercial product
designed to reduce or block illegal file
sharing) while others may need to
employ a combination of such
deterrents.
The additional proposed components
of an effective plan in
§ 668.14(b)(30)(i)(B) and (C) reflect
general agreement by the committee that
a plan to effectively combat the
unauthorized distribution of
copyrighted material by users of the
institution’s network should include an
educational component and a
description of the institution’s
procedures for handling the
unauthorized distribution of
copyrighted material to provide a
deterrent by ensuring that users are
made aware that the unauthorized
distribution of copyrighted material is
illegal, what actions constitute illegal
distribution of copyrighted material,
and the potential penalties for the
unauthorized distribution of
copyrighted materials.
The final component of the plan, in
proposed § 668.14(b)(30)(i)(D), would
require an institution to periodically

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review its plan to evaluate whether it is
working. One of the most controversial
aspects of the proposed regulations was
the evaluation of whether a plan was
effectively combating the unauthorized
distribution of copyrighted material.
There was extensive discussion over
how a plan should be reviewed to
determine its effectiveness, and how
much discretion institutions should be
given in this area. Ultimately, tentative
agreement was reached on a provision
requiring an institution to periodically
review its plan using relevant
assessment criteria, permitting an
institution discretion to determine the
most appropriate criteria. As the
specifics of a plan will be determined by
an institution, the Department believes
that the institution is in the best
position to determine the appropriate
criteria to assess its plan. In some cases,
appropriate assessment criteria might be
process-based, so long as the
institution’s information system
information does not contradict such a
determination. Such process-based
criteria might look at whether the
institution is following best practices, as
laid out in guidance worked out
between copyright owners and
institutions or as developed by similarly
situated institutions that have devised
effective methods to combat the
unauthorized distribution of
copyrighted material. In other cases,
assessment criteria might be outcomebased. The criteria might look at
whether there are reliable indications
that a particular institution’s plans are
effective in combating the unauthorized
distribution of copyrighted material.
Among such indications may be ‘‘before
and after’’ comparisons of bandwidth
used for peer-to-peer applications, low
recidivism rates, and reductions (either
in absolute or in relative numbers) in
the number of legitimate electronic
infringement notices received from
rights holders. The institution is
expected to use the assessment criteria
it determines are relevant to evaluate
how effective its plans are in combating
the unauthorized distribution of
copyrighted materials by users of the
institution’s networks.
In addition to reflecting the statute
requiring that institutions, to the extent
practicable, offer legal alternatives to
illegal downloading or otherwise
acquiring copyrighted material,
proposed § 668.14(b)(30)(ii) reflects
general agreement that institutions
should periodically review the legal
alternatives, and make available the
results of the review to its students
through a Web site or other means, as
such legal alternatives are likely to

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change over time. Based on the
discussions of the subcommittee, the
Department anticipates that individual
institutions, national associations, and
commercial entities will develop and
maintain up-to-date lists that may be
referenced for compliance with this
provision.
Consumer Information
For consistency, § 668.43(a)(10)
would implement the consumer
information portion of the statute within
the existing framework and using the
definitions found in current regulations.
The committee discussed whether the
statutorily required annual disclosure
should be a one-to-one notice provided
directly to each student by the
institution. However, as the statute
requires that most institutional
information in this section of the HEA
instead be made readily available to
prospective and enrolled students, the
information regarding institutional
policies and sanctions related to the
unauthorized distribution of
copyrighted material would be handled
in the same manner (i.e., included in the
list of institutional information that an
institution must make available
pursuant to § 668.43). The Department
believes that the required disclosure of
institutional policies and sanctions
related to the unauthorized distribution
of copyrighted materials can be met
without imposing the burden of a oneto-one notification on institutions.
There was some discussion by the
committee of extending the statutory
provision to require an institution to
disclose the required information to
employees of the institution in addition
to students. As the statute does not
require disclosure of this information to
employees, this would not be mandated
in the regulations. The Department
believes that employees of an institution
are more likely to be aware that
unauthorized distribution of
copyrighted material is illegal and does
not believe that the benefit of such
disclosure would justify the potential
added burden to the institution.
However, we encourage institutions to
make such information available to
employees and the general public if they
believe it will be beneficial.
Consumer Information (§§ 668.41 and
668.45)
Statute: Section 485(a) of the HEA
lists the types of information that
institutions are required to make
available to prospective and enrolled
students. Section 488 of the HEOA
expands the list of consumer
information requirements in section
485(a)(1) of the HEA, and from that

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expanded list, Team V discussed a
number of the requirements, including
the following:
• The placement and types of
employment obtained by graduates of
the institution’s degree or certificate
programs;
• The types of graduate and
professional education in which
graduates of the institution’s four-year
degree programs enrolled; and
• The retention rates of the certificate
or degree seeking, first-time, full-time,
undergraduate students entering the
institution.
Note that the information required by
section 485(a)(1) of the HEA addressing
‘‘institutional policies and sanctions
that relate to copyright infringements’’
and ‘‘the fire safety report’’ (that is
prepared by the institution pursuant to
section 485(i) of the HEA) is discussed
elsewhere in this preamble.
Section 488 of the HEOA also amends
the calculation procedures for
completion and graduation rates in
section 485(a)(4) of the HEA that
address situations in which students
leave school to serve in the Armed
Forces, on official church missions, or
with a recognized foreign aid service of
the Federal Government. Section 488 of
the HEOA also adds section 485(a)(7) to
the HEA, which directs an institution to
disaggregate its completion and
graduation rate information by gender,
by each major racial and ethnic
subgroup, and by recipients of several
types of Federal title IV aid—if the
number of students in each such
subgroup or with each such status is
sufficient to yield statistically reliable
information and reporting this
information will not reveal personally
identifiable information about an
individual student.
Current Regulations: Section 668.41
lists the types of information that an
institution must make available to
enrolled and prospective students (and
in some cases, employees, prospective
employees, prospective student-athletes,
the public, and others). This
information includes:
• Financial assistance available to
students;
• The institution’s completion and
graduation rate;
• An annual security report
(including institutional security policies
and crime statistics that are described in
§ 668.46);
• The completion and graduation
rates for student-athletes;
• Athletic program participation rates
and financial support data; and
• Institutional information (including
the cost to attend the institution, its
academic programs and faculty, etc.).

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Section 668.45 specifies how an
institution must prepare the annual
completion or graduation rate for its
certificate- or degree-seeking, full-time,
undergraduate students. It also
addresses how an institution must
prepare a transfer-out rate if the
institution’s mission includes providing
substantial preparation for students to
enroll in another institution. An
institution must make its completion or
graduation rate, and if applicable, its
transfer-out rate available by July 1
following the 12-month period ending
August 31 during which 150 percent of
the normal time for completion or
graduation has elapsed for the students
on which the institution bases its
calculations.
Proposed Regulations: In proposed
§ 668.41(d), we would add retention rate
information, placement rate
information, and information on the
types of graduate and professional
education in which graduates of the
institution’s four-year degree programs
enroll, to the types of information that
an institution must provide to its
enrolled and prospective students.
When reporting its retention rate,
proposed § 668.41(d) would require an
institution to disclose the institution’s
retention rate as reported to the
Integrated Postsecondary Education
Data System (IPEDS). We have adopted
IPEDS’ definition of ‘‘retention rate’’ in
proposed § 668.41(a) for this purpose.
For its placement information, the
institution may use various sources of
information (such as State data systems,
surveys, or other relevant sources).
However, if it calculates an actual
placement rate, it must disclose that
rate. For the types of graduate and
professional education in which
graduates of the institution’s four-year
degree programs enroll, the institution
also may use various sources of
information (such as State data systems,
surveys, or other relevant sources). For
both placement information and the
types of graduate and professional
education in which graduates of the
institution’s four-year degree programs
enroll, the institution would have to
identify the source of the information it
discloses, as well as the time frames and
methodology associated with that
information.
In addressing the requirement for an
institution to make certain information
available to students or prospective
students (and sometimes the public), we
have removed the words ‘‘on request’’ in
proposed § 668.41(d) and (g)(1)(i).
Similar words have been deleted from
proposed § 668.43(a) and (b).
Under proposed § 668.45, an
institution’s completion and graduation

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rate information must be disaggregated
by gender, by each major racial and
ethnic subgroup, and by whether or not
the institution’s students received
certain types of Federal student aid. The
disaggregation by receipt of aid is
categorized by whether students were—
• Recipients of a Federal Pell Grant;
• Recipients of a Federal Family
Education Loan or a Federal Direct Loan
(other than an Unsubsidized Stafford
Loan); and
• Recipients of neither a Federal Pell
Grant nor a Federal Family Education
Loan or a Federal Direct Loan (other
than an Unsubsidized Stafford loan).
The institution would report its
completion and graduation rate
information in a disaggregated manner
only if the number of students in each
category is sufficient to yield
statistically reliable information, and
doing so would not reveal personally
identifiable information about an
individual student. Otherwise, the
institution would note that it enrolled
too few students in the affected category
to disclose the information with
confidence and confidentiality.
In calculating its completion and
graduation rate, an institution normally
counts students as completing or
graduating if they have completed or
graduated by the end of the 12-month
period ending August 31 during which
150 percent of the normal time for
completion or graduation from the
program has elapsed. However, as
proposed, if 20 percent or more of the
certificate- or degree-seeking, full-time,
undergraduate students at the
institution left school to serve in the
Armed Forces, to serve on official
church missions, or to serve with a
foreign aid service of the Federal
Government (such as the Peace Corps),
then the institution may recalculate the
completion or graduation rate of those
students by adding to the 150 percent
time frame they normally have to
complete or graduate, the time period
the students were not enrolled due to
their service in one of these specified
categories.
Reasons: The proposed changes in
§§ 668.41 and 668.45 would implement
statutory changes to section 485 of the
HEA made by section 488 of the HEOA.
As specified in § 668.41(d), institutions
are allowed to use various sources to
compile information on placements and
on the types of graduate and
professional education in which
graduates of the institution’s four-year
degree programs enroll. A number of the
non-Federal negotiators noted that this
latitude to compile information from
various sources should not be
compromised or otherwise qualified by

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Federal Register / Vol. 74, No. 161 / Friday, August 21, 2009 / Proposed Rules
requiring institutions to disclose
methodologies used in compiling the
data. However, because the information
can come from any number of sources
and may not be comparable to similarlooking information at another
institution, the Department believes it is
important that the institution disclose
the source of the information, as well as
the time frames and methodology
associated with it, when the institution
discloses that information to its enrolled
and prospective students. This will
allow the student and prospective
student recipients of the information to
make more informed decisions
regarding their educational choices.
Since the statute is silent about
requiring an institution to calculate an
actual placement rate, or to disseminate
that rate if it calculates one, a number
of non-Federal negotiators argued that
the regulations should remain silent in
that regard. However, the Department
believes that disclosing placement rate
information would be beneficial to
students and prospective students. If the
institution makes available placement
rates that it has, students and especially
prospective students will be able to
make more informed decisions about
enrollment in various programs at the
institution. Therefore, when a
placement rate is voluntarily calculated
by the institution, proposed § 668.41(d)
would require the institution to disclose
that rate along with other placement
information.
The words ‘‘on request’’ (or ‘‘upon
request’’) were removed from
§§ 668.41(d), 668.41(g)(1)(i), and
668.43(a) and (b) because the
Department believes that they do not
reflect how institutions currently
operate in terms of making various types
of information available to their
students, prospective students, and
sometimes the public. While it is true
that an individual may not receive
information unless he or she asks about
it, institutions, in essence, are
considered to ‘‘make their information
available’’ by having it on a Web site or
in printed material without regard to
whether any one individual requests it
or not. When an individual inquires
about the information in question, the
institution would direct him or her to
the appropriate source.
The requirement in proposed § 668.45
for an institution to disaggregate its
completion and graduation rate
information by gender, by each major
racial and ethnic subgroup, and by
receipt or nonreceipt of certain types of
Federal student aid is from section 485
of the HEA. All of the negotiators agreed
that the Department should use the
IPEDS racial and ethnic categories for

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this purpose, but several of them raised
the issue of how institutions should
disaggregate the information by receipt
or nonreceipt of student aid. For
example, should a student be
considered to have received aid if the
student received it at any time during
his enrollment, or only during the
student’s first year, or for some other
period of time? The Department and the
non-Federal negotiators ultimately
agreed that the question of receipt of aid
for this determination should be based
on whether the student received the aid
during the time period when the student
entered the institution that is associated
with the cohort of students the student
is a part of for purposes of the
institution’s calculation of completion
or graduation, retention, and transfer
out rates. For institutions with a
predominate number of programs based
on semesters, trimesters, or quarters,
this would be the fall term of the year
the student’s cohort of certificate- or
degree-seeking, first-time, full-time
undergraduate students first entered the
institution. For other institutions, this
would be the period between September
1 of one year and August 31 of the
following year when the student’s
cohort of certificate- or degree-seeking,
first-time, full-time undergraduate
students first entered the institution.
It is possible that an institution could
have a significant number of its students
interrupt their education to serve in the
Armed Forces, on church missions, or
with a foreign aid service of the Federal
Government (e.g., the Peace Corps).
Were that to occur, the normal
calculation of the institution’s
completion or graduation rate would
result in a misleadingly smaller rate.
Thus, consistent with section 485 of the
HEA, when 20 percent or more of the
certificate- or degree-seeking, full-time,
undergraduate students at the
institution leave school to serve in one
of the ways listed in § 668.45(d)(1)(i)
through (iii), the institution may
recalculate its completion or graduation
rate to take that fact into consideration.
That is, when the institution calculates
its completion or graduation rate, it may
add the time period the students were
not enrolled due to their service time to
the 150 percent time frame that students
normally have to complete or graduate.
Campus Safety Provisions
Hate Crime Reporting (§ 668.46(c)(3))
Statute: Section 488(e)(1)(c) of the
HEOA amended section 485(f) of the
HEA to expand the list of hate crimes
that institutions must report to the
Department to include larceny-theft,
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destruction, damage, or vandalism of
property.
Current Regulations: Section
668.46(c)(3) of the Department’s
regulations currently requires
institutions to report as hate crimes the
occurrence of criminal homicide, sex
offenses, robbery, aggravated assault,
burglary, motor vehicle theft, arson, and
any other crime involving bodily injury
reported to local police agencies or a
campus security authority if there is
manifest evidence that the victim was
intentionally selected on the basis of
certain characteristics.
Proposed Regulations: We propose to
revise § 668.46(c)(3) to add the crimes of
‘‘larceny-theft,’’ ‘‘simple assault,’’
‘‘intimidation,’’ and ‘‘destruction/
damage/vandalism of property’’ to the
crimes that must be reported in hate
crime statistics. Additionally, we would
update the definitions of the terms
‘‘Weapons: carrying, possessing, etc.,’’
‘‘Drug abuse violations,’’ and ‘‘Liquor
law violations’’ in appendix A to
subpart D of 34 CFR part 668, which are
excerpted from the Federal Bureau of
Investigation’s Uniform Crime Reporting
Program, to reflect changes made by the
FBI.
Reasons: The proposed regulations
would implement the statutory changes
made by the HEOA by using the FBI’s
Hate Crime Data Collection Guidelines
in the Uniform Crime Reporting
Handbook (available at http://
www.fbi.gov/ucr/hatecrime.pdf) to
define the hate crimes to be reported.
Definition of Test (§ 668.46(a))
Statute: Section 488(e)(1)(D) of the
HEOA amended section 485(f) of the
HEA to require institutions to include a
statement of policy regarding their
emergency response and evacuation
procedures in the annual security
report. As part of this policy statement
an institution must describe how it will
test its emergency response and
evacuation procedures on an annual
basis. Current Regulations: Section
668.46(a) contains definitions that apply
to the requirements for institutional
security policies and the reporting of
crime statistics.
Proposed Regulation: Under proposed
§ 668.46(a), we would define test for
purposes of the emergency response and
evacuation procedures as ‘‘regularly
scheduled drills, exercises, and
appropriate follow-through activities,
designed for assessment and evaluation
of emergency plans and capabilities.’’
Reasons: This definition would clarify
the meaning of test for the purposes of
complying with the statutory
requirement that an institution test its
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procedures. Following a
recommendation from some of the nonFederal negotiators, the definition of the
term was drawn from the Emergency
Management Accreditation Program
(EMAP) Standard, which was designed
to serve as a set of standards defining a
quality emergency management program
and was collaboratively developed by
numerous organizations involved in
emergency management and response.

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Annual Security Report—Emergency
Response and Evacuation Procedures
(§ 668.46(b))
Statute: Section 485(f) of the HEA
outlines the elements that must be
included in an institution’s annual
security report. Section 488(e)(1)(D) of
the HEOA added to section 485(f) of the
HEA a requirement that an institution
must include a statement of policy
regarding emergency response and
evacuation procedures in its annual
security report. This statement must
describe how the institution will
immediately notify the campus
community upon the confirmation of a
significant emergency or dangerous
situation involving an immediate threat
to the health or safety of students or
staff occurring on the campus, unless
the notification will compromise efforts
to contain the emergency.
Current Regulations: Section
668.46(b) delineates the elements that
must be included in an institution’s
annual security report.
Proposed Regulations: Proposed
§ 668.46(b)(13) would require
institutions to include a statement of
policy regarding their emergency
response and evacuation procedures in
the annual security report. Institutions
must satisfy this requirement beginning
with the annual security report
distributed by October 1, 2010.
Reasons: These new provisions
implement the new statutory
requirement. We would require this
statement of policy for the October 1,
2010 report because it is the first report
due after these regulations would go
into effect. As institutions are expected
to make a good faith effort to comply
with the statute in the absence of
regulations, institutions should be
gathering this information in
preparation for the 2010 report.
Timely Warning and Emergency
Notification (§ 668.46(e))
Statute: Section 485(f)(3) of the HEA
requires institutions to make timely
warnings to the campus community on
crimes considered to be a threat to
students and employees that are
reported to campus security or local
police agencies. Section 488(e)(1)(D) of

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the HEOA added section 485(f)(1)(J) to
the HEA to require institutions to have
a policy for emergency notification of
the campus community upon the
confirmation of a significant emergency
or dangerous situation involving an
immediate threat to the health or safety
of students or staff occurring on the
campus, unless the notification will
compromise efforts to contain the
emergency.
Current Regulations: Section
668.46(e) describes the situations in
which an institution must send a timely
warning to the campus community to
report on crimes that are considered by
the institution to represent a threat to
students and employees.
Proposed Regulations: Proposed
§ 668.46(e)(3) would clarify the
difference between the existing timely
warning requirement and the new
requirement for an emergency
notification policy. While a timely
warning must be issued in response to
crimes specified in § 668.46(c)(1) and
(3), an emergency notification is
required in the case of an immediate
threat to the health or safety of students
or employees occurring on campus, as
described in proposed § 668.46(g). The
proposed language would clarify that an
institution that follows its emergency
notification procedures is not required
to issue a timely warning based on the
same circumstances; however, the
institution must provide adequate
follow-up information to the community
as needed.
Reasons: Many of the non-Federal
negotiators requested that the
regulations clearly explain the
difference between a timely warning
circumstance and an emergency
notification circumstance. The
emergency notification requirement
applies to a wider range of threats, such
as crimes, gas leaks, highly contagious
viruses, or hurricanes. Many nonFederal negotiators also asked that the
Department make it clear that
institutions may satisfy a timely
warning requirement with an emergency
notification in appropriate
circumstances to avoid inundating
students and employees with messages
that may become ineffective. On the
other hand, some non-Federal
negotiators also expressed concern that
providing insufficient information could
jeopardize the safety of the campus
community, for instance, in a situation
in which the emergency or investigation
is still developing.
To address these concerns, we are
proposing to require an institution that
uses its emergency notification system
to provide follow-up information to the
community as needed. The phrase ‘‘as

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needed’’ was used to address the wide
variety of threats that might occur.
Annual Security Report—Emergency
Response and Evacuation Procedures
(§ 668.46(g))
Statute: Section 485(f)(1)(J) of the
HEA, added by the HEOA, requires
institutions to include a statement of
policy regarding emergency response
and evacuation procedures in the
annual security report. This policy
statement must describe how the
institution will immediately notify the
campus community upon the
confirmation of a significant emergency
or dangerous situation involving an
immediate threat to the health or safety
of students or staff occurring on the
campus, unless the notification will
compromise efforts to contain the
emergency.
Current Regulations: None.
Proposed Regulations: Proposed
§ 668.46(g) would set out the following
elements that an institution must
include in its statement of policy
describing its emergency response and
evacuation procedures in its annual
security report:
• Procedures to immediately notify
the campus community upon the
confirmation of a significant emergency
or dangerous situation involving an
immediate threat to the health or safety
of students or employees occurring on
the campus.
• A description of the process that the
institution will use to (1) confirm that
there is a significant emergency or
dangerous situation, (2) determine the
appropriate segment or segments of the
campus community to receive a
notification, (3) determine the content of
the notification, and (4) initiate the
notification system.
• A statement that the institution
will, without delay, and taking into
account the safety of the community,
determine the content of the notification
and initiate the notification system,
unless issuing the notification will, in
the professional judgment of responsible
authorities, compromise efforts to assist
a victim or to contain, respond to, or
otherwise mitigate the emergency.
• A list of the titles of the persons or
organizations responsible for carrying
out the actions in proposed
§ 668.46(g)(2).
• Procedures for disseminating
emergency information to the larger
community.
• Procedures for testing its emergency
response and evacuation procedures on
at least an annual basis. Such tests
could be announced or unannounced,
would be publicized in conjunction
with at least one test per calendar year,

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and would be documented, including a
description of the exercise, the date,
time, and whether it was announced or
announced.
Reasons: The proposed regulations
are intended to ensure that institutions
have sufficiently prepared for an
emergency situation on campus, that
they are testing these procedures to
identify and improve weaknesses, and
that they have considered how they will
inform the campus community and
other individuals, such as parents.
While the non-Federal negotiators
generally agreed with these goals, some
of them expressed concern that
institutions need to have flexibility to
appropriately respond to situations
while maintaining a level of
accountability in the system.
To allow appropriate flexibility in the
system, the Department has not
specified that institutions use a
particular mode of communication, but
notes that institutions may and should
have multiple methods of
communication with the campus
community. For example, in the case of
a gas leak, an institution may determine
that the most effective mode of
communication is a fire alarm, whereas
in other situations it might be best to
use a text message system. The
Department encourages institutions to
consider overlapping means of
communication in case one method fails
or malfunctions. Additionally,
institutions have the flexibility to alert
only the appropriate segment or
segments of the population that they
determine to be at risk; for instance,
only notifying individuals in the
building where there is a gas leak. This
provision is intended to guard against
the possibility that too many emergency
notifications would lead some members
of the campus community to begin to
ignore the notices, thus dampening its
response to a potentially dangerous
situation. Institutions also have the
flexibility to list the organizations that
may be best equipped to respond to
different situations, for instance, the
health department may best respond to
an outbreak of a virus. Further,
institutions would have a great deal of
flexibility in designing tests of the
emergency notification system, as a test,
as defined in the proposed changes to
§ 668.46(a), could be done in many
ways, such as by a tabletop exercise or
a test conducted on a campus-wide
scale.
Parents and students affected by the
shootings at the Virginia Polytechnic
Institute and State University in 2007
attended part of the negotiations and
discussed their experiences and
opinions regarding how the Department

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should regulate in this area. They
emphasized the need for institutions to
keep parents and families informed in
the case of an emergency. Some nonFederal negotiators suggested that
institutions be encouraged to use Web
sites, radio, and television stations to
keep the larger community apprised of
emergency situations. Additionally, in
the case of an institution that uses a
texting system to relay emergency
notification information, several nonFederal negotiators suggested allowing
parents to sign up to receive texts along
with students and employees.
Some non-Federal negotiators were
concerned that an institution could
misinterpret these proposed regulations
to mean that, as part of its procedures,
it should disclose all of the details of
how it would respond to any of a variety
of situations. The negotiators noted that
this approach could potentially hamper
law enforcement efforts to address or
investigate an emergency. In response,
we note that the proposed regulations
would not require institutions to
publish in great detail how they would
respond to specific emergencies.
Finally, many non-Federal negotiators
raised concerns that institutions
consider the needs of students with
disabilities in developing emergency
response and evacuation policies and
procedures. The Department expects an
institution to consider the diverse needs
of all members of the campus
community in developing or revising an
emergency plan.
Definition of On-Campus Student
Housing Facility (§ 668.41(a))
Statute: Section 488(g) of the HEOA
added section 485(j) to the HEA to
require an institution that maintains an
on-campus student housing facility to
establish, for students who reside in oncampus student housing, a missing
student notification policy that allows
students to confidentially register a
contact person, and procedures to notify
that contact person if the student is
missing for more than 24 hours.
Current Regulations: Section
668.41(a) contains definitions that apply
to 34 CFR part 668, subpart D.
Proposed Regulations: The proposed
regulations would add a definition of
the term on-campus student housing
facility to § 668.41(a) to mean a
dormitory or other residential facility
for students that is located on an
institution’s campus, as defined in
§ 668.46(a).
Reasons: The proposed definition
would be added to clarify what is meant
by on-campus student housing facility
and to link the meaning of ‘‘on-campus’’
to the existing regulatory definition of

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campus in § 668.46(a), which is used for
crime reporting under § 668.46(c). For
the purposes of the fire safety reporting
requirements under proposed § 668.49
and the missing student notification
policies and procedures requirements
under proposed § 668.46, a student
housing facility that is on property
owned by an institution, even if the
building is owned and maintained by a
student organization or other party,
would be considered an on-campus
student housing facility. If neither the
property nor the building is owned by
the institution, then the student housing
facility would not be covered by this
definition. While on-campus student
housing facility is used in the statute in
reference to the new fire safety and
missing student notification provisions,
the definition of on-campus student
housing facility would also apply to the
existing crime reporting requirements in
§ 668.46. The Department believes this
approach will minimize confusion and
create less administrative burden for
institutions.
Annual Security Report—Missing
Student Notification Policy (§ 668.46(b)
and (h))
Statute: Section 485(f) of the HEA, as
amended by the section 488(g) of the
HEOA, requires institutions that
maintain an on-campus student housing
facility to establish, for students who
reside in an on-campus student housing
facility, both a missing student
notification policy that allows students
to confidentially register a contact
person, and procedures for notifying a
missing student’s contact person.
Current Regulations: Section
668.46(b) delineates the elements that
must be included in an institution’s
annual security report.
Proposed Regulations: The proposed
changes in § 668.46(b)(14) would
require an institution to include its
missing student notification policy and
procedures in its annual security report.
This would be required beginning with
the annual security report distributed by
October 1, 2010.
Reasons: Some non-Federal
negotiators felt that an institution
should have the flexibility to decide
how and when to distribute its missing
student policies and procedures. The
Department considered this suggestion
but agrees with other negotiators who
argued that having the information in
the annual security report would enable
students and parents to more easily
compare policies across institutions. We
propose to require that these policies
and procedures be included in the
institution’s annual security report, but
note that institutions may also distribute

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these policies and procedures at other
appropriate times, such as during a new
student orientation. This policy
statement must be included in the
report that must be distributed by
October 1, 2010 because it is the first
report due after these regulations go into
effect. Institutions must make a good
faith effort to comply with the statute in
the absence of regulations; therefore,
institutions should be gathering this
information in preparation for the 2010
report.
Missing Student Notification Policy
(§ 668.46(h))
Statute: Section 485 of the HEA, as
amended by section 488 of the HEOA,
requires an institution that maintains an
on-campus student housing facility to
establish, for students who reside in oncampus student housing, a missing
student notification policy that includes
notifying students that they can
confidentially register an individual to
be contacted if the student is
determined to be missing. The statute
requires an institution to advise
students who are under 18 years old and
not emancipated that a custodial parent
or guardian must be notified if the
student is determined to be missing.
Further, all students residing in an oncampus student housing facility must be
advised that, regardless of whether they
register a contact person, the local law
enforcement agency will be notified in
the event that the student is determined
to be missing.
Current Regulations: None.
Proposed Regulations: Proposed
§ 668.46(h)(1) implements the new
statutory requirements, specifying that
an institution’s statement of policy
regarding missing student notification
for students residing in on-campus
student housing facilities must include:
• A list of the titles of the persons or
organizations to which students,
employees, or other individuals should
report that a student has been missing
for 24 hours;
• A requirement that any official
missing student report be immediately
referred to the institution’s police or
campus security department or to the
local law enforcement agency with
jurisdiction in the area;
• The option for each student to
identify a contact person to be notified
if the student is determined missing by
the institutional police or campus
security department, or the local law
enforcement agency; and
• A disclosure that contact
information will be registered and
maintained confidentially.
Proposed § 668.46(h)(1) would further
require an institution to advise students

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who are under 18 and not emancipated
that if the student is missing it will
notify a custodial parent or guardian in
addition to any contact person
designated by the student. All students
must also be advised that, regardless of
whether they name a contact person, the
institution must notify the local law
enforcement agency that the student is
missing, unless the local law
enforcement was the entity that
determined that the student is missing.
Reasons: These new provisions would
implement the statutory requirements.
Like the existing crime reporting
regulations and the proposed fire
reporting regulations, these proposed
regulations require institutions to
include a list of the titles of the persons
or organizations to which a student
should be reported missing.
These regulations provide that only
authorized campus officials, and law
enforcement officers in furtherance of a
missing person investigation, may have
access to the confidential contact
information and that it may not be
disclosed to others. This limit was
proposed in order to protect the privacy
rights and safety of the student.
Missing Student Notification Procedures
(§ 668.46(h))
Statute: Section 485 of the HEA, as
amended by section 488(g) of the HEOA,
requires an institution that maintains an
on-campus student housing facility to
establish procedures that the institution
will follow if a student who resides in
on-campus student housing is
determined to be missing. The statute
specifies time frames during which
certain actions must occur. When a
student is reported missing, the
institution has 24 hours to inform the
local law enforcement agency with
jurisdiction in the area where the
student has been reported missing. After
the law enforcement agency determines
that the student is missing, the
institution has 24 hours to notify the
student’s contact person, if applicable.
Current Regulations: None.
Proposed Regulations: Proposed
§ 668.46(h)(2) reflects the statutory
requirements.
Reasons: The proposed regulations
reflect the new statutory requirements.
These regulations do not preclude the
institution from contacting the student’s
contact person or the parent
immediately upon determination that
the student has been missing for 24
hours.
Annual Fire Safety Report (§ 668.41(e))
Statute: Section 488(g) of the HEOA
amended section 485 of the HEA to
require institutions that maintain on-

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campus student housing facilities to
publish a fire safety report each year
and provide a copy of the report to the
Secretary.
Current Regulations: None.
Proposed Regulations: Proposed
§ 668.41(e) would provide that
institutions that maintain an on-campus
student housing facility must distribute
an annual fire safety report, as described
in proposed § 668.49(b). In addition, we
propose to revise § 668.41(e) to create
publication requirements for the annual
fire safety report that are similar to the
long-standing regulations for the annual
security report.
The proposed regulations would
allow an institution to publish the
annual security report and the annual
fire safety report together, as long as the
title of the document clearly states that
it contains both the annual security
report and the annual fire safety report.
If an institution chooses to publish the
reports separately, it would have to
include information in each of the two
reports about how to directly access the
other report.
Reasons: We are proposing to require
the same distribution method for both
the annual fire safety report and the
annual security report to reduce
administrative burden and to make it
easier for students and parents to access
the information. The Department
believes that providing one source for
this information best ensures that
students and parents will find and
review the material. Under the proposed
regulations, institutions would have the
flexibility to choose whether to combine
the two reports; however, if the reports
are combined, the title of the combined
document must make it clear that both
the annual fire safety report and the
annual security report are included to
give both reports equal emphasis and to
clarify that the fire safety provisions are
separate from the crime provisions. An
institution that chooses to publish the
reports separately must provide
information in each report about how to
directly access the other report to aid
students and parents in locating and
comparing information across
institutions.
Annual Fire Safety Report—Definitions
of Terms (§ 668.49(a))
Statute: Section 485(i)(1) of the HEA,
as amended by section 488(g) of the
HEOA, specifies that the annual fire
safety report must contain statistics
concerning the number of fires in the
institution’s on-campus housing
facilities; the cause of each fire; the
number of injuries and deaths related to
each fire; and the value of property
damage caused by each fire.

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Federal Register / Vol. 74, No. 161 / Friday, August 21, 2009 / Proposed Rules
Additionally, the annual fire safety
report must include a description of
each on-campus student housing facility
fire safety system and the number of
regular mandatory supervised fire drills.
Current Regulations: None.
Proposed Regulations: We are
proposing to add new § 668.49(a) to
define the following terms relevant to
the fire safety reporting requirements:
• Cause of fire: The factor or factors
that give rise to a fire. The causal factor
may be, but is not limited to, the result
of an intentional or unintentional
action, mechanical failure, or act of
nature.
• Fire: Any instance of open flame or
other burning in a place not intended to
contain the burning or in an
uncontrolled manner.
• Fire drill: A supervised practice of
a mandatory evacuation of a building for
a fire.
• Fire-related injury: Any instance in
which a person is injured as a result of
a fire, including an injury sustained
from a natural or accidental cause,
while involved in fire control,
attempting rescue, or escaping from the
dangers of a fire. The term ‘‘person’’
may include students, faculty, staff,
visitors, firefighters, or any other
individuals.
• Fire-related death: Any instance in
which a person (1) is killed as a result
of a fire, including death resulting from
a natural or accidental cause while
involved in fire control, attempting
rescue, or escaping from the dangers of
a fire; or (2) dies within one year of
injuries sustained as a result of a fire.
• Fire-safety system: Any mechanism
or system related to the detection of a
fire, the warning resulting from a fire, or
the control of a fire. This may include
sprinkler systems or other fire
extinguishing systems; fire detection
devices; stand-alone smoke alarms;
devices that alert one to the presence of
a fire, such as horns, bells, or strobe
lights; smoke-control and reduction
mechanisms; and fire doors and walls
that reduce the spread of a fire.
• Value of property damage: The
estimated value of the loss of the
structure and contents, in terms of the
cost of replacement in like kind and
quantity. This estimate should include
contents damaged by fire, and related
damages caused by smoke, water, and
overhaul; however, it does not include
indirect loss, such as business
interruption.
Reasons: We have added these
definitions to enable comparability
across institutions of the statistics that
institutions are required to report under
section 485(i)(1) of the HEA. The
definitions for cause of fire, fire-related

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injury, fire-related death, and value of
property damage were drawn largely
from the National Fire Incident
Reporting System (NFIRS), a standard
national reporting system used by U.S.
fire departments to report fires and
other incidents. The non-Federal
negotiators recommended, and we
agreed, that we should use the NFIRS
definitions to remain consistent with
definitions already used in the field.
The definition of fire drill was
developed to capture the HEA
requirement that institutions report
regular, mandatory, supervised fire
drills. Further, the definition of fire
safety system was developed through
collaboration with experts in the fire
safety field, who advised that the
definition should include the variety of
systems and mechanisms used to detect
and alert someone to the presence of a
fire, reduce the spread of fire, and
control and reduce the amount of smoke
from a fire.
The committee discussed the
definition of fire at length. Generally,
the negotiators agreed that the critical
elements of a reportable fire are that it
occurs in a place not intended to
contain the fire or involves any burning
that is not under control. For instance,
under these proposed regulations, a fire
in a trash can would count as a fire for
reporting purposes, even if the fire was
still under control, because a trash can
is not intended to contain a fire. A lit
candle, by contrast, while possibly
against the institution’s policies for
candles in dorms, would not generally
be considered a reportable fire, as it is
in a place intended to contain the fire
and is under control. However, if the
flame from a lit candle were to spread
and become uncontrolled, it would be
considered a reportable fire. The
definition of fire is also intended to
capture situations in which there is
burning (not necessarily an open flame)
that might easily become a fire, such as
a smoldering couch. Burning or other
flames can easily become a fire, at great
risk to students and other individuals.
Annual Fire Safety Report—Statistics
(§ 668.49(b) and (c))
Statute: Section 485(i)(1), as amended
by section 488(g) of the HEOA, requires
an institution to include in its annual
fire safety report statistics on the
number of fires and the cause of each
fire; the number of injuries related to a
fire that resulted in treatment at a
medical facility; the number of deaths
related to a fire; and the value of
property damage caused by a fire.
Section 485(i)(2) of the HEA requires
that an institution report these statistics
to the Secretary.

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Current Regulations: None.
Proposed Regulations: Proposed
§ 668.49(b)(1) would require an
institution to report the statistics that it
submits to the Department in its annual
fire safety report. The institution would
have to provide data for the three most
recent calendar years for which data are
available. Proposed § 668.49(c) would
delineate the statutorily required
statistics.
Reasons: The proposed regulations
would implement the statutory
requirements. The majority of the
committee supported the position that
institutions should report statistics for
the three most recent calendar years to
remain consistent with current reporting
requirements for crime statistics under
§ 668.46(c). Moreover, the three year
time frame will better enable consumers
to compare statistics across institutions
while helping to identify trends in the
data. This reporting requirement would
be phased in beginning with the
collection of statistics for calendar year
2009 in the October 1, 2010 Annual Fire
Safety Report. Data would be collected
for three subsequent calendar years
until three years are represented. The
first report to contain the full three years
of data would be the report due on
October 1, 2012.
Annual Fire Safety Report—Description
of Policies (§ 668.49(b))
Statute: Section § 485(i)(1) of the
HEA, as amended by section 488(g) of
the HEOA, requires that, in its annual
fire safety report, an institution must
include a description of each on-campus
student housing facility fire safety
system, including fire sprinkler systems;
the number of regular mandatory
supervised fire drills; the institution’s
policies on portable electrical
appliances, smoking, and open flames;
procedures for evacuation; fire safety
education and training program
policies; and plans for future
improvements in fire safety, if
applicable.
Current Regulations: None.
Proposed Regulations: Proposed
§ 668.49(b) would outline the elements
that an institution must disclose in its
annual fire safety report, including:
• The fire statistics required by
paragraph 485(i)(1)(A) of the HEA;
• A description of each on-campus
student housing facility fire safety
system;
• The number of fire drills held
during the previous calendar year;
• Policies or rules on portable
electrical appliances, smoking, and
open flames in student housing
facilities;

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• Procedures for evacuation of
student housing facilities in the case of
a fire;
• Policies on fire safety education and
training programs provided to students,
faculty, and staff, including a
description of the procedures that
students and employees should follow
in the case of a fire;
• For purposes of including a fire in
the statistics in the annual fire safety
report, a list of the titles of each person
or organization to which students and
employees should report that a fire has
occurred; and
• Plans for future improvements in
fire safety, if determined necessary by
the institution.
Reasons: These proposed regulations
would implement the statutory
requirements for the annual fire safety
report, and specify that an institution
must include: (1) A description of the
procedures that students and employees
should follow in the case of a fire, and
(2) procedures for reporting fires that do
not require a call to the fire department,
for instance, those that are discovered
after the fact and are no longer a threat
to safety. In response to concerns
expressed by some negotiators that all
fires, even those that have already been
put out, should be included in reported
statistics, the proposed regulations
would require institutions to provide a
list of the titles of each person or
organization to which such fires should
be reported.

portion of the log older than 60 days
must be made available within two
business days of a request for
inspection. Finally, the proposed
regulations would also implement the
statutory requirement that an institution
make an annual report to the campus
community on the fires recorded in the
fire log; however, the proposed
regulations specify that this requirement
may be satisfied by the annual fire
safety report described in proposed
§ 668.49(b).
Reasons: The proposed regulations
would implement the statutory
requirement that an institution record
all reportable fires in a fire log. Many of
the negotiators recommended that
institutions have flexibility in
maintaining this log. Therefore, we have
not specified a format for the log, and
we would allow institutions to
determine whether to combine the
annual report to the campus community
on the fires in the fire log with the
annual fire safety report. Many
negotiators also recommended, and we
agreed, that the fire log follow the
requirements for the crime log. As a
result, we have specified requirements
for how information in the fire log
should be updated, in accordance with
the long-standing requirements for the
crime log described in § 668.46(f).

Fire Log (§ 668.49(d))
Statute: Section 485(i)(3) of the HEA,
as amended by section 488(g) of the
HEOA, requires an institution that
maintains an on-campus student
housing facility to maintain a log of all
fires that occur in on-campus student
housing facilities, including the nature,
date, time, and general location of each
fire. An institution must make annual
reports to the campus community on
such fires.
Current Regulations: None.
Proposed Regulations: Proposed
§ 668.49(d) would specify that an
institution that maintains an on-campus
student housing facility must maintain
a written and easily understood fire log
that records, by the date that the fire
was reported, any fire that occurred in
an on-campus student housing facility.
The log would have to include the
nature, date, time, and general location
of each fire. Further, the proposed
regulations would specify that additions
or changes to the log must be made
within two business days of the receipt
of the information, and require that the
log be available for public inspection for
the most recent 60-day period. Any

Institutional Eligibility and Eligible
Program (§§ 600.2, 600.4, 600.5, 600.6,
and 668.8)
Statute: Section 485(a)(8) of the
HEOA added section 484(s) to the HEA
to provide that a student with
intellectual disabilities who enrolls in a
comprehensive transition and
postsecondary program is eligible to
receive title IV, HEA program funds
under the Federal Pell Grant, FSEOG,
and FWS programs. Under the newly
added provision, the student does not
have to be a high school graduate (or
have obtained a GED, or have passed an
ability-to-benefit test) and does not have
to be enrolled in a program that leads
to a degree or certificate.
Current Regulations: Section 600.2
defines an educational program as a
legally authorized postsecondary
program of organized instruction or
study that, in part, leads to an academic,
professional, or vocational degree, or
certificate, or other recognized
educational credential.
Under the definitions of an institution
of higher education (§ 600.4(a)(2)),
proprietary institution of higher
education (§ 600.5(a)(3)), and

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postsecondary vocational institution
(§ 600.6(a)(2)), the institution is required
to admit as regular students, as defined
in § 600.2, only those persons who have
a high school diploma or its equivalent.
In addition, in §§ 600.4(a)(4),
600.5(a)(5), 600.6(a)(4), and the
definition of an eligible program under
§ 668.8(c)(1) and (d)(1)(iii), the
institution must provide an educational
program for which it awards a degree,
certificate, or other recognized
credential or that prepares students for
gainful employment in a recognized
occupation.
Proposed Regulations: Proposed
§§ 600.2 (paragraph (1)(i) of the
definition of educational program),
600.4(a)(4), 600.5(a)(5), and 600.6(a)(4)
would provide that an institution may
provide a comprehensive transition and
postsecondary program for students
with intellectual disabilities. In
addition, proposed § 668.8(n) would
define a comprehensive transition and
postsecondary program as an eligible
program if it is approved by the
Secretary.
Reasons: The proposed regulations
would implement the statutory
requirements by making it clear that an
institution does not jeopardize its
participation in the title IV, HEA
programs by admitting students with
intellectual disabilities who do not have
a high school diploma or its equivalent,
or admitting students with intellectual
disabilities into non-degree or noncertificate programs. In addition, the
proposed regulations would specify that
a comprehensive transition and
postsecondary program approved by the
Secretary qualifies as an eligible
program.
Scope and Purpose (§ 668.230)
Statute: Section 485(a) of the HEOA
added section 484(s) to the HEA
authorizing the Secretary to develop
regulations allowing students with
intellectual disabilities to be eligible for
funds under the Federal Pell Grant,
FSEOG, and FWS programs. New
section 484(s)(3) of the HEA authorizes
the Secretary to waive any statutory
provision applicable to these programs,
except needs analysis provisions, or
waive any institutional eligibility
provisions, to ensure that students with
intellectual disabilities who enroll in
comprehensive transition and
postsecondary programs remain eligible
for this assistance.
Current Regulations: None.
Proposed Regulations: The proposed
regulations would specify that students
with intellectual disabilities who enroll
in comprehensive transition and
postsecondary programs are eligible for

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assistance under the Federal Pell Grant,
FSEOG, and FWS programs, and would
restate the Secretary’s waiver authority
by providing that, except for provisions
related to needs analysis, the Secretary
may waive any title IV, HEA program
requirement related to these programs or
institutional eligibility.
Reasons: The proposed regulations
would implement the statutory
provisions, and clarify that the
Secretary’s waiver authority may be
used to ensure that students with
intellectual disabilities remain eligible
for Federal Pell Grant, FSEOG, and FWS
program funds.
Definition of a Comprehensive
Transition and Postsecondary Program
(§ 668.231)
Statute: Section 709 of the HEOA
added section 760 to the HEA to define
a comprehensive transition and
postsecondary program as a degree,
certificate, or non-degree program that—
• Is offered by an institution of higher
education;
• Is designed to support students
with intellectual disabilities who are
seeking to continue academic, career
and technical, and independent living
instruction at an institution to prepare
for gainful employment;
• Includes an advising and
curriculum structure; and
• Requires students with intellectual
disabilities to participate on not less
than a half-time basis, as determined by
the institution, with that participation
focusing on academic components and
occurring through one or more of the
following activities:
• Regular enrollment in creditbearing courses with students without
disabilities.
• Auditing or participating in courses
with students without disabilities for
which the student does not receive
regular academic credit.
• Enrollment in non-credit-bearing,
nondegree courses with students
without disabilities.
• Participation in internships or
work-based training in settings with
students without disabilities.
Current Regulations: None.
Proposed Regulations: Proposed
§ 668.231 would define a
comprehensive transition and
postsecondary program by
incorporating the statutory provisions,
but would add a provision that the
program would have to be delivered to
students physically attending the
institution. The proposed regulations
would also clarify that the program
must provide opportunities for students
with intellectual disabilities to
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activities with students without
disabilities.
Reasons: Proposed § 668.231 would
incorporate the statutory requirements
from section 760 of the HEA except for
the proposed addition and clarification
described in the preceding Proposed
Regulations section. Some of the nonFederal negotiators initially opposed the
proposed requirement that a
comprehensive transition and
postsecondary program must be
delivered to students physically
attending the institution. The
negotiators argued that students should
have the option of taking distance
courses because they might be unable to
commute to a campus or because some
courses might only be offered online.
Other negotiators and experts in the
field argued that Congress intended for
students with intellectual disabilities to
be integrated into campus life as much
as possible and did not want to allow
distance education to be the sole or
main delivery method. The Department
does not wish to regulate to preclude all
distance courses for students with
intellectual disabilities and may permit
a limited number of courses to be
delivered via distance, as long as the
institution explains why it believes the
course is applicable to, and benefits,
students with intellectual disabilities.
Similarly, we wish to clarify that a
comprehensive transition and
postsecondary program may include an
internship for students or other
activities that are located off-campus—
the physically-attending requirement
does not exclude these activities.
With regard to students participating
in one or more of the identified
activities with students without
disabilities, an institution has the
flexibility to determine the activity or
combination of activities that is best
aligned with student needs and
interests, as long as students with
intellectual disabilities participate in
these activities for at least half the time
that they are enrolled in the program.
Some non-Federal negotiators
suggested that comprehensive transition
and postsecondary programs might offer
multiple ways for students with
intellectual disabilities to participate in
campus life beyond those that are
delineated in the statute. In response,
we propose that a program provide
students with opportunities to
participate in coursework and other
activities with students without
disabilities, such as student
government, clubs, social events, and
sports.

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Definition of a Student With an
Intellectual Disability (§ 668.231)
Statute: Section 709 of the HEOA
added section 760 of the HEA to define
student with an intellectual disability as
a student:
• With mental retardation or a
cognitive impairment characterized by
significant limitation in intellectual and
cognitive functioning and adaptive
behavior as expressed in conceptual,
social, and practical adaptive skills; and
• Who is currently, or was formerly,
eligible for a free appropriate public
education (FAPE) (i.e., special
education and related services) under
the Individuals with Disabilities
Education Act (IDEA).
Current Regulations: None.
Proposed Regulations: Proposed
§ 668.231 would define student with an
intellectual disability as set forth in the
statute, but clarify that a student who
was determined eligible for services
under the IDEA but was home-schooled
or attended private school would also
meet this part of this definition.
Reasons: Proposed § 668.231 would
incorporate the statutory requirements
from section 760 of the HEA except for
the proposed clarification regarding
students who are home-schooled or
attended private school.
While some non-Federal negotiators
felt that the statute could be read to
include students with intellectual
disabilities who are home-schooled or
attended a private school but were not
determined eligible for special
education and related services under the
IDEA, the Department does not believe
that the HEA provides this flexibility.
Under §§ 612(a)(3), 612(a)(10)(A)(ii)(I)
and 613(a)(1) of the Individuals with
Disabilities Education Act (IDEA) (20
U.S.C. 1221e–3, 1406, 1411–1419; 23
CFR part 304), State educational
agencies (SEAs) and local educational
agencies (LEAs) are required to locate,
identify and evaluate all students with
disabilities within the jurisdiction of the
State and LEA. In addition, under
§ 614(a)(1)(B) of the IDEA, LEAs and
SEAs must assess students for eligibility
for special education and related
services under the IDEA if requested by
the parent. These are ongoing
responsibilities that extend to all
children residing in the State, or in the
jurisdiction of the LEA, including
children attending private schools. To
qualify for title IV aid pursuant to
§ 484(s) of the HEA, a student should
obtain an IDEA eligibility determination
while the student is still age-eligible for
IDEA services from, (1) for students
attending private elementary and
secondary schools, including home

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schools if home schools are considered
private schools under State law, the
LEA in which the private school is
located, or (2) for students not attending
private elementary and secondary
schools, the LEA that is responsible for
making available a FAPE to the student
(generally, the LEA in which the student
resides).
Program Eligibility (§ 668.232)
Statute: Section 485(a)(8) of the
HEOA adds section 484(s) to the HEA to
establish the eligibility of students with
intellectual disabilities who enroll in
comprehensive transition and
postsecondary programs to receive aid
under the Federal Pell Grant, FSEOG,
and FWS programs.
Current Regulations: None.
Proposed Regulations: Consistent
with current procedures under which an
institution adds an additional program,
an institution that wishes to offer a
comprehensive transition and
postsecondary program would have to
apply and receive approval from the
Secretary under proposed § 668.232.
The proposed regulations outline the
elements that an institution must
include in its application, including:
• A detailed description of the
comprehensive transition and
postsecondary program, addressing all
of the components of the program as
defined in proposed § 668.231;
• The policy for determining whether
a student enrolled in the program is
making satisfactory academic progress;
• A statement of the number of weeks
of instructional time and the number of
semester or quarter credit hours or clock
hours in the program, including the
equivalent credit or clock hours
associated with noncredit or reduced
credit courses or activities;
• A description of the educational
credential offered or identified outcome
or outcomes established by the
institution for all students enrolled in
the program;
• A copy of the letter or notice sent
to the institution’s accrediting agency
informing the agency of its
comprehensive transition and
postsecondary program; and
• Any other information the Secretary
may require.
Reasons: Proposed § 668.232 would
incorporate the statutory provisions
from section 484(s) of the HEA. The
Department would use the requested
information to determine whether to
approve the institution’s program for
funding under the Federal Pell Grant,
FSEOG, and FWS programs.
The requirement that an institution
provide a copy of the notice sent to its
accrediting agency is intended only to

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ensure that the accrediting agency is
informed that the institution offers or
will offer a comprehensive transition
and postsecondary program. The
accrediting agency would then decide
whether to take any actions.
One of the non-Federal negotiators
felt that an institution should not have
to set up a separate advising and
curriculum structure for students with
intellectual disabilities. The Department
will consider, on a case-by-case basis,
allowing an institution to use an
existing structure based on the
institution’s explanation of how that
structure is applicable to, and benefits,
students with intellectual disabilities.
Other negotiators asked whether the
Department would approve a
comprehensive transition and
postsecondary program developed to
serve the needs of a single student, as
this is already the practice in the field.
The Department will consider, on a
case-by-case basis, whether to approve a
comprehensive transition and
postsecondary program developed to
serve the needs of a single student.
However, an institution would have to
submit a separate application for each
comprehensive transition and
postsecondary program for which it
seeks approval, even if the program is
developed for only one student, as each
would be considered a separate
program.
Student Eligibility (§§ 668.32 and
668.233)
Statute: Section 484(s) of the HEA
specifies that a student with an
intellectual disability must:
• Be enrolled or accepted for
enrollment in a comprehensive
transition and postsecondary program
for students with intellectual disabilities
at an institution of higher education;
• Be maintaining satisfactory progress
in the program as determined by the
institution, in accordance with
standards established by the institution;
and
• Meet the student eligibility
requirements in sections 484(a)(3), (4),
(5), and (6) of the HEA, under which a
student must not be in default on any
Federal student loans, must have filed a
FAFSA, must be a United States citizen
or national, and, if the student was
convicted of fraud in obtaining funds
under this title, must have repaid those
funds.
Current Regulations: Section 668.32
describes the requirements for student
eligibility for title IV, HEA program
assistance. In part, under this section a
student must:
• Be enrolled for the purpose of
obtaining a degree or certificate;

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• Have a high school diploma, a
recognized equivalent of a high school
diploma, or have passed an ability to
benefit test; and
• Be making satisfactory progress
according to the institution’s published
standards for satisfactory progress that
satisfy the provisions of § 668.16(e) and,
if applicable, those under § 668.34.
Proposed Regulations: Proposed
§§ 668.32(n) and 668.233 would provide
that a student with intellectual
disabilities enrolled in a comprehensive
transition and postsecondary program
may be eligible for title IV, HEA
program assistance under the Federal
Pell Grant, FSEOG, and FWS programs
if—
• The student is making satisfactory
academic progress in accordance with
the institution’s published standards for
students enrolled in the comprehensive
transition and postsecondary program;
and
• The institution obtains a record
from a local or State educational agency
that the student is or was eligible for
special education and related services
under IDEA. If the student’s record does
not indicate that the student has an
intellectual disability, as discussed in
paragraph (1) of the definition of a
student with an intellectual disability in
proposed § 668.231, the institution
would have to also obtain
documentation from another source that
identifies the intellectual disability.
Reasons: The proposed regulations
would implement the statutory
requirements by clarifying that a student
with an intellectual disability is exempt
from the requirements that he or she
have a high school diploma or its
equivalent, and is making satisfactory
academic progress under § 668.16(e) and
§ 668.34, if applicable. Also, because a
student with an intellectual disability
does not have to be enrolled in a degree
or certificate program, the student
would be eligible for a second Pell Grant
in the same award year if the student
otherwise qualifies for that grant under
proposed § 690.67.
With respect to documentation
establishing an intellectual disability,
there was some concern among the
negotiators that institutions would
require updated evaluations that could
be costly or cost prohibitive. Proposed
§ 668.233 would allow institutions to
accept the most recent documentation,
even if it is more than a few years old.
Also, if available in the student’s record
and to better understand a student’s
abilities and limitations, we encourage
institutions to consider using a student’s
summary of academic achievements and
functional performance, as described in
34 CFR 300.305(e)(3), which includes

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recommendations on how to assist the
student in meeting the student’s
postsecondary goals.
Institutional Information (§ 668.43)
Statute: Section 485(a)(I) of the HEA
specifies that institutions must
disseminate information about special
facilities and services available to
students with disabilities.
Current Regulations: Section 668.43
requires an institution to provide a
description of any special facilities and
services available to disabled students.
Proposed Regulations: Proposed
§ 668.43(a)(7) would change the phrase
‘‘any special facilities and services’’ to
‘‘the services and facilities,’’ and replace
the phrase ‘‘disabled students’’ with
‘‘students with disabilities.’’ The
proposed changes would also clarify
that a description of services and
facilities for students with disabilities
must also contain the services and
facilities available for students with
intellectual disabilities.
Reasons: The proposed changes
reflect changes in terminology in the
special education and disability fields.
Further, we wanted to clarify that a
description of the services and facilities
available to students with intellectual
disabilities must be included in the
description of the services and facilities
available to all students with
disabilities.
Part 675 Federal Work-Study
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Definition of Community Services
(§ 675.2)
Adding the Field of Emergency
Preparedness and Response
Statute: Section 441 of the HEOA
amended the definition of community
services in section 441(c)(1) of the HEA
to include the field of emergency
preparedness and response.
Current Regulations: Section 675.2(b)
provides the definitions of terms for the
FWS Program, including the term
community services. The definition of
community services includes a list of
possible services in fields such as
literacy training and education tutoring
that may be considered community
services under the FWS Program. The
definition does not provide a complete
list of acceptable services, but highlights
certain services that may improve the
quality of life for outside community
residents, particularly low-income
individuals, or solve particular
problems related to their needs.
Proposed Regulations: We propose to
revise the definition of the term
community services in § 675.2(b) to
include the field of emergency

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preparedness and response to reflect the
statutory definition.
Reasons: This proposed regulatory
change is needed to conform the
regulatory definition of community
services with section 441(c)(1) of the
HEA.
Conforming FWS Payment
Requirements to the Cash Management
Regulations (§ 675.16)
Handling Minor Prior-Year Charges
Statute: Under Part E—Need Analysis
of the HEA (particularly sections 471
through 473), a student’s need for most
Title IV, HEA program funds for a
period of enrollment during an award
year is determined by subtracting the
expected family contribution (EFC) and
other estimated financial assistance for
that same enrollment period during the
award year from the student’s cost of
attendance for the same period. The cost
of attendance is based on current award
year educational expenses. The EFC is
the amount that can reasonably be
contributed toward meeting the
student’s educational expenses for the
period of enrollment during the award
year for which a need determination is
made. The Title IV, HEA funds are
awarded to defray the educational costs
for the award year.
Current Regulations: Under
§ 675.16(a)(3)(iv), an institution may use
a student’s current year FWS
compensation to pay for minor prioraward year charges if the charges are
less than $100, or the charges are $100
or more and the payment of those
charges does not prevent the student
from paying his or her current
educational costs. In either case, the
institution must first obtain the
student’s written authorization. The
cash management requirements in
§ 668.164(d) for the other title IV, HEA
programs allow an institution to use a
student’s current year title IV, HEA
program funds to pay for minor prioryear charges if the charges are not more
than $200.
Proposed Regulations: Under the
provisions in proposed § 675.16(b)(1)(ii)
and (b)(2), the FWS regulations are
amended in three ways regarding the
use of current award year FWS funds to
pay prior award year charges. First, the
amount of prior award year charges that
could be paid with current award year
FWS funds would increase to not more
than $200. Second, the FWS provision
that allows an institution to pay for
prior award year charges of $100 or
more would be removed. Finally, we
clarify that the $200 limit applies to all
title IV, HEA program funds that an
institution uses to pay prior-year

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charges. For example, if an institution
uses FWS funds in combination with
other title IV, HEA program funds to
credit a student’s account to satisfy
prior award year charges, the total
amount of the funds used must be $200
or less. We note that an institution is
still required to obtain the student’s
written authorization to credit FWS to
the student’s account.
Reasons: The proposed changes are
needed to conform the FWS payment
regulations to the cash management
requirements in § 668.164(d) regarding
the prior award year limit. When the
Department amended the regulations for
minor prior award year charges under
§ 668.164(d) in November 1, 2007, for
the other title IV, HEA programs, we
failed to make the conforming change
for the FWS Program in § 675.16.
Electronic Disbursements
Statute: The HEA does not address
the issue of electronic disbursement of
FWS or other Title IV, HEA program
funds.
Current Regulations: The current FWS
regulations in § 675.16(a) provide that
an institution may pay a student by
check or similar instrument that the
student can cash on his or her own
endorsement, by initiating an electronic
funds transfer (EFT) to the student’s
bank account, or by crediting the
student’s account at the institution. If an
institution wishes to make an EFT or
credit the student’s account at the
institution, it must obtain the student’s
written authorization. The current FWS
regulations do not allow an institution
to require a student to have a bank
account in order to be paid FWS
compensation. Also, the current FWS
regulations do not address payments
made via a stored-value card.
Proposed Regulations: The proposed
FWS regulations in § 675.16(a)(1) would
adopt the regulations in § 668.164(c) for
the direct payment of FWS
compensation. The provisions for
issuing a check and expanding the use
of EFTs to bank accounts that underlie
stored-value cards and other transaction
devices that already exist for the other
title IV, HEA programs would also apply
to the FWS Program. The proposed
regulations would remove the FWS
requirement that an institution obtain a
student’s written authorization to make
an EFT payment and add a provision
allowing an institution to issue a storedvalue card or similar device. The
proposed regulations continue the
current requirement that an institution
must obtain a student’s written
authorization to credit FWS
compensation to a student’s account at
the institution for any purpose because

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the funds are earnings and holding
those funds without the student’s
permission would be a garnishment of
wages. Finally, the proposed FWS
regulations would allow an institution
to establish a policy requiring students
to provide bank account information or
open an account at a bank of the
student’s choosing, as long as this
policy does not delay the disbursement
of FWS earnings to the student. Thus, if
the student does not comply with the
policy, the institution must still
disburse the funds to the student in a
timely manner in another way. Further,
an institution is not allowed to refuse to
hire a student who does not comply
with the policy to provide bank account
information or open a bank account, nor
to fire him or her for that same reason.
This policy is based on section 445(c) of
the HEA, which states that an
institution may, upon the request of a
student, make a direct deposit to the
student’s account.
Reasons: The proposed regulations
eliminate inconsistencies and otherwise
harmonize the requirements in the FWS
and cash management regulations.
Providing consistency among the title
IV, HEA programs for making direct
payments to students would make the
FWS Program easier for institutions to
administer and make the process easier
for students to understand.
Eliminating Separate Student
Authorizations
Statute: The HEA does not address
the issue of student written
authorizations for crediting FWS funds
directly to the student’s account at the
institution or holding FWS credit
balances on behalf of a student.
Current Regulations: Under
§ 675.16(a), an institution must obtain
written authorization from the student
to credit the student’s account at the
institution with FWS funds and to hold
a title IV credit balance. The
authorization to credit FWS funds to a
student’s account at the institution must
be separate from any other
authorization. The FWS written
authorization may not be included as
part of a list or in combination with
other types of authorizations signed by
the student, including authorizations for
all the other title IV, HEA programs as
provided in § 668.165. This requirement
for a separate student authorization to
credit FWS funds to a student’s account
also applies to the written authorization
required to hold an FWS credit balance
for the student.
Proposed Regulations: Under the
provisions in proposed § 675.16(d), the
FWS written authorization required to
credit a student’s account at the

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institution or the written authorization
required to hold a credit balance for the
student will no longer be required to be
separated from other authorizations.
Reasons: The proposed FWS change
would allow the administrative
collection of the student authorizations
required under the FWS Program for
crediting student accounts and holding
credit balances at the institution to be
combined with the student
authorizations required in § 668.165 for
the other title IV, HEA programs. This
combination of student authorizations
will make the collection process easier
for both the student and the institution.
Terms for the Work Colleges Program
(Subpart C of Part 675)
Statute: The amendments made by the
HEOA to section 448 of the HEA replace
the term work-learning each place it
appears in the statute for the Work
Colleges Program with the term worklearning-service. In addition, the name
of the comprehensive student worklearning program that a work college
must have, was changed to the
comprehensive student work-learningservice program.
Current Regulations: Throughout
subpart C of part 674, the current Work
Colleges Program regulations refer to the
term work-learning or the term
comprehensive work-learning programs
and the term comprehensive student
work-learning program is defined in
§ 675.41(b).
Proposed Regulations: Under the
proposed changes to the regulations in
subpart C of part 674, the term worklearning is replaced with the term worklearning-service each place that it
appears. Further, the name of the
defined term comprehensive student
work-learning program in § 675.41(b)
would be changed to comprehensive
student work-learning-service program.
Reasons: This change is needed to
conform the wording in the Work
Colleges Program regulations to the
wording used in the HEA. The addition
of the word service is important because
it recognizes the value of service as an
intrinsic element and educational
outcome of work that is provided as part
of the overall education program at a
Work College that benefits the college,
the community, and the student. The
word service that was added as part of
the term work-learning-service in the
HEA and now in the proposed
regulations, refers to uncompensated
volunteer service or compensated
service for work performed for the good
of the college community or the external
community beyond the campus. It
includes work performed in the public
interest at a Federal, State, or local

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public agency, or at a private nonprofit
organization.
Additional Standards for the Definition
of the Term Work College
Statute: The amendments made by the
HEOA to section 448 of the HEA
amended the definition of work college.
The term work college was amended by
adding additional standards that a
public or private nonprofit institution
must meet to be eligible for this
program. The institution must be a fouryear, degree-granting institution and
must require at least one-half of all of its
full-time students to participate in a
comprehensive student work-learningservice program. The institution must
continue to have all of its resident
students participate in a comprehensive
student work-learning-service program.
In addition, the institution must require
the students to participate in a
comprehensive student work-learningservice program for at least five hours
each week or at least 80 hours during
each period of enrollment, except for
summer school, an approved study
abroad program, or an externship
program. A period of enrollment means
a semester, quarter, trimester, or a
similar period.
Current Regulations: Section
675.41(a) defines the term work college.
Proposed Regulations: Under
proposed § 675.41(a), the definition of
work college would now include the
requirement that an institution must be
a four-year, degree-granting institution.
The proposed definition would also
provide that the institution must have at
least one-half of all of its full-time
students participate in the required
comprehensive work-learning-service
program. In addition, all of the students
in that program must participate for a
minimum of five hours each week or a
minimum of 80 hours during each
period of enrollment, except for summer
school, an approved study abroad
program, or an externship program.
Reasons: The proposed additional
requirements are needed to conform the
definition of a work college to the
statutory definition.
Expanding FWS Community Service
Jobs (§§ 675.18(g) and 675.26(d))
Promoting Civic Education and
Participation Activities
Statute: The amendments made by the
HEOA to section 443 of the HEA permit
institutions to meet the FWS seven
percent community service expenditure
requirement by using FWS funds to pay
students employed in projects that teach
civics in schools, raise awareness of
government functions or resources, or
increase civic participation.

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If an institution decides to place FWS
students in a community service project
performing civic education and
participation activities, it must to the
extent practicable:
• Give priority to the employment of
FWS students in projects that educate or
train the public about evacuation,
emergency response, and injury
prevention strategies relating to natural
disasters, acts of terrorism, and other
emergency situations; and
• Ensure that the FWS students
performing these projects receive the
appropriate training to carry out the
required educational services.
The FWS students employed in
community service projects performing
these civic education and participation
activities may be paid for the time spent
in training and travel. Further, the FWS
students employed in community
service projects performing civic
education and participation activities
may be paid FWS compensation with a
Federal share that exceeds the regular
75 percent limit.
Current Regulations: The current FWS
regulations do not address and promote
civic education and participation
activities as a community service
project.
Proposed Regulations: Section
675.18(g) would be amended to
implement section 443 of the HEA that
promotes the use of FWS funds to
employ FWS students in community
service projects performing civic
education and participation activities.
The proposed regulations would
provide that when a school decides to
have FWS students perform these
activities, to the extent practicable, it
must give priority to the employment of
students participating in projects that
educate or train the public about
evacuation, emergency response, and
injury prevention strategies relating to
natural disasters, acts of terrorism, and
other emergency situations. The
institution, to the extent practicable,
would also have to ensure that the
students receive the appropriate training
to carry out the educational services
required.
Section 675.26(d) would be amended
to implement the requirement in section
443 of the HEA to allow the Federal
share of the compensation paid to FWS
students performing the civic education
and participation activities in
community service projects to exceed
the regular 75 percent limit. These FWS
students may be paid with a Federal
share of up to 100 percent.
Reasons: The proposed changes to the
FWS regulations are needed to add this
new use of FWS funds and to promote
the employment of FWS students in

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community service projects performing
civic education and participation
activities. Allowing institutions to pay
FWS students with a Federal share of up
to 100 percent encourages institutions to
place students in community service
projects performing civic education and
participation activities.
We note that the conference language
in the HEOA urges FWS participating
institutions to improve the availability
and quality of community service job
information to students and to improve
their outreach to community service
agencies. The addition of this new use
of FWS funds to have students perform
civic education and participation
activities in community service projects
provides an opportunity for an
institution to make the above requested
improvements and to meet the seven
percent community service expenditure
requirement.
Flexible Use of FWS Funds (§ 675.18(i))
Paying Students Under Certain
Conditions in the Event of a Major
Disaster
Statute: The amendments made by the
HEOA added a new subsection (d) to
section 445 of the HEA. This new
provision allows an eligible institution
located in any area affected by a major
disaster to make FWS payments to
disaster-affected students under certain
limited conditions. The FWS payments
may only be made for the period of
time, not to exceed one academic year,
in which the disaster-affected students
were prevented from fulfilling their
FWS work obligations due to the major
disaster.
Payments may be made to the
disaster-affected students in an amount
equal to or less than the amount of FWS
wages the students would have been
paid had the students been able to
complete the work obligation necessary
to receive the FWS funds. Payments
may not be made to any student who
was not eligible for FWS or was not
completing the work obligation
necessary to receive the FWS funds
prior to the occurrence of the major
disaster. Any payments made to
disaster-affected students must meet the
applicable FWS matching requirements,
unless the Secretary has waived the
matching requirements.
Section 445(d) of the HEA defines the
term ‘‘disaster-affected student’’ as a
student enrolled at the institution who
has received the FWS award and earned
FWS wages prior to the occurrence of
the major disaster, was prevented from
working for all or part of the academic
year due to the major disaster, and was
unable to be reassigned to another FWS

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job after the major disaster. The
amended HEA also provides that the
term ‘‘major disaster’’ has the meaning
as defined in section 102(2) of the
Robert T. Stafford Disaster Relief and
Emergency Assistance Act (42 U.S.C.
5122(2)).
Current Regulations: The current FWS
regulations do not provide for the
flexibility to pay FWS funds to disasteraffected students unable to work due to
a major disaster. Under the current
regulations, there is no exception to the
FWS Program requirement that an FWS
student may never be paid FWS funds
until the student has performed the
work and earned those funds.
Proposed Regulations: Section 675.18
would be amended by adding a new
paragraph (i) that allows an institution
located in any area affected by a major
disaster to make FWS payments to
disaster-affected students. However, this
one special exception to the basic
requirement that an FWS student may
not be paid FWS funds until the student
has performed the FWS work has very
specific conditions that must be met.
To apply this limited flexible use of
FWS funds to pay disaster-affected
students an institution must be located
in an area affected by a major disaster.
A major disaster must be declared by
the President. The counties or parishes
covered by the declaration are provided
by the Federal Emergency Management
Agency (FEMA).
The FWS payments may only be made
for the period of time in which the
disaster-affected students were
prevented from completing their FWS
work obligations due to the major
disaster. The period of time cannot
exceed one academic year for this
purpose. The FWS payments made to
disaster-affected students cannot exceed
the amount of FWS wages the students
would have been paid had these
students been able to complete the FWS
work obligation necessary to receive the
FWS funds. The institution in paying
the FWS funds to the disaster-affected
students must make the appropriate
match for the FWS Federal funds,
unless the Secretary has waived the
matching requirements.
The disaster-affected students must
have been eligible for FWS and awarded
FWS prior to the occurrence of the
major disaster. The disaster-affected
students must have earned FWS funds
and be completing the FWS work
obligation prior to the occurrence of the
major disaster. The disaster-affected
students could not have been separated
from their FWS employment prior to the
occurrence of the major disaster. The
major disaster must prevent the FWS
students from working for a portion or

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all of the academic year. In addition, the
disaster-affected students must be
unable to be reassigned to other FWS
jobs by the institution after the
occurrence of the major disaster.
Reasons: The proposed changes to the
FWS regulations are needed to add this
new flexibility to pay disaster-affected
students who are unable to work
because of a major disaster. The change
would allow the eligible FWS students
unable to work due to a major disaster
to still receive the FWS funds that they
need to help pay for educational costs.
Part 686 Teacher Education
Assistance for College and Higher
Education (TEACH) Grant Program
TEACH Grant Program

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Periods of Suspension (§ 686.41)
Statute: None.
Current Regulations: Section
686.41(a) provides that a TEACH Grant
recipient may be granted a suspension
of the eight-year period required for
completing his or her teaching service
obligation, in a low-income school as a
highly-qualified teacher in a high-need
field, based on a call or order to active
military duty. The suspension ends
upon the completion of that military
service.
Proposed Regulations: A TEACH
Grant recipient who is called or ordered
to active military duty (or his or her
representative) may request a
suspension of the eight-year period in
increments not to exceed three years.
Under proposed § 686.41(a)(2), a request
for a suspension of the eight-year period
may be granted in one-year increments.
Proposed § 686.41(a)(2)(ii) would allow
a suspension of the eight-year period for
no more than three years. Once the
recipient has exceeded the three-year
suspension period, the recipient (or his
or her representative) may request a
discharge of all or a portion of his or her
teaching service obligation.
Reasons: The proposed regulations
would no longer provide an indefinite
delay of the eight-year, service
obligation period to a TEACH Grant
recipient who is called or ordered to
active duty. Instead a TEACH Grant
recipient that exceeds the three-year
suspension period could qualify for a
discharge of all or part of his or her
teaching service obligation as provided
in proposed § 686.42. The proposed
discharge provides a greater benefit than
a suspension of the service obligation to
a TEACH Grant recipient who is called
or ordered to active military duty for
extended periods.

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Discharge of Agreement To Serve
(§ 686.42)
Statute: Section 420N(d)(2) of the
HEA, as amended by the HEOA,
requires the Secretary to establish
categories of extenuating circumstances
under which a TEACH Grant recipient
who is unable to fulfill all or a portion
of his or her teaching service obligation
may be excused from fulfilling that
portion of the teaching service
obligation.
Current Regulations: None.
Proposed Regulations: As provided in
proposed § 686.42(c)(2), the recipient
may qualify for a proportional discharge
of his or her service obligation based on
the number of years the recipient has
been called or ordered to active military
duty. The recipient would qualify for a
one-year discharge if the call or order to
active military duty is for more than
three years. Similarly, the recipient
would qualify for a two-year, three-year,
or total discharge if the call or order to
active military duty is for more than
four, five, or six years, respectively.
To obtain the discharge, the recipient
(or his or her representative) would be
required under § 686.42(c)(3) to provide
the Secretary:
• A written statement from his or her
commanding or personnel officer
certifying that the recipient is on active
duty in the Armed Forces, the date on
which that service began, and the date
the service is expected to end; and
• A copy of his or her official military
orders and military identification.
The term Armed Forces would be
defined in § 686.42(c)(4) to mean the
Army, Navy, Air Force, Marine Corps,
and Coast Guard.
Finally, under proposed
§ 686.42(c)(5), the Department would
notify a TEACH Grant recipient or his
or her representative of the decision
reached on his or her request for a
partial or full discharge of the teaching
service obligation. The grant recipient
would be responsible for fulfilling any
teaching service obligation that is not
discharged.
Reasons: The proposed regulations in
§ 686.41 implement the statutory
requirement in section 420N(d)(2)of the
HEA by providing for a discharge of a
teaching service obligation based on a
call or order to active military duty.
Under current § 686.42(a) and (b), a
TEACH Grant recipient may have his or
her teaching service obligation
discharged upon the recipient’s death or
if he or she becomes totally and
permanently disabled. The Department
believes it would be appropriate to also
provide a discharge of a TEACH Grant
recipient’s teaching service obligation in

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cases when the grant recipient cannot
comply with his or her agreement to
teach because of a call or order to active
military duty for an extended period of
time. TEACH Grant recipients who are
called to active military duty for an
extended period of time may return
from their military service with teaching
credentials that are no longer valid, may
require retraining to meet the standards
established by the State before they can
be placed in a teaching position, or may
otherwise encounter difficulties in
obtaining a teaching position that could
be used to fulfill their teaching service
obligation.
Several non-Federal negotiators
believed that additional extenuating
circumstances should also be
considered. Some of them suggested
that we expand the categories of
extenuating circumstances to include
economic hardship. Noting that teachers
were being laid off in a number of areas,
they argued that TEACH Grant
recipients might not be able to find fulltime employment in their high-need
fields due to the current economic
conditions, which they felt might
continue for some time. While we are
sympathetic to these concerns, the
Department believes that, because a
TEACH Grant recipient has eight years
to complete a four-year teaching service
obligation, he or she should still be able
to fulfill that obligation notwithstanding
the fact that he or she may encounter a
temporary hardship in locating a
suitable position.
Part 690

Federal Pell Grant Program

Two Federal Pell Grants in an Award
Year (§§ 690.63(h), 690.64, and 690.67)
Statute: Section 401(b)(5) of the HEA,
as amended by the HEOA, provides that
a student may receive up to two
consecutive Federal Pell Grant
Scheduled Awards during a single
award year if the student is enrolled at
least half-time for more than one
academic year, more than two
semesters, or the equivalent time during
a single award year. The student must
also be enrolled in a certificate,
associate degree, or baccalaureate degree
program. Section 484(s)(3) of the HEA
provides the authority to waive this
provision for students with intellectual
disabilities who enroll in a
comprehensive transition and
postsecondary program.
Student Eligibility for a Second
Scheduled Award (§ 690.67(a))
Current Regulations: The current
regulations provide that the Secretary
announces in the Federal Register
whether an institution may award up to

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a second Federal Pell Grant Scheduled
Award to a student in a particular award
year. An institution may award up to a
second Scheduled Award if a student is
enrolled as a full-time student in an
eligible program that leads to an
associate or baccalaureate degree and
the student has completed the credit
hours and weeks of instructional time in
an academic year leading to his or her
associate or baccalaureate degree
program. If an institution awards a
student a second Scheduled Federal Pell
Grant award, the institution must make
that award to all students who qualify.
Proposed Regulations: The proposed
regulations would amend § 690.67 to
provide that a student would be eligible
for a second Scheduled Award if the
student has earned in an award year at
least the credit or clock hours of the first
academic year of the student’s eligible
program, and is enrolled as at least a
half-time student in a program leading
to a bachelor’s or associate degree or
other recognized educational credential
(such as a postsecondary certificate or
diploma), except as provided in
proposed 34 CFR part 668, subpart O for
students with intellectual disabilities.
Reasons: We are proposing these
requirements to encourage a student to
accelerate the completion of his or her
program of study within a shorter time
period than the regularly scheduled
completion time, i.e., the published
length of the program. Providing up to
two Federal Pell Grants to students for
attendance in all payment periods in an
award year supports this acceleration.
We believe that, by encouraging the
student to complete the credit or clock
hours in the academic year
expeditiously, the benefit of most
students’ second Scheduled Awards
would be maximized.
We initially proposed that a student
would be required to complete the
credit or clock hours of the first
academic year before receiving a second
Scheduled Award or to complete the
credit or clock hours of the first
academic year in the payment period for
which he or she is receiving a payment
from the second Scheduled Award in
the award year. We further proposed to
amend § 690.80 to provide that if the
projected enrollment status of a student
enrolled in a term-based program
changed at any time during a payment
period in which the student is receiving
a payment from a second Scheduled
Award in an award year, the institution
would be required to recalculate the
student’s payment for the payment
period. This recalculation requirement
would ensure that a student who is not
accelerating does not receive the benefit

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of a payment from a second Scheduled
Award.
We did not propose any similar
recalculation requirement for clock-hour
and nonterm-credit-hour programs. A
recalculation requirement would not be
relevant to these programs. A student
enrolled in one of these programs must
successfully complete the credit or
clock hours of a payment period to
progress to the next payment period.
Thus, a student is required to earn the
credit or clock hours of the first
academic year to advance to a payment
from a second Scheduled Award.
Some of the non-Federal negotiators
objected to the recalculation
requirements for term-based programs.
These non-Federal negotiators were
concerned that the requirements would
be administratively burdensome. They
also objected to the difference in
treatment compared to the requirements
for recalculations for payments from a
student’s first Scheduled Award in the
award year. In addition, some of these
non-Federal negotiators believed that
the satisfactory academic progress
standards in 34 CFR 668.16(e), as well
as the new limitation under section
401(c)(5) of the amended HEA that a
student’s lifetime eligibility is limited to
nine Scheduled Awards, provided
sufficient minimum standards for
ensuring a student’s advancement in his
or her eligible program. We are not
convinced that the satisfactory progress
standards at most institutions are robust
enough for this purpose or that the
lifetime limitation on eligibility is short
enough to provide a sufficient basis for
encouraging students to complete their
eligible programs in less than the
regularly scheduled completion time.
As a result of the non-Federal
negotiators objections to the
requirements for recalculations for
changes in enrollment status, we
proposed an alternative approach.
Instead of recalculation, we proposed
that a student in a term-based program
must earn the credit or clock hours in
an academic year before the student
would be eligible for any payment from
a second Scheduled Award. This
proposal would be similar to the current
treatment of students in clock-hour and
nonterm-credit-hour programs.
Some of the non-Federal negotiators
objected to the proposed alternative
approach. They did not believe it was
appropriate to require a student in a
term-based program to earn the credit or
clock hours of the first academic year
for the student to be eligible for a
second Scheduled Award. In addition,
the non-Federal negotiators disagreed
with our understanding that
acceleration means that a student would

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complete his or her eligible program in
less than the regularly scheduled period
for completion. The non-Federal
negotiators believed that acceleration
meant that a student was earning
additional credit or clock hours beyond
the first academic year in the award year
without respect to whether the
additional hours were sufficient for the
student to advance significantly toward
the completion of his or her eligible
program. Some of these non-Federal
negotiators believed that the statute
intended acceleration to apply only on
a student-by-student basis. For example,
a student would be accelerating by
completing his or her eligible program
in a shorter period of time than the
student would otherwise have
completed the program without
reference to any objective standard. We
do not agree. We do not believe the
statute limits the implementation of
these requirements in this manner, nor
do we believe that adopting the nonFederal negotiators’ position would
provide the necessary encouragement
for a student to accelerate the
completion of his or her educational
program.
As an alternative to our proposal, the
non-Federal negotiators again advanced
their belief that the satisfactory progress
standards and the nine-ScheduledAward limit were sufficient. However,
they did not provide any further
information on how these requirements
would serve to advance a student’s
acceleration in his or her eligible
program.
Consensus was not reached and the
Department decided to move forward
with the proposal to require a student to
earn the credit or clock hours in the
(first) academic year before the student
would be eligible for any payment from
a second Scheduled Award in the award
year.
Transfer Students (§ 690.67(b))
Current Regulations: None.
Proposed Regulations: The proposed
regulations would provide that an
institution must determine the credit or
clock hours that a transfer student has
earned at a prior institution during the
award year based on the Federal Pell
Grant disbursements that the student
received at the prior institution during
the award year in relation to the
student’s Scheduled Award at that prior
institution. The credit or clock hours
that the student would be considered to
have earned would be in the same
proportion to credit or clock hours in
the current institution’s academic year
as the disbursements that the student
has received at the prior institution in
the award year are in proportion to the

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student’s Scheduled Award at the prior
institution.
If the student’s first Scheduled Award
has been disbursed at institutions
previously attended, the student would
be considered to have completed the
credit or clock hours of the first
academic year in the award year. If less
than the first Scheduled Award has
been disbursed at prior institutions, the
student’s credit or clock hours earned
would be determined by multiplying the

payments of the student’s Scheduled
Award disbursed at a prior institution
during the award year by the number of
credit or clock hours in the current
institution’s academic year and dividing
the product of the multiplication by the
amount of the Scheduled Award at the
prior institution. If the student
previously attended more than one
institution in the award year, the
institution would add the results of the
calculation for each prior institution.

For example, a transfer student received
$2,000 of his or her first Scheduled
Award of $4,000 while enrolled at a
prior institution. The student’s current
institution defines its academic year, in
part, as 24 semester hours. To determine
the number of credit hours the student
is considered to have earned in the
award year at the prior institution, the
current institution performs the
following calculation:

In this case the student would be
considered to have earned 12 semester
hours of the first academic year in the
award year.
Reasons: We are proposing these
changes because we believe that they
limit the administrative burden for
institutions in implementing the
requirements for determining the
eligibility of transfer students.
During negotiated rulemaking, the
non-Federal negotiators noted that our
initial proposal did not address the
eligibility status of transfer students. As
a result, we proposed that, unless the
institution had information to the
contrary such as a transcript from the
other institution, an institution could
determine the credit or clock hours that
a transfer student earned at another
institution during the award year based
on the Federal Pell Grant disbursements
that the student received at the other
institution during the award year in
relation to the student’s Scheduled
Award at that institution. Many of the
non-Federal negotiators were concerned
about the difficulties for institutions
administering the Federal Pell Grant
Program. Specifically, the non-Federal
negotiators were concerned that
transcripts that might be in the
registrar’s office might not always be
readily available to the financial aid
office in a form or process conducive to
implementing these provisions.
Based on the non-Federal negotiators’
concerns, we have revised our proposal
to provide that an institution would rely
solely on assuming the credit or clock
hours earned in an award year based on
the Federal Pell Grant disbursements
received from the student’s Scheduled
Award at another institution.
Special Circumstances (§ 690.67(c))
Current Regulations: None.
Proposed Regulations: The proposed
regulations would provide that a
financial aid administrator may waive

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the requirement that a student complete
the credit or clock hours in the student’s
first academic year in the award year if
the administrator determines that the
student was unable to complete the
clock or credit hours in the student’s
first academic year in the award year
due to circumstances beyond the
student’s control. The financial aid
administrator would be required to
make and document the determination
on an individual basis. The proposed
regulations also provide examples of
circumstances that may be considered
beyond the student’s control, such as
withdrawing from classes due to illness,
and those that would not be considered
beyond the student’s control, such as
failing to register for a necessary class to
avoid a particular instructor.
Reasons: During negotiated
rulemaking, the non-Federal negotiators
noted that our initial proposal did not
provide any authority for a financial aid
administrator to consider whether there
were special circumstances affecting a
student’s ability to complete the credits
or clock hours to be eligible for a
payment from a second Scheduled
Award. We agree.
Nonapplicable Credit or Clock Hours
(§ 690.67(d))
Current Regulations: None.
Proposed Regulations: We are
proposing that, in determining a
student’s eligibility for a second
Scheduled Award in an award year, an
institution may not use credit or clock
hours that the student received based on
Advanced Placement (AP) programs,
International Baccalaureate (IB)
programs, testing out, life experience, or
similar competency measures.
Reasons: A student’s eligibility for a
second Scheduled Award is based, in
part, on the student’s progress in
earning the credits or clock hours of the
first academic year in the award year.
This provision ensures that only those

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credits or clock hours earned in the
award year are considered in
determining the student’s eligibility.
Payment Period in Two Award Years
(§ 690.64)
Current Regulations: Under current
§ 690.64, if a payment period is
scheduled to occur in two award years,
an institution must consider this
‘‘crossover’’ payment period to occur
entirely in one award year. In general,
an institution may assign a crossover
payment to either award year. The
assignment, for example, may be on a
student-by-student basis, or the
institution may establish a policy of
assigning the crossover payment period
of all students to the same award year.
If more than six months of a crossover
payment period are scheduled to occur
within one award year, the institution
must assign the payment period to that
award year.
Proposed Regulations: Under
proposed § 690.64, if a student is
enrolled in a crossover payment period
as a half-time or less-than-half-time
student, the current requirements
generally would apply.
If a student is enrolled as a threequarter-time or full-time student, an
institution must consider the payment
period to be in the award year in which
the student would receive the greater
payment for the payment period based
on the information available at the time
that the student’s Federal Pell Grant is
initially calculated. If the institution
subsequently receives information that
the student would receive a greater
payment for the payment period by
reassigning the payment to the other
award year, the institution would be
required to reassign the payment to the
award year providing the greater
payment.
A student may request that the
institution place the payment period in
the award year that can be expected to

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$2,000 disbursement × 24 semester hours
$4,000 Scheduled Award = 12 semester hours

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Federal Register / Vol. 74, No. 161 / Friday, August 21, 2009 / Proposed Rules
result in the student receiving a greater
amount of Federal Pell Grants over the
two award years in which the payment
period is scheduled to occur. If the
student makes that request, the
institution must assign the payment
period to that award year.
Reasons: To the extent practicable, we
believe that a crossover payment period
should be assigned in a way that
maximizes a student’s eligibility over
the two award years in which the
payment period is scheduled to occur.
Initially, we proposed that a crossover
payment period should be assigned to
the award year in which the student
receives the greater payment for the
payment period based on the
information available to the institution
at the time of disbursement. If,
subsequent to that date, the institution
determines that the student would
receive a greater payment for the
payment period by reassigning the
payment to the other award year, the
institution may reassign the payment
period to the other award year.
The non-Federal negotiators objected
to the mandatory assignment of a
crossover payment period to the award
year with the higher payment. They
objected because, based on the student’s
enrollment status in a term-based
program, there may be a decrease in the
overall amount the student would
receive for the two award years of the
crossover payment period. For example,
a student is enrolled in a traditional
semester-based program with an
academic year that is defined, in part, as
24 semester hours. The student attends
half-time, 6 semester hours, for a
summer term that must be assigned to
the second award year due to the higher
payment and enrolls for 12 semester
hours in the fall semester. The student
would not have earned the semester
hours of the first academic year at the
end of the fall semester. When the
student enrolls full-time in the spring
semester, the student is not yet eligible
for a payment from the second
Scheduled Award. Thus, the student
would receive only the remaining onefourth of his or her first Scheduled
Award, instead of a full payment of onehalf of a Scheduled Award. However, if
the student’s summer crossover
payment period were assigned to the
first award year of the crossover
payment period, the student would be
eligible for a full payment of one-half of
a Scheduled Award for that following
spring semester. The difference for the
spring semester between a payment of
one-fourth of a Scheduled Award under
the first approach, and one-half of a
Scheduled Award under the second
approach, would usually more than

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make up for the generally smaller
amount that the student would receive
for the summer term if it were assigned
to the first award year.
In addition, the non-Federal
negotiators believed that determining
the higher payment for the crossover
payment period at the time of
disbursement created significant
administrative difficulties, since the
higher disbursement amount might be
determined not only by a change in the
Scheduled Award for the award year,
but also by a change in a student’s
expected family contribution (EFC). As
an alternative, they suggested that the
determination of the higher amount be
set based solely on the higher Payment
or Disbursement Schedule. They
believed that this approach would not
require a financial aid administrator to
track changes in a student’s EFC.
As a result of the non-Federal
negotiators’ concerns regarding the
assignment of crossover payment
periods for term-based programs, we
provided an alternative proposal that is
the basis for these proposed regulations.
In the case of a half-time student or lessthan-half-time student, we do not
believe the difference in the payments
from each award year for a crossover
payment period will usually be a
significant amount. In these situations,
we do not believe it would be necessary
to mandate assignment based on the
higher payment. In addition, in those
circumstances where the assignment by
the institution may not be to the
student’s advantage, the student may
request a determination by the
institution of the assignment that would
provide the student the greater amount
of Federal Pell Grants over the two
award years. The institution must
comply with the student’s request and
must reassign the crossover payment
period if the reassignment would be
expected to provide the student the
greater amount of Federal Pell Grants
over the two award years.
With regard to a student enrolled at
least three-quarter-time, we believe that,
generally, a student would significantly
benefit from a crossover payment period
being assigned to the award year in
which the student would receive the
greater payment for the payment period.
If a student is enrolled at least threequarter-time in a crossover payment
period that is assigned to the second
award year, the student would generally
be able to complete the credit hours of
an academic year in the next semester
or next two quarters by taking slightly
more than the minimum course load
required for a full-time student and
would be able to qualify for a full
payment from the second Scheduled

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42409

Award in the subsequent spring term.
As in the case of a student enrolled halftime or less, the student may request
that the institution assign the crossover
payment period to the award year that
would be expected to provide the
student the greater amount of Federal
Pell Grants over the two award years,
and the institution must comply with
the student’s request.
Some of the non-Federal negotiators
were concerned that the time for a
determination of the award year to
which a crossover payment period must
be assigned may prevent institutions
from closing out the earlier of the two
award years in which the crossover
payment period is scheduled to occur.
They suggested that the proposed
regulations include a provision for a
deadline for such determinations. We
agree that an institution must be able to
close out the earlier award year in a
timely manner, but we do not believe a
specific reference is necessary in these
proposed regulations. Sections 690.12,
690.61(b), and 690.83 and 34 CFR part
668.60 already provide the necessary
authorities to establish deadlines for
closing out application processing and
Federal Pell Grant financial reporting
for an award year. If a student’s higher
payment for a crossover payment period
is from the earlier award year, the
application and financial reporting
deadlines would still be applicable. If
the determination occurred subsequent
to those deadlines, no further action
would be required of the institution. If
a student’s higher payment for a
crossover payment period is from the
later award year, the applicable
deadlines would be those for the later
award year.
The Department specifically invites
public comment on the proposal to
require institutions to initially place the
crossover payment period in the award
year that results in the payment of the
higher amount to a student enrolled at
least three-quarter-time (and to allow
the student to request that the payment
period be placed in the other award year
if that placement would be expected to
result in the student receiving a greater
amount of Federal Pell Grant aid over
the two award years in which the
payment period is scheduled to occur).
Further, the Department is interested in
data from past practices and experiences
of institutions in the placement of
crossover payment periods and in
whether, and to what degree, this
proposal will burden or otherwise
adversely affect institutions’
administration of the Federal Pell Grant
Program.

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Federal Register / Vol. 74, No. 161 / Friday, August 21, 2009 / Proposed Rules

Payment From Two Scheduled Awards
(§ 690.63(h))
Current Regulations: None.
Proposed Regulations: Under
§ 690.63(h) of the proposed regulations,
if a student is eligible for the remaining
portion of a first Scheduled Award in an
award year and for a payment from the
second Scheduled Award, the student’s
payment would be calculated using the
annual award for his or her enrollment
status for the payment period. The
student’s payment would be the
remaining amount of the first Scheduled
Award being completed plus an amount
from the second Scheduled Award in
the award year up to the total amount
of the payment for the payment period.
Reasons: In certain circumstances, a
student may, within the same payment
period, be completing his or her
eligibility for the remaining balance of
the first Scheduled Award in the award
year while also having eligibility to
receive a payment from the second
Scheduled Award. We have identified
two circumstances in which a student
may be paid from two Scheduled
Awards in a payment period. One
circumstance would be if the institution
determined, under proposed § 690.67(c),
that a student was unable to earn the
credits in the first academic year due to
special circumstances beyond the
control of the student. The other
circumstance would be that a student
completed the hours of the first
academic year but had not received all
of his or her first Scheduled Award.
This provision would provide guidance
to institutions in calculating a student’s
payment for the payment period in
these circumstances and would ensure
that eligible students receive their
awards.

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Maximum Federal Pell Grant for
Children of Soldiers (§ 690.75(e))
Statute: Section 401(f)(4) of the HEA
provides that a student whose parent or
guardian died as a result of performing
military service in Iraq or Afghanistan
after September 11, 2001, is deemed to
have a zero expected family
contribution (EFC) for purposes of the
Federal Pell Grant Program. The HEA
further directs the Secretary of Veterans
Affairs and the Secretary of Defense to
provide necessary information to the
Secretary of Education to carry out this
provision.
Current Regulations: None.
Proposed Regulations: Under
proposed § 690.75(e), a student whose
parent or guardian was a member of the
Armed Forces of the United States and
died as a result of performing military
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September 11, 2001, would
automatically receive a zero EFC for
purposes of the Federal Pell Grant
Program if he or she was under 24 years
old or enrolled in an institution of
higher education at the time of the
parent’s or guardian’s death.
Reasons: These proposed regulations
would implement the statutory
provisions. Some of the negotiators
objected to our initial proposal that a
student must have an EFC in the
numerical range that would make a
student eligible for a Federal Pell Grant
to qualify for a maximum Federal Pell
Grant. The negotiators believed that the
Secretary would be adding an additional
student eligibility requirement that the
statute did not provide. Based on the
non-Federal negotiators objections and
our belief that any student should
receive a zero EFC if the student’s
parent or guardian died as a result of
performing military service in Iraq or
Afghanistan after September 11, 2001,
we removed the proposal that a student
must have an initial Federal Pell Grant
EFC that makes him or her eligible in
order to qualify for a zero EFC under
this provision.
The non-Federal negotiators also
objected to the Secretary’s position that
an eligible student would be considered
to have a zero EFC rather than the
maximum Federal Pell Grant Scheduled
Award. We do not agree. The statute
explicitly states that an eligible student
is deemed to have an EFC of zero.
We are not proposing any regulations
in relation to the Secretary of Veterans
Affairs and the Secretary of Defense
providing the necessary information to
the Secretary of Education to carry out
this provision, nor will this provision
require any additional questions on the
Free Application for Federal Student
Aid (FAFSA). Once a student completes
the FAFSA, the Secretary of Education
will perform a data match with the
Department of Defense and the
Department of Veterans Affairs to
confirm that the student had a parent or
guardian who died as a result of
performing military service in Iraq or
Afghanistan after September 11, 2001.
A tentative consensus was reached on
these proposed regulations during the
negotiations.
Part 692 Leveraging Educational
Assistance Partnership Program
LEAP Program—Non-Federal Share
(§ 692.10)
Statute: Section 415C(b)(10) of the
HEA, as amended by the HEOA,
provides that the non-Federal share of
the amount of student grants or workstudy jobs under the LEAP Program

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must be from State funds for the
program and no longer requires that the
non-Federal share must be from a direct
appropriation of State funds.
Current Regulations: Section
692.10(b) references ‘‘State-appropriated
funds’’ in the provisions concerning
how the Secretary determines the
number of students deemed eligible for
purposes of calculating State allotments
under § 692.10(a).
Proposed Regulations: Proposed
§ 692.10(b) would remove references to
State funds being appropriated funds
and would make technical corrections
in § 692.10(a) to reflect that multiple
programs are funded under part 692.
Reasons: This proposal is necessary to
implement section 415C(b)(10) of the
HEA, as amended by the HEOA.
Several members of the LEAP/GAP
subcommittee raised concerns regarding
whether we should define the term
‘‘State funds’’ to clarify this change to
the nature of the program’s matching
funds. We did not agree that a definition
was necessary. During the subcommittee
discussions, we noted that the term
‘‘State funds’’ only refers to cash funds,
and this cash may be from Stateappropriated funds or may be from
dedicated State revenues such as
revenues from a State lottery or tuition
revenues at a State’s public institutions
of higher education used to provide
grant aid. The term ‘‘State funds’’ would
not include in-kind support to a student
such as a tuition waiver at a public
institution of higher education. ‘‘Inkind’’ support is not cash. If a State
were to choose to use tuition revenues
at public institutions, or some other
sources of State cash, to meet its nonFederal share, use of this cash may
affect information that the State must
provide in its application to participate
in the LEAP and GAP programs in
addition to being included in the
amount of funds reported for the nonFederal share.
In addition, discussions of the LEAP/
GAP subcommittee noted that, in
accordance with 34 CFR 80.24 of the
Education Department General
Administrative Regulations (EDGAR),
other Federal funds generally may not
be used to meet a State’s non-Federal
share nor may a State use the same nonFederal funds to meet the non-Federal
share of more than one Federal program.
For example, tuition revenues at a
public institution used to meet the nonFederal share of the LEAP Program may
not be used by the institution to meet
the matching requirement of the FSEOG
Program.

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Notification to Students of LEAP Grant
Funding Sources (§ 692.21(k))
Statute: Section 415C(b)(11) of the
HEA requires that a State notify eligible
students that grants under the LEAP
Program are (1) LEAP Grants and (2) are
funded by the Federal Government, the
State, and, where applicable, other
contributing partners.
Current Regulations: None.
Proposed Regulations: Proposed
§ 692.21(k) would require that the State
program notify eligible students that
grants under the LEAP Grant Program
are (1) LEAP Grants and (2) are funded
by the Federal Government, the State,
and, where applicable, other
contributing partners.
Reasons: The proposed regulations
generally reflect the statutory language.
Some LEAP/GAP subcommittee
members questioned whether the
regulations should reflect the extent to
which States had flexibility in
implementing this provision. While we
noted in the discussions with the
subcommittee that our intent is to
provide maximum flexibility to the
States in implementing this provision,
we believe the statutory language as
used in the proposed regulations
inherently sets certain minimum
standards.
As was discussed by the
subcommittee members, the State would
need to ensure that students who
receive a LEAP Grant are aware of the
source of those funds. A State would
need to establish a policy that would
define the term ‘‘eligible student,’’ the
State would use the policy to identify
the students that the State would notify
in accordance with the proposed
regulations. A State may consider an
‘‘eligible student’’ to be all students
submitting an application, thus
including potentially eligible students;
we believe that this approach would
minimize the State’s administrative
burden. A State may consider an
‘‘eligible student’’ to be students
awarded LEAP Grants, or, at a
minimum, recipients of LEAP Grants.
Also, under the proposed regulations,
notifications must be to individual
students rather than general
notifications; a State may use electronic
media; and a State may rely on
institutions as the agent of the State to
provide the notifications.
Some subcommittee members were
concerned with whether it would be
appropriate to revise the notification to
say that the LEAP Grant ‘‘may be
funded’’ by Federal, State, or, for
purposes of the GAP Program, other
contributing partners. We do not believe
such an alteration is appropriate or

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necessary. The language in the required
notice would accurately describe, for
example, a grant that consisted solely of
State funds or solely of Federal funds.
In some cases, a State may not
determine actual LEAP recipients at the
time State grants are made, for example,
if a State selects students considered to
have received a LEAP Grant after the
award year has ended. In this
circumstance, the State would be
expected to provide notices at least to
all State grant recipients.
In general, these same considerations
apply to notifications for LEAP Grants
made under the GAP Program in
accordance with proposed
§ 692.100(a)(8).
Grants for Access and Persistence
Program (Subpart C of Part 692
Consisting of §§ 692.90 Through
692.130)
Statute: Section 415E of the HEA, as
amended by the HEOA, authorizes the
Grants for Access and Persistence (GAP)
Program to assist States in establishing
partnerships to provide eligible students
with LEAP Grants under GAP to attend
institutions of higher education. The
GAP Program replaces the SLEAP
Program previously authorized by
section 415E of the HEA.
Current Regulations: None.
Proposed Regulations: Under
proposed part 692, subpart C, §§ 692.90
through 692.130, we are proposing the
regulations necessary to implement the
GAP Program. The proposed regulations
would—
• Describe the definitions and other
regulations that would apply to the GAP
Program (See § 692.92);
• Provide the requirements for
participation in the GAP Program by
students, States, degree-granting
institutions of higher education, early
information and intervention,
mentoring, or outreach programs (early
intervention programs), and
philanthropic organizations or private
corporations (See § 692.93);
• Describe the requirements a State
must satisfy, as the administrator of a
partnership with institutions of higher
education, early intervention programs,
and philanthropic organizations or
private corporations, to receive GAP
Program funds (See § 692.94);
• Describe the requirements that a
State must meet to receive an allotment
under this program, including
submitting an application on behalf of a
partnership and serving as the primary
administrative unit of the partnership
(See § 692.100);
• Describe the responsibilities of the
members of a State partnership in a

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State that receives a GAP allotment; (See
§ 692.101)
• Describe how the Secretary would
allot funds to the States (See § 692.110);
• Provide that the State must use at
least 98 percent of the Federal funds
received under the GAP Program to
fund LEAP Grants under GAP and may
use up to two percent of the Federal
funds received for administrative
expenses such as the establishment of a
partnership, early notification to
potentially eligible students and their
families of their potential eligibility for
student assistance including LEAP
Grants under GAP, and issuing to
students preliminary award
notifications (See § 692.112);
• Describe the requirements for funds
matching the Federal allotment under
the GAP Program (See § 692.113);
• Describe the requirements for
student eligibility under the GAP
Program including that the student
meets the relevant eligibility
requirements in 34 CFR 668.32; has
graduated from secondary school or, for
a home-schooled student, has
completed a secondary education; has
financial need for a grant; and meets any
additional requirements that the State
may require for receipt of a LEAP Grant
under GAP (See § 692.120);
• Provide that a State may impose
reasonable time limits for a student to
complete his or her degree (See
§ 692.120(c)(2)); and
• Describe how a participating
institution may request a waiver of
statutory or regulatory requirements that
would inhibit the ability of the
institution to successfully and
efficiently participate in the activities of
the partnership (See § 692.130).
Reasons: These proposed regulations
are necessary to implement the
provisions of section 415E of the HEA,
as amended by the HEOA.
Early Intervention Programs
(§§ 692.94(a)(2)(ii), and 692.101(c))
Statute: Section 415E(c)(3) provides
that a State agency apply for a GAP
allotment with, among others, early
intervention programs located in the
State. Section 415E(c)(4)(C) requires that
an early intervention program in a
partnership must provide direct
services, support, and information
(direct services) to participating
students.
Current Regulations: None.
Proposed Regulations: Proposed
§ 692.94(a)(2)(ii) provides that a State
applying for a GAP allotment must
establish a partnership that includes
new or existing early intervention
programs. Under proposed § 692.101(c),
an early intervention program

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administered by a State or private
organization is eligible to establish a
partnership under the GAP Program, if
the program provides direct services,
support, and information to
participating students.
Reasons: These proposed regulations
are necessary to implement section
415E(c)(3) of the HEA and to clarify
what is considered an eligible early
intervention program.
Members of the LEAP/GAP
subcommittee were concerned that the
proposed regulations did not define the
direct services that would be expected.
We did not believe such an expansion
of the regulations is necessary but
agreed to provide further clarification.
Under these proposed regulations, early
intervention services would include, but
would not be limited to, direct services
such as after-school and summer-school
tutoring, test preparation, assistance in
obtaining summer jobs, career
mentoring, a summer-bridge
component, i.e., a precollege campus
experience, and academic, personal and
career counseling. These services may
be provided through electronic media if
the electronic media would be
appropriate to the direct service
provided and would interactively and
directly engage individual students.
Disseminating literature, or providing
informational Web sites, would not
qualify as direct services.
Members of the LEAP/GAP
subcommittee also questioned the
minimum number of early intervention
programs that must be in a State
partnership. Under these proposed
regulations, a State partnership would
be required to have more than one
program that offers an early intervention
component. Section 415E(c)(3) of the
HEA, which the regulations mirror,
refers to early information and
intervention, mentoring, or outreach
programs, suggesting that more than one
of these types of programs must be
included in the GAP Partnership. We
believe the proposed regulations are
consistent with the statute. A State or
private organization that has a single
early intervention program that includes
several components or programs within
its structure would satisfy the
requirement of having more than one
early intervention program.
Persistence to Degree Completion
(§ 692.100(a)(6))
Statute: Section 415E(c)(1)(B)(vi) of
the HEA provides that a State’s
application for a GAP allotment must
include a description of the steps the
State would take to ensure that students
who receive LEAP Grants under GAP
would persist to degree completion.

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Current Regulations: None.
Proposed Regulations: Under
proposed § 692.100(a)(6), a State must
include in its application the steps it
plans to take to ensure, to the extent
practicable, that students who receive a
LEAP Grant under GAP would persist to
degree completion.
Reasons: Proposed § 692.100(a)(6) is
necessary to implement section
415E(c)(1)(B)(vi) of the HEA.
Some members of the LEAP/GAP
subcommittee believed that the
proposed regulations should directly
address eligible students attending
nonparticipating institutions of higher
education. We do not agree. For a State
that provides a LEAP Grant under GAP
to an eligible student attending a
nonparticipating institution of higher
education, we would expect the State to
obtain a signed assurance from the
nonparticipating institution. The
nonparticipating institution would
assure the State that it would follow the
State’s plan established in the State’s
GAP application.
Notification to Students of LEAP Grant
Funding Sources (§ 692.100(a)(8))
Statute: Section 415E(c)(1)(B)(viii) of
the HEA requires that a State notify
eligible students that grants are (1)
LEAP Grants and (2) are funded by the
Federal Government; the State; and,
where applicable, other contributing
partners.
Current Regulations: None.
Proposed Regulations: Under
proposed § 692.100(a)(8) a State GAP
Program is required to notify eligible
students that the grants they receive
under GAP are LEAP Grants and that
the grants are funded by the Federal
Government; the State; and where
applicable, other contributing partners.
Reasons: Section 415E(c)(1)(B)(viii) of
the HEA for the GAP Program, which
these proposed regulations implement,
is basically the same as section
415C(b)(11) of the HEA for the LEAP
Program. The reasons for these proposed
regulations are the same as those
reasons described for the LEAP Program
proposed regulations as discussed under
proposed § 692.21(k).
For a LEAP Grant under GAP, a State
may include this notification in the
award notification required under
proposed § 692.111(e). The notifications
would apply to LEAP Grants under GAP
that are funded by in-kind contributions
as well as those funded by the Federal
allotment or cash contributions to the
non-Federal share.

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Recruiting Eligible Students
(§ 692.101(b)(2))
Statute: Section 415E(c)(4)(B)(i)(I) of
the HEA provides that an institution of
higher education in a GAP partnership
must recruit and admit participating
qualified students and provide
additional grant aid as agreed to with
the State agency.
Current Regulations: None.
Proposed Regulations: Under
proposed § 692.101(b)(2), a degreegranting institution of higher education
that is in a partnership under the GAP
Program must recruit, admit, and
provide institutional grant aid to
participating eligible students as agreed
to with the State agency.
Reasons: The proposed regulations
generally reflect the language in section
415E(c)(4)(B)(i)(I) of the HEA. Some
LEAP/GAP subcommittee members
were concerned that the regulations may
adversely affect the admissions
standards of participating institutions.
We believe that under these proposed
regulations institutions and States
would have broad discretion regarding
what may be included in an agreement,
e.g., there is no requirement that an
institution must waive its admissions
standards.
GAP and SLEAP Allotments (§§ 692.70
and 692.110)
Statute: Section 415E(b) of the HEA,
as amended by the HEOA, provides that
the Secretary makes an allotment under
the GAP Program to each State that
submits an application to meet the costs
of the Federal share of the State’s GAP
Program. The statute requires that, in
making a continuation award for a State,
the Secretary would make an allotment
to the State that is not less than the
allotment made to the State in the
previous fiscal year and further provides
that the Secretary give priority to a State
that applies for an allotment in
partnerships with degree-granting
institutions whose combined full-time
enrollment represents a majority of all
students attending institutions of higher
education in the State.
Section 415E(g) of the HEA, as
amended by the HEOA, provides that
the LEAP Program provisions that are
not inconsistent with GAP requirements
apply to GAP.
For the programs authorized under
part A, subpart 4 of title IV of the HEA,
including the GAP Program, section
415B of the HEA provides that
allotments are based on the ratio that
the number of eligible students in a
State bears to the number of eligible
students in all the States except that no
State may receive less than the State

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Federal Register / Vol. 74, No. 161 / Friday, August 21, 2009 / Proposed Rules
received for fiscal year 1979 (1979–1980
award year). Section 415B of the HEA
further provides that any allotted funds
not required by a State may be realloted
to other States in proportion to the
original allotments to these other States.
Section 415A(b) of the HEA, as
amended by the HEOA, provides that
the amount of the annual appropriation
for the LEAP and GAP programs that is
in excess of $30,000,000 must be made
available to carry out the GAP Program.
Section 415E(j) of the HEA, as
amended by the HEOA, provides that
for the two-year period that begins on
August 14, 2008, the date of enactment
of the HEOA, a State may continue to
make grants under the SLEAP Program,
i.e., through the 2010–2011 award year.
Current Regulations: There are no
current regulations for the GAP
Program. Section 692.70 provides that
funds are allotted to States applying
under the SLEAP Program in
accordance with § 692.10.
Proposed Regulations: Proposed
§ 692.110(a)(1) would apply to the GAP
Program the allotment formula
authorized under section 415B of the
HEA and used to allot a State’s Federal
LEAP funds under § 692.10(a) for a
fiscal year.
Proposed § 692.110(a)(2) would
provide priority to qualifying States by
increasing the number of eligible
students in a State to 125 percent in
determining the ratio for allotting funds
for a fiscal year. This provision would
apply to a State that meets the
requirements under proposed
§ 692.113(b) for reduced State matching
because the State is applying for an
allotment in partnership with degreegranting institutions whose combined
full-time enrollment represents a
majority of all students attending
institutions of higher education in the
State.
In some years, sufficient funds may be
available to allot to each State that
participated in the prior fiscal year a
continuation award that is the same
amount of Federal GAP funds as were
allotted in the prior fiscal year, but are
not sufficient both to allot at least the
same amount of Federal GAP funds
allotted in the prior year to these States
and also to allot funds to additional
States in accordance with the ratio used
to allot the States’ Federal LEAP funds
under § 692.10(a). For these
circumstances we are proposing
§ 692.110(a)(3)(i) that would provide to
each State that participated in the prior
fiscal year a continuation award in the
amount the State received in the prior
fiscal year. From the remaining Federal
GAP funds, new applicants would be
allotted an amount based on the ratio

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used to allot the State’s Federal LEAP
funds under § 692.10(a).
Insufficient funds may be available to
allot a continuation award that is at
least the amount of Federal GAP funds
that were allotted to each State in the
prior fiscal year. In this circumstance,
proposed § 692.110(a)(3)(ii) would
provide that each State would receive
an allotment that bears the same ratio to
the amount of Federal GAP funds
available as the amount of Federal GAP
funds allotted to each State in the prior
fiscal year bears to the amount of
Federal GAP funds allotted to all States
in the prior fiscal year.
Proposed § 692.110(b) provides that
we would reallot funds available for
reallotment in a fiscal year in
accordance with the provisions of
proposed § 692.110(a) that were used to
calculate initial allotments for the fiscal
year.
Proposed § 692.110(c) provides that
any funds made available for GAP but
not expended in a fiscal year may be
allotted or reallotted under the LEAP
Program.
Proposed § 692.70 would clarify that,
for fiscal year 2010 (2010–2011 award
year), we would allot funds to States
applying under the SLEAP Program in
accordance with § 692.10 prior to
calculating allotments to States applying
for GAP funds under proposed subpart
C of part 692.
Reasons: Except to carry out
provisions specific to GAP, we are
proposing to apply the allotment
formulas applicable to the LEAP
Program. This proposal is in accordance
with section 415E(g) of the HEA, as
amended by the HEOA, that provides
that the LEAP Program provisions that
are not inconsistent with GAP
requirements apply to GAP.
Two specific provisions of GAP
would modify the allotment formulas
used for the LEAP Program. One
provision gives priority to States that
apply for an allotment in partnerships
with degree-granting institutions whose
combined full-time enrollment
represents a majority of all students
attending institutions of higher
education in the State. The other
provision provides that a State’s GAP
allotment may not be less than the
allotment made to the State in the
previous year.
We propose to implement the funding
priority in proposed § 692.110(a)(2) by
providing that the State’s enrollment of
eligible students would be 125 percent
of its eligible students in applying the
allotment formula to all States. We
believe that the proposed 125 percent
fulfills the statutory provision while
providing that all eligible States have an

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opportunity to qualify for funding under
the allotment formula.
For continuing awards, there may be
a year in which there are sufficient
funds available to allot to each State that
participated in the prior fiscal year the
same amount of Federal GAP funds that
were allotted in the prior fiscal year, but
insufficient funds are available both to
allot the same amount of Federal GAP
funds to these continuing States as in
the prior year and to allot additional
funds to additional States in accordance
with the ratio used to allot the States’
Federal LEAP funds. For these
circumstances, we believe it is in
accordance with the statute to provide
continuing States with the same
allotment as received in the prior fiscal
year as proposed in § 692.110(a)(3)(i).
Additional applicants would receive an
allotment based on applying to the
remaining available funds the allotment
formula used to allot the States’ Federal
LEAP funds.
Another circumstance affecting
continuing awards would be a year for
which there are insufficient funds
available to allot a continuation award
that is at least the amount of Federal
GAP funds allotted to each State in the
prior year. Proposed § 692.110(a)(3)(ii)
would provide that we ratably reduce
the allotment of each State in proportion
to its prior year funding. Under this
proposal we would allot to each State an
amount that would bear the same ratio
to the amount of Federal GAP funds
available as the amount of Federal GAP
funds allotted to each State in the prior
fiscal year bears to the amount of
Federal GAP funds allotted to all States
in the prior fiscal year. This proposal
would ensure that, to the extent
practicable, a State with an allotment in
the prior fiscal year would receive, at
least proportionately, the same
allotment as in the prior year.
Proposed § 692.110(b) provides that
we would reallot available funds in a
fiscal year in accordance with the
provisions of proposed § 692.110(a) that
were used to calculate initial allotments
for the fiscal year, and under proposed
§ 692.110(c) any funds made available to
GAP but not expended would be
allotted or reallotted under the LEAP
Program. We believe that applying the
provisions for realloting funds as
authorized under section 415B of the
HEA is not inconsistent with the
provisions of GAP and, therefore, must
be applied to GAP allotments in
accordance with section 415E(g) of the
HEA. In addition we believe that it
would be consistent with the provisions
of section 415A(b) of the HEA to allot
or reallot funds under the LEAP

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Program that were previously made
available to GAP but not expended.
We are proposing to amend § 692.70
of the SLEAP Program to implement the
provisions of section 415E(j) of the HEA
for fiscal year 2010 (2010–2011 award
year). As a practical matter, no State was
able to participate in the GAP Program
in fiscal year 2009 (2009–2010 award
year), and these procedures are
necessary only for fiscal year 2010.
In proposed appendix A to subpart C
of part 692, we are providing a case
study that would illustrate the proposed
requirements for allotting funds under
the GAP Program, including the
provisions implementing the funding
priority, continuation awards, and
SLEAP Program funding during the
transition period of fiscal year 2010 (the
2010–2011 award year) when a State
may continue to participate in the
SLEAP Program in lieu of GAP Program
participation. Apart from State
enrollments for fiscal year 1979 used in
the allotment formula, nothing in the
case study should be considered to
reflect any State’s actual circumstances
or the expected results for any State.
Non-Federal Matching Funds
(§ 692.113(a)(2))
Statute: Section 415E(b)(2) of the HEA
provides that the non-Federal matching
funds for a State’s GAP Program may be
cash or a noncash, in-kind contribution
that has monetary value and helps a
student meet the cost of attendance at
an institution of higher education.
Current Regulations: None.
Proposed Regulations: Under
proposed § 692.113(a)(2), a State may
include cash or in-kind contributions as
non-Federal matching funds of a State
partnership under the GAP Program. An
in-kind contribution must be fairly
evaluated; have monetary value, such as
a tuition waiver; and be considered
estimated financial assistance under 34
CFR 673.5(c).
Reasons: These proposed regulations
would implement the provisions of
section 415E(b)(2) of the HEA.
Members of the LEAP/GAP
subcommittee noted the need to clarify
the qualifying matching funds,
including the in-kind contributions that
may qualify as matching funds to make
LEAP Grants under GAP to eligible
students.
Cash that qualifies as matching funds
may include, but is not limited to, Stateappropriated funds or other State funds
such as funds from a State lottery or
tuition revenue at public institutions of
higher education. Matching cash may
also be grants to students provided by
private institutions or philanthropic
organizations or private corporations.

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An in-kind contribution is a noncash
contribution that has monetary value,
such as a tuition waiver, the provision
of room and board, transportation
passes, or other provisions that help a
student meet the cost of attending an
institution of higher education. The
proposed regulations would further
clarify that an in-kind contribution must
be considered to be estimated financial
assistance under 34 CFR 673.5(c). As in
the case of matching cash, matching inkind contributions may be provided by
the State, institutions of higher
education, or philanthropic
organizations or private corporations.
Regardless of whether the funds are
cash or are an in-kind contribution,
funds would qualify as matching funds
only if awarded in accordance with the
GAP Program requirements, and the
matching funds would be considered
title IV, HEA program assistance. For
example, if a student receiving a tuition
waiver did not graduate from secondary
school, as required under § 692.120(a)(2)
to qualify as an eligible student for a
LEAP Grant under GAP, the amount of
the tuition waiver could not qualify as
matching funds for the non-Federal
share of a State’s GAP Program nor
would it qualify as title IV, HEA
program assistance. If another student
receiving a tuition waiver graduated
from secondary school and was
otherwise eligible for a LEAP Grant
under GAP, the amount of this other
student’s tuition waiver would qualify
as matching funds for the non-Federal
share of a State’s GAP Program and as
title IV, HEA program assistance.
Nothing in these proposed regulations
would require a State to provide LEAP
Grants under GAP to meet all costs of
attendance. As with LEAP Grants under
subpart A of this part, a State may, for
example, restrict a LEAP Grant under
GAP to meeting a student’s tuition and
fees. The restriction could apply to
funds from both the Federal allotment
and both cash and in-kind contributions
toward the non-Federal share.
In accordance with 34 CFR 80.24 of
EDGAR, generally other Federal funds
may not be used to meet a State’s nonFederal share nor may a State use the
same non-Federal funds to meet the
non-Federal share of more than one
Federal program. For instance, nonFederal funds used to match the Gaining
Early Awareness and Readiness for
Undergraduate (GEAR UP) Program may
not be used as matching funds for the
GAP Program because those non-Federal
funds were already used to match
another Federal program. However,
those non-Federal funds would be
included in the State’s base-year and

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maintenance of effort requirements
under proposed § 692.100(f) and (g).
Enrollment and the Amount of State
Match (§ 692.113(b))
Statute: Section 415E(b)(2) of the HEA
provides that the amount of the nonFederal matching funds for a State’s
GAP Program is based on the full-time
equivalent enrollment of the institutions
of higher education participating in the
State’s partnership.
Current Regulations: None.
Proposed Regulations: Under
proposed § 692.113(b), the non-Federal
match of the Federal allotment must be
forty-three percent of the expenditures
under this subpart if a State applies for
a GAP allotment in partnership with
degree-granting institutions of higher
education in the State whose combined
full-time enrollment represents less than
a majority of all students attending
institutions of higher education in the
State, or thirty-three and thirty-four onehundredths percent of the expenditures
under this subpart if a State applies for
a GAP allotment in partnership with
degree-granting institutions of higher
education in the State whose combined
full-time enrollment represents a
majority of all students attending
institutions of higher education in the
State.
Reasons: These proposed regulations
would implement the provisions of
section 415E(b)(2) of the HEA. Members
of the LEAP/GAP subcommittee
believed that the number of students
used in determining these percentages
should include both in-State and out-ofState students. We agree.
Base-year Requirement (§ 692.100(f))
Statute: Section 415E(i) of the HEA
provides that in determining a State’s
share of the costs of the State’s GAP
Program, the State may consider only
those expenditures from non-Federal
sources that exceed the State’s total
expenditures for need-based grants,
scholarships, and work-study assistance
for fiscal year 1999.
Current Regulations: None.
Proposed Regulations: Under
proposed § 692.100(f), the State must
provide an assurance that the nonFederal funds used as matching dollars
under the State’s GAP Program is in
excess of what the State spent in fiscal
year 1999 on need-based grants,
scholarships, and work-study
assistance.
Reasons: Section 415E(i) of the HEA
and proposed § 692.100(f) are identical
to the base-year provisions for the
previously authorized SLEAP Program.
Proposed § 692.100(f) would consider
the same fiscal year 1999 expenditures

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from the same need-based grant,
scholarship, and work-study programs a
State operated in fiscal year 1999. Thus,
the amount of a State’s expenditures in
fiscal year 1999 as determined for the
SLEAP Program would be the same
amount applicable for the State under
these proposed regulations for the GAP
Program.
Maintenance-of-Effort Requirement
(§ 692.100(g))
Statute: Section 415E(h) of the HEA
provides that the aggregate amount
expended by a State per student, or the
aggregate expenditures by the State, for
funds derived from non-Federal sources,
for the authorized activities under
section 415E(d) of the HEA for the
preceding fiscal year were not less than
the amount expended per student or the
aggregate expenditure by the State for
these authorized activities for the
second preceding fiscal year. The
authorized activities under section
415E(d) of the HEA include making
LEAP Grants under GAP and certain
administrative expenses.
Current Regulations: None.
Proposed Regulations: Under
proposed § 692.100(g), the State must
provide an assurance that it meets the
GAP maintenance-of-effort (MOE)
requirement. Under the GAP MOE
requirement, for the fiscal year prior to
the fiscal year for which the State is
requesting Federal funds, the amount
the State expended from non-Federal
sources per student, or the aggregate
amount the State expended, for all the
authorized activities in § 692.111, i.e.,
making LEAP Grants under GAP and
certain administrative expenses for the
GAP Program, will be no less than the
amount the State expended from nonFederal sources per student, or in the
aggregate, for those activities for the
second fiscal year prior to the fiscal year
for which the State is requesting Federal
funds.
Reasons: Section 415E(h) of the HEA
and proposed § 692.100(g) are
essentially the same as the MOE
provisions for the previously authorized
SLEAP Program except that the GAP
MOE provision is concerned only with
expenditures for GAP program
activities. Because States can only
participate in the GAP Program starting
in the 2010–2011 award year, the total
State expenditures for authorized GAP
activities for the 2008–2009 and 2009–
2010 award years would be zero. A
State’s MOE would not be relevant to
qualifying for a GAP allotment until
fiscal year 2012 (the 2012–2013 award
year).
Note that although the statute and
regulations refer to funding in terms of

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a fiscal year, States receive LEAP,
SLEAP, and GAP funds operationally on
an award year (July 1 through June 30)
basis. Therefore, a State’s MOE and
matching requirements are also
measured on an award year basis.
Student Eligibility—Secondary School
Graduate (§ 692.120(a)(2))
Statute: Section
415E(d)(2)(B)(i)(V)(bb) of the HEA
provides that a student must graduate
from secondary school to be eligible for
a LEAP Grant under GAP.
Current Regulations: None.
Proposed Regulations: Under
proposed § 692.120(a)(2), to be eligible
for a LEAP Grant under GAP, a student
must graduate from secondary school or,
for a home-schooled student, must
complete a secondary education.
Reasons: Proposed § 692.120(a)(2) is
necessary to implement section
415E(d)(2)(B)(i)(V)(bb) of the HEA. We
believe that a home-schooled student
who completes a secondary education
would satisfy the statutory requirement
that a student graduate from secondary
school. However, a student who passed
an approved ability-to-benefit test or
obtained a General Educational
Development (GED) certificate would
not satisfy the statutory provision and
would not qualify as an eligible student
for a LEAP Grant under GAP.
Student Eligibility—State’s Maximum
LEAP Program Award
(§ 692.120(a)(3)(ii)(B))
Statute: Section 415E(d)(3)(A)(ii) of
the HEA provides that a student is
eligible for a LEAP Grant under GAP if
the student qualifies for the State’s
maximum undergraduate LEAP Grant
under the LEAP Program as authorized
under section 415(C)(b) of the HEA.
Current Regulations: None.
Proposed Regulations: Proposed
§ 692.120(a)(3)(ii)(B) would provide
that, in an award year in which a
student is receiving an additional LEAP
Grant under GAP, a student’s eligibility
may be based, in part, on qualifying for
a State’s maximum undergraduate
award for LEAP Grants under the LEAP
Program in accordance with subpart A
of part 692.
Reasons: Proposed
§ 692.120(a)(3)(ii)(B) is necessary to
implement section 415E(d)(3)(A)(ii) of
the HEA. Members of the LEAP/GAP
subcommittee were concerned that a
State’s LEAP Program may not have a
single maximum award amount. They
were also concerned that a student may
qualify for a maximum award but not
receive the maximum amount. We agree
that a student may qualify for the State’s
maximum LEAP Grant under the LEAP

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Program in a State that may have more
than one maximum award amount
without qualifying for the highest of the
maximum awards, e.g., a State may have
different maximum awards for
attendance at public and private
institutions. In these cases, a student’s
maximum award is based on the
maximum award amount established for
the applicable category or program
under which the student qualifies. We
agree that a student would meet this
requirement if the student qualifies for
the State’s maximum undergraduate
award but does not actually receive the
full amount of the maximum award.
Executive Order 12866
Regulatory Impact Analysis
Under Executive Order 12866, the
Secretary must determine whether the
regulatory action is ‘‘significant’’ and
therefore subject to the requirements of
the Executive Order and subject to
review by the OMB. Section 3(f) of
Executive Order 12866 defines a
‘‘significant regulatory action’’ as an
action likely to result in a rule that may
(1) have an annual effect on the
economy of $100 million or more, or
adversely affect a sector of the economy,
productivity, competition, jobs, the
environment, public health or safety, or
State, local or tribal governments or
communities in a material way (also
referred to as an ‘‘economically
significant’’ rule); (2) create serious
inconsistency or otherwise interfere
with an action taken or planned by
another agency; (3) materially alter the
budgetary impacts of entitlement grants,
user fees, or loan programs or the rights
and obligations of recipients thereof; or
(4) raise 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 this
proposed 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)(1) of Executive Order 12866.
Virtually all of the economic impact
associated with these proposed
regulations flows from proposed
§ 690.67 (implementing the statutory
provision in section 401(a)of the HEOA)
allowing the award of two Pell Grants in
one year for students who wish to
accelerate their program of study.
Outside of this provision, the cost of
which is driven almost entirely by
explicit statutory requirements, these
proposed regulations would not be
considered ‘‘economically significant.’’

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The Secretary 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
These proposed regulations are
needed to implement provisions of the
HEA, as amended by the HEOA, related
to changes to the Federal grant and
work-study programs, campus safety,
educational programs for students with
intellectual disabilities, copyright
infringement, teach-outs, readmission of
servicemembers, and non-Title IV
revenue.
In general, these regulations simply
restate specific HEOA requirements, in
many cases using language drawn
directly from the statute, or make
technical changes to conform with
statutory requirements or other
regulations. In the following areas, the
Secretary has exercised limited
discretion in implementing the HEOA
provisions in these proposed
regulations:
Definition of baccalaureate liberal
arts programs offered by proprietary
institutions: The Secretary determined
that, to meet the statutory requirement
that an institution offer a program, a
liberal arts program must be an
organized program of study that is
essentially the same for all students,
except that it could include some
elective courses.
Readmission requirements for
servicemembers: The Secretary
determined that the statute applies both
to a student who began attendance at an
institution and left because of service in
the uniformed services and to a student
admitted to an institution who did not
begin attendance because of service in
the uniformed services. The Secretary
defined ‘‘promptly readmit’’ as
readmitting a student into the next class
or classes in the student’s program
unless the student requests a later date
of admission, or unusual circumstances
require the institution to admit the
student at a later date.
Non-title IV revenue requirement (90/
10)—institutional eligibility and
sanctions: The Secretary determined
that an institution has 45 days after the
end of its fiscal year to notify the
Department if it failed the 90/10
requirement.
Non-title IV revenue requirement (90/
10)—calculating revenue percentage:
The Secretary identified types of nontitle IV eligible programs from which an
institution could count, as revenue,
funds paid for students taking those
programs; identified elements to
distinguish an institutional loan from
other student account receivables; and

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set criteria to allocate excess loan funds
treated as non-Federal revenue to each
payment period.
Net present value: As discussed more
fully in the net present value discussion
in this preamble, the Secretary
established a formula for institutions to
use in calculating the net present value
of institutional loans made during a
fiscal year for the purpose of counting
those loans as non-Federal revenue. As
an alternative, the proposed regulations
would also allow an institution to use
50 percent of the total amount of loans
it made during the fiscal year as the
NPV, provided that none of these loans
are sold until they have been in
repayment for at least two years.
Institutional plans for improving the
academic program: While requiring
institutions to provide prospective and
enrolled students information about
plans for improving the institution’s
academic program, the Secretary
determined that institutions themselves
are in the best position to determine
what defines a plan, including when a
plan becomes a plan subject to
dissemination under this provision.
Peer-to-peer file sharing/copyrighted
material: The Secretary determined that
in implementing statutory requirements
intended to reduce the unauthorized
distribution of copyrighted material,
institutions must incorporate at least
one technological deterrent; must
inform users that the unauthorized
distribution of copyrighted material is
illegal, what actions constitute illegal
distribution of copyrighted material,
and the potential penalties for doing so;
and must use relevant assessment
criteria to evaluate how effective its
plans are in combating the unauthorized
distribution of copyrighted materials by
users of the institution’s networks.
Consumer Information: The Secretary
determined that institutions must
identify the source of the information
disclosed, as well as the time frames
and methodology associated with that
information; that institutions must
disclose the retention rate as reported to
the Integrated Postsecondary Education
Data System (IPEDS); that, with limited
exceptions, institutions must
disaggregate completion and graduation
rate data by gender, by major racial and
ethnic subgroup, and by whether or not
the institution’s students received
certain types of Federal student aid; and
that, in cases where 20 percent or more
of the certificate- or degree-seeking, fulltime, undergraduate students at an
institution left school to serve in the
Armed Forces, to serve on official
church missions, or to serve with a
foreign aid service of the Federal
Government (such as the Peace Corps),

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the institution may recalculate the
completion or graduation rate of those
students by adding the time period of
service to the 150 percent time frame
they normally have to complete or
graduate.
Campus Safety Provisions—Hate
Crime Reporting: The Secretary
determined that the current FBI’s Hate
Crime Data Collection Guidelines in the
Uniform Crime Reporting Handbook
should be used to define the hate crimes
to be reported.
Campus Safety Provisions—Definition
of Test: The Secretary defines test for
purposes of emergency response and
evacuation procedures as regularly
scheduled drills, exercises, and
appropriate follow-through activities,
designed for assessment and evaluation
of emergency plans and capabilities.
Campus Safety Provisions—Annual
Security Report/Emergency Response
and Evacuation Procedures: The
Secretary determined that institutions
must include a statement of policy
regarding their emergency response and
evacuation procedures in the annual
security report beginning with the
annual security report distributed by
October 1, 2010. The Secretary
established these emergency response
procedures to ensure institutions are
prepared for an emergency situation on
campus. These procedures include
testing procedures to identify and
improve weaknesses and procedures to
providing emergency information to the
campus and larger community, such as
parents.
Campus Safety Provisions—Timely
Warning and Emergency Notification:
The Secretary determined that a timely
warning must be issued in response to
crimes specified in the regulations and
that an emergency notification is
required in the case of an immediate
threat to the health or safety of students
or employees occurring on campus,
covering a broader scope of situations
than those covered by the timely
warning requirement.
Campus Safety Provisions—Annual
Security Report/Emergency Response
and Evacuation Procedures/Definition
of On-Campus Student Housing Facility:
The Secretary defines the term oncampus student housing facility to mean
a dormitory or other residential facility
for students that is located on an
institution’s campus, as defined in
§ 668.46(a).
Campus Safety Provisions—Annual
Security Report/Missing Student
Notification Policy: The Secretary
determined that the annual security
report must include information about
missing student policies and
procedures.

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Federal Register / Vol. 74, No. 161 / Friday, August 21, 2009 / Proposed Rules
Campus Safety Provisions—Missing
Student Notification Policy: The
Secretary determined that institutional
missing student notification policies
must include a list of the titles of the
persons or organizations to which a
student should be reported missing,
must allow students to register in a
confidential manner a contact person to
be notified within 24 hours if they are
reported missing, must inform students
that their parent or guardian will be
notified if they are under eighteen and
not an emancipated minor, and must
inform students that law enforcement
will be notified within 24 hours if the
student has been determined to be
missing for 24 hours.
Campus Safety Provisions—Annual
Fire Safety Report: The Secretary
included definitions for cause of fire,
fire, fire drill, fire-related injury, firerelated death, fire-safety system, and
value of property damage to enable
comparability across institutions of the
statistics that institutions are required to
report. Additionally, institutions must
submit statistics to the Department in
their annual fire safety report and must
provide data for the three most recent
calendar years for which data are
available, with reporting requirements
phased in beginning with the collection
of calendar year 2009 statistics for
inclusion in the October 1, 2010 Annual
Fire Safety Report.
Financial Assistance for Students
with Intellectual Disabilities: The
Secretary determined that a
comprehensive transition and
postsecondary program for students
with intellectual disabilities must be
delivered to students who physically
attend the institution and that such a
program must provide opportunities for
students with intellectual disabilities to
participate in coursework and other
activities with students without
disabilities.
Work-Study: The Secretary
determined that written authorizations
from students will no longer be required
before an institution can credit a
student’s account or hold a credit
balance for the student.
TEACH Grant Program Periods of
Suspension and Discharge of Agreement
to Serve: The Secretary determined that
a TEACH Grant recipient’s teaching
service obligation should be discharged
in cases when the recipient cannot
comply with his or her agreement to
teach because of a call or order to active
military duty for an extended period of
time.
Two Federal Pell Grants in an Award
Year: The Secretary determined that a
student would be eligible for a second
Scheduled Award if the student has

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earned in an award year at least the
credit or clock hours of the first
academic year of the student’s eligible
program, and is enrolled as at least a
half-time student in a program leading
to a bachelor’s or associate degree or
other recognized educational credential,
except as provided for students with
intellectual disabilities. The Secretary
determined that a financial aid
administrator may, on an individual
basis, waive the requirement that a
student complete the credit or clock
hours in the student’s first academic
year in the award year due to special
circumstances beyond the student’s
control. The Secretary determined that
in calculating a transfer student’s
eligibility to receive a second Scheduled
Award, an institution determines the
credit or clock hours the student has
earned at a prior institution during the
award year based on the Federal Pell
Grant disbursements that the student
received at the prior institution during
the award year in relation to the
student’s Scheduled Award at that prior
institution.
The Secretary determined that if a
student is enrolled as a three-quartertime or full-time student, an institution
must consider a crossover payment
period, i.e., a payment period that
occurs in two award years, to be in the
award year in which the student would
receive the greater payment for the
payment period based on the
information available at the time that
the student’s Federal Pell Grant is
initially calculated. If the institution
subsequently receives information that
the student would receive a greater
payment for the payment period by
reassigning the payment to the other
award year, the institution would be
required to reassign the crossover
payment to the award year providing
the greater payment.
A student may request that the
institution place the payment period in
the award year that can be expected to
result in the student receiving a greater
amount of Federal Pell Grants over the
two award years in which the payment
period is scheduled to occur. If the
student makes that request, the
institution must assign the payment
period to that award year.
Maximum Federal Pell Grant for
Children of Soldiers: The Secretary
determined that a student whose parent
or guardian died as a result of
performing military service in Iraq or
Afghanistan after September 11, 2001 is
deemed to have a zero expected family
contribution (EFC) for the Federal Pell
Grant Program.

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Regulatory Alternatives Considered
This section addresses the alternatives
that the Secretary considered in
implementing the discretionary portions
of the HEOA provisions. Except where
noted, alternatives considered did not
have a measurable effect on Federal
costs. These alternatives are discussed
in more detail in the Reasons sections
of this preamble related to the specific
regulatory provisions.
Campus-Safety Provisions: In general,
the Secretary adopted alternatives that
maximized the availability of
information provided to students and
parents while avoiding unnecessary
burden on institutions. Specific
examples of this process are discussed
in the Reasons sections accompanying
individual regulatory provisions.
Two Federal Pell Grants in an Award
Year: The Department proposed that a
student would be eligible to receive
payment from a second Scheduled
Award if the student was also
completing the hours of the first
academic year in that payment period.
In conjunction with this provision, the
Department proposed to require
recalculation of a student’s payment for
any payment period in which the
student is receiving a second Scheduled
Award if the projected enrollment status
of a student enrolled in a term-based
program changed. This recalculation
requirement would ensure that a
student who is not accelerating does not
receive the benefit of a payment from a
second Scheduled Award. Non-Federal
negotiators objected to the recalculation
requirements, citing concern that they
would be administratively burdensome
and create a different treatment
compared to recalculations for first
Scheduled Awards. As discussed
extensively above in the Reasons
section related to this provision, the
Department rejected a number of
alternatives proposed by non-Federal
negotiators, because they failed to
encourage a student to accelerate the
completion of his or her program of
study within a shorter time period than
the regularly scheduled completion
time, i.e., the published length of the
program. Consensus was not reached on
this issue.
Maximum Federal Pell Grant for
Children of Soldiers: During the
negotiation of these proposed
regulations, the Department proposed
that a student must have an EFC in the
numerical range that would make a
student eligible for a Federal Pell Grant
to qualify for a zero EFC under this
provision. Non-Federal negotiators
objected that this added an additional
student eligibility requirement not

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provided for in the statute. Based on
this objection and the Department’s
belief that any student with a parent or
guardian who died in Iraq or
Afghanistan after September 11, 2001
should receive a zero EFC, the
Department agreed with the non-Federal
negotiators’ proposed language although
the Department’s alternative would have
cost approximately $450,000 less over
five years than the proposed regulations
that drew consensus.
Non-Federal negotiators also
suggested that recipients should receive
a Maximum Pell Award instead of a
zero EFC. The Department declined on
the basis that it conflicted with the
explicit language of the statute.
TEACH Grant Program Periods of
Suspension and Discharge of Agreement
to Serve: Several non-Federal
negotiators suggested that the
Department should expand the
categories of extenuating circumstances
under which a TEACH Grant recipient
who is unable to fulfill all or a portion
of his or her teaching service obligation
may be excused from fulfilling that
portion of the teaching service
obligation to include economic
hardship, noting that teachers were
being laid off in a number of areas and
TEACH Grant recipients might not be
able to find full-time employment in
their high-need fields due to the current
economic conditions. The Department
rejected this alternative, believing that
the eight-year timeframe to complete the
four-year service requirement is
sufficient to overcome temporary
hardship in locating a suitable position.
Benefits
Benefits provided in these proposed
regulations include greater transparency
for prospective and enrolled students at
institutions participating in the Federal
Student Financial Assistance programs;
increased eligibility for certain
recipients of Federal Student Financial
Assistance program funds; established
requirements under which
servicemembers are readmitted to
participating institutions; established
extenuating circumstances under which
a TEACH Grant recipient may be
excused from fulfilling all or part of his
or her service obligation; expanded use
of FWS funds to permit institutions to
compensate students employed in
projects that teach civics in school, raise
awareness of government functions or
resources, or increase civic
participation; allowing institutions
located in major disaster areas to make
FWS payments to disaster-affected
students; new requirements for
determining how proprietary
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percent of revenue derived from sources
other than title IV, HEA program funds;
providing that an institution that
conducts a teach-out at a site of a closed
institution may, under certain
conditions, establish that site as an
additional location; amending the
definition of ‘‘proprietary institution of
higher education’’ to include
institutions that provide a program
leading to a baccalaureate degree in
liberal arts, if the institution provided
that program since January 1, 2009, and
has been accredited by a regional
accrediting agency since October 1,
2007, or earlier; providing that the nonFederal share of LEAP Grants no longer
has to come from a direct appropriation
of State funds; increased information to
LEAP Grant recipients and recipients of
the new GAP program; and the
establishment of the activities, awards,
allotments to States, matching funds
requirements, consumer information
requirements, application requirements,
and other requirements needed to begin
and continue participating in the GAP
Program. In most cases, the Department
lacks data to accurately assess the
impact of these benefits. The
Department is interested in receiving
comments or data that would support a
more rigorous analysis of the impact of
these provisions.
These benefits all flow directly from
statutory changes included in the
HEOA; they are not materially affected
by discretionary choices exercised by
the Department in developing these
regulations. As discussed in greater
detail under Net Budget Impacts, these
proposed provisions result in net costs
to the government of $1,644 million
over 2010–2014.
Costs
Many of the statutory provisions
implemented though this NPRM will
require regulated entities to develop
new disclosures and other materials, as
well as accompanying dissemination
processes. Other proposed regulations
generally would require discrete
changes in specific parameters
associated with existing guidance—such
as changes to FWS cash management
practices and TEACH Grant service
suspension and discharge benefits.
Entities wishing to continue to
participate in the student aid programs
have already absorbed most of the
administrative costs related to
implementing these proposed
regulations. Marginal costs over this
baseline are primarily related to onetime system changes that, while
possibly significant in some cases, are
an unavoidable cost of continued
program participation. In assessing the

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potential impact of these proposed
regulations, the Department recognizes
that certain provisions—such as the
requirement for additional disclosures—
are likely to increase workload for some
program participants. This additional
workload is discussed in more detail
under the Paperwork Reduction Act of
1995 section of this preamble.
Additional workload would normally be
expected to result in estimated costs
associated with either the hiring of
additional employees or opportunity
costs related to the reassignment of
existing staff from other activities. Given
the limited data available, the
Department is particularly interested in
comments and supporting information
related to possible burden stemming
from the proposed regulations.
Estimates included in this notice will be
reevaluated based on any information
received during the public comment
period.
Federal Pell Grant Program:
Statutory changes implemented by
these proposed regulations are
estimated to increase grant awards
under the Federal Pell Grant Program by
$297 million over award year 2009–
2010 and a total of $1,643 million over
five years. This will increase Federal
costs by the same amount.
Statutory changes implemented by
these proposed regulations to grant
children of deceased soldiers a zero EFC
are estimated to increase grant awards
under the Federal Pell Grant Program by
approximately $280,000 over award
year 2009–2010 and a total of $500,000
over five years. This will increase
Federal costs by the same amount.
Because institutions of higher
education affected by these regulations
already participate in the Federal Pell
Grant Program, these schools have
already established systems and
procedures to meet program eligibility
requirements. Accordingly, entities
wishing to continue to participate in the
program have already absorbed most of
the administrative costs related to
implementing these regulations.
Marginal costs over this baseline are
primarily related to one-time system
changes that, while possibly significant
in some cases, are an unavoidable cost
of continued program participation.
Net Budget Impacts
HEOA provisions implemented by
these proposed regulations are
estimated to have a net budget impact
of $297.4 million in 2010 and $1.6
billion over FY 2011–2013. Absent
evidence on the impact of these
regulations on student behavior, budget
cost estimates were based on behavior
as reflected in various Department data

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sets and longitudinal surveys listed
under Assumptions, Limitations, and
Data Sources in this preamble. The
budgetary impact of the proposed
regulations is almost entirely driven by
statutory changes involving the
provision of two Pell Grants in one year.
Assumptions, Limitations, and Data
Sources
Because these proposed regulations
would largely restate statutory
requirements that would be selfimplementing in the absence of
regulatory action, impact estimates
provided in the preceding section reflect
a pre-statutory baseline in which the
HEOA changes implemented in these
proposed regulations do not exist. Costs
have been quantified for five years. In
general, these estimates should be
considered preliminary; they will be
reevaluated in light of any comments or
information received by the Department
prior to the publication of the final
regulations. The final regulations will
incorporate this information in a revised
analysis.
In developing these estimates, a wide
range of data sources were used,
including data from the National
Student Loan Data System; operational
and financial data from Department of
Education systems; and data from a
range of surveys conducted by the
National Center for Education Statistics
such as the 2004 National
Postsecondary Student Aid Survey, the
1994 National Education Longitudinal
Study, and the 1996 Beginning
Postsecondary Student Survey. For the
regulations related to the Federal Pell
Grant Program, the sample file used for
the Pell Grant estimation model is
created from a representative portion of
FAFSA applicants merged to Pell
recipient data from the most current
completed academic year (currently AY
2007–08). The sample data is ‘‘aged’’
using OMB economic assumptions and
applicant growth assumptions to project
future awards. Data from other sources,
such as the Census Bureau, were also
used. Data on administrative burden at
participating schools and third-party
servicers are extremely limited;
accordingly, as noted above, the
Department is particularly interested in
comments in this area.
Elsewhere in this SUPPLEMENTARY
INFORMATION section we identify and
explain burdens specifically associated
with information collection
requirements. See the heading
Paperwork Reduction Act of 1995.
Accounting Statement
As required by OMB Circular A–4
(available at http://

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www.Whitehouse.gov/omb/Circulars/
a004/a-4.pdf), in Table 1, we have
prepared an accounting statement
showing the classification of the
expenditures associated with the
provisions of these proposed
regulations. This table provides our best
estimate of the changes in Federal
student aid payments as a result of these
proposed regulations. Expenditures are
classified as transfers from the Federal
government to student loan borrowers
(for expanded loan discharges, teacher
loan forgiveness payments).

TABLE 1—ACCOUNTING STATEMENT:
CLASSIFICATION OF ESTIMATED EXPENDITURES (IN MILLIONS)
Category

Transfers

Annualized Monetized
Transfers.
From Whom To
Whom?

$297.4 million in
2010.
Federal Government
To Student Loan
Borrowers.

Clarity of the Regulations
Executive Order 12866 and the
Presidential memorandum ‘‘Plain
Language in Government Writing’’
requires each agency to write
regulations that are easy to understand.
The Secretary invites comments on
how to make these proposed regulations
easier to understand, including answers
to questions such as the following:
• Are the requirements in the
proposed regulations clearly stated?
• Do the proposed regulations contain
technical terms or other wording that
interferes with their clarity?
• Does the format of the proposed
regulations (grouping and order of
sections, use of headings, paragraphing,
etc.) aid or reduce their clarity?
• Would the proposed regulations be
easier to understand if we divided them
into more (but shorter) sections? (A
‘‘section’’ is preceded by the symbol
‘‘§ ’’ and a numbered heading; for
example, § 682.209 Repayment of a
loan.)
• Could the description of the
proposed regulations in the
‘‘Supplementary Information’’ section of
this preamble be more helpful in
making the proposed regulations easier
to understand? If so, how?
• What else could we do to make the
proposed regulations easier to
understand?
To send any comments that concern
how the Department could make these
proposed regulations easier to
understand, see the instructions in the
ADDRESSES section of this preamble.

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42419

Regulatory Flexibility Act Certification
The Secretary certifies that these
proposed regulations would not have a
significant economic impact on a
substantial number of small entities.
These proposed regulations would affect
institutions of higher education that
participate in Title IV, HEA programs
and individual students and parents.
The U.S. Small Business Administration
Size Standards define institutions and
lenders as ‘‘small entities’’ if they are
for-profit or nonprofit institutions with
total annual revenue below $5,000,000
or if they are institutions controlled by
governmental entities with populations
below 50,000. A significant percentage
of the institutions participating in the
Federal student loan programs meet the
definition of ‘‘small entities.’’ For these
institutions, the new requirements
imposed under the proposed regulations
are not expected to impose significant
new costs. The impact of the proposed
regulations on individuals is not subject
to the Regulatory Flexibility Act.
The Secretary invites comments from
small institutions and lenders as to
whether they believe the proposed
changes would have a significant
economic impact on them and, if so,
requests evidence to support that belief.
Paperwork Reduction Act of 1995
Proposed §§ 668.14, 668.18, 668.23,
668.28, 668.41, 668.43, 668.45, 668.46,
668.49, 668.232, 668.233, 686.41,
686.42, 690.63, 690.64, 690.67, 690.75,
692.21, and 692.100, 692.101, 692.111
contain information collection
requirements. Under the Paperwork
Reduction Act of 1995 (44 U.S.C.
3507(d)), the Department of Education
has submitted a copy of these sections
to the Office of Management and Budget
(OMB) for its review.
Section 600.5(a)(5)—Definition of
Baccalaureate Liberal Arts Programs
Offered by Proprietary Institutions
The proposed change to § 600.5(a)(5)
would add to the definition of
proprietary institution of higher
education, an institution that provides a
program leading to a baccalaureate
degree in liberal arts that the institution
has provided since January 1, 2009, so
long as the institution has been
accredited by a recognized regional
accreditation agency or organization
since October 1, 2007, or earlier. This
proposed change in the definition of a
proprietary institution does not impact
burden.
While the current regulations point to
OMB 1840–0098, we estimate that there
is no change in burden associated with
this section of the regulations as

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reported under the redesignated OMB
Control Number 1845–0012.

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Section 668.14(b)(31)—Institutional
Requirements for Teach-Outs/Eligibility
and Certification Procedures
The proposed regulations in
§ 668.14(b)(31) are amended to require
an institution to submit a teach-out plan
to its accrediting agency whenever (1)
the Department or their accrediting
agency initiates an LS&T, or an
emergency action against the institution,
as required by statute; (2) the
institution’s State licensing or
authorizing agency revokes the
institution’s license or legal
authorization to provide an educational
program; (3) the institution intends to
close a location that provides 100
percent of at least one program; or (4)
the institution otherwise intends to
cease operations.
While the current regulations in
§ 668.14 point to OMB 1840–0537, we
estimate that the proposed changes in
§ 668.14 will increase burden by 160
hours for institutions under the
redesignated OMB Control Number
1845–0022.
Section 668.18—Readmission
Requirements for Servicemembers
The proposed § 668.18 of the
regulations include the general
requirements that an institution may not
deny readmission to a servicemember,
but must readmit the servicemember
with the same academic status as when
the student was last admitted to the
institution. The proposed regulations
clarify that the requirements also apply
to a student who was admitted to an
institution, but did not begin attendance
because of service in the uniformed
services. The proposed regulations
specify that the institution must
promptly readmit a student, and would
define ‘‘promptly readmit’’ as
readmitting a student into the next class
or classes in the student’s program
unless the student requests a later date
of admission, or unusual circumstances
require the institution to admit the
student at a later date. The proposed
regulations require the institution to
make reasonable efforts to help the
student become prepared or to enable
the student to complete the program
including, but not limited to, providing
refresher courses at no extra cost and
allowing the student to retake a pretest
at no extra cost. The institution would
not be required to readmit the student
if, after reasonable efforts by the
institution, the student is still not
prepared to resume the program at the
point where he or she left off, or is still
unable to complete the program.

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The proposed regulation requires an
institution to designate one or more
offices for the purpose of receiving
advance notice from students of their
absence from the institution
necessitated by service in the uniformed
services, and notice from students of
intent to return to the institution.
However, such notice would not need to
follow any particular format, nor would
a student have to indicate if the student
intends to return to the institution. Also,
any such notice may be provided by an
appropriate officer of the Armed Forces.
The notice of intent to return may be
provided orally or in writing and would
not need to follow any particular format.
A period of absence from the institution
before or after performing service in the
uniformed services would not count
against the period of uniformed service
which is limited to the five years.
The proposed regulations list the
documentation that support the
institution’s determination for
readmission that a student must submit
with an application for readmission.
The proposed regulations make clear
that the types of documentation
available or necessary will vary from
case to case.
The proposed regulations list the
circumstances that a student’s eligibility
for readmission to an institution would
be terminated.
We estimate that the proposed
changes will increase burden for
students by 384 hours and for
institutions by 1,129 hours for a total
increase in burden of 1,513 hours in
OMB Control Number 1845–NEW1.
Non-Title IV Revenue Requirement (90/
10)
Section 668.28(a)—Calculating the
Revenue Percentage
The proposed regulations in
§ 668.28(a) implement the statutory
provisions relating to counting revenue
from non-title IV eligible programs.
Regarding institutional loans for
which a net present value (NPV) would
be calculated, the proposed regulations
establish that institutional loans would
have to be credited in-full to the
students’ accounts, be evidenced by
standalone repayment agreements
between students and the institution,
and be separate from enrollment
contracts signed by students.
To count revenue from loan funds in
excess of the loan limits in effect prior
to ECASLA in the allowable revenue
category, the proposed regulations allow
institutions to count the excess amount
on a payment-period basis.
We estimate that the proposed
regulations will increase burden for

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institutions; however, these proposed
regulations only define non-title IV
revenue. The burden increase is found
in § 668.28(b) and (c) under OMB 1845–
NEW2.
Section 668.28(b)—Net Present Value
The proposed regulation 668.28(b)
defines the NPV as the sum of the
discounted cash flows. Proposed
Appendix C illustrates how an
institution calculates its 90/10 revenue
percentage.
The proposed regulations allow a
simpler alternative to performing the
NPV calculation, by allowing an
institution to use 50 percent of the total
amount of loans it made during the
fiscal year as the NPV. However, as a
condition of using the 50 percent
alternative calculation, if the institution
chooses to use this alternative, it may
not sell any of the associated loans until
they have been in repayment for at least
two years.
We estimate that the proposed
regulations will increase burden for
institutions by 3,087 hours in the new
OMB Control Number 1845–NEW2.
Section 668.28(c)—Non-title IV Revenue
(90/10)
The proposed regulations in
§ 668.28(c) would remove all of the 90/
10 provisions from 34 CFR 600.5 and
relocate the amended provisions to
subpart B of part 668. The proposed
regulations amend the program
participation agreement to specify that a
proprietary institution must derive at
least 10 percent of its revenue from
sources other than title IV, HEA
program funds. If an institution does not
satisfy the 90/10 requirement, the
proposed regulations require the
institution to notify the Department no
later than 45 days after the end of its
fiscal year that it failed the 90/10
requirement. In keeping with
provisional certification requirements
the current regulations are amended by
adding proposed language to provide
that a proprietary institution’s
certification automatically becomes
provisional if it fails the 90/10
requirement for any fiscal year.
We estimate that the proposed
regulations in § 668.28(c) will increase
burden for institutions by 1 hour in the
new OMB Control Number 1845–NEW2.
Section 668.23(d)(4)—Audited Financial
Statements
The proposed regulations in
§ 668.23(d)(4) require that a proprietary
institution must disclose in a footnote to
its financial statement audit the
percentage of its revenues derived from
the title IV, HEA program funds that the

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institution received during the fiscal
year covered by that audit. The
institution must also report in the
footnote the non-Federal and Federal
revenue by source that was included in
the 90/10 calculation.
While the current regulations point to
OMB Control Number 1840–0697, we
estimate that the proposed regulations
in § 668.23(d)(4) will increase burden
for institutions by 165 hours for the
redesignated OMB Control Number
1845–0038.
Section 668.43(a)(5)(iv)—Institutional
Plans for Improving the Academic
Program
The proposed regulation in
§ 668.43(a) amends the information
about the academic program that the
institution must make readily available
to enrolled and prospective students
about any plans by the institution for
improving any academic program at the
institution. An institution would be
allowed to determine what a ‘‘plan’’ is,
including when a plan becomes a plan.
We estimate that the proposed
regulations will increase burden for
institutions by 968 hours in OMB
Control Number 1845–0022.

srobinson on DSKHWCL6B1PROD with PROPOSALS2

Sections 668.14(b) and 668.43(a)—Peerto-Peer File Sharing/Copyrighted
Material
Section 668.14(b)(30)—Program
Participation Agreement (PPA)
The proposed regulations require an
institution, as a condition of
participation in a title IV, HEA program,
to agree that it has developed and
implemented plans to effectively
combat the unauthorized distribution of
copyrighted material by users of the
institution’s network without unduly
interfering with the educational and
research use of the network.
An institution’s plan must include:
The use of one or more technologybased deterrents;
Mechanisms for educating and
informing its community about
appropriate versus inappropriate use of
copyrighted material;
Procedures for handling unauthorized
distribution of copyrighted material,
including disciplinary procedures; and
Procedures for periodically reviewing
the effectiveness of the plans.
The proposed regulations make clear
that no particular technology measures
are favored or required for inclusion in
an institution’s plans, and each
institution retains the authority to
determine what its particular plans for
compliance will be, including those that
prohibit content monitoring.
The proposed regulation requires an
institution, in consultation with the

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chief technology officer or other
designated officer of the institution, to
the extent practicable, offer legal
alternatives to illegal downloading or
otherwise acquiring copyrighted
material, as determined by the
institution. The proposed regulations
would also require that institutions (1)
periodically review the legal
alternatives for downloading or
otherwise acquiring copyrighted
material and (2) make the results of the
review available to their students
through a Web site and/or other means.
While the current regulations in
§ 668.14 point to OMB 1840–0537, we
estimate that the proposed changes in
§ 668.14(b)(30) will increase burden by
91,120 hours for institutions under the
redesignated OMB Control Number
1845–0022.
Section 668.43(a)(10)—Consumer
Information
The proposed regulations requires
information regarding institutional
policies and sanctions related to the
unauthorized distribution of
copyrighted material be included in the
list of institutional information
provided upon request to prospective
and enrolled students. This information
must (1) explicitly inform enrolled and
prospective students that unauthorized
distribution of copyrighted material,
including peer-to-peer file sharing, may
subject a student to civil and criminal
liabilities; (2) include a summary of the
penalties for violation of Federal
copyright laws; and (3) delineate the
institution’s policies with respect to
unauthorized peer-to-peer file sharing,
including disciplinary actions that are
taken against students who engage in
illegal downloading or unauthorized
distribution of copyrighted materials
using the institution’s information
technology system.
We estimate that the proposed
regulations in § 668.43(a)(10) will
increase burden for institutions by 1,424
hours in OMB Control Number 1845–
0022.
Section 668.41—Reporting and
Disclosure of Information
The proposed regulations in § 668.41
add retention rate information,
placement rate information, and
information on the types of graduate
and professional education in which
graduates of the institution’s four-year
degree programs enroll, to the types of
information that an institution must
provide to its enrolled and prospective
students. When reporting its retention
rate, an institution must disclose the
institution’s retention rate as defined by
and reported to the Integrated

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Postsecondary Education Data System
(IPEDS). The institution may use
various sources of retention rate
information and information on types of
graduate and professional education in
which graduates of the institution’s
four-year degree programs enroll (such
as State data systems, surveys, or other
relevant sources). If an actual placement
rate is calculated by the institution, it
must be disclosed. The institution
would have to identify the source of the
information it discloses, as well as the
time frames and methodology associated
with that information.
While the current regulations point to
both OMB 1845–0004 and OMB 1845–
0010, OMB 1845–0010 has been
recently discontinued, therefore, we
estimate that the proposed regulations
will increase burden for institutions
8,541 hours in OMB Control Number
1845–0004.
Section 668.45—Information on
Completion or Graduation Rates
Under the proposed regulations in
§ 668.45, an institution’s completion
and graduation rate information must be
disaggregated by gender, by each major
racial and ethnic subgroup, and by
whether or not the institution’s students
received certain types of Federal student
aid. The disaggregation by receipt of aid
is categorized by:
Recipients of a Federal Pell Grant;
Recipients of a Federal Family
Education Loan or a Federal Direct Loan
(other than an Unsubsidized Stafford
Loan); and
Recipients of neither a Federal Pell
Grant nor a Federal Family Education
Loan or a Federal Direct Loan (other
than an Unsubsidized Stafford loan).
The institution would report its
completion and graduation rate
information in a disaggregated fashion
only if the number of students in each
category is sufficient to yield
statistically reliable information, and
doing so would not reveal personally
identifiable information about an
individual student.
We estimate that the proposed
regulations will increase burden for
institutions 7,488 hours in OMB Control
Number 1845–0004.
Campus Safety Provisions
Section 668.46(c)(3)—Hate Crime
Reporting
The proposed regulations add the
crimes of ‘‘larceny-theft,’’ ‘‘simple
assault,’’ ‘‘intimidation,’’ and
‘‘destruction/damage/vandalism of
property’’ to the crimes that must be
reported in hate crime statistics.
Additionally, the proposed regulations

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update the definitions of the terms
‘‘Weapons: carrying, possessing, etc.,’’
‘‘Drug abuse violations,’’ and ‘‘Liquor
law violations’’ which are excerpted
from the Federal Bureau of
Investigation’s Uniform Crime Reporting
Program, to reflect changes made by the
FBI to these definitions in 2004.
We estimate that the proposed
regulations will increase burden for
institutions by 5,695 hours in OMB
Control Number 1845–0022.
Reporting Emergency Response and
Evacuation Procedures
Section 668.46(e)—Timely Warning and
Emergency Notification
The proposed regulations clarify the
difference between the existing timely
warning requirement and the new
requirement for an emergency
notification policy. While a timely
warning must be issued in response to
specific crimes, an emergency
notification is required in the case of an
immediate threat to the health or safety
of students or employees occurring on
campus. The proposed language would
clarify that an institution that follows its
emergency notification procedures is
not required to issue a timely warning
based on the same circumstances;
however, the institution must provide
adequate follow-up information to the
community as needed.
We estimate that the proposed
regulations will increase burden for
institutions by 1,424 hours in OMB
Control Number 1845–0022.

srobinson on DSKHWCL6B1PROD with PROPOSALS2

Section 668.46(g)—Emergency Response
and Evacuation Procedures
The proposed regulations outline the
elements that an institution must
include in its statement of policy
describing its emergency response and
evacuating procedures in its annual
security report to include the following:
Procedures to immediately notify the
campus community upon the
confirmation of a significant emergency
or dangerous situation involving an
immediate threat occurring on the
campus.
A description of the process that (1)
confirms that there is a significant
emergency or dangerous situation, (2)
determines the appropriate segment or
segments of the campus community to
receive a notification, (3) determines the
content of the notification, and (4)
initiates the notification system.
A statement that the institution will,
without delay, and taking into account
the safety of the community, determine
the content of the notification and
initiate the notification system, unless
issuing the notification will, in the

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professional judgment of responsible
authorities, compromise efforts to assist
a victim or to contain, respond to, or
otherwise mitigate the emergency.
A list of the titles of the persons or
organizations responsible for carrying
out the actions proposed.
Procedures for disseminating
emergency information to the larger
community.
Procedures for testing its emergency
response and evacuation procedures on
at least an annual basis with at least one
test per calendar year, and be
documented, including a description of
the exercise, the date, time, and if it was
announced or unannounced.
We estimate that the proposed
regulations will increase burden for
institutions by 11,390 hours in OMB
Control Number 1845–0022.
Missing Student Procedure
Section 668.41(a)—Definition of OnCampus Student Housing Facility
The proposed regulations in
§ 668.41(a) would add a definition of the
term on-campus student housing facility
to mean a dormitory or other residential
facility for students that is located on an
institution’s campus.
The proposed definition would be
added to clarify what is meant by oncampus student housing facility and to
link the meaning of ‘‘on-campus’’ to the
existing regulatory definition of campus
in § 668.46(a), which is used for crime
reporting under § 668.46(c). The
proposed change is to a definition and
does not impact burden.
While the current regulations point to
both OMB 1845–0004 and OMB 1845–
0010, OMB 1845–0010 has recently
been discontinued. We estimate that
there is no change in burden associated
with this section of the regulations as
reported under OMB Control Number
1845–0004.
Section 668.46(b)—Annual Security
Report
The proposed regulations in
§ 668.46(b) require an institution to
include its missing student notification
policy and procedures in its annual
security report. This would be required
beginning with the annual security
report distributed by October 1, 2010.
We estimate that the proposed
regulations will increase burden for
institutions by 456 hours for an increase
in burden in OMB Control Number
1845–0022.
Section 668.46(h)—Missing Student
Notification Policy
The proposed regulation in
§ 668.46(h) implements the new

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statutory requirements, specifying that a
statement of policy regarding missing
student notification for students
residing in on-campus student housing
facilities must include:
A list of the titles of the persons or
organizations to which students,
employees, or other individuals should
report that a student has been missing
for 24 hours;
A requirement that any official
missing student report be immediately
referred to the institution’s police or
campus security department or, if not
applicable, to the local law enforcement
agency with jurisdiction in the area;
The option for each student to
identify a contact person to be notified
if the student is determined missing by
the institutional police or campus
security department, or the local law
enforcement agency; and
A disclosure that contact information
will be registered and maintained
confidentially.
The proposed regulation further
requires an institution to advise
students who are under 18 and not
emancipated that if the student is
missing it will notify a custodial parent
or guardian in addition to any contact
person designated by the student. All
students must also be advised that,
regardless of whether they name a
contact person, the institution must
notify the local law enforcement agency
that the student is missing, unless the
local law enforcement was the entity
that determined that the student is
missing.
The proposed regulations reflect the
new statutory requirements. These
regulations do not preclude the
institution from contacting the student’s
contact person or the parent
immediately upon determination that
the student has been missing for 24
hours.
We estimate that the proposed
regulations will increase burden for
institutions by 2,423 hours for an
increase in burden in OMB Control
Number 1845–0022.
Fire Safety Standards
Section 668.41(e)—Annual Fire Safety
Report
The proposed regulations provide that
institutions that maintain an on-campus
student housing facility must distribute
an annual fire safety report and to create
publication requirements for the annual
fire safety report that are similar to the
long-standing rules for the annual
security report.
The proposed regulations allow an
institution to publish the annual
security report and the annual fire safety

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srobinson on DSKHWCL6B1PROD with PROPOSALS2

report together, as long as the title of the
document clearly states that it contains
both the annual security report and the
annual fire safety report. If an
institution chooses to publish the
reports separately, it would have to
include information in each of the two
reports about how to directly access the
other report.
While the current regulations point to
both OMB 1845–0004 and OMB 1845–
0010, OMB 1845–0010 has recently
been discontinued. The burden
associated with the data collection and
reporting for the annual fire safety
report is reflected in § 668.49 as
reported under OMB Control Number
1845–NEW3.
Section 668.49—Annual Fire Safety
Report
The proposed regulations define the
following terms relevant to the fire
safety reporting requirements: Cause of
fire; Fire; Fire drill; Fire-related injury;
Fire-related death; Fire-safety system;
and Value of property damage.
The proposed regulation requires an
institution to report to the public, the
statistics that it submits to the
Department in its annual fire safety
report. The institution would have to
provide data for the three most recent
calendar years for which data are
available. The first full report to contain
the full three years of data would be the
report due on October 1, 2012.
The proposed regulations outline the
elements that an institution must
disclose in its annual fire safety report,
including: Fire statistics; A description
of each on-campus student housing
facility fire safety system; The number
of regular, mandatory, supervised fire
drills held during the previous calendar
year; Policies or rules on portable
electrical appliances, smoking, and
open flames in student housing
facilities; Procedures for student
housing evacuation in the case of a fire;
Policies on fire safety education and
training programs provided to students,
faculty, and staff; A list of the titles of
each person or organization to which
students and employees should report
that a fire has occurred; and Plans for
future improvements in fire safety.
The proposed regulations specify that
an institution that maintains an oncampus student housing facility must
maintain a written and easily
understood fire log that records, by the
date that the fire was reported (as
opposed to by the date that the fire
occurred), any fire that occurred in an
on-campus student housing facility. The
log would have to include the nature,
date, time, and general location of each
fire, and require that the log be available

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for public. These proposed regulations
also implement the statutory
requirement that an institution make an
annual report to the campus community
on the fires recorded in the fire log;
however, this requirement may be
satisfied by the annual fire safety report
described in proposed § 668.49(b).
We estimate that the proposed
regulations will increase burden for
institutions by 7,283 hours in OMB
Control Number 1845–NEW3.
Financial Assistance for Students With
Intellectual Disabilities
Section 600.5—Proprietary Institution of
Higher Education
The proposed regulation in
§ 600.5(a)(5)(i)(B)(2)(ii) defines a
proprietary institution of higher
education as one that may have a
comprehensive transition and
postsecondary program as an eligible
program when it is approved by the
Secretary. The proposed change in the
definition of an eligible program does
not impact burden.
While the current regulations in
§ 600.5 point to OMB 1840–0098, this
information collection has been
discontinued and redesignated to 1845–
0012. We estimate that there is no
change in burden associated with this
proposed change in the regulations.
Section 668.8—Eligible Program
The proposed regulation in § 668.8(n)
defines a comprehensive transition and
postsecondary program as an eligible
program when it is approved by the
Secretary. The proposed change in the
definition of an eligible program does
not impact burden.
While the current regulations in
§ 668.8 point to OMB 1845–0537, this
collection package has been
discontinued; we estimate that there is
no change in burden associated with
this proposed change in the regulations.
Section 668.232—Program Eligibility
The proposed regulations require an
institution that wishes to provide a
comprehensive transition and
postsecondary program to apply and
receive approval from the Secretary. The
proposed regulations outline the
elements that an institution must
include in its application, including: A
detailed description of the
comprehensive transition and
postsecondary program; The policy for
determining whether a student enrolled
in the program is making satisfactory
academic progress; A statement of the
number of weeks of instructional time
and the number of semester or quarter
credit hours or clock hours in the

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program; A description of the
educational credential offered or
identified outcome or outcomes
established by the institution for all
students enrolled in the program; A
copy of the letter or notice sent to the
institution’s accrediting agency
informing the agency of its
comprehensive transition and
postsecondary program; and Any other
information the Department may
require. We estimate that the proposed
regulations will increase burden for
institutions by 66 hours in OMB Control
Number 1845–NEW4.
Section 668.233—Student Eligibility
The proposed regulations in § 668.233
provide that a student with intellectual
disabilities enrolled in a comprehensive
transition and postsecondary program
may be eligible for title IV, HEA
program assistance under the Federal
Pell grant, FSEOG, and FWS programs
if: The student is making satisfactory
academic program in accordance with
the institution’s published standards for
students enrolled in the comprehensive
transition and postsecondary program;
and The institution obtains a record
from a local educational agency that the
student is or was eligible for FAPE
under IDEA. If the FAPE record does not
indicate that the student has an
intellectual disability, the institution
would have to obtain documentation
from another source that identifies the
intellectual disability.
We estimate that the proposed
regulations will increase burden for
institutions by 768 hours in OMB
Control Number 1845–NEW4.
Section 668.43(a)(7)—Institutional
Information
The proposed regulation changes the
phrase ‘‘any special facilities and
services’’ to ‘‘the services and facilities,’’
and replaces the phrase ‘‘disabled
students’’ with ‘‘students with
disabilities.’’ The proposed changes
would also clarify that a description of
services and facilities for students with
disabilities must also contain the
services and facilities available for
students with intellectual disabilities.
We estimate that the proposed
regulations will increase burden for
institutions by 44 hours in OMB Control
Number 1845–0022.
Federal Work Study Programs
Section 675.16—Conforming FWS
Payment Requirements to the Cash
Management Regulations
The proposed regulations in
§ 675.16(b)(1)(ii) and (b)(2), amend the
FWS regulations in three ways regarding

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the use of current award year FWS
funds to pay prior award year charges.
First, the amount of prior award year
charges that could be paid with current
award year FWS funds would increase
to not more than $200. Second, the FWS
provision that allows an institution to
pay for prior award year charges of $100
or more would be removed. Finally, we
clarify that the $200 limit applies to all
title IV, HEA program funds that an
institution uses to pay prior-year
charges. These changes to conform the
FWS payment requirements to the
current cash management regulations do
not impact burden.
We estimate that there is no change in
burden associated with this section of
the regulations under OMB Control
Number 1845–0019.
TEACH Grant Program

srobinson on DSKHWCL6B1PROD with PROPOSALS2

Section 686.41—Period of Suspension
The proposed regulations in § 686.41
provide that a TEACH Grant recipient
who is called or ordered to active
military duty (or his or her
representative) may request a
suspension of the eight-year period in
increments not to exceed three years.
Once the recipient has exceeded the 3year suspension period, the recipient (or
his or her representative) may request a
discharge of all or a portion of his or her
teaching service obligation.
We estimate that the proposed
regulations will increase burden for
institutions in OMB Control Number
1845–0083. The Department will submit
an 83–C incorporating the changes after
the final regulations have published.
Section 686.42—Discharge of
Agreement To Serve
The proposed regulations in § 686.42
provide that the recipient may qualify
for a proportional discharge of his or her
service obligation based on the number
of years the recipient has been called or
ordered to active military duty.
To obtain the discharge, the recipient
(or his or her representative) would be
required to provide the Department:
A written statement from his or her
commanding or personnel officer
certifying that the recipient is on active
duty status in the Armed Forces, the
date on which that service began, and
the date the service is expected to end;
and a copy of his or her official military
orders and military identification.
The Department would notify a
TEACH Grant recipient of the decision
reached on his or her request for a
partial or full discharge of the teaching
service obligation. The grant recipient
would be responsible for fulfilling any
teaching service obligation that is not
discharged.

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We estimate that the proposed
regulations will increase burden for
institutions in OMB Control Number
1845–0083. The Department will submit
an 83–C incorporating the changes after
the final regulations have published.
Federal Pell Grant Program
Two Federal Pell Grants in an Award
Year
Section 690.67(a)—Student Eligibility
for a Second Scheduled Award
The proposed regulations would
amend § 690.67 to provide that a
student would be eligible for a second
Scheduled Award if the student has
earned in an award year at least the
credit or clock hours of the first
academic year of the student’s eligible
program, and is enrolled as at least a
half-time student in a program leading
to a bachelor’s or associate degree or
other recognized educational credential
(such as a postsecondary certificate or
diploma), except as provided for
students with intellectual disabilities.
To the extent that the institution will be
reporting these second scheduled award
Pell disbursements via the Common
Origination and Delivery (COD) system,
there will be some additional burden for
institutions.
We estimate that the proposed
regulations will increase burden for
institutions by 47,432 hours in OMB
Control Number 1845–NEW5.
Section 690.67(b)—Transfer Students
The proposed regulations in
§ 690.67(b) would provide that an
institution determine the credit or clock
hours that a transfer student has earned
at a prior institution during the award
year based on the Federal Pell Grant
disbursements that the student received
at the prior institution during the award
year in relation to the student’s
Scheduled Award at that prior
institution. The credit or clock hours
that the student would be considered to
have earned would be in the same
proportion to credit or clock hours in
the current institution’s academic year
as the disbursements that the student
has received at the prior institution in
the award year are in proportion to the
student’s Scheduled Award at the prior
institution.
To the extent that the institution will
be reviewing the transfer records of
these students and subsequently
reporting second scheduled award Pell
disbursements via the Common
Origination and Delivery (COD) system,
there will be some additional burden for
institutions.
We estimate that the proposed
regulations will increase burden for

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institutions by 14,400 hours in OMB
Control Number 1845–NEW5.
Section 690.67(c)—Special
Circumstances
The proposed regulations in
§ 690.67(c) would provide that a
financial aid administrator may waive
the requirement that a student complete
the credit or clock hours in the student’s
first academic year in the award year
due to circumstances beyond the
student’s control. The financial aid
administrator would be required to
make and document the determination
on an individual basis.
To the extent that the institution will
be documenting these special
circumstances and subsequently
awarding second Pell grants, the
institutions will be reporting the second
Pell disbursements via the Common
Origination and Delivery (COD) system,
there will be some additional burden for
institutions.
We estimate that the proposed
regulations will increase burden for
institutions by 3,429 hours in OMB
Control Number 1845–NEW5.
Section 690.67(d)—Nonapplicable
credit or clock hours
The proposed regulation in
§ 690.67(d) states that, in determining a
student’s eligibility for a second
Scheduled Award in an award year, an
institution may not use credit or clock
hours that the student received based on
Advanced Placement (AP) programs,
International Baccalaureate (IB)
programs, testing out, life experience, or
similar competency measures.
To the extent that the institution will
be making determinations about the
applicability of AP, IB, or other nonapplicable courses, institution will
subsequently award second Pell grants
and thereafter report Pell disbursements
via the Common Origination and
Delivery (COD) system, thus there will
be some additional reporting burden for
institutions.
We estimate that the proposed
regulations will increase burden for
institutions by 2,032 hours in OMB
Control Number 1845–NEW5.
Section 690.64—Payment Period in Two
Award Years
In this proposed regulation in
§ 690.64, if a student is enrolled in a
crossover payment period as a half-time
or less-than-half-time student, the
current requirements generally would
apply.
If a student is enrolled as a threequarter-time or full-time student, an
institution must consider the payment
period to be in the award year in which

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Federal Register / Vol. 74, No. 161 / Friday, August 21, 2009 / Proposed Rules
the student would receive the greater
payment for the payment period based
on the information available at the time
that the student’s Federal Pell Grant is
initially calculated. If the institution
subsequently receives information that
the student would receive a greater
payment for the payment period by
reassigning the payment to the other
award year, the institution would be
required to reassign the payment to the
award year providing the greater
payment.
A student may request that the
institution place the payment period in
the award year that can be expected to
result in the student receiving a greater
amount of Federal Pell Grants over the
two award years in which the payment
period is scheduled to occur. If the
student makes that request, the
institution must assign the payment
period to that award year.
To the extent that the institution will
be reviewing enrollment status in each
of the two award years and making
determinations about which award year
must be used and subsequently
reporting these second scheduled award
Pell disbursements via the Common
Origination and Delivery (COD) system,
there will be some additional burden for
institutions.
We estimate that the proposed
regulations will increase burden for
institutions by 33,881 hours in OMB
Control Number 1845–NEW5.

zero EFC for purposes of the Federal
Pell Grant Program if he or she was
under 24 years old or enrolled in an
institution of higher education at the
time of the parent’s or guardian’s death.
We estimate that the proposed
regulations will increase burden for
institutions by 48 hours in OMB Control
Number 1845–NEW6.

Section 690.63(h)—Payment From Two
Scheduled Awards
Under the proposed regulations in
§ 690.63(h), if a student is eligible for
the remaining portion of a first
Scheduled Award in an award year and
for a payment from the second
Scheduled Award, the student’s
payment would be calculated using the
annual award for his or her enrollment
status for the payment period. The
student’s payment would be the
remaining amount of the first Scheduled
Award being completed plus an amount
from the second Scheduled Award in
the award year up to the total amount
of the payment for the payment period.
We estimate that the proposed
regulations will increase burden for
institutions by 8,471 hours in OMB
Control Number 1845–NEW5.

Section 692.100—Requirements a State
Must Meet To Receive GAP Funds

Section 690.75(e)—Maximum Pell Grant
for Children of Soldiers
Under the proposed regulation in
§ 690.75(e), a student whose parent or
guardian was a member of the Armed
Forces of the United States and died as
a result of performing military service in
Iraq or Afghanistan after September 11,
2001, would automatically receive a

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Part 692 Leveraging Educational
Assistance Partnership Program
Section 692.21(k)—Notification to
Students of LEAP Grant Funding
Sources
The proposed regulations require that
the State program notify eligible
students that grants under the LEAP
Grant Program are (1) LEAP Grants and
(2) are funded by the Federal
Government, the State, and, where
applicable, other contributing partners.
The implementation of the proposed
regulations for the changes to LEAP and
the introduction of the GAP program
will increase burden to States. We
estimate that the burden in these
proposed regulations will be associated
with the application and performance
report forms under development. These
forms will be developed after the final
regulations are published to insure that
the forms comport with the finalized
requirements. The new forms will be
submitted to OMB for approval under
OMB Control Number 1845–NEW7.

The proposed regulations in § 692.100
describe the requirements that a State
must meet to receive an allotment under
this program including submitting an
application on behalf of a partnership
and serving as the primary
administrative unit of the partnership.
Under proposed § 692.100(a)(6), a State
must include in its application the steps
it plans to take to ensure, to the extent
practicable, that students who receive a
LEAP Grant under GAP would persist to
degree completion.
Under proposed § 692.100(a)(8) a
State GAP Program is required to notify
eligible students that the grants they
receive under GAP are LEAP Grants and
that the grants are funded by the Federal
Government, the State and where
applicable, other contributing partners.
The implementation of the proposed
regulations for the changes to LEAP and
the introduction of the GAP program
will increase burden to States. We
estimate that the burden in these
proposed regulations will be associated
with the application and performance
report forms under development. These
forms will be developed after the final

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42425

regulations are published to insure that
the forms comport with the finalized
requirements. The new forms will be
submitted to OMB for approval under
OMB Control Number 1845–NEW7.
Section 692.101—Requirements That
Must Be Met by a State Partnership
The proposed regulations in
§ 692.101(b)(2) provide that a degreegranting institution of higher education
that is in a partnership under the GAP
Program must recruit, admit, and
provide institutional grant aid to
participating eligible students as agreed
to with the State agency.
The implementation of the proposed
regulations for the changes to LEAP and
the introduction of the GAP program
will increase burden to States. We
estimate that the burden in these
proposed regulations will be associated
with the application and performance
report forms under development. These
forms will be developed after the final
regulations are published to insure that
the forms comport with the finalized
requirements. The new forms will be
submitted to OMB for approval under
OMB Control Number 1845–NEW7.
Section 692.111—Purposes for Which a
State May Use Its GAP Grant
The proposed regulations in § 692.111
provide that each State receiving an
allotment shall annually notify
potentially eligible students in grades 7
through 12 in the State, and their
families, of their potential eligibility for
student financial assistance, including a
LEAP Grant under GAP, to attend a
LEAP-participating institution of higher
education.
The notice shall include information
about early information and
intervention, mentoring, or outreach
programs available to the student. The
notice shall provide a nonbinding
estimate of the total amount of financial
aid that an eligible student with a
similar income level may expect to
receive, including an estimate of the
amount of a LEAP Grant under GAP and
an estimate of the amount of grants,
loans, and all other available types of
aid from the major Federal and State
financial aid programs. The proposed
notice will also include any additional
requirements that the State may require
for receipt of a LEAP Grant under GAP.
The implementation of the proposed
regulations for the changes to LEAP and
the introduction of the GAP program
will increase burden to States. We
estimate that the burden in these
proposed regulations will be associated
with the application and performance
report forms under development. These
forms will be developed after the final

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Federal Register / Vol. 74, No. 161 / Friday, August 21, 2009 / Proposed Rules

regulations are published to insure that
the forms comport with the finalized
requirements. The new forms will be
submitted to OMB for approval under
OMB Control Number 1845–NEW7.

collections that the Department will
submit to the Office of Management and
Budget for approval and public
comment under the Paperwork and
Reduction Act.

Regulatory section

Information section

Collection

668.14(b)(31) .......................................

Providing that an institution that conducts a teachout at a site of a closed institution may, under
certain conditions, establish that site as an additional location (see sections 487(f) and 498 of
the HEA).
Establishing requirements under which an institution must readmit servicemembers to the same
academic status they had when they last attended the institution (see section 484C of the
HEA).
Adds new requirements to include in the audited
financial statement footnote the non-Federal and
Federal revenue that was included in the 90/10
calculation.
Establishing new requirements for determining
how proprietary institutions calculate the amount
and percent of revenue derived from sources
other than title IV, HEA program funds (see section 487(d) of the HEA).
Expanding the information that an institution must
make available to prospective and enrolled students to include a description of any plans the
institution has to improve its academic program
(see section 485(a) of the HEA).
Providing that an institution must certify that it has
plans to effectively combat unauthorized distribution of copyrighted material and will offer alternatives to illegal downloading or peer-to-peer
distribution of intellectual property (see sections
485(a)(1) and 487(a) of the HEA).
Expanding the information that institutions must
make available to prospective and enrolled students to include information on: the employment
and placement of students, and the retention
rates of first-time, full-time undergraduate students.
Expanding the information that institutions must
make available to prospective students to include completion and graduation rate data that
is disaggregated by gender, race, and grant or
loan assistance (see section 485(a) of the
HEA).
Expanding the list of crimes that institutions must
include in the hate crimes statistics reported to
the Department. Requiring institutions to include
in the annual security report a statement of
emergency response and evacuation procedures (see section 485(f) of the HEA).
Requiring institutions that provide on-campus
housing facilities to develop and make available
a missing student notification policy and allow
students who reside on campus to confidentially
register contact information (see section 485(j)
of the HEA).
Requiring institutions that provide on-campus
housing facilities to develop and make available
a missing student notification policy and allow
students who reside on campus to confidentially
register contact information (see section 485(j)
of the HEA).
Establishing requirements for institutions that
maintain on-campus housing facilities to publish
annually a fire safety report, maintain a fire log,
and report fire statistics to the Department (see
section 485(i) of the HEA).

OMB 1845–0022. There will be an increase in burden of 160 hours.

668.18 ..................................................

668.23(d)(4) .........................................

668.28 ..................................................

668.43(a)(5)(iv) ....................................

668.14(b)(30), 668.43(a)(10) ................

668.41 ..................................................

668.45 ..................................................

668.46(c)(3), (e), (g) .............................

668.41(a) ..............................................

668.46(b), (h) .......................................
srobinson on DSKHWCL6B1PROD with PROPOSALS2

Consistent with the discussion above,
the following chart describes the
sections of the proposed regulations
involving information collections, the
information being collected, and the

668.41(e) ..............................................

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OMB 1845–NEW1. There will be a new collection.
A separate 60-day Federal Register notice will
be published to solicit comments. There will be
an increase in burden of 1,513 hours.
OMB 1845–0038. There will be an increase in burden of 165 hours.

OMB 1845–NEW2.
There will be a new collection. A separate 60-day
Federal Register notice will be published to solicit comments. There will be an increase in burden of 3,088 hours.
OMB 1845–0022. There will be an increase in burden of 968 hours.

OMB 1845–0022. There will be an increase in burden of 92,544 hours.

OMB 1845–0004. There will be an increase in burden of 8,541 hours.

OMB 1845–0004. There will be an increase in burden of 7,488 hours.

OMB 1845–0022. There will be an increase in burden of 18,509 hours.

OMB 1845–0004. There is no change in burden
associated with this section of the proposed regulations.

OMB 1845–0022. There will be an increase in burden of 2,879 hours.

OMB 1845–0004. There is no change in burden
associated with this section of the proposed regulations.

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Federal Register / Vol. 74, No. 161 / Friday, August 21, 2009 / Proposed Rules
Regulatory section

Information section

Collection

668.49 ..................................................

Establishing requirements for institutions that
maintain on-campus housing facilities to publish
annually a fire safety report, maintain a fire log,
and report fire statistics to the Department (see
section 485(i) of the HEA).
Expanding the eligibility for Federal Pell Grant,
FWS, and FSEOG Program funds to students
with intellectual disabilities (see sections 484(s)
and 760 of the HEA).
Expanding the eligibility for Federal Pell Grant,
FWS, and FSEOG Program funds to students
with intellectual disabilities (see sections 484(s)
and 760 of the HEA).
Requires that institutions report a description of
services and facilities for students with intellectual disabilities.
Establishing extenuating circumstances under
which a TEACH Grant recipient may be excused from fulfilling all or part of his or her service obligation (see section 420N(d)(2) of the
HEA).
Establishing requirements under which students
may receive up to two Federal Pell Grant
Scheduled Awards during a single award year
(see section 401(b)(5)(A) of the HEA).
Providing the maximum Federal Pell Grant eligibility to a student whose parent was in the
armed forces and died in Iraq or Afghanistan if
the student was under 24 years old or enrolled
in an institution of higher education at the time
the parent died (see section 401(F)(4) of the
HEA).
Requiring the State program to notify students that
grants are LEAP Grants that are funded by the
Federal Government, the State, and for LEAP
Grants to students under the new Grants for Access and Persistence (GAP) Program, other
contributing partners (see section 415C(b) of the
HEA). Establishing the activities, awards, allotments to States, matching funds requirements,
consumer information requirements, application
requirements, and other requirements needed to
begin and continue participating in the GAP Program (see sections 415B and 415E of the HEA).

OMB 1845–NEW3. There will be a new collection.
A separate 60-day Federal Register notice will
be published to solicit comments. There will be
an increase in burden of 7,283 hours.

668.232 ................................................

668.233 ................................................

688.43(a)(7) .........................................
686.41, 686.42 .....................................

690.67, 690.64, 690.63(h) ...................

690.75(e) ..............................................

692.21, 692.100, 692.101, 692.111 .....

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If you want to comment on the
proposed information collection
requirements, please send your
comments to the Office of Information
and Regulatory Affairs, OMB, Attention:
Desk Officer for U.S. Department of
Education. Send these comments by
e-mail to [email protected]
or by fax to (202) 395–6974. You may
also send a copy of these comments to
the Department contact named in the
ADDRESSES section of this preamble.
We consider your comments on these
proposed collections of information in—
• Deciding whether the proposed
collections are necessary for the proper
performance of our functions, including
whether the information will have
practical use;
• Evaluating the accuracy of our
estimate of the burden of the proposed
collections, including the validity of our
methodology and assumptions;

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OMB 1845–NEW4. There will be a new collection.
A separate 60-day Federal Register notice will
be published to solicit comments. There will be
an increase in burden of 66 hours.
OMB 1845–NEW4. There will be a new collection.
A separate 60-day Federal Register notice will
be published to solicit comments. There will be
an increase in burden of 768 hours.
OMB 1845–0022. There will be an increase in burden of 44 hours.
OMB 1845–0083. Changes will be incorporated
into the Agreement to Serve form.

OMB 1845–NEW5. There will be a new collection.
A separate 60-day Federal Register notice will
be published to solicit comments. There will be
an increase in burden of 109,645 hours.
OMB 1845–NEW6. There will be a new collection.
A separate 60-day Federal Register notice will
be published to solicit comments. There will be
an increase in burden of 48 hours.

OMB 1845–NEW7. There will be a new collection.
A separate 60-day Federal Register notice will
be published to solicit comments.

• Enhancing the quality, usefulness,
and clarity of the information we
collect; and
• Minimizing the burden on those
who must respond. This includes
exploring the use of appropriate
automated, electronic, mechanical, or
other technological collection
techniques or other forms of information
technology; e.g., permitting electronic
submission of responses.
OMB is required to make a decision
concerning the collections of
information contained in these
proposed regulations between 30 and 60
days after publication of this document
in the Federal Register. Therefore, to
ensure that OMB gives your comments
full consideration, it is important that
OMB receives the comments within 30
days of publication. This does not affect
the deadline for your comments to us on
the proposed regulations.

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Intergovernmental Review
These programs are not subject to
Executive Order 12372 and the
regulations in 34 CFR part 79.
Assessment of Educational Impact
In accordance with section 411 of the
General Education Provisions Act, 20
U.S.C. 1221e–4, the Secretary
particularly requests comments on
whether these proposed regulations
would require transmission of
information that any other agency or
authority of the United States gathers or
makes available.
Electronic Access to This Document
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.

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Federal Register / Vol. 74, No. 161 / Friday, August 21, 2009 / Proposed Rules
and 692 of title 34 of the Code of
Federal Regulations as follows:

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.

1. The authority citation for part 600
continues to read as follows:

(Authority: 20 U.S.C. 1091, 1094, 1099b,
1141(a))

Authority: 20 U.S.C. 1001, 1002, 1003,
1088, 1091, 1094, 1099b, and 1099c, unless
otherwise noted.

4. Section 600.5 is amended by:
A. Revising paragraph (a)(5).
B. In paragraph (a)(6), adding the
word ‘‘and’’ after the punctuation ‘‘;’’.
C. In paragraph (a)(7), removing the
word ‘‘; and’’ and adding, in its place,
the punctuation ‘‘.’’.
D. Removing paragraph (a)(8).
E. Removing paragraphs (d) through
(g).
F. Redesignating paragraph (h) as
paragraph (d).
G. Adding a new paragraph (e).
H. Revising the OMB control number
and authority citation at the end of the
section.
The revisions and addition read as
follows:

(Catalog of Federal Domestic Assistance
Numbers: 84.063 Federal Pell Grant Program;
84.033 Federal Work-Study Program; 84.379
TEACH Grant Program; 84.069 LEAP)

List of Subjects
34 CFR Part 600
Colleges and universities, Foreign
relations, Grant programs-education,
Loan programs-education, Reporting
and recordkeeping requirements,
Student aid, Vocational education.

34 CFR Part 686
Administrative practice and
procedure, Colleges and universities,
Education, Elementary and secondary
education, Grant programs-education,
Reporting and recordkeeping
requirements, Student aid.

For the reasons discussed in the
preamble, the Secretary proposes to
amend parts 600, 668, 675, 686, 690,

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Definitions.

*
*
*
*
Educational program: (1) * * *
(i) Leads to an academic, professional,
or vocational degree, or certificate, or
other recognized educational credential,
or is a comprehensive transition and
postsecondary program, as described in
34 CFR part 668, subpart O; and
*
*
*
*
*
Teach-out plan: A written plan
developed by an institution that
provides for the equitable treatment of
students if an institution, or an
institutional location that provides 100
percent of at least one program, ceases
to operate before all students have
completed their program of study, and
may include, if required by the
institution’s accrediting agency, a teachout agreement between institutions.
*
*
*
*
*
(Authority: 20 U.S.C. 1071 et seq., 1078–2,
1088, 1091, 1094, 1099b, 1099c, 1141; 26
U.S.C. 501(c))

34 CFR Part 690
Colleges and universities, Education
of disadvantaged, Grant programseducation, Reporting and recordkeeping
requirements, Student aid.

Dated: July 30, 2009.
Arne Duncan,
Secretary of Education.

2. Section 600.2 is amended by:
A. Revising paragraph (1)(i) of the
definition of educational program.
B. Adding, in alphabetical order, a
definition for teach-out plan.
C. Revising the authority citation at
the end of the section.
The revisions and addition read as
follows:
*

34 CFR Part 675
Colleges and universities,
Employment, Grant programseducation, Reporting and recordkeeping
requirements, Student aid.

34 CFR Part 692
Colleges and universities, Grant
programs-education, Reporting and
recordkeeping requirements, Student
aid.

PART 600—INSTITUTIONAL
ELIGIBILITY UNDER THE HIGHER
EDUCATION ACT OF 1965, AS
AMENDED

§ 600.2

34 CFR Part 668
Administrative practice and
procedure, Aliens, Colleges and
universities, Consumer protection,
Grant programs-education, Loan
programs-education, Reporting and
recordkeeping requirements, Selective
Service System, Student aid, Vocational
education.

srobinson on DSKHWCL6B1PROD with PROPOSALS2

students for gainful employment in a
recognized occupation; and
(ii) May provide a comprehensive
transition and postsecondary program,
as described in 34 CFR part 668, subpart
O; and
*
*
*
*
*

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.

3. Section 600.4 is amended by:
A. Revising paragraph (a)(4).
B. Revising the authority citation at
the end of the section.
The revisions read as follows:
§ 600.4

Institution of higher education.

(a) * * *
(4)(i) Provides an educational
program—
(A) For which it awards an associate,
baccalaureate, graduate, or professional
degree;
(B) That is at least a two-academicyear program acceptable for full credit
toward a baccalaureate degree; or
(C) That is at least a one-academicyear training program that leads to a
certificate, degree, or other recognized
educational credential and prepares

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§ 600.5 Proprietary institution of higher
education.

(a) * * *
(5)(i)(A) Provides an eligible program
of training, as defined in 34 CFR 668.8,
to prepare students for gainful
employment in a recognized
occupation; or
(B)(1) Provides a program leading to a
baccalaureate degree in liberal arts, as
defined in paragraph (e) of this section,
and has provided that program since
January 1, 2009; and
(2) Is accredited by a recognized
regional accrediting agency or
association, and has continuously held
such accreditation since October 1,
2007, or earlier; and
(ii) May provide a comprehensive
transition and postsecondary program
for students with intellectual
disabilities, as provided in 34 CFR part
668, subpart O;
*
*
*
*
*
(e) For purposes of this section, a
‘‘program leading to a baccalaureate
degree in liberal arts’’ is a program that
the institution’s recognized regional
accreditation agency or organization
determines, is a general instructional
program in the liberal arts subjects, the
humanities disciplines, or the general
curriculum, falling within one or more
of the following generally-accepted
instructional categories comprising such
programs, but including only
instruction in regular programs, and
excluding independently-designed
programs, individualized programs, and
unstructured studies:

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Federal Register / Vol. 74, No. 161 / Friday, August 21, 2009 / Proposed Rules

(a) * * *
(4)(i) Provides an eligible program of
training, as defined in 34 CFR 668.8, to
prepare students for gainful
employment in a recognized
occupation; and
(ii) May provide a comprehensive
transition and postsecondary program
for students with intellectual
disabilities, as provided in 34 CFR part
668, subpart O;
*
*
*
*
*

taken by the Secretary under 34 CFR
668.83; and
(ii) The teach-out plan required under
34 CFR 668.14(b)(31) is approved by the
closed institution’s accrediting agency.
(2)(i) An institution that conducts a
teach-out and is approved to add an
additional location described in
paragraph (d)(1) of this section—
(A) Does not have to meet the twoyear requirement of § 600.5(a)(7) or
§ 600.6(a)(6) for the additional location
described in paragraph (d)(1) of this
section;
(B) Is not responsible for any
liabilities of the closed institution as
provided under paragraphs (c)(1) and
(c)(2) of this section if the institutions
are not related parties and there is no
commonality of ownership or
management between the institutions,
as described in 34 CFR 668.188(b) and
34 CFR 668.207(b); and
(C) Will not have the default rate of
the closed institution included in the
calculation of its default rate, as would
otherwise be required under 34 CFR
668.184 and 34 CFR 668.203, if the
institutions are not related parties and
there is no commonality of ownership
or management between the
institutions, as described in 34 CFR
668.188(b) and 34 CFR 668.207(b).
(ii) As a condition for approving an
additional location under paragraph
(d)(1) of this section, the Secretary may
require that payments from the
institution conducting the teach-out to
the owners or related parties of the
closed institution, are used to satisfy
any liabilities owed by the closed
institution.
*
*
*
*
*

(Authority: 20 U.S.C. 1088, 1091, 1094(c)(3))

(Authority: 20 U.S.C. 1088, 1099c, 1141)

6. Section 600.32 is amended by:
A. In paragraph (a), removing the
words ‘‘(b) and (c)’’ and adding, in their
place, the words ‘‘(b), (c), and (d)’’.
B. Redesignating paragraph (d) as
paragraph (e).
C. Adding a new paragraph (d).
D. Revising the authority citation at
the end of the section.
The addition and revision read as
follows:

PART 668—STUDENT ASSISTANCE
GENERAL PROVISIONS

(1) A program that is a structured
combination of the arts, biological and
physical sciences, social sciences, and
humanities, emphasizing breadth of
study.
(2) An undifferentiated program that
includes instruction in the general arts
or general science.
(3) A program that focuses on
combined studies and research in the
humanities subjects as distinguished
from the social and physical sciences,
emphasizing languages, literatures, art,
music, philosophy, and religion.
(4) Any single instructional program
in liberal arts and sciences, general
studies, and humanities not listed in
paragraph (e)(1) through (e)(3) of this
section.
(Approved by the Office of Management and
Budget under control number 1845–0012)
(Authority: 20 U.S.C. 1088, 1091)

5. Section 600.6 is amended by:
A. Revising paragraph (a)(4).
B. Revising the authority citation at
the end of the section.
The revisions read as follows:
§ 600.6 Postsecondary vocational
institution.

§ 600.32

Eligibility of additional locations.

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*

*
*
*
*
(d)(1) An institution that conducts a
teach-out at a site of a closed institution
may apply to have that site approved as
an additional location if—
(i) The closed institution ceased
operations as result of an action taken
by the Secretary to limit, suspend, or
terminate the institution’s participation
under § 600.41 or subpart G of this part,
or as a result of an emergency action

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7. The authority citation for part 668
continues to read as follows:
Authority: 20 U.S.C. 1001, 1002, 1003,
1070g, 1085, 1088, 1091, 1092, 1094, 1099c,
and 1099c-1, unless otherwise noted.

8. Section 668.8 is amended by:
A. Revising paragraph (n).
B. Removing the OMB control number
at the end of the section.
The revision reads as follows:
§ 668.8

Eligible program.

*

*
*
*
*
(n) For title IV, HEA program
purposes, eligible program includes a
direct assessment program approved by
the Secretary under § 668.10 and a
comprehensive transition and
postsecondary program approved by the
Secretary under § 668.232.
*
*
*
*
*

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9. Section 668.13(c) is revised to read
as follows:
§ 668.13

Certification procedures.

*

*
*
*
*
(c) Provisional certification. (1)(i) The
Secretary may provisionally certify an
institution if—
(A) The institution seeks initial
participation in a Title IV, HEA
program;
(B) The institution is an eligible
institution that has undergone a change
in ownership that results in a change in
control according to the provisions of 34
CFR part 600;
(C) The institution is a participating
institution—
(1) That is applying for a certification
that the institution meets the standards
of this subpart;
(2) That the Secretary determines has
jeopardized its ability to perform its
financial responsibilities by not meeting
the factors of financial responsibility
under § 668.15 or the standards of
administrative capability under
§ 668.16; and
(3) Whose participation has been
limited or suspended under subpart G of
this part, or voluntarily enters into
provisional certification;
(D) The institution seeks a renewal of
participation in a title IV, HEA program
after the expiration of a prior period of
participation in that program; or
(E) The institution is a participating
institution that was accredited or
preaccredited by a nationally recognized
accrediting agency on the day before the
Secretary withdrew the Secretary’s
recognition of that agency according to
the provisions contained in 34 CFR part
603.
(ii) A proprietary institution’s
certification automatically becomes
provisional if it does not derive at least
10 percent of its revenue for any fiscal
year from sources other than title IV,
HEA program funds, as required under
§ 668.14(b)(16).
*
*
*
*
*
10. Section 668.14 is amended by:
A. Adding paragraph (b)(16).
B. In paragraph (b)(25)(ii), removing
the word ‘‘and’’ that appears after the
punctuation ‘‘;’’.
C. Adding paragraph (b)(30).
D. Adding paragraph (b)(31).
E. Revising the OMB control number
at the end of the section.
The additions and revision read as
follows:
§ 668.14

Program participation agreement.

*

*
*
*
*
(b) * * *
(16) For a proprietary institution, the
institution will derive at least 10

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percent of its revenues for each fiscal
year from sources other than title IV,
HEA program funds, as provided in
§ 668.28(a) and (b), or be subject to
sanctions described in § 668.28(c);
*
*
*
*
*
(30) The institution—
(i) Has developed and implemented
written plans to effectively combat the
unauthorized distribution of
copyrighted material by users of the
institution’s network, without unduly
interfering with educational and
research use of the network, that
include—
(A) The use of one or more
technology-based deterrents;
(B) Mechanisms for educating and
informing its community about
appropriate versus inappropriate use of
copyrighted material, including that
described in § 668.43(a)(10);
(C) Procedures for handling
unauthorized distribution of
copyrighted material, including
disciplinary procedures; and
(D) Procedures for periodically
reviewing the effectiveness of the plans
to combat the unauthorized distribution
of copyrighted materials by users of the
institution’s network using relevant
assessment criteria. No particular
technology measures are favored or
required for inclusion in an institution’s
plans, and each institution retains the
authority to determine what its
particular plans for compliance with
paragraph (b)(30) of this section will be,
including those that prohibit content
monitoring; and
(ii) Will, in consultation with the
chief technology officer or other
designated officer of the institution—
(A) Periodically review the legal
alternatives for downloading or
otherwise acquiring copyrighted
material;
(B) Make available the results of the
review in paragraph (b)(30)(ii)(A) of this
section to its students through a Web
site or other means; and
(C) To the extent practicable, offer
legal alternatives for downloading or
otherwise acquiring copyrighted
material, as determined by the
institution; and
(31) The institution will submit a
teach-out plan to its accrediting agency
in compliance with 34 CFR 602.24(c),
and the standards of the institution’s
accrediting agency upon the occurrence
of any of the following events:
(i) The Secretary initiates the
limitation, suspension, or termination of
the participation of an institution in any
title IV, HEA program under 34 CFR
600.41 or subpart G of this part or
initiates an emergency action under
§ 668.83.

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(ii) The institution’s accrediting
agency acts to withdraw, terminate, or
suspend the accreditation or
preaccreditation of the institution.
(iii) The institution’s State licensing
or authorizing agency revokes the
institution’s license or legal
authorization to provide an educational
program.
(iv) The institution intends to close a
location that provides 100 percent of at
least one program.
(v) The institution otherwise intends
to cease operations.
*
*
*
*
*
(Approved by the Office of Management and
Budget under control number 1845–0022)

*

*
*
*
*
11. Section 668.18 is added to subpart
B of part 668 to read as follows:
§ 668.18 Readmission requirements for
servicemembers.

(a) General. (1) An institution may not
deny readmission to a person who is a
member of, applies to be a member of,
performs, has performed, applies to
perform, or has an obligation to perform,
service in the uniformed services on the
basis of that membership, application
for membership, performance of service,
application for service, or obligation to
perform service.
(2)(i) An institution must promptly
readmit to the institution a person
described in paragraph (a)(1) of this
section with the same academic status
as the student had when the student last
attended the institution or was last
admitted to the institution, but did not
begin attendance because of that
membership, application for
membership, performance of service,
application for service, or obligation to
perform service.
(ii) ‘‘Promptly readmit’’ means that
the institution must readmit the student
into the next class or classes in the
student’s program beginning after the
student provides notice of his or her
intent to reenroll, unless the student
requests a later date of readmission or
unusual circumstances require the
institution to admit the student at a later
date.
(iii) To readmit a person with the
‘‘same academic status’’ means that the
institution admits the student—
(A) To the same program to which he
or she was last admitted by the
institution or, if that exact program is no
longer offered, the program that is most
similar to that program, unless the
student requests or agrees to admission
to a different program;
(B) At the same enrollment status that
the student last held at the institution,
unless the student requests or agrees to

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admission at a different enrollment
status;
(C) With the same number of credit
hours or clock hours completed
previously by the student, unless the
student is readmitted to a different
program to which the completed credit
hours or clock hours are not
transferable;
(D) With the same academic standing
(e.g., with the same satisfactory
academic progress status) the student
previously had;
(E)(1) If the student is readmitted to
the same program, for the first academic
year in which the student returns,
assessing the same institutional charges
that the student was or would have been
assessed for the academic year during
which the student left the institution; or
(2) If the student is admitted to a
different program, and for subsequent
academic years for a student admitted to
the same program, assessing no more
than the institutional charges that other
students in the program are assessed for
that academic year; and
(F) Waiving charges for equipment
required in lieu of equipment the
student paid for when the student was
previously enrolled.
(iv)(A) If the institution determines
that the student is not prepared to
resume the program with the same
academic status at the point where the
student left off, or will not be able to
complete the program, the institution
must make reasonable efforts to help the
student become prepared or to enable
the student to complete the program
including, but not limited to, providing
refresher courses at no extra cost and
allowing the student to retake a pretest
at no extra cost.
(B) The institution is not required to
readmit the student on his or her return
if—
(1) After reasonable efforts by the
institution, the institution determines
that the student is not prepared to
resume the program at the point where
he or she left off;
(2) After reasonable efforts by the
institution, the institution determines
that the student is unable to complete
the program; or
(3) The institution determines that
there are no reasonable efforts the
institution can take to prepare the
student to resume the program at the
point where he or she left off or to
enable the student to complete the
program;
(C)(1) ‘‘Reasonable efforts’’ means
actions that do not place an undue
hardship on the institution.
(2) ‘‘Undue hardship’’ means an
action requiring significant difficulty or
expense.

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(D) The institution carries the burden
to prove by a preponderance of the
evidence that the student is not
prepared to resume the program with
the same academic status at the point
where the student left off, or that the
student will not be able to complete the
program.
(3) This section applies to an
institution that has continued in
operation since the student ceased
attending or was last admitted to the
institution but did not begin attendance,
notwithstanding any changes of
ownership of the institution since the
student ceased attendance.
(4) The requirements of this section
supersede any State law (including any
local law or ordinance), contract,
agreement, policy, plan, practice, or
other matter that reduces, limits, or
eliminates in any manner any right or
benefit provided by this section.
(b) Service in the uniformed services.
For purposes of this section, service in
the uniformed services means service,
whether voluntary or involuntary, in the
Armed Forces, including service by a
member of the National Guard or
Reserve, on active duty, active duty for
training, or full-time National Guard
duty under Federal authority, for a
period of more than 30 consecutive days
under a call or order to active duty of
more than 30 consecutive days.
(c) Readmission procedures. (1) Any
student whose absence from an
institution is necessitated by reason of
service in the uniformed services shall
be entitled to readmission to the
institution if—
(i) Except as provided in paragraph
(d) of this section, the student (or an
appropriate officer of the Armed Forces
or official of the Department of Defense)
gives advance oral or written notice of
such service to an office designated by
the institution, and provides such notice
as far in advance as is reasonable under
the circumstances;
(ii) The cumulative length of the
absence and of all previous absences
from that institution by reason of service
in the uniformed services, including
only the time the student spends
actually performing service in the
uniformed services, does not exceed five
years; and
(iii) Except as provided in paragraph
(f) of this section, the student gives oral
or written notice of his or her intent to
return to an office designated by the
institution—
(A) For a student who completes a
period of service in the uniformed
services, not later than three years after
the completion of the period of service;
or

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(B) For a student who is hospitalized
for or convalescing from an illness or
injury incurred in or aggravated during
the performance of service in the
uniformed services, two years after the
end of the period that is necessary for
recovery from such illness or injury.
(2)(i) An institution must designate
one or more offices at the institution
that a student may contact to provide
notification of service required by
paragraph (c)(1)(i) of this section and
notification of intent to return required
by paragraph (c)(1)(iii) of this section.
(ii) An institution may not require
that the notice provided by the student
under paragraph (c)(1)(i) or (c)(1)(iii) of
this section follow any particular
format.
(iii) The notice provided by the
student under paragraph (c)(1)(i) of this
section—
(A) May not be subject to any rule for
timeliness; timeliness must be
determined by the facts in any
particular case; and
(B) Does not need to indicate whether
the student intends to return to the
institution.
(iv) For purposes of paragraph (c)(1)(i)
of this section, an ‘‘appropriate officer’’
is a commissioned, warrant, or
noncommissioned officer authorized to
give such notice by the military service
concerned.
(d) Exceptions to advance notice. (1)
No notice is required under paragraph
(c)(1)(i) of this section if the giving of
such notice is precluded by military
necessity, such as—
(i) A mission, operation, exercise, or
requirement that is classified; or
(ii) A pending or ongoing mission,
operation, exercise, or requirement that
may be compromised or otherwise
adversely affected by public knowledge.
(2) Any student (or an appropriate
officer of the Armed Forces or official of
the Department of Defense) who did not
give advance written or oral notice of
service to the appropriate official at the
institution in accordance with
paragraph (c)(1) of this section may
meet the notice requirement by
submitting, at the time the student seeks
readmission, an attestation to the
institution that the student performed
service in the uniformed services that
necessitated the student’s absence from
the institution.
(e) Cumulative length of absence. For
purposes of paragraph (c)(1)(ii) of this
section, a student’s cumulative length of
absence from an institution does not
include any service—
(1) That is required, beyond five
years, to complete an initial period of
obligated service;

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42431

(2) During which the student was
unable to obtain orders releasing the
student from a period of service in the
uniformed services before the expiration
of the five-year period and such
inability was through no fault of the
student; or
(3) Performed by a member of the
Armed Forces (including the National
Guard and Reserves) who is—
(i) Ordered to or retained on active
duty under—
(A) 10 U.S.C. 688 (involuntary active
duty by a military retiree);
(B) 10 U.S.C. 12301(a) (involuntary
active duty in wartime);
(C) 10 U.S.C. 12301(g) (retention on
active duty while in captive status);
(D) 10 U.S.C. 12302 (involuntary
active duty during a national emergency
for up to 24 months);
(E) 10 U.S.C. 12304 (involuntary
active duty for an operational mission
for up to 270 days);
(F) 10 U.S.C. 12305 (involuntary
retention on active duty of a critical
person during time of crisis or other
specific conditions);
(G) 14 U.S.C. 331 (involuntary active
duty by retired Coast Guard officer);
(H) 14 U.S.C. 332 (voluntary active
duty by retired Coast Guard officer);
(I) 14 U.S.C. 359 (involuntary active
duty by retired Coast Guard enlisted
member);
(J) 14 U.S.C. 360 (voluntary active
duty by retired Coast Guard enlisted
member);
(K) 14 U.S.C. 367 (involuntary
retention of Coast Guard enlisted
member on active duty); or
(L) 14 U.S.C. 712 (involuntary active
duty by Coast Guard Reserve member
for natural or man-made disasters);
(ii) Ordered to or retained on active
duty (other than for training) under any
provision of law because of a war or
national emergency declared by the
President or the Congress, as
determined by the Secretary concerned;
(iii) Ordered to active duty (other than
for training) in support, as determined
by the Secretary concerned, of an
operational mission for which personnel
have been ordered to active duty under
section 12304 of title 10, United States
Code;
(iv) Ordered to active duty in support,
as determined by the Secretary
concerned, of a critical mission or
requirement of the Armed Forces
(including the National Guard or
Reserve); or
(v) Called into Federal service as a
member of the National Guard under
chapter 15 of title 10, United States
Code, or section 12406 of title 10,
United States Code (i.e., called to
respond to an invasion, danger of

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invasion, rebellion, danger of rebellion,
insurrection, or the inability of the
President with regular forces to execute
the laws of the United States).
(f) Notification of intent to reenroll. A
student who fails to apply for
readmission within the periods
described in paragraph (c)(1)(iii) of this
section does not automatically forfeit
eligibility for readmission to the
institution, but is subject to the
institution’s established leave of
absence policy and general practices.
(g) Documentation. (1) A student who
submits an application for readmission
to an institution under paragraph
(c)(1)(iii) of this section shall provide to
the institution documentation to
establish that—
(i) The student has not exceeded the
service limitation in paragraph (c)(1)(ii)
of this section; and
(ii) The student’s eligibility for
readmission has not been terminated
due to an exception in paragraph (h) of
this section.
(2)(i) Documents that satisfy the
requirements of paragraph (g)(1) of this
section include, but are not limited to,
the following:
(A) DD (Department of Defense) 214
Certificate of Release or Discharge from
Active Duty.
(B) Copy of duty orders prepared by
the facility where the orders were
fulfilled carrying an endorsement
indicating completion of the described
service.
(C) Letter from the commanding
officer of a Personnel Support Activity
or someone of comparable authority.
(D) Certificate of completion from
military training school.
(E) Discharge certificate showing
character of service.
(F) Copy of extracts from payroll
documents showing periods of service.
(G) Letter from National Disaster
Medical System (NDMS) Team Leader
or Administrative Officer verifying dates
and times of NDMS training or Federal
activation.
(ii) The types of documents that are
necessary to establish eligibility for
readmission will vary from case to case.
Not all of these documents are available
or necessary in every instance to
establish readmission eligibility.
(3) An institution may not delay or
attempt to avoid a readmission of a
student under this section by
demanding documentation that does not
exist, or is not readily available, at the
time of readmission.
(h) Termination of readmission
eligibility. A student’s eligibility for
readmission to an institution under this
section by reason of such student’s
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terminates upon the occurrence of any
of the following events:
(1) A separation of such person from
the Armed Forces (including the
National Guard and Reserves) with a
dishonorable or bad conduct discharge.
(2) A dismissal of a commissioned
officer permitted under section 1161(a)
of title 10, United States Code by
sentence of a general court-martial; in
commutation of a sentence of a general
court-martial; or, in time of war, by
order of the President.
(3) A dropping of a commissioned
officer from the rolls pursuant to section
1161(b) of title 10, United States Code
due to absence without authority for at
least three months; separation by reason
of a sentence to confinement adjudged
by a court-martial; or, a sentence to
confinement in a Federal or State
penitentiary or correctional institution.
(Approved by the Office of Management and
Budget under control number 1845–NEW1)
Authority:

20 U.S.C. 1088 et seq.)
12. In 668.23, revise paragraph (d)(4)
to read as follows:
§ 668.23 Compliance audits and audited
financial statements.

*

*
*
*
*
(d) * * *
(4) Disclosure of title IV, HEA
program revenue. A proprietary
institution must disclose in a footnote to
its financial statement audit the
percentage of its revenues derived from
the title IV, HEA program funds that the
institution received during the fiscal
year covered by that audit. The revenue
percentage must be calculated in
accordance with § 668.28. The
institution must also report in the
footnote the non-Federal and Federal
revenue by source that was included in
the 90/10 calculation.
*
*
*
*
*
13. Section 668.28 is added to subpart
B of part 668 to read as follows:
§ 668.28

Non-title IV revenue (90/10).

(a) General. (1) Calculating the
revenue percentage. A proprietary
institution determines whether it
satisfies the requirement in
§ 668.14(b)(16) that at least 10 percent of
its revenue is derived from sources
other than title IV, HEA program funds
by using the formula in appendix C of
this subpart to calculate its revenue
percentage for its latest complete fiscal
year.
(2) Cash basis accounting. Except for
institutional loans made to students
under paragraph (a)(5)(i) of this section,
the institution must use the cash basis
of accounting in calculating its revenue
percentage.

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(3) Revenue generated from programs
and activities. The institution must
consider as revenue only those funds it
generates from—
(i) Tuition, fees, and other
institutional charges for students
enrolled in eligible programs as defined
in § 668.8;
(ii) Activities conducted by the
institution that are necessary for the
education and training of its students
provided those activities are—
(A) Conducted on campus or at a
facility under the institution’s control;
(B) Performed under the supervision
of a member of the institution’s faculty;
and
(C) Required to be performed by all
students in a specific educational
program at the institution; and
(iii) Funds paid by a student, or on
behalf of a student by a party other than
the institution, for an education or
training program that is not eligible
under § 668.8 if the program—
(A) Is approved or licensed by the
appropriate State agency;
(B) Is accredited by an accrediting
agency recognized by the Secretary
under 34 CFR part 602;
(C) Provides an industry-recognized
credential or certification, or prepares
students to take an examination for an
industry-recognized credential or
certification issued by an independent
third party;
(D) Provides training needed for
students to maintain State licensing
requirements; or
(E) Provides training needed for
students to meet additional licensing
requirements for specialized training for
practitioners that already meet the
general licensing requirements in that
field.
(4) Application of funds. The
institution must presume that any title
IV, HEA program funds it disburses, or
delivers, to or on behalf of a student will
be used to pay the student’s tuition,
fees, or institutional charges, regardless
of whether the institution credits the
funds to the student’s account or pays
the funds directly to the student, except
to the extent that the student’s tuition,
fees, or other charges are satisfied by—
(i) Grant funds provided by nonFederal public agencies or private
sources independent of the institution;
(ii) Funds provided under a
contractual arrangement with a Federal,
State, or local government agency for
the purpose of providing job training to
low-income individuals who need that
training;
(iii) Funds used by a student from a
savings plan for educational expenses
established by or on behalf of the
student if the saving plan qualifies for

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special tax treatment under the Internal
Revenue Code of 1986; or
(iv) Institutional scholarships as
provided under paragraph (a)(5)(iv) of
this section.
(5) Revenue generated from
institutional aid. The institution must
include the following institutional aid
as revenue:
(i) For loans made to students,
including funds advanced to students
under installment sales contracts, on or
after July 1, 2008 and prior to July 1,
2012, include as revenue the net present
value of the loans made to students
during the fiscal year, as calculated
under paragraph (b) of this section, if
the loans—
(A) Are bona fide as evidenced by
standalone repayment agreements
between the students and the institution
that are enforceable promissory notes;
(B) Are issued at intervals related to
the institution’s enrollment periods;
(C) Are subject to regular loan
repayments and collections by the
institution; and
(D) Are separate from the enrollment
contracts signed by the students.
(ii) For loans made to students before
July 1, 2008, include as revenue only
the amount of payments made on those
loans that the institution received
during the fiscal year.
(iii) For loans made to students on or
after July 1, 2012, include as revenue
only the amount of payments made on
those loans that the institution received
during the fiscal year.
(iv) For scholarships provided by the
institution in the form of monetary aid
or tuition discount and based on the
academic achievement or financial need
of its students, include as revenue the
amount disbursed to students during the
fiscal year. The scholarships must be
disbursed from an established restricted
account and only to the extent that the
funds in that account represent
designated funds from an outside source
or income earned on those funds.
(6) Revenue generated from loan
funds in excess of loan limits prior to
the Ensuring Continued Access to
Student Loans Act of 2008 (ECASLA).
For each student who receives an
unsubsidized loan under the FFEL or
Direct Loan programs on or after July 1,
2008 and prior to July 1, 2011, the
amount of the loan disbursement for a
payment period that exceeds the
disbursement for which the student
would have been eligible for that

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payment period under the loan limit in
effect on the day prior to enactment of
the ECASLA is included as revenue
from a source other than title IV, HEA
program funds but only to the extent
that the excess amount pays for tuition,
fees, or institutional charges remaining
on the student’s account after title IV,
HEA program funds are applied.
(7) Funds excluded from revenues.
For the fiscal year, the institution does
not include—
(i) The amount of Federal Work Study
(FWS) wages paid directly to the
student. However, if the institution
credits the student’s account with FWS
funds, those funds are included as
revenue;
(ii) The amount of funds received by
the institution from a State under the
LEAP, SLEAP, or GAP programs;
(iii) The amount of institutional funds
used to match title IV, HEA program
funds;
(iv) The amount of title IV, HEA
program funds refunded or returned
under § 668.22, including funds
refunded or returned under paragraph
(a)(6) of this section; or
(v) The amount the student is charged
for books, supplies, and equipment
unless the institution includes that
amount as tuition, fees, or other
institutional charges.
(b) Net present value (NPV). (1) As
illustrated in appendix C of this subpart,
an institution calculates the NPV of the
loans it made under paragraph (a)(5)(i)
of this section by—
(i) Using the formula, NPV = sum of
the discounted cash flows Rt/(1+i)t,
where—
(A) The variable ‘‘i’’ is the discount
rate. For purposes of this section, an
institution must use the most recent
annual inflation rate as the discount
rate;
(B) The variable ‘‘t’’ is time or period
of the cash flow, in years, from the time
the loan entered repayment; and
(C) The variable ‘‘Rt’’ is the net cash
flow at time or period t; and
(ii) Applying the NPV formula to the
loans made during the fiscal year by—
(A) If the loans have substantially the
same repayment period, using that
repayment period for the range of values
of variable ‘‘t’’; or
(B) Grouping the loans by repayment
period and using the repayment period
for each group for the range of values of
variable ‘‘t’’; and

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(C) For each group of loans, as
applicable, multiplying the total annual
payments due on the loans by the
institution’s loan collection rate (e.g.,
the total amount of payments collected
divided by the total amount of payments
due). The resulting amount is used for
variable ‘‘R’’ in each period ‘‘t’’, for each
group of loans that a NPV is calculated.
(2) Instead of performing the
calculations in paragraph (b)(1) of this
section, using 50 percent of the total
amount of loans that the institution
made during the fiscal year as the NPV.
However, if the institution chooses to
use this 50 percent calculation, the
institution may not sell any of these
loans until they have been in repayment
for at least two years.
(c) Sanctions. If an institution does
not derive at least 10 percent of its
revenue from sources other than title IV,
HEA program funds—
(1) For two consecutive fiscal years, it
loses its eligibility to participate in the
title IV, HEA programs for at least two
fiscal years. To regain eligibility, the
institution must demonstrate that it
complied with the State licensure and
accreditation requirements under 34
CFR 600.5(a)(4) and (a)(6), and the
financial responsibility requirements
under subpart L of this part, for a
minimum of two fiscal years after the
fiscal year it became ineligible; or
(2) For any fiscal year, it becomes
provisionally certified under
§ 668.13(c)(1)(ii) for the two fiscal years
after the fiscal year it failed to satisfy the
revenue requirement. However, the
institution’s provisional certification
terminates on—
(i) The expiration date of the
institution’s program participation
agreement that was in effect on the date
the Secretary determined the institution
failed this requirement; or
(ii) The date the institution loses its
eligibility to participate under
paragraph (c)(1) of this section; and
(3) It must notify the Secretary no
later than 45 days after the end of its
fiscal year that it failed to meet this
requirement.
(Approved by Office of Management and
Budget under control number 1845–NEW2)
(Authority: 20 U.S.C. 1085, 1088, 1091, 1092,
1094, 1099a-3, 1099c, 1141)

14. Appendix C is added to subpart B
of part 668 to read as follows:
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15. Section 668.32 is amended by:
A. Revising the introductory text.
B. In paragraph (a)(1)(iii), adding the
word ‘‘and’’ after the punctuation ‘‘;’’.
C. In paragraph (a)(2), removing the
punctuation ‘‘;’’ and adding, in its place,
the punctuation ‘‘.’’.
D. In paragraph (b), removing the
punctuation ‘‘;’’ and adding, in its place,
the punctuation ‘‘.’’.
E. In paragraph (c)(4)(ii), removing the
punctuation ‘‘;’’ and adding, in its place,
the punctuation ‘‘.’’.
F. In paragraph (d), removing the
punctuation ‘‘;’’ and adding, in its place,
the punctuation ‘‘.’’.
G. In paragraph (e)(4)(ii), removing
the punctuation ‘‘;’’ and adding, in its
place, the punctuation ‘‘.’’.
H. In paragraph (f), removing the
punctuation ‘‘;’’ and adding, in its place,
the punctuation ‘‘.’’.
I. In paragraph (g)(4), removing the
punctuation ‘‘;’’ at the end of the
paragraph and adding, in its place, the
punctuation ‘‘.’’.

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J. In paragraph (h), removing the
punctuation ‘‘;’’ and adding, in its place,
the punctuation ‘‘.’’.
K. In paragraph (i), removing the
punctuation ‘‘;’’ and adding, in its place,
the punctuation ‘‘.’’.
L. In paragraph (j), removing the
punctuation ‘‘;’’ and adding, in its place,
the punctuation ‘‘.’’.
M. In paragraph (k)(9), removing the
word ‘‘; and’’ and adding, in its place,
the punctuation ‘‘.’’.
N. In paragraph (l), removing the
word ‘‘; and’’ and adding, in its place,
the punctuation ‘‘.’’.
O. Adding paragraph (n).
The revision and addition read as
follows:
§ 668.32

Student eligibility—general.

A student is eligible to receive title IV,
HEA program assistance if the student
either meets all of the requirements in
paragraphs (a) through (m) of this
section or meets the requirement in
paragraph (n) of this section as follows:
*
*
*
*
*

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(n) Is enrolled in a comprehensive
transition and postsecondary program
under subpart O of this part and meets
the student eligibility criteria in that
subpart.
*
*
*
*
*
16. Section 668.41 is amended by:
A. In paragraph (a), adding, in
alphabetical order, definitions of oncampus student housing facility and
retention rate.
B. Revising paragraph (d).
C. Revising paragraph (e).
D. In paragraph (g)(1)(i), removing the
words ‘‘on request’’.
E. In the OMB control number
parenthetical at the end of the section,
removing the words, ‘‘and 1845–0010’’.
The additions and revisions read as
follows:
§ 668.41 Reporting and disclosure of
information.

(a) * * *
On-campus student housing facility:
A dormitory or other residential facility
for students that is located on an

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institution’s campus, as defined in
§ 668.46(a).
*
*
*
*
*
Retention rate means a measure of the
rate at which students persist in their
educational program at an institution
expressed as a percentage. For four-year
institutions, this is the percentage of
first-time bachelors (or equivalent)
degree-seeking undergraduates from the
previous fall who are again enrolled in
the current fall. For all other
institutions, this is the percentage of
first-time degree- or certificate-seeking
students from the previous fall who
either re-enrolled or successfully
completed their program by the current
fall.
*
*
*
*
*
(d) General disclosures for enrolled or
prospective students. An institution
must make available to any enrolled
student or prospective student through
appropriate publications, mailings or
electronic media, information
concerning—
(1) Financial assistance available to
students enrolled in the institution
(pursuant to § 668.42).
(2) The institution (pursuant to
§ 668.43).
(3) The institution’s retention rate as
reported to the Integrated Postsecondary
Education Data System (IPEDS). In the
case of a request from a prospective
student, the information must be made
available prior to the student’s enrolling
or entering into any financial obligation
with the institution.
(4) The institution’s completion or
graduation rate and, if applicable, its
transfer-out rate (pursuant to § 668.45).
In the case of a request from a
prospective student, the information
must be made available prior to the
student’s enrolling or entering into any
financial obligation with the institution.
(5) The placement of, and types of
employment obtained by, graduates of
the institution’s degree or certificate
programs.
(i) The information provided in
compliance with this paragraph may be
gathered from—
(A) The institution’s placement rate
for any program, if it calculates such a
rate;
(B) State data systems;
(C) Alumni or student satisfaction
surveys; or
(D) Other relevant sources.
(ii) The institution must identify the
source of the information provided in
compliance with this paragraph, as well
as any time frames and methodology
associated with it.
(iii) The institution must disclose any
placement rates it calculates.

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(6) The types of graduate and
professional education in which
graduates of the institution’s four-year
degree programs enroll.
(i) The information provided in
compliance with this paragraph may be
gathered from—
(A) State data systems;
(B) Alumni or student satisfaction
surveys; or
(C) Other relevant sources.
(ii) The institution must identify the
source of the information provided in
compliance with this paragraph, as well
as any time frames and methodology
associated with it.
(e) Annual security report and annual
fire safety report—(1) Enrolled students
and current employees—annual security
report and annual fire safety report. By
October 1 of each year, an institution
must distribute to all enrolled students
and current employees its annual
security report described in § 668.46(b),
and, if the institution maintains an oncampus student housing facility, its
annual fire safety report described in
§ 668.49(b), through appropriate
publications and mailings, including—
(i) Direct mailing to each individual
through the U.S. Postal Service, campus
mail, or electronic mail;
(ii) A publication or publications
provided directly to each individual; or
(iii) Posting on an Internet Web site or
an Intranet Web site, subject to
paragraph (e)(2) and (3) of this section.
(2) Enrolled students—annual
security report and annual fire safety
report. If an institution chooses to
distribute either its annual security
report or annual fire safety report to
enrolled students by posting the
disclosure or disclosures on an Internet
Web site or an Intranet Web site, the
institution must comply with the
requirements of paragraph (c)(2) of this
section.
(3) Current employees—annual
security report and annual fire safety
report. If an institution chooses to
distribute either its annual security
report or annual fire safety report to
current employees by posting the
disclosure or disclosures on an Internet
Web site or an Intranet Web site, the
institution must, by October 1 of each
year, distribute to all current employees
a notice that includes a statement of the
report’s availability, the exact electronic
address at which the report is posted, a
brief description of the report’s
contents, and a statement that the
institution will provide a paper copy of
the report upon request.
(4) Prospective students and
prospective employees—annual security
report and annual fire safety report. For
each of the reports, the institution must

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provide a notice to prospective students
and prospective employees that
includes a statement of the report’s
availability, a description of its
contents, and an opportunity to request
a copy. An institution must provide its
annual security report and annual fire
safety report, upon request, to a
prospective student or prospective
employee. If the institution chooses to
provide either its annual security report
or annual fire safety report to
prospective students and prospective
employees by posting the disclosure on
an Internet Web site, the notice
described in this paragraph must
include the exact electronic address at
which the report is posted, a brief
description of the report, and a
statement that the institution will
provide a paper copy of the report upon
request.
(5) Submission to the Secretary—
annual security report and annual fire
safety report. Each year, by the date and
in a form specified by the Secretary, an
institution must submit the statistics
required by §§ 668.46(c) and 668.49(c)
to the Secretary.
(6) Publication of the annual fire
safety report. An institution may
publish its annual fire safety report
concurrently with its annual security
report only if the title of the report
clearly states that the report contains
both the annual security report and the
annual fire safety report. If an
institution chooses to publish the
annual fire safety report separately from
the annual security report, it must
include information in each of the two
reports about how to directly access the
other report.
*
*
*
*
*
17. Section 668.43 is amended by:
A. In the introductory text of
paragraph (a), removing the words
‘‘upon request’’.
B. In paragraph (a)(5)(ii), removing the
word ‘‘and’’ that appears after the
punctuation ‘‘;’’.
C. In paragraph (a)(5)(iii), adding the
word ‘‘and’’ after the punctuation ‘‘;’’.
D. Adding paragraph (a)(5)(iv).
E. Revising paragraph (a)(7).
F. In paragraph (a)(8), removing the
word ‘‘and’’ that appears after the
punctuation ‘‘;’’.
G. In paragraph (a)(9), removing the
punctuation ‘‘.’’ And adding, in its
place, the word ‘‘; and’’.
H. Adding paragraph (a)(10).
I. In paragraph (b), removing the
words ‘‘, upon request,’’.
The additions and revision read as
follows:
§ 668.43

Institutional information.

(a) * * *

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(5) * * *
(iv) Any plans by the institution for
improving the academic program of the
institution;
*
*
*
*
*
(7) A description of the services and
facilities available to students with
disabilities, including students with
intellectual disabilities as defined in
subpart O of this part;
*
*
*
*
*
(10) Institutional policies and
sanctions related to copyright
infringement, including—
(i) A statement that explicitly informs
its students that unauthorized
distribution of copyrighted material,
including unauthorized peer-to-peer file
sharing, may subject the students to
civil and criminal liabilities;
(ii) A summary of the penalties for
violation of Federal copyright laws; and
(iii) A description of the institution’s
policies with respect to unauthorized
peer-to-peer file sharing, including
disciplinary actions that are taken
against students who engage in illegal
downloading or unauthorized
distribution of copyrighted materials
using the institution’s information
technology system.
*
*
*
*
*
18. Section 668.45 is revised to read
as follows:

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§ 668.45 Information on completion or
graduation rates.

(a)(1) An institution annually must
prepare the completion or graduation
rate of its certificate- or degree-seeking,
first-time, full-time undergraduate
students, as provided in paragraph (b) of
this section.
(2) An institution that determines that
its mission includes providing
substantial preparation for students to
enroll in another eligible institution
must prepare the transfer-out rate of its
certificate- or degree-seeking, first-time,
full-time undergraduate students, as
provided in paragraph (c) of this
section.
(3)(i) An institution that offers a
predominant number of its programs
based on semesters, trimesters, or
quarters must base its completion or
graduation rate, retention rate, and, if
applicable, transfer-out rate
calculations, on the cohort of certificateor degree-seeking, first-time, full-time
undergraduate students who enter the
institution during the fall term of each
year.
(ii) An institution not covered by the
provisions of paragraph (a)(3)(i) of this
section must base its completion or
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calculations, on the cohort of certificateor degree-seeking, first-time, full-time
undergraduate students who enter the
institution between September 1 of one
year and August 31 of the following
year.
(4)(i) An institution covered by the
provisions of paragraph (a)(3)(i) of this
section must count as an entering
student a first-time undergraduate
student who is enrolled as of October
15, the end of the institution’s drop-add
period, or another official reporting date
as defined in § 668.41(a).
(ii) An institution covered by
paragraph (a)(3)(ii) of this section must
count as an entering student a first-time
undergraduate student who is enrolled
for at least—
(A) 15 days, in a program of up to,
and including, one year in length; or
(B) 30 days, in a program of greater
than one year in length.
(5) An institution must make available
its completion or graduation rate and, if
applicable, transfer-out rate, no later
than the July 1 immediately following
the 12-month period ending August 31
during which 150 percent of the normal
time for completion or graduation has
elapsed for all of the students in the
group on which the institution bases its
completion or graduation rate and, if
applicable, transfer-out rate
calculations.
(6)(i) Completion or graduation rate
information must be disaggregated by
gender, by each major racial and ethnic
subgroup (as defined in IPEDS), by
recipients of a Federal Pell Grant, by
recipients of a Federal Family Education
Loan or a Federal Direct Loan (other
than an Unsubsidized Stafford Loan
made under the Federal Family
Education Loan Program or a Federal
Direct Unsubsidized Stafford Loan) who
did not receive a Federal Pell Grant, and
by recipients of neither a Federal Pell
Grant nor a Federal Family Education
Loan or a Federal Direct Loan (other
than an Unsubsidized Stafford Loan
made under the Federal Family
Education Loan Program or a Federal
Direct Unsubsidized Loan) if the
number of students in such group or
with such status is sufficient to yield
statistically reliable information and
reporting will not reveal personally
identifiable information about an
individual student. If such number is
not sufficient for such purpose, i.e., is
too small to be meaningful, then the
institution shall note that the institution
enrolled too few of such students to so
disclose or report with confidence and
confidentiality.
(ii) With respect to the requirement in
paragraph (a)(6)(i) of this section to
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graduation rate information by the
receipt or nonreceipt of Federal student
aid, students shall be considered to have
received the aid in question only if they
received such aid in the period
specified in paragraph (a)(3) of this
section.
(iii) The requirement in paragraph
(a)(6)(i) of this section shall not apply to
two-year, degree-granting institutions of
higher education until academic year
2011–2012.
(b) In calculating the completion or
graduation rate under paragraph (a)(1) of
this section, an institution must count
as completed or graduated—
(1) Students who have completed or
graduated by the end of the 12-month
period ending August 31 during which
150 percent of the normal time for
completion or graduation from their
program has lapsed; and
(2) Students who have completed a
program described in § 668.8(b)(1)(ii), or
an equivalent program, by the end of the
12-month period ending August 31
during which 150 percent of normal
time for completion from that program
has lapsed.
(c) In calculating the transfer-out rate
under paragraph (a)(2) of this section, an
institution must count as transfers-out
students who by the end of the 12month period ending August 31 during
which 150 percent of the normal time
for completion or graduation from the
program in which they were enrolled
has lapsed, have not completed or
graduated but have subsequently
enrolled in any program of an eligible
institution for which its program
provided substantial preparation.
(d) For the purpose of calculating a
completion or graduation rate and a
transfer-out rate, an institution may—
(1) Exclude students who—
(i) Have left school to serve in the
Armed Forces;
(ii) Have left school to serve on
official church missions;
(iii) Have left school to serve with a
foreign aid service of the Federal
Government, such as the Peace Corps;
(iv) Are totally and permanently
disabled; or
(v) Are deceased.
(2) In cases where the students
described in paragraphs (d)(1)(i) through
(iii) of this section represent 20 percent
or more of the certificate- or degreeseeking, full-time, undergraduate
students at the institution, recalculate
the completion or graduation rates of
those students by adding to the 150
percent time-frame they normally have
to complete or graduate, as described in
paragraph (b) of this section, the time
period the students were not enrolled
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Forces, on official church missions, or
with a recognized foreign aid service of
the Federal Government.
(e)(1) The Secretary grants a waiver of
the requirements of this section dealing
with completion and graduation rate
data to any institution that is a member
of an athletic association or conference
that has voluntarily published
completion or graduation rate data, or
has agreed to publish data, that the
Secretary determines are substantially
comparable to the data required by this
section.
(2) An institution that receives a
waiver of the requirements of this
section must still comply with the
requirements of § 668.41(d)(3) and (f).
(3) An institution, or athletic
association or conference applying on
behalf of an institution, that seeks a
waiver under paragraph (e)(1) of this
section must submit a written
application to the Secretary that
explains why it believes the data the
athletic association or conference
publishes are accurate and substantially
comparable to the information required
by this section.
(f) In addition to calculating the
completion or graduation rate required
by paragraph (a)(1) of this section, an
institution may, but is not required to—
(1) Calculate a completion or
graduation rate for students who
transfer into the institution;
(2) Calculate a completion or
graduation rate for students described in
paragraphs (d)(1)(i) through (iv) of this
section; and
(3) Calculate a transfer-out rate as
specified in paragraph (c) of this
section, if the institution determines
that its mission does not include
providing substantial preparation for its
students to enroll in another eligible
institution.
(Approved by the Office of Management and
Budget under control number 1845–0004)

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(Authority: 20 U.S.C. 1092)

19. Section 668.46 is amended by:
A. In paragraph (a), adding, in
alphabetical order, a definition of test.
B. In paragraph (b), adding paragraphs
(13) and (14).
C. Revising paragraph (c)(3).
D. In paragraph (e), revising the
paragraph heading and adding
paragraph (e)(3).
E. Adding paragraph (g).
F. Adding paragraph (h).
The additions and revisions read as
follows:
§ 668.46 Institutional security policies and
crime statistics.

(a) * * *
Test: Regularly scheduled drills,
exercises, and appropriate follow-

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through activities, designed for
assessment and evaluation of emergency
plans and capabilities.
*
*
*
*
*
(b) * * *
(13) Beginning with the annual
security report distributed by October 1,
2010, a statement of policy regarding
emergency response and evacuation
procedures, as described in paragraph
(g) of this section.
(14) Beginning with the annual
security report distributed by October 1,
2010, a statement of policy regarding
missing student notification procedures,
as described in paragraph (h) of this
section.
(c) * * *
(3) Reported crimes if a hate crime.
An institution must report, by category
of prejudice, the following crimes
reported to local police agencies or to a
campus security authority that manifest
evidence that the victim was
intentionally selected because of the
victim’s actual or perceived race,
gender, religion, sexual orientation,
ethnicity, or disability:
(i) Any crime it reports pursuant to
paragraph (c)(1)(i) through (vii) of this
section.
(ii) The crimes of larceny-theft, simple
assault, intimidation, and destruction/
damage/vandalism of property.
(iii) Any other crime involving bodily
injury.
*
*
*
*
*
(e) Timely warning and emergency
notification. * * *
(3) If there is an immediate threat to
the health or safety of students or
employees occurring on campus, as
described in paragraph (g)(1) of this
section, an institution must follow its
emergency notification procedures. An
institution that follows its emergency
notification procedures is not required
to issue a timely warning based on the
same circumstances; however, the
institution must provide adequate
follow-up information to the community
as needed.
*
*
*
*
*
(g) Emergency response and
evacuation procedures. An institution
must include a statement of policy
regarding its emergency response and
evacuation procedures in the annual
security report. This statement must
include—
(1) The procedures the institution will
use to immediately notify the campus
community upon the confirmation of a
significant emergency or dangerous
situation involving an immediate threat
to the health or safety of students or
employees occurring on the campus;
(2) A description of the process the
institution will use to—

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(i) Confirm that there is a significant
emergency or dangerous situation as
described in paragraph (g)(1) of this
section;
(ii) Determine the appropriate
segment or segments of the campus
community to receive a notification;
(iii) Determine the content of the
notification; and
(iv) Initiate the notification system;
(3) A statement that the institution
will, without delay, and taking into
account the safety of the community,
determine the content of the notification
and initiate the notification system,
unless issuing a notification will, in the
professional judgment of responsible
authorities, compromise efforts to assist
a victim or to contain, respond to, or
otherwise mitigate the emergency;
(4) A list of the titles of the person or
persons or organization or organizations
responsible for carrying out the actions
described in paragraph (g)(2) of this
section;
(5) The institution’s procedures for
disseminating emergency information to
the larger community; and
(6) The institution’s procedures to test
the emergency response and evacuation
procedures on at least an annual basis,
including—
(i) Tests that may be announced or
unannounced;
(ii) Publicizing its emergency
response and evacuation procedures in
conjunction with at least one test per
calendar year; and
(iii) Documenting, for each test, a
description of the exercise, the date,
time, and whether it was announced or
unannounced.
(h) Missing student notification
policies and procedures. (1) An
institution that provides any on-campus
student housing facility must include a
statement of policy regarding missing
student notification procedures for
students who reside in on-campus
student housing facilities in its annual
security report. This statement must—
(i) Indicate a list of titles of the
persons or organizations to which
students, employees, or other
individuals should report that a student
has been missing for 24 hours;
(ii) Require that any missing student
report must be referred immediately to
the institution’s police or campus
security department, or, in the absence
of an institutional police or campus
security department, to the local law
enforcement agency that has jurisdiction
in the area;
(iii) Contain an option for each
student living in an on-campus student
housing facility to identify a contact
person or persons whom the institution
shall notify if the student is determined

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missing by the institutional police or
campus security department, or the
local law enforcement agency;
(iv) Advise students that their contact
information will be registered
confidentially, that this information will
be accessible only to authorized campus
officials, and that it may not be
disclosed, except to law enforcement
personnel in furtherance of a missing
person investigation;
(v) Advise students that if they are
under 18 years of age and not
emancipated, the institution must notify
a custodial parent or guardian when the
student is missing, in addition to any
additional contact person designated by
the student; and
(vi) Advise students that, regardless of
whether they name a contact person,
unless the local law enforcement agency
was the entity that made the
determination that a student is missing,
the institution will notify the local law
enforcement agency that the student is
missing.
(2) The procedures that the institution
must follow when a student who resides
in an on-campus student housing
facility is determined to have been
missing for 24 hours include—
(i) If the student has designated a
contact person, notifying that contact
person within 24 hours;
(ii) If the student is under 18 years of
age and is not emancipated, notifying
the student’s custodial parent or
guardian and any other designated
contact person within 24 hours; and
(iii) Regardless of whether the student
has identified a contact person, is above
the age of 18, or is an emancipated
minor, informing the local law
enforcement agency that has jurisdiction
in the area that the student has been
reported to be missing within 24 hours.
*
*
*
*
*
§ 668.48

[Amended]

20. Section 668.48(b) is amended by
removing the parenthetical ‘‘(d)’’ and
adding, in its place, the parenthetical
‘‘(e)’’.
21. Section 668.49 is added to subpart
D of part 668 to read as follows:

srobinson on DSKHWCL6B1PROD with PROPOSALS2

§ 668.49 Institutional fire safety policies
and fire statistics.

(a) Additional definitions that apply
to this section.
Cause of fire: The factor or factors that
give rise to a fire. The causal factor may
be, but is not limited to, the result of an
intentional or unintentional action,
mechanical failure, or act of nature.
Fire: Any instance of open flame or
other burning in a place not intended to
contain the burning or in an
uncontrolled manner.

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Fire drill: A supervised practice of a
mandatory evacuation of a building for
a fire.
Fire-related injury: Any instance in
which a person is injured as a result of
a fire, including an injury sustained
from a natural or accidental cause,
while involved in fire control,
attempting rescue, or escaping from the
dangers of the fire. The term ‘‘person’’
may include students, faculty, staff,
visitors, firefighters, or any other
individuals.
Fire-related death: Any instance in
which a person—
(1) Is killed as a result of a fire,
including death resulting from a natural
or accidental cause while involved in
fire control, attempting rescue, or
escaping from the dangers of a fire; or
(2) Dies within one year of injuries
sustained as a result of the fire.
Fire safety system: Any mechanism or
system related to the detection of a fire,
the warning resulting from a fire, or the
control of a fire. This may include
sprinkler systems or other fire
extinguishing systems, fire detection
devices, stand-alone smoke alarms,
devices that alert one to the presence of
a fire, such as horns, bells, or strobe
lights; smoke-control and reduction
mechanisms; and fire doors and walls
that reduce the spread of a fire.
Value of property damage: The
estimated value of the loss of the
structure and contents, in terms of the
cost of replacement in like kind and
quantity. This estimate should include
contents damaged by fire, and related
damages caused by smoke, water, and
overhaul; however, it does not include
indirect loss, such as business
interruption.
(b) Annual fire safety report.
Beginning by October 1, 2010, an
institution that maintains any oncampus student housing facility must
prepare an annual fire safety report that
contains, at a minimum, the following
information:
(1) The fire statistics described in
paragraph (c) of this section.
(2) A description of each on-campus
student housing facility fire safety
system.
(3) The number of fire drills held
during the previous calendar year.
(4) The institution’s policies or rules
on portable electrical appliances,
smoking, and open flames in a student
housing facility.
(5) The institution’s procedures for
student housing evacuation in the case
of a fire.
(6) The policies regarding fire safety
education and training programs
provided to the students, faculty, and
staff. In these policies, the institution

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must describe the procedures that
students and employees should follow
in the case of a fire.
(7) For purposes of including a fire in
the statistics in the annual fire safety
report, a list of the titles of each person
or organization to which students and
employees should report that a fire
occurred.
(8) Plans for future improvements in
fire safety, if determined necessary by
the institution.
(c) Fire statistics. (1) An institution
must report statistics for each oncampus student housing facility, for the
three most recent calendar years for
which data are available, concerning—
(i) The number of fires and the cause
of each fire;
(ii) The number of injuries related to
a fire that resulted in treatment at a
medical facility, including at an oncampus health center;
(iii) The number of deaths related to
a fire; and
(iv) The value of property damage
caused by a fire.
(2) An institution is required to
submit a copy of the fire statistics in
paragraph (c)(1) of this section to the
Secretary on an annual basis.
(d) Fire log. (1) An institution that
maintains on-campus student housing
facilities must maintain a written, easily
understood fire log that records, by the
date that the fire was reported, any fire
that occurred in an on-campus student
housing facility. This log must include
the nature, date, time, and general
location of each fire.
(2) An institution must make an entry
or an addition to an entry to the log
within two business days, as defined
under § 668.46(a), of the receipt of the
information.
(3) An institution must make the fire
log for the most recent 60-day period
open to public inspection during normal
business hours. The institution must
make any portion of the log older than
60 days available within two business
days of a request for public inspection.
(4) An institution must make an
annual report to the campus community
on the fires recorded in the fire log. This
requirement may be satisfied by the
annual fire safety report described in
paragraph (b) of this section.
(Approved by the Office of Management and
Budget under control number 1845–NEW3)
(Authority: 20 U.S.C. 1092)

22. Appendix A to subpart D of part
668 is amended by:
A. Revising the introductory text.
B. Under the heading, ‘‘Crime
Definitions From the Uniform Crime
Reporting Handbook,’’ revising and

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renaming the definition of Weapon Law
Violations, as Weapons: Carrying,
Possessing, Etc. and revising the
definitions of Drug Abuse Violations
and Liquor Law Violations.
C. Adding a heading at the end of the
appendix, ‘‘Definitions From the Hate
Crime Data Collection Guidelines of the
Uniform Crime Reporting Handbook’’
followed by definitions for larceny-theft
(except motor vehicle theft), simple
assault, intimidation, and destruction/
damage/vandalism of property.
The revisions and additions read as
follows:
Appendix A to Subpart D of Part 668—
Crime Definitions in Accordance With
the Federal Bureau of Investigation’s
Uniform Crime Reporting Program
The following definitions are to be used for
reporting the crimes listed in § 668.46, in
accordance with the Federal Bureau of
Investigation’s Uniform Crime Reporting
Program. The definitions for murder; robbery;
aggravated assault; burglary; motor vehicle
theft; weapons: carrying, possessing, etc.; law
violations; drug abuse violations; and liquor
law violations are excerpted from the
Uniform Crime Reporting Handbook. The
definitions of forcible rape and nonforcible
sex offenses are excerpted from the National
Incident-Based Reporting System Edition of
the Uniform Crime Reporting Handbook. The
definitions of larceny-theft (except motor
vehicle theft), simple assault, intimidation,
and destruction/damage/vandalism of
property are excerpted from the Hate Crime
Data Collection Guidelines of the Uniform
Crime Reporting Handbook.

*

*

*

*

*

Crime Definitions From the Uniform Crime
Reporting Handbook

*

*

*

*

*

srobinson on DSKHWCL6B1PROD with PROPOSALS2

Weapons: Carrying, Possessing, Etc.
The violation of laws or ordinances
prohibiting the manufacture, sale, purchase,
transportation, possession, concealment, or
use of firearms, cutting instruments,
explosives, incendiary devices, or other
deadly weapons.
Drug Abuse Violations
The violation of laws prohibiting the
production, distribution, and/or use of
certain controlled substances and the
equipment or devices utilized in their
preparation and/or use. The unlawful
cultivation, manufacture, distribution, sale,
purchase, use, possession, transportation, or
importation of any controlled drug or
narcotic substance. Arrests for violations of
State and local laws, specifically those
relating to the unlawful possession, sale, use,
growing, manufacturing, and making of
narcotic drugs.
Liquor Law Violations
The violation of State or local laws or
ordinances prohibiting the manufacture, sale,
purchase, transportation, possession, or use

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of alcoholic beverages, not including driving
under the influence and drunkenness.

*

*

*

*

*

Definitions From the Hate Crime Data
Collection Guidelines of the Uniform Crime
Reporting Handbook
Larceny-Theft (except motor vehicle theft)
The unlawful taking, carrying, leading, or
riding away of property from the possession
or constructive possession of another.
Attempted larcenies are included.
Embezzlement, confidence games, forgery,
worthless checks, etc., are excluded.
Simple Assault
An unlawful physical attack by one person
upon another where neither the offender
displays a weapon, nor the victim suffers
obvious severe or aggravated bodily injury
involving apparent broken bones, loss of
teeth, possible internal injury, severe
laceration, or loss of consciousness.
Intimidation
To unlawfully place another person in
reasonable fear of bodily harm through the
use of threatening words and/or other
conduct, but without displaying a weapon or
subjecting the victim to actual physical
attack.
Destruction/Damage/Vandalism of Property
To willfully or maliciously destroy,
damage, deface, or otherwise injure real or
personal property without the consent of the
owner or the person having custody or
control of it.

23. Section 668.161 is amended by:
A. Revising the section heading.
B. Revising paragraph (a)(4).
The revisions read as follows:
§ 668.161 Scope and purpose (cash
management rules).

(a) * * *
(4) An institution must follow the
disbursement procedures in 34 CFR
675.16 for paying a student his or her
wages under the FWS Program instead
of the disbursement procedures in
§§ 668.164(a), (b), and (d) through (g),
and 668.165.
*
*
*
*
*
§ 668.184

[Amended]

24. Section 668.184(a)(1) is amended
by removing the word ‘‘If’’ and adding,
in its place, the words ‘‘Except as
provided under 34 CFR 600.32(d), if’’.
25. Subpart O, consisting of
§§ 668.230 through 668.233, is added to
part 668 to read as follows:
Subpart O—Financial Assistance for
Students With Intellectual Disabilities
Sec.
668.230
668.231
668.232
668.233

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Scope and purpose.
Definitions.
Program eligibility.
Student eligibility.

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Subpart O—Financial Assistance for
Students With Intellectual Disabilities
§ 668.230

Scope and purpose.

This subpart establishes regulations
that apply to an institution that offers
comprehensive transition and
postsecondary programs to students
with intellectual disabilities. Students
enrolled in these programs are eligible
for Federal financial assistance under
the Federal Pell Grant, FSEOG, and
FWS programs. Except for provisions
related to needs analysis, the Secretary
may waive any title IV, HEA program
requirement related to the Federal Pell
Grant, FSEOG, and FWS programs or
institutional eligibility, to ensure that
students with intellectual disabilities
remain eligible for funds under these
assistance programs. However, unless
provided in this subpart or subsequently
waived by the Secretary, students with
intellectual disabilities and institutions
that offer comprehensive transition and
postsecondary programs are subject to
the same regulations and procedures
that otherwise apply to title IV, HEA
program participants.
(Authority: 20 U.S.C. 1091)
§ 668.231

Definitions.

The following definitions apply to
this subpart:
Comprehensive transition and
postsecondary program means a degree,
certificate, nondegree, or noncertificate
program that—
(1) Is offered by a participating
institution;
(2) Is delivered to students physically
attending the institution;
(3) Is designed to support students
with intellectual disabilities who are
seeking to continue academic, career
and technical, and independent living
instruction at an institution of higher
education in order to prepare for gainful
employment;
(4) Includes an advising and
curriculum structure;
(5) Requires students with intellectual
disabilities to have at least one-half of
their participation in the program, as
determined by the institution, focus on
academic components through one or
more of the following activities:
(i) Taking credit-bearing courses with
students without disabilities.
(ii) Auditing or otherwise
participating in courses with students
without disabilities for which the
student does not receive regular
academic credit.
(iii) Taking non-credit-bearing,
nondegree courses with students
without disabilities.

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Federal Register / Vol. 74, No. 161 / Friday, August 21, 2009 / Proposed Rules
(iv) Participating in internships or
work-based training in settings with
individuals without disabilities; and
(6) Provides students with intellectual
disabilities opportunities to participate
in coursework and other activities with
students without disabilities.
Student with an intellectual disability
means a student—
(1) With mental retardation or a
cognitive impairment characterized by
significant limitations in—
(i) Intellectual and cognitive
functioning; and
(ii) Adaptive behavior as expressed in
conceptual, social, and practical
adaptive skills; and
(2) Who is currently, or was formerly,
eligible for special education and
related services under the Individuals
with Disabilities Education Act (IDEA)
(20 U.S.C. 1401), including a student
who was determined eligible for special
education or related services under the
IDEA but was home-schooled or
attended private school.
(Authority: 20 U.S.C. 1091, 1140)

srobinson on DSKHWCL6B1PROD with PROPOSALS2

§ 668.232

Program eligibility.

An institution that offers a
comprehensive transition and
postsecondary program must apply to
the Secretary to have the program
determined to be an eligible program.
The institution applies under the
provisions in 34 CFR 600.20 for adding
an educational program, and must
include in its application—
(a) A detailed description of the
comprehensive transition and
postsecondary program that addresses
all of the components of the program, as
defined in § 668.231;
(b) The institution’s policy for
determining whether a student enrolled
in the program is making satisfactory
academic progress;
(c) The number of weeks of
instructional time and the number of
semester or quarter credit hours or clock
hours in the program, including the
equivalent credit or clock hours
associated with noncredit or reduced
credit courses or activities;
(d) A description of the educational
credential offered (e.g., degree or
certificate) or identified outcome or
outcomes established by the institution
for all students enrolled in the program;
(e) A copy of the letter or notice sent
to the institution’s accrediting agency
informing the agency of its
comprehensive transition and
postsecondary program. The letter or
notice must include a description of the
items in paragraphs (a) through (d) of
this section; and
(f) Any other information the
Secretary may require.

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(Approved by the Office of Management and
Budget under control number 1845–NEW4)
(Authority: 20 U.S.C. 1091)
§ 668.233

Student eligibility.

A student with an intellectual
disability is eligible to receive Federal
Pell, FSEOG, and FWS program
assistance under this subpart if—
(a) The student satisfies the general
student eligibility requirements under
§ 668.32, except for the requirements in
paragraphs (a), (e), and (f) of that
section. With regard to these exceptions,
a student—
(1) Does not have to be enrolled for
the purpose of obtaining a degree or
certificate;
(2) Is not required to have a high
school diploma, a recognized equivalent
of a high school diploma, or have
passed an ability to benefit test; and
(3) Is making satisfactory progress
according to the institution’s published
standards for students enrolled in its
comprehensive transition and
postsecondary programs;
(b) The student is enrolled in a
comprehensive transition and
postsecondary program approved by the
Secretary; and
(c) The institution obtains a record
from a local educational agency that the
student is or was eligible for special
education and related services under the
IDEA. If that record does not identify
the student as having an intellectual
disability, as described in paragraph (1)
of the definition of a student with an
intellectual disability in § 668.231, the
institution must also obtain
documentation establishing that the
student has an intellectual disability,
such as—
(1) A documented comprehensive and
individualized psycho-educational
evaluation and diagnosis of an
intellectual disability by a psychologist
or other qualified professional; or
(2) A record of the disability from a
local or State educational agency, or
government agency, such as the Social
Security Administration or a vocational
rehabilitation agency, that identifies the
intellectual disability.
(Approved by the Office of Management and
Budget under control number 1845–NEW4)
(Authority: 20 U.S.C. 1091)

PART 675—FEDERAL WORK-STUDY
PROGRAMS
26. The authority citation for part 675
is revised to read as follows:
Authority: 3 20 U.S.C. 1070g, 1094; 42
U.S.C. 2751–2756b; unless otherwise noted.

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§ 675.2

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[Amended]

27. In § 675.2(b), paragraph (1) of the
definition of community services is
amended by adding the words
‘‘emergency preparedness and
response,’’ after the words ‘‘public
safety,’’.
28. Section 675.16 is revised to read
as follow:
§ 675.16

Payments to students.

(a) General. (1) An institution must
follow the disbursement procedures in
this section for paying a student his or
her wages under the FWS Program
instead of the disbursement procedures
in 34 CFR 668.164(a), (b), and (d)
through (g), and 34 CFR 668.165. The
institution must follow 34 CFR
668.164(c) on making direct FWS
payments to students and 34 CFR
668.164(h) on handling the return of
FWS funds that are not received or
negotiated by a student.
(2) An institution must pay a student
FWS compensation at least once a
month.
(3) Before an institution makes an
initial disbursement of FWS
compensation to a student for an award
period, the institution must notify the
student of the amount of funds the
student is authorized to earn, and how
and when the FWS compensation will
be paid.
(4) Regardless of who employs the
student, the institution is responsible
for ensuring that the student is paid for
work performed.
(5) A student’s FWS compensation is
earned when the student performs the
work.
(6) An institution may pay a student
after the student’s last day of attendance
for FWS compensation earned while he
or she was in attendance at the
institution.
(7) A correspondence student must
submit his or her first completed lesson
before receiving a payment.
(8) The institution may not obtain a
student’s power of attorney to authorize
any disbursement of funds without prior
approval from the Secretary.
(9) An institution makes a
disbursement of FWS program funds on
the date that the institution credits a
student’s account at the institution or
pays a student directly with—
(i) Funds received from the Secretary;
or
(ii) Institutional funds used in
advance of receiving FWS program
funds.
(b) Crediting a student’s account at
the institution. (1) If the institution
obtains the student’s authorization
described in paragraph (d) of this
section, the institution may use the FWS

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funds to credit a student’s account at the
institution to satisfy—
(i) Current year charges for—
(A) Tuition and fees;
(B) Board, if the student contracts
with the institution for board;
(C) Room, if the student contracts
with the institution for room; and
(D) Other educationally related
charges incurred by the student at the
institution; and
(ii) Prior award year charges with the
restriction provided in paragraph (b)(2)
of this section for a total of not more
than $200 for—
(A) Tuition and fees, room, or board;
and
(B) Other institutionally related
charges incurred by the student at the
institution.
(2) If the institution is using FWS
funds in combination with other title IV,
HEA program funds to credit a student’s
account at the institution to satisfy prior
award year charges, a single $200 total
prior award year charge limit applies to
the use of all the title IV, HEA program
funds for that purpose.
(c) Credit balances. Whenever an
institution disburses FWS funds by
crediting a student’s account and the
result is a credit balance, the institution
must pay the credit balance directly to
the student as soon as possible, but no
later than 14 days after the credit
balance occurs on the account.
(d) Student authorizations. (1) Except
for the noncash contributions allowed
under paragraphs (e)(2) and (3) of this
section, if an institution obtains written
authorization from a student, the
institution may—
(i) Use the student’s FWS
compensation to pay for charges
described in paragraph (b) of this
section that are included in that
authorization; and
(ii) Except if prohibited by the
Secretary under the reimbursement or
cash monitoring payment method, hold
on behalf of the student any FWS
compensation that would otherwise be
paid directly to the student under
paragraph (c) of this section.
(2) In obtaining the student’s
authorization to perform an activity
described in paragraph (d)(1) of this
section, an institution—
(i) May not require or coerce the
student to provide that authorization;
(ii) Must allow the student to cancel
or modify that authorization at any time;
and
(iii) Must clearly explain how it will
carry out that activity.
(3) A student may authorize an
institution to carry out the activities
described in paragraph (d)(1) of this
section for the period during which the
student is enrolled at the institution.

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(4)(i) If a student modifies an
authorization, the modification takes
effect on the date the institution
receives the modification notice.
(ii) If a student cancels an
authorization to use his or her FWS
compensation to pay for authorized
charges under paragraph (b) of this
section, the institution may use those
funds to pay only those authorized
charges incurred by the student before
the institution received the notice.
(iii) If a student cancels an
authorization to hold his or her FWS
compensation under paragraph (d)(1)(ii)
of this section, the institution must pay
those funds directly to the student as
soon as possible, but no later than 14
days after the institution receives that
notice.
(5) If an institution holds excess FWS
compensation under paragraph (d)(1)(ii)
of this section, the institution must—
(i) Identify the amount of funds the
institution holds for each student in a
subsidiary ledger account designed for
that purpose;
(ii) Maintain, at all times, cash in its
bank account in an amount at least
equal to the amount of FWS
compensation the institution holds for
the student; and
(iii) Notwithstanding any
authorization obtained by the institution
under this paragraph, pay any
remaining balances by the end of the
institution’s final FWS payroll period
for an award year.
(e)(1) Timing of institutional share
and noncash contributions. Except for
the noncash contributions allowed
under paragraph (e)(2) or (3) of this
section, an institution must pay the
student its share of his or her FWS
compensation at the same time it pays
the Federal share.
(2) If an institution pays a student its
FWS share for an award period in the
form of tuition, fees, services, or
equipment, it must pay that share before
the student’s final payroll period.
(3) If an institution pays its FWS share
in the form of prepaid tuition, fees,
services, or equipment for a forthcoming
academic period, it must give the
student a statement before the close of
his or her final payroll period listing the
amount of tuition, fees, services, or
equipment earned.
(Authority: 20 U.S.C. 1091, 1094; 42 U.S.C.
2753)

29. Section 675.18 is amended by:
A. Adding paragraph (g)(4).
B. Adding paragraph (i).
C. Revise the authority citation at the
end of the section.
The additions and revisions read as
follows:

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§ 675.18

Use of funds.

*

*
*
*
*
(g) * * *
(4)(i) In meeting the seven percent
community service expenditure
requirement in paragraph (g)(1) of this
section, students may be employed to
perform civic education and
participation activities in projects that—
(A) Teach civics in schools;
(B) Raise awareness of government
functions or resources; or
(C) Increase civic participation.
(ii) To the extent practicable, in
providing civic education and
participation activities under paragraph
(g)(4)(i) of this section, an institution
must—
(A) Give priority to the employment
of students in projects that educate or
train the public about evacuation,
emergency response, and injury
prevention strategies relating to natural
disasters, acts of terrorism, and other
emergency situations; and
(B) Ensure that the students receive
appropriate training to carry out the
educational services required.
*
*
*
*
*
(i) Flexibility in the event of a major
disaster. (1) An institution located in
any area affected by a major disaster
may make FWS payments to disasteraffected students for the period of time
(not to exceed the award period) in
which the students were prevented from
fulfilling their FWS obligations. The
FWS payments—
(i) May be made to disaster-affected
students for an amount equal to or less
than the amount of FWS wages the
students would have been paid had the
students been able to complete the work
obligation necessary to receive the
funds;
(ii) May not be made to any student
who was not eligible for FWS or was not
completing the work obligation
necessary to receive the funds, or had
already separated from their
employment prior to the occurrence of
the major disaster; and
(iii) Must meet the matching
requirements of § 675.26, unless those
requirements are waived by the
Secretary.
(2) The following definitions apply to
this section:
(i) Disaster-affected student means a
student enrolled at an institution who—
(A) Received an FWS award for the
award period during which a major
disaster occurred;
(B) Earned FWS wages from an
institution for that award period;
(C) Was prevented from fulfilling his
or her FWS obligation for all or part of
the FWS award period because of the
major disaster; and

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(D) Was unable to be reassigned to
another FWS job.
(ii) Major disaster is defined in
section 102(2) of the Robert T. Stafford
Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5122(2)).
(Authority: 20 U.S.C. 1095, 1096; 42 U.S.C.
2753, 2755, 2756(b))

30. Section 675.26 is amended by:
A. In paragraph (d)(2)(iii), removing
the word ‘‘or’’ that appears after the
punctuation ‘‘;’’.
B. In paragraph (d)(2)(iv), removing
the punctuation ‘‘.’’ and adding, in its
place, the word ‘‘; or’’.
C. Adding paragraph (d)(2)(v).
The addition reads as follows:
§ 675.26

§ 675.44

*
*
*
*
(d) * * *
(2) * * *
(v) The student is employed in
community service activities and is
performing civic education and
participation activities in a project as
defined in § 675.18(g)(4).
*
*
*
*
*
31. Section 675.41 is amended by:
A. Revising paragraph (a).
B. Revising the paragraph heading
and introductory text in paragraph (b).
C. In paragraph (b)(2), removing the
word ‘‘, participation,’’.
D. In paragraph (b)(5), removing the
words ‘‘work-learning’’ and adding, in
their place, the words ‘‘work-learningservice’’.
E. In paragraph (b)(6), removing the
words ‘‘work-learning’’ and adding, in
their place, the words ‘‘work-learningservice’’.
The revisions read as follows:
Special definitions.

srobinson on DSKHWCL6B1PROD with PROPOSALS2

*
*
*
*
(a) Work-college: An eligible
institution that—
(1) Is a public or private nonprofit,
four-year, degree-granting institution
with a commitment to community
service;
(2) Has operated a comprehensive
work-learning-service program for at
least two years;
(3) Requires resident students,
including at least one-half of all
students who are enrolled on a full-time
basis, to participate in a comprehensive
work-learning-service program for at
least five hours each week, or at least 80
hours during each period of enrollment,
except summer school, unless the
student is engaged in an institutionally
organized or approved study abroad or
externship program; and
(4) Provides students participating in
the comprehensive work-learning-

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[Amended]

[Amended]

33. Section 675.44(b) is amended by
removing the words ‘‘work-learning’’
and adding, in their place, the words
‘‘work-learning-service’’.

FWS Federal share limitations.

*

§ 675.43

32. Section 675.43 is amended by
removing the words ‘‘work-learning’’
and adding, in their place, the words
‘‘work-learning-service’’.

*

§ 675.41

service program with the opportunity to
contribute to their education and to the
welfare of the community as a whole.
(b) Comprehensive student worklearning-service program: A student
work-learning-service program that—
*
*
*
*
*

§ 675.45

[Amended]

PART 686—TEACHER EDUCATION
ASSISTANCE FOR COLLEGE AND
HIGHER EDUCATION (TEACH) GRANT
PROGRAM
35. The authority citation for part 686
continues to read as follows:
Authority: 20 U.S.C. 1070g, et seq., unless
otherwise noted.
[Amended]

36. Section 686.12(c)(1) is amended
by adding the words ‘‘, a suspension
approved under § 686.41(a)(2), or a
military discharge granted under
§ 686.42(c)(2)’’ after the words ‘‘teaching
service’’.
37. Section 686.41 is amended by:
A. In the introductory text of
paragraph (a)(2), removing the words
‘‘and (ii)’’ and adding, in their place, the
words ‘‘, (ii), and (iii)’’.
B. Revising paragraphs (a)(2)(ii), (b),
and (c).
C. Adding an OMB control number at
the end of the section.
The revisions and addition read as
follows:
§ 686.41

Periods of suspension.

(a) * * *
(2) * * *
(ii) Does not exceed a total of three
years under paragraph (a)(1)(iii) of this
section.
(b) A grant recipient, or his or her
representative in the case of a grant

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recipient who qualifies under paragraph
(a)(1)(iii) of this section, must apply for
a suspension in writing on a form
approved by the Secretary prior to being
subject to any of the conditions under
§ 686.43(a)(1) through (a)(5) that would
cause the TEACH Grant to convert to a
Federal Direct Unsubsidized Loan.
(c) A grant recipient, or his or her
representative in the case of a grant
recipient who qualifies under paragraph
(a)(1)(iii) of this section, must provide
the Secretary with documentation
supporting the suspension request as
well as current contact information
including home address and telephone
number.
(Approved by the Office of Management and
Budget under control number 1845–0083)

*

34. Section 675.45 is amended by:
A. In paragraph (a)(1), in the
introductory text of paragraph (a)(4),
and in paragraph (a)(4)(i) removing the
words ‘‘work-learning’’ and adding, in
their place, the words ‘‘work-learningservice’’.
B. In paragraph (a)(5), removing the
words ‘‘work service learning’’ and
adding, in their place, the words ‘‘worklearning-service’’.

§ 686.12

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*
*
*
*
38. Section 686.42 is amended by:
A. Adding paragraph (c).
B. Adding an OMB control number at
the end of the section.
The additions read as follows:
§ 686.42

Discharge of agreement to serve.

*

*
*
*
*
(c) Military discharge. (1) A grant
recipient who has completed or who has
otherwise ceased enrollment in a
TEACH Grant-eligible program for
which he or she received TEACH Grant
funds and has exceeded the period of
time allowed under § 686.41(a)(2)(ii),
may qualify for a proportional discharge
of his or her service obligation due to an
extended call or order to active duty
status. To apply for a military discharge,
a grant recipient or his or her
representative must submit a written
request to the Secretary.
(2) A grant recipient described in
paragraph (c)(1) of this section may
receive a—
(i) One-year discharge of his or her
service obligation if a call or order to
active duty status is for more than three
years;
(ii) Two-year discharge of his or her
service obligation if a call or order to
active duty status is for more than four
years;
(iii) Three-year discharge of his or her
service obligation if a call or order to
active duty status is for more than five
years; or
(iv) Full discharge of his or her
service obligation if a call or order to
active duty status is for more than six
years.
(3) A grant recipient or his or her
representative must provide the
Secretary with—
(i) A written statement from the grant
recipient’s commanding or personnel
officer certifying—

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(A) That the grant recipient is on
active duty in the Armed Forces of the
United States;
(B) The date on which the grant
recipient’s service began; and
(C) The date on which the grant
recipient’s service is expected to end; or
(ii)(A) A copy of the grant recipient’s
official military orders; and
(B) A copy of the grant recipient’s
military identification.
(4) For the purpose of this section, the
Armed Forces means the Army, Navy,
Air Force, Marine Corps, and the Coast
Guard.
(5) Based on a request for a military
discharge from the grant recipient or his
or her representative, the Secretary will
notify the grant recipient or his or her
representative of the outcome of the
discharge request. For the portion on the
service obligation that remains, the
grant recipient remains responsible for
fulfilling his or her service obligation in
accordance with § 686.12.
(Approved by the Office of Management and
Budget under control number 1845–0083)

*

*

*

*

*

PART 690—FEDERAL PELL GRANT
PROGRAM
39. The authority citation for part 690
continues to read as follows:
Authority: 20 U.S.C. 1070a, 1070g, unless
otherwise noted.

40. Section 690.63 is amended by:
A. Adding paragraph (h).
B. Adding an OMB control number
and authority citation at the end of the
section.
The additions read as follows:
§ 690.63 Calculation of a Federal Pell
Grant for a payment period.

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*

*
*
*
*
(h) Payment from two Scheduled
Awards. (1) In a payment period, a
student may receive a payment from the
student’s first Scheduled Award in the
award year and the student’s second
Scheduled Award in the award year if—
(i) The student is an eligible student
who meets the provisions of § 690.67;
and
(ii) The student’s payment for the
payment period is greater than the
remaining balance of the first Scheduled
Award.
(2) The student’s payment for the
payment period—
(i) Is calculated based on the total
credit or clock hours and weeks of
instructional time in the payment
period; and
(ii) Is the remaining amount of the
first Scheduled Award plus an amount
from the second Scheduled Award for
the balance of the payment for the
payment period.

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(Approved by the Office of Management and
Budget under control number 1845–NEW5)

§ 690.67 Receiving up to two Scheduled
Awards during a single award year.

(Authority: 20 U.S.C. 1070a)

(a) Eligibility. An institution shall
award up to the full amount of a second
Scheduled Award to a student in an
award year if the student—
(1) Has successfully completed the
credit or clock hours of the first
academic year in the award year;
(2) Is enrolled in an eligible program
leading to a bachelor’s or associate
degree or other recognized educational
credential except as provided in 34 CFR
part 668, subpart O for students with
intellectual disabilities; and
(3) Is enrolled at least as a half-time
student.
(b) Transfer student. If a student
transfers to an institution during an
award year, the institution must—
(1) Assume that a student has
completed the credit or clock hours in
the first academic year of the award year
if the first Scheduled Award was
disbursed at other institutions during
the award year; or
(2) If less than the first Scheduled
Award has been disbursed at a prior
institution that the student attended
during the award year, the institution
must determine the credit or clock
hours the student is considered to have
previously earned in the award year
by—
(i) Multiplying the amount of the
student’s Scheduled Award disbursed at
a prior institution during the award year
by the number of credit or clock hours
in the institution’s academic year and
dividing the product of the
multiplication by the amount of the
Scheduled Award at the prior
institution; and
(ii) If the student previously attended
more than one institution in the award
year, adding the results of paragraph
(b)(2)(i) of this section for each prior
institution.
(c) Special circumstances. (1) The
financial aid administrator at a student’s
institution may waive the requirement
in paragraph (a)(1) of this section, if the
financial aid administrator—
(i) Determines that, in the period
during which the first Scheduled Award
was disbursed, the student was unable
to complete the clock or credit hours in
the student’s first academic year in the
award year due to circumstances
beyond the student’s control; and
(ii) The determination is made and
documented on an individual basis.
(2) For purposes of paragraph (c)(1) of
this section, circumstances beyond a
student’s control—
(i) May include, but are not limited to,
the student withdrawing from classes
due to illness or being unable to register
for classes necessary to complete his or

41. Section 690.64 is revised to read
as follows:
§ 690.64 Calculation of a Federal Pell
Grant for a payment period which occurs in
two award years.

If a student enrolls in a payment
period that is scheduled to occur in two
award years—
(a) The entire payment period must be
considered to occur within one award
year;
(b)(1) Except as provided in paragraph
(b)(2) of this section—
(i) For a full-time or a three-quartertime student—
(A) An institution must assign the
payment period to the award year in
which the student receives the greater
payment for the payment period based
on the information available at the time
that the student’s Federal Pell Grant is
initially calculated; and
(B) If, subsequent to the initial
calculation of the student’s payment for
the payment period, the institution
receives information that the student
would receive a greater payment for the
payment period by reassigning the
payment to the other award year, the
institution must reassign the payment to
the award year providing the greater
payment; and
(ii) For a half-time or less-than-halftime student, an institution may assign
the payment period to either award year
if the student is enrolled for the
payment period as a half-time or lessthan-half-time student; and
(2) Upon request of a student, an
institution must assign the payment
period to the award year in which the
student can be expected to receive a
greater amount of Federal Pell Grants
over the two award years in which the
payment period is scheduled to occur;
(c) Except as provided in paragraph
(b)(1)(i) of this section, the institution
shall place a payment period with more
than six months scheduled to occur
within one award year in that award
year;
(d) If an institution places the
payment period in the first award year,
it shall pay a student with funds from
the first award year; and
(e) If an institution places the
payment period in the second award
year, it shall pay a student with funds
from the second award year.
(Approved by the Office of Management and
Budget under control number 1845–NEW5)
(Authority: 20 U.S.C. 1070a)

42. Section 690.67 is revised to read
as follows:

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Federal Register / Vol. 74, No. 161 / Friday, August 21, 2009 / Proposed Rules
her eligible program because those
classes were not offered during that
period; and
(ii) Do not include, for example,
withdrawing to avoid a particular grade
or failing to register for a necessary class
that was offered during the period to
avoid a particular instructor.
(d) Nonapplicable credit or clock
hours. To determine the student’s
eligibility for a second Scheduled
Award in an award year, an institution
may not use credit or clock hours that
the student received based on Advanced
Placement (AP) programs, International
Baccalaureate (IB) programs, testing out,
life experience, or similar competency
measures.
(Approved by the Office of Management and
Budget under control number 1845–NEW5)
(Authority: 20 U.S.C. 1070a)

43. Section 690.75 is amended by:
A. Adding paragraph (e).
B. Revising the OMB control number
at the end of the section.
The additions read as follows:
§ 690.75 Determination of eligibility for
payment.

*

*
*
*
*
(e) A student is considered to have an
expected family contribution of zero if—
(1) The student’s parent or guardian
was a member of the Armed Forces of
the United States and the parent or
guardian died as a result of performing
military service in Iraq or Afghanistan
after September 11, 2001; and
(2) At the time of the parent or
guardian’s death the student—
(i) Was under the age of 24; or
(ii) Was enrolled at an institution of
higher education.
(Approved by the Office of Management and
Budget under control number 1845–NEW6)

*

*

*

*

*

44. The authority citation for part 692
is revised to read as follows:

srobinson on DSKHWCL6B1PROD with PROPOSALS2

§ 692.10

[Amended]

45. Section 692.10 is amended by:
A. In paragraph (a)(1), adding the
words ‘‘for the programs under this
part’’ after the number ‘‘1979’’.
B. In paragraph (a)(2), removing the
word ‘‘If’’ and adding, in its place, the
words ‘‘For the programs under this
part, if’’.
C. In paragraph (a)(2), removing the
word ‘‘LEAP’’ each time it appears.

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§ 692.21 What requirements must be met
by a State program?

*

*
*
*
*
(k) Notifies eligible students that the
grants are—
(1) Leveraging Educational Assistance
Partnership Grants; and
(2) Funded by the Federal
Government, the State, and, where
applicable, other contributing partners;
and
*
*
*
*
*

How Does a State Apply To Participate in
GAP?
692.100 What requirements must a State
meet to receive an allotment under this
program?
692.101 What requirements must be met by
a State partnership?
What Is the Amount of Assistance and How
May It Be Used?
692.110 How does the Secretary allot funds
to the States?
692.111 For what purposes may a State use
its payment under the GAP Program?
692.112 May a State use the funds it
receives from the GAP Program to pay
administrative costs?
692.113 What are the matching
requirements for the GAP Program?
How Does the Partnership Select Students
Under the GAP Program?
692.120 What are the requirements for
student eligibility?
How Does the Secretary Approve a Waiver
of Program Requirements?
692.130 How does a participating
institution request a waiver of program
requirements?
Appendix A to Subpart C of Part 692—
Grants for Access and Persistence Program
(GAP) State Grant Allotment Case Study

Subpart C—Grants for Access and
Persistence Program

(Approved by the Office of Management and
Budget under control number 1845–NEW7)

General

*

§ 692.90 What is the Grants for Access
and Persistence Program?

*
*
*
*
47. Section 692.70 is revised to read
as follows:
§ 692.70 How does the Secretary allot
funds to the States?

For fiscal year 2010–2011, the
Secretary allots to each eligible State
that applies for SLEAP funds an amount
in accordance with the provisions in
§ 692.10 prior to calculating allotments
for States applying for GAP funds under
subpart C of this part.
(Authority: 20 U.S.C. 1070c–3a)

PART 692—LEVERAGING
EDUCATIONAL ASSISTANCE
PARTNERSHIP PROGRAM

Authority: 20 U.S.C. 1070c–1070c–4,
unless otherwise noted.

D. In paragraph (b), removing the
word ‘‘-appropriated’’ after the word
State, both times it appears.
E. In the authority citation at the end
of the section, adding ‘‘, 1070c–2’’ after
the number ‘‘1070c’’
46. Section 692.21 is amended by:
A. In paragraph (c), removing the
figure ‘‘$5,000’’ and adding, in its place,
the words ‘‘the lesser of $12,500 or the
student’s cost of attendance under
section 472 of the HEA’’.
B. In paragraph (j), removing the word
‘‘and’’ that appears after the punctuation
‘‘;’’.
C. Redesignating paragraph (k) as
paragraph (l).
D. Adding a new paragraph (k).
E. Adding an OMB control number at
the end of the section.
The additions read as follows:

42447

48. Subpart C, consisting of §§ 692.90
through 692.130, is added to part 692 to
read as follows:
Subpart C—Grants for Access and
Persistence Program
General
Sec.
692.90 What is the Grants for Access and
Persistence Program?
692.91 What other regulations apply to the
GAP Program?
692.92 What definitions apply to the GAP
Program?
692.93 Who is eligible to participate in the
GAP Program?
692.94 What requirements must a State
satisfy, as the administrator of a
partnership, to receive GAP Program
funds?

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The Grants for Access and Persistence
(GAP) Program assists States in
establishing partnerships to provide
eligible students with LEAP Grants
under GAP to attend institutions of
higher education and to encourage
increased participation in early
information and intervention,
mentoring, or outreach programs.
(Authority: 20 U.S.C. 1070c–3a)
§ 692.91 What other regulations apply to
the GAP Program?

The regulations listed in § 692.3 also
apply to the GAP Program.
(Authority: 20 U.S.C. 1070c–3a)
§ 692.92 What definitions apply to the GAP
Program?

The definitions listed in § 692.4 also
apply to the GAP Program.
(Authority: 20 U.S.C. 1070c–3a)
§ 692.93 Who is eligible to participate in
the GAP Program?

(a) States. States that meet the
requirements in §§ 692.94 and 692.100
are eligible to receive payments under
the GAP Program.
(b) Degree-granting institutions of
higher education. Degree-granting

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institutions of higher education that
meet the requirements in § 692.101 are
eligible to participate in a partnership
under the GAP Program.
(c) Early information and
intervention, mentoring, or outreach
programs. Early information and
intervention, mentoring, or outreach
programs that meet the requirements in
§ 692.101 are eligible to participate in a
partnership under the GAP Program.
(d) Philanthropic organizations or
private corporations. Philanthropic
organizations or private corporations
that meet the requirements in § 692.101
are eligible to participate in a
partnership under the GAP Program.
(e) Students. Students who meet the
requirements of § 692.120 are eligible to
receive assistance or services from a
partnership under the GAP Program.
(Authority: 20 U.S.C. 1070c–3a)

srobinson on DSKHWCL6B1PROD with PROPOSALS2

§ 692.94 What requirements must a State
satisfy, as the administrator of a
partnership, to receive GAP Program
funds?

To receive GAP Program funds for any
fiscal year—
(a) A State must—
(1) Participate in the LEAP Program;
(2) Establish a State partnership
with—
(i) At least—
(A) One public degree-granting
institution of higher education that is
located in the State; and
(B) One private degree-granting
institution of higher education, if at
least one exists in the State that may be
eligible to participate in the State’s
LEAP Program under subpart A of this
part;
(ii) New or existing early information
and intervention, mentoring, or
outreach programs located in the State;
and
(iii) At least one philanthropic
organization located in, or that provides
funding in, the State, or private
corporation located in, or that does
business in, the State;
(3) Meet the requirements in
§ 692.100; and
(4) Have a program under this subpart
that satisfies the requirements in
§ 692.21(a), (e), (f), (g), and (j).
(b) A State may provide an early
information and intervention,
mentoring, or outreach program under
paragraph (a)(2)(ii) of this section.
(Authority: 20 U.S.C. 1070c–3a)

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How Does a State Apply To Participate
in GAP?
§ 692.100 What requirements must a State
meet to receive an allotment under this
program?

For a State to receive an allotment
under the GAP Program, the State
agency that administers the State’s
LEAP Program under subpart A of this
part must—
(a) Submit an application on behalf of
a partnership in accordance with the
provisions in § 692.20 at such time, in
such manner, and containing such
information as the Secretary may
require including—
(1) A description of—
(i) The State’s plan for using the
Federal funds allotted under this
subpart and the non-Federal matching
funds; and
(ii) The methods by which matching
funds will be paid;
(2) An assurance that the State will
provide matching funds in accordance
with § 692.113;
(3) An assurance that the State will
use Federal GAP funds to supplement,
and not supplant, Federal and State
funds available for carrying out the
activities under Title IV of the HEA;
(4) An assurance that early
information and intervention,
mentoring, or outreach programs exist
within the State or that there is a plan
to make these programs widely
available;
(5) A description of the organizational
structure that the State has in place to
administer the program, including a
description of how the State will
compile information on degree
completion of students receiving grants
under this subpart;
(6) A description of the steps the State
will take to ensure, to the extent
practicable, that students who receive a
LEAP Grant under GAP persist to degree
completion;
(7) An assurance that the State has a
method in place, such as acceptance of
the automatic zero expected family
contribution under section 479(c) of the
HEA, to identify eligible students and
award LEAP Grants under GAP to such
students;
(8) An assurance that the State will
provide notification to eligible students
that grants under this subpart are LEAP
Grants and are funded by the Federal
Government and the State, and, where
applicable, other contributing partners.
(b) Serve as the primary
administrative unit for the partnership;
(c) Provide or coordinate non-Federal
share funds, and coordinate activities
among partners;
(d) Encourage each institution of
higher education in the State that

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participates in the State’s LEAP Program
under subpart A of this part to
participate in the partnership;
(e) Make determinations and early
notifications of assistance;
(f) Ensure that the non-Federal funds
used as matching funds represent
dollars that are in excess of the total
dollars that a State spent for need-based
grants, scholarships, and work-study
assistance for fiscal year 1999, including
the State funds reported for the
programs under this part;
(g) Provide an assurance that, for the
fiscal year prior to the fiscal year for
which the State is requesting Federal
funds, the amount the State expended
from non-Federal sources per student,
or the aggregate amount the State
expended, for all the authorized
activities in § 692.111 will be no less
than the amount the State expended
from non-Federal sources per student,
or in the aggregate, for those activities
for the second fiscal year prior to the
fiscal year for which the State is
requesting Federal funds; and
(h) Provide for reports to the Secretary
that are necessary to carry out the
Secretary’s functions under the GAP
Program.
(Approved by the Office of Management and
Budget under control number 1845–NEW7)
(Authority: 20 U.S.C. 1070c–3a)
§ 692.101 What requirements must be met
by a State partnership?

(a) State. A State that is receiving an
allotment under this subpart must meet
the requirements under §§ 692.94 and
692.100.
(b) Degree-granting institution of
higher education. A degree-granting
institution of higher education that is in
a partnership under this subpart—
(1) Must participate in the State’s
LEAP Program under subpart A of this
part;
(2) Must recruit and admit
participating eligible students and
provide additional institutional grant
aid to participating students as agreed to
with the State agency;
(3) Must provide support services to
students who receive LEAP Grants
under GAP and are enrolled at the
institution;
(4) Must assist the State in the
identification of eligible students and
the dissemination of early notifications
of assistance as agreed to with the State
agency; and
(5) May provide funding or services
for early information and intervention,
mentoring, or outreach programs.
(c) Early information and
intervention, mentoring, or outreach
program. An early information and

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intervention, mentoring, or outreach
program that is in a partnership under
this subpart shall provide direct
services, support, and information to
participating students.
(d) Philanthropic organization or
private corporation. A philanthropic
organization or private corporation in a
partnership under this subpart shall
provide non-Federal funds for LEAP
Grants under GAP for participating
students or provide funds or support for
early information and intervention,
mentoring, or outreach programs.
(Approved by the Office of Management and
Budget under control number 1845–NEW7)
(Authority: 20 U.S.C. 1070c–3a)

What Is the Amount of Assistance and
How May It Be Used?

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§ 692.110 How does the Secretary allot
funds to the States?

(a)(1) The Secretary allots to each
State participating in the GAP Program
an amount of the funds available for the
GAP Program based on the ratio used to
allot the State’s Federal LEAP funds
under § 692.10(a).
(2) If a State meets the requirements
of § 692.113(b) for a fiscal year, the
number of students under § 692.10(a) for
the State is increased to 125 percent in
determining the ratio in paragraph (a) of
this section for that fiscal year.
(3) Notwithstanding paragraph (a)(1)
and (2) of this section—
(i) If the Federal GAP funds available
from the appropriation for a fiscal year
are sufficient to allot to each State that
participated in the prior year the same
amount of Federal GAP funds allotted in
the prior fiscal year, but are not
sufficient both to allot the same amount
of Federal GAP funds allotted in the
prior fiscal year to these States and also
to allot additional funds to additional
States in accordance with the ratio used
to allot the States’ Federal LEAP funds
under § 692.10(a), the Secretary allots—
(A) To each State that participated in
the prior year, the amount the State
received in the prior year; and
(B) To each State that did not
participate in the prior year, an amount
of Federal GAP funds available to States
based on the ratio used to allot the
State’s Federal LEAP funds under
§ 692.10(a); and
(ii) If the Federal GAP funds available
from the appropriation for a fiscal year
are not sufficient to allot to each State
that participated in the prior year at
least the amount of Federal GAP funds
allotted in the prior fiscal year, the
Secretary allots to each State an amount
which bears the same ratio to the
amount of Federal GAP funds available
as the amount of Federal GAP funds

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allotted to each State in the prior fiscal
year bears to the amount of Federal GAP
funds allotted to all States in the prior
fiscal year.
(b) The Secretary allots funds
available for reallotment in a fiscal year
in accordance with the provisions of
paragraph (a) of this section used to
calculate initial allotments for the fiscal
year.
(c) Any funds made available for the
program under this subpart but not
expended may be allotted or reallotted
for the program under subpart A of this
part.
(Authority: 20 U.S.C. 1070c–3a)
§ 692.111 For what purposes may a State
use its payment under the GAP Program?

(a) Establishment of a partnership.
Each State receiving an allotment under
this subpart shall use the funds to
establish a partnership to award grants
to eligible students in order to increase
the amount of financial assistance
students receive under this subpart for
undergraduate education expenses.
(b) Amount of LEAP Grants under
GAP. (1) The amount of a LEAP Grant
under GAP by a State to an eligible
student shall be not less than—
(i) The average undergraduate in-State
tuition and mandatory fees for full-time
students at the public institutions of
higher education in the State where the
student resides that are the same type of
institution that the student attends
(four-year degree-granting, two-year
degree-granting, or non-degreegranting); minus
(ii) Other Federal and State aid the
student receives.
(2) The Secretary determines the
average undergraduate in-State tuition
and mandatory fees for full-time
students at public institutions in a State
weighted by enrollment using the most
recent data reported by institutions in
the State to the Integrated Postsecondary
Education Data System (IPEDS)
administered by the National Center for
Educational Statistics.
(c) Institutional participation. (1) A
State receiving an allotment under this
subpart may restrict the use of LEAP
Grants under GAP only to students
attending institutions of higher
education that are participating in the
partnership.
(2) If a State provides LEAP Grants
under subpart A of this part to students
attending institutions of higher
education located in another State,
LEAP Grants under GAP may be used at
institutions of higher education located
in another State.
(d) Early notification to potentially
eligible students. (1) Each State
receiving an allotment under this

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subpart shall annually notify potentially
eligible students in grades 7 through 12
in the State, and their families, of their
potential eligibility for student financial
assistance, including a LEAP Grant
under GAP, to attend a LEAPparticipating institution of higher
education.
(2) The notice shall include—
(i) Information about early
information and intervention,
mentoring, or outreach programs
available to the student;
(ii) Information that a student’s
eligibility for a LEAP Grant under GAP
is enhanced through participation in an
early information and intervention,
mentoring, or outreach program;
(iii) An explanation that student and
family eligibility for, and participation
in, other Federal means-tested programs
may indicate eligibility for a LEAP
Grant under GAP and other student aid
programs;
(iv) A nonbinding estimate of the total
amount of financial aid that an eligible
student with a similar income level may
expect to receive, including an estimate
of the amount of a LEAP Grant under
GAP and an estimate of the amount of
grants, loans, and all other available
types of aid from the major Federal and
State financial aid programs;
(v) An explanation that in order to be
eligible for a LEAP Grant under GAP, at
a minimum, a student shall—
(A) Meet the eligibility requirements
under § 692.120; and
(B) Enroll at a LEAP-participating
institution of higher education in the
State of the student’s residence or an
out-of-State institution if the State elects
to make LEAP Grants under GAP for
attendance at out-of-State institutions in
accordance with paragraph (c)(2) of this
section;
(vi) Any additional requirements that
the State may require for receipt of a
LEAP Grant under GAP in accordance
with § 692.120(a)(4); and
(vii) An explanation that a student is
required to file a Free Application for
Federal Student Aid to determine his or
her eligibility for Federal and State
financial assistance and may include a
provision that eligibility for an award is
subject to change based on—
(A) A determination of the student’s
financial eligibility at the time of the
student’s enrollment at a LEAPparticipating institution of higher
education or an out-of-State institution
in accordance with paragraph (c)(2) of
this section;
(B) Annual Federal and State
spending for higher education; and
(C) Other aid received by the student
at the time of the student’s enrollment
at the institution of higher education.

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(e) Award notification. (1) Once a
student, including a student who has
received early notification under
paragraph (d) of this section, applies for
admission to an institution that is a
partner in the partnership of the State of
the student’s residence, files a Free
Application for Federal Student Aid and
any related State form, and is
determined eligible by the State, the
State shall—
(i) Issue the student a preliminary
award certificate for a LEAP Grant
under GAP with estimated award
amounts; and
(ii) Inform the student that the
payment of the grant is subject to
certification of enrollment and
eligibility by the institution.
(2) If a student enrolls in an
institution that is not a partner in the
partnership of the student’s State of
residence but the State has not restricted
eligibility to students enrolling in
partner institutions, including, if
applicable, out-of-State institutions, the
State shall, to the extent practicable,
follow the procedures of paragraph
(e)(1) of this section.
(Approved by the Office of Management and
Budget under control number 1845–NEW7)
(Authority: 20 U.S.C. 1070c–3a)
§ 692.112 May a State use the funds it
receives from the GAP Program to pay
administrative costs?

(a) A State that receives an allotment
under this subpart may reserve not more
than two percent of the funds made
available annually for State
administrative functions required for
administering the partnership and other
program activities.
(b) A State must use not less than
ninety-eight (98) percent of an allotment
under this subpart to make LEAP Grants
under GAP.
(Authority: 20 U.S.C. 1070c–3a)

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§ 692.113 What are the matching
requirements for the GAP Program?

(a) The matching funds of a
partnership—
(1) Shall be funds used for making
LEAP Grants to eligible students under
this subpart;
(2) May be—
(i) Cash; or
(ii) A noncash, in-kind contribution
that—
(A) Is fairly evaluated;
(B) Has monetary value, such as a
tuition waiver or provision of room and
board, or transportation;
(C) Helps a student meet the cost of
attendance at an institution of higher
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(D) Is considered to be estimated
financial assistance under 34 CFR part
673.5(c); and
(3) May be funds from the State,
institutions of higher education, or
philanthropic organizations or private
corporations that are used to make
LEAP Grants under GAP.
(b) The non-Federal match of the
Federal allotment shall be—
(1) Forty-three percent of the
expenditures under this subpart if a
State applies for a GAP allotment in
partnership with—
(i) Any number of degree-granting
institutions of higher education in the
State whose combined full-time
enrollment represents less than a
majority of all students attending
institutions of higher education in the
State as determined by the Secretary
using the most recently available data
from IPEDS; and
(ii) One or both of the following—
(A) Philanthropic organizations that
are located in, or that provide funding
in, the State; or
(B) Private corporations that are
located in, or that do business in, the
State; and
(2) Thirty-three and thirty-four onehundredths percent of the expenditures
under this subpart if a State applies for
a GAP allotment in partnership with—
(i) Any number of degree-granting
institutions of higher education in the
State whose combined full-time
enrollment represents a majority of all
students attending institutions of higher
education in the State as determined by
the Secretary using the most recently
available data from IPEDS; and
(ii) One or both of the following—
(A) Philanthropic organizations that
are located in, or that provide funding
in, the State; or
(B) Private corporations that are
located in, or that do business in, the
State.
(c) Nothing in this part shall be
interpreted as limiting a State or other
member of a partnership from
expending funds to support the
activities of a partnership under this
subpart that are in addition to the funds
matching the Federal allotment.
(Authority: 20 U.S.C. 1070c–3a)

How Does the Partnership Select
Students under the GAP Program?
§ 692.120 What are the requirements for
student eligibility?

(a) Eligibility. A student is eligible to
receive a LEAP Grant under GAP if the
student—
(1) Meets the relevant eligibility
requirements contained in 34 CFR
668.32;

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(2) Has graduated from secondary
school or, for a home-schooled student,
has completed a secondary education;
(3)(i) Has received, or is receiving, a
LEAP Grant under GAP for each year
the student remains eligible for
assistance under this subpart; or
(ii) Meets at least two of the following
criteria—
(A) As designated by the State, either
has an EFC equal to zero, as determined
under part F of the HEA, or a
comparable alternative based on the
State’s approved criteria for the LEAP
Program under subpart A of this part;
(B) Qualifies for the State’s maximum
undergraduate award for LEAP Grants
under subpart A of this part in the
award year in which the student is
receiving an additional LEAP Grant
under GAP; or
(C) Is participating in, or has
participated in, a Federal, State,
institutional, or community early
information and intervention,
mentoring, or outreach program, as
determined by the State agency
administering the programs under this
part; and
(4) Any additional requirements that
the State may require for receipt of a
LEAP Grant under GAP.
(b) Priority. In awarding LEAP Grants
under GAP, a State shall give priority to
students meeting all the criteria in
paragraph (a)(3)(i) of this section.
(c) Duration of eligibility. (1) A
student may receive a LEAP Grant
under GAP if the student continues to
demonstrate that he or she is financially
eligible by meeting the provisions of
paragraph (a)(3)(ii)(A) or (B) of this
section.
(2) A State may impose reasonable
time limits to degree completion.
(Authority: 20 U.S.C. 1070c–3a)

How Does the Secretary Approve a
Waiver of Program Requirements?
§ 692.130 How does a participating
institution request a waiver of program
requirements?

(a) The Secretary may grant, upon the
request of an institution participating in
a partnership that meets the
requirements of § 692.113(b)(2), a
waiver for the institution from statutory
or regulatory requirements that inhibit
the ability of the institution to
successfully and efficiently participate
in the activities of the partnership.
(b) An institution must submit a
request for a waiver through the State
agency administering the partnership.
(c) The State agency must forward to
the Secretary, in a timely manner, the
request made by the institution and may
include any additional information or

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appropriate for the Secretary’s
consideration.

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(Authority: 20 U.S.C. 1070c–3a)
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